Patent Law William Fisher (2024.04.10)
  Scope
    General Principles
      Central vs Peripheral Claiming
        Central
          Inventor identifies the essence or heart of her invention
          The government (typically a court) determines the scope of her monopoly power/property right in the course of infringement litigation
          Primary criterion in determining scope = amount of contribution to technology/society
        Peripheral
          Inventor marks the boundaries of her property right
          In litigation, the government (typically a court) merely enforces the “no trespassing” signs
          Scope of the right determined in two steps:
            1. threshold struggle between inventor and representative of the state (patent office)
            2. “Claim construction” by a court
        History
          US system initially uses central claiming
          Beginning in late 19th c., US moves gradually toward peripheral pole
          But still retains elements of central claiming theory -- and those elements may be increasing
    Claim Construction
      USA
        Method
          Policies
            Notice Function
            Channeling Function
            Evidentiary Value
          Resources
            Intrinsic
              Claims
              Specification
              Drawings
              File wrapper
                Example: file wrapper for the improved mousetrap
            Extrinsic
              Dictionaries
                Available at the time of patent application
              Non-cited prior art
              Testimony
                technical experts
                patent attorney
                patentee
          Canons of Interpretation
            Cf. Llewellyn, Canons
            The language of the claims themselves is the best evidence
              Plain meaning
                “[W]ords will be given their ordinary and accustomed meaning unless it appears that the inventor used them differently.”
                Miken Composites (CAFC 2008)
                  Facts
                    Patent
                      Figures
                      Claim 1: A bat, comprising: a hollow tubular bat frame having a circular cross-section; and an insert positioned within the frame, the insert having a circular cross-section, the insert having first and second ends adjoining the tubular frame, the insert being separated from the tubular frame by a gap forming at least part of an annular shape along a central portion between said first and second ends,
the frame elastically deflectable across the gap to operably engage the insert along a portion of the insert between the insert first and second ends.
                      Claim 18: A bat, comprising: a hollow tubular bat frame having a small-diameter handle portion and a large-diameter impact portion having a circular cross-section with an inner and outer diameter; at least one insert having a substantially circular cross-section with an outer diameter less than the inner diameter of the frame impact portion, the insert being held within the impact portion; and the impact portion being inwardly elastically deflectable
such to establish a tight interference fit between the insert and the impact portion.
                    Defendant’s carbon bat made differently
                      An internal component is first fabricated by rolling alternate layers of preimpregnated carbon fiber reinforced/epoxy tape, polypropylene shrink tape and nylon shrink tape over a mandrel, curing the component at an elevated temperature, removing the external layers of shrink tape and then dipping the component into a release agent.   Each internal component is comprised of two layers of carbon fiber reinforced epoxy/tape and the placement and quantity of shrink tape layers vary slightly depending on the specific bat.   Dry pre-woven fabrics are then tightly drawn over the internal component, and the entire assembly is infused with resin.
                  holding
                    "insert" = something put inside, not a layer
                      We note first that nothing in the claims or specification indicates, explicitly or implicitly, that the inventor used the term in a novel way or intended to impart a novel meaning to it.   To the contrary, the claims and written description of the ′ 398 patent consistently use the term “insert” in the sense of its ordinary meaning as “something inserted or intended for insertion.”   Webster's II New College Dictionary (3d ed.2005);  see also Webster's Third New International Dictionary Unabridged (1993) (defining “insert” as “something that is inserted or is for insertion”);  ′398 patent col.3 l.5 (“the insert is inserted into the tubular frame 11”);  id. col.4 ll.24-28 (“the insert 18 is coated with the lubricant before being inserted into the tubular frame 11”).
                      Had the patentee, “who was responsible for drafting and prosecuting the patent, intended something different, it could have prevented this result through clearer drafting.”  ...
                      Moreover, the parties have presented no evidence to suggest that the term “insert” in the context of the patent has a particular meaning differing from the ordinary and customary meaning in the field of art encompassed by the ′398 patent.   The term “insert” is a common term used to denote structure.   To contend, however, as Wilson does, that it does not matter whether an insert is placed into a pre-existing frame or whether a frame is built around it ignores that ordinary and customary meaning, notwithstanding Wilson's attempts to categorize the term “insert” as “purely structural.”
                        The issue would have been different if the claims contained the language argued in Wilson's briefs;  to wit, “internal structural member,” Wilson Br. at 31, 38, or “multi-wall product,” Reply Br. at 3, but they do not.   It is the language of the claims not the argument that governs.
              Read through the eyes of a PHOSITA
                for criticism of the PHOSITA perspective, see Golden (2008)
                  “ Crudely stated, if claims are to be the fundamental determinants of patent scope, the basic approach to construing claims should be one of reasonableness according to (1) established legal principles, (2) a well-informed reading of the patent and its prosecution history, and (3) the mores and understandings of claims' relevant interpretive community. The ordinary artisan perspective is not well designed to implement this approach. Ordinary engineers or scientists typically do not form a well-constituted interpretive community for patent claims. Consequently, their views on claim meaning might be too legally ill-informed and idiosyncratic to permit substantial predictability.”
                  “ A better perspective to associate with claim construction is that of a patent attorney having access to the knowledge of a person of technological skill. Such an attorney-with-artisan perspective would make use of the artisan's knowledge to help ensure claim construction's technological sensibility. But it would more generally follow rules and techniques for claim construction that are publicly known and anchored in the practices of an active interpretive community. Claim construction law and practice are already mostly in agreement with this attorney-with-artisan perspective, and substantially in conflict with the ordinary artisan perspective. Further, use of an ordinary artisan perspective for claim construction has a surprisingly weak historical pedigree. Recognition that an attorney-with-artisan perspective governs claim construction should promote the law's transparency, coherence, and predictability, as well as providing a more sensible reference point for its improvement and critique.”
                Strictly speaking, through the eyes of a PHOSITA at the time the invention was made -- typically, the effective filing date of the patent application
              "substantially as described" = surplusage
            Roles of the specification
              Subject matter disclosed but not claimed is dedicated to the public
                Unique Concepts (CAFC 1991)
              “Every patentee may be his own lexicographer.”
                explicit definitions
                  e.g., Cultor (CAFC 2000)
                    Specification includes the following language: “As used herein, the expression “water-soluble polydextrose” (also known as polyglucose or poly-D-glucose) specifically refers to the water-soluble polydextrose prepared by melting and heating dextrose (also known as glucose or D-glucose), preferably with about 5-15% by weight of sorbitol present, in the presence of a catalytic amount (about 0.5 to 3.0 mol %) of citric acid.”
                    Held: “Having explicitly defined this term as limited to that prepared with a citric acid catalyst, this effected a disclaimer of the other prior art acids.   Claims are not correctly construed to cover what was expressly disclaimed.”
                implicit definitions
                  e.g., Nystrom (CAFC 2005)
                    consistent use in specification of "board" as wood confines meaning of "wood" in claim
            Resolving ambiguity
              Avoid claim interpretations that lead to redundancy (claim differentiation)
              Interpret an ambiguous claim so as to “secure to the patentee his actual invention”
                “[A] claim interpretation that would exclude the inventor's device is rarely the correct interpretation”
                  Elekta Instrument (2000)
              Interpret an ambiguous claim so as to preserve its validity
                e.g., Wright (1910)
                now seen as "last resort"
                  MBO Labs (CAFC 2007)
                competing canon: invalidate ambiguous claim as failing definiteness or enablement requirement
                  Liebel Flarsheim (CAFC 2007)
              Interpret an ambiguous claim against the patentee
                cf. adhesion contracts
            Interpret pioneering inventions generously
              Westinghouse v. Boyden Brake (SCOTUS 1898)
                “ To what liberality of construction these claims are entitled depends, to a certain extent, upon the character of the invention and whether it is what is termed, in ordinary parlance, a "pioneer." This word, although used somewhat loosely, is commonly understood to denote a patent covering a function never before performed, a wholly novel device, or one of such novelty and importance as to mark a distinct step in the progress of the art, as distinguished from a mere improvement or perfection of what had gone before.
                  Most conspicuous examples of such patents are the one to Howe, of the sewing machine; to Morse, of the electrical telegraph, and to Bell, of the telephone.
                  The record in this case would indicate that the same honorable appellation might be safely bestowed upon the original air brake of Westinghouse, and perhaps also upon his automatic brake. In view of the fact that the invention in this case was never put into successful operation, and was to a limited extent anticipated by the Boyden patent of 1883, it is perhaps an unwarrantable extension of the term to speak of it as a "pioneer," although the principle involved subsequently, and through improvements upon this invention, became one of great value to the public.
                The fact that this invention was first in the line of those which resulted in placing it within the power of an engineer, running a long train, to stop in about half the time and half the distance within which any similar train had stopped, is certainly deserving of recognition, and entitles the patent to a liberality of construction which would not be accorded to an ordinary improvement upon prior devices.
                At the same time, as hereinafter observed, this liberality must be exercised in subordination to the general principle above stated -- that the function of a machine cannot be patented, and hence that the fact that the defendants' machine performs the same function is not conclusive that it is an infringement.
              Eibel Process Co. v. Minn. & Ontario Paper, 261 U.S. 45 (1923)
              Cole v. Malleable Iron Fittings, 70 F.2d 686 (2d Cir. 1934)
          Assembling the pieces
            Pre-Phillips
              Approach #1: Strict Hierarchy among sources
                Guidance may be sought from the specification only if a claim recites a term in need of definition
                Guidance may be sought from extrinsic evidence only if intrinsic evidence is ambiguous
                  Vitronics (CAFC 1996)
                  Johnson v. Zebco, 175 F.3d 985 (1999)
              Approach #2: “Holistic”
                e.g., Wang v. AOL, 197 F.3d 1377 (1999)
              Approach #3: Privilege dictionaries
                Texas Digital (CAFC 2002?)
              Reversal Rates ~ 35%
                Sources
                  Kimberly A. Moore, Markman Eight Years Later: Is Claim Construction More Predictable?, 9 LEWIS & CLARK L. REV. 231 (2005)
                  Gretchen Ann Bender, Uncertainty and Unpredictability in Patent Litigation, 8 J. INTELL. PROP. L. 175 (2001)
                  Christian A. Chu, Empirical Analysis of the Federal Circuit’s Claim Construction Trends,
16 BERKELEY TECH. L.J. 1075 (2001)
                  Andrew T. Zidel, Patent Claim Construction in the Trial Courts, 33 SETON HALL L. REV. 711 (2003)
            Phillips (CAFC en banc 2005)
              facts
              Adopt open-ended “holistic” approach to claim interpretation
                "[T]here is no magic formula or catechism for conducting claim construction. Nor is the court barred from considering any particular sources or required to analyze sources in any specific sequence, as long as those sources are not used to contradict claim meaning that is unambiguous in light of the intrinsic evidence. ... The sequence of steps used by the judge in consulting various sources is not important; what matters is for the court to attach the appropriate weight to be assigned to those sources in light of the statutes and policies that inform patent law. In [prior caselaw], we did not attempt to provide a rigid algorithm for claim construction, but simply attempted to explain why, in general, certain types of evidence are more valuable than others."
            Impact of Phillips
              Wagner and Petheridge (2007)
              Anderson & Menell (2014)
          Special types of claims
            Means + Function Elements
              examples
                "means whereby said rudder is caused to present to the wind that side thereof nearest the side of the aeroplane having the smaller angle of incidence and offering the least resistance to the atmosphere"
                  Wright patent (1906), claim 11
              112(f)
                An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.
                  Only possible with respect to combination patents
                  “Statutory equivalents” interpreted in much the same fashion as judicial equivalents (see below)
                  Statutory equivalents must be in existence at the time the patent is granted
                    Al-Site (CAFC 1991)
                  To satisfy “claim definiteness” requirement, the specification must set forth the structure that constitutes the means of achieving the function
                  Popularity of this type of claim has declined because of narrowness of scope
            Product by process claims
              Construed as product patents
              But the process elements serve as limitations
                Abbott (CAFC 2009 en banc)
        Procedure
          Claim Construction by District Courts
            Markman Hearings
              Made possible by the decision in Markman (SCOTUS 1996)
                Holding: claim construction = question of Law; no 7th amendment right to jury trial
              Claim construction made by judge, not jury, in hearing separate from determination of infringement at trial
              possible placement of the hearing
                before close of discovery
                after close of discovery, before trial (85%)
                  Sometimes combined with summary judgment proceedings, sometimes separate
                at conclusion of presentation of evidence, before jury instructions
            Standard of Review
              Old Rules
                de novo review
                  Cybor (CAFC en banc 1998)
              New Rules
                Teva Pharmaceuticals (SCOTUS 2015)
                  District Court’s ultimate interpretations of claim terms reviewed under de novo standard
                  But District Court’s evaluations of extrinsic evidence should be upheld unless “clearly erroneous”
                    Federal Rule of Civil Procedure 52(a)(6)
                  Sometimes, such evaluations of extrinsic evidence will be decisive
          Claim Construction by PTAB (post-AIA)
            PTAB now obliged to determine “the proper meaning of a claim” -- not, as before, the “broadest reasonable interpretation”
              Duty applies to inter-partes review, ex parte reexaminations and ex parte post-grant reviews
            Standard of Review
              CAFC review of PTAB constructions are governed (for now) by the same standards applicable to District Court rulings
      Europe
        EPC
          Article 69(1): The extent of the protection conferred by a European patent or a European patent application shall be determined by the claims. Nevertheless, the description and drawings shall be used to interpret the claims.
          Protocol
            (1) General Principles: Article 69 should not be interpreted as meaning that the extent of the protection conferred by a European patent is to be understood as that defined by the strict, literal meaning of the wording used in the claims, the description and drawings being employed only for the purpose of resolving an ambiguity found in the claims. Nor should it be taken to mean that the claims serve only as a guideline and that the actual protection conferred may extend to what, from a consideration of the description and drawings by a person skilled in the art, the patent proprietor has contemplated. On the contrary, it is to be interpreted as defining a position between these extremes which combines a fair protection for the patent proprietor with a reasonable degree of legal certainty for third parties.
            (2) Equivalents: For the purpose of determining the extent of protection conferred by a European patent, due account shall be taken of any element which is equivalent to an element specified in the claims.
        Germany
          Traditional central-claiming approach now largely abandoned
            German Patent Act, section 14: “The extent of the protection conferred by the patent and the patent application shall be determined by the patent claims. Nevertheless, the description and the drawings shall be used to interpret the patent claims.”
          Standard hierarchy of sources of guidence
            intrinsic
              Ordinary meaning of the words of the claim, as known to PHOSITA
              Patentee can be his own lexicographer
            extrinsic
              Dictionaries, etc.
              Intent of the inventor is irrelevant
                BGH, GRUR (2010), 602 – Xa ZR 36/08
“Gelenkanordnung”
              No file wrapper estoppel
          “Purposive claim interpretation”
            Attribute to each term a definition that preserves its technical function
              BGH, (1999) 30 IIC 932 – X ZR 85/96
“Spannschraube”
          Because of the bifurcated system, it is especially important that the claim interpretation adopted in invalidity proceedings be the same as that adopted in infringement litigation
        France
          Traditional catalogue of relevant sources
            e.g., file wrapper can be consulted to resolve ambiguities, but no formal doctrine of file wrapper estoppel -- Institute Pasteur v. Chiron (2010)
          Typically construe claims generously
            Dolle v. Emdens (1990)
              “Article 69, as completed by its protocol, has chosen a middle way between a literal construction of the claim, in which the description and the drawings should be used only to dissipate ambiguities, and a broad
construction, in which the claim would be used just as a guideline and in which the protection would extend to what, according to the skilled
person, the patentee intended to protect.
              “This compromise must ensure a fair protection for the patentee against the skill of the infringer to disguise infringement, and enable third parties to know with certainty what is protected.
              “In view of Article 69, the judge must construe the claims by reference to the description and drawings. He must give the claim its full meaning, so that this condensed text is
understood.
              “The construction leads to a definition of the substance of the claimed invention, without adding any element which the claim did not include and did not suggest.”
          Expansive equivalents doctrine
        Netherlands
          Slow drift away from central claiming, toward peripheral claiming
            Philips v. Tasseront (1930): claim construction requires using “the essence of the invention” as the starting point
            1978 reform of the Dutch Patent Act, Art. 30(2): the claims determine the scope of the patent
            Ceiba Geiger v. One Optics (1995): the essence of the invention = “the inventive concept behind the wording of the claims”
            Lely v. Delaval (2007): the essence of the invention is not the starting point, but rather a “viewpoint”
            Medinol v. Abbott (2014): reiterate metaphor of “viewpoint”; reject exclusive focus on the language of the claims
          Adopt traditional hierarchy of sources of guidance
            E.g., prosecution history relevant only if claims + specification fail to remove ambiguity
          Gradual constriction of the doctrine of equivalents
        UK
          UK continues to hew to long-standing peripheral claiming approach
            UK Patent Act 125(1): “For the purposes of this Act an invention for a patent for which an application has been made or for which a patent has been granted shall, unless the context otherwise requires, be taken to be that specified in a claim of the specification of the application or patent, as the case may be, as interpreted by the description and any drawings contained in that specification, and the extent of the protection conferred by a patent or application for a patent shall be determined accordingly.”
            Section 125(3): “The Protocol on the Interpretation of Article 69 of the European Patent Convention (which Article contains a provision corresponding to subsection (1) above) shall, as for the time being in force, apply for the purposes of subsection (1) above as it applies for the purposes of that Article."
          Catnic Components v Hill & Smith [1982] RPC 183
            "The question in each case is: whether persons with practical knowledge
and experience of the kind of work in which the invention was intended to be used, would understand that strict compliance with a particular descriptive word or phrase appearing in a claim was intended by the
patentee to be an essential requirement of the invention so that any variant would fall outside the monopoly claimed, even though it could have no material effect upon the way the invention worked."
          Improver v Remington, [1990] FSR 181, expanded the Catnic inquiry into 3 questions
            1. Does the variant have a material effect upon the way the invention works? If yes, the variant is outside the claim. If no -
            2. Would this (i.e. that the variant had no material effect) have been obvious at the date of publication of the patent to a reader skilled in the art? If no, the variant is outside the claim. If yes -
            3. Would the reader skilled in the art nevertheless have understood from the language of the claim that the patentee intended that strict compliance with the primary meaning was an essential requirement of the invention? If yes, the variant is outside the claim.
          Kirin-Amgen v. Hoechst Marion Roussel [2004] UKHL 46.
            In a complex case, the proper question is: What would a skilled addressee understand the patentee (i.e. the person drafting the patent) to have used the words in the claim to mean?
      China
        Patent Act, Article 64: “ For the patent right of an invention or a utility model, the scope of protection shall be confined to the content of the claims. The description and the drawings attached may be used to explain the content of the claims.”
      Japan
        Article 70
          (1)The technical scope of a patented invention must be determined based upon the statements in the claims attached to the written application.
          (2)In the case referred to in the preceding paragraph, the meanings of terms used in the claims are to be interpreted in consideration of the statements in the description and drawings attached to the written application.
          (3)In the case referred to in the preceding two paragraphs, statements in the abstract attached to the written application must not be taken into consideration.
        Article 71
          (1)A request may be made to the Japan Patent Office for an advisory opinion on the technical scope of a patented invention.
          (2)If a request under the preceding paragraph is filed, the Commissioner of the Japan Patent Office must designate three administrative patent judges to provide an advisory opinion on the requested matter.
      Korea
        statutory basis: Article 97 (Scope of Protection of Patented Inventions)
          The scope of protection of a patented invention shall be determined by the descriptions of the claims.
            Method
            Procedure
            “The scope of the claim is, therefore, determined by the claim itself. The meaning of the words used in the claims should be interpreted using the plain and ordinary meaning of the words.”
              When the meaning of the terms within a claim is not clear, one may to look to the patent specification and drawings to gain a better understanding of the meaning of the terms.
              If the terms are not understandable even after consulting the specification and drawings, one would seek how a person of the ordinary skill in the art would have interpreted the terms at the time of the invention.
              The prosecution history may be taken into consideration as well, but usually at the request of the parties.
        _Canon v. Alphachem, et al., Supreme Court Case No. 2012Hu917 (2014)
          “[T]he scope of a patented invention must be construed in an objective/reasonable manner based on the plain language of the claims and also in light of the invention's detailed description and drawings, [and]…where it is difficult to fully understand the inventive features from the claim language alone, other disclosures of the specification, including the drawings, should be considered to determine the technical features of the invention." Also relevant are the purpose of the claimed invention, how the claimed element at issue achieves the purpose, and the effect of the claimed invention in defining the technical meaning of the claimed element.
        Special procedure: Trial to Confirm Scope of Rights (before IPTAB)
    Duration
      USA
        Default Term
        Extensions
        “Jumping the Gun”
          Paper Converting Machine (CAFC 1984)
        Special Rules for Drugs
          Roche (CAFC 1984)
          Choi et al, “Medicines for the Mind,”
84 Neuron 554 (2014)
      Europe
      China
      Japan
      Korea
        Default Term
          statutory basis = Article 88 (Term of Patent)
            (1) The term of a patent shall begin on the registration date of the grant of the patent right under Article 87 (Registration of Grant of Patents and Publication of Registration) (1) and last for 20 years from the filing date of the patent application.
            (2) Where a patent is granted for a patent application filed by the legitimate right-holder under Article 34 (Patent Applications Filed by Unentitled Persons and Protection of Legitimate Right-Holders) or 35 (Patents Granted to Unentitled Persons and Protection of Legitimate Right-Holders), the term of the patent under paragraph (1) shall begin on the day immediately following the filing date of the patent application filed by the unentitled person.
        Extensions
          statutory basis = Article 89 (Extension of Patent Terms by Permission, etc.)
            (1) Notwithstanding Article 88 (Term of Patent)(1), the term of a patent on an invention may be extended only once by up to five years to compensate for the period during which the invention cannot be executed, if the invention is specified by Presidential Decree and requires permission, registration, etc. under any other statute (hereinafter referred to as "permission, etc.") to execute patented invention but it takes a long time to undergo necessary tests for validity, safety, etc. for such permission, registration, etc.
            (2) For the purposes of paragraph (1), the period required due to a cause attributable to the person who has obtained permission, etc. shall not be included in "period during which the invention cannot be executed" in paragraph (1).
          statutory basis = Article 95 (Effects of Patent with Extended Term by Permission, etc.)
            The effects of a patent, the term of which has been extended under Article 90 (Applications for Registration of Extended Patent Terms by Permission, etc.) (4), shall extend only to executing the patented invention on the things on which permission, etc. for registration of the extension is based (things used for specified purposes, if the purposes of such things are specified in the permission, etc.).
          statutory basis for extension procedures
            Article 90 (Applications for Registration of Extended Patent Terms by Permission, etc.)
            Article 91 (Determination to Reject Applications for Registration of Extended Patent Term by Permission, etc.)
            Article 92 (Determination, etc. to Register Extended Patent Term by Permission, etc.)
            Article 92-2 (Extension of Term of Patent Right Following Delayed Registration)
            Article 92-3 (Application to Register Extension of Term of Patent Right Following Delayed Registration)
            Article 92-4 (Decision to Reject Application for Registration of Extension of Term of Patent Right Following Delayed Registration)
            Article 92-5 (Decision, etc. to Register Extension of Term of Patent Right Following Delayed Registration)
            Article 93 (Provisions Applicable Mutatis Mutandis)
              Articles 57 (Examinations by Examiners) (1), 63 (Notice of Grounds for Rejection), 67 (Formalities for Decision on Patentability) and subparagraphs 1 through 5 and 7 of Article 148 (Exclusion of Administrative Patent Judges) shall apply mutatis mutandis to examination of an application for registration of an extended term of a patent.
          novel developments
            Patent Court decision 2016 Heo 9035, (decided December 21, 2017) (Alitretinoin Patent Term Extension Case)
              Article 89 (Extension of Patent Terms by Permission, etc.) provides for extensions in the cases where time is taken to obtain regulatory approval after patent registration (such as with pharmaceutical or agrochemical agents in the form of compound, composition/formulation, or process of preparation thereof)
                According to Enforcement Decree of the Korean Patent Act (of April 3, 2013),” patent term extension only possible based on initial marketing approval for a new substance whose active moiety has a novel chemical structure”
                  thus patent for a second medical use of a known drug is not possible
                  but no guideline provided as to what constitutes a “new substance”
              Patent Court reversed Trial Board decision to find that Alitretinoin is a new substance on the grounds that “geometric isomers have different stereochemical structures and thus may show significant differences in physiochemical or biological activities”
                Thus “Patent Court decision suggests that it is possible to obtain patent term extension for patents relating to stereoisomers which have a different mechanism of action and a different therapeutic effect from other stereoisomers, owning to their unique chemical composition.”
                  “Therefore, development of new stereoisomers would be a promising approach to secure second generation patents with the possible development of patent term extension in Korea.”
  Entitlements
    Infringement
      USA
        Statutory Provisions
          USA
            35 USC 271(a)
              Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent
          Japan
            Article 2(3)
              (3) "Working" of an invention in this Act means the following acts:
(i) in the case of an invention of a product (including a computer program, etc., the same shall apply hereinafter), producing, using, assigning, etc. (assigning and leasing and, in the case where the product is a computer program, etc., including providing through an electric telecommunication line, the same shall apply hereinafter), exporting or importing, or offering for assignment, etc. (including displaying for the purpose of assignment, etc., the same shall apply hereinafter) thereof;
(ii) in the case of an invention of a process, the use thereof; and
(iii) in the case of an invention of a process for producing a product, in addition to the action as provided in the preceding item, acts of using, assigning, etc., exporting or importing, or offering for assignment, etc. the product produced by the process.
            Article 68
              A patentee shall have the exclusive right to work the patented invention as a business; provided, however, that where an exclusive license regarding the patent right is granted to a licensee, this shall not apply to the extent that the exclusive licensee is licensed to exclusively work the patented invention.
          China
            Art. 59
              For the patent right of an invention or a utility model, the scope of protection shall be confined to what is claimed, and the written description and the pictures attached may be used to explain what is claimed.
        Forbidden Actions
          Make
            combination patents
              make = components are brought together into one operable assembly
              Assembly overseas
                Deepsouth Packing (SCOTUS 1972)
                  Facts: combination patent on a shrimp deveining machine
                  Holding (5/4): Manufacturing all components of a machine covered by a combination patent, then shipping those components overseas for assembly there, is not “making”
                271(f)(1) overturns Deepsouth
                  Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components
are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer
            joint infringement
              ordinarily, patentee must prove that a single legal entity practiced each element of the claim -- either literally or through equivalents
              if some elements are practiced by entity #1 and some by entity #2 (e.g., customers), patentee can prevail on joint infringement theory, but only if entity #1 "controls or directs" the conduct of entity #2 or they form a “joint enterprise”
                BMC Resources (CAFC 2007)
                Miniauction (CAFC 2008)
                Akamai v. Limelight (CAFC 2010; SCOTUS 2014; CAFC 2015 en banc)
                  Doctrine of inducement (see below) cannot be used to extend liability
                  CAFC (at suggestion of SCOTUS) loosens definitions
                    “Directs or controls” includes situations in which E1 conditions E2’s participation in an activity or receipt of a benefit upon performance of a step of a patented method and establishes the manner or timing of that performance
                    “Joint enterprise” requires (only):
                      1. An agreement, express or implied
                      2. A common purpose
                      3. A community of pecuniary interest in that purpose, and
                      4. An equal right to a voice in the direction of the enterprise
            repair/reconstruction
              repairing a patented product that one has a right to use is not infringing
                rationale: tacit term of the original sale of the patented product
                  Possible alternative justification: hostility to planned obsolescence and use-based differential pricing
                Examples:
                  Replacing the worn-out fabric of a patented convertible top is “repair”
                  Upgrading a patented fish canning machine, including changing the can size from 1 pound to 5 ounces is “repair”
              repairing a patented product that one does not have a right to use is infringing
                rationale: no underlying tacit license is available
                repair perpetuates the underlying unlawful use
                  Aro (SCOTUS 1964)
              reconstructing a patented product that one has a right to use is infringing
                rationale: right to reconstruct is not a tacit term of the original sale of the patented product
          Use
            Use of patented products made without authority by someone other than the patentee or a licensee is infringement
              patent rights include “right to put into service any invention” – Bauer (SCOTUS 1913); Flat Slabs (1920)
              Aro (SCOTUS 1964)
              NTP v. RIM (CAFC 2005)
            Borderline situations involving meaning of “use”
              Mere possession of a patented machine is not "use", in absence of "threatened or contemplated" use
                Calif. Table Grape Comm. (ED Cal. 2007)
              Early cases hold sales demonstrations = use (now covered by “offer to sell”)
              Demonstration at a trade show may not be "use"
                Medical Solutions (CAFC 2008) does not resolve the issue
              Testing is "use"
                Waymark (CAFC 2001)
              Continued use of infringing product made and sold before patent grant is infringement
                Olssen (1938); Coakwell (Ct Cl 1967)
              Use of a patented product (not manufactured by the patentee or licensee) for purposes other than those contemplated by patentee is still infringement
                "all uses" theory
          Sell
            Qualified by first-sale doctrine
              presumed that sale of the patented product to consumers carries with it right to resell
              see Exhaustion Doctrine, below
          Offer to sell
            Domestic offer, foreign sale
              Quality Tubing (SD Tex 1999): offer to sell, made in U.S. is not infringement where neither manufacture nor delivery will occur in U.S. (overturned by Rotec, infra)
              Rotec Industries (CAFC 2000): dictum: offer to sell, made in U.S., is infringement, regardless of location of manufacture and delivery
          Import
            Importation of patented products
              271(a): Except as otherwise provided in this title, whoever without authority ... imports into the United States any patented invention during the term of the patent therefor, infringes the patent.
            importation of products made overseas with patented process
              271(g) Whoever without authority imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer, if the importation, offer to sell, sale, or use of the product occurs during the term of such process patent.
              In an action for infringement of a process patent, no remedy may be granted for infringement on account of the noncommercial use or retail sale of a product unless there is no adequate remedy under this title for infringement on account of the importation or other use, offer to sell, or sale of that product.
              A product which is made by a patented process will, for purposes of this title, not be considered to be so made after—
                (1) it is materially changed by subsequent processes; or
                (2) it becomes a trivial and nonessential component of another product.
            Principal limitation: Exhaustion (see Defenses, below)
        Types of Infringement
          Literal
            all-elements rule
              element = any limitation found in the claim language
              Roughly speaking, a limitation is a characteristic or aspect identified in a claim
              CAFC acknowledges that what qualifies as a limitation depends on the level of generality one selects -- but has not provided guidance concerning the choice of level of generality
                e.g., Corning Glass (CAFC 1989)
          Equivalents
            Element-by-element approach
            Tests
              Most commonly used: “Function-way-result”
                D’s product must perform substantially the same function in substantially the same way to achieve the same result as P’s product
              Less commonly used: Are the differences between the two products “Insubstantial”
              Older cases explicitly applied a more lenient test to “pioneering” inventions
                e.g., Perkin-Elmer (CAFC 1987)
                This variant of the doctrine is largely moribund today
            State of mind
              bad intent on part of defendant is unnecessary
            Application to technological advances
              a factor in the analysis is whether PHOSITA, at the time of the infringement, knew of the interchangeability of P's and D's components
                Warner (1997)
              However, DOE can be used to reach equivalent technologies not in existence at the time of the patent grant
                this doctrine is in tension with the enablement principle
                For criticism of the doctrine, see Sarnoff (2004)
            Limits of DOE
              Prior art
                Wilson (CAFC 1990)
                  Opinion
                  Holding
                    “ Infringement may be found under the doctrine of equivalents if an accused product "performs substantially the same overall function or work, in substantially the same way, to obtain substantially the same overall result as the claimed invention." ...
                    “Even if this test is met, however, there can be no infringement if the asserted scope of equivalency of what is literally claimed would encompass the prior art. ... ..
                      “ [A] patentee should not be able to obtain, under the doctrine of equivalents, coverage which he could not lawfully have obtained from the PTO by literal claims. ...
                      “The doctrine of equivalents exists to prevent a fraud on a patent, ... not to give a patentee something which he could not lawfully have obtained from the PTO had he tried. Thus, since prior art always limits what an inventor could have claimed, it limits the range of permissible equivalents of a claim.”
                    “This issue--whether an asserted range of equivalents would cover what is already in the public domain--is one of law, which we review de novo, ... but we presume that the jury resolved underlying evidentiary conflicts in Wilson's favor...”
                  Applied
                    Dimpled golf ball
                    The specific question before us, then, is whether Wilson has proved that a hypothetical claim, similar to claim 1 but broad enough to literally cover Dunlop's balls, could have been patentable. As we have explained above, Dunlop's balls are icosahedral balls with six great circles, five of which are intersected by dimples. The balls contain 432 to 480 dimples, 60 of which intersect great circles in amounts from 4 to 9 thousandths of an inch. In order for a hypothetical claim to cover Dunlop's balls, its limitations must permit 60 dimples to intersect the great circles by at least 9 thousandths of an inch. Thus, the issue is whether a hypothetical claim directed to an icosahedral ball having six great circles intersected by 60 dimples in amounts up to 9 thousandths of an inch could have been patentable in view of the prior art Uniroyal ball.
                    On the Uniroyal ball, the extent to which the dimples intersect the great circles is from 12 to 15 thousandths of an inch. Stated as a percentage of dimple radius, the intersection permitted in the hypothetical claim is 13% or less, and the dimples on the Uniroyal ball intersect by 17% to 21%. The number of dimples which intersect the great circles is also similar for the hypothetical claim and the prior art Uniroyal ball. The pertinent hypothetical claim limitation reads on any ball having 60 or less intersecting dimples. This limitation reads on the prior art Uniroyal ball, which has 30 intersecting dimples. If viewed in relative terms, the hypothetical claim limitation reads on any ball which has less than 14% of its dimples intersecting great circles. Roughly 12% of the dimples on the Uniroyal ball intersect great circles.
                    We hold that these differences are so slight and relatively minor that the hypothetical claim--which permits twice as many intersecting dimples, but with slightly smaller intersections--viewed as a whole would have been obvious in view of the Uniroyal ball. As Dunlop puts it, there is simply "no principled difference" between the hypothetical claim and the prior art Uniroyal ball. Accordingly, Wilson's claim 1 cannot be given a range of equivalents broad enough to encompass the accused Dunlop balls.
              Material disclosed but not claimed
                Johnson (CAFC en banc 2002)
                rationale: purpose of the doctrine is to protect P against evasion through use of unanticipatable substitutes; it should not apply when P was aware of substitutes
              Prosecution History Estoppel
                Principle: Patentee is bound by representations made during patent prosecution and may not use doctrine of equivalents to recover territory she gave up in the course of patent prosecution
                  Schriber-Schroth (SCOTUS 1940): an applicant “may not, by resort to the doctrine of equivalents, give to an allowed claim [the] scope which it might have had without the [narrowing] amendments.”
                History
                  CAFC (1983-2000): Inconsistent Standards
                    Some panels adopt “Flexible Bar” approach: Patentee permitted to reclaim ground surrendered during prosecution if she could show that the surrender was unnecessary to obtain the patent
                      E.g., Hughes Aircraft (1983)
                    Others adopt “Complete Bar” approach
                      E.g., Kinzenbaw (1984)
                  Warner (SCOTUS 1997)
                    Adopt rebuttable presumption that a limitation added in the course of patent prosecution was necessary to obtain the patent
                    Did not resolve the intra-circuit split
                  Festo (CAFC en banc 2000): “Complete Bar” Rule
                    PHE applies to all amendments related to statutory requirements for patentability
                      §102, §103, §101, §112
                    Voluntary amendment has the same effect as compelled amendment
                      Serves policies of notice and certainty
                  Festo (SCOTUS 2002): “Forseeable Bar” Rule
                    1. A narrowing amendment made to satisfy any requirement of the Patent Statute may give rise to an estoppel
                      E.g., utility; novelty; nonobviousness; written description; enablement; best mode
                    2. Estoppel does not apply, however, when:
                      Equivalents were unforseeable at time of amendment, or
                      Rationale for amendment bears only “tangential relation” to the equivalent at issue, or
                      Patentee could not reasonably be expected to have described the insubstantial substitute
                        PHOSITA standard
                    Patentee bears the burden of proof on issue #2
                    Rationale: the imperfections of language
                      The patent laws “promote the Progress of Science and useful Arts” by rewarding innovation with a temporary monopoly. The monopoly is a property right; and like any property right, its boundaries should be clear. This clarity is essential to promote progress, because it enables efficient investment in innovation. A patent holder should know what he owns, and the public should know what he does not. For this reason, the patent laws require inventors to describe their work in “full, clear, concise, and exact terms,” as part of the delicate balance the law attempts to maintain between inventors, who rely on the promise of the law to bring the invention forth, and the public, which should be encouraged to pursue innovations, creations, and new ideas beyond the inventor’s exclusive rights.
                        Unfortunately, the nature of language makes it impossible to capture the essence of a thing in a patent application. The inventor who chooses to patent an invention and disclose it to the public, rather than exploit it in secret, bears the risk that others will devote their efforts toward exploiting the limits of the patent’s language:
                      “An invention exists most importantly as a tangible structure or a series of drawings. A verbal portrayal is usually an afterthought written to satisfy the requirements of patent law. This conversion of machine to words allows for unintended idea gaps which cannot be satisfactorily filled. Often the invention is novel and words do not exist to describe it. The dictionary does not always keep abreast of the inventor. It cannot. Things are not made for the sake of words, but words for things.”
                        The language in the patent claims may not capture every nuance of the invention or describe with complete precision the range of its novelty. If patents were always interpreted by their literal terms, their value would be greatly diminished. Unimportant and insubstantial substitutes for certain elements could defeat the patent, and its value to inventors could be destroyed by simple acts of copying. For this reason, the clearest rule of patent interpretation, literalism, may conserve judicial resources but is not necessarily the most efficient rule. The scope of a patent is not limited to its literal terms but instead embraces all equivalents to the claims described.
        Secondary Liability
          Contributory Infringement
            271(c): Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.
            scienter requirement
              necessary that the defendant knew that the combination for which he was supplying a part was both patented and infringing
                Aro (1964) (5/4)
                but see Sandisk (ND Cal 2000): necessary only that the defendant knew of the patent and of the activity alleged to be infringing
                rare exception to general pattern of strict liability
            defense: substantial noninfringing uses
              Bard (CAFC 1990)
              cf. Sony; Grokster -- incorporating this principle into the interpretation of contributory infringement in copyright law
            Licensee triangles
          Inducement
            271(b) “Whoever actively induces infringement of a patent shall be liable as an infringer”
            Examples
              distributing brochures advertising sale of infringing equipment;
              instructing in the use of patented process;
              purchase of articles made through unauthorized use of a patented process;
              indemnifying infringer;
              inducing licensee to breach
license agreement
              But: inaction is not inducement
                e.g., failure to take action to prevent corporate affiliates from engaging in infringing behavior is not inducement
                  Tegal (CAFC 2001)
            scienter requirement
              Plaintiff must prove that defendant was aware of (a) the patent and (b) the acts induced by defendant constitute infringement
                Global-Tech (SCOTUS 2011)
              Defendant’s good-faith belief that the patent is invalid is not a defense
                Commil (SCOTUS 2015)
      Europe
      China
        Art. 59
          For the patent right of an invention or a utility model, the scope of protection shall be confined to what is claimed, and the written description and the pictures attached may be used to explain what is claimed.
      Japan
        Article 2(3)
          (3) "Working" of an invention in this Act means the following acts:
(i) in the case of an invention of a product (including a computer program, etc., the same shall apply hereinafter), producing, using, assigning, etc. (assigning and leasing and, in the case where the product is a computer program, etc., including providing through an electric telecommunication line, the same shall apply hereinafter), exporting or importing, or offering for assignment, etc. (including displaying for the purpose of assignment, etc., the same shall apply hereinafter) thereof;
(ii) in the case of an invention of a process, the use thereof; and
(iii) in the case of an invention of a process for producing a product, in addition to the action as provided in the preceding item, acts of using, assigning, etc., exporting or importing, or offering for assignment, etc. the product produced by the process.
        Article 68
          A patentee shall have the exclusive right to work the patented invention as a business; provided, however, that where an exclusive license regarding the patent right is granted to a licensee, this shall not apply to the extent that the exclusive licensee is licensed to exclusively work the patented invention.
      Korea
        direct, indirect, and divided infringement
          statutory basis:
            Articles 2, 126-127
              Article 2 (Definitions)
                The terms used in this Act shall be defined as follows:
                  (1) The term "invention" means the highly advanced creation of a technical idea utilizing the laws of nature
                  (2) The term "patented invention" means an invention for which a patent has been granted;
                  (3) The term "executing" means any of the following activities:
                    (a) An invention of a thing: Manufacturing, using, assigning, leasing, or importing the thing or offering to assign or lease the thing (including displaying the thing for the purpose of assignment or lease; hereinafter the same shall apply)
                    (b) An invention of a process: Using the process
                    (c) An invention of a process of manufacturing a thing: Using, assigning, leasing, or importing the thing manufactured by the process or offering to assign or lease the thing, other than the activities specified in item (b).
              Article 126 (Right to Seek Injunction against Infringement, etc.)
                (1) A patentee or an exclusive licensee may file a complaint to seek injunction against, or prevention of, infringement against a person who infringes, or is likely to infringe, his/her rights.
                (2) When a patentee or an exclusive licensee files a complaint under paragraph (1), he/she may demand the destruction of the means by which the infringement has been committed (including the products obtained by infringement if the relevant invention is a process for manufacturing the products), the removal of the facilities used for infringement, and other measures necessary to prevent infringement.
              Article 127 (Conduct Deemed Infringement)
                Conducting either of the following activities for business purposes shall be deemed infringement of a patent or an exclusive license:
                  (1) If the patent is for the invention of a thing: Manufacturing, selling, leasing, or importing the thing used exclusively for manufacturing the thing or offering to sell or lease the thing;
                  (2) If the patent is for the invention of a process: Manufacturing, selling, leasing, or importing a thing used exclusively for executing the process or offering to sell or lease the thing.
          divided infringement
            no statutory provision within Patent Act
              “There have been a few decisions by the Korean courts that found infringement by a principal infringer who had directed or controlled the other joint infringers who practiced relatively minor element of the method claim at issue. However, the jurisprudence on this particular issue has not been well settled and still being debated on by the scholars”
        doctrine of equivalents
          has been generally recognized in Korea
            According to the decisions of Korean courts, even if all elements of a claim is not literally present in a product or a process, a finding of patent infringement is possible under the doctrine of equivalents if certain requirements are met, including the following:
              (1) The accused product or process uses the same principle to solve the same problems as the invention of the patent
              (2) The accused product or process use equivalent element or elements to achieve substantially the same effect as the corresponding claim element
              (3) The equivalent element is obvious to a person of ordinary skill in the relevant art such that it is easily conceivable
              (4) The accused product or process utilizes the prior art or what would have been obvious for the person of ordinary skill in the art to devise using the prior art
              (5) The equivalent element was not purposefully excluded from the patent claims during the patent’s prosecution
              Burden of proof:
                plaintiff has the burden to allege and prove the first three elements (1)-(3)
                defendant has the burden to allege and prove the next two elements (4)-(5)
          another source on this matter
    Defenses and Limitations
      USA
        Statute: 35 USC 282(b)
          The following shall be defenses in any action involving the validity or infringement of a patent and shall be pleaded:
          (1) Noninfringement, absence of liability for infringement or unenforceability.
          (2) Invalidity of the patent or any claim in suit on any ground specified in part II as a condition for patentability.
          (3) Invalidity of the patent or any claim in suit for failure to comply with—
            (A) any requirement of section 112, except that the failure to disclose the best mode shall not be a basis on which any claim of a patent may be canceled or held invalid or otherwise unenforceable; or
            (B) any requirement of section 251.
          (4) Any other fact or act made a defense by this title.
        Invalidity
          Procedure
            35 USC 282(a)
              A patent shall be presumed valid. Each claim of a patent (whether in independent, dependent, or multiple dependent form) shall be presumed valid independently of the validity of other claims; dependent or multiple dependent claims shall be presumed valid even though dependent upon an invalid claim. The burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity.
            Claim-by-claim challenge
            Defendant bears the burden of establishing invalidity by clear and convincing evidence
              Microsoft (SCOTUS 2011)
          Collateral Estoppel
            Triplett (SCOTUS 1936)
              Finding of invalidity does not bind patentee in subsequent infringement suit against another defendant
            Blonder-Tongue (SCOTUS 1971)
              Final judgment of invalidity does bind patentee in subsequent infringement suit against another defendant -- provided that patentee had a full and fair opportunity to litigate the issue
        Sovereign Immunity
          11th Amendment
            The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.
          States
            Florida Prepaid (SCOTUS 1999)
              11th Amendment gives states, their instrumentalities, and their employees acting in official capacity immunity against infringement liability
            However, IPR proceedings against states are no longer barred
              Covidien LP v. University of Florida Research Foundation Inc, Case Nos. IPR 2016-01274; -01275, and -01276 (PTAB January 25, 2017)
                “On the whole, considering the nature of inter partes review and civil litigation, we conclude that the considerable resemblance between the two is sufficient to implicate the immunity afforded to the States by the Eleventh Amendment.”
                “Although there are distinctions, such as in the scope of discovery, we observe that there is no requirement that the two types of proceedings be identical for sovereign immunity to apply to an administrative proceeding. Further, we note that there are several similarities between civil litigation and inter partes review that are not unlike those compared in Vas-Cath for interferences.”
              Ericsson v. Univ. of Minnesota (PTAB, Dec. 19, 2017) applies litigation waiver doctrine to IPR proceedings
                By bringing infringement suit in federal court, patentee waives sovereign immunity for responsive IPR proceeding
              2019: CAFC affirms Ericsson on a broader ground: Sovereign immunity does not apply to IPR proceedings
                “[I]mmunity applies not only to proceedings brought by a private party in an Article III forum but also to agency adjudications brought by private parties that are similar to court adjudications. However, sovereign im- munity does not apply to suits brought by the United States, including agency proceedings commenced by the United States.”
                IPR proceedings are more like agency proceedings than like private civil suits -- in several respects:
                  First, “[i]t is the Director, the politically appointed ex- ecutive branch official, not the private party, who ulti- mately decides whether to proceed against the sovereign.”
                  Second, even if the petitioner or patent owner elects not to participate during IPR, the Board can continue to a final written decision, “reinforc[ing] the view that IPR is an act by the agency in reconsidering its own grant of a public franchise.”
                  Third, the IPR procedure is in other respects distinct from ordinary civil litigation. The Federal Rules of Civil Procedure do not apply. Unlike civil litigation, during IPR a patent owner may amend its claims. (In district court litigation, a patent owner may only amend patent claims to correct typographical errors). Even though discovery and a live hearing may be part of an IPR proceeding, both are more limited than their civil counterparts.
                “ We also read the Supreme Court’s holding in Oil States, that IPR evaluation of patent validity concerns “public rights,” as supporting the conclusion that IPR is in key respects a proceeding between the government and the pa- tent owner.”
                “We finally note, although not implicated in the facts of this case, the concerns raised by the parties and amici that if sovereign immunity barred IPR proceedings against pa- tents obtained by a sovereign, nothing would prevent a state from lending its sovereign immunity to private par- ties, as the tribe attempted to do in Saint Regis. Such manipulation would undo Congress’ central quality control mechanism in creating post-grant administrative proceedings.”
          Native American Tribes
            Federal courts have long recognized the right of tribes, as “domestic dependent nations” to refuse to be sued in almost all cases
            Seeking to capitalize on this immunity, Allergan recently assigned to the Saint Regis Mohawk Tribe a set of patents pertaining to Restasis; Tribe issues licenses to Allergan to exploit the patents; Tribe is paid $13M + possible $15M
              Objective: prevent generic firms (e.g., Mylan) from challenging the validity of the patents in inter partes review
              Saint Regis Mohawk Tribe v. Mylan (CAFC 2018)
                Held: tribal sovereign immunity does not apply to IPR proceedings, because “immunity does not apply where the federal government acting through an agency engages in an investigative action or pursues an adjudicatory agency action”
            St. Regis Mohawk Tribe (CAFC 2018): IPR proceedings are not barred by tribal sovereign immunity
              SCOTUS denies certiorari
        Conduct by Defendant
          Reverse Equivalents
            Original Doctrine
              Westinghouse (1898)
                Westinghouse pioneered and repeatedly improved the technology for train air brakes -- and obtained a patent on each improvement
                Boyden’s brake significantly improved the efficiency of a mechanism for allowing a train engineer, in an emergency, to transfer compressed air from the main “train pipe” to the auxiliary reservoir underneath each train car, thus accelerating the application of the brakes in cars located a long distance from the locomotive
                Holding: “But even if it be conceded that the Boyden device corresponds with the letter of the Westinghouse claims, that does not settle conclusively the question of infringement. We have repeatedly held that a charge of infringement is sometimes made out, though the letter of the claims be avoided. The converse is equally true. The patentee may bring the defendant within the letter of his claims, but if the latter has so far changed the principle of the device that the claims of the patent, literally construed, have ceased to represent his actual invention, he is as little subject to be adjudged an infringer as one who has violated the letter of a statute has to be convicted, when he has done nothing in conflict with its spirit and intent.”
                Applied: Boyden’s invention “is a novel one and a manifest departure from the principle of the Westinghouse patent . . . because it solved at once in the simplest manner the problem of quick action, whereas the Westinghouse patent did not prove to be a success until certain additional members had been incorporated into it.”
            CAFC has effectively repudiated the doctrine
              Scripps (CAFC 1991)
              Tate Access Floors (2002)
                “The Supreme Court referred to the reverse doctrine of equivalents in Graver Tank & Manufacturing Co. v. Linde Air Products Co., 339 U.S. 605, 608-609 (1950).   It applies “where a device is so far changed in principle from a patented article that it performs the same or a similar function in a substantially different way, but nevertheless falls within the literal words of the claim.”   In such a case, the reverse doctrine of equivalents “may be used to restrict the claim and defeat the patentee's action for infringement.”
                “Not once has this court affirmed a decision finding noninfringement based on the reverse doctrine of equivalents.   And with good reason:  when Congress enacted 35 U.S.C. § 112, after the decision in Graver Tank, it imposed requirements for the written description, enablement, definiteness, and means-plus-function claims that are co-extensive with the broadest possible reach of the reverse doctrine of equivalents....
                “Even were this court likely ever to affirm a defense to literal infringement based on the reverse doctrine of equivalents, the presence of one anachronistic exception, long mentioned but rarely applied, is hardly reason to create another.”
            Scholarly criticism of the repudiation
              Crouch, “The Lost Precedent of the Reverse Doctrine of Equivalents” (2016)
              Samuel Ernst, “The Supreme Court Case that the Federal Circuit Overruled” (2018)
          Experimental Use
            Common-law exemption
              Origin: dicta in Whittemore v. Cutter (Story, J.,1813)
                "it could never have been the intention of the legislature to punish a man, who constructed [an infringing device] merely for philosophical ex- periments, or for the purpose of ascertaining the sufficiency of the machine to produce its described effects."
              Constriction
                Roche Products v. Bolar Pharmaceuticals (CAFC 1984)
                  Experimentation on pharmaceutical products does not fall within “experimental use”
                Madey (CAFC 2002)
                  “In Embrex, we followed the teachings of Roche and Pitcairn to hold that the defense was very narrow and limited to actions performed “for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry.”   Further, use does not qualify for the experimental use defense when it is undertaken in the “guise of scientific inquiry” but has “definite, cognizable, and not insubstantial commercial purposes.”   The concurring opinion in Embrex expresses a similar view:  use is disqualified from the defense if it has the “slightest commercial implication.”  Moreover, use in keeping with the legitimate business of the alleged infringer does not qualify for the experimental use defense...
                  “Our precedent clearly does not immunize use that is in any way commercial in nature.   Similarly, our precedent does not immunize any conduct that is in keeping with the alleged infringer's legitimate business, regardless of commercial implications.   For example, major research universities, such as Duke, often sanction and fund research projects with arguably no commercial application whatsoever.   However, these projects unmistakably further the institution's legitimate business objectives, including educating and enlightening students and faculty participating in these projects.   These projects also serve, for example, to increase the status of the institution and lure lucrative research grants, students and faculty.
                  “In short, regardless of whether a particular institution or entity is engaged in an endeavor for commercial gain, so long as the act is in furtherance of the alleged infringer's legitimate business and is not solely for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry, the act does not qualify for the very narrow and strictly limited experimental use defense.   Moreover, the profit or non-profit status of the user is not determinative.”
            Regulatory-review exemption
              Hatch-Waxman Act overturns Roche with respect to testing pharmaceutical products for regulatory approval
          Prior User Right
            35 USC 273(a)
              A person shall be entitled to a defense under section 282(b) with respect to subject matter consisting of a process, or consisting of a machine, manufacture, or composition of matter used in a manufacturing or other commercial process, that would otherwise infringe a claimed invention being asserted against the person if—
                (1) such person, acting in good faith, commercially used the subject matter in the United States, either in connection with an internal commercial use or an actual arm’s length sale or other arm’s length commercial transfer of a useful end result of such commercial use; and
                (2) such commercial use occurred at least 1 year before the earlier of either—
                  (A) the effective filing date of the claimed invention; or
                  (B) the date on which the claimed invention was disclosed to the public in a manner that qualified for the exception from prior art under section 102(b).
              effective date: 2011/9/16
                applies to all suits filed on or after that date
            defendant, who uses a process (or a product in a process) commercially in US more than 1 year prior to filing (or disclosure) by patentee, may continue to do so
              generalize the prior-user defense that has been available for Business Method Patents since 1999
            Likely impact
              previously, inventor of a new process, considering relying on trade-secret protection instead of patent protection, ran a risk: someone else would invent and patent the process, forcing first innovator to stop
              reduction of that risk (to one-year interval) will increase marginally reliance on trade secrecy, rather than patents
        Conduct by the Patentee
          Inequitable Conduct
            Applicants have a duty to disclose to PTO all known information pertaining to patentability
            Breach of this duty renders the entire patent unenforceable
            In 2009 and 2011, the CAFC tightened considerably the requirements for establishing this defense
              Defendant must plead IC with particularity
                Exergen (CAFC 2009)
                  “ In sum, to plead the "circumstances" of inequitable conduct with the requisite "particularity" under Rule 9(b), the pleading must identify the specific who, what, when, where, and how of the material misrepresentation or omission committed before the PTO. Moreover, although "knowledge" and "intent" may be averred generally, a pleading of inequitable conduct under Rule 9(b) must include sufficient allegations of underlying facts from which a court may reasonably infer that a specific individual (1) knew of the withheld material information or of the falsity of the material misrepresentation, and (2) withheld or misrepresented this information with a specific intent to deceive the PTO.
              Defendant must prove, by clear and convincing evidence:
                (a) the withheld material (or falsely submitted) was material
                  Therasense (CAFC en banc 2011): defendant must show either (i) that the examiner would not have allowed a claim if the material had been disclosed or (ii) “affirmative acts of egregious misconduct”
                (b) patentee intended to deceive the PTO
                  Therasense: requires proof of both (i) knowledge and (ii) deliberate conduct
          Delay
            1. Temporal Limit on Recovery of Damages
              35 USC 286
                Except as otherwise provided by law, no recovery shall be had for any infringement committed more than six years prior to the filing of the complaint or counterclaim for infringement in the action.
            2. Laches is no longer available
              Traditional Doctrine summarized in Aukerman (CAFC en banc 1992)
                1. Laches is cognizable under 35 U.S.C. § 282 (1988) as an equitable defense to a claim for patent infringement.
                2. Where the defense of laches is established, the patentee’s claim for damages prior to suit may be barred.
                3. Two elements underlie the defense of laches:
                  (a) the patentee’s delay in bringing suit was unreasonable and inexcusable, and
                  (b) the alleged infringer suffered material prejudice attributable to the delay. The district court should consider these factors and all of the evidence and other circumstances to determine whether equity should intercede to bar pre-filing damages.
                4. A presumption of laches arises where a patentee delays bringing suit for more than six years after the date the patentee knew or should have known of the alleged infringer’s activity.
                5. A presumption has the effect of shifting the burden of going forward with evidence, not the burden of persuasion.
              SCA Hygiene
                Traditional doctrine reaffirmed by CAFC en banc in 2015 (6/5) despite SCOTUS’ repudiation of laches in the comparable context in copyright law (Petrella)
                SCOTUS overturns CAFC (2017)
                  Laches cannot be interposed as a defense against damages where the infringement occurred within the period prescribed by §286.
          Equitable Estoppel
            Elements
              1. Patentee misleads defendant into reasonably inferring that patentee does not intend to enforce the patent against him or her
              2. Defendant relies
              3. Due to this reliance, defendant will be materially prejudiced if plaintiff is allowed to proceed
            Effect: entire patent is permanently unenforceable against this defendant
              Bars both legal and injunctive relief
            Preserved by SCOTUS in SCA Hygiene (2017)
              “We note, however, as we did in Petrella, that the doctrine of equitable estoppel provides protection against some of the problems that [the defendant] highlights, namely, unscrupulous patentees inducing potential targets of infringement suits to invest in the production of arguably infringing products.”
          Implied License
            Irrevocable license to use the patent in specific ways may be inferred from the patentee’s conduct, even in the absence of reliance
              Wang Labs (CAFC 1997)
            Primary current application: patentee’s failure to disclose patents when an SSO is setting and industry standard (see discussion of SSOs below)
              e.g., Hynix Semiconductor Inc. v. Rambus Inc. (CAFC 2011)
                “A member of an open standard setting organization may be equitably estopped or may have impliedly waived its right to assert infringement claims against standard-compliant products. Qualcomm, 548 F.3d at 1022–24 (noting that either waiver or equitable estoppel may properly be asserted in this context).
                “To support a finding of implied waiver in the standard setting organization context, the accused must show by clear and convincing evidence that ‘[the patentee’s] conduct was so inconsistent with an intent to enforce its rights as to induce a reasonable belief that such right has been relinquished.’ ... Such conduct can be shown where (1) the patentee had a duty of disclosure to the standard setting organization, and (2) the patentee breached that duty.
                “To support a finding of equitable estoppel, the accused must show that ‘[t]he patentee, through misleading conduct, led the alleged infringer to reasonably infer that the patentee does not intend to enforce its patent against the alleged infringer.’ ... ‘ “Conduct” may include specific statements, action, inaction, or silence where there was an obligation to speak.’”
                “The two elements of implied waiver must also be shown to prove equitable estoppel, because without a disclosure duty, [an accused infringer] could not ‘reasonably infer’ that [a patent owner] did not intend to enforce its patents against it, and without a breach of that duty, [the patent owner’s] nondisclosure could not be “misleading conduct.”
        Exhaustion
          Traditional Rules: broad scope for exhaustion
            Domestic
              Principle: authorized sale of a patented
product to consumers carries with it
right to use and resell that product
              Cases
                Adams v. Burke (US 1873)
                  patent on improved coffin lids
                  patentee limits geographic area in which assignee may sell coffins
                  held: No permissible limits on use of lawfully purchased products
                General Talking Pictures (US 1938)
                  patentee of amplifiers used in projectors granted license to ATC, but only to make and sell projectors to homes, not theatres
                  ATC sold projectors in violation of that restriction
                    [distinguished by SCOTUS in Lexmark on the basis of this factor]
                  held: patentee could prevail in infringement suit against defendant purchaser, who had notice of the restriction but bought amplifiers for use in theatres
                Univis (US 1942)
                  price-fixing scheme -- in which patentee on bifocals sought to set prices charged by (a) manufacturer, (b) wholesalers, and (c) retailers -- held unlawful
                  General principle: “[T]he authorized sale of an article which is capable of use only in practicing the patent is a relinquishment of the patent monopoly with respect to the article sold. . . . Sale of a lens blank by the patentee or by his licensee is thus in itself both a complete transfer of ownership of the blank, which is within the protection of the patent law, and a license to practice the final stage of the patent procedure.”
                    “The reward [Univis] was demanded and received is for the article and the invention which it embodies . . . . He has thus parted with his right to assert the patent monopoly with respect to it and is no longer free to control the price at which it may be sold either in its unfinished or finished form.”
                    "double-dipping" rationale
            Parallel Importation
              Intermediate position: exhaustion applies to sales of goods overseas unless patentee forbids reimportation when products are first sold
                Curtiss Aeroplane, 266 F. 71 (CA2 1920)
          1986-2008: Contraction
            Domestic
              exhaustion can be overridden by
contract or notice
                Mallinkrodt (CAFC 1992)
                  "single use" notice on medical device
                  held: patentee has infringement claim against firm that refurbishes the devices in violation of the notice
                  Univis distinguished on the ground that this restriction did not violate antitrust laws or other public policies
                R Braun Med. (CAFC 1997)
                  conditional sales do not result in exhaustion of patentee's right to control uses of the product
            Parallel Importation
              Jazz Photo (CAFC 2002)
                appears to adopt national exhaustion & reject international exhaustion
                but ruling may be limited to products used and repaired prior to reimportation
              Fuji Photo (CAFC 2005)
                more clearly rejects international exhaustion principle
                rationale: foreign sales cannot be "authorized" under a U.S. patent
                  because that would imply extraterritorial application of U.S. patents
          2008-present: Expansion
            Quanta (SCOTUS 2008)
              Facts
                LGE held both product patents on computer chips and process patents on method of making those chips
                LGE granted Intel a license to make chips -- with a restriction:
                  purchasers of chips may not combine them with non-Intel parts
                Quanta bought chips from Intel and combined with non-Intel parts
              CAFC:
                Exhaustion not applicable to process patents
                Conditional sales; no exhaustion
              SCOTUS Holding
                Exhaustion is applicable to process patents
                An authorized sale of a patented item terminates all patent rights to that item
                use restrictions therefore invalid against purchasers
              Issues left open:
                application to sales overseas?
                  [Now resolved by Lemmark (2017)]
                contract remedies still available?
                  potential limitations:
                    privity problems
                    preemption
                    more limited remedies
                  potential advantages:
                    fine tune using "public policy" limitations
                can downstream behavior by purchasers retroactively render initial sales "unauthorized"?
                  see Hungar memo
                may patentee restrict licensee's freedom to sell products embodying product or process patents (as opposed to restricting post-sale uses)?
            Aftermath of Quanta
              Broadcom v. Qualcomm (filed 2008)
                Qualcomm licenses chipset makers -- with a restriction:
                  chipsets may only be incorporated into handsets by handset manufacturers who pay Qualcomm a royalty
                Broadcom asserts patent misuse; exhaustion
                settled -- as part of comprehensive settlement -- in 2009
              Transcore (CAFC 2009)
                unconditional covenant not to sue is the functional equivalent of unconditional license
                surprisingly expansive interpretation of "estoppel" doctrine to enlarge the set of patents covered by a prior settlement/covenant
                  unclear whether this will affect treatment of the two forms of permission in bankruptcy
              Static Control (EDKy 2009)
                Quanta impliedly overruled Mallinckrodt
                single-use restrictions no longer enforceable
              LGE v. Hitachi (NDCa 2009)
                unconditional foreign sale of a product licensed under a United States patent exhausts the patent holder's rights
                repudiate Jazz Photo as inconsistent with logic of Quanta
                Issues left open:
                  May the resultant impediment to geographic price discrimination be avoided through restrictions on the licensee's right to sell?
                  May the impediment be avoided by dividing patent holding companies geographically?
              Fujifilm v. Benun (CAFC 2010)
                Quanta did not eliminate the territorial requirement for exhaustion
                semble: US continues to adhere to principle of national exhaustion
          Culmination: Lexmark (SCOTUS 2017)
            “[A] patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose or the location of the sale”
            Complete exhaustion triggered by authorized sale of product
              Either in US or overseas
              Either by patentee or by licensee
        Competition Law
          Patent Misuse
          Abuse of Standard Essential Patents
          Reverse-Payment Settlements
      Europe
        Germany
          section 11.1
            “the effect of a patent shall not extend to acts done privately and for non-commercial purposes.”
            a narrow, private-use exemption
          section 11.2
            “the effect of a patent shall not extend to […] acts done for experimental purposes relating to the subject matter of the invention.”
            construed to support a broad "experimenting on" exemption
              Clinical Trials I
            construed to support a reasonably broad regulatory-review exemption
              Clinical Trials II
              however, this does not extend to testing for the purpose
of introducing a generic version at the expiration of the patent term
            does not support an "experimenting with" (research tool) exemption
          section 11.2b
            recently adopted regulatory review exemption, encompassing generics
            implementation of Article 10(6) of EC Directive 2004/27
        UK
          60(5)(a)
            an activity that otherwise “would constitute an infringement of a patent for an invention shall not do so if […] it is done privately and for purposes which are not commercial.”
            narrow private-use exemption
          60(5)(b)
            an activity that otherwise “would constitute an infringement of a patent for an invention shall not do so if […] it is done for experimental purposes relating to the subject-matter of the invention.”
            construed to support a broad experiment-on exemption
              including commercial activity
            no research tool exemption
          60(5)(i)
            recently adopted regulatory review exemption, encompassing generics
            implementation of Article 10(6) of EC Directive 2004/27
            broader than the analogous German provision
              Syed: specifically, § 60(5)(i) seems to provide an exemption to
                (1) producers of generic replications of chemical drugs or close substitutes of biologics, as well, as perhaps, of rival innovator follow-ons,
                (2) when the replications or substitutes are for drugs already approved by any EU member state,
                (3) for activities involved in “conducting a study, test or trial which is necessary for and is conducted with a view to” or “required for” obtaining regulatory approval,
                (4) when such activities use a patented invention.
                  broader coverage than merely drugs
                  in this respect, like the US
      China
      Japan
        article 68
          implicit exemption for "private" or "familial" uses of the patented technology
          likely does not extend to university research
        article 69(1)
          a patentee’s exclusive rights “shall not be effective against the working of the patented invention for experimental or research purposes.”
          seems to support a general "experimenting on" exemption
          seems not to support a general research-tool exemption
            US scholarship to the contrary notwithstanding
          recently (1999) construed to support a regulatory-review exemption for drugs
      Korea
        Defenses
          limitation of claims
            "Statute of Limitation is a defense to patent infringement. The limitation period for patent infringement claims is consistent with most civil claims, which is 10 years from the date on which the action accrued, or three years from the date the claimant became aware of the damages and the identity of the infringer."
          exhaustion
            “ Although there is no statutory provision for the concept of patent exhaustion, i.e. Korean Patent Act does not explicitly provide for the patent exhaustion, the Korean court has recognized the principle of exhaustion of the patent right. Korean courts have interpreted the law that, when a patentee or a licensee who has been granted a license from the patentee transfers a patented product in Korea, for the patented product, the patent right shall be deemed to have been exhausted, and the patentee may no longer exercise its patent right against such patented product.”
              “However, there have not been many cases in which patent exhaustion was at issue in Korea, so the legal principle is not yet well developed in a comprehensive manner.”
                “For example, it cannot be said that the specific criteria or standard has been well established when it comes to judging whether exhaustion principle is applicable to a patent claiming an invention of a method or process.”
          conversion of an invalid patent into a utility model
            “In Korea, a utility model requires an examination and registration by the KIPO, similar to a patent. One can choose to file either application based on the same invention. A pending patent application during the examination period, and even within 30 days of the rejection of such application, may be converted into an application for a utility model under the Utility Model Act, Art. 10. However, once a patent is issued, the same underlying invention cannot apply for a utility model in Korea. Therefore, an issued patent that has been ruled to be invalid through an invalidity proceeding cannot be converted into a utility model under Korean law.”
          Abuse of right = unenforceability due to likely invalidity
            a patent can be invalidated on the following grounds:
              non-statutory subject matter
              lack of novelty or inventiveness
              violation of statutory description requirements
              double patenting
              amendment introducing new matter
          compulsory license
            If a patented invention is not practiced in Korea, a compulsory license may be granted.
              A patented invention is considered not to have been practiced in Korea in the following cases:
                The patented invention has not been worked for three or more consecutive years in Korea, except in the case of:
                  natural disaster
                  unavoidable circumstances
                  other justifiable reasons
                The patented invention has not been worked on a substantially commercial scale in Korea for three or more consecutive years without justifiable reasons or where the domestic demand for the patented invention has not been satisfied to an appropriate extent and under reasonable conditions.
              “Prior consultation with the patentee or exclusive licensee is required before filing a compulsory license petition.”
                “However, prior consultation is not required when the patented invention will be non-commercially worked for the public interest or when the working of the patented invention is necessary to remedy a practice determined to be anti-competitive by judicial or administrative proceedings.”
                “Further, a compulsory license may be granted when the working of the patented invention is necessary for the export of medicine under the World Trade Organization Doha Declaration to a country that intends to import the medicine in order to treat diseases that threaten the health of most of its citizens.”
                  These medicines include:
                    patented medicines
                    medicines manufactured by patented manufacturing methods
                    patented active ingredients necessary for producing medicines
                    patented diagnostic kits necessary for using medicines
          prior use rights
          prosecution history estoppel
    Licenses and Assignments
      USA
        Estoppel
        Permissible Duration of License Fees
      Europe
      China
      Japan
      Korea
        Exclusive licenses
          statutory basis
            Article 100 (Exclusive Licenses)
              (1) A patentee may grant an exclusive license of the patent to other persons.
              (2) An exclusive licensee with the exclusive license shall have the sole right to commercially or industrially execute the patented invention to the extent prescribed at the grant of the license.
              (3) Except in the following cases, no exclusive licensee may transfer the exclusive license, without the consent of the patentee:
                1. Where the exclusive license is transferred with the underlying business
                2. Where the exclusive license is transferred by inheritance or other universal succession
              (4) No exclusive licensee may establish a pledge right over the exclusive license or grant a non-exclusive license, without the consent of the patentee.
              (5) Article 99 (Transfer and Joint Ownership of Patents), (2) through (4) shall apply mutatis mutandis to exclusive licenses.
            Article 101 (Effects of Registration of Patents and Exclusive Licenses)
              (1) The following dispositions shall take effect upon registration:
                1. The transfer (excluding transfer by inheritance or other universal succession) of a patent, the expiration of a patent by relinquishment, or restrictions on the disposal of a patent;
                2. The grant, transfer (excluding transfer by inheritance or other universal succession), amendment, or expiration (excluding expiration by confusion) of an exclusive license or restrictions on the disposal of an exclusive license;
                3. The establishment, transfer (excluding transfer by inheritance or other universal succession), amendment, or expiration (excluding expiration by error) of a pledge right over a patent or an exclusive license or restrictions on the disposal of such pledge right.
              (2) When a patent, exclusive license, or pledge right is transferred by inheritance or other universal succession as referred to in paragraph (1), a report thereon shall be filed without delay with the Commissioner of the Korean Intellectual Property Office.
            Article 94 (Effects of Patent)
              A patentee shall have the exclusive right to execute his or her patented invention for business purposes: Provided, That the foregoing shall not apply where an exclusive license of the patent has been granted so that the exclusive licensee can have the exclusive right to execute the patented invention under Article 100 (Exclusive Licenses) (2).
        Non-Exclusive licenses
          statutory basis
            Article 102 (Non-Exclusive Licenses)
              (1) A patentee may grant a non-exclusive license of the patent to others.
              (2) A non-exclusive licensee shall have the right to commercially or industrially execute the patented invention to the extent provided for in this Act or prescribed at the grant of the license.
              (3) A non-exclusive license granted under Article 107 (Adjudication on Grant of Non-Exclusive Licenses) may be transferred, only if it is transferred with the underlying business.
              (4) A non-exclusive license granted under Article 138 (Trial for Grant of Non-Exclusive Licenses) of this Act, Article 32 of the Utility Model Act (Trial for Granting Non-exclusive License), or Article 123 of the Design Protection Act (Trials for Granting Non-Exclusive Licenses) shall be transferred with the relevant patent, utility model right, or design right of the non-exclusive licensee, and shall expire simultaneously with the expiration of the relevant patent, utility model right, or design right.
              (5) No non-exclusive license, other than non-exclusive licenses referred to in paragraphs (3) and (4), shall be transferred without the consent of the patentee (or the consent of the patentee and the exclusive licensee, if the non-exclusive license is based on an exclusive license), unless it is transferred with the underlying business or by inheritance or other universal succession.
              (6) No pledge right may be established over a non-exclusive license, other than non-exclusive licenses referred to in paragraphs (3) and (4), without the consent of the patentee (or the consent of the patentee and the exclusive licensee, if the non-exclusive license is based on an exclusive license).
              (7) Article 99 (Transfer and Joint Ownership of Patents), (2) and (3) shall apply mutatis mutandis to non-exclusive licenses.
            Article 103 (Non-Exclusive Licenses Based on Prior Use)
              A person who has created the same invention as a patent claimed in an application filed for registration of the patent without prior knowledge of the invention claimed in the patent application, or who has become aware of such patent from the person who had created it before the patent application was filed, and commercially or industrially executes, or prepares to execute, the patent within the Republic of Korea shall be granted a non-exclusive license of the patent on the invention claimed in the patent application within the scope of objectives of the invention that the person executes or prepares to execute and of the business.
            Article 104 (Non-Exclusive Licenses Based on Executing Prior to Registration of Petitions for Trial on Invalidity)
              (1) If any of the following persons has executed, or has prepared to execute, his or her patented invention or registered utility model commercially or industrially within the Republic of Korea, without knowing that the patented invention or registered utility model is invalid, before a petition seeking a trial to invalidate the patent or the registration of the utility model is filed, the person shall be granted a non-exclusive license of the patent or the exclusive license of the patent existing as at the time the patent or the registration of the utility model was invalidated, within the scope of objectives of the invention or design that the person has executed or has prepared to execute and of the business:
                1. The original patentee of the invalidated patent, where one of at least two patents on the identical invention is invalidated;
                2. The original owner of a registered but invalidated utility model, where the registered utility model is invalidated because it is identical to a patented invention;
                3. The original patentee of an invalidated patent, where the patent is invalidated, and another patent is granted to the legitimate right-holder of the identical invention;
                4. The original owner of an invalidated utility model, where the registration of his or her utility model is invalidated and a patent is granted to the legitimate right-holder on the invention identical to the design;
                5. A person who has already acquired and registered an exclusive license, a non-exclusive license, or a non-exclusive license of the exclusive license before a petition seeking a trial to invalidate the patent or utility model, which is invalidated under any provision of subparagraphs 1 through 4, is filed: Provided, That the person who has acquired a non-exclusive license under Article 118 (Effects of Registration of Non-Exclusive Licenses) (2) shall need not be registered.
              (2) A person granted a non-exclusive license under paragraph (1) shall pay equitable remuneration to the patentee or exclusive licensee.
            Article 105 (Non-Exclusive Licenses after Expiration of Design Rights)
              (1) If a design right claimed in an application filed on or before the filing date of a patent application and registered accordingly conflicts with the patent, the holder of the design right at the expiration of the term of the design right shall have a non-exclusive license of the patent within the scope of the design right or a non-exclusive license of the exclusive license that exists on the patent at the expiration of the term of the design right, within the scope of the design right.
              (2) If a design right claimed in an application filed on or before the filing date of a patent application and registered accordingly conflicts with the patent, the holder of either of the following rights at the expiration of the design right shall have a non-exclusive license of the patent within the scope of the design right or a non-exclusive license of the exclusive license that exists on the patent at the expiration of the design right, within the scope of the original right:
                1. An exclusive license of the design right that exists at the expiration of the term of the design right;
                2. A non-exclusive license in effect over the design right or an exclusive license of the design right under Article 104 (Effects of Registration of Non-Exclusive Licenses) (1) of the Design Protection Act
              (3) A non-exclusive license holder under paragraph (2) shall pay equitable remuneration to the patentee or exclusive licensee.
            articles covering adjudications, transfers, etc.
              Article 107 (Adjudication on Grant of Non-Exclusive Licenses)
              Article 122 (Non-Exclusive Licenses Subsequent to Transfer of Patent by Exercise of Pledge Right)
              Article 138 (Trial for Grant of Non-Exclusive Licenses)
        applicable laws and rules
          Monopoly Regulation and the Fair Trade Law
            does not apply for fair exercise of IP rights
            may be applied to unfair exercise of IP rights
              unfair exercise determined according to regularly-revised “Review Guidelines on Unfair Exercise of Intellectual Property Rights” established by the Korean Fair Trade Commission (KFTC) in 2000
                provides guidance in re licensing, including:
                  cost for the grant of a license
                  refusal to license
                  limitations on the scope of licensing
                  imposition of conditions when granting a license
                  patent pool and cross-licensing
                  exercising patent rights relating to technology standards
                    “KFTC guidelines state that the disclosure of patent information and prior consultation on the conditions for licensing is crucial for preventing the abuse of technology designated as a technical standard. Whether these procedures have been followed is a key factor in determining the fairness of the exercise of patent rights relating to technical standards. The guidelines also state that ill use of the standardization procedure or demanding unfair conditions after being designated as a technical standard can be deemed an unfair exercise of patent rights.”
  Remedies
    Damages
      USA
        Statutory basis
          35 USC 284
            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.
            When the damages are not found by a jury, the court shall assess them. In either event the court may increase the damages up to three times the amount found or assessed. Increased damages under this paragraph shall not apply to provisional rights under section 154(d)
          35 USC 286
            Except as otherwise provided by law, no recovery shall be had for any infringement committed more than six years prior to the filing of the complaint or counterclaim for infringement in the action.
            In the case of claims against the United States Government for use of a patented invention, the period before bringing suit, up to six years, between the date of receipt of a written claim for compensation by the department or agency of the Government having authority to settle such claim, and the date of mailing by the Government of a notice to the claimant that his claim has been denied shall not be counted as part of the period referred to in the preceding paragraph.
          35 USC 287(a)
            Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented, either by fixing thereon the word "patent" or the abbreviation "pat.", together with the number of the patent, or when, from the character of the article, this can not be done, by fixing to it, or to the package wherein one or more of them is contained, a label containing a like notice. In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.
            not applicable to processes
        Compensatory Damages
          goal: return patentee to position she would have occupied in absence of infringement
          Lost profits from sale of patented products
            Patentee must prove:
              1. Demand for patented product
                presumed from act of infringement
              2. Absence of acceptable noninfringing substitutes
                infringer escapes if she can identify a product produced by a third party, with similar price and characteristics, in eyes of consumers
                  Relevant market defined by consumer demand
                infringer escapes if she can show that she was ready and able to produce a noninfringing substitute, but didn't for cost reasons
                  Grain Processing (1999)
                  Applied in Samsung v. Apple (CAFC 2015)
                patentee may rebut by showing that he had stable share of multi-supplier market
                  State Industries (1989)
              3. Patentee had the capability to exploit the demand
                Either on its own or by licensing the technology to others
              4. Amount of profit patentee would have made
                lost revenues
                  lost sales x pre-infringement prices
                minus incremental costs
                  No deduction for fixed costs
                    R&D
                    management
                plus diminution of patentee’s profits from the market he did retain because of "price erosion"
            Profits on contracts to perform services outside of US?
              WesternGeco (CAFC 2015), section III, held no; not at issue in WesternGeco (CAFC 2017)
          Consequential damages
            "Entire Market Value" rule
              Patentee can recover lost profits from sale of components or supplies, provided that they function together with patented components to produce a desired result
                Rite-Hite (1985) -- tort theory
                Nies dissent: P does not have an exclusive property right in market for unpatented products
              E.g., Juicy Whip (CAFC 2004)
            But not decline in stock price
              Rite-Hite
        Reasonable Royalty
          General definition: “the amount ‘which a person, desiring to manufacture and sell a patented article, as a business proposition, would be willing to pay as a royalty and yet be able to make and sell the patented article, in the market, at a reasonable profit.’”
          Applicable if patentee is unable to demonstrate compensatory damages
            e.g., usually employed by NPEs
          Approach #1: Hypothetical Negotiation
            royalty that would have been negotiated by a willing patentee and a willing licensee on the day infringement started
              Panduit Crop. v. Stahlin Bros. (CA6 1978)
            factors
              Georgia-Pacific factors:
                1. The royalties received by the patentee for the licensing of the patent in suit, proving or tending to prove an established royalty.
                2. The rates paid by the licensee for the use of other patents comparable to the patent in suit.
                  Lucent (CAFC 2009) (“This factor examines whether the licenses relied on by the patentee in proving damages are sufficiently comparable to the hypothetical license at issue in suit.”)
                  In practice, patentee commonly introduces licenses entered into by other players in the industry (as well as the licensee) and argues that they are “comparable”
                3. The nature and scope of the license
                  exclusive or nonexclusive
                  restricted or nonrestricted in terms of
territory or to whom the product may
be sold
                4. The licensor's established policy and marketing program to maintain his patent monopoly
                  e.g., by not licensing others to use the invention
                  e.g., by granting licenses under special conditions
                5. The commercial relationship between the licensor and licensee
                  e.g., whether they are competitors in the
same territory in the same line of business
                  e.g., whether they are inventor and promoter
                6. Derivative or convoyed sales
                  The effect of selling the patented specialty
in promoting sales of other products of the
licensee;
                    Panduit
                    Transworld Mfg. (CAFC 1984)
                      “ By supplying the patented racks for displaying the eyeglasses, Nyman used "the patented [invention] in promoting sales of" the nonpatented eyeglasses. Trans-World may be able to prove that Nyman's infringing use of the displays played an important part in the retail sales of Nyman's eyeglasses. Furthermore, the extent of the profits from such sales could be relevant in determining the amount of a reasonable royalty. If, for example, sales were increased because of the infringing use of the displays, that fact could affect the amount of royalties a potential licensee would be willing to pay.”
                  the existing value of the invention to the licensor as a generator of sales of his non-patented items; and the extent of such derivative or convoyed sales.
                7. The duration of the patent and the term of the license.
                8. The established profitability of the product made under the patent; its commercial success; and its current popularity.
                9. The utility and advantages of the patent property over the old modes or devices, if any, that had been used for working out similar results.
                10. The nature of the patented invention
                  the character of the commercial embodiment
of it as owned and produced by the licensor;
                  and the benefits to those who have used the invention.
                11. The extent to which the infringer has made use of the invention; and any evidence probative of the value of that use.
                12. The portion of the profit or of the selling price that may be customary in the particular business or in comparable businesses to allow for the use of the invention or analogous inventions.
                  profits customary allowed to licensors in the market at the time
                    Panduit
                  use of “most-favored-nation” clauses
                    Stickle (CAFC 1983)
                13. The value added to the infringer's product by the invention
                  “The portion of the realizable profit that should be credited to the invention as distinguished from non-patented elements, the manufacturing process, business risks, or significant features or improvements added by the infringer.”
                    e.g., Lucent (CAFC 2009): Factors 10 and 13 “ both aim to elucidate how the parties would have valued the patented feature during the hypothetical negotiation. The evidence can support only a finding that the infringing feature contained in Microsoft Outlook is but a tiny feature of one part of a much larger software program.”
                  availability of acceptable noninfringing substitutes
                    Panduit
                    cf. standards for compensatory damages
                14. The opinion testimony of qualified experts.
                15. The amount that a licensor (such as the patentee) and a licensee (such as the infringer) would have agreed upon (at the time the infringement began) if both had been reasonably and voluntarily trying to reach an agreement
                  “ that is, the amount which a prudent licensee —who desired, as a business proposition, to obtain a license to manufacture and sell a particular article embodying the patented invention — would have been willing to pay as a royalty and yet be áble to make a reasonable profit and which amount would have been acceptable by a prudent patentee who was willing to grant a license.”
              nonfactors
                infringer's actual profits
                  Hanson v. Alpine Valley Ski Area (CAFC 1983) (“The issue of the infringer’s profit is to be determined not on the basis of a hindsight evaluation of what actually happened, but on the basis of what the parties to the hypothetical license negotiations would have considered at the time of the negotiations.”).
                  Radio Steel & Mfg. Co. v. MTD Prods., Inc. (CAFC 1986) (“The determination of a reasonable royalty ... is based not on the infringer’s profit, but on the royalty to which a willing licensor and a willing licensee would have agreed at the time the infringement began.”)
                  But see Lucent (CAFC 2009)
                    “In Fromson v. Western Litho Plate & Supply Co., 853 F.2d 1568, 1575 (Fed. Cir. 1988), ... we observed that the hypothetical negotiation analysis “permits and often requires a court to look to events and facts that occurred thereafter and that could not have been known to or predicted by the hypothesized negotiators.”
                    “Consideration of evidence of usage after infringement started can, under appropriate circumstances, be helpful to the jury and the court in assessing whether a royalty is reasonable. Usage (or similar) data may provide information that the parties would frequently have estimated during the negotiation.”
                likelihood that patent would be upheld if challenged in litigation
              "doing justice to patentee" often tacitly leads to a premium
                Panduit
                Stickle (CAFC 1983)
                  “ As a final matter we would add that the trial court may award an amount of damages greater than a reasonable royalty so that the award is "adequate to compensate for the infringement." As stated in Panduit Corp. v. Stahlin Bros. Fibre Works, supra, 575 F.2d at 1158, 197 USPQ at 731: ’[T]he infringer would have nothing to lose, and everything to gain if he could count on paying only the normal, routine royalty non-infringers might have paid. As said by this court in another context, the infringer would be in a heads-I-win, tails-you-lose position.’ Such an increase, which may be stated by the trial court either as a reasonable royalty for an infringer (as in Panduit) or as an increase in the reasonable royalty determined by the court, is left to its sound discretion.”
            Proposed Reforms
              Durie & Lemley
                (1) whether the patentee in fact produces a product in the market;
                (2) the contribution made by the patented technology compared to the next best alternative;
                (3) the number and importance of other inputs necessary to make that technology work; and
                (4) evidence of how the market has actually valued the patent, to the extent it differs from the outcome of (1), (2), and (3).
              Cotter et al.
                “When applying a “bottom-up” approach to estimating reasonable royalties, courts should replace the Georgia-Pacific factors (and analogous factors used outside the United States) with a smaller list of considerations, specifically:
                (1) calculating the incremental value of the invention and dividing it appropriately between the parties;
                (2) assessing market evidence, such as comparable licenses; and
                (3) where feasible and cost-justified, using each of these first two considerations as a “check” on the accuracy of the other.”
                Source:
                  Cotter, Thomas F. and Golden, John M. and Liivak, Oskar and Love, Brian J. and Siebrasse, Norman and Suzuki, Masabumi and Taylor, David O., Chapter 1: Reasonable Royalties (September 13, 2018). Forthcoming, Patent Remedies and Complex Products: Toward a Global Consensus, Ch. 1 (Brad Biddle, Jorge L. Contreras, Brian J. Love, and Norman V. Siebrasse, eds., Cambridge University Press) ; SMU Dedman School of Law Legal Studies Research Paper No. 405; Cornell Legal Studies Research Paper No. 18-49. Available at SSRN: https://ssrn.com/abstract=3249096
          Approach #2: Share of Infringer’s Profit (”Analytical approach”)
            infringer's anticipated net profit margin on sales of infringing products
            minus industry standard profit
            Examples
              TWM Mfg. Co. v. Dura Corp. (CAFC 1986) (describing this method as “subtract[ing] the infringer’s usual or acceptable net profit from its anticipated net profit realized from sales of infringing devices”)
              Energy Transportation (CAFC 2012) (“ Mr. Musika further performed an entirely separate analysis of a reasonable royalty using the method set forth in TWM Mfg. Co. (Fed.Cir.1986). This analysis compared the average expected profit margin on the infringing products, as set forth in Defendants' expert reports, to the industry average expected profit margin. Mr. Musika testified this analysis showed the infringing products garnered a 6.4% increase in expected profit margin based on the technology in the ETG Patents. Mr. Musika's suggested reasonable royalty rates were thus tied to the benefit accorded by the patents at issue.”)
        Prejudgment Interest
          from date of last infringement to date of payment
        Provisional Remedies
          After filing but before issuance, the applicant cannot prevent competitors from engaging in activities that, after issuance, would constitute infringement, but...
          If the patent is granted, patentee can recover “reasonable royalty" for period between publication of the application and grant of the patent
          requirements
            invention as claimed in final grant is "substantially identical" to invention as claimed in published application
            infringer had "actual notice" of published application
      EPC
      China
      Japan
        Recent expansion in CO2 Viscous Composition (2019)
      Korea
        Statutory basis = Articles 128 (incl. 128-2), 131 (drawing on 130)
          Article 128 (Claim for Compensation for Loss)
            (1) A patentee or exclusive licensee may claim compensation for a loss inflicted by a person who has intentionally or negligently infringed the patent or exclusive license.
            (2) Where a compensation for a loss is claimed pursuant to paragraph (1), but the infringer has assigned the infringing products to third parties, the amount of loss that the patentee or exclusive licensee has sustained may be calculated by multiplying the quantity of products so assigned by the profit per unit of the products that the patentee or the exclusive licensee could have assigned, but for the infringement.
            (3) The amount of loss referred to in paragraph (2) shall not exceed the amount calculated by multiplying the quantity of products that the patentee or exclusive licensee could have manufactured, less the quantity of products actually assigned, by the profit per unit: Provided, That the quantity of products that the patentee or exclusive licensee could not assign due to any cause or event other than the infringement shall be subtracted therefrom, if such cause or event, in addition to the infringement, prevented the patentee or exclusive licensee from assigning the products.
            (4) Where a compensation for a loss is claimed pursuant to paragraph (1), the profits that a person who has intentionally or negligently infringed the patent or exclusive license has gained due to the infringement, if any, shall be deemed the loss that the patentee or exclusive licensee has sustained.
            (5) Where a compensation for a loss is claimed pursuant to paragraph (1), the patentee or exclusive licensee may claim the amount that he/she would usually be entitled to receive for practicing the patented invention as the loss that he/she has sustained.
            (6) Notwithstanding paragraph (5), the amount of loss exceeding the amount specified in the same paragraph may also be claimed as damages. In such cases, the court may consider the fact that there was no intentional conduct or gross negligence on the part of the person who infringed the patent or exclusive license in determining the damages.
            (7) If the court finds, in legal proceedings on infringement of a patent or exclusive license, that a loss has been incurred due to the infringement but it is extremely impracticable to verify the facts necessary for evidencing the loss in light of the nature of relevant facts, it may award reasonable damages based on the gist of entire arguments and the results of examination of evidence, notwithstanding paragraphs (2) through (6).
            [NEW as of July 2019]: (8) Notwithstanding paragraph (1), the court may award damages up to three times the amount of damages determined pursuant to paragraphs (2) to (7), if the activity infringing the patent right or the exclusive license right is found to be willful.
            [NEW as of July 2019]: The court shall consider each of the following factors in considering the damages pursuant to paragraph 8:
              (i) whether the infringer has a dominant position
              (ii) whether the infringer knew the act of infringement would cause harm to a patent owner
              (iii) the significance of such damages
              (iv) the economic benefits to the infringer from the infringement
              (v) how frequently and how long the infringing activity was committed
              (vi) the criminal penalty for the infringing activity
                reflecting prohibition of double jeopardy in Korean law
              (vii) the infringer’s financial status
              (viii) what efforts the infringer has made to reduce the harm to the patent owner
              [cf. “Read Factors” in Read v Portec Inc., 970 F.2d 816 (Fed. Cir. 1992)]
          Article 128-2 (Duty of Explaining Matters for Appraisal)
            Where the court orders an appraisal in legal proceedings on infringement of a patent or exclusive license for the calculation of the amount of losses caused by the infringement, a party shall explain the matters necessary for the appraisal to an appraiser.
          Article 130 (Presumption of Negligence)
            A person who infringes a patent or exclusive license of any third person shall be presumed negligent regarding such infringement.
          Article 131 (Reinstatement of Reputation of Patentee, etc.)
            Upon request of a patentee or exclusive licensee, the court may order the person who has degraded the business reputation of the patentee or exclusive licensee by intentionally or negligently infringing the patent or exclusive license to take necessary measures to reinstate the business reputation of the said patentee or exclusive licensee, in lieu of damages therefor or in addition to damages.
        2019 amendment of Patent Act increased monetary punitive damages (up to three times the amount of compensatory damages) as remedy for infringement
        limitations on the time period for which a patent can be enforced for damages calculation purposes
          Patent infringement damages are generally limited to either:
            Ten years before the infringement action was filed
            Three years before the infringement action was filed, if the claimant fails to bring an action within three years of becoming aware of the infringement
    Penalties
      USA
        Enhanced Damages
          35 USC 284
            “... the court may increase the damages up to three times the amount found or assessed”
          Fluctuations in the standard
            1793-1836: Treble damages are mandatory
            1836: Congress makes enhanced damages (up to treble) discretionary
            Seymour (SCOTUS 1854)
              The purpose of enhanced damages is punishment, not compensation
              Not appropriate when defendant acted in ignorance or good faith
              Appropriate when defendant’s conduct was “wanton or malicious”
            1870 and 1952 Statutory Reforms preserve this system
            Early CAFC opinions
              Underwater Devices (CAFC 1983)
                Defendant’s have affirmative duty of care to avoid patent infringement
              Kloster Speedsteel (CAFC 1986)
                Adverse inferences may be drawn from defendant’s failure to obtain opinion of counsel
              Knorr-Bremse (CAFC 2004)
                Repudiate adverse inferences rule
            Seagate (CAFC en banc 2007) raises the bar
              Patentee must prove, by clear and convincing evidence, both:
                1. Objectively high probability that defendant’s conduct was infringing
                  "[W]e overrule the standard set out in Underwater Devices and hold that proof of willful infringement permitting enhanced damages requires at least a showing of objective recklessness.
                  "[T]o establish willful infringement, a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent. The state of mind of the accused infringer is not relevant to this objective inquiry.”
                  Appellate review of this step is de novo
                2. Defendant knew or should have known of the risk
                  "If this threshold objective standard is satisfied, the patentee must also demonstrate that this objectively-defined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the
accused infringer"
                  Appellate review of this step is substantial evidence
              Adverse inferences may not be drawn from:
                invocation of attorney-client privilege
                failure to obtain opinion of counsel
                  "Because we abandon the affirmative duty of due care, we also reemphasize that there is no affirmative obligation to obtain opinion of counsel"
              Aftermath of Seagate
                some district courts persisted in allowing juries to take into account failure to get an opinion of counsel as one factor in determining willfulness
                  E.g., Matthews 2010
            Halo (SCOTUS 2016) lowers the bar
              Proof of objective unreasonableness is no longer necessary
              Patentee need only show that defendant’s conduct was “egregious”
                “Consistent with nearly two centuries of enhanced damages under patent law, however, such punishment should generally be reserved for egregious cases typified by willful misconduct.”
                “willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or—indeed—characteristic of a pirate.”
              Preponderance of the evidence standard, not clear and convincing
            Aftermath of Halo
              District Courts continue to submit question of “willfulness” to juries; instructions vary
              Juries are finding willfulness more often than before Halo
              Judges are exercising their discretion to enhance damages in roughly half of the cases in which juries find wilfulness
          bottom line: best defense remains reasonable reliance on opinion of counsel
            conclusory opinions have no value
              Datascope (CAFC 1989)
            submission of opinion of "opinion counsel" results in waiver of attorney-client privilege work-product protection for "all communications on the same subject matter, as well as any documents memorializing attorney-client communications"
        Court Costs
          presumption that prevailing party gets costs
        Attorney Fees
          35 USC 285
            “The court in exceptional cases may award reasonable attorney fees to the prevailing party.”
          Brooks Furniture (CAFC 2005) defines “exceptional cases” narrowly. The prevailing party must establish by clear and convincing evidence either:
            (a) “there has been some material inappropriate conduct,” or
              i.e., “there has been some material inappropriate conduct related to the matter in litigation, such as willful infringement, fraud or inequitable conduct in procuring the patent, misconduct during litigation, vexatious or unjustified litigation, conduct that violates Fed. R. Civ. P. 11, or like infractions.”
            (b) the litigation is both “brought in subjective bad faith” and “objectively baseless.”
              litigation is objectively baseless only if it is “so unreasonable that no reasonable litigant could believe it would succeed”
                iLOR (CAFC 2011)
          Octane Fitness (SCOTUS 2014) enlarges the set of cases that may qualify as “exceptional”
            “We hold, then, that an “exceptional” case is simply one that stands out from others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated. District courts may determine whether a case is “exceptional” in the case-by-case exercise of their discretion, considering the totality of the circumstances.”
              “As in the comparable context of the Copyright Act, “‘[t]here is no precise rule or formula for making these determinations,’ but instead equitable discretion should be exercised ‘in light of the considerations we have identified.’”
            “Finally, we reject the Federal Circuit’s requirement that patent litigants establish their entitlement to fees under §285 by ‘clear and convincing evidence.’”
          Net effect: significant increase both in requests for fee awards and in grants
            Awards against unsuccessful patentees, though less common than awards against infringers, are possible
              Thermolife (CAFC 2019)
      EPC
      China
      Japan
      Korea
        Enhanced Damages
          2019 amendment of Patent Act
            increased punitive damages (up to three times the amount of compensatory damages) as remedy for infringement
              Article 128 (Claim for Compensation for Loss), Sections (8) and (9) [cited above in “damages”]
              “According to the bill to revise the Korean Patent Act that was passed by the Korean National Assembly on 7 December 2018, the amount of damages that may be claimed against an infringer of a patent right is changed from the amount equivalent to ‘what the patentee would have normally received from working the patented invention’ to ‘what the patentee would have reasonably received from working the patented invention’. This revision makes it clear that the amount of damages to an amount equivalent to a reasonable range of the royalties should be calculated in consideration of the individual and specific circumstances of the patent infringement”
            increased difficulty for infringers to withhold details of their product or process during litigation
              [NEW of July 2019]: Article 126-2 (Obligation to Describe the Details of the Working Acts):
                (1) An alleged infringer denying the specific [working] acts of infringement alleged by the patent right holder or exclusive licensee is now required to present one’s own specific [working] acts used
                (2) If the alleged infringer argues that he/she has a reasonable ground for not being able to describe the details of the working acts, the court may order the alleged infringer to submit materials in order to determine whether the argument is reasonable. This does not apply if there is a reasonable ground for the alleged infringer to refuse the submission of the materials
                (3) The provisions of Articles 132 paragraphs (2) and (3) shall apply mutates mutants to the previous paragraph (2). In such cases, “when it is necessary to prove the infringement or calculate the amount of damages” in Article 132, paragraph (3) shall be construed as “when it is necessary to determine whether there is a reasonable ground for not being able to describe the details of the working acts.”
                  court may order materials to be submitted even if alleged infringer claims that they are trade secrets; Article 132 paragraphs (2) and (3) provide for procedure
                (4) If, without any reasonable grounds, the alleged infringer does not describe details of the working acts, then the court will accept the patentee or licensee’s argument that the working act in question constitutes and infringing act. [CG translation]
              while burden remains with Plaintiff to prove details of infringement, this new provision makes it easier to do so
                especially “for process patents where infringing activities are done mainly within the infringer’s territory, and, thus, obtaining direct evidence of infringement is quite difficult”
        Court Costs
          presumption that prevailing party gets costs
            “Recoverable litigation costs include certain administrative costs incurred during the court proceedings, as well as a portion of the successful party's attorney fees. However, the amount of recoverable attorney fees is statutorily limited to a fraction of actual attorney fees incurred ”
        Attorney Fees
          statutory basis
            Article 191-2 (Patent Attorney’s Fees and Costs of Litigation)
              Article 109 of the Civil Procedure Act shall apply to fees payable to patent attorneys representing a party to legal proceedings. In such cases, "attorney at law" shall be construed as "patent attorney."
                Article 109 (Attorney Fees and Costs of Lawsuit)
                  (1) A fee paid or to be paid by a party to an attorney-at-law who performs a lawsuit on behalf of the party shall be admitted as the costs of lawsuit within the limit of the amounts as prescribed by the Supreme Court Regulations.
                  (2) When calculating the costs of lawsuit under paragraph (1), even if more than one attorneys-at-law have performed the lawsuit on behalf of the party, it shall be deemed to be representation of one attorney-at-law.
          “Although the prevailing party in patent infringement litigation can ordinarily recover costs for the proceeding including court fees and attorneys’ fees from the losing party, the recoverable attorneys’ fees are limited to the amount calculated based on a statutory fee schedule, which is nominal. Litigation cost is determined in a separate proceeding.”
          contingency fees
            allowed for parties in civil actions
            not allowed for defendants in criminal actions
              Supreme Court decision 2015 Da 200111 (decided June 23, 2015)
        Criminal penalties
          rare
            statutory basis = Chapter XII, Article 225 (Infringements)
              (1) Any person who infringes a patent or an exclusive license shall be punished by imprisonment with labor for not more than seven years or by a fine not exceeding 100 million won.
              (2) No person shall be prosecuted for committing a crime under paragraph (1) without a criminal complaint filed by the injured party.
            “It is theoretically possible to bring both a patent infringement claim and an unfair competition claim based on the same set of facts under the "catch-all" provision of the Korean Unfair Competition Prevention and Trade Secret Protection Act (Article 2, paragraph 1, item 10), but this has not been tested in practice.”
              “generally, bringing a patent infringement action will raise anti-trust concerns if the claimant is found to have known when filing the suit that the patent was clearly invalid or not infringed”
      Other jurisdictions
    Injunctions
      USA
        statutory basis: 35 USC 283
          The several courts having jurisdiction of cases under this title [35 USCS §§ 1 et seq.] may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.
        Permanent
          Phase I (prior to formation of Federal Circuit)
            Public interest invoked reasonably often to deny injunctions
            Examples
              Milwaukee (CA7 1934) -- public health
              Vitamin Technologists (CA9 1944) -- public health
              Nerney (CA2 1936) -- large sunk costs by infringer
              Foster (CA2 1974) -- noncompetitor patentee
          Phase II (1982-2006)
            strong presumption in favor of injunctive relief
            Injunction occasionally denied if result would be to hurt public health or welfare
            very rarely denied if only economic injuries would result from grant
              Polaroid (1985)
              but cf. Atari (ND CA 1994)
          eBay (2006)
            facts
              patent 5,845,265
                Abstract: A method and apparatus for creating a computerized market for used and collectible goods by use of a plurality of low cost posting terminals and a market maker computer in a legal framework that establishes a bailee relationship and consignment contract with a purchaser of a good at the market maker computer that allows the purchaser to change the price of the good once the purchaser has purchased the good thereby to allow the purchaser to speculate on the price of collectibles in an electronic market for used goods while assuring the safe and trusted physical possession of a good with a vetted bailee.
                full patent
            holding
              apply traditional rules of equity in determining whether to grant injunctions in patent cases
                (a) the plaintiff has suffered an irreparable injury;
                (b) monetary damages are inadequate to compensate for that injury;
                (c) the balance of hardships favors the plaintiff; and
                (d) the public interest would not be disserved by a permanent injunction
            concurrences
              Roberts, Scalia, Ginsburg
                exercise of discretion should take into account that injunctions traditionally had issued in vast majority of successful patent suits
              Kennedy, Stevens, Souter, Breyer
                denying injunctions may be appropriate when:
                  plaintiff is an NPE
                  patent covers one component of complex product
                  patent in question is a business method patent, often of suspect validity
                    "In addition injunctive relief may have different consequences for the burgeoning number of patents over business methods, which were not of much economic and legal significance in earlier times. The potential vagueness and suspect validity of some of these patents may affect the calculus under the four-factor test."
          Phase III (2006 to present)
            Robert Bosch (CAFC 2011)
              finding of validity and infringement does not create presumption of irreparable harm
              but irreparable harm is established where D is a competitor, corroded P's market, and is financially unstable
                even though there are more than two competitors in the market
                and even though P is much larger than D
            “Causal Nexus”
              CAFC, in multiple rounds of Apple v. Samsung, creates, then adjusts, the nexus requirement
                In 2012, CAFC holds (on appeals from two different rulings by Judge Koh) that injury to reputation as an innovator, permanent lost market share, and and permanent lost customers are insufficient to establish irreparable injury; patentee must also show causal nexus between defendant’s infringing conduct and the injuries
                  Apple I, 678 F.3d at 1324 (CAFC 2012)
                  Apple II, 695 F.3d 1370 (CAFC 2012)
                In Apple IV (2015), CAFC softens the requirement
                  “When a patentee alleges it suffered irreparable harm stemming from lost sales solely due to a competitor’s infringement, a finding that the competitor’s infringing features drive consumer demand for its products satisfies the causal nexus inquiry. In that case, the entirety of the patentee’s alleged harm weighs in favor of injunctive relief. Such a showing may, however, be nearly impossible from an evidentiary standpoint when the accused devices have thousands of features, and thus thousands of other potential causes that must be ruled out. Nor does the causal nexus requirement demand such a showing. Instead, it is a flexible analysis, as befits the discretionary nature of the four-factor test for injunctive relief. We have explained that proving a causal nexus requires the patentee to show “some connection” between the patented features and the demand for the infringing products. Apple III, 735 F.3d at 1364. Thus, in a case involving phones with hundreds of thousands of available features, it was legal error for the district court to effectively require Apple to prove that the infringement was the sole cause of the lost downstream sales. The district court should have determined whether the record established that a smartphone feature impacts customers’ purchasing decisions. ... Though the fact that the infringing features are not the only cause of the lost sales may well lessen the weight of any alleged irreparable harm, it does not eliminate it entirely.”
                  On remand, District Court finally grants permanent injunction against sales of Galaxy S3 -- largely moot
              Genband (CAFC 2017)
                Reaffirms the soft version of the requirement adopted in Apple IV
                  “[I]t has been clear since at least Apple III that a standard of the less demanding variety—as an interpretation of “drive demand,” a standard based on “a driver” as opposed to “the driver,” applied in the multi-consumer, multi-feature context—is the governing one for what suffices to meet the causation component of the requirement of irreparable injury, i.e., that the injury asserted to be irreparable be injury from the defendant’s use of infringing features.”
                  “The clarified standards set forth in Apple III and Apple IV govern the causal-nexus inquiry, at least in a multi-purchaser, multi-component situation in which only a component of a larger product or system is covered by the patent in suit. The formulations in those decisions avoid a too-demanding causal-nexus requirement that might be attributed to the “drive demand” language. The standard prescribed by Apple III and Apple IV, as appropriate to the multi-purchaser, multi-component context, lies between the unduly stringent “sole reason” standard we rejected in Apple III and Apple IV and the unduly lax “insubstantial connection” standard we rejected in Apple II. The standards seek to reflect “general tort principles of causation,” ... and to make proof of causal nexus practical “from an evidentiary standpoint,” ... in a multi- purchaser, multi-component setting.”
                  “Where the patentee relies on lost sales to show irreparable injury, it matters what reasons various buyers have for making the purchases lost to the patentee. If all but an insignificant number of purchases from the infringer would have been made even without the infringing feature, the causal connection to the asserted lost-sale-based injury is missing. But this court’s cases have now made clear that, under the causation approach suitable for a multi-feature, multi-purchaser context, the patentee may be able to make the causal connection between infringement and the relevant lost sales through evidence of various kinds, e.g., that the infringing features significantly increased the product’s desirability, that soundly supports an inference of causation of a significant number of purchasers’ decisions.”
            Factors courts rely on when deciding whether to grant an injunction
              Does P practice the invention?
                trolls are disfavored
                but universities and small inventors who license, rather than practice are not penalized
                *this dovetails with the circumstances governing the advisability of licensing, from a business standpoint -- see IPStrategy
              evidence of actual harm?
              are P & D competitors?
              P's history of licensing patent
              laches
              public interest in health or in product diversity
                but cf. Amgen v. Roche, finding that the public interest points toward preserving robust incentives for pharmaceutical research
              source: Seaman (2016)
            cases in which injunctions are denied typically result in order of "running royalty"
              Who sets the rate?
                sometimes set by court
                sometimes left to jury
                CAFC advocates ordering parties to negotiate a RR
              How is the rate set?
                sometimes by extrapolating from pre-judgment royalty
                  but CAFC discourages reliance on pre-judgment royalty
                some courts look to Georgia-Pacific factors
                considerable uncertainty and confusion on this issue
        Preliminary
          Pre-eBay Doctrine
            1. Likelihood of success on the merits
              helps if the patent was previously held valid in an infringement action against another defendant
              if defendant raises a substantial question concerning patent validity, no PI
            2. Irreparable harm if relief is denied
              if likelihood of success is high, this will be presumed
              factors that disfavor patentee:
                long delay in bringing suit
                patentee had engaged in a pattern of licensing
            3. Balance of Hardship
              almost always deemed to favor patentee
              e.g., Polaroid (1985)
                grant of PI would cost $200m and put 4000 employees out of work
            4. Impact on the Public Interest
              primary application: public interest in enforcement of patents
          Impact of Ebay
            CAFC takes the position that, after eBay, the standard for a preliminary injunction is the same as the standard for a permanent injunction, with the additional requirement that patentee prove likelihood of success on the merits
            Net impact
              Gupta & Kesan (2016)
      EPC
        Enforcement Directive (2004/48/EC)
          Article 3(1): Member States shall provide for the measures, procedures and remedies necessary to ensure the enforcement of the intellectual property rights covered by this Directive. Those measures, procedures and remedies shall be fair and equitable and shall not be unnecessarily complicated or costly, or entail unreasonable time-limits or unwarranted delays.
          Article 3(2): Those measures, procedures and remedies shall also be effective, proportionate and dissuasive and shall be applied in such a manner as to avoid the creation of barriers to legitimate trade and to provide for safeguards against their abuse.
      China
      Japan
      Korea
        statutory basis: Article 126 (Right to Seek Injunction against Infringement, etc.)
          (1) A patentee or an exclusive licensee may file a complaint to seek injunction against, or prevention of, infringement against a person who infringes, or is likely to infringe, his/her rights.
          (2) When a patentee or an exclusive licensee files a complaint under paragraph (1), he/she may demand the destruction of the means by which the infringement has been committed (including the products obtained by infringement if the relevant invention is a process for manufacturing the products), the removal of the facilities used for infringement, and other measures necessary to prevent infringement.
        types of actions available
          civil
            preliminary injunction action
              only remedy = preliminary injunction
                faster to obtain (c. 6-12 months); enforcement immediate
              [as of 2015]: may be requested before final decision of main infringement action
              proof of irreparable harm required
              [as of 2015]: lower rate of success
                about 20% in Seoul Central District Court
                if patent in question has been invalidated, then bad faith or negligence on part of Plaintiff presumed
            main infringement action
              permanent injunction and/or damages
              proof of irreparable harm not required
              slower = 8-18 months
            filing of actions sequentially or concurrently
              “For preliminary injunction to convert into permanent injunction, one needs to file a separate civil main action at the district court. Preliminary injunction action and a civil main action can be filed separately or concurrently.”
          criminal
            rare
              in cases with complex disputes; must be initiated with relevant authorities; one district prosecutor has recently retained technical staff to begin prosecuting patent infringements more actively
              statutory basis = Chapter XII, Article 225 (Infringements)
                (1) Any person who infringes a patent or an exclusive license shall be punished by imprisonment with labor for not more than seven years or by a fine not exceeding 100 million won.
(2) No person shall be prosecuted for committing a crime under paragraph (1) without a criminal complaint filed by the injured party.
              “It is theoretically possible to bring both a patent infringement claim and an unfair competition claim based on the same set of facts under the "catch-all" provision of the Korean Unfair Competition Prevention and Trade Secret Protection Act (Article 2, paragraph 1, item 10), but this has not been tested in practice.”
                “generally, bringing a patent infringement action will raise anti-trust concerns if the claimant is found to have known when filing the suit that the patent was clearly invalid or not infringed”
          border control
            obtaining an order against importation of infringing goods from the Korea Trade Commission (KTC)
              KTC empowered to issue injunction orders agains infringing goods (imports and exports)
              KTC can also investigate, pursue criminal and administrative penalties
            filing a suspension request against infringing imports with the Korean Customs Service (KCS)
              KCS empowered to act upon petitions or on its own initiative
        process for enforcing patent rights in court
          first instance
            infringement cases
              infringement cases are handled at first instance by the five district courts with exclusive jurisdiction (Seoul Central, Daejeon, Daegu, Busan and Gwangju)
                majority of cases filed at Seoul Central (highest concentration of IP specialists)
              statutory definition for conduct deemed infringement = Article 127 (Conduct Deemed Infringement)
                Conducting either of the following activities for business purposes shall be deemed infringement of a patent or an exclusive license:
                  (1) If the patent is for the invention of a thing: Manufacturing, selling, leasing, or importing the thing used exclusively for manufacturing the thing or offering to sell or lease the thing;
                  (2) If the patent is for the invention of a process: Manufacturing, selling, leasing, or importing a thing used exclusively for executing the process or offering to sell or lease the thing.
            invalidation cases
              invalidation cases are initially handled by the Intellectual Property Trial and Appeal Board (IPTAB) within the Korean Intellectual Property Office (KIPO)
          appeal
            IPTAB invalidation decisions and most district court infringement decisions (other than preliminary injunction orders) can both be appealed to the Patent Court
              Patent Court = IP specialist court with jurisdiction over entire country
          final appeal
            heard by Supreme Court at its discretion
              Supreme Court has access to same set of IP specialist research judges and KIPO patent examiners as does Patent Court
    Declaratory Judgment
      USA
        Available to putative infringer if he can demonstrate that "the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”
          Medimmune (SCOTUS 2007)
          not necessary to show that the putative infringer has a reasonable apprehension that the patentee will file suit
          it helps (though may not be essential) for putative infringer to show that he has made meaningful preparation toward potential infringing activities
            Cat Tech (CAFC 2008)
              "We conclude that although Medlmmune articulated a “more lenient legal standard” for the availability of declaratory judgment relief in patent cases, Micron Tech., 518 F.3d at 902-03, the issue of whether there has been meaningful preparation to conduct potentially infringing activity remains an important element in the totality of circumstances which must be considered in determining whether a declaratory judgment is appropriate. See Teva Pharms., 482 F.3d at 1339 (Medlmmune requires that a court look at “all the circumstances” to determine whether a justiciable Article III controversy exists.). If a declaratory judgment plaintiff has not taken significant, concrete steps to conduct infringing activity, the dispute is neither “immediate” nor “real” and the requirements for justiciability have not been met. See Lang v. Pac. Marine & Supply Co., 895 F.2d 761, 764 (Fed.Cir.1990) (emphasizing that the test for justiciability “looks to the accused infringer’s conduct and ensures that the controversy is sufficiently real and substantial”).”
      EPC
      China
      Japan
      Korea
        Available at the Intellectual Property Trial and Appeal Board (IPTAB).
          A declaratory judgment suit may be initiated with or without a co-pending infringement action before a district court for damages or injunction.
          An action for declaratory judgment of infringement may be brought before the IPTAB by a patentee or an exclusive licensee.
          On the other hand, an accused infringer can bring an action before the IPTAB for declaratory judgment of non-infringement without having to wait for the patentee to bring an infringement action.
          Requirement for declaratory judgment
            for non-infringement
              requirement is lenient
                complainant for non-infringement could simply show:
                  (a) the complaining party is in the same business area as the patent claim defines AND
                  (b) has a plan to make, use or sell a related product
                That party does not need to have engaged in activity that could constitute infringement or have made meaningful preparations to engage in such activity
                an actual controversy between the parties at the time the action is initiated is not required
            for infringement
              requirement not as liberal (as in the case of a non-infringement declaration)
                plaintiff must specify:
                  the alleged infringing product or process to an extent that can be compared to the claims of the subject patent AND
                  show the defendant has a plan to exploit it
                assuming the conditions for bringing an action are met, plaintiff may seek a declaratory judgment of non-infringement, invalidity or unenforceability or a combination of the above
    Standard Essential Patents
      Background
        Standard = set of technical specifications that provides a common design for a product or process
          Most often governs issues involving interoperability, safety, quality, or security
        Standard Setting Organization (SSO) = organization responsible for setting and adjusting standards
          Variations:
            Scale (international, regional, national)
            Degree of governmental management or imprimatur
            Degree of industry specificity
              “Standard Development Organization” (SDO) usually refers to a consortium of companies producing products in a particular industry
          Currently over 1000 SSOs, worldwide
        Standard Essential Patent (SEP) = a patent that “reads on” a standard
          To produce or sell a product or service conforming to the standard, one must either secure a license to the patent or infringe
          The set of patents that companies identify as SEPs is larger than the set of true SEPs
      Potential Advantages of SSOs to Participants
        1. increases value of the products produced by all firms in the market
          Sources of increased value
            1. network externalities
              e.g., interoperability of mobile phone systems radically expands direct network effects associated with each system
              adherents to a standard can share benefits of indirect network effects
                e.g., standardization of VCR format enables all manufacturers to share indirect network effects of increased production of movies
            2. increase in functionality: safety and reliability
              pool knowledge concerning (and control over) attractive features
            3. economies of scale in manufacture of components can reduce production costs for all participants
              e.g., when all cell phone manufacturers purchase standard-compliant chips from one or a few makers (Qualcomm and Intel)
          Benefits are maximized by anticipatory standard setting
            agree on a common technology prior to the introduction of any products
            contrast Betamax v. VHS
          Magnitude of increased value
            EU Commission Staff estimates that 1% increase in number of standards used in a country correlates with ~1% increase in GDP
        2. Potential IP licensing revenue
          the more closely the standard aligns with a firm's IP, the higher the revenues
          e.g., 4G LTE standard
            Qualcomm owns ~12.5% of SEPs for 4G LTE standard; received in licensing revenue ~3.2% of price of every 4G LTE phone sold in the world
              source: Trefis, "Nokia" (2013)
            Nokia owns an even larger share
          from a social-welfare standpoint, this is neutral
            transfer payment; no impact on aggregate welfare
        3. Maintain profits above competitive levels
          e.g., block competition from a new technology
            e.g., manufacturers of steel electrical conduits combined to form a standard forbidding use of plastic conduits
          E.g., collective action to suppress prices paid for a component or ingredient
            e.g., manufacturers of macaroni collaborate through a trade association to cap the percentage of semolina in their products, in order to reduce the price that all of them paid for semolina. 1964 FTC Order
              “The complaint in this matter charges, in essence, that the principal domestic manufacturers of macaroni products, acting through respondent trade association, entered into an agreement fixing the composition of such products at a 50% semolina-50% farina blend; that they did so in order to depress the price of durum wheat, from which semolina is produced; and that such an agreement violates Section 5 of the Federal Trade Commission Act. After full evidentiary hearings, the hearing examiner rendered his initial decision, upholding the complaint and entering an order to cease and desist. Respondents have appealed. We have concluded that the findings of fact and conclusions of law of the examiner are correct, but have modified the cease and desist order in minor respects.
              “’Under the Sherman Act a combination formed for the purpose and with the effect of raising, depressing, fixing, pegging, or stabilizing the price of a commodity in interstate or foreign commerce is illegal per se." [United States v. Socony-Vacuum Oil Co. , 310 U.S. 150, 223][1]. This rule applies to combinations among purchasers as well as among sellers ([Mandeville Island Farms, Inc. v. American Crystal Sugar Co. , 334 U.S. 219, 235)][2]; for sellers, as well as buyers, are entitled to the benefits of competition. [Id. , at 236][3]. Since respondents' action in fixing the composition of macaroni products was clearly the result of agreement, the critical question is whether the purpose and effect of the agreement were to manipulate the price of durum wheat.
              “Macaroni products are ordinarily made from 100% semolina; if they contain less semolina they are considered inferior. At the time the agreement challenged here was entered into, it appeared that durum wheat, from which semolina is produced, would be in short supply, and consequently that prices for durum would skyrocket if the macaroni manufacturers bid freely among themselves for the available supply. The record shows that the challenged agreement was intended to ward off such price competition by lowering total industry demand to the level of the available supply. Since the macaroni industry is the only market for durum, and since the parties to this agreement dominate the domestic macaroni industry, it seems clear that the agreement actually affected in a substantial degree the price of durum during the period in the which the agreement was in effect.”
        4. Opportunities for Rent Seeking
          each participating firms wants disproportionate share of the social benefit of the standard
            illustration
            problematic from standpoint of social welfare
              a. waste of resources resulting from struggle over shares
              b. potential sacrifice of safety and efficiency benefits of the standard
            Some economists argue that, in competitive industries governed by properly structured SSOs, this will not occur
              Spulber 2016
                “The key finding is that Standard Setting Organizations (SSOs) choose efficient technology standards because voting power and market power have counterbalancing effects.”
      Law Governing SSOs
        SDOs are permitted
          exception to antitrust prohibitions
        But
          1. They must have a legitimate objective
            General guideline: If suppression of competition is the only plausible rationale for the standard, AT violation
              Allied Tube & Conduit Corp. v. Indian Head, Inc. (SCOTUS 1988)
            However, if there are type #1 benefits, then standard setting is not an AT violation
          2. They must abide abide by procedural requirements designed to reduce abuse
            ANSI Requirements
              Openness
              Balance/Lack of Dominance
              Public Notice
              Consideration of Views
              Consensus Voting
              Appeals Process
              Written Procedures
              IP Policy
                both US and EU treat these policies as contracts: binding on SDO members
                  Broadcom v. Qualcomm (CA3 2007)
              cf. “Rule of Law” in political theory
                Aristotle, Locke, Montesquieu, Dicey
                The state may impose its power on persons only through:
                  The promulgation -- by lawmakers who do not know the identity of the individuals affected
                  And enforcement -- by judges who are free from bias and immune to pressure
                  Of general, clear, well-publicized rules that are capable of being obeyed
                corollaries
                  No person is above the law
                  Similar cases must be treated similarly
                  Legal rules may not be retroactive
                  Any person accused of violating a law has a right to a “day in court”
          3. Ability of Participating Firms to Use their IP rights is curtailed
            Duty to Disclose
              Each firm must reveal patents -- or pending applications -- that might be necessary to implement the standard
              failure to do so may render patents unenforceable against SSO members
                In re Dell (1996)
                Stambler v. Diebold (CAFC 1989)
                Mitsubishi v. Wang (CA3 1997)
            Duty to License
              Option #1: Announce in advance refusal to abide by constraints
              Option #2: Commit to Licensing on Particular Terms. The terms vary widely. The most common are:
                a. Royalty-free licensing
                b. FRAND Licensing
                  "Fair"
                    license terms would not be considered anticompetitive if imposed by a dominant firm in a market without a standard
                    "unfair" license terms include:
                      bundling
                        to get the attractive license, licensee must license an unattractive product or process
                      free grantbacks
                        license agrees to grant to licensor licensee's patents for free
                      mandatory exclusivity
                        licensee agrees not to license from licensor's competitors
                      agreement not to challenge patents
                        Motorola Mobility (EC April 2014)
                  "Reasonable"
                    general guidelines
                      a. license fee should approximate the amount that patentee could have collected in the absence of a standard
                      b. license fees should not be so high as to render the industry uncompetitive
                      applied more strictly in EU than US
                  "Nondiscriminatory"
                    same terms offered to all firms in the industry and to all potential entrants
                      Ambiguity concerning “same terms”
                    OK to vary terms with credit-worthiness, volume
            Legal Source of Obligation
              Patent Law
                Implied license
                Equitable Estoppel
                Patent Misuse
              Contract Law
                FRAND commitments to other members of SSO are contracts
                3rd party beneficiary doctrine available to newcomers
              Competition Law
                Trend in most jurisdictions is toward decreasing reliance on Antitrust as a constraint on actions by SSOs
                  Compare Broadcom v. Qualcom (CA3 2007) with FTC v. Rambus (CAFC 2008) and FTC v. Qualcomm (CA9 2020)
                Abuse of Dominant Position (EU)
                Duty of Good Faith (EU)
      Law Governing SEPs
        Mechanisms for Interpretation
          Judicial Opinions
          Orders by Competition Authorities
            EC
            FTC
          Acceptance of Settlements by Competition Authorities
          Public Statements by Officials
          Growing use of "voluntary" commitments to define "FRAND"
            e.g., FRAND "Clarification" Letters by Apple, Microsoft, Google, February 7-8, 2012
              FRAND Coverage
              FRAND Obligations
        Inter-jurisdictional Competition
          Courts in US, EU, UK, and China are increasingly seeking the power to set global licensing terms
          Effect: SEP holders and standard implementers “race” to the jurisdictions they regard as most favorable
          Side Effect: Increasingly common use of ASIs (anti-suit injunctions)
            In personam orders, forbidding a party to initiate or pursue litigation in another jurisdiction
            Response: anti-anti-suit injunctions
            Examples
              2019-2023: Chinese courts issue at least 5 ASIs
                In 4 of the 5, the beneficiary of the ASI was a Chinese implementer, who was seeking a determination, in China, of a global FRAND rate
                Lead decision: Huawei v. Conversant (SPC 2020): Decision whether to grant an ASI should hinge on 5 factors:
                  1. The impact of the foreign court proceeding/enforcement of foreign court judgment on the parallel Chinese court proceedings;
2. The necessity of the anti-suit / anti-enforcement injunction;
3. A reasonable balance between the parties’ interests;
4. The impact of the anti-suit / anti-enforcement injunction on public interest;
5. International comity (in particular the dates of case registration, the jurisdiction of the courts, and/or the impact of the anti-suit / anti-enforcement injunction on foreign court proceedings/enforcement of foreign court judgment)
              2019-2022: German courts issue multiple anti-anti-suit injunctions
            EU/China WTO Dispute
              Substance
                The European Union submitted its second request for a dispute panel to examine its claims regarding China's enforcement of intellectual property rights. The EU's first request was blocked by China at the previous DSB meeting on 20 December. The EU reiterated the basis for its complaint, namely that the Chinese measures unduly restrict the possibility to enforce intellectual property rights and are inconsistent with China's obligation under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
China said it regretted the EU's second request for the panel. Anti-suit injunction in the field of essential patents is a novel issue that has emerged in recent years in many jurisdictions of WTO members, including the EU, and no unified international rules have been established to govern this issue, China said. China added that it will vigorously defend its legitimate measures and is ready to engage further with the EU to resolve the issue.
              Status
                • On 7 December 2022, the European Union requested the establishment of a panel. At its meeting on 20 December 2022, the DSB deferred the establishment of the panel.
• At its meeting on 27 January 2023, the DSB established a panel. Australia, Brazil, Canada, Colombia, India, Indonesia, Japan, Korea, Norway, Peru, the Russian Federation, Singapore, Switzerland, Chinese Taipei, Thailand, Ukraine, the United Kingdom, the United States, and Viet Nam reserved their third-party rights.
• Following the agreement of the parties, the panel was composed on 28 March 2023.
• On 4 July 2023, the European Union and China informed the DSB that they had agreed to Procedures for Arbitration under Article 25 of the DSU in this dispute. Such procedures were entered into by the European Union and China to give effect to the communication JOB/DSB/1/Add.12 (“Multi-Party Interim Appeal Arbitration Arrangement Pursuant to Article 25 of the DSU (MPIA)”) and with the objective of setting a framework for an Arbitrator to decide on any appeal from any final panel report issued in this dispute, if the Appellate Body is not able to hear such an appeal under Articles 16.4 and 17 of the DSU.
• On 2 November 2023, the Chair of the panel informed the DSB that, in accordance with the panel's timetable adopted following consultations with the parties, taking into account the parties' availability due to other commitments, the panel estimated that it would issue its final report to the parties not before the second half of 2024. The Chair apprised the DSB that the report would be available to the public once it was circulated to the Members in all three official languages, and that the date of circulation depended on completion of translation.
        Limits on injunctive relief
          Unsettled law concerning whether the holder of an SEP subject to FRAND commitments may obtain an injunction to force another firm to take a license
            For a while, different jurisdictions seemed to be converging on the view that the answer was no
              Motorola (Google) v. Apple
                July 2013, FTC Order accepts settlement
                  Google will not seek injunctions
                  anywhere in the world
                  for 10 years
                  for use of SEPs related to any standard set by any SSO
                  against potential licensees who commit to specified licensing framework
                    good-faith negotiation for 6 months
                    arbitration by AAA, JAMS, or WIPO
                April 2014, EC accepts settlement
                  If patentee has committed to FRAND licensing of a SEP and a manufacturer has committed to enter into a license on reasonable terms, patentee may not seek an injunction against use of the patented technology
                    Motorola Mobility holds patents on technologies essential to GPRS standard (part of GSM)
                    Apple had agreed to take a license and to abide by determination of reasonable license fees by a German court
              Samsung v. Apple
                In 2011, Samsung initiated lawsuit against Apple, seeking injunctions in several EU countries for violation of Samsung's SEPs related to 3G UMTS standard
                December 2012, EC informs Samsung that it considers the initiative an abuse of dominant position
                October 2013, Samsung proposes settlement
                April 2014, EC accepts (and renders binding under EU antitrust rules) Samsung's commitment not to seek injunctions in EEA for 5 years for use of SEPs related to mobile-device standards against potential licensees who commit to a specified licensing framework
            Trend now is toward greater latitude to seek injunctions against uncooperative parties
              USA now moving toward the view that seeking an injunction is not necessarily impermissible
                e.g., 2019 Joint Policy Statement by USPTO, the National Institute of Standards and
Technology (NIST) and the U.S. Department of Justice, Antitrust Division (DOJ)
                  Seeking an injunction to enforce a FRAND-encumbered patent will not longer be considered a potential antitrust violation in the U.S.
              EU creates safe-harbor system
                Huawei v. ZTE (ECJ 2015)
                  Patentee may seek an injunction if:
                  1. patentee first alerts the defendant of the claimed infringement and specifies the way in which the patent has been infringed; and
                  2. Makes a written offer for a license, specifying the royalty and calculation methodology
                  3. Offeree does not promptly initiate good-faith negotiation
                National courts, applying this framework, have granted injunctions more frequently
                  e.g., Sisal (Germany 2020)
              Unwired Planet (UK 2020) increased the availability of injunctive relief
              Korea and Japan now seem to be taking similar positions
                Critical issue is whether the defendant is a “willing licensee” negotiating in good faith
                See Padilla et al. (JOLT 2019)
          No consensus yet on whether patentee may seek an injunction in the absence of a FRAND commitment
        Determining FRAND Royalties
          Methods
            Market Methods
              a. Look to terms of prior arms-length licenses of the SEP(s) at issue
              b. Look to terms of prior arms-length licenses of comparable patents
              c. Look to publicized rates for licenses of comparable patents
                Tends to produce higher royalty rates than b.
              d. Look to market license rates for patent pools of which the SEP is a member, then determine the share of the pool properly attributed to the SEP
            Economic Benefit Methods
              a. Estimate the additional income that licensee earned from use of the SEP
                Increased sales or prices
                Decreased costs
              b. Estimate cost to licensee of “inventing around” the SEP
          Selected Cases
            Microsoft v. Motorola (W.D. Wash. 2013)
              reasonable rates determined through application of Georgia-Pacific factors
              modified by:
                a. sensitivity to public benefits of standards through increased production and price competition
                b. need to avoid royalty stacking
                  each licensor enters into licensing negotiations as if it were bilateral
                  net result: higher aggregate licenses than would emerge if all patents were held by a single entity
                  in extreme cases, higher aggregate license fee than licensee can afford
                c. principle that the license fee should be commensurate with the value the technology in question contributes to the standard and to the product
              applied:
                Motorola asked for $4B p.a.
                at trial, Motorola reduced demand to $400M
                Court concludes that RAND licensing would require Microsoft to pay Motorola $1.8M p.a.
                Motorola’s refusal to license on such terms and effort to secure an injunction (in Germany) held to be a breach of contract
                  Microsoft can enforce as 3rd party beneficiary
                  Microsoft recovers in damages $15M (for relocating EU distribution center to Netherlands and for atty fess and costs)
              Affirmed by CA9 (2015)
            Huawei v. InterDigital (Shenzhen Intermediate People’s Court 2013)
            Ericsson v. D-Link 773 F.3d 1201 (CAFC 2014)
              Implementer claiming royalty stacking must prove that actual cumulative remedy it paid is excessive
              Implementer claiming “holdout” by patentee must prove exploitation of technological lock-in
            CISCO v. CSIRO 809 F.3d 1295 (CAFC 2016)
              Implementer claiming royalty stacking must prove it
  Requirements
    A. Utility
      General Principles
        Weak version: prevent the patent system from fostering the development of socially pernicious innovations
        Strong version: channel innovation toward areas of greatest social need
      USA
        Foundations
          Constitution, Art I, Section 8, Clause 8
            "The Congress shall have power … to promote the Progress of science and useful arts, by securing for limited times to authors and inventors, the exclusive right to their respective Writings and Discoveries"
          35 USC 101
            “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”
        1. “General Utility” (operable)
          no patents for inventions that violate generally accepted scientific principles
            E.g., perpetual-motion machine
              Newman v. Quigg, 877 F.2d 1575 (CAFC 2007)
          But invention that works imperfectly or crudely or partially passes muster
            DuPont v. Berkeley, 620 F.2d 1247 (CA8 1980)
          Applicant need not demonstrate subjective knowledge of the reasons why the invention works
        2. “Specific Utility” (practical)
          General Principle: very low threshold
            Amusement is sufficient
            Research tools ordinarily pass muster
            not necessary that the invention be commercially viable or superior to alternatives
              Bedford v. Hunt (CCDMass 1817) (Justice Story): “degree of utility” is irrelevant
          Problem: When in a research endeavor is a patent appropriate?
            A. Pharmaceuticals
              Not necessary that a compound have received FDA approval
                In re Brana (CAFC 1995)
            B. Chemistry
              Chemical compounds (or processes for producing them) whose function is uncertain
                Brenner v. Manson (US 1966)
            C. Biochemistry
              Expressed Sequence Tags
                2001 Utility guidelines
                In re Fisher (CAFC 2005)
                  facts
                    “ An EST is a short nucleotide sequence that represents a fragment of a cDNA clone. It is typically generated by isolating a cDNA clone and sequencing a small number of nucleotides located at the end of one of the two cDNA strands. When an EST is introduced into a sample containing a mixture of DNA, the EST may hybridize with a portion of DNA. Such binding shows that the gene corresponding to the EST was being expressed at the time of mRNA extraction.
                    Claim 1 of the ’643 application recites: “A substantially purified nucleic acid molecule that encodes a maize protein or fragment thereof comprising a nucleic acid sequence selected from the group consisting of SEQ ID NO: 1 through SEQ ID NO: 5.”
                  holding
                    “ Turning to the “specific” utility requirement, an application must disclose a use which is not so vague as to be meaningless. Indeed, one of our predecessor courts has observed “that the nebulous expressions ‘biological activity’ or ‘biological properties’ appearing in the specification convey no more explicit indication of the usefulness of the compounds and how to use them than did the equally obscure expression ‘useful for technical and pharmaceutical purposes’ unsuccessfully relied upon by the appellant in In re Diedrich.” In re Kirk, 376 F.2d 936, 941 (C.C.P.A. 1967). Thus, in addition to providing a “substantial” utility, an asserted use must also show that that claimed invention can be used to provide a well-defined and particular benefit to the public.
                    “ Regarding the seven uses asserted by Fisher, we observe that each claimed EST uniquely corresponds to the single gene from which it was transcribed (“underlying gene”). As of the filing date of the ’643 application, Fisher admits that the underlying genes have no known functions.”
        3. “Beneficial Utility” (good for society)
          Old rule: no patents for inventions "injurious to the morals, health, or good order of society"
            Bedford v. Hunt
(CCDMass 1817)
(Justice Story)
              Examples: “a new invention to poison people, or to promote debauchery, or to facilitate private assassination”
            Rickard v. Du Bon (CA2 1900)
            Scott & Williams v. Aristo Hosiery, 7 F.2d 1003 (CA2 1925)
              facts
                patent
                  “1. A seamless stocking having therein at the back of the leg a structural variation of the knit fabric of which it is composed, imitating the narrowing marks occurring in seamed or other narrowed stockings.”
                purpose
                  Patentee argues: ”Unthinking purchasers still depend upon superficial characteristics of the once superior sort of stocking to indicate to them a desirable article of purchase, without examining the stocking for the other structural features upon which a more intelligent choice might be based. Such persons usually prefer, when they can be induced to make a decision on their respective merits, that type of stocking having no seam at the back, which has manifest advantages as an article of wear. The existence of a large body of prejudice of this sort in the minds of the public unfairly militates against the sale of the circular knit articles of hosiery."
              holding
                “This record justifies the claim that the full-fashioned stocking is superior to the seamless stocking. The testimony of the retailers, jobbers, and manufacturers of seamless stockings are all to the effect that they are not the equal of the full-fashioned stocking as a desirable article of wear, because they do not possess the qualities of fit that make it a desirable article that a full-fashioned stocking has been recognized to be. At best, the seamless stocking has imitation marks for the purpose of deception, and the idea prevails that with such imitation the article is more salable.”
                “But such accomplishment does not create a new useful discovery or invention, and it was not the intention of Congress to grant protection to those who confer no other benefit to the public than an opportunity for making the article more salable.”
          Modern rule: immorality or deceptiveness not relevant
            Juicy Whip v. Orange Bang (CAFC 1999)
              “We decline to follow Rickard and Aristo Hosiery, as we do not regard them as representing the correct view of the doctrine of utility under the Patent Act of 1952. The fact that one product can be altered to make it look like another is in itself a specific benefit sufficient to satisfy the statutory requirement of utility.”
      EPC
        EPC 52
          (1) European patents shall be granted for any inventions, in all fields of technology, provided that they are new, involve an inventive step and are susceptible of industrial application.
          (2) The following in particular shall not be regarded as inventions within the meaning of paragraph 1:
            (a) discoveries, scientific theories and mathematical methods;
            (b) aesthetic creations;
            (c) schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers;
            (d) presentations of information.
          (3) Paragraph 2 shall exclude the patentability of the subject-matter or activities referred to therein only to the extent to which a European patent application or European patent relates to such subject-matter or activities as such.
        EPC 53
          European patents shall not be granted in respect of:
          (a) inventions the commercial exploitation of which would be contrary to "ordre public" or morality; such exploitation shall not be deemed to be so contrary merely because it is prohibited by law or regulation in some or all of the Contracting States;
            EPO Examination Guidelines for interpreting this provision
              4.1 Matter contrary to "ordre public" or morality
                Any invention the commercial exploitation of which would be contrary to "ordre public" or morality is specifically excluded from patentability. The purpose of this is to deny protection to inventions likely to induce riot or public disorder, or to lead to criminal or other generally offensive behaviour (see also F-II, 7.2). Anti-personnel mines are an obvious example. Examples in the area of biotechnological inventions as laid down in Rule 28 are listed in G-II, 5.3.
                This provision is likely to be invoked only in rare and extreme cases. A fair test to apply is to consider whether it is probable that the public in general would regard the invention as so abhorrent that the grant of patent rights would be inconceivable. If it is clear that this is the case, an objection is raised under Art. 53(a); otherwise not. The mere possibility of abuse of an invention is not sufficient to deny patent protection pursuant to Art. 53(a) EPC if the invention can also be exploited in a way which does not and would not infringe "ordre public" and morality (see T 866/01). If difficult legal questions arise in this context, then refer to C-VIII, 7.
                Where it is found that the claims relate in part to such excluded subject-matter, this may have led to the issuing of a partial European or supplementary European search report under Rule 63 (see B-VIII, 1, 3.1 and 3.2). In such cases, in the absence of appropriate amendment and/or convincing arguments provided by the applicant in his response to the invitation under Rule 63(1) (see B-VIII, 3.2) or to the search opinion under Rule 70a (see B-XI, 8), an objection under Rule 63(3) will also arise (see H-II, 5).
              4.1.1 Prohibited matter
                Exploitation is not to be deemed to be contrary to "ordre public" or morality merely because it is prohibited by law or regulation in some or all of the contracting states. One reason for this is that a product could still be manufactured under a European patent for export to states in which its use is not prohibited.
              4.1.2 Offensive and non-offensive use
                Special attention must be paid to applications in which the invention has both an offensive and a non-offensive use, e.g. a process for breaking open locked safes, the use by a burglar being offensive but the use by a locksmith in the case of emergency non-offensive. In such a case, no objection arises under Art. 53(a). Similarly, if a claimed invention defines a copying machine with features resulting in an improved precision of reproduction and an embodiment of this apparatus could comprise further features (not claimed but apparent to the skilled person) the only purpose of which would be that it also allows reproduction of security strips in banknotes strikingly similar to those in genuine banknotes, the claimed apparatus would cover an embodiment for producing counterfeit money which could be considered to fall under Art. 53(a). There is, however, no reason to consider the copying machine as claimed to be excluded from patentability, since its improved properties could be used for many acceptable purposes (see G 1/98, Reasons 3.3.3). However, if the application contains an explicit reference to a use which is contrary to "ordre public" or morality, deletion of this reference is required under the terms of Rule 48(1)(a).
              4.1.3 Economic effects
                The EPO has not been vested with the task of taking into account the economic effects of the grant of patents in specific areas of technology and of restricting the field of patentable subject-matter accordingly (see G 1/98 Reasons 3.9, and T 1213/05). The standard to apply for an exception under Art. 53(a) is whether the commercial exploitation of the invention is contrary to "ordre public" or morality.
              Biotechnology
                Under Art. 53(a), in conjunction with Rule 28(1), European patents are not to be granted in respect of biotechnological inventions which concern:
                (i) Processes for cloning human beings
                  For the purpose of this exception, a process for the cloning of human beings may be defined as any process, including techniques of embryo splitting, designed to create a human being with the same nuclear genetic information as another living or deceased human being (EU Dir. 98/44/EC, rec. 41).
                (ii) Processes for modifying the germ line genetic identity of human beings
                (iii) Uses of human embryos for industrial or commercial purposes
                  A claim directed to a product which at the filing date of the application could be exclusively obtained by a method which necessarily involved the destruction of human embryos from which the said product is derived is excluded from patentability under Rule 28(1)(c), even if said method is not part of the claim (see G 2/06). The point in time at which such destruction takes place is irrelevant (T 2221/10).
                  When examining subject-matter relating to human embryonic stem cells under Art. 53(a) and Rule 28(1)(c), the following has to be taken into account:
                    (a) the entire teaching of the application, not only the claim category and wording, and
                    (b) the relevant disclosure in the description in order to establish whether products such as stem cell cultures are obtained exclusively by the use, involving the destruction, of a human embryo or not. For this purpose, the disclosure of the description has to be considered in view of the state of the art at the date of filing.
                  The exclusion of the uses of human embryos for industrial or commercial purposes does not affect inventions for therapeutic or diagnostic purposes which are applied to the human embryo and are useful to it (EU Dir. 98/44/EC, rec. 42).
                (iv) Processes for modifying the genetic identity of animals which are likely to cause them suffering without any substantial medical benefit to man or animal, and also animals resulting from such processes
                  The substantial medical benefit referred to above includes any benefit in terms of research, prevention, diagnosis or therapy (EU Dir. 98/44/EC, rec. 45).
                In addition, the human body, at the various stages of its formation and development, and the simple discovery of one of its elements, including the sequence or partial sequence of a gene, cannot constitute patentable inventions (see, however, G-II, 5.2). Such stages in the formation or development of the human body include germ cells (EU Dir. 98/44/EC, rec. 16).
                Also excluded from patentability under Art. 53(a) are processes to produce chimeras from germ cells or totipotent cells of humans and animals (EU Dir. 98/44/EC, rec. 38).
                Judgments of the Court of Justice of the European Union on the interpretation of EU Directive 98/44/EC are not binding on the EPO. Still, they may be considered as being persuasive (T 2221/10 and T 1441/13).
          (b) plant or animal varieties or essentially biological processes for the production of plants or animals; this provision shall not apply to microbiological processes or the products thereof;
          (c) methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practised on the human or animal body; this provision shall not apply to products, in particular substances or compositions, for use in any of these methods.
            EPO Examination Guidelines
      China
        Article 5
          Patent rights shall not be granted for invention-creations that violate the law or social ethics, or harm public interests....
        Article 22
          Inventions and utility models for which patent rights are to be granted shall be ones which are novel, creative and of practical use....
          Practical use means that the said invention or utility model can be used for production or be utilized, and may produce positive results.
      Japan
        Article 29 (1)
          An inventor of an invention that is industrially applicable may be entitled to obtain a patent for the said invention...
            第二十九条　産業上利用することができる発明をした者は、次に掲げる発明を除き、その発明について特許を受けることができる。
        Article 32
          Article 32　Notwithstanding Article 29, any invention that is liable to injure public order, morality or public health shall not be patented.
            第三十二条　公の秩序、善良の風俗又は公衆の衛生を害するおそれがある発明については、第二十九条の規定にかかわらず、特許を受けることができない。
      Korea
        Article 29 (Requirements for Patent Registration), Section (1)
          An invention having industrial applicability,... is patentable:
        Article 32 (Unpatentable Inventions)
          Notwithstanding Article 29 (1), no invention that violates public order or sound morals or is likely to harm public health is patentable.
        cf. Article 41 (Inventions, etc. Necessary for National Defense)
          (1) The Government may prohibit filing a patent application with a foreign patent office or may order an inventor, applicant, or agent to keep confidential an invention for which a patent application has been filed, if necessary for national defense: Provided, That a patent application may be filed in a foreign country with prior permission from the Government therefor.
          (2) The Government may refuse to grant a patent, if an invention for which a patent application has been filed is necessary for national defense and may expropriate the entitlement to a patent for national defense during a war, an incident, or any similar emergency.
          (3) The Government shall pay reasonable compensation for losses incurred due to prohibition against filing a patent application in a foreign country, or classification of a patent application as confidential under paragraph (1).
          (4) The Government shall pay reasonable compensation if it refuses to grant a patent or expropriates the entitlement to a patent under paragraph (2).
          (5) If a person violates an order prohibiting filing a patent application in a foreign country or keeping a patent application confidential under paragraph (1), the person shall be deemed to relinquish his or her entitlement to a patent on the relevant invention.
          (6) If a person violates an order prohibiting filing a patent application in a foreign country or keeping a patent application as confidential under paragraph (1), the person shall be deemed to relinquish his or her entitlement to claim for compensation for losses incurred due to prohibition against filing the patent application in a foreign country, or classification of the patent application as confidential.
          (7) Procedures for prohibiting filing a patent application in a foreign country, or for classifying a patent application as confidential under paragraph (1), procedures for expropriation and the payment of compensation therefor under paragraphs (2) through (4), and other necessary matters shall be prescribed by Presidential Decree.
          cf. Article 106 (Expropriation of Patents) and Article 106-2 (Execution of Patented Inventions by Government, etc.) on conditions allowing patent expropriation by government and subsequent procedures
    B. Disclosure
      General Principles
        Purposes of disclosure requirement
          a. Compell patentee to reveal information that will facilitate further technical progress
            “Quid pro quo” of the patent system
            Accelerate, instead of impede, cumulative innovation
          b. Provide competitors guidance in what they may and may not do
            Application of the fundamental principles of the rule of law
          c. Provide courts guidance in understanding the invention and construing the claims
            cf. evidentiary function of formalities
          d. Prevent patentee from locking up a disproportionate territory
          e. Reinforce priority principles by denying priority dates to persons who have not yet fully achieved the invention
        Critique: assuming these goals are desirable, the present disclosure rules do not advance them effectively
          Benjamin Roin (2005)
            Reasons why disclosure rules don’t work
              1. Patents are most heavily used for products that can easily be reverse engineered; in those contexts, disclosure in patents is unnecessary
              2. Patent applicants commonly omit know-how essential to practicing and invention -- and use language designed to claim as much territory as possible and to obscure technological advances
              3. Threat of enhanced damages awards for willful infringement [see Remedies section] prompt firms to discourage their employees from reading patents
            Data confirm these problems
              US and European firms rarely report reliance on patents as a source of information concerning technological advances in their fields
              Japanese firms may rely on patents somewhat more
          Coleen Chien (2016)
            Effective disclosure would require revelation of contextual information:
              Whether the patent is commercially important
              Whether the patent is subject to licensing commitments
              Whether the patent is held for defensive or offensive purposes
            Chemistry and drug patents work better than patents in other fields, because they are effectively searchable, are bound into databases of practice, and are often published long before products are commercially available
      USA
        statutory basis: 35 USC 112
          (a) The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor or joint inventor of carrying out the invention.
          (b) The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention.
        Aspects
          1. Enablement
            The description must be sufficient to enable a PHOSITA to make and use all of the embodiments of the invention claimed in the patent
              Automotive Technologies (CAFC 2007)
              E.g., Boston University v. Everlight (CAFC 2018)
            Wands factors
              Quantity of experimentation necessary
                That a PHOSITA would need to do some experimentation to practice the invention is OK, so long as it’s not “undue”
              Amount of guidance provided by the patent
              Presence in the application of working examples
                Often helpful, but not essential
              Nature of the invention
              State of prior art
              Skill of PHOSITAs
              Predictability of the art
                Mechanical and electrical fields are considered predictable -- and thus enablement requirements are less strict
                Chemical and biological fields are considered unpredictable -- and thus enablement requirements are stricter
              Breadth of claims
            disaggregation by technology
              Lemley & Burk hypothesis
          2. Best Mode
            Old Rules
              2-step analysis
                Step 1: (Subjective) Did the inventor consider a particular way of implementing the invention superior?
                  Knowledge or intent of assignee irrelevant
                    Glaxo v. Novopharm, 52 F.3d 1043 (CAFC 1995)
                Step 2: (Objective) Did the application adequately enable that particular way?
                  I.e., did it provide sufficient information for a PHOSITA to make and use the best mode without undue experimentation
                Chemcast v. Arco, 913 F.2d 923 (CAFC 1990)
              Identifying the best mode
                Not essential that the best mode be singled out (typically as the "preferred embodiment")
                but EA Poe strategy may violate the requirement
              Refinements
                no need to disclose a preferred manufacturing component or method if the patent does not cover it
                  Eli Lilly (CAFC 2001)
                no need to disclose an intermediate if it has no effect on properties of final product
                  Bayer (CAFC 2002)
                Failure of a foreign application to comply with best-mode requirement may prevent invocation of priority date under Paris Convention
                Temporal Paradox
              Policies
                Pro
                  Avoid socially inefficient redundant research
                  Foster competition in the manufacture and sale of patent-dependent products immediately after patent expires
                Con
                  Adds substantially to cost of patent litigation
            New Rules
              failure to disclose best mode is no longer a ground for challenging the validity of a patent (35 USC 282(b)(3)(A))
                Either in litigation
                Or in post-grant administrative challenges
              But:
                can be used by PTO to reject an application
                And falls within a patent agent’s duty of candor
                Old Rules remain applicable to proceedings commenced before September 16, 2011
          3. Written Description
            Often invoked when applicant amends application
              Pertinent provisions
                Section 120: amended patent application gets priority date of original patent application
                Section 132: amendment may not introduce new matter into the disclosure
              Original disclosure must show that the applicant was then "in possession" of the invention eventually claimed
                Vas-Cath (CAFC 1991)
                Hyatt (CAFC 1998)
                Stanford v. Chinese University of Hong Kong (CAFC 2017)
                FWP v. Biogen (CAFC 2018)
                Courts are more lax when patent is “pioneering”
            Recently applied by CAFC outside of the extension context: applicant must describe the invention itself, not just how to make and use it (enablement)
              Lilly (1998)
              Gentry Gallery (1998)
              Rochester (CAFC en banc 2004)
              Ariad Pharms v. Lilly, 598 F.3d 1336 (CAFC 2010)(en banc)
                facts
                  In 1980s, 13 scientists at Harvard, MIT, and Whitehead Institute identified Nuclear Factor Kappa (NF-kB), a protein that affects gene expression
                  On the basis of their discovery of the way the protein worked, they postulated that suppressing NF-kB activity could reduce symptoms of cancer, AIDS, and sepsis
                  They proposed that such suppression could be achieved by (a) specific inhibitors; (b) interfering molecules; and (c) decoy molecules
                  Universities applied for were granted patents on methods using any of substances that will have this suppressing effect
                    one of the patents is licensed to Ariad
                  claims
                    80. [A method for modifying effects of external influences on a eukaryotic cell, which external influences induce NF-κB-mediated intracellular signaling, the method comprising altering NF-κB activity in the cells such that NF-κB-mediated effects of external influences are modified, wherein NF-κB activity in the cell is reduced] wherein reducing NF-κB activity comprises reducing binding of NF-κB to NF-κB recognition sites on genes which are transcriptionally regulated by NF-κB.
                    95. [A method for reducing, in eukaryotic cells, the level of expression of genes which are activated by extracellular influences which induce NF-κB-mediated intracellular signaling, the method comprising reducing NF-κB activity in the cells such that expression of said genes is reduced], carried out on human cells.
                    144. [A method for reducing bacterial lipopolysaccharide-induced expression of cytokines in mammalian cells, which method comprises reducing NF-κB activity in the cells so as to reduce bacterial lipopolysaccharide-induced expression of said cytokines in the cells] wherein reducing NF-κB activity comprises reducing binding of NF-κB to NF-κB recognition sites on genes which are transcriptionally regulated by NF-κB.
                    145. [A method for reducing bacterial lipopolysaccharide-induced expression of cytokines in mammalian cells, which method comprises reducing NF-κB activity in the cells so as to reduce bacterial lipopolysaccharide-induced expression of said cytokines in the cells], carried out on human cells.
                holding (9/2)
                  “[A] generic claim may define the boundaries of a vast genus of chemical compounds, and yet the question may still remain whether the specification, including original claim language, demonstrates that the applicant has invented species sufficient to support a claim to a genus. The problem is especially acute with genus claims that use functional language to define the boundaries of a claimed genus. In such a case, the functional claim may simply claim a desired result, and may do so without describing species that achieve that result. But the specification must demonstrate that the applicant has made a generic invention that achieves the claimed result and do so by showing that the applicant has invented species sufficient to support a claim to the functionally-defined genus.”
                  [A] sufficient description of a genus ... requires the disclosure of either a representative number of species falling within the scope of the genus or structural features common to the members of the genus so that one of skill in the art can “visualize or recognize” the members of the genus.”
                applied
                  Patent provided insufficient detail concerning any of the three types of NF-kB suppressing materials
              AbbVie v. Janssen Biotech, 759 F.3d 1285 (CAFC 2014)
            Resistance to this expansive reading of “written description” has been strong, but so far unavailing
              e.g., Amgen cert petition (2018)
          4. Definiteness
            The claims must be clear and definite
              United Carbon (SCOTUS 1942)
                “The statutory requirement of particularity and distinctness in claims is met only when [the claims] clearly distinguish what is claimed from what went before in the art and clearly circumscribe what is foreclosed from future enterprise.”
              Datamize (CAFC 2005)
                A requirement in a claim that a user interface be “aesthetically pleasing” is indefinite
            Factors that affect the application of this requirement
              When a claim in an issued patent is challenged, courts are more forgiving than during patent prosecution
                Exxon Research, 265 F.3d 1371 (CAFC 2001)
              The greater the risk that a claim will encroach on prior art, the more demanding will be the courts
                Halliburton (CAFC 2008)
              If information in the specification is sufficient to enable a PHOSITA to resolve the ambiguity, indefiniteness is not fatal
                Oakley, 316 F.3d 1331 (CAFC 2003)
              If a claim is ambiguous because it its susceptible of two possible interpretations, court may be willing to save the claim by adopting the narrower of the two interpretations
                Athletic Alternatives, 73 F.3d 1573 (CAFC 1996)
      EPC
      China
      Japan
      Korea
        Statutory basis: Chapter II, Article 42 (Patent Applications)
          Most relevant section for statutory basis is Chapter 2, Article 42: [2.42.(2)]: "A patent application filed under paragraph (1) shall be accompanied by a specification containing the description of the invention and the claims, necessary drawings, and an abstract."
        Aspects
          Enablement, written description, and definiteness are intended for disclosure. Generally the same as the US, except the best mode approach
    C. Novelty
      USA
        Old Rules
          Govern applications filed or patents granted before March 16, 2013
          First to invent
            35 USC 102(g)
              A person shall be entitled to a patent unless... (g)(1) during the course of an interference conducted under section 135 or section 291, another inventor involved therein establishes to the extent permitted in section 104, that before such person's invention thereof the invention was made by such other inventor and not abandoned, suppressed, or concealed, or
                applies only to interference proceedings
                  each party claims the same invention
                Geographic coverage
                  In US prior to 12/8/93
                  In US or NAFTA member country prior to 1/1/96
                  In US, NAFTA member country or any WTO member country after 1/1/96
              (2) before such person's invention thereof, the invention was made in this country by another inventor who had not abandoned, suppressed, or concealed it.
                applies even outside of interference proceedings
                limitations
                  applies only to inventions "in this country"
                  applies only to "inventions" -- i.e., requires reduction to practice
              In determining priority of invention under this subsection, there shall be considered not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to conception by the other.
            The patent is awarded to the first person to invent a particular invention
              Interference Scenarios
            Presumptive Date of Invention = date of reduction to practice
              (1) Actual
                Physical embodiment +
                  RTP of a gene is isolating it (Amgen (1991))
                Complete embodiment +
                  Equivalents don't count
                Testing sufficient to demonstrate utility and success
                  Unless their efficacy is obvious (Manville (1990))
              (2) Constructive
                Patent application
                  including provisional applications
                  Date of the US application governs, not date of prior foreign application
              Need corroborating evidence
                "rule of reason" test for sufficiency
                  Brown (CAFC 2002)
            Backdating
              Conception
                Formulation of the complete means of solving a problem sufficiently detailed that a PHOSITA could RTP without further research
                  (Mahurkar (1996)
                  Conception of gene requires envisioining its "detailed chemical structure"
                    Amgen (1991)
                    Fiers (1993)
                Idea must encompass all parts of the invention
                Question of law, not fact
                Need corroborating evidence
                  "rule of reason" test for sufficiency
                    Brown (CAFC 2002)
              Diligence
                Actual activity or legitimate excuse during entire critical period
                For constructive RTP, applicant charged with diligence or laziness of his attorney
                Need corroborating evidence
            Forfeiting the benefit of a reduction to practice
              Abandonment, Concealment or Suppression
                type 1: actively hide your invention from then public
                  commercialization of the output of the invention, while concealing the invention = bad
                    "non-informing public use"
                  commercialization of an object embodying the invention, which is impossible to reverse engineer = OK
                    "hidden public use"
                type 2: substantial delay in filing for a patent
                  Peeler (CCPA 1976)
                  legitimate excuse for delay: working on refining the invention, and refinements are reflected in ultimate patent application
                change of heart
                  concealment, followed by renewed efforts to obtain a patent: applicant can claim priority date of renewal of effort
                    Paulik (CAFC 1985)
                  renewed activity in response to appearance of a competitor does not count
              Derivation
                35 USC 102(f)
                  a person shall be entitled to a patent unless he did not himself invent the subject matter sought to patented
                X did not invent the "invention" if:
                  (1) Y conceived of it first, and
                  (2) the conception was communicated to X in a fashion that would enable a PHOSITA to practice it
                    i.e., the disclosure by Y must have met standard enablement requirements and must have encompassed all elements of the invention
                    Agawam (1869)
                Location of the derivation irrelevant
                Need corroborating evidence
            Joint Invention
              35 USC 116
                "When an invention is made by two or more persons jointly, they shall apply for patent jointly and each make the required oath, except as otherwise provided in this title. Inventors may apply for a patent jointly even though (1) they did not physically work together or at the same time, (2) each did not make the same type of amount of contribution, or (3) each did not make a contribution to the subject matter of every claim of the patent."
              Requirements
                Each contributes significantly (measured by quality) to conception or RTP of at least one of the claims, in a fashion other than the explanation of familiar principles
              Effects
                Each acquired an undivided ownership interest in the entire patent
                Each may unilaterally license others to practice the invention -- without an accounting
                  35 USC 262
                    In the absence of any agreement to the contrary, each of the joint owners of a patent may make, use, offer to sell, or sell the patented invention within the United States, or import the patented invention into the United States, without the consent of and without accounting to the other owners.
          Fatal conditions --if they occur prior to the invention by the applicant
            "Known or used by others" in USA
              35 USC 102(a)
                a person shall be entitled to a patent unless -- (a) the invention was known or used by others in this country ..., before the invention thereof by the applicant for patent
              Known
                = idea sufficiently well developed that a PHOSITA could reduce it to practice
                What if subsequently forgotten?
                  Gayler (SCOTUS 1850) suggests that forgotten prior art can't anticipate, but current validity is in doubt
              Used
                = reduced to practice
                  Abandoned (and never perfected) experiments don't anticipate
              "By others"
                = reasonably accessible to the public
                  National Tractor Pullers (ND Ill. 1980) MD 394
                    drawings on the underside of a kitchen tablecloth, never published, later destroyed don't suffice
                  Rosaire (1955)
                    Non secret use of oil prospecting method is sufficient
                  Woodland Trust (CAFC 1998)
                    “Section 102(a) establishes that a person can not patent what was already known to others. If the invention was known to or used by others in this country before the date of the patentee's invention, the later inventor has not contributed to the store of knowledge, and has no entitlement to a patent.”
                    “Accordingly, in order to invalidate a patent based on prior knowledge or use, that knowledge or use must have been available to the public.”
                      See Carella v. Starlight Archery, 804 F.2d 135, 139, 231 U.S.P.Q. 644, 646 (Fed. Cir. 1986) (the § 102(a) language "known or used by others in this country" means knowledge or use which is accessible to the public);
                      35 U.S.C. § 102(a) reviser's note (1952) (noting that " 'known' has been held to mean 'publicly known' " and that "no change in the language is made at this time");
                      P.J. Federico, Commentary on the New Patent Act (1954) reprinted in 75 J. PAT. TRADEMARK OFF. SOC'Y Y 161, 178 (1993) ("interpretation [of § 102(a) ] by the courts excludes various kinds of private knowledge not known to the public"; these "narrowing interpretations are not changed").
                      See also Coffin v. Ogden, 85 U.S. (18 Wall.) 120, 124-25, 21 L. Ed. 821 (1873) (accessible hence anticipating prior use); Gayler v. Wilder, 51 U.S. (10 How.) 477, 497-98, 13 L. Ed. 504 (1850) (nonaccessible hence nonanticipating prior use).
            Patented or Described in a Printed Publication anywhere in the world (a)
              35 USC 102(a)
                A person shall be entitled to a patent unless -- (a) the invention was ... patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent
              "printed" includes information available in digital form
              publication (or patent) must have been accessible to the public
                "public" = members of the public interested in the art, exercising reasonable diligence
                examples of documents deemed publicly accessible
                  typed or mimeographed document deposited in public library
                  scientific paper submitted for refereeing to a journal
                  properly indexed microfilm in Library of Congress
                  catalogued dissertation in university library
                    Hall (1986)
                  instruction sheet distributed on one island in Japan
                  German design patent available for public viewing in Germany
                    Carlson (1992)
                examples of documents deemed not publicly accessible
                  private papers
                  memos internal to an organization
                  scientific paper delivered orally to an audience
                  improperly indexed microfilm in Library of Congress
                  dissertation deposited in library but not catalogued or shelved
                    Bayer
                  undergraduate thesis deposited and shelved in college library, but catalogued only by author's name
                    Cronyn (1989)
                  documents filed in USSR, inaccessible to Americans
                  grant application sent to outside reviewers
            Described in Prior US Patent Applications by Others
              102(e)
                A person shall be entitled to a patent unless ... (e) the invention was described in (1) an application for patent, published under section 122(b), by another filed in the United States before the invention by the applicant for patent or (2) a patent granted on an application for patent by another filed in the United States before the invention by the applicant for patent, except that an international applicant filed under the treaty defined in Section 351(a) shall have the effects for the purposes of this sub section of an application filed in the United States only if the international application designated the United States and was published under Article 21(2) of such treaty in the English language
              applies only to descriptions of the invention in prior patent applications by others, not claims in prior patent applications by others
              International Novelty Problem
            Strict Anticipation Rules apply to these scenarios
              Each element of the claimed invention is disclosed in a single prior-art reference or embodied in a single prior-art device or practice
                That which would literally infringe, if later, anticipates, if earlier
                  No anticipation by equivalents
                "Inherency" gloss on "disclosed"
                  In re Robertson (1999) MD 361
                  Sprouts Litigation (CAFC 2002) MD 384
                    broccosprouts.com
                  Schering (CAFC 2003) MD 374
                  SmithKline (CAFC 2005)
              Inadvertent prior art
does not count
                Mitchell v. Tilghman (US 1873)
                Edison Light (CA3 1909)
                In re Seaborg (CCPA 1964)
              Enablement
                Description of the invention must be enabling, taking into account the level of ordinary skill in the pertinent art
                  Paulsen (CAFC 1994)
                  enablement applies to making the invention, not using the invention
                    contrast 35 USC 112
                    Hafner (CCPA 1969) MD 381
                But a device or practice embodying the invention need not be enabling
                  Lockwood (CAFC 1997) MD 385
              Disclosure of a species anticipates a genus, but not vice versa
          Fatal conditions -- if they occur more than 1 year before filing a patent application
            "On Sale" in USA
              102(b) A person shall be entitled to a patent unless ...(b) the invention was ... on sale in this country more than one year prior to the date of the application for patent in the United States
              Requires “definite sale or offer to sell"
                Of What?
                  Of embodiment of the invention
                  Not of patent rights
                  Not necessary that the sale reveal the technology to the public
                Not necessary that the sale or offer be public
                  Confidential commercial sales still qualify
                What constitutes a sale or offer to sell is determined with reference to the law of contracts
                  Test: would it have been regarded as a sale or an offer “within the commercial community”
                  Medicines Co. (CAFC 2016)
              For the bar to apply, the technology that is offered for sale must be sufficiently well developed as to be “ready for patenting” on the critical date
                Pfaff, 525 U.S. 55 (SCOTUS 1998)
                “Ready for patenting” can be shown either “by proof of reduction to practice before the critical date; or by proof that prior to the critical date the inventor had prepared drawings or other descriptions of the invention that were sufficiently specific to enable a person skilled in the art to practice the invention.”
              Gaps between the challenged claims and the thing sold
                to create a bar, the thing on sale must be:
                  The invention itself, or
                  Something that makes the invention (as claimed) obvious
                    Smith (CAFC 1983)
                    Tec Air (CAFC 1999)
                Claim-by-claim analysis
              public sales of fruits of concealed process?
                Metallizing Engineering (CA2 1946): will bar patenting of the process
                Exception for sales by a third party of fruits of a secret process
                  W.L. Gore (CAFC 1983)
              Narrow "experimental
use" exception
                Applicable only when the sale was "merely incidental to the primary purpose of experimentation"
                  Scaltec (CAFC 1999);
                  Aqua Marine (CAFC 2001)
                compare Atlanta Attachment (CAFC 2008)
              Geographic scope
                One of the following must have happened in the US
                  Sale
                  Offer to sell
                  Substantial activity prefatory to a sale
            "In public use" in USA
              102(b)
                A person shall be entitled to a patent unless ... (b) the invention was in public use ... in this country ..., more than one year prior to the date of the application for patent in the United States
              "public"
                How many embodiments of the invention?
                  Egbert (SCOTUS 1881): 1 is sufficient
                How many people?
                  Egbert: 1 is sufficient
                Visibility to the public at large?
                  Egbert: Not necessary
                  Hall (SCOTUS 1883)
                    Conical bolts in a safe
                    “The invention was complete in those safes. It was capable of producing the results sought to be accomplished, though not as thoroughly as with the use of welded steel and iron plates. The construction and arrangement and purpose and mode of operation and use of the bolts in the safes were necessarily known to the workmen who put them in. They were, it is true, hidden from view after the safes were completed, and it required a destruction of the safe to bring them into view. But this was no concealment of them or use of them in secret. They had no more concealment than was inseparable from any legitimate use of them.
                    Also no experimental-use defense
                      As to the use's being experimental, it is not shown that any attempt was made to see if the plates of the safes could be stripped off, and thus to prove whether or not the conical bolts were efficient. The safes were sold, and apparently no experiment and no experimental use were thought to be necessary. The idea of a use for experiment was an afterthought. An invention of the kind might be in use and no burglarious attempt be ever made to enter the safe, and it might be said that the use of the invention was always experimental until the burglarious attempt should be made, and so the use would never be other than experimental. But it is apparent that there was no experimental use in this case, either intended or actual. The foregoing views, which are controlling to show that claim 3 of the patent in suit cannot be sustained, are in accordance with those announced by this Court in Egbert v. Lippmann
                  How open must the venue be to the public at large?
                    Beachcombers (CAFC 1994); kaleidescope at a party = public
                    Baxter (CAFC 1996): centrifuge in a laboratory = public
                    New Railhead (CAFC 2002) (2/1): commercial use of a drill bit (and a method of using it) under public land is sufficiently public
              Exceptions
                Confidentiality
                  Express or tacit agreements by persons permitted to use the invention not to make it public prevents operation of the bar
                Experimental Use
                  City of Elizabeth (1878)
                  Lough (CAFC 1996)
                    Facts
                    “ To determine whether a use is "experimental," a question of law, the totality of the circumstances must be considered, including various objective indicia of experimentation surrounding the use, such as the number of prototypes and duration of testing, whether records or progress reports were made concerning the testing, the existence of a secrecy agreement between the patentee and the party performing the testing, whether the patentee received compensation for the use of the invention, and the extent of control the inventor maintained over the testing.... The last factor of control is critically important, because, if the inventor has no control over the alleged experiments, he is not experimenting. If he does not inquire about the testing or receive reports concerning the results, similarly, he is not experimenting.
                    “ In order to justify a determination that legally sufficient experimentation has occurred, there must be present certain minimal indicia. The framework might be quite formal, as may be expected when large corporations conduct experiments, governed by contracts and explicit written obligations. When individual inventors or small business units are involved, however, less formal and seemingly casual experiments can be expected. Such less formal experiments may be deemed legally sufficient to avoid the public use bar, but only if they demonstrate the presence of the same basic elements that are required to validate any experimental program. ...The question framed on this appeal is whether Lough's alleged experiments lacked enough of these required indicia so that his efforts cannot, as a matter of law, be recognized as experimental.
              Identity?
                Suppose I try out an invention in public, then add a minor feature that improves it, file patent application for the improved version. As of what date am I barred?
                To create a bar, the thing in public use must be:
                  The Invention itself, or
                  Something that makes the invention (as claimed) obvious, or
                  Drawings sufficient to be enabling
            "Patented or Described in a
Printed Publication anywhere in the world (b)
              102(b)
                A person shall be entitled to a patent unless ... (b) the invention was patented or described in a printed publication in this or a foreign country..., more than one year prior to the date of the application for patent in the United States
              "patent"
                Same definition as in context of novelty (102(a))
              "publication"
                Same definition as in the context of novelty (102(a))
                Examples
                  Klopfenstein (CAFC 2004)
                    Poster displayed for 3 days at a conference for cereal chemists = printed publication
                      “The factors relevant to the facts of this case are: the length of time the display was exhibited, the expertise of the target audience, the existence (or lack thereof) of reasonable expectations that the material displayed would not be copied, and the simplicity or ease with which the material displayed could have been copied.”
                  SRI International (CAFC 2008)
                    Posting a paper on one’s own FTP servers and providing the address to the chair of conference panel is not printed publication
                  Medtronic (CAFC 2018)
                    Remand for reconsideration of a borderline case in light of the following factors:
                    “These decisions illustrate some common considerations about materials that are distributed at meetings or conferences. As relevant to this case, the size and nature of the meetings and whether they are open to people interested in the subject matter of the material disclosed are important considerations. Another factor is whether there is an expectation of confidentiality between the distributor and the recipients of the materials. Even if there is no formal, legal obligation of confidentiality, it still may be relevant to determine whether any policies or practices associated with a particular group meeting would give rise to an expectation that disclosures would remain confidential.”
            Foreign Patents by
the Applicant
              102(d)
                A person shall be entitled to a patent unless ...(d) the invention was first patented or caused to be patented, or was the subject of an inventor's certificate, by the applicant or his legal representatives or assigns in a foreign country prior to the date of the application for patent in this country on an application for patent or inventor's certificate filed more than twelve months before the filing of the application in the United States
              Effective Date of Foreign Patent Grant
                Kathawala
              Identity
                Kathawala issue
                Obviousness issue
        New Rules
          Govern applications filed on or after March 16, 2013
          First inventor to file
            Patent Awarded to the first inventor to file
              new 35 USC 102(a)(2)
                A person shall be entitled to a patent unless ... the claimed invention was described in a patent issued [to another] … or in [another’s] application for patent published … [that] was effectively filed before the effective filing date of the claimed invention.
            Forfeiting the benefit of first to file
              filer derived the invention from someone else
              filer abandons or suppresses the application
          Fatal conditions --if they occur prior to the filing by the applicant
            Invention was on sale anywhere in the world
              new 35 USC 102(a)
                A person shall be entitled to a patent unless -- (a) the invention was ... on sale before the effective filing date of the claimed invention
              incorporate old rules about "on sale," but now applied throughout the world
              Secret sales or offers to sell may still qualify
                Helsinn (SCOTUS, forthcoming 2019) will address the issue
            Invention was in public use anywhere in the world
              new 35 USC 102(a)
                A person shall be entitled to a patent unless -- (a) the invention was ... in public use before the effective filing date of the claimed invention
              Legislative history suggests intent to narrow the interpretation of “public”
                Fewer activities qualify than used to; movement of the boundary of the hazardous zone upward
              Is a secret noninforming use by the applicant a public use?
                Merges and Duffy contend yes; this rule survives
            Invention was available to the public anywhere in the world
              new 35 USC 102(a)
                A person shall be entitled to a patent unless -- (a) the invention was ... otherwise available to the public before the effective filing date of the claimed invention
              similar to old "known or used by others" (in USA)
            Invention was Patented or Described in a Printed Publication anywhere in the world
              new 35 USC 102(a)
                A person shall be entitled to a patent unless -- (a) the invention was ... the claimed invention was patented, [or] described in a printed publication, ... before the effective filing date of the claimed invention
              publication (or patent) must have been accessible to the public
                "public" = members of the public interested in the art, exercising reasonable diligence
                old cases defining boundary between public and nonpublic are still relevant
              "printed" includes information available in digital form
              Strict Anticipation Rules
                (see above)
            Invention was described in an issued US patent or in a US patent application filed before applicant's filing date
              102(a)(2): A person shall be entitled to a patent unless— ... the claimed invention was described in a patent issued [to another] … or in [another’s] application for patent … [that] was effectively filed before the effective filing date of the claimed invention.
              This implements the new (qualified) “first-to-file” principle
          Grace Period
            102(b) now creates a set of 1-year exceptions to the prior art that will invalidate a patent under 102(a)
            Prior Art does not include disclosures made less than 1 year before filing date by the inventor or derived (directly or indirectly) from disclosures made by the inventor
              35 USC 102(b)(1)(A)
                “ A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if— (A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor...”
              effect: no penalty for disclosing your invention prior to filing
              “Derivation” determined in a “derivation” proceeding
              New provision will probably be construed broadly, to shield inventors from adverse effects of any of their own actions during grace period
                e.g., sales (either secret or open)
            Prior Art does not include disclosures made less than 1 year before filing date by 3rd parties after a "public" disclosure by the inventor
              35 USC 102(b)(1)(B)
                “ A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if— (B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.
              effect: strong incentive to disclose your invention publicly early
                The set of disclosures by an inventor that will immunize the inventor against adverse effects of subsequent prior art by 3rd parties may be narrower than the set of disclosures that an inventor is permitted to make (during the grace period) without forfeiting his/her own patent protection
            Prior Art does not include disclosures made less than 1 year before filing date by 3rd parties in patents or patent applications if:
              3rd party derived the information from inventor, or
              3rd party filed after public disclosure by inventor, or
              common assignee for the two patent applications
                Purpose of this provision is to facilitate more joint research ventures
              35 USC 102(b)(2)
                (2) DISCLOSURES APPEARING IN APPLICATIONS AND PATENTS.—A disclosure shall not be prior art to a claimed invention under subsection (a)(2) if—
(A) the subject matter disclosed was obtained directly or indirectly from the inventor or a joint inventor;
(B) the subject matter disclosed had, before such subject matter was effectively filed under subsection (a)(2), been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or
(C) the subject matter disclosed and the claimed invention, not later than the effective filing date of the claimed invention, were owned by the same person or subject to an obligation of assignment to the same person.
            Net effects
              If P wants patent protection only in the US, new regime will create strong incentives to disclose as early as possible
                prevent rivals from patenting
                disable rivals from interfering with P's patenting ability through early disclosure
                grace period ensures no penalty for disclosing before patenting
              If P wants global protection, file as soon as possible
                disclosing prior to filing will be fatal in many countries, which lack grace periods
      EPC
      China
      Japan
      Korea
        First inventor to file
          Patent awarded to the first inventor to file
            Article 36
              "Where at least two patent applications are filed for an identical invention on different dates, only the applicant who filed first is entitled to a patent on the invention."
              If two parties file on same date, only the party agreed upon by all parties may obtain patent; if no agreement, no patent. Above two rules apply to filings of patent application and application for utility model registration. Other conditions detailed in Art. 36 (5) and (6).
        Grace Period
          Article 30
            [post March 15, 2012]: 12 months from "relevant date" in the following cases:
              1. When a person entitled to a patent has caused his/her invention to fall under any subparagraph of Article 29 (1)" (except for "where the relevant application has been laid open, or the patent has been registered and published, in the Republic of Korea or in any foreign country under a treaty or an Act");
                Grace period not automatic
                  Requires submission of written statement and evidentiary document
                    Written statement (at time of filing date) = declaration of of intent to apply grace period
                    Evidentiary document (within 30 days of filing date) = must show the following
                      (i) disclosure date
                      (ii) disclosing party
                      (iii) type of disclosure
                      (iv) content of disclosure
                    [post July 29, 2015]: extensions to window in which grace period may be applied allowed in the following cases:
                      upon submission of an amendment
                        (i) at any time prior to issuance of first office action (Notice of Preliminary Rejection, Notice of Allowance)
                        (ii) within time period for responding to a preliminary rejection
                        (iii) when filing request for reexamination
                      within three months of receipt of Notice of Allowance, but before registration
                  must accompany a direct patent application, either in Korea or internationally
                    filing internationally does not extend the grace period
                elibility
                  eligible disclosures include:
                    public use
                    presentation at academic conference
                    printed publication
                  ineligible disclosures include:
                    laid-open publication (in/outside Korea)
                    registration publication (in/outside Korea)
                disclosure and the meaning of “an invention publicly known or worked”
                  Supreme Court decision 2011Hu4011 (decided April 26, 2012)
                    reasoned that a person having ordinary skill in the art may be able to disassemble and analyze a product covered by the invention to understand the invention
                      thus “invention publicly known or worked” = that disclosed under the condition that a person who does not have confidentiality obligations can readily grasp the content of the invention, whether or not that person recognizes the invention
                  Patent Court decision 2016Heo7954 (decided on January 11, 2016, upheld by Supreme Court)
                    [in re a chemical substance or medicine]: even if a product was publicly sold before the filing date, if a person skilled in the art was unable to determine its compositional ratio or components without undue effort, then it cannot be considered that the person could have recognized the invention in the product
              2. When the invention falls under any subparagraph of Article 29 (1) contrary to the will of the person entitled to a patent."
Detailed rules and procedures follow in Art. 30 (2) and (3).
                if a third party discloses the invention in any form before the filing date, it serves as prior art
                  examples of scenarios from precedent cases determined to constitute disclosure against will of applicant:
                    an invention disclosed to the public intentionally of negligently by a licensee or agent
                    third party has invention disclosed to public as a result of threat, fraud, industrial espionage, or violation of confidentiality
    D. Inventive Step
      History
        United States
          Early 19th century
            Novelty rules established through adjudication
              Evans v. Eaton (SCOTUS 1818)
                Independent creation is insufficient; novelty is necessary
              Pennock v. Dialogue (SCOTUS 1829)
                lopng-standing public use of an invention by a third party will bar patenting
            Before 1850, no nonobviousness requirement
          Hotchkiss (SCOTUS 1850): no patents for creations that are “destitute of ingenuity or invention”
            To be patentable, an invention must require “more ingenuity and skill” than that held by “an ordinary mechanic acquainted with the business”
            Doorknob made of clay or porcelain (rather than wood or metal) deemed to fail this requirement
          1850-1950: Vague and Shifting Doctrine
            Cuno Corp. (SCOTUS 1941): need “flash of creative genius”
          1952: Congress adds section 103
          1952-1966: Confusion re impact of 103
          Graham (SCt 1966)
            “Under §103, the scope and content of the prior art are to be determined; differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved. Against this background the obviousness or nonobviousness of the subject matter is determined. Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented.”
          1966-1982: Circuit courts diverge
            2nd Circuit upholds only 4.8% of challenged patents
            8th Circuit: 6%
            1st, 3rd, 6th, 7th, 9th, 10th Circuits: around 19%
            4th and 5th Circuits: around 40%
          1982-2007: Federal Circuit relaxes the standard
            increased reliance on secondary factors
            TSM test
              challenger must identify some teaching, suggestion, or motivation to combine prior-art references
              E.g., Al-site Corp. (CAFC 1999)
          1973-2004: Changing scope of prior art
            courts gradually expand scope of 103 prior art to match 102
            partially offsetting series of statutes, excluding prior art developed by patentee or affiliates
          KSR (SCt 2007)
            reject "rigid application" of TSM test
              “ We begin by rejecting the rigid approach of the Court of Appeals. Throughout this Court’s engagement with the question of obviousness, our cases have set forth an expansive and flexible approach inconsistent with the way the Court of Appeals applied its TSM test here....”
              “ Helpful insights, however, need not become rigid and mandatory formulas; and when it is so applied, the TSMtest is incompatible with our precedents. The obviousness analysis cannot be confined by a formalistic conception ofthe words teaching, suggestion, and motivation, or by overemphasis on the importance of published articles and the explicit content of issued patents.”
            Suggest revival of “obvious to try” as one way of establishing obviousness
              “ The same constricted analysis led the Court of Appeals to conclude, in error, that a patent claim cannot be proved obvious merely by showing that the combination of elements was “obvious to try.” ... When there is a design need or market pressure to solve a problem and there are a finite number of identified, predictable solutions, a person of ordinary skill has good reason to pursue the known options within his or her technical grasp. If this leads to the anticipated success, it is likely the product not of innovation but of ordinary skill and common sense. In that instance the fact that a combination was obvious to try might show that it was obvious under §103.”
            Express skepticism concerning non-obviousness of combination patents
              “The combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results. “
              “ When a work is available in one field of endeavor, design incentives and other market forces can prompt variations of it, either in the same field or a different one. If a person of ordinary skill can implement a predictable variation, §103 likely bars its patentability. For the same reason, if a technique has been used to improve one device, and a person of ordinary skill in the art would recognize that it would improve similar devices in the same way, using the technique is obvious unless its actual application is beyond his or her skill.”
            increase somewhat the creativity attributed to a PHOSITA
              “The second error of the Court of Appeals lay in its assumption that a person of ordinary skill attempting to solve a problem will be led only to those elements of prior art designed to solve the same problem. ... Common sense teaches, however, that familiar items may have obvious uses beyond their primary purposes, and in many cases a person of ordinary skill will be able to fit theteachings of multiple patents together like pieces of a puzzle.”
            Don’t overstate the hazard of hindsight bias
              “ A factfinder should be aware, of course, of the distortion caused by hindsight bias and must be cautious of arguments reliant upon ex post reasoning. ... Rigid preventative rules that deny factfinders recourse to common sense, however, are neither necessary under our case law nor consistent with it.”
          AIA
            Relevant date for assessing obviousness is date of filing, not date of invention
            Simplify mechanism for identifying relevant prior art
              Incorporate by reference definition of prior art under 102
              Limited (as before) by requirement that the art be “analogous”
          Empirical studies of the Impact of the Changing Standard
            John R. Allison & Mark A. Lemley, Empirical Evidence on the Validity of Litigated Patents, 26 AIPLA Q.J. 185 (1998)
            Sean M. McEldowney, New Insights on the “Death” of Obviousness: An Empirical Study of District Court Obviousness Opinions, 2006 Stanford Technology Law Review 4
            Lee Petherbridge & R. Polk Wagner, The Federal Circuit and Patentability: An Empirical Assessment of the Law of Obviousness, 85 Texas Law Review 2051 (2007)
            Christopher A. Cotropia, Nonobviousness and the Federal Circuit: An Empirical Analysis of Recent Case Law, 82 Notre Dame Law Review 911 (2007)
            Ali Mojibi, An Empirical Study of the Effect of KSR v. Teleflex on the Federal Circuit’s Patent
Validity Jurisprudence, 20 Albany Law Journal of Science and Technology 559 (2010)
            Jason Rantanen, The Federal Circuit’s New Obviousness Jurisprudence: An Empirical Study, 16 Stanford Technology Law Review 709 (2013)
            Gregory Mandel, “ A Nonobvious Comparison: Nonobviousness Decisions at the PTAB and in the Federal Courts” 24 Texas Intellectual Property Law Review (2017)
        Other jurisdictions
      Policies
        Welfare Theory
          a. We should not incur unnecessary social costs by extending monopoly protection to inventions that would have emerged (soon) even in the absence of the carrot of a patent
            Roberts v. Sears (CA7 1983)(Posner, J.)
            “ [T]he costs as well as benefits of patent protection are relevant to deciding which inventions should be patentable. The balance tips against protection when the invention is the sort that was likely to be made, and as soon, even if no one could have patented it. In such a case patent protection would have no good incentive effects but would have the usual bad monopoly effects.
            All this is well recognized in the law. The Supreme Court in the Graham case, referring to Thomas Jefferson's views on patent policy, said it was "the underlying policy of the patent system that 'the things which are worth to the public the embarrassment of an exclusive patent,' as Jefferson put it, must outweigh the restrictive effect of the limited patent monopoly. The inherent problem was to develop some means of weeding out those inventions which would not be disclosed or devised but for the inducement of a patent."
            The means chosen was the concept codified in the statutory term "obvious." The term identifies the cases in which patent protection is not necessary to induce invention and would therefore visit the costs of monopoly on the consuming public with no offsetting gains.
              As Professor Kitch has explained, "the basic principle on which the non-obviousness test is based [is that] a patent should not be granted for an innovation unless the innovation would have been unlikely to have been developed absent the prospect of a patent . . . . The non-obviousness test makes an effort, necessarily an awkward one, to sort out those innovations that would not be developed absent a patent system." Kitch, Graham v. John Deere Co.: New Standards for Patents, 1966 Sup. Ct. Rev. 293, 301.
              Now it is true that if the invention, though the sort of thing that ordinarily would be expected to take much time and toil to make, was made in a flash of genius, this does not make it "obvious." That is the force of the last sentence of section 103 ("Patentability shall not be negatived by the manner in which the invention was made"), as explained in the Reviser's Note. Much time and toil may have been spent in getting to the point where the spark of genius could be struck, and in any event people should not be encouraged to do drudge work by making it a condition of obtaining patent protection. But if a court thinks an invention for which a patent is being sought would have been made as soon or almost as soon as it was made even if there were no patent laws, then it must pronounce the invention obvious and the patent invalid.
          b. The non-obviousness requirement helps offset distortions caused by risk aversion
            Robert Merges, “Uncertainty and the Standard of Patentability” (1992), pp. 43-51
            Patent doctrine tempered by non obviousness requirement increases the expected value of risky R&D investments more than the expected value of safe R&D investments
            That, in turn, will mitigate the socially inefficient tendency of R&D managers to select safe investments instead of risky ones, even when the expected values of the former is less than that of the latter
            Illustration
        Fairness Theory
          a. Only especially creative labor merits the reward of intellectual property
            Lawrence Becker, “Deserving to Own Intellectual Property” (1993)
              A ... version of the desert-for-labor argument has to do with the way in which the laborer can come to have special needs that can appropriately be met by the award of property rights. Suppose we argue as follows:
              (a) Laborers sometimes become dependent on their products in a way connected to their identity as persons, so that the welfare
of the product is related directly to their (psychological) integrity or welfare as persons. Let us call this relation identity-dependence.
              (b) Identity-dependence on the products of one's labor constitutes having a basic personal need for the welfare of those products.
              (c) If a basic personal need is generated and sustained by social norms, and if one's meeting that personal need requires the help of additional social norms, then either i) the help should be given, or ii) the need-sustaining norms should be changed.
              (d) Identity-dependence on the products of one's intellectual labor is generated and sustained by social norms that identify human excellence with authorship, originality, and singularity, and which encourage the author-identification of products.
              (e) Ownership norms sometimes help meet the basic personal needs of identity-dependence on the products of one's intellectual labor.
          b. Locke’s “sufficiency” proviso forbids grants of (intellectual) property to things that would soon be invented by others
            Robert Nozick, Anarchy, State, and Utopia
              Extending patent protection to an invention that would have emerged (soon) leaves both other inventors and consumers worse off than if not such property rights were available
              Problem could be avoided if “independent invention” were a defense (as it is in copyright law)
                “An inventor's patent does not deprive others of an object which would not exist if not for the inventor. Yet patents would have this effect on others who independently invent the object. Therefore, these independent inventors, upon whom the burden of proving independent discovery may rest, should not be excluded from utilizing their own invention as they wish (including selling it to others). Furthermore, a known inventor drastically lessens the chances of actual independent invention. For persons who know of an invention usually will not try to reinvent it, and the notion of independent discovery here would be murky at best. Yet we may assume that in the absence of knowledge of the invention, for independent discovery.”
      USA
        statutory basis:
35 USC 103
          Old Rules
            (a) A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. Patentability shall not be negatived by the manner in which the invention was made.
            (b) [Biotechnological Processes]
              (1) Notwithstanding subsection (a), and upon
timely election by the applicant for patent to
proceed under this subsection, a biotechnological process using or resulting in a composition of matter that is novel under section 102 and nonobvious under subsection (a) of this section shall be considered nonobvious if--
                (A) claims to the process and the composition
of matter are contained in either the same
application for patent or in separate applications having the same effective filing date; and
                (B) the composition of matter, and the process
at the time it was invented, were owned by the
same person or subject to an obligation of
assignment to the same person.
              (2) A patent issued on a process under paragraph (1)--
                (A) shall also contain the claims to the
composition of matter used in or made
by that process, or
                (B) shall, if such composition of matter is
claimed in another patent, be set to expire
on the same date as such other patent,
notwithstanding section 154 [35 USCS § 154].
              (3) For purposes of paragraph (1), the
term "biotechnological process" means--
                (A) a process of genetically altering or
otherwise inducing a single- or
multi-celled organism to--
                  (i) express an exogenous nucleotide sequence,
                  (ii) inhibit, eliminate, augment, or alter expression of an endogenous nucleotide sequence, or
                  (iii) express a specific physiological characteristic not naturally associated with said organism;
                (B) cell fusion procedures yielding a
cell line that expresses a specific protein,
such as a monoclonal antibody; and
                (C) a method of using a product produced
by a process defined by subparagraph
(A) or (B), or a combination of
subparagraphs (A) and (B).
            (c) ["Bass disqualifier"]
              (1) Subject matter developed by another person, which qualifies as prior art only under one or more of subsections (e), (f), and (g) of section 102 of this title, shall not preclude patentability under this section where the subject matter and the claimed invention were, at the time the claimed invention was made, owned by the same person or subject to an obligation of assignment to the same person.
              (2) For purposes of this subsection, subject matter developed by another person and a claimed invention shall be deemed to have been owned by the same person or subject to an obligation of assignment to the same person if--
                (A) the claimed invention was made by or on behalf of parties to a joint research agreement that was in effect on or before the date the claimed invention was made;
                (B) the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and
                (C) the application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the joint research agreement.
              (3) For purposes of paragraph (2), the term
"joint research agreement" means a written
contract, grant, or cooperative agreement
entered into by two or more persons or entities
for the performance of experimental,
developmental, or research work in the field
of the claimed invention.
          New Rules
            A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.
        Consider three variables:
          (a) scope and content of the prior art
            "prior art" now includes all types of prior art under 102
              including secret prior art under 102(e)
            provided that the prior art in question is "analogous"
              ie., either within the same field of endeavor as the invention
              or reasonably pertinent to the same problem as that addressed by the invention
            Exclusions of prior art developed by patentee or affiliates
              "Bass disqualifier"
              AIPA (1999)
              CREATE Act of 2004
          (b) gap between prior art and claims
          (c) level of skill in the art
            Factors include:
              Education level of typical worker in the field
              Education level of the inventor(s)
                Daiichi (CAFC 2007)
              Kinds of problems typically encountered in the field
              Pace on innovation in the field
              Sophistication and difficulty of the technology in the field
          “Against this background the obviousness or nonobviousness of the subject matter is determined.”
            Test: Would the invention, as claimed, have been obvious to a PHOSITA
        “Secondary factors”
          commercial success
            must show "nexus" between the invention and the commercial success of the product (or process) embodying it
            Novartis (CAFC 2017) in addition requires demonstration of nexus between the aspect of the invention that reflects an inventive step and commercial success
          long-felt need
          failure of others
          unexpected results
          Skepticism of experts prior to invention
          Industry praise after invention
          copying by others
          public recognition of patentee as the inventor
            e.g., through licensing
          simultaneous invention by others
            currently given very little weight
          Illustration: World Bottling Cap (PTAB 2017)
        Ancillary Tests
          TSM requirement rejected in KSR
            But such motivating circumstances are still relevant
          "obvious to try" test
            At the time of the invention, would it have been obvious to a PHOSITA to try the particularly combination of elements that eventually produced the invention? If so, the invention is obvious.
            rejected by CAFC in In re Deuel (1995)
            Revived by KSR (SCOTUS 2007)
            Current scope of the test varies by CAFC panels
              Leo Pharma 2013
              Sanofi 2014
              Hoffmann 2014
          prior art "taught away"
        Standard of Review
          Nonobviousness is a question of law
            Determinations are thus subject to de novo review
          but depends on factual findings, which are reviewed under different standards:
            if by PTO, "substantial evidence" test
            if by District Court judge, "clearly erroneous" standard
            if by jury, "substantial evidence" test
        Illustration
          Kraft v. Kellogg (2017)
            Patent
            Decision
      EPC
      China
      Japan
      Korea
        statutory basis: Article 29
          Article 29 (Requirements for Patentability)
            (1) An invention having industrial applicability, other than the following, is patentable:
              1. An invention publicly known or practiced in the Republic of Korea or in a foreign country prior to the filing of a patent application;
              2. An invention published in a publication distributed in the Republic of Korea or in a foreign country or an invention made available to the public via telecommunications lines prior to the filing of a patent application.
            (2) Notwithstanding paragraph (1), an invention that can be made easily by a person with ordinary skill in the art to which the invention pertains, from the invention referred in any subparagraph of paragraph (1), prior to the filing of a patent application, shall not be patentable.
        Guidelines
          Patent Examination Guidelines
            Part III (Requirements for Patentability)
              Chapter 2. “Novelty”
              Chapter 3. “Inventive Step”
            Part IV (Amendment of Specification, Claims, or Drawing[s])
            Part V (Examination Procedure)
              Chapter 2. “Search for Prior Art”
              Chapter 3. “Examination Process”
            Part IX (Examination Criteria by Technology)
        Illustration
          Korea’s inventive step in comparison (C-J-K)
          Illustrative cases
            On how to read prior art in making an inventive step determination
              Supreme Court decision 2013 Hu 2873 + 2880 (consolidated)
                clarified that prior art must be considered as a whole:
                  “...to determine the inventiveness of an invention, the prior art should be considered in its entirety...not just from the portion of prior art...”
                  “...when a different prior art is presented which is contradictory to the (portion of) prior art, then this prior art reference must also be considered...when determining the inventive step.”
            Case where the inventive step of the parameter or numerically limited range of the subject invention is denied by the combination of Prior Arts
              Patent Court decision 2017 Heo 3720 (decided January 25, 2019)
                “ If the parameters are expressed by changing only the expression of the properties of characteristics of a publicly known product by a prior invention, the parameter invention must be regarded as being essentially the same or similar to the prior invention, thereby lacking the novelty and inventive step. On the other hand, the inventive step may not be denied if the parameter as a technical means for solving a different problem from publicly known inventions has significance, and the descriptions that there is a causal relationship between the parameter and the peculiar effect such as heterogeneous effect is described in the specification in detail, or a person having ordinary skill in the art (a “skilled person”) is able to infer the above significance as a technical means and the causal relationship from the description of the specification. Even if the above technical significance cannot be recognized with the introduction of the parameter itself, if the parameter invention can also be a numerical limitation invention and significant difference occurs between in and out of a limited numerical range, the inventive step should not be denied. ”
            On (1) the elements required to deny the novelty of selective invention; (2) the elements to recognize that the detailed description of selective invention states conspicuous differences in effect compared to the preceding invention so that the inventive step of selective invention is not denied
              Supreme Court decision 2008 Hu 736 + 743 (decided October 15, 2009) [Revocation of Registration (Patent)]
            On the criteria to determine an inventive step in the case of a patented invention which uses specific numerical values to express the scope of elements for a publicly known invention
              Supreme Court decision 2008 Hu 4998 (decided August 19, 2010) [Invalidity of Registration (Patent)]
            On the inventive step in a case where an invention can easily be invented by a person of ordinary skill in the art based on the compared invention(s) and widely-known and commonly-used technology
              Patent Court decision 2013 Heo 5803 (decided January 10, 2014) [Refusal of Registration (Patent)]
            On the process by which inventive step is determined
              Patent Court decision 2008 Heo 8792 (in Korean)
  Subject Matter
    General Principles
      Potential Reasons for Limiting Subject Matter
        1. Necessary Evil
          Patents have socially undesirable side effects; they should be used only when essential to stimulate innovative activity that otherwise would not occur
          e.g., Senator Frist, justifying 35 USC 287(c)
            “[I]nnovations in surgical and medical procedures do not require the midwifery of patent law."
        2. Excessive Scope
          Patents should not reach unduly large territories
        3. Proportionality
          The rights conferred by a patent should be proportional to the effort that went into it and/or to the benefit it confers on society
          e.g., DDR Holdings (CAFC 2014) (Mayer dissenting)
            “ The potential scope of DDR's patents is staggering, arguably covering vast swaths of Internet commerce. DDR has already brought infringement actions against ten defendants, including Digital River, Inc., Expedia, Inc., Travelocity.com, L.P., and Orbitz Worldwide, LLC. See J.A. 255-63; ante at 1250. DDR's claims are patent ineligible because their broad and sweeping reach is vastly disproportionate to their minimal technological disclosure. See Mayo, 132 S.Ct. at 1303 (In assessing patent eligibility, "the underlying functional concern ... is a relative one: how much future innovation is foreclosed relative to the contribution of the inventor.”).”
        4. Protect Opportunities for Downstream Innovation
          e.g., Myriad/Mayo
            “We have “long held that this provision contains an important implicit exception[:] Laws of nature, natural phenomena, and abstract ideas are not patentable.” Mayo, (slip op., at 1) Rather, “‘they are the basic tools of scientific and technological work’” that lie beyond the domain of patent protection. As the Court has explained, without this exception, there would be considerable danger that the grant of patents would “tie up” the use of such tools and thereby “inhibit future innovation premised upon them.” This would be at odds with the very point of patents, which exist to promote creation.”
        5. Nationalism/Mercantilism
          If lawmakers in country A think that firms in country A lead in technological development with respect to field X, then they should advocate extension of subject-matter coverage to inventions in field X, both domestically and internationally
          If lawmakers in country A think that firms in country A do (and will) lag firms in other countries with respect to field X, then they should advocate elimination of subject-matter coverage to inventions in field X, both domestically and internationally
        6. Hubris
          Humans should not assert rights to the work of the gods
        7. Pandora’s Box
          Unconstrained curiosity will release uncontrollable evils into the world
          Patent law should not encourage inventive activity in sectors that will plague humanity
        8. Sector-Specific Opposition to Privatization
          e.g., Hippocratic Oath with respect to medical procedures
            Louis Lasagna version (1964)
              I swear to fulfill, to the best of my ability and judgment, this covenant:
              I will respect the hard-won scientific gains of those physicians in whose steps I walk, and gladly share such knowledge as is mine with those who are to follow.
              I will apply, for the benefit of the sick, all measures [that] are required, avoiding those twin traps of overtreatment and therapeutic nihilism.
              I will remember that there is art to medicine as well as science, and that warmth, sympathy, and understanding may outweigh the surgeon's knife or the chemist's drug.
              I will not be ashamed to say "I know not," nor will I fail to call in my colleagues when the skills of another are needed for a patient's recovery.
              I will respect the privacy of my patients, for their problems are not disclosed to me that the world may know. Most especially must I tread with care in matters of life and death. If it is given me to save a life, all thanks. But it may also be within my power to take a life; this awesome responsibility must be faced with great humbleness and awareness of my own frailty. Above all, I must not play at God.
              I will remember that I do not treat a fever chart, a cancerous growth, but a sick human being, whose illness may affect the person's family and economic stability. My responsibility includes these related problems, if I am to care adequately for the sick.
              I will prevent disease whenever I can, for prevention is preferable to cure.
              I will remember that I remain a member of society, with special obligations to all my fellow human beings, those sound of mind and body as well as the infirm.
              If I do not violate this oath, may I enjoy life and art, respected while I live and remembered with affection thereafter. May I always act so as to preserve the finest traditions of my calling and may I long experience the joy of healing those who seek my help.
          e.g., Free Software Movement
            Ricard Stallman’s manifesto
              Users' control over the program requires four essential freedoms.
              (0) The freedom to run the program as you wish, for whatever purpose.
              (1) The freedom to study the program's “source code”, and change it, so the program does your computing as you wish. Programs are written by programmers in a programming language—like English combined with algebra—and that form of the program is the “source code”. Anyone who knows programming, and has the program in source code form, can read the source code, understand its functioning, and change it too. When all you get is the executable form, a series of numbers that are efficient for the computer to run but extremely hard for a human being to understand, understanding and changing the program in that form are forbiddingly hard.
              (2) The freedom to make and distribute exact copies when you wish. (It is not an obligation; doing this is your choice. If the program is free, that doesn't mean someone has an obligation to offer you a copy, or that you have an obligation to offer him a copy. Distributing a program to users without freedom mistreats them; however, choosing not to distribute the program—using it privately—does not mistreat anyone.)
              (3) The freedom to make and distribute copies of your modified versions, when you wish.
            e.g., Eben Moglen, “dotCommunist Manifesto”
    USA
      Constitution, Art I, Section 8, Clause 8
        "The Congress shall have power … to promote the Progress of science and useful arts, by securing for limited times to authors and inventors, the exclusive right to their respective Writings and Discoveries"
      35 USC 101
        Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”
      Specific Subjects
        Life Forms
          Microorganisms
            Diamond v. Chakrabarty (1980) (5/4)
              Facts: “This human-made, genetically engineered bacterium is capable of breaking down multiple components of crude oil. Because of this property, which is possessed by no naturally occurring bacteria, Chakrabarty's invention is believed to have significant value for the treatment of oil spills.”
              “The Committee Reports accompanying the 1952 Act inform us that Congress intended statutory subject matter to "include anything under the sun that is made by man." S.Rep.No.1979, 82d Cong., 2d Sess., 5 (1952); H.R.Rep.No.1923, 82d Cong., 2d Sess., 6 (1952).”
              “[T]he patentee has produced a new bacterium with markedly different characteristics from any found in nature and one having the potential for significant utility. His discovery is not nature's handiwork, but his own; accordingly it is patentable subject matter.”
          Plants
            International
Agreements
              UPOV
                History
                  Union International Pour La Protection des Obtentions Vegetales
                  Formed 1961
                  Modified 1972, 1978, 1991
                  USA joins 1978 version in 1981, with reservation to avoid exclusivity
                  USA joins 1991 version in 1999
                  Membership: 54 Countries
                Content
                  Member states must provide protection for new, distinct, uniform, stable plant varieties
                    Arts. 2, 5-9
                  Breeder's rights shall include, with respect to the protected variety and to any "essentially derived" variety, the following exclusive rights: (Art. 14)
                    reproduction
                    conditioning for the purpose of propagation
                    sale or offering to sell
                    importing or exporting
                  Exceptions (Arts. 15-16)
                    private and noncommercial acts
                    acts for experimental purposes
                    acts for the purpose of breeding other varieties
                    (optional) farmers' right to save and plant seeds
                  Duration (Art. 19)
                    20 years from grant
                    for trees and vines, 25 years from grant
                  National Treatment Principle (Art. 4)
                  1-year priority right (Art. 11)
              TRIPS
                Member states may decline to provide patent protection for plants -- Art. 27(3)(6)
                But if so, must provide "sui generis" protection
            Plant Protection Act (1930)
              subject matter
                new, manmade plant varieties
                  variety = subspecies showing distinctive characteristics
                  no protection for discovered naturally occurring varieties
                  but protection does extend to "cultivated" new varieties, even if they arise spontaneously
              requirements
                ordinary utility patent requirements, except:
                  disclosure and enablement satisfied if written description is as complete as "reasonably possible"
              infringement
                reproduction through grafting or other forms of asexual reproduction, or sale of asexually reproduced copies
                n.a. to reproduction through seeds
                n.a. to independent invention
                  Imazio Nursery (CAFC 1995)
              in practice
                shields nurseries against reproduction of ornamental plants and fruits
                  examples
                largely irrelevant to food staples
            Plant Variety Protection Act
              Subject Matter
                plant variety = "a plant grouping within a single botanical taxon of the lowest rank"
                  7 USC 2401(a)(9)
              Requirements
                new
                  as of the time of application, the variety has not been sold or given, by the breeder or with his consent, to anyone
                    in US, more than 1 year before
                    outside the US, more than 4 years before (or 6 years before, if it's a tee or vine)
                distinct
                  clearly differentiable from any other known variety
                uniform
                  any variations are describable, predictable, and commercially acceptable
                stable
                  if reproduced, will remain stable to essential characteristics
              Procedure
                examination by Plant Variety Protection Office (within USDA)
                  seed deposit
                administrative appeal to Plant Variety Protection Board
                judicial appeal to District Court or CAFC
              Infringement
                sell, offer to sell, or transfer possession
                  Delta & Pine Land Co. (CAFC 1999): requires scienter
                    defendant knows or has reason to know that transfer is infringing
                import or export
                reproduce
                use the variety in producing a hybrid
              Exceptions
                "any act done privately and for noncommercial purposes"
                plant breeding
                bona fide research
                "saved seed" for use on the farm
                  Asgrow (1995): a farmer who meets the requirements set forth in sec 2543's proviso may sell for reproductive purposes only such seed as he has saved for the purpose for replanting his own acreage
                compulsory license
                  Secretary of Agriculture may order, for 2 years, provided
                    (a) reasonable royalty
                    (b) necessary to maintain adequate food supply
              Scope
                the variety itself
                a variety "essentially derived" from the protected variety
                no equivalents doctrine
                practical effect: almost impossible to infringe unless you begin with the protected variety itself
                  analogous to copyright
                  contrast patent
              Term
                20 years from grant
                25 years from grant for trees and vines
              In practice
                primarily used to shield new forms of staple crops
                  soybeans
                  corn
                Usage data
                very little litigation
or licensing
                  suits mostly against farmers who exceed "saved seed" exemption
                easy for competitors to circumvent
              Is it effective?
                i.e., does it stimulate R&D in plant varieties?
                enthusiasts
                  Gasser & Fraley, "Genetically Engineering Plants" (1989)
                  Lesser & Mason, Economic Analysis of the PVPA (1985)
                  Evanson, "IP Rights and Agribusiness" (1983)
                skeptics
                  Kloppenberg, "First the Seed" (1988)
                  Butler (1985 & 1996)
                  Alston & Venner, "The Impact of the PVPA on Wheat" (2000)
                  Janis & Kesan, "Sound and Fury" (2002)
            Utility Patents
              extended to new, manmade plant varieties
                Hibberd (1985)
                  PTO practice post Hibberd: 1800 patents on plants
                Pioneer Hi-Bred (2001)
              requirements
                utility
                novelty
                nonobviousness
                disclosure
                  PTO Regs: depositing seeds in depository open to the public is sufficient
              infringement
                "make, use, or sell" the patented plant
                  does this reach "innocent infringement"?
                    e.g., by pollen drift
                  Cf. Schmeiser v. Monsanto (Canada 2002)
                    Schmeiser's replication of "Roundup Ready" canola was not innocent because he know or had reason to know of the patent
                  North Dakota statute: patentees must designate "independent laboratories" to test crops to determine patent infringement
                potentially more expansive claims than under PPA or PVPA
                equivalents doctrine
              exceptions
                experimental use
                  Should it be expanded to parallel breeder's exemption under PVPA?
                no "saved seed" exception
                  Monsanto v. McFarling (CAFC 2002)
              usage
                likely to rise with perceived inadequacy of PVPA
                likely to rise with increased economic importance of genetically modified crops
            Nonpatent forms of protection
              Trademark
                Passing Off Theory
                  Y produces new plant variety
                  advertises and sells seeds as X's
                Reverse Passing Off Theory
                  Y buys X's seeds, reproduces them
                  sells them as Y's new variety
                Registration Systems
                  Creator of a new plant variety registers it
                  Creator is then protected against passing off by competitors
                  France, Netherlands, Germany
              Contracts
                "Bag Tag" Licenses
                  "Resale of this seed for planting is strictly prohibited"
                  seeds may be used for planting a commercial crop only in a single season
                  purchaser may not save any seed for replanting or supply saved seed to anyone for replanting
                enforceable?
                  arguably illegitimately curtails doctrine of patent exhaustion
                  arguably a contract of adhesion
                    cf. Clevenger dissent in McFarling
              Technology
                terminator genes
          Animals
            Animals are patentable
              Ex parte Allen (1987)
              ALDF v. Quigg (CAFC 1991)
            No patents on claims on or "encompassing" a human being
              Newman (PTO final rejection (2004))
              Weldon Amendment (2004)
              AIA 33(a) (2011)
            Cloned animals are not patentable
              In re Roslin Institute (CAFC 2014)
                “ Here, as in Myriad, Roslin "did not create or alter any of the genetic information" of its claimed clones, "[n]or did [Roslin] create or alter the genetic structure of [the] DNA" used to make its clones. Myriad, 133 S.Ct. at 2116. Instead, Roslin's chief innovation was the preservation of the donor DNA such that the clone is an exact copy of the mammal from which the somatic cell was taken. Such a copy is not eligible for patent protection.”
        Stem Cells
          Patentable in US, China, India
          Brustle v. Greenpeace (ECJ 2011)
            Stem cell patents challenged as inconsistent with EU Biotechnology Directive
            Holding: An invention is excluded from
patentability if the process requires either
the prior destruction of human embryos or
their prior use as base material, even if the
application does not refer to the use of
human embryos. Furthermore, the CJEU
concluded that scientific research entailing the use of human embryos cannot
access the protection of patent law
        Genes
          USA
            Background: fluctuating judicial treatment of patents on isolated forms of naturally occurring substances
              Parke-Davis (1911) (adrenalin)
                “[E]ven if it were merely an extracted product without change, there is no rule that such products are not patentable. Takamine [the inventor] was the first to make it available for any use by removing it from the other gland-tissue in which it was found, and, while it is of course possible logically to call this a purification of the principle, it became for every practical purpose a new thing commercially and therapeutically. That was a good ground for a patent.” Parke-Davis & Co. v. H.K. Mulford Co., 189 F. 95, 103 (C.C.S.D.N.Y. 1911) (L. Hand)
                Jon Harkness characterizes the decision as an “under-informed mistake”
              Funk Bros. (SCOTUS 1948)
                Facts
                  Inventor discovers that certain strains of bacteria that help some plants remove nitrogen from the air do not interfere with one another
                  Inventor combines the strains into a single inoculant -- and seeks a patent on it
                Result: Composition is not eligible for protection because inventor did not alter the bacteria
              lsolated natural genes demed patentable
                aprx. 20,000 patents in USA on isolated DNA sequences
            Myriad Genetics
              Facts
                Myriad discovers and isolates two genes, mutations in which sharply increase the risk of breast and ovarian cancer
                Myriad is granted product patents on both the naturally occurring sequences and the corresponding complementary DNS sequences (synthesized from the messenger RNA, which in turn is naturally generated by the DNA sequences)
              Procedural History
                SDNY (March 2010): Naturally occurring genes are not patentable
                  they are "directed to a law of nature and therefore improperly granted"
                Intense debate over policies implicated by the ruling
                  US DOJ, over objections of PTO, supports the ruling
                    although criticizes Judge Sweet's opinion, to the extent it suggested that even manipulated forms of genes are not patentable
                  Steven Salzburg endorsement (Forbes 2010)
                CAFC (July 2011) reverses SDNY, upholds validity of patents on genes
                In 2012, SCOTUS vacates and remands for reconsideration in light of Mayo
                CAFC (August 2012) reiterates position in favor of patentability
              SCOTUS
                “[A] naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated, but ... cDNA is patent eligible because it is not naturally occurring.”
                  1. “[G]enes and the information they encode are not patent eligible under §101 simply because they have been isolated from the surrounding genetic material.”
                    “Nor are Myriad’s claims saved by the fact that isolating DNA from the human genome severs chemical bonds and thereby creates a nonnaturally occurring molecule. Myriad’s claims are simply not expressed in terms of chemical composition, nor do they rely in any way on the chemical changes that result from the isolation of a particular section of DNA. Instead, the claims understandably focus on the genetic information encoded in the BRCA1 and BRCA2 genes. If the patents depended upon the creation of a unique molecule, then a would-be infringer could arguably avoid at least Myriad’s patent claims on entire genes (such as claims 1 and 2 of the ’282 patent) by isolating a DNA sequence that included both the BRCA1 or BRCA2 gene and one additional nucleotide pair.”
                  2. “cDNA does not present the same obstacles to patentability as naturally occurring, isolated DNA segments. --- [C]reation of a cDNA sequence from mRNA results in an exons-only molecule that is not naturally occurring.”
          Japan
            Genes, including DNA fragments, whose specific utility is known and disclosed, are patentable
          EPC
            Biotech Directive (1998)
              “ An element isolated from the human body or otherwise produced by means of a technical process, including the sequence or partial sequence of a gene, may constitute a patentable invention, even if the structure of that element is identical to that of a natural element.”
              Highly controversial
                Principal impetus: keep EU competitive with US and Japan in biotechnology
                Not fully implemented until 2005
                Reluctantly adopted by France, Germany, Netherlands
            Incorporated into EPC law through Implementing Regulations
              Rule 26(1)
              EPO Examination Guidelines
                5.2
                5.3
            ECJ (2001): Patenting of human genetic material does not violate principles of human dignity
            Net effect: An isolated gene is patentable, so long as the applicant specifies its industrial application
              Technical mistakes caused some of Myriad’s EPC BRCA patents to be narrowed, but the EPO rejected all subject-matter challenges to them
            Monsanto v. Cetera (ECJ 2010)
              Facts
                Monsanto holds EPO patents on roundup-ready soybeans (specifically, on the modified soybean DNA sequence that gives the plant resistance to roundup)
                  patent from EPO
                  but no patent in Argentina
                Cetera grows roundup-ready soybeans in Argentina, then imports soybean meal into Europe
                Monsanto alleges violation of Dutch patent, based upon importation of a product that contains an inactive ("dead") version of the patented gene
                Cetera defends on the ground that Dutch patent law is inconsistent with EU Biotechnology Directive
              Law
                Under EU Biotechnology Directive
                  The protection conferred by a patent on a product containing or consisting of genetic information shall extend to all material . . . in which the product is incorporated and in which the genetic information is contained and performs its function.
                But importation of a product containing an inactive form of the patented gene is not infringement
                  national patent laws that suggest it is infringement are invalid
              Impact
                considerable uncertainty remains concerning when a gene is inactive
                reflects growing hostility toward expansive deployments of gene patents
        Software
          U.S.
            1960s: CCPA forces PTO to increase availability of patent protection for software
              Prater (1969)
              Bernhart (1969)
                software for depicting three dimensional objects in two dimensions
                Held: A machine programmed in a new and nonobvious way is patentable
              Musgrave (1970)
            1970s: Supreme Court
applies the brakes
              Gottshalk v. Benson (1972)
                computerized process for converting binary-coded numerals to pure binary form
                Held: unpatentable because the invention claimed consists of no more than a mathematical algorithm; a patent would preempt its use
              Parker v. Flook (1978)
                computerized method for continuously recalculating the "alarm limit" during a chemical conversion process
                Held: unpatentable, because if one ignores the algorithm on which the process is based, the claimed invention contains nothing new or inventive
                Door left open a crack: "We do not hold that no process patent could ever qualify if it did not meet the requirements of our prior precedents. It is said that the decision precludes a patent for any program servicing a computer. We do not so hold."
            1980-2010:
Gradual Relaxation of
impediments
              CCPA
                "Freeman-Walker-Abele test"
                  If the claimed invention (a) directly or indirectly recites a mathematical algorithm, but (b) applies that algorithm in an otherwise statutory appparatus or process claim, it's patentable
                In re Freeman (1977)
                In re Walter (1980)
                In re Abele (1982)
              Supreme Court
                Diamond v. Diehr
(US 1981)
                  a process for continuously monitoring the temperature inside a synthetic rubber mold, using a computer and the well-known Arrhenius equation for measuring cure time as a function of temperature and other variables
                  Held: patentable, because this is an ordinary industrial process that happens to incorporate a computer program
              CAFC
                Iwahashi (1989)
                  voice pattern recognition software
                    incorporating improved technique for calculating autocorrelation coefficients
                    i.e., compaing short snippets of speech
                  held: fact that it was embedded in a read-only device made it a patentable machine or manufacture
                Arrhythmia (1992)
                  computerized method of analyzing electrocardiograph ("ECG") patterns to detect persons at risk for certain heart diseases
                  "These claimed steps of 'converting,' 'applying,' 'determining,' and "comparing' are physical process steps that transform one physical, electrical signal into another."
                Allappat (1994)
                  software for controlling the illumination of pixels on an oscilliscope to minimize discontinuity and jaggedness
                  Held: an algorithm embedded in general purpose computer is patentable
                State Street Bank (1998)
                  computerized hub & spoke accounting method
                  Transformation of data by a machine into a final share price constitutes a practical application of an algorithm and is therefore patentable subject matter
                  Repudiate "business methods" exception to patentability
                AT&T (1999)
              PTO
                1996 Guidelines
                  will accept applications for patents on software on disks
              Data
            2014 to present: Supreme Court applies the brakes again
              Alice (2014)
                facts
                  The claims at issue relate to a computerized scheme for mitigating “settlement risk”—i.e., the risk that only one party to an agreed-upon financial exchange will satisfy its obligation. In particular, the claims are designed to facilitate the exchange of financial obligations between two parties by using a computer system as a third-party intermediary.
                  The intermediary creates “shadow” credit and debit records (i.e., account ledgers) that mirror the balances in the parties’ real-world accounts at “exchange institutions” (e.g., banks). The intermediary updates the shadow records in real time as transactions are entered, allowing “only those transactions for which the parties’ updated shadow records indicate sufficient resources to satisfy their mutual obligations.”
                  At the end of the day, the intermediary instructs the relevant financial institutions to carry out the “permitted” transactions in accordance with the updated shadow records, thus mitigating the risk that only one party will perform the agreed-upon exchange.
                Holding
                  [A] framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts:
                    Step 1: First, we determine whether the claims at issue are directed to one of those patent-ineligible concepts.
                    Step 2: If so, we then ask, “[w]hat else is there in the claims before us?” To answer that question, we consider the elements of each claim both individually and “as an ordered combination” to determine whether the additional elements “transform the nature of the claim” into a patent-eligible application.
                      We have described step two of this analysis as a search for an “ ‘inventive concept’”—i.e., an element or combination of elements that is “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.”
                Applied
                  Step 1: “On their face, the claims before us are drawn to the concept of intermediated settlement, i.e., the use of a third party to mitigate settlement risk.
                    Like the risk hedging in Bilski, the concept of intermediated settlement is “ ‘a fundamental economic practice long prevalent in our system of commerce.’” ... Thus, intermediated settlement, like hedging, is an“abstract idea” beyond the scope of §101.”
                  Step 2: “We conclude that the method claims, which merely require generic computer implementation, fail to transform that abstract idea into a patent eligible invention. ...
                    Taking the claim elements separately, the function performed by the computer at each step of the process is “[p]urely conventional.” ... Petitioner’s claims to a computer system and a computer readable medium fail for substantially the same reasons. ... Put another way, the system claims are no different from the method claims in substance. The method claims recite the abstract idea implemented on a generic computer; the system claims recite a handful of generic computer components configured to implement the same idea.”
              CAFC caselaw since Alice
                Claims that pass step 1
                  DDR Holdings (2014)
                  Enfish (2016)
                  McRO (2016)
                    patent
                    opinion
                  Visual Memory (2017)
                    patent
                    opinion
                Claims that fail step 1, but pass step 2
                  Bascom (2016)
                Claims that fail step 1 and fail step 2
                  Digitech (2014)
                  buySafe (2014)
                  Ultramerical (2014)
                  Content Extraction (2014)
                  OP Technologies (2015)
                  IV v. Capital One (2015)
                  Mortgage Grader (2016)
                  Affinity Labs (2016)
                    patent
                    opinion
                  FairWarning (2016)
                    patent
                    opinion
                  Automation Middleware (2018)
                Procedure
                  Contested issues of fact with respect to step 2 will prevent summary judgment against patentee
                    Berkheimer (CAFC 2018)
                  But where no such contested issues exist, summary judgment is appropriate
                    BSG Tech (CAFC 2018)
          E.U.
        Business Methods
          USA
            Examples of BMPs
            History of Legal Treatment
              Before 1980: Business Methods were assumed to be outside patent protection
                Hotel Security (1908)
                Sterling (1934)
                Wait (1934)
                Patton (1942)
                Loew's Drive-in (1949)
                Murray (1988)
              1980-2000: Increased Receptivity to BMPs
                1980s and 1990s: PTO grants growing number of BMPs
                  many under auspices of loosening rules concerning software patents
                1996: PTO guidelines instruct examiners to treat BMPs like any other process patent applications
                State Street Bank (CAFC 1998)
                  facts
                    innovation
                    the patent
                  holding
                    applications for BMPs should be treated like any other process patent applications
                    a process is patent-eligible if it produces “a useful, concrete, and tangible result” — such as the transformation of financial data from one form to another form.
              1996-2010: Backlash
                Prior User right (1998)
                  Section 273: Defense to a suit for infringement of a BMP: defendant had in good faith both:
                    (a) reduced the invention to practice more than 1 year before filing date and
                    (b) commercially used the invention prior to filing date
                Nonobviousness challenges
                  e.g., Amazon "one click"
                SPER (March 2000)
                  more examiners for Class 705 hired
                  duty to consult more prior-art references
                  each allowed application is reviewed by second examiner
                eBay (SCOTUS 2006)
                  Justice Kennedy concurrence
                  See the “Remedies” section of this map
                Comiskey (CAFC 2007)
                  a claim reciting an algorithm or abstract idea can state statutory subject matter only if, as employed in the process, it is embodied in, operates on, transforms, or otherwise involves another class of statutory subject matter, i.e., a machine, manufacture, or composition of matter
                  the present statute does not allow patents to be issued on particular business systems—such as a particular type of arbitration—that depend entirely on the use of mental processes
                Net Impact
                  BMPs applied for and issued
                  Impact of SPER
                    large increase in prior-art references
                      roughly correlated with increase in patent quality
                        probability that patent will be found valid if challenged
                        i.e., strength in terms of novelty, nonobviousness, and enablement
                      Allison & Hunter 2005
                    Bad news: strategic drafting to avoid SPER
              Bilski (2010)
                facts
                  method of trading weather risks
                  claim 1:
                    1. A method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price comprising the steps of:
                    (a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumer;
                    (b) identifying market participants for said commodity having a counter-risk position to said consumers; and
                    (c) initiating a series of transactions between said commodity provider and said market participants at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions.
                  no reference to computer
software or apparatus
                procedural history
                  examiner rejects
                  BPAI affirms
                  CAFC orders en banc review
                    (1) Whether claim 1 of the 08/833,892 patent application claims patent-eligible subject matter under Section 101?
                    (2) What standard should govern in determining whether a process is patent-eligible subject matter under Section 101?
                    (3) Whether the claimed subject matter is not patent-eligible because it constitutes an abstract idea or mental process; when does a claim that constitutes both mental and physical steps create patent-eligible subject matter?
                    (4) Whether a method or process must result in a physical transformation of an article or be tied to a machine to be patent-eligible subject matter under Section 101?
                    (5) Whether it is appropriate to reconsider State Street Bank & Trust Co. v Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998), and AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352 (Fed. Cir. 1999), in this case and, if so, whether those cases should be overruled in any respect?
                  oral arguments heard
on May 8, 2008
                    PTO position
                      "process" limited to:
                        process limited to a particular apparatus (i.e., machine implemented)
                        process that operates to change materials to a different state or thing
                  CAFC decision
(en banc October 30, 2008)
                    Majority opinion
                      distance itself from State Street Bank
                      holding: "machine or transformation" test
                        For a claimed process to be patent-eligible under § 101, it is both necessary and sufficient that either:
                          (1) it is tied to a particular machine or apparatus, or
                          (2) it transforms a physical article or object into a different state or thing.
                      ambiguities
                        unclear whether recitation of implementation in a general-purpose computer will suffice
                          PTO takes the position: No
                            Ex parte Langemyr and Ex parte Wasynczuk
                    dissents
                      Mayer
                        would expressly overrule State Street and declare all BMPs unpatentable
                      Rader
                        would adhere to State Street test
                        Bilski patent should be rejected as an "abstract idea"
                      Newman
                        would adhere to State Street test
                        Bilski patent should be granted
                options presented to SCt
                  (1) Variations on Chakrabarty test
                    (a) reinstate Chakrabarty (1980)
                      patentable
                        anything under the sun made by man
                      unpatentable:
                        laws of nature
                        physical phenomena
                        abstract ideas
                    (b) Chakrabarty + exclusion for tax patents
                    (c) Chakrabarty + for business-method patents
                    (d) Chakrabarty + exclusion of algorithms not tied to physical elements or steps
                      Freeman-Walter-Abele test
                  (2) Variations on "Technical Aspect" Test
                    EU approach
                    cf. IBM amicus brief
                  (3) Variations on "Useful, Tangible, Result" Test
                    (a) reinstate State Street test
                    (b) State Street + requirement of physical steps
                      cf. Microsoft brief
                    (c) State Street + requirement of specific series of steps
                      cf. Yahoo! brief
                  (4) Variations on "machine or transformation" test
                    (a) CAFC decision in Bilski
                    (b) reject option of satisfying "machine" through recitation of general-purpose computer
                Result
                  reject blanket exclusion of business methods
                  reject "machine or transformation" test as the exclusive test, but approve it as one among many
                  reinstate, roughly, prior open-ended definitions of "process"
                  encourage CAFC to continue to look for ways of limiting BMPs to ensure they advance the purposes of the patent system
              2010-2014: Continued Controversy and Uncertainty
                2011 patent reform
                  defendants accused of infringing BMPs in financial services field can initiate post-grant PTO review of the patents
                  this option expires in 2020
                Cybersource (CAFC 2011)
                Ultramercial v. Hulu (2011)
                  [Overturned in the wake of Alice: Ultramercial (2014)]
                Dealertrack (2012)
                Fort Properties (2012)
              Now governed by Alice (see Software, above)
          EPC
          Japan
        Medical Procedures
          TRIPS 27(3)(A) permits exclusion
            3. Members may also exclude from patentability:
(a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals...
          The overwhelming majority of countries exclude medical procedures
            e.g., EPC 53: no patents
              European patents shall not be granted in respect of: ... (c) methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practised on the human or animal body; this provision shall not apply to products, in particular substances or compositions, for use in any of these methods.
          USA
            Statutory limitation on remedies
              Background
              US position after 1996: patents permissible but doctors and "related health care entities" are not subject to patent remedies for "performance" of "medical activities"
                287(c)
                  (1) With respect to a medical practitioner’s performance of a medical activity that constitutes an infringement under section 271(a) or (b), the provisions of sections 281, 283, 284, and 285 shall not apply against the medical practitioner or against a related health care entity with respect to such medical activity.
                  (2) For the purposes of this subsection:
                    (A) the term “medical activity” means the performance of a medical or surgical procedure on a body, but shall not include (i) the use of a patented machine, manufacture, or composition of matter in violation of such patent, (ii) the practice of a patented use of a composition of matter in violation of such patent, or (iii) the practice of a process in violation of a biotechnology patent.
                      [biotechnology patent = "a process of genetically altering of inducing a single or multi-celled organism" or "cell fusion procedures yielding a cell line that expresses a specific protein" or "methods of using a product produced" by the above processes.]
                    (B) the term “medical practitioner” means any natural person who is licensed by a State to provide the medical activity described in subsection (c)(1) or who is acting under the direction of such person in the performance of the medical activity.
                    (C) the term “related health care entity” shall mean an entity with which a medical practitioner has a professional affiliation under which the medical practitioner performs the medical activity, including but not limited to a nursing home, hospital, university, medical school, health maintenance organization, group medical practice, or a medical clinic.
                    (D) the term “professional affiliation” shall mean staff privileges, medical staff membership, employment or contractual relationship, partnership or ownership interest, academic appointment, or other affiliation under which a medical practitioner provides the medical activity on behalf of, or in association with, the health care entity.
                    (E) the term “body” shall mean a human body, organ or cadaver, or a nonhuman animal used in medical research or instruction directly relating to the treatment of humans.
                    (F) the term “patented use of a composition of matter” does not include a claim for a method of performing a medical or surgical procedure on a body that recites the use of a composition of matter where the use of that composition of matter does not directly contribute to achievement of the objective of the claimed method.
                    (G) the term “State” shall mean any State or territory of the United States, the District of Columbia, and the Commonwealth of Puerto Rico.
                  (3) This subsection does not apply to the activities of any person, or employee or agent of such person (regardless of whether such person is a tax exempt organization under section 501(c) of the Internal Revenue Code), who is engaged in the commercial development, manufacture, sale, importation, or distribution of a machine, manufacture, or composition of matter or the provision of pharmacy or clinical laboratory services (other than clinical laboratory services provided in a physician’s office), where such activities are:
                    (A) directly related to the commercial development, manufacture, sale, importation, or distribution of a machine, manufacture, or composition of matter or the provision of pharmacy or clinical laboratory services (other than clinical laboratory services provided in a physician’s office), and
                    (B) regulated under the Federal Food, Drug, and Cosmetic Act, the Public Health Service Act, or the Clinical Laboratories Improvement Act.
                  (4) This subsection shall not apply to any patent issued based on an application which has an effective filing date before September 30, 1996.
                Prospective only
            Judicial hostility toward patents on medical procedures increases
              Lab. Corp. v. Metabolit (2006)
              Mayo v. Prometheus (US 2012)
                facts
                  Patent
                    representative claim
                      "A method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising:
"(a) administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointestinal disorder; and
"(b) determining the level of 6-thioguanine in said subject having said immune-mediated gastrointestinal disorder, "wherein the level of 6-thioguanine less than about 230 pmol per 8x108 red blood cells indicates a need to increase the amount of said drug subsequently administered to said subject and
"wherein the level of 6-thioguanine greater than about 400 pmol per 8x108 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject."
                    gist of claims
                      administer a drug for inflammatory bowel disease
                      test for levels of resultant metabolite in the blood
                      administer more or less of the drug, depending on whether metabolite levels fall above or below specified range
                  Is suit barred by 287(c)?
                    Prometheus argued no
                      “ [W]hile “individual doctors generally are immune from suit, ... the commercial entities that enable and induce the infringement (such as Mayo’s for-profit laboratory) are not.” Brief for the Respondent in Opposition (to the petition for writ of certiorari), at 34.
                    AIPPI Amicus argued yes
                      However, 35 U.S.C. § 287(c) makes no distinction between “for- profit,” “not-for-profit,” and any other types of the defined “related health care entities” based upon financial motivation or any other criteria, for that matter; all are immune from suit unless one of the three § 287(c)(2)(A) exceptions applies.
                      Prometheus fails completely to explain why Mayo Clinic Rochester and its related Mayo Collaborative Services are not “related health care entities” within the meaning of 35 U.S.C. § 287(c)(2)(C) and (D), both entitled to be free from patent infringement suits of the instant type. In fact, AIPPI respectfully suggests that both named defendants are plainly “related health care entities” and that, accordingly, Congress has eliminated availability of a federal civil action for patent infringement of Prometheus’ patent against them.
                      The immunity from suit provided by Congress in 35 U.S.C. § 287(c)(1) should be given effect, and the case dismissed for lack of federal subject matter jurisdiction. That this issue apparently was not raised before either the District Court or the Federal Circuit is of no import, as it is hornbook law that “[o]bjections to subject-matter jurisdiction ... may be raised at any time.”
                CAFC
                  rely on "machine or transformation" test to uphold the patent against 101 challenge
                Supreme Court
                  reject patent on 101 grounds
                  "If a law of nature is not patentable, then neither is a process reciting a law of nature, unless that process has additional features that provide practical assurance that the process is more than a drafting effort designed to monopolize the law of nature itself. "
                  "Purely "conventional or obvious" "[pre]solution activity" is normally not sufficient to transform an unpatentable law of nature into a patent eligible application of such a law. "
                  Policy
                    “[P]atent law [should] not inhibit further discovery by improperly tying up the future use of laws of nature"
              Ariosa (CAFC)
            Impact on “personalized medicine”
              Adjustment of therapies to meet individual patient’s needs, often following diagnostic testing to ascertain individual characteristics
        Tax Strategies
          USA
            PTO begins to grant them in 1992
            1992-2011: pressure to eliminate these patents grows
              Equal Access to Tax Planning Act of 2011
              introduced in Senate, January 26, 2011
              accountants favor elimination of tax patents
                • Limits taxpayers’ ability to use fully tax law interpretations intended by Congress;
                • May cause some taxpayers to pay more tax than Congress intended or more than others similarly situated;
                • Complicates the provision of tax advice by professionals;
                • Hinders compliance by taxpayers;
                • Misleads taxpayers into believing that a patented strategy is valid under the tax law; and
                • Precludes tax professionals from challenging the validity of a patented strategy.
              criticism by tax professors
                Bernie Wolfman
            2011: eliminated
              American Invents Act, Section 14
                (a) IN GENERAL.--For purposes of evaluating an invention under section 102 or 103 of title 35, United States Code, any strategy for reducing, avoiding, or deferring tax liability, whether known or unknown at the time of the invention or application for patent, shall be deemed insufficient to differentiate a claimed invention from the prior art.
                (b) DEFINITION.--For purposes of this section, the term “tax liability” refers to any liability for a tax under any Federal, State, or local law, or the law of any foreign jurisdiction, including any statute, rule, regulation, or ordinance that levies, imposes, or assesses such tax liability.
                (c) EXCLUSIONS.--This section does not apply to that part of an invention that--
                  (1) is a method, apparatus, technology, computer program product, or system, that is used solely for preparing a tax or information return or other tax filing, including one that records, transmits, transfers, or organizes data related to such filing; or
                  (2) is a method, apparatus, technology, computer program product, or system used solely for financial management, to the extent that it is severable from any tax strategy or does not limit the use of any tax strategy by any taxpayer or tax advisor.
                (d) RULE OF CONSTRUCTION.--Nothing in this section shall be construed to imply that other business methods are patentable or that other business method patents are valid.
                (e) EFFECTIVE DATE; APPLICABILITY.--This section shall take effect on the date of the enactment of this Act and shall apply to any patent application that is pending on, or filed on or after, that date, and to any patent that is issued on or after that date.
          Other countries
            tax-strategy patents still available in Australia
        Sports Moves
          sports equipment
plainly patentable
          sports techniques patentable but controversial
        Designs
          Requirements
            Statute
              35 USC 171-173
                171(a): Whoever invents any new, original and ornamental design for an article of manufacture may obtain a patent therefor, subject to the conditions and requirements of this title.
                171(b): The provisions of this title relating to patents for inventions shall apply to patents for designs, except as otherwise provided.
            “Article of manufacture”
              Man-made tangible object
              Parts of objects are acceptable
                In re Zahn (1980) [ornamental shank of a drill bit]
              ephemeral “objects”
are acceptable
                In re Hruby (fountain)
            "Design"
              appearance
              Must be visible at some point
                e.g., In re Webb (CAFC 1990) (hip implant, shown in advertisements)
                  “ Hip stem prostheses of the design invented by Webb are metallic implants that are generally used by orthopedic surgeons to supplant the functioning of a diseased or broken femur, near the hip, where the femur is joined to the pelvis. According to Webb, and not disputed by the Patent and Trademark Office ("PTO"), surgeons are made aware of differing brands and types of prostheses through advertisements in professional journals and through trade shows, where the prostheses themselves are displayed. Advertisements that were put in the record prominently and visually display the features of the prostheses. Furthermore, the applicant's agent submitted that "an implant's appearance is observed by potential and actual purchasers, surgeons, nurses, operating room staff, and other hospital personnel." After purchase, the prosthesis is surgically implanted into a patient's body where the implant is to remain indefinitely. Neither party disputes that, after implantation, the prosthesis is no longer visible to the naked eye.”
            “Ornamental"
              Variety of interpretations
                Aesthetically pleasing
                Product of an artistic conception
                Manifesting grace or symmetry of form
              Cannot be “primarily functional”
                LA Gear (CAFC 1988)
                  facts
                  “ LAG correctly asserts that if a patented design is "primarily functional," rather than primarily ornamental, the patent is invalid. ... When function dictates a design, protection would not promote the decorative arts, a purpose of the design patent statute. ... There is no dispute that shoes are functional and that certain features of the shoe designs in issue perform functions. However, a distinction exists between the functionality of an article or features thereof and the functionality of the particular design of such article or features thereof that perform a function. Were that not true, it would not be possible to obtain a design patent on a utilitarian article of manufacture, see, e.g., Pacific Furniture Mfg. Co. v. Preview Furniture Corp., 800 F.2d 1111 (Fed. Cir. 1986) (design patent for chairs), or to obtain both design and utility patents on the same article, see, e.g., Carman Indus., Inc. v. Wahl, 724 F.2d 932, 938-39 (1958).
                  Quoting with approval the ruling of the District Court: “ But every function which [LAG] says is achieved by one of the component aspects of the sole in this case could be and has been achieved by different components. And that is a very persuasive rationale for the holding that the design overall is not primarily functional. Moreover, there is no function which even defendant assigns to the swirl effect around the pivot point, which swirl effect is a very important aspect of the design.”
                Ethicon (CAFC 2015)
                  Facts
                    “ The patents-in-suit are directed to surgical instruments that use ultrasonic energy created by blades vibrat- ing at high frequencies to cut tissue and blood vessels. These surgical instruments also use the heat generated from the friction of the blade vibrating against the blood vessel to coagulate and seal those blood vessels in order to prevent bleeding.”
                    “ The Design Patents claim particular ornamental designs of an ultrasonic surgical device. The D’801 patent claims a particular ornamental design of an inverted “U”-shaped trigger. The D’802 patent claims the overall appearance of the ornamental design of the “U”-shaped trigger and the particular ornamental design of a rounded and fluted torque knob positioned above and forward from the trigger. The D’803 patent claims the overall appearance of the ornamental design of the “U”-shaped trigger and the particular ornamental design of a rounded activation button positioned directly above the trigger. The D’804 patent claims the overall appearance of the ornamental designs of the “U”-shaped trigger, the fluted torque knob, and the rounded activation button, with the torque knob and the button positioned relative to the trigger as in the D’802 and D’803 patents, respectively.
                  Patents
                    Utility Patents
                      US8182501
                        Representative Claims
                          1. A method for sealing a blood vessel of a patient comprising the steps of:
a) obtaining an ultrasonic surgical shears including an ultrasonic surgical blade, a clamping arm operable to open and close toward the blade, a tissue pad attached to the clamping arm, means for providing a clamp force and means for limiting a user applied clamp force, wherein the blade and tissue pad define a clamping surface area so that the applied clamp force does not exceed a clamping pressure of 210 psi at the clamping surface area;...
                          12. An ultrasonic surgical shears comprising:
a) an ultrasonic surgical blade;
b) a clamping arm operable to open and close toward the blade;
c) a tissue pad attached to the clamping arm;
d) means for exerting a predetermined clamping force on the clamping arm, wherein the blade and tissue pad define a clamping surface area so that the clamp force does not exceed a clamping pressure of 210 psi at the clamping surface area; and
e) means for limiting a user applied clamping force.
                      US5989275
                    Design Patents
                      D661801
                      D661802
                      D661803
                      D661804
                  Holding
                    Articles of manufacture necessarily serve a utilitarian purpose, but design patents are directed to ornamental designs of such articles. 35 U.S.C. § 171. If a particular
design is essential to the use of an article, it cannot be the subject of a design patent. ... We have found designs to be essential to the use of an article when the claimed design is “dictated by” the use or purpose of the article. ... Design patents on such primarily functional rather than ornamental designs are invalid. In determining whether a claimed design is primarily functional, “[t]he function of the article itself must not be confused with ‘functionality’ of the design of the article.”... We have also instructed that the overall appearance of the article—the claimed design viewed in its entirety— is the basis of the relevant inquiry, not the functionality of elements of the claimed design viewed in isolation.
                    We have not mandated applying any particular test for determining whether a claimed design is dictated by its function and therefore impermissibly functional. We have often focused, however, on the availability of alternative designs as an important—if not dispositive—factor in evaluating the legal functionality of a claimed design....
                    The foregoing evidence does not support the district court’s grant of summary judgment that the claimed designs are primarily functional for two reasons.
                      First, the district court’s determination that the designs did not work “equally well” apparently describes the preferences of surgeons for certain basic design concepts, not differences in functionality of the differently designed ultrasonic shears....
                      Further, the district court’s functionality inquiry used too high of a level of abstraction. Instead of focusing on whether the specific patented designs had a functional purpose—the continuously curved “U” shape of the open trigger having tapered handles with ends flaring outwards, the football-shape of the activation button, and the asymmetrically-fluted torque knob with a flat front face— the district court focused its PHG analysis on the functional characteristics that any design of an open trigger, button, and torque knob would have for the underlying ultrasonic shears.
            “Original”
              Design cannot have been copied from something else
              Only the designer can obtain the patent
            Novel
              The overall impression of the design must be different from any single prior-art reference or device in the eyes of an "ordinary observer"
                Contrast “all elements” approach to the novelty of utility patents
              In other respects, the novelty provisions of 102 apply
              Applied: Apple (CAFC 2012)
                “ When the claimed portion of the side view is taken into account, the differences between the arched, convex front of the '638 reference distinguish it from the perfectly flat front face of the D'087 patent”
            Nonobvious
              PHOSITA = designer of ordinary skill of articles of the relevant type
              Relevant prior art = set of articles of manufacture, not design concepts
              Secondary factors are relevant provided applicant can establish a nexus
              Major cases
                Durling (CAFC 1996)
                  “In the design patent context, the ultimate inquiry under section 103 is whether the claimed design would have been obvious to a designer of ordinary skill who designs articles of the type involved .... More specifically, the inquiry is whether one of ordinary skill would have combined teachings of the prior art to create the same overall visual appearance as the claimed design. .... Before one can begin to combine prior art designs, however, one must find a single reference, ‘a something in existence, the design characteristics of which are basically the same as the claimed design.’ .... Once this primary reference is found, other references may be used to modify it to create a design that has the same overall visual appearance as the claimed design. .... These secondary references may only be used to modify the primary reference if they are ‘so related [to the primary reference] that the appearance of certain ornamental features in one would suggest the application of those features to the other.’ .”
                LA Gear (CAFC 1988)
                  facts
                  “ With respect to a design, obviousness is determined from the vantage of "the designer of ordinary capability who designs articles of the type presented in the application." In re Nalbandian, 661 F.2d at 1216,.... LAG argues that the designs would have been obvious because they are "traditional ones consisting of features old in the art." That some components of Avia's designs exist in prior art references is not determinative. " [I]f the combined teachings suggest only components of the claimed design but not its overall appearance, a rejection under section 103 is inappropriate." .... There is no evidence that the overall appearances of the '420 and '301 designs would have been suggested to ordinary shoe designers by the references.
                  LAG does not contest the commercial success of Avia's shoes manufactured according to the patented designs, but argues the success is attributable to factors other than the designs themselves, such as advertising. Although commercial success is relevant only if a nexus is proven between the success of the patented product and the merits of the claimed invention, ... Avia did present evidence tending to prove nexus and LAG's conclusory statements to the contrary fail to create a genuine factual dispute.
                  In addition, the trial court referred to the accused products as "copies" of the patented designs. ... Copying is additional evidence of nonobviousness. ... LAG's conclusory characterization of the evidence as "speculative" is insufficient to create a genuine factual dispute. On the basis of its evaluation of the four factors outlined above, the court held that the ordinary designer would not have found the '420 or '301 designs, considered as whole designs, obvious in light of the differences between the prior art and the claimed designs. We agree.
                International Seaway (CAFC 2009)
                  ‘“For design patents, the role of one skilled in the art in the obviousness context lies only in determining whether to combine earlier references to arrive at a single piece of art for comparison with the potential design or to modify a single prior art reference. Once that piece of prior art has been constructed, obviousness, like anticipation, requires application of the ordinary observer test, not the view of one skilled in the art.”
                Apple (CADC 2012)
                  In addressing a claim of obviousness in a design patent, "the ultimate inquiry . . . is whether the claimed design would have been obvious to a designer of ordinary skill who designs articles of the type involved."To determine whether "one of ordinary skill would have combined teachings of the prior art to create the same overall visual appearance as the claimed design," the finder of fact must employ a two-step process:
                    First, "one must find a single reference, 'a something in existence, the design characteristics of which are basically the same as the claimed design.'
                    Second, "other references may be used to modify [the primary reference] to create a design that has the same overall visual appearance as the claimed design." However, the "secondary references may only be used to modify the primary reference if they are 'so related to the primary reference that the appearance of certain ornamental features in one would suggest the application of those features to the other.'"
            Reduced to practice
              three-dimensional embodiment
          Procedure
            simple specification: drawing(s), title, single claim
          Term
            15 years from the date of grant
          Infringement
            “Ordinary Observer” Test
              Origin: Gorham (SCOTUS 1871)
                "[I]f, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other."
              Courts of Appeals supplement the “ordinary observer” test with “Point of Novelty” Test: The accused device must appropriate the novelty in the patented device which distinguishes it from the prior art
                schematic illustration
                e.g., Litton (CAFC 1984)
                  facts
                  Holding
                    “For a design patent to be infringed, however, no matter how similar two items look, "the accused device must appropriate the novelty in the patented device which distinguishes it from the prior art." .... That is, even though the court compares two items through the eyes of the ordinary observer, it must nevertheless, to find infringement, attribute their similarity to the novelty which distinguishes the patented device from the prior art. (This "point of novelty" approach applies only to a determination of infringement....)
                    “The novelty of the '990 patent consists, in light of our analysis in the previous section on the '990 patent's validity, of the combination on a microwave oven's exterior of a three-stripe door frame, a door without a handle, and a latch release lever on the control panel. The district court expressly found, however, that the Whirlpool design had none of these features.”
              In 2008, CAFC retreats in Egyptian Goddess (en banc)
                facts
                Held: apply the ordinary observer test (are the two designs substantially the same to an ordinary observer?) -- with the understanding that the ordinary observer will pay close attention to the prior art
                  "When the differences between the claimed and accused design(s) are viewed in light of the prior art, the attention of the hypothetical ordinary observer will be drawn to those aspects of the claimed design that differ from the prior art. And when the claimed design is close to the prior art designs, small differences between the accused design and the claimed design are likely to be important to the eye of the hypothetical ordinary observer."
                  Suggest 2-stage analysis:
                    “In some instances, the claimed design and the accused design will be sufficiently distinct that it will be clear without more that the patentee has not met its burden of proving the two designs would appear "substantially the same" to the ordinary observer, as required by Gorham.
                    “In other instances, when the claimed and accused designs are not plainly dissimilar, resolution of the question whether the ordinary observer would consider the two designs to be substantially the same will benefit from a comparison of the claimed and accused designs with the prior art.... Where there are many examples of similar prior art designs, ... differences between the claimed and accused designs that might not be noticeable in the abstract can become significant to the hypothetical ordinary observer who is conversant with the prior art.”
                Applied
                  “It is agreed that the general shape of the accused nail buffer at issue in this case is the same as that of the patented buffer design. The difference between the two is that the accused buffer has raised buffing pads on all four sides, while the patented buffer has buffing pads on only three sides.
                  “The two closest prior art nail buffers before the court were the Falley nail buffer, which has a solid, rectangular cross section with slightly raised buffers on all sides, and the Nailco patent, which shows a nail buffer design having a triangular shape and a hollow cross section, and in which raised buffing pads are located on all three sides
                  “The question before this court under the standard we have set forth above is whether an ordinary observer, familiar with the prior art Falley and Nailco designs, would be deceived into believing the Swisa buffer is the same as the patented buffer....
                  “In light of the similarity of the prior art buffers to the accused buffer, we conclude that no reasonable fact-finder could find that EGI met its burden of showing, by a preponderance of the evidence, that an ordinary observer, taking into account the prior art, would believe the accused design to be the same as the patented design.”
          Remedies
            35 USC 289
              Whoever during the term of a patent for a design, without license of the owner, (1) applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale, or (2) sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit, but not less than $250, recoverable in any United States district court having jurisdiction of the parties.
Nothing in this section shall prevent, lessen, or impeach any other remedy which an owner of an infringed patent has under the provisions of this title, but he shall not twice recover the profit made from the infringement.
            Samsung (SCOTUS 2016)
              “Article of manufacture” can mean a component of a product -- in which case damages for infringement = “total profit” attributable to that component
            Double Patenting
              permissible to secure both a utility patent and a design patent on the same article of manufacture
                lamp example
                See Ethicon (above)
              but only one damages
recovery for infringement
          Data
    EPC
      Statutory basis
        Art. 52
          (1) European patents shall be granted for any inventions which are susceptible of industrial application, which are new and which involve an inventive step.
          (2) The following in particular shall not be regarded as inventions within the meaning of paragraph 1:
            (a) discoveries, scientific theories and mathematical methods;
            (b) aesthetic creations;
            (c) schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers;
            (d) presentations of information.
          (3) The provisions of paragraph 2 shall exclude patentability of the subject-matter or activities referred to in that provision only to the extent to which a European patent application or European patent relates to such subject-matter or activities as such.
          (4) Methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practised on the human or animal body shall not be regarded as inventions which are susceptible of industrial application within the meaning of paragraph 1.
            This provision shall not apply to products, in particular substances or compositions, for use in any of these methods.
        Art. 53
          European patents shall not be granted in respect of:
            (a) inventions the publication or exploitation of which would be contrary to "ordre public" or morality, provided that the exploitation shall not be deemed to be so contrary merely because it is prohibited by law or regulation in some or all of the Contracting States;
            (b) plant or animal varieties or essentially biological processes for the production of plants or animals; this provision does not apply to microbiological processes or the products thereof.
            (c) methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practised on the human or animal body; this provision shall not apply to products, in particular substances or compositions, for use in any of these methods.
        Art. 57
          An invention shall be considered as susceptible of industrial application if it can be made or used in any kind of industry, including agriculture.
    China
      Statutory basis
        Article 5
          Patent rights shall not be granted for invention-creations that violate the law or social ethics, or harm public interests.
          Patent rights shall not be granted for inventions that are accomplished by relying on genetic resources which are obtained or used in violation of the provisions of laws and administrative regulations.
        Article 22
          Inventions and utility models for which patent rights are to be granted shall be ones which are novel, creative and of practical use.
          Novelty means that the invention or utility model concerned is not an existing technology; no patent application is filed by any unit or individual for any identical invention or utility model with the patent administration department under the State Council before the date of application for patent right, and no identical invention or utility model is recorded in the patent application documents or the patent documentations which are published or announced after the date of application.
          Creativity means that, compared with the existing technologies, the invention possesses prominent substantive features and indicates remarkable advancements, and the utility model possesses substantive features and indicates advancements.
          Practical use means that the said invention or utility model can be used for production or be utilized, and may produce positive results.
    Japan
      Statutory basis
        Article 29 (1)
          An inventor of an invention that is industrially applicable may be entitled to obtain a patent for the said invention, except for the following:
            第二十九条　産業上利用することができる発明をした者は、次に掲げる発明を除き、その発明について特許を受けることができる。
          (i)　inventions that were publicly known in Japan or a foreign country, prior to the filing of the patent application;
            一　特許出願前に日本国内又は外国において公然知られた発明
          (ii)　inventions that were publicly worked in Japan or a foreign country, prior to the filing of the patent application; or
            二　特許出願前に日本国内又は外国において公然実施をされた発明
          (iii)　inventions that were described in a distributed publication, or inventions that were made publicly available through an electric telecommunication line in Japan or a foreign country, prior to the filing of the patent application.
            三　特許出願前に日本国内又は外国において、頒布された刊行物に記載された発明又は電気通信回線を通じて公衆に利用可能となつた発明
        Article 32
          Article 32　Notwithstanding Article 29, any invention that is liable to injure public order, morality or public health shall not be patented.
            第三十二条　公の秩序、善良の風俗又は公衆の衛生を害するおそれがある発明については、第二十九条の規定にかかわらず、特許を受けることができない。
    Korea
      Statutory basis
        Article 2 (Definitions)
          The definitions of the terms used in this Act are as follows:
            1. The term "invention" means the highly advanced creation of a technical idea utilizing the laws of nature;
            2. The term "patented invention" means an invention for which a patent has been granted;
            3. The term "practice" means any of the following acts:
              (a) An invention of a product: Manufacturing, using, assigning, leasing, or importing the product or offering to assign or lease the product (including displaying the product for the purpose of assigning or leasing; hereinafter the same shall apply);
              (b) An invention of a process: Using the process;
              (c) An invention of a process of manufacturing a product: Using, assigning, leasing, or importing the product manufactured by the process or offering to assign or lease the product, other than the acts specified in item (b).
        Article 29 (Requirements for Patent Registration), Section (1)
          An invention having industrial applicability, other than the following, is patentable:
          1. An invention publicly known or executed in the Republic of Korea or in a foreign country prior to the filing of a patent application;
          2. An invention published in a publication distributed in the Republic of Korea or in a foreign country or an invention disclosed to the public via telecommunications lines prior to the filing of a patent application.
        Article 32 (Unpatentable Inventions)
          Notwithstanding Article 29 (1), no invention that violates public order or sound morals or is likely to harm public health is patentable.
        Article 96 (Limitations on Effects of Patents)
          (1) The effects of a patent shall not extend to the following:
            1. Execution of a patented invention for the purpose of research or testing (including research and testing for obtaining permission for items of medicines or reporting items of medicines by under the Pharmaceutical Affairs Act or for registering pesticides under the Pesticide Control Act
            2. Ships, aircraft, vehicles merely passing through the Republic of Korea, or machines, instruments, equipment, or other articles used therein
            3. Articles existing in the Republic of Korea as at the time the relevant patent application was filed.
          (2) The effects of a patent on the invention of a medicine manufactured by mixing at least two medicines (referring to products used for the diagnosis, relief, treatment, therapy, or prevention of human diseases; hereinafter the same shall apply) or on the invention of a process for manufacturing medicines by mixing at least two medicines shall not extend to the preparation of prescriptions and medicines prepared according to such prescriptions under the Pharmaceutical Affairs Act.
      cf. USA
        “Unlike the United States, isolated genes and other biological materials such as proteins, small molecules and herbal extracts are all patentable in Korea.”
          “it is well established in Korea that genes, cDNAs, vectors and other biological materials isolated from nature are patent eligible regardless of their sources”
          “Human genes are, therefore, patentable.”
          “Although it is in a legally separate issue, proving the utility of claimed genes is often discussed on the same level with the patent eligibility.”
            “To this issue, the Korean court states that specific, substantial and credible utility is required for genes to be patented.”
              Patent Court decision 2007 Heo 5116
          “Cells and higher life forms such as plants and animals are also patent eligible”
            “This is also true for stem cells...stem cells may be patented by defining cells by their origins, expression markers, morphological features, functions and preparation methods”
              However “stem cells and higher life forms may be affected by [Article 32, which holds that inventions liable to contravene public order and morality cannot be patented] more than any other types of inventions for ethical reasons.”
            Seed Industry Law (under UPOV convention) may also be used to protect plant varietals
        “Methods of medical treatment for humans cannot be patented in Korea”
          no explicit prohibition on these within Patent Act, but: “courts are clear that these claims cannot be patented primarily because of the concern about the misuse of privately owned patent rights against public health.”
            “Practically, they are rejected for lacking industrial applicability.”
            [Until 2019]: diagnostic claims (requiring a human body) could not be be patented either
              [NEW development]
                [From March 18, 2019]: "diagnostic technology concerning methods of information processing on computers such as bio-big data processing methods are not classified as medical acts and therefore, are acknowledged as having industrial applicability."
                  “For example, because inventions such as a method of diagnosing a retinal disorder through analysis of retinal scan data by a computer, a method of predicting or diagnosing cancer by analyzing a patient's data through an artificial intelligence algorithm of a computer are not necessarily performed by physicians, such inventions are not classified as medical acts and therefore, are acknowledged as having industrial applicability.“
          [NEW development]
            [Until 2019]: “In Korea, medical use of a pharmaceutical composition must be claimed as a type of a second medical use claim such as ‘A pharmaceutical composition comprising X for the treatment of Y.’ This also applies when X is a new compound. As the method of treatment claims is not allowable, claiming combination therapy is not easy in Korea although not impossible. Claims need to be cleverly worded as composition claims...”
            [From March 18, 2019]: due to the recent confluence of IT technologies (including AI) with medical technologies, KIPO has had to revise its Patent Examination Guidelines.
              [From March 18, 2019]: “already known inventions of pharmaceutical composition for treatment of a disease comprising a pharmaceutically active ingredient are now considered patentable, if such pharmaceutical composition exhibits remarkable therapeutic effect on a certain patient group.”
                “For example, the invention of a pharmaceutical composition comprising a known pharmaceutical active ingredient exhibiting a remarkable therapeutic effect only in patients with a particular gene is patentable.”
                  “For such inventions, a clear definition of a particular patient population and empirical verification of the remarkability of its therapeutic effect should be described in the specification.”
          yet “method[s] of medical treatment for animals which explicitly exclude humans from the treatment subject can be patented.”
  International Framework
    Patent Systems
      Five systems currently dominate patenting activity
        USA
        EPC
        China
        Japan
        Korea
        together, these receive aprx. 90% of all patent applications
      Comprehensive Indices
        National
        Regional
          OAPI
          ARIPO
          EAPO
          GCC
    Integration and Harmonization
      Background
        19th century: wide variations among countries in substantive patent law
          Priority rules
            First to invent
            First to file
          Publication practices
            Upon filing
            Upon grant
            Upon expiration
          Substantive examination of patent applications
          Subject Matter coverage
        Each country tended to
favor its own nationals
          E.g., “working" requirements
          Rationales
            Nationalism
            if the inventive activity stimulated by the patent regime occurs outside the country, the country reaps fewer social benefits while bearing all the social harms
      Paris Convention
        History
          Created 1884
          6 revisions
          Currently, 177 member countries
            list
            map
        Major Provisions
          National Treatment
            Article 2(1)
              “Nationals of any country of the Union shall, as regards the protection of industrial property, enjoy in all the other countries of the Union the advantages that their respective laws now grant, or may hereafter grant, to nationals; all without prejudice to the rights specially provided for by this Convention. Consequently, they shall have the same protection as the latter, and the same legal remedy against any infringement of their rights, provided that the conditions and formalities imposed upon nationals are complied with.”
            Reject reciprocity principle
            Applies to both patents and utility models
          Right of Priority
            Article 4(A)
              (1) Any person who has duly filed an application for a patent, or for the registration of a utility model, or of an industrial design, or of a trademark, in one of the countries of the Union, or his successor in title, shall enjoy, for the purpose of filing in the other countries, a right of priority during the periods hereinafter fixed.
              (2) Any filing that is equivalent to a regular national filing under the domestic legislation of any country of the Union or under bilateral or multilateral treaties concluded between countries of the Union shall be recognized as giving rise to the right of priority.
              (3) By a regular national filing is meant any filing that is adequate to establish the date on which the application was filed in the country concerned, whatever may be the subsequent fate of the application.
            Article 4(C)(1)
              The periods of priority referred to above shall be twelve months for patents and utility models, and six months for industrial designs and trademarks.
            Eliminate need to file in separate countries on same day
            Procedure
              File in member country A
              File in member country B within 1 year
              Get priority date in B of filing in A
            Priority claim does not affect term of patent -- 4bis(5)
              “(5) Patents obtained with the benefit of priority shall, in the various countries of the Union, have a duration equal to that which they would have, had they been applied for or granted without the benefit of priority.”
            US Implementation: 35 USC 119
              Can invoke this procedure iff claims in American application are supported by prior foreign application to extent required by 112
          Restrictions on Compulsory Licenses
            Modest (but controversial) limitations on ability of member countries to impose compulsory licenses or declare patents forfeit for “failure to work”
            No limits on the grant of CLs in the public interest
          Member states may form "Special Agreements"
        Gaps
          No minimum standards for patent protection
          No guarantees of effective enforcement of patents
          No meaningful system for policing violations of the Convention
            Possible to seek review of another country's compliance in Court of International Justice
            Never invoked
      Patent Cooperation Treaty
        History
          Limited to members of Paris Convention
          Effective 1970
          US Accession 1978
          Modified 1979, 1984
          Currently 157 member countries
        Procedures
          (1) International Patent Application
            In designated national patent offices (Receiving Offices”) or with WIPO
            Designate any or all PCT states
            May claim priority date of prior filing in Paris Convention Country
          (2) International Search Report
            Prepared by an "International Search Authority" selected by applicant
              designated national patent offices
              currently the national offices of: Australia; Austria; Brazil; Canada; China; Finland; Sweden; Japan; Republic of Korea; Russian Federation; Spain; USA; the international office of “Nordic Patent Institute” (Denmark/Iceland/Norway); and the European Patent Office
            content
              Classification of invention
              Fields searched
              Citations to prior art
            Published 18 months after priority date
          (3) International Preliminary Examination
            Optional
              currently requested in by only aprx. 10% of applicants
            Nonbinding opinion concerning novelty, nonobviousness, utility
          (4) National Patent Examinations
            Each office tests application against local standards
            No requirement of full faith and credit
          Fees
            WIPO
            USPTO
        Advantages to patentees
          Reduce expense of international filings
          Delay prior to "National Phase"
            up to 30 months
            exceptions
              31 months for EPO
              20 months for Luxembourg, Tanzania, and Uganda
        PCT Usage
      Patent Law Treaty
        Standardize patent applications
          Mandate particular ways of interpreting terms (e.g., date of application)
          Forbid member countries to adopt more onerous filing requirements
        History
          Adopted in 2000
          Currently 40 members
            Including US, EPO, Japan
      TRIPS
        History
          Adopted 1994, as part of Uruguay Round of GATT
            Interpretations of the Origins of the Agreement
              (1) Leaders of less developed countries saw increased IP protections as beneficial for them in the long run -- and used the WTO as a vehicle to outflank parochial local pirate industries
                Edmund W. Kitch,
The Patent Policy of Developing Countries,
13 UCLA Pac. Basin L.J. 166 (1994)
                Interpretation undermined by World Bank report concluding that, thus far, developing countries have been disadvantaged
                  World Bank, Global Economic Prospects and the Developing Countries 2002, Chpt. 5 (2001), http://siteresources.worldbank.org/INTGEP2002/Resources/gep2002complete.pdf
              (2) Less developed countries rationally traded obligation to increase IP protections for (a) increased opportunities to export agricultural products and textiles and (b) protection from unilateral sanctions by USA
                Peter Yu, "TRIPS and Its Discontents,"
10 Marq. Intell. Prop. L. Rev. 369 (2006)
                Reichman & Dreyfuss, “Harmonization Without Consensus,” 57 Duke L.J. 85 (2007)
              (3) Developed countries forced less developed countries to accept IP rules not in their best interest
                The leaders of major industries (Hollywood and PHARMA) successfully used the GATT process to advance their own interests
                  Susan K. Sell, Private Power, Public Law:
The Globalization of Intellectual Property
Rights (2003)
                  Ruth L. Okediji, Public Welfare and the
Role of the WTO: Reconsidering the
TRIPS Agreement, 17 Emory Int'l L. Rev.
819 (2003)
              (4) Developed countries duped less developed countries into accepting IP rules not in their best interest
          Currently 164
member countries
            list
            map
            Compliance hiatus for Least Developed Countries
              Membership determined by the Committee for Development of the United Nations
              Currently 47 such countries, 36 of which are members of the WTO
              Map
              Deadline for compliance with TRIPS recently extended to 2021 for most issues; 2033 for pharmaceuticals (or until a country escapes the category of “least developed”)
        Substance
          Incorporate Paris Convention, Articles 1-12, 19
          National Treatment
          Most-favored-nation principle
            “With regard to the protection of intellectual property, any advantage, favour, privilege or immunity granted by a Member to the nationals of any other country shall be accorded immediately and unconditionally to the nationals of all other Members” – 4
            Limited exceptions
              Exempted from this obligation are any advantage, favour, privilege or immunity accorded by a Member:
              (a) deriving from international agreements on judicial assistance or law enforcement of a general nature and not particularly confined to the protection of intellectual property;
              (b) granted in accordance with the provisions of the Berne Convention (1971) or the Rome Convention authorizing that the treatment accorded be a function not of national treatment but of the treatment accorded in another country;
              (c) in respect of the rights of performers, producers of phonograms and broadcasting organizations not provided under this Agreement;
              (d) deriving from international agreements related to the protection of intellectual property which entered into force prior to the entry into force of the WTO Agreement, provided that such agreements are notified to the Council for TRIPS and do not constitute an arbitrary or unjustifiable discrimination against nationals of other Members.
          Mandatory Subject-Matter Coverage (27)
            Countries must grant patents for all inventions (products and processes) that are:
              Novel
              Involve an inventive step
              Capable of Industrial Application
            No discrimination on basis of:
              Field of technology
              Place of invention
              Local production
                “Patent rights [shall be] enjoyable without discrimination as to … whether products are imported or locally produced”
                Possible Interpretations:
                  (a) ban all “working” obligations
                  (b) compulsory licenses are permitted if they do not treat differently imported and locally produced products
                commentary
                  for analysis of the scope of a country's authority to impose working requirements, see Halewood, "Regulating Patent Holders: Local Working Requirements and Compulsory Licenses at International Law," 35 Osgood Hall L.J. 243 (1997)
                  Mercurio and Tyagi, “ Treaty Interpretation in WTO Dispute Settlement: The Outstanding Question of the Legality of Local Working
Requirements,” Minnesota Journal of International Law (2010)
            Permissible Exclusions
              “inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment” – 27.2
              “diagnostic, therapeutic and surgical methods for the treatment of humans or animals” – 27.3
              “plants and animals other than micro-organisms” & biological [not microbiological] processes for the production thereof – 27.3
                But must then provide sui generis protection for plant varieties
          Mandatory Entitlements
            Products: “to prevent third parties not having the owner's consent from the acts of: making, using, offering for sale, selling, or importing” – 28.1(a)
            Processes: “to prevent third parties not having the owner's consent from the act of using the process, and from the acts of: using, offering for sale, selling, or importing for these purposes at least the product obtained directly by that process” – 28.1(b)
            Rights to assign and license – 28.2
            Exceptions
              “Limited” exceptions to exclusive rights
permissible only if they “do not unreasonably
conflict with a normal exploitation of the
patent and do not unreasonably prejudice
the legitimate interests of the patent owner,
taking account of the legitimate interests
of third parties” – 30
                "three step test"
              Possible examples
                Experimental Use Defense
                Refusals to grant injunctive relief where it might threaten public health
          Limits on Compulsory Licenses (31)
            Constraints
              (a) authorization considered on the merits;
              (b) must first try to obtain authorization on reasonable commercial terms
                Waived in cases of "national emergency or other circumstances of extreme urgency"
                  Each Member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted.
Doha Declaration (11/14/2001), 5(b).
                  Each Member has the right to determine what constitutes a national emergency or other circumstances of extreme urgency, it being understood that public health crises, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a national emergency or other circumstances of extreme urgency. Doha Declaration (11/14/2001), 5(c)
              (c) scope and duration limited to original purpose;
              (d) nonexclusive;
              (e) nonassignable;
              (f) authorized predominantly for the use of the domestic market;
                Waived with respect to drugs exported to a member country that lacks sufficient manufacturing capacity and grants a CL on the drug, Clarification of Doha, 8/30/2003
                  Importing countries must take measures to prevent re-exportation
                  Other member countries must take measures to prevent importation of such drugs
              (g) license ceases when the circumstances no longer exist;
              (h) “appropriate compensation” for the use, “taking into account the economic value of the license”;
                When both exporting and importing countries create CLs for drugs, exporting country must arrange payment of adequate remuneration to patentee, but importing country need not, Clarification of Doha, 8/30/2003
              (i) validity of license subject to judicial review;
              (j) appropriate compensation subject to judicial review;
              (k) anti-competitive practices by the patent holder taken into consideration
                Members are not obliged to apply the conditions set forth in subparagraphs (b) and (f) where such use is permitted to remedy a practice determined after judicial or administrative process to be anti-competitive.
                  Used by Competition Commission of South Africa to provoke issuance of "voluntary" licenses to generic companies for HIV cocktails (December 2003)
                    (a) monopoly prices unreasonably impede access to medicine
                    (b) refusal to issue voluntary licenses to generics abusively impedes competition
                    (c) refusal to issue voluntary licenses denies access to "essential facilities"
                The need to correct anti-competitive practices may be taken into account in determining the amount of remuneration in such cases.
                Competent authorities shall have the authority to refuse termination of authorization if and when the conditions which led to such authorization are likely to recur
          Enablement Requirement (29.1)
            Mandatory enablement requirement
            Optional best-mode requirement
          Term
            minimum: 20 years from filing (Art. 33)
              "The term of protection available shall not end before the expiration of a period of twenty years counted from the filing date"
            No maximum
              E.g., U.S. 35 USC §154
          Mandatory enforcement (41-49)
            "fair and equitable" procedures
            Decisions in writing
            Damages
            Injunctions
          “Flexilibities”
            Subject Matter
              Exceptions permitted by Art 27 to subject matter
                “necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment”
                medical procedures
                plants
              Exceptions latent in requirement of “industrial application”
                e.g., availability of patent protection for software and business methods
              Utility Models / Petty Patents
            Requirements for Obtaining a Patent
              Definition of inventive step
              “First to file” vs. “first to invent”
            Patent Entitlements
              Scope of doctrine of equivalents
              Exhaustion – 6
                "For the purposes of dispute settlement under this Agreement, subject to the provisions of Articles 3 and 4 nothing in this Agreement shall be used to address the issue of the exhaustion of intellectual property rights."
                critical because of the discretion it leaves countries with respect to opportunities for geographic price discrimination
              Prior-user rights
              Exceptions permitted by article 30 to mandatory entitlements
              Some latitude in issuing compulsory licenses
                Article 31
                Doha Declaration and Council Resolution
        Dispute Resolution
          Procedure
            Consultation among disputants
            WTO Panel considers dispute
            Appellate Review within WTO
          Penalties: Cross-sectoral retaliation
      Free Trade Agreements
        History
          soon after TRIPS, US and EU began negotiating bilateral and regional agreements with stricter IP obligations
          impediments to further tightening of IP regime through WTO (e.g., Cancun 2003) has led to increased reliance on this approach
        Examples
          bilateral FTAs between US and other countries
          Regional FTAs
            NAFTA
              Article 1709: Patents
              Subject Matter
                1. Subject to paragraphs 2 and 3, each Party shall make patents available for any inventions, whether products or processes, in all fields of technology, provided that such inventions are new, result from an inventive step and are capable of industrial application. For purposes of this Article, a Party may deem the terms "inventive step" and "capable of industrial application" to be synonymous with the terms "non-obvious" and "useful", respectively.
                2. A Party may exclude from patentability inventions if preventing in its territory the commercial exploitation of the inventions is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to nature or the environment, provided that the exclusion is not based solely on the ground that the Party prohibits commercial exploitation in its territory of the subject matter of the patent.
                3. A Party may also exclude from patentability:
                  1 (a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals;
                  (b) plants and animals other than microorganisms; and
                    Notwithstanding subparagraph (b), each Party shall provide for the protection of plant varieties through patents, an effective scheme of sui generis protection, or both.
                  (c) essentially biological processes for the production of plants or animals, other than non-biological and microbiological processes for such production.
                4. If a Party has not made available product patent protection for pharmaceutical or agricultural chemicals commensurate with paragraph 1:
                  1 (a) as of January 1, 1992, for subject matter that relates to naturally occurring substances prepared or produced by, or significantly derived from, microbiological processes and intended for food or medicine, and
                  (b) as of July 1, 1991, for any other subject matter,
                  that Party shall provide to the inventor of any such product or its assignee the means to obtain product patent protection for such product for the unexpired term of the patent for such product granted in another Party, as long as the product has not been marketed in the Party providing protection under this paragraph and the person seeking such protection makes a timely request.
              Mandatory Entitlements
                5. Each Party shall provide that:
                  1 (a) where the subject matter of a patent is a product, the patent shall confer on the patent owner the right to prevent other persons from making, using or selling the subject matter of the patent, without the patent owner's consent; and
                  (b) where the subject matter of a patent is a process, the patent shall confer on the patent owner the right to prevent other persons from using that process and from using, selling, or importing at least the product obtained directly by that process, without the patent owner's consent.
                6. A Party may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking into account the legitimate interests of other persons.
                7. Subject to paragraphs 2 and 3, patents shall be available and patent rights enjoyable without discrimination as to the field of technology, the territory of the Party where the invention was made and whether products are imported or locally produced.
                8. A Party may revoke a patent only when:
                  1 (a) grounds exist that would have justified a refusal to grant the patent; or
                  (b) the grant of a compulsory license has not remedied the lack of exploitation of the patent.
                9. Each Party shall permit patent owners to assign and transfer by succession their patents, and to conclude licensing contracts.
                10. Where the law of a Party allows for use of the subject matter of a patent, other than that use allowed under paragraph 6, without the authorization of the right holder, including use by the government or other persons authorized by the government, the Party shall respect the following provisions:
                  1 (a) authorization of such use shall be considered on its individual merits;
                  (b) such use may only be permitted if, prior to such use, the proposed user has made efforts to obtain authorization from the right holder on reasonable commercial terms and conditions and such efforts have not been successful within a reasonable period of time. The requirement to make such efforts may be waived by a Party in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use. In situations of national emergency or other circumstances of extreme urgency, the right holder shall, nevertheless, be notified as soon as reasonably practicable. In the case of public non-commercial use, where the government or contractor, without making a patent search, knows or has demonstrable grounds to know that a valid patent is or will be used by or for the government, the right holder shall be informed promptly;
                  (c) the scope and duration of such use shall be limited to the purpose for which it was authorized;
                  (d) such use shall be non-exclusive;
                  (e) such use shall be non-assignable, except with that part of the enterprise or goodwill that enjoys such use;
                  (f) any such use shall be authorized predominantly for the supply of the Party's domestic market;
                  (g) authorization for such use shall be liable, subject to adequate protection of the legitimate interests of the persons so authorized, to be terminated if and when the circumstances that led to it cease to exist and are unlikely to recur. The competent authority shall have the authority to review, on motivated request, the continued existence of these circumstances;
                  (h) the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization;
                  (i) the legal validity of any decision relating to the authorization shall be subject to judicial or other independent review by a distinct higher authority;
                  (j) any decision relating to the remuneration provided in respect of such use shall be subject to judicial or other independent review by a distinct higher authority;
                  (k) the Party shall not be obliged to apply the conditions set out in subparagraphs (b) and (f) where such use is permitted to remedy a practice determined after judicial or administrative process to be anticompetitive. The need to correct anticompetitive practices may be taken into account in determining the amount of remuneration in such cases. Competent authorities shall have the authority to refuse termination of authorization if and when the conditions that led to such authorization are likely to recur;
                  (l) the Party shall not authorize the use of the subject matter of a patent to permit the exploitation of another patent except as a remedy for an adjudicated violation of domestic laws regarding anticompetitive practices.
                11. Where the subject matter of a patent is a process for obtaining a product, each Party shall, in any infringement proceeding, place on the defendant the burden of establishing that the allegedly infringing product was made by a process other than the patented process in one of the following situations:
                  1 (a) the product obtained by the patented process is new; or
                  (b) a substantial likelihood exists that the allegedly infringing product was made by the process and the patent owner has been unable through reasonable efforts to determine the process actually used.
                  In the gathering and evaluation of evidence, the legitimate interests of the defendant in protecting its trade secrets shall be taken into account.
              Duration
                12. Each Party shall provide a term of protection for patents of at least 20 years from the date of filing or 17 years from the date of grant. A Party may extend the term of patent protection, in appropriate cases, to compensate for delays caused by regulatory approval processes.
            CAFTA (2004)
        Typical provisions
          patent duration
            parties must extend patent terms to offset unreasonable delays in granting patents
          limits on compulsory licenses
          limits on parallel importation
          limits on access to clinical testing data
          prohibition on registration of generics until expiration of drug patents
      European Systems
        European Patent Organization
          History
            First discussed in 1950s
            Signed 1973
            Effective 1977
          Membership
            38 member countries (EU members plus several others)
            2 "Extension States" and 2 “Validation States”
            map
          Centralized filing and granting system
            File single application for European Patent with EPO (Munich)
            EPO conducts prior-art search
            Publication (18 months after filing)
            Report of EPO Examiner
              Response if appropriate
            Patent granted
            Opposition (may be filed within 9 months of grant)
            Conversion to national patents in designated member countries (within 3 months of grant)
          Substantive
Provisions
            Subject Matter
              52
              53
              57
            Novelty
              54
              55
            Inventive Step
              56
            Infringement
              69
          Limitations
            Harmonization is incomplete
              Rights of employees; rules of co-ownership; remedies all left to member countries
              Ambiguity in some of the substantive provisions
            No judicial centralization
              Enforcement requires separate suits in individual countries
              No appellate system for reconciling divergent interpretations
              Examples
                Epilady litigation: scope of equivalents doctrine (69 & Protocol); same patent; same litigants
                  Infringement found in
Belgium, Germany, Italy
                  Infringement not found in
UK, Austria, Netherlands
            Unanimity necessary (in practice) for revision
              Revision system of 172 never invoked
              Antiquated systems applicable to novelty and (arguably) software & biotechnology
          Usage
        Unitary Patent
          Background
            Inconclusive Efforts to establish a Community Patent
              Community Patent Convention
                Signed in 1975
                1989 Revision
                  Provided for appeal from national courts to a Community Patent Appeals Court
                  Mandatory translation of all applications into all EC languages
                Too few states ratified it;
never implemented
              Proposed Community Patent Regime
                Structure
                  Single application with EPO
                    National patent offices could
receive and forward applications
                  Issuance of single Community Patent, applicable throughout EU
                  Translation
                    Application in English, French, or German
                    Claims translated into other 2 languages
                    Claims translated into all other EC languages "within reasonable time"
                  Centralized Interpretation and Enforcement (under auspices of EJC)
                    Single Community Patent Court (to be formed by 2010)
                      National courts retain
jurisdiction until then
                    Appellate review by Court of First Instance of European Communities
                Evolution
                  3/3/2003: Competitiveness Council of Ministers announces "common political approach"
                  4/16/2003: President of EU Council distributes revised proposal for Council Regulation
                  2/2/2004: European Commission proposes two Council Decisions for judicial centralization
                  3/2004: Competitiveness Council fails to agree on details
                  4/2007: European Commission issues white paper, seeking to revive the plan
                  12/2009: EU Competitiveness Council makes significant progress
                    agreements
                      Process to fix and distribute renewal fees
                      Functioning of the Enhanced Partnership
                      Establishment of a unified patent litigation system
                        movement toward a European and EU Patents Court (EEUPC), which would have exclusive jurisdiction over EU and the European patents
                    next steps
                      Agreeing on an approach to regulate the translation of EU patents
                        early in 2009, EU Council had recommended a central translation service
                      Revising the European Patent Convention (EPC), to which the EU accedes
                  Ultimately morphs into Unitary Patent system
            Failed Initiative to Create 12-country patent system
              subset of EU countries hoping to offer a patent applicable in them all, without the costs of translation
                UK, Denmark, Estonia, Finland, France, Germany, Lithuania, Luxembourg, The Netherlands, Poland, Slovenia and Sweden
                opposition by Spain and Italy
                Not a major reform; essentially cost-reduction strategy
              Status
                procedure: "enhanced cooperation mechanism"
                approved by committee of Parliament, Jan. 31, 2011
                Parliament approves
                March 2011: ECJ rejects it as not adapted to EU law
                September 2011: 3 professors at Universidad Carlos III de Madrid advocated similar set of reforms, to be applicable throughout Europe
          Features of the new Unitary Patent
            Granted by the EPO
            Instead of multiple national patents, enforceable only in national courts, it will be a single patent, enforceable in all ratifying states (within the EU), enforceable in a single new Unified Patent Court
              Participating countries
              Unified Patent Court
                locations
                  Court of Appeal: Luxembourg
                  Court of First Instance (Central Division): Paris
                  Court of First Instance (branches): Munich, London
              languages
                English
                French
                German
          Advantages
            Less expensive
            Consistent interpretation of the patent throughout the participating states
          Status
            scheduled for implementation sometime in 2018
            However, implementation is threatened by:
              (a) constitutional challenge to implementing legislation in Germany (filed in June 2017)
              (b) Brexit