Peter Lattman, in today’s Wall Street Journal, reviews KSR’s aftermath in nonobviousness cases.

[ Hat tip to The Patent Prospector ]

Patently-O covers last week’s trial court denial of a permanent injunction in MercExchange v. eBay.  Prof. Crouch includes a link to the trial court’s opinion.

In 1977, to commemorate the 25th anniversary of the creation of section 103 as part of the 1952 recodification of the Patent Act, John Witherspoon organized a conference on section 103.  It lead to the publication of a BNA volume entitled, “Nonobviousness-The Ultimate Condition of Patentability.”

My question is this: Has there been, since that 1977 conference, any other U.S. law conference devoted entirely to patent law’s nonobviousness standard?  If you know of such a conference (e.g., from having attended it, or having seen a law review issue devoted to its proceedings), please leave a comment to this post with as much information about it as you can remember.

Thanks!

I’ve just posted to SSRN a new essay.  It’s entitled Remixing Obviousness.

Here’s the abstract:

In April 2007, the Supreme Court, for the first time in 41 years, decided a case about the basic contours of patent law’s nonobviousness standard. The case, KSR, upends 25 years of Federal Circuit jurisprudence, and on a legal requirement that every patent must satisfy. In this essay, I show how KSR dismantles two predicates that have long shaped Federal Circuit nonobviousness cases — namely, the intertwined premises that hindsight-driven distortion is the gravest risk to an accurate nonobviousness requirement, and that the person of ordinary skill in the art (from whose perspective nonobviousness is judge) is singularly uncreative. In place of hindsight dread and the dullard artisan, the Supreme Court gives us caution against overpatenting and the creative artisan. Perhaps most important is that, consistent with these new predicates, the Supreme Court revives its holding from 1950 that a combination claim, i.e., a claim that simply remixes prior art technologies according to their established functions, must be scrutinized with great caution because it is likely unpatentable. I propose an evidentiary presumption framework to regularize KSR’s mandate.

If you’re interested, download the paper from SSRN …

Yesterday, in Daiichi Sankyo Co. v. Apotex, Inc. (Fed. Cir. July 11, 2007) (nonprecedential), the Federal Circuit overturned a bench trial verdict that the asserted ear infection treatment method claims were not invalid for obviousness. The patent in suit was U.S. Pat. No. 5,401,741, entitled “Topical preparation for treating otopathy.” Claim 1, treated as representative in the case, is as follows:

A method for treating otopathy which comprises the topical otic administration of an amount of ofloxacin or a salt thereof effective to treat otopathy in a pharmaceutically acceptable carrier to the area affected with otopathy.

Key to the Federal Circuit’s reasoning in the case is its rejection (as clear error) of the trial judge’s finding about the level of skill in the art. (The key prior art reference was dismissed by the trial judge because it was pitched to higher skill level; once that error on skill level is corrected, the reference comes in with full force against the claims of the ‘741 patent.)

Parties don’t often contest the level-of-skill finding. (Indeed, the only other Federal Circuit case overturning a level-of-skill finding, of which I’m aware, is last fall’s Dystar Textilfarben GmbH v. C.H. Patrick Co., 464 F.3d 1356, 1361-1363 (Fed. Cir. 2006). If you know of any others, please post the info as a comment to this entry.) As a result, this case gives valuable insight into how to analyze a level-of-skill dispute.

Here’s what the Federal Circuit said in Daiichi:

The district court concluded that the ordinary person skilled in the art pertaining to the ’741 patent “would have a medical degree, experience treating patients with ear infections, and knowledge of the pharmacology and use of antibiotics. This person would be . . . a pediatrician or general practitioner – those doctors who are often the ‘first line of defense’ in treating ear infections and who, by virtue of their medical training, possess basic pharmacological knowledge.” Daiichi Pharm. Co. v. Apotex, Inc., 380 F. Supp. 2d 478, 485 (D.N.J. 2005) (“Claim Construction Order”). Apotex argues that the district court clearly erred in this determination and that one having ordinary skill in the relevant art is properly defined as “a person engaged in developing new pharmaceuticals, formulations and treatment methods, or a specialist in ear treatments such as an otologist, otolaryngologist, or otorhinolaryngologist who also has training in pharmaceutical formulations.”

“Factors that may be considered in determining level of ordinary skill in the art include: (1) the educational level of the inventor; (2) type of problems encountered in the art; (3) prior art solutions to those problems; (4) rapidity with which innovations are made; (5) sophistication of the technology; and (6) educational level of active workers in the field.” Envtl. Designs, Ltd. v. Union Oil Co., 713 F.2d 693, 696 (Fed. Cir. 1983) (citing Orthopedic Equip. Co., Inc. v. All Orthopedic Appliances, Inc., 707 F.3d 1376, 1381-82 (Fed. Cir. 1983)). These factors are not exhaustive but are merely a guide to determining the level of ordinary skill in the art.

In making its determination regarding the level of skill in the art, the district court noted that the parties had provided “little more than conclusory arguments concerning this issue in their briefs.” As a result, the court looked to other decisions involving patents for a method of treating a physical condition for guidance. Only one case cited by the district court is binding on us, Merck & Co., Inc. v. Teva Pharm. USA, Inc., 347 F.3d 1367 (Fed. Cir. 2003). The district court was correct that in that case we affirmed the trial court’s conclusion that a person having ordinary skill in the relevant art was a person having a medical degree, experience treating patients with osteoporosis, and knowledge of the pharmacology and usage of biphosponates – the compounds at issue in Merck. However, in Merck the level of skill in the art was not disputed by the parties. Thus, we simply accepted the district court’s finding. That clearly is not the case before us. Therefore, the district court’s reliance on the level of skill in the art stated in Merck was improper.

The art involved in the ’741 patent is the creation of a compound to treat ear infections without damaging a patient’s hearing. The inventors of the ’741 patent were specialists in drug and ear treatments – not general practitioners or pediatricians. At the time of the invention, Inventor Sato was a university professor specializing in otorhinolaryngology; Inventor Handa was a clinical development department manager at Daiichi, where he was involved with new drug development and clinical trials; and Inventor Kitahara was a research scientist at Daiichi engaged in the research and development of antibiotics. Additionally, others working in the same field as the inventors of the ’741 patent were of the same skill level. See Daiichi Material for [C]onference on Development, Nov. 11, 1987 (stating that “there are many voices among medical persons concerned with otorhinolaryngology for demanding development of an otic solution making use of [ofloxacin]”).

Further, the problem the invention of the ’741 patent was trying to solve was to create a topical antibiotic compound to treat ear infections (otopathy) that did not have damage to the ear as a side effect. ’741 Patent, col.1 ll.23-34. Indeed, most of the written description details the inventors’ testing ofloxacin on guinea pigs and their findings that ototoxicity did not result from the use of their compound. Such animal testing is traditionally outside the realm of a general practitioner or pediatrician. Finally, while a general practitioner or pediatrician could (and would) prescribe the invention of the ’741 patent to treat ear infections, he would not have the training or knowledge to develop the claimed compound absent some specialty training such as that possessed by the ’741 patent’s inventors. Accordingly, the level of ordinary skill in the art of the ’741 patent is that of a person engaged in developing pharmaceutical formulations and treatment methods for the ear or a specialist in ear treatments such as an otologist, otolaryngologist, or otorhinolaryngologist who also has training in pharmaceutical formulations. Thus, the district court clearly erred in finding otherwise.

Slip op. at 3-5. Food for thought!

The PharmaStem case, decided yesterday, arises from district court infringement litigation. It is not a case on direct review from the PTO, with a disappointed applicant arguing that a claim has been wrongly rejected. As a result, the Supreme Court’s decision in Dickinson v. Zurko, 527 U.S. 150 (1999), which considered the proper standard of review for findings of fact (not conclusions of law, like obviousness) on direct review from a PTO rejection, has nothing whatever to do with PharmaStem.

The Patent Act, now as ever, gives an accused infringer the right to put the validity of the asserted patent in question. 35 U.S.C. sec. 282. Of course, that same section of the Patent Act gives the patent a presumption of validity. But that’s it … there’s no Zurko-type, A.P.A.-driven deference in patent infringement litigation.

The Federal Circuit held this directly in a case decided not long after Zurko, Purdue Pharma LP v. Faulding Inc., 230 F.3d 1320 (Fed. Cir. 2000). In Purdue, the Federal Circuit affirmed the trial court’s conclusion that a claim was invalid for lack of adequate written description support. The patentee complained that, among other things, the trial court hadn’t given A.P.A.-driven deference to the PTO’s approval of the written description support for the claim. The Federal Circuit squarely rejected the argument:

Relying on the Supreme Court’s decision in Dickinson v. Zurko, 527 U.S. 150 (1999), Purdue makes the related argument that the district court should have sustained the examiner’s decision on the written description issue as long as it was supported by substantial evidence. The short answer to that argument is that this was an infringement action that originated in the district court, not an appeal from a decision of the Patent and Trademark Office Board of Appeals and Interferences, which was at issue in Zurko. The Administrative Procedure Act standard of review adopted in Zurko therefore has no application here. To be sure, as we have noted, the decision of the Patent and Trademark Office with respect to patentability is accorded deference in district court litigation, deference that takes the form of the presumption of validity that is accorded to issued patents under 35 U.S.C. § 282. … The court, however, was not bound by the examiner’s finding in the ex parte application proceeding that the new claims were supported by the specification, particularly in light of the fact that the court heard extensive evidence on the issue in an adversary hearing, none of which was before the patent examiner.

230 F.3d at 1329.

I was thus surprised to see, in Gene Quinn’s comment on PharmaStem at the PLI Patent Blog, the thought that the invalidation of the claims in PharmaStem undermines Zurko:

[O]n Monday, July 9, 2007, the Federal Circuit found that a patent that had been reexamined three times was obvious. If that is what this Federal Circuit is going to start doing then reexamination has just become completely useless, and apparently so has the Supreme Court’s decision in Zurko.

I don’t see it, Gene.

The Federal Circuit’s decision today in PharmaStem Therapeutics, Inc. v. Viacell, Inc., Nos. 05-1490, -1551, slip op., 2007 WL 1964863 (Fed. Cir. July 9, 2007), overturns a jury’s “not invalid for obviousness” verdict to strike down claims from two different patents … a group of claims to a “cryopreserved therapeutic composition comprising viable human neonatal or fetal hematopoietic stem cells derived from the umbilical cord blood or placental blood of a single human being,” and a group of claims to a “[m]ethod for hematopoietic or immune reconstitution of a human.” Judge Bryson wrote for himself and Judge Prost. Judge Newman dissented.

The opinion offers an interesting look at contributory infringement of a process claim under section 271(c). But I’m more interested, today, in excerpting the majority’s analysis of the obviousness question. Again, the majority concludes that the only conclusion a jury could reasonably reach is that the claimed product and process inventions would have been obvious at the time the claimed inventions were made.

First, the majority slips back into a near-pre-KSR take on the suggestion test. Specifically, the majority says the following:

The defendants contend that the two patents in suit are invalid for obviousness based on a combination of several prior art references. In such a case, the burden falls on the patent challenger to show by clear and convincing evidence that a person of ordinary skill in the art would have had reason to attempt to make the composition or device, or carry out the claimed process, and would have had a reasonable expectation of success in doing so. See Medichem, 437 F.3d at 1164; Noelle v. Lederman, 355 F.3d 1343, 1351–52 (Fed. Cir. 2004); Brown & Williamson Tobacco Co. v. Philip Morris, Inc., 229 F.3d 1120, 1121 (Fed. Cir. 2000); see also KSR Int’l Co. v. Teleflex Inc., 127 S. Ct. 1727, 1740 (2007) (a combination of elements “must do more than yield a predictable result”; combining elements that work together “in an unexpected and fruitful manner” would not have been obvious).

Slip op. at 28-29. Two steps – a reason to attempt, and a reasonable expectation of success.

This case turns on the second step, the first having been easily met. See id. at 29 (”this is not a case in which there is any serious question whether there was a suggestion or motivation to devise the patented composition or process”).

Patentee PharmaStem fails in part because its expert is contradicted by the text of the patents themselves: “PharmaStem’s argument that stem cells had not been proved to exist in cord blood prior to the experiments described in the patents is contrary to the representation in the specification that the prior art disclosed stem cells in cord blood. Admissions in the specification regarding the prior art are binding on the patentee for purposes of a later inquiry into obviousness.” Slip op. at 33.

Quite apart from the contradictions, the fact that the inventors moved the knowledge needle from “strongly suspected” to “empirically verified” is not enough to justify a conclusion of nonobviousness:

While the inventors may have proved conclusively what was strongly suspected before – that umbilical cord blood is capable of hematopoietic reconstitution – and while their work may have significantly advanced the state of the science of hematopoietic transplantations by eliminating any doubt as to the presence of stem cells in cord blood, the mouse experiments and the conclusions drawn from them were not inventive in nature. Instead, the inventors merely used routine research methods to prove what was already believed to be the case. Scientific confirmation of what was already believed to be true may be a valuable contribution, but it does not give rise to a patentable invention. See KSR, 127 S. Ct. at 1732 (”Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress … .”); Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348, 1367-69 (Fed. Cir. 2007) (simply because the formation and properties of a new compound must be verified through testing does not mean that the compound satisfies the test for patentability “since the expectation of success need only be reasonable, not absolute”); In re Merck & Co., 800 F.2d 1091, 1097 (Fed. Cir. 1986) (”Obviousness does not require absolute predictability.”). Good science and useful contributions do not necessarily result in patentability.

Slip op. at 36. After reviewing O’Farrell, the famed “obvious to try” case, the panel concludes that “providing proof sufficient to justify conducting in vivo procedures on humans, while useful, is not a test of patentability. The evidence at trial demonstrated that the patentees did not invent a new procedure or a new composition; instead, they simply provided experimental proof that the cord blood could be used to effect hematopoietic reconstitution of mice and, by extrapolation, could be expected to work in humans as well.” Id. at 38.

Something tells me that Big Pharma won’t be too happy about this …

On Monday, July 2, a trial judge denied plaintiff patentee Andersen Mfg.’s motion for a preliminary injunction against accused infringer Diversi-Tech Corp. See Andersen Mfg. v. Diversi-Tech Corp., No. 05-923, 2007 WL 1892509 (D. Utah July 2, 2007) (Benson, J.). Andersen Mfg. asserts U.S. Patent No. 7,156,412, directed to an extruded aluminum trailer hitch.

The reason for the denial? Diversi-Tech, the trial court concluded, had raised a substantial question whether the ‘412 patent can survive an obviousness attack. The trial court’s core reasoning is as follows:

The Court finds that Andersen has failed to show a substantial likelihood of success on the merits regarding the validity of the ‘412 patent because Diversi-Tech has raised substantial questions in regard to the obviousness of the apparatus claimed in the ‘412 patent. The Supreme Court has recently reaffirmed the centrality of nonobviousness to a valid patent: “[f]or over a half century, the Court has held that a ‘patent for a combination which only unites old elements with no change in their respective functions … obviously withdraws what is already known into the field of its monopoly and diminishes the resources available to skillful men.’” KSR Intern. Co. v. Teleflex Inc., 127 S.Ct. 1727, 1739 (2007) (quoting Great Atl. & Pac. Tea Co. v. Supermarket Equip. Corp., 340 U.S. 147, 152 (1950). “The combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results.” Id. Moreover, these familiar elements can be derived from the same field of technology or from different fields. Id. at 1740. In KSR, the Court counsels vigilance in the granting of patents lest every commonplace or incremental change in technology trigger patent protection so as to stifle rather than encourage innovation: “the results of ordinary innovation are not the subject of exclusive rights under the patent laws.” Id. at 1746.

In the instant case, the only significant novelty claimed by Andersen is the fact that the trailer hitch drop bar described in the ‘412 patent is made of aluminum alloy. Both Andersen, Diversi-tech, and the patent examiner admit that drop bars are well known in the trailer hitch industry. Moreover, in the detailed description of the ‘412 patent, the inventor states “the hitch component manufactured through the use of an extrusion process comprises an aircraft quality aluminum alloy.” ‘412 patent, col.4, lns. 36-38. By Andersen’s own admission in the ‘412 description, aluminum alloy was already known to the prior art in aircraft manufacture. Moreover, there is evidence of aluminum already being used in the trailer hitch industry as well. See U.S. Patent No. 6,129,371 (filed Feb. 12, 1999), U.S. Patent No. 6,464,240 (filed Oct. 23, 2000). Therefore, there is support for the proposition that both a trailer hitch drop bar and aluminum alloy are well-known elements in the prior art.

Accordingly, Andersen’s motion for a preliminary injunction fails to meet the burden of step 1. Andersen has not shown a substantial likelihood of success on the merits due to significant questions as to the validity of the ‘412 patent. Because Andersen has failed to meet its burden regarding challenges of the ‘412 patent’s validity, the Court finds no reason to reach the question of infringement or the other aspects of the preliminary injunction test.

A muscular application of KSR, indeed.

This morning brings another Federal Circuit decision on the Festo case … this time, a panel opinion affirming the trial judge’s conclusion that the purported equivalent in the case (a nonmagnetizable sleeve) was foreseeable at the time of the narrowing claim amendment and thus cannot be recaptured as an infringement by means of the doctrine of equivalents.

Festo had argued on remand “that it was not foreseeable at the time of the amendments that the equivalents could perform the same function as the Festo device.”  Slip op. at 10.  Specifically, “[b]ased on the patent specification, Festo argued that a purpose of the sleeve was to shield against magnetic field leakage; while aluminum was well known [as a sleeve material], its utility to provide magnetic field shielding was unknown and that its use for that purpose was unforeseeable at the time of the amendment.”  Id.  Put another way, “Festo contends that the [alleged] equivalent must be foreseeable under the function/way/result test at the time of the amendment” before the patentee can be charged with having surrendered it with a narrowing amendment.  Slip op. at 15.
In a lengthy opinion, and over Judge Newman’s dissent, Judge Dyk (writing for himself and Chief Judge Michel) rejects Festo’s theory about how to analyze foreseeability for purposes of salvaging an infringement theory from fatal prosecution history estoppel.  The court states the foreseeability standard as follows:

“Rather, we find that an alternative is foreseeable if it is disclosed in the pertinent prior art in the field of the invention.  In other words, an alternative is foreseeable if it is known in the field of the invention as reflected in the claim scope before amendment.”  Slip op. at 16.

“[W]e conclude that, contrary to Festo’s argument, the foreseeability requirement does not require the knowledge that the equivalent would satisfy the function/way/result test or the insubstantial differences test.” Slip op. at 18.

“An equivalent is foreseeable if one skilled in the art would have known that the alternative existed in the field of art as defined by the original claim scope, even if the suitability of the alternative for the particular purposes defined by the amended claim scope were unknown.” Slip op. at 21.