IP Law Bulletin

On August 14, 2012, the U.S. Patent and Trademark Office (USPTO) published its final rules for implementing the Inventor’s Oath or Declaration provisions of the America Invents Act (AIA). The final rules take effect on September 16, 2012, with respect to any application filed on or after this date, regardless of any claim for priority. The final rules provide a great deal of detailed explanation and include the new text of the relevant C.F.R. sections, but below is a brief summary of significant changes implemented by the final rules.

As diagnostics, end-user sophistication, and mobile and web-based technologies grow, so does the likelihood that potential infringement is carried out across multiple users or entities, i.e., divided infringement. Divided infringement scenarios exist where a single entity does not perform every element of a claim, but rather different entities perform the different steps of a claim. This divided infringement scenario occurs frequently as customers begin performing critical steps in implementing technologies – for instance, a doctor performing a collection or diagnostic step or a server user modifying a webpage. The divided infringement defense has grown more popular in recent years, paralleling the rising importance of method claims used to describe cutting edge computer software, business method inventions, and diagnostic and therapeutic inventions in biotech. This is particularly relevant where companies have been able to strategically avoid claims by performing less than all steps of a method claim and having their customers or other entities perform remaining elements of the claim.

This month, on September 16, 2012, post allowance proceedings as defined by the American Invents Act (AIA) begin, including Inter Partes review (IPR), Post Grant Review (PGR), and Business Method PGR. A table comparing these different post allowance proceedings, as well as current Ex parte reexamination proceedings, can be found at the end of this article, following a discussion of the various proceedings.

Patent prosecutors drafting claims that recite open-ended ranges (e.g., at least 10%, greater than 5 units) were again warned of the perils of claiming more than has been disclosed. In a recent decision by the Federal Circuit, MagSil Corp. v. Hitachi Global Storage Tech., Inc., the Court affirmed the trial court’s determination that the asserted claims were invalid as a matter of law for lack of enablement. The Court found that the open-ended range recited in the independent claim was not enabled because the disclosure provided support for only a small portion of the claimed open-ended range, citing to the dual function of enablement for both ensuring there is adequate disclosure to support a claimed invention and preventing claims broader than the disclosed invention. Patent practitioners reciting open-ended ranges should consider taking one or more steps to better ensure validity of their claims, including reciting the structure that enables the recited range in the claim, adding dependent claims that close the open-ended range, and providing examples in the specification that support a wide spectrum of values, and in particular values that fall within the high end of the open-ended range.

In a July 12, 2012 order, Suffolk Superior Court Justice Lauriat dismissed a lawsuit by urologist Dr. Grocela, asserting that his employer’s Intellectual Property (IP) policy as applied to him was an unfair restraint on trade since his employer, Massachusetts General Hospital (MGH), claimed ownership of an invention that was not related to urology. (The order, Grocela v. General Hospital Corp. also dismissed a complaint that MGH had breached Grocela’s right to privacy in violation of M.G.L.A. c. 214 §1B, which is not discussed.) The Court found that, as the IP policy was reasonably limited and Dr. Grocela had voluntarily chosen to avail himself of staff privileges, he must be bound by the terms of the policy.

On August 16, 2012, biotechnology patent owners breathed a short sigh of relief, as the US Court of Appeals for the Federal Circuit issued the highly anticipated decision in Association for Molecular Pathology v. Myriad Genetics, finding that DNA sequences are indeed eligible for patent protection. However, not all biotech innovators will be happy with the Myriad decision since certain diagnostic method claims were again struck down as ineligible for patent protection. Additionally, one of the three judges on the panel dissented on the patentability of isolated DNA, arguing, “extracting a gene is akin to snapping a leaf from a tree.” The final word on this subject may need to come from the Supreme Court.

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.