Lefstin, Patents & Trade Secrets, Fall 2010
Theory Behind the US Patent System
1. Two theories for why we should have a patent system:
a. Natural Rights theory (Europe): This theory is a moral based theory that holds that an inventor deserves an exclusive right over his or her invention because they developed the novel idea.
b. Utilitarian theory (US): This theory holds that patents should be assigned to inventors not because they justly deserve patent rights, but because this will greater serve the public. The theory explains that by giving inventors a monopoly over their inventions, Inventors will have an incentive to disclose their ideas, and thus, benefit the public.
§ Furthermore, the specific focus is to bring inventions to the marketplace FASTER. Many inventions would eventually reach the marketplace, but the idea behind this utilitarian theory is to expedite the delivery of these inventions to the market place.
2. The difficult BALANCE throughout the patent system is to:
a. (1) Provide a sufficient incentive to create to inventors and
b. (2) Maintain a competitive marketplace
3. Economic Theory
a. The patent system is important to protect inventors from the “free rider” problem, which can have momentous costs in certain industries. For example, a biotech company may spend over 100 million dollars developing a product, which if unprotected could be commercialized by another company.
b. The problem with the patent system is that it gives the patent holder a monopoly over the particular product. This means that there will not be competition by other sellers, and therefore the seller can charge more money. This will cause higher costs and less products sold.
§ This is known as the “deadweight loss”, or in other words, a loss of efficiency in the marketplace.
4. Quid Pro Quo
a. The inventor must give something to the public (disclose the invention), in order to receive a benefit (the patent protection)
5. Grant of Power
a. Art. 1, §8, Cl. 8 of the U.S. Constitution authorizes Congress to enact patent and © laws.
§ “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.”
§
Prosecution, Jurisdiction and Patent Structure
1. Patent Prosecution Basics:
a. The first step: is to file a patent with the PTO office. The PTO officer will grant a patent if the application satisfies all of the statutory requirements, however, it is also possible that there will be a back and forth between the applicant and the PTO. If the PTO office rejects the patent then go to step 2.
b. Second step: If the inventors application is rejected then the inventor can appeal to the Board of Patent Appeals and Interferences (BPAI). The BPAI consists of administrative judges within the PTO.
c. Third step: the inventors can appeal the BPAI to the federal circuit.
i. Alternatively, one could also appeal directly to the district court. This is rare but has the advantage of enabling the introduction of additional evidence. If this fails, then one appeals the district court back to the federal circuit and one has now managed to introduce additional evidence.
2. Jurisdiction
a. 28 USC § 1338(a) gives district court jurisdiction over cases “arising under” patent laws.
b. 28 USC § 1295 gives the Court of Appeals Federal Circuit (CAFC) authority for appeals to patent cases.
c. However, if a case does not have a patent law cause of action in the initial complaint, but only in the counterclaim response, then this will not necessary go to the CAFC on appeal.
i. Holmes Group, Inc. v. Vornado Air Circulation Systems
1. In this case SC held that when the c/a is only in the counter-claim, then the claim does not arise under patent law, which means the district court’s jx is not based on §1338(a). Therefore the regional circuit and not the CAFC has jx over the patent claims.
3. Structure of a Patent
a. Specification: §112
i. Written Description §112(1)
1. The written description must contain a written description of the invention, and of the manner and process of making and using it, in such full, clear and exact terms to enable a person skilled in the art. It must also contain the best mode contemplated by the inventor of carrying out his invention.
ii. Claim §112(2)
1. The claims describe the inventive features/properties of the invention. In general, a claim has three parts: (1) preamble; (2) transition; and (3) body. The purpose of the claims is to define the boundaries of the inventions exclusive rights
a. Preamble: The preamble identifies what kind of invention is being claimed. It describes the overall method, context or theme of the invention. The preamble also introduces the rest of the claim.
i. Example: “a method of teach law” or “an apparatus for grading exams” or “a pizza”
ii. Whether the preamble is part of the limitations of a claim is an indeterminate question. The standard is if the preamble is “necessary to provide life, meaning and vitality to the claim.” The preamble is more likely to limit the claim when it recites structure. It is less likely to limit the claims when it just provides context.
b. Transition:
i. Comprising: This is an open transition, covering the listed elements, and any additional elements.
ii. Consisting of: This is a closed transition, covering only the listed elements. The addition of other elements avoids infringement.
iii. Consisting Essentially of: This is an in-between format. Variations in elements after this transition would be infringing if the variation did not make the variant essential different from the claimed invention. That is, variants having basic and fundamental additions would fall outside the scope of the claim, but those with less significant additions would fall within it.
c. Body: The body lists all the elements of the invention and how they interact. The body will define the scope of the claim and its limitations.
i. Example: If the preamble states “a pizza” and the transition states “consisting of,” the body may state “spinach and mushroom.”
2. Independent vs. Dependent Claims
a. A claim can be independent or dependent. Dependent claims are more narrow, while independent claims are broader. A dependent claim tends to narrow the independent claim. A dependent claim may be valid, while the independent claim is invalid.
i. Example: “The pizza of claim 1, further comprising pepperoni”
3. Means-Plus-Function Elements – PA §112 ¶6:
a. “An element for a combination may be expressed as a means or step for performing a
In this case a method of inserting information into long-distance telephone call records to facilitate differential billing held patentable subject matter.
ii. The issue with this case is that there was an algorithm involved, which falls under the abstract idea category. The court however made a new rule that if the abstract idea or algorithm is applied to “produce a useful, concrete and tangible result” without preempting other uses of the mathematical principle then it is still patentable subject matter.
c. AT&T v. Excel (method claim)
i. Endorsed the “useful, concrete and tangible result” analysis, and even applied it to a method claim. The key was that even though there was not a physical product, it gave a useful result, and was therefore valid subject matter.
ii. Case involved differential billing for long distance phone calls.
d. Comiskey
i. Business systems that depend for their operation on human intelligence alone are not patentable, even where it produces a solution to a practical problem. But when a mental process is combined with a machine, the combination may produce patentable subject matter. However, the mere use of the machine to collect data necessary for application of the mental process may not make the claim patentable subject matter.
e. Labcorp v. Metabolite
i. This case involved a method patent for correlating test results. Although the case was ultimately dismissed, the dissent to the dismissal by Justice Stevens indicated an unhappiness with the current useful, concrete and tangible” test.
f. In re Bilski
i. 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.
g. Bilski v. Kappos
i. In this case, the invention was a method of risk hedging (business method)
ii. The Supreme Court held that the Federal Circuit’s machine-or-transformation test was not the sole test for determining the patent-eligibility of an invention.
iii. The Court refused to categorically exclude business methods, but narrowed the types of instances where they would be allowed.
iv. The Court held that an abstract idea is not patentable, but does not define what an abstract idea is. It noted that the machine-or-transformation test is “a clue.”
§101 – Utility
1. Operability: an invention must actual be operable and the results reproducible.
a. In re Swartz
i. The cold fusion invention was not patentable because it failed to pass the utility test since the results were not reproduceable and therefore did not satisfy the utility requirement.
