IP Update, Volume 5, No. 1, January 2002
January 2002
IN THIS ISSUE
- Patents/Inequitable Conduct - No Intent to Deceive Despite Failure to File Full Translation of Material, Non-Cumulative Foreign Art
- Patents/Prosecution History Estoppel - The Federal Circuit’s Early Christmas Presents—Two Escapes from Festo
- Trademarks/E-Commerce - Chinese Website Located at cnnews.com Constitutes Actionable "Use in U.S. Commerce" Under Lanham Act
- Trademarks/Dilution - Trademark Must Be Famous Outside the Context of Its Goods and Services in Order to Qualify for Protection Under the Federal Dilution Act
- Patents/On-Sale Bar - Only A Legally Enforceable, Contractual Offer For Sale Will Satisfy The First Prong of The Supreme Court’s On-Sale Bar Test
- Patents/Litigation Sanctions - Lawyer Filing Infringement Claim Need Not Be Soothsayer To Avoid Rule 11 Sanctions
- Patents/Litigation - District Court Acted Within Its Discretion When It Dismissed, Without Prejudice, Case by Plaintiff Who Did Not Actually Own the Patent-In-Suit
- Patents/Reissue - If Operating Under Old Rule 175, Are All Errors Accounted for in the Reissue Oath?
No Intent to Deceive Despite Failure to File Full Translation of Material, Non-Cumulative Foreign Art
By Natalia Blinkova
The U.S. Court of Appeals for the Federal Circuit upheld the district court’s claim construction (by soon-to-vacate Judge McKelvie) finding the amended claim language "substantially completely wetted," to be a "clarification," not an additional limitation, and deferred to the district court’s finding that the prosecuting attorney did not intend to deceive the U.S. Patent and Trademark Office (PTO) when failing to cite a material, noncumulative prior art reference. LNP Eng’g Plastics, Inc. v. Miller Waste Mills, Inc., Case Nos. 00-1501, - 1563 (Dec. 21, 2001)
The district court’s construed the claim term "substantially completely wetted," a term nowhere defined in the written description of the two patents in suit, as "largely but not completely surrounded by resin." In affirming this claim construction, the court also agreed with the district court that patentee’s amendment, adding the phrase "substantially completely" to modify "wetted" in order to overcome a prior art rejection during a reexamination proceeding, merely clarified but did not further limit the claim element.
Also, the Federal Circuit agreed with the district court that the patentee had not committed inequitable conduct during reexamination proceedings involving one of the patents in suit by withholding a prior art Japanese patent that formed the basis for the Japanese Patent Office’s rejection of the counterpart of one of the patents at issue. The prosecuting attorney had ordered a partial translation of the reference, compared that partial translation to a related Japanese patent (which had been cited to the PTO) and testified that he concluded the two patents were cumulative. The attorney thus decided to forego a full translation of the reference and did not submit the art to the PTO. Although the district court concluded the two references were not cumulative and that the prosecuting attorney’s overall behavior raised issues of inequitable conduct, it concluded that the patentee’s actions "did not evince intent to deceive the PTO." The Federal Circuit, citing to the deferential standard of review, upheld the ruling of no inequitable conduct: "[a] very deferential standard of review… governs inequitable conduct determinations. Moreover, the district court’s determination on intent in this case, depended heavily on the assessment of witness testimony at trial."
Practice Note: Although the claim construction issue in this case did not arise in the context of a doctrine of equivalents infringement analysis, the Court’s willingness to construe the amended claim language "substantially completely wetted" as a "clarification" that did not narrow the original claim language "wetted," where the claim language was amended during reexamination to overcome a prior art rejection, will likely be cited by many patentees in a doctrine of equivalents context to counter a Festo absolute bar defense.
Also, in deferring to the district court holding of no unenforceability, the Federal Circuit did not even cite to the recent and factually similar case of SEL v. Samsung (see IP Update, Vol. 3, No. 4 (April 2000)). In SEL, the Federal Circuit deferred to the district court’s exercise of discretion in upholding a finding of unenforceability where a patentee filed a partial translation, omitting the most material disclosure of a foreign language reference. [editors]
Patents/Prosecution History Estoppel
The Federal Circuit’s Early Christmas Presents—Two Escapes from Festo
By Keith George
Pending a decision from the U.S. Supreme Court, the only apparent way to avoid the Festo-bar problem is to avoid narrowing the claim element. Two decisions issued the week before Christmas, Bose Corp. v. JBL, Inc., Case No 01-1054 (Fed. Cir. Dec. 17, 2001) and Interactive Pictures Corp. v. Infinite Pictures, Inc., Case No 01-1029 (Fed. Cir. Dec. 30, 2001), exemplify the gifts some panels may give patentees by characterizing amendments as non-narrowing and allowing application of the doctrine of equivalents.
In its Festo decision last year, the Federal Circuit imposed a strict rule that any narrowing amendment made for a reason related to patentability creates prosecution history estoppel, resulting in a complete bar to equivalents for the amended claim element. The court has followed that case with a series of decisions that applied the rule to all manner of amending claims that lead in any way to a narrower scope of coverage than originally sought. If the Festo rule survives Supreme Court review, the area that will become hotly contested with regard to the doctrine of equivalents and prosecution history estoppel will be the question of whether an amendment actually narrowed the scope of the effected element of the patent claim.
In the Bose case, the independent claim included a limitation regarding an ellipse. During prosecution, Bose amended the independent claim to further state that the ellipse had a "major diameter" in order to provide express antecedence for a reference to such a diameter in one of the dependent claims. The Federal Circuit concluded that the amendment did not narrow the claim, because one skilled in the art would have known that an ellipse inherently has a major diameter. Essentially, the court found that the addition only provided an express recitation of a feature that was already inherent and did not narrow the ellipse limitation.
In Interactive Pictures, the claimed device included an image transform processor that produced output signals based on a combination of stored digitized image signals and selected viewing angles and magnification. In response to an art rejection, the applicant amended the claim to indicate that the processor output signals were "output transform calculation signals." The court held that the amendment only made explicit what was already implicit in the original claim recitation of "transform" processor and the disclosure of equations used to compute the output signals. The opinion characterizes the amendment as one not made for a reason related to patentability. However, the rational is similar to that applied in its Turbocare case (see IP Update, Volume 4, No. 8- August 2001), which held that an amendment to make an implicit requirement explicit does not narrow the effected claim element. The court cited Turbocare to support its conclusion in Interactive Pictures that the Festo bar was inapplicable.
Chinese Website Located at cnnews.com Constitutes Actionable "Use in U.S. Commerce" Under Lanham Act
By Carrie Ann Shufflebarger
Registering and using the domain name cnnews.com to provide a Chinese website and news service constitutes actionable "use in United States commerce" under the Lanham Act, even though the site was primarily in the Chinese language and directed to Chinese-speaking individuals. Cable News Network L.P. v. CNNEWS.COM, Civ. Action No. 00-2022-A, 2001 U.S. Dist. LEXIS 21388 (E.D. Va. December 21, 2001).
A Chinese company registered the domain name cnnews.com, which it used in connection with a Chinese website offering news services and other information targeting Chinese-speaking individuals worldwide. Although the text of the website was primarily in the Chinese language, the site also included a significant amount of English-language content. Upon learning of this website, the plaintiff, Cable News Network. L.P. (CNN), brought an in rem suit under the Anticybersquatting Consumer Protection Act (ACPA) against the domain name, including claims for trademark infringement and trademark dilution.
The domain name registrant argued that the cnnews.com domain name was not substantially "used in commerce" under the Lanham Act because the domain name registration contract was with a domain name registrar located in China, and that the site sells products only to Chinese citizens and, therefore, does not target United States citizens. The court rejected each of these arguments, finding that .com is essentially an American top-level domain (TDL) administered by an American domain name registry, that CNN is a famous trademark in the United States and internationally and that the site targets Chinese-language speakers globally, including Chinese speakers in the United States. The court held that these circumstances combined to affect American commerce under the Lanham Act.
Weighing the elements of each of CNN’s causes of action, the court granted summary judgment to CNN on its trademark infringement claim under the ACPA. The court denied CNN’s trademark dilution claim, however, holding that CNN was unable to demonstrate actual economic harm as is required under Fourth Circuit dilution law.
Trademark Must Be Famous Outside the Context of Its Goods and Services in Order to Qualify for Protection Under the Federal Dilution Act
By John Dabney
The U.S. Trademark Trial and Appeal Board (TTAB) has held that in order for a mark to be protected under the federal Dilution Act, a plaintiff generally must prove that its mark is famous outside the context of the plaintiff’s goods and services. The Toro Co. v. ToroHead, Inc., 2001 TTAB LEXIS 823 (TTAB Dec. 12, 2001).
Toro Co. owns the federally registered mark TORO for lawn care products. The applicant applied for the mark ToroMR for "very low reluctance, thin magnetic reading and writing heads for sale to OEM manufacturers of high yield performance computer disk drives." Toro Co. opposed registration of the applicant’s mark on the ground that it violated the Dilution Act, 15 U.S.C. § 1125(c).
The TTAB held that the opposer had failed to prove that its mark TORO was sufficiently famous to qualify for protection under the Dilution Act. The TTAB explained that "to be vulnerable to dilution, a mark must be not only famous, but also so distinctive that the public would associate the term with the owner of the famous mark even when it encounters the term apart from the owner’s goods or services, i.e., devoid of its trademark context." Because Toro had failed to offer sufficient evidence that consumers associate Toro’s mark in any context with Toro, the TTAB concluded that Toro had failed to prove that its mark was famous. It did not matter that Toro had offered circumstantial evidence of fame in the form of substantial advertising and promotional activities. "In a dilution case, this would only be the beginning of establishing that the mark is famous. Parties claiming their marks are famous must establish conclusively that the advertising has succeeded." Evidence demonstrating that the trademark owner’s advertising efforts have succeeded includes recognition by the other party, intense media coverage and consumer surveys.
Only A Legally Enforceable, Contractual Offer For Sale Will Satisfy The First Prong of The Supreme Court’s On-Sale Bar Test
By Matthew Weil & Jennifer Yokoyama
In its continuing quest to establish "bright line" tests in the area of patent law, the U.S. Court of Appeals for the Federal Circuit has confirmed and strengthened its earlier holding that, in order to constitute an "offer for sale" in the context of the Section 102 "on-sale bar," commercial activity must rise to the level of an offer for sale under contract law. Linear Technologies Corp. v. Micrel, Case No. 99-1598, 00-1045 (December 28, 2001).
In Linear Technologies, the Federal Circuit overturned a district court ruling that sufficient activity had taken place to constitute an "offer for sale" within the meaning of the "ready for patenting" prong of the test articulated in Pfaff v. Wells Electronics, Inc. In so doing, the Federal Circuit accepted the district court’s factual findings concerning aggressive marketing by Linear Technologies of the product in question—which the district court found rose to the level of "substantial preparatory activity prior to the [critical date], including seeking feedback from its sales representatives and distributors regarding the pricing of the [product] and the publication of data sheets and other promotional materials"—but determined that none of Linear Technologies’ activities constituted an "offer for sale" under contract law.
The Linear Technologies opinion puts a strong exclamation point after the Federal Circuit Court’s earlier decision in Group One, Ltd. v. Hallmark Cards, Inc., (See, IP Update Vol. 4, No. 7), in which the Court had opined that Pfaff "strongly suggests that the offer must meet the level of an offer for sale in the contract sense, one that would be understood as such in the commercial community." In reaffirming and reinforcing Group One, the Court appears to have put a final stake through the heart of RCA Corp. v. Data General Corp., which held that commercial activity not rising to the level of a formal offer for sale could trigger the on-sale bar.
Lawyer Filing Infringement Claim Need Not Be Soothsayer To Avoid Rule 11 Sanctions
By Matthew Weil & Jennifer Yokoyama
The Court of Appeals for the Federal Circuit confirmed that lawyers do not need to be prescient in order to comply with their pre-filing investigation obligations under Rule 11. Antonious v. Spalding & Evenflo Cos., Case No. 01-1088 (January 7, 2001).
In the district court, the patentee’s lawyers, Finnegan, Henderson, filed suit against Spalding & Evenflo. Spalding won summary judgment of non-infringement as to certain of the accused products, in part by convincing the district court to reject Antonious’ proposed claim construction.
Having prevailed on summary judgment, Spalding sought sanctions under Rule 11(c) against Antonious and its counsel, Finnegan, Henderson, for failure to conduct a reasonable pre-filing factual investigation. The district court awarded sanctions against Finnegan, Henderson, apparently on the grounds that Finnegan, Henderson lawyers had not adequately investigated whether the accused devices infringed the patents in suit in view of the claim construction that the court subsequently determined to be the proper one. Finnegan, Henderson appealed.
The Federal Circuit vacated the sanctions order and remanded to the district court to consider the adequacy of Finnegan, Henderson’s pre-filing investigation in light of Finnegan, Henderson’s view of the proper claim construction, not in light of the claim construction ultimately settled upon by the court. Sanctions are appropriate only if the court determines that the pre-filing investigation was inadequate under patentee’s claim construction.
District Court Acted Within Its Discretion When It Dismissed, Without Prejudice, Case by Plaintiff Who Did Not Actually Own the Patent-In-Suit
By Matthew Weil & Jennifer Yokoyama
In a case that the U.S. Court of Appeals for the Federal Circuit itself termed procedurally "unusual," the Court affirmed the district court’s decision to dismiss without prejudice a patent case in which the plaintiff had not yet obtained legal title to the patent-in-suit. H.R. Technologies, Inc. v. Astechnologies, Inc., Case No. 01-1121 (January 11, 2001).
At the time it filed suit, H.R. believed that it had obtained ownership of the patent-in-suit pursuant to an assignment from a company owned by the inventor of the patent. During discovery, however, the parties learned that H.R. did not actually own the patent because the company from which it purportedly acquired it did not own the patent at the time of the purported assignment.
The parties did not dispute that dismissal of the case was proper in view of the newly discovered facts. They did, however, dispute the district court’s decision to enter a dismissal without prejudice. As a threshold matter, applying its own law (not that of the regional circuit) to the question of the finality of the dismissal, the Federal Circuit concluded that a dismissal of a patent action without prejudice is a final, appealable order and it, therefore, had jurisdiction over the appeal. In determining whether a dismissal should have been with or without prejudice, the court applied the law of the regional circuit, under which the decision whether to dismiss with or without prejudice is committed to the sound discretion of the district court, concluding that the district court did not abuse its discretion in this case.
The parties also disputed the district court’s decision to dismiss Astechnologies’ counterclaims along with the main action. Realizing that the practical effect of the dismissal of the counterclaims was likely insignificant in this case (as the counterclaims had already all been reasserted in new proceedings), the Federal Circuit nevertheless held that it was legal error for the district court to dismiss those counterclaims over the counterclaimant’s objections and vacated that portion of the district court’s order.
If Operating Under Old Rule 175, Are All Errors Accounted for in the Reissue Oath?
By Lawrence Cullen
The U.S. Court of Appeals for the Federal Circuit, in affirming a district court ruling that claims in a reissue patent are invalid, made it clear that strict compliance with 37 C.F.R. § 1.175 is mandatory. Dethmers Mfg. Co. v. Automatic Equipment, Case No. 00-1114, 00-1130 (Dec. 5, 2001).
Dethmers filed for and obtained a reissue of their patent directed to a removable towing hitch to correct two stated errors: the inclusion of the subject matter of application claims 2 and 3 in application claim 7, which issued as claim 1; and the use of the term "pivot block" in application claim 4. The reissue application was granted and the reissue patent was granted.
When Dethmers sued Automatic for infringement, Automatic defended on the basis that the reissue declaration was fatally defective because it failed to satisfy the requirements of 37 C.F.R. § 1.175. The district court found the reissue declaration to be fatally defective for failure to identify an error corresponding to each amendment to the claims and specification and held all claims invalid due to the defective reissue declaration.
The Federal Circuit held that the U.S. Patent and Trademark Office’s old Rule 175 required the reissue declaration to particularly specify each error relied upon, and how it arose or occurred, even though word-for-word correspondence is not required between a reissue declaration and the changes made in a reissue application. The Court held that amendments that were required by the examiner during the reissue proceedings were not required to be addressed in the reissue declaration. However, the Court held that the alleged error in the reissue declaration of including claims 2 and 3 in application claim 7 was not an assertion of error to include of either of claims 2 or 3 individually in claim 7. The Court also held that an allegation of an error regarding the term "pivot block" did not constitute an allegation of an error relating to the term "pivot member." The Court held that any claims that contained an amendment not discussed in the reissue declaration is invalid.
The court noted that new Rule 1.175, which took effect on December 1, 1997, does not require each error to be discussed in the reissue declaration but, rather, requires only one error to be discussed.
Judge Dyk dissented-in-part on the basis that the Court should give deference to the USPTO in application of the rules of the USPTO. The dissent was based on the rationale that the standards of the Administrative Procedures Act were to be applied under the Supreme Court decision in Dickinson v. Zurko.
