IP Update, Volume 4, No. 11, November 2001
November 2001
IN THIS ISSUE
- Patents/Damages - "Exceptional Case" Finding Not Appealable Until the Fee Award Is Set
- Trademarks/Trade Dress - Famous Lounge Chair and Ottoman Design Protectable as Trade Dress
- Patents/Prosecution - Patentholders Will Have to Live with More of Their Mistakes
- Patents/Claim Construction - Prosecution History Estoppel Recognised by English Court of Appeal
- Patents/On-Sale Bar - On-Sale Bar: Pfaff Revisited
- Patents/Litigation - Dismissal OK But Permissible Sanctions for Inventor Litigation Misconduct Do Not Include Patent Unenforceability
- Patents/Claim Construction - Means-Plus Function Elements: Where [and How] to Find "Corresponding Structure"
"Exceptional Case" Finding Not Appealable Until the Fee Award Is Set
By George Hampton
In a case of first impression, the U.S. Court of Appeals for the Federal Circuit joined its sister circuit courts in finding that a district court order holding a case to be exceptional (so as to justify an award of attorney fees) is not a final and appealable order if it does not set the amount of such award. Special Devices, Inc. v. OEA, Inc., 2001 U.S. App. LEXIS 23205 (Fed. Cir., Oct. 30, 2001).
After the district court granted partial summary judgment of infringement, Special Devices filed a motion for attorney fees. The district court granted the motion, deeming the case exceptional within the meaning of § 285. The district court deferred setting the dollar amount of the award pending evidentiary submissions. OEA appealed the district court’s order before the attorney fee award was quantified.
In dismissing the appeal for lack of jurisdiction, the Federal Circuit drew an analogy to an earlier decision under F.R.C.P. 11, View Engineering, Inc. v. Robotic Vision Systems, Inc., where the Federal Circuit held that the mere finding of a Rule 11 violation was not a final decision for purposes of appeal until an award decision is made. The Court held that the same considerations of judicial efficiency favor treating an exceptional case determination as unappealable unless it is tied to some specified fee award.
Famous Lounge Chair and Ottoman Design Protectable as Trade Dress
By John Dabney
The U.S. Court of Appeals for the Sixth Circuit has held that the design of the famous Eames lounge chair and ottoman is protectable trade dress under the Lanham Act. Herman Miller, Inc. v. Palazzetti Imports & Exports, Inc., 2001 U.S. App. LEXIS 22601 (6th Cir. Oct. 22, 2001).
Plaintiff, Herman Miller, manufactures and sells the Eames lounge chair and ottoman. Defendant had manufactured and sold a similar looking lounge chair and ottoman. Plaintiff asserted trade dress infringement against defendant under the Lanham Act. The district court awarded summary judgment in favor of defendant on the ground that the lounge chair and ottoman were not protectable trade dress as a matter of law. The Sixth Circuit reversed.
The Sixth Circuit held that seven factors should be considered in determining whether trade dress has acquired secondary meaning and, thus, is protectable: (i) direct consumer testimony; (ii) consumer surveys; (iii) exclusivity, length, and manner of use; (iv) amount and manner of advertising; (v) amount of sales and number of customers; (vi) established place in the market; and (vii) proof of intentional copying. The court found that plaintiff had offered sufficient circumstantial evidence to establish secondary meaning. In particular, the court pointed to plaintiff’s affidavit evidence from non-consumers, i.e., design experts, authors, historians and employees, that consumers associate the design of the Eames lounge chair and ottoman with Herman Miller. The Court also relied on the fact that plaintiff had been selling its lounge chair and ottoman for more than 45 years and had sold over 100,000 chairs and ottomans. Defendant’s admission that it had attempted to copy plaintiff’s trade dress "as closely as possible" was further evidence of secondary meaning. As the court put it, "That evidence is especially helpful to establishing secondary meaning because there is no logical reason for the precise copying save an attempt to realize upon a secondary meaning that is in existence." The court rejected the contention that a consumer survey showing secondary meaning was required: "[C]onsumer surveys, while helpful, are not a prerequisite to establishing secondary meaning."
Patentholders Will Have to Live with More of Their Mistakes
By Matthew Weil
A recent decision tends to limit the circumstances in which patentees will be excused for imprecision, error or lack of foresight in patent prosecution, articulating a tough standard for judging when mistakes can be corrected as "of a clerical or typographical nature, or of minor character" under 35 U.S.C. § 255. Superior Fireplace Co. v. The Majestic Products Co., Nos. 00-1233, 00-1281, and 00-1282 (Fed. Cir. Nov. 1, 2001). Now, if correcting a mistake in a patent would broaden the claim, the claim can only be corrected under § 255 if both the mistake—and the proper way to correct the mistake—are clearly evident from the specification, drawings, and prosecution history.
Superior’s patent claimed a safer, more efficient in-wall fireplace unit. Unfortunately for Superior, the patent issued with a mistake in its one independent claim, which referred to both "rear walls" (plural) and "the rear wall" (singular). According to Superior, it was unaware of this inconsistency in its patent until after it sued Majestic. When it learned of the mistake, Superior sought and received a certificate of correction from the Patent and Trademark Office (PTO), correcting "rear walls" to "rear wall."
Upon Majestic’s motion for summary judgment, the district court declared the certificate invalid. Affirming, the Federal Circuit held that a mistake in a claim, the correction of which broadens the scope of coverage of that claim and is not clearly evident from the specification, drawings and prosecution history, is not a "mistake of a clerical or typographical nature" subject to correction under § 255. The court also held that a mistake, the correction of which broadens a claim, is not a "mistake of . . . minor character" subject to correction under § 255. While the two claim limitations at issue were mutually inconsistent, it was not clear from the prosecution history which of the two variants was correct. Accordingly, a broadening certificate of correction should not have issued.
Prosecution History Estoppel Recognised by English Court of Appeal
By Justin Hill
It used to be thought that prosecution history estoppel did not exist in the United Kingdom and that whatever was said to the British or European Patent Office for the grant of a patent could not be used against the patentee in an English court as an aid to construction after grant. Following an English Court of Appeal decision in Rohm and Haas Co v Collag Ltd 29 October 2001 (unreported), this no longer appears to be the case.
Rohm and Haas issued proceedings in 1999 against Collag for patent infringement. Collag counterclaimed for revocation of the patent and a declaration of non-infringement. The trial court granted that declaration and Rohm and Haas appealed against the order. At the heart of the case was the construction of the patent, particularly the meaning of "surfactant" in claim 1 of the patent specification which taught a process for manufacturing water-dispersible granules containing propanil, a broad-spectrum agricultural herbicide.
During the appeal, a question was raised for the first time about the admissibility of material that was filed at the European Patent Office but was not part of the specification. The material under consideration included a letter which the appealable court described as echoing an opinion on construction given by the defendants’ expert witness. If admissible, it was clearly relevant to the issue of construction.
The appealable court acknowledged that the letter did not have the same status as published prior art identified in the specification, which is readily admissible. Nevertheless, he was persuaded by the unreported Dutch case, Ciba-Geigy v Oté Optics (13 January 1995), that had it been necessary for the court to take account of the letter in order to resolve the issue of construction, it would have been entitled to do so.
The Rohm and Haas case is a land mark in English law for the view, unanimously expressed by the U.K. Court of Appeal, that it is permissible to look at the prosecution file as an aid to construction of the claims of a patent.
Practice Note: It appears that from now on, prosecution history estoppel can be included in arguments before a UK Patent Court. It also appears that UK law has started to move in the direction of absolute prosecution history estoppel as held by the U.S. Court of Appeals for the Federal Circuit in Festo. In case there was any doubt, patent attorneys and in-house counsel prosecuting applications for European and, in particular, British patent applications must now adopt the precautionary rules of thumb routinely adopted by their U.S. counterparts. For example, attorneys should avoid making unnecessary statements during prosecution which could be asserted to apply a narrow construction to elements of a claim.
On-Sale Bar: Pfaff Revisited
By Kara Fletcher
Based on the on-sale bar, the U.S. Court of Appeals for the Federal Circuit recently affirmed a grant of summary judgment of patent invalidity in two separate cases. In the one case, the court focused on two areas of the Pfaff analysis: that an invention may be barred regardless of whether plaintiff realized the full potential of the process at the time of sale; and that a process may be barred if it was ready for patenting at the time of an offer for sale where the description of the process was enabling under 35 U.S.C. § 112, ¶ 1. Scaltech, Inc. v. Retec/Tetra, L.L.C., Case Nos. 01-1005, -1009, 2001 U.S. App. LEXIS 22946 (Fed. Cir., Oct. 23, 2001). In the other case, the court found that neither the text of § 102(b) nor the precedent interpreting it permitted an exception to the on-sale bar that would allow inventors to stockpile commercial embodiments of their patented invention via commercial contracts with suppliers more than a year before they file their patent application. Special Devices, Inc. v. OEA, Inc., Case Nos. 01-1053, -1078, 2001 U.S. App. LEXIS 22946 (Fed. Cir. Oct. 26, 2001).
The invention in Scaltech was a process for treating oil refinery waste by using it to produce coke. Plaintiff offered to refine the waste of multiple companies in order to test the process. In two of its proposals, Plaintiff offered to process waste generated by oil refining, including small particle size, DAF float waste. In its offer, Scaltech did not indicate specific solid concentration or particle size. However, the parties agreed that DAF waste satisfied the particle size limitations of the patent. Scaltech also admitted that the process offered would inherently produce a solid slurry that was covered by the patent claim. The content of the offer to the oil refining companies described the invention later disclosed in a patent application.
The district court determined that the language of Scaltech’s offers was sufficiently definite to constitute a commercial offer for sale within the meaning of the statute. The district court determined that the offers constituted a commercial offer for sale, which, if accepted, would create a contract. The district court further determined that the offer for sale satisfied all claim limitations. "Defendant does not have to show that all embodiments of the invention were on sale more than one year before filing, but must show that at least one embodiment of the invention was offered for sale beyond the one year period." The court also noted that the inventor does not have to appreciate his invention to trigger the on-sale bar. "If the process that was offered for sale inherently possessed each of the claim limitations, then the process was on sale, whether or not the seller recognized that his process possessed the claimed characteristics."
The Federal Circuit affirmed, noting that an invention is ready for patenting when either there is a reduction to practice or a showing that the inventor’s drawings or descriptions enable someone skilled in the art to practice the invention. The Federal Circuit found that Scaltech had reduced the invention to practice, even though it was not fully conceived and that the process was ready for patenting when Scaltech offered to treat hazardous waste and provided a description that would allow the practice of an embodiment of the invention.
In Special Devices, more than a year before filing an application, patentee began negotiating with a supplier capable of mass producing the invention, an "all glass header" device for car air bags. OEA ordered 20,000 air bag headers according to the invention for delivery and the manufacturer outlined the general terms for a requirements contract. OEA also made arrangements to begin stockpiling the air bag headers for future sales. The Patent and Trademark Office (PTO) discovered the arrangement between OEA and its supplier, which was not reported to the PTO, and rejected the application under the on-sale bar. (§ 102(b)).
Applicant appealed to the district court, which granted partial summary judgment, holding all claims invalid under the on-sale bar. OEA then appealed to the Federal Circuit urging that Brasseler v. Stryker Sales Corp. created a "corporate overlap" between OEA and its supplier, so they should be considered a single entity under a Pfaff analysis and, therefore, under a "corporate overlap" theory, not subject to the on-sale bar. The Federal Circuit, in affirming the district court, found no"clear overlap" as in Brasseler and held that the separate entities transaction did initiate the on-sale bar. The Federal Circuit noted that exceptions to the bar are for U.S. Congress, not the court, to create.
The Federal Circuit noted that neither the statute nor precedent created an exception to the on-sale bar and that use of the passive voice (in § 102(b)) indicates the intent of Congress that it does not matter who places the invention "on sale."
Dismissal OK But Permissible Sanctions for Inventor Litigation Misconduct Do Not Include Patent Unenforceability
By Paul Devinsky
The U.S. Court of Appeals for the Federal Circuit held that a district court went too far in sanctioning litigation misconduct by declaring the patent in suit unenforceable. Aptix Corp. v. Quickturn Design Systems, Case No. 00-1468, 1669 (Fed. Cir. Nov. 5, 2001).
The chief executive officer of Aptix was the sole inventor of the patent in suit. Aptix non-exclusivity licensed the patent to Meta and Mentor Graphics, granting Meta the right to sue to enforce the patent in San Jose, California, where Quickturn was located. Since Meta was only a non-exclusive licensee, Aptix and Meta jointly sued Quickturn for infringement.
During discovery, Quickturn moved to compel production of the original inventor notebooks for forensic testing. The inventor had been insistent upon personally keeping the notebooks, locking them in a safe in his house. However, soon after the Quickturn motion, the inventor took the notebooks to work and left them in his car the entire day. That night, he purportedly found his car window broken and the notebooks gone. The trial court found that the "circumstances of the ‘theft’ strongly suggest" that the incident was "staged."
After the disappearance of the notebooks, the inventor produced additional evidence to corroborate his asserted conception date. However, forensic evidence showed that these entries were written with an ink that was not manufactured until five years after the supposed entries.
The trial court held an evidentiary hearing concerning the authenticity of the notebooks. The inventor took the stand and asserted his Fifth Amendment privilege against self-incrimination in response to all questions. Thereafter, the trial court concluded that Aptix had attempted "to defraud the court and to strengthen its patent through the premeditated and sustained campaign of lies and forgery," determined that the patent was unenforceable and dismissed the complaint, invoking the unclean hands doctrine as set forth by the U.S. Supreme Court in Keystone Driller Co. v. General Excavator Co.
The Federal Circuit found that "the district court’s finding of litigation misconduct fully justified its decision to invoke the unclean hands doctrine and dismiss Aptix from suit" and that the district court possessed "ample discretion" to award Quickturn attorney fees and costs. "Without question, fraud and misconduct make this case exceptional under § 285 and warrants a full compensation of Quickturn’s reasonable attorney fees and costs." Further, the Federal Circuit affirmed the district court’s dismissal of the entire action, finding that upon dismissal of Aptix, Meta lost standing to sue in its own right.
However, the Federal Circuit reversed the trial court finding that the patent was unenforceable. "Litigation misconduct, while serving as a basis to dismiss the wrongful litigant, does not infect, or even affect, the original grant of the property right. The doctrine of unclean hands does not reach out to extinguish a property right based on misconduct during litigation to enforce the right." Rather, the Federal Circuit noted that doctrine of inequitable conduct, which may render a patent unenforceable, is only intended to prevent the enforcement of patents secured by fraud since "[i]nequitable conduct in the process of procuring a patent taints the property right itself."
Thus, the Federal Circuit concluded that the remedies for litigation misconduct differ from the remedies for misconduct in acquisition of a property right. "While inequitable conduct before the PTO renders the patent unenforceable by any party, the unclean hands doctrine bars only the offending party. . . . Moreover, a finding of unclean hands generally does not prejudice the offending party in subsequent cases, but only provides a bar to relief in the case at hand."
Chief Judge Mayer in dissent stated that: "[B]ecause a fraud upon the court is no less grave than a fraud on the Patent and Trademark Office, I would affirm the district court’s holding that the [patent] is unenforceable."
Means-Plus Function Elements: Where [and How] to Find "Corresponding Structure"
By David Jafari
The Federal Circuit recently overturned a summary judgment of no infringement in a case presenting issues of interpretation of means-plus function claim elements. Asyst Technologies, Inc. v. Empak, Inc., Case No. 00-1514 (Fed. Cir. October 10, 2001).
The patents at issue, which are directed to processing semiconductor wafers into integrated circuits, include claims in the means-plus function format. Under 35 U.S.C. §112, ¶6, an element of a claim may be expressed as a means for performing a specified function. Such claims, however, "shall be construed to cover the corresponding structure . . . described in the specification and equivalents thereof." Under Markman practice, it is up to the court to identify "corresponding structures" and their "equivalents" in the specification.
The issue in this case was whether a lot validating system used in semiconductor processing infringed Asyst’s patents. The patented systems feature microprocessor and communication "means" mounted on sealed containers used to transport a batch of semiconductor wafers from one processing station to the next. The system was claimed as a series of means-plus-function limitations, e.g., "microprocessor means for processing data"; "communications means for communicating data to said means for processing data," etc.
The district court concluded that the corresponding structures for the "processing" and "communication means" as described in the specification were "a local control processor connected to a two-way communication means 50 via a line 51." The court found that the line 51—which was an external cable—was part of the corresponding structure. This interpretation resulted in a finding of non-infringement because the accused system did not use such a "connecting line." With respect to another claim having a "means for sensing" limitation, the district court found no structure corresponding to that limitation in the written description.
The Federal Circuit reversed, finding the claim construction and analysis "flawed." Specifically, the Federal Circuit held that the district court erred by construing the line 51 as part of the structure corresponding to the microprocessor means, explaining that the patent does not "clearly link line 51" to the function recited, and that the external link was "best viewed as a [separate] structure." In response to the appealee’s argument that the processor could not function without the line 51, the Federal Circuit stated, "[A]n electrical outlet enables a toaster to work, but the outlet is not for that reason considered part of the toaster."
Regarding the district court’s construction of the "means for sensing" limitation, the Federal Circuit found that the trial judge did not examine the patent specification in sufficient detail. The Federal Circuit acknowledged that the specification "does not contain any obvious reference to such a device" [means for sensing], but found a description of an inventory management aspect of the invention. The court instructed that when a structure is missing from the written description, the issue becomes whether what remains is "sufficient" to constitute some structure that corresponds to the function recited in the claim to the extent necessary to satisfy §112, ¶ 6. The Federal Circuit concluded that "it seems likely that any commercial embodiment of the claimed invention would carry out required functions.
Practice Note: It may be unwise to present only means-plus-functions claims in an application. While means-plus-functions claim elements have a role to play in the post-Festo, world practitioners who use this claim format should be certain that the written description includes a "corresponding structure" for every limitation, and the written description "clearly links" a corresponding structure to the function recited for the means.
