IP Update, Volume 4, No. 10, October 2001
October 2001
IN THIS ISSUE
- Patents/Claim Construction - Specification Defines the Scope of a Claim Term
- Patents/Invalidity/Claim Construction - "And" and "Or" Really Do Mean Different Things
- Patents/USPTO - The Federal Circuit Validates a Customer- Friendly PTO
- Trademarks/Fair Use - Defendant’s "Joy Of Six" Is Fair Use
- Patents/Enablement - Federal Circuit Defers to Jury’s Factual Findings on Enablement
- Patents/Invalidity - Inherency: Not Always in the Eye of the Beholder
- Copyrights - DMCA "Safe Harbor" Shields Online Auction Site from Secondary Copyright Liability
- Patents/Litigation - Watch What the Judge Says at Settlement— How the Text of the Dismissal Order Defines Settlement Agreement Jurisdiction
Specification Defines the Scope of a Claim Term
By Shamita Etienne-Cummings
The U.S. Court of Appeals for the Federal Circuit affirmed a grant for declaratory judgeament of non-infringement by confirming that the district court properly construed a claim term by relying on statements made in the specification. Kopykake Enterprises, Inc. v. The Lucks Co. Case No. 01-1015 (Fed. Cir. Sept. 10, 2001).
In moving for a partial summary judgement of infringement, the patentee argued that the claimed invention, which generally describes a method for producing edible base shapes upon which pictorial images are printed, encompassed printing images through an ink jet process. The only independent claim of the patent-in-suit, however, specifically recites "screen printing" as the process for applying a pictorial image onto the edible base shape. Although claim 1 specifically uses the term "screen printing," the specification broadly defines "screen printing" as any conventional process by which pictorial images are applied to the base shapes.
In determining whether Kopykake’s ink jet printing method infringed the claim at issue, the district court first relied on statements made in the specification to construe "screen printing." The court then determined whether ink jet printing, as used in the accused method, was a conventional process at the time the patent was actually or constructively reduced to practice. The district court reasoned that because ink jet printing was an emerging technology rather than a common practice in the food industry at the time of filing the patent, the claimed invention did not encompass the accused method.
The U.S. Court of Appeals for the Federal Circuit agreed, reasoning that "when a claim term understood to have a narrow meaning when the application is filed later acquires a broader definition, the literal scope of the term is limited to what it was understood to mean at the time of filing." Although ink jet printing may currently be a common practice in the food industry, statements made in the specification limited the claimed invention to conventional food printing practices at the time of filing the patent.
Patents/Invalidity/Claim Construction
"And" and "Or" Really Do Mean Different Things
Contact: Paul Devinsky
The U.S. Court of Appeals for the Federal Circuit recently affirmed a grant of summary judgment that an asserted claim of the patent-at-issue was invalid as anticipated based upon the Court’s interpretation of the term "or" in the claim.
In Brown v. 3M, Case No. 00-1552 (Fed. Cir. September 18, 2001), both the patent-at-issue (the Brown patent) and the anticipating reference (the turn of the century or TOCS patent) pertained to software solutions to the "Y2K" problem. The TOCS patent solved the problem by offsetting the computer clock and then adjusting two-digit year-dates so the data would not be affected. The Brown patent also taught this solution, but further taught in the specification the adjustment of two-digit, three-digit or four-digit year-dates to account for programs using those formats.
There were two limitations in dispute: a "database file …containing records with year-date data with years being represented by at least one of two-digit, three-digit, or four-digit year-date representations; and a mechanism for converting the year-date data representations in the database file to a two-digit year-date data representation."
The majority found that because the claim uses the term "or," it requires only one of the three types of year-date representations so tat the TOCS’ teaching of a two-digit year-date representation anticipates the claim.
Chief Judge Mayer dissented, however, based upon his reliance of the second limitation at issue. First, he argued that because it discloses no structure, the "mechanism" limitation was a means-plus-function limitation. Then he reasoned that because the limitation is a means-plus-function limitation, it requires reference to the part of the specification that discloses the mechanism for converting the year-date representations. Finally, he concluded that because the disclosed structure incorporates a mechanism that converts all three different date formats, the claim also includes this limitation even if all three formats are not always converted. Based on this more restricted reading of the claim, Chief Judge Mayer dissented from the majority’s affirmance of invalidity.
The Federal Circuit Validates a Customer- Friendly PTO
By Lawrence Cullen
In Exxon Corp. v. Phillips Petroleum Company, 2001 U.S. App. LEXIS 20638, the U.S. Court of Appeals for the Federal Circuit held that the United States Patent and Trademark Office (USPTO) can refuse to follow instructions that would cause a loss of rights to the applicant.
Exxon’s U.S. Patent No. 5,324,800 (the ‘800 patent) was filed on August 30, 1991, under 37 C.F.R. § 1.60 as a fourth generation continuation application. The application was filed before the parent application became abandoned. On the rule 60 continuation form, used to file the application, Exxon instructed cancellation of all of the pending claims (1-11). Rather than follow Exxon’s instructions, the USPTO entered the amendment in-part and cancelled only claims 2-11, leaving claim 1. By doing this, the application was made complete—it contained a claim and thus was afforded a filing date to make it co-pending with the parent application and for priority under 35 U.S.C. § 120. Priority was necessary to avoid a finding of invalidity under 35 U.S.C. § 102(b) as being anticipated by a published foreign patent application having the same text as the ‘800 patent.
The Court distinguished that present case from Baxter Int’l, Inc. v. McGaw, Inc., 149 F.3d 1321 (Fed. Cir. 1998) holding that the USPTO could not retroactively waive the statutory requirement of the presence of a claim in an application. The Court noted that the USPTO cancelled all of the claims in the application in Baxter. Since that application did not then have a claim, the Court found the application to be incomplete and not co-pending with its parent application. Baxter filed a set of claims after the parent application became abandoned and was granted a petition to obtain the benefit of the original filing date of the continuation submission. However, in the Exxon application, the USPTO did not cancel all of the claims.
The Court held that the USPTO procedures providing for entry of amendments in-part (MPEP §§ 711.01, 714.19 and 714.20), rather than follow an applicant’s instructions literally, does not violate any statutes or rules. Such procedures are left to the administrative discretion of the agency.
Defendant’s "Joy Of Six" Is Fair Use
By John Dabney
The U.S. Court of Appeals for the Seventh Circuit has held that a defendant may use plaintiff’s federally registered mark on promotional goods if that use is a non-trademark use, made in good faith, to describe only a quality of the goods. Packman v. Chicago Tribune Co., 2001 U.S. App. LEXIS 21047 (7th Cir. Sept. 27, 2001).
The plaintiff owns a federal trademark registration for the mark JOY OF SIX for entertainment services in the field of basketball. Following the Chicago Bulls sixth NBA championship, the defendant, Chicago Tribune, ran a banner headline entitled THE JOY OF SIX. Subsequently, the defendant reproduced its front page, including the CHICAGO TRIBUNE masthead and THE JOY OF SIX banner headline, on promotional goods such as t-shirts, posters and plaques.
The plaintiff filed a complaint for trademark infringement against the defendant based on the reproduction of the front page on promotional goods. The district court awarded summary judgment in favor of the defendant based on the fair use defense. The Seventh Circuit affirmed.
The Seventh Circuit held that to prevail on a fair use defense, the defendant must prove that it used THE JOY OF SIX in a non-trademark sense; the phrase is descriptive of the defendant’s goods and services; and the phrase JOY OF SIX was used "fairly and in good faith" only to describe the defendant’s products or services. The Court reasoned that the defendant’s use of THE JOY OF SIX was a non-trademark use because that phrase was not used to designate the source of the goods. Instead, the defendant’s CHICAGO TRIBUNE masthead served that function.
Further, the court explained, the defendant used THE JOY OF SIX to describe the happiness associated with a newsworthy event, i.e., the Bulls six NBA championships; the fact that the headline was placed on promotional goods did not change its descriptive quality. Finally, the court held that the defendant had not acted in bad faith simply because it has actual knowledge of the plaintiff’s federal trademark registration before producing the promotional goods and refused to cease the sale of those goods in response to the plaintiff’s cease and desist letter. Instead, the evidence could only support the conclusion that THE JOY OF SIX headline played no part in the defendant’s decision to produce the promotional goods; that decision was made because of the defendant’s long-standing practice of capturing historical events on memorabilia. According to the court, the "[d]efendant cannot appropriate THE JOY OF SIX to herself and thereby prevent others from using THE JOY OF SIX."
Federal Circuit Defers to Jury’s Factual Findings on Enablement
By Willem Gadiano
The U.S. Court of Appeals for the Federal Circuit recently vacated a grant of judgment as a matter of law in favor of Genentech in Bio-Technology General Corp. and Bio-Technology General (Israel) Ltd. v. Genentech, Inc., Case Nos. 00-1223, -1267 (September 27, 2001).
Mature human growth hormone (hGH) is a protein consisting of 191 amino acids that is used as a treatment for increasing height in children with GH deficiency, chronic renal insufficiency or Turner’s syndrome. Genentech is the owner of U.S. Patent No. 4,601,980, entitled "Microbial Expression of a Gene for Human Growth Hormone." The ‘980 patent discloses a method for producing met-hGH, a 192 amino acid protein, consisting of the 191 amino acid protein hGH with an attached leader amino acid, methionine. Claim 2, the only claim at issue, recites "a gene for human growth hormone unaccompanied by the leader sequence of human growth hormone or other extraneous protein bound thereto." The specification of the ‘980 patent states that although the methionine leader does not affect the bioactivity of the resulting hGH protein product, "one can expect" the methionine to be cleaved within the bacterial cell to yield mature hGH.
Genentech alleged the ‘980 patent is infringed by Bio-Technology General’s (BTG) hGH product, which is described in BTG’s new drug application as containing 93.8 percent met-hGH and 6.2 percent mature hGH. In its defense, BTG asserted that claim 2 is invalid for failure to enable the production of hGH without the methionine leader because the method described in the ‘980 patent produces only met-hGH.
After extensive expert testimony by both sides, the jury decided that BTG had not proven by clear and convincing evidence that the ‘980 patent would not have enabled a scientist skilled in the art in July 1979 to make any mature human growth hormone of 191 amino acids. In response, BTG filed a motion for judgment as a matter of law (JMOL) that claim 2 of Genentech’s ‘980 patent is invalid for lack of enablement. The district court granted BTG’s motion for JMOL stating that "no reasonable jury could have failed to answer [that claim 2 was not enabled]." Because it ruled that claim 2 is invalid, the district court did not reach the issue of infringement. Genentech appealed.
Noting that enablement issues are a matter of law based on underlying factual inquiries, Judge Newman rejected BTG’s arguments with respect to non-enablement of claim 2, relying on a claim interpretation in earlier litigation involving the ‘980 patent that claim 2 encompasses both met-hGH and hGH. Judge Newman noted, "[T]he evidence presented at trial must be considered in the light most favorable to the jury’s verdict, drawing reasonable factual inferences and resolving issues of credibility in favor of the verdict." The Court continued, "[W]hen scientific certainty is not available, and the scientific theories and evidence are within a reasonable range of difference of scientific opinion, resolution of such difference based on weight and credibility of evidence is the province of the trier of fact." Here, because the Court believed that the disputed jury verdict was supported by substantial evidence (expert testimony) and could have been reached by a reasonable jury, it vacated the district court’s judgment of invalidity based on non-enablement and reinstated the jury verdict. The Court remanded the case for further proceedings with respect to the issue of infringement.
Inherency: Not Always in the Eye of the Beholder
By Michael O' Neill
Arguing "in the alternative" is a venerable legal tradition: "I cannot be liable for this man’s dog bite injuries, your Honor, because my dog never bites . . . alternatively, I have no dog." EMI Group North America, Inc. v. Cypress Semiconductor Corp., Case No. 00-1508 (Sept. 21, 2001), once again enshrines this tradition, as the U.S. Court of Appeals for the Federal Circuit affirmed a judgment entered on a jury’s mutually inconsistent alternative verdicts.
EMI’s patents claimed the use of low-energy laser beams and a special, multi-layered fuse to disrupt small metal interconnects on integrated circuit chips. Cypress’ expert testified that the claimed explosion mechanism is physically impossible and that the supposedly patented process could not work as claimed. The expert also testified that, if he was wrong about impossibility, in any event the claimed mechanism would be inherent in similar prior art fuses, though he admitted that the mechanism would not have been known to those of ordinary skill in the art. In its special verdict, the jury found that the patents’ claims describe a mechanism that is impossible, and alternatively, that they describe a property inherent in the prior art and therefore was anticipated. The district court denied EMI’s judgement as a matter of law (JMOL) motion that the claims are not invalid for impossibility but granted EMI’s JMOL motion that the claims are not anticipated.
The Federal Circuit affirmed the denial of the first JMOL motion. The court noted that when one claim limitation recites incorrect science the entire claim is invalid under Section 101 for a lack of utility. The court concluded that Cypress’ expert testimony supported the jury’s verdict that the claimed explosion mechanism is impossible.
The Federal Circuit reversed the district court on EMI’s other JMOL motion, holding that it was error to insist on proof that one of ordinary skill in the art would have recognized or understood the natural law supposedly at work in the prior art devices. Pointing out that the person who first discovered that combustion requires oxygen could not have patented "a method of making fire by lighting a flame in the presence of oxygen," the Court held it was not necessary that one of ordinary skill understand the workings of prior art fuses for those fuses to anticipate EMI’s claims.
DMCA "Safe Harbor" Shields Online Auction Site from Secondary Copyright Liability
By Carrie Shufflebarger
A provider of internet auction services cannot be held secondarily liable for allegedly infringing auction items appearing on the auction site absent proper notice given by the copyright holder under the Digital Millennium Copyright Act (DMCA). Hendrickson v. eBay, Inc., Case No. CV 01-0495, 2001 U.S. Dist. LEXIS 14420 (C.D. Cal. September 4, 2001).
The plaintiff, Robert Hendrickson, appearing pro se, alleged to be the copyright owner of the documentary "Manson." Hendrickson sent a demand letter to eBay, asserting that pirated copies of "Manson" were being offered through eBay’s auction site. This letter did not fully describe Hendrickson’s copyright interest, nor did it identify which copies of "Manson" being offered on eBay were infringing copies. eBay responded by asking Hendrickson for more detailed information on which items were allegedly infringing and requested that Hendrickson submit proper notice pursuant to the DMCA’s notice provision, 17 U.S.C. § 512(c)(3)(A). Hendrickson refused to provide eBay with this information and brought a series of lawsuits against eBay in an attempt to hold the company secondarily liable for copyright infringement based on the allegedly infringing copies of "Manson" being offered for auction through its website.
The court determined that eBay was shielded from secondary liability under the "safe harbor" provision of the DMCA, 17 U.S.C. § 512(c), which shields an internet service provider from liability for infringing material stored or displayed on the service provider’s website, or for infringing activity that occurs using the material on the service provider’s computer system. The Court held that eBay qualified for safe harbor protection because eBay never received proper notice of infringement from Hendrickson, thereby precluding any duty on the part of eBay to remove or disable access to the allegedly infringing items. In particular, Hendrickson had not "substantially complied" with the notice requirements of the DMCA because he had failed to identify the problematic listings, he had not explained how to distinguish authorized copies from unauthorized copies being offered on the auction site, and he had failed to make a statement attesting to the good faith and accuracy of his claims. The Court found that the limited information that Hendrickson provided to eBay could not, as a matter of law, establish that the company had actual or constructive knowledge that a particular listing involved infringing activity.
The Court likewise held that eBay does not have the right or ability to control the infringing activities, even though eBay does have the technical ability to block access to materials appearing on its website. The Court noted that to hold otherwise would defeat the purpose of the safe harbor provision and render the DMCA internally inconsistent insofar as the DMCA requires service providers to remove or block access to materials posted on its system when it receives a proper notice of claimed infringement. See 17 U.S.C. § 512(c)(1)(C). Congress could not have intended for a service provider to lose immunity under the safe harbor provision of the DMCA because it engaged in acts that are specifically required by the DMCA. Since eBay met each prong of the DMCA’s "safe harbor" provision, the Court granted summary judgment to eBay.
Watch What the Judge Says at Settlement—
How the Text of the Dismissal Order Defines Settlement Agreement Jurisdiction
By Steven Allis
Patent litigation is the exclusive domain of the federal courts. However, settlement agreements resulting from patent litigation are contracts that are typically interpreted and enforced by state courts, unless jurisdiction over the agreement is retained by the federal court. Schaefer Fan Co., Inc. v. J&D Manufacturing, Case No. 00-1545 (Fed. Cir. Sept. 7, 2001).
The patent at issue in Schaefer concerned a patent for a fan safety guard. After the parties settled, the district court issued an order dismissing the case "pursuant to a confidential settlement agreement." The agreement itself stated that either party had the right to seek enforcement of the agreement in the district court. After learning about two new J&D fan guards that Schaefer believed breached the agreement, Schaefer returned to the district court to seek enforcement of the agreement. The district court found it had subject matter jurisdiction and, through a special master, interpreted the claim language to find that J&D willfully breached the agreement. J&D failed to appeal the special master’s claim construction. The district court held J&D in contempt and awarded costs and damages to Schaefer. J&D appealed arguing that the lower court lacked subject matter jurisdiction since enforcement of the agreement is a matter of state law, not patent law.
The majority opinion by Judge Rader concluded that the district court properly retained subject matter jurisdiction because it manifested an intent to retain jurisdiction over the settlement agreement. That intent was derived from the dismissal order and the district court’s apparent acceptance of the enforcement jurisdiction as stated in the settlement agreement. The court concluded that since the settlement agreement was "embodied within the dismissal order," the district court had jurisdiction under principles of retained jurisdiction.
The dissent by Judge Dyk criticized the majority’s reliance on earlier cases that were inconsistent with the Supreme Court’s decision in Kokkonen v. Guardian Life Insurance Co. of America, 511 U.S. 375 (1994), holding that retained jurisdiction is only present where a district court affirmatively incorporates a settlement agreement into its order, rather than merely indicating its awareness of the agreement. The dissent also faulted the majority for giving weight to the jurisdiction clause in the settlement agreement since federal court jurisdiction can not be conferred by the litigants. Finding insufficient evidence that the district court was even aware of the terms of the settlement agreement, the dissent concluded that the district court lacked subject matter jurisdiction under Eighth Circuit case law.
