IP Update, Volume 6, No. 3, March 2003
March 2003
IN THIS ISSUE
U.S. Supreme Court Requires Trademark Owners to Show Actual Dilution
By Robert Zelnick and Jennifer Mikulina
By a unanimous vote, the U.S. Supreme Court has now ruled that plaintiffs in trademark dilution lawsuits must prove their famous trademarks have actually been diluted, not just a likelihood of harm. Moseley v. V Secret Catalogue, Inc., Case No. 01-1015 (March 4, 2003).
In this case, the U.S. Supreme Court reversed the lower court decision and ruled in favor of the owners of Victor’s Little Secret, an Elizabethtown, Kentucky store selling adult videos, novelties and lingerie. Victoria’s Secret had filed suit against the store’s owners, alleging trademark infringement, unfair competition and trademark dilution in violation of the U.S. Federal Trademark Dilution Act (FTDA). Victoria’s Secret argued under the FTDA that the store’s name was likely to "blur and erode the distinctiveness" of its famous trademark VICTORIA’S SECRET, which is widely recognized from its U.S. stores, catalogs and advertising.
Dilution of a trademark under the FTDA occurs when the use of a mark lessens the capacity of a famous mark to identify and distinguish goods or services. In particular, the FTDA protects famous marks from third-party uses that blur, tarnish or disparage the distinctiveness of the famous mark.
The U.S. District Court granted summary judgment in favor of Victoria’s Secret on its trademark dilution claim, finding that the defendants’ use of the "Victor’s Little Secret" store name had a tarnishing effect on the VICTORIA’S SECRET trademark. The district court’s decision was affirmed by the Sixth Circuit. The defendants then appealed the decision to the Supreme Court. The defendants did not challenge Victoria’s Secret’s allegation of fame, and the Supreme Court agreed that the trademark VICTORIA’S SECRET is "unquestionably valuable."
Justice John Paul Stevens, writing for the Court, reversed the lower court and held that the FTDA required Victoria’s Secret to show "actual dilution," not mere likelihood of harm. In its interpretation of the statute, the Supreme Court reviewed state dilution statutes upon which the FTDA was modeled. The Supreme Court found that while many state statutes only require a "likelihood of harm," in its interpretation, the FTDA requires a completed harm. Particularly, the Supreme Court held that the FTDA provides relief to the owner of a famous mark where a third party’s use of the mark "causes dilution of the distinctive quality of the famous mark." According to the Supreme Court, "[T]his text unambiguously requires a showing of actual dilution, rather than a likelihood of dilution."
Reasoning that mental association "will not necessarily reduce the capacity of the famous mark to identify the goods of its owner," the Supreme Court also held that mere "mental association" in the mind of consumers between two marks does not constitute dilution. On the other hand, the Supreme Court indicated that is not necessary to prove the actual loss of sales or profits or provide survey evidence to show actual dilution, especially where actual dilution could be reliably proven through circumstantial evidence. Accordingly, the Supreme Court reversed and remanded for further proceedings, finding that there was insufficient evidence of record for the lower court to grant summary judgment to Victoria’s Secret on the dilution count.
Disclosure Requirements for § 112, ¶6 Keyed to Level of Skill in the Art
By David Jafari
The U.S. Court of Appeals for the Federal Circuit recently upheld a summary judgment of non-infringement based on a license defense involving an industry standard. The Court also wrestled with the issue of whether a specification that fails to disclose specific structure corresponding to a functional limitation satisfies the disclosure requirement. Intel Corp. v. VIA Technologies, Inc., Case
Nos. 02-1212, -1213 (Fed. Cir. February 14, 2003).
The patent at issue (the `291 patent) relates to "Fast Write" technology, an optional protocol for what is known as the accelerated graphics port (AGP) interface specification developed by Intel. The `291 patent specification describes how AGP permits graphics devices to communicate with the core logic without using the slower, peripheral interface component (PCI) bus. Intel licenses the AGP protocol to interested parties on a reciprocal, royalty-free basis, as a way of setting the industry standard for certain computer-chip specifications. The license covers any patent claims that "must be infringed in order to comply with" the standards set out in the AGP specification. VIA acquired an AGP license and conceded that its products practiced several claims of the `291 patent, but asserted that its activities were covered by the AGP cross-license agreement. Intel sued, asserting VIA’s activities were outside the scope of the AGP license. VIA also cross-claimed for a declaratory judgment of invalidity of the `291 patent on the basis that the patent failed to disclose structure corresponding to the recited function in a "means-plus-function" claim element. The district court granted VIA’s summary judgment of non-infringement, but did not find Intel’s patent to be invalid.
The Federal Circuit upheld both rulings. The Federal Circuit found that the terms of the AGP license agreement were subject to more than one reasonable interpretation, i.e., that there was ambiguity in the agreement as to whether "Fast Write," an optional protocol, was covered by the license. The Federal Circuit held that "[w]hen a contract is ambiguous, the principle of contra proferentum … requires that the agreement be construed against the drafter who is solely responsible for its terms." Because Intel alone had drafted the non-negotiated license agreement, and the agreement was ambiguous as to whether it covered the "Fast Write" protocol, the Federal Circuit resolved the ambiguity against Intel.
The Federal Circuit also agreed with the district court that the claims of the `291 patent were not invalid for indefiniteness. VIA had argued that the claim at issue was indefinite because the `291 patent specification failed to disclose adequate structure corresponding to the function recited in a means-plus-function claim element. The district court rejected this contention, finding that "the core logic of a computer modified to perform Fast Write is the corresponding structure for the functions recited." VIA did not dispute this finding, but maintained that "a generic core logic is an inadequate disclosure of structure because no circuitry is disclosed to show the modification." The Federal Circuit posed the test as whether VIA had proven, by clear and convincing evidence, that the specification lacks adequate disclosure of structure, as it would be understood by one of skill in the art, to perform the recited function. Answering in the negative, the Federal Circuit held that the patent "is not indefinite merely because no specific circuitry is disclosed" to show how the core logic is modified to perform Fast Write reasoning that "[h]ow to modify the core logic to perform Fast Write on the circuitry level may … be properly left to the knowledge of those skilled in the art, and need not be identified in the patent."
The Federal Circuit, noted that the specification of the `291 patent included three diagrams, 35 signal charts and a detailed written description explaining the invention and a generic description of the core logic as adapted to practice Fast Write pursuant to the specification. Thus, the Court found sufficient corresponding structure notwithstanding the absence of circuitry.
Finally, the Federal Circuit rejected VIA’s argument that absent a disclosure of structure, i.e., circuitry, the scope of what constitutes corresponding disclosed structure plus equivalents is indefinite, making it impossible for competitors to design around the patent. The Federal Circuit held that even if there are multiple ways to implement the claimed function in circuitry, the claim was not invalid simply because the universe of such implementations is undefined. Rather, the Court noted that the "novelty of the invention" was in the signal protocol for implementing Fast Write, "not in unclaimed circuitry" for carrying out the specified protocol. Thus, one may design around the invention by using another signal protocol.
Practice Note: When drafting claims having a means-plus-function element, the written description should include "corresponding structure" for every m+f limitation and "clearly links" the corresponding structure to the recited function. Although details of structures that are generally known by those skilled in the art need not be included, if there is any doubt on the issue, prudence counsels inclusion of such structural details.
Rambus Redux? Statements in Prosecution May Trump Plain Meaning After All
By Matthew Weil
Notwithstanding its recent decision in Rambus v. Infineon Technologies AG, the U.S. Court of Appeals for the Federal Circuit has reaffirmed the time-honored rule that saddles inventors with the errors of the lawyers who prosecute their patents. Spring Window Fashions v. Novo Industries, Case Nos. 02-1309,-1347 (Fed. Cir. February 13, 2003).
In Rambus, as reported in IP Update, Vol. 6, No. 2, the Federal Circuit held that a mistaken statement by a prosecuting lawyer during the course of patent prosecution could be overlooked in construing the claims of a patent if the statement was "facially inaccurate" and if crediting the lawyer’s mistaken representation would result in the adoption of a claim construction at odds
with the "plain meaning" of the claims. In the Spring Window Fashions case, however, notwithstanding the apparent new liberality of the Rambus case, the Court reaffirmed that arguments in the prosecution history distinguishing the claimed invention over prior art result in the surrender of patent scope, even when the argument turns out to have been a misstatement. The Court observed, "If the applicant mistakenly disclaimed coverage of the claimed invention, then the applicant should have amended the file to reflect the error, as the applicant is the party in the best position to do so." Here, the Federal Circuit, agreeing with the district court, held that the statements distinguishing the prior art reference cited by the examiner were "detailed, consistent, and repeated." According to the Court, a "reasonable competitor" would have believed that the applicant’s disclaiming statements were not a mere mistake.
Practice Note: The principle and the tension underlying both the Rambus and Window Fashions cases appears to be the Court’s mindfulness of the public notice function of patents and prosecution histories balanced against a hard-fast rule that might on occasion lead to an inequitable result. Whether an inventor or patent holder will have to live with the misstatements of the prosecuting lawyer will depend on whether a "reasonable competitor," reading the patent and prosecution history, would necessarily realize a mistake had been made. While the "test" is somewhat objective, the result is nevertheless likely to lead to some uncertainty for counsel when advising clients.
Motion for JMOL at Close of Evidence Must Specifically Raise Obviousness to Preserve Issues for Appeal
By Matthew Weil
Applying its own "nascent" law, and taking a more exacting view than the regional circuits might have done, the U.S. Court of Appeals for the Federal Circuit has ruled that a motion for judgment as a matter of law at the close of evidence on the issue of inequitable conduct was not sufficiently specific to preserve the right to seek review of the jury’s verdict that the art purportedly withheld from the U.S. Patent and Trademark Office rendered the patented invention obvious. Duro-Last, Inc. v. Custom Seal, Inc., Case Nos. 02-1218, -1262 (Fed. Cir. February 28, 2003).
Duro-Last sued Custom Seal for infringement of its patent of roofing products used to cover roof protrusions such as vent pipes and air conditioning units. At the close of evidence, Duro-Last moved for judgment as a matter of law (JMOL or what used to be called "directed verdict") under Rule 50 on Custom Seal’s defense of inequitable conduct. When the jury later returned a verdict of invalidity under Section 103 (apparently on the basis that the art purportedly withheld from the U.S. Patent and Trademark Office rendered the patent invalid for obviousness), Duro-Last sought JMOL (or what used to be called JNOV) that the patent was not obvious.
To win review of the factual basis of the jury’s verdict by the district court, Duro-Last argued that its JMOL motion at the close of evidence on inequitable conduct had implicitly put in issue the question of obviousness. According to Duro-Last, the question of whether the reference it was accused of concealing was material necessarily raised the underlying question of obviousness.
While acknowledging that Duro-Last’s analysis might have prevailed under the law of some of the regional circuits, the Federal Circuit held that the sufficiency of a JMOL motion at the close of evidence to preserve the right to seek post-verdict JMOL on obviousness was a matter of Federal Circuit law, and, under that law, Duro-Last’s post-evidence motion was insufficient. The Court specifically held that "the various unenforceability and invalidity defenses that may be raised by a defendant—inequitable conduct, the several forms of anticipation and loss of right under § 102, and obviousness under § 103—require different elements of proof." Each must be raised specifically in a post-evidence JMOL if it is to be preserved.
Practice Note: Kitchen-sink JMOL motions at the close of evidence remain the better practice. Although JMOL motions are often brought on short notice and under intense time pressure, the motion should name every ground upon which the jury could possibly find liability and point out why the evidence is insufficient to support a verdict.
Industry Practice an Element in Determining On-Sale Bar
By Dawn Palmer
Over a forceful dissent by Judge Newman, the U.S. Court of Appeals for the Federal Circuit has ruled that a determination of whether a patent barring offer for sale has been made must be based on contract law principles, but predicated on standard practices within the applicable industry. The Court also invalidated patent claims under § 102(b) based on pre-grant publications of foreign applications having common inventorship with subject patent but published more than one year prior to the application filing date. Lacks Industries, Inc. v. McKechnie Vehicle Components USA, Inc., Case Nos. 01-1371, -1395, -1396 (Fed. Cir. March 13, 2003).
Lacks Industries (Lacks) accused McKechnie of infringement of certain claims directed to automobile wheel chrome-plated cladding, including method claims of its U.S. Patent No. 5,597,213 (the `213 patent). The district court adopted a special master’s finding that certain claims of the `213 patent were invalid due to an offer for sale, which triggered an on-sale bar and granted summary judgment of invalidity of other claims based on the publication of a foreign counterparts of a related U.S. patent having common inventorship with the `213 patent. The Federal Circuit affirmed the grant of summary judgment (based on § 102(b)) and remanded the on-sale issue for a determination of industry practices.
More than one year before the `213 patent filing date, Lacks engaged in sales promotion activities, none of which evidenced an offer to sell a particular article for a particular price. The special master (quoting RCA Corp. v. Data General Corp.) decided this activity constituted an offer for sale. The Federal Circuit noted that the incorrect legal standard was used because RCA was decided before the "totality of the circumstances test" was replaced in 1998, by the two-prong test of Pfaff v. Wells Elecs., Inc. that looked to a "commercial offer for sale" coupled with an invention ready for patenting. While Pfaff did not provide guidance on the meaning of a "commercial offer for sale," the Court noted that legal standard was clarified by the Federal Circuit, in Group One Ltd. v. Hallmark Cards, to require a communication "which the other party could make into a binding contract by simple acceptance (assuming consideration)." In Group One, the Federal Circuit also held that Federal Circuit law, and not state contract law, would control such a determination and that the UCC would be used for guidance. In Lacks, the Court remanded the on-sale issue for reconsideration based on the standard articulated in Group One, i.e., whether there had been a "formal offer under contract law principles," the panel majority further suggesting that evidence of the practice in the pertinent industry be considered to determine whether the commercial activity in question was an offer.
In dissent, Judge Newman noted the opinion in Group One recognized the need for uniformity nationwide when analyzing on-sale bar activities and criticized the majority opinion as working against uniformity by allowing the analysis to depend on the practices of a particular industry; thus, moving back in the direction of the imprecise "totality of the circumstances" standard rejected in Pfaff.
Regarding the § 102(b) issue, more than a year before the `213 patent filing, foreign applications corresponding to another patent by the same inventor were published in Germany and Japan. The district court had found that these publications "anticipated" the `213 patent claims, which were therefore invalid. On appeal, Lacks argued only that the foreign publications did not disclose or teach certain claimed subject matter. The panel majority concluded that the lower court decision is understood to be based on a § 102(b) statutory bar, rather than anticipation. "It is ‘well settled’ law that an inventor’s own disclosure ‘will not anticipate his later invention unless that work is such as to constitute a statutory bar under § 102(b)." The majority found that the published foreign applications "expressly disclose[]" the subject matter and, therefore, affirmed the summary judgment grant of invalidity.
In dissent, Judge Newman stated that "the court has created a new and unnecessary melding of prior art, anticipation, and statutory bar, in ruling sua sponte that the `213 patent is barred by the ‘laying open’ of foreign counterparts of related United States patents of the same inventor" (emphasis in original). Judge Newman disagreed that the publications constitute a "statutory bar" to the `213 patent claims for two reasons. First, the public policy of encouraging timely patent filing does not require treating a foreign publication of an earlier application which is not prior art, as a bar to a later timely filed application directed to "enlargements and improvements" over the published subject matter. Second, in the dissent’s view, the publications do not "describe and enable the same invention as claimed in the patent alleged to be barred, in the same technologic detail."
Biotech Claims Found to Be Over Combinations of Prior Art References
By Jennifer Yokoyama
The U.S. Court of Appeals for the Federal Circuit affirmed the decision by the U.S. Patent and Trademark Office (USPTO) Board of Patent Appeals, rejecting the appellants’ application for "Mutated Recombinant Collagens" as obvious. In re Berg, Case Nos. 02-1120, -1160 (Fed. Cir. February 20, 2003). Uncharacteristically, the Court appears to have applied the substantial evidence standard with some care and given a high degree of deference in this complicated art to the "persons of scientific competence" at the USPTO.
Collagen is a natural protein found in humans that can be produced as a recombinant protein. In order to synthesize collagen, one typically starts with a precursor known as procollagen. Procollagen consists of collagen with additional peptide extensions at either end of the collagen chain, i.e., the N-terminus or the C-terminus. The extensions are then removed by enzymes that cleave, or "cut off," the extensions at specific sites to produce collagen that can successfully be used in humans. The appellants’ patent claimed a procollagen chain, which included a non-natural "cut-off" site between the collagen chain and the natural C-terminal extension, allowing the extension to be removed by using a specific enzyme that reacts with the non-natural site, leaving just the collagen.
The decision in In re Berg came down to a question of how broadly the teachings of a prior art "suggestion to combine" would be read. The examiner and the board viewed the prior art reference broadly, as disclosing that two proteins can be fused together for a variety for reasons, and once those proteins are expressed they can be chemically or enzymatically separated at specific sites on the protein chain. The appellant urged a narrower reading and was rebuffed, by the examiner, the board and now the Federal Circuit. Based on the record before it, and giving considerable deference to the examiner and the board, the Federal Circuit affirmed the finding of obviousness and the denial of the patent, holding that "it would have been obvious to a person of ordinary skill in the art to create a recombinant DNA system for the production of procollagen in which the recombinant procollagen chain consisted of a natural collagen polypeptide and a first natural propeptide, with a first non-natural site-specific proteolytic agent recognition site located between them."
Practice Note: In areas of complicated technology, such as biotechnology, the Federal Circuit tends to rely more heavily on the expertise of the Board of Patent Appeals and the "substantial evidence" rule can have some bite.
Intel Suit Affects EU Intellectual Property Rights Holders
By Duncan Curley
The U.K. Court of Appeal recently issued a decision, which raises the possibility of senior company executives’ intellectual property rights-holders having to justify their European intellectual property exploitation and licensing policies under the spotlight of public cross-examination in the U.K. Courts. Intel Corp. v. VIA Technologies, Inc. (Court of Appeal (Civ. Div.) Dec. 20, 2002). Intel brought two suits for patent infringement against VIA Technologies in the U.K. Patents Court. VIA raised antitrust defences to both suits (Eurodefences) based on Articles 81 and 82 of the European (EC) Treaty; the two main planks of European antitrust law. Article 81 prohibits agreements that have as their object or effect the prevention or distortion of free competition in Europe and European trade. Article 82 prohibits undertakings by those in an economically dominant market position from carrying out certain acts (termed "abuses") that are incompatible with free competition in Europe.
At an early stage of the case, a bifurcation of the patent law and the antitrust aspects of the case were ordered. Intel then mounted a summary application to have the antitrust defences removed from the case, on the grounds that they did not raise triable issues. Although Intel was successful before the trial court, the Court of Appeal comprehensively overruled the initial decision and reinstated all of VIA’s "Eurodefences" in both actions.
The Court of Appeal recognised that there is a tension between the exercise of intellectual property rights, which, in general, subsist by virtue of national laws in the various European member states and the need to respect European antitrust law. The Court noted that in the earlier case of ITT Promedia v. Commission, the European Court of Justice had held that in specific circumstances, Article 82 may prohibit certain undertakings by those in a dominant market position from adopting a course of conduct or from taking measures that under ordinary circumstances would be legitimate. The Court of Appeal, therefore, concluded that the exercise of intellectual property rights by those in a dominant market position was not necessarily unobjectionable under European competition law. The Court of Appeal decided that it was open to VIA to argue at a trial that there were exceptional circumstances which would allow it to bring
forward its defences to patent infringement based on Article 82.
Via also alleged that the terms of a draft agreement upon which Intel proposed to licence VIA, its patents contained a market division term and a cross-licensing term, both of which were contrary to Article 81. The Court of Appeal held that VIA had a prospect of success in demonstrating that both the market division term and the cross-licensing term would be contrary to Article 81, if contained in an executed agreement.
Practice Note: The Intel v. VIA decision is of special relevance to those concerned with licensing and the policing of access to industry standard technologies. European jurisprudence on the question of when Article 82 should apply, insofar as intellectual property rights are concerned, is still in a state of development. There is only one test of general application (the Magill case), which states that it is only in exceptional circumstances that the exercise of intellectual property rights by a dominant market player may involve abusive conduct contrary to Article 82. "Eurodefences" based on Articles 81 and 82 have, in the past, been treated with skepticism by the U.K. judiciary system. With this decision, the U.K. Court of Appeal has firmly opened the door to antitrust arguments (of the kind familiar to many U.S. lawyers) in intellectual property infringement cases. Antitrust defences are now likely to play a more prominent role in U.K. trials concerned with the enforcement of intellectual property rights. The Intel case is also relevant in the context of the broader European debate about whether European antitrust law operates to constrain the exercise of intellectual property rights in certain situations, and if so, how any such constraint should operate in practice.
ICANN Domain Name Dispute Resolution Not an Arbitration Under Federal Arbitration
By Carrie Shufflebarger
A domain name dispute decided pursuant to the ICANN Uniform Domain Name Dispute Resolution Policy (UDRP) is not an arbitration under the U.S. Federal Arbitration Act (FAA) and, thus, is not entitled to the deferential standard of judicial review afforded by the FAA. Dluhos v. Strasberg, Case No. 01-3713, 2003 U.S. App. LEXIS 3014 (3rd Cir. February 20, 2003).
The plaintiff, Dluhos, registered the domain name leestrasberg.com, invoking the name of well-known acting coach Lee Strasberg. Mr. Strasberg’s widow and estate brought a complaint against Dluhos pursuant to the ICANN UDRP, and the UDRP panel ordered that the domain name be transferred to the Strasbergs. Dluhos in turn filed a complaint in federal court seeking, among other things, restoration of his right in the domain name. The district court reviewed the UDRP decision under the FAA’s extremely deferential standard of review, under which a district court may only vacate an arbitration award: when the arbitrators were guilty of misconduct, or when the evidence demonstrates a "manifest disregard of the law." Applying these highly deferential standards, the district court granted the Strasberg motion to dismiss Dluhos’ complaint.
The U.S. Court of Appeals for the Third Circuit reversed and remanded, holding that a non-binding ICANN UDRP decision is not an "arbitration under the FAA, which only applies to ‘contracts… to settle disputes by arbitration.’" Unlike dispute resolution mechanisms covered by the FAA, the UDRP was not intended to replace formal litigation; the unique contractual arrangement under the UDRP contemplates the possibility of judicial intervention by either party at any time, including before, during or after the UDRP process. Moreover, the Third Circuit reasoned that since the trademark holder is not required to participate in a UDRP such proceeding before moving ahead in court, the UDRP proceedings do not qualify as the type that would entail a court’s compelling parties’ participation prior to independent judicial review—a power that is granted to federal courts under the FAA. Accordingly, the Third Circuit held that judicial review of UDRP decisions is not restricted to a motion to vacate an arbitration award under the FAA, which applies only to binding proceedings likely to realistically settle the dispute.
Finally, the Third Circuit held that although a private contractual covenant such as the UDRP cannot confer federal jurisdiction where none independently exists, in enacting the U.S. Anticybersquatting Consumer Protection Act (ACPA), Congress explicitly created a cause of action by which UDRP decisions may be challenged. Noting that its decision did not intimate a belief that the UDRP panelist erred in its judgment, but merely that the decision was not entitled to deference under the FAA, the Third Circuit remanded the matter to the district court with the direction that it review the UDRP decision de novo under the ACPA.
USPTO Clarifies Rule for Claiming Priority to an Earlier Filed Application
By Michael Fogarty
On February 24, 2003, the U.S. Patent and Trademark Office (USPTO) issued a notice clarifying the rule for claiming priority to an earlier filed application. As set forth in 37 C.F.R. § 1.78(a)(2)(i), any non-provisional application that claims the benefit of one or more earlier-filed copending applications (including international applications designating the United States) must contain, or be amended to contain a reference to each such earlier filed application, which identifies the application serial number, and an indication of the relationship between the applications (i.e., continuation, continuation-in-part or divisional). The notice makes clear that the permissible relationships between the applications are mutually exclusive and, therefore, only one relationship should be identified (i.e., an application cannot be both a continuation and a continuation-in-part of an earlier filed application). 37 C.F.R. § 1.78(a)(2)(iv) recites that a request for a continued prosecution application (CPA) under 1.53(d) is the specific reference required under 35 U.S.C. § 120 to the earlier-filed application. Thus, no additional reference to the earlier filed application is required when filing a CPA.
The foregoing requirement under 37 C.F.R.§ 1.78(a)(2)(i) must be completed the later of four months from the filing date of the later-filed application, or sixteen months from the filing date of the earlier filed application. Failure to comply with this requirement will result in a waiver of the priority claim. However, it is possible to petition the USPTO to accept an unintentionally delayed claim under 37 C.F.R. § 1.78(a)(3).
Premiere Biotechnology IP Group Joins McDermott, Will & Emery
The Firm is pleased to announce the addition of one of the foremost biotechnology, intellectual property practice groups in the United States. Cathryn Campbell, Ph.D., IP biotechnology pioneer and founding partner of Campbell & Flores, LLP, together with litigator and co-founder Mauricio Flores and a team of eight lawyers, patent agents and scientific advisors joined the Firm in San Diego and Orange County, California on March 4, 2003. This addition propels the Firm’s current life sciences practice in to the forefront of biotechnology IP.
Patent Found to Hog Method Swine Disease Vaccine
By John Prince, Ph.D.
The U.S. Court of Appeals for the Federal Circuit has upheld a jury verdict that Schering-Plough infringed U.S. Pat. No. 5,476,778 (`788 patent) for a method for isolating and growing the virus that causes the "Mystery Swine Disease" (Porcine Reproductive Respiratory Syndrome or PPRS), under the doctrine of equivalents. Boehringer Ingelheim Vetmedica, Inc. v. Schering-Plough Corp., Case Nos. 02-1026, 1027 (Fed. Cir., Feb. 21, 2003).
PRRS was a major killer of piglets in the 1980s. Using a method of growing the virus in pig tissue culture, inoculating cultured monkey cells with the virus and incubating the monkey cells until a cytopathic effect (CPE) was observed, scientists at Boehringer discovered that a previously unknown virus caused PRRS. The `788 patent claims this method.
Both Boehringer and Schering developed and produced vaccines against PRRS by weakening the PRRS virus in monkey cell culture. Boehringer sued Schering. Because Schering’s vaccine production process measures the incubation by elapsed time, rather than by an achieved observational result as claimed, the district court precluded literal infringement and the jury returned a verdict of infringement under the doctrine of equivalents. Schering appealed. The issue on appeal was whether the district court erred in its claim construction.
The claimed method is one "of growing and isolating" the subject virus. The Federal Circuit construed the term "isolation," as found in the claim preamble, to be limiting, indeed "the raisin d’être of the claimed method." In terms of substantive claim constructions, the district court, citing a "common definition" found in the Random House College Dictionary, concluded that the PRRS virus was "isolated" in each serial passage when the virus was separated from the infected cells. Schering, citing a technical dictionary, argued on appeal for a more microbiological definition of "isolation," meaning the process of obtaining a pure culture from a naturally occurring population. The Federal Circuit, citing negatively to a technical dictionary proffered by Schering for the first time on appeal (The Dictionary of Microbiology and Molecular Biology), upheld the district court’s construction, noting that the customary meaning of "isolating" in the field of the invention encompasses more than the microbiological definitions of initial isolation of a virus from an infected tissue sample.
The issue regarding the claim term "ATCC-VR2332" was one of scope. Schering argued for a definition encompassing only disease-causing viruses while Boehringer argued for a broader definition that would include any attenuated strain, disease causing or not. Based on the reference to the American Type Culture Collection (ATCC) in the claim term and the patentee’s failure to use broader claim term, e.g., "PRRS virus," the Federal Circuit agreed with the district court that term referred to the "specific strain of PRRS virus deposited with the ‘ATCC.’"
Finally, the issue regarding the meaning of the claimed step of "incubating … until CPE is observed" was whether the claim was limited to only a minimum incubation period or to an end period beyond which incubation is not permitted. The district court, analogizing the claimed step to an instruction to cook a turkey until the skin is browned, construed the claim as requiring a clear stopping point. The Federal Circuit did not see the initial observation of CPE as limiting the end of the incubation period, reasoning that because the utility of the claimed process "is not premised on a particular stopping point, there is no barrier to additional incubation periods." Nevertheless, the error was held to be harmless.
The district court’s claim construction having been substantially upheld, the Federal Circuit held that the jury’s verdict on infringement under the doctrine of equivalents was reasonable.
Practice Note: In this and in other recent cases, the Federal Circuit has followed the reasoning of Tex. Digital Sys., Inc. v. Telegenix, Inc. regarding the use of dictionaries to construe terms in patent claims.
