“Does 35 U.S.C. § 271(f) apply to method claims, as well as product claims?”

Once available from the court, I’ll make the oral argument file available on the casepage for the en banc appeal. (I’ll post my notes on the oral argument once prepared).

I can think of several reasons, but learned of another after reading the Federal Circuit’s decision in Crown Packaging Technology v. Rexam Beverage Can (08-1284). The district court had dismissed the defendant’s infringement counterclaim for failure to comply with the marking requirement of 35 U.S.C. § 287(a). The Federal Circuit reversed the dismissal on appeal, though, explaining that the marking statute was not applicable because the defendant had asserted only the method claims of a patent that included both method and apparatus claims:

“In this case and Hanson, the patentee only asserted method claims despite the fact that the patent contained both method and apparatus claims. In American Medical, in contrast, both apparatus and method claims of the ‘765 patent were asserted. Because Rexam asserted only the method claims of the ‘839 patent, the marking requirement of 35 U.S.C. § 287(a) does not apply. Consequently, we reverse the district court’s grant of Crown’s motion for summary judgment dismissing Rexam’s counterclaim for infringement of the ‘839 patent.” (emphasis added, internal quotations omitted, citation omitted)

A method claim, then, might preserve your ability to file an infringement claim when your marking practices have been less than perfect.

Reading the Crown Packaging Technology opinion gives you the sense that this might not always be the case. Judge Moore, the author of the opinion of the court, phrased the court’s holding – both in the opinion’s introduction and in the conclusion of the section relating to the marking issue – as one that is mandated by precedent:

“[B]ecause we are bound by our holding in Hanson v. Alpine Valley Ski Area, Inc., 718 F.2d 1075 (Fed. Cir. 1983)—that the marking requirement of 35 U.S.C. § 287(a) does not apply when only method claims are asserted—we reverse the district court’s grant of summary judgment dismissing Rexam’s counterclaim based on a failure to mark.” (emphasis added)

Judge Moore’s disagreement with the rule of Hanson is clear.

Read the PTP review of Crown Packaging Technology for a detailed analysis of the court’s opinion.

In a bit of Friday afternoon silliness, Steve Nipper and I debated the issue a bit. We decided that the old college mainstay – the beer bong – highlights the issue perfectly. For those that don’t know, the classic beer bong is an extremely simple device -  a funnel attached to a length of hose. Beer goes in the funnel, travels through the hose and exits into an awaiting mouth. The beer travels straight down – there is no ‘intermediate elevation.’

So is a beer bong a siphon?

Counsel for patentee would argue that it is:

“[a] ’siphon’ in its ordinary meaning is the pulling of water as a result of negative pressure that is created by the falling of a column of water…there is nothing in the patent to limit the use of the term ’siphon’ to an intermediate elevation.”

Steve and I decided that it’s just a simple gravity drain, not a siphon. The classic two-beer-hat, which clearly includes an intermediate elevation, would certainly qualify, though.

Unfortunately, despite the lengthy debate during oral argument, the opinion doesn’t address the issue so we don’t know the court’s final thoughts on the meaning of the term.

As I’ve re-read the case several times, Judge Bryson’s concurring opinion continues to draw my attention. His open wondering about the ability of the Office to limit serially-filed continuations is very interesting…especially when considered in light of the Office’s recent efforts to explore the possibility of implementing a deferred examination system.

Could a deferred examination system that allows an applicant to file, in parallel, several continuations while the original application remains pending provide a compromise to the competing concerns over late-filed continuations and an applicant’s ability to claim that which he disclosed?

I provided several updates on Twitter as I read the opinion, and reproduce them below for the wider audience:

1. CAFC: Tafas v. Dudas – CON limit contrary to patent act; all other rules, including RCE and ESD, are not –> BASED ONLY ON ARGS PRESENTED.

2. CAFC: Tafas v. Dudas – Bryson concurrence – opinion does not decide whether limit on SERIALLY-FILED CONS would be consistent with patent act

3. CAFC: Tafas v. Dudas – Judge Rader dissents, would strike down all proposed rules as substantive limitations carrying “startling change”

4. CAFC: Tafas v. Dudas – Next – request for panel reh’g and for reh’g en banc. At this point, two judges decided a major patent policy issue.

5. CAFC: Tafas v. Dudas – Meanwhile, USPTO sits without a Director…without a policy leader. What comes of the new rules and this decision?

6. CAFC Tafas v. Dudas (Doll) opinion: http://is.gd/ocWP

I’ll provide a more detailed analysis when I post my full review of the case.

All eyes are on Congress this week as many believe both chambers will see introductions of new vintages of the now perennial patent reform bill. Bicameral introduction, with bipartisan original sponsors in each chamber, is expected and would be a new twist. Such an approach might be a sign that, somehow, this round is different. But don’t forget that, despite significant hearing activity and coverage in the media, patent reform legislation has seen very little movement in previous sessions. Only time will tell if the 111th is any different.

The coming excitement doesn’t end there, though. Remember that the Court of Appeals for the Federal Circuit is sitting on the Tafas v. Dudas case, and a decision could come anytime over the next several weeks. Depending on the outcome, the opinion could represent a posthumous victory for the Dudas administration or a final reminder of its failed attempts at aggressive administrative reform.

And don’t forget that we’re still waiting for President Obama to appoint a new Under Secretary of Commerce/Director of the Patent and Trademark Office. The confirmation hearings for the person tapped for this exciting and challenging post will, no doubt, receive a great deal of attention as many stakeholders wait to see if the Office will continue the policy initiatives of the Dudas era or if new leadership will bring new approaches to familiar problems.

Clear your schedules – there’s plenty of patent law excitement on the way.

The Patent Office has properly started citing the Bilski decision to support rejections of process claims for failure to define patentable subject matter. This LA Times article notes example Bilski-based rejections of claims for processes ranging from seismic data analyses to methods for converting an internet domain names to read both left to right, for languages like English, and in the opposite direction, for languages like Arabic and Hebrew.

Such rejections are expected, of course – the Patent Office is simply applying the current law, as it should. But a recent patent granted to Chase Card Services, the credit card division of JP Morgan Chase, has to make you wonder how strenuously the Office is applying the new test.

United States Patent No. 7,480,631 is directed to fraud detection processes and was granted on January 20, 2009. Claim 1 is reproduced below:

1. A method for detecting and processing fraud and credit abuse, the method comprising: receiving a telephone call from a caller concerning a credit account; identifying one or more potential fraud-related problems by searching the credit account data for conditions that match one or more predetermined qualifiers and quantifiers; presenting the caller with a series of questions and soliciting, from the caller, responses to the series of questions, wherein each question in the series is generated based on the one or more potential fraud-related problems and further based on the caller’s responses to earlier questions in the series; and determining a fraud status associated with the credit account based on a computerized analysis of the solicited responses.

Where’s the Bilski-required machine, apparatus, or transformation in that claim? Is it the ‘computerized analysis’? If so, is the term “computerized” sufficient to tie this claim to a particular computing machine? Beyond that, I can only wonder, tongue only partially in cheek, whether the ‘telephone’ provides the machine or apparatus.

It’s interesting to compare the Patent Office application of Bilski, which produced the claim above, to the approach taken by the Federal Circuit. Comparing this claim to the claim summarily rejected by the Federal Circuit in its post-Bilski decision in Classen Immunotherapies v. Biogen IDEC, which included a step of “immunizing mammals,” suggests that the new ‘machine, apparatus, or transformation’ test is not being applied consistently between the Office and the court. On one hand, the Office appears willing to find a required connection to a particular machine or apparatus either in a vague term like ‘computerized’ or through the use of a known apparatus like ‘telephone.’ On the other hand, the court appears completely unwilling to recognize a step that recites a physical act that is well-known to trigger a physiological change as a required transformation.

The claim of the ‘631 patent is, of course, anecdotal in nature. It represents only a single post-Bilski patent issued by the Office and surely there are numerous examples of applications in which examiners took a strict approach to applying Bilski. But the existence of even one issued claim like the one above is troublesome because it reveals the difficulty associated with applying the vague test against which all process claims now must be evaluated.

UPDATE: A quick glance at the prosecution history for the ‘631 patent shows that the examiner mailed the Notice of Allowance on October 17, 2008 – 13 days before the court announced the Bilski decision. The timing, of course, doesn’t change the impact of the decision on the claim or render it subject to a different test for patentable subject matter. It may, though, explain the absence of a clear tie to a machine, apparatus or transformation – while the patent didn’t issue until January, the administrative gears of the issue process had already been set into motion and, apparently, could not be stopped.

In my mind, this actually raises more questions than it answers. Should the Office be required to evaluate all allowed claims that have yet to issue as patents when an intervening major change in patentability law is announced? What about a minor change? These are, of course, administrative headaches and would be time-consuming and expensive to implement. Should the patent attorney be responsible? Should prosecuting attorneys be required to amend claims or present additional arguments when such an intervening change is implicated? How about when such an intervening change might be implicated?

I wonder if this explains why Chase waited nearly 5 weeks to announce the granting of this patent.

I decided to assemble a validity scorecard to help stakeholders watch the trend as it continues to develop. The scorecard is a simple tally of decisions in which the Court of Appeals for the Federal Circuit reached patent validity on the merits. Sure it’s a simple bit of anecdotal evidence, but I’m confident it will prove interesting over time. I’ll update the scorecard monthly.

Here’s the scorecard for January, 2009:

Valid: 0

Invalid: 4

During the month of January, the court issued four substantive opinions that addressed validity on the merits. Of those, the court held the patent invalid every single time (three for obviousness, one for lack of patentable subject matter).

Here’s the details (with links)

• Panavise Products v. National Products – validity not at issue (PTP review)
• Vehicle IP v. General Motors – validity not at issue (PTP review)
• Lencco Racing v. Jolliffe – no substantive opinion issued
• Tokyo Keiso v. SMC – affirmed invalidity for obviousness (PTP review)
• Zipwall v. Fastcap – no substantive opinion issued
• Friskit v. Realnetworks – affirmed invalidity for obviousness (PTP review)
• In re Comiskey – invalid for lack of patentable subject matter (sua sponte) (PTP review)
• Boston Scientific v. Cordis – reversal of validity; invalid for obviousness (PTP review)
• Sud-Chemie v. Multisorb Technologies – validity not reached on the merits; remanded for further proceedings (PTP review)

Nothing illustrates this point better than a recent exchange between Judge Rader and counsel for the patent owner in Boston Scientific v. Cordis. Judge Rader asked about the meaning of a simple claim term – “implantable” – and the resulting exchange shows that a legal determination of the meaning of the term is anything but simple. “Implantable” is one of those terms you think you understand, until you really think about it…which is exactly what Judge Rader did. Ultimately, the meaning of the term was not dispositive in the case (it isn’t even mentioned in the opinion), but the oral argument should serve as a reminder to all of us about the complexities of claim language.

A transcript of the exchange appears below…but listening to the audio really underscores the point. You can download the mp3 from the court’s website (search for case number 08-1073) or listen to it on the PTP audio notes page for the case.

Judge Rader: “How can you have an implantable device before it’s sterilized? You wouldn’t implant something that’s going to kill a patient.”

Counsel (for patentee): “‘Implantable’ here, I think, clearly refers to the character, to the geometry, to the structure of the device…”

Judge Rader: “‘Implantable’ means capable of being implanted. I don’t think there’s any problem with that interpretation…You’re not going to implant an unsterile device, are you? An incomplete device….”

Counsel: “I can make two brief points on that Your Honor….”

Judge Rader (interrupting): “Get to my question: Implantable or not before it’s sterilized?”

Counsel: “It is physically implantable.”

Judge Rader: “How can it be? You’re abdicating implantation of a non-sterilized product.”

Counsel: “I’m certainly not abdicating anything. There’s no question that when a device like this is used in people it should be and must be sterilized.”

Judge Rader: “And can it be implanted before that?”

Counsel: “Yes it can be.”

Judge Lourie: “You mean physically, but it’s not medically ready.”

Counsel: “That would be correct, Your Honor.”

Overturning a jury verdict holding the claims valid and infringed, the court determined that the claims were obvious in light of a single prior art patent. The reference taught all limitations of the claims, but did so across two separate embodiments. To arrive at the claimed invention, the court reasoned, a skilled artisan need only combine the two embodiments, which were illustrated in side-by-side figures in the patent. According to the court, making this combination “does not require a leap of inventiveness.”

So far, this seems fairly straightforward. But here’s the interesting part – the court did not conduct any sort of analysis under Graham v. John Deere to support its conclusion of obviousness. The opinion has no discussion of the Graham factors and, indeed, doesn’t even cite the case. Instead, the court points to the “predictable variation” language of KSR v. Teleflex and indicates that “one of ordinary skill in the art would have been motivated to combine the [separate embodiments of the reference] to arrive at [the claimed invention].”

Is it acceptable to skip the Graham analysis under these circumstances? The “predictable variation” language of KSR – relied upon here as support for the conclusion of obviousness – seems to cry out for a Graham analysis:

“[i]f a person of ordinary skill can implement a predictable variation, §103 likely bars its patentability.” (emphasis added)

“Likely” seems to leave room for the possibility that a claim to a predictable variation is, in fact, nonobvious. The Graham framework likely provides an appropriate structure for evaluating the issue – secondary considerations seem particularly relevant here. The court, nevertheless, skipped the analysis altogether, at least in the written opinion.

This seems to beg the question of whether a summary conclusion of obviousness is acceptable in certain situations, or whether a full Graham analysis is always necessary. Is this the summary conclusion of obviousness that KSR warned against?

There’s another interesting wrinkle to the Boston Scientific v. Cordis opinion – While the court failed to mention or discuss the Graham factors, it did note – in two separate instances – that the skilled artisan would have been motivated to combine the separate embodiments of the prior art patent to arrive at the claimed invention. In the absence of a Graham analysis, the mentions of a ‘motivation to combine’ appear to be an important factor on which the court relies for its conclusion of obviousness. Indeed, in the absence of any discussion of the Graham factors, it seems to come dangerously close to litmus-test treatment of the issue.

Does this hint at a clarification of the role of the TSM test in an obviousness analysis in the post-KSR world? If, in fact, the ‘motivation to combine’ was used in litmus test fashion, is this acceptable following KSR? All of these questions surrounding Boston Scientific v. Cordis are likely limited to the realm of obviousness issues based on combinations of embodiments from a single reference, which is presumed to be a relatively small universe.

Read the PTP review and analysis of Boston Scientific v. Cordis here.