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As we previously discussed, the United States Patent and Trademark Office (USPTO) proposed significant changes to the Examiner count system on September 30, 2009.  Those proposed changes took effect on February 18, 2010.  As indicated in the USPTO press release (found here), the changes “place emphasis on complete and thorough initial examination, and are expected to decrease redundancy and encourage quicker resolution of issues in the patent application process.”

Among other things, the changes give the examiners more time for a first office action on the merits and time for examiner-initiated interviews, while reducing the credits received on requests for continued examination.  In order to gauge the effectiveness of the changes, the USPTO has launched a “Feedback Channel”.  The public now has an opportunity to provide comments and input to agency official regarding the new count system.

The Federal Circuit has recently addressed the issue of the knowledge required to support a finding of induced infringement under 35 U.S.C. § 271(b).  SEB S.A., et al. v. Montgomery Ward & Co., et al., Case Nos. 2009-1099, -1108, -1119 (Fed. Cir. 2010).  The Federal Circuit addressed past precedent and drew upon case law from other civil contexts to ultimately find that “a claim for inducement is viable even where the patentee has not produced direct evidence that the accused infringer actually knew of the patent-in-suit.”  P. 25.  The Federal Circuit found that the record supported the conclusion that the defendant deliberately disregarded a known risk that a patent covered its product.  In this case, (1) the defendant copied the plaintiff’s product, (2) the defendant hired a patent attorney to perform a right-to-use study for its product, but did not tell the patent attorney that it had copied the plaintiff’s product, and (3) the defendant’s president was well versed in the U.S. patent system.  As a result and based on a finding of direct and induced infringement, the Federal Circuit upheld the $4.8 million judgment against the defendant.

The Federal Circuit clearly stated that a “failure to inform one’s counsel of copying would be highly suggestive of deliberate indifference in most circumstances.”  Id.  As is always the case, clients should be open and honest with their attorneys.  This is particularly important if the disclosed invention was in any way based upon a known product or design.  Inventors should understand that this type of information is important to the work of their patent attorney.

To download a copy of the SEB decision, please click here.

The Federal Circuit has recently affirmed a Northern District of California decision finding, among other things, U.S. Patent No. 5,820,551 (the ‘551 patent) unenforceable due to inequitable conduct. Therasense, Inc. v. Becton, Dickinson and Co., Case No. 2009-1511 (Fed. Cir. 2010). During prosecution before the U.S. Patent and Trademark Office (USPTO), the ‘551 patent was rejected on prior art grounds. In order to avoid the rejection, the Applicant submitted a declaration attesting that the cited prior art’s disclosure of an element being “optionally, but preferably” present in the disclosed device would be interpreted by one of ordinary skill as being “required”. The Applicant then failed to disclose to the USPTO statements made by the Applicant to the European Patent Office (EPO) in a related European application. During a proceeding before the EPO, the Applicant argued that the identical prior art language was “unequivocally clear” that the particular element was “optionally utilized” in the disclosed device. The Federal Circuit found that the Applicant violated its duty of disclosure for failing to make the USPTO aware of the contrary position presented to the EPO.

As a result of the Therasense decision, inventors and their patent attorneys should be mindful of the assertions made to the USPTO and patent offices abroad. In the event contrary representations are made to another forum, an Applicant should consider whether the USPTO should be made aware of the statements.

To download a copy of the Therasense decision, please click here.

As many patent owners and licensees are aware, U.S. law allows manufacturers of patented products to mark the product with the number of the relevant patent (or simply “patent pending” if a patent has been applied for).  This not only allows a patent plaintiff to collect damages for infringement which occurred prior to the accused infringer receiving actual notice, but also may provide a benefit with respect to the perceived quality of the product.  However, the law also imposes penalties for products which are improperly marked.

Under the statute, a party who falsely marks an unpatented article with a patent number or even the word “patent” may be subject to a fine of “not more than $500 for every such offense.”  35 U.S.C. § 292.  The statute also contains an intent element, requiring that liability be limited to those cases where the false marking was done “for the purpose of deceiving the public.”

Despite the language referring to a penalty “for every such offense,” many courts have interpreted the statute as limiting the total damages to a single $500 fine, even in cases where large quantities of a product are mismarked over a period of time.  This interpretation is based in part on London v. Everett H. Dunbar, a 1910 1^st Circuit case evaluating a previous version of the statute.  179 F. 506.  That version, before being revised in 1952, listed the statutory damages as “not less than one hundred dollars” for each offense.  The London court held that the total damages should still be limited to $100, reasoning that a minimum $100 fine for each unit sold would be out of proportion to the product value in cases involving very cheap products.  Courts continued to follow this interpretation, even after the damages provision was revised from “not less than $100” to “not more than $500” per offense.

However, a recent ruling from the Federal Circuit held that each falsely-marked unit of a product may qualify as a “separate offense” when evaluating damages under the statute.  In Forest Group, Inc. v. Bon Tool Co., the court found that the 1952 statutory revision from a minimum to a maximum fine eliminated the policy concerns regarding excessive damages for cheaper products, as courts now have the discretion to award damages based on a much lower per-unit amount.  93 U.S.P.Q.2d 1097 (Fed. Cir. 2009).  The opinion also noted that Congressional intent favored a per-article award based on another statutory provision which permits members of the public to bring false marking actions on behalf of the government and keep half of any proceeds, reasoning that no plaintiff would go to the expense of pursuing litigation in order to split a single $500 award.

Based on the holding in Forest, manufacturers should to be careful to ensure that any product marked with a patent number or “patent pending” is covered by the listed patent and that the patent is still enforceable.  Particular attention should be paid to products which are manufactured in large quantities, as a total damage award for false marking may quickly escalate based on the per-unit calculation.

Please contact us if you would like more information on patent marking.

In a recent case (Wyeth v. Kappos), the Federal Circuit issued an opinion concerning how Patent Term Adjustment (PTA) should be calculated.  The USPTO’s method of calculating PTA will now be revised based on the new standard.  The result favors patent owners, and will typically lead to greater length patent terms in the future.  Owners of previously issued patents may be able to secure amended calculations of PTA conforming to the new standard.

As background, PTA is a process by which additional time is added to the standard patent term of 20 years from the earliest priority date when the USPTO causes undue delays during prosecution of the patent application.  PTA is normally calculated by the USPTO after the application has been allowed.  The two most common reasons behind adjusting the term of a patent are that the USPTO has not provided “prompt” responses (A-delay) and that the application pendency exceeded three years (B-delay).  PTA is subject to an overlap limitation whereby if A-delay periods overlap with B-delay periods, the larger of the two controls.

Previously, the USPTO recognized overlap anytime both A-delay and B-delay occurred, reasoning that the B-delay guarantee started with the patent application date rather than three years later.  The Federal Circuit’s new interpretation holds that the B-delay guarantee begins three years after the filing date, effectively limiting overlap to only those instances in which A-delay occurs more than three years from the filing date.

Because the effect of the new interpretation is to add patent term in cases where the USPTO miscalculated, patent owners should consider whether they may be eligible for additional PTA under the new standard.  The USPTO recently announced guidelines regarding requests for recalculation of PTA in light of the revised standard.  According to the guidelines, the USPTO will recalculate patent terms for free for patents issued prior to March 2, 2010, and for which a request is made no later than 180 days after issuance.

Please contact us if you have any questions regarding PTA or would for us to request review of previous PTA calculations for issued patents.