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Interesting Patent Case:

PatentlyO (Prof. Dennis Crouch) blogs about the cert petition in IGT v. Aristocrat Tech of Australia, which has also drawn in an amicus petition from various tech industry giants (Google, Microsoft, Dell, etc.):

Every year, the PTO revives hundreds of unintentionally abandoned patent applications, and about half of those eventually issue as patents ....

In court, IGT has argued the revival was improper and thus, that the patents are invalid[, but t]he Federal Circuit ... [held] that improper revival is not a "cognizable defense" to patent infringement ... [because it] did not fall within any of the four categories of [statutory] defenses .... The case implicitly calls into question other traditional defenses such as nonstatutory double patenting, improper inventorship....

Of course, a defendant should have some mechanism for challenging an improperly revived patent -- either through the courts or a post-grant procedure at the PTO. Under the Federal Circuit's rule, however, a typical defendant would have no recourse. (Two potential avenues could be (1) inequitable conduct in the revival and (2) trigger an interference.)

Leaving the PTO's revival grant's unchallengeable is particularly troublesome because of the serious lack of transparency in the petitions office. Pre-grant revivals are tucked away in individual prosecution file wrappers and cannot be searched in any public database. Thus, the public is left without any check on the system at either the micro or macro level....

In several ways, this cases parallels the other recent Supreme Court patent cases such as KSR, eBay, and MedImmune. At least as history tells the story, each of those cases began with a rigid rule created by the Federal Circuit to favor patent holders. In each case, the Supreme Court softened the rule to add flexibility in a way that favors the defendants. In KSR, the rigid TSM test for applying multiple references during obviousness analysis was relaxed. In eBay, the rule strongly favoring injunctive relief was relaxed. And, in MedImmune, the rule setting a reasonable apprehension of a lawsuit as a condition precedent to a declaratory judgment action was also relaxed. In the IGT case at hand, the Supreme Court has the opportunity to tear down another rigid application of the law and open a new avenue for defendants to challenge a patent holder's rights....

Disclosure: The lawyers on the petition are colleagues of mine at Mayer Brown LLP.

Cornellian (mail):
Somehow the words "aristocrat" and "Australia" just don't seem to fit
together.
3.29.2009 12:15pm
Soronel Haetir (mail):
I am continually amazed by the patent rulings that the Federal Circuit hands down. At least SCOTUS has noticed and started reigning the FC in some. Hopefully this will be another such case.
3.29.2009 12:25pm
krs:
It's "rein," like a horse. And I'm not sure what's so wrong with this one. It seems like it could go either way, and it's not really "amaz[ing]" to decide a close question by upholding a practice the PTO has followed for years.

The Federal Circuit has its flaws, but it also has more than enough drive-by critics.
3.29.2009 1:08pm
John (mail):
Shouldn't (couldn't?) those objecting to the PTO's action have pursued some remedy under the APA rather than to attack the patent?
3.29.2009 1:09pm
CrazyTrain (mail):
[I]t's not really "amaz[ing]" to decide a close question by upholding a practice the PTO has followed for years.

Umm, krs??? I don't think you are following what's going on here. The CAFC did not uphold any PTO practice at all. It held that Article III courts have no authority to review, in the context of an infringement or DJ action, whether a patent is valid in a particular circumstance, ie where an applicant has revived an application that was purportedly unitentionally abandoned. The CAFC did not hold that the PTO was doing the right thing. It simply held that courts don't have the authority to determine that.

And, in my opinion and the opinion of I would guess most people who practice patent litigation (as opposed to prosecution), the CAFC's case law in recent years is a nightmare that has been unmoored to federal statutes and Supreme Court precedent. The recent reversals by the Supremes have all been obviously correct (no significant dissents I can think of). And there is still much more work to do -- such as the CAFC's absurd interpretation of Markman as meaning that claim construction is always an issue of law that involves no factual determinations whatsoever, when Markman simply held that interpretation of a patent is a judicial function - not a fact/law issue (much like equitable issues are for judges, but still involve findings of fact by a district judge reviewed for clear error by an appeals court).
3.29.2009 2:18pm
tvk:
Umm, CrazyTrain, which part of this sentence makes the Federal Circuit's interpretation of Markman "absurd"?

"The question here is whether the interpretation of a so-called patent claim, the portion of the patent document that defines the scope of the patentee's rights, is a matter of law reserved entirely for the court." Markman v. Westview Instruments, Inc., 517 U.S. 370, 372 (1996) (emphasis added).
3.29.2009 2:45pm
CrazyTrain (mail):
Yes, I find that it is helpful to read beyond the first line of a Supreme Court opinion to know what it means. In other words, keep reading -- that was the question and the Supreme Court answered that it could NOT be classified either as a pure issue of law or a pure issue of fact; rather that it was a "mongrel" practice between fact and law, and that the law/fact distinction simply did not resolve the case. Anyone with a cursory understanding of Markman and the debate that continues to flow from it knows that the Supremes did NOT hold that claim construction is an issue of law.

Here are some examples from Markman, culled from others:

Markman, 116 S. Ct. at 1390 (calling the construction of a term of art following receipt of evidence a "mongrel practice"); id. at 1395 (suggesting that claim construction "'falls somewhere between a pristine legal standard and a single historical fact'" ); id. at 1396 ("notwithstanding [claim construction's] evidentiary underpinnings").

The Court repeatedly refused to describe the questions presented by claim construction as either purely issues of fact or law: "[b]ut the sounder course, when available, is to classify a mongrel practice," "no clear answers," "in theory there could be a case," "leaves us doubtful," "[i]n the main," "[w]e accordingly think there is sufficient reason to treat construction of terms of art like many other responsibilities that we ceded to a judge," "independent reason to allocate," "treating interpretive issues as purely legal will promote . . . ." Markman, 116 S. Ct. 1390-96
3.29.2009 3:15pm
tvk:
CrazyTrain, to use your own quote against you: "treating interpretive issues as purely legal will promote ... intrajurisdictional certainty." Id. at 391 (emphasis added).

Seems to me fairly clear (or at least a highly plausible and non-absurd interpretation) that they were saying "it is best described in reality as a mongrel practice, but we are going to hold it purely legal, and lower courts must accordingly follow this fiction whether they like it or not."
3.29.2009 3:43pm
krs:
Any other examples besides Cybor of how the CAFC's patent cases have been a "a nightmare that has been unmoored to federal statutes and Supreme Court precedent"? Cybor was decided incorrectly, and the majority was wrong to invoke Markman as supporting the result there. Several of the CAFC judges recognize this. It was a few votes short of being fixed in Amgen, and I imagine that it will be fixed in the next case with decent briefing where the result actually turns on the standard of review applied to the claim construction.

That said, I don't think that counts as a "nightmare"
3.29.2009 4:04pm
krs:
CrazyTrain writes:

Umm, krs??? I don't think you are following what's going on here. The CAFC did not uphold any PTO practice at all. It held that Article III courts have no authority to review, in the context of an infringement or DJ action, whether a patent is valid in a particular circumstance, ie where an applicant has revived an application that was purportedly unitentionally abandoned. The CAFC did not hold that the PTO was doing the right thing. It simply held that courts don't have the authority to determine that

I'll reread the decision. Maybe I'm being a drive-by defender.
3.29.2009 4:36pm
Bruce Hayden (mail):
It may portend something positive. Pretty much any patent that is asserted through litigation is defended in part through a claim of inequitable conduct. As a patent prosecutor, as opposed to litigator, it has made our job significantly harder. Every little thing is now double checked by the defendant, and if the prosecutor made any mistakes, it will be used as grounds for invalidating the patent.

Add to this that the USPTO is totally insensitive to this, attempting to impose rules that would make this much worse, such as IDS requirements, where the reason for the flood of IDS's was claims of inequitable conduct, and the USPTO response was to greatly increase the possibility of such claims by requiring that if more than a few references were cited, the attorney/applicant would have to specifically point out the relevance of the reference.

So, at least in this one small instance, we don't have to worry that we screwed up the paperwork just a tiny bit, resulting in a multi-million dollar malpractice claim.
3.29.2009 11:14pm
Yinka Double Dare:
Tying Bruce's and krs's posts together, the CAFC said that inequitable conduct is the way to challenge a revival. And I submit that inequitable conduct jurisprudence is another area where the CAFC has made right hash of the law. The last en banc decision was Kingsdown, but what the CAFC currently applies is very divorced from that case, and as Judge Linn noted recently, actually comes from a case pre-Kingsdown that was part of line overruled by Kingsdown.

Linn also notes that Supreme Court precedent would seem to limit inequitable conduct to actual fraud. Kingsdown is more in line with this. Current CAFC jurisprudence allows a much lower standard, where if it is material enough, you can pretty much presume intent to deceive, which is pretty ridiculous.

The problem isn't with this case (it isn't really a "screwed up the paperwork a tiny bit" if you abandoned a case -- blowing deadlines is what causes most malpractice for patent lawyers, and revivals are almost always because of blown deadlines), it's with the inequitable conduct line of cases. I'm hoping someone is able to appeal to SCOTUS a case where there is no actual fraud and no clear and convincing evidence of intent to deceive yet the CAFC affirms inequitable conduct anyways.
3.31.2009 4:33pm

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