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South Texas College of Law Houston
Field, Ted L.

Patent Law

Field – Fall 2014

I. Introduction

I. Types of IP Protection

a. Trademark

i. Word, name, symbol, or device

ii. Identifies and distinguishes goods from those sold by others

iii. Indicates source of goods (single origin – even if source unknown)

iv. Ex. Dr. Pepper v. Peppo (now Mr. Pibb)

b. Copyright

i. Original works of authorship

ii. Fixed in a tangible medium of expression

iii. Ex. Mickey Mouse character

c. Trade Secret

i. Information used in business that:

1. Has commercial value from the fact of its secrecy, AND

2. Is the subject of reasonable efforts to maintain its secrecy

ii. Types of misappropriation:

1. Theft or illegal acts (e.g. wiretapping)

2. Breach of a confidential relationship (ex. contractual)

3. “Other improper means”

iii. Ex. Formulas, recipes, customer lists

d. Patent

i. Utility Patent

1. New and useful:

1. Processes,

2. Machines,

3. Manufactures, or

4. Compositions of Matter and

5. Improvements thereof.

2. Protects functional aspects of a product.

3. Limited to 20 years protection

ii. Design Patent

1. Protects the ornamental appearance of a useful product

1. No utility requirement

2. Limited to 14 years protection

iii. Plant Patent

1. Protects distinct plant varieties that are asexually reproduced

1. However, sexually reproduced plants may be protected by an alternate system

i. Plant Variety Protection Act

2. Requires distinctness but not utility

2. Reasons for protection:

1. Plants considered “products of nature” for purposes of patent law

2. Plants not amenable to “written description” requirement

3. Limited to 20 years protection

II. Foundations of the U.S. Patent System

a. Constitution

i. Article I, Section 8

1. “The Congress shall have Power To…promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries”

ii. “Exclusive right”

1. The right to exclude (a negative right)

1. NOT a right to use – valid patents may not infringe other preexisting valid patents

iii. Interpretive lens

1. Congressional laws must enable progress, or else run afoul of the Patent Clause

III. Economic Rationales for a Patent System

a. “Natural Law” – European View

i. Focuses on inventor, NOT society

ii. Natural Rights – Labor Theory of property

1. Locke, Hegel

2. Property rights as result of intellectual labor

iii. Problems:

1. Duration?

2. Accidental discoveries?

b. “Reward by Monopoly”

i. Focuses on inventor, NOT society

ii. Patent monopoly = reward

1. Property rights as a reward for services rendered

2. Reward related to social utility

1. More useful to society, the more valuable/marketable the monopoly

c. “Monopoly-Profit-Incentive” – American View

i. Encouragement of R&D and innovation

1. Patents as artificial market mechanisms to increase the incentives above free market

1. Incentivizes investment into R&D and innovation

i. Assumes free market alone cannot incentivize all necessary inventions

ii. Ex. Pharmaceutical industry

d. “Exchange for Secrets”

i. Quid pro quo

1. Inventor discloses knowledge in exchange for protection

2. Without protection, inventors would keep details of inventions out of public domain

IV. Economic Consequences of a Patent System

a. Premium on patented goods

i. Higher prices, but arguably better than not having the good at all

b. Inefficient allocation of limited resources

i. System incentivizes “designing around” to find alternatives to existing art

c. Patent thickets in particular industries

i. Discourages research and development / stifles academic access

d. Non-Practicing Entities (NPEs)

i. A.k.a. “Patent trolls” may enforce without practicing or licensing

ii. May be of some benefit to individuals or small entities

iii. Stifles innovation by supporting useless or less valuable patents

V. The Players

a. U.S. Congress & The President

i. Congressional “mandate” or, at the very least, authority to create IP regime

1. *Field interprets this as not a strict requirement, whereas Shurn considers mandate

2. Unlikely to be abolished in any event

ii. President appoints directors of administrative agencies

b. U.S. Patent & Trademark Office (USPTO)

i. A subset of the Department of Commerce

1. Executive administrative agency with focus on US economy, global trade

ii. Director appointed by President

iii. Adjudicative authority for challenging validity

1. Patent Trial and Appeal Board (PTAB)

1. Administrative law court (Article I)

2. Reviews of adverse decisions and appeals of reexaminations

3. Derivation proceedings

4. Inter partes and Post-grant reviews

5. Decides interferences

c. U.S. District Courts

i. Exclusive & Original jurisdiction of civil actions regarding IP

1. Personal jurisdiction (persons)

2. Venue (location)

3. Subject matter jurisdiction (subject matter)

d. U.S. Court of Appeals for the Federal Circuit (CAFC) (1982-onward)

i. Exclusive court of appeals for patent matters

1. Previously the “Court of Customs and Patent Appeals” (CCPA) (pre-1982)

1. Old CCPA cases remain precedential (good law, unless overruled)

2. On par with the twelve (12) regional Circuit Courts of Appeal

3. If “well-pleaded complaint” includes patent infringement, entire case appealed here

ii. Direct appeals from USPTO denials

1. Only for patent matters; trademark infringement still appealed to regional circuits

iii. Traditionally set most legal precedent for patents

1. Other matters handled include customs, veterans’ affairs, international trade, government contracts, etc.

e. U.S. Supreme Court (SCOTUS)

i. Highest court

1. Recent years, more writs of certiorari granted for patent issues

1. Subject matter eligibility frequently reviewed, active disagreement with CAFC

VI. Patent Application & Appeal Process (“Prosecution”)


i. Applications sent to examiners for allowance or rejection

1. Divided into “art groups”

2. Office actions may be sent

ii. Rejections can be appealed to the Patent Trial & Appeal Board (PTAB)

1. Previously the Board of Patent Appeals & Interferences

b. Appeals – Two (2) Routes


1. Section 141 directly appeals from PTAB to CAFC

1. De novo review for questions of law

2. Substantial evidence for questions of fact

2. Evidence limited to USPTO records

1. Prosecution history, a.k.a. “File Wrapper”

2. Usually adequate and relatively low-cost for clients compared to a trial

3. Three (3) judge panels decide the law

1. Must be overruled en banc (ALL judges)

i. Later panels can onl

1. Patents may be given for significant artificial changes made to natural substances

1. Claims often directed to “isolated” or “purified” products

iv. Mayo v. Prometheus

1. “Inventive Concept” Test

1. An element, or combination of elements, that is sufficient to ensure that the patent in practice amounts to “significantly more than a patent upon the [ineligible concept] itself”

2. Significant “post-solution” activity will transform unpatentable law of nature into patent-eligible subject matter

2. Comparison of how much future innovation foreclosed vs. inventor’s contribution

1. Important policy consideration to protect basic research tools

i. Process for determining medicine dosage by comparison to metabolite levels = unpatentable routine, conventional activity by those in the field

3. Mayo Framework

1. Is the claim directed to a patent-ineligible concept?

i. Laws of nature;

ii. Natural phenomena; or

iii. Abstract ideas

2. Is the claim directed to an “inventive concept” in addition to the patent-ineligible concept?

i. Something significantly more than the patent-ineligible concept itself

ii. “Inventive concept” transforms the claimed abstract idea into a patent-eligible application

v. Myriad v. Ass’n for Molecular Pathology

1. Naturally occurring DNA sequences unpatentable subject matter

1. Product of nature, no human creation or alteration of genomic sequences

i. Isolation from genome insufficiently patentable; DNA sequence claims not expressed as chemical compositions nor rely on chemical changes from isolation

ii. Claims primarily for information contained (impermissible)

2. cDNA sequences = patent-eligible subject matter!

1. “Not naturally occurring” – sequence exists only as mRNA, not DNA

c. Computer-Related Inventions & Business Methods

i. Gottschalk v. Benson

1. Algorithm found to be too abstract; no applications outside of computer = unpatentable

1. Conversion of binary coded decimals to pure binary

2. **Distinguished by later cases

1. Court may not have understood the technology at the time, implications for future

2. Software programs are not precluded from patent protection

ii. Diamond v. Diehr

1. Subject matter does not preempt a natural law when appropriately limited

1. Process claims Arrhenius equation in context of rubber curing = patentable

iii. “Methods of Doing Business”

1. Previously unpatentable subject matter – not as relevant prior to late 1990s

1. State Street Bank & Trust Co. v. Signature Financial Group, Inc.

i. “Useful, Concrete, and Tangible Result” Test – now OVERRULED!

1. Algorithm patentable if practical application produces a useful, concrete, and tangible result

ii. But, business methods are properly patentable subject matter

2. NOT the same as industrial processes