Recent Patent Law Cases

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Below are snapshots of three recent Supreme Court cases, followed by other federal court decisions:

  • The willful blindness standard: inducing infringement does not require actual knowledge of infringement. A company, SEB, patented a “cool touch” deep-fryer whose exterior was cool to the touch. GlobalTech Appliances, operating outside the U.S. copied everything but the cosmetic aspects of the SEB deep fryer. GlobalTech then branded these deep fryers for sale by Sunbeam, Montgomery Ward, and others. SEB sued GlobalTech for inducing others to infringe its cool-touch patent. GlobalTech defended itself by arguing that it couldn't induce others to infringe because it had no actual knowledge it was infringing SEB's patent. (GlobalTech had vetted its device with a patent attorney but had failed to disclose to the attorney that their device was copied directly from the SEB deep-fryer.) The Supreme Court ruled for the patent owner, SEB. The court said that inducing infringement required knowledge of the existing patent, but that knowledge could be inferred using a legal standard referred to as "willful blindness." As the Court stated: Many criminal statutes require proof that a defendant acted knowingly or willfully, and courts applying the doctrine of willful blindness hold that defendants cannot escape the reach of these statutes by deliberately shielding themselves from clear evidence of critical facts that are strongly suggested by the circumstances.” The Court went on to distinguish willful blindness from a lower court's standard known as "deliberate indifference." As for the differences, the bottom line is that when asking an attorney to render a legal opinion (Does my deepfryer infringe?), don't hide information (like, 'I copied this from another deepfryer'). (GlobalTech Appliances v. SEB, __U.S. __ (2011).
  • Proving invalidity requires clear and convincing evidence. The Supreme Court refused to alter the standard for invalidating a patent in a battle between tech companies. Microsoft was sued for patent infringement by i4i, a Canadian company over an XML feature of Microsoft’s Word software. At trial, Microsoft argued that i4i failed to disclose a prior invention that might have invalidated the application (a principle known as the 'oneyear rule'). The jury was instructed that the patent could only be invalidated if there was "clear and convincing" evidence of invalidity. Microsoft and many other tech companies wanted the court to use the lower standard of "preponderance of the evidence" which would make it easier to invalidate many of the iffy patents used by non practicing entities (also known as patent trolls). The justices refused to change the standard, althoughthe Court threw one small bone to troll victims: they could tell juries about any evidence that hadn't been considered by the patent office  like the facts Microsoft had advanced about i4i's patent. Bottom line: Tech companies will need to petition Congress for a change (unlikely) and big Pharma is happy with the decision. Microsoft Corp. v. i4i Limited Partnership, __ U.S. __ (2010).
  • Clear language in conflicting assignments determinative of ownership (not Bayh-Dole Act). In a case involving Stanford University and the Roche pharmaceutical company, the Supreme Court was faced with two agreements signed by a university scientist: one in which he promised to assign rights to the university; and another in which he actually assigned rights to a company that was later purchased by Roche. The Supreme Court ruled that the agreement in which rights were actually assigned took precedence over the agreement in which rights were promised. Stanford's position was that the inventor's rights automatically vested in the university under the Bayh-Dole Act. The Bayh-Dole Act, enacted in 1980, permits universities to claim patent rights in inventions created with federal funding at a university. The university may then license these discoveries to private industry—a practice some critics have likened to corporate welfare. Curiously, one of the prerequisites for the university to claim these rights is that the university must have written agreements with its faculty and technical staff requiring disclosure and assignment of inventions. The ruling won't invalidate past assignments. But problems may occur in cases like this one, where two assignments appear to conflict. In addition, you can expect that universities will stop using language in which inventors promise to assign and instead automatically assign inventions. Stanford v. Roche, 563 U. S. ____ (2011)

And here are some federal court cases from 2009-2010

  • Human genes are unpatentable as ‘products of nature.’ A federal district court determined that certain patent claims for BRCA1 and BRCA2 human genes were invalid. The genes are found in the cells of breast and other tissue, where they help repair damaged DNA. The genes are a factor in breast cancer diagnosis. The court held that the subject matter was unpatentable because genes are the physical embodiment of [genetic] information. In Association for Molecular Pathology v. USPTO, 702 F. Supp. 2d 181 (S.D.N.Y. 2010).
  • Filing date of provisional patent application establishes prior art references. An inventor, Giacomini, filed a patent application claiming a method of selectively storing sets of electronic data. Another inventor, Tran, filed a patent application after Giacomini for a similar invention. However, Tran’s application was based on a provisional patent application that accurately described the invention and was filed before Giacomini’s application. In that case, the Federal Circuit held that Tran as “first inventor,” could claim patent rights and use his patent application as prior art against Giacomini.  In re Giacomini, 612 F.3d 1380 (Fed. Cir. 2010).
  • Registered copyright and deposit copy are not necessarily publicly accessible prior disclosures. Printed publications function as prior art if they are publicly accessible, no matter how burdensome it is to obtain the publication. In this case, an inventor, Lister, filed a copyright registration and furnished a deposit to the Congress Office. However, the Copyright Office’s database had such limited search capabilities that the Federal Circuit determined that the evidence was insufficient and remanded the case. In Re Lister, 583 F.3d 1307 (Fed. Cir. 2009). In Perfect Web Technologies, Inc. v. InfoUSA, Inc.
  • Nonobviousness determination can be based on common sense. In this case, a court invalidated a patent for email distribution. The patent claimed a method for managing bulk e-mail distribution to groups of consumers including selecting recipients, sending e-mails to that group, and tabulating the number of e-mails successfully transmitted. If the number did not exceed a certain minimum, the last step called for repeating the previous steps. The district court summarized the last step as obvious since it was based on the common sense principle, “If at first you don’t succeed, try again.” Perfect Web Technologies, Inc. v. InfoUSA, Inc, 587 F.3d 1324 (Fed. Cir. 2009).
  • Patent misuse standard narrowed. The Federal Circuit narrowed the scope of patent misuse in a case involving compact disc patents. Under the Federal Circuit’s new standard, there must be evidence of anticompetitive effects associated in addition to restrictions on use. Alleging wrongful conduct is not enough. Princo Corp. v. International Trade Commission, 616 F.3d 1318 (Fed. Cir. 2010).
  • Employment agreement is not conclusive as to invention assignment. A scientist signed an employee invention agreement that required that inventions created during employment would belong to his employer unless: the invention was developed entirely on his own time; equipment, supplies, facility, or trade secret of the Company was used in its development‚ and it does not relate to the business or actual or demonstrably anticipated research, or development of the Company, or (ii) it does not result from any work performed by [him] for the Company. The scientist invented a method of sequencing DNA on his own time using his home computer and without the assistance of any company trade secrets. The Federal Circuit determined that under California law, the scientist need only meet either of the two requirements established in the third criteria. The court determined the invention did not result from work performed for the company and on that basis, there was no assignment. Applera Corp. Applied Biosystems Group v. Illumina, Inc., 2009-1260, 2010 WL 1169936 (Fed. Cir. Mar. 25, 2010).
  • A coinventor does not have to make a complete conception of invention. A dispute arose as to whether Vanderbilt professors could be added as coinventors on a patent for an inhibitors, useful for treating erectile dysfunction. A district court had that coinventorship required that each coinventor have a full conception of the inhibitor. The Federal Circuit determined this was an error because each coinventor must only engage with the others in some significant way toward that end. (The error was considered harmless because Vanderbilt failed to prove its methodlogy was used in the patent.) Vanderbilt University v. ICOS Corp., 601 F.3d 1297 (Fed. Cir. 2010).