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Patent Law Main Outline Fall 2015 University of Virginia - Prof. John Duffy POLICY:
? Why do we want to grant any property rights for innovations?
? Why are the property rights that we do permit so heavily restricted (e.g., ending after only 20 years)?
? Incentive to Create Theory: patents allow for an optimal return on investment for R&D o Even without patents, innovation occurs (e.g., marijuana) but there may be sub-optimal ROI
? Prospect Theory: investment/R&D can happen after application for or after granting of a patent (Xerox: product in market much after patent granted)
? First Mover Advantage: first to bring to market will get ROI before copies made
? Regulatory Problem: e.g. pollution - absence of regulation = too much polluters o Patent system is the opposite (i.e., a Positive Externality): absence of regulation = too little innovation
? Coase: w/ well-defined property rights and zero transaction costs, there would be efficient R&D, thus no patents needed. Externalities make the patent system necessary
? Competition: patents limit short-term price competition but encourage long-term research competition (it "orders" competition, not limits it) - w/o patents we would have the opposite result
? Natural Monopoly Problem: high development costs but low costs of production thereafter o Innovation Costs: high initial cost, i.e., a higher first unit cost, with lower marginal cost o Possible Solutions from Friedman:
? (1) State ownership (now "public domain" subsidy)
? (2) Private monopoly with regulation
? (3) Unfettered private monopoly: complete private monopoly o Partial Property Rights:
? Canada pharma: price regulation w/ compulsory licenses
? Temporarily Limited Franchise: like patents today
? Other limitations: fair use, first sale, libraries
? Patentability: should 101 track trends in technology? See e.g. financial engineering
? Concern for the need for more investigation: o See 101 Mayo, Morse o See Utility Brenner o See Enablement: Edison Ch. 1: Introduction
? Patent: o (1) Qualifying Inventions: new, useful and not obvious o (2) Disclosure Required: must disclose information to allow others to practice the invention o (3) Rights Conferred: certain exclusive rights precluding anyone from making, using, offering for sale, selling or importing the invention
? Historical Overview of Patent Law: slides 16-19, with lessons on 20
? The Architecture of a Modern Patent o Specification/Drawings o Claims: Claims must "particularly point out and distinctly claim the subject matter which the applicant regards as his invention." 35 U.S.C. SS 112
? Preamble: must start with "I claim" or "we claim"
? Includes what is not part of your invention because may not count for infringement analysis (e.g., airplane seats for an airplane tray table invention)
? Transition Words: 1
"Open" Claims: "Comprising" "Closed Claims: "Consisting of" "Consisting Essentially of" = in between
? Can include additional unclaimed elements IFF they do not make the variant essentially different from the claimed invention
? "The combination with [elements] of [more details]"
? DUFFY: if evaluating a claim, too narrow a transition word is considered a problem Body of the claim
? Claim Definiteness:
? Must be able to determine the scope of the claim, see definiteness, as well as Written Description and Enablement for what's in the spec.
? No words like "should," but "approximately" is more of a gray area
? Three Formal Requirements for Claim Drafting
? (1) Single Sentence
? (2) No Freestanding Elements: must set forth how each element interacts with at least one other element
? (3) Antecedent Basis: claim references to previously mentioned elements must be clear
? Independent & Dependent Claims
? Independent Claim: may not refer to any other claims ("A windmill comprising...")
? Dependent Claim: depends on a prior independent claim ("The window according to claim 1, wherein/further comprising...")
? Must narrow the independent claim
? Insurance against granted but overly broad independent claims
? Helps expedite patent process to find patentable claim scope
? Multiple Dependent Claims: may not depend from other multiple dependent claims
? Combination Claims: "the combination of _(1)_ with _(2)_"
? Older way of claiming things
? May run into obviousness issues
? Means-Plus-Function Elements
? Cannot have single means claim, you need a combination (i.e., at least two elements) per 35 U.S.C. SS 112(6) or 112(f)????See Definiteness under Written Description requirement See Equivalents of disclosed structure in Claim Interpretation in Infringement
Relation to Written Description Requirement:
? Unclear terms must be found in the spec Jepson Claims: claiming improvement on works of others ("A __, wherein the improvement comprises __")
? Stuff before the improvement is considered prior art or known Negative Limitations
? Only permitted when there is a proper foundation in the patent specification
? Sontarus Inc. v. Par Pharmaceutical, Inc. (Fed. Cir. 2012): According to 112(a) written description requirement: negative claim limitations are adequately supported when the specification describes a reason to exclude the relevant limitation 2
? "Wherein" is always attached to an element
? DUFFY on Claim Scope: when reviewing claims, always think what language/limitations could be taken out (i.e. what narrows it too much?)
? Overview of the Patent System (see slides)
? Globalization and Patent Rights (slide 48, p. 55-67) o Late 19th Century: Paris Convention o 1970s: Process Consolidation o TRIPS: Substantive Harmonization The Patent Term Provisional Applications Eighteen Month Publication of Applications o Continuing Evolution??
Ch. 2: Patentable Subject Matter - 35 U.S.C. SS 101
? 35 U.S.C. SS 101: Inventions patentable. 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. o Broadly interpreted (includes "anything under the sun that is made by man" Chakrabarty quoting S. Rep.), but subject to two types of exclusions
? General Exclusions: principles of nature, natural products, physical phenomena, abstract ideas
? POLICY: these run into problems with other doctrines
? Novelty: things in nature aren't new
? Utility: new law of nature is merely an explanation, not a useful application
? Abstraction: if it's too abstract, the legal system may be unable to define property rights
? Public policy: basic science should be available to all
? Mental Steps: patents are not meant to cover processes of the human mind
? Other IP: patents are not supposed to cover that which is covered by copyrights
? Field Restrictions: specific legislative exclusions from patentability (e.g. some nations exclude surgical methods or business methods)
? Naturally Occurring Things: Living Things & Natural Phenomena o Overview:
? There is no per se rule against patenting living things (Chakrabarty)
? Current Two Step Process: (From Alice, applied in Ariosa Diagnostics)
? (1) Are the claims directed to a patent-ineligible subject matter? (but isn't everything abstract or natural to some degree?)
? Natural: DNA and blood samples (Ariosa)
? Natural: Naturally occurring plasmids (Chakrabarty)
? Natural: Level of compound in blood (Mayo)
? Natural: Isolated DNA (Myriad)
? Natural: Non-modified bacteria
? Y/N Natural: Electrical signals (O'Reilly v. Morse & Telephone Cases)
? N Natural: Synthetic non-naturally occurring cDNA (Myriad)
? (2) If yes, do the claims recite additional elements that "transform the nature of the claim" into a patent eligible application (step-by-step, and then as a whole) 3
N: Describe the natural relation (Mayo) N: Simple Application of Discovered Phenom. !patentable (Funk Bros.) N: Isolated natural thing (Myriad) Maybe: Measurement method or actual dosage adjustment (see Mayo) Y/N: Limited to structure beyond overly broad new principle (compare O'Reilly v. Morse to Telephone Cases)
? Y: Genetic modification (Chakrabarty) o Cases: Ariosa Diagnostics, Inc. v. Sequenom, Inc. (Fed. Cir. 2015, supplement) two step process for claims directed to ineligible SM
? FACTS: diagnostic method claims directed toward isolating plasma from a maternal blood sample, and amplifying/isolating paternally inherited nucleic acid, and detecting the paternally inherited nucleic acid.
? RULE: two step process (adding to Mayo?)
? (1) Are the claims directed to a patent-ineligible subject matter?
? DUFFY: everything can be thought of as an abstract idea/law of nature/etc., so the second prong is really all that matters
? (2) If yes, do the claims recite additional elements that "transform the nature of the claim" into a patent eligible application
? Two Parts:
? (a) Look at each element alone - is it beyond the abstract idea and was it in the prior art?
? (b) Look at the combination - does it add more over prior art? (Duffy thinks Ariosa missed this step, so came out wrong)
? (1) Claims were directed toward cffDNA which is naturally occurring
? (2) Claims start with nucleic acid (naturally occurring) and end with paternal cffDNA (also naturally occurring and known), and the intermediate process of amplification was well-known. Since the only thing "new" was the discovery of paternal cffDNA in maternal blood, so there is not enough to make take this out of the barred category of natural phenomena
? IMPORTANT: looks at the claim step-by-step, not as a whole (the claim was for a new way of getting paternal cffDNA, but the only thing new was that it existed in maternal blood, i.e., nothing about the method was new except the starting point, which was a natural phenomenon)
? BUT SEE patentability of new use for known/natural things (not claimed)
? Paternal was cffDNA normally discarded, but further describing a new use thereof or specific new steps in the method of isolating may have passed the test
? Diamond v. Chakrabarty (1980) no formalistic or per se rule against living things
? FACTS: invention was genetically modified bacteria ("at least two stable energygenerating plasmids, each of said plasmids providing a separate hydrocarbon degradative pathway") that breaks down oil (e.g., oil spills). In some claims included "inoculum" which included bacteria and carrier material (straw)
? Claims: one for process, one for inoculum, another for just the bacteria???
RULE: man-made microorganism is patentable, as it is not excepted by congress, thus all claims are patent eligible subject matter
? DUFFY: requires "artificiality"
? DUFFY: This case says the default rule is that congress should except things from patent eligible SM, but Benson says the opposite, that it is up to congress to say something is patentable! Duffy thinks the court, in general, will not exclude a broad man-made category, but may exclude limited parts thereof DICTA: May patent anything under the sun made by man
? DUFFY RESULT: courts began allowing patents on more things
? DUFFY: falls under "composition of matter" and "manufacture" but also possibly "machine" Brennan DISSENT: based on original meaning of the act, living organisms were not included, so should only get a patent for the process of making the bacteria POLICY: compare to CRM---SCOTUS avoids formalistic approach of PTO and CAFC (don't just need to tie to "inoculum") POLICY: congress wrote 101 to include broad things it didn't know about Distinction from Plant Patents (Plant Patent Act): needed separate statute because plant breeders couldn't describe repeatable process for obtaining the same results or otherwise enable the invention (how to make and 112)
? Mayo v. Prometheus (2012) - something more than describe natural relation FACTS: claims drawn to a method of treating a gastrointestinal disorder including (1) administering a test for 6-thioguanine, (2) determining the level of it, wherein the level of 6-thioguanine below a threshold "indicates a need to increase" dosage of a drug, and the level of 6-thioguanine above another threshold "indicates a need to decrease" dosage of a drug
? Strategy: wanted to sue those who measure, not who prescribe who probably don't do the testing steps - divided infringement RULE: claims embody natural relations, but fail to do "significantly more than simply describe ... [the] natural relations," and do not "add enough to their statements of the correlations to allow the processes they describe to qualify as patent-eligible processes that apply natural laws"
? DUFFY: this is a method of analysis, not a rule POLICY: court notes that traditional excluded categories are not rigid, and at some level, everything could be considered as a law of nature, a natural phenomenon, or an abstract idea
? O'Reilly v. Morse (1853, p. 107) - Overly Broad New Principle FACTS: claim 8 was directed to a method of using electromotive force to send characters/letters/signs at a distance, explicitly not limited to the specific machinery in the spec. I.e. new use of electromotive force RULE: invalid because it was a too broad---it would cover future inventions based on the natural principle (of communicating at a distance via electromotive force) that Morse did not disclose (note: other claims were allowed)
? HISTORY: historically interpreted as invalid because it was a purely functional claim
? NOTE: claims purely directed to Morse code that were held valid were a problem for the machine/transformation test Bilski 5
?????????POLICY: this is important as a pioneering invention patent that would block use for future improvements DUFFY: Enablement: claimed a result but didn't disclose all ways of doing it
? Telephone Cases (1888, p. 116) - Limitation to Contribution FACTS: broad method claim directed to the transmission of vocal/sound with electrical undulations RULE: claim valid patent eligible SM because the undulations in the current were not naturally occurring. His claim language was limited to his contribution ("herein described") and does not cover that which is distinct from that which was disclosed (this distinguishes from Morse)
? Funk Bros. Seed Co. v. Kalo Inoculant Co. (1948) - Can't Patent Conventional Application of Natural Phenomenon FACTS: plants needed bacteria as inoculants to take nitrogen from the air, but each strain could only be used with specific types of plants, and some strains inhibited each other. Patentee found strains that did not inhibit each other and patented multi-purpose combination of them method for making. Infringement suit only for the product RULE: the conventional application that results from discovering a natural phenomenon (i.e., strains not inhibiting each other) is not patentable
? This is true even if it the product is not found in nature that way (i.e., strains not found in nature together) But see Diamond v. Diehr for proposition that novelty is irrelevant
? AMP v. Myriad (2013, supplement) naturally vs. randomly occurring FACTS: discovered genes that contribute to certain cancers. Claimed isolated DNA and synthetic cDNA for coding (processing) that DNA. Method claims for comparing/analyzing, etc. to find breast cancer not at issue. RULE 1: isolated or purified naturally occurring substance is per se patentable (though the mere possibility that it could or might occur in nature is insufficient), i.e. naturally occurring DNA is unpatentable
? HISTORY: L. Hand held that things like this were patentable back when isolation/purification was difficult RULE 2: cDNA is patentable as it is not naturally occurring. Even though cDNA might usually/rarely occur randomly in nature does not render the composition unpatentable. Abstract Ideas: software, business methods, etc. o Two step test (Alice v. CLS Bank)
? Step 1: identify the abstract idea If there is a combination of abstract idea, you may be able to stop the analysis as no case says this is unpatentable See stuff above for natural phenom. Abstract: Binary to decimal conversion (Benson) Abstract: hedging process (Bilski) Abstract: third party intermediary exchange (Alice) Abstract: digitally implementation of method (Alice, Diehr, Bilski) Abstract: electrical signals (Morse but see Benson)
? Step 2: Go through the claim and look for "an element or combination of elements that is 'sufficient to ensure that 6
the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself."????
? (a) Look at each element alone - is it beyond the abstract idea and was it in the prior art?
? (b) Look at the combination - does it add more over prior art?
? E.g. Ariosa decided wrongly - each step was known but many think the combination itself was enough Enough:
? Digital implementation of method connected to machine for process (Diehr)
? Best case for software patents
? Bell telephone Not Enough:
? Digitally implementation of method (Alice, Bilski)
? Convert binary to decimal (shift registers or not) (Benson) o Cases:
? Alice v. CLS Bank (2014) - Two Step Test FACTS: computer implemented scheme for using a third-party intermediary to accomplish exchange of obligations RULE: two part test:
? (1) "whether the claims at issue are directed to one of those patentineligible concepts"
? DUFFY: everything can be thought of in this way, and court agrees here
? (2) If yes, then what else is in the claims
? Look at elements or combination of elements to determine if it's sufficient to be significantly more than ineligible concept
? Not Eligible Cases for Comparison: Mayo (gastrointestinal), Benson (binary conversion), Ariosa (maternal-->paternal), Myriad (DNA), Funk Bros. (bacteria for plants)
? Eligible Cases for Comparison: Bell (telephone), Diehr (digital computer operating rubber press), Myriad (cDNA) APPLICATION:
? (1) This is an abstract idea
? (2) Nothing significantly more than applying abstract idea of intermediated settlement using unspecified generic computer. Not enough
? Bilsky v. Kappos (2010) - no per se bar on bus. methods, MOT doesn't control FACTS: patent related to a business method including a market hedging process (could be accomplished either by contracts or computer) in the energy industry including a formula
? Take long-term contract for a commodity fixed cost, then hedge risk based on that fixed cost by taking a position in those that would benefit if the price of that commodity went up RULE:
? (1) Machine-Or-Transfer (MOT) test previously endorsed by PTO and CAFC is only an important clue to 101 analysis
? (2) No per se bar on business method patents (5 justices) 7
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