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IP Bulletin, May 2011

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05.17.2011 | Legal Update

Federal Circuit Developments Regarding Divided Infringement
The divided infringement defense, which requires that a single party infringe every element of a patent claim to establish liability, has received a great deal of attention in the past few years. The Federal Circuit recently agreed to rehear the case of Akamai Technologies, Inc. v. Limelight Networks, Inc. en banc to provide further guidance concerning this defense. This decision closely follows two other Federal Circuit opinions that also deal with divided infringement: Centillion Data Systems, LLC v. Quest Communications International, Inc. and McKesson Technologies, Inc. v. Epic Systems Corporation. Applicants should continue to review their method and system claim drafting strategies to ensure they are not susceptible to divided infringement problems.

To read more about the en banc hearing of Akamai Technologies, as well as practical tips about claim drafting to avoid divided infringement problems, click here.

BPAI Rules on Inter Partes Reexamination Jurisdiction
In only its third and fourth Informative Opinions of 2011, the Board of Patent Appeals and Interferences (BPAI) considered whether it has jurisdiction to hear refusal of an inter partes reexamination request. In Belkin Int’l v. Optimumpath and Abbott Diabetes Care, Inc. v. Patent of Dexcom, Inc., the BPAI ruled that it does not have jurisdiction to consider errors in an examiner’s decision to deny a third party’s request for reexamination because it raises no substantial new question of patentability. A third party requestor can petition such an unfavorable decision to the Director under 37 C.F.R. §1.927, but the Director’s decision is final and non-appealable. These cases serve as a reminder that third party requestors in inter partes reexamination proceedings should take care to be thorough and vigilant in their requests before the Examiner and the Director to reduce the chances of their request being denied, since there is no opportunity for appeal beyond the Director to the BPAI or other authority.

For a copy of BPAI’s opinion on Belkin Int’l v. Optimumpath, click here.

For a copy of BPAI’s opinion on Abbott Diabetes Care, Inc. v. Patent of Dexcom, Inc., click here.

Funding Cuts Stall USPTO Backlog Initiatives
The recent federal budget compromise will cut approximately $100,000,000 from the fees collected by the United States Patent and Trademark Office (USPTO) and divert that money to other federal programs. In response to this funding cut, the recently announced expedited patent examination program and the opening of the Detroit satellite office have been indefinitely postponed. The cuts will also directly affect the examining corps as Director Kappos has instituted a hiring freeze and announced cuts to overtime, training, and expenses. Funding for the outsourcing of Patent Cooperation Treaty (PCT) searches will also be substantially reduced. Despite the funding cuts, the “Clearing the Oldest Patent Applications” (COPA) initiative remains in place and appears to be having an impact on the number of applications that have been waiting at least 16 months for a first Office Action. On April 14, 2011 the House Judiciary Committee voted in favor of a bill that would put an end to fee diversion from the USPTO, which may be up for a full vote when Congress returns in May.

To read more about the USPTO funding cuts, and the impact the cuts may have on practitioners, click here.

Two Solutions to a Single Problem – Can I Claim Just One of the Solutions?
In the recent Crown Packaging Tech. v. Ball Metal Beverage Container Corp. case, the Federal Circuit provided further guidance on the written description requirement, adding to its post-Ariad jurisprudence. In this latest case, related to soda cans (or “pop” cans, as this Midwestern-raised author prefers), the court was tasked with determining whether a specification that presented two solutions for solving a single problem provided written support for claims directed to only one of the two solutions. The defendant alleged that the specification only supported claims with both solutions because it only disclosed embodiments that incorporated both solutions. The plaintiff Crown owned two patents that each described two ways of saving metal when seaming can bodies and can ends: 1) increasing the slope of the chuck wall (the can end wall); and 2) limiting the width of the anti-peaking bead (the indented ring typically found just inside the rim of a can top). Some of the claims, however, covered just the use of the increased slope. The court rejected the premise that if two solutions relate to the same problem, they must both be recited in the independent claims. In reaching its decision, the court found that the specification supported two separate and clearly described solutions. The court also relied on the premise that a patentee is not limited to only the figures (which each illustrated both solutions), as well as on the doctrine of claim differentiation (dependent claims recited a reduced width of the anti-peaking bead). One of the judges dissented, arguing that there needed to be a disclosure of a can that included the increased slope but that lacked the reduced-width anti-peaking bead. In view of this decision, practitioners should keep in mind the benefits of drafting specifications with multiple and diverse embodiments and in using dependent claims for the benefit of making future claim differentiation arguments. Nevertheless, a specification describing a single embodiment may not be too limiting provided appropriate care is taken to avoid language specifically limiting the patentee to that embodiment.

To read the Federal Circuit decision in Crown Packaging Tech. v. Ball Metal Beverage Container Corp., click here.

$1.67 Billion Jury Verdict Reversed on Written Description Grounds
In the recent Centocor Ortho Biotech, Inc. v. Abbott Laboratories case, the Federal Circuit reversed a $1.67 billion jury verdict that found Abbott to have willfully infringed one of Centocor’s patents with its Humira® antibody. On appeal, the Federal Circuit held that Centocor’s asserted claims were invalid for lack of written description. The Court stated that while, in some instances, disclosure of a protein provides adequate written description for antibodies that bind to that protein, such a disclosure was not present here. The Court distinguished earlier cases that disclosed novel antigens where creation of the claimed antibodies was routine from the instant case, in which specific properties of the claimed antibodies were not adequately described.

While this case does not represent a substantial departure from existing written description law, it does underscore a predicament in the “unpredictable” arts: while narrow claims tend to limit the value of patent protection, broad claims may be susceptible to invalidity attack on written description grounds. Some commentators view this decision as indicative of a trend at the Federal Circuit to use the written description requirement to prevent overreaching by holders of broad, pioneering biotech patents. Some also see this as a trend that may soon expand into the more “predictable” arts.

To read more about the Centocor decision, and for practical tips related to meeting written description requirements, click here.

FTC Releases Report Detailing its Recommendations for Improving the Patent System
The Federal Trade Commission (FTC) recently released a report detailing its recommendations for improving the patent system to enhance consumer welfare and encourage competitive innovation. In 2008, the FTC held eight days of hearings with business representatives, independent inventors, patent practitioners, scholars, and economists on the interplay of notice, remedies, innovation, and competition in the patent system. The culmination of these hearings is a report entitled “The Evolving IP Marketplace: Aligning Patent Notice and Remedies with Competition” that summarizes the FTC’s findings and suggestions for improvement. As the title suggests, the report highlights two aspects of the patent system that the FTC feels are key to encouraging competitive innovation. First, the report recommends that the patent notice function be improved. Without clear notice of what a patent covers, businesses become hesitant about investing in or designing around a patent, and technology transfer is stalled. Second, the report notes that patent remedies should seek to replicate the market reward that the patent holder would have earned absent infringement. Under-compensation discourages investment in research and development while over-compensation encourages speculation in patent rights and litigation. The report concludes that improvement in these two realms should provide a more suitable and fertile environment for sustained competitive innovation, and thereby enhance overall consumer welfare.

To read the FTC’s report “The Evolving IP Marketplace: Aligning Patent Notice and Remedies with Competition,” click here.

Nutter's IP Bulletin is a bi-monthly publication of the Intellectual Property Practice at Nutter McClennen & Fish LLP in Boston. This edition of the bulletin was edited by Michael P. Visconti. Assistance in the preparation of this issue was provided by Rory P. Pheiffer and Derek P. Roller. For further information, please contact your Nutter attorney at 617-439-2000.

Recognized as a “Go-To” patent firm by IP Law & Business and Corporate Counsel, Nutter is dedicated to making its clients’ strategic goals a reality and to maximizing the protection and value of their intellectual property. The firm has a long track record as the trusted IP advisor to innovative public and private companies, medical institutions and research universities, investors, entrepreneurs and inventors.

This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.

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