PATENT VALIDITY 101.

Subject Matter & Utility [what can be patented] Whoever invents or discovers any new and 1) useful process 2) machine, 3) manufac ture, 4) composition of matter, or 5) any new and useful improvement thereof, ma y obtain a patent therefor, subject to the conditions and requirements of this t itle Composition of Matter o Chakrabarty: invented bacteria (Test: human intervention on composition ma tter, not naturally occurring) ? Cannot patent on ? laws of nature ? physical phenomena ? abstract idea o Funk Brothers: did not invent bacterial but combined two different types ? no patent. Not man-made, could be naturally occurring ? Their ingenious discovery is merely the handiwork nature o Harvard College: genetically altered mouse ? No patent b/c the definition of invention or manufacture or composition of ma tter does not encompass higher life forms such as oncomouse o Myriad: genetic component (genome) in breast cancer ? Cannot patent genes but if you isolate the gene, you may. ? Isolating genes (slicing and dicing) ? specific gene sequence not existi ng in nature ? patentable Process (no guidance from statute, historical background) o 3 supreme court cases (1972-1980) ? Benson: no patent on mathematical formula or software ? Flook (6 years later): can patent if there is something more ? Diehr(2 years later): application of a law of nature or mathematical for mula to a known structure or process is okay o 1st Circuit case: State Stree Bank & Trust co (no longer good law): meth od must have a useful, concrete, and tangible result allowing software patent (ove rruled by Bilski) o Bilski: cannot be patentable process ? abstract idea ? Machine or Transformation Test (useful but not exclusive) ? Tied to a particular machine or apparatus; or ? Transforms a particular article into a different state or thing ? Held: machine or transformation test is not the sole test for deciding t he patentability on process ? machine or transformation test may not encompass the patentability of sof tware, advanced diagnostic medicine techniques, and inventions based on linear p rogramming, data compression.. o Mayo: no patent on the diagnostic kit that embody the medical process ? process did not pass the transformation test because the steps are not sufficien t to transform unpatentable natural correlations into patentable application of those regularities. Utility Operability o In Re Swartz: substantial evidence that PHOSITA would reasonably doubt t he asserted utility and operability of cold fusion Beneficial Utility o Cannot be injurious to the well-being, good policy, or sound morals of s ociety Substantial Utility (=practical utility/real world utility) o TEST: Present and available benefit to the public o Brenner v. Manson (Steroid chemical compound produced by process): unles s and until a process is refined and developed to this point where specific bene fit exists in currently available form there is insufficient justification for p atent ? A patent is not a hunting license. A patent is not a reward for the sea

rch, but compensation for its successful conclusion ? if you have hunting licens e, everyone will stop hunting Specific Utility o TEST: Cannot be so vague as to be meaningless ? Must give a well-defined and particular benefit to the public o In Re Fisher (Molecular genetics and ESTs): the application does not ide ntify the function for the underlying protein-encoding genes. Without such ident ification ? no immediate, well-defined, real-world benefit to eh public meriting the grant of patent 102. Novelty (102(a), (e), (g)) NOVELTY: o General: have to prove anticipation to defeat novelty ? All-limitation Test: to anticipate, the prior art must meet every limita tion of the claimed invention, either explicitly or inherently ? Inherent Doctrine: Atlas Powder Company prior arts inherently anticipate d because the limitation was necessarily present in or inevitably flows from the reference ? Four corners of doctrine: to anticipate, all of the claimed elements mus t appear in a single prior art reference ? Enablement doctrine: to anticipate, the prior art must enable one of ord inary skill to make and use the invention o Prior Art: 102(a) known or used by others in this country or patented or described in a printed publication before the invention date o Post AIA: the claimed invention was patented, described in a printed pub lication or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention. ? Known or Used by Others in this Country: ? Known by others: Gayler (fire-proof safe): No anticipation as prior art that was lost/abandoned Natial Truck Pullers requires public knowledge (fact that invention may have bee n thought up by a few individuals years ago on a lost tablecloth does not antici pate) ? Used by others [PUBLIC USE]: Rosaire (methods of prospecting for oil) Us e if public and anticipates, if done openly in the ordinary course of business No efforts to conceal or exclude public No attempt to keep secret Low threshold ? Printed Publication ANYWHERE ? Determined based on: Dissemination Public Accessibility ? Factors [In Re Klopfenstein: slides presentation printed and posted at c onference for three days, yes publication] The length of time the display was exhibited The expertise of the target audience, the existence of Reasonable expectations that the material displayed would not be copied Simplicity or ease with which the material displayed could have been copied Organized, searchable, accessible? o Secret Prior Art 102(e) - No patent if the invention was described [but not claimed] in: ? (1) an application of patent by another [eventually published] filed in the US before your invention or ? (2) a patent granted on an application for patent by another filed in th e US before the date of invention ? Codifies Milburn (Clifford and Whiteford s same patent) A disclosure in a subsequently issued patent or published relates back to the original date of appli cation ? Foreign filing date counts if it later was filed in the US within one ye ar (relates back to the foreign filing date?)

PRIORITY 102(g) No patent if, another inventor established that o 1) in an interference proceeding: o 2) before such person s invention, the invention was made by in this count ry by another inventor who had not abandoned, suppressed, or concealed it. ? In determining priority you must consider ? Conception Definite idea of a complete and operative invention PHOSITA could reduce to practice without excessive experimentation ? Reduction to practice Actual: building a model Constructive: filing an enabling patent application ? TEST: The first inventor to reduce to practice has priority unless anoth er inventor can prove ? First Conception ? Reasonable diligence from before first inventor s conception date ? Valid diligence (delay between conception and reduction) ? Need to develop closely related invention to test primary invention ? Serious illness ? Lab burns down STATUTORY BAR [Counts as PRIOR ART if Done by others Before the Critical Date year prior to filing. But if done by you, you are creating your own novelty AND statutory bar] o Policy Reasoning: Prevent Extension of Monopoly & Public Reliance o ON-SALE BAR ? Two Conditions must be satisfied: ? 1) Commercial Offer for sale ? Product must be the subject of a commercial offer for sale Pluntree soft ware v. Datamize Experimental Use Exception ? Requires consideration ? 2) B/f critical date, Ready for Patenting ? Reduction to Practice ? Enablement ? Pfaff v. Wells Electronics: socket was offered for sale more than 1 year before the patent application ? was able to produce when he accepted the purcha se order. Had detailed drawings and specifications, contained all the elements o f the invention claimed in the patent ? Space Systems [prolonging life of a satellite]: a bare conception that h as not been enabled not ready for patenting ? Pluntree software v. Datamize [method patent] has not performed all of t he patented steps before the critical date o PUBLIC USE RULE: Private uses of an invention by the inventor or Confidential-based uses ar e excluded from the purview of 102(b) ? Used and shown by others: Giving invention to another without limitation or restriction is public use Egbert: one person other than the inventor saw it. Has worn in public without li mitation or restriction for more than 11 years ? barred ? Non-disclosure Agreement ? not publicly used; ? Must be used for its intended purpose - Motionless Keyboards ? Commercial Exploitation of a secret method can constitute public use Met allizing ? MORE Control ? private; ? Moleculon research v. CBS: inventor lets friend play wit the model witho ut losing control over it. So even though showed to other people, never got out of private use. ? EXCEPTION: Experimental Use (CONTROL is Significant) ? Applicable only btw conception and reduction to practice ? Factors to Consider: The necessity for public testing

The amount of control over it Nature of the invention Length of the test period Whether payment was made Secrecy obligation Record on experiment was kept Who conducted experiment Degree of commercial exploitation during the test Testing was systematically performed Constant monitoring ? City of Elizabeth (on-going experimentation) Not for profit, control, good faith effort to reduce invention to practice Invention cannot be easily tested in private, due diligence, constant visiting o f the cite ? EMD v. Trans: no experimental use because they had no more control and d id not test it. ? Lisle Corp. v. AJ Mftg: more control making it look like an experiment u se (customers aware that it was experimental, getting feedback, running back and forth, meetings) 103. Non-obviousness TMS Test: required that a patent examiner or accused infringer must show that a teaching or motivation to combine references existed at the time of invention Graham Test o 1) Scope and Content of prior art o 2) Difference between prior art and claimed invention o 3) Define the Level of PHOSITA ? Educational level of the inventor ? Type of problems encountered in the prior art ? Rapidity with which innovations are made ? Sophistication of the technology o 4) Obviousness to PHOSITA ? Is this the only way to fix it? Other alternatives? ? Predictable Result vs. Unexpected result ? Adams (battery) Not obvious b/c result was wholly unexpected and overcam e teaching-away Case Studies for Predictable Result Test: KSR (Electronic Sensor on the pedal) overruled TMS test o TMS (Teaching Motivation and Suggestion Test) is too rigid o Test should be more flexible o Predictable results are obvious (known elements?) o PHOSITA is creative and able to combine insights from other fields Perfect Web Technologies: As in KSR, obviousness can be measured in various sour ces of information such as design incentives, the interrelated teachings of mult iple patents, any need or problems known in the filed, the background knowledge, creativity, common sense (expanded the sources) Teva Pharm: Would PHOSITA have a reason to modify? No. AND have a reasonable exp ectation of success (predictabitliy)? No ? not obvious Analogous Prior Art TEST: Obvious to combine known prior arts? o Same field of prior art? o Same problem to resolve? o In re Icon Health and Fitness (folding treadmill from folding bed): NOT the same field BUT, similar purpose o In re Clay: Same field (oil refining vs oil extracting) ? no. Same probl em? ? no. Held: different field and fundamentally different problem are not anal ogous arts. Secondary Considerations o Teaching away ? unpredictable result o Commercial Success: must be a nexus btw this and technical merits of the claimed invention o Long-felt need

o o o

Failure of others Copying by others Ex. Iron Grip Barbell Company

112. Adequately disclosed and claimed The specification shall contain a written description of the invention, and the m anner and process of making it, so as to enable any person skilled in the art to make and use the same [enablement], and shall set forth the best mode contempla ted by the inventor for carrying out the invention. The specification shall incl ude one or more claims particularly pointing out and distinctly claiming [defini teness] the subject matter. Enablement: Enablement requirement is satisfied when one skilled in the art, aft er reading the specification, could practice the claimed invention without undue experimentation. TEST: the specification shall describe the manner and process of making and using the invention, in such full, clear, concise, and exact terms as to enable any p erson skilled in the art to which it pertains, or with which it is most nearly c onnected, to make and use the invention. (BMW) o Claim scope: Disclosure must be commensurate with the scope of claims ? O Rilley v. Morse: not patent for claiming too broadly ? cannot claim more than you discovered ? Incandescent Lamp: carbonized fibrous material ? two broad (cannot claim t he entire kingdom when there are 6000 carbonized and fibrous material and experi mented only a few) o Undue Experimentation ? Factors to consider Quantity of experimentation necessary Amount of direction or guidance presented Presence of absence of working examples Nature of the invention State of the prior art Relative skill of the art Predictability or unpredictability of the art Breadth of the claims (Edison Incandescent) ? Cedarapids, inc. v. Nordberg, Inc. (rock crusher increasing efficiency b y adjusting speed and throw ? does not entail undue experimentation by PHOSITA) Predictability: degree of details of the specification o Predictable (machinery, electrical element) requires less o Unpredictable (chemistry or genetics) requires more specific and details ? BMW (sensors using both mechanical and electronic switch): electronic sw itch was not enabled ? specification fails to provide reasonable detail sufficient to enable for a PHOSITA to use make and use that invention Written Description o TEST: Must show possession by sufficiently disclosing as to satisfy the inventor s obligation to disclose the technological knowledge upon which the paten t is based, and to demonstrate that the patentee was in possession of the invent ion claimed o Gentry Gallery Case(sectional sofa): Inventor must show possession of the invention in specification. Cannot claim thins the written description does not prove to a PHOSITA You have claimed more broadly than the spec. No. o Eli Lilly (cDNA drug): rejected as general method not enough to show posse ssion of the invention, fails written description. Definiteness particularly point out and distinctly claim the subject matter o Indefinite: not amenable to construction or insolubly ambiguous ? TEST: Would PHOSITA understand what was claimed and determine what the l imits are? ? Reynolds Tobacco (anaerobic condition indefinite? Yes to PHOSITA. Whethe r the claim delineates to a skilled artisan the bounds of the invention is the k

ey) o Requires some OBJECTIVE Standards/elements ? Datamize ? aesthetically pleasing, too subjective ? Orthokinetics ? automobile comes in different sizes; rmissible.

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Patent Litigation Two Phases: 1. Claim construction 2. Infringement Analysis Rules of Claim Construction Philips Case: Claims to be construed contextually, in light of both intrinsic an d extrinsic evidence not simple dictionary literalism o Intrinsic Evidence ? Claims ? Specification ? Prosecution History o Extrinsic ? Dictionary, experts, treatises etc. Dictionaries often give different meaning from PHOSITA o Since Philips, dictionaries are hardly used and reversal rate decreased Cybor (before Philips) claim interpretation reviewed de novo on appeal o Makes sense it s a matter of law but arguably there are underlying factual elements o High reversal rate of Federal Circuit Canons of Claim interpretation o Patentee can be own lexicographer o Should not read limitations into the claims from the specification o Narrow construction if need to save validity o Patentee cannot recapture territory they have disclaimed o Claim differentiation ? give different scope in every claim o Purpose of patent Juries decided ? question for the judge for the court ? The Phillips Court echoe d in Vitronics court: generally improper to rely on extrinsic evidence in determ ining the legally operative meaning of claim language ? Cybor (de novo review) ? Reversal rate 34.5% ? Phillips v. AWH: court of appeals Federal Circuit (no dic tionary INFRINGEMENT 1) Direct Infringement: Section 271(a) Whoever without authority, makes, use s, offers to sell, sells, any patent invention [within the US] infringes the pate nt. a. TEST: Accused invention contains all the limitations of the claims or th eir equivalents i. Literal infringement: 1. The absence of even one element of a patent s claim from the accused produ ct is not a literal infringement Lamari v. Amron (water gun toy) ii. Non-literal infringement (DOE): any equivalent element? 1. Doctrine of Equivalent: Warner-Jenkinson a. Whether an ingredient is a equivalent depends on: purpose, function, qua lities in combination (Graver Tank) b. Test of Equivalent i. Same function, way, and result Or ii. Insubstantial differences c. Limitations i. Matter disclosed but not claimed ii. Matter within the prior art iii. Matter you gave up in Prosecution 2. Warner-Jenkins held: 1) must look at every limitation ? every single limitation must be either litera

lly infringed or infringed by equivalence 2) no proof of intent or knowledge required by DoE 3) Doe evaluated at time of infringement 4) Test is either triple identity test or insubstantial differences test 3. Prosecution History Estoppel: cannot reclaim material you gave up via na rrowing amendments in prosecution a. Applies to any narrowing amendment made to satisfy any requirement of the Patent Act (Festo) b. When PHE applies, Exception (cannot bar) i. Unforeseeability: equivalents were unforeseeable at time of application ii. Rationale of amendment bares only tangential relation to equivalent iii. Some other reason patentee could not reasonably have been expected to dr aft claim including equivalent 4. Festo (2002) Held: 1) when claims narrowed, does not necessarily give up ALL equivalents ? while a narrowing amendment is presumed to surrender all equivalents to the narrowed ele ment, the patentee can overcome this presumption by showing that the amendment d oes not surrender the particular equivalent in question ? Estoppel is not a comp lete bar ? unforeseeability 2) Indirect Infringement a. Contributory 271(c) (cannot get the infringer outside the US) i. Requirements: 1. Someone directly infringes 2. D offered to sell a component that is a material part of the invention 3. D knew that the combination of its components is patented and infringed 4. No substantial non-infringing uses ii. Lucent v. Gateway: MS included a date-clicker and contributed to this in fringement because they were teaching us how to use it. b. Inducement 271(b) (can get the infringer outside the US) i. Willful Blindness 1. D must subjectively believe that there is a high probability that a fact exists and a. Requires knowledge 2. D must take deliberate actions to avoid learning of that fact 3) Geography of Infringement a. Divided Infringement under 271(a): Defining WITHIN THE US i. NTP v. RIM: Geographical Test for infringement interprets used in the US a s where control and beneficial use of the infringing system is located in the US . 1. Method Claims: ALL steps must be performed in the US to infringe. b. Foreign Activity 271(f) & (g) i. 271(f) liable if supplies or causes to be supplied in or from the US (Ex port) 1. all or substantial portion of components of an invention in such a manne r to actively induce infringement; OR 2. any component of a patented invention that is made especially to infring e ii. 271(g) Whoever without authority imports into the US or offers to sell, sells or uses within the US (import): 1. Cannot import a product which is made by a process patented in the US 2. UNLESS the product is a. Materially changed by subsequent processes OR b. It becomes a trivial and nonessential component of another product c. Case Under 271(f) - MS v. AT&T allowing downloads does not suffice to se nding a component; made distinction btw software in the abstract (idea, code) and t angible copy (disk) d. Case Under 271(g) Eli Lilly no infringement due to 1) substantial materi al change of the product through additional steps 4) DEFENSES

a. i. b. c. i. ii. d. i. ii. e. f. g. h.

Invalidity Burden on the alleged infringer by clear and convincing evidence Equitable Defense Experimental USE Common Law 271(e) Authority Issues Exhaustion/first sale Implied license Prior User Rights (business method rule) Medical Activities Statute of Soveirgn immunity Statute of Limitation (6years)

1) Inequitable Conduct [Therasense Examples] a. Duty of Candor: PTO Rule 56 duty to disclose all information material to patentability b. Requires proof of following: i. Intent 1. Intent to deceive a. Has to be more than gross negligence b. Subjective 2. No Sliding Scale a. High materiality cannot substitute intent 3. Circumstantial Evidence is OK 4. Patentee need not offer any good faith explanation for ii. Materiality 1. but-for test: Preponderance of Evidence 2. Proving Invalidity of Patent can automatically prove materiality (Validi ty standard higher) 2) Experimental USE a. Common law Defense: experimental use only if solely for amusement, to sat isfy idle curiosity, or for strictly philosophical inquiry (Madey v. Duke) ? very narrow i. Slightly Commercial Use will defeat the defense b. Statutory 271(e) Exemption covers only reasonably related to development and submission of information to a federal regulatory body such as (FDA Merck v . Integra) ? much broadened the app. i. Merck: covers experiments even when there ends up being no FDA submissio n, so long as reasonably related to the development of submission information. 3) Misuse for Equitable Defense a. Prevent patentee from extending the monopoly of the patent when the pate ntee engages in anticompetitive conduct i. Morton Saul Co. no patent immunity for a monopoly not within the grant. Prosecution of infringement may not be performed due to the patentee s engagement with unlawful act (foreclosing competition in salt tablets, unpatented article) b. 271(d)(5) requires a finding of Market Power in the field of invention i. Philips Corp: (patent-to-patent tying is OK. But patent-to-product tying is not ok. Some pro-competitive effects exist) c. Repair/Reconstruction Doctrine i. Repair is OK but reconstruction is NOT OK 4) Exhaustion a. Patentee s rights are exhausted after the first valid sale of a patented o bject; cannot condition sales (Quanta) i. Quanta: the authorized sale of an article that substantially embodies a patent exhausts the patent holder s rights and prevents the patent holder from inv oking patent law to control post-sale use of the article. ii. Held: 1) method claims ARE subject to exhaustion 2) Embodiments substant ially containing claimed technology exhausts a patent 3) sales were authorized u nder the licensing agreement

iii. ** Suggests that effective restrictions/notice in LICENSE AGREEMENT MAY BIND DOWNSTREAM USERS. b. Rationale: free alienability, transaction costs, liberty interests i. BUT, Contracts restricting uses are OK AND CONDITIONAL Sales are OK ii. Mallinckrodt Single Use Only condition is enforceable because restriction on reuse was WITHIN THE SCOPE OF THE PATENT GRANT ? So, violation can be remedie d by action for patent infringement DAMAGES 1) Monetary Damages a. Lost Profit (Actual damages) i. TEST: Panduit 4-factor Test ( But-for Approach) 1. Demand for patented product 2. Absence of non-infringing substitutes (divide market share if there was sub.) 3. Manufacturing and Marketing capability 4. Amount of profits that would have been made (acct evidence) Ex. Rite-Hite: can get lost profits for all foreseeable lost sales, even if noni nfringing ii. The Entire Market Value Rule: if the patented feature is the basis of co nsumer demand, then lost profits are calculated based on the value of the sales of the entire apparatus. b. Reasonable Royalty (if cannot prove lost profits) i. Based on hypothetical negotiation at the date of infringement ii. Panduit suggests that the royalty should be extra-compensatory iii. Lucent vs. MS 1. Needs to assume the patent is valid and infringed 2. Number of factors: industry norms, licensee fee 2) Injunction a. Historical Presumption: injunctions used to be a typical remedy in paten t law and presumed injunctions absent special circumstances (changed in eBay) b. Types i. Preliminary 1. 4 Factors a. Reasonable likelihood of success i. D can say: substantial merit that the patent is invalid ii. Meritable claim that the patent is invalid or meritable claim that they did not infringe (Amazon.com) 1. Invalidity under 102, 101, 112 a. Easier to prove than not infringed b. Irreparable harm i. Presume likely infringement would cause irreparable harm c. Balance of Hardship i. who s going to be hurt more d. Impact on public interest ii. Permanent (eBay) 1. 4 Factors a. Irreparable harm b. No adequate remedy at law c. Balance of hardships d. Impact on public interest 2. eBay : The Sup. Court. Held that the decision whether to grant or deny in junctive relief rests within the equitable discretion of the district courts, an d that such discretion must be exercised consistent with traditional principles of equity 3. Robert s Concurrence: a. history and purposes of patent law should be considered in exercising eq uitable discretion b. The long tradition of equity practice is not surprising, given the diffi culty of protecting a right to exclude through monetary remedies that allow an i

nfringer to use an invention against the patentee s wishes. ? satisfying the first two factors of the four requirements 4. eBay Kennedy Concurrence: a. Change in law to STOP PATENT TROLLS i. Trolls don t produce under patent, just use it as means of getting royalti es ii. Concern about hold up problems and exploitation, where troll can extract l arge fee because of unsuspecting reliance, iii. When the patent is a small component of the product the companies seek t o produce and the threat of an injunction is employed simply for undue leverage in negotiations, legal damages will be huge and an injunction may not serve the public interest. iv. Injunctive relief may have different consequences for the burgeoning num ber of patents over business methods, which were not of much economic and legal significance in earlier times. b. Considered particular problem in IT c. CISRO Permanent Injunction Practice i. Irreparable Harm: could establish by showing that an existing infringeme nt precludes his ability to license his patent ? potential that other licensees will stop taking a license a. Counter: Buffalo argues that since they are not competitors, no irrepara ble harm b. Counter: Or lack of commercial activity in practicing patent ? shows tha t there will be no irreparable harm 2. CISRO has shown that its harm is not merely financial ? though they don t compete without each other for marketshare, CSIRO does compete internationally w ith other research group ? harm in their reputation. 3. Needs royalties to fund their research ? irreparable harm ii. Adequacy ? Monetary compensation is not adequate for the damage because the damage is not only financial 1. Buffalo s infringement relates to the essence of the technology and is not a small component of Buffalo s infringing products ? monetary damages are less ad equate for the future Buffalo s infringement iii. Balance of hardship ? since wireless products make up only 11 % of Buffa lo s technology s business, Buffalo s hardship if it is precluded from making future w ireless sales in the US is far from catastrophic 1. And no considerable hardship will be imposed on distributors and reselle rs by an injunction against Buffalo because they may continue to sell non-infrin ging Buffalo products and other competing WLAN products 2. The harm to Buffalo is merely monetary while the harm to CSIRO, if no in junction issues has far reaching effects as a research and development instituti on. iv. Public interests 1. Public has an interest in a strong patent system ? public policy favors the enforcement of patent rights ? interest in protecting the rights of patent h olders ? permanent injunction serve that interest (property right) 2. Health and Safety concerns ? has a contrary interest (for public welfare and health) 3. Public interest is advanced by encouraging investment by research organi zations into future technologies and serves to promote the progress of science a nd the useful arts.