Lundgren filed U.S. Patent Application No. 08/093,516 on July 16, 1993, claiming the benefit of a series of continuation applications going back to 1988 for a method of compensating a manager who exercises administrative control over operations of a privately owned firm in an oligopolistic industry comprising, inter alia, the step of transferring compensation to the manager. The title of the application refers to a "Method and Apparatus," but no apparatus is disclosed or claimed.

In prior Appeal No. 96-0519, the Board of Patent Appeals and Interferences reversed the examiner's rejection of all of the claims under 35 U.S.C. §101 as being directed to non-statutory subject matter. The Examining Corps filed a request for reconsideration and rehearing, listing the following two issues for reconsideration:

1. Whether the invention as a whole is in the technological arts
2. Assuming that the invention is in the technological arts, whether the claim transferring compensation to a manager is a practical application.

In further prosecution, the examiner again rejected all of the claims as being directed to non-statutory subject matter under 35 U.S.C. §101, stating as follows:

both the invention and the practical application to which it is directed to be outside the technological arts, namely an economic theory expressed as a mathematical algorithm without the disclosure or suggestion of computer, automated means, apparatus of any kind, the invention as claimed is found non-statutory.

The rejection was predicated on two assertions by the examiner—that the claims fail to produce a useful, concrete, and tangible result (later withdrawn by the Examiner), and that the claims are not limited to the technological arts as required by 35 U.S.C. §101.

Lundgren filed a second appeal to the Board, and an expanded panel of the Board heard oral argument on April 20, 2004.

In a rare precedential opinion issued in October 2005, a 3–2 majority consisting of Chief Administrative Patent Judge (APJ) Fleming, Vice Chief APJ Harkcom, and APJ Hairston reversed the examiner's rejection of the claims as being directed to non-statutory subject matter under 35 USC 101 in an eight-page per curiam opinion. The majority stated that the only issue for review in the appeal was, to use the examiner's terminology, "whether or not claims 1, 2, 6, 7, 19-22, 32, and 35-40 are limited to the technological arts, as required by 35 U.S.C. § 101."

The majority noted that claim 1 is directed to a process, one of the four statutory classes of subject matter listed in 35 U.S.C. § 101 which provides as follows:

Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain patent therefor, subject to the conditions and requirements of this title.

The majority then reviewed these three cases, and found that they did not support the examiner's separate "technological arts" test, stating as follows:

Our determination is that there is currently no judicially recognized separate "technological arts" test to determine patent eligible subject matter under § 101. We decline to create one. Therefore, it is apparent that the examiner's rejection can not be sustained.

In a five-page dissenting opinion, APJ Jerry Smith took the position that the issue presented by the examiner was one of first impression, and disagreed with the majority's apparent position that all categories of non-statutory subject matter have been established (i.e., laws of nature, physical phenomena, and abstract ideas).

APJ Smith warned the majority that their position that essentially anything that can be claimed as a process is entitled to a patent under 35 U.S.C. §101 "opens the floodgate for patents on essentially any activity which can be pursued by human beings without regard to whether those activities have anything to do with the traditional sciences or whether they enhance the technological arts in any manner." APJ Smith took the position that the appropriate forum for deciding the question at issue in this case is the federal judiciary, and urged that the examiner's rejection be sustained so that the federal judiciary will have a chance to decide the question. He also joined APJ Barrett in urging the Board to enter a new ground of rejection under 35 U.S.C. 101.

In a massive sixty-five-page single-spaced concurring-in-part and dissenting-in-part opinion, APJ Barrett agreed with the majority that there is no separate "technological arts" test. However, in an exhaustive legal analysis of statutory subject matter reaching back to the British Statute of Monopolies of 1623, 21 Jac. 1, ch. 3., APJ Barrett vigorously dissented with virtually every other statement made by the majority and concluded that claim 1 is not directed to statutory subject matter under 35 U.S.C. § 101 for numerous other reasons, and urged that the Board enter a new ground of rejection under 35 U.S.C. § 101 for those reasons.

BPAI outlines requirements for Examiner's to maintain prima facie rejection of claims under 35 U.S.C. §112, first paragraph, for a genus where specification describes at least one species of the genus
In an appeal from a final rejection, the Board of Patent Appeals and Interferences reversed rejections based on both the written description and enablement requirements of 35 U.S.C. § 112, first paragraph, and entered a new ground of rejection under 35 U.S.C. § 112, second paragraph for one of the claims. The Board found that the claims were directed to a naturally occurring amino acid (or polynucleotide) sequence at least 95% identical to the disclosed amino acid (or polynucleotide) sequence and met the written description requirement. The Examiner has rejected claims for failing to comply with the written description requirement, asserting that the specification provides only a single representative species – the polynucleotide of SEQ ID NO: 2, and fails to disclose any structure-function relationship in this species. The Examiner also rejected the claims for failing to comply with the enablement requirement, asserting that because the specification does not teach the specific amino acids and structural motifs in the proteins encoded by the claimed polynucleotides that are essential for protein activity (specifically, malate dehydrogenase activity), the amount of experimentation required to make the claimed polynucleotides was undue. In response, the Appellants contended that because the claims at issue recite polynucleotides having a naturally occurring polynucleotide sequence, or that encode a polypeptide having a naturally occurring amino acid sequence, "through the process of natural selection, nature will have determined the appropriate amino acid sequences."

On appeal, the Board sided with the Appellants on whether the claims were supported by the specification for the purposes of 35 U.S.C. §112, first paragraph. Specifically, on the issue of written description, the Board noted that "[t]he written description requirement . . . does not require a description of the complete structure of every species with a chemical genus." While the Examiner asserted that the disclosure of the single disclosed species does not disclose the structure sufficient to support a genus, the Board found there was insufficient evidence to maintain a rejection under 35 U.S.C. §112, first paragraph, for lack of written description since "the examiner has not adequately explained and/or provided evidence to support that assertion."

Similarly, with regard to the enablement rejection, the Board disagreed with the Examiner's assertion that in order to satisfy this requirement, the specification must provide guidance regarding the specific amino acid residues that are tolerant to change without affecting malate dehydrogenase activity. Instead, the Board deemed persuasive the Appellants' argument that because the claims were limited to naturally occurring sequences, nature will have determined the amino acid residues that are tolerant to change (i.e., naturally occurring variants will presumably retain malate dehydrogenase activity). In particular, in reversing the Examiner's enablement rejection, the Board determined that the Examiner had not provided sufficient evidence that a naturally occurring polypeptide that is at least 95% identical to the amino acid sequence of SEQ ID NO: 1 or a polypeptide encoded by a naturally occurring polynucleotide sequence that is at least 95% identical to the polynucleotide sequence of SEQ ID NO: 2 would not retain malate dehydrogenase activity. As such, for the purposes of satisfying 35 U.S.C. §112, the disclosure of a natural sequence in and of itself is generally sufficient for disclosing a variance for that sequence, and the Examiner is required to provide evidence that such disclosure is insufficient in order to maintain a prima facie case of failure to comply with 35 U.S.C. §112, first paragraph. Ex parte Bandman, No. 2004-2319, (BPAI January 2005) (Non-Precedential).

BPAI interprets closed transition phrase for method claims
In a case involving processes for preparing an organic electroluminescent element, the patent examiner issued a rejection for indefiniteness under 35 USC 112, second paragraph. The examiner indicated that the claimed language of "consisting essentially of" is accepted as "excluding any further steps which materially affect the process." The examiner further stated that since dependent claims 43, 44, 55 and 56 require the further step of forming a sealing membrane which would affect the claimed process, therefore, these claims contradict "two mutually exclusive limitations." On appeal at the Board of Patent Appeals and Interferences (BPAI), the Board reversed the examiner. In a non-precedential opinion, the Board held that the phrase "consisting essentially of" does not "limit the claim to only those steps recited in the claim," Ex parte Hoffman, 12 USPQ2d 1061, 1063 (BPAI 1989), as would a phrase such as "consisting solely of." In fact, according to the Board, the phrase, "consisting essentially of" does not necessarily limit the claims so as to exclude other things when the specification clearly indicates that other constituents may be present. The Board found that limitations described in the dependent claims were disclosed in the specification. As such, the Board concluded that those elements cannot contradict the basic characteristics of the invention as suggested by the Examiner. Ex parte Hideaki Ueda, Appeal No. 2004-1584 (BPAI November 18, 2004) (Non-Precedential).

Means-Plus-Function Claim
Limitation in claim for image processing apparatus that recites “a destroying member for destroying said thermally processed film after said film has been scanned” is means-plus-function limitation, since term “a destroying member” is provided within functional context to describe functional feature of destroying thermally processed film after it has been scanned, and as such is permissible under narrow rule of construction of 35 U.S.C. §112, sixth paragraph. (Sanada v. Reynolds, 67 USPQ2d 1459, Bd Pat App & Int (unpub), 3/19/03).

Web Balance’s patent 6,128,279 (‘279 patent) described a method and apparatus for web site computer servers to handle incoming requests from client computers using URIs. URIs are essentially resources located on a particular server. Plaintiff’s “Weblogic” software performed similar, allegedly, infringing tasks. The case hinged on the usage and definitions of URI—Uniform Resource Identifiers, and URL—Uniform Resource Locators. Plaintiff’s software used a session ID to track a user’s interaction with a particular website. The session ID begins with a semicolon and is appended or inserted into the requested web address of the user—“http://www.zzz.com/app;jsessionid=1234.” The ‘279 patent claim 4 asserted a method for handling user requests, where the server handles the request or forwards it to a different computer for processing.

Plaintiff alleged Weblogic did not infringe claims 4, 6, or 8 of the ‘279 patent. Specifically, plaintiff cited 2nd embodiment of ‘279 in claiming that Web Balance considered the URI to be the discrete portion of a URL, “http://www.zzz.com/application”, where “/application” is the URI and “www.zzz.com” is the URL. Thus, Weblogic’s session ID could not be considered the URI. Web Balance countered that common usage of the terms URI and URL (as evidenced in Internet Request for Comments (RFC)) indicated that the entire string of characters in a web address constituted the URI, including both URL and session ID.

The court resorted to the analysis of Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) in concluding that, although the claims must be read in light of the specification, it is improper to confine such claims to any preferred embodiment. However, since the language of the patent did not adequately define URI, and the prosecution history was unrevealing, the court considered extrinsic evidence in the form of the parties’ expert testimony. Although both experts offered similar definitions of URI, the court concluded that the ‘279 patent language provided that a particular server would handle all the requests for a particular resource (URI). Weblogic’s system however allowed a particular server to handle all the requests from a specific user (session ID). Further, both systems would be recognized as performing their respective functions by those skilled in the art. Since the session ID did not specify a particular resource, rather only a specific user, it was fundamentally different than a URI. Hence, the court allowed plaintiff’s motion for summary judgment of non-infringement.

As there was no explicit waiver in the DMCA, the Court of Federal Claims reviewed the Tucker Act, 28 U.S.C. §1491, and found that this waiver only applies where the underlying cause of action creates a right to monetary damages against the Federal Government. As the DMCA did not contain a clear and unambiguous waiver of sovereign immunity and only vaguely imposes liability on "any party," the Tucker Act does not cure this omission.

Additionally, while 28 U.S.C. §1498(b) provides a waiver of sovereign immunity with regards to copyright infringement, the Court of Federal Claims found that the DMCA provides "a new violation and not merely a new subset of infringement." As such, 28 U.S.C. §1498(b) also does not afford relief for circumvention activities under the DMCA.

z4 Technologies owns patents 6,044,471 and 6,785,825, which are drawn to “product activation” methods which prevent the unauthorized use of computer software. At trial, z4 technologies asserted infringement of three claims (one from ‘471 and two from’825). The jury found infringement of all three claims by both defendants, and found Microsoft’s infringement willful. Hence, the jury awarded z4 $115 million from Microsoft and $18 million from Autodesk. z4 subsequently filed the motion denied in this decision, requesting a permanent injunction on defendants’ manufacture of sale of the infringing products

To deny the permanent injunction, the court relied on the recent Supreme Court result in eBay, Inc. v. Mercexchanges, LLC, 126 S.C. 1837 (2006). There the Supreme Court held that permanent injunctions in patent cases must meet the traditional four-factor test for equitable relief. To win, a plaintiff must show 1) irreparable injury, 2) that remedies at law (primarily damages) are inadequate compensation, 3) that, balancing the respective hardships of each party, equitable relief is warranted, and 4) that a permanent injunction would not disserve the public interest.

Irreparable Injury
z4 argued for a rebuttable presumption of irreparable injury, claiming that eBay incorporated the Federal Circuit presumption of irreparable injury when considering preliminary injunctions in patent cases. z4 also argued that the Federal Circuit’s presumption was incorporated from copyright law, and since eBay draws a parallel between patent and copyright law, a presumption is appropriate. The court rejected both these arguments for a presumption of injury, relying on the plain wording of the eBay case which “places the burden of proving irreparable injury on the plaintiff.” Id. at 4.

The court also rejected z4’s claims that its “tremendous efforts to commercialize” their invention failed due to Microsoft’s infringement and that Microsoft’s infringement will continue to damage z4’s efforts to market its invention. The court, finding that Microsoft does not sell, license, or distribute individually package product activation software, nor do Microsoft customers purchase MS products for their software activation functionality, could find no logical way in which Microsoft’s infringement damaged z4’s market.

Adequacy of Remedies Available at Law
The court rejected z4’s claim that monetary damages for future infringement were not sufficient to compensate for the loss of their right to exclude Microsoft’s use of z4’s patents. eBay, says the court, indicated that a violation of the right to exclude does not inevitably mean that the loss is beyond compensation. In cases where the infringer damages the market for the patent holders enterprise by saturation or damage to the patent holder’s reputation, monetary compensation may be inadequate due to the difficulty of calculating the loss of market share. The District Court distinguished such cases from this one because here the only loss of market share is lost sales to Microsoft itself. Monetary damages can be easily calculated for this loss.

The court also noted that Justice Kennedy’s eBay concurrence suggested that monetary damages are often sufficient when the infringing practice is “but a small component of the product” at issue. Since in this case product activation is a small feature of the Microsoft Windows and Office software, Justice Kennedy’s concurrence supports a conclusion that monetary damages are sufficient and an injunction may be against the public interest.

Finally, the court said that available legal remedies are sufficient because Microsoft plans on phasing out the infringing products with the next three years. The court reasoned that calculation of a royalty for this period should not be too difficult or indefinite. Also, the court found that there was is no credible issue with Microsoft’s ability to pay these future royalties.

For the above reasons, the court held that z4 had not show the insufficiency of monetary damages, and therefore the second prong of the factors for injunction weighed in Microsoft’s favor.

The Balance of Hardships
z4’s request for injunction, if granted, would have required Microsoft to 1) after a reasonable grace period, cease selling infringing versions of Windows and Office and 2) immediately deactivate Microsoft product activation servers. The court found that the hardship these two requirements would inflict on Microsoft could include the enormous expense of repairing versions of software that will soon be obsolete and the potential of rampant piracy once product activation servers were deactivated. In contrast, z4’s hardship is one that can be remedied with monetary damages. Therefore, the balance of hardships weighs in favor of Microsoft.

The Public Interest
The court noted that Microsoft products are incredibly popular, and while the actual effects of an injunction can only be hypothesized, even a small disruption in the availability of these products would likely be at least somewhat harmful to the public. Likewise, deactivation of Microsoft’s product activation servers may cause an increase in piracy and the potential of harm from illegitimate software. In contrast, denying the injunction at issue would seem to have no harmful effects on the general public. Thus, while the damage to the public is somewhat speculative, this prong also weighs against granting the injunction.

Conclusion
Thus, the court found that each of the four traditional equitable relief factors weighed against granting z4’s request for an injunction. Instead, the court issued an order severing z4’s claim of future damages and requested the filing of a new complaint. The court also ordered Microsoft to file quarterly reports on the number of Windows and Offices units shipped so as to facilitate the calculation of future damages. This straightforward application of the newly decided eBay case is likely only the first of many decisions to deny what used to be almost automatic injunctions against infringers.

Plaintiff argued that it had no product to mark; its website was simply a method to obtain a service provided using the patented system. For intangible inventions, the Supreme Court has said that marking can only be given in connection with a fabricated article; patentees who do not provide a fabricated article have no duty to mark. Wine Ry. Appliance Co. v. Enterprise Ry. Equipment Co, 297 U.S. 387 (1936). In the present case, the patented database and transaction servers are neither made nor offered for sale by IMX. In fact, customers never see the servers physically. Thus, according to the Plaintiff, marking the fabricated, tangible system would not serve the notice purpose of 35 U.S.C. 287(a) since the actual system itself is not before the relevant public.

In finding for the Defendant, the District Court interpreted the Federal Circuit as further explaining the holding of Wine Ry. Appliance Co. in American Medical Systems, Inc. v. Medical Engineering Corp., 6 F.3d 1523 (Fed. Cir. 1993). Under the standard in American Medical Systems, to the extent there is a tangible item to mark by which notice could be given, the party has a duty to do so in order to obtain the benefits of increased damages under 35 U.S.C. 287. The court held that the IMX website was a tangible item through which the patented system was accessed by the relevant public. Since the IMX website was intrinsic to the patented system, the website needed to be marked with an appropriate patent marking in accordance to 35 U,S,C, §287(a) in order to qualify for pre-notice damages.

Lastly, the Plaintiff asserted that, since the infringed patents were technically on its company website in the form of press releases, the website was marked for the purposes of 35 U.S.C. 287. However, the court found that that the existing descriptions on the website including mentions of a “patented process,” “patented system,” and a link to the patent were not sufficient to meet the requirements of 35 U.S.C. 287(a) since they did not obviously relate to the website through which customers would access the patented database and transaction servers.

The terminal disclaimer disclaimed any term of the ‘538 patent that would otherwise have extended beyond the ‘422 patent, which expired on June 23, 2003. The original termination date of the ‘422 patent was June 3, 2002 (17 years from its issue date) but, pursuant to 35 U.S.C. §154, this date was reset to June 23, 2003 (20 years from its filing date). The USPTO agreed that the ‘538 patent’s expiration date should be reset at June 23, 2003 as well since the term of the ‘538 patent was linked to the term of the ‘422 patent. Thus, based on the terminal disclaimer, the ‘538 patent had been scheduled to expire on June 23, 2003.

On June 4, 2003, pursuant to 35 U.S.C. §156, the PTO extended the term of the ‘538 patent for a period of 1810 days, running from June 23, 2003, based on FDA review. Teva submitted an ANDA to the FDA seeking approval to engage in the commercial manufacture, use, and sale of zaleplon, a generic product which is bioequivalent to King’s Sonata drug products. The crux of Teva’s argument is that the term of a terminally disclaimed patent may not be extended under 35 U.S.C. §156 and, therefore, the ‘538 patent expired on June 23, 2003.

On the issue of whether a terminally disclaimed patent is extended under 35 U.S.C. §156, the District Court held that a terminally disclaimed patent is eligible for extension under 35 U.S.C. §156. Specifically, the District Court held that 35 U.S.C. §156 is plain and unambiguous: a terminally disclaimed patent is not barred from receiving a 35 U.S.C.§156 extension. The only limitations on the provision of a 35 U.S.C.§156 patent term extension are those expressly enumerated at §156(a)(1)-(5). Nonexistence of a terminal disclaimer is not among those enumerated conditions, and, therefore, cannot be construed to be a condition for obtaining a 35 U.S.C. §156 patent term extension.

Additionally, the District Court compared 35 U.S.C. §156 and 35 U.S.C. §154(b) to show that unlike 35 U.S.C.§156, 35 U.S.C.§154(b) expressly refers to terminally disclaimed patents. Specifically, 35 U.S.C.§154(b) provides that "[n]o patent the term of which has been disclaimed beyond a specified date may be adjusted under this section beyond the expiration date specified in the disclaimer.” As such, 35 U.S.C.§154 demonstrates that Congress knows how to draft a clear exception barring a terminally disclaimed patent from receiving a patent term extension.

Moreover, the District Court found that Congress amended both 35 U.S.C.§156 and 35 U.S.C.§154 in Pub. L. No. 103-465, §532 (1994), in which Congress initially enacted 35 U.S.C.§154’s exception for terminally disclaimed patents, and has amended both provisions several times since it enacted Pub. L. No. 103-465, §532 (1994). The Court thus presumed that Congress acted intentionally and purposely when it included an exception for terminally disclaimed patents in 35 U.S.C.§154 and omitted any exception for terminally disclaimed patents in §156.

Lastly, the District Court noted that the United States Patent and Trademark Office, in 37 C.F.R. §1.775(a), states that “[i]f a determination is made pursuant to §1.750 that a patent for a human drug, antibiotic drug or human biological product is eligible for extension, the term shall be extended by the time as calculated in days in the manner indicated by this section. The patent term extension will run from the original expiration date of the patent or any earlier date set by terminal disclaimer (§1.321).” Since the PTO promulgated §1.775(a), Congress amended §156 six times. However, Congress has never amended §156 to undermine the PTO’s interpretation of §156 or to change §156’s language to bar terminally disclaimed patents from receiving a §156 extension.

As a result, Medrad filed a second reissue application to remedy the problems of the ‘648 patent. The PTO issued the ‘602 patent, the only divergence from its immediate predecessor is that during the prosecution of the ‘602 patent, the missing supplemental reissue declarations were filed. The ‘602 patent does not differ from the ’648 patent in the specifications, drawings, or claims.

Tyco filed a motion for summary judgment of invalidity of the ‘602 patent, arguing that the reissue was defective under the reissue statute, 35 U.S.C. § 251. This statute provides that a reissue application can only be filed to correct one of four statutorily identified errors: a defect in the specification, a defect in the drawings, or an error in either overclaiming or underclaiming in the patent. Medrad contends that a reissue can correct any number of patent prosecution mistakes, including failure to file the appropriate declarations.

The District Court relied on the case law of the Court of Appeals for the Federal Circuit (CAFC), which does not establish any precedent of 35 U.S.C. § 251 being used to correct procedural errors made during prosecution. Rather, all of the CAFC cases identified by the court that address this issue begin their analysis by identifying which of the four statutorily identified errors the reissue applicant is trying to correct. That is, the courts have consistently interpreted the reissue statute to require that the mistake sought to be remedied be within the express terms of the statute. Therefore, the District Court granted Tyco’s motion for summary judgment of invalidity of the ‘602 patent since this reissue patent was not based upon an issue for which reissue can be sought under 35 U.S.C. § 251. As such, while reissue is generally available for a multitude of errors, reissue is not available for more procedural defects not within the scope of the reissue statute itself.

On the issue of whether the phrase "Frosty Treats" is a protectable trademark, the Eighth Circuit reviewed the factors of whether a mark is protectable. For a mark to be protectable, the mark must first be categorized as (1) generic, (2) descriptive, (3) suggestive, or (4) arbitrary or fanciful. Court held that, while "Frosty Treats" as a mark is not generic, the mark is descriptive. Thus, the mark is only protectable to the extent the mark has acquired secondary meaning in the relevant market. Therefore, Frosty Treats needed to show that the mark had acquired a secondary meaning to identify its goods and distinguish them from those of others. According to the evidence of record, the evidence indicated that respondents to a survey conducted recognized the truck with the Frosty Treats phrase simply as a generic ice cream truck, thus failing to establish secondary meaning for the phrase "Frost Treats" on the ice cream. Although direct evidence such as consumer testimony or surveys are probative of secondary meaning, secondary meaning can also be proven by circumstantial evidence. However, the circumstantial evidence offered by Frosty failed to raise a genuine issue of material fact. Therefore, the Court concluded that the "Frosty Treats" phrase was not protectible under trademark law.

On the issue of whether the Safety Clown graphic is a protectable mark or a non-protectable functional graphic, the District Court held that because the Safety Clown graphic serves a purpose, the graphic is functional and therefore not protectible. The Eighth Circuit disagreed since District Court evaluated the issue using the colloquial meaning of "functional" rather than specialized meaning it has in trademark law. In trademark law, "a product feature is functional, and cannot serve as a trademark, if it is essential to the use or purpose of the article or if it affects the cost or quality of the article." To be functional, the feature must be necessary to afford a competitor the means to compete effectively. There was no evidence that the exclusive use of the Safety Clown graphic would deny Frosty Treats' competitors the ability to compete effectively or place competitors at any non-reputational disadvantage. Therefore, whether the Safety Clown graphic is functional presents a factual issue not appropriate for resolution upon a motion for summary judgment.

However, even assuming that the Safety Clown graphic and the mark "Frosty Treats" are protectable as trademarks, the Eighth Circuit held that there was no likelihood of confusion. Specifically, the Eighth Circuit evaluated whether a likelihood of confusion exists with respect to the trade dress of the trucks and the Safety Clown in light of six criteria: (1) strength of owner's mark; (2) similarity between the owner's mark and the alleged infringer's mark; (3) degree to which the products compete with each other; (4) alleged infringer's intent to pass off its goods as those of the trademark owner; (5) incidents of actual confusion; and (6) type of product, its costs and conditions of purchase. For the first factor, the Eighth Circuit held that the Safety Clown mark and trade dress of Frosty Treats' truck are weak marks since the use of a clown on an ice cream trucks is hardly novel and Frosty Treats' vans resemble a generic ice cream truck and therefore lack distinctiveness within the marketplace. For the second factor, the Eighth Circuit held that the Safety Clown mark and trade dress of Frosty Treats vans are visually distinct from depictions in video games and no reasonable juror could find them similar. In regards to the third and fourth factors, the Eighth Circuit held that SCEA's products do not compete with Frosty Treats and no evidence was shown that SCEA intends to pass off Frosty Treat's mark as its own. For the fifth factor, Frosty Treats failed to provide any proof of actual confusion by a non-interested party, with the only evidence of actual confusion being the testimony of an interested person. Lastly, in deciding the sixth factor, the Eighth Circuit held that the sixth factor is more important in confusion-of-source cases where degree of care that a purchaser exercises in purchasing a product can eliminate confusion that might otherwise exist. In this case, Frosty Treats' action is based on confusion of sponsorship, and thus the customers' degree of care is of diminished importance. Accordingly, Frosty failed to present sufficient evidence to create a triable issue as to the likelihood of confusion between the trade dress of Frosty Treats' trucks or its Safety Clown.

Lastly, the Eighth Circuit held that Frosty Treats does not have actionable claims for trademark dilution under federal and Missouri law. Specifically, Frosty Treats failed to show that the marks and trade dress at issue are famous as required by 15 U.S.C. §1125(c). In addition, the Eighth Circuit held that Frosty Treats failed to show "likelihood of injury to business reputation or of dilution of the distinctive quality of mark….shall be ground for injunctive relief," since the marks and trade dress at issue are so dissimilar that it would be erroneous to hold that there was a likelihood of dilution. Frosty Treats v. Sony Computer Entertainment America (SCEA), 2005 U.S. App. LEXIS 15127, Civ. Case No. No. 04-2502 (8th Cir. July 25, 2005)

License Agreement: Patented cartridge inside sold subject to a Single Use Only restriction. It is a violation of this agreement and/or it is unlawful to resell, reuse, refill or remanufacture.

On motion for summary judgment, the District Court for the District of Northern California reviewed the law of patent exhaustion and found that, for exhaustion to attach, the patented article must have been sold without restrictions on the use. Further, if the sale was conditional, patent exhaustion does not apply. In analyzing the sale of the printer cartridge having the single use restriction, the District Court noted that the single use restriction was obviously placed and readily seen by the end user. The District Court further held that the restriction was included in a valid shrink wrap license and that the user is able reject the restriction by obtaining a more costly version of the cartridge from Lexmark, which was evidence that the end user received consideration for the restriction on the cartridge's use. As such, the District Court held that the restriction was valid and enforceable such that the sale was conditional. Since the sale of the cartridge was conditional, the patent was not exhausted. Therefore, the District Court granted summary judgment dismissing ACRA's claims of unfair trade practices, and found that Lexmark's use of the single use restriction was proper and "falls squarely within Lexmark's patent right." ACRA v. Lexmark Int'l Inc., Civ. No. 01-4626 (N.D. Cal. Sept. 29, 2003).

While the case is currently on appeal pending a decision by the Ninth Circuit, the District Court's decision is instructive in showing that, by placing a condition on the sale of the patented consumable, it is possible to preserve the patent rights for that patented consumable. Specifically, the use of end user license agreements would appear to directly prevent the end user from performing one or more tasks not required for the intended end use of the consumable (i.e., using the printer cartridge in the printer) while validly preventing the unauthorized use of the consumable (i.e., re-filling the printer cartridge).

On October 24, 2001, Medrad filed a complaint in district court against Tyco alleging infringement of the ‘602 reissue patent. Medrad and Tyco filed cross motions for summary judgment regarding the validity of the ‘602 reissue patent, and more specifically, regarding whether the failure of Medrad to file a supplemental declaration in the '648 reissue patent qualified as an “error” under 35 U.S.C. §251. 35 U.S.C. §251 requires the following in regards to the error requirement:

Whenever any patent is, through error without any deceptive intention, deemed wholly or partially inoperative or invalid, by reason of a defective specification or drawing, or by reason of the patentee claiming more or less than he had a right to claim in the patent, the Director shall, on the surrender of such patent and the payment of the fee required by law, reissue the patent for the invention disclosed in the original patent, and in accordance with a new and amended application, for the unexpired part of the term of the original patent.

On appeal, the Federal Circuit held that 35 U.S.C. §251 can be read to encompass any error that causes a patentee to claim more or les than he had a right to claim. The Federal Circuit relied on its previous holding in In re Weiler, 790 F.2d 1576, 1579 (Fed. Cir. 1986) that “in enacting [§251], Congress provided a statutory basis for correction of ‘error.’ The statute is remedial in nature, based on fundamental principles of equity and fairness, and should be construed liberally.” The plain meaning of 35 U.S.C. §251 indicates that the error involves rendering a patent wholly or partly invalid by reason of – i.e., because of – claiming more or less than a patentee has a right to claim. Here, by including changes to the language of the claims that narrowed the scope of coverage and by correcting inventorship, the resulting ‘648 reissue patent claimed more than it had a right to claim in the patent without submitting a supplemental declaration to support the narrowing subject matter and the change in inventorship. The correction of such an error meets the express terms of §251, and thus serves as a basis for reissue. As such, the Federal Circuit reversed the district court's finding of invalidity.

Motivation to combine sufficient to establish prima facie case of obviousness can be based upon implicit teaching supported by expert witness evidence about understanding at time of invention
In Alza Corporation v. Mylan Laboratories, Case No. 06-1019 (Fed. Cir. Sept. 6, 2006), the Federal Circuit upheld a district court’s decision that plaintiff-appellant Alza’s patent (6,124,355) was invalid and was not infringed by defendant-appellee Mylan’s generic version of an extended release anti-incontinence drug, oxybutynin.

The court upheld the finding that the patent was invalid as obvious while primarily discussing the “motivation-suggestions-teaching” doctrine. The court defended the motivation requirement as flexible because the motivation need not be found explicitly in the prior art so long as there is evidence in the record as to why, at the time of the invention, one skilled in the art would make the asserted combination. While an explicit motivation to combine is one way to meet this test, the Federal Circuit held that the broader inquiry rests "on the unremarkable premise that legal determinations of obviousness, as with such determinations generally, should be based on evidence rather than on mere speculation or conjecture." Moreover, in meeting the prima facie burden for obviousness, "where the testimony of an expert witness is relevant to determining the knowledge that a person of ordinary skill in the art would have possessed at a given time, this is one kind of evidence that is pertinent to our evaluation of a prima facie case of obviousness." Thus, it is sufficient for the record show some evidence demonstrating that, at the time of the invention, information was available which would lead one skilled in the art to make the combination.

In applying this test, the court held that the motivation to combine oxybutynin and the time-release pill delivery system existed to the person of ordinary skill in the art in 1995 (the time of the ‘355 patent filing) based upon expert witness testimony. Plaintiff argued that two prior art references demonstrated that, in 1995, no one knew that oxybutynin would be well-absorbed in the colon and thus would not be motivated to create a time release pill form factor. The court found that both references in fact implied that drugs such as oxybutynin would be well-absorbed in the colon, and that the expert witness testimony on the knowledge of persons in the art at the time of the invention was sufficient to meet a prima facie burden for obviousness purposes. The Federal Circuit held that the Plaintiff had failed to rebut this prima facie burden since the applied references did not undercut the witness' testimony and no other evidence contradicted the testimony or otherwise showed that the expectations were other than that set forth by the expert witness, and found the claims invalid under 35 U.S.C. §103.

The court upheld the finding of non-infringement because Alza failed to submit evidence sufficient to demonstrate that Mylan’s formulation met the time-release characteristics claimed in the ‘355 patent. Alza submitted profiles of the amount of drug in a subject’s blood for both Alza’s and Mylan’s formulation, and similarly submitted evidence of similar release times in laboratory apparatus for the two formulations. However, since the ‘355 patent claimed the rate of in vivo dissolution in the gastrointestinal tract, and since Alza declined to link its two studies to the rate of in vivo dissolution, the court found that the Mylan formulation did not infringe the ‘355 patent.

Licensing Limitations That Prevent Patent Exhaustion For Use of Seeds Also Do Not Constitute Patent Misuse or Antitrust Violations
In Monsanto Company v. Mitchell Scruggs, Civ. Case Nos. 04-1532, 05-1120, 05-1121 (Fed. Cir. August 16, 2006), Mitchell Scruggs (Scruggs) appealed the holding of the Northern District of Mississippi granting Monsanto Company (Monsanto) a permanent injunction against Mr. Scruggs and granting Monsanto’s motions for summary judgment regarding patent validity and infringement to the United States Court of Appeals for the Federal Circuit. Mr. Scruggs also appealed the District Court’s denial of his claims of antitrust violations, patent misuse, tortuous interference, unfair competition and invasion of property. The Federal Circuit affirmed the District Court's holding with respect to the motion for summary judgment of patent validity and infringement and the denial of his cross-claims. The Federal Circuit further ordered the permanent injunction to be vacated and the case remanded to the District Court for reconsideration of the permanent injunction in light of the Supreme Court’s eBay Inc. v. MercExchange L.L.C. holding.

Monsanto is the owner of U.S. Patent No. 5,352,605 (‘605). The ‘605 patent is directed toward insertion of a synthetic gene consisting of a 35S cauliflower mosaic virus promoter amongst other advancements, to create herbicide resistance. Using the ‘605 patent, Monsanto developed glyphosate herbicide resistant soybeans and cotton which were sold as Roundup Ready (Roundup) soybeans and cotton. The licensing of Roundup Ready soybeans and cotton began in 1996. Monsanto further combined the ‘605 patent with patents No. 5,164,315; 5,196,525; and, 5,322,938. This combination was licensed in 1998 as Bollgard/Roundup Ready cotton technology.

Monsanto’s licensing agreements with seed growers allowed the seed growers to incorporate Monsanto’s biotechnology into their seeds. The licenses also required seed companies to avoid selling seeds to growers unless the grower signed a Monsanto license and that seeds sold under the license be used to grow only a single commercial crop. Mr. Scruggs purchased the seeds produced under the Monsanto patents from seed companies but never signed a licensing agreement. Further, he harvested the soybeans and cotton, retained the new generation of seeds and subsequently planted the new seeds in a later generation of crops. Monsanto filed suit for infringement of their patents against Mr. Scruggs in 2004.

Patent Exhaustion
The District Court found the patent exhaustion defense claimed by Mr. Scruggs was inapplicable because Monsanto never made an unrestricted sale of its biotechnology. Mr. Scruggs argued that he purchased the Monsanto seeds in an unrestricted sale. As such, he was therefore entitled to use those seeds in an unencumbered fashion under the doctrine of patent exhaustion.

Relying on Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700, 701 (Fed. Cir. 1992); and LG Elecs., Inc. v. Bizcom Elecs., Inc., 2006 U.S. App. Lexis 16916 (Fed. Cir. July 7, 2006), the Federal Circuit held that the “first sale/patent exhaustion doctrine establishes that the unrestricted first sale by a patentee of his patented article exhausts his patent rights in the article.” Based upon this standard, the Federal Circuit affirmed the District Court's denial of the affirmative defense of patent exhaustion because patent exhaustion was inapplicable to the Mr. Scruggs' case since there was no unrestricted first sale.

Specifically, the Federal Circuit found there was no unrestricted sale because the use of the seeds by seed growers was conditioned on obtaining a license, and because the new seeds grown from the original batch had never been sold in a manner corresponding to an unrestricted first sale. The Court therefore found that there can be no patent exhaustion as to a subsequent generation of seeds where there was no unrestricted first sale. Thus, the fact that a patented technology can replicate itself does not give a purchaser the right to use replicated copies of the technology. The Federal Circuit concluded that the application of the first sale doctrine to subsequent generations of self-replicating technology would injure the rights of the patent holder, and resultantly upheld the District Court's holding that the patent exhaustion defense is inapplicable.

Antitrust/Misuse
Mr. Scruggs claimed Monsanto violated the Sherman Act §1 and §2 by asserting that the exclusivity provision, no replant policy, and technology fee payments required by Monsanto’s licensing agreement with seed growers are illegal anticompetitive practices. He also argued on appeal that Monsanto was tying the purchase of seed to the purchase of Roundup through grower license agreements, grower incentive agreements and seed partner license agreements, a violation of section 1 of the Sherman Act. Mr. Scruggs also claimed Monsanto unlawfully monopolized or attempted to monopolize a relevant market under §2 of the Sherman Act and misused its patents.

Section 1 of the Sherman Act
The Federal Circuit first analyzed Mr. Scruggs' claim under section 1 of the Sherman Act, specifically, the claim of a tying agreement. The Court stated that a tying arrangement is the sale or lease of one product on the condition that the buyer or lessee purchase a second product. To prove a tying arrangement existed, he was required to show the involvement of two separate products or services; the sale of one product or service being conditioned on the purchase of another; Monsanto’s market power in the tying product; and, the amount of interstate commerce in the tied product was not insubstantial.

In affirming the District Court’s rejection of the anticompetitive claim under section 1 of the Sherman Act, the Federal Circuit stated Monsanto had a right to exclude others from making, using or selling its patented plant technology. Additionally, Monsanto's “no replant policy simply prevents purchasers of the seeds from using the patented biotechnology when that biotechnology makes a copy of itself.” The Federal Circuit further stated Monsanto’s uniform technology fee was essentially a royalty fee which was also within the scope of the patent grant. The Court lastly stated that a no research policy is a field of use restriction and is also within the protection of the patent laws.

The Federal Circuit also found Mr. Scruggs failed to point to sufficient evidence to establish that Monsanto’s behavior constitutes illegal tying, that the grower incentive program was optional and not coerced and that Monsanto’s seed partners were not forced to buy Roundup under the seed partner agreements. As a result, the Federal Circuit affirmed the District Court’s rejection of the claim of an antitrust violation under section 1 of the Sherman Act.

Section 2 of the Sherman Act
The Federal Circuit next analyzed Mr. Scruggs' claim under section 2 of the Sherman Act which prohibits unlawful monopolization. The Court stated that proving a section 2 violation required that the party charged had “monopoly power in a relevant market and acquired or maintained that power by anti-competitive practices instead of by competition on the merits.” The Court affirmed the District Court’s denial of the unlawful monopolization claim under section 2 of the Sherman Act because he failed to provide sufficient evidence proving unlawful monopolization or attempted monopolization.

Patent Misuse
The Federal Circuit also analyzed Mr. Scruggs' claim under the patent misuse doctrine. Although the Court stated patent misuse can be found even where there is no antitrust violation, “the policy of the patent misuse doctrine is to prevent the patentee from using the patent to obtain market benefit beyond that which inures in the statutory right.” Further, the Federal Circuit held that patent misuse requires a party to impermissibly broaden the scope of the patent grant with anticompetitive effect. As such, the doctrine of patent misuse does not extend to a patent owner by reason of his refusal to license or use any rights to the patent, which is within the permissible scope of the granted patent rights.

The Federal Circuit quickly affirmed the District Court’s denial of the claim of patent misuse because patent misuse covers activities falling outside of the patent grant. Specifically, Mr. Scruggs did not point to any activity falling outside Monsanto’s patent. Further, under the patent misuse doctrine, Mr. Scruggs was required to show that the challenged contract had an actual adverse effect on competition, which he failed to do. As such, the Federal Circuit found that Monsanto’s conduct did not amount to patent misuse.

Patent Enforcement By A University Against Customers Insufficient to Waive Sovereign Immunity under Florida Prepaid To Allow the Supplier To File A Declaratory Judgment Action
In Tegic Communications v. Bd. of Regents of the Univ. of Texas System, Civ. Case. No. 05-1553 (Fed. Cir. August 10, 2006), Tegic Communications filed a declaratory judgment in the Western District of Washington against the Board of Regents of the University of Texas System ("the University") due to the University's enforcement of U.S. Patent No. 4,674,112 in the Western District of Texas against 48 cellular-telephone companies. Tegic Communications alleged that, since it supplied allegedly infringing software to 39 of 48 these companies, Tegic Communications was under a reasonable apprehension of suit. Relying on Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank, 527 US 627, 51 USPQ2d 1081 (1999), the District Court dismissed the complaint as the University was immune under the Eleventh Amendment from patent infringement claims and had not waived its sovereign immunity for such claims by bringing suit against the 39 companies. The Federal Circuit affirmed the District Court's dismissal.

The Federal Circuit held that, while a State can waive its sovereign immunity by filing a patent infringement suit, the waiver does not extend to non-participants in the suit. Specifically, the mere filing of the patent infringement suit in a Federal court does not act as a full waiver of sovereign immunity through participation in a Federal regulatory process. The waiver extends only to compulsory counterclaims from the defendants in the action. Thus, the filing of the patent infringement suit in Western District of Texas represented only a limited voluntary waiver of sovereign immunity in the Western District of Texas, and does not represent a voluntary waiver extending to non-parties in other Districts. Instead, the Federal Circuit agreed with the District Court that, while Tegic Communications might avail itself of the University's sovereign immunity waiver by intervening in the Western District of Texas action, the University retained its Eleventh Amendment immunity such that the case in Western District of Washington was properly dismissed.

Ability to Petition State Legislature for Patent Infringement Damages Sufficient Remedy Such That Sovereign Immunity Prevents Suit Against University under Florida Prepaid
In Pennington Seed v. Produce Exchange No. 299, et al., 457 F.3d 1334 (Fed. Cir. 2006), Pennington Seed, Inc. and AgResearch Limited (collectively “Pennington”) filed suit against the University of Arkansas (“the University”) for infringement and conversion of U.S. Patent No. 6,111,170 (“the ’170 patent”) in the Western District of Missouri. Relying on Florida Prepaid Postsecondary Education Expense Board v. College Savings Bank, 527 US 627, 51 USPQ2d 1081 (1999), the District Court dismissed the complaint as Arkansas was immune under the Eleventh Amendment from patent infringement claims and had not waived its sovereign immunity for such claims. Thus, the University, as a state entity, is also immune. The Federal Circuit affirmed the District Court's dismissal.

Wireless is the assignee of U.S. Patent No. 6,665,173 entitled “Physical Configuration of a Hand-Held Electronic Communication Device.” The lone independent claim of the ‘173 patent provides, “A hand-held, electronic computing device having a physical configuration comprising…an alphanumeric keyboard carried by the body portion…” The Federal Circuit stated the appeal for denial of a preliminary injunction would turn on the correct claim construction of the term “alphanumeric keyboard.”

Relying on the methodology set forth in Phillips v. AWH Corp., 423 F.3d 1303, 75 USPQ2d 1321 (Fed. Cir. 2005) (en banc), the Federal Circuit noted the scope of the term “alphanumeric keyboard” was not readily apparent from the face of the claim and that there was no common dictionary definition of the term. The Court provided that the term must be read in view of the specification of which it is part. The description of the invention in the Summary of Invention section stated that “The keyboard may be a keyboard with a layout such as the common QWERTY layout but not be limited to the particular layout…may include…any other alphanumeric layout that includes a substantially full set of alphanumeric keys.” As a result, the Federal Circuit stated it could not allow Wireless to claim a keyboard with less than a substantially full set of keys “or risk injuring the public’s right to take the patentee at his word.”

The Federal Circuit also noted the specification explicitly referenced the disadvantages of keypads having only twelve digits when it stated, “the keypad is typically a twelve-digit keypad designed for numeric data entry…this method being extremely slow, awkward, error prone, and not appropriate for a device intended to transfer textual data on a regular basis.” The Court stated, “where the specification makes clear that the invention does not include a particular feature, that feature is deemed to be outside the reach of the claims of the patent, even though the language of the claims, read without reference to the specification, might be considered broad enough to encompass the feature in question.” Thus, the specification disclaimed coverage for keyboards such as twelve digit keyboards through such statements.

The Federal Circuit also considered extrinsic evidence including a statement by a Wireless expert witness but found that the expert’s statement was conclusory and unsupported by reference to any contemporaneous document and therefore of no value in the claim construction analysis. As a result, the Federal Circuit held the District Court’s claim construction was correct, that the undisputed evidence established that the accused device utilized twelve keys instead of a substantially fully set of alphanumeric keys and thus affirmed the denial of a preliminary injunction against Sony.

Patent License Term Limiting End Component Combination In Systems Prevents Patent Exhaustion and Implied License From Allowing Non-Authorized Combinations
In LG Electronics, Inc. v. Bizcom Electronics, Inc., Civ. Case Nos. 05-1261, -1262, -1263, -1264, -1302, -1303, -1304, 2006 U.S. App. LEXIS 16916 (Fed Cir. July 7, 2006), all parties appealed from the District Court for the Northern District of California. The Court of Appeals affirmed-in-part, reversed-in-part, vacated-in-part and remanded for further proceedings. A copy of the decision can be found here.

LG Electronics, Inc. (LG) is the owner of patents relating to personal computers including patents 4,918,645; 5,077,733; 4,939,641; 5,379,379; and, 5,892,509. LG sued the defendants alleging infringement of these patents. The defendants purchased microprocessors and chipsets from Intel or Intel’s authorized distributors and installed them in computers. Under an agreement with LG, Intel was authorized to sell the microprocessors and chipsets to all of the defendants. However, pursuant to the agreement between LG and Intel, Intel was required to notify the defendants that although Intel was licensed to sell the products, they were not authorized to combine the products with non-Intel products.

In 2002, LG brought suit against the defendants asserting that the combination of microprocessors or chipsets with other computer components infringes LG’s patents covering those combinations but did not assert patent rights in the microprocessor or chipsets themselves. The District Court, after deciphering the patent claims, granted summary judgment of non-infringement for each patent. The District Court determined that there was no implied license to any defendant, however, with the exception of the ‘509 patent, LG’s rights in any system claims were exhausted. It also found that LG was contractually barred from asserting infringement of the ‘509 patent against the defendants and found the ‘645, ‘733 and ‘379 patents were not infringed after applying claim construction to the accused methods and devices.

Implied Licensing
Reviewing the District Court's granting of summary judgment without deference, the Federal Circuit first considered the issue of implied licensing. “In a suit for patent infringement, the burden of proving the establishment of an implied license falls upon the defendant.” Bandag, Inc. v. Al Bolser’s Tire Stores, Inc., 750 F.2d 903, 924 (Fed. Cir. 1984). The Federal Circuit stated that the defendants were required to establish that the products have no noninfringing uses and that the circumstances of the sale…plainly indicate that the grant of a license should be inferred. Concluding that no implied license existed between LG and the defendants, the Court stated that because Intel expressly informed them that Intel’s license agreement with LG did not extend to any of defendant’s products made by combining an Intel product with a non-Intel product no license could be implied.

Patent Exhaustion
The Federal Circuit next considered the issue of patent exhaustion for each of LG’s patents. It stated, “an unconditional sale of a patented device exhausts the patentee’s right to control the purchaser’s use of the device thereafter…however, the exhaustion doctrine does not apply to an expressly conditional sale or license. In such a transaction, it is more reasonable to infer that the parties negotiated a price that reflects only the value of the use rights conferred by the patentee.”

The Federal Circuit found the LG-Intel license expressly disclaimed granting a license allowing computer system manufacturers to combine Intel’s licensed parts with other non-Intel components. It further found that this conditional agreement required Intel to notify its customers of the limited scope of the license and although Intel was free to sell its microprocessors and chipsets, those sales were conditional and Intel’s customers were expressly prohibited from infringing LG’s combination patents. As a result, the Federal Circuit held LG’s rights in asserting infringement of its systems claims were not exhausted, reversing the District Court’s holding with respect to the system claims. With respect to the method claims, the Federal Circuit also found that even if the exhaustion doctrine were applicable to method claims, it would not apply in the LG case because there was no unconditional sale. It held that a sale of a device does not exhaust a patentee’s rights in its method claims and resultantly affirmed the District Court's holding with respect to the method claims.

The ‘509 Patent: "Control Unit" Term Does Not Invoke 35 U.S.C. 112, Para. 6
The Federal Circuit next reviewed the District Courts granting of summary judgment of non-infringement on the ground that LG was contractually barred from asserting infringement against the defendants with respect to the ‘509 patent. The Federal Circuit held that because a genuine issue of material fact existed as to whether the defendants fell within the protection of a contract provision between LG and Microsoft barring LG from suing Microsoft, its suppliers, their subsidiaries or their licensees, it reversed the District Court’s granting of summary judgment of non-infringement. On remand, the defendants must establish that LG is contractually barred from pursuing infringement claims against them.

Because the parties also disputed the District Court’s construction of several claim terms in the ‘509 patent, the Federal Circuit also reviewed the District Court's finding that claim 35 was a means-plus-function. LG claimed the District Court erred when it construed the term “control unit” as a means-plus-function limitation. The Federal Circuit stated “A claim that does not use means will trigger the rebuttable presumption that §112 AP 6 does not apply…but this presumption can be rebutted by showing that the claim element recites a function without reciting sufficient structure for performing that function.” The Federal Circuit held the claim limitation at issue does not use the term means such that there is a presumption that the claim term is not a means plus function claim. Additionally, the Federal Circuit found that the claim recited specific structure, including a CPU and a memory, such that the presumption against means-plus-function treatment is not overcome. Thus, the Federal Circuit held that the recited control unit is not written in means plus function form.

The ‘645 Patent: "Requesting Agent" Defined Based On Intrinsic Evidence and Industry Standard
In reviewing the District Court's interpretation of the recited term "requesting agent," the Federal Circuit held the District Court erred when it failed to give proper weight to the incorporated industry standard and failed to consider the standard as intrinsic evidence of the meaning to one of ordinary skill in the art as of the filing date. Thus, the Federal Circuit concluded that LG’s proffered definition based on the standard is correct and thus, the term “requesting agent” meaning “an agent that has entered into the arbitration function for bus access” was entirely consistent with the specification.

The Federal Circuit found that while prosecution history is relevant to claim construction, it often lacks the clarity of the specification and thus is less useful for claim construction purposes. Further, while it agreed with the District Court that the patentee (LG) did not act as its own lexicographer, the specification made clear that the term requesting agent is properly construed to mean an agent that has entered into the arbitration function for bus access.

A Foreign Unpublished Patent Application Is a “Printed Publication” Under §102.

In Bruckelmyer v. Ground Heaters, 445 F.3d 1374 (Fed. Cir. April 20, 2006), petition for reh'g denied (June 28, 2006), the Court of Appeals for the Federal Circuit affirmed the lower court’s summary judgment invalidating plaintiff Bruckelmyer’s patents 5,567,085 and 5,820,301.

Bruckelmyer’s patents were for using flexible tubes carrying heated liquid to thaw frozen ground so as to permit proper curing of concrete. Thirteen years prior to Bruckelmyer’s filing, Norman Young filed an application which eventually issued as Canadian Patent 1,158,119. Young’s patent was for a portable heating system using flexible hoses with the primary purpose of conditioning ground for concrete pouring, although thawing frozen ground was not the objective. Two illustrations accompanied Young’s application and illustrated the use of the invention to thaw frozen ground. These two illustrations did not accompany the issued patent because they were cancelled; however, they were still available in the file wrapper during the critical period.

In 2002, Bruckelmyer sued Ground Heaters for infringement. Ground Heaters counterclaimed, asserting invalidity based on the two illustrations in Young’s ‘119 patent application, and filed a motion for summary judgment. The district court determined that the illustrations in the file wrapper were “sufficiently accessible to the relevant and interested public” to be a “printed publication” under 35 U.S.C. §102(b), which forbids patents on inventions “described in a printed publication … more than one year prior to the date of filing in the U.S.” However, the district court denied Ground Heater’s motion for summary judgment to resolve whether the illustrations were sufficient to enable a person of ordinary skill in the art to practice the invention in the ‘085 and ‘301 patents.

Disagreeing that the illustrations were “printed publication[s],” Bruckelmyer filed a stipulation conceding that the illustrations permitted the practice of the ‘085 and ‘301 patents, upon which Ground Heaters successfully renewed their motion for summary judgment. Bruckelmyer then appealed to the Court of Appeals for the Federal Circuit on the single issue of whether the two illustrations of the ‘119 patent are printed publications under § 102.

The Court of Appeals analyzed the case under the precedent of In re Wyer, 655 F.2d 221 (CCPA 1981), where an Australian patent application was available to the public and an abstract of the application was published. According to Wyer, a reference meets the standard of § 102 if “such document has been disseminated or otherwise made available to the extent that persons interested and ordinarily skilled in the subject matter or art exercising reasonable diligence, can locate it …” Id. at 226. In Wyer, the published application abstract was considered a sufficient roadmap to the application to meet this standard. In the current case, the court reasoned that the published ‘119 patent was an even better research aid in finding the application file wrapper; thus the file wrapper was publicly available.

The court also clarified its holding in In re Cronyn, a case where several student theses were found to not be publicly accessible, in part because they were not meaningfully catalogued or indexed. 890 F.2d at 1161. The court found Bruckelmyer’s reliance on Cronyn to be misplaced, noting that indexing or cataloguing is not a necessary element, but relevant only to establishing if one ordinarily skilled in the art could locate these references. Whether the file wrapper in this case was indexed or catalogued “in a meaningful way” was irrelevant, according to the court, since the ‘119 patent was certainly indexed and would lead a person of reasonable diligence to the application wrapper.

A short dissent by Judge Linn questioned the suitability of a granted patent as an “index” to the patent application, especially when, as in this case, the patent itself contained little to indicate that the drawings in the file wrapper disclosed subject matter not discussed in the patent itself.

A copy of the decision is available at Bruckelmyer v. Ground Heaters, 445 F.3d 1374 (Fed. Cir. April 20, 2006)

Following this case, the Court of Appeals for the Federal Circuit denied Bruckelmyer’s request for rehearing en banc. Judge Newman argued forcefully in dissent that a file wrapper only available by traveling to a foreign country and which discloses an invention not mentioned in the resulting patent is not a “printed publication” under any reasonable interpretation of the term. (Fed. Cir. Case No. 2005-1412). Yet the Court’s judgment stands, arguably expanding the realm of available prior art.

A copy of the denial of rehearing and Judge Newman’s dissent is available here.

FEDERAL CIRCUIT DEFINES CLAIMS IN CONTINUATION APPLICATIONS SIMILARLY EVEN WHERE CLAIMS DIFFERENTLY WORDED
In Advanced Cardiovascular Sys, Inc. v. Medtronic Vascular, Inc.., Civ. Case Nos. 05-1280, 05-1281, 05-1282 (Fed Cir. May 26, 2006) (non-precedential), the Federal Circuit affirmed a district court decision of granting a summary judgment of non-infringement of Medtronic’s U.S. Patent No. 5,292,331 (the ‘331 patent), U.S. Patent No. 5,674,278 (the ‘278 patent), U.S. Patent No. 5,879,382 (the ‘382 patent), and U.S. Patent No. 6,344,053 (the ‘053 patent), which are drawn to stent devices and methods of delivery and manufacture and all of which are related patents.

In interpreting the claims of the ‘331, ’278, ‘382, and the ‘053 patents at trial, the District Court had found that the terms “circular member”, “stent member,” “ring”, and endovascular support member” have the same meaning as a “stent.” The Federal Circuit upheld this construction since, while used in different claims and in different patents, these terms had no clear meaning from the specification and were “employed in a manner analogous to and interchangeable with the term ‘stent’.”

Further, in interpreting the term “stent,” the District Court found that Medtronic had clearly disavowed any stent not having straight segments ending at peaks. Specifically, during prosecution of the ‘331 patent, Medtronic asserted that the invention distinguished over the prior art since the stent used substantially straight segments connected to form ends, and that the ends must be at top or bottom. The Federal Circuit agreed that this assertion in prosecution was sufficient to disavow any additional element being used on the recited stent ends.

Moreover, even though the disavowal was arguably broader than necessary to overcome the prior art, the Federal Circuit held that “’there is no principle of patent law that the scope of a surrender of subject matter during prosecution is limited to what is absolutely necessary to avoid a prior art reference. Norian Corp. v. Stryker Corp., 432 F.3d 1356, 1361-62 (Fed. Cir. 2005).” Since the broader disclaimer was applied to the claims of the ‘331 patent, this same disavowal applied to the remaining continuation patents: the ‘278 patent, the ‘382 patent, and the ‘053 patent. The Federal Circuit relied upon a statement in the prosecution of each of the the ‘278 patent, the ‘382 patent, and the ‘053 patent that the claims were allowable “for at least the same reasons as the parent application.”

Also, while acknowledging that certain of the claims, such as in the ‘053 patent, do not recite an “end”, the Federal Circuit found that the claims instead recited a “turn,” which is used in the specification and claims use the term “turn” synonymously with “end,” the claims of the ‘053 patent also recite an end and are subject to the disavowal in the parent application.

Lastly, the Federal Circuit found that no doctrine of equivalents was available for the recited “stent” and the synonymous terms in any of the patents due to prosecution history estoppel due to prosecution history estoppel caused by the broad disavowal in the ‘331 patent.

A copy of the case is available at Advanced Cardiovascular Sys, Inc. v. Medtronic Vascular, Inc.., Civ. Case Nos. 05-1280, 05-1281, 05-1282 (Fed Cir. May 26, 2006).

FEDERAL CIRCUIT USES SUMMARY OF THE INVENTION TO BROADEN RECITED “FORM SET” TO ENCOMPASS A SINGLE SHEET AS WELL AS MULTIPLE SHEETS
In Paymaster Technologies, Inc. v. United States, Civ. Case Nos. 05-5025, 05-5029 (Fed Cir. May 2, 2006), the Federal Circuit affirmed a Court of Federal Claims decision finding the United States was liable under 28 U.S.C. 1498 for the unauthorized use of Paymaster Technologies’ U.S. Patent No. 5,292,283 (the ‘283 patent) since the United States’ use of a money orders.

The claimed invention of the ‘283 patent is directed to money orders having a form set and which has a sheet allowing ink to permeate from a front of the sheet to a back surface to create a mirror image on the back surface. The United States was using two types of money orders at issue: a five ply money order having three sheets on which indicia are copied and ink-infused transfer layers between each of the sheets, and a singly ply money order in which the ink penetrates the first sheet and the remaining sheets are stored electronically. The Court of Federal Claims found infringement under 28 U.S.C. 1498 for both types of money orders.

On appeal, the Federal Circuit agreed with the Court of Federal Claims that the recited form set includes singly ply form sheets, and does not require multiple sheets per form set. The Federal Circuit noted that, while claims 1 and 5 recite three sheets, claim 10 does not recite multiple sheets. Further, the specification contained an example of a negotiable instrument sheet as the form set without requiring multiple sheets in the summary of the invention. While the detailed description had no specific example of a form set with only one sheet, the detailed description was entitled “Description of a Preferred Embodiment.” According to the Federal Circuit, “it is axiomatic that claims are only rarely, if ever, construed as limited to the preferred embodiment.” As such, in view of the summary of the invention, the Federal Circuit found that a form set can include a single sheet.

The Federal Circuit further held that the term “on” does not require that the ink “on” the back surface permeate through the back surface so long as the ink is on the surface. The Federal Circuit noted that this construction is consistent with the specification, is consistent with the extrinsic evidence set forth in dictionaries, and is consistent with the actual usage in the claims.

Lastly, the Federal Circuit upheld the royalty rate of 3.5% awarded by the Court of Federal Claims.

A copy of the case is available at Paymaster Technologies, Inc. v. United States, Civ. Case Nos. 05-5025, 05-5029 (Fed Cir. May 2, 2006).

FEDERAL CIRCUIT FINDS NON-INFRINGEMENT JUDGMENT SINCE CLAIMED “RIGID” DOES NOT ENCOMPASS SEMI-RIGID
In Schoenhaus v. Genesco, Inc., 78 USPQ2d 1252 (Fed Cir. 2006), the Federal Circuit affirmed a district court decision of granting a summary judgment of non-infringement of Schoenhaus’ U.S. Patent No. 5,174,052 (the ‘052 patent) based on the absence of a claimed element from the accused product.

The claimed invention of the ‘052 patent is directed to an orthotic device for preventing hyperpronation of a human foot. During the prosecution of this patent, the inventors approached the defendants attempting to arrange a license agreement. After the signing of a confidential disclosure agreement, the defendant entered negotiations with the inventors for 2-1/2 years, but ultimately withdrew from the negotiations. About 8 years later, in 2002, the inventors discovered that the defendants were selling a line of footwear which they believed to infringe the claims of the ‘052 patent. The inventors filed suits against the defendants alleging infringement of the ‘052 patent, as well as misappropriation of trade secrets and unjust enrichment. The defendants filed a counterclaim of invalidity.

On January 10, 2005, the district court granted a summary judgment of non-infringement. The inventors appealed.

The claims of the ‘052 patent are directed to an orthotic shoe device designed to prevent flatting of the foot arch. Genesco’s accused footwear had a rear heel portion of the upper of the shoe to provide support, rather than only an insert. The issue on appeal was whether the claimed “orthotic device” was limited to a discrete insert that was removable or immovable from a shoe, or whether the term encompassed other parts of a shoe.

During trial, the Plaintiffs attempted to define the use of the term "ridged" in the patent to mean "semi-ridged" in hopes of making the claims broad enough to cover the allegedly infringing footwear. However, the Federal Circuit noted the specification of the ‘052 patent refers to the term "semi-ridged" as a material to be used in the manufacture of the orthotic insert, instead of the resulting product itself. The Federal Circuit also noted that there was no support for the term “ridged” in the file history. Therefore, the Federal Circuit concluded that “rigid” could not include “semi-rigid.” The Federal Circuit reasoned that if one was to substitute each proposed construction for the claimed “orthotic device,” this term could only encompass an “insert or immovable insert portion” because an illogical and inconsistent construction would result if the term read on any part of the shoe. Accordingly, the Federal Circuit affirmed the district court’s decision.

A copy of the case is available at Schoenhaus v. Genesco, Inc., 78 USPQ2d 1252 (Fed Cir. 2006).

CLAIM PREAMBLE IS LIMITING WHEN IT RECITES ESSENTIAL STRUCTURE OF INVENTION
In Bicon v. Straumann, Civ. Case No. 05-1168 (Fed. Cir. March 20, 2006), Appellant Diro, Inc. (“Diro”) and Diro’s licensee Bicon, Inc. (“Bicon”) owned U.S. Pat. No, 5,749,731 (“the ‘731’ patent”). The '731 patent is directed towards a plastic cuff that is designed to preserve a space around a dental implant so that when a dental crown is placed on top of the implant, the base of the crown can fit beneath the patient’s gum line. The preamble of claim 5 of the ‘731 patent reads as follows:

An emergence cuff member for use in preserving the interdental papilla during the procedure of placing an abutment on a root member implanted in the alveolar bone of a patient in which [a] the abutment has a frusto-spherical basal surface portion and [b] a conical surface portion having a selected height extending therefrom comprising …[e] the bore having a taper generally matching that of the conical surface portion of the abutment …(claim elements a-d and f-h omitted for simplicity).

The U.S. District Court for the District of Massachusetts granted summary judgment of noninfringement on several grounds. The court held that claim 5’s preamble was an integral part of the claim and thus limited the claim. Since Straumann’s devices did not incorporate one of the limitations in the preamble, the court held that Straumann did not infringe the ‘731 patent. The court also held that Straumann’s devices did not literally or equivalently infringe claim 5 because they did not read on claim element [e]. The court also held that licensee Bicon did not have standing to sue Straumann since Bicon was not an exclusive licensee of Diro, and thus dismissed Bicon as a party plaintiff.

On appeal, the Federal Circuit held that the preamble is regarded as limiting. Specifically, the Federal Circuit noted that a preamble is considered to be limiting if the preamble recites essential structure that is important to the invention or necessary to give meaning to the claim. In the '731 patent, the preamble of claim 5 is not limited to stating the purpose or intended use of the invention, but contains structural features of the abutment. Further, the body of the claim referred back to features of the abutment described in the preamble, so that the references to the abutment in the body of the claim derive their antecedent basis from the preamble. If claim 5 is not limited to the particular abutment described in the preamble, then elements [e] and [h] of claim 5 become meaningless. As such, the Federal Circuit upheld the District Court's summary judgment on the issue of no literal infringement.

Additionally, the Federal Circuit upheld the finding of no infringement under the doctrine of equivalents since claim 5 recites specific convex shapes not found in the accused device. Quoting SciMed Life Sys., Inc. v. Advanced Cardiovascular Sys., Inc., 242 F.3d 1337, 1346 (Fed. Cir. 2001), the Federal Circuit held that, as in claim 5, “by defining the claim in a way that clearly excluded certain subject matter, the patent implicitly disclaimed the subject matter that was excluded and thereby barred the patentee from asserting infringement under the doctrine of equivalents.” As such, the Federal Circuit also upheld the District Court's finding of no infringement under the doctrine of equivalents.

A copy of the case is available at Bicon v. Straumann, Civ. Case No. 05-1168 (Fed. Cir. 2006).

OPINION LETTER DOES NOT PROVIDE DEFENSE TO CHARGE OF WILLFUL INFRINGEMENT WHERE IMPORTANT TECHNICAL DOCUMENT IS WITHHELD FROM LEGAL COUNSEL.
In nCube Corp. v. SeaChange International, Inc., 436 F.3d 1317; 77 U.S.P.Q.2D (Fed. Cir. 2006), a panel of the Court of Appeals for the Federal Circuit affirmed the trial court’s upholding of the jury’s finding of infringement, damages and partial attorney’s fees and granting infringer’s JMOL motion on infringement under the doctrine of equivalents. J. Rader, writing the opinion for the Court, found the trial court correctly construed the claims of nCube’s patent (U.S. Patent No. 5,805,804, hereinafter referred to as the '804 patent) to encompass SeaChange’s systems used by cable TV networks.

On the issue of claim construction, the Federal Circuit upheld the District Court's interpretation. Specifically, the ‘804 patent claims a particular server for connecting a client to a multimedia experience. The server accomplishes this by using an upstream manager to send requests from the client, a downstream manager to send the requested multimedia content to the client, and a service to maintain connections across networks to accomplish the delivery of the upstream and downstream communications. According to the Federal Circuit, the District Court’s claim construction correctly did not require all communications to go through the upstream manager since the specification suggested another embodiment. The District Court was also upheld in not requiring all communications to use a logical address to route the packets of information in the communications across various non-uniform networks even though the logical address was the only embodiment in the specification since the requirement for the logical address was in the depending claims, thereby implying that the independent claim was broader. Based on evidence including one expert’s testimony, the jury found SeaChange’s systems infringed the ‘804 patent.

The jury also found willful infringement which, “hinges on when the defendants had actual knowledge of plaintiff’s patent rights, and their actions after that time.” nCube, pg. 10. The willful infringement took place after nCube filed suit giving Seachange actual knowledge of the ‘804 patent and thus