IP Law Bulletin

The Federal Circuit in In re Baxter International upheld a reexamination decision by the Board of Patent Appeals and Interferences that conflicted with the Federal Circuit’s prior determination of validity of certain claims.  The Federal Circuit’s original decision was rendered on appeal from a request by Fresenius, a competitor of Baxter, to declare Baxter’s patent invalid.  Fresenius originally lost on certain claims in both the District Court and the Federal Circuit for failing to prove the patent’s invalidity by clear and convincing evidence.

In the wake of the Supreme Court’s recent decision in Prometheus v. Mayo, the Federal Circuit held in CLS Bank v. Alice Corp. in a 2-1 decision that it must be “manifestly evident” that a claim is directed to an abstract idea for the claim to be invalid for that reason under 35 U.S.C. § 101.  The court held that the single most reasonable conclusion must be that the “claim is directed to nothing more than a fundamental truth or disembodied concept, with no limitations in the claim attaching that idea to a specific application” for the claim to be invalid for claiming an abstract idea.  The court cautioned against “paraphrasing a claim in overly simplistic generalities” and emphasized that “[p]atent eligibility must be evaluated based on what the claims recite, not merely on the ideas upon which they are premised.”  The majority also noted that sections 102, 103, and 112 of 35 U.S.C. are equally as important as § 101, and that a district court is free to address invalidity issues in whatever order it chooses.

In a victory for patent applicants and owners, a recent decision by the Federal Circuit re-emphasized the importance of the Graham factors to avoid the ever-present risk of using hindsight when making an obviousness determination, and questioned the all-too-familiar reliance on “common sense” to make obviousness arguments. In Mintz v. Dietz & Watson, Inc., the court vacated a previous summary judgment ruling of obviousness against the patentee of a patent directed to a casing structure for encasing meat products. In the decision, the court repeatedly warned against “the forbidden use of hindsight” and the “prohibited reliance on hindsight,” as well as the need for “a court to walk a tightrope blindfolded (to avoid hindsight).” As discussed below, patent applicants and plaintiffs will likely find the court’s warnings useful in support of arguments against obviousness.

The World Intellectual Property Organization (WIPO) recently introduced the Global Brand Database, a new search tool for internationally protected trademarks, appellations of origin and armorial bearings, flags and other state emblems, and the names, abbreviations and emblems of intergovernmental organizations. The tool allows free of charge, simultaneous brand-related searches across multiple collections.

About five years ago, the Federal Circuit in In re Seagate Technology set-out a two-prong test for proving a patent was willfully infringed: (1) patentee must show by clear-and-convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent; and (2) patentee must also demonstrate that this objectively-defined risk was either known or so obvious that it should have been known to the accused infringer. In a recent decision Bard Peripheral v. W.L. Gore, the Federal Circuit provided further insight to this test by holding that the first prong, i.e., whether a defendant’s actions were objectively reckless, is a question of law to be determined by the judge. While the second prong and the ultimate determination of willful infringement remains a question for the jury to decide, it is anticipated that when a judge finds a defendant acted in an objectively reckless manner, a jury will find in favor of the second prong, and thus in favor of willful infringement. However, by putting the first question in the hands of the judge, it is also anticipated that there will be fewer findings of objective recklessness because many consider it more difficult to convince a judge than a jury that a defendant’s actions were objectively reckless. Of note to litigators is that the objective reckless determination is now subject to de novo review, i.e., without deference to the lower court’s decision, because the determination is a question of law.

On May 16, 2012, the United States Patent and Trademark Office (PTO) launched a new “Quick Path Information Disclosure Statement (QPIDS)” pilot program.  The program is intended to reduce application pendency and applicant costs when it becomes necessary to submit an information disclosure statement (IDS) after the issue fee is paid for a patent application.

On July 2, 2012, the PTO announced plans to open regional PTO offices in Denver, Colorado, Dallas, Texas, and San Jose, California. These three offices, along with the regional office that just opened this past week in Detroit, Michigan, will be used to work with entrepreneurs to process patent applications, reduce the backlog of unexamined patents and appeals of examiner rejections, and speed up the overall patent application process. The PTO plans to establish a timeline for opening the newly announced offices in the coming months. The PTO is also currently working on establishing a model for how the regional offices will be set-up and operate in conjunction with the main office in Alexandria, Virginia. This model will likely evolve based on lessons learned from the new Detroit office. We note that the Boston Patent Law Association (BPLA) spearheaded an effort to bring one of the regional offices to the New England region. While we are disappointed that the exceptional bid prepared by the BPLA was unsuccessful, the new offices will certainly help our clients even if they do not have offices in Detroit, Denver, Dallas, or San Jose as these regional offices continue to support the PTO’s efforts to expedite patent prosecution. Stay tuned to future updates from Nutter about the set-up and operation of the regional offices.

On July 5, 2012, the United States Patent and Trademark Office issued a memorandum to all patent examiners providing guidelines for examining process claims for patent eligibility in view of the Supreme Court decision Mayo v. Prometheus. Entitled “2012 Interim Procedure for Subject Matter Eligibility Analysis of Process Claims Involving Laws of Nature,” the much-anticipated guidance is intended to apply to process claims focused on a law of nature, natural phenomenon, or naturally occurring relation or correlation (“natural principle”). Although it is expected this guidance will predominantly impact claims examined in Technology Center 1600 (Biotechnology), the guidelines will be applicable to any process claim that refers to a natural principle. Process claims directed to abstract ideas, such as the claims in Bilski will continue to be examined using the previously issued guidance for determining subject matter eligibility under Bilski v. Kappos.