In general, a claim can be divided into different elements such as steps A, B and C for a method claim.  For example, a hypothetical method claim for a new way to drive a car may recite “A method for controlling a car comprising the steps of grasping a joystick (i.e., element A), moving the joystick (i.e., element B) and transmitting GPS position of the car (i.e., element C).  When one entity makes, uses, sells or imports a device that incorporates all of the steps A, B and C or performs all of the steps A, B and C then that entity is infringing on the patent.  However, when two different entities collectively practice all of the steps, but not individually then neither entity is infringing on the claimed invention.  For example, if the driver performs steps A and B but a third party does the transmitting step then the driver and the third party do not infringe the method claim.  Accordingly, the claims when drafted should be directed so that the claim can be infringed by one entity. The following case illustrates this issue.

SiRF (alleged infringers) manufactured and sold GPS units to end users.  Global Locate (patentee) held patents related to GPS technology.  The claims of the patents at issue required the step of transmitting data to the end user and processing the data at the GPS receiver.  SiRF contended that they did not perform all of the steps recited in the claims of the patent, namely, the processing step.  SiRF transmitted the data to the end user but the GPS receiver operated by the end user processed the data.  The end users performed the processing steps with the GPS receiver.  Accordingly, it appears that no single entity performed all of the steps of the claimed method.  Nonetheless, the court held that SiRF performed the processing step even though the GPS receivers were being used by the end users.  The reason is that the GPS receivers were built and sold by SiRF enabled and ready to process data.  SiRF’s device automatically performed the processing step.  Hence, the Court held that SiRF infringed the asserted claims.  SiRF Technology v. ITC 2009-1262 (Fed. Cir. April 12, 2010)

Problems arise when the company does not have an agreement by the independent contractor to assign inventions to the company.  In this situation, the independent contractor owns the invention even though the company hired the independent contractor.  The company may have a license or the right to use the invention due to the nature of the relationship between the independent contractor and the company.  However, the company cannot exploit the patent rights because the independent contractor owns the invention, not the company.  The company cannot license the patent rights to another, cannot file a patent application on the invention, etc.  As such, it is important to negotiate ownership terms with independent contractors before engagement.

In relation to employer-employee relationships, read Avoid Problems: Get an Invention Assignment Agreement.

You may also be interested in Conflicting Invention Assignment Clauses.

For more information, please feel FREE to contact me at (949) 433-0900 or James@OCPatentLawyer.com.

The following case involved a copycat footwear that looked similar but not identical to Crocs.  The copycat footwear was being sold by quite a few companies.  Crocs had a design patent directed toward their footwear and sued these companies.  Design patents protect the ornamental look of a product.  Design patents do not prevent others from incorporating or copying a utilitarian function – that is the function of a utility patent.  Fortunately for Crocs, recent cases have broadened the scope of protection afforded by a design patent.  Crocs was ultimately successful in obtaining a judgement of infringement against at least some of the eleven companies.

The present case clarifies the new standard of design patent infringement which is the ordinary observer” test.  Under this test, infringement exist if the ordinary observer, familiar with the prior art designs, would be deceived into believing that the accused product is the same as the patented design.  The Court emphasized that the test looks to the overall design and does not place undue emphasis on details. In comparing the accused product and the patented design, the Court conducted a side by side comparison and looked to the overall effects of the patented design.  For example, in the present case, one of the overall effects of the of the patented design that helped the Court to decide that the copycat footwear infringed the design patent is that the patented design created a focal point through the convergence of multiple major design lines and curves which was incorporated into the copycat footwear.  The Court held that despite minor differences between the accused product and the patented design, the accused copycat footwear still infringed Crocs’ design patent.  Crocs, Inc. v. ITC, 2008-1596 (Fed. Cir. Feb. 24, 2010).

Should you have any questions, please feel free to contact me.

The following case illustrates how one company violated a competitor’s patent rights by copying their product.  SEB v. Pentalfa, 2009-1099 (Fed. Cir. Feb. 5, 2010). SEB held a patent directed to a deep fryer.  The patent claimed a way of manufacturing the exterior skirt of the deep fryer with an inexpensive ordinary grade plastic thereby reducing the cost of the deep fryer.  A ring of heat insulating and heat resistive material is mounted to the top of the skirt and an inner hot pan.  The skirt and hot pan is separated by an air space of sufficient width to insulate the skirt from the hot pan.

Pentalfa copied SEB’s deep fryer.  However, before manufacturing and selling the copy-cat product, Pentalfa obtained a “right-to-use study” from a patent attorney.  The patent attorney conducted a search but did not find SEB’s deep fryer patent.   The patent attorney provided a positive right-to-use opinion.  Despite the positive right to use opinion, the jury held that Pentalfa actively induced others to infringe SEB’s patent.  To be held liable for active inducement of infringement, the alleged infringer must have the specific intent to encourage another’s infringement.  Pentalfa contends that they did  not have the “specific intent” to encourage another’s infringement because they did not have actual knowledge of SEB’s deep fryer patent.

However, the Court held that the requisite specific intent does not require actual knowledge of the patent but may also include a deliberate indifference of a known risk that SEB held a patent.  In the present dispute, Pentalfa copied SEB’s deep fryer.  Pentalfa hired an attorney to conduct a right to use study but did not tell the patent attorney that it based its product on SEB’s deep fryer.  The Court indicated that the failure to inform one’s counsel of copying would be highly suggestive of deliberate indifference.  Also, the parties were sophisticated with respect to the patent system.  Hence, the Court held that Pentalfa actively induced others to infringe SEB’s patent.

Based on this case, if you copy another company’s product then you should inform your patent attorney of this fact.  Also, you should inform your patent attorney of the process by which the product was invented.  The purpose is to address the issue of patent infringement early during the process so that design around options can be implemented if possible.  Design arounds are alternative designs that avoid the patent yet retain the functional feature of the patented product.  Typically, it is less expensive to redesign at the manufacturing stage compared to the cost to recall, litigation and a pay out of damages to the patentee.

Should you have any questions, please feel free to contact me.

The following case illustrates the problems associated with companies that do not have invention assignment agreements or with relying upon a sub-contractor that does not have the proper invention assignment procedures in place.  General Electric (“GE”) manufactures jet engines.  GE attempted to manufacture the blades with composite material.  However, the blades were subject to failure.  As a result, GE outsourced engineering and manufacturing of the composite blade to a division of Chromalloy Gas Turbine Corporation (“Chromalloy”).  Chromalloy appointed Teets as the chief engineer for the project.  Unfortunately, Chromalloy did not have an Invention Assignment Agreement in place with Teets.  Eventually, Teets invented a new process for fabricating a durable composite blade which GE purchased for its engines.  A patent application was filed.  Later, Teets asserted that he, not Chromalloy owned the invention rights in the process for fabricating the composite blade.  The lower Court held that Chromalloy at least had “shop rights” in the invention.  As such, at the least, Chromalloy could continue to sell the new composite blades to GE.  Upon appeal, the Federal Circuit held that Chromalloy had more than just “shop rights” but also owned the patent rights.  Although the Teets did not expressly assign the invention to Chromalloy, the Court construed an implied-in-fact contract to assign the invention to Chromalloy based on the particulars of the employment relationship.  Teets v. Chromalloy Gas Turbine Corporation, 83 F.3d 403 (Fed. Cir. 1996).

Based on this case, it is important to set up proper procedures and documentation to clarify ownership of intellectual property rights cases not only in the employment context but also when hiring a sub-contractor.  Employers should implement procedures to obtain invention assignment agreements from employees.  It may also be important to ensure that your sub contractors have proper invention assignments from its employees to prevent any delays in production if one of the sub-contractor’s employees objects to intellectual property ownership issues.

Should you have any questions, please feel free to contact me.

In Schendel v. Curtis, Schendel and Curtis both filed patent applications directed to a fusion protein.  However, Curtis filed the patent application (3) months after Schendel.  According to the filing dates of the two patent applications, Schendel was the first to file and Curtis had the burden to show a date of invention prior to the filing date of the Schendel’s patent application.  Curtis attempted to challenge the filing date of Schendel’s patent application by showing that Curtis made a working model of the invention prior to the filing date of the earlier application.  To this end, Curtis provided various documents which ultimately failed to provide sufficient evidence to show that Curtis made a working model of the invention prior to the filing date of the earlier filed patent application.  Hence, Schendel was awarded the patent.  Schendel v. Curtis, 38 U.S.P.Q.2d 1743 (Fed. Cir. 1996).

The earlier filing date of Schendel’s patent application shifted the burden of proving the case to Curtis which is a significant advantage to Schendel.  Schendel relied solely on the filing date of his patent application.  Curtis may have been the first to invent but, without sufficient evidence, was unable to successfully overcome the burden of proving “first to invent.”  Accordingly, the earlier filing date provided Schendel the needed advantage to win his case.

The United States by following a first to invent rule is unusual compared to most other foreign countries that follows the first to file rule.  Nonetheless, there are significant benefits to filing first in the United States as illustrated above.  Also, the United States provides a one year grace period for inventors to commercialize, send out brochures to potential clients and offer their invention for sale to the public before a patent application must be filed.  Many foreign countries require that a patent application be filed first before triggering any of these events to preserve the right to seek patent protection.  Nonetheless, as illustrated above, the first inventor to file a patent application has significant advantages in determining which of two inventors should be entitled to a patent on the invention.

To the extent possible, it is often beneficial to file patent applications early and often to gain the advantage in being the first to file.  There may be budget constraints, different products may at different product development stages, etc. that would prevent or delay filing of the patent application.  Nonetheless, seek the advice of a competent patent attorney on how best to cost effectively protect your inventions.

You may also be interested in Importance of Documenting the Invention.

Should you have any questions, please feel free to contact me.

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The following case illustrates the meaning of an offer for sale or the “on sale” bar and illustrates one example in which an earlier filing date would have been beneficial. In RCA v. General Data, RCA (the patentee) submitted bid documents on a government project for a display system for computer generating alphanumeric characters on a standard raster scan television monitor. The defendant argued that the bid documents constituted an offer for sale triggering the start of the one year time period to file a patent application. Since the patent application was filed more than one year after submission of the bid documents, if the bid documents constitute an offer for sale, RCA’s patent would be rendered invalid. RCA contended that the bid documents could not be an offer for sale since the bid documents did not disclose all of the aspects of the invention. The Court disagreed. Although the bid documents did not disclose all aspects of the invention, the court held that such fact does not prove that the bid document is not an offer for sale of the invention. The issue of whether the invention was on sale may be established by any relevant evidence outside of the bid documents (e.g., memoranda, drawings, correspondence memoranda, drawings, correspondence, and testimony of witnesses). In this case, an RCA witness testified that RCA intended to incorporate the invention into the device if their bid was accepted by the government. Hence, the bid documents constituted an offer for sale.  RCA v. General Data, 12 USPQ2d 1449 (Fed. Cir. 1989).

One exception to the “on sale” bar is that the offer for sale does not trigger the start of the one year time period if the inventor was still experimenting with the invention. Unfortunately for RCA, an RCA witness testified that an actual working prototype of the invention was made before the bid documents were submitted. Thus, the experimental use exception did not apply.

Businesses may generate a quote for their product, software, or service.  The quote may trigger the one year time period in which the inventor or business must file an application for patent under the on sale bar discussed above.  This is a hard date.  There are no extensions or petitions.  As such, based on the foregoing discussion, it is advantageous to file patent applications as early as possible to mitigate inadvertent loss of patent rights.

You may also be interested in:

• Public Use Bars Patent Protection After One Year Unless such Use is an Experiment
• Preventing Loss of Patent Rights

Should you have any further questions, please feel free to contact me.

The following case illustrates a different scenario in which patent assignments arise, specifically, conflicting agreements.  A Researcher working for Leland Stanford Junior University (“Stanford”) executed a patent assignment agreement wherein the Researcher agreed to assign any inventions to Stanford.  Stanford and Cetus were jointly developing ways to determine the efficacy of antiretroviral drugs for HIV infected patients.  During the joint research work, the Researcher also executed a Visitor Confidentiality Agreement containing an invention assignment clause which assigned all inventions of the Researcher to Cetus.  Hence, Stanford’s agreement was in conflict with Cetus’ Visitor Confidentiality Agreement.

The different language used in the patent assignment clauses of the conflicting agreements was one of the key factors in deciding that Cetus owned the invention instead of Stanford.  In the patent assignment for Stanford, the Researcher promised that he “will” assign inventions to Stanford which is an assignment in the future.  In contrast, in Cetus’s Visitor Confidentiality Agreement, the language included the phrase “does hereby assign” which is a present assignment.

As a result of the joint research, Stanford ultimately filed a patent application on subject matter invented by the Researcher.  After filing the patent application, the Researcher executed a patent assignment document  which was subsequently recorded at the Patent Office.  The Court held that title or ownership of the invention still vested in Cetus.  At the time of filing the patent application, the “does hereby assign” language contained in Cetus’ Visitor Confidentiality Agreement immediately vested title in Cetus by operation of law.  The later assignment from Researcher to Stanford was ineffective.  Stanford v Roche 2008-1509, -1510 (Fed. Cir. Sept. 30, 2009).

Based on this case, it is important to understand the difference between the “will assign” language and the “does hereby assign” language that are typically found in invention assignment agreements.

I also invite you to contact me should you have any questions.

The following case discusses the requirements to plead inequitable conduct during litigation.  Although this case focuses on the procedural steps during litigation, it is important to understand the level of detail required to properly allege inequitable conduct so that one may properly gage the likelihood of success based on inequitable conduct either as the accused or the accuser.

In Exergen v. Wal-Mart Stores, Inc. 2006-1491 (Fed. Cir. Aug. 4, 2009), the accused infringer showed that the patentee had knowledge of a particular prior art reference material to the patentability of the invention.  The accused infringer alleged that the patent owner had the intent to mislead the Patent Office since the material prior art reference was not disclosed in the patent at issue.  The Court reasoned that one cannot reasonably infer an “intent” to mislead by merely failing to disclose a prior art reference.  The Court stated that the alleged infringer failed to provide specific factual allegations to show that a specific individual knew of material information and then decided to deliberately withhold the material information from the Patent Office.

Although the patentee avoided facing the allegations of inequitable conduct, the recommended course of action is to disclose all relevant information regardless of whether that information is material to patentability of the invention.  Generally, it is better to spread a wide net in deciding which information to disclose to the Patent Office and address the potentially fatal information before the Patent Office than to face charges of inequitable conduct during litigation.  The Examiner may decide that the potentially fatal information is inconsequential or not the closest prior art.  As a result, any patent issuing from your patent application is “presumed” to be valid over the information.  In this position, the patentee has a stronger patent.  Also, defendants will have more difficulty in successfully alleging inequitable conduct.

You may also be interested in Duty to Disclose.

Should you have any questions or comments, please do not hesitate to contact me.

Some of the benefits of the First Action Interview Pilot Program are the ability to resolve patentability issues one-on-one with the examiner at the beginning of the examination process and to facilitate early allowance of a patent, if one does issue. The reason is that during the interview, the examiner and applicant ask questions and provide answers immediately about the operation of the invention, the teachings of the prior art, and other patentability issues. Misunderstandings about the prior art, the invention, etc. can be resolved quicker.

You may also be interested in my prior post Interview the Examiner.  Should you have any questions regarding interviews, please feel FREE to contact me.