Induced Patent Infringement Requires Direct Infringement

The U.S. Supreme Court ruled, Monday, June 2, 2014, that liability for induced infringement requires one person to perform all of the steps of a claimed method. The unanimous ruling over turned the Federal Circuit’s prior holding that induced infringement can occur when the steps of a method are performed by multiple people. This ruling will make it more difficult for patent owners to enforce patents covering methods or processes.

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Apple Inc. Rapidly Growing Its Patent Portfilio

The U.S. Patent and Trademark Office has awarded 2505 patents to Apple Inc. this year. Apple is clearly investing significantly to protect its concepts. Interestingly, almost half of these patents are design patents, with 1261 being  utility patents and 1244 being design patents. Apple undoubtedly believes in the potential value of design patents. And why wouldn’t it? Its Design Patent No. D604305 for a “Graphical User Interface for a Display Screen or Portion Thereof” accounted for $725 million of the $1 billion jury verdict against Samsung.

Start-ups, entrepreneurs, and small businesses can learn from the technology giant when considering patent protection by not quickly tossing aside design patents and, rather, carefully evaluate how design patents may be effectively used to protect their concepts.

The U.S. Supreme Court Continues Its Interest in Intellectual Property

This past Tuesday, the U.S. Supreme Court agreed to review the Federal Circuit’s decision in three intellectual property cases. Two of the cases involve patents. And the third is a copyright case.

Highmark Inc.v. Allcare Health Management Sys., Docket No. 121163, is a patent case and concerns awarding attorney’s fees in exceptional cases. The question presented is “[w]hether a district court’s exceptional-case finding…based on its judgment that a suit is objectively baseless, is entitled to deference.”

Octane Fitness, LLC v. ICON Health & Fitness, Inc., Docket No. 12-1184, is the second patent case, and concerns the Federal Circuit’s test for finding exceptional cases to award attorney fees. The question presented is whether the Federal Circuit’s test for determining an exceptional case creates an unbalance in attorney fee awards between prevailing plaintiffs and prevailing defendants.

Petrella v. MGM, Docket No. 12-1315, is the copyright case, and concerns the statute of limitations for bringing a copyright infringement suit. The question presented is “[w]hether the nonstatutory defense of laches is available without restriction to bar all remedies for civil copyright claims filed within the three-year statute of limitations prescribed…”

Supreme Court Finds Claims That Merely Apply Laws of Nature Are Ineligible for Patent Protection

ImageIn a highly anticipated decision, on March 20, 2012, a unanimous Supreme Court of the United States held that claims directed to a diagnostic method were not patent-eligible under 35 U.S.C. § 101 because the claims were mere applications of the laws of nature, and because the additional steps that were claimed in the methods did not add anything “of significance to the natural laws themselves.” Mayo Collaborative Services v. Prometheus Labs., Inc., 566 U.S. ___ (2012).

Mayo, who had previously purchased and used patented diagnostic tests sold by Prometheus, began to use and sell its own competing diagnostic test in 2004. Prometheus filed a patent infringement suit in response. While the district court found that Mayo’s test infringed, it ultimately found the patents were invalid as being subject matter ineligible for patent protection under 35 U.S.C. § 101. The Federal Circuit reversed on appeal and found that the claims met the “machine or transformation test.” The Supreme Court granted certiorari when Mayo appealed, but remanded the case for reconsideration in light of the Supreme Court’s then-recent holding in Bilski v. Kappos, 130 S. Ct. 3218 (2010). On remand, when the Federal Circuit found in Prometheus’ favor once more, Mayo appealed again.

While laws of nature are not, alone, eligible for patent protection, applications of the laws of nature may be. Prometheus argued that “administering” the drug, the “wherein” clauses telling about the relevant natural laws, and “determining” the level of metabolites were enough for patent protection. The Court, however, was unconvinced, finding that the patent merely instructed doctors to engage in “well-understood, routine, [and] conventional activit[ies] previously engaged in by those in the field” and, in effect, simply told doctors to “apply the law somehow when treating their patients.” The Court contrasted the claims at issue with patents directed to new drugs or new ways of using existing drugs. This decision, which comes less than two years after its decision in Bilski v. Kappos, marks the Court’s second recent major decision in the field of patent-eligible subject matter of method claims.

It should also be noted that, on March 26, the Supreme Court granted certiorari in the high-profile “breast cancer gene” case, Association for Molecular Pathology v. Myriad Genetics, No. 11-725, and remanded the case back to the Federal Circuit to reconsider its decision to uphold patents held by Myriad Genetics on two isolated genes, i.e., BRCA1 and BRCA2; associated with a high risk of breast and ovarian cancer, in light of its decision in Prometheus. The case involves the ethically charged but commercially important question of whether the isolated genes are patentable due to the fact that they are different from naturally occurring molecules. Whatever the outcome at the Federal Circuit, however, it is highly possible that the Myriad case will reappear before the Supreme Court.

America Invents Act Enacted into Law

On September 16, 2011, President Barack Obama signed the Leahy-Smith America Invents Act into law. The U.S. Senate voted on September 8, 2011, to reform U.S. patent laws by approving the Leahy-Smith America Invents Act, with identical provisions to H.R. 1249, which was met with overwhelming approval by the House of Representatives on June 23, 2011, by a vote of 304-117. Many of the provisions of the act will be implemented in stages over the next 18 months.

Several reforms such as those relating to litigation, new standards for the institution of inter partes reexaminations, best mode, fee setting authority, and the establishment of a micro-entity for purposes of reducing patent fees for inventors, took effect as soon as the Act was signed into law. A few other changes, including a 15% increase on most USPTO fees and provisions relating to false marking, took effect on September 26, 2011.

Most of the other patent reforms, i.e., the reforms that will have the most profound effects on how patents will be prepared, obtained, and enforced within the United States; are scheduled to take effect on September 16, 2012, one year from the Act being enacted into law. These include provisions relating to inter partes review, post-grant review. Finally, the provisions which change the United States from a first-to-invent to a first-to-file system, replace interference proceedings with derivation proceedings, and modify the definition of “prior art” take effect in 18 months, on March 16, 2013.

Patent Milestones

On August 16, 2011, the United States Patent and Trademark Office (USPTO) issued patent number 8,000,000!  The patent was granted to Second Sight Medical Products, Inc., whose invention was for a visual prosthesis apparatus that is able to enhance visual perception for people having gone blind due to outer retinal degeneration.  The invention, the Argus® II, works by electrically stimulating the retina to produce the visual perception of patterns of light and is currently in clinical trials in the U.S. and has received marketing approval in Europe.  The signing and presentation to celebrate the milestone of the 8 millionth patent took place at the Smithsonian American Art Museum on Sept. 8, 2011.

According to the USPTO, the first patent was issued in 1836.  In August 1911, nearly 75 years later, patent number 1,000,000 issued.  However, it took just under six years to get from patent number 7,000,000 to patent number 8,000,000.  More information on these milestones are available online.

It should also be noted that as the USPTO celebrated this milestone, the controversial Leahy-Smith America Invents Act of 2011 was approved by Congress on September 8, 2011 and will soon be signed into law by President Obama.  It is the first major reform that has been made to the U.S. patent system in nearly sixty years.

On The Road to Patent Reform

It has been roughly two and a half months since the House Judiciary Committee approve the patent-reform bill, back in the middle of April.  On June 23, 2011, the U.S. House of Representatives also passed the House bill, H.R. 1249, otherwise known as the “America Invents Act,” with a vote of 304-117.  For those who have been tracking the developments of this bill, the Senate passed a bill which is nearly identical, S. 23, back in March by an even greater margin of 95-5.

Both the House and Senate’s versions of the bill, at their core, would change the United States from its current “first-to-invent” system to a “first-to-file” system, which would grant patent rights to the applicant who applies for a patent first, rather than the party who invents first.  Both bills also seek to include controversial provisions to challenge patents as well as provisions to rein in false patent marking suits, among others.

However, unlike the Senate bill, the House bill does not ban fee diversion, a criticized practice which diverts the United States Patent and Trademark Office’s (USPTO’s) revenue to other government programs.  At present, the USPTO relies on a tight-pursed Congress to allocate funds to keep the office running, which has been argued to keep the USPTO severely understaffed.  While both bills would allow the USPTO to set and collect its own fees, the House bill would continue to allocate a set amount of the collected fees to the USPTO, while the excess would be made available to Congress to do with it as it sees fit.  The Senate bill, on the other hand, allows the USPTO to keep all of its fees.

President Obama has expressed his willingness to sign a patent-reform bill if one is presented before him; if and when this happens, it would mark the first significant change to our country’s patent system since 1952.  However, before it can be presented for the president’s signature, the two versions of the bills must be reconciled in a House and Senate conference committee.