Yesterday the United States Court of Appeals for the Federal Circuit, in a split decision with Judge Lourie writing and Judge Bryson joining, took a step forward in the evolution of the law of obviousness that confirms my worst fears about obviousness in this post-KSR era.

I have written about KSR v. Teleflex numerous times and we have engaged in thought-provoking and sometimes heated debate in the comments to those articles. We have argued about the extent to which the obviousness laws have changed, and many have sought to calm my fears by pointing out that even under the ridiculously naive approach to obviousness set forth by the Supreme Court in KSR it was still necessary under previous Supreme Court rulings that the prior art teach each and every element of the invention. In short, it has been argued by many that even after KSR it is not an appropriate rejection, or reason to invalidate an issued claim, that it would be “common sense” to modify elements within the prior art in a wholly new way and then combine the “common sense” modifications. I did agree that was true, at least until yesterday.

Last week the United States Court of Appeals for the Federal Circuit issued a precedential opinion in Centillion Data Systems, LLC v. Qwest Communications International, Inc., in which the district court was affirmed in part and reversed in part. Of particular note here is the determination of the meaning of “use” as that term is used in 35 U.S.C. 271(a). The Federal Circuit, per Judge Moore (with Judges Lourie and Linn joining) acknowledged that the Court has never directly addressed the issue of infringement for “use” of a system claim that includes elements in the possession of more than one actor, thereby making the specific issue a question of first impression.

The CAFC went on to hold that to “use” a system for purposes of infringement, a party must put the invention into service, or in other words control the system as a whole and obtain benefit from it. Furthermore, the Court held that the on-demand operation is a “use” of the system as a matter of law despite the fact that the back-end processing is physically possessed by another, who in this case was Qwest.

Inventive Step is reporting that President Obama has renominated Edward C. DuMont and Jimmie Reyna to serve on the United States Court of Appeals for the Federal Circuit.  Oddly, the press release announcing the renomination of DuMont and Reyna, along with the renomination of 40 others, is not available from WhiteHouse.gov.  On January 5, 2011, President Obama forwarded numerous nominations to the Senate, but the press release naming the 42 judges isn’t available. The only place where I could find a copy of the press release, which was apparently sent to some journalists and just not published otherwise, is here.

In any event, President Obama nominated both DuMont and Reyna in 2010.  DuMont was nominated in April to take the position opened by the retirement of Chief Judge Michel and Reyna was nominated in September to take the position opened by Judge Mayer’s decision to take senior status.  Neither individual had a hearing in the Senate Judiciary Committee, a prerequisite to an up or down vote by the full Senate.  Perhaps the Senate Judiciary Committee will take swifter action on these nominations in 2011, but even if they do there is no guarantee that the Senate will have an up or down vote.

Earlier today Uniloc USA, Inc. won a partial victory today in an appeal to the United States Court of Appeals for the Federal Circuit in their case against Microsoft.  See Uniloc USA, Inc. v. Microsoft Corp. Truth be told, while the Federal Circuit ruled that Microsoft did infringe and the patent claim in question (claim 19 of U.S. Patent No. 5,490,216) was valid, it was Microsoft who was the big winner here.  The damages awarded by the jury to Uniloc were $388 million, which was set aside by the district court, a ruling that the Federal Circuit affirmed.  The Federal Circuit also agreed there was no willful infringement.  So while Uniloc has won at least something from Microsoft as a result of its infringement of a valid patent claim, it seems like it will be far less than the $388 million, particularly given the Federal Circuit threw out the 25 percent rule and said the entire market value rule was not applicable in this case.

Judge Kathleen O'Malley

On March 10, 2010, District Court Judge Kathleen O’Malley was nominated by President Barack Obama to succeed Alvin Schall, who retired from the United States Court of Appeals for the Federal Circuit. Earlier today, Judge O’Malley was confirmed by the United States Senate, see Senate Confirms Five Judicial Nominees.  O’Malley’s confirmation, along with the confirmation of 18 others in recent days, is the result of a deal between Senate Democrats and Republicans that ensured passage of 19 nominations in exchange for an agreement not to move forward with other controversial nominations, including the hotly challenged nomination of Goodwin Lui, who is Associate Dean and Professor of Law at University of California Berkeley School of Law.  O’Malley will join 15 other colleagues on the Federal Circuit, 6 of who are on senior status.

Judge O’Malley has served on the the United States District Court for the Northern District of Ohio since being appointed by President William J. Clinton on September 20, 1994 and confirmed by a voice vote of the Senate on October 12, 1994.  See Thomas: Nomination PN1786-103.

On Friday, December 17, 2010, the United States Court of Appeals for the Federal Circuit issued a decision in one of the patentable subject matter cases that was returned to the Court by the Supreme Court in the wake of the Supreme Court’s decision in Bilski v. Kappos. Prometheus Laboratories, Inc. v. Mayo Collaborative Services first reached the Federal Circuit on an appeal brought by Prometheus, challenging the final judgment of the United States District Court for the Southern District of California. The district court had granted summary judgment of invalidity of U.S. Patents 6,355,623 and 6,680,302 under 35 U.S.C. § 101. In the original case the Federal Circuit held that the district court erred as a matter of law in finding Prometheus’s asserted medical treatment claims to be drawn to non-statutory subject matter under the machine-or-transformation test, which at the time was the definitive test for determining the patent eligibility of a process under § 101. In Bilski, however, the Supreme Court held that the machine-or-transformation test, although “a useful and important clue,” was not the sole test for determining the patent eligibility of process claims. The Supreme Court vacated and remanded the Prometheus case for further consideration in light of Bilski v. Kappos. On remand, once again, the Federal Circuit held (per Judge Lourie with Chief Judge Rader and Judge Bryson) that Prometheus’s asserted method claims are drawn to statutory subject matter, reversing for the second time the district court’s grant of summary judgment of invalidity under § 101.

Earlier today the United States Supreme Court granted certiorari in Microsoft Corporation v. i4i Limited Partnership, with Chief Justice John Roberts taking no part in the decision or petition. The Supreme Court did not request the views of the Solicitor General, choosing rather to accept the matter with no input from the United States government.  The decision to grant cert. comes only days after the United States Patent and Trademark Office refused to grant reexamination of the patent in question.

Microsoft had filed an ex parte reexamination request on the patent in question, US Patent No. 5,787,449. The ’449 patent exited reexamination unchanged. Microsoft then filed a second ex parte reexamination request, and it is this second request that was denied by the Patent Office on Wednesday, November 24, 2010. The denial of this second request means that the Patent Office did not believe there to be a substantial new question of patentability.

Last week, on November 18, 2010, the United States Court of Appeals for the Federal Circuit granted a stay to HemCon, Inc., which will prevent implementation of the injunction issued against it and in favor of Marine Polymer Technologies, Inc.  The stay will remain in effect during the pendency of HemCon’s appeal to the Federal Circuit. The stay issued by the Federal Circuit will allow the adjudicated infringing bandages sold by HemCon to continue to be supplied to the United States Military.

The permanent injunction had been awarded by the United States Federal District Court for the District of New Hampshire, and relates to U.S. Patent No. 6,864,245, for Biocompatible poly-?-1?4-N-acetylglucosamine. In essence, the ’245 patent relates to a polymer of high molecular weight that is free of proteins and substantially free of organic and inorganic contaminants. The biodegradable barriers of the invention include p-GlcNAc based materials used for temporary barriers which become resorbed by the body. Products that prevent the formation of surgical adhesions, stop bleeding, and promote wound healing are contemplated by the ’245 patent.

On Tuesday, November 9, 2010, the United States Court of Appeals for the Federal Circuit heard oral arguments in TiVo, Inc. v. EchoStar Corp.  The case pits TiVo versus Dish, and any ruling from the Federal Circuit will necessarily define the extent to which a district court judge can rely on contempt proceedings to enforce an injunction rather than simply order a full blown new trial.  In process the en banc oral argument in this case at the Federal Circuit did not substantially differ from the oral argument held at the Supreme Court the day earlier in the Costco copyright case, where the Supreme Court was struggling with the meaning of the phrase “lawfully made under this Title.”  There are two phrases that will be at the center of resolving the TiVo case. The first is “fair ground of doubt,” and the second is “merely colorably different.”

Yesterday, November 8, 2010, the United States Court of Appeals for the Federal Circuit issued a decision in a case that will likely have limited applicability for most, but will definitively add another weapon in the arsenal of those who wish to challenge the final determinations of the United States Patent and Trademark Office. In a peculiar oddity (redundancy on purpose) those who choose to challenge the final determinations on patentability of the Board of Patent Appeals and Interferences (BPAI) can elect to either proceed directly to the United States Court of Appeals for the Federal Circuit, or they can elect to proceed to the United States Federal District Court for the District of Columbia. The question presented and considered by the full Court at the Federal Circuit was whether new evidence (i.e., evidence not previously presented to the USPTO) can be presented to the District Court when challenging a decision of the BPAI. The short answer — YES.  However, without new evidence at the District Court the Federal Circuit must continue to give deference to the USPTO on further appeal.

The potential use of reexamination by an accused infringer to reverse, in essence, a CAFC holding of patent validity was demonstrated anew this past week in the PTO Board’s decision, Ex parte Funai Electric Co., Ltd.

Funai filed a complaint in 2007 at the U.S. International Trade Commission alleging that Vizio and a number of other manufacturers had violated Section 337 through the importation into the United States of digital television sets that infringed Funai’s U.S. Patent No. 6,115,074. The ITC found the ‘074 patent to be valid and infringed, and issued a limited exclusion order prohibiting the importation of infringing television sets into the United States. In May of this year the CAFC affirmed the ITC’s ruling, including its determination that the ‘074 claims were “not invalid” over the combination of prior art references asserted by Vizio and the other Respondents.

Chief Judge Paul Michel at his retirement party, October 19, 2010

This is the final installment in my follow-up interview with Chief Judge Paul Michel, who retired from the United States Court of Appeals for the Federal Circuit effective June 1, 2010. In some ways this might be the most interesting of all of the interview segments for those practicing in the patent arena, or those who have any reason to appear in front of the Federal Circuit. In this final installment Chief Judge Michel speaks with me about what, in his opinion, makes for effective appellate advocacy, both in terms of written briefs and in terms of oral presentation.

It has been a privilege to provide my two different interviews with Chief Judge Michel, and to be invited to his recent retirement party. Chief Judge Michel has always been gracious and giving of his time, and is truly committed to working for a better patent system now that he is a private citizen. Despite his extraordinary accomplishments he is always exceptionally humble and truly a nice guy, proving the old adage that nice guys finish last is not always true.