Aug 202012
 

An important precedential decision was decided recently on the issue of obviousness.  I have provided my summary of the case along with some take-home messages.

ALCON RESEARCH, LTD. (FORMERLY KNOWN AS ALCON MANUFACTURING, LTD.), ALCON LABORATORIES, INC., AND KYOWA HAKKO KIRIN CO. LTD., v. APOTEX INC. AND APOTEX CORP., Appeal No. 2011-1455 (Fed. Cir. August 8, 2012). Before Prost, Moore, and O’Malley. Appealed from S.D. of Indiana (Judge Young).

Background:

Alcon holds a patent which claimed methods for treating allergic eye diseases in humans by topically administering an olopatadine composition. olopatadine was known in the prior art as an effective antihistamine, and chemicals related to olopatadine were known to have mast cell stabilizing activity.  However, olopatadine was not known to stabilize mast cells.  Moreover, mast cells from different species, and even different tissue from the same species, can have different biological responses.  Therefore, even though the drug was already known in the art, Alcon’s scientists were the first to show that olopatadine could stabilize conjunctival mast cells in humans. The commercial embodiment of this patent was the anti-allergy eye drop Patanol.

Apotex submitted an Abbreviated New Drug Application (ANDA) to the Food and Drug Administration seeking approval to market a generic version of Patanol. Alcon sued Apotex for patent infringement. The district court held that the claims were not obvious over a Kamei reference, which disclosed an overlapping range of administration of olopatadine in guinea pigs. The claims required administering a therapeutically effective amount of the composition to stabilize the conjuctival mast cells. Dependent claims specified a range of amount that the olopatadine was administered. The district court primarily relied on Kamei’s disclosure that olopatadine was actually not a mast cell stabilizer in finding the claims non-obvious. Apotex appealed.

Issue/Holding:

Did the district court err in holding that the Kamei reference did not render obvious the claims of Alcon’s patent? Yes, reversed-in-part.

Discussion:

The Federal Circuit first reasoned that “a therapeutically effective amount” could not be a range less than 0.0001% w/v to 5% w/v, because a dependent claim cannot be broader than a claim from which it depends. Thus the claimed therapeutically effective amount had to include at least the dependent claim range or else the claim was inoperable. Furthermore, because the claims required that the mast cells be stabilized, because Alcon admitted that certain quantities within the dependent claimed range do not stabilize the mast cells, the district court improperly read out of the claims the limitation of its dosage amount. The dosage in the range that was thus not operable. When claiming a range, part of the range that is inoperative (i.e., not enabled), cannot be later disavowed. Instead, the entire claim is invalid. “Courts do not rewrite the claims to narrow them for the patentee to cover only the valid portion.”

The Federal Circuit reasoned that there was a motivation to apply Kamei to humans because the lower court found that animal models are predictive of antihistamic efficacy in humans. The “motivation to modify a prior art reference to arrive at the claimed invention need not be the same motivation that the patentee had.”

The Federal Circuit after balancing the objective considerations of outstanding commercial success of Patanol of achieving nearly 70% of the market share within two years of its launch, nearly $2billion in sales within 10 years and garnering wide-spread praise within the industry, that Apotex had established by clear and convincing evidence that claims 1-3 and 5-7 would have been obvious to one of ordinary skill in the art over Kamei.

The Federal Circuit further held that claims 4 and 8, which did not fall within the range recited by Kamei, were not rendered obvious over Kamei.

 

 

 Posted by at 4:31 am
Apr 172012
 

My 5-year period of living in New England is coming to a close. I will be joining Oliff & Berridge, an IP law firm based in Alexandria Va, this month. I’m really looking forward to it! Posts may accordingly be either more sporadic or more regular. It just all depends.

 Posted by at 8:04 am
Mar 212012
 

Yesterday, a unanimous (9–0) Supreme Court reversed the Federal Circuit and held that a company’s personalized medicine dosing process was not eligible for patent protection because the process was an unpatentable law of nature. Rather than get in to the specifics, I’m just going to include a couple of thoughts.

It’s interesting that the Federal Circuit would twice (and unanimously) uphold Prometheus’s patent under the established subject matter framework only to have the Supreme Court reverse the Federal Circuit decision unanimously. Is it just me or doesn’t that seem like a very stark contrast? Wouldn’t you expect at least a couple of Supremes to side with the lower court’s reasoning? No, instead it’s as if there was not a doubt on the Supreme Court bench that the Federal Circuit did not know what it was doing. But to me it looks like the Federal Circuit panels did know what they were doing when they applied the machine-or-transformation test.

Next, subject matter eligibility appears to be a doctrine that will continue to grow rather than go away. In MySpace, Inc. v. GraphOn Corp., the Federal Circuit sought to avoid the murky morass of 101. There was hope that this pattern of looking to 101 as a very last resort would continue. However, with this most recent case by the Supreme Court this hope has dimmed. Instead the morass will likely be clarified and refined. Hopefully too, because as it is right now, it’s kind of confusing: abstract idea, law of nature, mental step, mental process, insignificant post-solution activity, no machine or transformation, nominally tied to apparatus, not embodied in a tangible medium, not limited to tangible practical application, can be performed by a human using pen and paper, does not constitute functional descriptive material, field of use limitation insufficient, mathematical algorithm, logic per se, only data elements, no structural components, physicality lacking, etc., etc., etc. What does it all mean? It kind of looks like if the court doesn’t subjectively like the patent, it fails 101.

 Posted by at 6:08 am
Jan 292012
 

It is difficult to say how much patent practitioners charge on average for filing a provisional patent application. It depends on a number of factors including the technology, the geographical locale, and the experience of the practitioner. But I have seen estimates between $1500-$3500 not including the USPTO filing fees. Some people inexperienced with the patent system may think this amount is too much money. “There’s got to be a cheaper alternative,” they insist. They might then get online and Google around. After looking through the results, these bargain hunter entrepreneurs may then choose a cheap provisional-filing alternative. To get a sense of what I am talking about, click here or Google “provisional patent filing” and you will see that there are services that charge as little as $97 to file. This sounds too good to be true, especially for the entrepreneur who is just starting out and wants to save every cent money possible. The problem is that these ultra cheap services are too good to be true. They are actually ripping you off if your goal is to eventually get a non-provisional out of this provisional application. Since the PTO does not evaluate the provisional application, a practitioner could technically file a load of jumbled and garbled text in a provisional application and the inventor could still have the coveted “Patent pending” status. But consider doing yourself a favor and using that money elsewhere. Because if you decide to go with an ultra cheap patent practitioner, you might as well forget that you ever wanted a patent with your desired filing date. Instead, you could approach someone in financial need, give them $225 (the amount of the $100 they charge plus the $125 filing fee) because you’re not going to get that back.

One of the big problems with these ultra cheap practitioners is that the provisional application they file is super bare bones. I encountered a situation where the specification was literally one paragraph. You might still be able to get a patent on such minimal amount of detail if your invention is very unique in its field. However, you might run up against a reference that is slightly similar to your invention and you have to rely on a particular nuance that sets your invention apart from the reference. With a one-paragraph specification, you do not have that good of a shot of dodging any prior art bullets.

One of the biggest sources of value that a patent practitioner can provide is ways for you to consider alternative embodiments of your invention so you’re not stuck when a generic reference appears to stand in your way. A good practitioner will also help you expand your invention’s scope.

So in sum, remember to beware of the ultra cheap patent practitioner.

 Posted by at 7:10 pm
Dec 202011
 

The Board of Patent Appeals and Interferences takes into account a number of authorities when deciding appeals. First at the BPAI’s disposal are the higher courts of the Federal Circuit and Supreme Court. Then there are the rulemaking guidelines issued by the PTO. Then of course there’s the MPEP. I’ve been interested in the whether the Federal Circuit affects the BPAI in terms of the number of rejections the Board issues.

Appeals before the Board are initiated after an examiner rejects a claim at least twice. The applicant, rather than continuing to spend time arguing with the examiner, can elect to appeal to the Board where a panel of three judges will hear both arguments. The Board then has three options. It can reverse the rejection, it can affirm the rejection, or it can introduce a new rejection. Since Bilski v. Kappos has been decided, the Board has used § 101 to reverse 95 times, affirm 166 times, and introduce 65 new rejections. Up until today, the percent of new rejections to how many times the Board has acted is about 20%.

To see whether the Board is affected by Federal Circuit cases, I divided the time frames up into intervals roughly 6 months apart when big Federal Circuit cases were decided. Here are the Federal Circuit cases: Research Corp v. Microsoft, Ass’n for Molecular Pathology v. Myriad, and Ultramercial v. Hulu. At times, there were two Federal Circuit cases decided within a short period of time, which I just combined.

 

A little about the time frames. The first time period is from June 28, 2010 to December 9, 2010, starting with the Supreme Court case Bilski v. Kappos and ending with the first big Federal Circuit decision decided on the merits of § 101. In this time period, the Board introduced new rejections 22.4% of the time, higher than the overall average. This was likely a result of the recent Supreme Court case and the PTO publishing post-Bilski guidelines a month after Bilski. In addition to these factors, two Federal Circuit cases that did not receive that much attention mentioned § 101 subject matter patent-eligibility: Intervet v. Merial Ltd included a dissent with a 101 focus and Astrazeneca v. Apotex was mostly decided on other grounds, but did mention subject matter. Both cases used 101 to poke holes in the patent at issue and the effect may have been felt at the BPAI.

Research Corp v. Microsoft was a subject matter game changer in the sense that it broadened the Bilski analysis by saying that unless the invention was very obviously an abstract idea, the invention should be statutory subject matter. As noted on Ryan Alley’s blog, the case looked as if it would affect the BPAI’s decisions when followed by the BPAI. Prometheus v. Mayo was decided over a week later which was also favorable to patent-eligible subject matter, especially for diagnostic methods. This time period saw new rejections dip to 18.4%.

Next, AMP v. USPTO.  The now-famous gene patenting case is familiar to most. While the take-home message from this Federal Circuit case is that the District Court was wrong in concludingi gene patents are not statutory subject matter, the method claims which were affirmed received far less attention. As noted on the Patents4Life blog post, the method claim analysis was very brief and the arguments not very well developed. Very shortly after AMP, the Federal Circuit decided Cybersource v. Retail Decisions. These two cases seemed to propel the BPAI forward with new rejections, cresting to 24.3%.

Ultramercial v. Hulu was another game changer. Like Research Corp, Ultramercial was another Judge Radar decision which seemed to broaden the 101 analysis from the earlier cases of AMP and Cybersource. This decision until the present has seen a dip in the number of new rejections at the BPAI to 16.7%.

In conclusion, it is interesting to see how the patent tides of change can be felt not only in the higher courts, but at the Board and the effect most likely trickles down to each examiner. I found that differences in rejections in the different time frames were interesting and expected, but not all the time frames were statistically significant at an acceptable confidence level.

All data was mined from the website http://www.bpai101.com/decisions. The word “affirmed” was searched in the outcome field for those decisions that were affirmed. The word “reversed” was searched for reversed decisions and the word “new” was searched for new rejections. Some cases performed multiple operations in one decisions, such as affirming one claim, reversing another or introducing a new rejection. In such cases of multiple operations, I included each operation separately. For instance, one decision could potentially yield a reversal, affirmation, and new rejection. Most decisions, however, had only one operation.

 Posted by at 8:41 am
Dec 152011
 

I haven’t come across a candidate as exciting and as dynamic as Ron Paul in a long time. The man’s focus is liberty and a more careful following of the constitution. I find him a very intelligent speaker and the consistency of his positions is remarkable. Here is an interesting interview about Anti-Trust and Monopoly with economics professor Dominick Armentano from 1983.

Dec 092011
 

I have been interested in § 101 cases for a number of reasons. First, as I’ve taken on clients, inevitably questions come up that relate back to § 101. I like to look at the Board of Patent Appeals and Interferences (BPAI) decisions because of the sheer volume of cases. From a practical perspective, studying decisions that involve subject matter patent-eligibility is a great way to improve your claim and specification drafting skills because you can learn from applicants’ brilliant or not-so-brilliant moments.

I have also been interested in BPAI § 101 out of sheer academic curiosity. In law school, I spent a considerable amount of time researching claim drafting for my law review note. I found that § 101 is increasingly becoming a volatile area of law, which is bad for predictability. Indeed, section 101 has recently been called the substantive due process clause of patent law and I’ve kind of wanted to figure it out. Like higher courts, I find it interesting when there appears to be contradictory holdings, that some decisions perhaps might have gone the other way if a different panel of judges had been assigned the case.

Section 101 has been in flux for awhile now, arguably since the Benson, Flook, Diehr cases starting in the 1970s. This flux has been highlighted within the last few years, with the Supreme Court “solidifying” § 101 law in Bilski v. Kappos. But since then, the lower courts including the BPAI have struggled to consistently apply precedent.

I have created a website devoted to making sense of § 101 patent-eligibility since Bilski v. Kappos by looking at the BPAI’s decisions that have been decided on the merits of subject matter patent-eligibility. The website is called BPAI101.com. It’s meant for both the practitioner who would like to keep up on current cases at the BPAI and also the academic who is interested in trends at the BPAI.

I decided to create this website because there is no site like it anywhere. The closest site is the BPAI’s ReadingRoom, but in trying to mine the BPAI’s decisions for interesting and relevant information, the website struggles for a number of reasons. Part of the reason for its struggles lies in the 1990s-style BPAI website itself. Each decision is only available by viewing its PDF file. Who wants to deal with a bunch of PDFs? Also, there is only one full-text search field, meaning that you have to search very broadly. If you are interested in a particular art unit and don’t want to sift through other numbers that happen to also appear in the entire document, you are out of luck. Next, only the precedential decisions have been OCR’d, meaning that content on the front page of each decision that are non-precedential will not show up. I don’t mean to diminish the BPAI’s site, but the website administrator simply told me that they don’t have the resources to add additional functionality.

BPAI101.com is designed to overcome many of these shortcomings. The site already starts with only those decisions that have been decided on the merits of subject matter 101. By going to the decisions page, you can view in tabular format a listing of all the decisions, which you can sort by clicking on the relevant column. You can also refine the results on a wide variety of filters. For instance, if you are interested in a particular time frame of decisions, you can select before, after, or in between values. You can also export these results into either CSV, Word, Excel, or XML format.

Another interesting feature of BPAI101.com is its unique use of tags. Each decision is made up of multiple tags that allow for more interesting information about it to be analyzed. For instance, in every decision, certain cases or guidelines can be used to support the decision. Each of these make up a “Support” tag. By looking at the tags, you can see which cases the Board uses to either affirm or reverse a particular rejection. Similarly, the Arguments tags lets you see how the Board articulates its reasoning for affirming or reversing a rejection. Examples of this include “Abstract idea” or “Mental steps” or “Fails the machine or transformation test.” Other tags include art unit, examiner, correspondent (applicant), authoring judge, and participating judge. At the very least, these tags will give you interesting conversation starters for the upcoming holidays: “So, did you know that Hubert C. Lorin and Jean R. Homere have each authored the most BPAI decisions on 101 subject matter?” “Hey, I don’t know if you knew this, but art unit 2166 has the most activity with regards to subject matter 101 appeals.” “Have you heard that Wilbert L. Starks is the examiner who has been appealed the most with regards to § 101?” The possibilities for interesting conversation are really endless.

BPAI101.com also allows for you to get connected to these decisions in the format that’s best for you. Equipped with an RSS feed to subscribe to, BPAI101 also has a Twitter account, Facebook page, Google+ page, and LinkedIn Group. With the help of BPAI101.com, you will hear about new 101 BPAI decisions before most people.

 Posted by at 8:05 am
Nov 222011
 

The Manual of Patent Examining Procedure is the reference for patent agents and patent attorneys. In the MPEP, the PTO outlines established patent law and guidelines into this one reference, the result of which is a manual of literally thousands of pages. The MPEP also importantly provides guidance for PTO employees and applicants in areas of patent law that are somewhat in flux. Since the first edition in 1949, new editions to the MPEP have been relatively slow going.

First Edition, November 1949
Second Edition, November 1953
Third Edition, November 1961
Fourth Edition, June 1979
Fifth Edition, August 1983
Sixth Edition, January 1995
Seventh Edition, July 1998
Eighth Edition, August 2001

However, since 2001, the PTO has accelerated updates through revisions on almost a yearly basis. 

Revision 1, February 2003
Revision 2, May 2004
Revision 3, August 2005
Revision 4, October 2005
Revision 5, August 2006
Revision 6, September 2007
Revision 7, July 2008
Revision 8, July 2010

Not too long ago, I passed the PTO registration examination. Studying for the exam involved me becoming very familiar with the MPEP. I found that the MPEP needs some updating. You see, the latest revision of the 8th edition of the MPEP was released July 2010. However, since that time a lot has changed that warrants another revision, or even edition. Besides the most obvious updates including the post-KSR guidelines, the America Invents Act additions, and additional pilot programs, it appears as if Section 2106 needs a complete revamp.

Section 2106 includes the 2005 interim guidelines of Subject Matter Eligibility. Since this time, we’ve seen a lot of activity with regards to § 101. For instance, the 2009 Guidelines in light of In re Bilski, Bilski v. Kappos, and the 2010 Guidelines. As you’ll see, this section focuses a lot on utility.

In section I.A., the guidance is to: “Identify and Understand Any Utility . . .”

However, isn’t the utility section of 101 another inquiry than subject matter eligibility?

The section continues: “The claimed invention as a whole must be useful and accomplish a practical application. That is, it must produce a “useful, concrete and tangible result.” State Street Bank & Trust Co. v. Signature Financial Group Inc.

But In re Bilski pretty decisively took care of this State Street doctrine, which Bilski v. Kappos did not overturn.

Next, “USPTO personnel should review the application to identify any asserted use. The applicant is in the best position to explain why an invention is believed useful.”

Again, utility is an inquiry in a different section 2107.

Finally, section III.C.2. refers to the “Useful Result, Tangible Result, Concrete Result.”

This entire section is State Street, which was overturned by In re Bilski. Outdated.

It is perhaps only a matter of time before outdated sections like 2106 become updated. However, it is too early to tell when this will happen. Part of me wants to predict that it will take quite some time. A lot of the America Invents Act provisions (some of which don’t become law until a couple years later) are still being planned and thought-through, which means that it may be a while before we actually see an update with these new provisions.

 

 

 Posted by at 1:27 pm
Nov 082011
 

Marty Goetz’s recent piece on reframing the software patent debate may be the best way to go forward. He asks, “Is an invention that is patentable in hardware, equally patentable if implemented in software?” This inquiry takes into consideration the machine-or-transformation test and the judicial statutory exceptions. For instance, if an invention is a patentable piece of hardware then the software that does the same thing should not be deemed an abstract idea or a mental process.

Goetz continued to compare software to a manufactured product. Both life cycles, he argues, have similar characteristics. The definition phase describes functionality, specifications, the environment in which it must operate, and its operating characteristics. In the design phase, they develop and define all the interfaces, break down the functionality into modules, and do all the engineering so that the product can be properly implemented. During the implementation phase the software is debugged, tested, and goes through quality assurance. During the delivery phase there is alpha and beta testing, documentation, installation, and training. Companies can sell the product to other companies where the product becomes a component of a larger system and is repackaged. During the maintenance phase the company warrants its workmanship, and guarantees the correction of errors and defects. Finally, during the enhancement phase the product is improved, enhanced, upgraded, and new models, or releases, are announced.

Notwithstanding all the similarities between computer programs and manufactures, to me the patentability inquiry should come down to how the invention is claimed. Thinking about a computer program as what it actually does and performs just like a hardware counterpart is useful in determining its patentability. It also helps to alleviate confusion among critics that claim that you can’t patent code. I think that the original Beauregard claim was claimed in a way that meets the Goetz standard, but since then there are many claims that don’t.

Consider this claim from Beauregard, patent number 5,710,578:

Claim 22. An article of manufacture comprising:
a computer usable medium having computer readable program code means embodied therein for causing a polygon having a boundary definable by a plurality of selectable pels on a graphics display to be filled, the computer readable program code means in said article of manufacture comprising:
computer readable program code means for causing a computer to effect, with respect to one boundary line at a time, a sequential traverse of said plurality of selectable pels of each respective said boundary line;
computer readable program code means for causing the computer to store in an array during said traverse a value of an outer pel of said boundary of said plurality of selectable pels for each one of a plurality of scan lines of said polygon; and
computer readable program code means for causing the computer to draw a fill line, after said traverse, between said outer pels having said stored values, for each said one of said scan lines.

Importantly, this claim as written specifies that the computer program code must be used to cause certain things to happen. For instance, “for causing a polygon . . . to be filled” and “for causing a computer to effect . . . a sequential traverse.” In other words, the inventor is not claiming the code, but rather the code to have the computer actually do something. This is much like a machine that has certain switches hard-coded into it, this claim is drafted to resemble it very nicely. Another example in simpler language is here:

A computer-readable medium storing instructions that, when executed by a computer, cause the computer to:

calculate a set of occluding shields in a voxel dataset using …;

designate a voxel whose effective opacity exceeds a specified …;

apply the occluding shields to identify the regions of the voxel data …; and

render the voxel dataset, ….

In my research, I have run into many Beauregard-style claims that do not claim the instructions causing the computer to do certain things. Instead, these overbroad claims claim a computer medium with instructions. This may not meet the Goetz standard. Consider this claim, for instance:

A computer-readable storage medium encoded with a set of instructions for a computer, said instructions including:

a display routine configured to display a plurality of two-dimensional (“2D”) images representative of cross-sections of a three-dimensional (“3D”) volume in a plurality of viewports, wherein the plurality of viewports includes a first viewport, a second viewport and a third viewport each configured to display one of the 2D images; and
an angle of cross-section modifying routine configured to :
(1) alter an angle of the 2D image displayed in the second viewport based on and simultaneous with a movement of a control line in the first viewport,
(2) alter an angle of the 2D image displayed in the third viewport based on and simultaneous with a movement of a control line in the second viewport, and
(3) not alter an angle of the 2D image displayed in the first viewport based on the movement of the control line in the second viewport.

Here the claim of a computer program product comprises a medium that has instructions. From the claim, the invention does not claim something like a manufacture, what the invention can concretely do. Instead, the claim is to a set of instructions. Other alternative language I have seen is medium that “bears” certain instructions, or is “operable” or “capable” of making the computer perform certain steps. Claiming a computer medium that has instructions operable to do certain things doesn’t mean a whole lot, however. The inquiry should be whether it does it or not. In fact, it is possible of having instructions on the medium that never make an effect on the invention itself.

Here the important distinction that supports the fact that software patents are deserved just as hardware patents are. If hardware and software are interchangeable, then features that are built into the product but never utilized are still part of code, but not part of the invention. Consider this snippet of imaginary code.
if(true){
first set of instructions
}
else{
second set of instructions
}
Here the invention never performs the second set of instructions. The computer program will perform only the first set of instructions because the statement is set to always be true. Just like if this was a piece of hardware and a switch was turned on, so this piece of software is always set to perform the first set of instructions. Yet the second set of instructions are on the machine-readable medium.

I think that the courts and PTO are struggling with how to classify software inventions. Like Goetz, I believe that in many instances they resemble real-manufactures quite remarkably. In order for them to be treated as such in the patent arena, their patent claims must likewise resemble what the claimed code is actually doing.

 Posted by at 9:46 am
Oct 282011
 

Everyone seems to have an opinion on patent trolls or NPEs. Me? I’m ambivalent. Having gone through law school and having worked at a small software company, I see both sides of the argument. Yes, having entities whose sole purpose is to sue and license to small companies seems to go against the purpose of patents, which is to promote the progress of science and useful arts. But on the other hand, a patent is a piece of property that can be transferred like any other piece of property with the same characteristics and privileges that the original owner had. According to the USPTO website, a patent is a property right granted by the Government of the United States of America to an inventor “to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States” for a limited time in exchange for public disclosure of the invention when the patent is granted. If you restrict rights of certain transferees, you undoubtedly diminish the strength of the patent as a whole.

The mainstream media has recently covered patents quite a bit especially with regards to reforming patent trolls. The America Invents Act changed the way that accused infringers are joined in federal court, for instance. But with all the talk of patent reform, and some people even calling for patents to be done away with, I think that an important conversation on damages is being passed over. Specifically, what is the damage sustained to an entity that just sits on its technology?And that only wants to license the technology?

In general, the code for damages is assessed first from the perspective of the patentee’s damage and then from the perspective of the infringer’s use:

Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court. 35 U.S.C. 284.

The first part of damages of this section, “adequate to compensate for the infringement,” would not seem to support lucrative compensation for non-practicing entities. After all, in order to be compensated one must be hurt and if one is not practicing his invention even very late into the tenure of the patent, where is the pain and suffering? The next part of §284 is the godsend for non-practicing entities: “in no event less than a reasonable royalty for the use made of the invention by the infringer.” In other words, the code takes a look at what the infringer is doing with the invention and uses that to calculate the damages that should be awarded. The section in the code further refers to an increase of the damages “up to three times the amount found or assessed.” Section 285 holds that in exceptional cases, reasonable attorneys’ fees can be awarded to the prevailing party.

I recently read a Hospital Systems complaint which rattled off against all listed defendants the same aggressive, boilerplate lingo. The plaintiff “has been and will continue to suffer damages as a result of Defendant’s infringing acts unless and until enjoined.”

What struck me further was in the request for relief.

WHEREFORE, Plaintiff Hospital Systems respectfully requests that the Court:
A.Permanently enjoin each Defendant, its agents, servants and employees, and all those in privity with each Defendant or in active concert and participation with any of the Defendants, from engaging in acts of infringement of the Patents;
B.Award Plaintiff Hospital Systems past and future damages together with interest to compensate for the infringement by Defendants of the Patents in accordance with 35 U.S.C. §284, and increase such award by up to three times the amount found or assessed in accordance with 35 U.S.C. §284;
C.Declare this case exceptional pursuant to 35 U.S.C. §285; and
D. Award Plaintiff Hospital Systems its costs, disbursements, attorneys’ fees, pre and post-judgment interest and such further and additional relief as is deemed appropriate by this Court.

These non-practicing entities don’t want to initially offer a license because of Sandisk v. MICRoelectric, which held that the offer of a license is threat of a lawsuit giving the offered party standing for a declaratory judgment. This means that the initiator of the lawsuit would get to choose their own favorable forum, like the Eastern District of Texas. However, a lot of these non-practicing entities really only want to license, so shortly thereafter a settlement letter is mailed: “we really want to resolve this outside of the courtroom, but we just did it because of that decision.”

How can an entity that claims in their complaint that they need an injunction, deserve treble damages and that the case is exceptional and attorneys’ fees are in order when they aren’t practicing their invention?? Even more interesting, how can they make such claims when the patent is about ready to expire? And if their only aspiration is to license? What is the plaintiff really suffering to see someone else make, use, or sell their invention after so many years of sitting on it? I’m not doubting that they are suffering, I think that what we are seeing with a lot of these complaints is the plaintiff trying to display a little more bark than they are capable of biting in hopes that a more favorable license can be negotiated.

 Posted by at 5:28 am