Using an invention to provide a service before filing the patent application can trigger the on-sale bar to patentability, according to a recent decision from the U.S. Court of Appeals for the Federal Circuit.
The court’s decision in Quest Integrity USA, LLC v. Cokebusters, LLC involved U.S. Patent 7,542,874, which relates to a system for displaying inspection data collected from a furnace. The patent’s priority date was June 1, 2004. However, the court found that the patent owner used the invention to commercially perform furnace inspection services at a Louisiana refinery in March 2003, which is more than one year before the priority date.
The patent owner did not sell hardware or software to the customer. However, the patent’s method claims included the step of “generating a display of at least a portion of said partitioned inspection data arranged to represent said physical geometry of a plurality of said tube segments and enable visual detection of a problem area comprising one or more of said tube segments.” The court found that this claimed method included the production of “strip charts,” which are shown by way of example in Figures 3 and 4 of the ‘874 patent.
The court held: “Sale of a product (here, sale of the [strip charts]) produced by performing a claimed process implicates the on-sale bar.” The court also noted: “Performance of a claimed method for compensation, or a commercial offer to perform the method, can also trigger the on-sale bar, even where no product is sold or offered for sale.”
The case indicates that inventors should not delay before filing a patent application for a new process, especially if commercialization activities that relate to the process are expected.
Historically, inventors who assign a patent to a company or other entity have been barred from later challenging the patent’s validity under the doctrine of “assignor estoppel.” This common-law doctrine has been in place for years. However, a new Federal Circuit decision scales it back by holding that assignor estoppel cannot stop certain inter partes review (IPR) proceedings filed by inventors with the Patent Trial and Appeals Board (PTAB).
In Arista Networks v. Cisco Systems, Inc. (Fed. Cir. Nov. 9, 2018), the court considered an appeal from the PTAB decision in an IPR proceeding. In the case, a company founded by an inventor (who was a former employee of the patent holder) argued that certain claims of the patent were obvious in view of prior art. While acknowledging that assignor estoppel is a “rule well settled by 45 years of judicial consideration and conclusion,” the court found that in the America Invents Act reveals Congress’ intent for a different rule in IPR proceedings. Specifically, since 35 U.S.C. §311(a) states that any “person who is not an owner of the patent” may file an IPR petition, the court ruled that an inventor who has assigned his or her interest — and who therefore is no longer an owner of the patent — may file an IPR petition that challenges validity of the patent.
A recent Federal Circuit decision held that a patent directed to a tool attachment for demolition equipment was obvious in view of two prior art references. The court reached this conclusion even though it did not deny that the proposed combination was physically impossible.
In Allied Erecting and Dismantling Co., Inc. v. Genesis Attachments, LLC (Fed. Cir. June 15, 2016), the court reviewed certain claims of the patent, which included various features for attaching and detaching jaw sets from a demolition tool. The Patent Trial and Appeals Board found the patent to be obvious based on two prior patents: one covering a different jaw attachment system, and the other describing a convertible bucket attachment for an excavator.
The patent holder argued that the proposed combination would render the prior art devices inoperable. The court did contradict this assertion. In fact, the court conceded that the combination “may impede the quick change functionality” disclosed in the first patent. Nonetheless, the court agreed with the PTAB and found it to be irrelevant: “it is not necessary that [the prior art] be physically combinable to render obvious the [‘489 patent].” The court also quoted a 1983 decision stating that “the criterion [is] not whether the references could be physically combined but whether the claimed inventions are rendered obvious by the teachings of the prior art as a whole.”
Notably, the court did not explain how its decision could be reconciled with certain other conflicting precedent. For example, previous Federal Circuit decisions held that if a combination of two references would render one of them unsuitable for its intended purpose, the prior art then teaches away from the combination. In re Gordon, (Fed. Cir. 1984). In fact, in cases as recent January 2016’s In re Urbanski, a different panel of Federal Circuit judges held: “[i]f references taken in combination would produce a ‘seemingly inoperative device,’… such references teach away from the combination and thus cannot serve as predicates for a prima facie case of obviousness.”
The Federal Circuit’s conflicting decisions leave open substantial questions about the effect that impossibility and inoperability have on obviousness.
In a consolidated decision involving two new cases, the U.S. Supreme Court continued its trend of shunning bright-line rules in patent infringement cases. The cases overturned the “objective recklessness” test that the Federal Circuit established in 2007 as a threshold criterion for finding that an accused infringer willfully infringed a patent.
In Halo Electronics, Inc. v. Pulse Electronics Inc. (consolidated with Stryker Corp. v. Zimmer Corp.) the Court held that Section 284 of the Patent Act gives district courts the discretion to determine whether to award enhanced damages against those guilty of patent infringement, and if so how much. The Court expressed concern that the “objective recklessness” test made it too easy for bad-faith infringers to avoid enhanced damages by simply presenting a reasonable defense to infringement at trial — even if the defense was unsuccessful and the infringer did not act on the basis of that defense. Instead, the Court said that in the context of willfulness, the proper rule is that “culpability is generally measured against the knowledge of the actor at the time of the challenged conduct.”
However, the Court cautioned that district court discretion is not without limits: “Awards of enhanced damages under the Patent Act … are not to be meted out in a typical infringement case, but instead are designed as a ‘punitive’ or ‘vindictive’ sanction for egregious infringement behavior” and “are generally reserved for egregious cases of culpable behavior.”
Because of this, the Court’s decision may not significantly alter the situations when damages are actually awarded for patent infringement, nor is the decision likely to have much effect on the amounts awarded. However, the decision will likely to make it easier for patent holders to bring patent infringement claims and avoid having those claims cut off in a summary judgment ruling. In addition, the decisions will ensure that truly bad-faith infringers don’t use a bright-line rule such as objective recklessness as a shield to avoid enhanced damages.
After months of deliberation, India’s Patent Office has issued new guidelines that firmly maintain the country’s practice of not granting patents for software inventions. Issued February 19, 2016, the new Guidelines for Examination of Computer Related Inventions put to rest the country’s recent debate over whether software can be patentable if it has industrial applicability.
India’s patent law does not define or use the term “software,” but it does say that “a mathematical or business method or a computer programme per se or algorithms” are excluded from patentability, as is “a presentation of information.” However, during the past year, the Patent Office began to interpret this exclusion narrowly by stating that software could be patentable if it is applicable to a particular industry.
The new Guidelines reject that notion and direct examiners to apply a three-part test when examining claims for computer-related inventions:
- Properly construe the claim and identify the actual contribution;
- If the contribution lies only in mathematical method, business method or algorithm, deny the claim;
- If the contribution lies in the field of computer programme, check whether it is claimed in conjunction with a novel hardware and proceed to other steps to determine patentability with respect to the invention. The computer programme in itself is never patentable. If the contribution lies solely in the computer programme, deny the claim. If the contribution lies in both the computer programme as well as hardware, proceed to other steps of patentability.
The Guidelines indicate that a claim must use some type of unique hardware, and that claims directed to “computer programmes,” a “set of instructions/ Routines and/or Sub-routines, “computer programme products,” a “Storage Medium having instructions,” a “Database,” or a “Computer Memory with instruction” should not be considered patentable.
The Guidelines include 15 examples of claims that are not patentable in India. Notably, the Guidelines include no examples in which the claims would considered acceptable.
The new Guidelines have been viewed as a win for Indian software company trade associations who lobbied hard to keep software out of the realm of patentability.
“Patent misuse” is perhaps one of the most “misused” phrases in patent law. When faced with a patent lawsuit or even just a cease-and-desist letter, accused infringers who disagree with the patent holder’s actions often ask whether they can counter the infringement accusation with a claim of patent misuse.
Which leads to the question: what exactly is “patent misuse” in U.S. patent law?
Patent misuse can occur when a patent holder improperly tries to expand the scope of the patent in a way that has an anti-competitive effect. (See B. Braun Med., Inc. v. Abbott Labs, 124 F.3d 1419, 1426 (Fed. Cir. 1997).) Patent misuse requires more than just aggressive litigation tactics or disagreement as to whether or not an accused product actually infringes: “the defense of patent misuse is not available to a presumptive infringer simply because a patentee engages in some kind of wrongful commercial conduct.” Princo Corp. v. International Trade Commission and U.S. Philips Corp.616 F.3d 1318, 1329 (Fed. Cir. 2010) (en banc). Because patent misuse typically requires an anti-competitive effect, courts give the doctrine a “narrow scope.” Id. Even a finding of anti-competitive effect may not be sufficient to find that patent misuse occurred. Continue reading
2015 could be a pivotal year for U.S. patent reform, with two significant — and very distinct — patent reform bills pending before Congress. This article compares the two bills, the Innovation Act and the STRONG Patents Act, the forces behind the bills, and the next steps in the U.S. patent reform debate.
Introduced in February 2015 by Rep. Bob Goodlatte as a measure to “curb abusive patent litigation,” the Innovation Act picks up where the America Invents Act of 2011 (AIA) left off by proposing additional reforms to patent litigation procedures. The Innovation Act would also streamline some of the AIA’s mechanisms for challenging patents.
In March 2015, Senator Christopher Coons and others introduced the STRONG Patents Act as a way to “reduce abuse while sustaining American leadership in innovation,” The STRONG Patents Act includes some reforms that are similar to those of the Innovation Act, along with several other sections that are designed to protect the positions of patent holders.
Significant provisions of each bill include: Continue reading