Metabolite, where’s the machine or transformation?

This piece builds on earlier pieces starting June 25, 2009, related to the Bilski machine or transformation test.  In these earlier pieces, the main question is whether or not the machine or transformation test stinks for the electronic world.  In this piece, the main question is whether or not the machine or transformation test stinks for other arts, like biotech, because, e.g., the machine or transformation test might not catch all claims to ineligible subject matter. 

Consider for example, a three justice dissent of a writ of certiorari that was dismissed as improvidently granted  in Laboratory Corp. of America Holdings v. Metabolite Laboratories Inc, No. 04-607 (U.S. Jun. 22, 2006).  Briefly, three doctors researched vitamin deficiencies and found a correlation between high levels of homocysteine in the blood and deficiencies of two essential vitamins, folate (folic acid) and cobalamin (vitamin B12).  They filed a patent application, which issued as a patent containing the following claim: 

        13. A method for detecting a deficiency of cobalamin or folate in warm-blooded animals comprising the steps of:
        assaying a body fluid for an elevated level of total homocysteine; and
        correlating an elevated level of total homocysteine in said body fluid with a deficiency of cobalamin or folate.

The dissent asked us to think about this claim.  The “assaying ” refers to the use of any and all tests to determine whether or not a body fluid has an “elevated level of total homocysteine.” At least some “assaying” is in the prior art.  The “correlating” step refers to simply an ordinary doctor’s inherent knowledge that a test that shows an elevated homocysteine level shows that the patient likely has a vitamin deficiency, a fundamental principle as written in med school text books.  In other words, claim 13 recites the steps necessary for an ordinary doctor to use her inherent knowledge of a fundamental principle. 

What’s wrong with that?  Before the discovery of the “correlating,” claim 13 did not exist and doctors were able to order any known “assaying” procedure.  After the discovery of the “correlating” and claim 13’s existence, anytime a doctor ordered an “assaying” procedure, the returned results would allow an ordinary doctor to perform the “correlating” step; it’s her job.  So, claim 13 effectively took away prior art “assaying” due to the claim language reciting a doctor’s knowledge of the fundamental principle of “correlating.”  Cf. Flook’s claim 1, without the post calculation step.

The Bilski machine or transformation test would probably side with the dissent, as neither a machine nor a transformation would necessarily be involved in claim 13.  Yet the Federal Circuit (at a time well before Bilski) never addressed defendant’s argument that claim 13 improperly covers a fundamental principle.  And the Supreme Court let this decision stand, as the case was DIG (and the above represents the comments of three dissenters).

Let’s change the facts a little and assume that the “assaying” step recited a machine from the prior art tests of “assaying.” Using the dissent’s reasoning, on one hand, the result would be the same. The results returned would allow an ordinary doctor to perform the “correlating” step, and such a claim would take away prior art “assaying” due to the claim language reciting a doctor’s knowledge of the fundamental principle of “correlating.”  Cf. the reasoning for holding ineligible Benson’s claim reciting hardware.  Using the Bilski machine or transformation test, on the other hand, the result would be different, namely, the claim would be eligible.  So, the Bilski machine or transformation test would not capture, nor scrutinize, ineligible subject matter identified by three active members of the Court.  Does this make the machine or transformation test insufficient? or stink?

Oh Diehr, missing dictum for Bilski

In Diamond v. Diehr, 450 U.S. 175 (1981), the Court determined that a process for curing synthetic rubber which includes in several of its steps the use of a mathematical formula and a programmed digital computer is patentable subject matter under 35 U.S.C. § 101.  A relevant claim reads:

1. A method of operating a rubber-molding press for precision molded compounds with the aid of a digital computer, comprising:
providing said computer with a data base for said press including at least,
natural logarithm conversion data (ln),
the activation energy constant (C) unique to each batch of said compound being molded, and
a constant (x) dependent upon the geometry of the particular mold of the press,
initiating an interval timer in said computer upon the closure of the press for monitoring the elapsed time of said closure,
constantly determining the temperature (Z) of the mold at a location closely adjacent to the mold cavity in the press during molding,
constantly providing the computer with the temperature (Z),
repetitively calculating in the computer, at frequent intervals during each cure, the Arrhenius equation for reaction time during the cure, which is
ln v = CZ + x
where v is the total required cure time,
repetitively comparing in the computer at said frequent intervals during the cure each said calculation of the total required cure time calculated with the Arrhenius equation and said elapsed time, and
opening the press automatically when a said comparison indicates equivalence.

A second independent, claim 11, was similar but never recited a computer. 

The relevant claims involved transforming an article, in this case raw, uncured synthetic rubber, into a different state or thing.  Relying on language from, Gottschalk v. Benson, 409 U.S. 63 (1972), the Court repeated: “Transformation and reduction of an article ‘to a different state or thing’ is the clue to the patentability of a process claim that does not include particular machines.” (citation omitted). The Court held that the recited process for molding precision synthetic rubber products falls within the § 101 categories of possibly eligible subject matter. 

This sounds like an easy decision by today’s standards.  But what dictum the Diehr decision never mentioned became more important over 27 years later in In re Bilski.  Notably, the Diehr Court never added dictum to the effect that a machine or transformation was necessary, as opposed to sufficient, for eligibility.  Why would it?  It, the first Rehnquist Court to address eligibility, found that a transformation was sufficient to impart eligibility.  And even though a machine (a computer) was recited in two of the claims, the Court never mentioned that a machine would make the claim sufficient for eligibility.  It didn’t have to, as all claims involved a transformation. 

But in Bilski, the CAFC used (and cited) missing dictum in its reasoning:

We recognize, however, that the Court was initially equivocal in first putting forward this [machine or transformation] test in Benson. As the Applicants and several amici point out, the Court there stated: It is argued that a process patent must either be tied to a particular machine or apparatus or must operate to change articles or materials to a ‘different state or thing.’ We do not hold that no process patent could ever qualify if it did not meet the requirements of our prior precedents. Benson, 409 U.S. at 71. In Flook, the Court took note that this statement had been made in Benson but merely stated: “As in Benson, we assume that a valid process patent may issue even if it does not meet [the machine-or-transformation test].” 437 U.S. at 589 n.9 (emphasis added). And this caveat was not repeated in Diehr when the Court reaffirmed the machine-or-transformation test. See Diehr, 450 U.S. at 184 (quoting Benson, 409 U.S. at 70) (”Transformation and reduction of an article ‘to a different state or thing’ is the clue to the patentability of a process claim that does not include particular machines.”). Therefore, we believe our reliance on the Supreme Court’s machine-or-transformation test as the applicable test for § 101 analyses of process claims is sound.

Wow.  Relying on dictum is one thing.  Relying on the absence of dictum is quite another.  And don’t get me started on the fact that Diehr never reached the machine prong of the test.  Maybe the reasoning used to determine that the machine or transformation test is necessary, as opposed to sufficient, makes the machine or transformation test stink.

In a future blog, more will follow on this test.

Flook out Bilski!

At the end of Bilski, is a decision necessary? (Jun. 25, 2009), the blog ended by noting that maybe for the electronic world the machine or transformation test stinks because of how it handles the facts of the Supreme Court’s Gottschalk v. Benson, 409 U.S. 63 (1972).  This blog begins with another Supreme Court case, Parker v. Flook, 437 U.S. 584 (1978), and its claim.

The claim at issue embraced a process for updating a number (an “alarm limit”) of an observable variable “involved in a process comprising the catalytic chemical conversion of hydrocarbons.”  The claim, if you want to read it, is as follows:

1. A method for updating the value of at least one alarm limit on at least one process variable involved in a process comprising the catalytic chemical conversion of hydrocarbons wherein said alarm limit has a current value of

Bo + K

wherein Bo is the current alarm base and K is a predetermined alarm offset which comprises: 

(1) Determining the present value of said process variable, said present value being defined as PVL;

(2) Determining a new alarm base B1, using the following equation:

B1 = Bo(1.0—F) + PVL(F)

where F is a predetermined number greater than zero and less than 1.0;

(3) Determining an updated alarm limit which is defined as B1 + K; and thereafter

(4) Adjusting said alarm limit to said updated alarm limit value.

The user defines a time interval (not explicitly recited), the alarm base for a particular process variable (Bo), its offset (K), and its weighting factor (F).  Using basic algebra, one variable could be bypassed, and steps (2)-(3) collapse into a single formula for determining the next alarm limit ALn+1 after the nth alarm limit (ALn):

ALn+1 = Bn (1.0—F) + PVLn(F) + K = ALn + F(PVLn— Bn)

In step (1), a process variable (i.e., PVL, e.g., temperature) is determined;

In steps (2)-(3), an updated alarm limit (ALn + F(PVLn— Bn)) is determined; and

In step (4), the alarm limit (a number) is updated. 

The Court framed the issue as “whether the identification of a limited category of useful, though conventional, post-solution applications of such a formula makes respondent’s method eligible for patent protection.”  The Court answered no. 

The Court noted that steps (1) & (4) were conventional.  “The chemical processes involved in catalytic conversion of hydrocarbons are well known, as are the practice of monitoring the chemical process variables, the use of alarm limits to trigger alarms, the notion that alarm limit values must be recomputed and readjusted, and the use of computers for ‘automatic monitoring-alarming.’”

Then the Court assumed that the formulae of steps (2)-(3) were useful and unknown and discovered by the inventors.  The Court then found that even though the formulae were unknown, they should be treated as if they were known for purposes of eligibility.  Because “the public must not be deprived of any rights that it theretofore freely enjoyed” (FN 15), granting a patent would prevent the public from using “a method for updating the value of … [a number] alarm limit …” as claimed.   Citing the CCPA with approval, the Court noted that “[a]s the Court of Customs and Patent Appeals has explained, ‘if a claim is directed essentially to a method of calculating, using a mathematical formula, even if the solution is for a specific purpose, the claimed method is nonstatutory.’” (citing In re Richman, 563 F.2d 1026, 1030 (CCPA 1977).)  Then the Court went out of its way to limit the holding: “Very simply, our holding today is that a claim for an improved method of calculation, even when tied to a specific end use, is unpatentable subject matter under § 101.” (FN 18).

So, couldn’t Flook and Benson stand for proposition that a process for solving a math problem (law of nature) is not eligible, regardless of whether or not the claim recites that a machine (or part thereof, a shift register) recorded the solution of the math problem, and regardless of whether or not the claim recites a specific end use? 

And how would the Bilski machine or transformation test handle this claim?  Well the recited steps never transform a particular article into a different state or thing.  Again, the claim recited a method for updating the value of … [a number] alarm limit on at least one process variable involved in a process comprising the catalytic chemical conversion of hydrocarbons ….  The recited steps do not alter the cracking process. 

And the claim is not necessarily tied to a machine.  Even though time interval between ALn+1 and ALn may be small enough so that the calculation might have to be done by a computer, the time interval between ALn+1 and ALn is user defined and may be defined as large enough so that the calculation may be done by hand.  So, maybe … so what.  If the claim explicitly required use of a computer, or if the claim recited a time interval between ALn+1 and ALn that was so small that the calculations must be done by a computer, would the Court still have found the claim ineligible?  I’d say so, because the court held “that a claim for an improved method of calculation, even when tied to a specific end use, is unpatentable subject matter under § 101.”  But the Bilski machine or transformation test would likely predict otherwise. 

So, I ask whether for the electronic world the machine or transformation test stinks because of how it handles the facts of Benson and Flook.  In fact, both cases explicitly rejected the machine or transformation test as the test for eligibility.  A future blog will look at other cases and technologies.

Bilski, is a decision necessary?

In 1997, Bilski filed an application claiming priority to a 1996 provisional application.  In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (en banc).  The 1997 application eventually claimed a method of “hedging”:

A method for managing the consumption risk costs of a commodity … 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 …;

(b) identifying market participants for said commodity …; and

(c) initiating a series of transactions between said commodity provider and said market participants ….

As job-number one, to avoid quality being number-two (thanks Richard), examiners should have determined the claim’s patentability over the prior art.  MPEP § 706.03 (“[Determining whether or not the claims are patentable over the prior art] should not be relegated to a secondary position while undue emphasis is given to nonprior art or “technical” rejections.”).  For some reason in this case, this procedure most likely did not occur, because if the examiner were to have looked up the word “hedging” in an encyclopedia, this application would have probably never made it to the Board, let alone the United States Supreme Court.  Cf. The Columbia Encyclopedia, 5th Ed. (1993) at p. 1215 (exemplifying hedging in terms of wheat).  DIG it?  In any case, it did on the issue of eligibility under § 101, the only issue to reach the Board, which sustained the § 101 rejection, albeit for different reasons than the examiner.  I refuse to analyze the Board’s opinion, as it was merely informative, not to mention that eligibility is reviewed de novo, so the opinion is given Rodney Dangerfield deference on review, namely, no respect.

The CAFC, en banc, majority never mentioned the ansatz that “anything under the sun that is made by man” is eligible for patenting.  Cf. Diamond v. Chakrabarty, 444 U.S. 1028 (1980).  Instead, the en banc majority quickly noted that the statutory term “process,” cf. 35 USC §§ 100(b); 101 (“Whoever invents or discovers any new and useful process[, which means a process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material,] … may obtain a patent therefor, subject to the conditions and requirements of this title.” ), does not have its ordinary meaning, because the Supreme Court held that a process claim is not eligible for patenting if it claims “laws of nature, natural phenomena, [or] abstract ideas,” i.e., “fundamental principles.”  Into this judicially created exception to eligibility, the en banc majority placed Bilski’s hedging claim. 

Without going into the details, the majority read, or misread, the Court’s most recent statement (Diamond v. Diehr, 450 U.S. 175 (1981)) as redefining the issue as whether a claim recites a fundamental principle and, if so, whether the claim would preempt substantially all uses of that fundamental principle if allowed.  Et volia, the majority held that a “claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing. (citing the big three, namely, Gottschalk v. Benson, 409 U.S. 63 (1972); Parker v. Flook, 437 U.S. 584 (1978); and Diehr).

“[S]urely patent-eligible under § 101” are strong words. And a few paragraphs later, the majority backtracked on its strong language after noting an obvious exception, Benson.  As you may recall, Benson’s application contained claim 8, which recited hardware, namely, a reentrant shift register (useful for memory), in the process of “converting signals from binary coded decimal form into binary.”  Moreover, as you may recall, Benson’s claim 13 recited “converting binary coded decimal number representations into binary number representations” without reciting any hardware.  The en banc majority noted that Benson’s claim’s “limitations tying the process to a computer were not actually limiting because the fundamental principle at issue, a particular algorithm, had no utility other than operating on a digital computer.”  Yet surely Benson’s claim 8 would not have preempted anyone from using the idea of converting binary coded decimals to binary.  Nor does patent law require more than a single use for establishing the utility prong of eligibility. So, why was claim 8 not eligible? 

In any case, the majority failed to address a harder concept related to the fact that Benson’s claim 8 also transformed signals in a shift register by “converting signals from binary coded decimal form into binary.”  If Benson’s claim 8 transformed signals in hardware, and if a “claimed process is surely patent-eligible under § 101 if … it transforms a particular article into a different state or thing,” then why, using the majority’s test, was Benson’s claim 8 not eligible for patenting?

Maybe for the electronic world the machine or transformation test stinks.  Benson’s claim 13 embraced solutions to a math problem, and claim 8 embraced an electronic recording of a solution to the math problem on a shift register.  So, couldn’t Benson stand for proposition that a process for solving a math problem (law of nature) is not eligible, regardless of whether or not the claim recites that a machine (or part thereof, a shift register) recorded the solution of the math problem?  In fact, Benson explicitly rejected the machine or transformation test as the test for eligibility.

Further blogs will futher consider whether or not the machine or transformation test stinks for electronic arts and other arts.  Until then, Sean.

Sanitizing Chef America

The CAFC promotes a contract theory of patent law but sometimes invites the bar to ignore custom.  For example, if a claim recited “talking on a phone,” you would get at least one side advocating that the phrase meant the person doing the talking was actually standing on a phone.

A case on point, Chef Am., Inc. v. Lamb-Weston, Inc., 358 F.3d 1371, 1374 (Fed. Cir. 2004) concerned a method for baking comprising “heating the resulting batter-coated dough to a temperature in the range of about 400° F. to 850° F.” No one doubts that the patentee meant for the user to set the oven at 400–850°, rather than a nonsensical temperature that would burn the dough to a crisp (“to 400–850°”).  But we all know how that case was resolved.

 ECOLAB, INC. v. FMC CORPORATION, Slip ops. 2008-1228, -1252 (Fed. Cir. Jun. 9, 2009) distinguished Chef Am.  FMC asserted against Ecolab a “method for sanitizing fowl … comprising contacting the fowl with an aqueous peracetic acid solution … for a time sufficient to sanitize the fowl ….”  FMC defined “sanitize” as “denot[ing] a bacterial population reduction to a level that is safe for human handling and consumption.”  Ecolab, to defend itself in the district court, argued that its accused product does not and cannot make raw poultry safe for human consumption without cooking. The district court disagreed, construing the term “sanitize” to mean that the treated meat has become safe for human handling and post-cooking consumption. 

On appeal to the CAFC, Ecolab argued that “[b]y incorporating a subsequent ‘cooking’ element into the term ‘sanitize,’ the district court overrode the express definition of ‘sanitize’ set forth in the [asserted] patent.”  The CAFC disagreed, distinguishing Chef Am. as concerning a claim reciting unambiguous language while, in the present case’s claim, the definition of “sanitize” is ambiguous in that it does not indicate when consumption is to take place—the definition does not indicate whether the consumption would occur immediately after application of the solution or, for example, at a later time after the meat is cooked.  To resolve the ambiguity, the CAFC immediately cited extrinsic evidence of common sense and custom: [Ecolab’s expert stated that] in-plant inspectors examine poultry that has been treated with [the solution] to determine if it is ‘fit for human consumption.’ …. Surely, the inspectors do not require the poultry to be ‘fit for human consumption’ in its uncooked state.” 

I would have appreciated the court’s analyzing the intrinsic evidence to learn the logical connection between the definition’s term “safe for human … consumption” and the admission’s statement “fit for human consumption.”  Maybe that analysis would shed light on the origin of the post-contacting cooking step’s use for sanitizing and why the stated ambiguity in the isolated term—sanitize—would have existed in the claim term—“contacting the fowl with an aqueous peracetic acid solution … for a time sufficient to sanitize the fowl …”—notwithstanding the specification’s teachings. 

Oh well, I have to go stand on a phone now.

More on BdR 200(b) and Affymetrix’s holding

I have been asked to clarify my last comment in the Affymetrix blog, where I stated as follows:

“After reading this case, I cannot help but imagine a situation in which Affymetrix’s ‘244 claims were fully supported by Affymetrix’s ‘244 specification and Affymetrix’s ‘244 claims, as interpreted by its ‘244 specification, still interfered in-fact with the subject matter of Agilent’s ‘968 claims.  In this case, the better prosecution would have been to add a set of fully supported claims and then explain why, despite any apparent differences, the claims define the same invention. BdR 203(a).”

Let’s assume that the PTO’s examiners, interference specialists, and the Board each did its job.  In doing so, the agency determined that (1) Affymetrix’s ‘244 claims were fully supported by Affymetrix’s ‘244 specification and (2) that Affymetrix’s ‘244 claims, as interpreted by its ‘244 specification, still interfered in-fact with the subject matter of Agilent’s ‘968 claims.  Thus, an interference was declared.

Under the CAFC’s Affymetrix holding, inquiries (1) & (2) are not made as a matter of procedure in the district court during a section 146 action, because Affymetrix’s holding requires that interfering subject matter exists, because the “copied” claims, if they were prior art, would have anticipated the patent’s claims and vice versa.  Cf. BdR 203(a).  Otherwise, the claims would not have been “copied.”  Yet interfering subject matter may also exist when if “copied” claims, if they were prior art, would have rendered obvious the patent’s claims and vice versa.  Cf. BdR 203(a).  So, the effect of Affymetrix’s holding is that a party who “copied” claims and elects to file a section 146 action waives its right to show interfering subject matter via the obviousness prong of the interference in-fact test. 

Would this case have been different had the action been brought under secton 141 (directly from BPAI to CAFC) instead of section 146 (from BPAI to district court)?  After the CAFC’s recent decision in Tafas v. Doll, slip op. 2008-1352 (Fed. Cir. Mar. 20, 2009), … well you could see where this is going.

In any case, I don’t know, nor do I care, if and when the CAFC would try to dictate procedure on the PTO.  One may be able to avoid this question by adding a set of fully supported claims and then explain why, despite any apparent differences, the claims define the same invention. BdR 203(a).

Interference BdR 200(b) interferes with budgets….

Why don’t clients like to participate in an interference?  Consider AGILENT TECHNOLOGIES, INC., v. AFFYMETRIX, INC., Slip op. 2008-1466 (Jun. 4, 2009, Fed. Cir.).

The interfering subject matter originated in the claims of Agilent’s patent, U.S. Patent No. 6,513,968. After Agilent’s ‘968 patent issued, some of its claims were copied in Affymetrix’s application no. 10/619,244 to provoke an interference.  Interference no. 105,285 was declared, and Affymetrix’s ‘244 application was accorded an earlier filing date, making Affymetrix the senior party.

Agilent filed one substantive motion, urging the threshold issue that Affymetrix’s ‘244 application was improperly accorded an earlier filing date due to a lack of written description of at least two steps in the interfering subject matter, namely, in the microarray arts, a method comprising … providing a bubble in the fluid; and moving a bubble within the fluid to result in mixing (“bubble mixing”). The Board denied Agilent’s motion, because it found that Agilent never provided any evidence suggesting that one of ordinary skill in the art would not have understood Affymetrix’s ‘244 application to inherently disclose “bubble mixing.”

Agilent appealed to a district court per § 146, where the court denied Agilent’s motion for summary judgment on written description, and granted Affymetrix’s cross-motion on written description.  In the district court, Agilent supplemented its evidence as the Board suggested by adding deposition testimony explaining why “bubble mixing” is not inherently present in Affymetrix’s ‘244 application, and importantly, by offering Affymetrix’s admissions that its ‘244 application does not inherently disclose “bubble mixing.”  The district court, nevertheless, discarded Agilent’s new evidence and used Affymetrix’s ‘244 application to construe the copied claims.

The CAFC held that the district court erred in its claim construction, improperly denied Agilent’s motion for summary judgment, and improperly granted Affymetrix’s cross-motion.  Regarding claim construction, the CAFC found that “[w]hen interpretation is required of a claim that is copied for interference purposes, the copied claim is viewed in the context of the patent from which it was copied.” (citation omitted).  Here, one of the issues was the meaning of “closed,” and its meaning flipped the tables to support Agilent’s burden of proving a lack of written description in Affymetrix’s ‘244 application by a preponderance of the evidence.  (see http://www.cafc.uscourts.gov/opinions/08-1466.pdf).  The CAFC held that the district court’s deferential review of the Board’s written description holding in the face of newly submitted conflicting evidence constituted legal error, and in light of the proper claim construction and the undisputed facts, Affymetrix’s ‘244 application provides no disclosure of “bubble mixing.”  As such, Affymetrix’s ‘244 application was accorded an effective filing date equal to its actual filing date, which is after Agilent’s 968 patent’s effective filing date. In other words, and as a result, the interfering subject matter is not patentable to Affymetrix.

After claims were copied in Affymetrix’s ‘244 application to provoke an interference, the factual question of written description remained improperly resolved until the case reached the CAFC.  In the PTO, examiners and APJs are guided by MPEP § 2301.03 and BdR 200(b): “Identical language in claims does not guarantee that they are drawn to the same invention. Every claim must be construed in light of the application in which it appears. 37 CFR 41.200(b).”  See also MPEP § 2304.02(d).  Although BdR 200(b) may be correct in the context of motions for patentability per old interference Rule 633(a), the CAFC noted that applying BdR 200(b) to the threshold issue of written description as an entitlement to provoke an interference is wrong, Agilent, Slip op. 2008-1466, p. 9 (citing In re Spina, 975 F.2d 854 (Fed. Cir. 1992)), and may lead to a totally expensive proceeding. Agilent supra.

After reading this case, I cannot help but imagine a situation in which Affymetrix’s ‘244 claims were fully supported by Affymetrix’s ‘244 specification and Affymetrix’s ‘244 claims, as interpreted by its ‘244 specification, still interfered in-fact with the subject matter of Agilent’s ‘968 claims.  In this case, the better prosecution would have been to add a set of fully supported claims and then explain why, despite any apparent differences, the claims define the same invention. BdR 203(a).

Can the USPTO’s reexamination ease a burden on accused infringers?

A plaintiff seeking a preliminary injunction (PI) must establish, in part, that it is likely to succeed on the merits.  Under this standard, a patent holder seeking a PI in a patent infringement suit must show that it will likely prove infringement and that its asserted patent will likely withstand challenges, if any, to the validity of the patent.  When the patent holder moves for a PI and the accused challenges the asserted patent’s validity, confusion existed about the correct procedure and burdens of production and proof.  In TITAN TIRE CORPORATION v. CASE NEW HOLLAND, INC., slip op. 2008-1078 (Fed. Cir. Jun. 3, 2009) the CAFC added its form of clarity to the issue. 

According to the CAFC, the accused does not have to persuade the trial court that the patent is invalid, because the moving party for a PI, namely, the patent holder, must persuade the court that, despite the challenge presented to validity, the patentee nevertheless is likely to succeed at trial on the validity issue, which the panel phrased as whether the patent holder can show that the invalidity defense “lacks substantial merit.”  By way of explanation, the panel added the following:  “[lacking substantial merit] refers to the net of the evidence after the trial court considers all evidence on both sides of the validity issue available at this early stage of the litigation.”  Or rephrased from another point of view, a finding of a “substantial question” of invalidity equals that the patent holder is unlikely to succeed on the merits of the validity issue, because the patent holder is seemingly unable to establish that the invalidity defense “lacks substantial merit.”  Plugging in the appropriate burdens, the issue becomes whether it is more likely than not that the accused will be able to prove at trial, by clear and convincing evidence, that the patent is invalid.

An interesting issue, one neither raised nor addressed by the court, is whether or not filing a reexamination could both ease the burden of proof on the accused and increase the burden of proof on the patent holder.  For example, in the PTO’s reexamination, the standard for unpatentability is more likely than not (preponderance of the evidence).  So, a parallel litigation-reexamination in which the accused asserts the same validity challenges to the patent in both venues, the accused could argue that the issue becomes whether it is more likely than not that the accused will be able to prove (not at trial but) in the PTO, by a preponderance of the evidence (rather than clear and convincing evidence), that the patent is unpatentable (rather than invalid).  If so, then the accused may be able to ease its burden for fighting off a PI.