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Fish Federal Circuit Summary Service: Issue # 299

May 17, 2007

Newsletters

Fish Federal Circuit Summary Service: Issue # 299

May 17, 2007

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For Reduction to Practice In Interference, Inventor Only Needs to Recognize Subject Matter of Invention Rather Than Exact Language of Count
Henkel Corp. v Procter & Gamble Co.
Date: May 11, 2007
Panel: Gajarsa, Linn, Moore
Author: Linn
District court: BPAI
Trial judge:
Summary: Fed Cir vacates and remand BPAI’s award of priority in interference proceeding to P&G. The interference relates to two-region detergent tablets in which one region dissolves faster than the other region, with the interference count covering a “dissolution rate to be calculated on a weight-by-weight basis.” The Fed Cir ruled that the BPAI improperly required proof that the inventors had specifically measured the rate of dissolution in order to show reduction to practice, even though the count does not require a specific range of dissolution rate. “As a matter of law, we do not require that a junior party in an interference demonstrate that it recognized the exact language of the ultimate count-only the subject matter of the invention. This is not a case in which there is a significant danger that the inventors unwittingly and accidentally created something new; rather, they set out to design detergent tablets with a particular structure and did so, and the only question is whether they appreciated that the tablets met one limitation of the interference count. ” Slip op. at 9.

KEY WORDS: INTERFERENCE, PRIORITY, REDUCTION TO PRACTICE, RECOGNITION

State Court Judgment re Ownership of Patent Not Subject to Collateral Attack in Federal Court; Coined Term Defined Based on Specification
MyMail, Ltd. v. Am. Online, Inc.
Date: Feb. 20, 2007
Panel: Newman, Schall, Bryson
Author: Bryson
District court: E.D. Tex.
Trial judge: Davis
Summary: Fed Cir affirms summary judgment of noninfringement and determination that patentee had standing to sue. The patent relates to a method of providing network customers with access to a network, like the internet, when they are away from their normal base of operations. Standing: MyMail obtained ownership in the patent through an assignment from an individual who purchased it through a state court foreclosure action on a promissory note secured by the patent application. The cross-appeal of no standing was improper, because the Texas state court judgment regarding title to the patent was open to challenge only in limited circumstances under state law and the defendants have not attempted to nullify the state court judgment under applicable state law. The Fed Cir further held that allegations of fraud relating to patent ownership does not open a state court judgment to collateral attack: “Fraud in the procurement [of a patent] bears on the enforceability of the patent and thus implicates the public’s interest in ensuring that the grant of patent rights is legitimate. Asserting that a third party owns a particular patent, however, is a different matter. In that case, the enforceability of the patent is not challenged; the only question is one of ownership. State law, not federal law, addresses such property ownership disputes.” Slip op. at 6. Noninfringement: The district court granted summary judgment based on a construction of the patent which required a “NSP” to perform authentication. Because “[b]oth parties agree that the term NSP is a coined term, without a meaning apart from the patent …. [w]e therefore look to the specification to determine what the NSP must do when establishing that communication link.” Slip op. at 6. Based on its analysis of the specification, the Fed Cir agreed with the district court’s construction. The Fed Cir further ruled that (i) a feature relied upon by MyMail for its construction was an additional functionality in an unclaimed invention and was thus irrelevant to the issue at bar; and (ii) MyMail’s counsel had conceded at a hearing before the district court that the NSP should perform the authentication function and MyMail is bound by this admission. Applying the claim construction to the undisputed facts, the Fed Cir concluded that summary judgment was proper.

KEY WORDS: STANDING, STATE LAW, OWNERSHIP, SUMMARY JUDGMENT, NONINFRINGEMENT, COINED TERM, CLAIM CONSTRUCTION (NARROW), ADMISSION

Party Which Contract To Enforce Patent Without Additional “Substantial Rights” In Patent Lacks Standing To Sue As Plaintiff or Co-Plaintiff
Propat Int’l Corp. v. Fink
Date: Jan. 4, 2007
Panel: Newman, Mayer, Bryson
Author: Bryson
District court: C.D. Cal.
Trial judge: Selna
Summary: Fed Cir affirms dismissal of action without prejudice for lack of jurisdiction based on Propat’s lack of standing to sue, and affirms order denying RPost’s request for fees and costs. Standing: Propat entered into an agreement with patent owner Authentix in which Propat bears the responsibility to license the patent, enforce any license, and sue third-parties after consultation with Authentix. Distinguishing cases like Vaupel and Speedplay, the Fed Cir ruled that Authentix retained sufficient rights in the patent so that Propat did not have “all substantial rights” in the patent, because Authentix (i) remained responsible for maintaining the patent; (ii) Authentix retained an equity interest in the proceeds from licensing and litigation of the patent; (iii) had veto power over who Propat could sue and over Propat’s ability to transfer its interest to a third party; and (iv) could terminate the agreement if Propat failed to meet certain specified benchmarks in its efforts to exploit the patent. Because “Propat lacks important indicia of a true ownership interest in the patent, such as the right to transfer its interest,” it does not have standing to sue as a co-plaintiff even if Authentix were joined as a party. Fees and costs: Applying regional circuit law, the Fed Cir found no abuse of discretion in the determination that (i) failure to name Authentix as a plaintiff did not render case “exceptional,” and (ii) while the attorneys on both sides “fell far short of a model prosecution and defense of a patent action, and an assessment that they met the minimum expectations would be a generous one,” Propat did not engage in vexatious litigation.

KEY WORDS: STANDING, OWNERSHIP, SUBSTANTIAL RIGHTS IN PATENT, ATTORNEYS FEES, COSTS

Post-KSR Loosening of Obviousness Requirement; Inventor’s Low Level of Skill Can Strengthen Obviousness Conclusion
Leapfrog Enters., Inc. v Fisher-Price, Inc.
Date: May 9, 2007
Panel: Mayer, Lourie, Dyk
Author: Lourie
District court: D. Del.
Trial judge: Sleet
Summary: Fed Cir affirms judgment of noninfringement and invalidity based on obviousness. The patent-in-suit relates to a learning device to help young children read phonetically. Noninfringement: Instead of challenging the claim construction, Leapfrog disputed the application of the construction to the facts. The Fed Cir found no clear error in the district court’s “application of the claim to the essentially undisputed facts of this case.” Obviousness: As to invalidity, Leapfrog primarily challenged the lack of a motivation to combine. Applying KSR, the Fed Cir reasoned that “[a]n obviousness determination is not the result of a rigid formula disassociated from the consideration of the facts of a case. Indeed, the common sense of those skilled in the art demonstrates why some combinations would have been obvious where others would not.” Slip op. at 7. Focusing on the goal of the disputed claim, the court further noted: “Accommodating a prior art mechanical device that accomplishes that goal to modern electronics would have been reasonably obvious to one of ordinary skill in designing children’s learning devices. Applying modern electronics to older mechanical devices has been commonplace in recent years.” Id. Based on this reasoning, the Fed Cir found that a skilled artisan would have found the disputed claim obvious based on three separate items of prior art, because (i) the first prior art item, which used an electric motor and mechanical structures rather than the claimed processor and electronics, “has the same method of operation, viewed as a whole,” as the disputed claim; (ii) the second prior art item, which contains electronics components, but has slightly different mode of operation than the first item, “provides a roadmap for one of ordinary skill in the art desiring to produce” the claimed invention; and (iii) the missing “reader” limitation was “well-known in the art at the time of the invention” and a skilled artisan would add a reader to the combination of the first two prior art items where doing so provided the same benefit and simplified use as other toys with a reader. Id. at 8-10. The Fed Cir also noted that its “conclusion is further reinforced by testimony from the sole inventor at trial that he did not have a technical background, could not have actually built the prototype himself, and relied on the assistance of an electrical engineer and Sandia National Laboratory to build a prototype of his invention.” Id. at 10. Finally, the Fed Cir ruled that, “given the strength of the prima facie obviousness showing, the evidence on secondary considerations was inadequate to overcome a final conclusion that claim 25 would have been obvious.” Id. at 10-11.

KEY WORDS: NONINFRINGEMENT, CLEAR ERROR STANDARD OF REVIEW, OBVIOUSNESS, MOTIVATION TO COMBINE (MAYBE), LEVEL OF SKILL OF THE INVENTOR, SECONDARY CONSIDERATION

Deliberate Choice to Forgo Earlier Priority Date Is Not An “Error” Correctable Through The Reissue Process
In re Serenkin
Date: March 6, 2007
Panel: Lourie, Schall, Gajarsa
Author: Lourie
District court: BPAI
Trial judge:
Summary: Fed Cir affirms BPAI’s determination that 35 USC 251 does not allow correction of a deliberate choice through the reissue application. Serenkin filed a non-provisional application without drawings less than a year after he filed his provisional application. When Serenkin tried to add his drawings after the one-year deadline, the PTO refused to accept the drawings unless the applicant agreed to forgo the priority date of the provisional application. Although Serenkin agreed to that condition, he subsequently sought reissue of his patent to claim priority to his provisional application. Interpreting a number of CCPA cases, the Fed Cir held that an applicant’s deliberate choice is not an “error” contemplated by section 251: “Our case law holds that the deliberate action of an inventor or attorney during prosecution generally fails to qualify as a correctable error under § 251.” Id. at 7. While a “reissue could be used to perfect a claim for priority” not made due to “inadvertence, accident, or mistake, which clearly are appropriate bases for reissue,” this case does not involve this type of error because Serenkin’s “attorney made a deliberate decision to forgo any right to a priority claim in exchange for the benefit of including newly submitted drawings or other material in his application.” Id. at 9-10.

KEY WORDS: REISSUE, ERROR, PRIORITY DATE

Any Foreign or Domestic Entity May Oppose A Trademark Registration; Waiver of Issue Not Binding Where Court’s Decision Would Become Advisory Opinion
First Niagara Insurance Brokers, Inc. v. First Niagara Fin. Group, Inc.
Date: Jan. 9, 2007
Panel: Rader, Clevenger, Prost
Author: Lourie
District court: TTAB
Trial judge:
Summary: Fed Cir reverses and remands TTAB’s rejection of Canadian insurance brokerage company’s registration opposition. The TTAB rejected the opposition because the foreign company’s activities with any connection to the U.S. was de minimis and not of “a type of commerce regulable by Congress.” Interpreting section 2(d) of the Lanham Act, the Fed Cir held that the right to oppose a trademark registration “attaches to all opposers, regardless of whether they are foreign or domestic. Thus, a foreign opposer can present its opposition on the merits by showing only use of its mark in the United States.” Slip op. at 6. The court further excused the Canadian company’s admitted waiver of the issue raised on appeal, because the waiver would require the Fed Cir to apply a hypothetical reading of section 2(d) and to reach a decision which “would arguably constitute an impermissible advisory opinion given the possibility that FN-Canada may eventually seek, in separate proceedings, to prove that its marks are used ‘in commerce’ in order to obtain its own registration with the USPTO.”

KEY WORDS: LANHAM ACT, TRADEMARK, REGISTRATION OPPOSITION, ADVISORY OPINION

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