University of Pennsylvania Law School

Intellectual Property:

Patent Law Law 677 | Spring 2001 Professor Wagner

COURSE MATERIALS Part 1

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University of Pennsylvania Law School 2001

Patents A Historical Perspective Frank P. Porcelli Fish & Richardson P.C. Boston, Massachusetts

John A. Dragseth Fish & Richardson P.C., P.A. Minneapolis, Minnesota

Ver. 0.4a Copyright © 1999,, 2000, 2001 by John A. Dragseth and Frank P. Porcelli Modifications by R. Polk Wagner, 2001.

Acknowledgements The authors would like to acknowledge the assistance they have received from the casebook, “Cases and Materials on Information Property: Unfair Competition, Copyright, and Patent,” originally developed in the late-1960s at Harvard Law School by William W. Rymer and David Westfall.

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Table of Contents I Introduction Chapter 1: Introduction to Patents................................................................1 Chapter 2: The Edges of Patent Law .........................................................19 II Requirements for Patentability Chapter 3 Novelty & Statutory Bars............................................................47 Chapter 4: Nonobviousness......................................................................133 Chapter 5: Statutory Subject Matter & Practical Utility.............................195 Chapter 6: The Patent Document.............................................................247

III Patent Scope and Enforcement Chapter 7: Claim Construction...................................................................tbd Chapter 8: Doctrine of Equivalents Infringement ......................................tbd Chapter 9: Dimensions of Patent Coverage..............................................tbd Chapter 10: Defenses and Counterclaims ................................................tbd Chapter 11: Remedies ...............................................................................tbd

IV Other Issues Chapter 12: Post-Issuance Activities.........................................................tbd Chapter 13: Design Patents.......................................................................tbd

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Bibliography An expansion in research and reference materials has accompanied the increased attention on patent law in the past two decades. Some of the most important materials are: Treatises Donald S. Chisum, Chisum on Patents. This is the premiere modern treatise on patent law. Consuming __ volumes, the treatise provides thorough historical review of most issues dealing with patent law. [fed cir digest, both hard and soft] Deller’s Walker on Patents:

Robinson

Texts Chisum et al. Adelman et al. Merges

Books Robert Harmon, Patents and the Federal Circuit.

_____, Biotechnology and the Federal Circuit

Periodicals Harvard Journal of Law and Technology (JOLT): IDEA: ____: Journal of the Patent & Trademark Office Society (JPTOS): Berkley’s Journal:______ Franklin Pierce: ______ John Marshall in Chicago: _____

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Section I

Introduction

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Chapter 1 Introduction to Patents What is a patent? U.S. patents are creatures of federal statute. The federal patent laws are located in Title 35 of the United States Code. Congress enacted the patent laws under the Intellectual Property Clause, Art. I, § 8, clause 8, of the Constitution, granting Congress the 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

Under the current law, a patent is a grant from the federal government that permits the patent owner (or “patentee”) to exclude others from making, using, offering to sell, or selling in the United States (or importing into the United States) anything covered by the claims of the patent, during the patent’s term. Each part of this definition is important: Grant from the federal government: There is no common law patent right. Rather, the right is created by federal statute, authorized by the Constitution. The federal patent statute preempts state attempts to provide patent-like protection. Permits the patent owner: The inventor is the original owner of her invention, and a patent must be applied for in her name. However, the inventor can transfer her ownership in a patent application or in a patent by assigning her rights. Inventors commonly have contractual obligations to assign their rights

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in their inventions to their employers. A patent is a piece of property, and may be transferred, sold, assigned, or licensed, to a new owner. To exclude others: A United States patent does not give its owner the right to make, use, or sell the patented article. Rather, the patent right is exclusionary, i.e., it gives its owner only the right to exclude others. Although this distinction may seem very fine and has been overlooked even in books by judges and seasoned practitioners, it is, nevertheless, an important distinction. As an example, assume that Jack holds a patent on a certain asthma drug, and Jill later receives a patent on an improvement for administering the drug. Jack can prevent Jill from practicing her invention until his patent expires (because her patent only gives her the right to exclude) and Jill can prevent Jack from using the improved administration method, but cannot prevent him from using other methods. Until Jack’s patent expires, he is in the better position because he can at least sell the drug. However, once Jack’s patent expires, anyone (including Jill) can sell the drug, and Jill can do so more effectively than anyone else (including Jack) by asserting her patent. Thus, during the window of time between the expiration of Jack’s patent and the expiration of Jill’s patent, Jill could wipe Jack out. What happens in this situation in the real world? Jack recognizes early that he needs Jill, and Jill recognizes that her patent is slowly expiring with no commercial benefit until Jack’s patent expires. Therefore, Jack and Jill will often enter into a cross-license, by which each promises not to sue the other for patent infringement. Jack and Jill will live happily ever after as the sole suppliers of the drug using the improved method, assuming their cross-license doesn’t run afoul of the antitrust laws. From making, using, selling, or offering to sell in the U.S. (or importing into the U.S.): The last part of this phrase (“in the U.S.”) is the simplest; the United States patent laws may not reach outside the United States*, but they may block infringing goods at the border. The rest of the phrase also seems pretty straightforward, but it has some tricky wrinkles. Making/using/selling/offering seems to cover about anything you could do with an infringing product or process. However, problems can arise when a party possesses a product but does not make, use, or sell it. In addition, where a patent covers a process, one party may make a product for performing the process and sell the product to another party that uses the process (for example, computer software). If the seller sells the product (a CDROM) but does not make, use, or sell the process, it is not liable for direct infringement. It could, however, be liable for two forms of indirect infringement: active inducement and contributory infringement. We will discuss later how these two forms of infringement can be much harder to prove than direct infringement. Anything covered by the claims of the patent: You will see a patent later. What is important now is that you understand that the claims, which are the numbered sentences at the very back of the patent, are what define the property right (i.e., the right to exclude). All of the pictures and the other text in a patent are simply there to help the reader understand the invention and to help the reader (including courts, attorneys, and competitors of the patentee) understand the words in the claims. For example, a simple claim for a toy could read: I claim an improved children’s toy, comprising a coil spring, whereby the toy slinks down multiple noncoplanar surfaces of varying height when a horizontal motive force is applied to said spring.

Assume that the patent’s written description (the main text of a patent) shows and describes a Slinky® toy, and assume an accused infringer makes a pogo stick. The question of infringement focuses on the claim and whether the stick is “covered” by the claim. The stick probably comprises a spring (among other things), and thus meets that limitation of the claim, even though the spring in the stick looks very different than the Slinky® toy spring shown in the patent. However, the stick probably does not “slink” down stairs (either alone or in pairs). The coined word “slink” appears in a dictionary, but not with the specific definition intended here, so the reader must go to the written description to find a *

There is even an exception to this rule, in that export of components to be assembled into an infringing product abroad is considered U.S. patent infringement under the current system.

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special definition of that term. Presumably, the definition would require some sort of end-over-end motion. The pogo stick would not meet the “slink” limitation in the claim. Therefore, you can see that some parts of an accused product may meet the claim limitations even if they do not match the embodiment of the invention shown in the written description. On the other hand, the written description can give meaning to the words in the claim that may not be apparent from the four corners of the claim. You will see more about this later, but if you enjoyed the old contract interpretation dispute over parol evidence and the “four corners” of the document, you’ll be ecstatic when we get to claim construction. During the patent’s term: A patent is a temporal right; the Constitution speaks of securing rights “for limited times.” For patents filed today, the patent term generally runs from the day the patent issues until 20 years after the patent application was filed. Older patents (i.e., those filed before 1995) have terms that run 17 years from issue. The change in the law was made in part to harmonize U.S. patent law with the rest of the world, and, because most patents take 2 or 3 years to issue, the change is generally a wash. However, by starting the term at filing, the new law discourages patent applicants from using Patent & Trademark Office procedures to delay the issuance of a patent in hopes that potential infringers will expand their infringing activities and thus provide greater gains for the patentee when the patent ultimately issues (so-called “submarine patents”). Under the old law, some patents originally filed in the 1950s and 1960s finally issued in the 1980s and 1990s, directed to such mature (and large) industries as bar-code scanners and lasers.

A Brief History The roots of patent law reach back at least as far as Aristotle, who mentioned, in Politics, a law proposed by Hippodamus of Miletus, “to the effect that all who made discoveries advantageous to their country should receive honours.” Aristotle recognized that Hippodamus’s idea sounded appealing, but he nevertheless condemned it as inviting “harassments,” presumably from assertion of rights over new ideas in the political and social arenas, rather than in technology. In this conflict, we can begin to see the tension between reward to an individual and the good of society. Although both Hippodamus and Aristotle certainly have the good of society in mind, they approach the subject from different directions. Hippodamus sees the good that innovators may bring to society, while Aristotle sees the damage that innovators (or charlatans presented as innovators) can do to society. The idea of a patent system never really caught on with the ancient Greeks and Romans. Furthermore, the Middle Ages are generally viewed as a period in which there was little interest in innovation, and technology did not advance a great deal. Although patents were granted sporadically in the fourteenth century, a genuine system to grant rewards for innovation was not developed until late in the fifteenth century, in Venice. The new thinking brought on by the Renaissance eventually resulted in an Act of 1747 by the Venetian Senate: We have among us men of great genius, apt to invent and discover ingenious devices; and in view of the grandeur and virtue of our city, more such men come to us every day from diverse parts. Now, if provision were made for the works and devices discovered by such persons, so that others who may see them could not build them and take the inventor’s honour away, more men would then apply their genius, would discover, and would build devices of great utility and benefit to our commonwealth. Therefore: Be it enacted that, by the authority of this Council, every person who shall build any new and ingenious device in this city, not previously made in our Commonwealth, shall give notice of it to the office of our General Welfare Board when it has been reduced to the perfection so that it can be used and operated. It being forbidden to every other person in any of our territories and towns to make any further device conforming with and similar to said one, without the consent and license of the author, for the term of 10 years. And if anybody builds it in violation hereof, the aforesaid author and inventor shall be entitled to

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have him summoned before any magistrate of this City, by which magistrate the said infringer shall be constrained to pay him hundred ducats; and the device shall be destroyed at once. It being, however, within the power and discretion of the Government, in its activities, to take and use any such device and instrument, with this condition however that no one but the author shall operate it.

What is amazing about this law is its great similarity to most modern patent laws. The law includes requirements that the invention be a new (35 U.S.C. § 102) and ingenious (see § 103) device (see § 101), and that the inventor give notice of the invention so that it can be used and operated (see § 112). The law provides for registration with an administrative agency and for bringing an infringement suit (§ 271), with the ability to recover damages (§ 284) and to receive an injunction, i.e., destruction (§ 283). The single important difference with current U.S. patent law is that the Venetian act is inclusionary rather than exclusionary, i.e., the inventor may practice his invention and exclude others from practicing it. The most important point to note about the Venetian act is its provision of a quid pro quo: the inventor receives his rights in exchange for disclosing the invention to the public so that it may be freely “used and operated” after a limited period (here, 10 years). The Act recognizes the benefit to society from this exchange, i.e., it will result in even more and greater inventions that will benefit society. With the opening of trade in Europe, Venice’s idea spread as Venetian craftsmen traveled about, doing their work. Soon, patent systems had sprung up in Germany, France, and England. Patent grants began in England as grants of importation franchises and monopolistic privileges. The system was meant largely to encourage skilled artisans to introduce technologies from the mainland onto the islands. However, the Crown (Elizabeth I) abused the practice of granting patents by giving privileges to its favorites (whether or not they had developed anything new), and the Queen’s Bench ultimately declared that monopolies violated the common law. After further abuses by James I, Parliament enacted the Statute of Monopolies of 1623, which declared all exclusive grants of privileges void and contrary to law, with an important exception, Section VI: [B]e it declared and enacted, that any declaration before mentioned shall not extend to any Letters Patents and grants of privilege for the term of 14 years or under hereafter to be made of the sole working or making of any manner of new manufacture within this Realm to the true and first inventor and inventors of such manufactures which others at the time of making such letters Patents and Grants shall not use so as also they be not contrary to law nor mischievous to the State, by raising prices of commodities at home, or hurt of trade, or generally inconvenient.

Although the Statute of Monopolies is greatly revered, one can see that it took 150 years just to get back to a system that differs more from modern patent laws than did the Venetian system. Even with this statute, the English patent system did not see much growth in patent development until the Industrial Revolution. The key contribution made by England to general patent law was the requirement that a patent applicant describe his or her invention clearly and completely. In 1778, Lord Mansfield held, in Liardet v. Johnson, that the written patent specification, rather than the introduction of a new industry into the country, was the consideration that the inventor gave in return for the patent grant. The English experience hopped the pond to the developing American colonies. Most of the thirteen colonies granted state patents, led by Massachusetts in 1641. Ultimately, interstate conflicts resulted in the need for a uniform system of patents and copyrights. The provision now found at Article I, Section 8, Clause 8, of the Constitution was proposed on September 5, 1787, near the close of the Constitutional Convention, and passed unanimously without debate. The first Patent Act was passed soon thereafter in May 1790, the early days of the first Congress. The first Act established a board, rather than a full patent office, to examine patent applications. The board was made up of the Secretary of State (Thomas Jefferson), the Attorney General (Edmund Randolph), and the Secretary of War (Henry Knox). The first patent was granted under this Act to Samuel Hopkins, for an improved method of making potash. Chapter 1 – Introduction to Patents

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A new Patent Act was passed in 1793 to relieve the board of its growing examination duties. Under the 1793 Act, the board was replaced with a clerical registration system. Although the registration system was open to abuse because the government did not scrutinize applications before granting patents, the system lasted until 1836. In that year, Congress enacted new provisions that required that applications be examined to determine whether they met novelty and utility requirements (i.e., the invention had to be new and useful). In 1850, the Supreme Court added, in Hotchkiss v. Greenwood, a requirement that an invention be nonobvious in light of inventions that had come before. The utility, novelty, and nonbviousness requirements are now located in sections 101, 102, and 103, respectively of Title 35, although the current nonobviousness requirement is more elaborate than the one announced in Hotchkiss. Major changes were also made to the patent statute in 1870 and 1952. The 1870 Act changed little from earlier laws, but it did place a greater emphasis on the patent claims and added a requirement that a patentee distinctly define the invention. The 1952 Act is the most recent overhaul of the patent laws, and it survives today with few modifications. The 1952 Act came amid a passion for patent-bashing on the Supreme Court, led by Justices Douglas and Black. The Supreme Court’s negative attitude grew out of a more general suspicion at the time of big business and trusts. During the early part of the century, the Court had limited the manner in which claims could be drafted and had also raised the bar for patentability by inserting a “flash of genius” requirement for invention. The drafters of the 1952 Act, among them Giles Sutherland Rich** and P.J. Federico, took advantage of changing attitudes after World War II, and crafted a piece of legislation that was much more friendly to patentees. As one of their most important and enduring contributions, they established the objective standard of nonobviousness in section 103 as the key hurdle for patentability (superseding the “flash of genius” test). Even after the 1952 Act, patent law still had its problems. Large differences existed among the regional circuit courts of appeals with regard to important issues of patent law. It is said that the Eighth Circuit did not uphold a single patent for three decades leading into the 1980s, while other circuits were much more pro-patent. This lack of uniformity resulted in extreme forum shopping, as parties raced for a courthouse in a favorable circuit. As a result, industry generally did not take patents seriously and did not count on patents as an important piece of business strategy. However, in the 1970s, people began debating the need for a single appellate court to handle all patent appeals. In 1982, Congress passed the Federal Courts Improvement Act, forming the Court of Appeals for the Federal Circuit (CAFC or “Federal Circuit”) as the nation’s thirteenth circuit. The court, located near the White House in Washington, D.C., has a diverse docket that includes international trade and government contracts appeals, employment issues, takings cases, and all patent appeals, including those from district courts and those from the U.S. Patent & Trademark Office. See 28 U.S.C. § 1295 (the Federal Circuit has exclusive jurisdiction over cases arising “under any Act of Congress relating to patents.”). Because the Federal Circuit is the exclusive, nationwide patent appellate court, you will not see any post-1982 cases from any other circuit. In addition, although the Federal Circuit adopted as binding the precedent of its predecessor courts (the Court of Customs and Patent Appeals and the old Claims Court), it generally has ignored patent decisions by the other circuit courts of appeals. The Federal Circuit was ostensibly formed to bring uniformity to patent law, but it has also strengthened the patent law in other ways. The court has effectively expanded the use of juries in patent trials, and practitioners have increasingly asked for juries after seeing jury awards of hundreds of millions of **

Remember this name. You will read many opinions by this man, who was appointed by Eisenhower, elevated to the Court of Appeals for the Federal Circuit at its creation in 1982, and passed away in 1999 at 95 years of age, the oldest active member of the federal judiciary. Until his death, Judge Rich worked full-time as an active (and outspoken) judge on the court. He has had more influence on patent law in the 20th century than any other person.

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dollars in other cases. Along with the increased protection of intellectual property rights given by the Federal Circuit, the economy has developed in ways that increasingly depend on protection of such rights. For example, increased foreign trade has sometimes required enforcement of intellectual property rights to protect innovators, and new high-technology developments require greater up-front research and development costs, but may be copied more easily than old brick-and-mortar products. There is an open and raging debate over whether the connection between the Federal Circuit and hightechnology economic development is one of causation or simply of correlation. However, there is no doubt that over the past two decades, patents have become increasingly important to both innovators and the people who provide funding to them. Perhaps the good arguments in favor of the Federal Circuit can be tempered somewhat by the following excerpt from an article by Judge Simon Rifkind, published in the American Bar Association Journal in 1951: Periodically one hears the suggestion that patent cases should be tried before patent judges. The proposals take a variety of forms but they all revolve about the proposition that the judicial product of patent litigation would be improved if the trials were conducted by judges specializing in patent cases. I deny this pivotal proposition; consequently I am opposed to patent courts for patent judges. The highly industrialized society in which we live has a great appetite for "know-how." Such a society elevates and aggrandizes the position of the expert. His is the voice with the ready answer. His opinions become the facts upon which lesser mortals -- laymen -- risk life and fortune. Against the citadel of the expert I tilt no quixotic lance. My contention is that the judicial process requires a different kind of expertise -- the unique capacity to see things in their context. Great judges embrace within their vision a remarkably ample context. But even lesser men, presiding in courts of wide jurisdiction, are constantly exposed to pressures that tend to expand the ambit of their ken. The patent law does not live in the seclusion and silence of a Trappist monastery. It is part and parcel of the whole body of our law. It ministers to a system of monopolies within a large competitive system. This monopoly system is separated from the rest of the law not by a steel barrier but by a permeable membrane constantly bathed in the general substantive and procedural law. Patent lawyers tend to forget that license agreements are essentially contracts subject to the law of contracts; that infringements are essentially trespasses subject to the law of torts; that patent rights are a species of property rights; and that proof in patent litigation is subject to the laws of evidence. Changes in all these branches of the law today have an effect on the patent law as well. As long as judges exercising a wide jurisdiction also try patent cases, so long do the winds of doctrine, the impulses towards slow change and accommodation, affect the patent law to the same degree as they affect the general body of the law.

Judge Rifkind went on to argue that a specialized judiciary would lead to “decadence in the law” by granting ownership of the patent law to a seclusive group of patent lawyers. In addition, he opined that there was little to be gained from a patent court because even specialized judge’s could have scientific knowledge in only a single narrow field and because consideration of an entire patent dispute often requires familiarity with many other areas of law. As you read decisions by the Federal Circuit in this book, ask yourself whether, or to what extent, Judge Rifkind’s concerns have resulted. In fairness, it should be remembered that the Federal Circuit does hear many appeals in areas other than patent law, thereby answering one of Judge Rifkind’s concerns. In addition, relatively few of the judges on the Federal Circuit are patent attorneys. Also, patent trials in the district courts are still conducted by non-specialized federal district judges. Nevertheless, the issue of judicial specialization remains a discussion point, and some recent commentaries have made criticisms that echo some of Judge Rifkind’s concerns.

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A Brief Explanation of Patent Practice Since 1790, Congress has provided a system for inventors to apply for and receive U.S. patents. Although the system has evolved and become much more complicated over the last 200 years, many key aspects have remained the same. The process for obtaining patents has, for most of the past two centuries, been an examination process in which patent applicants mail in their "patent applications" with a fee, and in which government officials (now called patent examiners) examine the "patent applications" to see if they meet the requirements of the patent statute. Patent applications generally follow a common form. First, an application has a title and an abstract that quickly describes the invention. It also contains a general description of the technological area of the invention and a summary of the invention. The application then describes the invention in detail. The application may be accompanied by drawings, if they are helpful or necessary to an understanding of the invention; the drawings are generally labeled with numbers that are referenced in the written description. The written portion of the patent, along with the drawings, is referred to as the “written description.” The application ends with the claims. By rule, each claim must be a single sentence, so claims can often seem unwieldly. The claims are the focus of a patent because they define the scope of the invention; the written description is merely used for help in defining the claims. Together, the written description and the claims make up the “specification.”*** The inventor or inventors must apply for the patent, but they often assign their rights to their employer. They are also usually represented by a patent attorney (or patent agent) who is either employed by the assigned company or retained by it. The process of obtaining a patent is known as patent “prosecution.” A patent attorney is an attorney who has passed the Patent Bar exam, while a patent agent is a non-attorney with a technical background who has passed the Patent Bar exam. Only pro se applicants and people who have passed the Patent Bar exam may prosecute patents. The examination is conducted at the United States Patent & Trademark Office ("PTO"), currently located in Arlington, Virginia. Specialized patent examiners assigned to specific technologies called "art groups" review incoming patent applications in their respective fields to determine whether the applications meet the statutory requirements for patentability. They perform "prior art searches" by looking for prior patents and publications (types of "prior art") that are related to the subject of the application to determine whether the claims of the application are "new" and "nonobvious" over this prior art. They review the adequacy of the description in the patent application to see if it would “enable” a persons of ordinary skill in the relevant field to make and use the claimed invention. They also review the claim language to make sure it is clear and definite. Each examiner then issues a preliminary decision on all of these matters (a "first office action"). The examiner may “reject” all of the claims, “allow” all of the claims, allow some and reject others, or “object” to problems of form in the written description. It is also possible for the examiner, before making these substantive rulings, to determine that separate inventions are contained in the patent application which should be divided into additional patent applications (so-called "restriction"), which results in additional application fees for the PTO and more examinations. The examiner generally communicates his actions by mail. The applicant or attorney then has an opportunity to respond to the first office action, usually within three months. Before responding, the attorney may have an interview in person or by telephone with the examiner to discuss the office action and present arguments why any rejection or objection should ***

As you read the materials in this book, you might notice that judges and others often incorrectly refer to the written description as the specification. This is generally a harmless oversight. However, in some situations, it can create problems. For example, a patent applicant cannot add new matter to a patent specification and still claim priority back to the date the patent application was originally filed. However, because the claims are part of the specification, a patent applicant might be able to point to an existing claim that contains the added matter, so that the applicant can argue that no “new” matter was added to the specification, even though new matter was added to the written description.

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be withdrawn. The attorney then files a written "response" to the office action. In addition to arguments, this response may contain proposed changes to the claims ("amendments") in an attempt to convince the examiner to withdraw the rejection. The response may also include sworn testimony in the form of affidavits or declarations, for example, of experts to provide evidence to rebut the rejection. The ball is again in the examiner's court, who may withdraw the rejections and objections, repeat them, or even make the rejections "final." If the rejection is final, the applicant is not entitled to a further response as of right and must either file an appeal to the Board of Patent Appeals and Interferences (the "Board") which is made up of special examiners, or pay a fee and "refile" the patent application as a “continuation” or “continuation-in-part” application. However, the applicant may submit after-final papers or obtain an interview with the examiner to clear up any problems, but the examiner is not required to grant such requests. If the applicant appeals to the Board and is successful, the examiner is directed to allow the claims, and a patent issues. If the appeal to the Board is unsuccessful, the applicant can appeal further or can "refile" the application. Further appeal can be to two different courts: appeal to the U.S. Court of Appeals for the Federal Circuit ("Federal Circuit") in Washington or civil action filed in the U.S. District Court for the District of Columbia, whose judgment is then appealable to the Federal Circuit. If the claims are finally allowed, whether directly by the examiner or after appeal, the PTO issues a formal document entitled "Notice of Allowance and Payment of Base Issue Fee," which requires that an issue fee be paid within a few months. If that is done, the PTO prints the patent, including the allowed claims numbered sequentially and bearing the official seal. The PTO issues patents each Tuesday, in numerical sequence. The PTO has already issued over 5.8 million patents since 1790. Once issued, patents are presumed valid, but must be enforced in federal court if there is an infringement dispute. Jurisdiction over patent disputes is exclusive to the federal courts. Infringement disputes between civil litigants must be brought in the appropriate federal district court in which venue lies and personal jurisdiction can be found over the defendant. Private parties may only bring infringement suits against the government in the U.S. Court of Federal Claims (formerly the Court of Federal Claims, and before that, the Claims Court) in Washington. Appeals from both types of actions go exclusively to the Federal Circuit, the sole appellate tribunal for patent actions. Of course, all the above appeals were and are reviewable on certiorari to the Supreme Court. Before there were circuit courts of appeals and before the discretionary appeal by certiorari, the Supreme Court heard many more patent appeals than it has in the last 50 years. Hence, there is a large body of Supreme Court patent case law in the 19th century and early 20th century. Supreme Court patent decisions were rare from 1950-1982, and also from 1982-1995, probably in part because the Federal Circuit exhibited a particular expertise in handling these complicated cases. However, it appears that with the decisions by the Court in Markman (1996), Warner-Jenkinson (1997), Pfaff (1998), Zurko (1999), and College Savings (____), the Court has taken a renewed interest in patents. The increasing importance of intellectual property in the modern U.S. economy is no doubt one reason for this, but whether the Court will continue to take patent cases at a high frequency remains to be seen. There are actually several kinds of U.S. patents. The most important type and the one that has been discussed above and will be the focus of this book is the basic patent, called the "utility patent." Utility patents cover new and useful processes, machines, manufactures, or compositions of matter. This book will also cover design patents, which consist essentially of a mechanical drawing, and are issued for ornamental designs, such as jewelry designs, automotive body parts, and tire treads. Other kinds of patents are plant patents (for asexually reproducing plants, such as potatoes) and plant variety protection certificates (for sexually reproducing plants).

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Patent Policy In general, patent law attempts to foster technological innovation and its dissemination to the public. Almost all policy debates regarding intellectual property, including patent law, revolve around an underlying tension: the public must (it is assumed) give some sort of reward to innovators to encourage them to innovate, but the public must receive something in return for giving the reward. In patent law, the public gives to a person who has an idea that can clear certain hurdles a right to keep other people from practicing the invention covered by the patent for almost two decades. This right not only is designed to spur innovation, but, more importantly, is designed to encourage others to invest in the production and dissemination of innovative products and processes. In return, the inventor is required to give the public a technical document (the patent) that teaches the public how to practice the patented invention. In this manner, the patent when issued becomes part of the technical literature so that the public can make improvements on the invention and can even design around the patent (to avoid infringement). Upon expiration of the patent, the public is no longer excluded by the patent from doing what its claims cover, so that the invention is available for all to use, subject, however, to the claims of other unexpired patents that may still prevent unfettered use of a particular product or method. We are no better at arguing policy than are you, so we give you this statement from “The Patent System and the Modern Economy”: Penicillin is a classic example of what may happen to an important scientific breakthrough in the absence of sufficient incentives for its exploitation. Dr. Alexander Fleming of St. Mary's Hospital at the University of London had discovered penicillin, ascertained its general properties, and published his results by 1928. He tried to interest others in pursuing the matter without success. For a decade the discovery lay dormant. Fortunately for humanity Dr. Fleming continued to cultivate the mold during this period so that it was available when the necessities of war stimulated research on its use and the development of effective production techniques that ultimately led to the commercially useful drug. The experience of Fleming should be contrasted with that of a contemporary, Dr. Wallace Carothers. Carothers had, by 1927, developed a theory that certain polymers would -- after initial mechanical stretching -- become tough elastic materials. DuPont employed Carothers to pursue this matter in 1927. In 1930, Dr. Julian Hill -- working at DuPont with Carothers -- experimentally demonstrated the Carothers' theory. From these theoretical beginnings the work continued to the production of $45 million in nylon research and $196,800,000 in plants and facilities for nylon production (U.S. v. Imperial Chemical Industries, 105 F. Supp. 215, 222 (S.D.N.Y. 1952)). And see Heckert, Synthetic Fibers, 30 J. Chem. Education 166 (1953). Query: To what extent does the experience of Fleming, as distinguished from that of Carothers, reflect the fact that until 1949 the British patent law did not provide for the patentability of chemical substances, such as penicillin?

Study of the Subcommittee on Patents, Trademarks, and Copyrights of the Committee on the Judiciary, United States Senate, Study No. 2 (84th Cong., 2d Sess.). Inscribed over the entrance of the Department of Commerce building in Washington are the following words of a former president who also happened to be an inventor: The patent system added the fuel of interest to the fire of genius. --A. Lincoln

In Marconi Wireless Co. v. United States, 320 U.S. 1 (1943), Justice Frankfurter said, in a partial dissent: For all I know, the basic assumption of our patent law may be false, and inventors and their financial backers do not need the incentive of a limited monopoly to stimulate invention.

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Has either Lincoln or Frankfurter been vindicated? Interestingly, Judge Jerome Frank, in a thoughtprovoking concurrence in Picard v. United Aircraft Corp., 128 F.2d 632 (2d Cir. 1942), suggested that it might be better to grant patents tailored to encourage investment rather than invention: “But if we never needed, or do not now need, patents as bait for inventors, we may still need them, in some instances, as a lure to investors.” What is it that society and government should be encouraging, and how can they do it most efficiently and fairly?

About This Book This book is organized around the historical development of United States patent law. Its focus is more on the rationales behind the core rules of patent law, rather than on the technical details of patent law. Most chapters contain Supreme Court opinions covering broad areas of patent law, followed by notes that fill in the gaps with modern developments in the law. The book also contains many opinions by the Honorable Learned Hand. He authored dozens of patent opinions during his time as a district and appeals court judge, including many timeless works. Not only are the opinions in this book some of the best written opinions, but they also avoid overwhelming the reader with technological complexity, a problem with many modern opinions. Notes and discussions scattered throughout the book fill in the modern detail left open by the excerpted cases, so that the reader can learn how best to analyze patent law issues and also learn the details of patent law. The book is organized into five parts. Chapters 1 and 2 provide an introduction to patents and indicate how patent law interacts with other laws. Chapters 3-6 deal with the requirements for receiving a patent on an invention. In particular, the invention must be new, or novel (Chapter 3); it must have been nonobvious when it was invented, when measured against previous inventions (Chapter 4); it must be a kind of invention that Congress has deemed patentable (Chapter 5); and it must be set out in a patent application that describes the invention well enough that others can practice it (Chapter 6). Later chapters cover patent claim interpretation (Chapter 7), infringement (Chapters 8 and 9), remedies available to a patentee (Chapter 10), and defenses and counterclaims available to an accused infringer (Chapter 11). The last three chapters cover more detailed and remote areas of patent law: reissue and reexamination of patents in the PTO, design and plant patents, and various procedural issue that arise in patent litigation.

One Final Comment No textbook would be complete without an explanation, in Chapter 1, of why the topic covered by the book is critical to the future of humankind. We try not to disappoint. Patent law is a core component of our modern economy. When properly implemented, patent laws encourage people to invest in new technology, with time or money, because they can expect that their innovations will be protected by the courts from second-comers. Modern technologies, such as pharmaceuticals, medical devices, and computer software, require enormous up-front costs for research and development. At the same time, they can be duplicated easily. Thus, without some sort of protection, it is unlikely anyone would take the risk of developing breakthrough ideas. Well-balanced patent laws also protect developers from overly broad allegations of patent infringement so that the inventive landscape is left open for full innovation in the future. Although one can debate whether the current law overprotects or underprotects particular classes of inventions, it is generally accepted that some sort of protection is necessary. Patent law is also increasingly important to the attorney in general practice because of two converging trends. First, our economy is increasingly moving to high-technology areas, and legal work follows the economy. Patents traditionally have been linked to high-technology, so general practitioners Chapter 1 – Introduction to Patents

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increasingly run into patent issues. At the same time, patent law has been moving toward the traditional economy. In a series of recent decisions, the courts have expanded the scope of the kinds of inventions that may be patented beyond the tradtional class of machines and chemicals. At the leading edge of this expansion, the courts determined that man-made living organisms and computerimplemented processes (i.e., software) are patentable. While both of these categories fall within the traditional high-technology category, the courts have also recently wiped out old prohibitions on patenting business methods. As a result, financial services companies can receive patents on methods of managing portfolios and other financial products and services. In addition, it appears that in light of recent rulings, patents conceivably might be obtained on legal processes, for example, methods of structuring a corporation or processes for handling finances to avoid tax liabilities. Thus, patents in the fields of business and marketing (especially on the Internet) have begun to proliferate as patent law moves toward even the Ludditic attorney.

Addendum: U.S. Patent No. 6,139,035 We conclude this chapter by offering an example of what an issued United States Patent looks like. The patent in question is No. 6,139,035, entitled “Brake Device for a Skate Cart,” and was issued on October 31, 2000. (See patent document on following pages.) Review the patent document carefully, to get a feel for the content and structure of the document. Each section has specific purposes – consider what those might be as you review the document. What parts do you think are the most important? As the book progresses, we’ll be discussing in detail the content and purpose of many of these sections of the patent document.

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Chapter 2 The Edges of Patent Law Introduction The patent law, of course, does not exist in a vacuum. Rather, it is surrounded by other pieces of federal and state legislation, and centuries of common law. Most important to the operation of the patent laws are other laws and policies dealing with other areas of kindred intellectual property. This may (or may not) explain why a patent book leads off with a copyright case. Mazer v. Stein 347 U.S. 201, 100 USPQ 325 (1954) MR. JUSTICE REED delivered the opinion of the Court. This case involves the validity of copyrights obtained by respondents for statuettes of male and female dancing figures made of semivitreous china. The controversy centers around the fact that although copyrighted as "works of art," the statuettes were intended for use and used as bases for table lamps, with electric wiring, sockets and lamp shades attached. Respondents are partners in the manufacture and sale of electric lamps. One of the respondents created original works of sculpture in the form of human figures by traditional clay-model technique. From this model, a production mold for casting copies was made. The resulting statuettes, without any lamp components added, were submitted by the respondents to the Copyright Office for registration as "works of art" or reproductions thereof under §§ 5 (g) or (h) of the copyright law, and certificates of registration issued. . . . Thereafter, the statuettes were sold Chapter 2 – The Edges of Patent Law

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in quantity throughout the country both as lamp bases and as statuettes. The sales in lamp form accounted for all but an insignificant portion of respondents' sales. **** Petitioners, charged by the present complaint with infringement of respondents' copyrights of reproductions of their works of art, seek here a reversal of the Court of Appeals decree upholding the copyrights. Petitioners in their petition for certiorari present a single question: "Can statuettes be protected in the United States by copyright when the copyright applicant intended primarily to use the statuettes in the form of lamp bases to be made and sold in quantity and carried the intentions into effect? "Stripped down to its essentials, the question presented is: Can a lamp manufacturer copyright his lamp bases?"

The first paragraph accurately summarizes the issue. The last gives it a quirk that unjustifiably, we think, broadens the controversy. The case requires an answer, not as to a manufacturer's right to register a lamp base but as to an artist's right to copyright a work of art intended to be reproduced for lamp bases. . . . [The Court first noted that, since 1870, the Copyright Act has explicitly provided protection for three-dimensional works of art such as statues. It then summarized the Copyright Office’s practice, since 1870, of permitting registration of works of art possessing utilitarian aspects.] The successive acts, the legislative history of the 1909 Act and the practice of the Copyright Office unite to show that "works of art' and "reproductions of works of art" are terms that were intended by Congress to include the authority to copyright these statuettes. Individual perception of the beautiful is too varied a power to permit a narrow or rigid concept of art. As a standard we can hardly do better than the words of the present Regulation, § 202.8, supra, naming the things that appertain to the arts. They must be original, that is, the author's tangible expression of his ideas. Compare Burrow-Giles Lithographic Co. v. Sarony, 111 U.S. 53, 59-60. Such expression, whether meticulously delineating the model or mental image or conveying the meaning by modernistic form or color, is copyrightable. What cases there are confirm this coverage of the statute. The conclusion that the statues here in issue may be copyrighted goes far to solve the question whether their intended reproduction as lamp stands bars or invalidates their registration. This depends solely on statutory interpretation. Congress may after publication protect by copyright any writing of an author. Its statute creates the copyright. It did not exist at common law even though he had a property right in his unpublished work. But petitioners assert that congressional enactment of the design patent laws should be interpreted as denying protection to artistic articles embodied or reproduced in manufactured articles. They say: "Fundamentally and historically, the Copyright Office is the repository of what each claimant considers to be a cultural treasure, whereas the Patent Office is the repository of what each applicant considers to be evidence of the advance in industrial and technological fields."

Their argument is that design patents require the critical examination given patents to protect the public against monopoly. Attention is called to Gorham Co. v. White, 14 Wall. 511, interpreting the design patent law of 1842, 5 Stat. 544, granting a patent to anyone who by "their own industry, genius, efforts, and expense, may have invented or produced any new and original design for a manufacture . . . ." A pattern for flat silver was there upheld. The intermediate and present law differs little. "Whoever invents any new, original and ornamental design for an article of manufacture may obtain a patent therefor, . . . " subject generally to the provisions concerning patents for invention. § 171, 66 Stat. 805. As petitioner sees the effect of the design patent law: Chapter 2 – The Edges of Patent Law

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"If an industrial designer can not satisfy the novelty requirements of the design patent laws, then his design as used on articles of manufacture can be copied by anyone."

Petitioner has furnished the Court a booklet of numerous design patents for statuettes, bases for table lamps and similar articles for manufacture, quite indistinguishable in type from the copyrighted statuettes here in issue. Petitioner urges that overlapping of patent and copyright legislation so as to give an author or inventor a choice between patents and copyrights should not be permitted. We assume petitioner takes the position that protection for a statuette for industrial use can only be obtained by patent, if any protection can be given. As we have held the statuettes here involved copyrightable, we need not decide the question of their patentability. Though other courts have passed upon the issue as to whether allowance by the election of the author or patentee of one bars a grant of the other, we do not. We do hold that the patentability of the statuettes, fitted as lamps or unfitted, does not bar copyright as works of art. Neither the Copyright Statute nor any other says that because a thing is patentable it may not be copyrighted. We should not so hold. Unlike a patent, a copyright gives no exclusive right to the art disclosed; protection is given only to the expression of the idea—not the idea itself. Thus, in Baker v. Seldon, 101 U.S. 99, the Court held that a copyrighted book on a peculiar system of bookkeeping was not infringed by a similar book using a similar plan which achieved similar results where the alleged infringer made a different arrangement of the columns and used different headings. The distinction is illustrated in Fred Fisher, Inc. v. Dillingham, 298 F. 145, 151, when the court speaks of two men, each a perfectionist, independently making maps of the same territory. Though the maps are identical, each may obtain the exclusive right to make copies of his own particular map, and yet neither will infringe the other's copyright. Likewise a copyrighted directory is not infringed by a similar directory which is the product of independent work. The copyright protects originality rather than novelty or invention—conferring only "the sole right of multiplying copies." Absent copying there can be no infringement of copyright. Thus, respondents may not exclude others from using statuettes of human figures in table lamps; they may only prevent use of copies of their statuettes as such or as incorporated in some other article. Regulation § 202.8, supra, makes clear that artistic articles are protected in "form but not their mechanical or utilitarian aspects." See Stein v. Rosenthal, 103 F. Supp. 227, 231. The dichotomy of protection for the aesthetic is not beauty and utility but art for the copyright and the invention of original and ornamental design for design patents. We find nothing in the copyright statute to support the argument that the intended use or use in industry of an article eligible for copyright bars or invalidates its registration. We do not read such a limitation into the copyright law. Nor do we think the subsequent registration of a work of art published as an element in a manufactured article, is a misuse of the copyright. This is not different from the registration of a statuette and its later embodiment in an industrial article. "The copyright law, like the patent statutes, makes reward to the owner a secondary consideration." United States v. Paramount Pictures, 334 U.S. 131, 158. However, it is "intended definitely to grant valuable, enforceable rights to authors, publishers, etc., without burden-some requirements; `to afford greater encouragement to the production of literary [or artistic] works of lasting benefit to the world.'" Washingtonian Co. v. Pearson, 306 U.S. 30, 36.

The economic philosophy behind the clause empowering Congress to grant patents and copyrights is the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors in "Science and Useful Arts." Sacrificial days devoted to such creative activities deserve rewards commensurate with the services rendered. Affirmed. Opinion of MR. JUSTICE DOUGLAS, in which MR. JUSTICE BLACK concurs. **** Chapter 2 – The Edges of Patent Law

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Questions, Comments, Problems 1. The question left open by the Court in Mazer was answered in 1974 by the U.S. Court of Customs and Patent Appeals (“CCPA”), a predecessor court to the Federal Circuit, which heard appeals from the Patent Office (since renamed the Patent & Trademark Office). In In re Yardley, 493 F.2d 1389, 181 USPQ 331 (CCPA 1974), the CCPA had to decide whether an applicant could obtain a design patent on the ornamental appearance of a Spiro Agnew watch if he had already copyrighted the watch face (a caricature of former Vice-President Agnew). The CCPA held that the applicant was not barred from obtaining this second form of federal protection. The court addressed the constitutional and legislative issue as follows: We agree with the [patent] board’s view that the framers of the Constitution recognized a distinction between “authors” and “inventors” and “writings” and “discoveries.” But, we do not think that the constitutional provision requires an election. . . . Congress has not required an author-inventor to elect between the two modes which it has provided for securing exclusive rights on the type of subject matter here involved. If anything, the concurrent availability of both modes of securing exclusive rights aids in achieving the stated purpose of the constitutional provision. Copyrights last far longer than design patents. At the time of this decision, copyrights lasted twenty-eight years from first publication, once renewable for a term of the same length, while design patents had, and still have, a maximum term of 14 years (35 U.S.C. § 173). So, what rights does the public actually receive when the Spiro Watch’s design patent expires if it is still protected by copyright? Does the public interest compel an election of rights here, or do you agree with the conclusion in Yardley? For another important analysis of the significance of patent expiration, read the following story of a battle over a famous cereal.

Kellogg Co. v. National Biscuit Co. 305 U.S. 111 (1938) Mr. Justice BRANDEIS delivered the opinion of the Court. This suit was brought in the federal court for Delaware by National Biscuit Company against Kellogg Company to enjoin alleged unfair competition by the manufacture and sale of the breakfast food commonly known as shredded wheat. The competition was alleged to be unfair mainly because Kellogg Company uses, like the plaintiff, the name shredded wheat and, like the plaintiff, produces its biscuit in pillow-shaped form. Shredded wheat is a product composed of whole wheat which has been boiled, partially dried, then drawn or pressed out into thin shreds and baked. The shredded wheat biscuit generally known is pillow-shaped in form. It was introduced in 1893 by Henry D. Perky, of Colorado; and he was connected until his death in 1908 with companies formed to make and market the article. Commercial success was not attained until the Natural Food Company built, in 1901, a large factory at Niagara Falls, New York. In 1908, its corporate name was changed to 'The Shredded Wheat Company'; and in 1930 its business and goodwill were acquired by National Biscuit Company. Kellogg Company has been in the business of manufacturing breakfast food cereals since its organization in 1905. For a period commencing in 1912 and ending in 1919 it made a product whose form was somewhat like the product in question, but whose manufacture was different, the wheat being reduced to a dough before being pressed into shreds. For a short period in 1922 it manufactured the article in question. In 1927, it resumed manufacturing the product. In 1928, the plaintiff sued for alleged unfair competition two dealers in Kellogg shredded wheat biscuits. That suit was discontinued by stipulation in 1930. On June 11, 1932, the present suit was brought. Much evidence was introduced; but the determinative facts are relatively few; and as to most of these there is no conflict. In 1935, the District Court dismissed the bill. It found that the name 'Shredded Wheat' is a term describing alike the product of the plaintiff and of the defendant; and that no passing off or deception had been shown. It held that upon the expiration of the Perky patent No. 548,086 issued October 15, 1895, the name of the patented article passed into the public domain. In 1936, the Circuit Court of Chapter 2 – The Edges of Patent Law

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Appeals affirmed that decree. Upon rehearing, it vacated, in 1937, its own decree and reversed that of the District Court, with direction 'to enter a decree enjoining the defendant from the use of the name 'Shredded Wheat' as its trade-name and from advertising or offering for sale its product in the form and shape of plaintiff's biscuit in violation of its trade-mark; and with further directions to order an accounting for damages and profits.' In its opinion the court described the trade-mark as 'consisting of a dish, containing two biscuits submerged in milk'. 3 Cir., 91 F.2d 150, 152, 155. We denied Kellogg Company's petition for a writ of certiorari, 302 U.S. 733, and denied rehearing 302 U.S. 777. On January 5, 1938, the District Court entered its mandate in the exact language of the order of the Circuit Court of Appeals, and issued a permanent injunction. Shortly thereafter National Biscuit Company petitioned the Circuit Court of Appeals to recall its mandate 'for purposes of clarification.' It alleged that Kellogg Company was insisting, contrary to the court's intention, that the effect of the mandate and writ of injunction was to forbid it from selling its product only when the trade name 'Shredded Wheat' is applied to a biscuit in the form and shape of the plaintiff's biscuit and is accompanied by a representation of a dish with biscuits in in; and that it was not enjoined from making its biscuit in the form and shape of the plaintiff's biscuit, nor from calling it 'Shredded Wheat,' unless at the same time it uses upon its cartons plaintiff's trade-mark consisting of a dish with two biscuits in it. On May 5, 1938, the Circuit Court of Appeals granted the petition for clarification and directed the District Court to enter a decree enjoining Kellogg Company (3d Cir., 96 F.2d 873): '(1) from the use of the name 'SHREDDED WHEAT' as its trade name, (2) from advertising or offering for sale its product in the form and shape of plaintiff's biscuit, and (3) from doing either.'

Kellogg Company then filed a petition for a writ of certiorari to review the decree as so clarified, and also sought reconsideration of our denial of its petition for certiorari to review the decree as entered in its original form. In support of these petitions it called to our attention the decision of the British Privy Council in Canadian Shredded Wheat Co. v. Kellogg Company of Canada, 55 R.P.C. 125, rendered after our denial of the petition for certiorari earlier in the term. We granted both petitions for certiorari. 304 U.S. 586. The plaintiff concedes that it does not possess the exclusive right to make shredded wheat. But it claims the exclusive right to the trade name 'Shredded Wheat' and the exclusive right to make shredded wheat biscuits pillow-shaped. It charges that the defendant, by using the name and shape, and otherwise, is passing off, or enabling others to pass off, Kellogg goods for those of the plaintiff. Kellogg Company denies that the plaintiff is entitled to the exclusive use of the name or of the pillowshape; denies any passing off; asserts that it has used every reasonable effort to distinguish its product from that of the plaintiff; and contends that in honestly competing for a part of the market for shredded wheat it is exercising the common right freely to manufacturer and sell an article of commerce unprotected by patent. First. The plaintiff has no exclusive right to the use of the term 'Shredded Wheat' as a trade name. For that is the generic term of the article, which describes it with a fair degree of accuracy; and is the term by which the biscuit in pillow-shaped form is generally known by the public. Since the term is generic, the original maker of the product acquired no exclusive right to use it. As Kellogg Company had the right to make the article, it had, also, the right to use the term by which the public knows it. Compare Saxlehner v. Wagner, 216 U.S. 375; Holzapfel's Compositions Co. v. Rahtjen's American Composition Co., 183 U.S. 1. . . . Moreover, the name 'Shredded Wheat', as well as the product, the process and the machinery employed in making it, has been dedicated to the public. The basic patent for the product and for the process of making it, and many other patents for special machinery to be used in making the article, issued to Perky. In those patents the term 'shredded' is repeatedly used as descriptive of the product. The basic patent expired October 15, 1912; the others soon after. Since during the life of the patents 'Shredded Wheat' was the general designation of the patented product, there passed to the public upon the expiration of the patent, not only the right to make the article as it was made during the patent Chapter 2 – The Edges of Patent Law

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period, but also the right to apply thereto the name by which it had become known. As was said in Singer Mfg. Co. v. June Mfg. Co., 163 U.S. 169, 185: 'It equally follows from the cessation of the monopoly and the falling of the patented device into the domain of things public that along with the public ownership of the device there must also necessarily pass to the public the generic designation of the thing which has arisen during the monopoly. . . .' To say otherwise would be to hold that, although the public had acquired the device covered by the patent, yet the owner of the patent or the manufacturer of the patented thing had retained the designated name which was essentially necessary to vest the public with the full enjoyment of that which had become theirs by the disappearance of the monopoly.'

It is contended that the plaintiff has the exclusive right to the name 'Shredded Wheat', because those words acquired the 'secondary meaning' of shredded wheat made at Niagara Falls by the plaintiff's predecessor. There is no basis here for applying the doctrine of secondary meaning. The evidence shows only that due to the long period in which the plaintiff or its predecessor was the only manufacturer of the product, many people have come to associate the product, and as a consequence the name by which the product is generally known, with the plaintiff's factory at Niagara Falls. But to establish a trade name in the term 'shredded wheat' the plaintiff must show more than a subordinate meaning which applies to it. It must show that the primary significance of the term in the minds of the consuming public is not the product but the producer. This it has not done. The showing which it has made does not entitle it to the exclusive use of the term shredded wheat but merely entitles it to require that the defendant use reasonable care to inform the public of the source of its product. **** Second. The plaintiff has not the exclusive right to sell shredded wheat in the form of a pillow-shaped biscuit—the form in which the article became known to the public. That is the form in which shredded wheat was made under the basic patent. The patented machines used were designed to produce only the pillow-shaped biscuits. And a design patent was taken out to cover the pillow-shaped form. Hence, upon expiration of the patents the form, as well as the name, was dedicated to the public. As was said in Singer Mfg. Co. v. June Mfg. Co., supra, page 185: 'It is self-evident that on the expiration of a patent the monopoly granted by it ceases to exist, and the right to make the thing formerly covered by the patent becomes public property. It is upon this condition that the patent is granted. It follows, as a matter of course, that on the termination of the patent there passes to the public the right to make the machine in the form in which it was constructed during the patent. We may therefore dismiss without further comment the complaint, as to the form in which the defendant made his machines.' Where an article may be manufactured by all, a particular manufacturer can no more assert exclusive rights in a form in which the public has become accustomed to see the article and which, in the minds of the public, is primarily associated with the article rather than a particular producer, than it can in the case of a name with similar connections in the public mind. Kellogg Company was free to use the pillow-shaped form, subject only to the obligation to identify its product lest it be mistaken for that of the plaintiff. **** It is urged that all possibility of deception or confusion would be removed if Kellogg Company should refrain from using the name 'Shredded Wheat' and adopt some form other than the pillow-shape. But the name and form are integral parts of the goodwill of the article. To share fully in the goodwill, it must use the name and the pillow-shape. And in the goodwill Kellogg Company is as free to share as the plaintiff. Compare William R. Warner & Co. v. Eli Lilly & Co., 265 U.S. 526, 528, 530. Moreover, the pillow-shape must be used for another reason. The evidence is persuasive that this form is functional—that the cost of the biscuit would be increased and its high quality lessened if some other form were substituted for the pillow-shape.

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Kellogg Company is undoubtedly sharing in the goodwill of the article known as 'Shredded Wheat'; and thus is sharing in a market which was created by the skill and judgment of plaintiff's predecessor and has been widely extended by vast expenditures in advertising persistently made. But that is not unfair. Sharing in the goodwill of an article unprotected by patent or trade-mark is the exercise of a right possessed by all-and in the free exercise of which the consuming public is deeply interested. There is no evidence of passing off or deception on the part of the Kellogg Company; and it has taken every reasonable precaution to prevent confusion or the practice of deception in the sale of its product. **** Mr. Justice McREYNOLDS and Mr. Justice BUTLER are of opinion that the decree of the Circuit Court of Appeals is correct and should be affirmed. To them it seems sufficiently clear that the Kellogg Company is fraudulently seeking to appropriate to itself the benefits of a goodwill built up at great cost by the respondent and its predecessors.

Questions, Problems, Comments 1. Consider the following passage from The Trade-Mark Cases, which held that Congress could not provide for federal trademark protection under the Intellectual Property clause: The ordinary trade-mark has no necessary relation to invention or discovery. The trade-mark recognized by the common law is generally the growth of a considerable period of use, rather than a sudden invention. It is often the result of accident rather than design, and when under the act of Congress it is sought to establish it by registration, neither originality, invention, discovery, science, nor art is in any way essential to the right conferred by that act. If we should endeavor to classify it under the head of writings and authors, the objections are equally strong. . . . The writings which are to be protected are the fruits of intellectual labor, embodied in the form of books, prints, engravings and the like. The trade-mark may be, and generally is, the adoption of something already in existence as the distinctive symbol of the party using it. 100 U.S. 82, 94 (1879). What does this passage tell us about the patent laws and the intent of the Constitution regarding intellectual property rights? Should inventors who come across a discovery by “accident rather than design” be accorded almost 20 years of exclusivity? 2. The Kellogg court mentioned, but found unproven, the secondary meaning of the term “shredded wheat.” What about the biscuit shape? Could Nabisco have proven secondary meaning and thereby attained trademark protection on the shape of the biscuit? What proof would it have needed? Would trademark protection conflict with the expiration of patent protection? The answer may depend on whether the trademark protection is under state law or federal law. Compare Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234, 140 USPQ 528 (1964) (holding that federal patent law preempts state unfair competition law when applied to protect an industrial design that acquired secondary meaning when the design is in an expired design patent), with In re Mogen David Wine Corp., 372 F.2d 539, 152 USPQ 593 (CCPA 1967) (concurring opinion by Judge Lane states, in dictum, that Compco does not preclude obtaining federal trademark protection for a design (there, a wine decanter) that was protected by an expired design patent). This leads nicely to our next subject—preemption of state laws by the federal patent laws.

PREEMPTION OF STATE LAWS Bonito Boats, Inc. v. Thunder Craft Boats, Inc. 489 U.S. 141, 9 USPQ2d 1847 (1989) JUSTICE O'CONNOR delivered the opinion of the Court. We must decide today what limits the operation of the federal patent system places on the States' ability to offer substantial protection to utilitarian and design ideas which the patent laws leave otherwise unprotected. In Interpart Corp. v. Italia, 777 F.2d 678 (1985), the Court of Appeals for the Federal Circuit concluded that a California law prohibiting the use of the "direct molding Chapter 2 – The Edges of Patent Law

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process" to duplicate unpatented articles posed no threat to the policies behind the federal patent laws. In this case, the Florida Supreme Court came to a contrary conclusion. It struck down a Florida statute which prohibits the use of the direct molding process to duplicate unpatented boat hulls, finding that the protection offered by the Florida law conflicted with the balance struck by Congress in the federal patent statute between the encouragement of invention and free competition in unpatented ideas. See 515 So.2d 220 (1987). We granted certiorari to resolve the conflict, 486 U.S. 1004 (1988), and we now affirm the judgment of the Florida Supreme Court. I In September 1976, Petitioner Bonito Boats, Inc. (Bonito), a Florida corporation, developed a hull design for a fiberglass recreational boat which it marketed under the trade name Bonito Boat Model 5VBR. App. 5. Designing the boat hull required substantial effort on the part of Bonito. A set of engineering drawings was prepared, from which a hardwood model was created. The hardwood model was then sprayed with fiberglass to create a mold, which then served to produce the finished fiberglass boats for sale. The 5VBR was placed on the market sometime in September 1976. There is no indication in the record that a patent application was ever filed for protection of the utilitarian or design aspects of the hull, or for the process by which the hull was manufactured. The 5VBR was favorably received by the boating public, and "a broad interstate market" developed for its sale. Ibid. In May 1983, after the Bonito 5VBR had been available to the public for over six years, the Florida Legislature enacted Fla. Stat. § 559.94 (1987). The statute makes "[i]t . . . unlawful for any person to use the direct molding process to duplicate for the purpose of sale any manufactured vessel hull or component part of a vessel made by another without the written permission of that other person." § 559.94(2). The statute also makes it unlawful for a person to "knowingly sell a vessel hull or component part of a vessel duplicated in violation of subsection (2)." § 559.94(3). Damages, injunctive relief, and attorney's fees are made available to "[a]ny person who suffers injury or damage as the result of a violation" of the statute. § 559.94(4). The statute was made applicable to vessel hulls or component parts duplicated through the use of direct molding after July 1, 1983. § 559.94(5). On December 21, 1984, Bonito filed this action in the Circuit Court of Orange County, Florida. The complaint alleged that respondent here, Thunder Craft Boats, Inc. (Thunder Craft), a Tennessee corporation, had violated the Florida statute by using the direct molding process to duplicate the Bonito 5VBR fiberglass hull, and had knowingly sold such duplicates in violation of the Florida statute. Bonito sought "a temporary and permanent injunction prohibiting [Thunder Craft] from continuing to unlawfully duplicate and sell Bonito Boat hulls or components," as well as an accounting of profits, treble damages, punitive damages, and attorney's fees. App. 6, 7. Respondent filed a motion to dismiss the complaint, arguing that under this Court's decisions in Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964), and Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234 (1964), the Florida statute conflicted with federal patent law and was therefore invalid under the Supremacy Clause of the Federal Constitution. App. 8-9. The trial court granted respondent's motion, id., at 10-11, and a divided Court of Appeals affirmed the dismissal of petitioner's complaint. 487 So.2d 395 (1986). On discretionary review, a sharply divided Florida Supreme Court agreed with the lower courts' conclusion that the Florida law impermissibly interfered with the scheme established by the federal patent laws. See 515 So.2d 220 (1987). The majority read our decisions in Sears and Compco for the proposition that "when an article is introduced into the public domain, only a patent can eliminate the inherent risk of competition and then but for a limited time." 515 So.2d, at 222. Relying on the Federal Circuit's decision in the Interpart case, the three dissenting judges argued that the Florida antidirect molding provision "does not prohibit the copying of an unpatented item. It prohibits one method of copying; the item remains in the public domain." 515 So.2d, at 223 (Shaw, J., dissenting). II Chapter 2 – The Edges of Patent Law

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Article I, § 8, cl. 8, of the Constitution gives Congress the power "[t]o promote the Progress of Science and the useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." The Patent Clause itself reflects a balance between the need to encourage innovation and the avoidance of monopolies which stifle competition without any concomitant advance in the "Progress of Science and the useful Arts." As we have noted in the past, the Clause contains both a grant of power and certain limitations upon the exercise of that power. Congress may not create patent monopolies of unlimited duration, nor may it "authorize the issuance of patents whose effects are to remove existent knowledge from the public domain, or to restrict free access to materials already available." Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 6 (1966). From their inception, the federal patent laws have embodied a careful balance between the need to promote innovation and the recognition that imitation and refinement through imitation are both necessary to invention itself and the very lifeblood of a competitive economy. Soon after the adoption of the Constitution, the First Congress enacted the Patent Act of 1790, which allowed the grant of a limited monopoly of 14 years to any applicant that "hath . . . invented or discovered any useful art, manufacture, . . . or device, or any improvement therein not before known or used." 1 Stat. 109, 110. In addition to novelty, the 1790 Act required that the invention be "sufficiently useful and important" to merit the 14-year right of exclusion. Ibid. Section 2 of the Act required that the patentee deposit with the Secretary of State, a specification and if possible a model of the new invention, "which specification shall be so particular, and said models so exact, as not only to distinguish the invention or discovery from other things before known and used, but also to enable a workman or other person skilled in the art or manufacture . . . to make, construct, or use the same, to the end that the public may have the full benefit thereof, after the expiration of the patent term." Ibid. The first Patent Act established an agency known by self-designation as the "Commissioners for the promotion of Useful Arts," composed of the Secretary of State, the Secretary of the Department of War, and the Attorney General, any two of whom could grant a patent. Thomas Jefferson was the first Secretary of State, and the driving force behind early federal patent policy. For Jefferson, a central tenet of the patent system in a free market economy was that "a machine of which we were possessed, might be applied by every man to any use of which it is susceptible." 13 Writings of Thomas Jefferson 335 (Memorial ed. 1904). He viewed a grant of patent rights in an idea already disclosed to the public as akin to an ex post facto law, "obstruct[ing] others in the use of what they possessed before." Id., at 326-327. Jefferson also played a large role in the drafting of our Nation's second Patent Act, which became law in 1793. The Patent Act of 1793 carried over the requirement that the subject of a patent application be "not known or used before the application." Ch. 11, 1 Stat. 318, 319. A defense to an infringement action was created where "the thing, thus secured by patent, was not originally discovered by the patentee, but had been in use, or had been described in some public work anterior to the supposed discovery of the patentee." Id., at 322. Thus, from the outset, federal patent law has been about the difficult business "of drawing a line between the things which are worth to the public the embarrassment of an exclusive patent, and those which are not." 13 Writings of Thomas Jefferson, supra, at 335. Today's patent statute is remarkably similar to the law as known to Jefferson in 1793. Protection is offered to "[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof." 35 U.S.C.§ 101. Since 1842, Congress has also made protection available for "any new, original and ornamental design for an article of manufacture." 35 U.S.C. § 171. To qualify for protection, a design must present an aesthetically pleasing appearance that is not dictated by function alone, and must satisfy the other criteria of patentability. The novelty requirement of patentability is presently expressed in 35 U.S.C. §§ 102(a) and (b), which provide: "A person shall be entitled to a patent unless -

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"(a) the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the application for patent, or "(b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country more than one year prior to the date of application for patent in the United States . . . ."

Sections 102(a) and (b) operate in tandem to exclude from consideration for patent protection knowledge which is already available to the public. They express a congressional determination that the creation of a monopoly in such information would not only serve no socially useful purpose, but would in fact injure the public by removing existing knowledge from public use. From the Patent Act of 1790 to the present day, the public sale of an unpatented article has acted as a complete bar to federal protection of the idea embodied in the article thus placed in public commerce. In the case of Pennock v. Dialogue, 2 Pet. 1 (1829), Justice Story applied these principles under the patent law of 1800. The patentee had developed a new technique for the manufacture of rubber hose for the conveyance of air and fluids. The invention was reduced to practice in 1811, but letters patent were not sought and granted until 1818. In the interval, the patentee had licensed a third party to market the hose, and over 13,000 feet of the new product had been sold in the city of Philadelphia alone. The Court concluded that the patent was invalid due to the prior public sale, indicating that, "if [an inventor] suffers the thing he invented to go into public use, or to be publicly sold for use" "[h]is voluntary act or acquiescence in the public sale and use is an abandonment of his right." Id., at 23-24. The Court noted that under the common law of England, letters patent were unavailable for the protection of articles in public commerce at the time of the application, id., at 20, and that this same doctrine was immediately embodied in the first patent laws passed in this country. Id., at 21-22. As the holding of Pennock makes clear, the federal patent scheme creates a limited opportunity to obtain a property right in an idea. Once an inventor has decided to lift the veil of secrecy from his work, he must choose between the protection of a federal patent, or the dedication of his idea to the public at large. As Judge Learned Hand once put it: "[I]t is a condition upon the inventor's right to a patent that he shall not exploit his discovery competitively after it is ready for patenting; he must content himself with either secrecy or legal monopoly." Metallizing Engineering Co. v. Kenyon Bearing & Auto Parts Co., 153 F.2d 516, 520 (CA2), cert. denied, 328 U.S. 881 (1946). In addition to the requirements of novelty and utility, the federal patent law has long required that an innovation not be anticipated by the prior art in the field. Even if a particular combination of elements is "novel" in the literal sense of the term, it will not qualify for federal patent protection if its contours are so traced by the existing technology in the field that the "improvement is the work of the skillful mechanic, not that of the inventor." Hotchkiss v. Greenwood, 11 How. 248, 267 (1851). In 1952, Congress codified this judicially developed requirement in 35 U.S.C. § 103, which refuses protection to new developments where "the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person of ordinary skill in the art to which said subject matter pertains." The nonobviousness requirement extends the field of unpatentable material beyond that which is known to the public under § 102, to include that which could readily be deduced from publicly available material by a person of ordinary skill in the pertinent field of endeavor. See Graham, 383 U.S. at 15. Taken together, the novelty and nonobviousness requirements express a congressional determination that the purposes behind the Patent Clause are best served by free competition and exploitation of that which is either already available to the public, or that which may be readily discerned from publicly available material. See Aronson v. Quick Point Pencil Co., 440 U.S. 257, 262 (1979) ("[T]he stringent requirements for patent protection seek to ensure that ideas in the public domain remain there for the use of the public").

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The applicant whose invention satisfies the requirements of novelty, nonobviousness, and utility, and who is willing to reveal to the public the substance of his discovery and "the best mode . . . of carrying out his invention," 35 U.S.C. § 112, is granted "the right to exclude others from making, using, or selling the invention throughout the United States," for a period of 17 years. 35 U.S.C. § 154. The federal patent system thus embodies a carefully crafted bargain for encouraging the creation and disclosure of new, useful, and nonobvious advances in technology and design in return for the exclusive right to practice the invention for a period of years. "[The inventor] may keep his invention secret and reap its fruits indefinitely. In consideration of its disclosure and the consequent benefit to the community, the patent is granted. An exclusive enjoyment is guaranteed him for seventeen years, but upon expiration of that period, the knowledge of the invention inures to the people, who are thus enabled without restriction to practice it and profit by its use." United States v. Dubilier Condenser Corp., 289 U.S. 178, 186-187 (1933). The attractiveness of such a bargain, and its effectiveness in inducing creative effort and disclosure of the results of that effort, depend almost entirely on a backdrop of free competition in the exploitation of unpatented designs and innovations. The novelty and nonobviousness requirements of patentability embody a congressional understanding, implicit in the Patent Clause itself, that free exploitation of ideas will be the rule, to which the protection of a federal patent is the exception. Moreover, the ultimate goal of the patent system is to bring new designs and technologies into the public domain through disclosure. State law protection for techniques and designs whose disclosure has already been induced by market rewards may conflict with the very purpose of the patent laws by decreasing the range of ideas available as the building blocks of further innovation. The offer of federal protection from competitive exploitation of intellectual property would be rendered meaningless in a world where substantially similar state law protections were readily available. To a limited extent, the federal patent laws must determine not only what is protected, but also what is free for all to use. . . . Thus our past decisions have made clear that state regulation of intellectual property must yield to the extent that it clashes with the balance struck by Congress in our patent laws. The tension between the desire to freely exploit the full potential of our inventive resources and the need to create an incentive to deploy those resources is constant. Where it is clear how the patent laws strike that balance in a particular circumstance, that is not a judgment the States may secondguess. We have long held that after the expiration of a federal patent, the subject matter of the patent passes to the free use of the public as a matter of federal law. See Coats v. Merrick Thread Co., 149 U.S. 562, 572 (1893) ("[P]laintiffs' right to the use of the embossed periphery expired with their patent, and the public had the same right to make use of it as if it had never been patented"); Kellogg Co. v. National Biscuit Co., 305 U.S. 111 (1938); Singer Mfg. Co. v. June Mfg. Co., 163 U.S. 169 (1896). Where the public has paid the congressionally mandated price for disclosure, the States may not render the exchange fruitless by offering patent-like protection to the subject matter of the expired patent. "It is self-evident that on the expiration of a patent the monopoly created by it ceases to exist, and the right to make the thing formerly covered by the patent becomes public property." Singer, supra, at 185. In our decisions in Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964), and Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234 (1964), we found that publicly known design and utilitarian ideas which were unprotected by patent occupied much the same position as the subject matter of an expired patent. The Sears case involved a pole lamp originally designed by the plaintiff Stiffel, who had secured both design and mechanical patents on the lamp. Sears purchased unauthorized copies of the lamps, and was able to sell them at a retail price practically equivalent to the wholesale price of the original manufacturer. Sears, supra, at 226. Stiffel brought an action against Sears in Federal District Court, alleging infringement of the two federal patents and unfair competition under Illinois law. The District Court found that Stiffel's patents were invalid due to anticipation in the prior art, but nonetheless enjoined Sears from further sales of the duplicate lamps based on a finding of consumer confusion under the Illinois law of unfair competition. The Court of Appeals affirmed, coming to the conclusion that the Illinois law of unfair

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competition prohibited product simulation even in the absence of evidence that the defendant took some further action to induce confusion as to source. This Court reversed, finding that the unlimited protection against copying which the Illinois law accorded an unpatentable item whose design had been fully disclosed through public sales conflicted with the federal policy embodied in the patent laws. The Court stated: "In the present case the `pole lamp' sold by Stiffel has been held not to be entitled to the protection of either a mechanical or a design patent. An unpatentable article, like an article on which the patent has expired, is in the public domain and may be made and sold by whoever chooses to do so. What Sears did was to copy Stiffel's design and sell lamps almost identical to those sold by Stiffel. This it had every right to do under the federal patent laws." 376 U.S., at 231.

A similar conclusion was reached in Compco, where the District Court had extended the protection of Illinois' unfair competition law to the functional aspects of an unpatented fluorescent lighting system. The injunction against copying of an unpatented article, freely available to the public, impermissibly "interfere[d] with the federal policy, found in Art. I, § 8, cl. 8, of the Constitution and in the implementing federal statutes, of allowing free access to copy whatever the federal patent and copyright laws leave in the public domain." Compco, supra, at 237. The pre-emptive sweep of our decisions in Sears and Compco has been the subject of heated scholarly and judicial debate. See, e.g., Symposium, Product Simulation: A Right or a Wrong?, 64 Colum. L. Rev. 1178 (1964); Lear, Inc. v. Adkins, 395 U.S. 653, 676 (1969) (Black, J., concurring in part and dissenting in part). Read at their highest level of generality, the two decisions could be taken to stand for the proposition that the States are completely disabled from offering any form of protection to articles or processes which fall within the broad scope of patentable subject matter. See id., at 677. Since the potentially patentable includes "anything under the sun that is made by man," Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980) (citation omitted), the broadest reading of Sears would prohibit the States from regulating the deceptive simulation of trade dress or the tortious appropriation of private information. That the extrapolation of such a broad pre-emptive principle from Sears is inappropriate is clear from the balance struck in Sears itself. The Sears Court made it plain that the States "may protect businesses in the use of their trademarks, labels, or distinctive dress in the packaging of goods so as to prevent others, by imitating such markings, from misleading purchasers as to the source of the goods." Sears, supra, at 232 (footnote omitted). Trade dress is, of course, potentially the subject matter of design patents. See W. T. Rogers Co. v. Keene, 778 F.2d 334, 337 (CA7 1985). Yet our decision in Sears clearly indicates that the States may place limited regulations on the circumstances in which such designs are used in order to prevent consumer confusion as to source. Thus, while Sears speaks in absolutist terms, its conclusion that the States may place some conditions on the use of trade dress indicates an implicit recognition that all state regulation of potentially patentable but unpatented subject matter is not ipso facto preempted by the federal patent laws. What was implicit in our decision in Sears, we have made explicit in our subsequent decisions concerning the scope of federal pre-emption of state regulation of the subject matter of patent. Thus, in Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 181 USPQ 673 (1974), we held that state protection of trade secrets did not operate to frustrate the achievement of the congressional objectives served by the patent laws. Despite the fact that state law protection was available for ideas which clearly fell within the subject matter of patent, the Court concluded that the nature and degree of state protection did not conflict with the federal policies of encouragement of patentable invention and the prompt disclosure of such innovations. Several factors were critical to this conclusion. First, because the public awareness of a trade secret is by definition limited, the Court noted that "the policy that matter once in the public domain must remain in the public domain is not incompatible with the existence of trade secret Chapter 2 – The Edges of Patent Law

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protection." Id., at 484. Second, the Kewanee Court emphasized that "[t]rade secret law provides far weaker protection in many respects than the patent law." Id., at 489-490. This point was central to the Court's conclusion that trade secret protection did not conflict with either the encouragement or disclosure policies of the federal patent law. The public at large remained free to discover and exploit the trade secret through reverse engineering of products in the public domain or by independent creation. Id., at 490. Thus, the possibility that trade secret protection would divert inventors from the creative effort necessary to satisfy the rigorous demands of patent protection was remote indeed. Ibid. Finally, certain aspects of trade secret law operated to protect non-economic interests outside the sphere of congressional concern in the patent laws. As the Court noted, "[A] most fundamental human right, that of privacy, is threatened when industrial espionage is condoned or is made profitable." Id., at 487 (footnote omitted). There was no indication that Congress had considered this interest in the balance struck by the patent laws, or that state protection for it would interfere with the policies behind the patent system. We have since reaffirmed the pragmatic approach which Kewanee takes to the preemption of state laws dealing with the protection of intellectual property. See Aronson, 440 U.S., at 262 ("State law is not displaced merely because the contract relates to intellectual property which may or may not be patentable; the states are free to regulate the use of such intellectual property in any manner not inconsistent with federal law"). At the same time, we have consistently reiterated the teaching of Sears and Compco that ideas once placed before the public without the protection of a valid patent are subject to appropriation without significant restraint. Aronson, supra, at 263. At the heart of Sears and Compco is the conclusion that the efficient operation of the federal patent system depends upon substantially free trade in publicly known, unpatented design and utilitarian conceptions. In Sears, the state law offered "the equivalent of a patent monopoly," 376 U.S., at 233, in the functional aspects of a product which had been placed in public commerce absent the protection of a valid patent. While, as noted above, our decisions since Sears have taken a decidedly less rigid view of the scope of federal pre-emption under the patent laws, e.g., Kewanee, supra, at 479-480, we believe that the Sears Court correctly concluded that the States may not offer patent-like protection to intellectual creations which would otherwise remain unprotected as a matter of federal law. Both the novelty and the nonobviousness requirements of federal patent law are grounded in the notion that concepts within the public grasp, or those so obvious that they readily could be, are the tools of creation available to all. They provide the baseline of free competition upon which the patent system's incentive to creative effort depends. A state law that substantially interferes with the enjoyment of an unpatented utilitarian or design conception which has been freely disclosed by its author to the public at large impermissibly contravenes the ultimate goal of public disclosure and use which is the centerpiece of federal patent policy. Moreover, through the creation of patent-like rights, the States could essentially redirect inventive efforts away from the careful criteria of patentability developed by Congress over the last 200 years. We understand this to be the reasoning at the core of our decisions in Sears and Compco, and we reaffirm that reasoning today. III We believe that the Florida statute at issue in this case so substantially impedes the public use of the otherwise unprotected design and utilitarian ideas embodied in unpatented boat hulls as to run afoul of the teaching of our decisions in Sears and Compco. It is readily apparent that the Florida statute does not operate to prohibit "unfair competition" in the usual sense that the term is understood. The law of unfair competition has its roots in the common-law tort of deceit: its general concern is with protecting consumers from confusion as to source. While that concern may result in the creation of "quasi-property rights" in communicative symbols, the focus is on the protection of consumers, not the protection of producers as an incentive to product innovation. Judge Hand captured the distinction well in Crescent Tool Co. v. Kilborn & Bishop Co., 247 F. 299, 301 (CA2 1917), where he wrote: "[T]he plaintiff has the right not to lose his customers through false representations that those are his wares which in fact are not, but he may not monopolize any design or pattern, however trifling.

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The defendant, on the other hand, may copy plaintiff's goods slavishly down to the minutest detail: but he may not represent himself as the plaintiff in their sale."

With some notable exceptions, including the interpretation of the Illinois law of unfair competition at issue in Sears and Compco, see Sears, supra, at 227-228, n.2, the common-law tort of unfair competition has been limited to protection against copying of nonfunctional aspects of consumer products which have acquired secondary meaning such that they operate as a designation of source. See generally P. Kaufmann, Passing Off and Misappropriation, in 9 International Review of Industrial Property and Copyright Law, Studies in Industrial Property and Copyright Law 100109 (1986). The "protection" granted a particular design under the law of unfair competition is thus limited to one context where consumer confusion is likely to result; the design "idea" itself may be freely exploited in all other contexts. In contrast to the operation of unfair competition law, the Florida statute is aimed directly at preventing the exploitation of the design and utilitarian conceptions embodied in the product itself. The sparse legislative history surrounding its enactment indicates that it was intended to create an inducement for the improvement of boat hull designs. See Tr. of Meeting of Transportation Committee, Florida House of Representatives, May 3, 1983, reprinted at App. 22 ("[T]here is no inducement for [a] quality boat manufacturer to improve these designs and secondly, if he does, it is immediately copied. This would prevent that and allow him recourse in circuit court"). To accomplish this goal, the Florida statute endows the original boat hull manufacturer with rights against the world, similar in scope and operation to the rights accorded a federal patentee. Like the patentee, the beneficiary of the Florida statute may prevent a competitor from "making" the product in what is evidently the most efficient manner available and from "selling" the product when it is produced in that fashion. Compare 35 U.S.C. § 154. The Florida scheme offers this protection for an unlimited number of years to all boat hulls and their component parts, without regard to their ornamental or technological merit. Protection is available for subject matter for which patent protection has been denied or has expired, as well as for designs which have been freely revealed to the consuming public by their creators. In this case, the Bonito 5VBR fiberglass hull has been freely exposed to the public for a period in excess of six years. or purposes of federal law, it stands in the same stead as an item for which a patent has expired or been denied: it is unpatented and unpatentable. See 35 U.S.C. § 102(b). Whether because of a determination of unpatentability or other commercial concerns, petitioner chose to expose its hull design to the public in the marketplace, eschewing the bargain held out by the federal patent system of disclosure in exchange for exclusive use. Yet, the Florida statute allows petitioner to reassert a substantial property right in the idea, thereby constricting the spectrum of useful public knowledge. Moreover, it does so without the careful protections of high standards of innovation and limited monopoly contained in the federal scheme. We think it clear that such protection conflicts with the federal policy "that all ideas in general circulation be dedicated to the common good unless they are protected by a valid patent." Lear, Inc. v. Adkins, 395 U.S., at 668. That the Florida statute does not remove all means of reproduction and sale does not eliminate the conflict with the federal scheme. See Kellogg, 305 U.S., at 122. In essence, the Florida law prohibits the entire public from engaging in a form of reverse engineering of a product in the public domain. This is clearly one of the rights vested in the federal patent holder, but has never been a part of state protection under the law of unfair competition or trade secrets. See Kewanee, 416 U.S., at 476 ("A trade secret law, however, does not offer protection against discovery by . . . so-called reverse engineering, that is by starting with the known product and working backward to divine the process which aided in its development or manufacture"); see also Chicago Lock Co. v. Fanberg, 676 F.2d 400, 405 (CA9 1982) ("A lock purchaser's own reverse-engineering of his own lock, and subsequent publication of the serial number-key code correlation, is an example of the independent invention and reverse engineering expressly allowed by trade secret doctrine"). The duplication of boat hulls and their component parts may be an essential part of innovation in the field of hydrodynamic design. Variations as to size and Chapter 2 – The Edges of Patent Law

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combination of various elements may lead to significant advances in the field. Reverse engineering of chemical and mechanical articles in the public domain often leads to significant advances in technology. If Florida may prohibit this particular method of study and recomposition of an unpatented article, we fail to see the principle that would prohibit a State from banning the use of chromatography in the reconstitution of unpatented chemical compounds, or the use of robotics in the duplication of machinery in the public domain. Moreover, as we noted in Kewanee, the competitive reality of reverse engineering may act as a spur to the inventor, creating an incentive to develop inventions that meet the rigorous requirements of patentability. 416 U.S., at 489-490. The Florida statute substantially reduces this competitive incentive, thus eroding the general rule of free competition upon which the attractiveness of federal patent bargain depends. The protections of state trade secret law are most effective at the developmental stage, before a product has been marketed and threat of reverse engineering becomes real. During this period, patentability will often be an uncertain prospect, and to a certain extent, the protection offered by trade secret law may "dovetail" with the incentives created by the federal patent monopoly. See Goldstein, Kewanee Oil Co. v. Bicron Corp.: Notes on a Closing Circle, 1974 Sup. Ct. Rev. 81, 92. In contrast, under the Florida scheme, the would-be inventor is aware from the outset of his efforts that the rights against the public are available regardless of his ability to satisfy the rigorous standards of patentability. Indeed, it appears that even the most mundane and obvious changes in the design of a boat hull will trigger the protections of the statute. See Fla. Stat. 559.94(2) (1987) (protecting "any manufactured vessel hull or component part"). Given the substantial protection offered by the Florida scheme, we cannot dismiss as hypothetical the possibility that it will become a significant competitor to the federal patent laws, offering investors similar protection without the quid pro quo of substantial creative effort required by the federal statute. The prospect of all 50 States establishing similar protections for preferred industries without the rigorous requirements of patentability prescribed by Congress could pose a substantial threat to the patent system's ability to accomplish its mission of promoting progress in the useful arts. Finally, allowing the States to create patent-like rights in various products in public circulation would lead to administrative problems of no small dimension. The federal patent scheme provides a basis for the public to ascertain the status of the intellectual property embodied in any article in general circulation. Through the application process, detailed information concerning the claims of the patent holder is compiled in a central location. See 35 U.S.C. §§ 111-114. The availability of damages in an infringement action is made contingent upon affixing a notice of patent to the protected article. 35 U.S.C. § 287. The notice requirement is designed "for the information of the public," Wine Railway Appliance Co. v. Enterprise Railway Equipment Co., 297 U.S. 387, 397 (1936), and provides a ready means of discerning the status of the intellectual property embodied in an article of manufacture or design. The public may rely upon the lack of notice in exploiting shapes and designs accessible to all. See Devices for Medicine, Inc. v. Boehl, 822 F.2d 1062, 1066 (CA Fed. 1987) ("Having sold the product unmarked, [the patentee] could hardly maintain entitlement to damages for its use by a purchaser uninformed that such use would violate [the] patent"). The Florida scheme blurs this clear federal demarcation between public and private property. One of the fundamental purposes behind the Patent and Copyright Clauses of the Constitution was to promote national uniformity in the realm of intellectual property. See The Federalist No. 43, p. 309 (B. Wright ed. 1961). Since the Patent Act of 1800, Congress has lodged exclusive jurisdiction of actions "arising under" the patent laws in the federal courts, thus allowing for the development of a uniform body of law in resolving the constant tension between private right and public access. See 28 U.S.C. § 1338; see also Chisum, The Allocation of Jurisdiction Between State and Federal Courts in Patent Litigation, 46 Wash. L. Rev. 633, 636 (1971). Recently, Congress conferred exclusive jurisdiction of all patent appeals on the Court of Appeals for the Federal Circuit, in order to "provide nationwide uniformity in patent law." H. R. Rep. No. 97-312, p. 20 (1981). This purpose is frustrated by the Florida scheme, which renders the status of the design and utilitarian "ideas" embodied in the boat hulls it protects uncertain. Given the Chapter 2 – The Edges of Patent Law

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inherently ephemeral nature of property in ideas, and the great power such property has to cause harm to the competitive policies which underlay the federal patent laws, the demarcation of broad zones of public and private right is "the type of regulation that demands a uniform national rule." Ray v. Atlantic Richfield Co., 435 U.S. 151, 179 (1978). Absent such a federal rule, each State could afford patent-like protection to particularly favored home industries, effectively insulating them from competition from outside the State. Petitioner and its supporting amici place great weight on the contrary decision of the Court of Appeals for the Federal Circuit in Interpart Corp. v. Italia. In upholding the application of the California "antidirect molding" statute to the duplication of unpatented automobile mirrors, the Federal Circuit stated: "The statute prevents unscrupulous competitors from obtaining a product and using it as the `plug' for making a mold. The statute does not prohibit copying the design of the product in any other way; the latter if in the public domain, is free for anyone to make, use or sell." 777 F.2d, at 685. The court went on to indicate that "the patent laws `say nothing about the right to copy or the right to use, they speak only in terms of the right to exclude.'" Ibid., quoting Mine Safety Appliances Co. v. Electric Storage Battery Co., 56 C. C. P. A. (Pat.) 863, 864, n.2, 405 F.2d 901, 902, n.2 (1969). We find this reasoning defective in several respects. The Federal Circuit apparently viewed the direct molding statute at issue in Interpart as a mere regulation of the use of chattels. Yet, the very purpose of antidirect molding statutes is to "reward" the "inventor" by offering substantial protection against public exploitation of his or her idea embodied in the product. Such statutes would be an exercise in futility if they did not have precisely the effect of substantially limiting the ability of the public to exploit an otherwise unprotected idea. As amicus points out, the direct molding process itself has been in use since the early 1950's. . . . Indeed, U.S. Patent No. 3,419,646, issued to Robert L. Smith in 1968, explicitly discloses and claims a method for the direct molding of boat hulls. The specifications of the Smith Patent indicate that "[i]t is a major object of the present invention to provide a method for making large molded boat hull molds at very low cost, once a prototype hull has been provided." . . . In fact, it appears that Bonito employed a similar process in the creation of its own production mold. . . .It is difficult to conceive of a more effective method of creating substantial property rights in an intellectual creation than to eliminate the most efficient method for its exploitation. Sears and Compco protect more than the right of the public to contemplate the abstract beauty of an otherwise unprotected intellectual creation—they assure its efficient reduction to practice and sale in the marketplace. Appending the conclusionary label "unscrupulous" to such competitive behavior merely endorses a policy judgment which the patent laws do not leave the States free to make. Where an item in general circulation is unprotected by patent, "[r]eproduction of a functional attribute is legitimate competitive activity." Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844, 863 (1982) (WHITE, J., concurring in result). See also Bailey v. Logan Square Typographers, Inc., 441 F.2d 47, 51 (CA7 1971) (Stevens, J.) ("[T]hat which is published may be freely copied as a matter of federal right"). Finally, we are somewhat troubled by the Interpart court's reference to the Mine Safety case for the proposition that the patent laws say "nothing about the right to copy or the right to use." As noted above, the federal standards for patentability, at a minimum, express the congressional determination that patent-like protection is unwarranted as to certain classes of intellectual property. The States are simply not free in this regard to offer equivalent protections to ideas which Congress has determined should belong to all. For almost 100 years it has been well established that in the case of an expired patent, the federal patent laws do create a federal right to "copy and to use." Sears and Compco extended that rule to potentially patentable ideas which are fully exposed to the public. The Interpart Court's assertion to the contrary is puzzling and flies in the face of the same court's decisions applying the teaching of Sears and Compco in other contexts. See Power Controls Corp. v. Hybrinetics, Inc., 806 F.2d 234, 240 (CA Fed. 1986) ("It is well established . . . that an action for unfair competition cannot be based upon a functional design"); Gemveto Jewelry Co. v. Jeff Cooper Inc., 800 F.2d 256, 259 (CA Fed. 1986) (vacating Chapter 2 – The Edges of Patent Law

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injunction against copying of jewelry designs issued under state law of unfair competition "in view of the Sears and Compco decisions which hold that copying of the article itself that is unprotected by the federal patent and copyright laws cannot be protected by state law"). Our decisions since Sears and Compco have made it clear that the Patent and Copyright Clauses do not, by their own force or by negative implication, deprive the States of the power to adopt rules for the promotion of intellectual creation within their own jurisdictions. See Aronson, 440 U.S., at 262; Goldstein v. California, 412 U.S. 546, 552-561 (1973); Kewanee, 416 U.S., at 478479. Thus, where "Congress determines that neither federal protection nor freedom from restraint is required by the national interest," Goldstein, supra, at 559, the States remain free to promote originality and creativity in their own domains. Nor does the fact that a particular item lies within the subject matter of the federal patent laws necessarily preclude the States from offering limited protection which does not impermissibly interfere with the federal patent scheme. As Sears itself makes clear, States may place limited regulations on the use of unpatented designs in order to prevent consumer confusion as to source. In Kewanee, we found that state protection of trade secrets, as applied to both patentable and unpatentable subject matter, did not conflict with the federal patent laws. In both situations, state protection was not aimed exclusively at the promotion of invention itself, and the state restrictions on the use of unpatented ideas were limited to those necessary to promote goals outside the contemplation of the federal patent scheme. Both the law of unfair competition and state trade secret law have co-existed harmoniously with federal patent protection for almost 200 years, and Congress has given no indication that their operation is inconsistent with the operation of the federal patent laws. See Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 144 (1963); United States v. Bass, 404 U.S. 336, 349 (1971). Indeed, there are affirmative indications from Congress that both the law of unfair competition and trade secret protection are consistent with the balance struck by the patent laws. Section 43(a) of the Lanham Act, 60 Stat. 441, 15 U.S.C. § 1125(a), creates a federal remedy for making "a false designation of origin, or any false description or representation, including words or other symbols tending falsely to describe or represent the same . . . ." Congress has thus given federal recognition to many of the concerns that underlie the state tort of unfair competition, and the application of Sears and Compco to nonfunctional aspects of a product which have been shown to identify source must take account of competing federal policies in this regard. Similarly, as Justice Marshall noted in his concurring opinion in Kewanee: "[s]tate trade secret laws and the federal patent laws have co-existed for many, many, years. During this time, Congress has repeatedly demonstrated its full awareness of the existence of the trade secret system, without any indication of disapproval. Indeed, Congress has in a number of instances given explicit federal protection to trade secret information provided to federal agencies." Kewanee, supra, at 494 (concurring in result) (citation omitted). The case for federal pre-emption is particularly weak where Congress has indicated its awareness of the operation of state law in a field of federal interest, and has nonetheless decided to "stand by both concepts and to tolerate whatever tension there [is] between them." Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 256 (1984). The same cannot be said of the Florida statute at issue here, which offers protection beyond that available under the law of unfair competition or trade secret, without any showing of consumer confusion, or breach of trust or secrecy. The Florida statute is aimed directly at the promotion of intellectual creation by substantially restricting the public's ability to exploit ideas which the patent system mandates shall be free for all to use. Like the interpretation of Illinois unfair competition law in Sears and Compco, the Florida statute represents a break with the tradition of peaceful co-existence between state market regulation and federal patent policy. The Florida law substantially restricts the public's ability to exploit an unpatented design in general circulation, raising the specter of state-created monopolies in a host of useful shapes and processes for which patent protection has been denied or is otherwise unobtainable. It thus enters a field of regulation which the patent laws have reserved to Congress. The patent statute's careful balance between public right and private Chapter 2 – The Edges of Patent Law

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monopoly to promote certain creative activity is a "scheme of federal regulation . . . so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it." Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947). Congress has considered extending various forms of limited protection to industrial design either through the copyright laws or by relaxing the restrictions on the availability of design patents. See generally Brown, Design Protection: An Overview, 34 UCLA L. Rev. 1341 (1987). Congress explicitly refused to take this step in the copyright laws, see 17 U.S.C. § 101; H. R. Rep. No. 941476, p. 55 (1976), and despite sustained criticism for a number of years, it has declined to alter the patent protections presently available for industrial design. See Report of the President's Commission on the Patent System, S. Doc. No. 5, 90th Cong., 1st Sess., 20-21 (1967); Lindgren, The Sanctity of the Design Patent: Illusion or Reality?, 10 Okla. City L. Rev. 195 (1985). It is for Congress to determine if the present system of design and utility patents is ineffectual in promoting the useful arts in the context of industrial design. By offering patent-like protection for ideas deemed unprotected under the present federal scheme, the Florida statute conflicts with the "strong federal policy favoring free competition in ideas which do not merit patent protection." Lear, Inc., 395 U.S., at 656. We therefore agree with the majority of the Florida Supreme Court that the Florida statute is preempted by the Supremacy Clause, and the judgment of that court is hereby affirmed. It is so ordered.

The Dow Chemical Co. v. Exxon Corp. 139 F.3d 1470, 46 USPQ2d 1120 (Fed. Cir. 1998) Before MICHEL, LOURIE, and CLEVENGER, Circuit Judges. MICHEL, Circuit Judge. Plaintiff-Appellant, The Dow Chemical Company ("Dow"), appeals from a final judgment of the United States District Court for the District of Delaware, entered on March 20, 1997, dismissing Dow's state law unfair competition claim against Exxon Corporation ("Exxon Corp.") because no justiciable issues remained in the case and denying Dow's claim for attorney fees pursuant to 35 U.S.C. § 285 because the requisite exceptional circumstances had not been shown to exist. Because Dow's state law unfair competition claim was not coterminous with a claim of inequitable conduct and was not otherwise preempted by the federal patent laws, we reverse the district court's dismissal of that claim and remand for further proceedings. However, because the district court did not commit clear error in finding that there were no exceptional circumstances, we affirm the district court's judgment to the extent it denied Dow an award of attorney fees. In addition, because ECPI was properly found not to be an indispensable party, we affirm the district court's dismissal of ECPI from the case. BACKGROUND

[Dow filed the action, seeking a declaration that it did not infringe Exxon's patent on wire and cable devices using a particular insulating polymer. Dow also made a claim of unfair competition and alleged that Exxon obtained the patent through inequitable conduct by making false statements to the PTO during the course of the patent's prosecution.] After [Exxon had given Dow immunity from suit and the district court dismissed Dow's claim of noningringement,] the district court held in a Memorandum Order entered November 26, 1996, that Chapter 2 – The Edges of Patent Law

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Dow would not be permitted to present evidence of Exxon's alleged inequitable conduct in connection with its remaining state law unfair competition claim. Dow, slip op. at 6-7 (D. Del. Nov. 26, 1996). The district court posited that "[t]he question for the court, then, is whether issues of patent validity, and specifically of Exxon's alleged inequitable conduct, may be decided in the context of a business tort claim where all claims arising directly under the patent laws have been dismissed." Id. at 3-4. The court explained that its decision to exclude evidence of inequitable conduct relied upon precedent indicating that a court should not reach beyond the scope of a given controversy to invalidate a patent. Id. at 5 (citing Pro-Mold & Tool Co. v. Great Lakes Plastics, Inc., 75 F.3d 1568, 1575, 37 USPQ2d 1626, 1631 (Fed. Cir. 1996); Vieau v. Japax, Inc., 823 F.2d 1510, 1517-20, 3 USPQ2d 1094, 1100-02 (Fed. Cir. 1987)). Thus, the district court "decline[d] to allow what in essence is a patent trial to proceed in the guise of a business tort trial." Id. at 6. In addition, the district court further declared that the presumptive validity attaching to patents meant that "a patent owner who exercises the right to exclude others from using the invention is presumed to be acting in good faith, even if the patent is later deemed invalid or unenforceable." Id. (citing Concrete Unlimited, Inc. v. Cementcraft, Inc., 776 F.2d 1537, 1539, 227 USPQ 784, 785 (Fed. Cir. 1985)). Hence, the court reasoned: [the patentee in Concrete Unlimited] 'had the right to exclude others from making, using, and selling the invention and to enforce those rights until the . . . patent was held invalid.' This proposition appears to apply even where, as in Concrete Unlimited, the plaintiff alleges that the patent was obtained by inequitable conduct. Thus, it appears that an unfair competition claim based solely on the defendant's assertion of patent rights allegedly obtained through inequitable conduct could not, as a matter of law, succeed.

Id. at 6 (alteration in original) (citation omitted). Consequently, because "Dow . . . conceded that inequitable conduct before the PTO is the sole basis for its [unfair competition] claim" the court concluded that no triable issues remained and dismissed the case in its entirety in an order entered on March 20, 1997. Dow, slip op. at 2 (D. Del. Mar. 20, 1997). **** ANALYSIS I. The principal problem presented to the court is whether state courts, or federal courts adjudicating state law claims, may hear a state law tort claim for intentional interference with actual and prospective contractual relations that implicates the patent law issue of inequitable conduct or, alternatively, whether such a claim is preempted by the federal patent law. We hold that such a state law tort claim is not preempted by the federal patent law, even if it requires the state court to adjudicate a question of federal patent law, provided the state law cause of action includes additional elements not found in the federal patent law cause of action and is not an impermissible attempt to offer patent-like protection to subject matter addressed by federal law. Article I, Section 8, Clause 8, of the United States Constitution grants Congress the power "[t]o 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." Under this authority, Congress enacted the federal Patent Act, 35 U.S.C. §§ 1-376 (1994). Pursuant to the Supremacy Clause, U.S. Const. art. VI, cl. 2, state causes of action are preempted if they stand "as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress" in enacting a statute. Hines v. Davidowitz, 312 U.S. 52, 67 (1941). The Supreme Court has provided substantial guidance as to what constitutes such an impermissible "obstacle" to the accomplishment and execution of the patent laws. In Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964), and Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234 (1964), two cases decided on the same day, the Supreme Court held that state law unfair competition statutes that prohibited (on passing-off grounds) the sale of lamps that were confusingly similar to unpatentable

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lamps already in the marketplace were unconstitutional under the Supremacy Clause. As the Sears, Roebuck Court explained: To allow a State by use of its law of unfair competition to prevent the copying of an article which represents too slight an advance to be patented would be to permit the State to block off from the public something which federal law has said belongs to the public. The result would be that . . . States could allow perpetual protection to articles too lacking in novelty to merit any patent at all under federal constitutional standards. This would be too great an encroachment on the federal patent system to be tolerated.

376 U.S. at 231-32. However, the Court also made clear that state law remedies for wrongs involving patented or patentable products were not altogether precluded. As the Court declared: Doubtless a State may, in appropriate circumstances, require that goods, whether patented or unpatented, be labeled or that other precautionary steps be taken to prevent customers being misled as to the source, just as it may protect businesses in the use of their trademarks, labels, or distinctive dress in the packaging of goods so as to prevent others, by imitating such markings, from misleading purchasers as to the source of the goods.

Id. at 232. Further instruction on the constitutional limits on state law remedies was provided by Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974). In Kewanee, the Supreme Court held that Ohio's law of trade secrets, which, inter alia, granted monopoly protection to processes and manufacturing techniques that had been in commercial use for over one year but were otherwise patentable, was not preempted by the federal Patent Act. See id. at 474. The Court's analysis of the permissible reach of state regulation focused on whether the Ohio statute "'clashes with the objectives of the federal patent laws.'" Id. at 480 (quoting Sears, Roebuck, 376 U.S. at 231). These objectives the Kewanee Court found to be threefold: providing an incentive to invent, promoting the full disclosure of inventions, and ensuring that "that which is in the public domain cannot be removed therefrom by action of the States." Id. at 480-81. The Court concluded that the Ohio trade secrets statute did not offend the first and third of these objectives and, while it did not promote full disclosure of inventions, the Court reasoned that its effect would be minimal given that few inventors with patentable subject matter would opt for the relatively weak protections of the trade secrets statute. See id. at 483-91. Thus, the Ohio trade secrets statute was held not to be preempted by federal patent law. See id. at 493. The Supreme Court applied the same three-factor test in Aronson v. Quick Point Pencil Co., 440 U.S. 257 (1979). In Aronson, although the licensor's patent application was rejected, the Court explained that enforcement of royalty agreements on intellectual property under state contract law was not preempted regardless of whether that intellectual property consisted of patentable subject matter. See id. at 262. As the Court reasoned, "[c]ommercial agreements traditionally are the domain of state law. State law is not displaced merely because the contract relates to intellectual property which may or may not be patentable; the states are free to regulate the use of such intellectual property in any manner not inconsistent with federal law." Id. Finally, in Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989), the Supreme Court reviewed a Florida statute prohibiting the use of a "direct molding process" to recreate the boat hull designs of others and creating a civil cause of action against anyone who knowingly sold a hull so duplicated. Id. at 144-45. The Court reiterated its holdings in Sears, Roebuck and Kewanee, pointing out that in those cases, "state protection was not aimed exclusively at the promotion of invention itself, and the state restrictions on the use of unpatented ideas were limited to those necessary to promote goals outside the contemplation of the federal patent scheme." Id. at 166. Thus, because the "Florida statute [was] aimed directly at the promotion of intellectual creation by substantially restricting the public's ability to exploit ideas that the patent system mandates shall be free for all to use," the Supreme Court struck down the statute as preempted by the federal patent laws. Id. at 167.

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Under the standard mandated by the Supreme Court, the state law cause of action at issue here does not present an "obstacle" to the execution and accomplishment of the patent laws. None of the three factors identified in Kewanee are implicated by a state tort remedy for intentional interference with actual and prospective contractual relations in instances where the tortfeasor's threats to sue were based upon infringement of a patent obtained by inequitable conduct. It is difficult to fathom how such a state law cause of action could have any discernible effect on the incentive to invent, the full disclosure of ideas, or the principle that ideas in the public domain remain in the public domain. Indeed, it seems most improbable that an inventor would choose to forfeit the benefits of patent protection because of fear of the risk of being found tortiously liable based upon attempting to enforce a patent obtained by inequitable conduct. Moreover, a key purpose behind this tort is the protection of the integrity of commercial contracts which, as noted above, "traditionally are the domain of state law." Aronson, 440 U.S. at 262; see generally, W. Page Keeton et al., Prosser and Keeton on the Law of Torts 978 (1984) ("The law of interference with contract is thus one part of a larger body of tort law aimed at protection of relationships, some economic and some personal." (footnotes omitted)). The tort plainly does not seek to offer patent-like protection to intellectual property inconsistent with the federal scheme. While it is true that, under the facts of this case, the "state court" would be required to make a determination of an issue of patent law in reaching its judgment on the underlying tort, this determination would only be ancillary to its central purpose. In any case, it is well established that a state court has authority to adjudicate patent questions so long as the action itself does not arise under the patent laws. See, e.g., Hathorn v. Lovorn, 457 U.S. 255, 266 n.18 (1982) ("We frequently permit state courts to decide 'collaterally' issues that would be reserved for the federal courts if the cause of action arose directly under federal law. For example, the state courts may decide a variety of questions involving the federal patent laws."); Jacobs Wind Elec. Co. v. Florida Dep't of Transp., 919 F.2d 726, 728, 16 USPQ2d 1972, 1974 (Fed. Cir. 1990) ("[A]lthough a state court is without power to invalidate an issued patent, there is no limitation on the ability of a state court to decide the question of validity when properly raised in a state court proceeding."); Intermedics Infusaid, Inc. v. Regents of the Univ. of Minn., 804 F.2d 129, 132-33, 231 USPQ2d 653, 656 (Fed. Cir. 1986) ("[T]here are no policies reflected in acts of Congress which require that the federal courts enjoin . . . a state court contract suit seeking royalties payable under a patent license wherein the state court is or could be asked by the defendant to rule on the validity of the patent."). This analysis remains unchanged regardless of whether the state law claim is grounded in contract or tort. See, e.g., American Well Works v. Layne & Bowler Co., 241 U.S. 257, 259 (1916) (suit for libel or slander based upon an allegation of infringement sounded in tort and did not arise under the patent laws); Gilson v. Republic of Ir., 787 F.2d 655, 657-58, 229 USPQ 460, 462 (D.C. Cir. 1986) (claim for misappropriation of rights under a patent license sounded in tort and did not arise under the patent laws). **** The dissent suggests that the state tort of interference with contractual relations is based essentially on an assertion of inequitable conduct and amounts to little more than an attempt to use state law to derive a damages remedy for inequitable conduct. Although acknowledging that the tort has additional elements, the dissent posits that to focus on such differences "merely masks the real issue." In our judgment, however, these different elements are the primary issue. The tort occurs not in the PTO, but later in the marketplace. A state has every right to protect its citizens and residents in their contractual relations from acts of wrongful interference inside its borders by any party, including a patentee. Moreover, as noted earlier, the Supreme Court has recognized that the protection of commercial, contractual relations is primarily the concern of state law. Any award of damages, then, would be based on local conduct that the state has a right to regulate; proof of acts before the PTO in such a trial are merely evidence of a patentee's bad faith in its subsequent contacts with customers. Bad faith in turn is only one of three elements that must be established to make out the tort. As noted earlier, the other two are the interfering communications themselves and the disruption and damages Chapter 2 – The Edges of Patent Law

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therefrom. Nor does the tort simply duplicate federal remedies under patent law as urged by the dissent. The remedy available for proven inequitable conduct is a holding of unenforceability of the patent in federal court; the remedy at law for tortious interference is money damages in state court. Thus, the wrongful acts, the remedies and the forum are all different. In short, we cannot agree with the dissent's characterization of the tort asserted here as based essentially on an assertion of inequitable conduct. Rather, we see the tort as based essentially on bad faith communications that interfere with contractual relations. It is true, however, that in this case without the alleged inequitable conduct before the PTO there would likely be inadequate proof of bad faith. Nevertheless, that the source of proof of bad faith, just one element of the tort, was purported inequitable conduct before the PTO, does not make this tort a patent issue preempted by federal law. The dissent further suggests that it is undesirable for inequitable conduct to be addressed during trial of a state law cause of action However, that cannot trump the right of the state to consider inequitable conduct as evidence of wrongful intent in a tort case, any more than it would preclude the state court from addressing the validity of a patent in a contract case. We simply do not see how the "bright line rule" desired by the dissent is either plain in application or possible under our federal patent system and settled case law. Any argument that this state law cause of action provides a duplication of federal remedies that could lead to conflicting results is similarly unfounded. The tort of intentional interference with contractual relations is a remedy of money damages for improper behavior by competitors in the marketplace. The tort at issue covers all types of commercial actors and does not single out patent-holders for either increased deference or additional scrutiny. Inequitable conduct, however, provides a defense to those accused by a patent-holder whose patent was obtained by improper conduct in the PTO and provides the specific relief of making the patent unenforceable. Far from being a duplication of remedies, the state tort and the federal defense address entirely different wrongs and also provide different forms of relief. In addition, given that, as discussed earlier, it is well-established that issues of validity and enforceability may be adjudicated in licensing disputes governed by state law and thus yield conflicting results, it seems somewhat unpersuasive to suggest that the possibility of conflicting results raised by this case is an adequate ground for preemption. **** AFFIRMED-IN-PART, REVERSED-IN-PART, and REMANDED. LOURIE, Circuit Judge, dissenting in part. **** I dissent because the district court correctly decided that the state law claim was preempted by federal law; it was essentially an inequitable conduct claim. The majority, citing Sears, Roebuck & Co. v. Stiffel, 376 U.S. 225, 140 USPQ 524 (1964), Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234, 140 USPQ 528 (1964), Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 181 USPQ 673 (1974), Aronson v. Quick Point Pencil Co., 440 U.S. 257, 201 USPQ 1 (1979), and Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 9 USPQ2d 1847 (1989), concludes that the state law claim for intentional interference with actual and prospective contractual relations does not stand as an impermissible obstacle to the accomplishment and execution of the patent laws and that it is therefore not preempted. **** Inequitable conduct is a defense to a claim of patent infringement when the patent was obtained by a failure of the patent applicant to comply with the duty of disclosure to the PTO. See 37 C.F.R. § 1.56 (1997). There already are remedies for such misconduct, including unenforceability of the patent, see 35 U.S.C. § 282 (1994), and attorney fees when the case is found to be exceptional, see id. § 285. Likewise, in cases of egregious misconduct or subsequent baseless attempts to enforce the patent, the patentee may be exposed to liability under the federal antitrust laws. See Walker Process Equipment, Inc. v. Food Machinery & Chem. Corp., 382 U.S. 172, 147 USPQ2d 404 (1965) (fraudulent Chapter 2 – The Edges of Patent Law

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misrepresentation); Professional Real Estate Investors, Inc. v. Columbia Pictures Indus., Inc., 508 U.S. 49, 26 USPQ2d 1641 (1993) (objectively and subjectively baseless suit). Dow attempts to bypass these federal remedies by asserting a state law cause of action. I believe that such a cause of action is preempted because it frustrates federal patent policy by providing damages for inequitable conduct distinct from the remedies established under federal law. Permitting a state law claim to be based essentially on an assertion of inequitable conduct is essentially a duplication of federal remedies. It leads to the potential of conflicting results, an eventuality that preemption is intended to avoid. Just as in Sears, Roebuck and Compco, and in Bonito Boats, a state cause of action that conflicts with federal remedies is preempted. The majority emphasizes that the tort of intentional interference with actual and prospective contractual relations involves elements in addition to a finding of inequitable conduct. That assertion is of course correct, but it merely masks the real issue. It is well-established that a patent owner is entitled to assert its patent against those it believes are infringers. See Virginia Panel Corp. v. MAC Panel Co., 133 F.3d 860, 869, 45 USPQ2d 1225, 1232 (Fed. Cir. 1997) ("[A] patentee must be allowed to make its rights known to a potential infringer so that the latter can determine whether to cease its allegedly infringing activities, negotiate a license if one is offered, or decide to run the risk if liability and/or the imposition of an injunction."). Whenever a patentee suspects that its patent is being infringed, it should, as a matter of civilized business practice, warn the suspected infringer to cease and desist, on pain of facing a lawsuit. If the accused infringer has a contractual relationship with another party, such as a customer, as is the usual case, that other party may be warned as well, as it is usually also an accused infringer. Warning infringers to stop infringing one's patent is a protected activity. The fact that the patent owner may lose its case, or even be found to be guilty of inequitable conduct does not mean that it had no right to demand that those it considered to be infringers stop their allegedly infringing conduct. Thus, the fact that this tort involves post-grant activities does not practically-speaking distinguish it from inequitable conduct per se. **** Just as inequitable conduct has become a staple defense in an infringement suit, the result of this decision may well be the generation of a staple state tort of interference with contract essentially based on conduct in the patent office involving the procurement of the patent. Every federal patent infringement suit in which a patentee has warned an accused infringer having a contract or business relationship with another party regarding the accused subject matter may now be fair game for a state tort action. I hope not, because I do not agree that the law provides for such an action, that it is necessary as a matter of policy, or that we should be creating new causes of action when federal law already provides remedies for the alleged offense. Maintenance of a bright line rule that state tort law does not provide a damages remedy for inequitable conduct best serves the law's goal of providing clarity concerning the distinction between federal and state causes of action. Accordingly, because the issue of inequitable conduct is part of a patent infringement law suit, it should not be raised separately in the guise of a state law claim. I therefore respectfully dissent from the reversal of the district court's dismissal of Dow's claim for intentional interference with actual and prospective contractual relations. Questions, Problems, and Comments 1. You may have noted that the Supreme Court mentioned in Bonito Boats: “the federal patent laws do create a federal right to ‘copy and to use.’” Does this passage mean that party that wants to challenge a patent that it thinks is invalid may bring a suit in federal court for a declaration of its right to copy and use? One party apparently thought so, but was shot down by the Federal Circuit in Leatherman Tool Group Inc. v. Cooper Industries, Inc.: From this passage, it is clear that the Supreme Court is not creating a federal right to bring a cause of action affirmatively against a competitor to ask for a declaration that under this federal right the declaratory judgment plaintiff has the “right to copy” a particular design in the public domain. The Supreme Court merely stated that while the patent laws provide the right to exclude others from making, using, or selling a claimed invention for a statutorily limited amount of time, if such rights could be but were not awarded under the patent laws, the states may not provide commensurate protection.

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Therefore, the patent laws do speak to the issue of the public’s right to copy what is in the public domain, but only in the context of unfettering such protection or lack thereof from state interference. The Supreme Court in Bonito Boats, however, did not create an affirmative right to file a cause of action against a competitor alleging that the federal patent laws create a “right to copy” what is in the public domain. That is a common law right. In fact, the federal patent laws do not create any affirmative right to make, use, or sell anything. As the Supreme Court has stated, “[t]he franchise which the patent grants, consists altogether in the right to exclude every one from making, using, or vending the thing patented, without the permission of the patentee. This is all that he obtains by the patent.” Bloomer v. McQuewan, 55 U.S. 539, 548 (1852). In expounding further on the right to exclude, the Supreme Court stated that when a purchaser of a patented article uses the article, [H]e exercises no rights created by the act of Congress, nor does he derive title to it by virtue of the franchise or exclusive privilege granted to the patentee. The inventor might lawfully sell it to him, whether he had a patent or not, if no other patentee stood in his way. And when the machine passes to the hands of the purchaser, it is no longer within the limits of the monopoly. It passes outside of it, and is no longer under the protection of the act of Congress. Id. at 549 (citations omitted). Therefore, the Supreme Court made clear that the patent laws provide a limited right to exclude others from making, using, or selling a claimed invention for a limited period of time, but afford no affirmative right to make, use, and sell a patented invention. By the same token, the patent laws create no affirmative right supporting a cause of action against a competitor to assert a right to make or copy what is in the public domain and excluded from patent protection. The Supreme Court’s decision in Bonito Boats did not change this result. Therefore, no basis under the federal patent laws exists to support Cooper’s right to file a declaratory judgment counterclaim seeking a declaration that it has a “right to copy” Leatherman’s Pocket Tool design that Cooper asserts is in the public domain. 131 F.3d 1011, 44 USPQ2d 1837 (Fed. Cir. 1997). 2. On the issue of whether federal patent law preempts state unfair competition claims that are premised on an assertion that a patentee has been unfairly flogging competitors with a patent obtained through inequitable conduct, consider the analysis in Hunter Douglas, Inc. v. Harmonic Design, Inc., 153 F.3d 1318, 47 USPQ2d 1769, which issued a couple months after Dow Chemical: In Dow Chemical, we understood the Supreme Court precedent to preempt state laws that "seek to offer patent-like protection to intellectual property inconsistent with the federal scheme." We concluded, however, that this precedent does not dictate whether a state law unfair competition claim relying on a violation of federal patent law is not preempted by federal patent law. Although this quintet of cases does not decide the preemption issue on appeal here, it sets forth the essential criteria—the "objectives of the federal patent laws"—for determining whether there is field or conflict preemption. Kewanee Oil, 416 U.S. at 480 (quoting Sears, Roebuck, 376 U.S. at 231) (internal quotation marks omitted). The objectives are: First, patent law seeks to foster and reward invention; second it promotes disclosure of inventions to stimulate further innovation and to permit the public to practice the invention once the patent expires; third, the stringent requirements for patent protection seek to assure that ideas in the public domain remain there for the free use of the public. Aronson, 440 U.S. at 262 (citing Kewanee Oil, 416 U.S. at 480-81). These objectives are in some "tension" with one another, and Congress struck a "balance" between them through federal patent law. Bonito Boats, 489 U.S. at 152. Referring to these goals, we held in Dow Chemical that there was no preemption of the two state law torts as pleaded by the plaintiff. In reviewing preemption of state unfair competition law, we look to the law of the regional circuit in which the district court resides, . . . where, consistent with the other circuits, the review of this issue is plenary, see, e.g., Espinal v. Northwest Airlines, 90 F.3d 1452, 1455 (9th Cir. 1996). Because Ninth Circuit law does not require any analytic process for assessment of preemption based on conflict with federal patent law, we apply our plenary authority to the issue at hand. C We readily conclude that, in accordance with Dow Chemical, there is no reason to believe that the clear and manifest purpose of Congress was for federal patent law to occupy exclusively the field pertaining to state unfair competition law. Because of the lack of such congressional intent, in conjunction with the

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underlying presumption disfavoring preemption, there is no field preemption of state unfair competition claims that rely on a substantial question of federal patent law. Dow Chemical, at the very least, compels this result, for if there were field preemption, then the state law claims in that case would presumably have been preempted. We accept Dow Chemical's logic and incorporate it here. . . . Of significant import to that decision, which we repeat here because of its relevance to the issue of field preemption, is the observation that state unfair competition law regulates conduct in a different field from federal patent law. . . . The state law remedies in Dow Chemical were directed to allegedly tortious conduct in the marketplace: "[S]tate law governs the maintenance of orderly contractual relations and this function is not preempted merely because patents and patent issues are presented in the substance of those contracts." **** Both the Supreme Court and this court have distinguished between the two fields in which federal patent law and state unfair competition law operate. In Bonito Boats, the Court opined: "Both the law of unfair competition and state trade secret law have coexisted harmoniously with federal patent protection for almost 200 years, and Congress has given no indication that their operation is inconsistent with the operation of the federal patent laws." 489 U.S. at 166. In Mars Inc. v. Kabushiki-Kaisha Nippon Conlux, 24 F.3d 1368, 30 USPQ2d 1621 (Fed. Cir. 1994), we espoused a similar view: Unfair competition law and patent law have long existed as distinct and independent bodies of law, each with different origins and protecting different rights. . . . The distinction between the law of unfair competition and patent law is also evident in the general statutory framework enacted by Congress. Whereas patent law is completely preempted by federal law, the law of unfair competition, despite some federal encroachment, see 15 U.S.C. § 1125(a) (1988), remains largely free from federal exclusivity. The provisions of Title 35 governing patents are not in pari materia with the state and federal provisions governing unfair competition. 24 F.3d at 1373, 30 USPQ2d at 1624 (citation omitted). Again, we spoke in Cover: "With respect to field pre-emption, Title 35 occupies the field of patent law, not commercial law between buyers and sellers." 83 F.3d at 1393, 38 USPQ2d at 1786. Not only does this precedent show the substantial difference between the two fields, but it also demonstrates that the regulation of business affairs is traditionally a matter for state regulation. See also, e.g., California v. ARC Am. Corp., 490 U.S. 93, 101 (1989) ("Given the long history of state common-law and statutory remedies against monopolies and unfair business practices, it is plain that this is an area traditionally regulated by the States." (footnote omitted)). Hence, under the Court's preemption jurisprudence, the presumption against preemption has greater force because of the states' long-standing governance of such affairs. See, e.g., Medtronic, 518 U.S. at 485; Rice, 331 U.S. at 230. That reinforced presumption instructs against field preemption. **** For conflict preemption, we consider whether the state law actions frustrate "the accomplishment and execution of the full purposes and objectives of Congress." Hines, 312 U.S. at 67. We vacate the district court's dismissal of the state law causes of action for conflict preemption, and remand for it to apply the analysis set forth below. To determine whether these state law torts are in conflict with federal patent law and accordingly preempted, we assess a defendant's allegedly tortious conduct. If a plaintiff bases its tort action on conduct that is protected or governed by federal patent law, then the plaintiff may not invoke the state law remedy, which must be preempted for conflict with federal patent law. Conversely, if the conduct is not so protected or governed, then the remedy is not preempted. This approach, which considers whether a state law tort, "as-applied," conflicts with federal patent law, is consistent with that employed by the Supreme Court in cases involving preemption of state unfair competition law. See, e.g., Sears, 376 U.S. at 231 (holding that state unfair competition law cannot be applied to "give protection of a kind that clashes with the objectives of the federal patent laws"); Compco, 376 U.S. at 238 (holding that state unfair competition law cannot be applied to impose liability on those who deceive the public by palming off a copy as an original). The Supreme Court has employed a similar approach, which focuses on the conduct alleged to be in conflict with federal law, for determining the preemptive scope of federal law. For example, in Linn v. United Plant Guard Workers of America, 383 U.S. 53 (1966), the Supreme Court considered the extent to which the National Labor Relations Act (NLRA) barred a state civil action for libel stemming from a

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labor dispute. See id. at 55. Instead of preempting the particular state libel law on its face, the Court "limit[ed] the availability of state remedies for libel to those instances in which the complainant can show that the defamatory statements were circulated with malice and caused him damage," for these requirements "guard[] against abuse of libel actions and unwarranted intrusion upon free discussion envisioned by the [NLRA]." Id. at 65. In California Coastal Commission v. Granite Rock Co., 480 U.S. 572 (1987), the Court refused to preempt state permitting regulations in their entirety because of an alleged conflict with federal mineral law, for there was "a possible set of permit conditions not in conflict with federal law." Id. at 593. As the Supreme Court noted, a state law is not per se preempted unless every fact situation that would satisfy the state law is in conflict with federal law. See id. at 580. By limiting the extent of preemption to those instances when the application of state law would conflict with federal law, this approach best respects the states' sovereign nature. Two types of conduct that federal patent law immunizes from state tort liability are relevant to this appeal. First, federal patent law bars the imposition of liability for conduct before the PTO unless the plaintiff can show that the patentholder's conduct amounted to fraud or rendered the patent application process a sham. In Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d 1059, 46 USPQ2d 1097, 1106 (1998), decided shortly after Dow Chemical, we held, following Supreme Court precedent, that federal patent law shields a patentholder from federal antitrust liability for conduct in obtaining a patent unless the antitrust plaintiff proves "that the asserted patent was obtained through knowing and willful fraud." Id. at 1068, 46 USPQ2d at 1104. In Abbott Laboratories v. Brennan, 952 F.2d 1346, 21 USPQ2d 1192 (Fed. Cir. 1991), we barred a state tort action based on a patentholder's conduct before the PTO "at least unless it is shown that the entire federal agency action was a 'sham.'" Id. at 1356, 21 USPQ2d at 1200 (quoting Eastern R.R. Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 144 (1961)). Nobelpharma and Abbott Laboratories strike a balance between a patentholder's rights under federal patent law and obligations under other federal law with a conduct-based test. In so doing, the law supplies a clear line that divides a patentholder's protected conduct from that which could expose it to liability. Second, federal patent law bars the imposition of liability for publicizing a patent in the marketplace unless the plaintiff can show that the patentholder acted in bad faith. . . . Indeed, Title 35 authorizes patentholders to "give notice to the public that the [patented article] is patented" and makes marking or specific notice of the patent to the accused infringer a prerequisite to the recovery of damages. 35 U.S.C. § 287 (1994 & Supp. I 1995). These two precepts of federal patent law mandate that such conduct may not be the subject of state tort liability. Accordingly, in a case involving a patentholder's conduct in obtaining or publicizing its patent, if the plaintiff were to fail to allege that the defendant patentholder was guilty of fraudulent conduct before the PTO or bad faith in the publication of a patent, then the complaint would be dismissed for failure to state a claim upon which relief can be granted because of federal preemption. If the complaint were sufficient but the proof were not to show such conduct, then the claim would fail on the merits. Of course, neither fraud nor bad faith need be a required element of a state law tort for that cause of action to stave off preemption by federal patent law, because a plaintiff could prove fraud or bad faith for a tort that not only would be met by such a showing of proof, but also would be satisfied by less. Although to state and maintain a claim under a state law tort, a plaintiff may not be required to allege or prove that the patentholder perpetrated fraud before the PTO or acted in bad faith in the marketplace, to escape preemption, the plaintiff would need to allege and prove ultimately such conduct. To require less would impermissibly alter the balance between the competing purposes of federal patent law that Congress has prescribed. Our holding in Dow Chemical is in harmony with this conduct-based approach. In that case, because the plaintiff alleged the bad faith enforcement of a patent, . . . the state law torts were not preempted. As explained above, the defendant's conduct for which the plaintiff sought relief under state law was neither protected nor governed by federal patent law. Hence, the state law torts, as-applied, were not preempted. Here, in the complaint, Hunter Douglas made several general allegations concerning the Defendants' conduct both before the PTO and in the marketplace in relation to the Harmonic patents. However, it is not clear on its face that the complaint alleges that the Defendants' conduct amounted to either fraud or bad faith. Consequently, we remand for the district court to decide whether, in accordance with the guidelines set forth above, Hunter Douglas's allegations in the complaint are sufficient to survive a motion to dismiss the state law counts on the basis of preemption by federal patent law and, if so, whether there is evidence to support those allegations. If Dow Chemical truly compelled the result in Hunter Douglas, why did the court completely reanalyze the issue? Did Hunter Douglas respond to Judge Lourie’s dissent in Dow Chemical? Was the analysis in Dow Chemical simply incomplete? Was the analysis in Hunter Douglas too complete?

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3. The Dow Chemical panel noted that a state court may “adjudicate patent questions so long as the action itself does not arise under the patent laws.” For example, a patentee may bring a breach of contract action against another party who has a license to the patentee’s technology but has recently refused to pay a royalty. The other party may raise a defense that it need not pay the royalty because the patent is invalid. A state court can adjudicate that claim even though it requires the court to rule on the patent’s validity. How are federal courts supposed to know when the patent question is important enough to the claim that it arises under the patent laws? Does the “well-pleaded complaint” rule play a role? If a state court determines in a contract action that a patent is invalid, does that decision have issue preclusive effect?

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Section II

Requirements for Patentability

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Chapter 3 Novelty & Statutory Bars Introduction A thing on which an applicant seeks a patent must be new, or novel. That has always been a basic premise of patent law. If the thing has been made before or has been done before, the applicant has very little to offer the public because the public already has possession of the thing. Why would the public give the applicant any rights in exchange for something the public already has? Section 101 of Title 35 requires that whatever is invented or discovered be “new.” This novelty requirement is spelled out in greater detail in section 102 of Title 35: Section 102: Conditions for patentability; novelty and loss of right to patent. A person shall be entitled to a patent unless (a) the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent, or (b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States, or (c) he has abandoned the invention, or (d) the invention was first patented or caused to be patented, or was the subject of an inventor’s certificate, by the applicant or his legal representatives or assigns in a foreign country prior to the

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date of the application for patent in this country on an application for patent or inventor’s certificate filed more than twelve months before the filing of the application in the United States, or (e) the invention was described in a patent granted on an application for patent by another filed in the United States before the invention thereof by the applicant for patent, or on an international application by another who has fulfilled the requirements of paragraphs (1), (2), and (4) of section 371(c) of this title before the invention thereof by applicant for patent, or (f)

he did not himself invent the subject matter sought to be patented, or

(g) before the applicant’s invention thereof the invention was made in this country by another who had not abandoned, suppressed, or concealed it. In determining priority of invention there shall be considered not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to conception by the other.

This is a very complicated way to say that an inventor may receive an invention unless the invention is not new. Why all the complexity? Because section 102 is designed to meet a variety of policy considerations that you will find discussed in the cases below. To make section 102 easier to understand, first parse it into two pieces: subsections (a) and (b), and all the rest. This doesn’t remove the complexity, but it does make the analysis more manageable. Subsections (a) and (b) are encountered most often in patent law, and they will receive the bulk of the attention in this chapter. Initially, note the time with which each subsection is concerned. Subsection (a) looks to the date of invention, while subsection (b) looks to the date the patent application was filed. Attorneys in the United States are blessed with this wrinkle because the United States is a “first-to-invent” country rather than a “first-to-file” country, which describes the patent systems of the European nations and most of the rest of the world. In a first-to-file country, any prior art activity that occurs before a patent application is filed can be applied against the applicant. Applicants in such countries are therefore encouraged to get to the patent office in a hurry. In contrast, applicants in the United States can reach behind certain prior art activities if they can show that they came up with the claimed invention before the prior art activities occurred. However, applicants can only reach back one year to pre-date the prior art activities listed in subsection (b). Issues falling under subsection (a) are “novelty” issues, while those falling under subsection (b) are called “statutory bars” because the one-year provision is a rigid, make-orbreak rule that “bars” a patent filed too late. Patent attorneys often speak of “bar dates” when they are rushing to get an application filed within a year after a client offers the invention for sale or makes it public. If the one-year bar date is missed, the patent application is dead. You may also hear someone refer to the date one-year before an application was filed as its “critical date,” because section 102(b) makes that date critical for prior art purposes. Also note to whom the activities are directed. Subsection (a) refers only to activities by persons other than the inventor. It can only refer to such activities, because the inventor cannot do anything with the invention before “the invention thereof” (there simply is no invention). In contrast, subsection (b) can apply to activities by anyone, whether the inventor, a co-worker of the inventor, or anyone else. Thus, if, more than a year before the application was filed, the invention was described in a printed publication, was in public use, or was on sale, a patent cannot issue. As you will see later, subsections (e) and (g) also are aimed at activities by persons other than the inventors, and subsection (d), which is rarely invoked, is directed toward actions by the inventor relating to foreign patenting. Next, note the repeated use of the term “the invention.” Through this phrase, the law requires that, for a piece of prior art, i.e., something that meets the other requirements of section 102, to render a putative invention “not new” or, in patent vernacular “anticipated,” it must be substantially the same as the thing claimed in the patent or patent application. If the earlier thing that was on sale, published, used, known, or patented lacks any of the features, or “limitations,” recited in a patent claim, that earlier thing cannot alone invalidate the claim for lack of novelty, or in other words, it cannot be an anticipation. Chapter 3 – Novelty & Statutory Bars

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Finally, pay attention to the difference between activities that occur “in this country” versus activities that occur in other countries. Consider the possible reasons for making such distinctions. But before we launch into the specific parts of the novelty section, step back and get into the “heads” of the inventor and the prior art.

Anticipation – Concept v. Embodiment Just what do we mean when we say a piece of prior art "anticipates" a claimed invention? It is best to answer that question by looking at a piece of prior art from two vantage points—the conceptual (mental) aspect and an embodiment aspect, i.e., the physical structure of the invention. It is equally helpful to describe the claimed invention, whatever it is, as a method of achieving a result. Specifically, by thinking of an invention in the following terms: "If I do A, I will get B (the desirable result.)" or "If I do A and B, I will get C." By thinking about inventions this way, we immediately bring the mental or conceptual side of inventions into play. That is, inventions are not simply machines, new chemical compounds, or other physical structures. They are products of the human mind, which is attempting to solve problems or imagine new approaches to problems not hitherto thought of. The AàB or A+BàC methodology causes you to state the invention as a mental process carried out in physical acts. After all, we are talking about intellectual property here, property of the mind, which results in tangible benefits to mankind. Hence, inventions have both a conceptual (mental) and embodiment (tangible carrying out of the mental concept, to yield a tangible benefit) aspect. An example is the invention in the landmark case of United States v. Adams, 383 U.S. 39 (1966), which we will cover in more detail in the next chapter. There, Adams had invented an improved battery by using particular chemicals and materials. One can state the invention quite simply: If you use magnesium as one electrode and cuprous chloride as the other in a water-activated battery, you will obtain a constant voltage battery operable over a wide temperature range. The same analysis applies to prior art. When viewing a piece of prior art (whether a prior use, knowledge, publication, or patent), think about that prior art in terms of the concept that underlay it as well as the resultant physical embodiment. Except in the rare instance in which the prior art being asserted is simply a product of nature, most prior art is created by people. Therefore, some mental act went into its creation. It is therefore important to ask two questions about any prior art: (1) What is the concept underlying it? (2) What is the physical embodiment of it? This analysis, both of the claimed invention and the prior art, can be applied to the next few cases. We start with the case of Mr. Tilghman, who in the 1850's patented a chemical process of great interest to the candlemaking industry. Patents of commercial interest often breed lawsuits. . . .

Tilghman v. Proctor 102 U.S. 707 (1880) MR. JUSTICE BRADLEY delivered the opinion of the court. **** The complainant's patent is dated the third day of October, 1854, and relates back to the ninth day of January of that year, being the date of an English patent granted to the patentee for the same Chapter 3 – Novelty & Statutory Bars

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invention. It has but a single claim, the words of which are as follows: 'Having now described the nature of my said invention, and the manner of performing the same, I hereby declare that I claim, as of my invention, the manufacturing of fat acids and glycerine from fatty bodies by the action of water at a high temperature and pressure.' **** We do not regard the accidental formation of fat acid in Perkins's steam cylinder from the tallow introduced to lubricate the piston (if the scum which rose on the water issuing from the ejection pipe was fat acid) as of any consequence in this inquiry. What the process was by which it was generated or formed was never fully understood. Those engaged in the art of making candles, or in any other art in which fat acids are desirable, certainly never derived the least hint from this accidental phenomenon in regard to any practicable process for manufacturing such acids. The accidental effects produced in Daniell's water barometer and in Walter's process for purifying fats and oils preparatory to soap-making, are of the same character. They revealed no process for the manufacture of fat acids. If the acids were accidentally and unwittingly produced, whilst the operators were in pursuit of other and different results, without exciting attention and without its even being known what was done or how it had been done, it would be absurd to say that this was an anticipation of Tilghman's discovery. Nor do we regard the patent of Manicler, which was taken out in 1826, as anticipating the process of Tilghman. It is true that he directs a mixture of fat with about one-quarter of its weight of water to be placed in a boiler, and subjected to a heat sufficient to create a pressure equal to one atmosphere above the natural atmospheric pressure (or about 250°F); the boiler being provided with a safety-valve which would secure that degree of pressure. But, subject to this pressure, the patent directed that the mixture should be made to boil, and of course that the water should be converted into steam: the words are, 'Apply fire to this digester to melt and digest the contained tallow or fat and water and keep up a rapid ebullition during about six hours.' It is probable, therefore, that any decomposition of the fat which may have been produced by this process was due to the steam formed and passing through the fat, as no means appears to have been adopted for keeping up the mixture of the fat and water. But we have no evidence that the process was ever successful in practice. One of the defendants' witnesses testifies that he tried it, and though he got some results, he adds this pregnant observation: 'To transform all the fat in this way at so low a temperature would have required many days.' He only pretends that the sample which he obtained showed by its appearance, as well as by its acid action, that the separation had commenced. Evidently, therefore, this was but an abandoned experiment, since we never hear any more of it from 1826 down to the trial of this cause. It is unnecessary to examine in detail other alleged anticipations of Tilghman's process. We believe that we have specified the most prominent and reliable instances. **** The decree of the Circuit Court will be reversed, and the cause remanded with directions to enter a decree in conformity with this opinion; and it is So ordered.

International Nickel Co. v. Ford Motor Co. 166 F. Supp. 551, 119 USPQ 72 (S.D.N.Y. 1958) IRVING R. KAUFMAN, District Judge

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[The patent was for a cast ferrous alloy, variously referred to as nodular iron, ductile iron, spheroidal iron and S. G. iron. Products produced by ferrous casting had certain problems in the past. For example, cast steel had a high melting point, requiring an elaborate and expensive process for production. Cast iron had reduced strength and ductility because it was filled with graphite flakes which disrupted its matrix. Malleable iron was a useful compromise between cast steel and cast iron, but required time consuming and expensive processing. The patent-in-suit provided for the addition of magnesium to molten iron, which would draw the graphite into spheroidal form rather than flake form and thereby improve the properties of the resulting cast iron. The special master had determined that addition of magnesium to molten iron was a daring accomplishment that had previously been thought a hazard likely to induce an explosive reaction. After International Nickel (INCO) filed its patent, the industry embraced the invention as a broad, new pioneering discovery, and production of cast iron increased significantly.] [Before the master, Ford relied on valve inserts that had been manufactured by Mack Truck Company as anticipatory prior art. Mack had sought a satisfactory alloy insert for years, and its principal mettalurgist had thought that problems of brittleness caused by impurities could be neutralized by addition of a deoxifier, such as an aluminum-magnesium additive. The master analyzed samples of Mack inserts and determined that, although many of the inserts exhibited properties as good as those in INCO’s patent, in only a few could those properties be traced to the magnesium. The master thus rejected the Mack inserts as a basis for anticipation. Judge Kaufman agreed:] Mack either failed to recognize or was indifferent to the presence of whatever nodular iron may have resulted from its process. Although the industry had long sought spheroidal graphite, Mack never commented on the presence of spheroids in the iron with which it was working. Nor did Mack use its available equipment to test for the full range of properties attributable to the production of spheroids. Had Mack noticed any alteration in graphite shape, it is likely that it attributed this to its annealing process, and not to the retention of magnesium. Thus the production of magnesium induce nodular iron by Mack was purely a matter of chance and not the inevitable result of its process. **** It is undeniably true, as Ford asserts, that a prior use of a product deliberately created may constitute an anticipation, though the full benefits accruing therefrom may not be fully appreciated or even recognized. The prior user may have been in complete ignorance of the scientific phenomenon involved. In law, it is anticipation nevertheless. . . . Nor is anticipation avoided by the adoption of a new use for an unchanged product or process. . . . Thus if INCO had done no more than appreciate and exploit the full potentialities in a product already developed by Mack, or had merely found a new use for Mack's product, then Ford's position would have to be upheld. Such, however, is not the situation in the instant case. Mack was not merely ignorant of the scientific phenomena underlying nodular iron. It is not that Mack knew it had a new iron but failed to appreciate that its unique properties were due to an alteration in graphite shape. Not only was Mack unaware that it had created a new iron but in fact Mack never consciously pursued the product here in question for any purpose. Nor did it ascribe any meaningful function to retained magnesium. Mack sought merely a means for the degasification of iron. Thus General Electric Co. v. Jewel Incandescent Lamp Co., 326 U.S. 242 (1945), on which Ford relies so heavily, is inapposite here. There, the product of both the prior art and the patentee was a double-etched glass surface. The patentee employed the etching process in order to add strength, whereas the objective of the prior art was to diffuse light. In finding anticipation the Court wrote: "If A without mentioning the element of strength patented a bulb which was extra strong, B could not obtain a patent on the bulb because of its strength, though he was the first to recognize that feature of it."

In General Electric, the product, double-etched glass, was deliberately sought by both the prior art and the patentee. Thus the patentee did no more than discover a new use for an unchanged product. This Chapter 3 – Novelty & Statutory Bars

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is to be contrasted with the facts of the instant case. Here Mack never sought to manufacture nodular iron, the product which INCO has discovered. Indeed it was unaware that it had done so and had no idea of the significance of retained magnesium. Where the allegedly anticipating product was produced merely by chance and never recognized nor appreciated, one who later discovers and recognizes the product may patent it. Even where the allegedly anticipating product was deliberately sought and obtained by the prior art the discovery of a new use need not be invalidated for anticipation. **** In the last analysis, the issue of anticipation as well as invention is to be determined by how much new information the patentee has contributed to the art. Metallizing Engineer Co. v. Kenyon Bearing & A. P. Co., 2 Cir., 153 F.2d 516. . . . In this case the patentees must be credited with the discovery of nodular iron—an accomplishment of the highest order. The fruits of this invention should not be denied them merely because Mack with more ingenuity, insight, research and persistence might have gleaned such information from its own inserts.

H.K. Regar & Sons v. Scott & Williams 63 F.2d 229 (2d Cir. 1933) Before L. HAND, SWAN, and CHASE, Circuit Judges. L. HAND, Circuit Judge. [The patent covered a method of producing a scalloped edge at the top of knitted "seamless" stockings both when the top were folded over and unfolded. The invention uses wale stitches at the peaks of the scallop and 'tuck' stitches in the valleys. Claim 1 is representative: “The method of producing a picot [scalloped] edge in knitted fabrics by forming tucks in suitably spaced wales along a transverse line of the fabric, and folding the fabric along the said line.”]. **** The defendant proved the manufacture of certain stockings made at least as early as 1917, nearly ten years before the application was filed, manufactured by one, Wilson, which completely anticipate the claim, if broadly construed. . . . **** [The Wilson patent showed a stocking of scalloped form when it was folded over.] The plaintiff answers that the effect was not intended in the Wilson stockings, and that the invention was not therefore anticipated. It is quite true that an accidental use will not anticipate a process, if the earlier practiser was not aware of what he was doing, or how he did it. His work must give some assurance that the result can be reached another time, and of this there can be none unless the process is deliberate and the means understood. Nothing else can be called an art; it is merely an accident. Tilghman v. Proctor, 102 U.S. 707, 711, Eibel Co. v. Paper Co., 261 U.S. 45, 66. But when the result is a necessary consequence of what was deliberately intended, it is irrelevant that it was then valueless for the purposes in mind. Were that enough to prevent anticipation, it would be possible to patent a new use for an unchanged process; which is never true. Roberts v. Ryer, 91 U.S. 150, 159, 23 L. Ed. 267; Ansonia B. & C. Co. v. Electrical Supply Co., 144 U.S. 11, 18, 19. . . . Cases like Topliff v. Topliff, 145 U.S. 156, and Potts v. Creager, 155 U.S. 597, 608, are to be distinguished. When old devices are changed at all, the change may be dictated by a new conception, which it took originality to conceive. Strictly, the old device is not then put to a new use; the new use begets a new device. In such cases it requires but little physical change to make an invention. Traitel Marble Co. v. Hungerford B. & C. Co., 18 F.(2) 66, 68 (C. C. A. 2); H. C. White Co. v. Converse, 20 F.(2d) 311, 313 (C. C. A. 2). But a new use of an old thing or an old process, quite unchanged, can under no Chapter 3 – Novelty & Statutory Bars

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circumstances be patentable; not because it may not take as much inventiveness to discover it, as though some trivial change were necessary, but because the statute allows patents only for a new "art, machine, manufacture or composition of matter" (section 31, title 35, U.S. Code [35 USCA §31]). The test is objective; mere discovery will not do. In the case at bar it is indeed hard to find even a new use; perhaps it would be more accurate to speak for a use for what had theretofore been thought useless. But the result is the same; it is final that the patented process, if broadly conceived, had been deliberately practised before. If later, women came to prize a scalloped edge, it was not possible to monopolize it by claiming as an invention the discovery that they prized it. There can be no question of the adequacy of the evidence. The very stockings were produced by witnesses who had had them in their possession since they were made, backed by their testimony, which there is no reason to challenge. The case is not one where we must rely upon the recollection of events long past; unless the witnesses, apparently unbiased, were perjured, the stockings were made long before any date material to the controversy. Decree reversed; bill dismissed for non-infringement.

Traitel Marble Co. v. U. T. Hungerford Brass & Copper Co. 18 F.2d 66 (2d Cir. 1927) Before MANTON, HAND, and SWAN, Circuit Judges. [Traitel’s patent, listing one Calkins as its inventor, covered guide strips for laying “terrazzo mosaic,” and disclosed a means for laying upon concrete flooring a top layer of variously colored concrete surface made in some pattern, and designed roughly to imitate a mosaic. The thin, bendable guide strips were pushed down into the concrete to form desired patterns that were later filled with various colored cements. The lower halves of the strips were slit at intervals, and the tabs made therefrom were bent upward to form horizontal wings that would stop the descent of the strips into the concrete. In addition, bent tabs left open intervals on the lower half of the strips so that concrete could pass through and form a continuous bond. Traitel’s strip met with wide success, avoided some earlier difficulties, and was required in many building specifications.] [Claim 1 recited: “A pattern and guide strip of the character described, comprising a substantially flat thin flexible strip of metal extending vertically in cross section, and having a width adapting the strip to serve as a height guide in placing a desired thickness of plastic material on a wall or flooring, and having an uninterrupted straight upper edge defining the upper level of said plastic material, and a plurality of wings pressed out of said strip from substantially the central longitudinal line, to and including portions of the lower edge thereof, and extending outwardly from opposite sides of said strip, with the faces of said wings substantially parallel with the upper edge of the strip, said wings defining the depth of the finishing coat of said material relative to the upper surface thereof."]

HAND, Circuit Judge (after stating the facts above). Guide strips for precisely the same purpose as Calkins' were indeed old in November, 1919, when he filed his first application; they are disclosed in the Swiss patent to Cassani of 1910. They left no scope for invention, except in the form of the strips themselves. Probably Cassani assumed that the patterns might be curved, though he did not so show them, but in any case that would make no difference, because his strips were of thin metal, and to bend them was at best no more than a new use of his disclosure. But Cassani showed strips without wings, or any intervals to create a bond, and Calkins certainly made a patentable advance over what he had done; indeed, we do not understand that so much is denied. Chapter 3 – Novelty & Statutory Bars

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Perhaps the nearest approach to the form of Calkins's strips was McKnight's, disclosed as early as 1883. That, it is true, was a patent for a pavement, apparently a street pavement; but that would scarcely in itself be a sufficient distinction, if it were all. He described a concrete pavement laid in several layers, three as it chanced, in which he wished to avoid cracks. This he sought to do by dividing into square sections the two upper layers, or it might be all three, by straight vertical strips, which were set in the lower layer, and in some cases had horizontal wings, apparently along the whole length of the strip. The strip was set in the lower layer while it was being laid, and, as its upper edge did not reach the top of the upper layer, it could make no pattern in it, which, indeed, would not have been desirable. Moreover, the wings were not struck out of the lower half of the strip, but extended along its whole length. Even had the device been used for the same purpose as Calkins's, we should have some doubt whether these differences were not enough; but in view of the fact that McKnight's purpose and his result were quire different, structural distinctions which might be trivial become crucial. Assuming, for argument, that the law is absolute that there can be no patent for the new use of an old thing, that is because the statute allows no monopolies merely for ideas or discoveries. If the thing itself be new, very slight structural changes may be enough to support a patent, when they presuppose a use not discoverable without inventive imagination. We are to judge such devices, not by the mere innovation in their form or material, but by the purpose which dictated them and discovered their functions. Certainly the art would have waited indefinitely, in the light of all that McKnight disclosed for Calkins's contribution to its advance. It will not serve now to observe how easy it was, given the suggestion, to change his invention into that of the patent in suit. Kahn's patent of 1912 is the best anticipation after McKnight's. He disclosed a metal and concrete beam, in which metal was reinforced by concrete, rather than concrete by metal. So far as his patent concerned sidewalk lights, we need not pause to describe it. His nearest approach to Calkins was in Figure 5 and 6, where he showed beams set in concrete, having tabs struck out of the metal at intervals to receive transverse connecting rods. The holes so made did indeed permit a bond between the sections of concrete created by the beams, and the similarity to Calkins's invention arises from this fact and from the form of the wings. But the resemblance stops there. The beams were wholly unfitted for use as guide strips. They had heavy flanges at the bottom, like ordinary I-beams, and the web was of solid material. They were not designed to come to the surface of the top layer of concrete, and could not be depressed into the lower; the wings did not, and could not, serve as stops to mark off the height to which the top layer was to be filled. It was to distinguish from this patent that the change in claim 1 was made, which required the slits which formed the wings to run to the lower edge of the strip. Such a distinction was quire unnecessary, and would have been ineffectual, if it had been. **** Thus the case is in substance familiar enough, one in which the inventor has culled this and that out of nearby arts, and so formed a combination nowhere before existing. It has been a success; it has substantially driven out earlier cumbersome methods; it has enabled the art to do with ease what before it could only do slowly and imperfectly. The result seems to us a genuine invention, and we so hold. ****

Dewey & Almy Chemical Co. v. Mimex 124 F.2d 986, 52 USPQ 138 (2d Cir. 1942). L. HAND, Circuit Judge **** The "Latex Patent" In the year 1905 the "open-top" or "sanitary" tin can was invented; i.e. a can with a detachable top. Generally the joint between can and cover has to be air tight, and various expedients were tried to Chapter 3 – Novelty & Statutory Bars

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make it so; rubber rims, paper gaskets, rubber cement solutions. None of these was satisfactory, so that in 1922, when Hopkinson and Dewey made their invention, the art had waited over sixteen years for a suitable seal. What these inventors disclosed was very simple; nothing more than the use of latex—the natural sap of the rubber tree—as much concentrated as was desired and usually preserved with ammonia. By this method the amount of rubber in the seal was increased much above that in rubber solutions and rubber rims, and the life of the seal was greatly prolonged because of the physical structure of the latex globules. Beginning with the year 1922 latex became the standard material for seals, and has very largely displaced all other substances; not the mere latex of the patent-in-suit, however, for it very quickly developed that that alone was not feasible mechanically. The art required the seal to be laid upon the cover while the cover was rotating at high speeds, and also that the covers, when completed, should be inspected by an operative who laid them top down along her arm in a slanting position. No concentration of latex was possible which would at once run with enough fluidity to be squirted into the groove of the cover, and yet when deposited would not splash out under the centrifugal force of rotation, and would not run unevenly to one side while being inspected. For these reasons the invention, while serviceable under ideal conditions, did not answer the actual needs of the art; it was the second patent that supplied its deficiencies. **** The "Latex Patent" did not go into use as it stood; some way had to be found to stiffen the latex enough to withstand the centrifugal force of rotation and the inspection; and it was also necessary to make the composition thick [sic] enough to be applied in squirt guns—elegantly called "extrusion machines." The "Bentonite Patent" supplied both these qualities to the latex. The inventors added a gum which thickened it—ordinarily "karaya gum"—already known as a "thickening agent" (Patent to Dunham, No. 1,334,356 (1920)). They added a new substance, "bentonite," which had the curious result of leaving it liquid under pressure in the squirt gun, and of thickening it at once when it was squirted out. "Bentonite" is a mineral powder in extremely minute particles, which are encased in a substance which will absorb an extraordinary amount of water, and which is therefore known as a "hydrophilic colloid." **** [C]hief reliance is upon Newton's British patent of 1855 (No. 1053). Aside from the extreme unreality of supposing that a disclosure, nearly seventy years old and made at a time when the science of colloids was utterly unknown, really helped the art of the next century to combine latex with colloids of this character, an analysis of Newton's disclosure shows that it was altogether inadequate as an anticipation. He wished only to "print or stain" fabrics and he used latex merely "as a vehicle for conveying it" (sic) "to and fastening upon the fabrics aforesaid any of the mineral pigments, lakes and dyes usually employed for coloring, painting and printing." To do this he recommended adding to the latex "as it comes from the tree . . . pigment or color having previously been reduced to a finely divided state.” **** The defendant's argument that this is an anticipation is as follows. If the pigments of which Newton spoke are thoroughly mixed with a gum and the mix is then "reduced to a finely divided state" by being "ground in an indigo mill," the equivalent of "bentonite" will result; that is, a substance will emerge which is made up of minute particles of mineral surrounded by a "hydrophilic colloid." This when used with latex, as Newton recommended, becomes a complete reproduction of the patented "sealing composition." **** No doctrine of the patent law is better established than that a prior patent or other publication to be an anticipation must bear within its four corners adequate directions for the practice of the patent invalidated. If the earlier discloser offers no more than a starting point for further experiments, if its teaching will sometimes succeed and sometimes fail, if it does not inform the art without more how to practice the new invention, it has not correspondingly enriched the store of common knowledge, and it is not an anticipation. . . . Tested by this doctrine, Newton's disclosure was inadequate for several reasons. We do not rely upon the fact that he was not concerned with making a "sealing composition," Chapter 3 – Novelty & Statutory Bars

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but only with finding a carrier for pigments effectively to "print or stain" fabrics; we shall assume that if his process would have iniformly resulted in the patented seal, it would have been a good anticipation even though it took a second authentic act of creative imagination to discover its fitness for the new use. The difficulty lies, not in his failure to anticipate the new use, but in what he actually disclosed and failed to disclose. . . . Thus, it is no parody to say that Newton's contribution to the invention was this: if one disregards his injunction to avoid gums; if one grinds a mixture of gum and pigment more than "sufficiently" for a purpose wholly unheard of in 1855—if one inverts the order of the steps of grinding the pigment and mixing the gum, one may occasionally get the "sealing composition" of Dewey and Crocker, but the chances are strongly against it. For the foregoing reasons it seems to us that the claims are valid. The invention has had a most exceptional success; the business of one of the plaintiffs, which had been threatened with extinction by the paper gasket, has become stable; its sales have risen to several millions a year. Other seals, like rubber rings and paper gasket, have practically disappeared; at an exposition in 1927 the American Chamical Society awarded a prize to the composition as one of the six outstandingly important developments in industrial chemistry; the spoilage of the contents of tin cans has been reduced very greatly by its use. **** Judgment reversed as to the "Bentonite Patent."

Cohn v. United States Corset Co. 93 U.S. 366 (1876) MR. JUSTICE STRONG delivered the opinion of the court. A careful examination of the evidence in this case has convinced us that the invention claimed and patented to the plaintiff was anticipated and described in the English provisional specification of John Henry Johnson . . . . It must be admitted that, unless the earlier printed and published description does exhibit the later patented invention in such a full and intelligible manner as to enable persons skilled in the art to which the invention is related to comprehend it without assistance from the patent, or to make it, or repeat the process claimed, it is insufficient to invalidate the patent. Keeping this principle in view, we proceed to compare the plaintiff's invention with the antecedent Johnson specification. In order to do this, a clear understanding of the patent and of the invention the plaintiff claims to have made is indispensable. His application at the Patent Office was made on the 30th of January, 1873. In it he claimed to have invented "a new and useful improvement in corsets." After reciting that previous to his invention it had been customary in the manufacture of corsets to weave the material with pocket-like openings or passages running from edge to edge, and adapted to receive the bones which are inserted to stay the woven fabric, and which serve as braces to give shape to and support the figure of the wearer, but that it had been necessary, after the insertion of the bones into said pocket-like passages, to secure each one endwise by sewing, he proceeded to mention objections to that mode of making a corset. He specified two only. The first was, that it involved much hand labor and consequent expense in sewing in the bones, or securing them endwise in the woven passages; and the second was, that the arrangement or placement of the bones in the passages had to be determined by hand manipulation, and that it was, therefore, variable and irregular, such as frequently to give to the corset an undesirable shape or appearance near its upper edge. These objections he proposed to remove, and to produce a corset in which the location or position endwise of the bones shall be predetermined with the accuracy of the jacquard, in the process of weaving the corset-stuffs, or material, thereby effecting the saving of labor and expense in the manufacture. He, therefore, declared his invention to consist in having the pocket-like openings or passages into which the bones are put closed up near one end, and at that point at which it is designed to have the end of

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each bone located. The claim then made was as follows: "A corset woven with the pockets for the bones closed at one end, substantially as and for the purpose set forth." It is very evident, that, when this application was presented to the Commissioner of Patents, the only invention the applicant supposed he had made, and the only one claimed, was a corset the bone pockets in which had been closed at one end in the weaving. A patent for it was refused, for the reason assigned, that such a corset was described in the printed publication of Johnson's specification. The plaintiff then amended his application, manifestly to set forth an invention differing in some particulars from that of Johnson. The amendment, however, proved insufficient, and a second rejection followed. Other amendments were then made, until his present patent was at last granted, dated April 15, 1873. In the specification which accompanies it the patentee admits, what he admitted at first, that prior to his invention it had been customary in the manufacture of corsets to weave the material with pocket-like openings or passages running through from edge to edge; and he makes the further admission, that it had been customary to weave the material with such passages all stopped and finished off at uniform distances from the edge. He, therefore, disclaims "a woven corset with the pockets stopped and finished off at a uniform distance from the edges," and disclaims also "a hand-made corset with pockets of varying lengths stitched on;" and his claim is, "a corset having the pockets for the reception of the bones formed in the weaving, and varying in length relatively to each other as desired, substantially in the manner and for the purposes set forth." The specification nowhere sets forth the manner in which the alleged improvements in the corsets are produced, unless it be by reference to a jacquard in the loom. . .. Now, in view of the patentee's disclaimers, stopping of the passages or pockets in the weaving is not covered by the patent. It is admitted that had been done before, and no claim is made for it. All that is left, then, is, that the woven and closed pockets in the corset vary in length. No rule is stated for the variation. It is not stated which are comparatively short and which long, or how much shorter some are than others, or how near any or all of them come to the edge. The demands of the claim in this respect are met, if some of the pockets desired to be longer than others are thus made. But the claim must be further limited in view of the state of the art when the application for the patent was made. The manufacture of hand-made and woven corsets is an art long known,--known long before the Johnson improvement. Those made by hand had gores inserted to give enlarged space for the breasts of the wearer, and also gores or gussets at the lower part to give space for the hips. In woven corsets these enlargements, equivalent to gussets, were formed by the jacquard loom. For more than twenty years it has been customary to weave in these gussets bone pockets stopped off or closed in the weaving at various distances from the edge of the corset. Those extending upward from the lower edges were stopped off at varying heights, and those extending from the upper edge downward over the breast were woven close at their lower extremities at unequal distances from the top. It is true, that, where the stoppage was effected in weaving, the pockets in the gussets were closed pointedly, and unavoidably so, by the necessary contraction of the threads of the weft. But whether the stoppage was pointed, or blunt, or square, is unimportant. It is not claimed as a feature of the plaintiff's invention. His claim, then, cannot refer to the gusset pockets. The well-known state of the art, existing before even the Johnson description, requires its limitation. It must refer exclusively to the pockets under the arms of the wearer, or on the back, or in front of the body. It claims weaving them of various lengths when closed. That is all. [The prior art Johnson reference stated in full:] "This invention relates to the manufacture of what are known as woven corsets, and consists in the employment of the jacquards in the loom, one of which effects the shape or contour of the corset, and the other the formation of the double portions of slots for the introduction of the whalebones. These slots or double portions are made simultaneously with the single part of the corset, and, in place of being terminated in a point, they are finished square off, and at any required length in the corset, instead of always running the entire length, as is usually the case in woven corsets. When the corset is taken from the loom, the whalebones are inserted into these cases, and the borders are formed, thus completing the article, which contains all the elegance and graceful contour of sewn corsets made by manual labor."

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Undeniably this is a description of woven corsets, woven by the use of the jacquards in the loom, woven with slots or passages for the bones, made simultaneously with the other parts of the corsets, and requiring nothing to be done to them after their removal from the loom, except the insertion of the bones and the formation of the borders. It is also plainly a description of corsets in which the passages for the bones, called the double portions or slots, are finished; that is, stopped off in the weaving. That the expression "finished off squares" means closed or stopped off squares, is manifest, for several reasons. It is used to distinguish the manufacture from one in which the termination of the slots is pointed, as is always the case with the slots in the gussets, and necessarily so. The pointed terminations are closures, and the finished square terminations are only a different mode of closure. The idea in Johnson's mind was, therefore, that of ending, or termination by shutting up, or closing squarely, instead of enclosing pointedly. And it was the slot or passage that was to be finished off, and not merely the upper portion of the slot, or one of its sides. A second reason for concluding that the specification describes closed slots or passages is found in the concluding paragraph, which states, that, when the corsets are taken from the loom, all that remains to be done to complete them is to insert the bones into these "cases," and form the borders. Thus, it is said, they are completed, "containing all the elegance and graceful contour of sewn corsets made by manual labor." There is not an intimation that the needle is to be applied after removal from the loom. This portion of the description is utterly inconsistent with the idea that the pockets are not closed by the weaving. If they are not, more is required to complete the corsets after the loom has done its work than forming the borders and inserting the bones. The pockets must be closed by stitching before they are ready for the bones. Besides, those parts of the corset which in one part of the specification are denominated "double portions of slots," and in another, "slots, or double portions" finished square off, are also called "cases," a word that expresses the idea of enclosure, and which is inapplicable to open passages. For these reasons, we cannot doubt that the meaning of the specification is, that the passages, slots, double portions, cases, pockets, by whatever name they are called, are to be closed in the weaving. And the plaintiff so understood it when he applied for his patent. In view of the published description to which his attention was called, he disclaimed stopping and finishing off the pockets in the weaving, and stated in his amended specification that he was aware of corsets thus made, and that it had been customary in the manufacture to weave the material with pocket-like passages, all stopped and finished off at uniform distances from the edge, and adapted to receive the bones. It is manifest, then, that there is nothing in the plaintiff's patent which was not described in the Johnson specification, unless it be that the closed slots or cases mentioned in the former are required to be woven of varying length. A variation in the length of the pockets relatively to each other, as desired, is, as we have seen, the sole distinctive feature of the plaintiff's invention. But it was well known before Johnson filed his specification that the bone-pockets of a corset must vary in length. They were made to vary in hand-made corsets, and in woven ones by sewing. In all corsets, whether hand-made or woven, the pockets under the arms were made shorter, and those at the back and in front were made longer, in order to fit the wearer and preserve a graceful shape at the top. Every person skilled in corset making knew the necessity of such variation. In Johnson's description, it was asserted that the shape or contour of his corset was formed in the weaving; so far, therefore, as that was effected by the relative length of the pockets, it was dependent upon the loom. The description left to the manufacturer to determine what should be the length of each pocket, in order to secure the elegance and graceful contour of sewn corsets; in other words, to determine before the weaving where the double portions or slots should be stopped off. Johnson knew—having before him the state of the art at the time—that pockets of uniform length would not adapt the corset to fit the wearer, and would not be consistent with elegance of shape. And there is not a word in his description that intimates the pockets are to be stopped off or closed at uniform distances from the edge or without variation in length. The contrary idea is manifest. It is said, they are to be finished (closed) at any required length. Required length? Required by whom, and for what? Plainly by the manufacturer; and that they may have all the elegance and graceful contour of sewn corsets made by manual labor, and also that they may fit the wearer. Such a requirement could be met only by pockets of different lengths in the same corset. And if they were stopped wherever required, and it was required that they should stop off at varying distances from the edges of the corset, the description pointed out a corset thus made. 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particular length of the different pockets was specified, nor was any proportion mentioned which one pocket should bear in length to another. That was left to the manufacturer, as it is to the manufacturer of hand-made corsets, and as it is in the plaintiff's specification. He does not say how near to the upper edges of his corset the base of the closed pockets comes, nor what proportion in length one bears to the others. He simply describes them as varying in length relatively to each other, as desired. This is certainly not more definite than Johnson's description. In both, the variations in length and their relative proportions are left to the judgment and taste of the corset-maker. It is impossible, therefore, to find any thing in the plaintiff's patent which was not with equal definiteness and perspicuity described in the printed publication (Johnson's specification), made nineteen years before the patent was granted. It is quite immaterial, even it be a fact, that the Johnson specification is insufficient to teach a manufacturer how to make the patented corset. It is enough if it sufficiently describes the corset itself. Neither it nor the plaintiff's specification exhibits the process of making. Neither of them set up a claim for a process. The plaintiff claims a manufacture, not a mode of making it; and the important inquiry, therefore, is whether the prior publication described the article. To defeat a party suing for an infringement, it is sufficient to plead and prove that the thing patented to him had been patented or described in some printed publication prior to his supposed invention or discovery thereof. Rev. Stat., sect. 4920. What is required is a description of the thing patented, not of the steps necessarily antecedent to its production. But the evidence shows that the Johnson specification, in connection with the known state of the art at the time when it was filed and published, was sufficient to enable one skilled in the art of corset-making and in the use of the jacquard to make the patented corset. It is very clearly proved that it gave sufficient instruction, and that it needed no addition to furnish full information to a corset-weaver how to weave a corset with the use of the jacquard, and stop off all the bonepockets in the weaving at the right places. . . .

MR. JUSTICE CLIFFORD dissenting. Inventors are required, before they receive a patent, to deliver a written description of their inventions, and of the process of making, constructing, and using the same, "in such full, clear, concise, and exact terms" as to enable persons skilled in the art or science to make, construct, and use the same. Power to grant letters patent is vested in the commissioner; but when the power is exercised and the patent has been duly granted, it is of itself prima facie evidence that the patentee is the original nd first inventor of that which is therein described and secured to him as his invention. Proofs are admissible to overcome that presumption; but it is well-settled law that patented inventions cannot be superseded by the mere introduction of a foreign publication of the kind, though of a prior date, unless the description and drawings contain and exhibit a substantial representation of the patented improvement, "in such full, clear, concise, and exact terms," as to enable any person skilled in the art or science to which it appertains, to make, construct, and use the invention to the same practical extent as he would be enabled to do if the information was derived from a prior patent. Applicants for a patent are as much required to describe the manner and process of making, constructing, and using the invention, as they are to file in the Patent Office a written description of the alleged improvement; and both are expressly required to be in such full, clear, concise, and exact terms, as to enable any person skilled in the art or science to make, construct, and use the invention. Nothing deserving the least consideration is exhibited in the record to support the defence that the appellant is not the original and first inventor of the patented improvement, except the Johnson specification, which, in my judgment, does not contain or exhibit a substantial representation of the patented invention in such full, clear, concise, and exact terms, as to enable even an expert, without previous experiments, to make, construct, or practise the invention.

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Instead of that, the provisional specification fails altogether to describe the means or mode of operation by which the pockets of varying lengths are to be stopped or closed in the process of weaving. Conclusive support to that proposition is found in the fact that it became necessary for the infringers to experiment for a long time before they could imitate the patented product.

Questions, Comments, Problems 1. In In re Coker, 463 F.2d 1344 ___ USPQ ____ (CCPA 1972), the Court of Customs and Patent Appeals considered an application for alkyl esters of polycarboxylic acids, which are useful as inhibitors which retard the reaction of aluminum with varying degreasing solvents, and as curing agents for acid terminated polymers. The patent board had applied an article by one Tsou, who had prepared a large number of aziridine derivatives and evaluated many of them as possible chemotherapeutic agents for cancer treatment. The Tsou reference described the preparation of several compounds according to the method in the pending application, but noted that the preparation of certain esters had not been successful. The patent board concluded that Tsou anticipated the pending claims because it named the claimed esters, which was alone sufficient to place the compounds in the possession of an organic chemist of ordinary skill. The court reversed: Whatever might have been the reason Tsou considered the attempted preparation of the succinate ester unsuccessful and regardless of what method was actually used in that attempt, we think that the clear import of the Tsou reference is that transesterification was used in the attempt and that the reference’s authors were unable to make transesterification work. The Tsou reference itself fully establishes the competence of its authors in the art. Thus the only evidence in this case regarding prior knowledge of a process by which the compound named in the Tsou reference might be prepared, indicates that the compound could not be made. . . . Since it has not been established that methods for making the compound named in the Tsou reference were known or were described in that reference, it cannot be said that the reference would have placed the public in possession of the invention. . . . The Tsou reference is therefore not an anticipation of the subject matter of the appealed claims. . . . The Tsou reference not only does not place the public in possession of the invention, it effectively directs the public away from the only method established in this record to be operable to make the claimed compound. Such a teaching is the antithesis of anticipation. 463 F.2d at ____, __ USPQ at ___. 2. A common error is to conclude that, if a reference does not enable the claimed invention, then it is not prior art. This is an overstatement. Rather, a reference that is not enabling is not anticipatory prior art, but as long as it meets the requirements of section 102 regarding the date and type of disclosure, it is prior art for what it enables. See Beckman Instruments, Inc. v. LKB Produkter AB, 892 F.2d 1547, 13 USPQ2d 1301 (Fed. Cir. 1989) (“Even if a reference discloses an inoperative device, it is prior art for all it teaches.”); Symbol Techs., Inc. v. Opticon, Inc., 935 F.2d 1569, 19 USPQ2d 1241 (Fed. Cir. 1991) (“While a reference must enable someone to practice the invention in order to anticipate under § 102(b), a non-enabling reference may qualify as prior art for the purpose of determining obviousness under § 103.”). Nevertheless, even if a reference is not enabling by itself, it may be able to be combined with other references to meet all of the limitations of a claim. You will see more about invalidation using multiple prior art references in the next chapter on nonobviousness.

Public use Now, let us get into section 102 of the statute. Putting second things first, we start with subsection (b) and the phrase “in public use,” which has been in the patent law since the 1830s, as an inventor’s widow learned the hard way. As you read the case, keep in mind the differences between the current law and the novelty provisions applicable in 1881: Act of July 4, 1836 §6. And be it further enacted, That any person or persons, having discovered or invented any new and useful art, machine, manufacture, or composition of matter, or any new and useful improvement on any art, machine, manufacture, or composition of matter, not known or used by others before his or their discovery or invention thereof, and not, at the time of his application for a patent, in public use or on

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sale, with his consent or allowance, as the inventor or discoverer; and shall desire to obtain an exclusive property therein, may make application, in writing, to the Commissioner of Patents, expressing such desire, and the Commissioner, on due proceedings had, may grant a patent therefor. **** §7. And be it further enacted, That on the filing of any such application, description, and specification, and the payment of the duty hereinafter provided, the Commissioner shall make, or cause to be made, an examination of the alleged new invention or discovery; and if, on any such examinations, it shall not appear to the Commissioner that the same had been . . . had been in public use or on sale with the applicant's consent or allowance prior to the application, if the Commissioner shall deem it to be sufficiently useful and important, it shall be his duty to issue a patent therefor. But whenever, on such examination, it shall appear to the Commissioner that the applicant was not the original and first inventor, or discoverer thereof, or that any part of that which is claimed as new had before been invented or discovered, or patented, or described in any printed publication in this or any foreign country, as aforesaid, or that the description is defective and insufficient, he shall notify the applicant thereof.. . . . In every such case, if the applicant shall elect to withdraw his application, relinquishing his claim to the model, he shall be entitled to receive back twenty dollars. **** §15. And be it further enacted. That the defendant in any such action shall be permitted to plead the general issue . . . that it . . . had been in public use or on sale with the consent and allowance of the patentee before his application for a patent . . . in either of which cases judgment shall be rendered for the defendant with costs.

Egbert v. Lippmann 104 U.S. 333 (1881) MR. JUSTICE WOODS delivered the opinion of the court. This suit was brought for an alleged infringement of the complainant's reissued letters-patent, No. 5216, dated Jan. 7, 1873, for an improvement in corset-springs. The original letters bear date July 17, 1866, and were issued to Samuel H. Barnes. The reissue was made to the complainant, under her then name, Frances Lee Barnes, executrix of the original patentee. The specification for the reissue declares:-"This invention consists in forming the springs of corsets of two or more metallic plates, placed one upon another, and so connected as to prevent them from sliding off each other laterally or edgewise, and at the same time admit of their playing or sliding upon each other, in the direction of their length or longitudinally, whereby their flexibility and elasticity are greatly increased, while at the same time much strength is obtained."

The second claim is as follows:-"A pair of corset-springs, each member of the pair being composed or two or more metallic plates, placed on one another, and fastened together at their centres, and so connected at or near each end that they can move or play on each other in the direction of their length."

The bill alleges that Barnes was the original and first inventor of the improvement covered by the reissued letters-patent, and that it had not, at the time of his application for the original letters, been for more than two years in public use or on sale, with his consent or allowance. **** Chapter 3 – Novelty & Statutory Bars

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The evidence on which the defendants rely to establish a prior public use of the invention consists mainly of the testimony of the complainant. She testifies that Barnes invented the improvement covered by his patent between January and May, 1855; that between the dates named the witness and her friend Miss Cugier were complaining of the breaking of their corset- steels. Barnes, who was present, and was an intimate friend of the witness, said he thought he could make her a pair that would not break. At their next interview he presented her with a pair of corset—steels which he himself had made. The witness wore these steels a long time. In 1858 Barnes made and presented to her another pair, which she also wore a long time. When the corsets in which these steels were used wore out, the witness ripped them open and took out the steels and put them in new corsets. This was done several times. It is admitted, and, in fact, is asserted, by complainant, that these steels embodied the invention afterwards patented by Barnes and covered by the reissued letters-patent on which this suit is brought. Joseph H. Sturgis, another witness for complainant, testifies that in 1863 Barnes spoke to him about two inventions made by himself, one of which was a corset-steel, and that he went to the house of Barnes to see them. Before this time, and after the transactions testified to by the complainant, Barnes and she had intermarried. Barnes said his wife had a pair of steels made according to his invention in the corsets which she was then wearing, and if she would take them off he would show them to witness. Mrs. Barnes went out, and returned with a pair of corsets and a pair of scissors, and ripped the corsets open and took out the steels. Barnes then explained to witness how they were made and used. This is the evidence presented by the record, on which the defendants rely to establish the public use of the invention by the patentee's consent and allowance. The question for our decision is, whether this testimony shows a public use within the meaning of the statute. We observe, in the first place, that to constitute the public use of an invention it is not necessary that more than one of the patented articles should be publicly used. The use of a great number may tend to strengthen the proof, but one well-defined case of such use is just as effectual to annul the patent as many. McClurg v. Kingsland, 1 How. 202; Consolidated Fruit- Jar Co. v. Wright, 94 U.S. 92; Pitts v. Hall, 2 Blatchf. 229. For instance, if the inventor of a mower, a printing-press, or a railway-car makes and sells only one of the articles invented by him, and allows the vendee to use it for two years, without restriction or limitation, the use is just as public as if he had sold and allowed the use of a great number. We remark, secondly, that, whether the use of an invention is public or private does not necessarily depend upon the number of persons to whom its use is known. If an inventor, having made his device, gives or sells it to another, to be used by the donee or vendee, without limitation or restriction, or injunction of secrecy, and it is so used, such use is public, even though the use and knowledge of the use may be confined to one person. We say, thirdly, that some inventions are by their very character only capable of being used where they cannot be seen or observed by the public eye. An invention may consist of a lever or spring, hidden in the running gear of a watch, or of a rachet, shaft, or cog-wheel covered from view in the recesses of a machine for spinning or weaving. Nevertheless, if its inventor sells a machine of which his invention forms a part, and allows it to be used without restriction of any kind, the use is a public one. So, on the other hand, a use necessarily open to public view, if made in good faith solely to test the qualities of the invention, and for the purpose of experiment, is not a public use within the meaning of the statute. Elizabeth v. Pavement Company, 97 U.S. 126; Shaw v. Cooper, 7 Pet. 292.

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Tested by these principles, we think the evidence of the complainant herself shows that for more than two years before the application for the original letters there was, by the consent and allowance of Barnes, a public use of the invention, covered by them. He made and gave to her two pairs of corsetsteels, constructed according to his device, one in 1855 and one in 1858. They were presented to her for use. He imposed no obligation of secrecy, nor any condition or restriction whatever. They were not presented for the purpose of experiment, nor to test their qualities. No such claim is set up in her testimony. The invention was at the time complete, and there is no evidence that it was afterwards changed or improved. The donee of the steels used them for years for the purpose and in the manner designed by the inventor. They were not capable of any other use. She might have exhibited them to any person, or made other steels of the same kind, and used or sold them without violating any condition or restriction imposed on her by the inventor. **** "An abandonment of an invention to the public may be evinced by the conduct of the inventor at any time, even within the two years named in the law. The effect of the law is that no such consequence will necessarily follow from the invention being in public use or on sale, with the inventor's consent and allowance, at any time within the two years before his application; but that, if the invention is in public use or on sale prior to that time, it will be conclusive evidence of abandonment, and the patent will be void." Elizabeth v. Pavement Company, supra. We are of opinion that the defense of two years' public use, by the consent and allowance of the inventor, before he made application for letters-patent,is satisfactorily established by the evidence. MR. JUSTICE MILLER dissenting. The sixth section of the act of July 4, 1836, c. 357, makes it a condition of the grant of a patent that the invention for which it was asked should not, at the time of the application for a patent, "have been in public use or on sale with the consent or allowance" of the inventor or discoverer. Section fifteen of the same act declares that it shall be a good defense to an action for infringement of the patent, that it had been in public use or on sale with the consent or allowance of the patentee before his application. This was afterwards modified by the seventh section of the act of March 3, 1839, c. 88, which declares that no patent shall be void on that ground unless the prior use has been for more than two years before the application. This is the law under which the patent of the complainant is held void by the opinion just delivered. The previous part of the same section requires that the invention must be one "not known or used by others" before the discovery or invention made by the applicant. In this limitation, though in the same sentence as the other, the word "public" is not used, so that the use by others which would defeat the applicant, if without his consent, need not be public; but where the use of his invention is by his consent or allowance, it must be public or it will not have that affect. The reason of this is undoubtedly that, if without his consent others have used the machine, composition, or manufacture, it is strong proof that he was not the discoverer or first inventor. In that case he was not entitled to a patent. If the use was with his consent or allowance, the fact that such consent or allowance was first obtained is evidence that he was the inventor, and claimed to be such. In such case, he was not to lose his right to a patent, unless the use which he permitted was such as showed an intention of abandoning his invention to the public. It must, in the language of the act, be in public use or on sale. If on sale, of course the public who buy can use it, and if used in public with his consent, it may be copied by others. In either event there is an end of his exclusive right of use or sale. The word public is, therefore, an important member of the sentence. A private use with consent, which could lead to no copy or reproduction of the machine, which taught the nature of the invention to no one but the party to whom such consent was given, which left the public at large as ignorant of this as it was before the author's discovery, was no abandonment to the public, and did not defeat his claim for a Chapter 3 – Novelty & Statutory Bars

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patent. If the little steep spring inserted in a single pair of corsets, and used by only one woman, covered by her outer-clothing, and in a position always withheld from public observation, is a public use of that piece of steel, I am at a loss to know the line between a private and a public use. The opinion argues that the use was public, because, with the consent of the inventor to its use, no limitation was imposed in regard to its use in public. It may be well imagined that a prohibition to the party so permitted against exposing her use of the steel spring to public observation would have been supposed to be a piece of irony. An objection quite the opposite of this suggested by the opinion is, that the invention was incapable of a public use. That is to say, that while the statute says the right to the patent can only be defeated by a use which is public, it is equally fatal to the claim, when it is permitted to be used at all, that the article can never be used in public. I cannot on such reasoning as this eliminate from the statute the word public, and disregard its obvious importance in connection with the remainder of the act, for the purpose of defeating a patent otherwise meritorious.

Pennock v. Dialogue 27 U.S. 1 (1829) Mr. Justice STORY delivered the opinion of the Court. [This opinion is one of the earliest Supreme Court pronouncements on patent law. Judge Learned Hand later summarized the facts in Metallizing Engineering Co. v. Kenyon Bearing & Auto Parts Co., Inc., 153 F.2d 516 (2d Cir. 1946): “[T]he invention had been completed in 1811, and the patent granted in 1818 for a process of making hose by which the sections were joined together in such a way that the joints resisted pressure as well as the other parts. It did not appear that the joints in any way disclosed the process; but the patentee, between the discovery of the invention and the grant of the patent, had sold 13,000 feet of hose” The jury had been charged: “That the law arising upon the case was, that if an inventor makes his discovery public, looks on and permits others freely to use it, without objection or assertion of claim to the invention, of which the public might take notice; he abandons the inchoate right to the exclusive use of the invention, to which a patent would have entitled him had it been applied for before such use. And, that it makes no difference in the principle, that the article so publicly used, and afterwards patented, was made by a particular individual, who did so by the private permission of the inventor."] This is a writ of error to the circuit court of Pennsylvania. The original action was brought by the plaintiffs in error for an asserted violation of a patent, granted to them on the 6th of July 1818, for a new and useful improvement in the art of making leather tubes or hose, for conveying air, water, and other fluids. The cause was tried upon the general issue, and a verdict was found for the defendant, upon which judgment passed in his favour; and the correctness of that judgment is now in controversy before this court. At the trial, a bill of exceptions was taken to an opinion delivered by the court, in the charge to the jury, as follows, viz. **** The single question then is, whether the charge of the court was correct in point of law. It has not been, and indeed cannot be denied, that an inventor may abandon his invention, and surrender or dedicate it to the public. This inchoate right, thus once gone, cannot afterwards be resumed at his pleasure; for, where gifts are once made to the public in this way, they become absolute. Thus, if a man dedicates a way, or other easement to the public, it is supposed to carry with it a permanent right of user. The question which generally arises at trials, is a question of fact, rather than of law; whether the acts or acquiescence of the party furnish in the given case, satisfactory proof of an abandonment or dedication Chapter 3 – Novelty & Statutory Bars

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of the invention to the public. But when all the facts are given, there does not seem any reason why the court may not state the legal conclusion deducible from them. In this view of the matter, the only question would be, whether, upon general principles, the facts stated by the court would justify the conclusion. **** It is obvious to the careful inquirer, that many of the provisions of our patent act are derived from the principles and practice which have prevailed in the construction of that of England. It is doubtless true, as has been suggested at the bar, that where English statutes, such for instance, as the statute of frauds, and the statute of limitations; have been adopted into our own legislation; the known and settled construction of those statutes by courts of law, has been considered as silently incorporated into the acts, or has been received with all the weight of authority. Strictly speaking, that is not the case in respect to the English statute of monopolies; which contains an exception on which the grants of patents for inventions have issued in that country. The language of that clause of the statute is not, as we shall presently see, identical with ours; but the construction of it adopted by the English courts, and the principles and practice which have long regulated the grants of their patents, as they must have been known and are tacitly referred to in some of the provisions of our own statute, afford materials to illustrate it. By the very terms of the first section of our statute, the secretary of state is authorised to grant a patent to any citizen applying for the same, who shall allege that he has invented a new and useful art, machine, &c. &c. 'not known or used before the application?' The authority is a limited one, and the party must bring himself within the terms, before he can derive any title to demand, or to hold a patent. What then is the true meaning of the words 'not known or used before the application?' They cannot mean that the thing invented was not known or used before the application by the inventor himself, for that would be to prohibit him from the only means of obtaining a patent. The use, as well as the knowledge of his invention, must be indispensable to enable him to ascertain its competency to the end proposed, as well as to perfect its component parts. The words then, to have any rational interpretation, must mean, not known or used by others, before the application. But how known or used? If it were necessary, as it well might be, to employ others to assist in the original structure or use by the inventor himself; or if before his application for a patent his invention should be pirated by another, or used without his consent; it can scarcely be supposed, that the legislature had within its contemplation such knowledge or use. We think, then, the true meaning must be, not known or used by the public, before the application. And, thus construed, there is much reason for the limitation thus imposed by the act. While one great object was, by holding out a reasonable reward to inventors, and giving them an exclusive right to their inventions for a limited period, to stimulate the efforts of genius; the main object was 'to promote the progress of science and useful arts;' and this could be done best, by giving the public at large a right to make, construct, use, and vend the thing invented, at as early a period as possible; having a due regard to the rights of the inventor. If an inventor should be permitted to hold back from the knowledge of the public the secrets of his invention; if he should for a long period of years retain the monopoly, and make, and sell his invention publicly, and thus gather the whole profits of it, relying upon his superior skill and knowledge of the structure; and then, and then only, when the danger of competition should force him to secure the exclusive right, he should be allowed to take out a patent, and thus exclude the public from any farther use than what should be derived under it during his fourteen years; it would materially retard the progress of science and the useful arts, and give a premium to those who should be least prompt to communicate their discoveries. A provision, therefore, that should withhold from an inventor the privilege of an exclusive right, unless he should, as early as he should allow the public use, put the public in possession of his secret, and commence the running of the period, that should limit that right; would not be deemed unreasonable. It might be expected to find a place in a wise prospective legislation on such a subject. If it was already

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found in the jurisprudence of the mother country, and had not been considered inconvenient there; it would not be unnatural that it should find a place in our own. Now, in point of fact, the statute of 21 Jac. ch. 3, commonly called the statute of monopolies, does contain exactly such a provision. That act, after prohibiting monopolies generally, contains, in the sixth section, an exception in favour of 'letters patent and grants of privileges for fourteen years or under, for the sole working or making of any manner of new manufactures within this realm, to the true and first inventor and inventors of such manufactures, which others, at the time of making such letters patent and grants, shall not use.' Lord Coke, in his commentary upon this clause or proviso, (3 Inst. 184,) says that the letters patent 'must be of such manufactures, which any other at the time of making such letters patent did not use; for albeit it were newly invented, yet if any other did use it at the making of the letters patent, or grant of the privilege, it is declared and enacted to be void by this act.' The use here referred to has always been understood to be a public use, and not a private or surreptitious use in fraud of the inventor. In the case of Wood vs. Zimmer, 1 Holt's N. P. Rep. 58, this doctrine was fully recognised by lord chief justice Gibbs. There the inventor had suffered the thing invented to be sold, and go into public use for four months before the grant of his patent; and it was held by the court, that on this account the patent was utterly void. Lord chief justice Gibbs said, 'To entitle a man to a patent, the invention must be new to the world. The public sale of that which is afterwards made the subject of a patent, though sold by the inventor only, makes the patent void.' By 'invention,' the learned judge undoubtedly meant, as the context abundantly shows, not the abstract discovery, but the thing invented; not the new secret principle, but the manufacture resulting from it. The words of our statute are not identical with those of the statute of James, but it can scarcely admit of doubt, that they must have been within the contemplation of those by whom it was framed, as well as the construction which had been put upon them by Lord Coke . . .. **** The only real doubt which has arisen upon this exposition of the statute, has been created by the words of the sixth section already quoted. That section admits the party sued to give in his defence as a bar, that 'the thing thus secured by patent was not originally discovered by the patentee, but had been in use anterior to the supposed discovery of the patentee.' It has been asked, if the legislature intended to bar the party from a patent in consequence of a mere prior use, although he was the inventor; why were not the words 'anterior to the application' substituted, instead of 'anterior to the supposed discovery? If a mere use of the thing invented before the application were sufficient to bar the right, then, although the party may have been the first and true inventor, if another person, either innocently as a second inventor, or piratically, were to use it without the knowledge of the first inventor; his right would be gone. In respect to a use by piracy, it is not clear that any such fraudulent use is within the intent of the statute; and upon general principles it might well be held excluded. In respect to the case of a second invention, it is questionable at least, whether, if by such second invention a public use was already acquired, it could be deemed a case within the protection of the act. If the public were already in possession and common use of an invention fairly and without fraud, there might be sound reason for presuming, that the legislature did not intend to grant an exclusive right to any one to monopolize that which was already common. There would be no quid pro quo—no price for the exclusive right or monopoly conferred upon the inventor for fourteen years. **** It is admitted that the subject is not wholly free from difficulties; but upon most deliberate consideration we are all of opinion, that the true construction of the act is, that the first inventor cannot acquire a good title to a patent; if he suffers the thing invented to go into public use, or to be publicly sold for use, before he makes application for a patent. His voluntary act or acquiescence in the public sale and use is an abandonment of his right; or rather creates a disability to comply with the terms and conditions on which alone the secretary of state is authorized to grant him a patent.

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****

Metallizing Engineering Co. v. Kenyon Bearing & Auto Parts Co., Inc. 153 F.2d 516, 68 USPQ 54 (2d Cir. 1946) Before L. HAND, AUGUSTUS N. HAND, and CLARK, Circuit Judges. L. HAND, Circuit Judge. The defendants appeal from the usual decree holding valid and infringed all but three of the claims of a reissued patent, issued to the plaintiff's assignor, Meduna; the original patent issued on May 25, 1943, upon an application filed on August 6, 1942. The patent is for the process of 'so conditioning a metal surface that the same is, as a rule, capable of bonding thereto applied spray metal to a higher degree than is normally procurable with hitherto known practices' (p. 2, lines 1-5). It is primarily useful for building up the worn metal parts of a machine.* **** The only question which we find necessary to decide is as to Meduna's public use of the patented process more than one year before August 6, 1942. The district judge made findings about this, which are supported by the testimony and which we accept. They appear as findings 8, 9, 10, 11, 12 and 13** on pages 46 and 47 of volume 62 of the Federal Supplement; and we cannot improve upon his statement. The kernel of them is the following: 'the inventor's main purpose in his use of the process prior to August 6, 1941, and especially in respect to all jobs for owners not known to him, was commercial, and * * * an experimental purpose in connection with such use was subordinate only.' Upon this finding he concluded as matter of law that, since the use before the critical date—August 6, 1941—was not primarily for the purposes of experiment, the use was not excused for that reason. Smith & Griggs Manufacturing Co. v. Sprague, 123 U.S. 249, 256; Aerovox Corp. v. Polymet Manufacturing Corp., 2 Cir., 67 F.2d 860, 862. Moreover, he also concluded that the use was not public but secret, and for that reason that its predominantly commercial character did prevent it from invalidating the patent. For the last he relied upon our decisions in Peerless Roll Leaf Co. v. Griffin & Sons, 29 F.2d 646, and Gillman v. Stern, 114 F.2d 28. We think that his analysis of Peerless Roll Leaf Co. v. Griffin & Sons, was altogether correct, and that he had no alternative but to follow that decision; on the other hand, we now think that we were then wrong and that the decision must be overruled for reasons we shall state. Gillman v. Stern, supra, was, however, rightly decided. Section one of the first and second Patent Acts, 1 Stat. 109 and 318, declared that the petition for a patent must state that the subject matter had not been 'before known or used.' Section six of the Act of 1836, 5 Stat. 117, changed this by providing in addition that the invention must not at the time of the application for a patent have been 'in public use or on sale' with the inventor's 'consent or allowance'; and Sec. 7 of the Act of 1839, 5 Stat. 353, provided that 'no patent shall be held to be invalid by reason [* The district court described the claimed invention as follows: The gist of the invention of each claim is as follows: (1) the preparation of the metallic base by stroking its surface with a metal electrode in a low-voltage circuit, thereby fusing to the base metallic electrode-material which forms a surface of irregular roughness having a multitude of projections with overhanging edges and minute craters with overhanging edges and (2) thereafter spraying molten metal upon the base part as thus conditioned. 62 F. Supp. At 43.] [** Finding 13: At all times prior to August 6, 1941, the practice of the process was so guarded as not to come to public knowledge; its nature was disclosed only to a few employees and advisers of the inventor, less than half a dozen in number, in all cases under a promise of confidence which was not abused. . . . I find that prior to August, 1941, the nature of the process could not have been deducted from inspection or physical tests upon specimens of the processed product in the hands of the public. . .]

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of such purchase, sale, or use prior to the application for a patent * * * except on proof of abandonment of such invention to the public; or that such purchase, sale, or prior use has been for more than two years prior to such application * * *.' Section 4886 of the Revised Statutes made it a condition upon patentability that the invention shall not have been 'in public use or on sale for more than two years prior to his application,' and that it shall not have been 'proved to have been abandoned.' This is in substance the same as the Act of 1839, and is precisely the same as Sec. 31 of Title 35, U.S.C.A. except that the prior use is now limited to the United States, and to one year before the application. [The court reviews the holding in Pennock]. In Shaw v. Cooper, 7 Pet. 292, the public use was not by the inventor, but he had neglected to prevent it after he had learned of it, and this defeated the patent. 'Whatever may be the intention of the inventor, if he suffers his invention to go into public use, through any means whatsoever, without an immediate assertion of his right, he is not entitled to a patent' 7 Pet. at page 323. In Kendall v. Winsor, 21 How. 322, the inventor had kept the machine secret, but had sold the harness which it produced, so that the facts presented the same situation as here. Since the jury brought in a verdict for the defendant on the issue of abandonment, the case adds nothing except for the dicta on page 328 of 21 How.: 'the inventor who designedly, and with the view of applying it indefinitely and exclusively for his own profit, withholds his invention from the public, comes not within the policy or objects of the Constitution or acts of Congress.' In Egbert v. Lippmann, 104 U.S. 333, although the patent was for the product which was sold, nothing could be learned about it without taking it apart, yet it was a public use within the statute. In Hall v. Macneale, 107 U.S. 90, the situation was the same. In the lower courts we may begin with the often cited decision in Macbeth-Evans Glass Co. v. General Electric Co., 6 Cir., 246 F. 695, which concerned a process patent for making illuminating glass. The patentee had kept the process as secret as possible, but for ten years had sold the glass, although this did not, so far as appears, disclose the process. The court held the patent invalid for two reasons, as we understand them: the first was that the delay either indicated an intention to abandon, or was of itself a forfeiture, because of the inconsistency of a practical monopoly by means of secrecy and of a later legal monopoly by means of a patent. So far, it was not an interpretation of 'prior use' in the statute; but, beginning on page 702 of 246 F. 695 Judge Warrington seems to have been construing that phrase and to hold that the sales were such a use . . . . Coming now to our own decisions (the opinions in all of which I wrote), the first was Grasselli Chemical Co. v. National Aniline & Chemical Co., 2 Cir., 26 F.2d 305, in which the patent was for a process which had been kept secret, but the product had been sold upon the market for more than two years. We held that, although the process could not have been discovered from the product, the sales constituted a 'prior use,' relying upon Egbert v. Lippmann, supra, 104 U.S. 333, and Hall v. Macneale, supra, 107 U.S. 90. There was nothing in this inconsistent with what we are now holding. But in Peerless Roll Leaf Co. v. Griffin & Sons, supra, 2 Cir., 29 F.2d 646, where the patent was for a machine, which had been kept secret, but whose output had been freely sold on the market, we sustained the patent on the ground that 'the sale of the product was irrelevant, since no knowledge could possibly be acquired of the machine in that way. In this respect the machine differs from a process * * * or from any other invention necessarily contained in a product' 29 F.2d at page 649. So far as we can now find, there is nothing to support this distinction in the authorities, and we shall try to show that we misapprehended the theory on which the prior use by an inventor forfeits his right to a patent. In Aerovox Corp. v. Polymet Manufacturing Corp., supra, 2 Cir., 67 F.2d 860, the patent was also for a process, the use of which we held not to have been experimental, though not secret. Thus our decision sustaining the patent was right; but apparently we were by implication reverting to the doctrine of the Peerless case when we added that it was doubtful whether the process could be detected from the product, although we cited only Hall v. Macneale, supra, 107 U.S. 90, and Grasselli Chemical Co. v. National Aniline Co., supra (2 Cir., 26 F.2d 305). In Gillman v. Stern, supra, 2 Cir., 114 F.2d 28, it was not the inventor, but a third person who used the machine secretly and sold the product openly, and there was therefore no question either of abandonment or forfeiture by the inventor. The only issue was whether a prior use which did not disclose the invention to the art was within the statute; and it is well settled that it is not.

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As in the case of any other anticipation, the issue of invention must then be determined by how much the inventor has contributed any new information to the art. . . . Gayler v. Wilder, 10 How. 477, 496, 497; Tilghman v. Proctor, 102 U.S. 707, 711; Carson v. American B. & R. Co., 9 Cir., 11 F.2d 766, 770, 771; Boyd v. Cherry, C.C. Iowa, 50 F. 279, 283; Acme Flexible Clasp Co. v. Cary Manufacturing Co., C.C.N.Y., 96 F. 344, 347; Ajax Metal Co. v. Brady Brass Co., C.C.N.Y., 155 F. 409, 415, 416; Anthracite Separator Co. v. Pollock, C.C.Pa., 175 F. 108, 111. From the foregoing it appears that in Peerless Roll Leaf Co. v. Griffin & Sons, supra, 2 Cir., 29 F.2d 646, we confused two separate doctrines: (1) The effect upon his right to a patent of the inventor's competitive exploitation of his machine or of his process; (2) the contribution which a prior use by another person makes to the art. Both do indeed come within the phrase, 'prior use'; but the first is a defence for quite different reasons from the second. It had its origin—at least in this country—in the passage we have quoted from Pennock v. Dialogue, supra, 2 Pet. 1; i.e., that it is a condition upon an inventor's right to a patent that he shall not exploit his discovery competitively after it is ready for patenting; he must content himself with either secrecy, or legal monopoly. It is true that for the limited period of two years he was allowed to do so, possibly in order to give him time to prepare an application; and even that has been recently cut down by half. But if he goes beyond that period of probation, he forfeits his right regardless of how little the public may have learned about the invention; just as he can forfeit it by too long concealment, even without exploiting the invention at all. Woodbridge v. United States, 263 U.S. 50; Macbeth-Evans Glass Co. v. General Electric Co., supra, 6 Cir., 246 F. 695. Such a forfeiture has nothing to do with abandonment, which presupposes a deliberate, though not necessarily an express, surrender of any right to a patent. Although the evidence of both may at times overlap, each comes from a quite different legal source: one, from the fact that by renouncing the right the inventor irrevocably surrenders it; the other, from the fiat of Congress that it is part of the consideration for a patent that the public shall as soon as possible begin to enjoy the disclosure. It is indeed true that an inventor may continue for more than a year to practice his invention for his private purposes or his own enjoyment and later patent it. But that is, properly considered, not an exception to the doctrine, for he is not then making use of his secret to gain a competitive advantage over others; he does not thereby extend the period of his monopoly. Besides, as we have seen, even that privilege has its limits, for he may conceal it so long that he will lose his right to a patent even though he does not use it at all. With that question we have not however any concern here. Judgment reversed; complaint dismissed.

Questions, Comments, Problems 1. Pennock is a very old case, so you can expect that some changes have been made to the statute in the interim. After the 1836 Act effectively codified the holding of Pennock, the 1839 Act softened its impact by providing for a two-year grace period in which to get a patent application filed. In 1870, Congress removed the language that referred to the inventor’s “consent or allowance.” In 1897, Congress provided that public uses or sales must be “in this country” to be a bar, and in 1939, Congress lowered the grace period to one year. Why do you suppose they decreased the length of the grace period? Do factors change over time that would support continuous review of an appropriate grace period? Should we switch to a first-to-file system and save a headache? Why do you suppose Congress has not changed to a first-to-file system? 2. In Moleculon Research Corp. v. CBS Corp., 793 F.2d 1261, 229 USPQ 805 (Fed. Cir. 1986), the Federal Circuit considered a patent on a cube-shaped toy that had been enforced against the popular Rubik's Cube puzzles. The defendant asserted that the patent was invalid for prior public use. The inventor, Larry D. Nichols, had constructed several paper models of his patented puzzle around 1960, when he was a graduate student. As noted by the court: “A few close friends, including two roommates and a colleague in the chemistry department, had occasion to see one of these paper models in Nichols' room and Nichols explained its operation to at least one of them.” Nichols began working for Moleculon in 1962, and built some wood models around 1968. Nichols’ boss, one Dr. Obermayer, saw the wood models, and Moleculon attempted to market the toy to various manufacturers,

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but was unsuccessful. The patent was filed in early 1970. The district court ruled that the patent was not invalid for prior public use, and the Federal Circuit agreed: CBS labels as public use Nichols' displaying of the models to other persons (such as his colleagues at school) without any mention of secrecy. CBS ascribes only commercial purpose and intent to Obermeyer's use of the wood model and argues that a conclusion of barring public use under § 102(b) is compelled. We disagree. This is what the district court had to say: **** While it is true that Nichols explained his puzzle to a few close colleagues who inquired about it and allowed Obermayer to in fact use it, the personal relationships and other surrounding circumstances were such that Nichols at all times retained control over its use as well as over the distribution of information concerning it. He never used the puzzle or permitted it used in a place or at a time when he did not have a legitimate expectation of privacy and of confidentiality. In these respects, I consider the exposure to Obermayer in Nichols' office no different than the exposure of Nichols' close friends in his home. . . . Here also the relationship between the participants in the alleged uses evidences a retention of control by Nichols. None of those participants had any basis for inferring that the puzzle was being given over by Nichols for their free and unrestricted use. Holding the public use bar inapplicable in these circumstances will not remove anything from the public domain. Moreover, there is absolutely no evidence in this case of commercially motivated activity by Nichols during the relevant period. Accordingly, the underlying policy against extending the effective term of exclusivity is not offended by a finding that the Nichols invention was not in public use. 594 F. Supp. at 1427 (citations omitted). CBS correctly recognizes that the district court's conclusion on public use under § 102(b) is subject to review as a question of law while the facts underlying the conclusion on public use are subject to the clearly erroneous standard of review. Hycor Corp. v. Schlueter Co., 740 F.2d 1529, 1537, 222 USPQ 553, 559 (Fed. Cir. 1984). CBS urges that the decision in Egbert v. Lippmann, 104 U.S. 333 (1881), compels a conclusion of public use in the present case. In Egbert, the claimed invention was drawn to improved corset-springs, also called corset-steels. In 1855, the inventor made and presented to his lady friend a pair of corsetsteels which embodied the invention. She wore the steels for a long time. The inventor made and gave her another pair three years later which she also wore a long time. On several occasions, when the corset itself wore out, the steels were removed and placed into a new corset. In 1866, an application for patent was filed. It was on those facts that the Court observed that: "If an inventor, having made his device, gives or sells it to another, to be used by the donee or vendee, without limitation or restriction, or injunction of secrecy, and it is so used, such use is public, even though the use and knowledge of the use may be confined to one person." Id. 104 U.S. at 336. The district court distinguished Egbert because here Nichols had not given over the invention for free and unrestricted use by another person. Based on the personal relationships and surrounding circumstances, the court found that Nichols at all times retained control over the puzzle's use and the distribution of information concerning it. The court characterized Nichols' use as private and for his own enjoyment. We see neither legal error in the analysis nor clear error in the findings. As for Obermayer's brief use of the puzzle, the court found that Nichols retained control even though he and Obermayer had not entered into any express confidentiality agreement. The court held, and we agree, that the presence or absence of such an agreement is not determinative of the public use issue. See TP Laboratories, Inc. v. Professional Positioners, Inc., 724 F.2d 965, 972, 220 USPQ 577, 583, (Fed. Cir.), cert. denied, 469 U.S. 826 (1984). It is one factor to be considered in assessing all the evidence. There can be no question that the court looked at the totality of evidence, see id. at 971, 220 USPQ at 582; Hycor Corp. v. Schlueter Co., 740 F.2d at 1535, 222 USPQ at 557, and evaluated that evidence in view of time, place, and circumstances. With regard to the question of control, CBS complains that "[t]he record is devoid of any testimony from the friends, associates and fellow workers who saw Nichols cube and to whom its operation was explained." The simple answer is that CBS had the burden at trial to prove public use with facts supported by clear and convincing evidence. Hycor Corp. v. Schlueter Co., 740 F.2d at 1536-37, 222 USPQ at 558-59. We think the district court's characterization of the evidence of record is entirely apt and we see no ground for reversal. Moreover, we agree with the district court that its conclusion on

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public use is consistent with the policies underlying the bar. See TP Laboratories, 724 F.2d at 968, 220 USPQ at 580. CBS further argues in connection with public use that the district court erred when it found no evidence of commercially motivated activity by Nichols prior to the critical date.3 Although CBS attempts to paint a picture of commercialization from the discussions between Obermayer and Nichols, we see only the brush strokes of speculation. The record lacks hard evidence. Discussion between employer and employee does not by itself convert an employee's private pursuit into commercial enterprise with the employer. CBS also makes much of a February 6, 1969 phone call by Obermayer to Parker Brothers to see if the latter was interested in receiving a submission of a puzzle idea from an outside inventor. Nothing concerning the nature or workings of Nichols' puzzle was disclosed. Obermayer simply inquired whether and how an outsider could submit a puzzle for Parker Brothers' consideration. We agree with the district court that those facts do not show commercialization. Thus this case differs from other cases where commercial activity was said to violate the policies of section 102(b). See Kinzenbaw v. Deere & Co., 741 F.2d 383, 222 USPQ 929 (Fed. Cir. 1984), cert. denied, 470 U.S. 1004 (1985); D.L. Auld Co. v. Chroma Graphics Corp., 714 F.2d 1144, 219 USPQ 13 (Fed. Cir. 1983); In re Smith, 714 F.2d 1127, 218 USPQ 976 (Fed. Cir. 1983). 793 F.2d 1261 (Fed. Cir. 1986). Do you agree that control by the inventor is the key? What other standards can you think of that would serve the varying policy considerations as well as the standards developed by the courts above? Why should the courts not only require that the use be private, but also that it be under the inventor’s control and not for a commercial purpose? Are the courts entitled to look past clear statutory language to the various policies underlying a provision? Did Congress not implicitly balance the various policies before it phrased the statute clearly? 3. Third-Party Use – In Electric Storage Battery Co. v. Shimadzu, 307 U.S. 5, 41 SPQ 155 (1939), the Court considered the following question: “Does commercial use of the patented process and apparatus in the alleged infringer's plant for more than two years prior to the application for patent preclude redress?” The court answered in the affirmative: Decisions turning on prior public use have been numerous both in this court and in other federal courts; and the definition of such use, formulated when the statute made only use by consent a bar, has been adopted in instances where the use was without consent or knowledge of the applicant for patent. A mere experimental use is not the public use defined by the Act, [Elizabeth v. Pavement Co., 97 U.S. 126, 134] but a single use for profit, not purposely hidden, is such. [Consolidated Fruit-Jar Co. v. Wright, supra, 94 U.S. page 94; Egbert v. Lippmann, 104 U.S. 333, 336] The ordinary use of a machine or the practise of a process in a factory in the usual course of producing articles for commercial purposes is a public use. [Manning v. Cape Ann Isinglass & Glue Co., 108 U.S. 462, 465; Twyman v. Radiant Glass Co., supra; Paraffine Co. v. Everlast, supra, 84 F.2d pages 338, 339] In the present case the evidence is that the petitioner, since June 1921, has continuously employed the alleged infringing machine and process for the production of lead oxide powder used in the manufacture of plates for storage batteries which have been sold in quantity. There is no finding, and we think none would have been justified, to the effect that the machine, process, and product were not well known to the employes in the plant, or that efforts were made to conceal them from anyone who had a legitimate interest in understanding them. [Compare Hall v. Macneale, 107 U.S. 90, 96, 97, 78] This use, begun more than two years before Shimadzu applied for [his] patents . . ., invalidated the claims in suit. In contrast, the court in Gillman v. Stern, 114 F.2d 28, 46 USPQ 430 (1940) (Hand, J.), agreed that, in general, third-party use can invalidate a patent. However, the court held that use by one Haas of his pneumatic “puffing machine” for blowing thread into pockets on a quilt, was not public because of steps Haas took to keep it secret: [I]t is clear that it was never in prior "public use," and that Haas was not a "first inventor." It was always kept as strictly secret as was possible, consistently with its exploitation. In general, everybody was carefully kept out of Haas's shop where the four machines were used. He testified that "no one was allowed to enter but my employees," girls he had had "for years"; and that he "had instructed my girls that if anybody should ask to get any kind of information simply tell them you don't know. In fact I have my shop door so arranged that it could only be opened from the inside." He also enjoined secrecy on his wife who testified "no one ever got into the place and no one ever saw the machine. He made everything himself." Indeed, as a condition upon even testifying in the case at bar Haas insisted, and the judge ordered, that the lawyers should be sworn to keep secret all he said about the construction of the "puffer," and that it should not be printed in the record, but typed and sealed for the inspection of the 3

In some instances, commercially motivated activities may implicate both the public use and the on sale bars.

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judges alone. It does not appear that the "girls" knew how the machines which they used were made, or how they operated. The only exception to this was a disclosure, such as it was, to two members of a firm going by the name of the Bona Fide Embroidery Co.—Custer and Kadison. In the same autumn of 1929 they and Haas testified that they had seen some of his quilting and were anxious to get the whole of his output. They went to his shop to satisfy themselves; Custer said that "it was very vital at that time that I should know the workings of the machine for my production of the proper designs." (By "workings" he could only have meant how it performed for he never learned its construction.) After this visit the two agreed that Haas should give them his whole production and that they should sell it; they even talked about taking out a patent, but did not have the necessary money. Thus, Haas kept his machine absolutely secret from the outside world except to secure selling agents for its product, and then it was only its performance, not its construction that even they learned. Moreover, Custer and Kadison had the same motive to suppress whatever information they got that Haas had, for without a patent the secret was all that protected their market. Such a use is clearly not a "public" one, and such an inventor is not a "first inventor." Finally, in W.L. Gore & Associates v. Garlock, Inc., 721 F.2d 1540, 220 USPQ 303 (Fed. Cir. 1983), Gore owned patents related to processes for stretching GORETEX® tape and various products made by those processes. One Budd had bought a tape stretching machine from a third-party, John Cropper, and had operated it before the patent’s critical date under an agreement to keep the workings of the machine confidential. Although Budd required his employees to sign confidentiality agreements, he did little else to keep the machine or its operation a secret. Nevertheless, the Federal Circuit ruled that Budd’s use was not an invalidating public use: There is no evidence that a viewer of the machine could thereby learn anything of which process, among all possible processes, the machine is being used to practice. As Cropper testified, looking at the machine in operation does not reveal whether it is stretching, and if so, at what speed. . . . There is no evidence that Budd’s secret use of the Cropper machine made knowledge of the claimed process available to the public. **** Assuming, arguendo, that Budd sold tape produced on the Cropper machine before [the critical date], and that the tape was made by a process set forth in a claim of the . . . patent, the issue under § 102(b) is whether that sale would defeat Dr. Gore’s right to a patent on the process inventions set forth in the claims. If Budd offered and sold anything, it was only tape, not whatever process was used in producing it. Neither party contends, and there was no evidence, that the public could learn the claimed process by examining the tape. If Budd and Cropper commercialized the tape, that could result in the forfeiture of a patent granted them for their process on an application filed by them more than one year later. There is no reason or statutory basis, however, on which Budd’s and Cooper’s secret commercialization of a process, if established, could be held a bar to the grant of a patent to Gore on that process. W. L. Gore indicates that secret use by a third party of a machine or process to make product that is commercially sold is not a bar to later claims for the machine or process. However, Metallizing, which has been followed by the Federal Circuit, holds that secret use by the patentee of a machine or process to make a publicly sold product is a bar. How does this distinction follow from the policies that underlie section 102?

Experimental Use

City of Elizabeth v. American Nicholson Pavement Co. 97 U.S. 126 (1877) MR. JUSTICE BRADLEY delivered the opinion of the court. This suit was brought by the American Nicholson Pavement Company against the city of Elizabeth, N. J., George W. Tubbs, and the New Jersey Wood-Paving Company, a corporation of New Jersey, upon a patent issued to Samuel Nicholson, dated Aug. 20, 1867, for a new and improved wooden pavement, being a second reissue of a patent issued to said Nicholson Aug. 8, 1854. The reissued patent was Chapter 3 – Novelty & Statutory Bars

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extended in 1868 for a further term of seven years. A copy of it is appended to the bill; and, in the specification, it is declared that the nature and object of the invention consists in providing a process or mode of constructing wooden block pavements upon a foundation along a street or roadway with facility, cheapness, and accuracy, and also in the creation and construction of such a wooden pavement as shall be comparatively permanent and durable, by so uniting and combining all its parts, both superstructure and foundation, as to provide against the slipping of the horses' feet, against noise, against unequal wear, and against rot and consequent sinking away from below. Two plans of making this pavement are specified. Both require a proper foundation on which to lay the blocks, consisting of tarred-paper or hydraulic cement covering the surface of the road-bed to the depth of about two inches, or of a flooring of boards or plank, also covered with tar, or other preventive of moisture. . . . **** The next question to be considered is, whether Nicholson's invention was in public use or on sale, with his consent and allowance, for more than two years prior to his application for a patent, within the meaning of the sixth, seventh, and fifteenth sections of the act of 1836, as qualified by the seventh section of the act of 1839, which were the acts in force in 1854, when he obtained his patent. It is contended by the appellants that the pavement which Nicholson put down by way of experiment, on Mill-dam Avenue in Boston, in 1848, was publicly used for the space of six years before his application for a patent, and that this was a public use within the meaning of the law. To determine this question, it is necessary to examine the circumstances under which this pavement was put down, and the object and purpose that Nicholson had in view. It is perfectly clear from the evidence that he did not intend to abandon his right to a patent. He had filed a caveat in August, 1847, and he constructed the pavement in question by way of experiment, for the purpose of testing its qualities. The road in which it was put down, though a public road, belonged to the Boston and Roxbury Mill Corporation, which received toll for its use; and Nicholson was a stockholder and treasurer of the corporation. The pavement in question was about seventy-five feet in length, and was laid adjoining to the toll-gate and in front of the toll-house. It was constructed by Nicholson at his own expense, and was placed by him where it was, in order to see the effect upon it of heavily loaded wagons, and of varied and constant use; and also to ascertain its durability, and liability to decay. Joseph L. Lang, who was toll-collector for many years, commencing in 1849, familiar with the road before that time, and with this pavement from the time of its origin, testified as follows: 'Mr. Nicholson was there almost daily, and when he came he would examine the pavement, would often walk over it, cane in hand, striking it with his cane, and making particular examination of its condition. He asked me very often how people liked it, and asked me a great many questions about it. I have heard him say a number of times that this was his first experiment with this pavement, and he thought that it was wearing very well. The circumstances that made this locality desirable for the purpose of obtaining a satisfactory test of the durability and value of the pavement were: that there would be a better chance to lay it there; he would have more room and a better chance than in the city; and, besides, it was a place where most everybody went over it, rich and poor. It was a great thoroughfare out of Boston. It was frequently travelled by teams having a load of five or six tons, and some larger. As these teams usually stopped at the toll-house, and started again, the stopping and starting would make as severe a trial to the pavement as it could be put to.' This evidence is corroborated by that of several other witnesses in the cause; the result of the whole being that Nicholson merely intended this piece of pavement as an experiment, to test its usefulness and durability. Was this a public use, within the meaning of the law? An abandonment of an invention to the public may be evinced by the conduct of the inventor at any time, even within the two years named in the law. The effect of the law is, that no such consequence will necessarily follow from the invention being in public use or on sale, with the inventor's consent and allowance, at any time within two years before his application; but that, if the invention is in public use or on sale prior to that time, it will be conclusive evidence of abandonment, and the patent will be void.

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But, in this case, it becomes important to inquire what is such a public use as will have the effect referred to. That the use of the pavement in question was public in one sense cannot be disputed. But can it be said that the invention was in public use? The use of an invention by the inventor himself, or of any other person under his direction, by way of experiment, and in order to bring the invention to perfection, has never been regarded as such a use. Curtis, Patents, sect. 381; Shaw v. Cooper, 7 Pet. 292. Now, the nature of a street pavement is such that it cannot be experimented upon satisfactorily except on a highway, which is always public. When the subject of invention is a machine, it may be tested and tried in a building, either with or without closed doors. In either case, such use is not a public use, within the meaning of the statute, so long as the inventor is engaged, in good faith, in testing its operation. He may see cause to alter it and improve it, or not. His experiments will reveal the fact whether any and what alterations may be necessary. If durability is one of the qualities to be attained, a long period, perhaps years, may be necessary to enable the inventor to discover whether his purpose is accomplished. And though, during all that period, he may not find that any changes are necessary, yet he may be justly said to be using his machine only by way of experiment; and no one would say that such a use, pursued with a bona fide intent of testing the qualities of the machine, would be a public use, within the meaning of the statute. So long as he does not voluntarily allow others to make it and use it, and so long as it is not on sale for general use, he keeps the invention under his own control, and does not lose his title to a patent. It would not be necessary, in such a case, that the machine should be put up and used only in the inventor's own shop or premises. He may have it put up and used in the premises of another, and the use may inure to the benefit of the owner of the establishment. Still, if used under the surveillance of the inventor, and for the purpose of enabling him to test the machine, and ascertain whether it will answer the purpose intended, and make such alterations and improvements as experience demonstrates to be necessary, it will still be a mere experimental use, and not a public use, within the meaning of the statute. Whilst the supposed machine is in such experimental use, the public may be incidentally deriving a benefit from it. If it be a grist-mill, or a carding- machine, customers from the surrounding country may enjoy the use of it by having their grain made into flour, or their wool into rolls, and still it will not be in public use, within the meaning of the law. But if the inventor allows his machine to be used by other persons generally, either with or without compensation, or if it is, with his consent, put on sale for such use, then it will be in public use and on public sale, within the meaning of the law. If, now, we apply the same principles to this case, the analogy will be seen at once. Nicholson wished to experiment on his pavement. He believed it to be a good thing, but he was not sure; and the only mode in which he could test it was to place a specimen of it in a public roadway. He did this at his own expense, and with the consent of the owners of the road. Durability was one of the qualities to be attained. He wanted to know whether his pavement would stand, and whether it would resist decay. Its character for durability could not be ascertained without its being subjected to use for a considerable time. He subjected it to such use, in good faith, for the simple purpose of ascertaining whether it was what he claimed it to be. Did he do any thing more than the inventor of the supposed machine might do, in testing his invention? The public had the incidental use of the pavement, it is true; but was the invention in public use, within the meaning of the statute? We think not. The proprietors of the road alone used the invention, and used it at Nicholson's request, by way of experiment. The only way in which they could use it was by allowing the public to pass over the pavement.

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Had the city of Boston, or other parties, used the invention, by laying down the pavement in other streets and places, with Nicholson's consent and allowance, then, indeed, the invention itself would have been in public use, within the meaning of the law; but this was not the case. Nicholson did not sell it, nor allow others to use it or sell it. He did not let it go beyond his control. He did nothing that indicated any intent to do so. He kept it under his own eyes, and never for a moment abandoned the intent to obtain a patent for it. In this connection, it is proper to make another remark. It is not a public knowledge of his invention that precludes the inventor from obtaining a patent for it, but a public use or sale of it. In England, formerly, as well as under our Patent Act of 1793, if an inventor did not keep his invention secret, if a knowledge of it became public before his application for a patent, he could not obtain one. To be patentable, an invention must not have been known or used before the application; but this has not been the law of this country since the passage of the act of 1836, and it has been very much qualified in England. Lewis v. Marling, 10 B. & C. 22. Therefore, if it were true that during the whole period in which the pavement was used, the public knew how it was constructed, it would make no difference in the result. It is sometimes said that an inventor acquires an undue advantage over the public by delaying to take out a patent, inasmuch as he thereby preserves the monopoly to himself for a longer period than is allowed by the policy of the law; but this cannot be said with justice when the delay is occasioned by a bona fide effort to bring his invention to perfection, or to ascertain whether it will answer the purpose intended. His monopoly only continues for the allotted period, in any event; and it is the interest of the public, as well as himself, that the invention should be perfect and properly tested, before a patent is granted for it. Any attempt to use it for a profit, and not by way of experiment, for a longer period than two years before the application, would deprive the inventor of his right to a patent.

Questions, Comments, Problems 1. In Lough v. Brunswick Corp., 86 F.3d 1113, 39 USPQ2d 1100 (Fed. Cir. 1996), Steven G. Lough, a boat motor repairman, had developed an improved seal assembly for Brunswick stern-drive motors. He made six prototypes and installed them on various boats, including the boat belonging to the owner of the marina where he worked and the boat of a marina customer. He gave the remaining prototypes to his friends to try. He did not charge for any of them. For more than a year before he filed for his patent application, Lough did not ask for comments from the people using the seal assemblies and he did not try to sell any seal assemblies. At trial, the jury found that Brunswick had not proven the patents invalid, and the district court refused to grant Brunswick’s motion for judgment as a matter of law (JMOL). The Federal Circuit, Judge Lourie authoring, reversed: We have defined "public use" as including "any use of [the claimed] invention by a person other than the inventor who is under no limitation, restriction or obligation of secrecy to the inventor." In re Smith, 714 F.2d 1127, 1134, 218 USPQ 976, 983 (Fed. Cir. 1983) (citing Egbert v. Lippmann, 104 U.S. 333, 336 (1881)). An evaluation of a question of public use depends on "how the totality of the circumstances of the case comports with the policies underlying the public use bar." . . . These policies include: (1) discouraging the removal, from the public domain, of inventions that the public reasonably has come to believe are freely available; (2) favoring the prompt and widespread disclosure of inventions; (3) allowing the inventor a reasonable amount of time following sales activity to determine the potential economic value of a patent; and (4) prohibiting the inventor from commercially exploiting the invention for a period greater than the statutorily prescribed time. . . . A patentee may negate a showing of public use by coming forward with evidence that its use of the invention was experimental. **** Neither party disputes that Lough's prototypes were in use before the critical date. Thus, both parties agree that the issue presented on appeal is whether the jury properly decided that the use of Lough's six prototypes in 1986, prior to the critical date, constituted experimental use so as to negate the conclusion of public use. . . . "The use of an invention by the inventor himself, or of any other person under his direction, by way of experiment, and in order to bring the invention to perfection, has never been regarded as [a public] use."

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City of Elizabeth v. American Nicholson Pavement Co., 97 U.S. 126, 134 (1877). This doctrine is based on the underlying policy of providing an inventor time to determine if the invention is suitable for its intended purpose, in effect, to reduce the invention to practice. See id. at 137 ("It is sometimes said that an inventor acquires an undue advantage over the public by delaying to take out a patent . . . but this cannot be said with justice when the delay is occasioned by a bona fide effort to bring his invention to perfection, or to ascertain whether it will answer the purpose intended."). . . . To determine whether a use is "experimental," a question of law, the totality of the circumstances must be considered, including various objective indicia of experimentation surrounding the use, such as the number of prototypes and duration of testing, whether records or progress reports were made concerning the testing, the existence of a secrecy agreement between the patentee and the party performing the testing, whether the patentee received compensation for the use of the invention, and the extent of control the inventor maintained over the testing. . . . The last factor of control is critically important, because, if the inventor has no control over the alleged experiments, he is not experimenting. If he does not inquire about the testing or receive reports concerning the results, similarly, he is not experimenting. In order to justify a determination that legally sufficient experimentation has occurred, there must be present certain minimal indicia. The framework might be quite formal, as may be expected when large corporations conduct experiments, governed by contracts and explicit written obligations. When individual inventors or small business units are involved, however, less formal and seemingly casual experiments can be expected. Such less formal experiments may be deemed legally sufficient to avoid the public use bar, but only if they demonstrate the presence of the same basic elements that are required to validate any experimental program. Our case law sets out these elements. . . . The question framed on this appeal is whether Lough's alleged experiments lacked enough of these required indicia so that his efforts cannot, as a matter of law, be recognized as experimental. **** . . . [I]t cannot be reasonably disputed that Lough's use of the invention was not "experimental" so as to negate a conclusion of public use. It is true that Lough did not receive any compensation for the use of the prototypes. He did not place the seal assembly on sale before applying for a patent. Lough's lack of commercialization, however, is not dispositive of the public use question in view of his failure to present objective evidence of experimentation. Lough kept no records of the alleged testing. . . . Nor did he inspect the seal assemblies after they had been installed by other mechanics. . . . He provided the seal assemblies to friends and acquaintances, but without any provision for follow-up involvement by him in assessment of the events occurring during the alleged experiments, and at least one seal was installed in a boat that was later sold to strangers. Thus, Lough did not maintain any supervision and control over the seals during the alleged testing. **** Lough argues that other evidence supports a finding that his uses were experimental, including his own testimony that the prototypes were installed for experimental purposes and the fact that the prototypes were used in such a manner that they were unlikely to be seen by the public. However, "the expression by an inventor of his subjective intent to experiment, particularly after institution of litigation, is generally of minimal value." TP Laboratories, 724 F.2d at 972, 220 USPQ at 583. In addition, the fact that the prototypes were unlikely to be seen by the public does not support Lough's position. . . .

**** PLAGER, Circuit Judge, dissenting. I respectfully dissent. In my view, the panel majority confuses its role as law-giver and law-reviewer with the role of fact-weigher and fact-decider. The majority and I agree that the issue is not whether the trial court applied the wrong law (it did not), or whether the jury was wrongly instructed (it was not). As the panel majority correctly notes, the issue is whether, on the totality of the circumstances, Mr. Lough was engaged in "a bona fide effort to bring his invention to perfection, or to ascertain whether it will answer the purpose intended," City of Elizabeth v. American Nicholson Pavement Co., 97 U.S. 126, 137 (1877), or whether he was engaged in selling or, on the facts of this case oddly enough for a working mechanic, giving away his invention to members of the public. This is not a contest between Evinrude (Outboard Marine Corporation) and Mercury Marine (Brunswick), the two big competitors in this field, to see who can market a better engine. If it were, we could expect the combination of engineering and legal staffs on each side to be punctilious about

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observing the niceties of our prior opinions on how to conduct experiments so as to avoid any possible running afoul of the public use bar. No, this is a home-made improvement by a man with only a high school education who worked on boats and boat engines, including his own, where he kept encountering the problem with these shaft seals that Mercury Marine had failed to solve. He solved it by trial and error, with an ingenious bushing of his own design, and, on his grandfather's metal lathe, after several tries, fashioned a half-dozen prototype seals that looked like they might do the job. He put one in his own boat, one in the boat of a close friend, one in the boat of the co-owner of the marine repair shop where he worked, and later put one in the boat of a customer of the shop who was having considerable problems with his stern drive because of the seal difficulty. He gave two to mechanic friends at another marina so they could put them in boats having the same troublesome seal problem, with the understanding they would be used to test the seals in different equipment. Of course it would have been better for all concerned (except perhaps for Mercury Marine) if Mr. Lough had read our prior opinions before he became an inventor. Then he might have kept detailed lab notes setting out the problem and the possible solutions, and he wisely would have obtained written confidentiality agreements from those allowed to see or use his prototypes. Had he studied our cases first, he no doubt would have developed a detailed questionnaire for the persons to whom he provided the seals, and he would have insisted on periodic written reports. In other words, he would have put in the set of tight controls the majority would have wanted. Instead, he did what seemed appropriate in the setting in which he worked: he waited to hear from his test cases what problems might emerge, and, hearing none, at least none that convinced him he was on the wrong track, he accepted some friendly advice and proceeded to patent his invention. Yes, he failed to conduct his testing, his experiments, with the careful attention we lawyers, with our clean and dry hands, have come to prefer. But, under all the facts and circumstances, it is more likely than not that he was testing and perfecting his device, rather than simply making it available gratis to members of the general public for what the law calls "public use.” The most that can be said for the majority view is that this is a close question under the totality of circumstances. The ultimate question of what is public use under 35 U.S.C. § 102(b) may be a question of law, but in a given case in which the issue is whether in fact the challenged use was experimental (a complete answer to an infringer’s defense based on a § 102(b) violation), the issue involves a blend of law and fact. This issue, unlike claim construction, is one in which a jury fully participates. Thus the question before us is not whether, on the facts, we are persuaded Lough retained all the control a well-designed test of the seals would have afforded, but whether a reasonable jury, on all the evidence before it, could have arrived at the conclusion it did. . . . Did the majority overstep its appellate role in overturning a jury finding in this case? What does it mean to say that experimental use is a legal issue that is based on underlying facts? Is that helpful to a jury? To a trial judge? To a trial attorney? How might the ruling in Lough affect the way in which a patentee’s attorney presents a case? How about the accused infringer’s attorney? What other factors might be considered in determining whether a use was experimental? Should the presence or absence of any factor be so important that it would require a finding of no experimental use? 2. Reduction to Practice – An invention is actually reduced to practice when it is shown to work for its intended purpose. An invention may also be “constructively” reduced to practice by the filing of a patent application that adequately discloses the invention. If an actual reduction to practice occurs when the invention is shown to work for its intended purpose, is it possible to have experimental use after there has been a reduction to practice? In RCA Corp. v. Data General Corp., 887 F.2d 1056, 12 USPQ2d 1449 (Fed. Cir. 1989), the Federal Circuit considered the issue of whether experimental use can follow a reduction to practice in the context of an “on sale” defense under 35 U.S.C. § 102(b). The court concluded that it could not: “Also, under our precedent, experimental use, which means perfecting or completing an invention to the point of determining that it will work for its intended purpose, ends with an actual reduction to practice.” Id. at 1061 (citing Gould, Inc. v. United States, 579 F.2d 571, 572, 583, 198 USPQ 156 (Ct. Cl. 1978)). Judge Nichols, of the former Court of Claims, who later sat on the Federal Circuit, dissented in Gould: I think it is fairly clear or at least arguable . . . that public use or sale more than one year prior to the patent application will be excused, even after the invention could be deemed reduced to practice in the “legal sense,” if experimentation is still going on that is reasonably necessary “to determine whether further refinement is needed.” In re Yarn Processing Patent Validity Litigation, 498 F.2d 271, 285 (5th Cir.), cert. Denied, 419 U.S. 1057 (1974). This seems to me to stand to reason. Experimentation adequate to test for utility or to complete the invention itself may necessarily precede reduction to practice “in the legal sense,” but experiments of broader purpose can occur later. The purpose of the experimental use exception is to avoid rushing the inventor to the Patent Office when the invention still needs further experiment, with the result that he will be cheated out of part of the period of monopoly

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exploitation allowed him by law, and, also, I should think, the waste of Patent Office resources in processing halfbaked inventions should be considered. These purposes are frustrated if the need for further experimentation of any kind stands in the way of prompt exploitation yet does not toll the running of the one year period for filing. **** I think, whatever their outcome, experiments to determine whether an invention can be improved are the same thing as experiments to determine whether, in Judge Thornberry’s phrase, “further refinement is needed.” In the eyes of a customer such as the U.S. Navy, at least, if an invention can be improved, it must be improved, and in such circumstances “further refinement” is always needed. If Sears and Roebuck had been the customer, we might have a different case. Is the Federal Circuit’s statement in RCA Corp. reconcilable with the holding of City of Elizabeth? Judge Hand, in dictum, seemed to suggest in Aerovox Corp. v. Polymet Mfg. Corp., 67 F.2d 860 (2d Cir. 1933), that the Supreme Court in City of Elizabeth permitted experimental use beyond the point of technical “reduction to practice”: The true situation appears to have been that the [Aerovox] invention was not in the experimental stage, if by that is meant that the inventor was testing it with an eye to perfecting it. His work was done; indeed he had no technical knowledge with which to proceed, for he merely chanced on the idea. At most all that remained was to see whether it would work well under service conditions. There are occasional expressions in the books which read as though the period of experiment is only that during which the inventor is trying to reduce the invention to a stable form, to adapt it completely to its purposes; but we should hesitate to hold that his privilege is so limited. For example, in Elizabeth v. Pavement Co., 97 U.S. 126, it did not appear that Nicholson, the inventor, delayed for any other reason than to learn how well his pavement would wear; apparently it was already as good as he hoped to make it. At any rate we shall assume that an inventor may wait longer, may wait until he learns whether his invention is of enough value to justify an application for a patent. On this view he may test it, not only to put it into definite form, but to see whether his ideas are worth exploiting. But this added privilege has its limit. If in doing so he does in fact exploit the completed invention commercially he takes a chance that he may lose his patent. It is not enough that he intends incidentally to test its value; he may not so reserve his rights; his primary purpose must be the test, though incidentally he may get what profit he can. One district court, not liking the ruling in RCA Corp., limited it to its holding, the “on sale” defense, and found itself not bound on the public use question. See Kearns v. Wood Motors Inc., 773 F. Supp. 979, 982, 19 USPQ2d 1138, 1141 (E.D. Mich. 1990). Another district court found the distinction made by the first district court untenable, and applied RCA Corp. to a public use situation. See Nordberg Inc. v. Telsmith, Inc., 881 F. Supp. 1252, 1285 n.23, 1287, 36 USPQ2d 1577, 1604 n.23, 1606 (E.D. Wisc. 1995) (“[T]he logic behind the [RCA Corp.] decision was the symmetry between the definition of ‘experimental use’ and ‘reduction to practice,’ a symmetry which exists regardless of whether the Court is faced with an on-sale or public use challenge.”). 3. Experimental Use Must be of Claimed Invention – The courts have narrowed the concept of experimental use by limiting its application to experimentation with the claimed features of the invention as opposed to nonclaimed features in a machine or system. Thus, in In re Theis, 610 F.2d 786, 204 USPQ 188 (CCPA 1979) (Rich, J.), the court disallowed experimentation done on the patented simulated conversation system for the purpose of correcting problems with the telephone interface. In reaching its holding, the court reasoned that “the claims do not require that the [simulated conversation] system be used with a telephone system.” Id. at 743. In that case, use with a telephone system was one of the principal uses contemplated by the inventor for his patented system but not the only one. Do you believe the court was being too technical in its application of the claimed versus unclaimed features distinction? Should it be enough that the testing bore some relation to the claimed features? Can you think of a different standard that would draw the line between privileged and nonprivileged experimentation so as to serve the policies behind experimental use? 3. Market Testing v. Experimental Use – In In re Smith, 714 F.2d 1127, 218 USPQ 476 (Fed. Cir. 1983), The Federal Circuit followed a line drawn by other circuit courts of appeal in differentiating between impermissible market testing and permissible experimental use: The experimental use exception, however, does not include market testing where the inventor is attempting to gauge consumer demand for his claimed invention. The purpose of such activities is commercial exploitation and not experimentation. [Citations omitted.] Id. at 1135. The facts in Smith presented a close question (the judges voted 3-2). The inventor’s employer, Airwick, conducted a consumer test of the new CARPET FRESH formulations the coinventors had developed. The test involved a first phase in which consumers watched a videotaped demonstration of the product and

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commented in a questionnaire on matters relating to price, believability of product claims and their purchase intent. The second phase involved two-week in-home use by the consumers of different versions of the product followed by interviews with most of them. Feedback related to matters such as ease of vacuuming up and deodorizing ability. The majority, over a vigorous dissent by Judges Nichols and Cowen, held that the test was primarily a market test and invalidated the patent claims. The dissent argued the need to perfect a product used in the home by actual in-home testing. Obviously a case like this has some facts pointing each way, but the first phase CARPET FRESH test seemd weighted toward marketing, not technological concerns. The case clearly stands as a warning to inventors of the dangers of mixing marketing and experimental objectives in the same test, lest courts find that the primary objective was the commercial one. Another noteworthy point is the emphasis the majority placed on the fact that the objectives of the testing could have been accomplished by laboratory testing in the inventors’ facilities. Do you find this reasonable, given the fact that many inventions are best tested in their actual intended environments, not simulated ones? Does City of Elizabeth support the validity of on-site rather than simulated testing? Is the better focus not on where the testing occurs but on what is being tested and under what controls? 5. Burdens of Proof in Court - It used to be that there was a two-step process in proving experimental use, with burdens shifting. First, the patent-challenger had a burden to prove public use by clear and convincing evidence (the burden required for proving all invalidity defenses). Then if the challenger was successful, the burden shifted to the patentee to prove the “experimental use exception,” also by clear and convincing evidence. Such was essentially how later courts understood the rule of Smith & Griggs Manufacturing Co. v. Sprague, 123 U.S. 249 (1887). See, e.g., Aerovox Corporation v. Polymet Mfg. Corporation, 67 F.2d 860, 861 (2 Cir. 1933)(L. Hand, J.). The Federal Circuit did away with this two-step methodolgy in T.P. Laboratories v. Professional Positioners, Inc., 724 F.2d 965, 220 USPQ 577 (Fed. Cir. 1984), holding that there is only one burden of persuasion, that on the patent challlenger, of proving public use by clear and convincing evidence. The court said that to the extent Smith & Griggs was to the contrary, it was no longer binding precedent in view of the enactment in 1952 of 35 USC §282, the presumption of validity, which permanently places the burden of proving facts necessary to a conclusion of invalidity on the party asserting such invalidity. Id. at 971, n.3. The court did say, however, that if a prima facie case is made of public use, the patent owner must be able to point out or must come forward with convincing evidence to counter that showing. Id. at 971. Showing that the use was primarily experimental would of course do that. But, to be precise, the court said there are not two separable issues, namely, first “Was it public use?”, and then, “Was it experimental?” but rather a single issue, “Was it public use under section102(b)?” For the latter, single issue, all the relevant facts, including those regarding the experimental nature, should be considered before the court makes a decision. Id. 971-972. Supposedly, TP Positioners makes life easier for the patentee. Do you really think it does? 6. Third-Party Experimental Use - In Baxter International, Inc. v. COBE Laboratories, Inc., 88 F.3d 1054, 39 USPQ2d 1437 (Fed. Cir. 1996), the Federal Circuit considered a use by a third party that the patentee alleged was experimental, and not an invalidating public use. The patent covered a sealless centrifuge, and the third party, Dr. Jaques Suaudeau of the National Institutes of Health, who was unrelated to the named inventor, tested such a centrifuge in his open laboratory. It was immediately apparent that the centrifuge worked properly as a separator, and Suaudeau continued to test the centrifuge to see if it would damage blood platelets involved in his area of research. The district court granted summary judgment that Suaudeau’s use was not experimental because he was not testing it to see if it would work for its intended purpose, but was instead making modifications to satisfy his particular requirements. On appeal to the Federal Circuit, the majority agreed: . . . . These experiments, which Baxter alleges constituted experimental use, were directed to fine-tuning the centrifuge to work for Suaudeau’s particular purpose of heart preservation, not to determining if it would work as a centrifugal blood processing apparatus, or perform a method of centrifugally processing blood, as recited in the claims and which he had already verified. Further refinement of an invention to test additional uses is not the type of experimental use that will negate a public use. **** The inventor’s lack of direction or control over Suaudeau’s use of the invention also supports a conclusion that the use was not experimental. One of the policies underlying experimental use as a negation of public use is allowing an inventor sufficient time to test an invention before applying for a patent. . . . Providing Cullis, the inventor, with the benefit of Suaudeau’s testing is thus contrary to this policy, as Suaudeau was not using or testing the invention for Cullis. . . . Accordingly, we hold that public testing before the critical date by a third party for his own unique purposes of an invention previously reduced to practice and obtained from someone other than the patentee, when such testing is independent of and not controlled by the patentee, is an invalidating public use, not an experimental one.

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Judge Newman dissented: [The panel majority’s] new rule of law, that unpublished laboratory use after a reduction to practice is a public use, creates a new and mischievious category of “secret” prior art. **** This use of unknown, private laboratory work to create a new bar to patentability as of the date of laboratory reduction to practice is a distortion of the law and policy set forth in 35 U.S.C. § 102. Sections 102(a) and (b) establish that prior art is prior knowledge that meets specified requirements. This new category of internal laboratory use is immune to the most painstaking documentary search. The court thus produces a perpetual cloud on any issued patent, defeating the objective standards and policy considerations embodied in the § 102 definitions of prior art. Do you believe that the majority’s holding unduly broadens the scope of public use without adequately considering the policies under section 102? In light of the language in Baxter and Lough, can you think of any way in which independent third-party activity could be a non-invalidating experimental use? The Seventh Circuit did not, stating in dictum in Magnetics, Inc. v. Arnold Engineering Co., 438 F.2d 72, 74, 168 USPQ 392 (7th Cir. 1971): “[T]he experimental use doctrine only lifts the one year statutory bar where the experimental use is by the inventor or persons under his control.” Is it logically better to analyze third-party use, not from the standpoint of whether it is “experimental,” but from the standpoint of whether the use confirms the concept?

On Sale A patent cannot be obtained on an invention that was "on sale" more than a year before the patent application was filed. Generally, this problem arises when a patent applicant commercializes an invention and decides only after some time has passed that the invention will be successful enough to support the substantial cost of obtaining a patent. Congress has permitted such a delay, but only for one year. One problem that has vexed the courts for some time with respect to the on-sale bar is the degree of completeness that is required of an invention before an offer to sell it can trigger the bar. For example, if a company contracts to develop and produce a fighter plane for the government, does the bar start to run on any invention that might be embodied in the plaine, even if the invention is not developed or even fully understood until after the allowable time for seeking a patent has expired? Or, should the bar on any particular invention not begin to run until the invention is fully reduced to practice, for example, by building a fully operational prototype? As you will see from the recent Pfaff decision, the Supreme Court selected a middle ground when faced with the question.

Pfaff v. Wells Electronics, Inc. 525 U.S. 55, 48 USPQ2d 1641 (1998) JUSTICE STEVENS delivered the opinion of the Court. Section 102(b) of the Patent Act of 1952 provides that no person is entitled to patent an "invention" that has been "on sale" more than one year before filing a patent application. We granted certiorari to determine whether the commercial marketing of a newly invented product may mark the beginning of the 1-year period even though the invention has not yet been reduced to practice. I On April 19, 1982, petitioner, Wayne Pfaff, filed an application for a patent on a computer chip socket. Therefore, April 19, 1981, constitutes the critical date for purposes of the on-sale bar of 35 U.S.C. §102(b); if the 1-year period began to run before that date, Pfaff lost his right to patent his invention.

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Pfaff commenced work on the socket in November 1980, when representatives of Texas Instruments asked him to develop a new device for mounting and removing semiconductor chip carriers. In response to this request, he prepared detailed engineering drawings that described the design, the dimensions, and the materials to be used in making the socket. Pfaff sent those drawings to a manufacturer in February or March 1981. Prior to March 17, 1981, Pfaff showed a sketch of his concept to representatives of Texas Instruments. On April 8, 1981, they provided Pfaff with a written confirmation of a previously placed oral purchase order for 30,100 of his new sockets for a total price of $91,155. In accord with his normal practice, Pfaff did not make and test a prototype of the new device before offering to sell it in commercial quantities. The manufacturer took several months to develop the customized tooling necessary to produce the device, and Pfaff did not fill the order until July 1981. The evidence therefore indicates that Pfaff first reduced his invention to practice in the summer of 1981. The socket achieved substantial commercial success before Patent No. 4,491,377 (the '377 patent) issued to Pfaff on January 1, 1985. After the patent issued, petitioner brought an infringement action against respondent, Wells Electronics, Inc., the manufacturer of a competing socket. Wells prevailed on the basis of a finding of no infringement. When respondent began to market a modified device, petitioner brought this suit, alleging that the modifications infringed six of the claims in the '377 patent. After a full evidentiary hearing before a Special Master, the District Court held that two of those claims (1 and 6) were invalid because they had been anticipated in the prior art. Nevertheless, the court concluded that four other claims (7, 10, 11, and 19) were valid and three (7, 10, and 11) were infringed by various models of respondent's sockets. App. to Pet. for Cert. 21a-22a. Adopting the Special Master's findings, the District Court rejected respondent's §102(b) defense because Pfaff had filed the application for the '377 patent less than a year after reducing the invention to practice. The Court of Appeals reversed, finding all six claims invalid. 124 F.3d 1429 (CA Fed. 1997). Four of the claims (1, 6, 7, and 10) described the socket that Pfaff had sold to Texas Instruments prior to April 8, 1981. Because that device had been offered for sale on a commercial basis more than one year before the patent application was filed on April 19, 1982, the court concluded that those claims were invalid under § 102(b). That conclusion rested on the court's view that as long as the invention was "substantially complete at the time of sale," the 1-year period began to run, even though the invention had not yet been reduced to practice. Id., at 1434. The other two claims (11 and 19) described a feature that had not been included in Pfaff 's initial design, but the Court of Appeals concluded as a matter of law that the additional feature was not itself patentable because it was an obvious addition to the prior art. Given the court's §102(b) holding, the prior art included Pfaff's first four claims. Because other courts have held or assumed that an invention cannot be "on sale" within the meaning of § 102(b) unless and until it has been reduced to practice, and because the text of § 102(b) makes no reference to "substantial completion" of an invention, we granted certiorari. 523 U. S. ___ (1998). II The primary meaning of the word "invention" in the Patent Act unquestionably refers to the inventor's conception rather than to a physical embodiment of that idea. The statute does not contain any express requirement that an invention must be reduced to practice before it can be patented. Neither the statutory definition of the term in §100 nor the basic conditions for obtaining a patent set forth in § 101 make any mention of "reduction to practice." The statute's only specific reference to that term is found in § 102(g), which sets forth the standard for resolving priority contests between two competing claimants to a patent. That subsection provides:

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"In determining priority of invention there shall be considered not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to conception by the other."

Thus, assuming diligence on the part of the applicant, it is normally the first inventor to conceive, rather than the first to reduce to practice, who establishes the right to the patent. It is well settled that an invention may be patented before it is reduced to practice. In 1888, this Court upheld a patent issued to Alexander Graham Bell even though he had filed his application before constructing a working telephone. Chief Justice Waite's reasoning in that case merits quoting at length: "It is quite true that when Bell applied for his patent he had never actually transmitted telegraphically spoken words so that they could be distinctly heard and understood at the receiving end of his line, but in his specification he did describe accurately and with admirable clearness his process, that is to say, the exact electrical condition that must be created to accomplish his purpose, and he also described, with sufficient precision to enable one of ordinary skill in such matters to make it, a form of apparatus which, if used in the way pointed out, would produce the required effect, receive the words, and carry them to and deliver them at the appointed place. The particular instrument which he had, and which he used in his experiments, did not, under the circumstances in which it was tried, reproduce the words spoken, so that they could be clearly understood, but the proof is abundant and of the most convincing character, that other instruments, carefully constructed and made exactly in accordance with the specification, without any additions whatever, have operated and will operate successfully. A good mechanic of proper skill in matters of the kind can take the patent and, by following the specification strictly, can, without more, construct an apparatus which, when used in the way pointed out, will do all that it is claimed the method or process will do. . . . "The law does not require that a discoverer or inventor, in order to get a patent for a process, must have succeeded in bringing his art to the highest degree of perfection. It is enough if he describes his method with sufficient clearness and precision to enable those skilled in the matter to understand what the process is, and if he points out some practicable way of putting it into operation." The Telephone Cases, 126 U. S. 1, 535-536 (1888).

When we apply the reasoning of The Telephone Cases to the facts of the case before us today, it is evident that Pfaff could have obtained a patent on his novel socket when he accepted the purchase order from Texas Instruments for 30,100 units. At that time he provided the manufacturer with a description and drawings that had "sufficient clearness and precision to enable those skilled in the matter" to produce the device. The parties agree that the sockets manufactured to fill that order embody Pfaff's conception as set forth in claims 1, 6, 7, and 10 of the '377 patent. We can find no basis in the text of § 102(b) or in the facts of this case for concluding that Pfaff's invention was not "on sale" within the meaning of the statute until after it had been reduced to practice. III Pfaff nevertheless argues that longstanding precedent, buttressed by the strong interest in providing inventors with a clear standard identifying the onset of the 1-year period, justifies a special interpretation of the word "invention" as used in § 102(b). We are persuaded that this nontextual argument should be rejected. As we have often explained, most recently in Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 151 (1989), the patent system represents a carefully crafted bargain that encourages both the creation and the public disclosure of new and useful advances in technology, in return for an exclusive monopoly for a limited period of time. The balance between the interest in motivating innovation and enlightenment by rewarding invention with patent protection on the one hand, and the interest in avoiding monopolies that unnecessarily stifle competition on the other, has been a feature of the federal patent laws since their inception. As this Court explained in 1871:

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"Letters patent are not to be regarded as monopolies . . . but as public franchises granted to the inventors of new and useful improvements for the purpose of securing to them, as such inventors, for the limited term therein mentioned, the exclusive right and liberty to make and use and vend to others to be used their own inventions, as tending to promote the progress of science and the useful arts, and as matter of compensation to the inventors for their labor, toil, and expense in making the inventions, and reducing the same to practice for the public benefit, as contemplated by the Constitution and sanctioned by the laws of Congress."

Seymour v. Osborne, 11 Wall. 516, 533-534. Consistent with these ends, § 102 of the Patent Act serves as a limiting provision, both excluding ideas that are in the public domain from patent protection and confining the duration of the monopoly to the statutory term. See, e.g., Frantz Mfg. Co. v. Phenix Mfg. Co., 457 F.2d 314, 320 (CA7 1972). We originally held that an inventor loses his right to a patent if he puts his invention into public use before filing a patent application. "His voluntary act or acquiescence in the public sale and use is an abandonment of his right" Pennock v. Dialogue, 2 Pet. 1, 24 (1829) (Story, J.). A similar reluctance to allow an inventor to remove existing knowledge from public use undergirds the on-sale bar. Nevertheless, an inventor who seeks to perfect his discovery may conduct extensive testing without losing his right to obtain a patent for his invention—even if such testing occurs in the public eye. The law has long recognized the distinction between inventions put to experimental use and products sold commercially. In 1878, we explained why patentability may turn on an inventor's use of his product. "It is sometimes said that an inventor acquires an undue advantage over the public by delaying to take out a patent, inasmuch as he thereby preserves the monopoly to himself for a longer period than is allowed by the policy of the law; but this cannot be said with justice when the delay is occasioned by a bona fide effort to bring his invention to perfection, or to ascertain whether it will answer the purpose intended. His monopoly only continues for the allotted period, in any event; and it is the interest of the public, as well as himself, that the invention should be perfect and properly tested, before a patent is granted for it. Any attempt to use it for a profit, and not by way of experiment, for a longer period than two years before the application, would deprive the inventor of his right to a patent." Elizabeth v. Pavement Co., 97 U. S. 126, 137 (emphasis added). The patent laws therefore seek both to protect the public's right to retain knowledge already in the public domain and the inventor's right to control whether and when he may patent his invention. The Patent Act of 1836, 5 Stat. 117, was the first statute that expressly included an on-sale bar to the issuance of a patent. Like the earlier holding in Pennock, that provision precluded patentability if the invention had been placed on sale at any time before the patent application was filed. In 1839, Congress ameliorated that requirement by enacting a 2-year grace period in which the inventor could file an application. 5 Stat. 353. In Andrews v. Hovey, 123 U. S. 267, 274 (1887), we noted that the purpose of that amendment was "to fix a period of limitation which should be certain"; it required the inventor to make sure that a patent application was filed "within two years from the completion of his invention," ibid. In 1939, Congress reduced the grace period from two years to one year. 53 Stat. 1212. Petitioner correctly argues that these provisions identify an interest in providing inventors with a definite standard for determining when a patent application must be filed. A rule that makes the timeliness of an application depend on the date when an invention is "substantially complete" seriously undermines the interest in certainty.11 Moreover, such a rule finds no support in the text of the statute. Thus, 11

The Federal Circuit has developed a multifactor, "totality of the circumstances" test to determine the trigger for the onsale bar. See, e.g., Micro Chemical, Inc. v. Great Plains Chemical Co., 103 F.3d 1538, 1544 (1997) (stating that, in determining whether an invention is on sale for purposes of 102(b), " `all of the circumstances surrounding the sale or

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petitioner's argument calls into question the standard applied by the Court of Appeals, but it does not persuade us that it is necessary to engraft a reduction to practice element into the meaning of the term "invention" as used in § 102(b). The word "invention" must refer to a concept that is complete, rather than merely one that is "substantially complete." It is true that reduction to practice ordinarily provides the best evidence that an invention is complete. But just because reduction to practice is sufficient evidence of completion, it does not follow that proof of reduction to practice is necessary in every case. Indeed, both the facts of the Telephone Cases and the facts of this case demonstrate that one can prove that an invention is complete and ready for patenting before it has actually been reduced to practice. We conclude, therefore, that the on-sale bar applies when two conditions are satisfied before the critical date. First, the product must be the subject of a commercial offer for sale. An inventor can both understand and control the timing of the first commercial marketing of his invention. The experimental use doctrine, for example, has not generated concerns about indefiniteness, and we perceive no reason why unmanageable uncertainty should attend a rule that measures the application of the onsale bar of § 102(b) against the date when an invention that is ready for patenting is first marketed commercially. In this case the acceptance of the purchase order prior to April 8, 1981, makes it clear that such an offer had been made, and there is no question that the sale was commercial rather than experimental in character. Second, the invention must be ready for patenting. That condition may be satisfied in at least two ways: by proof of reduction to practice before the critical date; or by proof that prior to the critical date the inventor had prepared drawings or other descriptions of the invention that were sufficiently specific to enable a person skilled in the art to practice the invention.14 In this case the second condition of the onsale bar is satisfied because the drawings Pfaff sent to the manufacturer before the critical date fully disclosed the invention. The evidence in this case thus fulfills the two essential conditions of the on-sale bar. As succinctly stated by Learned Hand: "[I]t is a condition upon an inventor's right to a patent that he shall not exploit his discovery competitively after it is ready for patenting; he must content himself with either secrecy, or legal monopoly." Metallizing Engineering Co. v. Kenyon Bearing & Auto Parts Co., 153 F. 2d 516, 520 (CA2 1946).

The judgment of the Court of Appeals finds support not only in the text of the statute but also in the basic policies underlying the statutory scheme, including § 102(b). When Pfaff accepted the purchase order for his new sockets prior to April 8, 1981, his invention was ready for patenting. The fact that the manufacturer was able to produce the socket using his detailed drawings and specifications demonstrates this fact. Furthermore, those sockets contained all the elements of the invention claimed in the `377 patent. Therefore, Pfaff's '377 patent is invalid because the invention had been on sale for offer to sell, including the stage of development of the invention and the nature of the invention, must be considered and weighed against the policies underlying section 102(b)' "); see also UMC Electronics Co. v. United States, 816 F. 2d 647, 656 (1987) (stating the on-sale bar "does not lend itself to formulation into a set of precise requirements"). As the Federal Circuit itself has noted, this test "has been criticized as unnecessarily vague." Seal-Flex, Inc. v. Athletic Track & Court Construction, 98 F.3d 1318, 1323, n.2 (1996). 14

The Solicitor General has argued that the rule governing on-sale bar should be phrased somewhat differently. In his opinion, "if the sale or offer in question embodies the invention for which a patent is later sought, a sale or offer to sell that is primarily for commercial purposes and that occurs more than one year before the application renders the invention unpatentable. Seal-Flex, Inc. v. Athletic Track and Court Constr., 98 F. 3d 1318, 1325 (Fed. Cir. 1996) (Bryson, J., concurring in part and concurring in the result)." It is true that evidence satisfying this test might be sufficient to prove that the invention was ready for patenting at the time of the sale if it is clear that no aspect of the invention was developed after the critical date. However, the possibility of additional development after the offer for sale in these circumstances counsels against adoption of the rule proposed by the Solicitor General.

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more than one year in this country before he filed his patent application. Accordingly, the judgment of the Court of Appeals is affirmed. It is so ordered.

Questions, Comments, Problems 1. Note that the thing Mr. Pfaff tried to sell was an embodiment of his invention, i.e., a real product or process. The on-sale bar does not, however, apply when the inventor merely offers his patent rights for sale, for example, by assigning the invention. See Moleculon Research Corp. v. CBS, Inc., 793 F.2d 1261, 1267 (Fed. Cir. 1986) (“[A]n assignment or sale of the rights in the invention and potential patent rights is not a sale of ‘the invention’ within the meaning of 102(b).”). 2. Although the Supreme Court in Pfaff ends its opinion by stating that Pfaff’s “patent” is invalid, the Court never addressed the validity of Pfaff’s patent claims 11 and 19, which the Federal Circuit had found not identical in scope to Pfaff’s offer for sale, and hence not anticipated. Instead, the Federal Circuit had struck down those claims as obvious under 35 U.S.C. § 103, in view of Pfaff’s offer for sale combined with other prior art. See 124 F.3d at 1436-39. Was the broad language used by the Supreme Court unintended, or was the Court implicitly agreeing with the Federal Circuit that if Pfaff’s offer was a statutory bar, then claims 11 and 19 would have been obvious based on a combination of that bar with other prior art? 3. Are the policies behind the public use bar and the on-sale bar identical? Compare Lough with Pfaff. Should the policies for both bars be identical, or can you think of any policies or interests that distinguish one bar from the other? 4. The Federal Circuit has had a number of chances since Pfaff issued to refine the Supreme Court’s broad pronouncement somewhat. A review of the following cases will provide the reader with a more complete understanding regarding the edges of the on-sale bar as it exists today: STX LLC v. Brine, Inc., 211 F.3d 588, 54 USPQ2d 1347 (Fed. Cir. 2000) (price quote for a lacrosse stick triggered the bar); Helifix Ltd. v. Blok-Lok, Ltd., 208 F.3d 1339, 54 USPQ2d 1299 (Fed. Cir. 2000) (invention was not “ready for patenting” where there had been no reduction to practice and a brochure disclosing the invention was not enabling); Vanmoor v. Wal-Mart Stores, Inc., 201 F.3d 1363, 53 USPQ2d 1377 (Fed. Cir. 2000) (an invention is “ready for patenting” if it is reduced to practice or if the inventor has documents that would enable the practice of the invention); Tec Air, Inc. v. Denso Mfg. Mach. Inc., 192 F.3d 1353, 52 USPQ2d 1294 (Fed. Cir. 1999) (the jury was permitted that a offer for sale relied upon by the defendant was not an offer for the patented invention, but was instead for a prior art product); Oney v. Ratliff, 182 F.3d 893, 51 USPQ2d 1697 (Fed. Cir. 1999) (question of whether a sale had occurred is one of fact to be decided by the jury); Brasseler U.S.A. I, L.P. v. Stryker Sales Corp., 182 F.3d 888, 51 USPQ2d 1470 (Fed. Cir. 1999) (after Pfaff, the court will not look at “all the circumstances”); Abbott Labs. v. Geneva Pharmaceuticals, Inc., 182 F.3d 1315, 51 USPQ2d 1307 (Fed. Cir. 1999) (there can be a sale even if the buyer does not know what it is buying); Scaltech, Inc. v. Retec/Tetra, L.L.C., 178 F.3d 1378, 51 USPQ2d 1055 (Fed. Cir. 1999) (the defendant provided no evidence that the claimed invention was offered for sale); Weatherchem Corp. v. J.L. Clark, Inc., 163 F.3d 1326, 49 USPQ2d 1001 (Fed. Cir. 1998) (an invention can be “ready for patenting” even if the inventor was still ironing out some wrinkles); C.R. Bard, Inc. v. M3 Sys., Inc., 157 F.3d 1340, 48 USPQ2d 1225 (Fed. Cir. 1998) (panel spliters three ways on the on-sale bar issue).

Printed Publication In this section, we turn to language that is common to subsections 102(a) and (b): “patented or described in a printed publication in this or a foreign country.” In subsection (a), prior patenting or publication before the invention date destroys novelty; in subsection (b) these same two events more than one year before the effective U.S. application filing date are patent-killing statutory bars, regardless of whether the invention was made before them. We first look at the far more common of the two—printed publication.

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Appeal from the District Court of the United States for the Eastern District of New York. [The patent covered an electric light fixture designed to look like a candle, with an electric bulb as the flame and an adjustable porcelain jacket as the candle.] **** The only prior art which it is necessary to describe is the printed catalogue of a German manufacturer found on file in the Patent Office at a date considerably later than the filing of the application. This was in French and intended only for the French trade; it was dated in 1908 and contained the price list of various Edison sockets with cuts of the articles for sale. On one page were several cuts of candle sockets and of the jackets to surround them. One of these, No. 712, which was described in the text as a candle socket with porcelain base adjustable in height from 100 to 130 millimeters, portrayed a socket support similar in all ways to the patented disclosure except for the particular details upon which the claims were granted. It disclosed a socket, with a single support in two parts, slidably connected, one leg to hold the socket, and the other to fit about the pipe terminal by means of a threaded collar or sleeve. In order to prove that this had been published before the date of the application, May 27, 1912, the defendants called one Schmidt, a member of an extinct German firm, Gogarten & Schmidt, which had issued the catalogue, who testified that it had been printed in the year of which it bears date, and had been at that time sent out to the customers of the firm either by its representatives or by mail. At first about 50 were issued, then about 100 and finally in all more than 1,000. The firm received orders and sold goods through its catalogues, and though he could remember no specific customers and no particular mailing, he was positive that this one had been so used. One Scharpe corroborated Schmidt. He had been employed by the firm during the year 1908 and made up customers' lists, to all of whom he sent out the catalogue of 1908, as well as a later one in 1910-11. He, too, could give no details. The catalogue of 1910-11 contained one of the 1908 candle sockets, but omitted that in question here and added two others. The District Judge held that the catalogue was not sufficiently proved to constitute a prior use, that the other prior art was irrelevant, and that the defendant infringed. **** Before MANTON, L. HAND, and AUGUSTUS N. HAND, Circuit Judges. L. HAND, Circuit Judge (after stating the facts above). We are content to follow the ruling in Imperial Glass Co. v. Heisey, 294 F. 267 (C.C.A. 6), that a catalogue distributed generally to a trade is a publication within Revised Statutes Sec. 4886, 35 USCA § 31 [“described in any printed publication in this or any foreign country before his invention or discovery thereof or more than two years prior to his application”]. . . . On principle we are entirely in accord, for the purpose of the statute is apparent, and we ought to effect it so far as its language will allow. While it is true that the phrase, 'printed publication,' presupposes enough currency to make the work part of the possession of the art, it demands no more. A single copy in a library, though more permanent, is far less fitted to inform the craft than a catalogue freely circulated, however ephemeral its existence; for the catalogue goes direct to those whose interests make them likely to observe and remember whatever it may contain that is new and useful. Whether the cut, No. 712, in Gogarten & Schmidt's 1908 catalogue, was a sufficient disclosure is another matter. If the claims be strictly limited, it certainly was not, because it did not show how the end of the upper leg was fastened to the stud—whether as the plaintiff does it, or as the defendant, or in some other way. But, if the claims be read as they must be to cover the supposed infringement, we do Chapter 3 – Novelty & Statutory Bars

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not see what can be thought missing. That it was an adjustable candle socket the text itself declares; how its adjustment was to be made the cut makes plain beyond chance of mistake. The socket at the top is plainly for a bulb and the screw thread at the bottom to fit upon the pipe terminal. The jacket was represented by figures 713 and 714, and the whole of this very simple invention was before the reader at a glance. We know of no rule that figures can never of themselves be an adequate anticipation of mechanical inventions, as of course they must be of designs, and we can see no reason for importing into the statute an arbitrary distinction, unrelated to its purposes, Keene v. New Idea Spreader Co., 231 F. 701, 708 (C.C.A. 6); Huebner v. Mathews, 253 F. 435, 444 (C.C.A. 6). Words have their equivocations quite as much as figures; the question always must be what the art necessarily gathered from what appeared. Whether the catalogue was in fact distributed generally, and when, are different questions. That it was printed in 1908 no one can reasonably doubt; it was a trade catalogue, meant to pass current for a season and to be superseded, as its successor of 1910 in this very case bears witness. To suppose that it bore an earlier date than that at which it first appeared contradicts all we know about merchandising; it might be post-dated like a motor car, but never the opposite. It is of course conceivable that, though printed, it was never distributed, or that the distribution was too limited to be a 'publication.' As to the last we can scarcely undertake to set a limit. Schmidt says that perhaps 1,000 went out. Far less would have served; the 50 which was his lower limit were quite enough. To be sure the fact of any distribution at all rests upon the uncorroborated testimony of him and Scharpe, because there was further documentary corroboration of neither, though each was explicit in his recollection, and each had had first hand knowledge. This would not be enough, if the catalogue itself were not produced, bearing its own evidence of existence since 1908, but no one can seriously suppose that such a document, printed in quantity, was intended to be kept secret; its whole purpose was to be spread broadcast as far as possible. It had been printed at some expense in French for French customers, and, unless some accident happened to prevent, it would in due course have gone upon its intended errand. To prove that no accident did happen, and that it did reach its destination we have, it is true, only oral, though entirely disinterested, testimony; but it is a mistake to assume that, even under the extraordinarily severe tests applied to the proof of anticipation, every step must be buttressed by documents. That some documents are necessary, perhaps, may be the rule; but, when the documents go so far as here, the ritual, if there is any, is satisfied, and the question is merely whether any doubt remains. We think that to entertain a scruple in a case so fortified is to catch at straws. ****

Questions, Comments, Problems 1. The Federal Circuit has noted that “public accessibility” is the touchstone in determining whether a reference is a “printed publication.” The court has held that even relatively hard to find documents may be sufficiently accessible to be printed publications under section 102. In In re Hall, 781 F.2d 897, 228 USPQ 453 (Fed. Cir. 1986), the court held that a single catalogued doctoral thesis can be sufficiently accessible to be a printed publication. In contrast, references in In re Cronyn, 890 F.2d 1158, 13 USPQ2d 1070 (Fed. Cir. 1989), three undergraduate theses, were not sufficiently accessible because they had not been either catalogued or indexed in a meaningful way before the applicant’s critical date. Finally, in In re Carlson, 983 F.2d 1032, 25 USPQ2d 1207 (Fed. Cir. 1992), a German Geschmacksmuster (which is a design registration obtained by an applicant from the German government after performing certain registration procedures), was found to be a printed publication. The Federal Circuit noted that, although Geschmacksmusters are only kept at regional government offices, certain particulars of the Geschmacksmusters are published in the German Bundesanzeiger, or Federal Gazette, so as to direct the public to potentially relevant designs and thus make the designs available to the public under section 102. In these cases, it was not necessary that a person of ordinary skill in the art had ever seen the references or that such a person likely would have been able to find the references. The test is merely that the reference be sufficiently accessible. Does it make sense to prevent widespread foreign use or knowledge from being prior art when a remote, hard-to-find literature reference can be prior art? Does a distinction between domestic and foreign activities continue to have any validity today? 2. Before the Federal Circuit was created, regional circuit courts also struggled with the issue of publication. In Philips Electronic & Pharmaceutical Industries Corp. v. Thermal & Electronics Industries, Inc., 450 F.2d 1164,

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171 U.S.P.Q. 641 (3d Cir. 1971), the Third Circuit considered whether a patent application on microfiche met the “printed” requirement of “printed publication”: Whether or not a microfilm qualifies as a "printed publication" is not a new legal issue. In Application of Tenney, 254 F.2d 619, 45 CCPA 894 (1958), the court found that the microfilm in question, also a German patent application, did not constitute a "printed publication." After a long treatment of the history of the "printed" publication requirement, Tenney found the essence of the requirement to be the "probability" of public knowledge—not its actuality—once it has been established that the item has been both printed and published. Without proof of something more, it held that the mere existence of a microfilm copy did not alone create any presumption of public knowledge so as to constitute it a "printed publication" within the contemplation of Section 102(b). It also attached significance to the fact that the single extant microfilm copy had been misindexed. The concurring opinions, however, give considerable illumination to the majority decision because they disclose that under certain circumstances a microfilm can be held to be a printed document within the statutory meaning. Judge Worley believed that other factors were entitled to consideration, including not only the physical process utilized in the production or reproduction, "but also availability, accessibility, dissemination and, perhaps in some cases, even intent." 254 F.2d at 627. Judge Rich's concurrence, written in a similar vein cautioned that "no rigid rule about microfilm should be deduced, however, from our decision." 254 F.2d at 629. Eight years later, the court in I. C. E. Corp. v. Armco Steel Corp., 250 F.Supp. 738 (S.D.N.Y.1966) was confronted with the similar question of whether or not a microfilm of a German patent application constituted a prior publication within the meaning of Section 102(a). After a careful analysis of Tenney and modern day document reproduction techniques, it concluded that under a motion for summary judgment it could not hold as a matter of law that a microfilm was not a "printed publication." It noted that the traditional methods of printing were not the only acceptable methods for the purposes of Section 102, particularly in the light of new developments. The paramount consideration, in the court's view, was whether or not the microfilmed material was "sufficiently accessible to the public so as to constitute a 'publication' within the meaning of the statute." 250 F.Supp. at 742. It seems to us that the rationale of I. C. E. Corp. v. Armco Steel is sound. It finds support in modern copymaking techniques and the widespread commercial, industrial and educational use of microfilm, as well as its use in our libraries and data storage banks. Since the decision in Tenney, there have been revolutionary developments in techniques for reproduction, printing and dissemination of documents and data. The traditional process of "printing" is no longer the only process synonymous with "publication." The emphasis, therefore, should be public dissemination of the document, and its availability and accessibility to persons skilled in the subject matter or art. The field is rapidly undergoing change and improvement. To restrict our interpretation of Section 102(a)'s "printed" publication requirement solely to the traditional printing press would ignore the realities of the scientific and technological period in which we live and the underlying rationale of Section 102. We hold, therefore, that the term "printed" as used in Section 102 can include documents duplicated by modern methods and techniques, including the now well established process of microfilming. Whether or not an individual microfilm is a "printed" publication within the meaning of the statute is a question of fact which ought to be determined by the application of criteria consonant with modern day methods of printing, duplicating and disseminating documents. 3 In In re LeGrice, 301 F.2d 929, 133 USPQ 365 (CCPA 1962), the Court of Customs and Patent Appeals was faced with two plant patent applications for roses. Section 102(b) applies equally to plant patents as it does to utility patents. See 35 U.S.C. § 161. The applied prior art included catalogues that included descriptions of the traits of the roses and color pictures sufficient to indicate that the rose on which the patent was sought was identical to the roses in the catalogues. The court held that the catalogues were not anticipatory references: We think it is sound law, consistent with the public policy underlying our patent law, that before any publication can amount to a statutory bar to the grant of a patent, its disclosure must be such that a skilled artisan could take its teachings in combination with his own knowledge of the particular art and be in possession of the invention. **** While man can and does assist nature by the cross-pollination of selected parent plants, the actual creation of the new plant, because of the almost infinite number of possible combinations between the genes and chromosomes, is not presently subject to a controlled reproduction by act of man. While those skilled in this art now understand the mechanics of plant reproduction and the general principles

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of plant heredity, they are not presently able to control the factors which govern the combination of genes and chromosomes required to produce a new plant having certain predetermined desired properties. The plant breeder must time and again recall the lines of Tennyson’s “Flower in the Crannied Wall,” after he has completed cross-pollination of the parent stock and awaits the new offspring: “Flower in the crannied wall, I pluck you out of the crannies, I hold you here, root and all, in my hands, Little flower—but if I could understand What you are, root and all, and all in all, I should know what God and Man is.” It is not until the rose breeder has germinated the sexually produced rose seeds from the selected parents and raised plants therefrom to blooming size that he can make the final selections of the individual plant or plants which are to be multiplied by asexual reproduction. The rosa floribunda plants here in issue thus appear to be something more than Gertrude Stein may have observed when she wrote in “Sacred Emily” that “A rose is a rose is a rose is a rose.” **** The board relies heavily on Cohn v. United States Corset Co., . . . which . . . is relied upon as support for the assertion that "the overwhelming weight of authority supports the proposition that a clear naked description in a prior publication is sufficient under the law to bar a subsequent inventor from obtaining a patent on the identical thing.” That the Cohn case did not so hold seems clear to us. . . . The court throughout its opinion in the Cohn case directly referred to those skilled in the art, and the knowledge which they possessed. We think it is because of this knowledge, and only because of this knowledge, that the court said “the important inquiry, therefore, is, whether the prior publication described the article.” **** Implicit in all of these cases is the concept of a certain degree of knowledge possessed by one skilled in the arts involved concerning the disclosure of the prior publication and the concept which was sought to be patented, to the end that this knowledge taken with the disclosure of the printed publications, was sufficient to place the disclosed invention in the possession of the public. **** The descriptions of the new roses in the instant publications are incapable of placing these roses in the public domain by their descriptions when interpreted in the light of the knowledge now possessed by plant breeders. The roses disclosed in the appealed applications are not, therefore, “described in a printed publication” within the meaning of 35 U.S.C. § 102(b). What if the publications had given the address of a grower who possessed the flowers and was willing to sell them to any interested party? Would that fact have supported an “on sale” rejection of the claims? 4. What exactly must be within the “four corners” of the reference? As to how rigid the “four corners” rule is, In re LeGrice seems to leave the door a bit ajar with its statement that a publication can amount to a statutory bar if the skilled artisan can ‘combine’ the publication’s teachings “with his own knowledge of the particular art” to be in possession of the invention. Does this personal knowledge element render the “four corners” rule meaningless? Not in practice. The CCPA in In re Samour, 571 F.2d 559, 197 USPQ 1 (CCPA 1978), later drew the line this way—the prior art reference has to disclose or inherently contain each element of the claimed invention, but how to make the invention could be supplied by external knowledge. In Samour, the claim was to a new chemical called DMMP, useful as an anticonvulsant agent. The prior art Doran publication disclosed DMMP but contained no process for making it. The court nevertheless held that the reference was anticipatory, reasoning: In this appeal, additional references (Henze, Fujinaga, and Henze et al.) are relied on solely as evidence that, more than one year prior to appellant’s filing date, a method of preparing the claimed subject matter (DMMP) would have been known by, or would have been obvious to, one of ordinary skill in the art. Therefore, the key issue before us is whether the PTO, in making a rejection under 35 U.S.C.§ 102(b) on a single prior art reference that discloses every material element of the claimed subject matter, can properly rely on additional references for such purpose. We hold in the affirmative. To do otherwise would sanction the granting of patents for inventions which do not meet the basic requirement of novelty.

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Id. 562-63. Do you find this result in harmony with the result in Dewey & Almy, supra? Must the prior art reference show utility? If the claim is directed to a chemical compund per se and the reference discloses the identical compound, the answer is no, according to In re Samour, Id. 563-64: Appellant’s further argument that “some practical utility” for DMMP must be disclosed in the prior art before Doran can serve as statutory bar… is also not persuasive. As stated by this court in In re Hafner, 410 F.2d 1403, 1405, 56 CCPA 1424, 1426, 161 USPQ 783, 785 (1969) – a disclosure lacking a teaching of how to use a fully disclosed compound for a specific, substantial utility or of how to use for such purpose a compound produced by a fully disclosed process is, under the present state of the law, entirely adequate to anticipate a claim to either the product or the process and, at the same time, entirely inadequate to support the allowance of such a claim. [Footnotes omitted.]

Patented Now for the less common of the two events present in both subsections (a) and (b): “. . . patented . . .”

Bendix Corp. v. Balax, Inc. 421 F.2d 809, 164 USPQ 485 (7th Cir. 1970) Before CASTLE, Chief Judge, HASTINGS, Senior Circuit Judge, and FAIRCHILD, Circuit Judge. HASTINGS, Senior Circuit Judge. Plaintiff's predecessor brought this action charging defendants with infringement of three of its patents and with appropriation of its trade secrets. Defendants counterclaimed charging plantiff with violations of the antitrust laws. **** The two remaining patents involved in this litigation both relate to a device known as a fluteless swaging tap. Patent Re. 24,572, hereinafter referred to as the reissue patent, covers the tool itself. Patent 3,050,755, hereinafter referred to as the '755 or method patent, covers the method performed by the tool. A tap is a tool used to form threads on the cylindrical inner surface of a hole. A swaging tap forms threads by deforming the metal and displacing it into the form of the desired thread. A swaging tap, which forms no chips, is to be distinguished from a cutting tap which forms threads by cutting away the metal with cutting teeth. The swaging method is said to be more economical and easier to perform than the cutting method. Swaging taps have a longer life than cutting taps. They produce no metal chips. The costly and time consuming inspection and cleaning of the work after the job is completed is thus eliminated. **** Defendants urge several reasons for the invalidity of the reissue patent. Their first contention is that it is anticipated by the 1939 German Gebrauchsmuster Patent 1,455,626 (GM). Section 102(b) of Title 35, U.S.C.A. provides: 'A person shall be entitled to a patent unless-- * * * (b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States * * *. A GM is clearly a patent within the meaning of this section, but it is not a printed publication. . . .

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On this basis, all parties agree that only that which is 'patented' by a GM may be considered as prior art under Section 102(b), supra. Subject matter which is ancillary to, but not a part of, the patented subject matter may not be considered. The district court so held. The disagreement between the parties concerns the method of determining what is 'patented' by the Gebrauchsmuster in question. The trial court held that a GM 'patents' only that which is disclosed by the bare words of its claims. It relied on language in Reeves, supra, in holding that it is never permissible to look to the specifications of a GM in construing its claims. The Reeves court had said: '* * * for anticipation purposes under Section 102 a GM * * * is a reference only for what is patented, i.e., for what it claims and not, for what is disclosed in its specifications.' 282 F.Supp. at 136. Defendants maintain that the claims of a GM are to be construed in light of its specifications and seek to distinguish Reeves. They note that in Reeves a GM was cited as a reference against a process patent and that a GM is by definition a patent only on an article and never on a process. From this they conclude the Reeves court ignored the specifications only because they referred to a process. However, the Reeves court clearly recognized that an article patent may in some cases anticipate a process. Such would be the case where 'a process in one patent can produce only one article and that article is definitely covered by what is claimed in another patent (e.g., in an earlier GM) * * *. [B]ut this alone may not be sufficient to treat the article patent as an anticipation of the process patent, if many processes are described in the article patent while only one specific process is described in the process patent.' 282 F. Supp. at 136-137. The patent in suit in Reeves claimed a method of laminating a sheet of plastic foam to a sheet of fabric by the application of heat from a gas flame. The GM cited against it claimed a fabric lined foam material with the fabric bonded directly to the foam. The specifications of the GM described the process by which the article could be made indicating the application of heat from heated rollers, hot gas, infrared light, or high frequency current. When the language of Reeves is read in light of these facts, it is clear to us that it calls for neither an absolute rule that GM specifications may never be resorted to, nor an absolute rule that they may always be resorted to in interpreting the claims. Rather, it is consistent with our own judgment as to the correct rule. We conclude that the specifications of a GM may be resorted to for the purpose of clarifying the meaning of the language used in the claims, but may not be resorted to for the purpose of adding completely new material to that which is disclosed by the claims. For example, in Reeves the GM claims disclosed an article which could have been produced by several processes. The court had held that in such a case the article patent could not anticipate any one of those processes when cited against a patent specifically claiming one of them. Therefore, resort to the specifications there to learn in what manner the claimed article was actually produced would have added wholly new matter to the claims. Without the specifications, the Reeves claims could anticipate no process, but with them, the claims would anticipate a process as well as an article. Reeves was thus a particularly clear case of specifications adding new matter to what was 'patented' by the claims, rather than simply giving meaning to the words of the claims for the purpose of determining what was 'patented' by them. Each case will, of course, turn on its own facts. In each case the question will be 'What is 'patented'?' The specifications of the GM may be resorted to if necessary to clarify the meaning of the words of the claim—to determine what it is that the claims 'patent' but not to add to what they patent. ****

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In re Bo Thuresson Af Ekenstam 256 F.2d 321, 118 USPQ 349 (CCPA 1958) WORLEY, Judge. **** The rejection is based on a single reference, namely the patent to Du Pont (Belgium) 494,439, having a “brevet octroye” date of March 31, 1950, and a “brevet public” date of July 1, 1950. **** The sole issue is whether the effective date of the reference is March 31, 1950, or July 1, 1950. . . . **** [O]n the “brevet octroye” date (March 31, 1950, in the instant case), which is normally less than a month after the application is filed, there is issued a decree which does not expressly grant specific rights but merely certifies that the application complies with the formal requirements. Nothing is sent to the appllicant at that time, but he may ask for and receive as many official copies of the decree as he desires at any time after the “brevet octroye” date. If he does not ask for such copies, a copy is mailed to him about six months after the date of the decree. The term of the patent begins on the day the application is filed but, as a practical matter, no court would grant relief unless it were presented with a copy of the decree, thus no suit could be effectively brought prior to the “brevet octroye” date. The application is deliberately kept secret from the public until the “brevet publie” date (July 1, 1950, in the instant case), which is approximately three months after the “brevet octroye” date. During that period the applicant may, if he desires, withdraw his application, in which case the decree is cancelled and the application is not made public. . . . The applicable Belgian law provides that the decree above referred to “shall constitute the patent” and the expression “brevet octroye,” which appears on the printed copies of the specification, may properly be translated “patent granted.” . . . It is extremely difficult for us to believe that Congress intended anything which might happen to be called a “patent” in foreign countries should ipso facto be a bar to applicants in this country regardless of how remote it might be from what is generally understood here as being a patent. . . . The word “patent” is derived from the Latin “patere,” meaning “to be open,” and the significance of “open” is still commonly attached to that word. . . . It is also noted that in each instance in which prior patenting is made a statutory bar by Title 35 U.S.C., it is coupled with publication, by the use of the expression “patented or described in a printed publication” (35 U.S.C. § 102(a) and (b) and 119), which would seem to indicate a connection between patenting and availability to the public. . . . There seems to be no logical reason why the granting of a secret patent abroad should be a bar to patenting in this country. Such a foreign patent is of no value to persons in this country unless and until it is made available to the public. It is to be noted that even a widespread prior knowledge of an invention abroad does not alone bar the grant of a patent in this country, and it is not reasonable to suppose that Congress intended to give greater effect to secret patenting abroad than to public knowledge there. **** It is also argued on behalf of the Commissioner that if patenting within the meaning of the statute is limited to patents which are open to the public, then a patent is merely a special form of printed publication, and the expression “patented or described in a printed publication” is redundant. That argument, however, overlooks the fact that there is nothing in the nature of a patent that requires it to Chapter 3 – Novelty & Statutory Bars

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be printed. In fact, it is agreed by appellant and the Patent Office that the Du Pont patent here was a patent on its “brevet publie” date of July 1, 1950, even though it was not printed at that time and was only open to inspection in typewritten form, a form which has been held not to be a printed publication. It is thus quite possible for a document to be a patent without also being a printed publication. For the reasons given, we are of the opinion, both on principle and authority, that the word “patented” as used in 35 U.S.C. § 102(a) and (b) is limited to patents which are available to the public.

Questions, Comment, Problems 1. Bendix and In re Ekenstam are interesting opinions, but with the advance of the technology for disseminating technical information, and given the prevalent liberal view of “printed publication,” it would seem that there will be fewer and fewer situations in which foreign patents will not also be “printed publications.” Since printed publications are prior art for all that they fairly describe, resort to the narrower scope of “patented” in subsections (a) and (b) will likely be even rarer than it already is.

“known or used by others. . .” We come now to the final piece of the section 102(a) and (b) puzzle: subsections (a)’s requirement that the invention, to be novel, not have been “known or used by others in this country . . . before the invention thereof by the applicant for patent.” Once again, as you read the following opinion, think about whether the Court is reading words into the statute to effectuate the policies behind the legislation and to carry out Constitutional objectives.

Gayler v. Wilder 51 U.S. 477 (1850) [The patent, invented by one Daniel Fitzgerald, covered a fire-proof chest, wherein one chest was builit inside another chest. The improvement involved filling the space between the chests with plaster of Paris or gypsum.] Mr. Chief Justice TANEY delivered the opinion of the court. **** The remaining question is upon the validity of the patent on which the suit was brought. It appears that James Conner, who carried on the business of a stereotype founder in the city of New York, made a safe for his own use between the years 1829 and 1832, for the protection of his papers against fire; and continued to use it until 1838, when it passed into other hands. It was kept in his counting-room and known to the persons engaged in the foundery; and after it passed out of his hands, he used others of a different construction. It does not appear what became of this safe afterwards. And there is nothing in the testimony from which it can be inferred that its mode of construction was known to the person into whose possession it fell, or that any value was attached to it as a place of security for papers against fire; or that it was ever used for that purpose. Upon these facts the court instructed the jury, 'that if Connor had not made his discovery public, but had used it simply for his own private purpose, and it had been finally forgotten or abandoned, such a discovery and use would be no obstacle to the taking out of a patent by Fitzgerald or those claiming under him, if he be an original, though not the first, inventor or discoverer.' Chapter 3 – Novelty & Statutory Bars

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The instruction assumes that the jury might find from the evidence that Conner's safe was substantially the same with that of Fitzgerald, and also prior in time. And if the fact was so, the question then was whether the patentee was 'the original and first inventor or discoverer,' within the meaning of the act of Congress. The act of 1836, ch. 357, § 6, authorizes a patent where the party has discovered or invented a new and useful improvement, 'not known or used by others before his discovery or invention.' And the 15th section provides that, if it appears on the trial of an action brought for the infringement of a patent that the patentee 'was not the original and first inventor or discoverer of the thing patented,' the verdict shall be for the defendant. Upon a literal construction of these particular words, the patentee in this case certainly was not the original and first inventor or discoverer, if the Conner safe was the same with his, and preceded his discovery. But we do not think that this construction would carry into effect the intention of the legislature. It is not by detached words and phrases that a statute ought to be expounded. The whole act must be taken together, and a fair interpretation given to it, neither extending nor restricting it beyond the legitimate import of its language, and its obvious policy and object. And in the 15th section, after making the provision above mentioned, there is a further provision, that, if it shall appear that the patentee at the time of his application for the patent believed himself to be the first inventor, the patent shall not be void on account of the invention or discovery having been known or used in any foreign country, it not appearing that it had been before patented or described in any printed publication. In the case thus provided for, the party who invents is not strictly speaking the first and original inventor. The law assumes that the improvement may have been known and used before his discovery. Yet his patent is valid if he discovered it by the efforts of his own genius, and believed himself to be the original inventor. The clause in question qualifies the words before used, and shows that by knowledge and use the legislature meant knowledge and use existing in a manner accessible to the public. If the foreign invention had been printed or patented, it was already given to the world and open to the people of this country, as well as of others, upon reasonable inquiry. They would therefore derive no advantage from the invention here. It would confer no benefit upon the community, and the inventor therefore is not considered to be entitled to the reward. But if the foreign discovery is not patented, nor described in any printed publication, it might be known and used in remote places for ages, and the people of this country be unable to profit by it. The means of obtaining knowledge would not be within their reach; and, as far as their interest is concerned, it would be the same thing as if the improvement had never been discovered. It is the inventor here that brings it to them, and places it in their possession. And as he does this by the effort of his own genius, the law regards him as the first and original inventor, and protects his patent, although the improvement had in fact been invented before, and used by others. So, too, as to the lost arts. It is well known that centuries ago discoveries were made in certain arts the fruits of which have come down to us, but the means by which the work was accomplished are at this day unknown. The knowledge has been lost for ages. Yet it would hardly be doubted, if any one now discovered an art thus lost, and it was a useful improvement, that, upon a fair construction of the act of Congress, he would be entitled to a patent. Yet he would not literally be the first and original inventor. But he would be the first to confer on the public the benefit of the invention. He would discover what is unknown, and communicate knowledge which the public had not the means of obtaining without his invention. Upon the same principle and upon the same rule of construction, we think that Fitzgerald must be regarded as the first and original inventor of the safe in question. The case as to this point admits, that, although Conner's safe had been kept and used for years, yet no test had been applied to it, and its capacity for resisting heat was not known; there was no evidence to show that any particular value was Chapter 3 – Novelty & Statutory Bars

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attached to it after it passed from his possession, or that it was ever afterwards used as a place of security for papers; and it appeared that he himself did not attempt to make another like the one he is supposed to have invented, but used a different one. And upon this state of the evidence the court put it to the jury to say, whether this safe had been finally forgotten or abandoned before Fitzgerald's invention, and whether he was the original inventor of the safe for which he obtained the patent; directing them, if they found these two facts, that their verdict must be for the plaintiff. We think there is no error in this instruction. For if the Conner safe had passed away from the memory of Conner himself, and of those who had seen it, and the safe itself had disappeared, the knowledge of the improvement was as completely lost as if it had never been discovered. The public could derive no benefit from it until it was discovered by another inventor. And if Fitzgerald made his discovery by his own efforts, without any knowledge of Conner's, he invented an improvement that was then new, and at that time unknown; and it was not the less new and unknown because Conner's safe was recalled to his memory by the success of Fitzgerald's. We do not understand the Circuit Court to have said that the omission of Conner to try the value of his safe by proper tests would deprive it of its priority; nor his omission to bring it into public use. He might have omitted both, and also abandoned its use, and been ignorant of the extent of its value; yet, if it was the same with Fitzgerald's, the latter would not upon such grounds be entitled to a patent, provided Conner's safe and its mode of construction were still in the memory of Conner before they were recalled by Fitzgerald's patent. **** Upon the whole, therefore, we think there is no error in the opinion of the Circuit Court, and the judgment is therefore affirmed.

Mr. Justice McLEAN. I dissent from the opinion of a majority of the judges in this case. The point of difference, I think, is essential to the maintenance of the rights of the public and also of inventors. **** If there be anything clear in the patent law, it is that the original inventor means the first inventor . . . . This instruction [by the district court] presupposes that the safes are the same in principle. Now, if the invention was patented abroad, or was described in a foreign publication, both of which were unknown to the inventor in this country, still his patent is void. So it is void, if such invention has been known to any person in this country. The instruction says, if Conner's invention 'had been forgotten or abandoned,' it was no obstacle to Fitzgerald's right. Can a thing be forgotten or abandoned that was never known? If known before Fitzgerald's invention, it is fatal to it. By whom must it have been forgotten? By the inventor, or the public, or both? And how must it have been abandoned? When an invention is abandoned, it is said to be given up to the public, and this is the sense in which the term abandonment is used in the patent law. Such an abandonment would be fatal to the right of Fitzgerald. Conner's safe, as appears from the bill of exceptions, was used in his counting-house, being accessible to every one, some six or eight years. In 1838 it passed into other hands; but into whose hands it does not appear. In 1843, Fitzgerald obtained his patent. How long before that he made experiments to test the invention is not proved. At most, the time must have been less than five years. This is a short period on which to found a presumption of forgetfulness. The law authorizes no such presumption. It can never become the law. It is not founded on probability or reason. The question is, Was Conner's invention prior to that of Fitzgerald? That it was of older date by some ten or twelve years is proved. And the instruction, it must be observed, was founded on the supposition that both inventions were similar.

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The instruction seems to attach great importance to the fact that Conner's safe was used only for his private purpose. This is of no importance. The invention is the question, and not the manner in which the inventor used it. The safe was constructed at the foundery, and must have been known to the hands there employed. How can it be ascertained that Fitzgerald was not informed by some of these hands of the structure of Conner's safe, or by some one of the many hundreds who had seen it in his counting-house in the city of New York? It was to guard against this, which is rarely if ever susceptible of proof, that the act is express,--if the thing patented was known before, the patent is void. If the fact of this knowledge in any one be established, it is immaterial whether the patentee may have known it or not, it avoids his patent. The law, on this subject, is not founded upon any supposed notions of equity. A foreign patent for the same thing, or a description of the thing in a foreign publication, is as effectual to avoid the patent as if the patentee had seen the prior invention. Notice to him is not important. The law is adopted on a settled public policy, which, while it is just to inventors, protects the rights of the public. Any other basis would open the door for endless frauds, by pretended inventors, without the probability of detection. And especially does this new doctrine of forgetfulness, or abandonment, used in any other sense than as recognized in the patent law, leaving such matters to a jury, overturn what I consider to be the settled law on this subject. Of the same character is the fact, that the invention was used for private purposes. A thing may be used in that way, and at the same time be public, as was the case with the Conner safe, and yet the jury are necessarily misled by such an instruction.

Mr. Justice DANIEL, dissenting. Differing from the majority in the decision just pronounced, I proceed to state the grounds on which my dissent from that decision is founded. **** In the next place, it is said by the learned judge, that, if Conner had abandoned this improvement which the charge admits him to have invented, this would justify a patent to another who had not known of the improvement, although a subsequent inventor. I have always understood it to be indisputable law, that wherever an inventor abandons or surrenders an invention or improvement which he has certainly made, and neither claims and exclusive right in himself nor transfers it to another, the invention or improvement is given to the public; but by the charge in this case, such an abandonment transfers an exclusive right to one who, by the case supposed, is admitted not to be the first inventor. So, too, with respect to the hypothesis of the learned judge that the invention had, or might have, been forgotten. To this the same objections of vagueness and uncertainty, and the graver objection of injustice to the real inventor or to the public, are applicable. By whom and for what interval of time must this improvement have been forgotten, in order to transfer it from the originator thereof? For a term of years? And if so, for how long a term? But suppose he forgets it for his lifetime, shall his executor or his posterity, upon the exhibition of indisputable proofs of the invention, yea, the very machine itself, perfect in all its parts and in its operation, be cut off? This surely cannot be; but, at any rate, the jury should have been furnished with some rule or measure of obliviousness, if this was to be made the substantive cause of deprivation as to the original inventor, or the foundation of right and of exclusive right in one confessedly not the first inventor. An attempt has been made to compare the doctrine propounded by the court to what it might be thought is the law as applicable to the discovery, or rather recovery, of the processes employed in what have been called the lost arts. This illustration is in itself somewhat equivocal, and by no means satisfactory; for if that process could certainly be shown to be the same with one claimed by the modern inventor, his discovery could scarcely have the merit of originality, or be the foundation of exclusive right. But, in truth, the illustration attempted to be drawn from a revival of a lost art is not apposite to the present case. The term lost art is applicable peculiarly to certain monuments of antiquity still remaining in the world, the process of whose accomplishment has been lost for centuries, has been irretrievably swept from the earth, with every vestige of the archives or records of the nations with whom those arts existed, and the origin or even the identity of which process Chapter 3 – Novelty & Statutory Bars

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none can certainly establish. And if a means of producing the effect we see and have amongst us be discovered, and none can either by history or tradition refer to a similar or to the identical process, the inventor of that means may so far claim the merit of originality, though the work itself may have been produced possibly by the same means. But not one principle drawn from such a state of things can be applied to a recent proceeding, which counts from its origin scarcely a period of fifteen years. In fine, this ruling of the learned judge is regarded as being at war not less with the policy and objects than it is with the express language of all the legislation by Congress upon the subject of patent rights, which legislation has uniformly constituted priority of invention to be the foundation and the test of all such rights. **** Every law, on the contrary, has emphatically demanded originality and priority as indispensable prerequisites to patent privileges, and every aspirant to such privileges is expressly required to swear to these pre-requisites, as well as to establish them. These tests ordained by the laws are not only founded upon the true reason for the privileges conferred, but they are simple and comprehensible; whereas the innovations permitted by the ruling of the learned judge not only conflict with the true reason and foundation of patent privileges, but tend to an uncertainty and confusion which cannot but invite litigation and mischief. I think that the judgment of the Circuit Court should be reversed, and the cause remanded for a venire facias de novo. Mr. Justice GRIER also dissented.

Questions, Comments, Problems 1. Again, the Court decides that section 102 must be read beyond its bare language. First, the knowledge or use must have been by someone other than the inventor. In addition, although others may have “known or used” the invention, that knowledge or use will not be an anticipation unless the prior knowledge or use was public. Where the prior inventor does not bring that invention to the public, the inventor did nothing for the public, and is, therefore, not rewarded by the patent law. Rather, the later inventor, who first publicized her invention, wins the patent. For a use to be public, must the earlier inventor have taken steps to publicize the invention, or need she merely not do anything to keep the invention secret? 2. Note also that section 102(a) only applies to knowledge or use “in this country.” What do you suppose is the reason for this? Although there is little legislative history to enlighten us, the Court in Gayler took a stab at identifying the policy rationale for the distinction. Does the Court’s rationale make sense today? What if the knowledge in this country is of an invention made in a foreign country? That was the issue in Westinghouse Machine Co. v. General Electric Co., 207 F. 75 (2d Cir. 1913). The court there held that such knowledge did not count under the identical predecessor to subsection (a), Revised Statutes § 4886, because it had to be read together with § 4923, which stated: Whenever it appears that a patentee, at the time of making his application for the patent, believed himself to be the original and first inventor or discoverer of the thing patented, the same shall not be held to be void on account of the invention or discovery, or any part thereof, having been known or used in a foreign country, before his invention or discovery thereof, if it had not been patented or described in a printed publication. The court added: “To that extent section 4923 qualifies the language of section 4886, which without such a qualification might well lead to a different result.” Congress in 1952 repealed a later version of § 4923, 35 U.S.C. § 72, and it appears that the result in Westinghouse would accordingly be different today. Does treating U.S. knowledge of a foreign invention as prior art serve the policies behind subsection (a)? 3. Gayler was decided at a time when third-party public use, not connected with the inventor, was not a statutory bar. When the statute was later amended to include independent third-party public use as a bar, do you think the result in Gayler would have changed (presumably Conner’s activity began well over two years before the patent’s filing date)? Should the degree of public accessibility for ‘knowledge and use by others’ under subsection (a) be greater than that for independent third-party “public use” under subsection (b)? 4. Must ‘knowledge by others’ be of a reduction to practice? Consider the following, from In re Borst, 345 F.2d 851, 145 USPQ 554 (CCPA 1965):

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In the case of In re Schlittler, 234 F.2d 882, 43 CCPA 986, this court was presented with the following situation: A manuscript containing an anticpatory disclosure of the appellants’ claimed invention had been submitted to The Journal of the American Chemical Society. . . . [T]he manuscript bore a notation that it has been received by the publisher on a date prior to the effective filing date of the appellants’ application. . . . [T]his court rejected the contention of the Patent Office, and concluded that such a document was not proper evidence of prior knowledge. In reversing, the court stated: “In our opinion, one of the essential elements of the word ‘known’ as used in 35 U.S.C. § 102(a) is knowledge of an invention which has been completed by reduction to practice, actual or constructive, and is not satisfied by disclosure of a conception only.” **** The knowledge contemplated by section 102(a) must be accessible to the public. . . . In the instant case, Samsel [an unpublished memorandum from the Atomic Energy Commission] was clearly not publicly available during the period it was under secrecy classification by the Atomic Energy Commission. [NB: a special AEC statute changed the result here] **** The remaining consideration regarding the status of Samsel as evidence of prior knowledge directly calls into question the correctness of the unequivocal holding in Schlittler that the knowledge must be of a reduction to practice, either actual or constructive. After much deliberation, we have concluded that such a requirement is illogical and anomalous, and to the extent Schlittler is inconsistent with the decision in this case, it is hereby expressly overruled. The mere fact that a disclosure is contained in a patent or application and thus “constructively” reduced to practice, or that it is found in a printed publication, does not make the disclosure itself any more meaningful to those skilled in the art (and thus, ultimately, to the public). Rather, the criterion should be whether the disclosure is sufficient to enable one skilled in the art to reduce the disclosed invention to practice. In other words, the disclosure must be such as will give possession of the invention to the person of ordinary skill. Even the act of publication or the fiction of constructive reduction to practice will not suffice if the disclosure does not meet this standard. Where, as is true of Samsel, the disclosure constituting evidence of prior knowledge contains, in the words of the Board of Appeals, “a description of the invention fully commensurate with the present patent application,” we hold that the disclosure need not be of an invention reduced to practice, either actually or constructively. . . .

102 (c) Subsection (c) is not a “prior art” provision. In other words, it is not concerned with events that occurred before the time of invention or more than a year before filing the patent application. Instead, it simply provides that a person cannot receive a patent if “he has abandoned the invention.” This provision does not mean that the person must have quit working on an invention and left it behind. Rather, a person abandons an invention under the subsection when he surrenders it to the public. We will avoid any debate over human nature and inherent generosity, but you have probably concluded (correctly) that this subsection does not often come into play. Nevertheless, the Supreme Court has had an opportunity to speak to the issue.

Agawam Woolen Co. v. Jordan 74 U.S. 583 (1868) **** Second defence, as stated in argument, is, that the invention, at the time the application for the original patent was made, had been on sale and in public use, with the consent and allowance of the applicant, Chapter 3 – Novelty & Statutory Bars

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for more than two years, and that the applicant abandoned the same to the public. Abandonment, as set up in the concluding paragraph of the proposition, is a distinct defence from that set up in the preceding part of the same proposition, and must be separately considered. Sale and public use, for more than two years prior to the application for the patent, are not alleged in the answer. What the respondents do allege is, that the invention, at the time the application for a patent was filed, and for a long time before, had been on sale and in public use, which, without more, is not a good defence against the charge of infringement. On the contrary, the correct rule is that no patent shall be held to be invalid on account of such sale and public use, except on proof that the invention was on sale and in public use more than two years before the application therefor was filed in the Patent Office. [5 Stat at Large, 354; McClurg v. Kingsland, 1 Howard, 209; Stimpson v. Railroad, 4 Id. 380]. Evidence to show that the invention of the original patentee, as finally perfected, was on sale and in public use more than two years before he applied for a patent is entirely wanting, and if such evidence was offered, it could not be admitted under the pleadings, as no such defence is set up in the answer. [Foster v. Goddard, 1 Black, 518]. Undoubtedly an inventor may abandon his invention, and surrender or dedicate it to the public; but mere forbearance to apply for a patent during the progress of experiments, and until the party has perfected his invention and tested its value by actual practice, affords no just grounds for any such presumption. [Kendall et al. v. Winsor, 21 Howard, 322; Pennock et al. v. Dialogue, 2 Peters, 1]. Application for a patent in this case was probably filed in the Patent Office before the middle of November, 1826, and the proofs are full and satisfactory to the court that the inventor, up to that time, was constantly engaged in perfecting his improvements, and in making the necessary preparations to apply for a patent.

Kendall v. Winsor 62 U.S. 322 (1858) Mr. Justice DANIEL delivered the opinion of the court. **** Upon the trial in the Circuit Court, in support of [the defense of invalidity] this defence, evidence was introduced tending to show that the plaintiff constructed a machine in substantial conformity with his specification as early as 1846, and that in 1849 he had several such machines in operation, on which he made harness to supply all such orders as he could obtain; that he continued to run these machines until he obtained his letters patent; that he repeatedly declared to different persons that the machine was so complicated that he preferred not to take a patent, but to rely on the difficulty of imitating the machine, and the secrecy in which he kept it. And the defendants also gave evidence tending to prove that the first of their machines was, completed in the autumn of 1853, and the residue in the autumn of 1854; and that, in the course of that fall, the plaintiff had knowledge that the defendants had built, or were building, one or more machines like his invention, and did not interpose to prevent them. The plaintiff gave evidence tending to prove that the first machine built by him was never completed so as to operate; that his second machine was only partially successful, and improvements were made upon it; that in 1849 he began four others, and completed them in that year, and made harness on them, which he sold when he could get orders; that they were subject to some practical difficulties, particularly as it respected the method of marking the harness, and Chapter 3 – Novelty & Statutory Bars

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the liability of the bobbin to get out of the clutch; that he was employed in devising means to remedy these defects, and did remedy them; that he also endeavored to simplify the machine by using only one ram-shaft; that he constantly intended to take letters patent when he should have perfected the machine; that he applied to Mr. Keller for this purpose in February, 1853, but the model and specifications were not sent to Washington till November, 1854; that he kept the machines from the view of the public, allowed none of the hands employed in the mill to introduce persons to view them, and that the hands pledged themselves not to divulge the invention; that among the hands employed by the plaintiff was one Kendall Aldridge, who left the plaintiff's employment in the autumn of 1852, and entered into an arrangement with the defendants to copy the plaintiff's machine for them, and did so; and that it was by Aldridge, and under his superintendence, and by means of the knowledge which he had gained while in the plaintiff's employment, under a pledge of secrecy, that the defendant's machines were built and put in operation; and that one of the defendants had procured drawings of the plaintiff's machine, and has taken out letters patent for it in England. [The district court refused to instruct the jury that an inventor must apply for a patent as soon as his machine is in working order unless he can later show some defect in construction which he desired ot remove by further study. The court also refused to instruct the jury that the defendants' infringement must be excused if its machines were built before the plaintiff applied for the patent. Instead, the court instructed the jury that the defendants could continue to use their machines if they built the machines before the application for patent was filed, in the belief that the patentee had authorized such construction and consented to it, and had chosen not to seek a patent.] B.R. CURTIS, Justice Sup. Ct. U.S. **** It is undeniably true, that the limited and temporary monopoly granted to inventors was never designed for their exclusive profit or advantage; the benefit to the public or community at large was another and doubtless the primary object in granting and securing that monopoly. This was at once the equivalent given by the public for benefits bestowed by the genius and meditations and skill of individuals, and the incentive to further efforts for the same important objects. The true policy and ends of the patent laws enacted under this Government are disclosed in that article of the Constitution, the source of all these laws, viz: 'to promote the progress of science and the useful arts,' contemplating and necessarily implying their extension, and increasing adaptation to the uses of society. (Vide Constitution of the United States, art. I, sec. 8, clause 8.) By correct induction from these truths, it follows, that the inventor who designedly, and with the view of applying it indefinitely and exclusively for his own profit, withholds his invention from the public, comes not within the policy or objects of the Constitution or acts of Congress. He does not promote, and, if aided in his design, would impede, the progress of science and the useful arts. And with a very bad grace could he appeal for favor or protection to that society which, if he had not injured, he certainly had neither benefitted nor intended to benefit. Hence, if, during such a concealment, an invention similar to or identical with his own should be made and patented, or brought into use without a patent, the latter could not be inhibited nor restricted, upon proof of its identity with a machine previously invented and withheld and concealed by the inventor from the public. The rights and interests, whether of the public or of individuals, can never be made to yield to schemes of selfishness or cupidity; moreover, that which is once given to or is invested in the public, cannot be recalled nor taken from them. But the relation borne to the public by inventors, and the obligations they are bound to fulfil in order to secure from the former protection, and the right to remuneration, by no means forbid a delay requisite for completing an invention, or for a test of its value or success by a series of sufficient and practical experiments; nor do they forbid a discreet and reasonable forbearance to proclaim the theory or operation of a discovery during its progress to completion, and preceding an application for protection in that discovery. The former may be highly advantageous, as tending to the perfecting the invention; the latter may be indispensable, in order to prevent a piracy of the rights of the true inventor. Chapter 3 – Novelty & Statutory Bars

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It is the unquestionable right of every inventor to confer gratuitously the benefits of his ingenuity upon the public, and this he may do either by express declaration or by conduct equally significant with language—such, for instance, as an acquiescence with full knowledge in the use of his invention by others; or he may forfeit his rights as an inventor by a wilful or negligent postponement of his claims, or by an attempt to withhold the benefit of his improvement from the public until a similar or the same improvement should have been made and introduced by others. Whilst the remuneration of genius and useful ingenuity is a duty incumbent upon the public, the rights and welfare of the community must be fairly dealt with and effectually guarded. Considerations of individual emolument can never be permitted to operate to the injury of these. But, whilst inventors are bound to diligence and fairness in their dealings with the public, with reference to their discoveries on the other hand, they are by obligations equally strong entitled to protection against frauds or wrongs practiced to pirate from them the results of thought and labor, in which nearly a lifetime may have been exhausted; the fruits of more than the viginti annorum lucubrationes, which fruits the public are ultimately to gather. The shield of this protection has been constantly interposed between the inventor and fraudulent spoliator by the courts in England, and most signally and effectually has this been done by this court, as is seen in the cases of Pennock & Sellers v. Dialogue, (2 Peters, 1,) and of Shaw v. Cooper, (7 Peters, 292.) These may be regarded as leading cases upon the questions of the abrogation or relinquishment of patent privileges as resulting from avowed intention, from abandonment or neglect, or from use known and assented to. **** The real interest of an inventor with respect to an assertion or surrender of his rights under the Constitution and laws of the United States, whether it be sought in his declarations or acts, or in forbearance or neglect to speak or act, is an inquiry or conclusion of fact, and peculiarly within the province of the jury, guided by legal evidence submitted to them at the trial. Recurring now to the instruction from the judge at circuit in this case, we consider that instruction to be in strict conformity with the principles hereinbefore propounded, and with the doctrines of this court, as declared in the cases of Pennock v. Dialogue and Shaw v. Cooper. That instruction diminishes or excludes no proper ground upon which the conduct and intent of the plaintiff below, as evinced either by declarations or acts, or by omission to speak or act, and on which also the justice and integrity of the conduct of the defendants were to be examined and determined. It submitted the conduct and intentions of both plaintiff and defendants to the jury, as questions of fact to be decided by them, guided simply by such rules of law as had been settled with reference to issues like the one before them; and upon those questions of fact the jury have responded in favor of the plaintiff below, the defendant in error. We think that the rejection by the court of the prayers offered by the defendants at the trial was warranted, by the character of those prayers, as having a tendency to narrow the inquiry by the jury to an imperfect and partial view of the case, and to divert their minds from a full comprehension of the merits of the controversy. The decision of the Circuit Court is affirmed, therefore, with costs.

Questions, Comments, Problems 1. Beyond the belief that inventors may not want to abandon their innovations after hours of hard work, can you think of other reasons that section 102(c) is not often invoked? Do you think section 102(b) often “trumps” section 102(c) and could be easier to prove at trial? You can see in Kendall how the concept of “known or used” can overlap with that of abandonment. 2. A later decision by the Sixth Circuit, Macbeth-Evans Glass Co. v. General Electric Co., 246 F. 695 (6th Cir. 1917), struck down a glassmaking process patent on the ground of “abandonment.” The ruling was based on the patentee’s deliberate decision to use the process in question in secret for ten years to make glass and sell it commercially, until the secret was stolen, when it then filed for a patent. The patentee’s prior commercial activity was essentially the same as that in Metallizing, but Judge Warrington declined to reach the issue of public use, preferring instead to decide the case on an abandonment of patent rights theory. He found that the patentee had “elected” trade secret protection and “abandoned” patent protection.

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Six years later, the Supreme Court decided Woodbridge v. United States, 263 U.S. 50 (1923), in which Chief Justice Taft characterized Macbeth-Evans as “a case of forfeiture rather than abandonment.” Id. at 59. Woodbridge is an odd case, and somewhat amusing also. Woodbridge, the inventor of an artillery shell, had asked the Patent Office to “table” his patent application, filed in 1852, for a year under a then-existing procedure. In fact, Woodbridge did not ask that his application be revived until nine years later, when the Civil War had started and when patent protection would be much more lucrative for him. The Supreme Court was not impressed with Mr. Woodbridge’s strategy. It disallowed compensation by the government to him, not because of “abandonment,” but because of his “forfeiting the right to a patent by designed delay.” Id. at 56. The Court did, however, say that it was relying in part on “the general principles upon which this Court has proceeded in cases of abandonment by conduct.” Id. at 59.

102 (d) Subsection (d), like subsection (c) before it, is not a “prior art” provision. Rather, it is concerned with foreign patenting activity, whether public or private. The subsection prohibits a patent when: the invention was first patented or caused to be patented, or was the subject of an inventor’s certificate, by the applicant or his legal representatives or assigns in a foreign country prior to the date of the application for patent in this country on an application for patent or inventor’s certificate filed more than twelve months before the filing of the application in the United States

This provision is meant to encourage inventors who obtain patent protection in other countries to apply for U.S. patent protection soon thereafter. Note that for design patents, which we will study later, the current grace period is six months rather than twelve months. See 35 U.S.C. § 172.

In re Kathawala 9 F.3d 942, 28 USPQ2d 1785 (Fed. Cir. 1993) Before LOURIE and RADER, Circuit Judges, and WOODS*, District Judge. LOURIE, Circuit Judge. **** BACKGROUND Kathawala's invention relates to a group of new compounds having the ability to inhibit a key enzyme in the biosynthesis of cholesterol. Claims 1 and 2 of the application are directed to the compounds per se, claim 19 is directed to a pharmaceutical composition containing the compounds, and claims 20 and 21 are directed to methods of using the compounds for inhibition of cholesterol biosynthesis and treatment of atherosclerosis. Kathawala filed the instant application on April 11, 1985, more than one year after he filed counterpart applications in Greece and Spain on November 21, 1983. Kathawala initially filed an application in the U.S. on November 22, 1982, claiming most of the same compounds as in the instant application. When he filed abroad, however, in 1983, he expanded his claims to include certain ester derivatives of the originally claimed compounds. It is claims to those esters, which Kathawala made the subject of a subsequent continuation-in-part application, the application now before us, that are at issue here. Both foreign patents issued prior to the instant application in the U.S., the Greek patent on October 2, 1984, and the Spanish patent on January 21, 1985. The specifications of the Greek and Spanish patents are substantially the same as that of the U.S. application, both disclosing the *

Honorable George E. Woods, District Judge, Eastern District of Michigan, sitting by designation.

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same compounds, compositions, and methods of use. The Greek patent contains claims directed to the compounds, compositions, methods of use, and processes for making the compounds. The Spanish patent contains only "process of making" claims. Because Kathawala filed his U.S. application claiming the esters more than one year after he filed his corresponding foreign applications, and those foreign applications issued as patents prior to the U.S. filing date, the examiner rejected the claims under 35 U.S.C. § 102(d), which precludes issuance of a patent when the invention was first patented or caused to be patented ... by the applicant or his legal representatives or assigns in a foreign country prior to the date of the application for patent in this country on an application for patent ... filed more than twelve months before the filing of the application in the United States.

35 U.S.C. § 102(d). The examiner rejected each of the claims over the Greek patent, and claims 1 and 2, the compound claims, over the Spanish patent. Kathawala appealed to the Board, arguing with respect to the rejection over the Greek patent that his invention was not "patented" in Greece under section 102(d) because the compound, composition, and method of use claims in the Greek patent were invalid under Greek law as directed to non-statutory subject matter. Kathawala also argued that the examiner's rejection based on the Spanish patent was erroneous because, although that patent issued and was enforceable prior to the U.S. filing date, the specification was not publicly available until August 1, 1985, the date on which the notice of the Spanish patent grant was officially published, which was after the U.S. filing date. Thus, Kathawala argues, the compositions were not "patented" for purposes of section 102(d). Kathawala further argued that the "invention ... patented" in Spain was not the same "invention" claimed in the U.S. application because the Spanish patent claimed processes for making the compounds, and claims 1 and 2 were directed to the compounds themselves. The Board affirmed the examiner's rejections over both foreign patents. With regard to the Greek patent, the Board concluded that the validity of the Greek claims was irrelevant for purposes of section 102(d), the controlling fact being that the Greek patent issued containing claims directed to the same invention as the U.S. application. With regard to the Spanish patent, the Board concluded that Kathawala's invention was "patented" when the patent was granted and Kathawala's rights became fixed. The Board also concluded that the "invention ... patented" in Spain was the same "invention" claimed in the U.S. application. Kathawala appealed. DISCUSSION The issue before us thus is whether the Board properly determined that the Greek and Spanish patents bar issuance of Kathawala's U.S. application under section 102(d). We must interpret the phrase "invention ... patented" under § 102(d) and determine whether Kathawala's "invention" was first "patented" in Greece and in Spain within the meaning of that provision. Statutory interpretation is a question of law which we review de novo. In re Carlson, 983 F.2d 1032, 1035, 25 USPQ2d 1207, 1209 (Fed. Cir. 1992) (citations omitted). Turning first to the Greek patent, there is no dispute that it contains claims directed to the same invention as that of Kathawala's U.S. application. Kathawala argues, however, that his invention was not first "patented" in Greece under section 102(d) because the compound, composition, and method of use claims are invalid under Greek patent law as directed to non-statutory subject matter. According to Kathawala, only his process claims are valid under Greek law. Kathawala thus argues that the validity of his claims under Greek patent law determines whether his invention was "patented" in Greece within the meaning of section 102(d) prior to his U.S. filing date.

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We disagree. Even assuming that Kathawala's compound, composition, and method of use claims are not enforceable in Greece, a matter on which we will not speculate, the controlling fact for purposes of section 102(d) is that the Greek patent issued containing claims directed to the same invention as that of the U.S. application. When a foreign patent issues with claims directed to the same invention as the U.S. application, the invention is "patented" within the meaning of section 102(d); validity of the foreign claims is irrelevant to the section 102(d) inquiry. This is true irrespective of whether the applicant asserts that the claims in the foreign patent are invalid on grounds of non-statutory subject matter or more conventional patentability reasons such as prior art or inadequate disclosure. Kathawala does not dispute that the Greek patent issued containing claims directed to the same invention as that of his U.S. application. Kathawala sought and obtained the claims contained in the Greek patent and cannot now avoid the § 102(d) bar by arguing that that which he chose to patent abroad should not have been allowed by the foreign patent office. Acceptance of such a position, as the Board stated, would place an " 'unrealistic burden' on the courts and PTO to resolve 'esoteric legal questions which may arise under the patent laws of numerous foreign countries[.']" Slip op. at 21. The PTO should be able to accept at face value the grant of the Greek patent claiming subject matter corresponding to that claimed in a U.S. application, without engaging in an extensive exploration of fine points of foreign law. The claims appear in the Greek patent because the applicant put them there. He cannot claim exemption from the consequences of his own actions. The Board thus correctly concluded that the validity of the Greek claims is irrelevant for purposes of section 102(d). Accordingly, the Board properly affirmed the examiner's rejection over the Greek patent. Also before us is the rejection of claims 1 and 2, the compound claims, based on the Spanish patent. Kathawala argues that this rejection was erroneous for two reasons. First, Kathawala asserts that although the Spanish patent was granted and enforceable prior to the U.S. filing date, it was not published until after that date. Kathawala thus argues that his invention was not "patented" in Spain until the publication date of the Spanish patent. Second, Kathawala argues that the "invention" of claims 1 and 2, the compounds themselves, is not the same "invention ... patented" in Spain under section 102(d), that compositions are a separate invention from processes. We reject both arguments of Kathawala. With regard to the first argument, Kathawala concedes that the Spanish patent issued and was enforceable on January 21, 1985, a date prior to the U.S. filing date. Kathawala nevertheless asserts that the effective date of a foreign patent for purposes of s 102(d), the date on which an invention is "patented," is not the date the foreign patent issues and becomes enforceable, but the date on which it becomes publicly available. The law on this issue was well established by our predecessor court in In re Monks, 588 F.2d 308, 200 USPQ 129 (CCPA 1978), and In re Talbott, 443 F.2d 1397, 170 USPQ 281 (CCPA 1971). In Monks, the court considered the date on which an invention was "patented" in Great Britain under § 102(d), and inquired whether the effective date for purposes of that section was the date on which the complete specification was published, a date prior to the U.S. filing date, or the date on which the patent was "sealed" under British law, which occurred after the U.S. filing date. After reviewing the legislative history of section 102(d), the court concluded that "patented" means "a formal bestowal of patent rights from the sovereign to the applicant such as that which occurs when a British patent is sealed." 588 F.2d at 310, 200 USPQ at 131. It was on the "sealed" date that the patentee's rights became fixed and settled and the rights of the patent accrued, not the later [sic: earlier] publication date. The court thus reversed the examiner's rejection, since the applicant's British patent was not sealed and hence "patented" until after his U.S. filing date. In Talbott the court held that a foreign patent need not be publicly available to be "patented" under section 102(d). The court rejected the applicant's argument that the statutory bar did not

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apply because he had kept his German patent secret until after his U.S. filing date. 443 F.2d 1397, 170 USPQ 281. . . . The import of the decisions in Monks and Talbott is that, contrary to Kathawala's argument, it is irrelevant under section 102(d) whether the Spanish patent was publicly available prior to the U.S. filing date. Rather, the Board correctly concluded that an invention is "patented" in a foreign country under section 102(d) when the patentee's rights under the patent become fixed. . . . In the instant case, Kathawala stipulated that the Spanish patent was enforceable on January 21, 1985, the date the patent was granted and a date prior to the U.S. filing date. Hence, the Board correctly concluded that Kathawala's invention was "patented" in Spain prior to his U.S. filing date. Kathawala's second argument is that the "invention" patented in Spain is not the same "invention" claimed in claims 1 and 2. Kathawala argues that each claim defines a separate invention, and since the Spanish claims are directed to processes for making the subject compounds, and claims 1 and 2 of the instant application are directed to the compounds themselves, the "invention" patented in Spain is not the same "invention" as that of claims 1 and 2. Hence Kathawala urges that the rejection of claims 1 and 2 under section 102(d) based on the Spanish patent was erroneous. We do not agree. It is a truism that a claim defines an invention, and a claim to a composition is indeed different from a claim to a process. However, we cannot let rigid definitions be used in situations to which they don't apply to produce absurd results. The word "invention" in the Patent Act has many meanings depending on the context. See Paul M. Janicke, The Varied Meanings of "Invention" in Patent Practice: Different Meanings in Different Situations, in Patent Law Perspectives App.-1 (Donald R. Dunner et al. eds., 1970). In the present context, it must have a meaning consistent with the policy and purpose behind section 102(d), which is to require applicants for patent in the United States to exercise reasonable promptness in filing their applications after they have filed and obtained foreign patents. See Donald S. Chisum, Patents § 6.04[1] (1993). Kathawala made an "invention" relating to a group of new compounds. He filed applications in Greece and Spain disclosing his invention as consisting of four different aspects: compounds, compositions, methods of use, and processes of making the compounds. While Kathawala had the potential to claim each of those aspects, and did so in his Greek application, he chose to claim only the processes in Spain because, he asserts, pharmaceutical compositions and methods of use were not patentable under Spanish patent law during the relevant time period. Kathawala's understandable decision not to claim the compounds in Spain, however, does not permit him to evade the statutory bar by arguing that the Spanish Patent Office would not have allowed such claims. Similarly, neither would it have mattered if Kathawala had applied for compound claims and the Spanish Patent Office had rejected them. What is controlling is that the application that Kathawala filed in Spain disclosed and provided the opportunity to claim all aspects of his invention, including the compounds. It would be contrary to the policy of the statute to permit an applicant to file a foreign application on an invention that may be claimed by four related types of claims, obtain a grant of whatever patent rights were available in the foreign country, and then file an application in the United States, after the foreign patent has issued and more than one year after the foreign filing date on the same invention, with claims directed to those aspects of the invention which were unpatentable in the foreign country. That would permit grant of a U.S. patent on what is essentially the same "invention" as that patented in the foreign country and would frustrate the policy underlying section 102(d), which is to encourage the filing of applications in the United States within a year of the foreign filing of a counterpart patent application. An applicant cannot evade the statutory bar by citing alleged defects of foreign law concerning scope of patentable subject matter. Chapter 3 – Novelty & Statutory Bars

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We thus hold that when an applicant files a foreign application fully disclosing his invention and having the potential to claim his invention in a number of different ways, the reference in section 102(d) to "invention ... patented" necessarily includes all disclosed aspects of the invention. Thus, the section 102(d) bar applies regardless whether the foreign patent contains claims to less than all aspects of the invention. While we appreciate Kathawala's assertion that he didn't realize that the foreign patents had issued claiming the esters until the critical date had passed, and that he unintentionally failed to file in this country within the statutory time period, we must conclude that Kathawala had his chance to file his application in this country and failed to do so in time to avoid the statutory bar. The Board thus properly affirmed the examiner's rejection of claims 1 and 2 under § 102(d) based on the Spanish patent. CONCLUSION Because Kathawala filed Greek and Spanish applications on his "invention" more than one year before he filed an application on the same invention in the United States, and the foreign applications issued as patents prior to his U.S. filing date, Kathawala is barred under 35 U.S.C. § 102(d) from obtaining a U.S. patent. Accordingly, the decision of the Board is affirmed. AFFIRMED.

Questions, Comments, Problems 1. Is this decision consistent with In re Ekenstam, supra, a case decided under subsections (a) and (b) of section 102? The Federal Circuit in Kathawala cites In re Talbott, 443 F.2d 1397, 170 USPQ 281 (CCPA 1971), for the proposition that “a foreign patent need not be publicly available to be ‘patented’ under section 102(d).” In Talbott, Judge Baldwin acknowledged Ekenstam, but said: [A]ppellant strongly argues that an affirmance of the board’s decision here would go counter to earlier decisions regarding secret “patents,” and would require a holding absolutely contrary to the logical premise “that in a law, carefully drafted, certain terms—such as the term ‘patented’—must have the same meaning, particularly since neither the law nor its legislative history contains any statement to the contrary.” To this we can only reply that, while appellant’s premise is desirable in the ideal, it is impractical in applying statutory provisions to cover circumstances which are very real but vastly different. The policy considerations underlying parts (b) and (d) of section 102, while overlapping to some extent, are not necessarily identical. As the Patent Office has pointed out, considerations in the nature of those which obviously governed our decision in Ekenstam, supra, have no application here. Id. at 1399. Would the “considerations” to which Judge Baldwin refers include the fact that “patented” in subsections (a) and (b) can be by a party independent of the inventor/applicant, whereas subsection (d) refers only to the actions of the applicant or his legal representatives? Are there any other considerations that would explain the difference in interpretation?

102 (e) With subsection (e), we return to the prior art provisions. This subsection, like subsections (a) and (g), is tied to events that occur before the invention date. It prevents a patent when: the invention was described in a patent granted on an application for patent by another filed in the United States before the invention thereof by the applicant for patent, or on an international application by another who has fulfilled the requirements of paragraphs (1), (2), and (4) of section 371(c) of this title before the invention thereof by applicant for patent

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Subsection (e) deals with the fact that patent applications are kept secret by statute, 35 U.S.C. § 122, until they issue as patents (with limited exceptions). It addresses the question of what happens when someone else discloses an invention identical to yours to the Patent & Trademark Office in an application filed before your invention date. Oliver Wendell Holmes Jr. wrestled with this question long before the provision was added by the 1952 Act:

Alexander Milburn Co. v. Davis-Bournonville Co. 270 U.S. 390 (1926) Mr. Justice HOLMES delivered the opinion of the Court. This is a suit for the infringement of the plaintiff's patent for an improvement in welding and cutting apparatus alleged to have been the invention of one Whitford. The suit embraced other matters but this is the only one material here. The defence is that Whitford was not the first inventor of the thing patented, and the answer gives notice that to prove the invalidity of the patent evidence will be offered that one Clifford invented the thing, his patent being referred to and identified. The application for the plaintiff's patent was filed on March 4, 1911, and the patent was issued on June 4, 1912. There was no evidence carrying Whitford's invention further back. Clifford's application was filed on January 31, 1911, before Whitford's, and his patent was issued on February 6, 1912. It is not disputed that this application gave a complete and adequate description of the thing patented to Whitford, but it did not claim it. The District Court gave the plaintiff a decree, holding that while Clifford might have added this claim to his application, yet as he did not, he was not a prior inventor. 297 F. 846. The decree was affirmed by the Circuit Court of Appeals. 1 F.(2d) 227. There is a conflict between this decision and those of other Circuit Courts of Appeal, especially the sixth. Lemley v. Dobson-Evans Co., 243 F. 391, 156 C.C.A. 171. Naceskid Service Chain Co. v. Perdue, 1 F.(2d) 924. Therefore a writ of certiorari was granted by this Court. 266 U.S. 596. The patent law authorizes a person who has invented an improvement like the present, 'not known or used by others in this country, before his invention,' etc., to obtain a patent for it. Rev. Sts. § 4886, amended by Act March 3, 1897, c. 391, § 1, 29 Stat. 692 (Comp. St. § 9430). Among the defences to a suit for infringement the fourth specified by the statute is that the patentee 'was not the original and first inventor or discoverer of any material and substantial part of the thing patented.' Rev. Sts. § 4920, amended by Act March 3, 1897, c. 391, § 2, 29 Stat. 692 (Comp. St. § 9466). Taking these words in their natural sense as they would be read by the common man, obviously one is not the first inventor if, as was the case here, somebody else has made a complete and adequate description of the thing claimed before the earliest moment to which the alleged inventor can carry his invention back. But the words cannot be taken quite so simply. In view of the gain to the public that the patent laws mean to secure we assume for purposes of decision that it would have been no bar to Whitford's patent if Clifford had written out his prior description and kept it in his portfolio uncommunicated to anyone. More than that, since the decision in the case of the Cornplanter Patent, 23 Wall. 181, it is said, at all events for many years, the Patent Office has made no search among abandoned patent applications, and by the words of the statute a previous foreign invention does not invalidate a patent granted here if it has not been patented or described in a printed publication. Rev. Sts. § 4923 (Comp. St. § 9469). See Westinghouse Machine Co. v. General Electric Co., 207 F. 75, 126 C. C. A. 575. These analogies prevailed in the minds of the courts below. On the other hand publication in a periodical is a bar. This as it seems to us is more than an arbitrary enactment, and illustrates, as does the rule concerning previous public use, the principle that, subject to the exceptions mentioned, one really must be the first inventor in order to be entitled to a patent. Coffin v. Ogden, 18 Wall. 120. We understand the Circuit Court of Appeals to admit that if Whitford had not applied for his patent until after the issue to Clifford, the disclosure by the latter would have had the same effect as the publication of the same words in a periodical, although not made the basis of a Chapter 3 – Novelty & Statutory Bars

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claim. 1 F.(2d) 233. The invention is made public property as much in the one case as in the other. But if this be true, as we think that it is, it seems to us that a sound distinction cannot be taken between that case and a patent applied for before but not granted until after a second patent is sought. The delays of the patent office ought not to cut down the effect of what has been done. The description shows that Whitford was not the first inventor. Clifford had done all that he could do to make his description public. He had taken steps that would make it public as soon as the Patent Office did its work, although, of course, amendments might be required of him before the end could be reached. We see no reason in the words or policy of the law for allowing Whitford to profit by the delay and make himself out to be the first inventor when he was not so in fact, when Clifford had shown knowledge inconsistent with the allowance of Whitford's claim, (Webster) Loom Co. v. Higgins, 105 U.S. 580, and when otherwise the publication of his patent would abandon the thing described to the public unless it already was old, McClain v. Ortmayer, 141 U.S. 419, 424. Underwood v. Gerber, 149 U.S. 224, 230. The question is not whether Clifford showed himself by the description to be the first inventor. By putting it in that form it is comparatively easy to take the next step and say that he is not an inventor in the sense of the statute unless he makes a claim. The question is whether Clifford's disclosure made it impossible for Whitford to claim the invention at a later date. The disclosure would have had the same effect as at present if Clifford had added to his description a statement that he did not claim the thing described because he abandoned it or because he believed it to be old. It is not necessary to show who did invent the thing in order to show that Whitford did not. It is said that without a claim the thing described is not reduced to practice. But this seems to us to rest on a false theory helped out by the fiction that by a claim it is reduced to practice. A new application and a claim may be based on the original description within two years, and the original priority established notwithstanding intervening claims. Chapman v. Wintroath, 252 U.S. 126, 137. A description that would bar a patent if printed in a periodical or in an issued patent is equally effective in an application so far as reduction to practice goes. As to the analogies relied upon below, the disregard of abandoned patent applications however explained cannot be taken to establish a principle beyond the rule as actually applied. As an empirical rule it no doubt is convenient if not necessary to the Patent Office, and we are not disposed to disturb it, although we infer that originally the practice of the Office was different. The policy of the statute as to foreign inventions obviously stands on its own footing and cannot be applied to domestic affairs. The fundamental rule we repeat is that the patentee must be the first inventor. The qualifications in aid of a wish to encourage improvements or to avoid laborious investigations do not prevent the rule from applying here. Decree reversed.

Questions, Comments, Problems 1. Note that section 102(e) is tied to the time of the applicant’s invention rather than to the filing date of the application. An examiner will typically only know the latter date and will thus presume that the invention date is the same as the filing date. Thus, the examiner may reject claims in an application under 102(e) based on a patent that was filed before the pending application was filed. If the applicant conceived of his invention before the other patent was filed, however, he may “swear behind,” or “overcome” the reference by filing an oath or declaration with the PTO in which he avers that he completed his invention before that date. See 37 C.F.R. § 1.131. Hence the name “Rule 131 declaration or affidavit” for the “swearing behind” document. An applicant can do the same when confronted with a rejection under section 102(a). In swearing behind a reference, the applicant need only aver that his date of invention is before the date of the reference that is being applied against the application. The applicant need not disclose the actual date of invention. An applicant will often support his declaration with copies of pages from a dated lab notebook in which the dates have been redacted in the materials submitted to the PTO.

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2. A reference that is a statutory bar under section 102(b) may not be “sworn behind.” That is because swearing behind effectively moves an inventor’s invention date to an earlier point in time, but does not affect her filing date, to which subsection (b) is keyed. 3. It is not necessary, in swearing behind, to prove completion of the full scope of the claimed invention before the date of the reference, but only so much of the claimed invention as the reference happens to show. That was the holding of In re Stempel, 241 F.2d 755, 113 USPQ 77 (CCPA 1957) (Rich, J.). There, the claim was to a chemical genus (a group of chemicals), and a prior art patent disclosed one species within the genus. The inventor proved by a Rule 131 affidavit that he had invented that species before the date of the reference, and the CCPA held the affidavit sufficient to overcome, or “remove,” the reference, without requiring the inventor to prove that he invented the entire genus before the reference’s date. It is also possible to “remove” a section 102(a) or (e) prior reference that is not a statutory bar by showing that the reference derived the material in its pertinent disclosure from the inventor. The PTO provides for removal of prior patents and publications in this way by an oath or declaration under 37 C.F.R. § 1.132 (a “Rule 132 declaration or affidavit”). See Manual of Patent Examining Procedure (“MPEP”) § 715.01. The Seventh Circuit allowed a patentee to overcome prior use or knowledge under subsection (a), which had been relied on as obviousness-type prior art (see the next chapter), where the patentee showed that the prior use or knowledge was derived from earlier work of the inventor. Illinois Tool Works, Inc. v. Solo Cup Co., 461 F.2d 265, 172 USPQ 385 (7th Cir. 1972). 4. Under 35 U.S.C. § 119, enacted pursuant to the Paris Convention, U.S. patent applicants may receive the benefit of an earlier filing date in another member country if the U.S. application is filed within 12 months of the foreign application (6 months in the case of design patents). In this manner, an applicant may use section 119 to move back his date of priority under sections 102(e) and (g). In a pair of opinions on a single application, the Court of Customs and Patent Appeals considered whether section 119 could also be used against an applicant by moving back the date of a patent that is used as a reference against the patentee. In in re Hilmer, 359 F.2d 859, 149 USPQ 480 (CCPA 1966) (“Hilmer I”), the court determined that such symmetry did not exist for section 102(e) and that section 119 did not modify the express provision in 102(e) that the reference patent is effective as of the date it was “filed in the United States.” The court therefore reversed a rejection by the patent board using 102(e). Undaunted, the patent board then rejected the application under section 102(g) (which you will study soon) as read in light of sections 119 and 104 (dealing with inventions made abroad). The board reasoned that although section 102(g) only furnishes prior art status to things made “in this country,” that limitation is removed by section 119. The court, in In re Hilmer, 424 F.2d 1108, 165 USPQ 255 (CCPA 1970) (“Hilmer II”), again disagreed. The court held that section 119 could not defeat the clear language of section 102(g), and that a lack of symmetry between the defensive and offensive use of foreign priority did not create any insurmountable problems. Read sections 102(e), 102(g), 104, and 119 closely, and decide whether you agree with the court, either as a matter of statutory construction or as a matter of policy. 5. Although U.S. patents cannot be prior art references under section 102(e) as of their foreign priority dates, they can have an earlier effective U.S. filing date under 35 U.S.C. § 120, which allows later-filed U.S. applications to “claim priority” of earlier-filed U.S. applications under certain conditions. Does this make sense—that section 120 lets you carry back the effective date of a U.S. patent application as prior art but section 119 does not?

102 (f) We now move out of the prior art subsections and into the “originality” subsection. Subsection (f) simply says that a person who “did not himself invent the subject matter” has no right to patent it because he was not the originator of the innovation. Instead, his supposed invention is a “derivation.” This subsection sits very much by itself. For some of the other subsections, it generally made a difference when the invalidating actions occurred, but here, the date of filing is irrelevant. The date of invention is also irrelevant because there has been no “invention.” In addition, for this subsection, it does not matter whether the putative inventor received the idea in the U.S. or overseas. Finally, it does not matter whether the information was public or secret.

Gambro Lundia AB v. Baxter Healthcare Corp. 110 F.3d 1573, 42 USPQ2d 1378 (Fed. Cir. 1997)

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Before ARCHER, Chief Judge, LOURIE, and RADER, Circuit Judges. RADER, Circuit Judge. **** In this patent infringement case, Gambro Lundia AB (Gambro) appeals and Baxter Healthcare Corporation (Baxter) cross-appeals a final judgment of the United States District Court for the District of Colorado. The patent at issue, U.S. Patent No. 4,585,552 (‘552 patent), claims a “system for the measurement of the difference between two fluid flows in separate ducts.” This invention recalibrates sensors during hemodialysis to accurately measure the impurities removed from a patient’s blood. Due to error in the district court’s analyses of invalidity, unenforceability, and infringement, this court reverses. BACKGROUND Hemodialysis, commonly called dialysis, removes contaminants and excess fluid from the patient’s blood when the kidneys do not function properly. Hemodialysis works by passing a dialysate solution through a machine, called a dialyzer, which functions as an artificial kidney. In the dialyzer, the dialysate passes on one side of a porous diffusion membrane, while the patient’s blood passes on the other side. Because of the pressure differential across the membrane, blood contaminants and excess fluid diffuse through the membrane from the patient’s blood into the dialysate. These impurities diffused from the patient’s blood are known as ultrafiltrate. After hemodialysis, the volume of the dialysate is greater. The difference between the initial and end volumes of dialysate can be used to calculate the amount of the ultrafiltrate removed from a patient’s blood. This calculation is critical to the success of hemodialysis. Removal of too much or too little ultrafiltrate may lead to severe medical problems or even death. Repgreen Limited (Repgreen), a British bioengineering company, improved ultrafiltrate calculation. Keith Wittingham, Repgreen’s chief designer, introduced the Repgreen monitoring system, the UFM 1000, in late 1977. Wittingham’s development relied on the research of Professor Michael Sanderson. The UFM 1000 used two electromagnetic flow sensors to measure the difference between the rate of dialysate flow into and out of the dialyzer. The difference in flow rates indicated the quantity of ultrafiltrate leaving the system. To calibrate the system for an accurate measurement of dialysate flow rates, the operator would direct clean dialysate through both sensors before dialysis. This calibration method, however, could not account for clogging in the outflow sensor during dialysis. Over time, the ultrafiltrate would build up behind the outflow sensor and disrupt the accuracy of the measurements. Experts refer to this increasing inaccuracy as “drift.” In the late 1970s, Gambro sought to improve ultrafiltrate monitoring. During 1979, Wittingham met with Gambro engineers on two occasions to discuss Repgreen’s development of an ultrafiltrate monitor for Gambro. In July 1979, after Repgreen went bankrupt, Gambro purchased Repgreen’s hemodialysis technology, including the rights to the UFM 1000 monitor. After acquiring Repgreen’s technology, Gambro’s research team worked for three years on improving ultrafiltration monitors. In June 1982, four Gambro engineers, including Bengt-Ake Gummesson, refined the monitoring system. Their invention ultimately issued as the ’552 patent. **** The Gambro invention uses valves to direct clean dialysate around the dialyzer to recalibrate the sensors during dialysis. The invention’s valve system can direct clean dialysate through the first flow sensor, around the dialyzer, and through the second flow sensor. To recalibrate, the invention momentarily blocks passage of contaminated dialysate through the outflow sensor. Instead, clean dialysate flows through the outflow sensor and recalibrates the detectors with the same clean dialysate flowing through both intake and outflow sensors. After the brief recalibration, the hemodialysis continues with contaminated dialysate flowing through the second sensor. Chapter 3 – Novelty & Statutory Bars

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**** In 1984, Baxter acquired the dialysis equipment division of Extracorporeal, Inc. Dissatisfied with the accuracy of the Extracorporeal technology, Baxter developed the Baxter SPS 550 and began marketing the device in December 1987. Gambro filed suit against Baxter in the District Court for the District of Colorado in March 1992 claiming the Baxter SPS 550 infringed the ‘552 patent. In defense, Baxter asserted the invalidity and unenforceability of the ‘552 patent. After a ten-day bench trial on the issues of infringement, validity, and unenforceability, the district court held claim 1 of the Gambro ‘552 patent invalid for obviousness and derivation, and unenforceable for inequitable conduct. The district court also entered judgment in favor of Baxter on infringement, contributory infringement, inducing infringement, and willful infringement due to the invalidity and unenforceability of the ‘552 patent. Further, the district court declined to award either party attorney fees or costs. DISCUSSION I. Derivation The trial judge found that Gambro had derived the ‘552 invention from a Wittingham proposal left in the files when Gambro acquired Repgreen’s dialysis technology. This court reviews a finding of derivation as a question of fact. Price v. Symsek, 988 F.2d 1187, 1190, 26 USPQ2d 1031, 1033 (Fed. Cir. 1993). This requires acceptance of the district court’s findings unless clearly erroneous or predicated on an improper legal foundation. Raytheon Co. v. Roper Corp., 724 F.2d 951, 956, 220 USPQ 592, 596 (Fed. Cir. 1983). To show derivation, the party asserting invalidity must prove both prior conception of the invention by another and communication of that conception to the patentee. Price, 988 F.2d at 1190. This court reviews a determination of prior conception, which must be proven by facts supported by clear and convincing evidence, as a question of law based on underlying factual findings. Id. at 1190-92. Turning first to conception, the district court found that Wittingham had conceived the invention no later than July 1979. The court based this finding on Wittingham’s testimony and the Wittingham proposal left in the Repgreen file. Although the district court found Wittingham highly credible, an inventor’s testimony, standing alone, is insufficient to prove conception. See Price, 988 F.2d at 1194. Conception requires corroboration of the inventor’s testimony. Id. Thus, this court must weigh whether the Wittingham proposal, prepared in 1979, corroborates Wittingham’s testimony of conception. The proposal is a four-page document alluding to an ultrafiltration monitor with valves that automatically zero the sensors upon start-up. The proposal briefly discusses the Auto Zero/Start feature: To ensure ease of operation the process of shunting the kidney in order to zero monitor will be done automatically on pressing of the start button. This will also initiate the automatic zeroing of unit.

Baxter contends that this document also discloses the concept of recalibration (or zeroing) during dialysis. In support of this contention, Baxter identifies the following passage from the proposal: A zero button may also be necessary in order to zero Ultrafiltration Monitor but not start the automatic control (start signal cannot be allowed till 20 minutes after switch on?).

Baxter argues that the only reason to zero the monitor without starting the automatic control is to zero the monitor when it is already started—in other words, during dialysis. Baxter’s novel interpretation of this single ambiguous passage in the Wittingham proposal, however, lacks sufficient support to corroborate Wittingham’s conception testimony. First, the reference is so unclear that even Wittingham conceded that this single sentence does not state expressly the concept of recalibration during dialysis. In fact, the parenthetical within the sentence suggests that the device should not be in use “till 20 minutes after switch on.” For this reason, among others, Professor Chapter 3 – Novelty & Statutory Bars

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Sanderson, an expert in dialysis whose early research formed the basis of Wittingham’s work, testified that one of ordinary skill in dialysis in 1982 would not have understood this obscure passage to disclose recalibration during dialysis. Professor Sanderson noted that the Repgreen monitor needed twenty minutes to stabilize before use. Therefore, this obscure sentence more reasonably suggests the use of the zero button during the pre-dialysis warm-up period. ****

The second prong of the derivation test—communication of the prior conception to the named inventor—poses similar difficulties for Baxter. As an initial matter, the district court applied the wrong legal standard. Citing New England Braiding Co. v. A.W. Chesterton Co., 970 F.2d 878, 23 USPQ2d 1622 (Fed. Cir. 1992), the district court concluded that Baxter did not need to prove communication of the entire conception, but rather only so much of the invention “as would have made it obvious to one of ordinary skill in the art.” Gambro Lundia AB v. Baxter Healthcare Corp., 896 F. Supp. 1522, 1540 (D. Colo. 1995) (citing New England Braiding, 970 F.2d at 883). Based on this reasoning, the district court applied the obviousness standard in 35 U.S.C. § 103 (1994) to determine that the named inventors received enough information to make the invention obvious to one skilled in the dialysis art. This reasoning, however, misconstrues the dictum in New England Braiding and introduces incorrectly an obviousness analysis into the test for derivation. The Supreme Court announced the standard for finding communication of a prior conception over 125 years ago in Agawam Woolen v. Jordan, 74 U.S. (7 Wall.) 583 (1868). The Court required a showing that the communication "enabled an ordinary mechanic, without the exercise of any ingenuity and special skill on his part, to construct and put the improvement in successful operation." Id. at 602-03 (emphasis added). This court’s predecessor consistently applied this Supreme Court standard. . . . This court recognizes that the district court’s incorrect derivation standard springs from dictum in this court’s New England Braiding decision. In that case, this court noted: “To invalidate a patent for derivation of invention, a party must demonstrate that the named inventor in the patent acquired knowledge of the claimed invention from another, or at least so much of the claimed invention as would have made it obvious to one of ordinary skill in the art.” New England Braiding, 970 F.2d at 883. This dictum did not in fact incorporate a determination of obviousness into a Section 102(f) analysis. Indeed, this court in New England Braiding did not apply such a test. The New England Braiding court upheld the denial of a preliminary injunction because the record showed a likelihood that New England Braiding’s patent was invalid under 35 U.S.C. § 102(f). The record showed that George Champlin, the named inventor, worked for the A.W. Chesterton Co. (Chesterton) and participated in experiments that developed the invention. One Chesterton employee testified that Champlin had said, when he left to start his own company, that he wanted to patent the experimental braiding if Chesterton decided not to do so. Champlin denied these allegations. Id. at 883-84. The key issue was a credibility determination between the witnesses for the two parties. The sufficiency of the communication, particularly whether the invention was obvious in light of such disclosure, was not at issue. Thus, New England Braiding did not incorporate an obviousness test into the § 102(f) analysis. Applying the correct standard—whether the communication enabled one of ordinary skill in the art to make the patented invention—this court discerns insufficient evidence of communication. Wittingham testified that he was not sure that he had discussed calibration during dialysis with anyone at Gambro, and he did not discuss the sensor contamination problem. The trial judge based his finding of communication solely on Wittingham’s written proposal. Gambro acquired this document when it acquired Repgreen’s technology. During discovery, the proposal appeared in the files of one of the named inventors. However, as discussed above, the proposal does not disclose recalibration during dialysis to one skilled in the art at the relevant time. If the proposal does not disclose recalibration Chapter 3 – Novelty & Statutory Bars

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during dialysis, it cannot serve as the basis for a communication of that idea. Thus, under the correct legal standard, the record evidence is insufficient to support a finding of communication. The district court erred in finding communication and conception, and, hence, the finding of derivation is also clearly erroneous. Because this court reverses the district court’s ruling of invalidity based on derivation, it need not reach the issue of correction of inventorship under 35 U.S.C. § 256 (1994). ****

102 (g) Having faced the previous six subsections of section 102, you are now ready to tackle subsection (g), an important and initially daunting provision. Subsection (g) says that an applicant may receive a patent unless: before the applicant’s invention thereof the invention was made in this country by another who had not abandoned, suppressed, or concealed it. In determining priority of invention there shall be considered not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to conception by the other.

This subsection deals in part with “priority,” and is made necessary because of the first-to-invent policy of the U.S. patent law. In the U.S., a person who files second can beat out the person who files first if he was the first to invent. This priority aspect of section 102(g) is initially resolved in the Patent & Trademark Office in an inter partes proceeding called an “interference.” But 102(g) is concerned with more than which of two (or more) aspiring patentees is entitled to a patent. It is also a prior art provision, referred to as “prior invention,” and can appear as a basis for rejection by a patent examiner in ex parte prosecution or as a defense of lack of novelty in a patent infringement suit. As a prior art provision, there is no requirement that the “prior inventor” ever have filed for a patent herself. Even though subsection 102(g) often applies during infringement actions, much of the judicial writing on the meaning of subsection 102(g) comes in the context of PTO interferences, so we will delve into the topic through that medium.

Paulik v. Rizkalla 760 F.2d 1270, 226 USPQ 224 (Fed. Cir. 1985) Before MARKEY, Chief Judge, and FRIEDMAN, RICH, DAVIS, BALDWIN, KASHIWA, BENNETT, MILLER, SMITH, NIES, NEWMAN and BISSELL, Circuit Judges. PAULINE NEWMAN, Circuit Judge. This appeal is from the decision of the United States Patent and Trademark Office Board of Patent Interferences (Board), awarding priority of invention to the senior party Nabil Rizkalla and Charles N. Winnick (Rizkalla), on the ground that the junior party and de facto first inventors Frank E. Paulik and Robert G. Schultz (Paulik) had suppressed or concealed the invention within the meaning of 35 U.S.C. § 102(g). We vacate this decision and remand to the Board. I. Rizkalla's patent application has the effective filing date of March 10, 1975, its parent application. Paulik's patent application was filed on June 30, 1975. The interference count is for a catalytic process for producing alkylidene diesters such as ethylidene diacetate, which is useful to prepare Chapter 3 – Novelty & Statutory Bars

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vinyl acetate and acetic acid. Paulik presented deposition testimony and exhibits in support of his claim to priority; Rizkalla chose to rely solely on his filing date. The Board held and Rizkalla does not dispute that Paulik reduced the invention of the count to practice in November 1970 and again in April 1971. On about November 20, 1970 Paulik submitted a "Preliminary Disclosure of Invention" to the Patent Department of his assignee, the Monsanto Company. The disclosure was assigned a priority designation of "B", which Paulik states meant that the case would "be taken up in the ordinary course for review and filing." Despite occasional prodding from the inventors, and periodic review by the patent staff and by company management, this disclosure had a lower priority than other patent work. Evidence of the demands of other projects on related technology was offered to justify the patent staff's delay in acting on this invention, along with evidence that the inventors and assignee continued to be interested in the technology and that the invention disclosure was retained in active status. In January or February of 1975 the assignee's patent solicitor started to work toward the filing of the patent application; drafts of the application were prepared, and additional laboratory experiments were requested by the patent solicitor and were duly carried out by an inventor. The evidentiary sufficiency of these activities was challenged by Rizkalla, but the Board made no findings thereon, on the basis that these activities were not pertinent to the determination of priority. The Board held that "even if Paulik demonstrated continuous activity from prior to the Rizkalla effective filing date to his filing date ... such would have no bearing on the question of priority in this case", and cited 35 U.S.C. § 102(g) as authority for the statement that "[w]hile diligence during the above noted period may be relied upon by one alleging prior conception and subsequent reduction to practice, it is of no significance in the case of the party who is not the last to reduce to practice". The Board thus denied Paulik the opportunity to antedate Rizkalla, for the reason that Paulik was not only the first to conceive but he was also the first to reduce to practice. The Board then held that Paulik's four-year delay from reduction to practice to his filing date was prima facie suppression or concealment under the first clause of section 102(g), that since Paulik had reduced the invention to practice in 1971 and 1972 he was barred by the second clause of section 102(g) from proving reasonable diligence leading to his 1975 filing, and that in any event the intervening activities were insufficient to excuse the delay. The Board refused to consider Paulik's evidence of renewed patent-related activity. II. The Board's decision converted the case law's estoppel against reliance on Paulik's early work for priority purposes, into a forfeiture encompassing Paulik's later work, even if the later work commenced before the earliest activity of Rizkalla. According to this decision, once the inference of suppression or concealment is established, this inference cannot be overcome by the junior party to an interference. There is no statutory or judicial precedent that requires this result, and there is sound reason to reject it. United States patent law embraces the principle that the patent right is granted to the first inventor rather than the first to file a patent application. The law does not inquire as to the fits and starts by which an invention is made. The historic jurisprudence from which 35 U.S.C. § 102(g) flowed reminds us that "the mere lapse of time" will not prevent the inventor from receiving a patent. Mason v. Hepburn, 13 App. D.C. 86, 91, 1898 C.D. 510, 513 (1898). The sole exception to this principle resides in section 102(g) and the exigencies of the priority contest. There is no impediment in the law to holding that a long period of inactivity need not be a fatal forfeiture, if the first inventor resumes work on the invention before the second inventor enters the field. We deem this result to be a fairer implementation of national patent policy, while in full accord with the letter and spirit of section 102(g).

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The Board misapplied the rule that the first inventor does not have to show activity following reduction to practice to mean that the first inventor will not be allowed to show such activity. Such a showing may serve either of two purposes: to rebut an inference of abandonment, suppression, or concealment; or as evidence of renewed activity with respect to the invention. Otherwise, if an inventor were to set an invention aside for "too long" and later resume work and diligently develop and seek to patent it, according to the Board he would always be worse off than if he never did the early work, even as against a much later entrant. Such a restrictive rule would merely add to the burden of those charged with the nation's technological growth. Invention is not a neat process. The value of early work may not be recognized or, for many reasons, it may not become practically useful, until months or years later. Following the Board's decision, any "too long" delay would constitute a forfeiture fatal in a priority contest, even if terminated by extensive and productive work done long before the newcomer entered the field. We do not suggest that the first inventor should be entitled to rely for priority purposes on his early reduction to practice if the intervening inactivity lasts "too long," as that principle has evolved in a century of judicial analysis. Precedent did not deal with the facts at bar. There is no authority that would estop Paulik from relying on his resumed activities in order to pre-date Rizkalla's earliest date. We hold that such resumed activity must be considered as evidence of priority of invention. Should Paulik demonstrate that he had renewed activity on the invention and that he proceeded diligently to filing his patent application, starting before the earliest date to which Rizkalla is entitled—all in accordance with established principles of interference practice—we hold that Paulik is not prejudiced by the fact that he had reduced the invention to practice some years earlier. III. This appeal presents a question not previously treated by this court or, indeed, in the historical jurisprudence on suppression or concealment. We take this opportunity to clarify an apparent misperception of certain opinions of our predecessor court which the Board has cited in support of its holding. There is over a hundred years of judicial precedent on the issue of suppression or concealment due to prolonged delay in filing. From the earliest decisions, a distinction has been drawn between deliberate suppression or concealment of an invention, and the legal inference of suppression or concealment based on "too long" a delay in filing the patent application. Both types of situations were considered by the courts before the 1952 Patent Act, and both are encompassed in 35 U.S.C. § 102(g). The result is consistent over this entire period—loss of the first inventor's priority as against an intervening second inventor—and has consistently been based on equitable principles and public policy as applied to the facts of each case. The earliest decisions dealt primarily with deliberate concealment. In 1858, the Supreme Court in Kendall v. Winsor, 62 U.S. (21 How.) 322, 328 (1858) held that an inventor who "designedly, and with the view of applying it indefinitely and exclusively for his own profit, withholds his invention from the public" impedes "the progress of science and the useful arts". In Mason v. Hepburn, supra, the classical case on inferred as contrasted with deliberate suppression or concealment, Hepburn was granted a patent in September 1894. Spurred by this news Mason filed his patent application in December 1894. In an interference, Mason demonstrated that he had built a working model in 1887 but showed no activity during the seven years thereafter. The court held that although Mason may have negligently rather than willfully concealed his invention, the "indifference, supineness, or wilful act" of a first inventor is the basis for "the equity" that favors the second inventor when that person made and disclosed the invention during the prolonged inactivity of the first inventor. 13 App.D.C. at 96, 1898 C.D. at 517.

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**** The legislative history of section 102(g) makes clear that its purpose was not to change the law. As described in H.R. Rep. No. 1923, 82d Cong., 2d Sess. 17-18 (1951), section 102(g) "retains the present rules of [the case] law governing the determination of priority of invention". The pre1952 cases all dealt with situations whereby a later inventor made the same invention during a period of either prolonged inactivity or deliberate concealment by the first inventor, after knowledge of which (usually, but not always, by the issuance of a patent to the second inventor) the first inventor was "spurred" into asserting patent rights, unsuccessfully.

**** IV. The decisions applying section 102(g) balanced the law and policy favoring the first person to make an invention, against equitable considerations when more than one person had made the same invention: in each case where the court deprived the de facto first inventor of the right to the patent, the second inventor had entered the field during a period of either inactivity or deliberate concealment by the first inventor. Often the first inventor had been spurred to file a patent application by news of the second inventor's activities. Although "spurring" is not necessary to a finding of suppression or concealment, see Young v. Dworkin, 489 F.2d at 1281, 180 USPQ at 391-92 and citations therein, the courts' frequent references to spurring indicate their concern with this equitable factor. Some decisions used the word "forfeiture" to describe the first inventor's loss of priority; but none interpreted section 102(g) as requiring an absolute forfeiture rather than requiring a balance of equities. In Brokaw v. Vogel, for example, the court said "the Mason v. Hepburn principle is not a forfeiture in the true sense; rather it is a rule according to which the patent right goes to the most deserving. Realistically, it is a forfeiture by the de facto first inventor of the right to rely on his earlier reduction to practice." 429 F.2d at 480, 57 C.C.P.A. at 1302, 166 USPQ at 431. In Young v. Dworkin Judge Rich wrote "I cannot agree with the board that the question in this case is whether Young 'forfeited his right to a patent'. But for Dworkin's conflicting claim, Young forfeited nothing and would get a patent. All he forfeited ... was the right to rely on his prior actual reduction to practice in a priority dispute." 489 F.2d at 1286, 180 USPQ at 395-96 (emphases in original). In no case where the first inventor had waited "too long" did he end his period of inactivity before the second inventor appeared. We affirm the long-standing rule that too long a delay may bar the first inventor from reliance on an early reduction to practice in a priority contest. But we hold that the first inventor will not be barred from relying on later, resumed activity antedating an opponent's entry into the field, merely because the work done before the delay occurred was sufficient to amount to a reduction to practice. This result furthers the basic purpose of the patent system. The exclusive right, constitutionally derived, was for the national purpose of advancing the useful arts—the process today called technological innovation. As implemented by the patent statute, the grant of the right to exclude carries the obligation to disclose the workings of the invention, thereby adding to the store of knowledge without diminishing the patent-supported incentive to innovate. But the obligation to disclose is not the principal reason for a patent system; indeed, it is a rare invention that cannot be deciphered more readily from its commercial embodiment than from the printed patent. The reason for the patent system is to encourage innovation and its fruits: new jobs and new industries, new consumer goods and trade benefits. We must keep this purpose in plain view as we consider the consequences of interpretations of the patent law such as in the Board's decision.

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A foreseeable consequence of the Board's ruling is to discourage inventors and their supporters from working on projects that had been "too long" set aside, because of the impossibility of relying, in a priority contest, on either their original work or their renewed work. This curious result is neither fair nor in the public interest. We do not see that the public interest is served by placing so severe a sanction on failure to file premature patent applications on immature inventions of unknown value. In reversing the Board's decision we do not hold that such inventions are necessarily entitled to the benefits of their earliest dates in a priority contest; we hold only that they are not barred from entitlement to their dates of renewed activity. **** RICH, Circuit Judge, concurring. I am in full agreement with Judge Newman's opinion. I write in order to express some additional thoughts respecting 35 U.S.C. § 102(g) as a member of the group which drafted that section, which was new in the Patent Act of 1952, our current statute. Section 102(g) is pivotal in deciding the priority issue in this case. In my view, considering what I know to have been the intent of the section, it has been thoroughly misapplied by the board and the dissent here, in a manner unsupported by any prior decision of which I am aware. This the board has done by applying to § 102(g) a kind of stultifying literalism, devising out of whole cloth novel propositions of law by misconstruing a section which was intended to be merely a codification of preexisting case law precedents well established in priority disputes, principally in interference practice, as I shall explain. The complete story of the drafting of the 1952 Patent Act is told in an article I wrote a decade after it came into effect, entitled "Congressional Intent—Or, Who Wrote the Patent Act of 1952?" published for the Southwestern Legal Foundation by BNA in a book entitled "Patent Procurement and Exploitation" (1963) and reprinted in Witherspoon, "Nonobviousness—The Ultimate Condition of Patentability" (BNA 1980). I assured the factual accuracy of the article by submitting it before publication for correction and supplementation to the people most involved. The key person was the late P.J. Federico of the then Patent Office. His official title was Examiner-inChief, meaning that he was a member of the Board of Appeals. But at the time involved (19491952), and earlier, he was more than that: he represented the Patent Office on legislative matters before Congress and was a close advisor to a succession of Commissioners of Patents. Because of this, in the regime of Commissioner Kingsland, when the House subcommittee on patents decided, in its other capacity as the Committee on Codification of the Laws, to codify Title 35, it fell to Federico to write the first draft of the 1952 Act. That draft was then taken in hand, in collaboration with Federico and the subcommittee staff, by a "Coordinating Committee" of the national patent bar chaired by Henry Ashton of New York. This committee had a two-man Drafting Committee, consisting of Paul A. Rose of Washington and myself, which worked with Ashton, Federico, and the subcommittee staff in putting together the several revisions of the bill which eventually became law. These people were the working nucleus of the full Coordinating Committee which consisted of representatives of thirty patent law associations, patent committees of general bar associations, and industrial associations, which met from time to time and provided much expert input on a nationwide basis. That, in brief, is the explanation of how I became familiar with the purposes and intents of the drafters underlying what I have to say here. I should also like to explain some further and perhaps now little known facts with respect to Federico's work. He not only wrote the first draft of the Act himself and actively participated for the next two years in every detail of its revisions but, having been made a special consultant to the House subcommittee in charge of the project, he was also a principal author of House Report No. 1923 on the bill, which was virtually copied by the Senate Judiciary Committee as its report No. 1979, and the author of the section-by-section Revisors Notes. He submitted the latter to Ashton and the Drafting Committee for suggestions. Federico, Ashton, and the members of the Drafting Committee then became principal witnesses at the hearings held by the House Subcommittee June 13-15, 1951, on H.R. 3760, the only hearings held. After enactment of the Chapter 3 – Novelty & Statutory Bars

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law, West Publishing Company asked Federico to write a commentary on it for publication in U.S.C.A., which he did, and it was published in 1954 in the first of the volumes containing the new Title 35. Federico also submitted drafts of the commentary to Ashton and the Drafting Committee for suggestions and thus I became very familiar with it prior to its publication. Against this background, I will now explain how and why § 102(g) got into the Patent Act. Federico's first draft did not contain such a section. Early in the work of the Coordinating Committee, Federico pointed out that because the Act repealed all of the old patent statutes, including R.S. 4920, the "second defense" of which had always been assumed to be a justification for interference proceedings, the statutes would no longer contain such justification and something would have to be done about it. That section of the old statute, which was § 61 of the Act of 1870, read in pertinent part as follows: Sec. 4920. R.S. In any action for infringement the defendant may plead the general issue, and having given notice in writing to the plaintiff or his attorney thirty days before, may prove one or more of the following special matters. .... Second: That he had surreptitiously or unjustly obtained the patent for that which was in fact invented by another, who was using reasonable diligence in adapting and perfecting the same; . . ..

Federico therefore brought in a proposed new section, 22-A, to follow § 22 of his original draft, which was later to become § 102, containing, inter alia, the following: (b) the invention was in fact invented before the applicant's invention thereof by another who had not abandoned the invention and who was using reasonable diligence in adapting and perfecting the same.

The parallel with the second defense of R.S. 4920 is clear. The Coordinating Committee adopted it at a May 9-10, 1950, meeting and it was incorporated as § 102(g) in the first bill to be introduced in Congress, H.R. 9133, 81st Cong., 2d Sess., July 17, 1950. This bill was given wide circulation and many suggestions and criticisms resulted. One was that under existing law the prior invention by "another" must have been "in this country." Therefore, § 102(g) of the next bill, H.R. 3760, 82nd Cong., 1st Sess., April 18, 1951, read: (g) before the applicant's invention thereof the invention was in fact made in this country by another who had not abandoned it and who was using reasonable diligence in this country in reducing it to practice or had reduced it to practice.

In the reported hearings on H.R. 3760, p. 31, Ashton told the House subcommittee that the Coordinating Committee had met May 22, 1951, and had adopted a list of suggested changes in the bill, which list had been previously submitted to the House subcommittee. The list is printed at p. 33 of the hearings and includes the following very pertinent item under § 102: Paragraph (g): The Coordinating Committee was not satisfied with either the language of the Bill or the suggested changes proposed at the meeting since none of them wholly took care of the situation. The matter was left to Mr. Federico to prepare a redraft. After consultation with others Mr. Federico recommends the following paragraph which is intended to codify the existing law [emphasis mine]: "(g) before the applicant's invention thereof the invention was made in this country by another who had not abandoned, suppressed, or concealed it. In determining priority of invention there shall be considered not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to conception by the other."

That recommended language is the statute as it is today. Its exact origin is obscured by time. It is of interest to note, however, from the aforesaid hearings (p. 51), that it was also adopted in the proposal for changes made to the subcommittee on behalf of the National Association of Manufacturers committee on patents in the testimony of its advisor, Mr. George E. Folk, who was a very active member of the Coordinating Committee and whose expertise in patent law was Chapter 3 – Novelty & Statutory Bars

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manifest from his career of 53 years. It included 2 years as a Patent Office examiner, 5 years in the Interference Division thereof writing opinions on priority, 10 years in private practice, 22 years in the patent department of American Telephone & Telegraph Co., of which he became head, and 13 years with the NAM committee. (Hearings, p. 53.) Testimony on § 102(g) before the subcommittee included: Federico: "Paragraph (g) relates to the question of priority of invention between rival inventors." (Hearings, p. 38) The Revision Note in House Report No. 1923 says of paragraph (g): "This paragraph retains the present rules of law governing the determination of priority of invention" (p. 18). The text of the Report makes the same statement Federico made in his testimony. All that Federico had to say about § 102(g) in his 1954 U.S.C.A. Commentary was this: Paragraph (g) relates to prior inventorship by another in this country as preventing the grant of a patent. It is based in part on the second defense in old R.S. 4920 ... and retains the rules of law governing the determination of priority of invention developed by decisions. [Emphasis mine.]

Charles J. Zinn, who was codification counsel to the House patents subcommittee during the drafting of the 1952 patent act and who was intimately familiar with it, also wrote a commentary published in the Dec. 20, 1952, U.S.Code Congressional and Administrative News as a special section. All he had to say about § 102(g) was this (p. 7): The provisions relating to the determination of priority of invention contained in subparagraph (g) are unchanged in substance. [Emphasis mine.]

That is to say, they were unchanged from existing priority law as the courts had made it. Nowhere in the whole legislative history is there even a hint of any concept of forfeiture such as the dissenting opinion herein would apply. Anyone having a scholarly interest in the philosophy underlying the old law will find much of it in Robinson on Patents § 390 (1890) and the cases reviewed in its footnotes. The Words "suppressed, or concealed" in § 102(g) Have No Definite Meaning These words were included in the section with no other intention than to codify pre-existing case law pertaining to priority determinations in interferences or infringement suits. One must, therefore, look to the prior cases and the fact situations involved in them to determine what is meant by "suppressed, or concealed." Their import cannot be ascertained merely by consulting dictionaries or one's inner consciousness. Those drafting the section were well aware that these terms do not explain themselves. In contemporaneously reporting on the Bill to the New York Patent Law Association in November, 1952, between its enactment and its effective date, January 1, 1953, I explained, in a talk of which about 1000 copies were distributed: **** In short, "suppressed or concealed" means only what courts say it means in each case. It is like deciding obviousness or negligence. No prior case—as can be assumed from the fact that this is a case of first impression, nothing to the contrary having appeared—compels the meaning which has been given to these words by the board herein. Deciding whether a party has "suppressed or concealed" is arriving at a conclusion of law, not finding a fact. In each case, the question is whether the facts as to what was or was not done lead to the legal conclusion of "suppressed, or concealed." To put the finger on the crucial flaw in the board's reasoning, I find it in these statements: We agree with Rizkalla that even if Paulik demonstrates continuous activity from prior to the Rizkalla effective filing date to his filing date that such would have no bearing on ... priority.... .... It is of no significance in the case of a party who is not the last to reduce to practice. [My emphasis.]

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It must be recognized that we are deciding a priority issue: which party is to be regarded as the "first" inventor in law, regardless of fact. The award, as the CCPA several times decided, should be to the one most deserving from a policy standpoint. In deciding who is prior in law, every fact has a "bearing" and is of "significance" and must be weighed on the scales of justice. It is of the utmost significance here whether Paulik was actively proceeding to patent his invention prior to any date established by Rizkalla, and thus the first to be on the way to giving the public the benefit of the invention. That is what a "priority" decision is all about. Rizkalla and the board are simply playing games with the language of paragraph (g), which was not written to be given a hypertechnical construction but merely in an attempt to sum up concisely existing priority law based on over a century of precedents, an attempt which proved to be rather difficult even for experts. With respect to the board's playing with the words of paragraph (g), it was, of course, trying to make something out of the phrase "the reasonable diligence of one who was first to conceive and last to reduce to practice" (my emphasis), in effect saying that Paulik's diligence from before Rizkalla's earliest date to Paulik's filing date is of "no significance" because Paulik was not the last but the first to reduce to practice! But the reason (g) was worded as it was, as I have explained above, is that it was an effort to restate concisely fundamental interference or priority law. In that law, it was, and still is, an elementary principle that one who is both the first to conceive and first to reduce to practice does not have to show diligence at all. Underwood's Interference Practice § 74 (1928); Rivise and Caesar, Interference Law and Practice, Ch. XIII, especially §§ 173 and 174(2) (1940). To take a statement that diligence shall be considered in the situation where it had long been required and turn it into a prohibition to consider it, or a ground for refusing to consider it, is about as perverse a construction as can be imagined. The old rule just stated does not, of course, apply here to Paulik's need to show diligence connecting his revived activity from just prior to Rizkalla's earliest proven date to his filing date or a reduction to practice, according to the established law. The statute does not deal with the situation here. Since the drafters of § 102(g) were only trying to provide a basis for interferences in the statute and state existing case law, no other "intent" can be attributed to Congress, especially an intent to create a forfeiture. **** An inventor can delay as long as he likes, in the absence of commercialization (see Metallizing Engineering Co. v. Kenyon Bearing and Auto Parts Co., 153 F.2d 516, 68 USPQ 54, cert. den., 328 U.S. 840 (1946)), if he is willing to risk having to show in an interference or in facing a defense of prior invention that he has the better right to the patent as between the contesting parties. On the facts shown by the present record, Paulik appears to have the better right when equities, rather than statements in opinions on unlike fact situations, are considered. And, finally, there is a question of fairness; why should Paulik be penalized for having done early work if, without reliance on it, he is still ahead of Rizkalla? There is more to § 102(g) than its bare words, namely, over a century of carefully thought out case law which must not be ignored in construing it. Two or three recent opinions dealing with entirely different fact situations do not control.

MARKEY, Chief Judge, additional views. **** FRIEDMAN, Circuit Judge (with whom DAVIS, KASHIWA, BENNETT and JACK R. MILLER, Circuit Judges, join), dissenting.

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I think that in awarding priority to Rizkalla, the Board properly applied section 102(g) and the pertinent precedents of this court. I therefore would affirm. **** I do not think that the language in section 102(g) leaves any room for considering the respective equities of (i) an earlier inventor who admittedly has suppressed or concealed his invention for an unreasonably long period and (ii) a later inventor who acted promptly in seeking the patent and was, in fact, first to file. Section 102(g) speaks in clear, simple, prohibitory terms. An inventor who has "abandoned, suppressed, or concealed" his invention is not entitled to priority as against a subsequent inventor who has not engaged in that conduct. Congress itself has made the judgment that in that situation the equities lie with the second inventor, not with the first. Under the statute, there is no room for the Board or the court to second-guess that congressional determination on the basis of the tribunal's own perception of where the equities lie in a particular case. There is nothing in the language or purpose of section 102(g) that justifies the court's newly minted gloss upon the text of making priority depend upon the date of the suppressing inventor's "resumed work" looking to the filing of a patent application. The statute gives priority to the applicant by whom "the invention was made" first and who has not suppressed or concealed it. The court does not disturb the Board's determination that Paulik "made," i.e., reduced to practice, the invention long before he asserts he "resumed work" on it, and that his lengthy delay itself constitutes prima facie suppression. The court does not, and cannot, point to any language in the statute that supports its result. Instead, it relies only upon general policy arguments that allegedly reflect the equities between the two parties to the interference. As stated, I do not think the statute contemplates or permits such an inquiry. ****

Palmer v. Dudzik 481 F.2d 1377, 178 USPQ 608 (CCPA 1973) Before MARKEY, Chief Judge, and RICH, ALMOND, BALDWIN, and LANE, Associate Judges. RICH, Judge. This appeal is from the decision of the Board of Patent Interferences awarding Dudzik, the junior party, priority of invention as to all ten counts, which relate to a method and apparatus used in the production of "set" yarns, on the ground that the senior party, Palmer et al. (hereinafter "Palmer"), had suppressed or concealed the invention within the meaning of 35 U.S.C. § 102(g). We affirm. The Contested Subject Matter [Palmer and Dudzik each independently discovered a way to more uniformly shrink "set" yarns in a steam autoclave or dye bath. They learned that yarn wound on a core could be produced uniformly if the inner layers are initially wound more loosely than the outer layers. The invention is carried out by providing an enlarged ring or collar at the end of the winding core to make the core rotate more slowly during the initial take-up of yarn.] Figs. 1, 2, and 4 of Palmer are illustrative.

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**** Facts in Brief With the assistance of Taylor, Palmer conceived of and reduced the invention to practice in the fall of 1965 by equipping Duplan's "Leesona 553" machine, Number 7, with the ring devices. Shortly thereafter the market for "set" yarn became depressed so production was suspended and machine No. 7 sat idle on Duplan's production floor. In the fall of 1966, Palmer equipped Duplan's "Turbo" machine with the invention. The Turbo was an experimental machine which was maintained in secret by Duplan. At this time the invention came to the attention of Duplan's technical director, Mr. Strub, who, after discussion with Mr. Roberts, Duplan's corporate vice president in charge of manufacturing and president of the textured yarn division, and Mr. H. C. Fisher, another Duplan vice president, stated in a memorandum to Fisher We would recommend not filing a Patent Application but simply using this system and trying our best to keep it as unpublicized as possible.

Early in 1967, Duplan equipped "ARCT" machines with the ring devices in accordance with the invention and produced and sold "set" yarn made according to Palmer's invention. Appellants tell us in their brief that "These ARCT machines were located on the production floor of Duplan's Forsyth Plant among the other production machines and were readily available to be seen by anyone who was on the production floor, including all production personnel and visitors." Meanwhile, appellee Dudzik independently conceived the invention on May 8, 1967, and reduced it to practice on May 9, 1967. In June 1967, a Mr. Daniel Fisher of Leesona Corp. visited Strub of Duplan and advised him of Dudzik's invention. Strub realizing it was the same as Palmer's invention, then conferred with Duplan's patent counsel and reversed his earlier recommendation, advising that a patent application be filed on Palmer's work. This was done post haste. Dudzik filed a week after Palmer. The Board's Decision [The Board held that Palmer had concealed the invention under section 102(g), and awarded priority to Dudzik. The Board did not rely on Palmer's having been "spurred into activitiy" by Dr. Fisher's visit to Duplan. The Board rejected Palmer's argument that suppression or concealment could not be found because all of his activities had occurred within the space of one year. Finally, the Board rejected Palmer's argument that there was no concealment because his application had been filed just three months after Duplan's commercial use of the invention began.] **** OPINION

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[The court first considered testimony indicating that Duplan had not disclosed the invention to anyone outside the company before filing the patent application, and that the invention was not apparent even to one skilled in the art who may have toured Duplan's plant. As a result, the court affirmed the board's decision that Palmer concealed the invention, forfeiting his right in it to a later invention.] While we have concluded that Duplan's use of the invention was not such that knowledge of the invention was made available to the public, there is a separate theme running throughout appellants' arguments that either there was no suppression or concealment of the invention in the first place, or—if there was—Duplan purged itself of it. This is the contention that commercial use of the invention by Duplan somehow so enriched the art or made the benefits of the invention available to the public as to prevent a finding of suppression or concealment, despite the fact that, as has already been shown, the nature of the invention which produced the superior commercial product was neither disclosed to the public nor determinable by examining the product. So far as we know, this issue has never been decided in the context of "suppression" or "concealment" under § 102(g), although we recognize that commercial use, without more, has long been a basis for finding a public use of the invention under other portions of § 102. We do not think that a finding of suppression or concealment is negated merely because a secret use of the invention has been commercial. To be sure, the public may have received some benefit from such use of the invention in the sense of being able to get the improved "set" yarn. But this alone has not, to use appellants' words, so "enriched the art" as to negate a finding of concealment within § 102(g). The public has learned nothing about the invention. In Thompson v. Weston, 19 App.D.C. 373, 1902 C.D. 52 (1902), the de facto first inventor, Thompson, reduced his invention, a combined ammeter- voltmeter, to practice and placed it in his private laboratory which was not open to outsiders where use of the invention was restricted to Thompson and his assistant. After Weston patented the invention, Thompson filed his application. The court awarded priority to Weston, noting, at 19 App.D.C. at 380, 1902 C.D. at 527, that * * * where one has completed the act of invention his right to the reward in the form of a patent becomes complete save in two instances that may be satisfactorily shown to exist. First, he loses the right as against the public in general by a public use for the statutory period. Second, by deliberate concealment or suppression of the knowledge of his invention he subordinates his claim, in accordance with the general policy of the law in the promotion of the public interest, to that of another and bona fide inventor who during the period of inaction and concealment shall have given the benefit of the discovery to the public. Viewed in the light of "the true policy and ends of the patent laws," the latter is the first to invent, and therefore entitled to the reward.

The facts in Thompson do not indicate whether the public would have received any benefit from Thompson's secret use of the invention, but this personal use by Thompson and his assistant certainly did not prevent a finding of concealment or suppression, the court noting that the doctrine of Mason v. Hepburn applied where it is the knowledge of the invention which is concealed or suppressed. In Doulett v. Muther, 51 App.D.C. 201, 277 F. 600, 1922 C.D. 101 (1922), the Court of Appeals of the District of Columbia considered the question of concealment of the invention, under the law of Mason v. Hepburn, where the de facto first inventor of a tool for setting invisible eyelets in shoes had maintained the invention in secret from unfriendly competitors. The court held that the rule of Mason v. Hepburn did not apply, noting that Doulett had commercially used the invention in such manner that "[k]nowledge of the invention, therefore, was sufficiently general to insure its preservation." (Our emphasis.) The court stated at 277 F. 602: We agree with the Examiner of Interferences that the conduct of Doulett was prompted solely by a desire to prevent the appropriation of his invention by what he conceived to be unfriendly interests, and not by any desire to conceal or suppress it. In the first place, the machine was in daily use in the factory where he was employed. One member of the firm was familiar with its use, and, as already noted, some half a dozen witnesses, most of whom were peculiarly skilled in the art, were equally familiar with it. Knowledge of the invention, therefore, was sufficiently general to

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insure its preservation, and, because the character of the invention was such as to render its appropriation easy, the conduct of Doulett was consistent and reasonable, in the circumstances. [Emphasis ours.]

We think that the principles of the above quotation are still valid today and that the question whether suppression or concealment under 35 U.S.C. § 102(g) is negated ought to be determined by asking whether the public has gained knowledge of the invention which will insure its preservation in the public domain. Here the commercial use conveyed no knowledge of the invention to the public. Accordingly, we do not find that such use negates a legal conclusion that Palmer concealed the invention within the meaning of § 102(g). Appellants' assertion that 35 U. S.C. § 102(b) gives Duplan an absolute one-year period from the date of first public use of the Palmer invention within which to file an application, was answered correctly in the negative by the board. The purpose and rationale for the one-year grace period of § 102(b) is entirely foreign to the way appellants would apply it. Section 102(b) provides a oneyear period during which an inventor may perfect his invention and prepare and file his application, testing it in public, if necessary. The section actually encourages earlier disclosure, publication, or public use of the invention, through which the public may gain knowledge of it. It does not, however, have any bearing on the rights of an inventor who, after his reduction to practice of the invention, conceals it while another makes the same invention and proceeds to apply for a patent, as is the case here. Finally, appellants have noted that their commercial use of the invention may be a statutory bar under § 102(a) to Dudzik's obtaining a patent on it, and they assert that it is therefore anomalous to deny them priority. The answer to this is twofold: First, it has not been determined that Duplan's use of the invention would be a bar under § 102(a) and that question is not before us. Secondly, as has often been noted, a decision in an interference on priority does no more than determine which of two or more inventors is not entitled to a patent because another was legally first. It does not determine, as appellants suggest, that the first inventor in law will be granted a patent. It is the Patent Office which grants patents, not this court. See In re Arkley, 455 F.2d 586, 59 CCPA 804 (1972) and Glass v. DeRoo, 239 F.2d 402, 44 CCPA 723 (1956). The only question with which we are here concerned is which of the parties has the better right to a patent, assuming, arguendo, that there is no impediment to granting a patent to the winner on the priority issue. The policy governing our decision has been fully stated in Brokaw v. Vogel, 429 F.2d 476, 57 CCPA 1296 (1970). A brief word is in order in response to appellants' argument that "Duplan purged itself of any wrongdoing which it may have committed" in keeping the Palmer invention secret. Their brief says, Duplan's affirmative activities in commercializing this invention clearly eradicated or cured any loss or damage which the public may have suffered * * *.

There is here no question of wrongdoing or of loss or damage to the public. Appellee, citing Brokaw, has neatly expounded the true nature of the situation: It may be suggested that to the extent that this defense has the ring of Mea Culpa to it, it seems to imply that a quality of wrongdoing accompanies the act of concealment of inventions. This seems quite contrary to the actual rationale for the applicable law, namely that an inventor, once he has reduced his invention to practice, may choose between the alternative courses of trying to maintain it in secrecy or applying for a patent thereon. That there is nothing nefarious about the former course is amply demonstrated by the fact that the common law (and equity) will come to his aid in protecting his secret. The condition which the law does impose on the inventor, and which Appellants are unwilling to accept, is that once he has elected the former he risks that a second inventor of the same invention will be able to secure a patent on it and impose his limited monopoly against him. In view of the policy goal to which the concealment of invention doctrine is directed, this is a fair and just result.

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Finnigan Corp. v. International Trade Comm’n 180 F.3d 1354, 51 USPQ2d 1001 (Fed. Cir. 1999) Before RICH, MICHEL, and LOURIE, Circuit Judges. LOURIE, Circuit Judge. [Finnigan filed a complaint before the U.S. International Trade Commission to prevent importation of its competitors’ products which Finnigan alleged were infringements of its patent for a “quadropole ion trap” used to generate a mass spectrum of a trapped sample. After an investigtion and hearing, the Administrative Law Judge (ALJ) issued an Initial Determination recommending that the Commission that none of Finnigan’s patent claims was infringed and that several claims were invalid under section 102(b). The ALJ found the claims anticipated based on an article written by one Keith P. Jefferts, and on Jefferts’ asserted prior public use of the claimed invention (based primarily on Jefferts’ testimony at the hearing, which the ALJ found to be very credible because he was not an interested party) The Commission agreed with the ALJ. Although the particular technological facts on invalidity were complicated, it is enough to know that the dispute was whether the prior art disclosed the use of “nonresonance ejection” of ions from the claimed ion trap.] **** DISCUSSION D. Anticipation Finnigan argues that neither of the ALJ's grounds for finding claims 1-4 and 8 anticipated is sustainable. As to the Jefferts article, Finnigan asserts that the article does not clearly disclose nonresonance ejection. Finnigan points to Jefferts' testimony in support of its argument, testimony which Finnigan characterizes as ambiguous concerning the reference's disclosure. As to Jefferts' public use, Finnigan argues that Jefferts' uncorroborated testimony cannot constitute clear and convincing evidence of invalidity as a matter of law. The Commission responds that substantial evidence supports the ALJ's finding that the Jefferts article, as supplemented by Jefferts' testimony, anticipates the disputed claims. The Commission asserts further that Jefferts was an uninterested party in the present dispute, and therefore that his testimony concerning his public use of the claimed invention need not be corroborated. Moreover, the Commission continues, Jefferts' article corroborated his testimony. Patents are presumed valid by statute. See 35 U.S.C. § 282 (1994). "The burden is on the party asserting invalidity to prove it with facts supported by clear and convincing evidence." SSIH Equip., S.A. v. United States Int'l Trade Comm'n, 718 F.2d 365, 375, 218 USPQ 678, 687 (Fed. Cir. 1983). We have reviewed the record and have determined that the invalidity determination was not based upon substantial evidence which is clear and convincing that the Jefferts article or Jefferts' public use anticipates. We therefore reverse the Commission's determination that claims 1-4 and 8 of the '884 patent are invalid. 1. The Jefferts Article A prior art reference anticipates a patent claim if the reference discloses, either expressly or inherently, all of the limitations of the claim. See Kalman v. Kimberley-Clark Corp., 713 F.2d 760, 771, 218 USPQ 781, 789 (Fed. Cir. 1983). The obvious shortcoming of the Jefferts article is that it does not expressly disclose the use of nonresonance ejection, a limitation of claims 1 and 8 as we have construed them. The ALJ was able to close this gap between the Jefferts article and the claim by concluding that "one skilled in the art" would understand the article to disclose nonresonance ejection. Because of the ALJ's reliance on the understanding of one skilled in the art, we understand the ALJ to have relied on an inherency theory in finding the claims anticipated.

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The operation of inherency in anticipation was aptly explained by this court in Continental Can Co., U.S.A. v. Monsanto Co., 948 F.2d 1264, 20 USPQ2d 1746 (Fed. Cir. 1991): To serve as an anticipation when the reference is silent about the asserted inherent characteristic, such gap in the reference may be filled with recourse to extrinsic evidence. Such evidence must make clear that the missing descriptive matter is necessarily present in the thing described in the reference, and that it would be so recognized by persons of ordinary skill. In re Oelrich, 666 F.2d 578, 581, 212 USPQ 323, 326 (CCPA 1981) (quoting Hansgirg v. Kemmer, 102 F.2d 212, 214, 40 USPQ 665, 667 (CCPA 1939)) [states]: Inherency, however, may not be established by probabilities or possibilities. The mere fact that a certain thing may result from a given set of circumstances is not sufficient. If, however, the disclosure is sufficient to show that the natural result flowing from the operation as taught would result in the performance of the questioned function, it seems to be well settled that the disclosure should be regarded as sufficient. This modest flexibility in the rule that "anticipation" requires that every element of the claims appear in a single reference accommodates situations where the common knowledge of technologists is not recorded in the reference; that is, where technological facts are known to those in the field of the invention, albeit not known to judges. Continental Can, 948 F.2d at 1268-69, 20 USPQ2d at 1749-50. The ALJ's understanding of the knowledge of one skilled in the art was informed solely by the testimony of Jefferts. The relevant portions of that testimony are as follows: Jefferts: "[Figure 2] is a diagram that's appropriate to the first experiment that I did in Bell Laboratories." ALJ: "All right. Now, were you using a nonresonant ejection technique in your first experiment . . . [a]t Bell Laboratories?" Jefferts: "At least part of the time, yes." ALJ: "And does [Figure 2] express that or depict that experiment?" Jefferts: "I think so." ALJ: "Could you explain that?" Jefferts: "I think it can be interpreted to mean nonresonant ejection almost exclusively. It shows no orbit drive, as it were, or associated RF field to drive the ions out. On the other hand, this is a pretty general box, and if it--" ALJ: "Which is the general box?" Jefferts: "That says 'trap drive voltage.' And the fact is that it's the same diagram also applied to later versions of this system, wherein I did selective excitation and selective ejection [i.e., resonance ejection]." Joint App. at A2034 (emphasis added). The portions of this testimony that we have emphasized show that Jefferts' testimony was far from unequivocal. In the end, Jefferts as much as admitted that Figure 2 might disclose a set-up for performing either resonance or nonresonance ejection. The mere possibility that Figure 2 might be understood by one of skill in the art to disclose nonresonance ejection is insufficient to show that it is inherently disclosed therein. See Continental Can, supra. As such, because one skilled in the art would not necessarily recognize that nonresonance ejection is disclosed in the Jefferts article, the evidence is not clear and convincing that the Jefferts article inherently anticipates claims 1 and 8.

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The law has long looked with disfavor upon invalidating patents on the basis of mere testimonial evidence absent other evidence that corroborates that testimony. The Supreme Court recognized over one hundred years ago that testimony concerning invalidating activities can be "unsatisfactory" due to "the forgetfulness of witnesses, their liability to mistakes, their proneness to recollect things as the party calling them would have them recollect them, aside from the temptation to actual perjury." The Barbed Wire Patent, 143 U.S. 275, 284 (1891). Accordingly, "[w]itnesses whose memories are prodded by the eagerness of interested parties to elicit testimony favorable to themselves are not usually to be depended upon for accurate information," and therefore such testimony rarely satisfies the burden upon the interested party, usually the accused infringer, to prove invalidity by clear and convincing evidence. See id. Mere testimony concerning invalidating activities is received with further skepticism because such activities are normally documented by tangible evidence such as devices, schematics, or other materials that typically accompany the inventive process. See Woodland Trust v. Flowertree Nursery, Inc., 148 F.3d 1368, 1373, 47 USPQ2d 1363, 1367 (Fed. Cir. 1998) (noting that the skepticism with which mere testimony of invalidating activity is received is "reinforced, in modern times, by the ubiquitous paper trail of virtually all commercial activity. It is rare indeed that some physical record (e.g., a written document such as notes, letters, invoices, notebooks, or a sketch or drawing or photograph showing the device, a model, or some other contemporaneous record) does not exist."); Eibel Process Co. v. Minnesota & Ontario Paper Co., 261 U.S. 45, 60 (1923) (holding that the oral testimony of prior public use "falls short of being enough to overcome the presumption of novelty from the granting of the patent" when "there is not a single written record, letter or specification of prior date to [the patentee's] application that discloses any such discovery by anyone . . . ."). While this court has in the past applied the requirement of corroboration more often in the context of priority disputes under 35 U.S.C. § 102(g),8 corroboration has been required to prove invalidity under other subsections of § 102 as well. In the context of § 102(f) (derivation) and § 102 (g) (priority), we have stated that "the case law is unequivocal that an inventor's testimony respecting facts surrounding a claim of derivation or priority of invention cannot, standing alone, rise to the level of clear and convincing proof." Price v. Symsek, 988 F.2d 1187, 1194, 26 USPQ2d 1031, 1036 (Fed. Cir. 1993). No principled reason appears for applying a different rule when other subsections of § 102 are implicated: a witness's uncorroborated testimony is equally suspect as clear and convincing evidence if he testifies concerning the use of the invention in public before invention by the patentee (§ 102(a)), use of the invention in public one year before the patentee filed his patent (§ 102(b)), or invention before the patentee (§ 102(g)). Moreover, the need for corroboration exists regardless whether the party testifying concerning the invalidating activity is interested in the outcome of the litigation (e.g., because that party is the accused infringer) or is uninterested but testifying on behalf of an interested party. That corroboration is required in the former circumstance cannot be debated. See, e.g., Stevenson v. International Trade Comm'n, 612 F.2d 546, 550, 204 USPQ 276, 280 (CCPA 1979) ("Uncorroborated oral testimony of prior inventors or users with a demonstrated financial interest in the outcome of the litigation is insufficient to provide such proof."). Uninterested witnesses are also subject to the corroboration requirement. For example, in Barbed Wire Patent, some twenty-four witnesses, all apparently uninterested in the outcome of the case, testified on behalf of the accused infringer that they had seen the patented fence exhibited by a third party, Mr. Morley, at a county fair more than two years prior to the filing of the 8

The Court in Barbed Wire Patent stated that the burden on the party proving invalidity was "clear, satisfactory and beyond a reasonable doubt." Barbed Wire Patent, 143 U.S. at 284. We have clarified that this formulation and others used subsequently by the Supreme Court are indistinguishable from the more modern parlance of "clear and convincing" evidence. See Woodland Trust , 148 F.3d at 1372-73, 47 USPQ2d at 1367 (Fed. Cir. 1998); Trans-World Mfg. Corp. v. Al Nyman & Sons, Inc., 750 F.2d 1552, 1559-60, 224 USPQ 259, 262-63 (Fed. Cir. 1984); see also Eibel Process Co. v. Minnesota & Ontario Paper Co., 261 U.S. 45, 60 (1923) ("The oral evidence on this point falls far short of being enough to overcome the presumption of novelty from the granting of the patent. The temptation to remember in such cases and the ease with which honest witnesses can convince themselves after many years of having had a conception at the basis of a valuable patent, are well known in this branch of the law, and have properly led to a rule that evidence to prove prior discovery must be clear and satisfactory.").

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patent. See Barbed Wire Patent, 143 U.S. at 286-87. That the witnesses themselves were not interested did not immunize their testimony from the corroboration requirement. See Barbed Wire, 143 U.S. at 284 ("[w]itnesses whose memories are prodded by the eagerness of interested parties to elicit testimony favorable to themselves are not usually to be depended upon for accurate information.") (emphasis added). It is not surprising that the cases have held that testimony concerning a witness's own anticipatory activities must be corroborated. A witness who testifies to antedating the invention of the patent-in-suit can be expected to derive a sense of professional or personnel accomplishment in being the first in the field, and in this sense is not uninterested in the outcome of the litigation, even if that witness is not claiming entitlement to a patent. Of course, the need for corroboration takes on special force when an otherwise uninterested witness shows some reason to be biased in favor of the interested party: As we have had occasion before to observe, oral testimony, unsupported by patents or exhibits, tending to show prior use of a device regularly patented, is, in the nature of the case, open to grave suspicion. The Barbed Wire Patent, 143 U.S. 275 [(1891)]. Granting the witnesses to be of the highest character, and never so conscientious in their desire to tell only the truth, the possibility of their being mistaken as to the exact device used, which, though bearing a general resemblance to the one patented, may differ from it in the very particular which makes it patentable, is such as to render oral testimony peculiarly untrustworthy; particularly so if the testimony be taken after the lapse of years from the time the alleged anticipating device was used. If there be added to this a personal bias, or an incentive to color the testimony in the interest of the party calling the witness, to say nothing of downright perjury, its value is, of course, still more seriously impaired. Deering v. Winona Harvester Works, 155 U.S. 286, 300-01 (1894) (emphasis added). In the final analysis, the Supreme Court has defined the necessity of corroboration not with reference to the level of interest of the testifying witness, but rather because of doubt that testimonial evidence alone in the special context of proving patent invalidity can meet the clear and convincing evidentiary standard to invalidate a patent. Thomson S.A. v. Quixote Corp., 166 F.3d 1172, 49 USPQ2d 1530 (Fed. Cir. 1999), . . . is not to the contrary. The Thomson court did opine on the necessity of corroboration, stating that "corroboration is required only when the testifying inventor is asserting a claim of derivation or priority of his or her invention and is a named party, an employee of or assignor to a named party, or otherwise is in a position where he or she stands to directly and substantially gain by his or her invention being found to have priority over the patent claims at issue." Thomson, 166 F.2d at 1176, 49 USPQ2d at 1533. However, Thomson did not involve uncorroborated testimony of a single witness. Indeed, the district court in that case "noted that the evidence supporting the anticipation finding came from one or more sources: the live testimony of two people who had worked on [the project that was alleged to anticipate]; an expert's report and portions of his deposition testimony . . . ; the expert's exhibits; and certain . . documents that the expert had reviewed." See id. at 1174, 49 USPQ2d at 1531. Therefore, the facts of Thomson did not present the question of the necessity of corroboration vel non, but rather the sufficiency of the corroborating evidence, a distinct inquiry involving an assessment of the totality of the circumstances, including consideration of "the interest of the corroborating witness in the subject matter of the suit." See Woodland Trust, 148 F.3d at 1371, 47 USPQ2d at 1366 (citing In re Reuter, 670 F.2d 1015, 1021 n.9, 210 USPQ 249, 255 n.9 (CCPA 1981)); see also id. at 1373, 47 USPQ2d at 1368 ("The relationship of the witnesses and the fact that the asserted prior uses ended twenty years before the trial, and were abandoned until the defendant reportedly learned of the patentee's practices, underscore the failure of this oral evidence to provide clear and convincing evidence of prior knowledge and use."). Cases like Thomson and Woodland Trust correctly recognized that the level of interest of the testifying witness is an important consideration when such testimony is offered to corroborate another witness's testimony. Those cases, however, do not stand for the proposition that only an interested witness's testimony requires corroboration. In any event, corroboration is required of any

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witness whose testimony alone is asserted to invalidate a patent, regardless of his or her level of interest. Cf. Price, 988 F.2d at 1194 & 1195 n.3, 26 USPQ2d at 1036 & 1037 n.3. Returning to the facts of this case, Jefferts' testimony that he used the claimed invention more than one year prior to the filing of the '884 patent was not corroborated by other evidence. The Jefferts' article simply does not corroborate his testimony because, as we have noted, that article is ambiguous at best concerning the claimed use of nonresonance ejection. Similarly, other testimony taken before the Commission was relevant only to whether Jefferts' experiments were sufficiently public to constitute public use. See Initial Determination at 77-78 (discussing the testimony of Drs. Ensberg and Klemperer). This testimony is therefore not corroborative of Jefferts' use of the claimed invention. The Commission cites certain statements in the case law in support of the proposition that not every aspect of Jefferts' testimony needs to be corroborated. See Knorr v. Pearson, 671 F.2d 1368, 1374, 213 USPQ2d 196, 201 (CCPA 1982) ("The law does not impose an impossible standard of 'independence' on corroborative evidence by requiring that every point [necessary to prove invalidity] be corroborated by evidence having a source totally independent of the inventor; indeed such a standard is the antithesis of the rule of reason."); Kridl v. McCormick, 105 F.3d 1446, 1451, 41 USPQ2d 1686, 1688 (Fed. Cir. 1997) ("An evaluation of all pertinent evidence must be made so that a sound determination of the credibility of the inventor's story may be reached."). These statements, however, are inapt here because they pertained to situations in which the question to be resolved was whether, under the totality of the circumstances, certain evidence was sufficiently corroborative of otherwise uncorroborated testimony of invalidating activities. See Knorr, 671 F.2d at 1374, 213 USPQ at 201 ("[W]e hold that [Pearson's reduction to practice] was adequately corroborated by independent evidence."); Kridl, 105 F.3d at 1450, 41 USPQ2d at 1689 (assessing whether Swain's testimony was sufficiently corroborative of McCormick's claim of priority). In this case, the sole basis to support a determination of a prior public use was Jefferts' testimony concerning his own work; there was no evidence corroborative of this testimony at all. This appeal therefore presents a different question from the "sufficiency" question presented in Knorr and Kridl. See note 11, supra, and accompanying text. In the end, what we are left with is Jefferts' testimony concerning his alleged public use. Such evidence is insufficient as a matter of law to establish invalidity of the patent. This is not a judgment that Jefferts testimony is incredible, but simply that such testimony alone cannot surmount the hurdle that the clear and convincing evidence standard imposes in proving patent invalidity. See Mahurkar v. C.R. Bard, Inc., 79 F.3d 1572, 1577, 38 USPQ2d 1288, 1291 (Fed. Cir. 1996) (noting that the corroboration rule, "provides a bright line for both district courts and the PTO to follow . . . .").

Questions, Comments, Problems 1. Defense of Lack of Novelty in Infringement Suits – Since the enactment of subsection (g) in 1952, courts have taken what was probably intended as a provision for determining the outcome of patent interferences in the PTO and permitted it to be used as a type of anticipation defense in infringement suits. Judge Rich, in footnote 3 of the Thomson v. Quixote decision cited in Finnigan, gives a policy argument for this by stating: “the public will have benefited [from the prior invention] because the invention was not abandoned, suppressed or concealed.” But does the public benefit necessarily follow? The Federal Circuit earlier in E.I. Du Pont de Nemours & Co. v. Phillips Petroleum Co., 849 F.2d 1430 (Fed. Cir. 1988), stated, in refusing to read into § 102(g) a “known in the art” requirement in a case using the subsection as a defense in an infringement action: Because work is “secret” does not necessarily mean that it has been “abandoned, suppressed or concealed.” . . . [¶] Nevertheless the requirement of proving no abandonment, suppression or concealment does mollify somewhat the “secret” nature of § 102(g) prior art. Id. at 1436 n.5, 1437.

2. The Diligence Period – Note that the second sentence of subsection (g) prescribes a very specific period during which diligence must be proven. It can be illustrated in the following way:

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Inventor A Conception

Inventor B Conception

*

*

Inventor B Reduction to Practice

Inventor A Reduction to Practice

*

*

Diligence Period

The general rule is that the person who first reduces her invention to practice (here, Inventor B) wins. However, if the person who is second to reduce the invention to practice (here, Inventor A) can show that she was the first to conceive and was diligent in reducing her invention to practice from before the other inventor’s conception, she can win. Note that Inventor A does not have to prove diligence starting from her own conception date, but only from just before Inventor B’s conception date. This differs from pre-1952 Act case law. E.g., Automatic Weighing Mach. Co. v. Pneumatic Scale Corp., 166 F. 288 (1st Cir. 1909) (inventor showing diligence must do so from his own conception date). 3. Abandonment of What? – Keep in mind that subsection (g) refers to abandonment of the invention, not to abandonment of a patent. A prior inventor may have forfeited her right to a patent, but her invention can still be anticipatory prior art that prevents a later inventor from getting a patent. The Supreme Court so held in Corona Cord Tire Co. v. Dovan Chemical Corp.: It is not an abandoned experiment because he confines his use of the rubber thus produced to his laboratory or to his lecture room. It is doubtless true that Kratz by his course in respect to his discovery as to the use of D. P. G. has abandoned any claim as against the public for a patent, but that is a very different thing from saying that it was abandoned as against a subsequent discoverer or patentee.

276 U.S. 358, 384-85 (1928). 4. Corroboration – In the Thomson v. Quixote case, the Federal Circuit held that testimony by third-parties regarding earlier inventorship did not need independent corroboration because the witnesses did not have a direct interest in the action: "We therefore hold that corroboration is required only when the testifying inventor is asserting a claim of derivation or priority of his or her invention and is a named party, an employee of or assignor to a named party, or otherwise in a position where he or she stands to directly and substantially gain by his or her invention being found to have priority over the patent claims at issue." 166 F.3d at ___, 49 USPQ2d at ___. Do you agree with this distinction? Does it take into account all the problems with oral testimony? What does “directly and substantially gain” mean? Is money the only thing that causes people to lie or “fill in”? What about ego, jealousy, or failing memory? Over 100 years ago, the Supreme Court noted “the unsatisfactory character of [uncorroborated oral] testimony, arising from the forgetfulness of witnesses, their liability to mistakes, their proneness to recollect things as the party calling them would have them recollect them, aside from the temptation to actual perjury. . . .” Barbed Wire Patent Case, 143 U.S. 275, 284 (1892). Thirty years later, the Court remained of the same view: “The temptation to remember in such cases and the ease with which honest witnesses can convince themselves after many years of having had a conception at the basis of a valuable patent, are well known in this branch of law. . . . ” Eibel Process Co v. Minnesota & Ontario Paper Co., 261 U.S. 45, 60 (1923). Shortly before the Thomson opinion, the Federal Circuit stated: “The Supreme Court’s view of human nature as well as human recollection, whether deemed cynical or realistic, retains its cogency.” Woodland Trust v. Flowertree Nursery, Inc., 148 F.3d 1368, 1373, 47 USPQ2d 1363, 1367 (Fed. Cir. 1998). Which of these opinions rings true from a psychological standpoint? The burden of persuasion on a party alleging any invalidity defense in an infringement action is clear and convincing evidence, a higher burden than preponderance of the evidence, which is the patentee’s burden in proving infringement. Does the clear and convincing standard afford sufficient protection to the patentee in an infringement suit, or do you think special requirements of corroboration are also needed in the case or prior invention, knowledge, or use?

Conclusion There is one thing in common with all of subsections (a) through (g) of section 102—identify between the subject matter of the claim and the activity proscribed in each subsection. Whether this activity be a prior patent, printed publication, knowledge or use by others, public use, on sale, act of abandonment, inventor’s foreign patenting, earlier filed U.S. patent, derivation, or prior invention, the Federal Circuit aptly summarized the requirement of identity needed to destroy novelty or anticipate as follows:

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Anticipation requires the presence in a single prior art disclosure of all elements of a claimed invention arranged as in the claim. . . . A prior art disclosure that “almost” meets that standard may render the claim invalid under §103 [for obviousness]; it does not “anticipate.” Connell v. Sears, Roebuck & Co., 722 F.2d 1542, 1548, 220 USPQ 193 (Fed. Cir. 1983) (Markey, C.J.). We have exhausted the statutory possibilities for invalidation of claims based on identical prior art or statutory bars. Next we enter the realm of the non-identical, where U.S. courts have struggled for 200 years to decide when a difference from the prior art is different enough to justify the granting of a patent. We will see that Congress entered the fray in 1952 with the statutory test of nonobviousness.

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Chapter 4 Nonobviousness Introduction - Before Graham As you covered the previous chapter, you may have thought that section 102, for all of its complications, lacks any real bite, because a challenger of a patent must, under section 102, find a single prior art reference that, by itself, matches the patent claims element-for-element. In contrast, a patent applicant, to avoid a section 102 anticipation, need only change her claims by a small amount from any piece of prior art, whether that change is obvious or not. The Supreme Court did not think that a patent should be granted on minor changes, so in 1850, it required that an applicant show more than a minor difference from the prior art to receive a patent. In 1952, Congress codified the requirement that a patent applicant show an appreciable difference between the claimed invention and the prior art. That requirement, in 35 U.S.C. § 103, reads, in relevant part: A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. Patentability shall not be negatived by the manner in which the invention was made.

A few interesting points may be adduced by parsing this provision. First, the section focuses on the obviousness, not of the differences between the prior art and the claimed invention, but of the subject matter as a whole in view of the differences. This is a subtle but important distinction. It puts the focus on the invention as a whole rather than just on the differences. Thus, the claims may not be chopped up and matched to disparate prior art references if the subject matter as a whole, when taken together, would not have been obvious. Second, the proper time frame for the inquiry is the time when the Chapter 4 – Nonobviousness

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invention was made. Thus, when conducting the inquiry, it is improper to consider the teachings of the patent in determining what would have been obvious. Finally, the provision looks to the artisan of ordinary skill. This standard lends some objectivity to the test, because the question is not what an expert would find obvious or what a judge would find obvious. Rather, the standard is tied to a fictitious legal entity, the artisan of ordinary skill, much like other areas of the law are tied to the “reasonable man.” Although it is often hard to envision the reasonable man or the artisan of ordinary skill, the standard at least provides an anchor for the analysis. Nonobviousness is really the most significant hurdle an aspiring patentee must clear. A claim may be rejected as obvious if it makes a change to distinguish a single piece of prior art that otherwise would have been anticipatory but still leaves a patent examiner or a court with the conclusion that the claim was obvious. In addition, a claim might be found obvious when compared to two or more different pieces of prior art, each of which only discloses a part of the claim, if there would have been a reason for a reasonably skilled artisan to combine the references the way they are combined in the claim. In the latter case, the challenger of the claim can typically piece together a variety of references that will meet all of the limitations of the claim, because most inventions are simply combinations of old parts. The more difficult task for the challenger is to find a reason, or motivation, for the artisan to modify or combine the prior art in a particular way. The next two cases show the early efforts of the Supreme Court to address the question of whether something more than novelty is required for patentability. The third case provides a nice history, after the enactment of the 1952 Act, of the nonobviousness requirement.

Hotchkiss v. Greenwood 52 U.S. (11 How.) 248 (1850) Mr. Justice NELSON delivered the opinion of the court. This is a writ of error to the Circuit Court of the United States for the District of Ohio. The suit was brought against the defendants for the alleged infringement of a patent for a new and useful improvement in making door and other knobs of all kinds of clay used in pottery, and of porcelain. The improvement consists in making the knobs of clay or porcelain, and in fitting them for their application to doors, locks, and furniture, and various other uses to which they may be adapted; but more especially in this, that of having the cavity in the knob in which the screw or shank is inserted, and by which it is fastened, largest at the bottom and in the form of dovetail, or wedge reversed, and a screw formed therein by pouring in metal in a fused state; and, after referring to drawings of the article thus made, the patentees conclude as follows:---“What we claim as our invention, and desire to secure by letters patent, is the manufacturing of knobs, as stated in the foregoing specifications, of potter’s clay, or any kind of clay used in pottery, and shaped and finished by moulding, turning, burning, and glazing; and also of porcelain.”

**** The court . . . charged the jury that, if knobs of the same form and for the same purposes as that claimed by the patentees, made of metal or other material, had been before known and used; and if the spindle and shank, in the form used by them, had been before known and used, and had been attached to the metallic knob by means of a cavity in the form of dovetail and infusion of melted metal, the same as the mode claimed by the patentees, in the attachment of the shank and spindle to their knob; and the knob of clay was simply the substitution of one material for another, the spindle and shank being the same as before in common use, and also the mode of connecting them by dovetail to Chapter 4 – Nonobviousness

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the knob the same as before in common use, and no more ingenuity or skill required to construct the knob in this way than that possessed by an ordinary mechanic acquainted with the business, the patent was invalid, and the plaintiffs were not entitled to a verdict. This instruction, it is claimed, is erroneous, and one for which a new trial should be granted. The instruction assumes, and, as was admitted on the argument, properly assumes, that knobs of metal, wood, &c., connected with a shank and spindle, in the mode and by the means used by the patentees in their manufacture, had been before known, and were in public use at the date of the patent; and hence the only novelty which could be claimed on their part was the adaptation of this old contrivance to knobs of potter's clay or porcelain; in other words, the novelty consisted in the substitution of the clay knob in the place of one made of metal or wood, as the case might be. And in order to appreciate still more clearly the extent of the novelty claimed, it is proper to add, that this knob of potter's clay is not new, and therefore constitutes no part of the discovery. If it was, a very different question would arise; as it might very well be urged, and successfully urged, that a knob of a new composition of matter, to which this old contrivance had been applied, and which resulted in a new and useful article, was the proper subject of a patent. The novelty would consist in the new composition made practically useful for the purposes of life, by the means and contrivances mentioned. It would be a new manufacture, and none the less so, within the meaning of the patent law, because the means employed to adapt the new composition to a useful purpose was old, or well known. But in the case before us, the knob is not new, nor the metallic shank and spindle, nor the dovetail form of the cavity in the knob, nor the means by which the metallic shank is securely fastened therein. All these were well known, and in common use; and the only thing new is the substitution of a knob of a different material from that heretofore used in connection with this arrangement. Now it may very well be, that, by connecting the clay or porcelain knob with the metallic shank in this well-known mode, an article is produced better and cheaper than in the case of the metallic or wood knob; but this does not result from any new mechanical device or contrivance, but from the fact, that the material of which the knob is composed happens to be better adapted to the purpose for which it is made. The improvement consists in the superiority of the material, and which is not new, over that previously employed in making the knob. But this, of itself, can never be the subject of a patent. No one will pretend that a machine, made, in whole or in part, of materials better adapted to the purpose for which it is used than the materials of which the old one is constructed, and for that reason better and cheaper, can be distinguished from the old one; or, in the sense of the patent law, can entitle the manufacturer to a patent. The difference is formal, and destitute of ingenuity or invention. It may afford evidence of judgment and skill in the selection and adaptation of the materials in the manufacture of the instrument for the purposes intended, but nothing more. **** Now if the foregoing view of the improvement claimed in this patent be correct, it is quite apparent that there was no error in the submission of the questions presented at the trial to the jury; for unless more ingenuity and skill in applying the old method of fastening the shank and the knob were required in the application of it to the clay or porcelain knob than were possessed by an ordinary mechanic acquainted with the business, there was an absence of that degree of skill and ingenuity which constitute essential elements of every invention. In other words, the improvement is the work of the skilful mechanic, not that of the inventor. We think, therefore, that the judgment is, and must be, affirmed. Chapter 4 – Nonobviousness

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Mr. Justice WOODBURY dissented. **** Now, on the point as to the invention being patentable, the direction virtually was to consider it not so, if an ordinary mechanic could have made or devised it; whereas in my view the true test of its being patentable was, if the invention was new, and better and cheaper than what preceded it. This test, adopted by the Circuit Court, is one sometimes used to decide whether the invention for which a patent has been obtained is new enough or distinguished enough from a former invention to prevent it from being an infringement, and to justify a new patent for it, and not, as here, whether it is valuable or material enough per se to be protected by any patent. **** [S]ome valuable discoveries are accidental rather than the result of much ingenuity, and some happy ones are made without the exercise of great skill, which are still in themselves both novel and useful. Such are entitled to protection by a patent, because they improve or increase the power, convenience, and wealth of the community. Chancellor Kent has truly said (2 Kent's Comm. 371), “The law has no regard to the process of mind by which the invention was accomplished, whether the discovery be by accident or by sudden or by long and laborious thought.” See also Earle v. Sawyer, 4 Mason, C. C. 1, 6; Crane v. Price, Webster's Pat. Cases, 411. **** It is thus apparent to my mind that the test adopted below for the purpose to which it was applied, and which has just been sanctioned here, has not the countenance of precedent, either English or American; and, at the same time, it seems open to great looseness or uncertainty in practice.

St. Germain v. Brunswick 135 U.S. 227 (1890) [The suit was brought by Brunswick for the infringement of a patent on a revolving billiard cue-rack. The rack consisted of two plates secured to a vertical shaft, and removably attached to brackets secured to a wall. The lower plate was provided with a rim around its edge to prevent the butt ends of cues from sliding out, and the upper plate was provided with several openings to receive the points of the cues.] Mr. Chief Justice FULLER, after stating the facts as above, delivered the opinion of the court. This case falls within the familiar rule that the application of an old process or machine or apparatus to a similar or analogous subject, with no change in the manner of application, and no result substantially distinct in its nature, will not sustain a patent, although the new form of result may not have before been contemplated. The ordinary cue-rack was made with the upper part perforated with holes to receive the small ends of the cues when put in the rack, and with a ledge or moulding along the front of the lower part, on which the cues stood, so as to prevent them from slipping off. The horizontal and straight upper and lower parts of the ordinary cue-rack were changed by complainant into two circular disks, called “plates” in the specification, having the perforations and the rim secured to a vertical shaft, and each provided with a metallic pivot, entering into and revolving in a metallic socket, inserted in ordinary brackets attached to the wall or pillar or any other object, for the support of the rack. As the revolving rack held the cues in the same way and by the same means as the ordinary rack, if patentable novelty existed at all it must be found in making the racks revolve, when constructed and

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operating in the manner stated. But revolving contrivances, such as table casters and the like, for the reception and carriage of articles, so as to bring them easily within reach, were well known, and the application of such a contrivance to the holding and carrying of cues was but the application of an old device to a new and analogous use, with such changes only as would naturally be made to adapt it thereto. The making of the old cue-rack circular, putting in the revolving apparatus, and suspending it on brackets, a common use of the latter, involved mechanical skill simply, and not the exercise of invention, in the creation of a novel, substantive result. The state of the art, as shown by the prior patents for revolving dining tables and bottle casters, introduced on behalf of defendant, illustrates the correctness of this conclusion. These tables and casters were so arranged as to revolve about a common center, and bring around dishes and decanters in that way, as desired. The office performed was the same in respect to dishes and decanters as that performed by complainant's contrivance in respect to cues. The difference between revolving and stationary tables and casters and between revolving and stationary cue-racks is the same. Those revolve, and these do not. We think that competent knowledge and skill in his calling on the part of an intelligent mechanic would have enabled him, on request, to construct the revolving billiard-cue rack in question, without calling the inventive faculty into play. The patent was void for want of novelty, and the decree is reversed, and the cause remanded, with a direction to dismiss the bill.

Lyon v. Bausch & Lomb Optical Co. 224 F.2d 530, 106 USPQ 1,106 USPQ 240 (2d Cir. 1955) Before HAND, SWAN and HINCKS, Circuit Judges. HAND, Circuit Judge. [Lyon's patent covered an anti-reflective coating for glass created through a process of heating the "optical surface" in a vacuum until "adsorbed water and grease have been evaporated from the surface," and then vaporizing an "inorganic salt" within the vacuum while keeping the optical surface heated several prior art patents discussed processes for coating, variously, inner surface of the vacuum chamber of a thermos bottle, a polished base with vacuum vaporized metals, and the inside of electric lightbulbs to reflect light back inward. The court determined that none of these patents was close enough even to be considered. Other patents to one Cartwright showed heating of the glass in a vacuum to clean it, coating the glass by vaporizing an inorganic salt, and sometimes providing a "postbake" to increase the ruggedness of the coating. However, none of the prior art showed the simultaneous heating of the optial surface.] **** Therefore we at length come to the question whether Lyon's contribution, his added step, was enough to support a patent. It certainly would have done so twenty or thirty years ago; indeed it conforms to the accepted standards of that time. The most competent workers in the field had for at least ten years been seeking a hardy, tenacious coating to prevent reflection; there had been a number of attempts, none satisfactory; meanwhile nothing in the implementary arts had been lacking to put the advance into operation; when it appeared, it supplanted the existing practice and occupied substantially the whole field. We do not see how any combination of evidence could more completely demonstrate that, simple as it was, the change had not been “obvious * * * to a person having ordinary skill in the art”--§ 104. On the other hand it must be owned that, had the case come up for decision within twenty, or perhaps, twenty-five, years before the Act of 1952 went into effect on January 1, 1953, it is almost certain that the claims would have been held invalid. The Courts of Appeal have very generally found in the recent opinions of the Supreme Court a disposition to insist upon a stricter test of invention than it used to apply—indefinite it is true, but indubitably stricter than that defined in § 104. Indeed, some of the justices themselves have taken the same view. The Act describes itself as a codification of existing law, as it certainly is in the sense that the structure of the system remains unchanged. Moreover those decisions that have passed upon it have uniformly referred to it as a codification, although so far as we Chapter 4 – Nonobviousness

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have found none of them has held that § 103 did not change the standard of invention. And so the question arises whether we should construe § 103 as restoring the law to what it was when the Court announced the definition of invention, now expressly embodied in § 103, or whether we should assume that no change whatever was intended. To decide that question it seems desirable to look briefly backward. From 1793, when the second patent act was passed, until the Act of 1952, the only statutory standard for invention was that the discovery should be “new and useful”; and indeed the Act of 1952 itself repeats this same test in § 101. Congress did not try to define it but left it to the courts to develop by precedent. So far as we can find, it was not until 1850 that the Supreme Court made any such attempt; so that, although the disclosure must be “new,” it was so, provided it had not been published or in public use and was original. However, in Hotchkiss v. Greenwood, 11 How. 248, 267, 13 L.Ed. 683, the Court imposed an authoritative gloss upon the word, which it put in the following words: “unless more ingenuity and skill in applying the old method” were necessary “than were possessed by an ordinary mechanic acquainted with the business, there was an absence of that degree of skill and ingenuity which constitute essential elements of every invention. In other words, the improvement is the work of a skillful mechanic, not that of the inventor.” The instruction to the jury, the exception to which the court overruled, had been in substantially the same words, 11 How. at page 253: if “no other ingenuity or skill” be “necessary to construct the knob than that of an ordinary mechanic acquainted with the business, the patent is void.” Thereafter this became the standard rubric and was applied in many cases. The variants were numberless; and “invention” became perhaps the most baffling concept in the whole catalogue of judicial efforts to provide postulates for indefinitely varying occasions. However, the Court never formally abjured it; nor has it ever substituted any other definite test. Even Cuno Engineering Corp. v. Automatic Devices Corporation, 314 U.S. 84—which in expression probably was the furthest departure, recognized the continued authority of Hotchkiss v. Greenwood, supra; 314 U.S. at page 90: “if an improvement is to obtain the privileged position of a patent more ingenuity must be involved than the work of a mechanic skilled in the art.” Again 314 U.S. at page 91: “The principle of the Hotchkiss case applies to the adaptation or combination of old or well known devices for new uses.” ****

Questions, Comments, Problems 1. Was the door knob in Hotchkiss novel? The statute at the time required only novelty. What authority did the Court have for setting up an additional requirement for patentability? Did the Court exceed its judicial power? 2. Was the cue rack in St. Germain novel? Was the Court trying to fit the invention requirement under the rubric of novelty? Do you agree with its approach?

The Graham Test The following group of Supreme Court cases, starting with Graham v. John Deere, lays out the Court’s post-1952 view on nonobviousness. Later cases flesh out the nonobviousness issue and provide details about the current standard.1

1

The use of the term “nonobviousness” rather than “obviousness” is not compelled by any case or by logic. Rather, it more likely reflects the rule that a patent is presumed to be nonobvious.

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Graham v. John Deere Co. 383 U.S. 1 (1966) MR. JUSTICE CLARK delivered the opinion of the court. After a lapse of 15 years, the Court again focuses its attention on the patentability of inventions under the standard of Art. I, § 8, cl. 8, of the Constitution and under the conditions prescribed by the laws of the United States. Since our last expression on patent validity, A. & P. Tea Co. v. Supermarket Corp., 340 U.S. 147 (1950), the Congress has for the first time expressly added a third statutory dimension to the two requirements of novelty and utility that had been the sole statutory test since the Patent Act of 1793. This is the test of obviousness, i.e., whether "the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. Patentability shall not be negatived by the manner in which the invention was made." § 103 of the Patent Act of 1952, 35 U.S.C. § 103 (1964 ed.). The questions, involved in each of the companion cases before us, are what effect the 1952 Act had upon traditional statutory and judicial tests of patentability and what definitive tests are now required. We have concluded that the 1952 Act was intended to codify judicial precedents embracing the principle long ago announced by this Court in Hotchkiss v. Greenwood, 11 How. 248 (1851), and that, while the clear language of § 103 places emphasis on an inquiry into obviousness, the general level of innovation necessary to sustain patentability remains the same. I. The Cases. (a). No. 11, Graham v. John Deere Co., an infringement suit by petitioners, presents a conflict between two Circuits over the validity of a single patent on a "Clamp for vibrating Shank Plows." The invention, a combination of old mechanical elements, involves a device designed to absorb shock from plow shanks as they plow through rocky soil and thus to prevent damage to the plow. In 1955, the Fifth Circuit had held the patent valid under its rule that when a combination produces an "old result in a cheaper and otherwise more advantageous way," it is patentable. Jeoffroy Mfg., Inc. v. Graham, 219 F.2d 511, cert. denied, 350 U.S. 826. In 1964, the Eighth Circuit held, in the case at bar, that there was no new result in the patented combination and that the patent was, therefore, not valid. 333 F.2d 529, reversing 216 F. Supp. 272. We granted certiorari, 379 U.S. 956. Although we have determined that neither Circuit applied the correct test, we conclude that the patent is invalid under § 103 and, therefore, we affirm the judgment of the Eighth Circuit. (b). No. 37, Calmar, Inc. v. Cook Chemical Co., and No. 43, Colgate-Palmolive Co. v. Cook Chemical Co., both from the Eighth Circuit, were separate declaratory judgment actions, but were filed contemporaneously. Petitioner in Calmar is the manufacturer of a finger-operated sprayer with a "holddown" cap of the type commonly seen on grocers' shelves inserted in bottles of insecticides and other liquids prior to shipment. Petitioner in Colgate-Palmolive is a purchaser of the sprayers and uses them in the distribution of its products. Each action sought a declaration of invalidity and noninfringement of a patent on similar sprayers issued to Cook Chemical as assignee of Baxter I. Scoggin, Jr., the inventor. By cross-action, Cook Chemical claimed infringement. The actions were consolidated for trial and the patent was sustained by the District Court. 220 F. Supp. 414. The Court of Appeals affirmed, 336 F.2d 110, and we granted certiorari, 380 U.S. 949. We reverse. Manifestly, the validity of each of these patents turns on the facts. The basic problems, however, are the same in each case and require initially a discussion of the constitutional and statutory provisions covering the patentability of the inventions. II. Chapter 4 – Nonobviousness

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At the outset it must be remembered that the federal patent power stems from a specific constitutional provision which authorizes the Congress "To promote the Progress of . . . useful Arts, by securing for limited Times to . . . Inventors the exclusive Right to their . . . Discoveries." Art. I, § 8, cl. 8. The clause is both a grant of power and a limitation. This qualified authority, unlike the power often exercised in the sixteenth and seventeenth centuries by the English Crown, is limited to the promotion of advances in the "useful arts." It was written against the backdrop of the practices—eventually curtailed by the Statute of Monopolies—of the Crown in granting monopolies to court favorites in goods or businesses which had long before been enjoyed by the public. See Meinhardt, Inventions, Patents and Monopoly, pp. 30-35 (London, 1946). The Congress in the exercise of the patent power may not overreach the restraints imposed by the stated constitutional purpose. Nor may it enlarge the patent monopoly without regard to the innovation, advancement or social benefit gained thereby. Moreover, Congress may not authorize the issuance of patents whose effects are to remove existent knowledge from the public domain, or to restrict free access to materials already available. Innovation, advancement, and things which add to the sum of useful knowledge are inherent requisites in a patent system which by constitutional command must "promote the Progress of . . . useful Arts." This is the standard expressed in the Constitution and it may not be ignored. And it is in this light that patent validity "requires reference to a standard written into the Constitution." A. & P. Tea Co. v. Supermarket Corp., supra, at 154 (concurring opinion). Within the limits of the constitutional grant, the Congress may, of course, implement the stated purpose of the Framers by selecting the policy which in its judgment best effectuates the constitutional aim. This is but a corollary to the grant to Congress of any Article I power. Gibbons v. Ogden, 9 Wheat. 1. Within the scope established by the Constitution, Congress may set out conditions and tests for patentability. McClurg v. Kingsland, 1 How. 202, 206. It is the duty of the Commissioner of Patents and of the courts in the administration of the patent system to give effect to the constitutional standard by appropriate application, in each case, of the statutory scheme of the Congress. **** III. The difficulty of formulating conditions for patentability was heightened by the generality of the constitutional grant and the statutes implementing it, together with the underlying policy of the patent system that "the things which are worth to the public the embarrassment of an exclusive patent," as Jefferson put it, must outweigh the restrictive effect of the limited patent monopoly. The inherent problem was to develop some means of weeding out those inventions which would not be disclosed or devised but for the inducement of a patent. This Court formulated a general condition of patentability in 1851 in Hotchkiss v. Greenwood, 11 How. 248. The patent involved a mere substitution of materials—porcelain or clay for wood or metal in doorknobs—and the Court condemned it, holding: "[U]nless more ingenuity and skill . . . were required . . . than were possessed by an ordinary mechanic acquainted with the business, there was an absence of that degree of skill and ingenuity which constitute essential elements of every invention. In other words, the improvement is the work of the skilful mechanic, not that of the inventor." At p. 267.

Hotchkiss, by positing the condition that a patentable invention evidence more ingenuity and skill than that possessed by an ordinary mechanic acquainted with the business, merely distinguished between new and useful innovations that were capable of sustaining a patent and those that were not. The Hotchkiss test laid the cornerstone of the judicial evolution suggested by Jefferson and left to the courts by Congress. The language in the case, and in those which followed, gave birth to "invention" as a word of legal art signifying patentable inventions. Yet, as this Court has observed, "[t]he truth is the word [`invention”] cannot be defined in such manner as to afford any substantial aid in determining whether a particular device involves an exercise of the inventive faculty or not." McClain v. Ortmayer, 141 U.S. 419, 427 (1891); A. & P. Tea Co. v. Supermarket Corp., supra, at 151. Its use as a label brought about a large variety of opinions as to its meaning both in the Patent Office, in the courts, and at the bar. The Hotchkiss formulation, however, lies not in any label, but in its functional approach to Chapter 4 – Nonobviousness

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questions of patentability. In practice, Hotchkiss has required a comparison between the subject matter of the patent, or patent application, and the background skill of the calling. It has been from this comparison that patentability was in each case determined. IV. The 1952 Patent Act. The Act sets out the conditions of patentability in three sections. An analysis of the structure of these three sections indicates that patentability is dependent upon three explicit conditions: novelty and utility as articulated and defined in § 101 and § 102, and nonobviousness, the new statutory formulation, as set out in § 103. The first two sections, which trace closely the 1874 codification, express the "new and useful" tests which have always existed in the statutory scheme and, for our purposes here, need no clarification. The pivotal section around which the present controversy centers is § 103. It provides: "§ 103. Conditions for patentability; non-obvious subject matter "A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. Patentability shall not be negatived by the manner in which the invention was made."

The section is cast in relatively unambiguous terms. Patentability is to depend, in addition to novelty and utility, upon the "non-obvious" nature of the "subject matter sought to be patented" to a person having ordinary skill in the pertinent art. The first sentence of this section is strongly reminiscent of the language in Hotchkiss. Both formulations place emphasis on the pertinent art existing at the time the invention was made and both are implicitly tied to advances in that art. The major distinction is that Congress has emphasized "nonobviousness" as the operative test of the section, rather than the less definite "invention" language of Hotchkiss that Congress thought had led to "a large variety" of expressions in decisions and writings. In the title itself the Congress used the phrase "Conditions for patentability; non-obvious subject matter" (italics added), thus focusing upon "nonobviousness" rather than "invention." The Senate and House Reports, S. Rep. No. 1979, 82d Cong., 2d Sess. (1952); H. R. Rep. No. 1923, 82d Cong., 2d Sess. (1952), reflect this emphasis in these terms: "Section 103, for the first time in our statute, provides a condition which exists in the law and has existed for more than 100 years, but only by reason of decisions of the courts. An invention which has been made, and which is new in the sense that the same thing has not been made before, may still not be patentable if the difference between the new thing and what was known before is not considered sufficiently great to warrant a patent. That has been expressed in a large variety of ways in decisions of the courts and in writings. Section 103 states this requirement in the title. It refers to the difference between the subject matter sought to be patented and the prior art, meaning what was known before as described in section 102. If this difference is such that the subject matter as a whole would have been obvious at the time to a person skilled in the art, then the subject matter cannot be patented. "That provision paraphrases language which has often been used in decisions of the courts, and the section is added to the statute for uniformity and definiteness. This section should have a stabilizing effect and minimize great departures which have appeared in some cases." H. R. Rep., supra, at 7; S. Rep., supra, at 6.

It is undisputed that this section was, for the first time, a statutory expression of an additional requirement for patentability, originally expressed in Hotchkiss. It also seems apparent that Congress intended by the last sentence of § 103 to abolish the test it believed this Court announced in the controversial phrase "flash of creative genius," used in Cuno Corp. v. Automatic Devices Corp., 314 U.S. 84 (1941). It is contended, however, by some of the parties and by several of the amici that the first sentence of § 103 was intended to sweep away judicial precedents and to lower the level of patentability. Others contend that the Congress intended to codify the essential purpose reflected in existing judicial Chapter 4 – Nonobviousness

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precedents—the rejection of insignificant variations and innovations of a commonplace sort—and also to focus inquiries under § 103 upon nonobviousness, rather than upon "invention," as a means of achieving more stability and predictability in determining patentability and validity. The Reviser's Note to this section, with apparent reference to Hotchkiss, recognizes that judicial requirements as to "lack of patentable novelty [have] been followed since at least as early as 1850." The note indicates that the section was inserted because it "may have some stabilizing effect, and also to serve as a basis for the addition at a later time of some criteria which may be worked out." To this same effect are the reports of both Houses, supra, which state that the first sentence of the section "paraphrases language which has often been used in decisions of the courts, and the section is added to the statute for uniformity and definiteness." We believe that this legislative history, as well as other sources, shows that the revision was not intended by Congress to change the general level of patentable invention. We conclude that the section was intended merely as a codification of judicial precedents embracing the Hotchkiss condition, with congressional directions that inquiries into the obviousness of the subject matter sought to be patented are a prerequisite to patentability. V. Approached in this light, the § 103 additional condition, when followed realistically, will permit a more practical test of patentability. The emphasis on nonobviousness is one of inquiry, not quality, and, as such, comports with the constitutional strictures. While the ultimate question of patent validity is one of law, A. & P. Tea Co. v. Supermarket Corp., supra, at 155, the § 103 condition, which is but one of three conditions, each of which must be satisfied, lends itself to several basic factual inquiries. Under § 103, the scope and content of the prior art are to be determined; differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved. Against this background, the obviousness or nonobviousness of the subject matter is determined. Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented. As indicia of obviousness or nonobviousness, these inquiries may have relevancy. See Note, Subtests of "Nonobviousness": A Nontechnical Approach to Patent Validity, 112 U. Pa. L. Rev. 1169 (1964). This is not to say, however, that there will not be difficulties in applying the nonobviousness test. What is obvious is not a question upon which there is likely to be uniformity of thought in every given factual context. The difficulties, however, are comparable to those encountered daily by the courts in such frames of reference as negligence and scienter, and should be amenable to a case-by-case development. We believe that strict observance of the requirements laid down here will result in that uniformity and definiteness which Congress called for in the 1952 Act. While we have focused attention on the appropriate standard to be applied by the courts, it must be remembered that the primary responsibility for sifting out unpatentable material lies in the Patent Office. To await litigation is—for all practical purposes—to debilitate the patent system. We have observed a notorious difference between the standards applied by the Patent Office and by the courts. While many reasons can be adduced to explain the discrepancy, one may well be the free rein often exercised by Examiners in their use of the concept of "invention." In this connection we note that the Patent Office is confronted with a most difficult task. Almost 100,000 applications for patents are filed each year. Of these, about 50,000 are granted and the backlog now runs well over 200,000. 1965 Annual Report of the Commissioner of Patents 13-14. This is itself a compelling reason for the Commissioner to strictly adhere to the 1952 Act as interpreted here. This would, we believe, not only expedite disposition but bring about a closer concurrence between administrative and judicial precedent.

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Although we conclude here that the inquiry which the Patent Office and the courts must make as to patentability must be beamed with greater intensity on the requirements of § 103, it bears repeating that we find no change in the general strictness with which the overall test is to be applied. We have been urged to find in § 103 a relaxed standard, supposedly a congressional reaction to the "increased standard" applied by this Court in its decisions over the last 20 or 30 years. The standard has remained invariable in this Court. Technology, however, has advanced—and with remarkable rapidity in the last 50 years. Moreover, the ambit of applicable art in given fields of science has widened by disciplines unheard of a half century ago. It is but an evenhanded application to require that those persons granted the benefit of a patent monopoly be charged with an awareness of these changed conditions. The same is true of the less technical, but still useful arts. He who seeks to build a better mousetrap today has a long path to tread before reaching the Patent Office. VI. We now turn to the application of the conditions found necessary for patentability to the cases involved here: A. The Patent in Issue in No. 11, Graham v. John Deere Co. This patent, No. 2,627,798 (hereinafter called the '798 patent) relates to a spring clamp which permits plow shanks to be pushed upward when they hit obstructions in the soil, and then springs the shanks back into normal position when the obstruction is passed over. The device, which we show diagrammatically in the accompanying sketches (Appendix, Fig. 1), is fixed to the plow frame as a unit. The mechanism around which the controversy centers is basically a hinge. The top half of it, known as the upper plate (marked 1 in the sketches), is a heavy metal piece clamped to the plow frame (2) and is stationary relative to the plow frame. The lower half of the hinge, known as the hinge plate (3), is connected to the rear of the upper plate by a hinge pin (4) and rotates downward with respect to it. The shank (5), which is bolted to the forward end of the hinge plate (at 6), runs beneath the plate and parallel to it for about nine inches, passes through a stirrup (7), and then continues backward for several feet curving down toward the ground. The chisel (8), which does the actual plowing, is attached to the rear end of the shank. As the plow frame is pulled forward, the chisel rips through the soil, thereby plowing it. In the normal position, the hinge plate and the shank are kept tight against the upper plate by a spring (9), which is atop the upper plate. A rod (10) runs through the center of the spring, extending down through holes in both plates and the shank. Its upper end is bolted to the top of the spring while its lower end is hooked against the underside of the shank. When the chisel hits a rock or other obstruction in the soil, the obstruction forces the chisel and the rear portion of the shank to move upward. The shank is pivoted (at 11) against the rear of the hinge plate and pries open the hinge against the closing tendency of the spring. (See sketch labeled "Open Position," Appendix, Fig. 1.) This closing tendency is caused by the fact that, as the hinge is opened, the connecting rod is pulled downward and the spring is compressed. When the obstruction is passed over, the upward force on the chisel disappears and the spring pulls the shank and hinge plate back into their original position. The lower, rear portion of the hinge plate is constructed in the form of a stirrup (7) which brackets the shank, passing around and beneath it. The shank fits loosely into the stirrup (permitting a slight up and down play). The stirrup is designed to prevent the shank from recoiling away from the hinge plate, and thus prevents excessive strain on the shank near its bolted connection. The stirrup also girds the shank, preventing it from fishtailing from side to side. In practical use, a number of spring-hinge-shank combinations are clamped to a plow frame, forming a set of ground-working chisels capable of withstanding the shock of rocks and other obstructions in the soil without breaking the shanks. Background of the Patent.

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Chisel plows, as they are called, were developed for plowing in areas where the ground is relatively free from rocks or stones. Originally, the shanks were rigidly attached to the plow frames. When such plows were used in the rocky, glacial soils of some of the Northern States, they were found to have serious defects. As the chisels hit buried rocks, a vibratory motion was set up and tremendous forces were transmitted to the shank near its connection to the frame. The shanks would break. Graham, one of the petitioners, sought to meet that problem, and in 1950 obtained a patent, U.S. No. 2,493,811 (hereinafter '811), on a spring clamp which solved some of the difficulties. Graham and his companies manufactured and sold the '811 clamps. In 1950, Graham modified the '811 structure and filed for a patent. That patent, the one in issue, was granted in 1953. This suit against competing plow manufacturers resulted from charges by petitioners that several of respondents' devices infringed the '798 patent. The Prior Art. Five prior patents indicating the state of the art were cited by the Patent Office in the prosecution of the '798 application. Four of these patents, 10 other United States patents and two prior-use spring-clamp arrangements not of record in the '798 file wrapper were relied upon by respondents as revealing the prior art. The District Court and the Court of Appeals found that the prior art "as a whole in one form or another contains all of the mechanical elements of the 798 Patent." One of the prior-use clamp devices not before the Patent Examiner—Glencoe—was found to have "all of the elements." We confine our discussion to the prior patent of Graham, '811, and to the Glencoe clamp device, both among the references asserted by respondents. The Graham '811 and '798 patent devices are similar in all elements, save two: (1) the stirrup and the bolted connection of the shank to the hinge plate do not appear in '811; and (2) the position of the shank is reversed, being placed in patent '811 above the hinge plate, sandwiched between it and the upper plate. The shank is held in place by the spring rod which is hooked against the bottom of the hinge plate passing through a slot in the shank. Other differences are of no consequence to our examination. In practice the '811 patent arrangement permitted the shank to wobble or fishtail because it was not rigidly fixed to the hinge plate; moreover, as the hinge plate was below the shank, the latter caused wear on the upper plate, a member difficult to repair or replace. Graham's '798 patent application contained 12 claims. All were rejected as not distinguished from the Graham '811 patent. The inverted position of the shank was specifically rejected as was the bolting of the shank to the hinge plate. The Patent Office examiner found these to be "matters of design well within the expected skill of the art and devoid of invention." Graham withdrew the original claims and substituted the two new ones which are substantially those in issue here. His contention was that wear was reduced in patent '798 between the shank and the heel or rear of the upper plate. He also emphasized several new features, the relevant one here being that the bolt used to connect the hinge plate and shank maintained the upper face of the shank in continuing and constant contact with the underface of the hinge plate. Graham did not urge before the Patent Office the greater "flexing" qualities of the '798 patent arrangement which he so heavily relied on in the courts. The sole element in patent '798 which petitioners argue before us is the interchanging of the shank and hinge plate and the consequences flowing from this arrangement. The contention is that this arrangement—which petitioners claim is not disclosed in the prior art—permits the shank to flex under stress for its entire length. As we have sketched (see sketch, "Graham '798 Patent" in Appendix, Fig. 2), when the chisel hits an obstruction the resultant force (A) pushes the rear of the shank upward and the shank pivots against the rear of the hinge plate at (C). The natural tendency is for that portion of the shank between the pivot point and the bolted connection (i.e., between C and D) to bow downward and away from the hinge plate. The maximum distance (B) that the shank moves away from the plate is slight—for emphasis, greatly exaggerated in the sketches. This is so because of the strength of the shank and the short - nine inches or so—length of that portion of the shank between (C) and (D). On the contrary, in patent '811 Chapter 4 – Nonobviousness

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(see sketch, "Graham '811 Patent" in Appendix, Fig. 2), the pivot point is the upper plate at point (c); and while the tendency for the shank to bow between points (c) and (d) is the same as in '798, the shank is restricted because of the underlying hinge plate and cannot flex as freely. In practical effect, the shank flexes only between points (a) and (c), and not along the entire length of the shank, as in '798. Petitioners say that this difference in flex, though small, effectively absorbs the tremendous forces of the shock of obstructions whereas prior art arrangements failed. The Obviousness of the Differences. We cannot agree with petitioners. We assume that the prior art does not disclose such an arrangement as petitioners claim in patent '798. Still we do not believe that the argument on which petitioners' contention is bottomed supports the validity of the patent. The tendency of the shank to flex is the same in all cases. If free-flexing, as petitioners now argue, is the crucial difference above the prior art, then it appears evident that the desired result would be obtainable by not boxing the shank within the confines of the hinge. The only other effective place available in the arrangement was to attach it below the hinge plate and run it through a stirrup or bracket that would not disturb its flexing qualities. Certainly a person having ordinary skill in the prior art, given the fact that the flex in the shank could be utilized more effectively if allowed to run the entire length of the shank, would immediately see that the thing to do was what Graham did, i.e., invert the shank and the hinge plate. Petitioners' argument basing validity on the free-flex theory raised for the first time on appeal is reminiscent of Lincoln Engineering Co. v. Stewart-Warner Corp., 303 U.S. 545 (1938), where the Court called such an effort "an afterthought. No such function . . . is hinted at in the specifications of the patent. If this were so vital an element in the functioning of the apparatus it is strange that all mention of it was omitted." At p. 550. No "flexing" argument was raised in the Patent Office. Indeed, the trial judge specifically found that "flexing is not a claim of the patent in suit . . ." and would not permit interrogation as to flexing in the accused devices. Moreover, the clear testimony of petitioners' experts shows that the flexing advantages flowing from the '798 arrangement are not, in fact, a significant feature in the patent. We find no nonobvious facets in the '798 arrangement. The wear and repair claims were sufficient to overcome the patent examiner's original conclusions as to the validity of the patent. However, some of the prior art, notably Glencoe, was not before him. There the hinge plate is below the shank but, as the courts below found, all of the elements in the '798 patent are present in the Glencoe structure. Furthermore, even though the position of the shank and hinge plate appears reversed in Glencoe, the mechanical operation is identical. The shank there pivots about the underside of the stirrup, which in Glencoe is above the shank. In other words, the stirrup in Glencoe serves exactly the same function as the heel of the hinge plate in '798. The mere shifting of the wear point to the heel of the '798 hinge plate from the stirrup of Glencoe—itself a part of the hinge plate—presents no operative mechanical distinctions, much less nonobvious differences. B. The Patent in Issue in No. 37, Calmar, Inc. v. Cook Chemical Co., and in No. 43, Colgate-Palmolive Co. v. Cook Chemical Co. The single patent involved in these cases relates to a plastic finger sprayer with a "hold-down" lid used as a built-in dispenser for containers or bottles packaging liquid products, principally household insecticides. Only the first two of the four claims in the patent are involved here and we, therefore, limit our discussion to them. We do not set out those claims here since they are printed in 220 F. Supp., at 417-418. In essence the device here combines a finger-operated pump sprayer, mounted in a container or bottle by means of a container cap, with a plastic overcap which screws over the top of and depresses the sprayer (see Appendix, Fig. 3). The pump sprayer passes through the container cap and extends down into the liquid in the container; the overcap fits over the pump sprayer and screws down on the Chapter 4 – Nonobviousness

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outside of a collar mounting or retainer which is molded around the body of the sprayer. When the overcap is screwed down on this collar mounting a seal is formed by the engagement of a circular ridge or rib located above the threads on the collar mounting with a mating shoulder located inside the overcap above its threads. The overcap, as it is screwed down, depresses the pump plunger rendering the pump inoperable and when the seal is effected, any liquid which might seep into the overcap through or around the pump is prevented from leaking out of the overcap. The overcap serves also to protect the sprayer head and prevent damage to it during shipment or merchandising. When the overcap is in place it does not reach the cap of the container or bottle and in no way engages it since a slight space is left between those two pieces. The device, called a shipper-sprayer in the industry, is sold as an integrated unit with the overcap in place enabling the insecticide manufacturer to install it on the container or bottle of liquid in a single operation in an automated bottling process. The ultimate consumer simply unscrews and discards the overcap, the pump plunger springs up and the sprayer is ready for use. The Background of the Patent. For many years manufacturers engaged in the insecticide business had faced a serious problem in developing sprayers that could be integrated with the containers or bottles in which the insecticides were marketed. Originally, insecticides were applied through the use of tin sprayers, not supplied by the manufacturer. In 1947, Cook Chemical, an insecticide manufacturer, began to furnish its customers with plastic pump dispensers purchased from Calmar. The dispenser was an unpatented fingeroperated device mounted in a perforated cardboard holder and hung over the neck of the bottle or container. It was necessary for the ultimate consumer to remove the cap of the container and insert and attach the sprayer to the latter for use. Hanging the sprayer on the side of the container or bottle was both expensive and troublesome. Packaging for shipment had to be a hand operation, and breakage and pilferage as well as the loss of the sprayer during shipment and retail display often occurred. Cook Chemical urged Calmar to develop an integrated sprayer that could be mounted directly in a container or bottle during the automated filling process and that would not leak during shipment or retail handling. Calmar did develop some such devices but for various reasons they were not completely successful. The situation was aggravated in 1954 by the entry of Colgate-Palmolive into the insecticide trade with its product marketed in aerosol spray cans. These containers, which used compressed gas as a propellent to dispense the liquid, did not require pump sprayers. During the same year Calmar was acquired by the Drackett Company. Cook Chemical became apprehensive of its source of supply for pump sprayers and decided to manufacture its own through a subsidiary, Bakan Plastics, Inc. Initially, it copied its design from the unpatented Calmar sprayer, but an officer of Cook Chemical, Scoggin, was assigned to develop a more efficient device. By 1956 Scoggin had perfected the shipper-sprayer in suit and a patent was granted in 1959 to Cook Chemical as his assignee. In the interim Cook Chemical began to use Scoggin's device and also marketed it to the trade. The device was well received and soon became widely used. In the meanwhile, Calmar employed two engineers, Corsette and Cooprider, to perfect a shippersprayer and by 1958 it began to market its SS-40, a device very much similar to Scoggin's. When the Scoggin patent issued, Cook Chemical charged Calmar's SS-40 with infringement and this suit followed. The Opinions of the District Court and the Court of Appeals. At the outset it is well to point up that the parties have always disagreed as to the scope and definition of the invention claimed in the patent in suit. Cook Chemical contends that the invention encompasses a unique combination of admittedly old elements and that patentability is found in the result produced. Chapter 4 – Nonobviousness

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Its expert testified that the invention was "the first commercially successful, inexpensive integrated shipping closure pump unit which permitted automated assembly with a container of household insecticide or similar liquids to produce a practical, ready-to-use package which could be shipped without external leakage and which was so organized that the pump unit with its hold-down cap could be itself assembled and sealed and then later assembled and sealed on the container without breaking the first seal." Cook Chemical stresses the long-felt need in the industry for such a device; the inability of others to produce it; and its commercial success—all of which, contends Cook, evidences the nonobvious nature of the device at the time it was developed. On the other hand, Calmar says that the differences between Scoggin's shipper-sprayer and the prior art relate only to the design of the overcap and that the differences are so inconsequential that the device as a whole would have been obvious at the time of its invention to a person having ordinary skill in the art. Both courts accepted Cook Chemical's contentions. While the exact basis of the District Court's holding is uncertain, the court did find the subject matter of the patent new, useful and nonobvious. It concluded that Scoggin "had produced a sealed and protected sprayer unit which the manufacturer need only screw onto the top of its container in much the same fashion as a simple metal cap." 220 F. Supp., at 418. Its decision seems to be bottomed on the finding that the Scoggin sprayer solved the long-standing problem that had confronted the industry. The Court of Appeals also found validity in the "novel `marriage” of the sprayer with the insecticide container" which took years in discovery and in "the immediate commercial success" which it enjoyed. While finding that the individual elements of the invention were "not novel per se" the court found "nothing in the prior art suggesting Scoggin's unique combination of these old features . . . as would solve the . . . problems which for years beset the insecticide industry." It concluded that "the . . . [device] meets the exacting standard required for a combination of old elements to rise to the level of patentable invention by fulfilling the long-felt need with an economical, efficient, utilitarian apparatus which achieved novel results and immediate commercial success." 336 F.2d, at 114. The Prior Art. Only two of the five prior art patents cited by the Patent Office Examiner in the prosecution of Scoggin's application are necessary to our discussion, i.e., Lohse U.S. Patent No. 2,119,884 (1938) and Mellon U.S. Patent No. 2,586,687 (1952). Others are cited by Calmar that were not before the Examiner, but of these our purposes require discussion of only the Livingstone U.S. Patent No. 2,715,480 (1953). Simplified drawings of each of these patents are reproduced in the Appendix, Figs. 4-6, for comparison and description. The Lohse patent (Fig. 4) is a shipper-sprayer designed to perform the same function as Scoggin's device. The differences, recognized by the District Court, are found in the overcap seal which in Lohse is formed by the skirt of the overcap engaging a washer or gasket which rests upon the upper surface of the container cap. The court emphasized that in Lohse "[t]here are no seals above the threads and below the sprayer head." 220 F. Supp., at 419. The Mellon patent (Fig. 5), however, discloses the idea of effecting a seal above the threads of the overcap. Mellon's device, likewise a shipper-sprayer, differs from Scoggin's in that its overcap screws directly on the container, and a gasket, rather than a rib, is used to effect the seal. Finally, Livingstone (Fig. 6) shows a seal above the threads accomplished without the use of a gasket or washer. Although Livingstone's arrangement was designed to cover and protect pouring spouts, his sealing feature is strikingly similar to Scoggin's. Livingstone uses a tongue and groove technique in which the tongue, located on the upper surface of the collar, fits into a groove on the inside of the overcap. Scoggin employed the rib and shoulder seal in the identical position and with less efficiency because the Livingstone technique is inherently a more stable structure, forming an interlock that withstands distortion of the overcap when subjected to rough handling. Indeed, Cook Chemical has now incorporated the Livingstone closure into its own shipper-sprayers as had Calmar in its SS-40. Chapter 4 – Nonobviousness

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The Invalidity of the Patent. Let us first return to the fundamental disagreement between the parties. Cook Chemical, as we noted at the outset, urges that the invention must be viewed as the overall combination, or—putting it in the language of the statute—that we must consider the subject matter sought to be patented taken as a whole. With this position, taken in the abstract, there is, of course, no quibble. But the history of the prosecution of the Scoggin application in the Patent Office reveals a substantial divergence in respondent's present position. As originally submitted, the Scoggin application contained 15 claims which in very broad terms claimed the entire combination of spray pump and overcap. No mention of, or claim for, the sealing features was made. All 15 claims were rejected by the Examiner because (1) the applicant was vague and indefinite as to what the invention was, and (2) the claims were met by Lohse. Scoggin canceled these claims and submitted new ones. Upon a further series of rejections and new submissions, the Patent Office Examiner, after an office interview, at last relented. It is crystal clear that after the first rejection, Scoggin relied entirely upon the sealing arrangement as the exclusive patentable difference in his combination. It is likewise clear that it was on that feature that the Examiner allowed the claims. In fact, in a letter accompanying the final submission of claims, Scoggin, through his attorney, stated that "agreement was reached between the Honorable Examiner and applicant's attorney relative to limitations which must be in the claims in order to define novelty over the previously applied disclosure of Lohse when considered in view of the newly cited patents of Mellon and Darley, Jr." (Italics added.) Moreover, those limitations were specifically spelled out as (1) the use of a rib seal and (2) an overcap whose lower edge did not contact the container cap. Mellon was distinguished, as was the Darley patent, infra, n.18, on the basis that although it disclosed a hold-down cap with a seal located above the threads, it did not disclose a rib seal disposed in such position as to cause the lower peripheral edge of the overcap "to be maintained out of contacting relationship with [the container] cap . . . when . . . [the overcap] was screwed [on] tightly . . . ." Scoggin maintained that the "obvious modification" of Lohse in view of Mellon would be merely to place the Lohse gasket above the threads with the lower edge of the overcap remaining in tight contact with the container cap or neck of the container itself. In other words, the Scoggin invention was limited to the use of a rib—rather han a washer or gasket—and the existence of a slight space between the overcap and the container cap. It is, of course, well settled that an invention is construed not only in the light of the claims, but also with reference to the file wrapper or prosecution history in the Patent Office. Hogg v. Emerson, 11 How. 587 (1850); Crawford v. Heysinger, 123 U.S. 589 (1887). Claims as allowed must be read and interpreted with reference to rejected ones and to the state of the prior art; and claims that have been narrowed in order to obtain the issuance of a patent by distinguishing the prior art cannot be sustained to cover that which was previously by limitation eliminated from the patent. Powers-Kennedy Co. v. Concrete Co., 282 U.S. 175, 185-186 (1930); Schriber Co. v. Cleveland Trust Co., 311 U.S. 211, 220221 (1940). Here, the patentee obtained his patent only by accepting the limitations imposed by the Examiner. The claims were carefully drafted to reflect these limitations and Cook Chemical is not now free to assert a broader view of Scoggin's invention. The subject matter as a whole reduces, then, to the distinguishing features clearly incorporated into the claims. We now turn to those features. As to the space between the skirt of the overcap and the container cap, the District Court found: "Certainly without a space so described, there could be no inner seal within the cap, but such a space is not new or novel, but it is necessary to the formation of the seal within the hold-down cap. "To me this language is descriptive of an element of the patent but not a part of the invention. It is too simple, really, to require much discussion. In this device the hold-down cap was intended to perform two functions—to hold down the sprayer head and to form a solid tight seal between the shoulder and

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the collar below. In assembling the element it is necessary to provide this space in order to form the seal." 220 F. Supp., at 420. (Italics added.)

The court correctly viewed the significance of that feature. We are at a loss to explain the Examiner's allowance on the basis of such a distinction. Scoggin was able to convince the Examiner that Mellon's cap contacted the bottle neck while his did not. Although the drawings included in the Mellon application show that the cap might touch the neck of the bottle when fully screwed down, there is nothing—absolutely nothing—which indicates that the cap was designed at any time to engage the bottle neck. It is palpably evident that Mellon embodies a seal formed by a gasket compressed between the cap and the bottle neck. It follows that the cap in Mellon will not seal if it does not bear down on the gasket and this would be impractical, if not impossible, under the construction urged by Scoggin before the Examiner. Moreover, the space so strongly asserted by Cook Chemical appears quite plainly on the Livingstone device, a reference not cited by the Examiner. The substitution of a rib built into a collar likewise presents no patentable difference above the prior art. It was fully disclosed and dedicated to the public in the Livingstone patent. Cook Chemical argues, however, that Livingstone is not in the pertinent prior art because it relates to liquid containers having pouring spouts rather than pump sprayers. Apart from the fact that respondent made no such objection to similar references cited by the Examiner, so restricted a view of the applicable prior art is not justified. The problems confronting Scoggin and the insecticide industry were not insecticide problems; they were mechanical closure problems. Closure devices in such a closely related art as pouring spouts for liquid containers are at the very least pertinent references. See II Walker on Patents 260 (Deller ed. 1937). Cook Chemical insists, however, that the development of a workable shipper-sprayer eluded Calmar, who had long and unsuccessfully sought to solve the problem. And, further, that the long-felt need in the industry for a device such as Scoggin's together with its wide commercial success supports its patentability. These legal inferences or subtests do focus attention on economic and motivational rather than technical issues and are, therefore, more susceptible of judicial treatment than are the highly technical facts often present in patent litigation. See Judge Learned Hand in Reiner v. I. Leon Co., 285 F.2d 501, 504 (1960). See also Note, Subtests of "Nonobviousness": A Nontechnical Approach to Patent Validity, 112 U. Pa. L. Rev. 1169 (1964). Such inquiries may lend a helping hand to the judiciary which, as Mr. Justice Frankfurter observed, is most ill-fitted to discharge the technological duties cast upon it by patent legislation. Marconi Wireless Co. v. United States, 320 U.S. 1, 60 (1943). They may also serve to "guard against slipping into use of hindsight," Monroe Auto Equipment Co. v. Heckethorn Mfg. & Sup. Co., 332 F.2d 406, 412 (1964), and to resist the temptation to read into the prior art the teachings of the invention in issue. However, these factors do not, in the circumstances of this case, tip the scales of patentability. The Scoggin invention, as limited by the Patent Office and accepted by Scoggin, rests upon exceedingly small and quite nontechnical mechanical differences in a device which was old in the art. At the latest, those differences were rendered apparent in 1953 by the appearance of the Livingstone patent, and unsuccessful attempts to reach a solution to the problems confronting Scoggin made before that time became wholly irrelevant. It is also irrelevant that no one apparently chose to avail himself of knowledge stored in the Patent Office and readily available by the simple expedient of conducting a patent search—a prudent and nowadays common preliminary to well organized research. Mast, Foos & Co. v. Stover Mfg. Co., 177 U.S. 485 (1900). To us, the limited claims of the Scoggin patent are clearly evident from the prior art as it stood at the time of the invention. We conclude that the claims in issue in the Scoggin patent must fall as not meeting the test of § 103, since the differences between them and the pertinent prior art would have been obvious to a person reasonably skilled in that art.

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The judgment of the Court of Appeals in No. 11 is affirmed. The judgment of the Court of Appeals in Nos. 37 and 43 is reversed and the cases remanded to the District Court for disposition not inconsistent with this opinion. It is so ordered. MR. JUSTICE STEWART took no part in the consideration or decision of Nos. 37 and 43. MR. JUSTICE FORTAS took no part in the consideration or decision of these cases.

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United States v. Adams 383 U.S. 39, 148 USPQ 479 (1966) MR. JUSTICE CLARK delivered the opinion of the Court. [The complaint charged the government with infringing Adams' patent on a wet battery. The patent was found not invalid at trial, and affirmed on appeal. The case was then taken up as a companion to Graham v. John Deere, Calmer v. Cook, and Colgate-Palmolive v. Cook.] **** We turn now to the merits. II. The Patent in Issue and Its Background. The patent under consideration, U.S. No. 2,322,210, was issued in 1943 upon an application filed in December 1941 by Adams. It relates to a nonrechargeable, as opposed to a storage, electrical battery. Stated simply, the battery comprises two electrodes—one made of magnesium, the other of cuprous chloride—which are placed in a container. The electrolyte, or battery fluid, used may be either plain or salt water. The specifications of the patent state that the object of the invention is to provide constant voltage and current without the use of acids, conventionally employed in storage batteries, and without the generation of dangerous fumes. Another object is "to provide a battery which is relatively light in weight with respect to capacity and in which the battery may be manufactured and distributed to the trade in a dry condition and rendered serviceable by merely filling the container with water." Following the specifications, which also set out a specific embodiment of the invention, there appear 11 claims. Of these, principal reliance has been placed upon Claims 1 and 10, which read: "1. A battery comprising a liquid container, a magnesium electropositive electrode inside the container and having an exterior terminal, a fused cuprous chloride electronegative electrode, and a terminal connecting with said electronegative electrode." "10. In a battery, the combination of a magnesium electropositive electrode, and an electronegative electrode comprised of cuprous chloride fused with a carbon catalytic agent."

For several years prior to filing his application for the patent, Adams had worked in his home experimenting on the development of a wet battery. He found that when cuprous chloride and magnesium were used as electrodes in an electrolyte of either plain water or salt water that an improved battery resulted. The Adams invention was the first practical, water-activated, constant potential battery which could be fabricated and stored indefinitely without any fluid in its cells. It was activated within 30 minutes merely by adding water. Once activated, the battery continued to deliver electricity at a voltage which remained essentially constant regardless of the rate at which current was withdrawn. Furthermore, its capacity for generating current was exceptionally large in comparison to its size and weight. The battery was also quite efficient in that substantially its full capacity could be obtained over a wide range of currents. One disadvantage, however, was that once activated the battery could not be shut off; the chemical reactions in the battery continued even though current was not withdrawn. Nevertheless, these chemical reactions were highly exothermic, liberating large quantities of heat during operation. As a result, the battery performed with little effect on its voltage or current in very low temperatures. Relatively high temperatures would not damage the battery. Consequently, the battery was operable from 65º below zero Fahrenheit to 200º Fahrenheit. See findings at 165 Ct. Cl., at 591-592, 330 F.2d, at 632.

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Less than a month after filing for his patent, Adams brought his discovery to the attention of the Army and Navy. Arrangements were quickly made for demonstrations before the experts of the United States Army Signal Corps. The Signal Corps scientists who observed the demonstrations and who conducted further tests themselves did not believe the battery was workable. Almost a year later, in December 1942, Dr. George Vinal, an eminent government expert with the National Bureau of Standards, still expressed doubts. He felt that Adams was making "unusually large claims" for "high watt hour output per unit weight," and he found "far from convincing" the graphical data submitted by the inventor showing the battery's constant voltage and capacity characteristics. He recommended, "Until the inventor can present more convincing data about the performance of his [battery] cell, I see no reason to consider it further." However, in November 1943, at the height of the war, the Signal Corps concluded that the battery was feasible. The Government thereafter entered into contracts with various battery companies for its procurement. The battery was found adaptable to many uses. Indeed, by 1956 it was noted that "[T]here can be no doubt that the addition of water-activated batteries to the family of power sources has brought about developments which would otherwise have been technically or economically impossible." . . . Surprisingly, the Government did not notify Adams of its changed views nor of the use to which it was putting his device, despite his repeated requests. In 1955, upon examination of a battery produced for the Government by the Burgess Company, he first learned of the Government's action. His request for compensation was denied in 1960, resulting in this suit. III. The Prior Art. The basic idea of chemical generation of electricity is, of course, quite old. Batteries trace back to the epoch discovery by the Italian scientist Volta in 1795, who found that when two dissimilar metals are placed in an electrically conductive fluid an electromotive force is set up and electricity generated. Essentially, the basic elements of a chemical battery are a pair of electrodes of different electrochemical properties and an electrolyte which is either a liquid (in "wet" batteries) or a moist paste of various substances (in the so-called "dry-cell" batteries). Various materials which may be employed as electrodes, various electrolyte possibilities and many combinations of these elements have been the object of considerable experiment for almost 175 years. See generally, Vinal, Primary Batteries (New York 1950). At trial, the Government introduced in evidence 24 patents and treatises as representing the art as it stood in 1938, the time of the Adams invention. Here, however, the Government has relied primarily upon only six of these references which we may summarize as follows. The Niaudet treatise describes the Marie-Davy cell invented in 1860 and De La Rue's variations on it. The battery comprises a zinc anode and a silver chloride cathode. Although it seems to have been capable of working in an electrolyte of pure water, Niaudet says the battery was of "little interest" until De La Rue used a solution of ammonium chloride as an electrolyte. Niaudet also states that "the capital advantage of this battery, as in all where zinc with sal ammoniac [ammonium chloride solution] is used, consists in the absence of any local or internal action as long as the electric circuit is open; in other words, this battery does not work upon itself." Hayes likewise discloses the De La Rue zinc-silver chloride cell, but with certain mechanical differences designed to restrict the battery from continuing to act upon itself. The Wood patent is relied upon by the Government as teaching the substitution of magnesium, as in the Adams patent, for zinc. Wood's patent, issued in 1925, states: "It would seem that a relatively high voltage primary cell would be obtained by using . . . magnesium as the . . . [positive] . . . electrode and I am aware that attempts have been made to develop such a cell. As far as I am aware, however, these Chapter 4 – Nonobviousness

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have all been unsuccessful, and it has been generally accepted that magnesium could not be commercially utilized as a primary cell electrode." Wood recognized that the difficulty with magnesium electrodes is their susceptibility to chemical corrosion by the action of acid or ammonium chloride electrolytes. Wood's solution to this problem was to use a "neutral electrolyte containing a strong soluble oxidizing agent adapted to reduce the rate of corrosion of the magnesium electrode on open circuit." There is no indication of its use with cuprous chloride, nor was there any indication that a magnesium battery could be water-activated. The Codd treatise is also cited as authority for the substitution of magnesium. However, Codd simply lists magnesium in an electromotive series table a tabulation of electrochemical substances in descending order of their relative electropositivity. He also refers to magnesium in an example designed to show that various substances are more electropositive than others, but the discussion involves a cell containing an acid which would destroy magnesium within minutes. In short, Codd indicates, by inference, only that magnesium is a theoretically desirable electrode by virtue of its highly electropositive character. He does not teach that magnesium could be combined in a water-activated battery or that a battery using magnesium would have the properties of the Adams device. Nor does he suggest, as the Government indicates, that cuprous chloride could be substituted for silver chloride. He merely refers to the cuprous ion—a generic term which includes an infinite number of copper compounds—and in no way suggests that cuprous chloride could be employed in a battery. The Government then cites the Wensky patent which was issued in Great Britain in 1891. The patent relates to the use of cuprous chloride as a depolarizing agent. The specifications of his patent disclose a battery comprised of zinc and copper electrodes, the cuprous chloride being added as a salt in an electrolyte solution containing zinc chloride as well. While Wensky recognized that cuprous chloride could be used in a constant current cell, there is no indication that he taught a water-activated system or that magnesium could be incorporated in his battery. Finally, the Skrivanoff patent depended upon by the Government relates to a battery designed to give intermittent, as opposed to continuous, service. While the patent claims magnesium as an electrode, it specifies that the electrolyte to be used in conjunction with it must be a solution of "alcoline, chlorochromate, or a permanganate strengthened with sulphuric acid." The cathode was a copper or carbon electrode faced with a paste of "phosphoric acid, amorphous phosphorous, metallic copper in spangles, and cuprous chloride." This paste is to be mixed with hot sulfuric acid before applying to the electrode. The Government's expert testified in trial that he had no information as to whether the cathode, as placed in the battery, would, after having been mixed with the other chemicals prescribed, actually contain cuprous chloride. Furthermore, respondents' expert testified, without contradiction, that he had attempted to assemble a battery made in accordance with Skrivanoff's teachings, but was met first with a fire when he sought to make the cathode, and then with an explosion when he attempted to assemble the complete battery. IV. The Validity of the Patent. The Government challenges the validity of the Adams patent on grounds of lack of novelty under 35 U.S.C. § 102 (a) (1964 ed.) as well as obviousness under 35 U.S.C. § 103 (1964 ed.). As we have seen in Graham v. John Deere Co., ante, p. 1, novelty and nonobviousness—as well as utility—are separate tests of patentability and all must be satisfied in a valid patent. The Government concludes that wet batteries comprising a zinc anode and silver chloride cathode are old in the art; and that the prior art shows that magnesium may be substituted for zinc and cuprous chloride for silver chloride. Hence, it argues that the "combination of magnesium and cuprous chloride in the Adams battery was not patentable because it represented either no change or an insignificant change as compared to prior battery designs." And, despite "the fact that, wholly unexpectedly, the battery showed certain valuable advantages over other batteries [these advantages] would not justify a patent on the essentially old formula." Chapter 4 – Nonobviousness

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There are several basic errors in the Government's position. First, the fact that the Adams battery is water-activated sets his device apart from the prior art. It is true that Claims 1 and 10, supra, do not mention a water electrolyte, but, as we have noted, a stated object of the invention was to provide a battery rendered serviceable by the mere addition of water. While the claims of a patent limit the invention, and specifications cannot be utilized to expand the patent monopoly, Burns v. Meyer, 100 U.S. 671, 672 (1879); McCarty v. Lehigh Valley R. Co., 160 U.S. 110, 116 (1895), it is fundamental that claims are to be construed in the light of the specifications and both are to be read with a view to ascertaining the invention, Seymour v. Osborne, 11 Wall. 516, 547 (1870); Schriber-Schroth Co. v. Cleveland Trust Co., 311 U.S. 211 (1940); Schering Corp. v. Gilbert, 153 F.2d 428 (1926). Taken together with the stated object of disclosing a water-activated cell, the lack of reference to any electrolyte in Claims 1 and 10 indicates that water alone could be used. Furthermore, of the 11 claims in issue, three of the narrower ones include references to specific electrolyte solutions comprising water and certain salts. The obvious implication from the absence of any mention of an electrolyte—a necessary element in any battery—in the other eight claims reinforces this conclusion. It is evident that respondents' present reliance upon this feature was not the after-thought of an astute patent trial lawyer. In his first contact with the Government less than a month after the patent application was filed, Adams pointed out that "no acids, alkalines or any other liquid other than plain water is used in this cell. Water does not have to be distilled. . . ." Letter to Charles F. Kettering (January 7, 1942), R., p. 415. Also see his letter to the Department of Commerce (March 28, 1942), R., p. 423. The findings, approved and adopted by the Court of Claims, also fully support this conclusion. **** We believe that the Court of Claims was correct in concluding that the Adams battery is novel. Skrivanoff disclosed the use of magnesium in an electrolyte completely different from that used in Adams. As we have mentioned, it is even open to doubt whether cuprous chloride was a functional element in Skrivanoff. In view of the unchallenged testimony that the Skrivanoff formulation was both dangerous and inoperable, it seems anomalous to suggest that it is an anticipation of Adams. An inoperable invention or one which fails to achieve its intended result does not negative novelty. Smith v. Snow, 294 U.S. 1, 17, 24 (1934). That in 1880 Skrivanoff may have been able to convince a foreign patent examiner to issue a patent on his device has little significance in the light of the foregoing. Nor is the Government's contention that the electrodes of Adams were mere substitutions of preexisting battery designs supported by the prior art. If the use of magnesium for zinc and cuprous chloride for silver chloride were merely equivalent substitutions, it would follow that the resulting device—Adams”—would have equivalent operating characteristics. But it does not. The court below found, and the Government apparently admits, that the Adams battery "wholly unexpectedly" has shown "certain valuable operating advantages over other batteries" while those from whom it is claimed to have been copied were long ago discarded. Moreover, most of the batteries relied upon by the Government were of a completely different type designed to give intermittent power and characterized by an absence of internal action when not in use. Some provided current at voltages which declined fairly proportionately with time. Others were so-called standard cells which, though producing a constant voltage, were of use principally for calibration or measurement purposes. Such cells cannot be used as sources of power. For these reasons we find no equivalency. We conclude the Adams battery was also nonobvious. As we have seen, the operating characteristics of the Adams battery have been shown to have been unexpected and to have far surpassed thenexisting wet batteries. Despite the fact that each of the elements of the Adams battery was well known in the prior art, to combine them together as did Adams required that a person reasonably skilled in the prior art must ignore that (1) batteries which continued to operate on an open circuit and which heated in normal use were not practical; and (2) water-activated batteries were successful only when combined with electrolytes detrimental to the use of magnesium. These long-accepted factors, when taken together, would, we believe, deter any investigation into such a combination as is used by Adams. This is not to say that one who merely finds new uses for old inventions by shutting his eyes to their prior disadvantages thereby discovers a patentable innovation. We do say, however, that known Chapter 4 – Nonobviousness

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disadvantages in old devices which would naturally discourage the search for new inventions may be taken into account in determining obviousness. Nor are these the only factors bearing on the question of obviousness. We have seen that at the time Adams perfected his invention noted experts expressed disbelief in it. Several of the same experts subsequently recognized the significance of the Adams invention, some even patenting improvements on the same system. Fischbach et al., U.S. Patent No. 2,636,060 (1953). Furthermore, in a crowded art replete with a century and a half of advancement, the Patent Office found not one reference to cite against the Adams application. Against the subsequently issued improvement patents to Fischbach, supra, and to Chubb, U.S. Reissue Patent No. 23,883 (1954), it found but three references prior to Adams—none of which are relied upon by the Government. We conclude that the Adams patent is valid. The judgment of the Court of Claims is affirmed. It is so ordered. MR. JUSTICE WHITE dissents. MR. JUSTICE FORTAS took no part in the consideration or decision of this case.

Questions, Comments, Problems 1. Did Mr. Adams win his case because of his compelling facts, or could he have been helped somewhat by the advocacy of his attorney, John A. Reilly? Consider the following recollection by Charles Reed, law clerk to Justice Clark when Adams was decided: [I]t was a classic of effectiveness. John brought a working model of the battery at issue to the argument. The model was an unpretentious glass of water, electrolyte, chemicals, and a Rube Goldberg combination of flimsy wire electrodes and lightbulb. John argued that the Army had scoffed at his client, claiming that the battery wouldn't work. As he argued, he fidgeted with his model. I recall Mr. Justice Black cracking a joke (perhaps not intentionally) by asking whether the contraption was going to explode. John assured him it was safe. I didn't know it at the time, but John had experimented with different temperatures of electrolyte to control the rate at which current was to be generated. On that day, he used a colder solution. The result was that when John's oral argument had ended, his battery had not. His opponent had to argue as all the while John's (or Mr. Adams's) battery powered that tiny, but attention-gathering, lightbulb. Indeed, the demonstration sputtered on into the next case quietly yet eloquently mocking the Army's lack of confidence. Charles Reed, Some Reflections on Graham v. John Deere Co., in John F. Witherspoon, III, Nonobviousness, the Ultimate Condition of Patentability, at 2:303-04 (BNA 1980). 2. In Hotchkiss, the Court stated that an invention must show “more ingenuity and skill” than the “ordinary mechanic” to be patentable. This spawned cases that spoke of a “requirement for invention,” a vague, difficult-to-apply test. In 1941, the Court, in Cuno Engineering Corp. v. Automatic Devices Corp., 314 U.S. 84 (1941), added a new wrinkle to the test by requiring that an invention be the result of a “flash of creative genius” to be patentable. Then, in 1950, the Court decided Great Atlantic Tea & Pacific Tea Co. v. Supermarket Equipment Corp., 340 U.S. 147, 87 USPQ 303 (1950). There, the invention, a checkout stand at a food market, was a combination of known elements, which the Court held unpatentable because the combination did not result in any “unusual or surprising consequences,” and the whole did not exceed the sum of the parts. This test came to be known as the “synergism requirement” for combination inventions. Section 103 was enacted in the face of these cases. It did not include an express requirement for a flash of creative genius, nor did it separate out combination inventions as a special class that required synergism for patentability. Yet, in Graham, the Court stated that section 103 was a mere “statutory expression” of Hotchkiss. Although it recognized that section 103 was aimed squarely at Cuno, it noted that Cuno was simply misunderstood by the public. Do you agree that section 103 was a mere codification of the earlier cases? Or, do you agree with Judge Hand in Lyon, where he stated: “The Courts of Appeal have very generally found in the recent opinions of the Supreme Court a disposition to insist upon a stricter test of

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invention than it used to apply—indefinite it is true, but indubitably stricter than that defined in § 103.”? For a discussion of the legislative history behind section 103, which both shows an intention to change the requirement for invention and also to avoid any major changes, see 2 Donald S. Chisum, Chisum on Patents, § 5.02[4] at 5-39 to 5-40 (1997). 3. Consider the following statements by the Supreme Court as its attitude toward patent validity drifted to and fro in the 102 years between the time it issued Hotchkiss and the ’52 Act. A.

B.

C.

Reckendorfer v. Faber, 92 U.S. (2 Otto) 347 (1875): “The law requires more than a change of form, or juxtaposition of parts, or of the external arrangement of things, or of the order in which they are used, to give patentability. . . . An instrument or manufacture which is the result of mechanical skill is one thing merely is not patentable. Mechanical skill is one thing: invention is a different thing. Perfection of workmanship, however much it may increase the convenience, extend the use, or diminish expense, is not patentable. The distinction between mechanical skill, with its conveniences and advantages and inventive genius, is recognized in all the cases.” Washburn & Moen Mfg. Co. v. Beat ‘Em All Barbed-Wire Co., 143 U.S. 275 (1892) (“Barbed Wire Patent Case”): [the patent placed a sharp, looped barb transversely to the fence wire, while the prior art [Kelly] had used a diamond-shaped piece of flat metal] “Under such circumstances courts have not been reluctant to sustain a patent to the man who has taken the final step which has turned a failure into a success. In the law of patents it is the last step that wins. It may be strange that, considering the important results obtained by Kelly in his patent, it did not occur to him to substitute a coiled wire in place of the diamond-shaped prong; but evidently it did not; and to the man to whom it did, ought not to be denied the quality of inventor. There are many instances in the reported decisions of this court where a monopoly has been sustained in favor of the last of a series of inventors, all of whom were groping to attain a certain result, which only the last one of the number seemed able to grasp.” Richards v. Chase Elevator Co., 158 U.S. 299 (1895): “Unless the combination accomplishes some new result, the mere multiplicity of elements does not make it patentable. So long as each element performs some old and well-known function, the result is not a patentable combination, but an aggregation of elements.”

These cases show that you should be very careful when citing early cases on nonobviousnesstype issues despite the Supreme Court’s statements in Graham regarding the survival of earlier holdings.

More on Nonobviousness In the following cases, you will see the courts struggle with the issue of the requisite level of inventive contribution needed to clear the hurdle of patentability, both before and after that hurdle was set by statute. Graham set out a format for analyzing the issue of obviousness, but the question of nonobviousness more often requires the application of common sense and gut instinct than set rules. Therefore, an effective attorney must understand the sort of reasoning that is persuasive in this area. The best way to gain that understanding is to read cases that display solid reasoning. To that end, the following cases may provide some clues about what works and what does not work when it comes to arguing obviousness or nonobviousness.

McClain v. Ortmayer et al. 141 U.S. 419 (1891) The facts of the case fully appear in the following statement by Mr. Justice BROWN: [McClain brought the action for infringement of two patents related to improvements in pads for horse collars. The pads are located between the collar and the horse's shoulders. McClain’s improvement

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was the use of springs to attach the pad to the collar. A second McClain patent replaced a two-roll spring in the original patent with a single-roll spring, which was cheaper to make and easier to attach to a collar.] Plaintiff's bill was dismissed by the circuit court upon the ground that the first patent was not infringed, and that the second patent, in view of the first, and of the other devices offered in evidence, was void for want of novelty. The opinion of the court is reported in 33 Fed. Rep. 284. **** Mr. Justice BROWN, after stating the facts as above, delivered the opinion of the court. **** 2. The second patent was principally contested upon the ground of want of invention. In his specification the patentee states it to be an improvement upon his prior patent, but differing materially from it in the fact that “this spring has but one curved portion, intended for the fore roll only of the collar, instead of a curved portion for the fore roll and one for the back roll.” It seems from his letter to the patent-office of September 2, 1882, to which reference has already been made, that in endeavoring to practice the invention in his prior patent he found that the two-roll spring was not generally applicable to collars of different sizes, as it had been supposed it would be; as the rolls in collars of different sizes and of different makes varied so much that, while it would make a pad applicable to collars of different sizes for light work, the same pad could not be used on collars for heavy work, and hence the invention proved to be imperfect. This resulted in the invention of the single-roll spring of his second application. Practically the only novelty consists in cutting the double-roll spring in two, and using the fore roll only. While this enables the pad to be located on the collar more readily than when two springs were used, the roll performs the same function as in the prior patent, and the patent can only be sustained upon the theory that the discarding of the after roll involved invention. What shall be construed as invention within the meaning of the patent laws has been made the subject of a great amount of discussion in the authorities, and a large number of cases, particularly in the more recent volumes of reports, turn solely upon the question of novelty. By some, “invention” is described as the contriving or constructing of that which had not before existed; and by another, giving a construction to the patent law, as “the finding out, contriving, devising, or creating something new and useful, which did not exist before, by an operation of the intellect.” To say that the act of invention is the production of something new and useful does not solve the difficulty of giving an accurate definition, since the question of what is new, as distinguished from that which is a colorable variation of what is old, is usually the very question in issue. To say that it involves an operation of the intellect, is a product of intuition, or of something akin to genius, as distinguished from mere mechanical skill, draws one somewhat nearer to an appreciation of the true distinction, but it does not adequately express the idea. The truth is, the word cannot be defined in such manner as to afford any substantial aid in determining whether a particular device involves an exercise of the inventive faculty or not. In a given case we may be able to say that there is present invention of a very high order. In another we can see that there is lacking that impalpable something which distinguishes invention from simple mechanical skill. Courts, adopting fixed principles as a guide, have by a process of exclusion determined that certain variations in old devices do or do not involve invention; but whether the variation relied upon in a particular case is anything more than ordinary mechanical skill is a question which cannot be answered by applying the test of any general definition. Counsel for the plaintiff in the case under consideration has argued most earnestly that the only practical test of invention is the effect of the device upon the useful arts; in other words, that utility is the sole test of invention, and, inferentially at least, that the utility of a device is conclusively proven by the extent to which it has gone into general use. He cited in this connection certain English cases, which go far to support his contention. These cases, however, must not be construed in such way as to control the language of our statute, which limits the benefits of patent laws to things which are new as well as useful. By the common law of England, an importer—the person who introduced into the Chapter 4 – Nonobviousness

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kingdom from any foreign country any useful manufacture—was as much entitled to a monopoly as if he had invented it. Thus in Darcy v. Allin, Noy, 178, it is stated that, “where any man, by his own charge and industry, or by his own wit or invention, doth bring any new trade into the realm, or any engine tending to the furtherance of a trade that never was used before, * * * the king may grant to him a monopoly patent * * * in consideration of the good that he doth bring by his invention to the commonwealth;” citing several instances of skill imported from foreign counties. In Edgebury v. Stephens, 1 Webst. Pat. Cas. 35, it was said: “The act [of monopolies] intended to encourage new devices useful to the kingdom, and whether learned by travel or by study it is the same thing.”

It is evident that these principles have no application to the patent system of the United States, whose beneficence is strictly limited to the invention of what is new and useful, and that the English cases, construing even their more recent acts, must be received with some qualification. That the extent to which a patented device has gone into use is an unsafe criterion, even of its actual utility, is evident from the fact that the general introduction of manufactured articles is as often effected by extensive and judicious advertising, activity in putting the goods upon the market, and large commissions to dealers, as by the intrinsic merit of the articles themselves. The popularity of a proprietary medicine, for instance, would be an unsafe criterion of its real value, since it is notorious fact that the extent to which such preparations are sold is very largely dependent upon the liberality with which they are advertised, and the attractive manner in which they are put up and exposed to the eye of the purchaser. If the generality of sales were made the test of patentability, it would result that a person, by securing a patent upon some trifling variation from previously known methods, might, by energy in pushing sales or by superiority in finishing or decorating his goods, drive competitors out of the market, and secure a practical monopoly, without in fact having made the slightest contribution of value to the useful arts. The very case under consideration is not barren of testimony that the great success of the McClain pads and clasping hooks—a large demand for which seems to have arisen and increased year by year—is due, partly at least, to the fact that he was the only one who made the manufacture of sweatpads a specialty; that he made them of a superior quality, advertised them in the most extensive and attractive manner, and adopted means of pushing them upon the market, and thereby largely increased the extent of their sales. Indeed, it is impossible from this testimony to say how far the large sales of these pads is due to their superiority to others or to the energy with which they were forced upon the market. While this court has held in a number of cases, even so late as Magowan v. Packing Co., 12 Sup. Ct. Rep. 71, (decided at the present term,) that in a doubtful case the fact that a patented article had gone into general use is evidence of its utility, it is not conclusive even of that, much less of its patentable novelty. In no view that we have been able to take of the case can we sustain the second McClain patent. We do not care to inquire how far it was anticipated by the various devices put in evidence, showing the use of a similar spring for analogous purposes, since we are satisfied that a mere severance of the double spring does not involve invention, at least in the absence of conclusive evidence that the single spring performs some new and important function not performed by it in the prior patent. The evidence upon this point is far from satisfactory, and the decree of the circuit court must therefore be affirmed.

Evans v. Watson 142 F. Supp. 225, 110 USPQ 478 (D.D.C. 1956) WILKIN, District Judge. Plaintiff, under 35 U.S.C. § 145, seeks judgment for letters patent on three claims, 1, 5 and 8 of application Serial No. 27,247, filed May 15, 1948, for an article designated a “Threaded Connection.”

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The article is a connection for joining, end-to-end, drill collars and drill pipe to make up a drill stem of an oil well rotary drilling apparatus. Pl. Brief, p. 6. The essential feature of the plaintiff's tool joint consists of employing a screw thread in which the angle between the two adjacent sloping sides of each screw thread is approximately 90 degrees, instead of the 60-degree crest angle in prior use. Plaintiff's tool joint, when connected or “made-up,” affords a high compressive strength between the abutting shoulders of the pin and box members. The important feature of plaintiff's connection is the elastic deformation or “swelling” of the walls of the pin and box members which is produced by the 90-degree crest angle of the threads. The Board of Appeals of the Patent Office in denying the plaintiff's application said: “We agree with the Examiner that there is nothing of patentable merit in the mere substitution of the well-known 90-degree thread for the standard 60-degree thread of the prior art.”

The Patent Office tribunals admitted, however, that plaintiff's threaded connection is superior to the conventional connections, and that no prior patent or publication shows a screw thread having a 90degree crest angle employed in oil well drilling equipment. Novelty and utility being admitted, and no contention being made that plaintiff is barred by Section 102 of Title 35, U.S.C., plaintiff's application was denied on the sole ground that he was barred by Section 103 of Title 35; that is, because “the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art.” At the end of the trial, the Court stated a definite impression that the change of the angle of the thread could hardly be invention; that threads of 90-degree angle had been made for other purposes; that such change was only a change in degree; but from the evidence it was quite clear that the change had produced a remarkable improvement; that the drilling operations with the 90-degree connections, especially in the hard-rock formations, were much more successful and less expensive; that the number of failures in the drilling string had been decreased to a remarkable degree. The Court then stated that if a patent was warranted, it would be because of the discovery of the effect, rather than because of the mechanical change; the change was simple, but the effect was striking and produced unexpected improvement; that the need for such improvement, especially in the deeper operations, had been recognized for many years, and various attempts to meet the need had been made without success; that the applicant's experiments were conducted at great expense, but were immediately crowned with success; and that the applicant's connection has been adopted quite generally. The Court then stated that the sole issue seemed to be whether or not the discovery of the usefulness of the change warranted a patent monopoly, and counsel agreed that such was the real issue. R. 183. It is, therefore, apparent that this case presents the issue of patentability in a most acute form. There is no dispute as to what the facts are; there is no dispute as to what the law says. The controversy arises over the question, Does the law which authorizes patent monopolies, considered in the light of its history, theory and purpose, warrant the grant of a patent in this case? Or, in other words, What is the effect of the established law on the established facts? **** The undisputed evidence before this Court reveals that the work done by plaintiff led directly to a discovery that promotes the progress of science, to a new and useful improvement in manufacture of the threaded connection in an oil well drill stem. The Patent Act, as well as the Constitution, mentions both invention and discovery; but the decisions for the most part deal with invention. They are not the same. Dennis v. Pitner, 7 Cir., 106 F.2d 142. Invention is something definitely sought or created and usually predictable. Discovery is something found or learned unexpectedly; it is unpredictable. Some accomplishments have elements of both invention and discovery. And the Patent Law and decisions seem to impose one condition on both—they must have been brought into existence by prior effort to merit the reward of patent monopoly.

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The purpose of the Patent Law is to encourage diligence, skill and initiative that “promote the progress of science and useful arts.” While there may be an element of luck in both invention and discovery, legislative history and the trend of patent decisions would hardly warrant the grant of a patent for a discovery entirely fortuitous. Morton v. New York Eye Infirmary, 17 Fed.Cas. p. 879, No. 9,865, 5 Blatchf. 116. As Walker says: “It is only when the discoverer has gone beyond the mere domain of discovery, and has laid hold of the new principle, force or law and connected it with some particular medium or mechanical contrivance by which, or through which, it acts upon the material world, that he can secure the exclusive control of it through the Patent Act.” Walker on Patents, 1 Deller's Edition 37.

But the evidence in this case reveals that the plaintiff expended a great deal of effort and money to accomplish the desired result. Furthermore, he embodied his discovery in a particular medium or mechanical contrivance by which, or through which, it acts. During the last World War, the great need for oil occasioned extensive drilling in West Texas and other hard-rock areas. The oil wells in such territories were drilled to depths of eight or nine thousand feet, and much of the distance was through a geological formation of very hard rock. These conditions occasioned an increase in the failures in the drilling stem connections. The breaks in the drilling stem and the interruptions occasioned by wear and tear on the drill collars made the expense in time and bits almost prohibitive. The oil companies, the drillers, and the manufacturers of drilling machinery all recognized that unless something could be done “to improve the rate of penetration and the footage by bit,” operations in the territory would have to be abandoned. Extensive experiments were made. They involved treatment of the metal with the hope of increasing its tensile strength, the use of lubricants, and other measures. None of the experiments met the need. The problem was so serious that the American Petroleum Institute became interested, and its Subcommittee on Drill Collars undertook a study and course of experimentation. The Committee in turn referred the problem to the Batell Memorial Institute of Columbus, Ohio, for a photo-elastic analysis and recommendations. Nothing constructive was accomplished. The plaintiff, Evans, suggested to his employer, The Hughes Tool Company, that the problem be approached by trying a designed change rather than by continuing surface treatments and lubricants. His suggestion was that a change in the crest angle of the thread from 60 to 90 degrees would put into the connection “a greater resilient stored energy.” It was quite generally believed that such a change in the crest angle of the thread would increase the “elastic swell” in the pin and box of the coupling, and it was feared that such “swell” would increase the failures. The witness, Payne, an officer of the Hughes Company, testified: “We knew we had to field test it. There was no other way we could determine whether it would be successful in accomplishing this needed goal of preventing loosening of joints in the presence of these forces that tended to loosen the screw connection.” Fifteen new connections were manufactured with a 90-degree crest angle, and were given a field test by the Carl B. King Drilling Company under the supervision of their drilling engineers. The new connections proved successful in the hardrock field. Ninety-degree connections were then made in other sizes for drill stems of greater diameter, and they too were quite successful. Experiments were then made with 60-degree pins and 90-degree pins in the same drilling operation, in order that a comparison of strength could be made under similar conditions. During a drilling period of 5,100 hours, there was a failure of fifteen of the 60-degree pins and a failure of only two of the 90-degree pins. As a result of such tests, there followed a very general acceptance and commercial use of the 90-degree connections. ****

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The evidence was clear and convincing that the case met the requirements and was within the purview of the Patent Law; and that while the mechanical change was obvious, the effect was not. It is the judgment of this Court that the plaintiff, in view of his initiative, patience, diligence, and expenditure, and his contribution to the benefit of the oil industry, is entitled to the grant of a patent.

Carl Schenck, A.G. v. Nortron Corp. 713 F.2d 782, 218 USPQ 698 (Fed. Cir. 1983) Before MARKEY, Chief Judge, and FRIEDMAN and NIES, Circuit Judges. MARKEY, Chief Judge. Appeal from a judgment of the District Court for the Middle District of Tennessee holding U.S. Patent No. 3,182,511 ('511 patent) valid and finding claims 1, 2, and 5 of that patent infringed by Nortron Corporation (Nortron). We affirm. BACKGROUND **** The '511 patent discloses and claims a machine for sensing vibration resulting from an imbalance in what are here called "wheels" (tires, wheels, turbine rotors, and other rotating elements). Claim 1 is representative: 1. A vibratory testing machine, comprising a rigidly fixed base structure 13, a vibratory workpieceholding structure 14 having means for accommodating a workpiece 10 and defining a given measuring direction M, supporting means 15 joining said structures and having a plurality of supporting rod members 15 forming a parallelogram linkage yieldable in said measuring direction M and stiff in planes transverse to said direction M (i.e., in direction A) to limit vibration of said holding structure 14 to said measuring direction M, said vibratory holding structure 14 and said base structure 13 as well as said supporting means 15 forming jointly a single integral and gaplessly continuous piece.

Judge Nixon entered a comprehensive unpublished Memorandum constituting his Findings and Conclusions, accompanied by an Order finding in favor of Schenck and setting a date (now stayed) for hearing on damages. In that Memorandum, Judge Nixon: described the physical phenomena involved in wheel balancing; set forth the long-term employment of soft-bearing balancer machines, their disadvantages, and their replacement by the hard-bearing machines of the invention; noted the belief of practitioners before the invention was made that resonance damping was required in hard-bearing machines, and the present inventor's contrary teaching that damping should be avoided; listed basic principles of patent law; held irrelevant the assertion that the invention had not been used in automotive balancers sold by Schenck in the United States; characterized as passe the defense that making a support structure in one piece "does not rise to the standard of invention", in view of recognition in Graham v. John Deere Co., 383 U.S. 1 (1966), that the standard is nonobviousness; surveyed the evidence supporting nonobviousness, particularly the abandonment of soft-bearing for hard-bearing machines; rejected the defense of no causal relationship between the invention and that industry shift; dismissed the argument that "a consolidation of elements can never rise to the level of patentable invention"; rejected the defense of fraud for failure of the drawing to disclose more than one support structure to the Patent and Trademark Office; rejected as not prior art an earlier patent of Federn; rejected the assertion of no infringement based on model 7402's allowance of axial movement, interpreting the claims as contemplating limited motion in the measuring direction and significantly more limited (i.e., less) motion in the axial direction; stated that he was interpreting the claims in the "manner of those skilled in the art," citing Autogiro Co. of America v. U.S., 384 F.2d 391, 155 U.S.P.Q. 697, (Ct.Cl.1967); quoted the description in a Nortron patent application of the model 7402 machine; found that description persuasive of the similarity of both parties' mechanisms; and rejected Nortron's tests as proof of noninfringement.

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**** A. Validity Nortron points to recognition in the '511 patent of a prior support structure in which legs and crosspieces are bolted together with notch-and-tooth engaging faces. From that it argues that the present invention was merely the forming of that structure in one piece, a step, Nortron says, that would have been obvious to those skilled in the art at the time the invention was made. The unchallenged testimony of record establishes that the legs of the notch-and-tooth design are broad leaf springs. Thus, far from eliminating damping (as Nortron asserts) the notch-and-tooth design introduces damping, as was pointed out to and accepted by the examiner during prosecution of the application that resulted in the '511 patent. The uncontested testimony of record further establishes that those skilled in the art believed that damping was required in hard-bearing balancers. Judge Nixon's finding that "many practitioners introduced damping into their measuring devices in order to suppress resonance" is amply supported in the record. That finding is not only not shown on appeal to have been clearly erroneous, it is not mentioned by appellant. Nortron has pointed to nothing of record that would suggest the replacement of a structure formed of bolted leaf springs and cross bars with a single, unitary, gapless (and thus rigid) structure. On the contrary, the record reflects that that step would remove the flexibility present and thought to be necessary in the former. In its argument that the invention here is but making integral what had earlier been made in four bolted pieces, Nortron seeks to limit the focus of inquiry to a structural difference from the prior art and then to show that that difference alone would have been obvious. That effort is not proper under the statute, which requires that an invention be considered "as a whole," 35 U.S.C. § 103. As Judge Nixon recognized, "the emphasis on nonobviousness is one of inquiry, not quality". Graham v. John Deere Co., 383 U.S. 1 (1966). The inquiry here establishes that the present invention includes the inventor's elimination of the need for damping. Because that insight was contrary to the understanding and expectations of the art, the structure effectuating it would not have been obvious to those skilled in the art. United States v. Adams, 383 U.S. 39 (1966). Indeed, hard-bearing balancers had been known since the early 1920's, but had not been successful because of the art-perceived need for mechanisms to dampen resonance. That the means of eliminating the need for damping was the one-piece gapless support structure described in the claims detracts in no manner from the contribution to the art made by the inventor. The present invention was a key to the unlocking of a pre-accepted barrier and to the resurrection of hard-bearing balancers, which then replaced widely-used soft-bearing balancers. Nortron was and is at liberty to employ, as it once did, a support formed of separate elements bolted together. That it felt impelled to abandon earlier devices and to employ the unitary structure of the invention is evidence of the latter's value. ****

United Chromium, Inc. v. International Silver Co. 60 F.2d 913 (2d Cir. 1932) Before L. HAND, AUGUSTUS N. HAND, and CHASE, Circuit Judges. L. HAND, Circuit Judge.

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This is a suit in equity upon a patent for a process of plating metals with chromium. Infringement being established, the issues turn upon the validity of the patent, and that in turn upon whether it disclosed an invention. The judge held that it did, and gave a decree upon all the claims in suit; it is not necessary to consider the verbal variations between them, except, as appears hereafter, in regard to claim sixteen. Before describing the disclosure it is necessary to say something about the art at large. All electroplating involves the immersion, in a bath of proper solution, of the two poles—the anode and the cathode—of an electric circuit. The current passes through the solution to complete the circuit, and as a result the metal in the solution is deposited upon the cathode—plates it. Thus the object to be plated must be the cathode. All this was a commonplace in other kinds of electroplating, silver, copper, nickel and the like; but the difficulties in regard to chromium were many, the most troublesome of which, at least in 1925, was the composition of the solution or bath; and it is about this that the suit principally turns. Chromic acid in solution had been found to be the most available form of the metal more than twenty years before Fink's application was filed at the very end of the year 1925. It is soluble in water and in anhydrous form consists of a molecule of chromium and oxygen in the relation of one atom of the first, to three of the second (CrO3); the current breaks down the molecule and sets free the chromium near the cathode. The art had added other substances to the solution, as for example sulphuric acid, but after 1920 had come chiefly to rely upon chromic sulphate, which is made up of chromium and a sulphate radical in the form indicated by the chemical symbol Cr2(SO4)3, two atoms of chromium to three molecules of the composite radical. It is not clear whether the art had recognized that the function of this substance was catalytic, that is, to assist the chemical reactions at which it was present, but not itself to enter into combination. However, Fink stood upon some ground already gained; he was not the first person who succeeded in electroplating chromium; nor did he claim to be. He did claim to be the discoverer of “a practical and commercially available process”; the question is whether he was justified. The disclosure is unusually clear; it prescribes the usual detail of electroplating with “a chromiumcarrying electrolytic solution, in the presence of a catalyst.” The solution is of chromic acid of from one hundred and fifty grams to a litre to saturation, an entirely adequate description. The catalyst must contain an acid radical, stable in the bath, among which are suggested acids and salts having a sulphate, fluoride, phosphate, or borate radical. Apparently the art has in practice only used the first, and to it many of the claims are confined. The catalyst is to be calculated from all sources, both the radical in the chromic acid—which comes in as an impurity—and in the substance added as catalyst, properly speaking. It is never safe to assume that commercial chromic acid is pure; the safest way is to test the solution of chromic acid and correct by adding or subtracting substances which will supplement or decrease the catalytic agent already there. Sometimes instable radicals are in the chromic acid; they will disappear with use, and thus, though initially calculated correctly, they must be replaced by stable radicals so as always to keep the proper ratio. That ratio is between four-tenths of one per cent. and two per cent. with an optimum of one per cent., which is what the defendant and the art generally has come to use with entire success. It has displaced generally, if not altogether, earlier processes of chromium plating. [Cravath & Curry had unsuccessful results using 14% chronic acid to 1% sulphuric acid, but did not concern themselves with the content of the radical. Another paper by Sargent from 1920 built on the work of Cravath & Curry, and added chronic sulphate to the solution. Sargent created some solutions that were very similar to those of Fink, but he never figured out that it was the radical that needed to be controlled, and the process he developed was not dependable. The inventor, Fink, worked with one Schwartz, and they were faced with these attempts by the prior art.] Schwartz and Fink were skilled chemists. The two in conjunction did not find the invention at once. Fink claims to have reached it in the spring of 1924; we need not decide whether that is the right date or a year later, for nothing of consequence intervened, as we shall show. For the moment the important thing is that, being men well versed in the art, they had to grope their way. It was only after repeated experiments that it occurred to Fink that the radical alone was the catalyst, whether in chromic sulphate, in sulphuric acid, or not a sulphate radical at all. The optimum ratio then followed from trial Chapter 4 – Nonobviousness

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and error. Unless, therefore, the art had already learned as much empirically, his idea, when verified, has every mark of an invention. The need had long existed; competent investigators had tried to fill it; they had hit the target but not the bull's eye; the art accepted and practiced the disclosure with success. In retrospect it now seems inevitable; perhaps it was in time. Chemists were probably bound in the end to learn how to electroplate chromium; it was another species of an art well known. But if this is to be the test, there will be few inventions, or none. The patent law need look only to the last step which overstrode what had so far balked advance. Those decisions which emphasize the implications of existing knowledge [Atlantic Works v. Brady, 107 U. S. 192, 199, 200; Thompson v. Boisselier, 114 U. S. 1, 18; Western Elec. Co. v. Rochester Tel. Co., 145 F. 41, 42 (C. C. A. 2)], are speaking of smaller gains within the compass of the routineer chemist, electrician or artisan; that is not a severe test. But while the law grants its monopoly only to those whose originality is out of the common, it does not demand genius. We cannot safely say in retrospect that that was simple which skilled and ingenious experimenters did not contrive. ****

Questions, Comments, Problems 1. After reading several cases, you may have started to get an appreciation for the difficulty that is encountered in determining whether an invention would have been obvious. Courts too have expressed their frustration, both before and after 1952: A.

Harries et al. v. Air King Products Co., Inc., 183 F.2d 158, 86 USPQ 57 (2d Cir. 1950) (Hand, J.): “There are good reasons for allowing some latitude of choice. A decision resting upon non-infringement is generally much more secure than one on invalidity, at least when the question is whether there is a patentable invention. That issue is as fugitive, impalpable, wayward, and vague a phantom as exists in the whole paraphernalia of legal concepts. It involves, or it should involve, as complete a reconstruction of the art that preceded it as is possible; for the test of invention is the originality of the discovery, and discovery depends upon the mental act of conceiving the new combination, for substantially every invention is only a combination. Nothing is more illusory, as nothing is more common, than to assume that this can be measured objectively by the magnitude of the physical readjustments required. Courts never tire, or at least in earlier times they never did, of expatiating upon the freshness of insight which observes a little, but fruitful, change which had theretofore escaped detection by those engaged in the field. When all is said, we are called upon imaginatively to project this act of discovery against a hypostatized average practitioner, acquainted with all that has been published and all that has been publicly sold. If there be an issue more troublesome, or more apt for litigation than this, we are not aware of it. The defence for always deciding it first, is that, if the claim be invalid, it should not be allowed to stand as a “scarecrow”; and that is quite true, granted the premise. Indeed, the same notion lies back of the disclaimer statute.”

B.

Expanded Metal Co. v. Bradford, 214 U.S. 366 (1909): “It is suggested that Golding’s improvement, while a step forward, is nevertheless only such as a mechanic skilled in the art, with the previous inventions before him, would readily take; and that the invention is devoid of patentable novelty. It is often difficult to determine whether a given improvement is a mere mechanical advance, or the result of the exercise of the creative faculty amounting to a meritorious invention. The fact that the invention seems simple after it is made does not determine the question; if this were the rule, many of the most beneficial patents would be stricken down. It may be safely said that if those skilled in the mechanical arts are working in a given field and have failed, after repeated efforts to discover a certain new and useful improvement, that he who first makes the discovery has done more than make the obvious improvement which would suggest itself to a mechanic skilled in the art, and is entitled to protection as an inventor.”

2. Law and Fact – Obviousness is a legal conclusion based on underlying facts, such as the scope and content of the prior art and the existence of objective indicia (secondary considerations) of nonobviousness. Thus, on appeal, the Federal Circuit must defer to the subsidiary factual findings made by a jury (or by a judge sitting as factfinder), but may freely reach its own obviousness conclusion, subject, of course, to those findings. Does this dual-level standard of review permit the appellate court effectively to ignore the factual findings of a jury by cloaking its conclusion as one of law? If all of the subsidiary factors

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pointed toward nonobviousness, could the appellate court still rule a patent obvious as a legal matter? Is a jury better at making the subsidiary findings while the court is better at making the ultimate conclusion of obviousness vel non? 3. The Court in McClain required a “new and important function” for the single spring. Do you find this a satisfactory way to resolve the inventive contribution issue? Is the Supreme Court's focus too narrow? Is the Court focusing on the structure of a part of the combination as opposed to the concept underlying it? 4. Nexus – The Court in McClain, in its discussion of the relevance of commercial success to the question of “invention,” foreshadowed what later cases have called the requirement for a nexus between the commercial success (or other objective evidence of nonobviousness) and the claimed invention. See, e.g., Demaco Corp. v. F. Von Langsdorff Licensing Ltd., 851 F.2d 1387, 7 USPQ2d 1222 (Fed. Cir. 1988). The objective indicia of nonbviousness are discussed later in this chapter. 5. Patent System Based on Novelty and Utility Only? The Court in McClain rejects the idea that utility alone should determine patentability. What do you think of a system based on novelty and utility, but without a third requirement for nonobviousness? Judge Frank essentially proposed such a system in his concurrence in Picard v. United Aircraft, 128 F.2d 632, 53 USPQ 563 (2d Cir. 1942), but his system also required investment before a patent would issue. Would such a system promote Constitutional objectives or would it be at odds with the Patents Clause? In Justice Douglas’s vitriolic attack in Great Atlantic Tea & Pacific Tea Co. v. Supermarket Equipment Corp., 340 U.S. 147 (1950), on the quality of patents issued by the Patent Office, he stated that the requirement of “invention” was Constitutionally mandated. Do you agree? 6. Compare Chief Judge Markey’s approach in Schenck with Judge Hand’s famous concurrence in H.K. Regar, in which he wrote: When old devices are changed at all, the change may be dictated by a new conception, which it took originality to conceive. Strictly, the old device is not then put to a new use; the new use begets a new device. In such cases it requires but little physical change to make an invention. 7. Former Federal Circuit Chief Judge Markey’s approach to nonobviousness cases was to personalize the inventor and the inventor’s contribution. By doing so, he brought home that inventions are not dry, academic issues decided on paper, but instead are creations of real people resolving real problems when others could not. Good examples of his approach may be seen in W.L. Gore & Associates, Inc. v. Garlock, Inc., 721 F.2d 1540, 220 USPQ 303 (Fed. Cir. 1983); Jones v. Hardy, 727 F.2d 1524, 220 USPQ 1021 (Fed. Cir. 1984); Panduit Corp. v. Dennison Mfg. Co., 810 F.2d 1561, 1 USPQ2d 1593 (Fed. Cir. 1987); and Rosemount, Inc. v. Beckman Instruments, Inc., 727 F.2d 1540, 221 USPQ 1 (Fed. Cir. 1984). In W.L. Gore, he wrote: On the entire record and in view of all the references, each in its entirety, it is clear that a person of ordinary skill confronted with a PTFE tape breakage problem would have either slowed the rate of stretching or increased the temperature to decrease the crystallinity. Dr. Gore did neither. He proceeded contrary to the accepted wisdom of the prior art by dramatically increasing the rate and length of stretch and retaining crystallinity. That fact is strong evidence of nonobviousness. 721 F.2d at 1552, 220 USPQ at ___..

The Scope and Content of the Prior Art Section 103 speaks of the “differences between the subject matter sought to be patented and the prior art.” How does one determine what references fall within the “scope” of the “prior art” for section 103 purposes? It seems that section 102 is a great place to borrow definitions for prior art, especially since section 103 explicitly applies when section 102 falls short. That is precisely how section 103 has been read for subsection 102(a); patents and printed publications serve as the vast majority of prior art in section 103 cases. See P.J. Federico, Commentary on the New Patent Act, 35 U.S.C.A. 1, 20 (1954) (“The antecedent of the words “prior art,” which here appear in a statute for the first time, lies in the phrase “disclosed or described as set forth in section 102” and hence these words refer to material specified in section 102 as the basis for comparison.”). In addition, subsection (b) has long been held to apply under section 103. See In re Foster, 343 F.2d 980 (CCPA 1965). The question of whether references from subsections (e), (f), and (g) apply under Section 103 has been more difficult. Chapter 4 – Nonobviousness

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Section 102(e) Section 102(e) states: “A person shall be entitled to a patent unless – (e) the invention was described in a patent granted on an application for patent by another filed in the United States before the invention thereof by the applicant for patent, or on an international application by another who has fulfilled the requirements of paragraphs (1), (2), and (4) of section 371(c) of this title before the invention thereof by applicant for patent

The Supreme Court considered the 102(e)/103 issue in Hazeltine Research, Inc. v. Brenner, 382 U.S. 252, 147 USPQ 429 (1965): Petitioners' primary contention is that the term "prior art," as used in § 103, really means only art previously publicly known. In support of this position they refer to a statement in the legislative history which indicates that prior art means "what was known before as described in section 102." They contend that the use of the word "known" indicates that Congress intended prior art to include only inventions or discoveries which were already publicly known at the time an invention was made. If petitioners are correct in their interpretation of "prior art," then the Wallace invention, which was not publicly known at the time the Regis application was filed, would not be prior art with regard to Regis' invention. This is true because at the time Regis filed his application the Wallace invention, although pending in the Patent Office, had never been made public and the Patent Office was forbidden by statute from disclosing to the public, except in special circumstances, anything contained in the application.* The Commissioner, relying chiefly on Alexander Milburn Co. v. Davis-Bournonville Co., 270 U.S. 390, contends that when a patent is issued, the disclosures contained in the patent become a part of the prior art as of the time the application was filed, not, as petitioners contend, at the time the patent is issued. In that case a patent was held invalid because, at the time it was applied for, there was already pending an application which completely and adequately described the invention. In holding that the issuance of a patent based on the first application barred the valid issuance of a patent based on the second application, Mr. Justice Holmes, speaking for the Court, said, "The delays of the Patent Office ought not to cut down the effect of what has been done. . . . [The first applicant] had taken steps that would make it public as soon as the Patent Office did its work, although, of course, amendments might be required of him before the end could be reached. We see no reason in the words or policy of the law for allowing [the second applicant] to profit by the delay . . . ." At p. 401. In its revision of the patent laws in 1952, Congress showed its approval of the holding in Milburn by adopting 35 U.S.C. § 102 (e) (1964 ed.) which provides that a person shall be entitled to a patent unless "(e) the invention was described in a patent granted on an application for patent by another filed in the United States before the invention thereof by the applicant for patent." Petitioners suggest, however, that the question in this case is not answered by mere reference to § 102(e), because in Milburn, which gave rise to that section, the co-pending applications described the same identical invention. But here the Regis invention is not precisely the same as that contained in the Wallace patent, but is only made obvious by the Wallace patent in light of the Carlson patent. We agree with the Commissioner that this distinction is without significance here. While we think petitioners' argument with regard to § 102 (e) is interesting, it provides no reason to depart from the plain holding and reasoning in the Milburn case. The basic reasoning upon which the Court decided the Milburn case applies equally as well here. When Wallace filed his application, he had done what he could to add his disclosures to the prior art. The rest was up to the Patent Office. Had the Patent Office acted faster, had it issued Wallace's patent two months earlier, there would have been no question here. As Justice Holmes said in Milburn, "The delays of the Patent Office ought not to cut down the effect of what has been done." P. 401. *

35 U.S.C. 122 (1964 ed.) states: "Applications for patents shall be kept in confidence by the Patent Office and no information concerning the same given without authority of the applicant or owner unless necessary to carry out the provisions of any Act of Congress or in such special circumstances as may be determined by the Commissioner."

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To adopt the result contended for by petitioners would create an area where patents are awarded for unpatentable advances in the art. We see no reason to read into § 103 a restricted definition of “prior art” which would lower standards of patentability to such an extent that there might exist two patents where the Congress has plainly directed that there should be only one.

Congress amended section 103(c) in late-1999 via the American Inventors Protection Act of 1999, to provide that that section 102(e) art is no longer applicable to an obviousness analysis. Section 102(g) Section 102(g) deals, in the main, with battles over priority, i.e., who, between two or more inventors (or groups of inventors), was the first to conceive the invention and reduce it to practice. However, section 102(g) has been applied outside the pure priority context. In addition, the Court of Customs and Patent Appeals, in In re Bass, 474 F.2d 1276, 177 USPQ 178 (CCPA 1973) (Rich, Acting C.J.), ruled that section 102(g) represents a type of prior art that may be used in applying section 103 even outside the priority context: [I]t is clear beyond question that in using § 102(g) prior art to support a rejection it has not been limited to situations involving “identity of invention,” as appellants contend, but has repeatedly been used to support the rejection of claims to different but obvious inventions under § 103. As a general proposition of law, and particularly considering the way in which full anticipation situations under §102 shade into obviousness rejections under §103 because of discernible differences, we cannot sanction an interpretation of the statute under which a prior invention is "prior art" under the former situation but not under the latter. The situation presents a close parallel to the situation under §102(e) which was dealt with by this court In re Harry, 51 CCPA 1541, 333 F.2d 920, 142 USPQ 164, 167 (1964), and by the Supreme Court a year later in Hazeltine Research, Inc. v. Brenner, 382 U.S. 252, 147 USPQ 429, 431 (1965). In Hazeltine the patentee tried in vain to do the very thing appellants attempt here, namely, to distinguish between §102 full anticipation and §103 obviousness rejections. A parallel attempt was made in Harry with respect to §102(e). In Hazeltine the Court gave this answer (emphasis added): Petitioners suggest, however, that the question in this case is not answered by mere reference to §102(e), because in Milburn, which gave rise to that section, the co-pending applications described the same identical invention. But here the Regis invention is not precisely the same as that contained in the Wallace patent, but is only made obvious by the Wallace patent in light of the Carlson patent. We agree with the Commissioner that this distinction is without significance here. In Harry, in discussing the §102(e) + §103 rejection, our summation reads (emphasis added): In our opinion, the "prior art" referred to in §103 includes, along with the patents, printed publications, public uses and sales of paragraphs (a) and (b) of section 102, prior invention as established by a co-pending application, if it becomes a patent, as contemplated by paragraph (e) and as held in the Milburn case. Such prior invention, as prior art, may be combined with other references to sustain a rejection for obviousness under section 103. Such being the law as to prior invention established under §102(e), as it surely is with the Supreme Court's approval, we see no reason a different rule should prevail when the prior invention is otherwise established, as by the circumstances of the case, an adverse ruling in an interference, admissions by the applicant, or otherwise, the statutory basis for using the prior invention being § 102(g). It is not a new idea that what is prior art for one purpose is prior art for all purposes. Judge Learned Hand, speaking for the Second Circuit Court of Appeals in Western States Mach. Co. v. S. S. Hepworth Co., 147 F.2d 345, 64 USPQ 141, 144-145 (1945), said, at the end of a long discussion of the

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"plausible" argument that there should be a distinction between a prior invention under the Milburn rule which fully anticipates and one which merely makes obvious. . . . once the first application is treated as prior art when it fully anticipates, there seems to be no reason to deny it whatever effect it would have as prior art, if it were literally such. [Emphasis added.] It is our view that the law as applied in the Patent Office must be uniform with the law as applied in the courts in passing on patent validity. It is our belief that is what it is doing in this case. ****

Judge Baldwin concurred with the majority: On the basis of the Milburn case, which changed the effective date of a U. S. patent from its issue date to its filing date, the principal opinion would change the effective date of all U. S. references to the unknown point in time when their subject matter was invented. On the basis of cases dealing with the rejection of a losing interference party's claims over the lost counts, the principal opinion condones the rejection of one applicant's claims over the contents of a patent where the parties' cases had never been in interference and in fact could not be put into interference under well established law. Further, the principal opinion fails to follow our previous cases which have decided the identical point of law. It would be impossible to describe in detail all of the problems adoption of the position taken in the principal opinion would cause. The substantial problems caused by the reasoning behind the rejection before us will emerge soon enough if the position taken in the principal opinion is adopted. What is particularly disturbing about the principal opinion is that it overrules a long line of our previous cases when it is not even necessary to do so. It is found in the principal opinion that the record fails to establish that Bass and Horvat were prior to Bass, Horvat and Jenkins. That being the case, the rejection must be reversed whether or not the board's theory regarding section 102 is correct, and there is no reason to hypothesize concerning the alleged relationships between sections 102(g) and 103 of the statute. The principal opinion takes the position that the term "prior art" as it is used in 35 U.S.C. 103 should include all inventions which were made in this country before an applicant or patentee made his invention, regardless of when those inventions are made public or patent applications on them are filed, so long as those inventions are found not to have been abandoned, suppressed or concealed. I disagree with that conclusion for the reasons stated hereinafter. **** The statute does not contain a definition of the term "prior art." Nor does section 103 require that everything referred to in section 102 must be considered as "prior art" as that term is used therein. Indeed, using the "common meaning of the words" approach to ascertain the meaning of section 103, one might easily conclude that the "prior art" was intended to include only that material in section 102 in which something is "disclosed or described." However, the history of section 103 contains indications that such an interpretation would be too restrictive. We are not called upon here to consider all aspects of the interrelationships between 102 and section 103. Our task is rather to decide whether a secret invention is within the meaning of "prior art," as that term is used in section 103, by virtue of section 102(g). Before dealing specifically with section (g), a short discussion of secret prior knowledge is in order. **** The doctrine that prior knowledge or use of an invention must be public before it can prevent the issuance of, or invalidate, a patent to another for that invention is an old one in patent law. It was firmly

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adopted as a ruling doctrine of United States law in the case of Pennock. v. Dialogue, 27 U.S. (2 Pet.) 1 (1829). **** To push the effective date of a non-anticipatory reference backwards beyond the point where the knowledge it contains was made public to the time when its author obtained that knowledge, as we are asked to do here, would be to extend the exception to the point where it essentially swallows the rule. Section 102(e) would be turned into mere surplusage, for the application date of the patent would no longer be important, except as showing a constructive reduction to practice and except as insofar as it evidences an intent not to suppress, conceal or abandon. The Milburn and Hazeltine decisions are strictly limited to applications for U. S. patents. **** In neither case did the Court push the effective date of a U. S. patent backward in time any further than its filing date. Both of the cases rely on the proposition that a prior applicant when he filed his application "had done what he could to add his disclosures to the prior art." They did nothing to extend the effective date to a point before the inventor filed his application—a point in time when he has done absolutely nothing towards "adding his disclosures to the prior art." Such a result conflicts with the rationale behind those cases. How can filing an application be a step towards adding an invention "to the prior art" if the invention itself is prior art at the moment it is conceived?

In the principal opinion, the majority responded to Judge Baldwin’s concurrence: The concurring opinion expresses the view that prior invention under §102(g) is not "prior art" under §103 unless the priority happens to have been established in an interference, when it is "prior art" under §103. Since there has been no interference here, the position taken is that the Bass patented suction nozzle and the Jenkins patented main cylinder screen would not be "prior art" under §103 even if the priority of these inventions were firmly established by evidence, and so these inventions must be ignored in determining obviousness under §103, on which basis the same result is reached that we reach. It also expresses the view that although prior inventions under §102(g) are prior art which can be used to sustain a full anticipation rejection under §102, they cannot be used to sustain an obviousness rejection under §103—that prior art is not prior art for all purposes. We consider this position anomalous. Much of what this concurring opinion says is contradicted by what has already been said above but since certain fundamental considerations appear to have been overlooked that will bear summarizing in the interest of clarifying our position. First of all, it is tolerably clear that this opinion does not change the law as it has been for 20 years, if not longer, in this court as well as elsewhere. The concurrence has no answer for cases like Sutter Products v. Pettibone Milliken (7th Cir. 1970) and there is no "long line" of cases in this court being overruled. Only two are named, Newton and Frilette, about which more anon. We are charged with holding as we do while remaining "silent" as to reasons why we should do so. We have not been silent, we have been ignored. Reason No. 1, supra, is that full anticipation under §102 shades so gradually into obviousness under §103 that it is not practicable to try to operate a patent system on the basis that which is prior art for full anticipation situations is not also prior art for determining obviousness (which is a partial anticipation, using "anticipation" in a non-technical but realistic sense). Reason No. 2, supra, is that it would be anomalous to have existing, side by side, the law of §102(e), Hazeltine, and In re Harry, which is that an invention which is prior as of the U.S. filing date of an issued patent disclosing it is prior art for both §102 anticipation and §103 obviousness rejections, and law as the concurrence would have it, namely, that an invention otherwise established by evidence to be prior to an applicant's invention is prior art only for §102 anticipation and not in

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determining §103 obviousness. Reason No. 3, supra, is that what we hold to be the law is already the law in infringement suits, as the concurrence tacitly admits, though it does not consider such decisions to be "binding on this court." However, the law must be the same in this court and in other courts which pass on patent validity. Reason No. 4 is that if the question here decided were presented to the Supreme Court it would almost certainly, in view of Milburn and Hazeltine, affirm our decision on the applicability of §102(g). In short, prior art for one purpose is prior art for all purposes and in all courts and in the Patent Office. On one matter the concurrence maintains a significant silence. Throughout, it takes it for granted that prior invention under §102(g) is prior art which will support a rejection of claims to the same or substantially the same invention. Without emphasis on the fact, the entire concurrence carefully limits its discussion to the status of "a non-anticipatory reference." It attempts to develop, as an assumed part of the law, a spurious distinction between "prior art" and "prior invention," a "prior art defense" and a "prior invention defense." Regardless of what may have been said in three opinions written in 1902, 1912, and 1916, long before Milburn and Hazeltine, prior invention is prior art and always has been. The only distinction which exists is between anticipation and obviousness and the determination of either depends on what is in the prior art. Its status as prior art is not determined by whether it fully discloses or only partially discloses the claimed invention. **** The concurrence worries about our decision making a lot of issued patents invalid, which presumably would not otherwise be. The concern is misdirected. Since we are making no change in the law—certainly no change as it is applied by other courts in infringement suits—no more patents will be invalid than is already the case. (The Patent Office never has and never will be able to examine applications as to all defenses to validity. See 35 U.S.C. § 28(2). However, should the law be as the concurrence would have it, the Patent Office would be compelled to issue more invalid patents by being barred from applying the law as other courts apply it. This is the amazing choice the concurrence makes out of fear of nightmarish situations of its own imagining. In all the years we have had the law as we now declare it to be none of them has materialized. The concurrence makes the erroneous statement that in past cases we have based our thinking on "the proposition that everything in section 102 is prior art" (original emphasis). The anatomy of §102 is fairly clear. As forecast in its heading, it deals with the two questions of "novelty and loss of right." It also deals with originality in subsection (f) which says that one who "did not himself invent the subject matter" (i.e., he did not originate it) has no right to a patent on it. Subsections (c) on abandonment and (d) on first patenting the invention abroad, before the date of the U.S. application, on an application filed more than a year before filing in the U.S., are loss of right provisions and in no way relate to prior art. Of course, (c), (d), and (f) have no relation to §103 and no relevancy to what is "prior art" under § 103. Only the remaining portions of § 102 deal with "prior art." Three of them, (a), (e), and (g), deal with events prior to applicant's invention date and the other, (b), with events more than one year prior to the U.S. application date. These are the "prior art" subsections.

Questions, Comments, Problems 1. Is there a personal knowledge requirement for 102(g) prior art? In 1980, seven years after In re Bass, the CCPA seemed to limit the effect of 102(g) prior art by engrafting a requirement that the inventor have knowledge of the prior invention before that prior invention could be applied against the inventor. See In re Clemens, 622 F.2d 1029, 206 USPQ 289 (CCPA 1980). But the Federal Circuit saw it differently. In Kimberly-Clark Corp. v. Johnson & Johnson, 745 F.2d 1437, 223 USPQ 603 (Fed. Cir. 1984), Judge Rich (the author of the majority opinion in In re Bass when he sat on the CCPA), writing for the court, reaffirmed Bass, finding that §102(g) did constitute prior art for purposes of §103, and holding that §102(g) contains no personal knowledge requirement, the statement in In re Clemens to the contrary discarded as mere dictum. If Clemens were the law, what would the difference be between §102(f) and (g)? The dictum in Bass that § 102(f) has “no relation to § 103” raises eyebrows. We shall see how the Federal Circuit dealt with it in the OddzOn case, discussed next.

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Section 102(f) You may remember from the last chapter that section 102(f), the originality requirement, does not often serve as a source for prior art. That subsection provides a person may not receive a patent if “he did not himself invent the subject matter sought to be patented.” Because of 102(f)’s low profile, it should not be surprising that the 102(f)/103 issue did not arise in the Federal Circuit until 1997. The Federal Circuit ruled, in OddzOn Products, Inc. v. Just Toys, Inc., 122 F.3d 1396 (Fed. Cir. 1997), that, although the question was close, section 102(f) could serve as the basis of prior art for a section 103 analysis:1 We now take the opportunity to settle the persistent question whether §102(f) is a prior art provision for purposes of §103. As will be discussed, although there is a basis to suggest that §102(f) should not be considered as a prior art provision, we hold that a fair reading of §103, as amended in 1984, leads to the conclusion that §102(f) is a prior art provision for purposes of §103. Section 102(f) provides that a person shall be entitled to a patent unless "he did not himself invent the subject matter sought to be patented." This is a derivation provision, which provides that one may not obtain a patent on that which is obtained from someone else whose possession of the subject matter is inherently "prior." It does not pertain only to public knowledge, but also applies to private communications between the inventor and another which may never become public. Subsections (a), (b), (e), and (g), on the other hand, are clearly prior art provisions. They relate to knowledge manifested by acts that are essentially public. Subsections (a) and (b) relate to public knowledge or use, or prior patents and printed publications; subsection (e) relates to prior filed applications for patents of others which have become public by grant; and subsection (g) relates to prior inventions of others that are either public or will likely become public in the sense that they have not been abandoned, suppressed, or concealed. Subsections (c) and (d) are loss-of-right provisions. Section 102(c) precludes the obtaining of a patent by inventors who have abandoned their invention. Section 102(d) causes an inventor to lose the right to a patent by delaying the filing of a patent application too long after having filed a corresponding patent application in a foreign country. Subsections (c) and (d) are therefore not prior art provisions. In In re Bass, 59 C.C.P.A. 1342, 474 F.2d 1276, 1290, 177 USPQ 178, 189 (CCPA 1973), the principal opinion of the Court of Customs and Patent Appeals held that a prior invention of another that was not abandoned, suppressed, or concealed (102(g) prior art) could be combined with other prior art to support rejection of a claim for obviousness under §103. The principal opinion noted that the provisions of §102 deal with two types of issues, those of novelty and loss-of-right. It explained: "Three of [the subsections,] (a), (e), and (g), deal with events prior to applicant's invention date and the other, (b), with events more than one year prior to the U.S. application date. These are the “prior art” subsections." Id. (emphasis in original). The principal opinion added, in dictum (§102(f) not being at issue), that "[o]f course, (c), (d), and (f) have no relation to §103." Id. There is substantial logic to that conclusion. After all, the other prior art provisions all relate to subject matter that is, or eventually becomes, public. Even the "secret prior art" of §102(e) is ultimately public in the form of an issued patent before it attains prior art status. Thus, the patent laws have not generally recognized, as prior art that which is not accessible to the public. It has been a basic principle of patent law, subject to minor exceptions, that prior art is: technology already available to the public. It is available, in legal theory at least, when it is described in the world's accessible literature, including patents, or has been publicly known or in . . . public use or on sale "in this country." That is the real meaning of "prior art" in legal theory—it is knowledge that is available, including what would be obvious from it, at a given time, to a person of ordinary skill in the art. 1

OddzOn involved a design patent rather than a utility patent. However, the requirements of sections 102 and 103 apply to both types of patents. See 35 U.S.C. § 171.

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Kimberly-Clark Corp. v. Johnson & Johnson, 745 F.2d 1437, 1453, 223 USPQ 603, 614 (Fed. Cir. 1984) (citations omitted). Moreover, as between an earlier inventor who has not given the public the benefit of the invention, e.g., because the invention has been abandoned without public disclosure, suppressed, or concealed, and a subsequent inventor who obtains a patent, the policy of the law is for the subsequent inventor to prevail. See W.L. Gore & Assocs, Inc. v. Garlock, Inc., 721 F.2d 1540, 1550, 220 USPQ 303, 310 (Fed. Cir. 1983) ("Early public disclosure is a linchpin of the patent system. As between a prior inventor [who does not disclose] and a later inventor who promptly files a patent application . . ., the law favors the latter."). Likewise, when the possessor of secret art (art that has been abandoned, suppressed, or concealed) that predates the critical date is faced with a later-filed patent, the later-filed patent should not be invalidated in the face of this "prior" art, which has not been made available to the public. Thus, prior, but non-public, inventors yield to later inventors who utilize the patent system. However, a change occurred in the law after Bass was decided. At the time Bass was decided, §103 read as follows: A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. Patentability shall not be negatived by the manner in which the inventor was made. 35 U.S.C. § 103. The prior art being referred to in that provision arguably included only public prior art defined in subsections 102(a), (b), (e), and (g). In 1984, Congress amended § 103, adding the following paragraph: Subject matter developed by another person, which qualifies as prior art only under subsection (f) or (g) of section 102 of this title, shall not preclude patentability under this section where the subject matter and the claimed invention were, at the time the invention was made, owned by the same person or subject to an obligation of assignment to the same person. 35 U.S.C. § 103 (now § 103(c)) (emphasis added). It is historically very clear that this provision was intended to avoid the invalidation of patents under § 103 on the basis of the work of fellow employees engaged in team research. See Section-by-Section Analysis: Patent Law Amendments Act of 1984, 130 Cong. Rec. 28069, 28071 (Oct. 1, 1984), reprinted in 1984 U.S.C.C.A.N. 5827, 5833 (stating that the amendment, which encourages communication among members of research teams, was a response to Bass and In re Clemens, 622 F.2d 1029, 206 USPQ 289 (CCPA 1980), in which "an earlier invention which is not public may be treated under Section 102(g), and possibly under 102(f), as prior art"). There was no clearly apparent purpose in Congress's inclusion of § 102(f) in the amendment other than an attempt to ameliorate the problems of patenting the results of team research. However, the language appears in the statute; it was enacted by Congress. We must give effect to it. The statutory language provides a clear statement that subject matter that qualifies as prior art under subsection (f) or (g) cannot be combined with other prior art to render a claimed invention obvious and hence unpatentable when the relevant prior art is commonly owned with the claimed invention at the time the invention was made. While the statute does not expressly state in so many words that § 102(f) creates a type of prior art for purposes of § 103, nonetheless that conclusion is inescapable; the language that states that § 102(f) subject matter is not prior art under limited circumstances clearly implies that it is prior art otherwise. That is what Congress wrote into law in 1984 and that is the way we must read the statute. This result is not illogical. It means that an invention, A', that is obvious in view of subject matter A, derived from another, is also unpatentable. The obvious invention, A', may not be unpatentable to the

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inventor of A, and it may not be unpatentable to a third party who did not receive the disclosure of A, but it is unpatentable to the party who did receive the disclosure. The PTO's regulations also adopt this interpretation of the statute. 37 C.F.R. § 1.106(d) (1996) ("Subject matter which is developed by another person which qualifies as prior art only under 35 U.S.C. § 102(f) or (g) may be used as prior art under 35 U.S.C. § 103."). Although the PTO's interpretation of this statute is not conclusive, we agree with the district court that it is a reasonable interpretation of the statute. It is sometimes more important that a close question be settled one way or another than which way it is settled. We settle the issue here (subject of course to any later intervention by Congress or review by the Supreme Court), and do so in a manner that best comports with the voice of Congress. Thus, while there is a basis for an opposite conclusion, principally based on the fact that § 102(f) does not refer to public activity, as do the other provisions that clearly define prior art, nonetheless we cannot escape the import of the 1984 amendment.

Questions, Comments, Problems 1. Do you believe that the 1984 amendment to section 103 made section 102(f) prior art applicable to section 103 for the first time or do you believe that it codified what was previously the case? Notwithstanding the dictum in In re Bass to the contrary, the First Circuit held that section 102(f) prior art was applicable to section 103. Dale Electronics, Inc. v. R.C.L. Electronics, Inc., 488 F.2d 382, 386, 180 USPQ 225 (1st Cir. 1973). Chief Judge Coffin said: “Since §102 is the referent for §103, we draw the conclusion that if the facts that the whole of an invention was known to others or that none of the invention was created by the patent applicant bar entitlement under §102, the condition of knowledge by others or the borrowing by the applicant of a sufficient body of lore to make the invention obvious bars entitlement under §103.” Id. at 386. In addition, precisely four months before OddzOn issued, the Federal Circuit decided Gambro Lundia AB v. Baxter Healthcare Corp., 110 F.3d 1573 (Fed. Cir. 1997), in which it faulted the district court as follows: Citing New England Braiding Co. v. A.W. Chesterton Co., 970 F.2d 878, 23 USPQ2d 1622 (Fed. Cir. 1992), the district court concluded that Baxter did not need to prove communication of the entire conception, but rather only so much of the invention “as would have made it obvious to one of ordinary skill in the art.” Gambro Lundia AB v. Baxter Healthcare Corp., 896 F. Supp. 1522, 1540 (D. Colo. 1995) (citing New England Braiding, 970 F.2d at 883). Based on this reasoning, the district court applied the obviousness standard in 35 U.S.C. § 103 (1994) to determine that the named inventors received enough information to make the invention obvious to one skilled in the dialysis art. This reasoning, however, misconstrues the dictum in New England Braiding and introduces incorrectly an obviousness analysis into the test for derivation. The Supreme Court announced the standard for finding communication of a prior conception over 125 years ago in Agawam Woolen v. Jordan, 74 U.S. (7 Wall.) 583 (1868). The Court required a showing that the communication "enabled an ordinary mechanic, without the exercise of any ingenuity and special skill on his part, to construct and put the improvement in successful operation." Id. at 602-03 (emphasis added). This court’s predecessor consistently applied this Supreme Court standard. See, e.g., Hedgewick v. Akers, 497 F.2d 905, 908, 182 USPQ 167, 169 (CCPA 1974) ("Communication of a complete conception must be sufficient to enable one of ordinary skill in the art to construct and successfully operate the invention.") (emphasis added); DeGroff v. Roth, 412 F.2d 1401, 1405, 162 USPQ 361, 365 (CCPA 1969). This court recognizes that the district court’s incorrect derivation standard springs from dictum in this court’s New England Braiding decision. In that case, this court noted: “To invalidate a patent for derivation of invention, a party must demonstrate that the named inventor in the patent acquired knowledge of the claimed invention from another, or at least so much of the claimed invention as would have made it obvious to one of ordinary skill in the art.” New England Braiding, 970 F.2d at 883. This dictum did not in fact incorporate a determination of obviousness into a Section 102(f) analysis. Indeed, this court in New England Braiding did not apply such a test.

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The New England Braiding court upheld the denial of a preliminary injunction because the record showed a likelihood that New England Braiding’s patent was invalid under 35 U.S.C. § 102(f). The record showed that George Champlin, the named inventor, worked for the A.W. Chesterton Co. (Chesterton) and participated in experiments that developed the invention. One Chesterton employee testified that Champlin had said, when he left to start his own company, that he wanted to patent the experimental braiding if Chesterton decided not to do so. Champlin denied these allegations. Id. at 883-84. The key issue was a credibility determination between the witnesses for the two parties. The sufficiency of the communication, particularly whether the invention was obvious in light of such disclosure, was not at issue. Thus, New England Braiding did not incorporate an obviousness test into the § 102(f) analysis. How do you square Gambro Lundia with OddzOn, in which the court called the issue it was deciding one of first impression?

Section 103(c) As the Federal Circuit noted in OddzOn, supra, the 1984 amendment to § 103 was for the purpose of avoiding invalidation of patents under section 103 on the basis of the work of fellow employees engaged in team research. Before the amendment, one appellate court reached the same result by a rather loose and expansive view of joint invention. In General Motors Corp. v. Toyota Motor Co., 667 F.2d 504, 212 USPQ 659 (6th Cir. 1981), the Sixth Circuit distinguished In re Bass to find that prior work within GM was not prior art, but was instead actually part of a broad joint invention. Id. at 506-07. What is clear is that back in the 1940s, Thurman Arnold, who had been U.S. Attorney General, a famous Yale law professor, and later founded Arnold, Fortas & Porter, took a dim view of corporate research patents when he was on the Court of Appeals for the District of Columbia. In Potts v. Coe, 145 F.2d 27, 62 USPQ 331 (D.C. Cir. 1944), Associate Justice Arnold took on corporate America as follows: We will restate the principle on which our decision rests and which appellants claim was improperly injected into the case. Where a corporation, as assignee of one of its employees, seeks a patent on a discovery made in the course of its organized technical research it must assume a different burden of proof from that imposed where the discovery is the product of independent inventive genius. The corporation, which in substance is seeking the patent, must show that (1) the employee is the real inventor, and (2) the discovery is above the level of the art current in its own corporate laboratory and other corporate laboratories with which it has connections and affiliations. Such a burden is not met merely by showing that the discovery is an advance over the art shown in technical literature outside the laboratory or in previous patent application by others. **** But the corporation is the real applicant, and the man whose name appears on the patent is only a nominal party. Furthermore, though the discovery may appear to be a startling innovation, actually it is frequently the product of years of research by many men who come and go, who consult each other and the employees of other corporations with which their own employer has affiliations and agreements. The result is a gradual advance in scientific knowledge made possible because large funds have been spent on research – not an invention. The use of this accumulating body of technical information is denied to the public and to new enterprise whenever a patent is granted on this kind of “discovery” . . . We do not deny that patentable invention may exist in a case where a corporation seeks a patent on the work of one of its employees who has been engaged in organized research. But the essential nature of corporate research makes such a situation unusual for two reasons. In the first place, the incentive to invent supplied by the patent law will not work in organized research because it destroys team work and cooperation. If one man or even a small group is competing with the others to be prior in invention, joint experimentation on a large scale becomes impossible. This has been pointed out over and over by men familiar with successful research. It might be said that only in a very poorly organized research laboratory is individual invention at all likely. In the second place, the research laboratory has gradually raised the level of industrial art until discoveries by ordinary skilled men, which would have seemed miraculous in the last century, are definitely predictable if money is available for organized research.

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The laboratory level of the art has become the level which the discovery must surpass in order to rise to the dignity of invention. The level outside the laboratory is years behind the times. The level of the laboratory art is not disclosed in current literature, or in previous patent application for the simple reason that it is not to the interest of the corporate research organization to make it public. For that reason patentability of a corporate research product cannot be determined by reference to literature. The employed technicians of organized research dominate the scientific societies and write the technical literature. But they cannot be expected to disclose facts adverse to the patent position of their employer. ... **** Today, when the strangling effects on industrial progress and the promotion of patent cartels, through the growth of the fiction under which corporate patenting has been inadvertently approved, are written large in the investigations authorized by Congress, appellants argue that we have no right to consider such public hearings in applying the principles of the patent law to corporate research. This argument is not worthy of serious consideration. . . . The patent law is designed to encourage competition among inventors by giving a patent to the ingenious individual who wins in a race for discovery. The modern corporate research laboratory is a negation of this principle because it is compelled to suppress competition between individuals. Instead, the race is between the financial interests that organize the laboratories. The result is that a corporation, by successfully eliminating competition for prior discovery between individuals, receives the statutory reward offered to encourage the individual effort which it has suppressed. **** Leaders in corporate research have argued that corporate patenting of technical information is in the public interest. Their contention is that corporate research is so expensive that the financing of research would stop if corporations were not offered a monopoly on the information for which they spend their funds. Independent innovators like Henry Kaiser and Edsel Ford repudiate this notion. The argument justifying corporate control of technical information is simply a variation of the larger argument justifying the protection of the investments and dominating position of cartels to ensure orderly production and full employment. To those who believe in the economics of free enterprise this position is both unsound and dangerous.

Justice Arnold would have shuddered at the idea of the 1984 amendment. Do you agree with him, or do you think the amendment promotes the progress of the useful arts? Please keep in mind what the 1984 amendment does not do. It does not change the law of anticipation under sections 102(f) and (g) in a corporate environment. Anticipatory work of a co-worker can invalidate your patent under sections 102(f) or (g), and it does not affect patents generated by a research group that may become section 102(e) prior art. Why do you think Congress excluded §102(e) prior art from the beneficial effect of the amendment on corporate research? In late-1999, Congress finally amended section 103(c) so that it now refers to sections 102(e), (f), and (g). What effect do you think this amendment will have on patent litigation?

Questions, Comments, Problems 1. Going Beyond Section 102 – Section 102 does not use the term prior art, while section 103 points to prior art as its source for invalidating references. As you have read, however, the courts have looked to section 102 to provide prior art for section 103. Is section 102 the only source of prior art? The answer to that question appears to be “Yes.” See S. Rep. No. 1979, 82d Cong., 2d Sess. 6 (1952) (“[Section 103] refers to the difference between the subject matter sought to be patented and the prior art, meaning what was known before as described in section 102.”). Should section 102 be the only source of prior art? 2. Analogous Art – The cases and discussion above indicate that prior art that meets the requirements of section 102 may generally be applied under section 103. However, not all references that disclose a part of a claimed invention and meet the date requirements to be prior art may be applied to make a section 103 rejection. Instead, the courts have recognized that the hypothetical artisan of ordinary skill cannot be expected to look far from the artisan’s own field. No engineer (at least no ordinary engineer) is such a masochist that she could be expected to read the proceedings of the Institute of Electrical and Electronics Engineers and every article in the Journal of the American Medical Association. Therefore, the

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courts have limited 103 prior art to art that is “analogous” to the subject matter sought to be patented. This differs from section 102, under which any prior art from any field may be applied if it meets all the limitations of the claim. The Federal Circuit has generally applied a two-step test to the problem: Whether a reference in the prior art is “analogous” is a fact question. . . . Thus, we review the Board’s decision on this point under the clearly erroneous standard. Two criteria have evolved for determining whether prior art is analogous: (1) whether the art is from the same field of endeavor, regardless of the problem addressed, and (2) if the reference is not within the field of the inventor’s endeavor, whether the reference still is reasonably pertinent to the particular problem with which the inventor is involved. In re Clay, 966 F.2d 656, 658-59, 23 USPQ2d 1058 (Fed. Cir. 1992). 3. Suggestions in the Art – As you can see from the cases above, the issue of obviousness is normally presented as whether a prior art reference would be modified so as to produce the claimed invention or would be combined with another reference so as to produce the claimed invention. Thus, the courts often ask whether the artisan would have been motivated to make such a modification or combination. The case law requires that the motivation come from the prior art or from knowledge generally available to a reasonably skilled artisan. As noted by the Federal Circuit in Pro-Mold & Tool Co. v. Great Lakes Plastics, Inc., 75 F.3d 1568, 37 USPQ2d 1626 (Fed. Cir. 1996), where the invention was a baseball card holder that was barely larger than a baseball card, and therefore could fit inside a box of cards: It is well-established that before a conclusion of obviousness may be made based on a combination of references, there must have been a reason, suggestion, or motivation to lead an inventor to combine those references. ACS Hosp. Sys., Inc. v. Montefiore Hospital, 732 F.2d 1572, 1577, 221 USPQ 929, 933. We start from the self-evident proposition that mankind, in particular, inventors, strive to improve that which already exists. Section 103 sets the dividing line between patentability and unpatentability at what would have been obvious to one having ordinary skill in the art to which the invention pertains. If one prior art reference describes the claimed invention, it is worse than obvious in terms of patentability; it lacks novelty. If the invention is different from what is disclosed in one reference, but the differences are such that combination with another reference would lead to what is claimed, the obviousness question then requires inquiry into whether there is reason, suggestion, or motivation to make that combination. Such a suggestion may come expressly from the references themselves. See, e.g., In re Sernaker, 702 F.2d 989, 994, 217 (USPQ 1, 5 (Fed.Cir. 1983). It may come from knowledge of those skilled in the art that certain references, or disclosures in the references, are known to be of special interest or importance in the particular field. Cf. Ashland Oil, Inc. v. Delta Resins & Refractories, Inc., 776 F.2d 281, 297 n. 24, 227 USPQ 657, 667 n. 24 (Fed.Cir. 1985) (stating that the knowledge of one skilled in the art may provide the "teaching, suggestion, or inference" to combine references), cert. denied, 475 U.S. 1017, 106 S.Ct. 1201, 89 L.Ed.2d 315 (1986). It may also come from the nature of a problem to be solved, leading inventors to look to references relating to possible solutions to that problem. See, e.g., In re Application of Rinehart, 531 F.2d 1048, 1054, 189 USPQ 143, 149 (C.C.P.A. 1976) (considering the problem to be solved in a determination of obviousness). In this case, the reason to combine arose from the very nature of the subject matter involved, the size of the card intended to be enclosed. There was surely a reason to combine a reference describing an elegant card holder and cover arrangement with a reference describing a card holder no larger than necessary to enclose the card. The suggestion or motivation to combine these features of the prior art was thus evident from the very size of the card itself. Card holders larger than the card had already been designed, as evidenced at least by the Squeeze Tite card holder. On the other hand, a card holder no larger than necessary clearly was desirable in order to enable the card holders to fit in a set box. It would also avoid having the cards bang around in a holder larger than needed. The invention may also be suggested when it is a mere continuation of a trend that is suggested by the prior art. See Monarch Knitting Corp. v. Fukuhara Industrial & Trading Co., 139 F.3d 1009, 45 USPQ2d 1977 (Fed. Cir. 1998). Finally, it is not even necessary that two references be physically combinable to render obvious the claimed invention. See In re Sneed, 710 F.2d 1544, 1550, 218 USPQ 385, 389 (Fed. Cir. 1983). However, if the suggestion to combine the references is directed toward a purpose that is not

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addressed by the claimed invention, the invention may still be deemed obvious. In re Dillon, 919 F.2d 688, 16 USPQ2d 1897 (Fed. Cir. 1990) (in banc) “This court, in reconsidering this case in banc, reaffirms that structural similarity between claimed and prior art subject matter, proved by combining references or otherwise, where the prior art gives reason or motivation to make the claimed compositions, creates a prima facie case of obviousness, and that the burden (and opportunity) then falls on an applicant to rebut that prima facie case. *** . . . [I]t is not necessary in order to establish a prima facie case of obviousness that both a structural similarity between a claimed and prior art compound (or a key component of a composition) be shown and that there be a suggestion in or expectation from the prior art that the claimed compound or composition will have the same or a similar utility as one newly discovered by applicant. To the extent that [In re] Wright [848 F.2d 1216] suggests or holds to the contrary, it is hereby overruled. Furthermore, even where there is a motivation to combine references, the claimed invention will not be deemed obvious unless there would have been a reasonable expectation that the combination of the prior art would be successful. See In re Merck & Co., 800 F.2d 1091, 1097, 231 USPQ 375 (Fed. Cir. 1986) (“Obviousness does not require absolute predictability. . . . Only a reasonable expectation that the beneficial result will be achieved is necessary to show obviousness.”). 4. “In” the Prior Art or “From” the Prior Art? – In a concurring opinion in In re Oetiker, 977 F.2d 1443, 24 USPQ2d 1443 (Fed. Cir. 1992), former Chief Judge Nies suggested that it may be better to speak of the motivation as “from the prior art” rather than “in the prior art.”: I believe that it would better reflect the concept of obviousness to speak in terms of "from the prior art" rather than simply "in the prior art." The word "from" expresses the idea of the statute that we must look at the obviousness issue through the eyes of one of ordinary skill in the art and what one would be presumed to know with that background. What would be obvious to one of skill in the art is a different question from what would be obvious to a layman. An artisan is likely to extract more than a layman from reading a reference. In any event, variance in the language used in opinions does not change the nature of the statutory inquiry. Under section 103, subject matter is unpatentable if it "would have been obvious . . . to a person having ordinary skill in the art." While there must be some teaching, reason, suggestion, or motivation to combine existing elements to produce the claimed device, it is not necessary that the cited references or prior art specifically suggest making the combination. In re Nilssen, 851 F.2d 1401, 1403, 7 USPQ2d 1500, 1502 (Fed.Cir. 1988). Such suggestion or motivation to combine prior art teachings can derive solely from the existence of a teaching, which one of ordinary skill in the art would be presumed to know, and the use of that teaching to solve the same or similar problem which it addresses. 5. Teaching Away – The inventor receives one benefit from the fact that the hypothetical artisan is charged with a full knowledge of the analogous art: within that body of art may be found references that could dissuade the artisan from making the combination. These references are referred to as art that “teaches away.” As stated in In re Gurley, 27 F.3d 551, 31 USPQ2d 1130 (Fed. Cir. 1994): “A reference may be said to teach away when a person of ordinary skill, upon reading the reference, would be discouraged from following the path set out in the reference, or would be led in a direction divergent from the path that was taken by the applicant.” However, don’t be fooled into thinking that a reference that teaches one solution to a problem would, by that teaching, discourage the hypothetical artisan from attempting another solution. As aptly mentioned by one article on the subject, teaching a way is not teaching away. See Lance Leonard Barry, Teaching A Way is Not Teaching Away, 79 J. Pat & Trademark Off. Soc. 867 (1997). 6. Obvious to Try – The courts have often explained that obviousness may not be made out simply because it would have been obvious to try to make the modification or combination that leads to the claimed invention. Rather, something must point the artisan in the right direction and there must be a reasonable expectation of success. The Federal Circuit, in In re O’Farrell, 853 F.2d 894, 7 USPQ2d 1673 (Fed. Cir. 1988), commented on some confusion that this axiom has created: It is true that this court and its predecessors have repeatedly emphasized that “obvious to try” is not the standard under § 103. However, the meaning of this maxim is sometimes lost. Any

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invention that would in fact have been obvious under § 103 would also have been, in a sense, obvious to try. The question is: when is an invention that was obvious to try nevertheless nonobvious? The admonition that “obvious to try” is not the standard under § 103 has been directed mainly at two kinds of error. In some cases, what would have been “obvious to try” would have been to vary all parameters or try each of the numerous possible choices until one possibly arrived at a successful result, where the prior art gave either no indication of which parameters were critical or no direction as to which of many possible choices is likely to be successful. . . . In others, what was “obvious to try” was to explore a new technology or general approach that seemed to be a promising field of experimentation, where the prior art gave only general guidance as to the particular form of the claimed invention or how to achieve it. . . . Neither of these situations applies here. Obviousness does not require absolute predictability of success. Indeed, for many inventions that seem quite obvious, there is no absolute predictability of success until the invention is reduced to practice. There is always at least a possibility of unexpected results, that would then provide an objective basis for showing that the invention, although apparently obvious, was in law nonobvious. . . . For obviousness under § 103, all that is required is a reasonable expectation of success. 7 USPQ2d at 1681. 7. Discovery of the Source of the Problem – It has long been established that the inventive concept to be tested under the obviousness standard may include discovery of the source of the problem as well as the solution to the problem. The Supreme Court made this point in the famous Eibel Co. v. Paper Co. case. Chief Justice Taft wrote (261 U.S. 45, 68): The invention was not the mere use of a high or substantial pitch to remedy a known source of trouble. It was the discovery of the source not before known, and the application of the remedy, for which Eibel was entitled to be rewarded in his patent. . . . We cannot agree with the Circuit Court of Appeals that the causal connection between the unequal speeds of the stock and the wire, and the disturbance and rippling of the stock, and between the latter and the defective quality of the paper in high speeds of the machine was so obvious that perception of it did not involve discovery which will support a patent. The fact that in a decade of an eager quest for higher speeds this important chain of circumstances had escaped observation, the fact that no one had applied a remedy for the consequent trouble until Eibel, and the final fact that when he made known his discovery, all adopted his remedy, leave no doubt in our minds that what he saw and did was not obvious and did involve discovery and invention. Looked at under the section 103 framework, the discovery of the source of a recognized problem can be part of the “subject matter as a whole [sought to be patented].” In re Sponnoble, 405 F.2d 578, 160 USPQ 237 (CCPA 1969). 8. Hindsight – The construct of a hypothetical artisan acting at the time the actual invention was made is designed to replicate the actual conditions faced by the inventor. The inventor did not have the benefit of the technological advances that occurred between the date of invention and the time of trial. She also did not have the benefit of her own invention. Thus, the problem facing the inventor may have been surprisingly difficult compared to its apparent simplicity later in time. For this reason, the courts continuously warn against the use of hindsight when judging the obvious vel non of an invention. A.

Webster Loom Co. v. Higgins, 105 U.S. (15 Otto) 580 (1881): “[I]t is plain from the evidence, and from the very fact that it was not sooner adopted and used, that it did not, for years, occur . . . to even the most skillful persons. It may have been under their very eyes, they may almost be said to have stumbled over it; but they certainly failed to see it, to estimate its value, and bring it into notice. . . . Now that it has succeeded, it may seem very plain to any one, that he could have done it as well. This is often the case with inventions of the greatest merit. It may be laid down as a general rule, though perhaps not an invariable one, that if a new combination and arrangement of known elements produce a new and beneficial result, never attained before, it is evidence of invention.”

B.

Diamond Rubber Co. v. Consolidated Rubber Tire Co., 220 U.S. 428, 435 (1911): “Knowledge after the event is always easy, and problems once solved present no difficulties,

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indeed, may be represented as never having had any, and expert witnesses may be brought forward to show that the new thing which seemed to have eluded the search of the world was always ready at hand and easy to be seen by a merely skillful attention. But the law has other tests of the invention than subtle conjectures of what might have been seen and yet was not. It regards a change as evidence . . . even as demonstration.” C.

Sensonics, Inc. v. Aerosonic Corp., 81 F.3d 1566, 1570 (Fed. Cir. 1996): “We agree that the references, alone or in combination, do not make obvious the ‘114 invention. There is no teaching or suggestion whereby a person of ordinary skill would have been led to select these mechanical and electrical structures and concepts and combine them as did DeMayo in the ‘114 invention. To draw on hindsight knowledge of the patented invention, when the prior art does not contain or suggest that knowledge, is to use the invention as a template for its own reconstruction—an illogical and inappropriate process by which to determine patentability. . . . The invention must be viewed not after the blueprint has been drawn by the inventor, but as it would have been perceived in the state of the art that existed at the time the invention was made.”

9. Manner of Invention – The last sentence of section 103(a) states: “Patentability shall not be negatived by the manner in which the invention was made.” Consider the judicial application of this concept (both before and after it was codified): A.

Diamond Rubber Co. v. Consolidated Rubber Tire Co., 220 U.S. 428, 435-36 (1911): “Nor does it detract from its merit that it is the result of experiment and not the instant and perfect product of inventive power. A patentee may be baldly empirical, seeing nothing beyond its experiments and its result; yet if he has added a new and valuable article to the world’s utilities, he is entitled to the rank and protection of an inventor. And how can it take from his merit that he may not know all of the forces which he has brought into operation? It is certainly not necessary that he understand or be able to state the scientific principles underlying his invention, and it is immaterial whether he can stand a successful examination as to the speculative ideas involved.”

B.

Radiator Specialty Co. v. Buhot, 39 F.2d 373, 4 USPQ 205 (3d Cir. 1930): “Invention is not always the offspring of genius; more frequently it is the product of plain hard work; not infrequently it arises from accident or carelessness; occasionally it is a happy thought of an ordinary mind; and there have been instances where it is the result of sheer stupidity. It is with the inventive concept, the thing achieved, not with the manner of its achievement or the quality of the mind which gave it birth, that the patent law concerns itself.”

C.

In re Dow Chem. Co., 837 F.2d 469, 5 USPQ2d 1529 (Fed. Cir. 1988): “The PTO argues that unless the prior art is shown to have led one of ordinary skill to expect the Baer technique [one of the prior art references] to fail [when used with the other references], the applicant’s burden [of rebutting a prima facie showing of obviousness] is not met. This is not the criterion. That these inventors eventually succeeded when they and others had failed does not mean that they or their colleagues must have expected each new idea to fail. Most technological advance is the fruit of methodical, persistent investigation, as is recognized in 35 U.S.C. § 103. (“Patentability shall not be negatived by the manner in which the invention was made.”).

The Hypothetical Artisan

Frank B. Killian & Co. v. Allied Latex Corp. 188 F.2d 940, 89 USPQ 219 (2d Cir. 1951) Before L. HAND, Chief Judge, AUGUSTUS N. HAND and CLARK, Circuit judges. L. HAND, Chief Judge. Chapter 4 – Nonobviousness

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**** The “Bead-Roller Patent.” **** Countless patents lie in patent offices, in fact unknown either because they were premature, or were not exploited, or because all their uses were not foreseen; yet an inventor is charged with an acquaintance with all of them. So far as they in fact anticipate his invention they stand on precisely the same footing as though he had had them before him. The fact that the art has not profited by them is irrelevant unless it also appears that they were generally known; and they are then relevant only in so far as they may indicate that the originality, necessary to step from them to the invention in suit, does not appear to have been part of the equipment of others versed in the subject matter. The phrase, “paper patent,” is a mere bit of rhetoric, usually employed as a makeweight by judges who wish to support the patent in suit, but are embarrassed by a reference, of an escape from which they are not too confident. It is a meaningless platitude. The “Distributing Patent.” Judge Bondy has described this patent in his opinion in the district court fully enough to serve as an introduction to our discussion of the questions involved. Killian's specifications state that the machine is to make “thin rubber articles, such as rubber balloons, finger cots, nipples, rubber gloves,” and it has in fact been used to some extent to make balloons; but it is agreed that the only important use of it and other such machines is to make the “prophylactics,” which have come to be manufactured in enormous quantities during the last twenty years. The disclosure does not indeed confine the machine to the use of pure latex; it extends to “liquid latex or rubber cement,” to “natural or partly coagulated rubber latex”; and to a “rubber latex partly reduced by a coagulated process to a desired consistency, or in the form of a cement consisting of rubber dissolved in naphtha or other solvent.” However, the testimony of the plaintiff's expert witness makes it clear that in the manufacture of “prophylactics” only pure latex is desirable, or indeed possible, if the necessary thinness is to be achieved. The “coagulent process” is not “practical for thin rubber articles, that is; very thin rubber articles”; by which the witness meant those of about six thousandths of an inch. So far as he knew that process had never been “used for the commercial production of prophylactics”; indeed, he did not think that the machine “would work satisfactorily in its present form with a solvent.” Latex did not, however, begin to come into this country until 1920; nor was it until 1924 that it was imported in substantial quantities. After that the tonnage grew, somewhat unevenly, until in 1930 when it amounted to nearly 4,500. Just what use the arts made of it in the ten years between 1920 and 1930 does not appear; there were a good many patents, some eight of which are in evidence and several of which were for its use without a coagulent. Yet it was apparently only in 1926 that “latex articles that had been developed were being offered for sale,” and “prophylactics” of “latex as distinguished from dipped rubber cement” did not appear until 1931 or 1932. It would therefore be unsafe to assume that there was a “surplus” available for use for “prophylactics” before 1928, or at the earliest 1926. On the other hand throughout this period, whether it was four or two years, between its first availability in quantity and 1930, the demand for “prophylactics” must have been substantially as great as it is now; and Killian is entitled to whatever merit is due to the first person who satisfies a long existing need. Moreover, presumably he designed his machine from the ground up and without suggestion or cue; and we may well agree that, taken as a feat, that displayed enough originality to support a patent. However, as we have just said in disposing of the “Bead-Rolling Patent,” the law does not use such a subjective test in judging a patent; on the contrary it imputes to the inventor an omniscience which will again and again deprive him of the reward that his talents as an individual might otherwise deserve. That is a corollary of a monopoly, not limited to plagiarists. In the case at bar there appeared in 1917 a Dutch patent, which disclosed a machine closely parallel in structure to Killian's, and to him must be imputed an acquaintance with it. It is true that the two machines were not identical and their purposes were widely different, for the Dutch patent was designed to make “rubber balls” of latex, apparently for ease in shipment. Nevertheless, with one Chapter 4 – Nonobviousness

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exception they are so far alike that the Dutch machine could have been substituted for the patent in suit after changes that certainly could not of themselves sustain a patent. Killian disclosed a series of arms at each side of his conveying belt, and he replaced the “sticks” of the Dutch patent with “forms,” which had been a commonplace in the art of making “prophylactics” for nearly twenty years; on neither of these can he depend. On the other hand he did add the feature that, after a “form” had been dipped in its bath of latex and had been raised, back again to horizontal, it was raised, still rotating, above the horizontal, so as to insure a more uniform spread of latex. The Dutch patent did not disclose that step and did not need to, because uniformity of distribution was no part of its aim, any more than curing the latex in a smoke chamber was part of Killian's aim. In 1921 Mitzel disclosed a machine for making “rubber articles” on “nipple forms,” consisting of a conveyor belt, carrying a series of “nipples.” These were first inverted and immersed in a “dipping chamber,” where they were coated with a liquid solution of rubber; after which the conveyor carried them in a drying chamber, in which through a devious course they were alternately inverted and raised upright. The purpose of these changes of position was the better to distribute the rubber over the surface, and thus to make the “article” of a uniform thickness. However, the “nipples” were not rotated, evenness of distribution being effected only by the inversion and reversion we have described. Nevertheless, had an inventor, bent on adapting the Dutch machine to the manufacture of “prophylactics” found that rotation of the “forms” at horizontal resulted in an uneven thickness, he would have been a curiously sluggish experimenter, if with Mitzel before him, he did not try out the effect of the method Mitzel disclosed. The case therefore comes down to this: How much insight was required to observe that the Dutch machine could be used for the new purpose. That insight once achieved, the necessary adaptations were easily within the reach of ordinary perseverance. The Dutch specifications as they read gave at least an intimation of their possible use for making thin sheaths, although their purpose was, as we have said, only to make “rubber balls.” That appears in the following passages. “The stick is successively immersed in a similar manner * * * so that after a certain length of time a good sized ball of raw rubber has formed at the end of the stick where layer upon layer of latex has coagulated.” Again, “The latex coagulates very rapidly: a stick, on leaving tunnel, m, arrives above receptacle, s, containing latex and is again immersed in order to collect a fresh layer of latex. This process is repeated * * * until rubber balls of proper size have formed around the latter” (the “sticks”). That is the description of a series of superimposed thin layers of latex, their number being whatever will produce a ball of “proper size.” Each immersion added a layer; the number of layers depended upon how big a “ball” one thought “proper.” Stop the “process” at two immersions and a “prophylactic” results: that, coupled with the mechanical changes that we have mentioned, is the full measure of all that can be attributed to Killian. We cannot agree that, if an inventor wished to supply the market with such articles and had the Dutch disclosure before him, this step demanded that degree of exceptional endowment which—especially in recent years—is necessary to support a patent. All that was needed was to stop the repetition of the “process” of imposing “layer upon layer of latex” at the right thickness. Even if the time had been much longer between the commercial availability of latex and the date of Killian's application, we should hesitate to hold that such a discovery was enough. As in the case of Hadfield's patent, we should have to be satisfied that the Dutch machine had been widely known in the art; a most unlikely possibility. As we have said, the inventor must justify his contribution against all that has gone before, known and unknown. Yet when he seeks to use the art's failure to anticipate him as evidence of his own perspicacity, he must appraise the art's ineptitude by the art's actual knowledge; he may not impute to it an acquaintance with any part of what went before of which it was not aware. It may result that he will benefit the art by a discovery of what it had practically never possessed or had possessed and lost. But there is no room for “lost arts” in the case of inventions, “described in printed publications in this or any foreign country”; the statute is plain and inexorable. As to the second patent also the judgment must be reversed and the complaint dismissed. Judgment reversed; complaint dismissed.

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In re Winslow 365 F.2d 1017, 151 USPQ 48 (CCPA 1966) Before WORLEY, Chief Judge, and RICH, MARTIN, SMITH, and ALMOND, Judges. RICH, Judge. **** The invention is an apparatus for packaging articles within flexible plastic bags by supplying a jet of air to the uppermost bag of a stack of bags to open it to permit the insertion of the article. The bags are generally rectangular and have an opening at one end. One of the walls is provided with an extension, or flap, which projects beyond the mouth and which contains a plurality of transversely aligned holes. Perforations extending from each hole to the edge of the flap weaken it so it can be torn from retaining pins. The bags are stacked, with their flap sides down, and placed on a horizontal support plate supported at one end on a spring-biased hinge. The plate is depressed when loaded with bags, pivoting on its hinge. Upon release, the spring urges the support upwardly toward an upper plate member having pins depending therefrom which pass through the holes in the bag flaps and into openings provided in the lower support plate. Only the flap of each bag underlies the upper plate member, which functions as a stop against unlimited upward movement of the stack of bags and which, in conjunction with the lower support, acts to clamp or sandwich the flaps of the bags, the pins passing through the flap holes.

The uppermost bag is opened by directing an air blast across the top plate member and into the mouth thereof. An article is then inserted, either automatically or manually, through the mouth which is kept open by continuing the blast. The bag is then pulled longitudinally in a direction parallel to and away from the air blast, thereby tearing the flap along the perforated lines and removing the filled bag from the pin. The bag is then closed and heat sealed. **** Appellant presents the usual argument that hindsight reconstruction has been employed by the examiner and the board. We disagree with that position. We think the proper way to apply the 103 obviousness test to a case like this is to first picture the inventor as working in his shop with the prior art references—which he is presumed to know—hanging on the walls around him. One then notes that what applicant Winslow built here he admits is basically a Gerbe bag holder having airblast bag opening to which he has added two bag retaining pins. If there were any bag holding problem in the Gerbe machine when plastic bags were used, their flaps being gripped only by spring pressure between the top and bottom plates, Winslow would have said to himself, "Now what can I do to hold them more securely?" Looking around the walls, he would see Hellman's envelopes with holes in their flaps hung on a rod. He would then say to himself, "Ha! I can punch holes in my bags and put a little Chapter 4 – Nonobviousness

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rod (pin) through the holes. That will hold them! After filling the bags, I'll pull them off the pins as does Hellman. Scoring the flap should make tearing easier." Thus does appellant make his claimed invention merely by applying knowledge clearly present in the prior art. Section 103 requires us to presume full knowledge by the inventor of the prior art in the field of his endeavor. We see no "hindsight reconstruction" here, but only selection and application by the examiner of very pertinent art. That is his duty.

Questions, Comments, Problems 1. Person of Ordinary Skill, not Inventor – Judge Rich made an important modification to his “inventor…working in his shop” metaphor in Kimberly-Clark v. Johnson & Johnson, 745 F.2d 1437, 223 USPQ 603 (Fed. Cir. 1984), by making clear that it is the hypothetical person of ordinary skill, not the inventor, that is in the shop. He proclaimed (id. at 1454): “We hereby declare the presumption that the inventor has knowledge of all material prior art to be dead.” By substituting the person or ordinary skill, Judge Rich conformed his Winslow metaphor to the language of '103. 2. Level of Ordinary Skill – The approach in Winslow shows one construct for hypothesizing the person of ordinary skill in the art and the challenge facing that person. Is it fair to charge the aspiring patentee with knowledge of all the analogous art by endowing the artisan of ordinary skill with omniscience? Is it also fair to assume that the hypothetical artisan was focused on solving the particular problem on which the inventor was dealing? The presumption does simplify the obviousness analysis by putting all inventors in the same position so that duplicative invention is not permitted. In addition, perhaps the presumption is a fair trade-off with the presumption that the hypothetical artisan has only ordinary skill. Judge Hand recognized perhaps another trade-off: Perhaps it would be desirable that an inventor should not be charged with acquaintance with all that the patent offices of this and every other country contain, and with all that has ever been publicly sold or used in the United States; although in that event it would be an inevitable corollary that infringements should be limited to plagiarisms. With such considerations we have nothing to do; as the law stands, the inventor must accept the position of a mythically omniscient worker in his chosen field. As the arts proliferate with prodigious fecundity, his lot is an increasingly hard one. Merit Mfg. Co. v. Hero Mfg. Co., 185 F.2d 350, 352, 87 USPQ 289, 291 (2d Cir. 1950). 3. Determining the Artisan’s Skill – The Federal Circuit has not left trial courts alone to determine the level of ordinary skill. Instead, the court has provided six factors that are pertinent to the inquiry: (1) (2) (3) (4) (5) (6)

the educational level of the inventor the type of problems encountered in the art the prior solutions to those problems the rapidity with which inventions are made the sophistication of the technology the educational level of workers active in the field

See Environmental Design, Ltd. v. Union Oil Co. of Calif., 713 F.2d 693, 218 USPQ 865 (Fed. Cir. 1983). 4. When inspecting the physical embodiments of the prior art, the hypothetical artisan may find himself motivated to combine the references in the way that they are combined in the patent claims. In Para-Ordnance Mfg., Inc. v. SGS Importers Int’l, Inc., 73 F.3d 1085, 37 USPQ2d 1237 (Fed. Cir. 1995), the patent covered a kit for expanding the ammunition capacity of a handgun by providing a widened ammunition magazine in the hand grip. The problem addressed by the patent was making the mechanical transition between the widened grip portion and the narrowed top portion of the handgun frame. In affirming a holding of obviousness of the claimed invention, the Federal Circuit stated: The problem addressed by the claimed "intermediate face portions which are converging" is making the mechanical transition between the widened grip portion and the narrower top portion of the handgun frame of the Para-Ordnance kit. As explained above, the grip portion of the frame is wider than the top portion because the grip must accommodate a widened magazine. Thus,

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the question is whether, in light of the prior art, it would have been obvious to one of ordinary skill in the art to use a one-piece frame with converging areas at the top of the grip that is claimed in the '618 patent. Put another way, would one of ordinary skill in the art who set out to solve the problem of increasing ammunition capacity, and who had before him in his workshop the prior art, have been reasonably expected to use the solution that is claimed in the '618 patent. We have no difficult concluding that the answer is yes. A person of ordinary skill in the art would have had before him various prior art handguns, including the Colt 1911 and the Browning Hi-Power, neither of which teach the concept of convergence to solve the problem confronting the person of ordinary skill in the art. Instead, those references merely teach the use of side faces of a frame to guide magazines snugly into their frames. These two references, as noted, were before the examiner during prosecution of the '618 patent. The most important prior art available to the person of ordinary skill in the art as he set out to solve his problem—art which was not put before the examiner—is the Llama Omni. As seen in the photograph below, the Llama Omni's two grip covers include angled plastic tabs, which converge in the direction of the top of the grip. These tabs function to guide the magazine into its proper position inside the grip. The Llama Omni's magazine, in turn, is widened so that it can hold more cartridges, and it shows convergence at its top portion. This convergence allows cartridges which are inside the magazine in a staggered side-by-side configuration to feed into the narrowed top portion of the magazine and then into the chamber. Thus, not only was convergence in the prior art, but it was there as part of the solution to the need for a handgun with an increased magazine capacity—precisely the same need that is addressed by the ParaOrdnance conversion kit. It is true that the plastic tabs inside the Llama Omni grip covers are not part of the frame and that the frame itself, without the grip cover attached, shows no convergence of the kind claimed in the '618 patent. We return, though, to the person of ordinary skill in the art in his workshop. We can presume that he would have carefully examined all the components of the Llama Omni. He no doubt would have examined the gun's magazine, frame, and grip covers as separate pieces. In so doing, he would have seen that the problem of expanding ammunition capacity was solved by widening the magazine so that it could hold more cartridges in a staggered side-by-side configuration. Essentially, at this point, the person of ordinary skill in the art was half way home. All he had to do now was to decide how to merge the widened grip necessarily resulting from the widened magazine with the handgun's top portion. Continuing his examination of the components of the Llama Omni, he no doubt would have attached the grip covers to the frame. Then, holding the Llama Omni with its grip covers attached but with no magazine inside, and looking up into the grip from the bottom, he would have seen, just as we can see from examining Para-Ordnance's Trial Ex. 6a-1 (the Llama Omni), convergence inside a unitary frame, once the grips are attached, as they must be for the handgun to be of any practical use. Indeed, the naked eye could not distinguish this conversion—created by the attachment of the grip covers—from the convergence created by the single piece frame of the '618 patent, except to recognize, of course, that the converging areas in the frame of the '618 patent are broader. Quite simply, the person of ordinary skill in the art would have found himself looking into a converging frame, just as if he were looking into the frame of the Para-Ordnance kit. When he did this, he would have seen the converging frame as the solution to the merging problem. **** The dissent makes two points. The first is that there was no "motivation or teaching for a person of ordinary skill in the art to use a frame made in a single piece with converging side face portions." As we have demonstrated, the motivation leaps at a person of ordinary skill in the art from thorough inspection of the assembled Llama Omni, inside the frame of which he observes converging side faces which snugly accommodate the prior art magazine. . . . **** In dissent, then-Chief Judge Archer, wrote: The obviousness analysis in this case is a classic example of hindsight. The district court clearly applied hindsight by taking two pieces of prior art, neither of which suggests a frame in a single piece with converging sides, and finds that such a frame would be obvious "even to not one [s]killed in the art." The majority similarly applies hindsight by making the same conclusion based on the same prior art. Other than the invention disclosed in the patent, there is no motivation or

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teaching to combine converging sides in a single piece frame; and in view of the strong secondary considerations, nonobviousness is the proper result. I, therefore, dissent. **** Neither the district court nor the majority points to any motivation or teaching for a person of ordinary skill in the pertinent art to use a frame made in a single piece with converging side face portions. A simple invention may be patentable, even if the invention comprises the combination of features known in the art, provided the combination itself is not obvious. See In re Sponnoble, 405 F.2d 578, 585, 160 USPQ 237, 243 (CCPA 1969) ("A patentable invention, within the ambit of 35 U.S.C. §103, may result even if the inventor has, in effect, merely combined features, old in the art, for their known purpose, without producing anything beyond the results inherent in their use.") (emphasis omitted). Here, however, the claimed invention would not even result from a combination of the cited references. As the district court and the majority recognize, neither the Browning Hi-Power nor the Llama Omni utilizes a single frame with converging side faces. Only the Llama Omni has any convergence, and its converging elements are formed by the grip covers, not the frame. "The mere fact that elements of [an invention] may be found in various [references] does not necessarily negate invention." **** The majority suggests that motivation for the claimed invention comes from looking into the Llama Omni with its grip covers attached but with no magazine inside and that convergence would be seen. The problem with this is that the convergence is still on the plastic handles, not the frame. To say as the majority does that viewing the Llama Omni convergence would suggest converging the frame is in my view not the teaching, suggestion, or motivation necessary to overcome the presumption of validity. It is not clear and convincing evidence of obviousness.

Objective Indicia of Nonobviousness In Graham, the Supreme Court referred to “secondary considerations” such as “commercial success, long felt but unsolved needs, failure of others, etc.” that could give light to the circumstances surrounding the invention. Since Graham, and under the case law of the Federal Circuit, these factors have obtained considerable importance. Reflecting this increased weight, the Federal Circuit, in the last decade, has generally rejected the term “secondary considerations” as improperly connoting that the factors are secondary in importance rather than secondary in time, and has replaced the term with “objective indicia of nonobviousness.” This term better reflects the idea that these are “real world” indicators that result from actions of people who do not care whether the patent is valid or not, and who have no subjective view of whether the invention is obvious or not. The objective indicia have received such great weight under the Federal Circuit that they must be considered when present. See, e.g., Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1538 (Fed. Cir. 1983) (“Indeed, evidence of secondary considerations may often be the most probative and cogent evidence in the record.”). History of Judicial Treatment of Objective Evidence Historically, the importance of the objective indicia has had its ups and downs. One notes the Court's skepticism about commercial success in McClain v. Ortmayer, 141 U.S. 419 (1891) ("[T]he extent to which a patented device has gone into use is an unsafe criterion . . . "). But such evidence has also worked strongly in the patentee's favor. E.g., Diamond Rubber Co. v. Consol. Tire Co., 220 U.S. 428, 441-42 (1911) ("That the tire is an invention is fortified by all of the presumptions, the presumption of the patent by that arising from the utility of the tire. . . . We have taken for granted in our discussion that the [patented] Grant tire immediately established and has ever since maintained its supremacy over all other rubber tires and has been commercially successful while they have been failures."). In upholding

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a patent for using vulcanized rubber as a base for dentures, the Court relied heavily on objective indicia in Smith v. Goodyear Dental Vulcanite Co., 93 U.S. (3 Otto) 486, 495-96 (1876): The properties of vulcanite were well known, but how to make use of them for artificial sets of teeth remained undiscovered, and apparently undiscoverable, until Cummings revealed the mode. But when revealed its value was soon recognized, and no one seems to have doubted that the resulting manufacture was a new and most valuable invention. The eminent dentists and experts examined in this case uniformly speak of it as such. . . . The evidence also shows that it has wrought a revolution in dental practice, and that many thousands of operators are using it in preference to older devices. All this is sufficient, we think, to justify the inference that what Cummings accomplished was more than a substitution of one material for another; more than the exercise of mechanical judgment and taste—that it was, in truth, invention. . . . We do not say the single fact that a device has gone into general use, and has displaced other devices which had previously been employed for analogous uses, establishes in all cases that the later device involves a patentable invention. It may, however, always be considered; and, when the other facts in the case leave the question in doubt, it is sufficient to turn the scale.

Note the Court's comment in Smith that objective evidence "may . . . always be considered." The Court did not follow this approach in many opinions in the 1930's and 40's striking down patents for want of "invention." E.g., Jungersen v. Ostby & Barton Co., 335 U.S. 560, 567 (1949) ("The fact that this process has enjoyed commercial success, however, does not render the patent valid. It is true that in cases where the question of patentable invention is a close one, such success has weight in tipping the scales of judgment toward patentability . . . . Where, as here, however, invention is plainly lacking, commercial success cannot fill the void. . . . Commercial success is really a makeweight where the patentability question is close."); Dow Co. v. Halliburton Co., 324 U.S. 320, 330, 64 USPQ 412 (1945) ("[P]etitioner claims that the Grebe-Sanford process has filled a long felt want and has been a commercial success. But these considerations are relevant only in a close case where all other proof leaves the question of invention in doubt."); Toledo Co. v. Standard Parts, 307 U.S. 350, 356-57, 41 USPQ 593 (1939) ("And similarly without significance on the question of novelty [sic: invention] is the fact that, as plaintiff claims, utility resulted and commercial success followed from what patentees did."); Altoona Theatres v. Tri-Ergon Corp., 294 U.S. 477, 487-88 (1935) ("The Court below, attributing the rapid development of the sound motion picture industry to the invention in the patent in suit, thought . . . that its utility and commercial success must be accepted as convincing evidence of invention. But we think that want of invention would have to be far more doubtful than it is to be aided by evidence of commercial success, indicating that it brought realization of a long-felt want."). The penchant of the Court to strike down patents, including many reversals of appellate courts, during this time, where there was objective evidence of nonobviousness caused Justice Jackson to utter the following famous words of frustration: It would not be difficult to cite many instances of patents that have been granted, improperly I think, and without adequate tests of invention by the Patent Office. But I doubt that the remedy for such Patent Office passion for granting patents is an equally strong passion in this Court for striking them down so that the only patent that is valid is one which this Court has not been able to get its hands on.

Jungersen v. Ostby & Barton Co., 335 U.S. 560, 572 (1949) (dissenting opinion). Although more circumspect, Judge Learned Hand felt the same way about the tendencies of the Supreme Court in the 1930's and 40's. See Lyon v. Bausch & Lomb, 245 F.2d 530, 535, 106 USPQ 1, 106 USPQ 240 (2d Cir. 1955) ("The Courts of Appeal have very generally found in the recent opinions of the Supreme Court [before the '52 Act] a disposition to insist upon a stricter test of invention than it used to apply—indefinite it is true, but indubitably stricter than that defined in §104."). The Court's discussion of "secondary considerations" in Graham v. John Deere Co., 383 U.S. 1, 17-18, 35-36 (1966), began to swing the pendulum back somewhat: Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented. As indicia of obviousness or nonobviousness, these inquiries may have relevancy. See Note, Subtests of "Nonobviousness": A Nontechnical Approach to Patent Validity, 112 U. Pa. L. Rev. 1169 (1964).

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**** Cook Chemical insists, however, that the development of a workable shipper-sprayer eluded Calmar, who had long and unsuccessfully sought to solve the problem. And, further, that the long-felt need in the industry for a device such as Scoggin's together with its wide commercial success supports its patentability. These legal inferences or subtests do focus attention on economic and motivational rather than technical issues and are, therefore, more susceptible of judicial treatment than are the highly technical facts often present in patent litigation. See Judge Learned Hand in Reiner v. I. Leon Co., 285 F.2d 501, 504, 128 USPQ 25 (1960). See also Note, Subtests of "Nonobviousness": A Nontechnical Approach to Patent Validity, 112 U. Pa. L. Rev. 1169 (1964). Such inquiries may lend a helping hand to the judiciary which, as Mr. Justice Frankfurther observed, is most ill-fitted to discharge the technological duties cast upon it by patent legislation. Marconi Wireless Co. v. United States, 320 U.S. 1, 60 (1943). They may also serve to "guard against slipping into use of hindsight," Monroe Auto Equipment Co. v. Heckethorn Mfg. & Sup. Co., 332 F.2d 406, 412 (1964), and to resist the temptation to read into the prior art the teachings of the invention in issue. However, these factors do not, in the circumstances of this case, tip the scales of patentability.

The Court's citation to Judge Learned Hand's opinion in Reiner v. I. Leon Co. is a reference to the following famous comment: The test laid down is indeed misty enough. It directs us to surmise what was the range of ingenuity of a person “having ordinary skill” in an “art” with which we are totally unfamiliar; and we do not see how such a standard can be applied at all except by recourse to the earlier work in the art, and to the general history of the means available at the time. To judge on our own that this or that new assemblage of old factors was or was not, “obvious” is to substitute our ignorance for the acquaintance with the subject of those who were familiar with it. There are indeed some sign posts: e.g., how long did the need exist; how many tried to find the way; how long did the surrounding and accessory arts disclose the means; how immediately was the invention recognized as an answer by those who used the new variant?

285 F.2d 501, 503-04, 128 USPQ 25, 27 (2d Cir. 1960). The Court seemed to slip back to its old ways in the following post-Graham opinions: Anderson's Black Rock v. Pavement Co., 396 U.S. 57, 63, 163 USPQ 673 (1969) ("It is, however, fervently argued that the combination filled a long felt want and has enjoyed commercial success. But those matters without invention will not make patentability.”), A & P. Tea Co. v. Supermarket Corp., 340 U.S. 147, 153, 87 USPQ 303 (1950) (obviously a pre-'52 Act decision), and Sakraida v. Ag Pro, Inc., 425 U.S. 273, 28283, 189 USPQ 449 (1976) (“Though doubtless a matter of great convenience, producing a desired result in a cheaper and faster way, and enjoying commercial success, Dairy Establishment “did not produce a “new or different function” . . . within the test of validity for combination patents.” . . . These desirable benefits “without invention will not make patentability.”). As of 1999, or 23 years after the Sakraida decision, the Court has yet to address the merits of a section 103 issue. The closest it came was in 1986, when it vacated and remanded a Federal Circuit decision that had reversed a district court judgment of obviousness. See Panduit Corp. v. Dennison Mfg. Co., 475 U.S. 809, 229 USPQ 478 (1986), vacating and remanding 774 F.2d 1082 (Fed. Cir. 1985). The Supreme Court was concerned about the fact/law division in obviousness determinations and whether the Federal Circuit had given proper deference to the factual findings of the district court under Fed. R. Civ. P. 52(a) ("clearly erroneous" rule). It remanded to receive the Federal Circuit's views. The Federal Circuit gave them at 810 F.2d 1561 (1987), and the Court declined further review at 481 U.S. 1052 (1987). Thus, it fell to the circuit courts of appeal and the CCPA and, beginning in 1982, to the Federal Circuit alone, to articulate how objective evidence was going to be treated in section 103 determinations. Pre-Federal Circuit opinions of the circuit courts followed the limited role accorded objective evidence in Anderson's Black Rock, Sakraida and pre-'52 Act Supreme Court opinions. See, e.g., Medical Laboratory Automation v. Labcon, Inc., 670 F.2d 671, 673, 213 USPQ 537, 540 (7th Cir. 1981) ("They only need be considered in close cases."); Stevenson v. Grentec, Inc., 652 F.2d 20, 211 USPQ 1020 (9th Cir. 1981) (district court did not err in not considering commercial success; "Where patents are obvious, they cannot be saved from invalidity by resorting to secondary factors."); American Seating Chapter 4 – Nonobviousness

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Co. v. National Seating Co., 586 F.2d 611, 622, 199 USPQ 257 (6th Cir. 1978) ("We find no reversible error in the District Court's failure to take into account these secondary factors in reaching its decision on the question of obviousness in this case. Although in a close case secondary factors may tip the scales toward patent validity, they cannot save a patent from invalidity when, as in the case here, there is such a plain lack of invention, and obviousness is clear."). The CCPA had a different view, both in infringement litigation and in appeals from ex parte patent prosecution. In actions before the International Trade Commission to block infringing imports under 19 U.S.C. § 1337, the only type of infringement litigation the CCPA had jurisdiction to review, it held that objective indicia must always be considered. See Stevenson v. International Trade Comm., 612 F.2d 546, 553, 204 USPQ 276 (CCPA 1979) ("Therefore, it is necessary that such secondary considerations also be evaluated in determining the final validity of that legal conclusion [of obviousness]."). Likewise, in deciding appeals from the PTO, the CCPA made it clear that objective evidence, if presented, had to be considered by an examiner before the examiner could make a final decision on obviousness. E.g., In re Mageli, 470 F.2d 1380, 1383, 176 USPQ 305, 307 (CCPA 1973) (Rich, J.) (criticizing the "kaleidoscopic reasoning [of courts] which was not uncommon before the 1952 Act sorted out the prerequisites to patentability" and, at p. 1383, stating: "[E]vidence bearing on the facts [relevant to obviousness] is never of “no moment”, is always to be considered, and accorded whatever weight it may have."). When the Federal Circuit was established in 1982, it immediately adopted the holdings of the CCPA (and the Court of Claims) as binding precedent. See South Corp. v. United States, 690 F.2d 1368, 215 USPQ 657 (Fed. Cir. 1982). Not surprisingly, it adopted the CCPA's view that objective evidence must always be considered. See Stratoflex, Inc. v. Aeroquip Corp., 713 F.2d 1530, 1538, 218 USPQ, 1871 (Fed. Cir. 1983) (Markey, C.J.) (citing, inter alia, In re Mageli). The court went on to say that, in an infringement action context, a district court should reserve judgment on the obviousness question until it has considered all the relevant evidence, including objective evidence, rather than come to an initial conclusion and then see how it is impacted by objective evidence. Id. at 1539. Indeed, the Federal Circuit renamed what the Supreme Court in Graham had referred to as "secondary" considerations as "objective indicia" to avoid the suggestion that this evidence was of lesser importance than the other three Graham factors. See, e.g., Fromson v. Advance Offset Plate, Inc., 755 F.2d 1549, 1557, 225 USPQ 26, 32 (Fed. Cir. 1985) (Markey, C.J.) ("Objective evidence (“secondary considerations”) . . . must when present be considered as part of the obviousness equation."). Chief Judge Markey has said that the use of the word "secondary" by the Supreme Court referred to the timing, not importance, of this evidence, as such evidence may occur after the invention was made, though evidence of long felt need and prior effort and failure clearly predates the date of invention. In any event, until the Supreme Court speaks on the question again, objective evidence, under current Federal Circuit law, must always be considered when present. The importance of objective evidence may have reached its high water mark in Simmons Fastener Corp. v. Illinois Tool Works, 739 F.2d 1573, 222 USPQ 744 (Fed. Cir. 1984). There the Federal Circuit criticized the district court for holding the patent claims obvious without discussing the objective evidence and for saying "no amount of commercial success can save [the patent]." Instead of remanding with instructions, the court reversed outright, stating: We agree with the trial court that the teachings of the prior art prima facie would have suggested to one of ordinary skill in the art the claimed invention. The reader is referred to the trial court's opinion for its discussion of the first three Graham factors. However, the evidence of secondary considerations in this case, particularly commercial success, is extremely strong, and is entitled to great weight. In considering the evidence of obviousness/nonobviousness collectively, we conclude the trial court's decision that the claimed invention of the '476 patent would have been obvious under 35 U.S.C. §103 must fail. We accordingly reverse the trial court's decision, and remand the case to the trial court for a determination of the infringement and enforceability questions.

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Nexus Even before the Federal Circuit was established, when courts did consider objective evidence, they required that there be a nexus, or connection, between the proffered evidence and the merits of the invention at issue. This nexus, as we shall see, could take many forms and have different requirements, depending on the type of objective evidence involved (e.g., commercial success, prior effort and failure, or long felt need). But each one placed the burden on the patentee to provide some kind of link between the objective evidence and the claimed invention for the evidence to have any probative value. Until quite recently, it was not clear how far a patentee had to go to establish prima facie nexus. Was it enough, for example, to prove nexus as to commercial success by proffering evidence that the success was linked to the invention, or did the patentee have to go further and affirmatively show that other factors, such as advertising or change in fashion, were not the causes for the success? The Federal Circuit answered this question as to commercial success objective evidence in Demaco Corp. v. F. Von Langsdorff Licensing Ltd., 851 F.2d 1387, 7 USPQ2d 1222 (Fed. Cir. 1988). The court actually cut back on what the patentee had to show to establish a prima facie case: The burden of proof as to this connection or nexus resides with the patentee . . . . In meeting its burden of proof, the patentee in the first instance bears the burden of coming forward with evidence sufficient to constitute a prima facie case of the requisite nexus. . . . **** A prima facie case of nexus is generally made out when the patentee shows both that there is commercial success, and that the thing (product or method) that is commercially successful is the invention disclosed and claimed in the patent. When the thing that is commercially successful is not coextensive with the patented invention—for example, if the patented invention is only a component of a commercially successful machine or process—the patentee must show prima facie a legally sufficient relationship between that which is patented and that which is sold. . . . **** When the patentee has presented a prima facie case of nexus, the burden of coming forward with evidence in rebuttal shifts to the challenger, as in any civil litigation. . . . It is thus the task of the challenger to adduce evidence to show that the commercial success was due to extraneous factors other than the patented invention, such as advertising, superior workmanship, etc. As discussed in Rosemount, Inc. v. Beckman Instruments, Inc., 727 F.2d 1540, 1546, 221 USPQ 1, 7 (Fed. Cir. 1984), "argument" and "conjecture" are insufficient . . . . Once a prima facie case of nexus is made the court must consider the evidence adduced on both sides of the question, with such weight as is warranted. . . . When a prima facie case is made and not fully rebutted, the district court may not totally ignore the objective evidence. . . . **** A patentee is not required to prove as part of its prima facie case that the commercial success of the patented invention is not due to factors other than the patented invention. It is sufficient to show that the commercial success was of the patented invention itself. A requirement for proof of the negative of all imaginable contributing factors would be unfairly burdensome, and contrary to the ordinary rules of evidence. See 9 Wigmore §2486 at 291. . . . **** By placing the burden on Langsdorff to prove that commercial success was not due primarily to advertising or other factors such as technical service to licensees and the licensing of other products, the district court put the shoe on the wrong foot. Demaco did not meet its burden of rebutting the prima facie case of nexus between the Langsdorff patented invention and its commercial success, and the district court clearly erred in its contrary finding.

Id. at 1392-94.

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Under Demaco, when the thing that is commercially successful is "coextensive" with the claimed invention, a patentee would not even need to adduce testimony that the success was causally related to the features of the claimed invention, but instead would only need to show the fact of the success and the fact that the claim is commensurate with what was sold. This seems to be a lesser burden on a patentee even that that required by the CCPA. See Solder Removal Co. v. United States Intern. Trade, 582 F.2d 628, 637, 199 USPQ 129 (CCPA 1978) ("The record, however, does not show a commercial success causally related to the features of the claimed invention.").

Commercial Success Commercial success is the most commonly analyzed of the indicia of nonobviousness. The rationale behind this factor is that, in a capitalist economy, each competitor is looking for an edge—for a new and successful innovation. Thus, the low hanging fruit will be harvested quickly, and by many parties, and the field of competition will be leveled quickly. When a development is commercially successful, therefore, it might be concluded that competitors were unable (despite their many efforts) to make the development and that it is, for that reason, more than an obvious advance in the art. In Jungersen v. Ostby & Barton Co., 335 U.S. 560, 80 USPQ 32 (1949), the patent covered a method of casting jewelry using the “lost wax” method, with the improvement of using centrifugal force to inject wax and metal into the jewelry mold. The majority found the patent invalid based on the prior use of centrifugal force in dental casting. As one of three dissenting justices, Justice Jackson was swayed by the evidence of commercial success, and felt the majority was swayed by layperson’s hindsight: Of course, commercial success will not fill any void in an invalid patent. But it may fill the void in our understanding of what the invention has meant to those whose livelihood, unlike our own, depends upon their knowledge of the art. Concededly, in this high-pressure age sales volume may reflect only powerful promotion or marketing magic, and its significance as an index of novelty or utility may rightly be suspected. But Jungersen’s [the patentee’s] success was grounded not in the gullibility of the public but in the hard-headed judgment of a highly competitive and critical if not hostile industry. Knowing well its need for and its failure to achieve improvements on available processes, that industry discarded them, adopted this outsider’s invention, and made it a commercial success. It would take a singular self-assurance on the part of one who knows as little of this art as I do, or as I can learn in the few hours that can be given to consideration of this case, to ignore the judgment of these competitors who grew up in the industry and say that they did not know something new and useful when they saw it. . . .

As discussed above, the commercial success must have a nexus to the claimed invention. Although the decisions typically speak of a single nexus requirement for commercial success, there are actually two requirements. First, the product or feature that is successful must be related to the claims of the patent. Second, the success of the product or feature must be attributable to the novelty of the product or feature, and not to other factors, such as advertising or promotion. Demaco, supra.

Long Felt But Unsolved Need – Failure of Others Evidence that people felt a need for a particular product for a long time and no one filled that need can be strong evidence of nonobviousness. Judge Easterbrook explained the rationale behind the assumption: The existence of an enduring, unmet need is strong evidence that the invention is novel, not obvious, and not anticipated. If people are clamoring for a solution, and the best minds do not find it for years,

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that is practical evidence—the kind that can’t be bought from a hired expert, the kind that does not depend on fallible memories or doubtful inferences—of the state of knowledge.

In re Mahurkar Patent Litigation, 831 F. Supp. 1354, 1377-78, 28 USPQ2d 1801, 1819 (N.D. Ill. 1993). Thus, long felt need is essentially a corollary to commercial success. Both are based on the premise that the world is stocked with artisans and businesspeople who are constantly looking to solve the needs of the world or make a profit (or both at the same time). Therefore, if a need, which would presumbly create a success if solved, remains unsolved for a substantial period of time or is a blazing success when solved, the courts will assume the solution was not obvious. Long felt need looks to preinvention evidence to show that the solution was not easily achieved, while commercial success looks to post-invention evidence to infer that the solution must have been difficult to achieve. Of course, a conclusion of nonobviousness based on long felt need must assume that competent people were actually trying to solve a need and did not solve it. Therefore, the courts have required evidence that the problem was a recognized and persistent one. See, e.g., Orthopedic Equip. Co. v. All Orthopedic Appliances, Inc., 707 F.2d 1376, 217 USPQ 1281 (Fed. Cir. 1983). Where there is evidence of actual failures by others, rather than supposition that someone must having been working on the problem, the conclusion of nonobviousness is reached more readily. See, e.g., Gambro Lundia AB v. Baxter Healthcare Corp., 110 F.3d 1573, 42 USPQ2d 1378 (Fed. Cir. 1997). Likewise, those who tried and failed must have known of the closest art for their failures to be significant. See CarterWallace Inc. v. Otte, 474 F.2d 529, 547, 176 USPQ 2 (2d Cir. 1972). Similarly, long felt need and prior efforts can reach back only to the date of the most pertinent prior art. See Graham, supra. That is because a particular piece of prior art may have set up the long felt problem for an easy solution. How “long” must the need be felt? There is no answer for this question, but one article cited by the Court in Graham notes that the time will depend on the speed of innovation in the particular industry, and that “the time the defect persisted should at least be longer than the average time lapse proceeding the unpatented solutions of defects in the relevant art.” Note, “Subtests of “Nonobviousness”: A Nontechnical Approach to Patent Validity,” 112 U. Pa. L. Rev. 1169, 1174 (1964).

Other Factors The factors mentioned in Graham are not an exclusive list of possibly objective indicia of nonobviousness. Rather, any objective fact that can shed substantial light on the obviousness vel non of an invention will be considered by the courts. Therefore, evidence that a defendant copied the patented invention rather than a product in the prior art, can support an inference that the invention has merit and is would not have been obvious. See, e.g., Panduit Corp. v. Dennison Mfg. Co., 774 F.2d 1082, 227 USPQ 337 (Fed. Cir. 1985). The inference may be stronger where the defendant attempted unsuccesfully to develop a device and finally copied the claimed invention. See, e.g., Dow Chem. Co. v. American Cyanamid Co., 816 F.2d 617, 2 USPQ2d 1350 (Fed. Cir. 1987). However, it is often difficult to separate cases in which the defendant saw a patent and attempted to design around the patented product to avoidinfringement from cases in which the defendant simply copied the product right out of the patent. Actions and reactions by others in the relevant field may also shed light on the obviousness issue. For instance, skepticism or initial incredulity by others in the art when they first hear about the invention can be evidence that the invention would not have been obvious. See, e.g., Burlington Indus., Inc. v. Quigg, 822 F.2d 1581, 3 USPQ2d 1436 (Fed. Cir. 1987). On the other hand praise for the invention by others within the relevant field also tends to prove that the invention would not have been obvious. See, e.g., Interconnect Planning Corp. v. Feil, 774 F.2d 1132, 227 USPQ 543 (Fed. Cir. 1985).

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In the end, although any evidence of objective indicia will be helpful to the patentee or prospective patent, the lack of such evidence does not indicate that the invention would have been obvious. See Medtronic Inc. v. Intermedics, Inc., 799 F.2d 734, 230 USPQ 641 (Fed. Cir. 1986).

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Now that you have immersed yourself in the concepts and nuances of sections 102 and 103, you may find the following opinion of the Supreme Court an intriguing test of your ability to apply those concepts, be sensitive to the nuances, and, above all, think critically about what courts say. In reading General Electric v. Jewel, ask yourself whether the Court’s analysis was correct and whether the result was correct. Do you think this opinion reflects difficulties the judiciary had before the enactment of section 103 in addressing the relationship between the claimed invention and the prior art?

General Electric Co. v. Jewel Incandescent Lamp Co. 326 U.S. 242, 67 USPQ 155 (1945) Mr. Justice DOUGLAS delivered the opinion of the Court. This is a suit for infringement of Pipkin Patent No. 1,687,510 issued to petitioner, assignee of Marvin Pipkin, on October 16, 1928. The District Court found the patent to be invalid and also that the accused structure did not infringe. It accordingly dismissed the bill. 47 F. Supp. 818. The Circuit Court of Appeals affirmed, holding the patent invalid. 146 F.2d 414. The case is here on a petition for writ of certiorari which we granted, because of a conflict of decision among the Circuit Courts of Appeals. The patent relates to a frosted glass bulb for electric lamps. It is defended here as a product not a process patent. The product is described in the first claim as follows: A glass electric lamp bulb having its interior surface frosted by etching so that the maximum brightness of an ordinary incandescent lamp comprising such a bulb will be less than twenty-five per cent of that of said lamp with a clear bulb, said interior bulb surface being characterized by the presence of rounded as distinguished from sharp angular crevices to such an extent that the strength to resist breakage by impact is greater than twenty per cent of that of the clear bulb.

Many years prior to the Pipkin patent, efforts had been made to reduce the glare produced by the brilliant filament of an incandescent lamp having a clear bulb. The most common method of reducing the glare was to frost the outside surface with an acid frosting solution. While bulbs so treated reduced the glare, the rough outside surface collected dirt and was difficult to clean, with the result that the light output was further reduced. Twenty-five years before Pipkin, Kennedy (patent No. 733,972 issued July 21, 1903) had showed an inside frosted bulb. But a difficulty appeared. When the outside surface of a bulb was frosted the strength of the bulb was not materially affected. When the inside surface, however, was frosted, the strength of the bulb was substantially reduced, making it unfit for practical use. Pipkin recited these facts in his specifications and stated, “The object of my invention is to produce an inside frosted glass bulb which will be much stronger than those heretofore produced.” He went on to state that the preferred method of frosting was by use of a chemical medium which, when applied so as to produce the proper light diffusion, made the bulb extremely fragile. And he added: “I have found, however, that if the bulb is given a further treatment, which I term a strengthening treatment, in which it is subjected to an etching or frosting treatment of lower degree than that to which it was first subjected, it becomes quite strong. Indeed, it may be made practically as stong as the original clear glass bulb.” He gave as the probable explanation the fact that the first treatment produced sharp, angular crevices or pits in the glass, while the second or strengthening treatment ate away Chapter 4 – Nonobviousness

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additional glass and rounded out the angular crevices into saucer-shaped pits. The fact that the bulb was strengthened when additional glass was dissolved was referred to by the court below as “Pipkin’s paradox”. The patent contains charts showing the relative extent to which the strength of the bulb is weakened by the first frosting treatment and its strength restored by the second treatment. The patent also shows that while the bulb of the patent materially reduced the glare obtained in a clear bulb, the lighting efficiency of the two is substantially the same for any given wattage. As the first claim of the patent indicates, the characteristic feature of the patented bulb is the fact that the interior surface is “characterized by the presence of rounded as distinguished from sharp angular crevices.” It is that feature which is responsible for the bulb's strength. Now, an electric bulb frosted on the inside was old in the art. Kennedy had disclosed such a product twenty-five years earlier. Moreover, it had long been known in the art that successive acid treatments of glass rounded out the sharp angular crevices produced by the first etching. That was shown in particularity by Reinitzer in 1887 and by Tillotson in 1917. And it was shown in Sprechsaal of 1907 (a German trade paper) that if hollow glass was subjected to a second etching, the surface would have a silk-like appearance, the finish being called satin etching or silk mat. It is true that these prior publications were concerned with frosting for the purpose of obtaining a decorative finish in glass ware or desired optical effects in focusing screens for cameras and the like. But Sprechsaal in 1912 specifically described the application of successive etchings to electric bulbs. And that publication recommended, as Pipkin did years later, that a weaker or diluted etching solution be used for the second etching. Moreover, Wood (patent No. 1,240,398 issued September 18, 1917) observed that successive acid treatments of glass rounded out the sharp angular crevices produced by the first etching, and he applied that idea to electric bulbs as well as to other glass articles. His patent covered the making of light-diffusing screens. He noted that if glass was etched once, the surface was cut into irregular crevices, pits and grooves with the result that only a portion of the light was transmitted. But if after the first etching (which he accomplished by a blast of air charged with a fine dust of flour emery or carborundum) the surface was flowed with acid, the crevices and pits were enlarged and smoothed out into minute concave lenses. These microscopical lenses diffused the light perfectly and transmitted practically all of it. He noted that his process was especially valuable in the case of certain types of cameras. But he added, “Such a screen is also useful for rendering the bulbs of incandescent lamps diffusing without at the same time causing the very marked loss in the efficiency of the lamp, which results from frosting the bulbs in the usual manner.” Wood, to be sure, did not describe frosting the inside of the bulb. Kennedy, however, had shown that. Moreover, prior to Wood it was well known in the art, as we have noted, that successive acid treatments of glass produced a surface characterized by the presence of rounded as distinguished from sharp angular crevices or pits. If there was novelty in applying that process to electric bulbs, Wood achieved it. At least since Kennedy, it was known that inside frosted electric bulbs were preferable to outside-frosted bulbs. Wood, of course, was concerned only with light diffusion and transmission primarily of screens, secondarily of electric bulbs. Neither he nor any other before Pipkin appears to have given any indication that the second treatment resulted in any strengthening of the glass. But strengthening was inherent in the method he proposed. And it appears that an electric bulb, which had been frosted inside pursuant to his method, would have inevitably obtained the rounded pits and hence the attendant strength characteristic of the Pipkin bulb. If A without mentioning the element of strength patented a bulb which was extra strong, B could not obtain a patent on the bulb because of its strength, though he was the first to recognize that feature of it. That is the import of Ansonia Brass & Copper Co. v. Electric Supply Co., 144 U.S. 11. That case involved the question of the validity of a patent for an insulated electric conductor. The prior art disclosed a similar method of insulation which was used in connection with the wiring of burglar alarms. Such use involved no problem of combustibility of the insulating material which emerged on the introduction of electric lighting. The insulator disclosed by the prior art was not intended to be, and perhaps was not known to be incombustible. But in fact the earlier insulator had approximately the same degree of incombustibility as that described in the patent. The Court ruled that “the application of Chapter 4 – Nonobviousness

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an old process to a new and analogous purpose does not involve invention, even if the new result had not before been contemplated.” 144 U.S. at page 18. Since the two insulators were practically the same in their method of construction, the patentee was not allowed to claim the feature of incombustibility as his invention. The benefits of the “potencies and values more important than the uses that were immediately apparent” belong to him who establishes priority of discovery. Radio Corporation of America v. Radio Engineering Laboratories, Inc., 293 U.S. 1, 14. Petitioner, however, insists that this is not a case where the patentee merely observed the advantageous properties of an old article of manufacture. It says that Pipkin created a new article of manufacture, an inside-frosted bulb having an etched inner surface characterized by rounded rather than sharp angular crevices—an article that never existed before. It points out that prior to Pipkin no one knew why inside frosted bulks were weak nor knew how to remedy the weakness. Pipkin indeed seems to be the first to have recognized that the form of the pitting had an effect on the strength of the glass. The prior art appears to have made no such disclosure. And it is true that the Pipkin bulb met with commercial success. The question remains, however, whether the Pipkin patent was invalid because of anticipation. It is true that there is a difference between the Ansonia case and the present one. There a prior product had been created having qualities which were unrecognized at the time and which later were sought to be patented. On the other hand, it does not appear in the present case that prior to Pipkin electric bulbs had been frosted on the interior with rounded rather than sharp angular crevices or pits. But Wood, as well as the art which preceded him, showed how to produce such a surface on electric bulbs as well as on other articles of glass. Kennedy showed how to frost the inside of an electric bulb. In view of these disclosures it is difficult to see how there could be invention in frosting either the outside or inside of an electric bulb so as to produce saucer-shaped rather than sharp, angular crevices or pits. A product claim describes an article, new and useful. The principle of the Ansonia case plainly would deny validity to the Pipkin patent if the prior art disclosed an electric bulb so frosted on the inside as to round out the angular crevices produced by the first etching, whether the full utility of the bulb had been previously recognized or not. The same result is indicated where, as in the present case, the prior art discloses the method of making an article having the characteristics of the patented product, though all the advantageous properties of the product had not been fully appreciated. Lovell Mfg. Co. v. Cary, 147 U.S. 623. Pipkin found latent qualities in an old discovery and adapted it to a useful end. But that did not advance the frontiers of science in this narrow field so as to satisfy the exacting standards of our patent system. Where there has been use of an article or where the method of its manufacture is known, more than a new advantage of the product must be discovered in order to claim invention. See De Forest Radio Co. v. General Electric Co., 283 U.S. 664, 682. It is not invention to perceive that the product which others had discovered had qualities they failed to detect. See Corona Cord Tire Co. v. Dovan Chemical Corporation, 276 U.S. 358, 369. AFFIRMED. Mr. Justice JACKSON took no part in the consideration or decision of this case.

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Chapter 5 Statutory Subject Matter & Practical Utility Introduction In the previous two chapters, we investigated the hurdles an invention must clear to be patentable, regardless of the category in which the invention falls. In this chapter, we look at the kinds, or classes, of things that can be patented, whether or not they are new and nonobvious. For example, a new and improved widget on a machine may certainly receive a patent. In contrast, the way a story is expressed in a novel is equally ineligible for a patent (although it may be copyrighted). A closer case might involve an algorithm that runs on a computer and generates a novel from a user’s input. The classes of things that may be patented are derived from the Constitution’s express terms: 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.

The focus of the patent laws is the “useful arts.” Thus, it is not enough merely to identify a problem; rather, to receive a patent, a person must develop a concrete solution for the problem. In addition, speculative or theoretical ideas fail the test if they are not connected to some practical result. To set out protection for the useful arts, Congress provided, in 35 U.S.C. § 100(b): The term “process” means process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material.

and, in section 101: 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.

The cases below explore the edges of the statutory and constitutional grants. As you read each case, you will see the courts struggling to keep pace with technological developments. The cases are ordered chronologically so that you can trace the development of this area of the law. They are also split into the two broad areas in which the question of statutory subject matter has most often arisen: Chapter 5 – Statutory Subject Matter & Practical Utility

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(1) bio-organisms, and (2) processes or algorithms carried out by machines such as computers. Consider the extent to which each opinion is concerned with general policy considerations or, alternatively, to which each opinion follows the wording of the Constitution. Also, consider whether the courts’ views of the obviousness vel non of the respective inventions at issue may be coloring their views on the bounds of permissible statutory subject matter for the class within which the invention falls.

Biological Inventions

Funk Bros. Seed Co. v. Kalo Inoculant Co. 333 U.S. 127, 76 USPQ 280 (1948) Mr. Justice DOUGLAS delivered the opinion of the Court. This is a patent infringement suit brought by respondent. The charge of infringement is limited to certain product claims of Patent No. 2,200,532 issued to Bond on May 14, 1940. . . . The question of validity is the only question presented by this petition for certiorari. Through some mysterious process leguminous plants are able to take nitrogen from the air and fix it in the plant for conversion to organic nitrogenous compounds. The ability of these plants to fix nitrogen from the air depends on the presence of bacteria of the genus Rhizobium which infect the roots of the plant and form nodules on them. These root-nodule bacteria of the genus Rhizobium fall into at least six species. No one species will infect the roots of all species of leguminous plants. But each will infect well-defined groups of those plants. Each species of root-nodule bacteria is made up of distinct strains which vary in efficiency. Methods of selecting the strong strains and of producing a bacterial culture from them have long been known. The bacteria produced by the laboratory methods of culture are placed in a powder or liquid base and packaged for sale to and use by agriculturists in the inoculation of the seeds of leguminous plants. This also has long been well known. It was the general practice, prior to the Bond patent, to manufacture and sell inoculants containing only one species of root-nodule bacteria. The inoculant could therefore be used successfully only in plants of the particular cross-inoculation group corresponding to this species. Thus if a farmer had crops of clover, alfalfa, and soy beans he would have to use three separate inoculants. There had been a few mixed cultures for field legumes. But they had proved generally unsatisfactory because the different species of the Rhizobia bacteria produced an inhibitory effect on each other when mixed in a common base, with the result that their efficiency was reduced. Hence it had been assumed that the different species were mutually inhibitive. Bond discovered that there are strains of each species of root-nodule bacteria which do not exert a mutually inhibitive effect on each other. He also ascertained that those mutually non-inhibitive strains can, by certain methods of selection and testing, be isolated and used in mixed cultures. Thus he provided a mixed culture of Rhizobia capable of inoculating the seeds of plants belonging to several cross-inoculation groups. It is the product claims which disclose that mixed culture that the Circuit Court of Appeals had held valid. We do not have presented the question whether the methods of selecting and testing the non-inhibitive strains are patentable. We have here only product claims. Bond does not create state of inhibition or of non-inhibition in the bacteria. Their qualities are the work of nature. Those qualities are of course not patentable. For patents cannot issue for the discovery of the phenomena of nature. See Le Roy v. Tatham, 14 How. 156, 175. The qualities of these bacteria, like the heat of the sun, electricity, or the qualities of metals, are part of the storehouse of knowledge of all men. They are manifestations of laws of nature, free to all men and reserved exclusively to none. He who discovers a hitherto unknown phenomenon of nature has no claim to a monopoly of it which the law recognizes. If there is to be Chapter 5 – Statutory Subject Matter & Practical Utility

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invention from such a discovery, it must come from the application of the law of nature to a new and useful end. . . . The Circuit Court of Appeals thought that Bond did much more than discover a law of nature, since he made an new and different composition of non—inhibitive strains which contributed utility and economy to the manufacture and distribution of commercial inoculants. But we think that that aggregation of species fell short of invention within the meaning of the patent statutes. Discovery of the fact that certain strains of each species of these bacteria can be mixed without harmful effect to the properties of either is a discovery of their qualities of non-inhibition. It is no more than the discovery of some of the handiwork of nature and hence is not patentable. The aggregation of select strains of the several species into one product is an application of that newly-discovered natural principle. But however ingenious the discovery of that natural principle may have been, the application of it is hardly more than an advance in the packaging of the inoculants. Each of the species of rootnodule-bacteria contained in the package infects the same group of leguminous plants which it always infected. No species acquires a different use. The combination of species produces no new bacteria, no change in the six species of bacteria, and no enlargement of the range of their utility. Each species has the same effect it always had. The bacteria perform in their natural way. Their use in combination does not improve in any way their natural functioning. They serve the ends nature originally provided and act quite independently of any effort of the patentee. There is, of course, an advantage in the combination. The farmer need not buy six different packages for six different crops. He can buy one package and use it for any or all of his crops of leguminous plants. And, as respondent says, the packages of mixed inoculants also hold advantages for the dealers and manufacturers by reducing inventory problems and the like. But a product must be more than new and useful to be patented; it must also satisfy the requirements of invention or discovery. Cuno Engineering Cor. v. Automatic Devices Corp., 314 U.S. 84, 90, 91, 40, 41, and cases cited; 35 U.S.C. § 31, 35 U.S.C.A. 31, R.S. § 4886. The application of this newly-discovered natural principle to the problem of packaging of inoculants may well have been an important commercial advance. But once nature's secret of the non-inhibitive quality of certain strains of the species of Rhizobium was discovered, the state of the art made the production of a mixed inoculant a simple step. Even though it may have been the product of skill, it certainly was not the product of invention. There is no way in which we could call it such unless we borrowed invention from the discovery of the natural principle itself. That is to say, there is no invention here unless the discovery that certain strains of the several species of these bacteria are non-inhibitive and may thus be safely mixed is invention. But we cannot so hold without allowing a patent to issue on one of the ancient secrets of nature now disclosed. All that remains, therefore, are advantages of the mixed inoculants themselves. They are not enough. Since we conclude that the product claims do not disclose an invention or discovery within the meaning of the patent statutes, we do not consider whether the other statutory requirements contained in 35 U.S.C. § 31, 35 U.S.C.A. 31, R.S. § 4886 are satisfied. Reversed. Mr. Justice FRANKFURTER, concurring. . . .Insofar as the court below concluded that the packaging of a particular mixture of compatible strains is an invention and as such patentable, I agree, provided not only that a new and useful property results from their combination, but also that the particular strains are identifiable and adequately identified. I do not find that Bond's combination of strains satisfies these requirements. The strains by which Bond secured compatibility are not identified and are identifiable only by their compatibility. Unless I misconceive the record, Bond makes no claim that Funk Brothers used the same combination of strains that he had found mutually compatible. He appears to claim that since he was the originator of the idea that there might be mutually compatible strains and had practically demonstrated that some such strains exist, everyone else is forbidden to use a combination of strains whether they are or are Chapter 5 – Statutory Subject Matter & Practical Utility

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not identical with the combinations that Bond selected and packaged together. It was this claim that, as I understand it, the District Court found not to be patentable, but which, if valid, had been infringed. **** It only confuses the issue, however, to introduce such terms as 'the work of nature' and the 'laws of nature.' For these are vague and malleable terms infected with too much ambiguity and equivocation. Everything that happens may be deemed 'the work of nature,' and any patentable composite exemplifies in its properties 'the laws of nature.' Arguments drawn from such terms for ascertaining patentability could fairly be employed to challenge almost every patent. On the other hand, the suggestion that 'if there is to be invention from such a discovery, it must come from the application of the law of nature to a new and useful end' may readily validate Bond's claim. Nor can it be contended that there was no invention because the composite has no new properties other than its ingredients in isolation. Bond's mixture does in fact have the new property of multi-service applicability. Multipurpose tools, multivalent vaccines, vitamin complex composites, are examples of complexes whose sole new property is the conjunction of the properties of their components. Surely the Court does not mean unwittingly to pass on the patentability of such products by formulating criteria by which future issues of patentability may be prejudged. In finding Bond's patent invalid I have tried to avoid a formulation which, while it would in fact justify Bond's patent, would lay the basis for denying patentability to a large area within existing patent legislation.

Mr. Justice BURTON, with whom Mr. Justice JACKSON concurs, dissenting. On the grounds stated by the Circuit Court of Appeals the judgment should be affirmed. When the patentee discovered the existence of certain strains of bacteria which, when combined with certain other strains of bacteria, would infect two or more leguminous plants without loss of their respective nitrogen-fixing efficiencies, and utilized this discovery by segregating some of these mutually non-inhibitive strains and combining such strains into composite inoculants, we agree with Mr. Justice FRANKFURTER that the combinations so produced satisfied the statutory requirements of invention or discovery. These products were a prompt and substantial commercial success, filling a long-sought and important agricultural need. However, we do not agree that the patent issued for such products is invalid for want of a clear, concise description of how the combinations were made and used. . . . . .In the present case, the patentee has defined the combinations in terms of their mutually inhibiting and non-inhibiting effects upon their respective abilities to take free nitrogen from the air and place it in the soil. These combinations were discovered by observation of these effects—they are in practice identified by these effects for the commercial uses for which they are made. It is these effects that differentiate them from the other bacteria heretofore generally identified only as common members of the same species and not commercially valuable for use with leguminous plants of more than one of the groups named in the opinion of the Court. The identification of the strains stated in the patent is that which the patentee used in making the novel combinations of them that have been shown to be highly useful. There appears to be no question but that the petitioners are now able to identify and use the strains in the manner described in the patent. The record thus indicates that the description is sufficiently full, clear, concise and exact to enable persons skilled in the art or science to which this discovery appertains or with which it is most nearly connected to make, construct, compound and use the same. There is no suggestion as to how it would be reasonably possible to describe the patented product more completely. The patent covers all composite cultures of bacterial strains of the species described which do not inhibit each other's ability to fix nitrogen. Bacteriologists, skilled in the applicable art, will not have difficulty in selecting the non-inhibitive strains by employing such standard and recognized laboratory tests as are described in the application for this patent. Chapter 5 – Statutory Subject Matter & Practical Utility

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The statute itself shows that Congress has recognized the inherent difficulty presented. While this patent may not be technically a 'plant patent' in the precise sense in which that term is used in this Section, the references in the Section to the differences in descriptions expected in mechanical patents and plant patents obviously support the position here taken. An inventor should not be denied a patent upon an otherwise patentable discovery merely because the nature of the discovery defies description in conventional terms. Terms ordinarily unsuitable to describe and distinguish products that are capable of description and distinction by their appearance may be the most appropriate in which to describe and distinguish other products that are not reasonably possible of identification by their appearance, but which are easily identified by their effects when being sought for or described by those skilled in the art.

Diamond v. Chakrabarty 447 U.S. 303, 206 USPQ 193 (1980) Mr. Chief Justice BURGER delivered the opinion of the Court. We granted certiorari to determine whether a live, human-made micro-organism is patentable subject matter under 35 U.S.C. § 101. I In 1972, respondent Chakrabarty, a microbiologist, filed a patent application, assigned to the General Electric Co. The application asserted 36 claims related to Chakrabarty's invention of "a bacterium from the genus Pseudomonas containing therein at least two stable energy-generating plasmids, each of said plasmids providing a separate hydrocarbon degradative pathway." This human-made, genetically engineered bacterium is capable of breaking down multiple components of crude oil. Because of this property, which is possessed by no naturally occurring bacteria, Chakrabarty's invention is believed to have significant value for the treatment of oil spills. Chakrabarty's patent claims were of three types: first, process claims for the method of producing the bacteria; second, claims for an inoculum comprised of a carrier material floating on water, such as straw, and the new bacteria; and third, claims to the bacteria themselves. The patent examiner allowed the claims falling into the first two categories, but rejected claims for the bacteria. His decision rested on two grounds: (1) that micro-organisms are "products of nature," and (2) that as living things they are not patentable subject matter under 35 U.S.C. § 101. Chakrabarty appealed the rejection of these claims to the Patent Office Board of Appeals, and the Board affirmed the Examiner on the second ground. Relying on the legislative history of the 1930 Plant Patent Act, in which Congress extended patent protection to certain asexually reproduced plants, the Board concluded that § 101 was not intended to cover living things such as these laboratory created micro-organisms. [The Court of Customs and Patent Appeals, by a divided vote, reversed.] **** II The Constitution grants Congress broad power to legislate to "promote the Progress of Science and the useful Arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries." Art. I, 8, cl. 8. The patent laws promote this progress by offering inventors exclusive rights for a limited period as an incentive for their inventiveness and research efforts. Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 480-481 (1974); Universal Oil Co. v. Globe Co., 322 U.S. 471, 484 (1944). The authority of Congress is exercised in the hope that "[t]he productive effort thereby fostered will have a positive effect on society through the introduction of new Chapter 5 – Statutory Subject Matter & Practical Utility

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products and processes of manufacture into the economy, and the emanations by way of increased employment and better lives for our citizens." Kewanee, supra, at 480. The question before us in this case is a narrow one of statutory interpretation requiring us to construe 35 U.S.C. § 101, which provides: "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."

Specifically, we must determine whether respondent's micro—organism constitutes a "manufacture" or "composition of matter" within the meaning of the statute. III In cases of statutory construction we begin, of course, with the language of the statute. Southeastern Community College v. Davis, 442 U.S. 397, 405 (1979). And "unless otherwise defined, words will be interpreted as taking their ordinary, contemporary, common meaning." Perrin v. United States, 444 U.S. 37, 42 (1979). We have also cautioned that courts "should not read into the patent laws limitations and conditions which the legislature has not expressed." United States v. Dubilier Condenser Corp., 289 U.S. 178, 199 (1933). Guided by these canons of construction, this Court has read the term "manufacture" in § 101 in accordance with its dictionary definition to mean "the production of articles for use from raw materials prepared materials by giving to these materials new forms, qualities, properties, or combinations, whether by hand-labor or by machinery." American Fruit Growers, Inc. v. Brogdex Co., 283 U.S. 1, 11 (1931). Similarly, "composition of matter" has been construed consistent with its common usage to include "all compositions of two or more substances and . . . all composite articles, whether they be the results of chemical union, or of mechanical mixture, or whether they be gases, fluids, powders or solids." Shell Development Co. v. Watson, 149 F. Supp. 279, 280 (DC 1957) (citing 1 A. Deller, Walker on Patents 14, p. 55 (1st ed. 1937)). In choosing such expansive terms as "manufacture" and "composition of matter," modified by the comprehensive "any," Congress plainly contemplated that the patent laws would be given wide scope. The relevant legislative history also supports a broad construction. The Patent Act of 1793, authored by Thomas Jefferson, defined statutory subject matter as "any new and useful art, machine, manufacture, or composition of matter, or any new or useful improvement [thereof]." Act of Feb. 21, 1793, Ch. 11, § 1, 1 Stat. 318. The Act embodied Jefferson's philosophy that "ingenuity should receive a liberal encouragement." 5 Writings of Thomas Jefferson 75-76 (Washington ed. 1871). See Graham v. John Deere Co., 383 U.S. 1, 7-10 (1966). Subsequent patent statutes in 1836, 1870 and 1874 employed this same broad language. In 1952, when the patent laws were recodified, Congress replaced the word "art" with "process," but otherwise left Jefferson's language intact. The Committee Reports accompanying the 1952 act inform us that Congress intended statutory subject matter to "include anything under the sun that is made by man." S. Rep. No. 1979, 82d Cong., 2d Sess., 5 (1952); H. R. Rep. No. 1923, 82d Cong., 2d Sess., 6 (1952). This is not to suggest that § 101 has no limits or that it embraces every discovery. The laws of nature, physical phenomena, and abstract ideas have been held not patentable. See Parker v. Flook, 437 U.S. 584 (1978); Gottschalk v. Benson, 409 U.S. 63, 67 (1972); Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948); O'Reilly v. Morse, 15 How. 62, 112-121 (1854); Le Roy v. Tatham, 14 How. 156, 175 (1853). Thus, a new mineral discovered in the earth or a new plant found in the wild is not patentable subject matter. Likewise, Einstein could not patent his celebrated law that E=mc2; nor could Newton have patented the law of gravity. Such discoveries are "manifestations of . . . nature, free to all men and reserved exclusively to none." Funk, supra, at 130.

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Judged in this light, respondent's micro-organism plainly qualifies as patentable subject matter. His claim is not to a hitherto unknown natural phenomenon, but to a nonnaturally occurring manufacture or composition of matter—a product of human ingenuity "having a distinctive name, character [and] use." Hartranft v. Wiegmann, 121 U.S. 609, 615 (1887). The point is underscored dramatically by comparison of the invention here with that in Funk. There, the patentee had discovered that there existed in nature certain species of root-nodule bacteria which did not exert a mutually inhibitive effect on each other. He used that discovery to produce a mixed culture capable of inoculating the seeds of leguminous plants. Concluding that the patentee had discovered "only some of the handiwork of nature," the Court ruled the product nonpatentable: "Each of the species of root-nodule bacteria contained in the package infects the same group of leguminous plants which it always infected. No species acquires a different use. The combination of the six species produces no new bacteria, no change in the six bacteria, and no enlargement of the range of their utility. Each species has the same effect it always had. The bacteria perform in their natural way. Their use in combination does not improve in any way their natural functioning. They serve the ends nature originally provided and act quite independently of any effort of the patentee." 333 U.S., at 127.

Here, by contrast, the patentee has produced a new bacterium with markedly different characteristics from any found in nature and one having the potential for significant utility. His discovery is not nature's handiwork, but his own; accordingly it is patentable subject matter under § 101. IV Two contrary arguments are advanced, neither of which we find persuasive. (A) [The Court first rejected the argument that the 1930 Plant Patent Act and 1970 Plant Variety Protection Act, protecting asexually and sexually reproduced plants, respectively, evinced a Congressional understanding that the terms "manufacture" or "composition of matter" do not include living things, because if they did, the two plant acts would be unnecessary.] (B) The Government's second argument is that microorganisms cannot qualify as patentable subject matter until Congress expressly authorizes such protection. Its position rests on the fact that genetic technology was unforeseen when Congress enacted 101. From this it is argued that resolution of the patentability of inventions such as respondent's should be left to Congress. The legislative process, the Government argues, is best equipped to weigh the competing economic, social, and scientific considerations involved, and to determine whether living organisms produced by genetic engineering should receive patent protection. In support of this position, the Government relies on our recent holding in Parker v. Flook, 437 U.S. 584 (1978), and the statement that the judiciary "must proceed cautiously when . . . asked to extend patent rights into areas wholly unforeseen by Congress." Id., at 596. It is, of course, correct that Congress, not the courts, must define the limits of patentability; but it is equally true that once Congress has spoken it is "the province and duty of the judicial department to say what the law is." Marbury v. Madison, 1 Cranch 137, 177 (1803). Congress has performed its constitutional role in defining patentable subject matter in § 101; we perform ours in construing the language Congress has employed. In so doing, our obligation is to take statutes as we find them, guided, if ambiguity appears, by the legislative history and statutory purpose. Here, we perceive no ambiguity. The subject-matter provisions of the patent law have been cast in broad terms to fulfill the constitutional and statutory goal of promoting "the Progress of Science and the useful Arts" with all that means for the social and economic benefits envisioned by Jefferson. Broad general language is not necessarily ambiguous when congressional objectives require broad terms.

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Nothing in Flook is to the contrary. That case applied our prior precedents to determine that a "claim for an improved method of calculation, even when tied to a specific end use, is unpatentable subject matter under § 101." 437 U.S., at 595, n. 18. The Court carefully scrutinized the claim at issue to determine whether it was precluded from patent protection under "the principles underlying the prohibition against patents for `ideas' or phenomena of nature." Id., at 593. We have done that here. Flook did not announce a new principle that inventions in areas not contemplated by Congress when the patent laws were enacted are unpatentable per se. To read that concept into Flook would frustrate the purposes of the patent law. This Court frequently has observed that a statute is not to be confined to the "particular application[s] . . . contemplated by the legislators." Barr v. United States, 324 U.S. 83, 90 (1945). Accord, Browder v. United States, 312 U.S. 335, 339 (1941); Puerto Rico v. Shell Co., 302 U.S. 253, 257 (1937). This is especially true in the field of patent law. A rule that unanticipated inventions are without protection would conflict with the core concept of the patent law that anticipation undermines patentability. See Graham v. John Deere Co., 383 U.S., at 12-17. Mr. Justice Douglas reminded that the inventions most benefiting mankind are those that "push back the frontiers of chemistry, physics, and the like." A. & P. Tea Co. v. Supermarket Corp., 340 U.S. 147, 154 (1950) (concurring opinion). Congress employed broad general language in drafting § 101 precisely because such inventions are often unforeseeable.10 To buttress its argument, the Government, with the support of amicus, points to grave risks that may be generated by research endeavors such as respondent's. The briefs present a gruesome parade of horribles. Scientists, among them Nobel laureates, are quoted suggesting that genetic research may pose a serious threat to the human race, or, at the very least, that the dangers are far too substantial to permit such research to proceed apace at this time. We are told that genetic research and related technological developments may spread pollution and disease, that it may result in a loss of genetic diversity, and that its practice may tend to depreciate the value of human life. These arguments are forcefully, even passionately, presented; they remind us that, at times, human ingenuity seems unable to control fully the forces it creates—that, with Hamlet, it is sometimes better "to bear those ills we have than fly to others that we know not of." It is argued that this Court should weigh these potential hazards in considering whether respondent's invention is patentable subject matter under 101. We disagree. The grant or denial of patents on microorganisms is not likely to put an end to genetic research or to its attendant risks. The large amount of research that has already occurred when no researcher had sure knowledge that patent protection would be available suggests that legislative or judicial fiat as to patentability will not deter the scientific mind from probing into the unknown any more than Canute could command the tides. Whether respondent's claims are patentable may determine whether research efforts are accelerated by the hope of reward or slowed by want of incentives, but that is all. What is more important is that we are without competence to entertain these arguments—either to brush them aside as fantasies generated by fear of the unknown, or to act on them. The choice we are urged to make is a matter of high policy for resolution within the legislative process after the kind of investigation, examination, and study that legislative bodies can provide and courts cannot. That process involves the balancing of competing values and interests, which in our democratic system is the business of elected representatives. Whatever their validity, the contentions now pressed on us should be addressed to the political branches of the government, the Congress and the Executive, and not to the courts.

10

Even an abbreviated list of patented inventions underscores the point: telegraph (Morse, No. 1,647); telephone (Bell, No. 174,465); electric lamp (Edison, No. 223,898); airplane (the Wrights, No. 821,393); transistor (Bardeen & Brattain, No. 2,524,035); neutronic reactor (Fermi & Szilard, No. 2,708,656); laser (Schawlow & Townes, No. 2,929,922). See generally Revolutionary Ideas, Patents & Progress in America, United States Patent and Trademark Office (1976).

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We have emphasized in the recent past that "[o]ur individual appraisal of the wisdom or unwisdom of a particular [legislative] course . . . is to be put aside in the process of interpreting a statute." TVA v. Hill, 437 U.S., at 194. Our task, rather, is the narrow one of determining what Congress meant by the words it used in the statute; once that is done our powers are exhausted. Congress is free to amend § 101 so as to exclude from patent protection organisms produced by genetic engineering. Cf. 42 U.S.C. § 2181 (a), exempting from patent protection inventions "useful solely in the utilization of special nuclear material or atomic energy in an atomic weapon." Or it may choose to craft a statute specifically designed for such living things. But, until Congress takes such action, this Court must construe the language of § 101 as it is. The language of that section fairly embraces respondent's invention. Accordingly, the judgment of the Court of Customs and Patent Appeals is Affirmed. MR. JUSTICE BRENNAN, with whom MR. JUSTICE WHITE, MR. JUSTICE MARSHALL, and MR. JUSTICE POWELL join, dissenting. . . . Because I believe the Court has misread the applicable legislation, I dissent. **** In this case, . . . we do not confront a complete legislative vacuum. The sweeping language of the Patent Act of 1793, as re-enacted in 1952, is not the last pronouncement Congress has made in this area. In 1930 Congress enacted the Plant Patent Act affording patent protection to developers of certain asexually reproduced plants. In 1970 Congress enacted the Plant Variety Protection Act to extend protection to certain new plant varieties capable of sexual reproduction. Thus, we are not dealing—as the Court would have it—with the routine problem of "unanticipated inventions." Ante, at 316. In these two Acts Congress has addressed the general problem of patenting animate inventions and has chosen carefully limited language granting protection to some kinds of discoveries, but specifically excluding others. These Acts strongly evidence a congressional limitation that excludes bacteria from patentability. ****

Questions, Comments, Problems 1. “Anything Under the Sun” – The Court’s statement that Congress intended to permit patenting of “anything under the sun that is made by man” is very sweeping. Can it be taken at face value? Would the court allow someone to patent the melody in a song? 2. International Harmonization – As you can imagine, attitudes toward patenting human-engineered life forms vary widely throughout the world. Not all countries are as open to the patenting of living organisms as is the United States (though the U.S. “attitude” could be more attributable to inertia, i.e., Congressional failure to modify a decades-old statute, than to an affimative view on the issue). On December 8, 1994, President Clinton signed legislation that implemented the General Agreement on Trade and Tariffs (GATT) (P.L. 103-465). GATT includes the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs), which sets out patentable subject matter in Article 27: 1.

2.

Subject to the provisions of paragraphs 2 and 3, patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application. . . . Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law.

Article 27 also permits member countries to exclude from patenting: (a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals;

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(b) plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof. The freedom given to member countries in subsection (b) to exclude plants and animals other than microorganisms from patenting and the latitude to enact broader public policy based proscriptions as set forth in (2) above are reflective of the traditions in many countries of not permitting patents on e.g., pharmaceuticals (Italy is a notable example). 3. Living Things – The Court in Chakrabarty rejected the argument that all living things are unpatentable because Congress showed, through its passage of the 1930 Plant Act and the 1970 Plant Variety Protection Act (PVPA), that the terms "manufacture" or "composition of matter" do not include living things. The 1930 Act provided protection for non-sexually reproducing plants, while the 1970 Act provided protection for sexually reproducing plants. Does Chakrabarty leave open the possibility that sexually reproducing plants (as opposed to all living things) are unpatentable under § 101 because Congress provided for their patentability instead in the PVPA? The Board of Patent Appeals and Interferences rejected this possibility in Ex Parte Hibberd, 227 USPQ 443 (BPAI 1985), and held that sexually-reproducing plants may be patented. The Board reasoned that neither act explicitly excluded plants from receiving utility patents. The Board also noted that Chakrabarty had upheld the patentability of man-made life forms, and the legislative history of the acts indicated no Congressional intent to limit the scope of patentable subject matter under section 101. The Board noted that “[t]here is ample precedent that the availability of one form of statutory protection does not preclude (or irreconcilably conflict with) the availability of protection under another form.” Id. at 446. The Board cited In re Yardley, 493 F.2d 1389, 181 USPQ 331 (CCPA 1974), for this proposition. Yardley, discussed in Chapter 2, supra, had permitted a design patent on subject matter that was already subject to a registered federal claim of copyright. Because the Board held that sexually-reproducing plants were patentable, there was no need for the applicant to appeal to the Federal Circuit, which still has not ruled on this issue. However, one party being sued for patent infringement by corn producer Pioneer Hi-Bred International recently argued that the Board erred in Hibberd because it overlooked a key statement in the legislative history to the PVPA. In the House Report, that statement notes: Under patent law, protection is presently limited to those varieties of plants which reproduce asexually, that is, by such methods as grafting or budding. No protection is available to those varieties of plants which reproduce sexually, that is, generally by seeds. Thus, patent protection is not available with respect to new varieties of most of the economically important agricultural crops, such as cotton or soybeans. The district court ruled that the statement did not prevent the patenting of sexually reproducing plants. See Pioneer Hi-Bred-International v. J.E.M. Ag Supply, No. C98-4016-DEO (N.D. Iowa Aug. 19, 1998) (Order). On appeal, the Federal Circuit affirmed, relying largely on the “anything under the sun” rationale, and, disappointingly, doing little to reconcile the legislative history of the PVPA. Pioneer Hi-Bred Int'l, Inc. v. J.E.M. Ag Supply, Inc., 200 F.3d 1374, 53 USPQ2d 1440 (Fed. Cir. 2000). 4. Patenting Animals – Relying on Chakrabarty and Hibberd, the PTO Board of Appeals reversed, in Ex parte Allen, 2 USPQ2d 1425 (BPAI 1987), aff’d 846 F.2d 77 (Fed. Cir. 1988) (nonpublished), a “living entities” rejection by an examiner of a claim to sterile, year-round edible oysters produced by a particular process. The PTO shortly afterwards, on April 12, 1988, issued a patent covering a transgenic mouse, Leder and Stewart U.S. Patent No. 4,736,866. Claim 1 of that patent states: A transgenic, non-human mammal all of whose germ cells and somatic cells contain a recombinant activated oncogene sequence introduced into said mammal, or an ancestor of said mammal, at an embryonic stage. Dependent claim 12 states that the mammal is a mouse. Because Harvard University owns this patent, the subject of the patent has been called the Harvard Mouse. Because of the public controversy created by the decision in Ex parte Allen, the PTO Commissioner issued a Policy Statement on Patentability of Animals on April 7, 1987. In it, the Commissioner made clear that humans could not be patented: “The position of the PTO is that the grant of a limited, but exclusive property right in a human being is prohibited by the Constitution.” But the Commissioner went on to say that patent claims directed to non-human, nonnaturally occurring manufactures or compositions of matter, including new animals, will not be rejected under 35 USC § 101 as being directed to non-statutory subject matter. The Animal Legal Defense Fund and other animal rights, animal husbandry, and farm organizations unsuccessfully sought to challenge the Commissioner’s Policy Statement by judicial review. Animal Legal Defense Fund v. Quigg,

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932 F.2d 920, 18 USPQ2d 1677 (Fed. Cir. 1977) (holding that plaintiffs lacked standing). But cf. Ritchie v. Simpson, No. 97-1371, 170 F.3d 1092, 50 USPQ2d 1023 (Fed. Cir. Mar. 15, 1999) (concluding that opposer to registration of trademarks O.J., O.J. SIMPSON, and THE JUICE had standing because he had “a personal interest in the proceeding beyond that of the general public,” since he alleged that he was a “family man” who believes that the “sanctity of marriage requires a husband and wife who love and nurture one another” and that he could potentially be damaged by marks that are allegedly synonymous with wife-beater and wife-murderer). 5. Products of Nature – Courts reject attempts to patent products of nature by reasoning that such products are not machines, compositions of matter, or manufactures. However, how can a product of nature not be a composition of matter? And, how can section 101 explicitly apply to things that are invented or discovered if it does not cover discoveries of naturally-occurring compositions? Would it be more satisfactory simply to admit that products of nature fit within section 101, and then to reject any claims to products in their natural state under section 102(f), which denies a patent if the applicant “did not himself invent the subject matter sought to be patented”? Judge Evans, of the Seventh Circuit, saw no reason to prevent a patent from issuing under either rationale when he wrote, in Dennis v. Pitner: It would seem to be an unjustifiable distinction to recognize as patentable a machine or other product which puts into novel combination a plurality of old elements producing a new and useful article, and deny to one working in a research field the protection of his discovery, because in his search he finds that a certain article, which we will call a chemical, will act, when taken into the human system or applied to the earth or upon some mineral found therein, in a beneficial way hitherto unknown to man. Clearly the patent law was enacted to benefit society by encouraging discoveries and inventions. That is accomplished by the Government’s giving to the inventor or discoverer a patent. . . . 42 USPQ 248, 251 (7th Cir. 1939) (dictum; claims to extract of cube root as insecticide invalid for lack of novelty and not infringed). In In re Kratz, 592 F.2d 1169, 201 USPQ 71 (CCPA 1979), the court held that claims to a product and process that imparted strawberry flavor by adding certain “synthetically produced” and “substantially pure” acids were patentable subject matter even though the acid is a naturally occurring product of strawberries. The court noted: Some prior dicta exist which would seem to support the proposition that a claim broadly reciting a naturally occurring chemical compound may be rejected as unpatentable over a naturally occurring composition containing that compound even though the compound’s existence is not known. . . . It should be clear that an anticipation rejection in such a case is necessarily based on a dual footing. First, the natural composition must inherently contain the naturally occurring compound. Secondly, the claim must be of sufficient breadth to encompass both the known natural composition and the naturally occurring compound. Id. at 1173, 201 USPQ at 75-76. The court held that the second part of the test was not met because the claims required that the acid be “substantially pure,” which was not the case, of course, with strawberries. The court also rejected an attack for obviousness on the ground that the prior art did not show that this acid was a significant strawberry flavor ingredient. Id. at 1175. Both sides of the issue were explored by the majority and dissent in Schering Corp. v. Gilbert, 153 F.2d 428, 68 USPQ 84 (2d Cir. 1946), involving a patent on a new compound that did not occur in nature. The majority ruled that the compound was patentable subject matter: They say that this new and useful composition of matter is not patentable because Claim 2 covers a new molecule and that a molecule is the inevitable result of the action of so-called laws of nature which are immutable by man and remain free for the use of all unrestricted by patent law. If this were wholly true the corrolary would be that the process by which a result is reached, involving as it does the application of natural laws, would be likewise unpatentable and that there could be no valid patents for new compositions of matter. Similarly, there could be no valid patents for new machines or for new methods for making them since so-called natural laws of physics, such as those relating to gravity and friction, to mention only two, always play their part. Obviously, such an advanced position cannot be maintained in the face of the patent statute and the multitude of authoritative decisions to the contrary. Yet there is a certain amount of plausibility in the argument and its interest lies in the fact that it is in effect the antithesis of the usual attack on patents based on the simplicity of the change from old to new. Now the deep-seated, fundamental character of the change is relied on to exclude credit to human ingenuity and give it all to natural forces, regardless of what it took on the part of the inventors to control and direct those natural forces. We cannot believe that this negatives invention though we agree that the so-called laws of nature cannot be patented per se. . . . Claim 2 does describe what in chemical

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parlance is a molecule though it is equally correct to call it a compound; but, however labelled, it is none the less a new composition of matter. 68 USPQ at 88. The dissent, of course, disagreed: A claim for a mere product, regardless of the process for producing it, is, I think, virtually a claim to what has sometimes been described as a “principle” or “idea,” held not to be patentable. It is indeed something of a paradox, but, nevertheless, doubtless wise, that our patent law gives no reward to the discoverers of scientific principles, while it protects the discoveries and inventions of lesser minds, who find new, original and useful applications of such principles. No Prometheus is welcome in the Patent Office. Id. at 90-91. 6. Processes – Although one may not patent a product of nature, one may patent a process that uses a newly discovered product of nature. See Ansonia Brass & Copper Co. v. Electric Supply, 144 U.S. 11, 18 (1892) (dicta: “[I]f an old device or process be put to a new use which is not analogous to the old one, and the adaptation of such process to the new use is of such a character as to require the exercise of inventive skill to produce it, such new use will not be denied the merit of patentability.”). This was not clear, however, until the mid-1900’s, and in particular, until the addition of the term “process in the 1952 Act. As noted in P.J. Federico’s Commentary on that Act: The decision of the Court of Customs and Patent Appeals in In re Thuau, 135 F.2d 344, has not been overruled by the statute. The holding of this decision is simply that an old material cannot be patented as a composition of matter, because it is an old material, and the fact that the inventor or discoverer may have discovered a new use for the old material does not make the material patentable. . . . It is believed that the primary significance of the definition of method above referred to is merely that a method claim is not vulnerable to attack, on the ground of not being within the field of patentable subject matter, merely because it may recite steps conventional from a procedural standpoint and the novelty resides in the recitation of the particular substance, which is old as such, used in the process. . . . The reference to the new use of a known machine or manufacture in the definition [35 U.S.C. § 100] merely means that the processes may utilize old machines or manufactures and the reference to the new use of a known process simply indicates that the procedural steps in a patentable process might be old. P.J. Federico, “Commentary on the New Patent Act,” reprinted in J. Pat. Off. Soc. 161 (Mar. 1993). Of course, a patent claim on a new use for a product does not cover the product itself or all uses of the product. 7. Is it Section 101 or Section 102? – You may already have noticed that much of the reasoning under section 101 sounds like rejections of novelty under section 102. For example, in Funk Bros., Justice Douglas noted: “The qualities of these bacteria . . . are part of the storehouse of knowledge of all men.” Does Justice Frankfurter have a better approach, when he reasons that the claims, although they meet the section 101 requirement, are nevertheless so broad that they impermissibly go beyond what Bond discovered? Or do you agree with the dissent that the claims were not impermissibly broad? We shall cover the overbreadth issue in more detail in the next chapter. Judge Haynsworth, of the Fourth Circuit, had an interesting comment on this 101/102(and /103) point: A product of nature which is not a "new and useful . . . machine, manufacture, or composition of matter," is not patentable, for it is not within the statutory definition of those things which may be patented. Even though it be a new and useful composition of matter it still may be unpatentable if the subject matter as a whole was obvious within the meaning of § 103 . . . In dealing with such considerations, unpatentable products have been frequently characterized as ‘products of nature.’ See Funk Brothers. . . . But where the requirements of the Act are met, patents upon products of nature are granted and their validity sustained. . . . To the extent that the ‘product of nature’ defense has validity, as urged here, it is a contention that the patented compositions are not ‘new and useful . . . compositions of matter’ within the meaning of § 101 of the Act. This defense may be separated into two doctrines, (1) that a patent may not be granted upon an old product though it be derived from a new source by a new and patentable process, and (2) that every step in the purification of a product is not a patentable advance, except, perhaps as to the process, if the new product differs from the old ‘merely in degree, and not in kind.’ Merck & Co. v. Olin Mathieson Chem. Corp., 253 F.2d 156, 162, 116 USPQ 484 (4th Cir. 1958). The Court in Merck found that neither part of the “product of nature” defense applied in the case before it. The Court sustained the validity of claims to vitamin B-12 produced by a fermentation process over the argument that

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this vitamin already existed in the livers of cattle. The fermentation product was far purer and less toxic than liver extracts, and before the invention of the patent in suit, no one knew that vitamin B-12 was the anemia medicine in these extracts. 8. Manufacture – The Court in Chakrabarty quoted the definition of “manufacture” used in American Fruit Growers, Inc. v. Brogdex Co, 283 U.S. 1, 11 (1931): The production of articles for use from raw or prepared materials by giving to these materials new forms, qualities, properties, or combinations, whether by hand labor or by machinery. The Court in Chakrabarty referred to “manufacture” as an “expansive” term. 447 U.S. at 308. Yet in American Fruit Growers, the Court concluded that the definition above did not cover a claim to an orange whose rind had been treated with borax for mold resistance. 283 U.S. 11-13. Clearly an orange is a “raw material” and the borax gave the orange the new “quality” of mold resistance. The Court did not see it that way, stating: Addition of borax to the rind of natural fruit does not produce from the raw material an article for use which possesses a new or distinctive form, quality or property. The added substance only protects the natural article against deterioration by inhibiting development of extraneous spores upon the rind. There is no change in the name, appearance, or general character of the fruit. It remains a fresh orange fit only for the same beneficial uses as heretofore. Id. at 11-12. Isn’t this a rather narrow view of what the Court 50 years later considered an expansive term?

Methods, Algorithms, and Computer Software

Gottschalk v. Benson 409 U.S. 63, 175 USPQ 673 (1972) MR. JUSTICE DOUGLAS delivered the opinion of the Court. Respondents filed in the Patent Office an application for an invention which was described as being related "to the processing of data by program and more particularly to the programmed conversion of numerical information" in general-purpose digital computers. They claimed a method for converting binary-coded decimal (BCD) numerals into pure binary numerals. The claims were not limited to any particular art or technology, to any particular apparatus or machinery, or to any particular end use. They purported to cover any use of the claimed method in a general purpose digital computer of any type. Claims 8 and 13 were rejected by the Patent Office but sustained by the Court of Customs and Patent Appeals, ___ C. C. P. A. (Pat.) ___, 441 F.2d 682, 169 USPQ 548. The case is here on a petition for a writ of certiorari. 405 U.S. 915, 172 USPQ 577. The question is whether the method described and claimed is a "process" within the meaning of the Patent Act. A digital computer, as distinguished from an analog computer, is that which operates on data expressed in digits, solving a problem by doing arithmetic as a person would do it by head and hand. Some of the digits are stored as components of the computer. Others are introduced into the computer in a form which it is designed to recognize. The computer operates then upon both new and previously stored data. The general purpose computer is designed to perform operations under many different programs. The representation of numbers may be in the form of a time-series of electrical impulses, magnetized spots on the surface of tapes, drums, or discs, charged spots on cathode ray tube screens, or the presence or absence of punched holes on paper cards, or other devices. The method or program is a sequence of coded instructions for a digital computer. Chapter 5 – Statutory Subject Matter & Practical Utility

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The patent sought is on a method of programming a general purpose digital computer to convert signals from binary coded decimal form into pure binary form. A procedure for solving a given type of mathematical problem is known as an "algorithm." The procedures set forth in the present claims are of that kind; that is to say, they are a generalized formulation for programs to solve mathematical problems of converting one form of numerical representation to another. From the generic formulation, programs may be developed as specific applications. **** . . .The method sought to be patented varies the ordinary arithmetic steps a human would use by changing the order of the steps, changing the symbolism for writing the multiplier used in some steps, and by taking subtotals after each successive operation. The mathematical procedures can be carried out in existing computers long in use, no new machinery being necessary. And, as noted, they can also be performed without a computer. The Court stated in Mackay Co. v. Radio Corp., 306 U.S. 86, 94, that "[w]hile a scientific truth, or the mathematical expression of it, is not a patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be." That statement followed the longstanding rule that "[a]n idea of itself is not patentable." Rubber-Tip Pencil Co. v. Howard, 20 Wall. 498, 507. "A principle, in the abstract, is a fundamental truth; an original cause; a motive; and these cannot be patented, as no one can claim in either of them an exclusive right." Le Roy v. Tatham, 14 How. 156, 175. Phenomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work. As we stated in Funk Bros. Seed Co. v. Kalo Co., 333 U.S. 127, 130, "He who discovers a hitherto unknown phenomenon of nature has no claim to a monopoly of it which the law recognizes. If there is to be invention from such a discovery, it must come from the application of the law of nature to a new and useful end." We dealt there with a "product" claim, while the present case deals with a "process" claim. But we think the same principle applies. Here the "process" claim is so abstract and sweeping as to cover both known and unknown uses of the BCD to pure binary conversion. The end use may (1) vary from the operation of a train to verification of drivers' licenses to researching the law books for precedents and (2) be performed through any existing machinery or future-devised machinery or without any apparatus. ****

Transformation and reduction of an article "to a different state or thing" is the clue to the patentability of a process claim that does not include particular machines. So it is that a patent in the process of "manufacturing fat acids and glycerine from fatty bodies by the action of water at a high temperature and pressure" was sustained in Tilghman v. Proctor, 102 U.S. 707, 721. The Court said, "The chemical principle or scientific fact upon which it is founded is, that the elements of neutral fat require to be severally united with an atomic equivalent of water in order to separate from each other and become free. This chemical fact was not discovered by Tilghman. He only claims to have invented a particular mode of bringing about the desired chemical union between the fatty elements and water." Id., at 729. **** It is argued that a process patent must either be tied to a particular machine or apparatus or must operate to change articles or materials to a "different state or thing." We do not hold that no process patent could ever qualify if it did not meet the requirements of our prior precedents. It is said that the decision precludes a patent for any program servicing a computer. We do not so hold. It is said that we have before us a program for a digital computer but extend our holding to programs for analog computers. We have, however, made clear from the start that we deal with a program only for digital computers. It is said we freeze process patents to old technologies, leaving no room for the revelations of the new, onrushing technology. Such is not our purpose. What we come down to in a nutshell is the following. Chapter 5 – Statutory Subject Matter & Practical Utility

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It is conceded that one may not patent an idea. But in practical effect that would be the result if the formula for converting binary code numerals to pure binary were patented in this case. The mathematical formula involved here has no substantial practical application except in connection with a digital computer, which means that if the judgment below is affirmed, the patent would wholly pre-empt the mathematical formula and in practical effect would be a patent on the algorithm itself. Reversed. MR. JUSTICE STEWART, MR. JUSTICE BLACKMUN, and MR. JUSTICE POWELL took no part in the consideration or decision of this case.

Parker v. Flook 437 U.S. 584, 198 USPQ 193 (1978) MR. JUSTICE STEVENS delivered the opinion of the Court. Respondent applied for a patent on a "Method For Updating Alarm Limits." The only novel feature of the method is a mathematical formula. In Gottschalk v. Benson 409 U.S. 63, 175 USPQ 673 (1972) we held that the discovery of a novel and useful mathematical formula may not be patented. The question in this case is whether the identification of a limited category of useful, though conventional, postsolution applications of such a formula makes respondent's method eligible for patent protection. I An "alarm limit" is a number. During catalytic conversion processes, operating conditions such as temperature, pressure, and flow rates are constantly monitored. When any of these "process variables" exceeds a predetermined "alarm limit," an alarm may signal the presence of an abnormal condition indicating either inefficiency or perhaps danger. Fixed alarm limits may be appropriate for a steady operation, but during transient operating situations, such as start-up, it may be necessary to "update" the alarm limits periodically. Respondent's patent application describes a method of updating alarm limits. In essence, the method consists of three steps: an initial step which merely measures the present value of the process variable (e. g., the temperature); an intermediate step which uses an algorithm to calculate an updated alarmlimit value; and a final step in which the actual alarm limit is adjusted to the updated value. The only difference between the conventional methods of changing alarm limits and that described in respondent's application rests in the second step—the mathematical algorithm or formula. Using the formula, an operator can calculate an updated alarm limit once he knows the original alarm base, the appropriate margin of safety, the time interval that should elapse between each updating, the current temperature (or other process variable), and the appropriate weighting factor to be used to average the original alarm base and the current temperature. The patent application does not purport to explain how to select the appropriate margin of safety, the weighting factor, or any of the other variables. Nor does it purport to contain any disclosure relating to the chemical processes at work, the monitoring of process variables, or the means of setting off an alarm or adjusting an alarm system. All that it provides is a formula for computing an updated alarm limit. Although the computations can be made by pencil and paper calculations, the abstract of disclosure makes it clear that the formula is primarily useful for computerized calculations producing automatic adjustments in alarm settings. The patent claims cover any use of respondent's formula for updating the value of an alarm limit on any process variable involved in a process comprising the catalytic chemical conversion of hydrocarbons. Chapter 5 – Statutory Subject Matter & Practical Utility

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Since there are numerous processes of that kind in the petrochemical and oil-refining industries, the claims cover a broad range of potential uses of the method. They do not, however, cover every conceivable application of the formula. II **** III This case turns entirely on the proper construction of § 101 of the Patent Act, which describes the subject matter that is eligible for patent protection. It does not involve the familiar issues of novelty and obviousness that routinely arise under § 102 and § 103 when the validity of a patent is challenged. For the purpose of our analysis, we assume that respondent's formula is novel and useful and that he discovered it. We also assume, since respondent does not challenge the examiner's finding, that the formula is the only novel feature of respondent's method. The question is whether the discovery of this feature makes an otherwise conventional method eligible for patent protection. The plain language of § 101 does not answer the question. It is true, as respondent argues, that his method is a "process" in the ordinary sense of the word.9 But that was also true of the algorithm, which described a method for converting binary-coded decimal numerals into pure binary numerals, that was involved in Gottschalk v. Benson. The holding that the discovery of that method could not be patented as a "process" forecloses a purely literal reading of § 101. Reasoning that an algorithm, or mathematical formula, is like a law of nature, Benson applied the established rule that a law of nature cannot be the subject of a patent. Quoting from earlier cases, we said: "`A principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right.' Le Roy v. Tatham, 14 How. 156, 175. Phenomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work." 409 U.S., at 67.

The line between a patentable "process" and an unpatentable "principle" does not always shimmer with clarity. Both are "conception[s] of the mind, seen only by [their] effects when being executed or performed." Tilghman v. Proctor, 102 U.S. 707, 728. In Benson we concluded that the process application in fact sought to patent an idea, noting that : "[T]he mathematical formula involved here has no substantial practical application except in connection with a digital computer, which means that if the judgment below is affirmed, the patent would wholly preempt the mathematical formula and in practical effect would be a patent on the algorithm itself." 409 U.S., at 71-72.

Respondent correctly points out that this language does not apply to his claims. He does not seek to "wholly preempt the mathematical formula," since there are uses of his formula outside the petrochemical and oil refining industries that remain in the public domain. And he argues that the presence of specific "post-solution" activity—the adjustment of the alarm limit to the figure computed according to the formula—distinguishes this case from Benson and makes his process patentable. We cannot agree. The notion that post-solution activity, no matter how conventional or obvious in itself, can transform an unpatentable principle into a patentable process exalts form over substance. A competent draftsman could attach some form of post-solution activity to almost any mathematical formula; the Pythagorean 9

The statutory definition of "process" is broad. See n. 8, supra. An argument can be made, however, that this Court has only recognized a process as within the statutory definition when it either was tied to a particular apparatus or operated to change materials to a "different state or thing." See Cochrane v. Deener, 94 U.S. 780, 787-788. As in Benson, we assume that a valid process patent may issue even if it does not meet one of these qualifications of our earlier precedents. 409 U.S., at 71.

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Theorem would not have been patentable, or partially patentable, because a patent application contained a final step indicating that the formula, when solved, could be usefully applied to existing surveying techniques.11 The concept of patentable subject matter under § 101 is not "like a nose of wax which may be turned and twisted in any direction . . . ." White v. Dunbar, 119 U.S. 47, 51. Yet it is equally clear that a process is not unpatentable simply because it contains a law of nature or a mathematical algorithm. See Eibel Process Co. v. Minnesota & Ontario Paper Co., 261 U.S. 45; Tilghman v. Proctor, supra. For instance, in Mackay Radio & Telegraph Co. v. Radio Corp. of America, 306 U.S. 86, the applicant sought a patent on a directional antenna system in which the wire arrangement was determined by the logical application of a mathematical formula. Putting the question of patentability to one side as a preface to his analysis of the infringement issue, Mr. Justice Stone, writing for the Court, explained: "While a scientific truth, or the mathematical expression of it, is not patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be." Id., at 94.

Funk Bros. Seed Co. v. Kalo Co., 333 U.S. 127, 130, expresses a similar approach: "He who discovers a hitherto unknown phenomenon of nature has no claim to a monopoly of it which the law recognizes. f there is to be invention from such a discovery, it must come from the application of the law of nature to a new and useful end."

Mackay Radio and Funk Bros. point to the proper analysis for this case: The process itself, not merely the mathematical algorithm, must be new and useful. Indeed, the novelty of the mathematical algorithm is not a determining factor at all. Whether the algorithm was in fact known or unknown at the time of the claimed invention, as one of the "basic tools of scientific and technological work," see Gottschalk v. Benson, 409 U.S., at 67, it is treated as though it were a familiar part of the prior art. **** Respondent argues that this approach improperly imports into § 101 the considerations of "inventiveness" which are the proper concerns of § 102 and § 103. This argument is based on two fundamental misconceptions. First, respondent incorrectly assumes that if a process application implements a principle in some specific fashion, it automatically falls within the patentable subject matter of § 101 and the substantive patentability of the particular process can then be determined by the conditions of § 102 and § 103. This assumption is based on respondent's narrow reading of Benson, supra and is as untenable in the § context of 101 as it is in the context of that case. It would make the determination of patentable subject matter depend simply on the draftsman's art and would ill serve the principles underlying the prohibition against patents for "ideas" or phenomena of nature. The rule that the discovery of a law of nature cannot be patented rests, not on the notion that natural phenomena are not processes, but rather on the more fundamental understanding that they are not the kind of "discoveries" that the statute was enacted to protect. The obligation to determine what type of discovery is sought to be patented must precede the determination of whether that discovery is, in fact, new or obvious. Second, respondent assumes that the fatal objection to his application is the fact that one of its components—the mathematical formula—consists of unpatentable subject matter. In countering this supposed objection, respondent relies on opinions by the Court of Customs and Patent Appeals which reject the notion "that a claim may be dissected, the claim components searched in the prior art, and, if 11

It should be noted that in Benson there was a specific end use contemplated for the algorithm - utilization of the algorithm in computer programming. See In re Chatfield, 545 F.2d 152, 161 (CCPA 1976) (Rich, J., dissenting). Of course, as the Court pointed out, the formula had no other practical application; but it is not entirely clear why a process claim is any more or less patentable because the specific end use contemplated is the only one for which the algorithm has any practical application.

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the only component found novel is outside the statutory classes of invention, the claim may be rejected under 35 U.S.C. 101." In re Chatfield, 545 F.2d 152, 158 (CCPA 1976). Our approach to respondent's application is, however, not at all inconsistent with the view that a patent claim must be considered as a whole. Respondent's process is unpatentable under § 101, not because it contains a mathematical algorithm as one component, but because once that algorithm is assumed to be within the prior art, the application, considered as a whole, contains no patentable invention. Even though a phenomenon of nature or mathematical formula may be well known, an inventive application of the principle may be patented. Conversely, the discovery of such a phenomenon cannot support a patent unless there is some other inventive concept in its application. Here it is absolutely clear that respondent's application contains no claim of patentable invention. The chemical processes involved in catalytic conversion of hydrocarbons are well known, as are the practice of monitoring the chemical process variables, the use of alarm limits to trigger alarms, the notion that alarm limit values must be recomputed and readjusted, and the use of computers for "automatic monitoring-alarming." Respondent's application simply provides a new and presumably better method for calculating alarm limit values. If we assume that that method was also known, as we must under the reasoning in Morse, then respondent's claim is, in effect, comparable to a claim that the formula 2(pi)r can be usefully applied in determining the circumference of a wheel. As the Court of Customs and Patent Appeals has explained, "if a claim is directed essentially to a method of calculating, using a mathematical formula, even if the solution is for a specific purpose, the claimed method is nonstatutory." In re Richman, 563 F.2d 1026, 1030 (1977). **** Reversed. MR. JUSTICE STEWART, with whom THE CHIEF JUSTICE and MR. JUSTICE REHNQUIST join, dissenting. It is commonplace that laws of nature, physical phenomena, and abstract ideas are not patentable subject matter. A patent could not issue, in other words, on the law of gravity, or the multiplication tables, or the phenomena of magnetism, or the fact that water at sea level boils at 100 degrees centigrade and freezes at zero—even though newly discovered. Le Roy v. Tatham, 14 How. 156, 175; O'Reilly v. Morse, 15 How. 62, 112-121; Rubber-Tip Pencil Co. v. Howard, 20 Wall. 498, 507; Tilghman v. Proctor, 102 U.S. 707; Mackay Radio & Telegraph Co. v. Radio Corp. of America, 306 U.S. 86, 94; Funk Bros. Seed Co. v. Kalo Co., 333 U.S. 127, 130. The recent case of Gottschalk v. Benson, 409 U.S. 63, 175 USPQ 673 stands for no more than this long-established principle, which the Court there stated in the following words: "Phenomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work." Id., at 67.

In Benson the Court held unpatentable claims for an algorithm that "were not limited to any particular art or technology, to any particular apparatus or machinery, or to any particular end use." Id., at 64. A patent on such claims, the Court said, "would wholly pre-empt the mathematical formula and practical effect would be a patent on the algorithm itself." Id., at 72. The present case is a far different one. The issue here is whether a claimed process loses its status of subject matter patentability simply because one step in the process would not be patentable subject matter if considered in isolation. The Court of Customs and Patent Appeals held that the process is patentable subject matter, Benson being inapplicable since "[t]he present claims do not preempt the formula or algorithm contained therein, because solution of the algorithm, per se, would not infringe the claims." In re Flook, 559 F.2d 21, 23.

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That decision seems to me wholly in conformity with basic principles of patent law. Indeed, I suppose that thousands of processes and combinations have been patented that contained one or more steps or elements that themselves would have been unpatentable subject matter.3 Eibel Process Co. v. Minnesota & Ontario Paper Co., 261 U.S. 45, is a case in point. There the Court upheld the validity of an improvement patent that made use of the law of gravity, which by itself was clearly unpatentable. See also, e. g., Tilghman v. Proctor, supra. The Court today says it does not turn its back on these well-settled precedents, ante, at 594, but it strikes what seems to me an equally damaging blow at basic principles of patent law by importing into its inquiry under 35 U.S.C. § 101 the criteria of novelty and inventiveness. Section 101 is concerned only with subject matter patentability. Whether a patent will actually issue depends upon the criteria of §§ 102 and 103, which include novelty and inventiveness, among many others. It may well be that under the criteria of §§ 102 and 103 no patent should issue on the process claimed in this case, because of anticipation, abandonment, obviousness, or for some other reason. But in my view the claimed process clearly meets the standards of subject-matter patentability of § 101. In short, I agree with the Court of Customs and Patent Appeals in this case, and with the carefully considered opinions of that court in other cases presenting the same basic issue. See In re Freeman, 573 F.2d 1237; In re Richman, 563 F.2d 1026; In re De Castelet, 562 F.2d 1236; In re Deutsch, 553 F.2d 689; In re Chatfield, 545 F.2d 152. Accordingly, I would affirm the judgment before us.

Diamond v. Diehr 450 U.S. 175, 209 USPQ 1 (1981) JUSTICE REHNQUIST delivered the opinion of the Court. We granted certiorari to determine whether a process for curing synthetic rubber which includes in several of its steps the use of a mathematical formula and a programmed digital computer is patentable subject matter under 35 U.S.C. § 101. I The patent application at issue was filed by the respondents on August 6, 1975. The claimed invention is a process for molding raw, uncured synthetic rubber into cured precision products. The process uses a mold for precisely shaping the uncured material under heat and pressure and then curing the synthetic rubber in the mold so that the product will retain its shape and be functionally operative after the molding is completed. Respondents claim that their process ensures the production of molded articles which are properly cured. Achieving the perfect cure depends upon several factors including the thickness of the article to be molded, the temperature of the molding process, and the amount of time that the article is allowed to remain in the press. It is possible using well-known time, temperature, and cure relationships to calculate by means of the Arrhenius equation when to open the press and remove the cured product. Nonetheless, according to the respondents, the industry has not been able to obtain uniformly accurate cures because the temperature of the molding press could not be precisely measured, thus making it difficult to do the necessary computations to determine cure time. Because the temperature inside the press has heretofore been viewed as an uncontrollable variable, the conventional industry practice has been to calculate the cure time as the shortest time in which all parts of the product will definitely be cured, assuming a reasonable amount of mold-opening time during loading and unloading. But the shortcoming of this practice is that operating with an uncontrollable variable inevitably led in some 3

In Gottschalk v. Benson, the Court equated process and product patents for the purpose of its inquiry: "We dealt there with a `product' claim, while the present case deals with a `process' claim. But we think the same principle applies." 409 U.S., at 67-68.

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instances to overestimating the mold-opening time and overcuring the rubber, and in other instances to underestimating that time and undercuring the product. Respondents characterize their contribution to the art to reside in the process of constantly measuring the actual temperature inside the mold. These temperature measurements are then automatically fed into a computer which repeatedly recalculates the cure time by use of the Arrhenius equation. When the recalculated time equals the actual time that has elapsed since the press was closed, the computer signals a device to open the press. According to the respondents, the continuous measuring of the temperature inside the mold cavity, the feeding of this information to a digital computer which constantly recalculates the cure time, and the signaling by the computer to open the press, are all new in the art. The patent examiner rejected the respondents' claims on the sole ground that they were drawn to nonstatutory subject matter under 35 U.S.C. 101.5 He determined that those steps in respondents' claims that are carried out by a computer under control of a stored program constituted nonstatutory subject matter under this Court's decision in Gottschalk v. Benson, 409 U.S. 63 (1972). The remaining steps—installing rubber in the press and the subsequent closing of the press—were "conventional in nature and necessary to the process and cannot be the basis of patentability." The examiner concluded that respondents' claims defined and sought protection of a computer program for operating a rubber-molding press. The Patent and Trademark Office Board of Appeals agreed with the examiner, but the Court of Customs and Patent Appeals reversed. In re Diehr, 602 F.2d 892 (1979). The court noted that a claim drawn to subject matter otherwise statutory does not become nonstatutory because a computer is involved. The respondents' claims were not directed to a mathematical algorithm or an improved process of calculation but rather recited an improved process for molding rubber articles by solving a practical problem which had arisen in the molding of rubber products. The Government sought certiorari arguing that the decision of the Court of Customs and Patent Appeals was inconsistent with prior decisions of this Court. Because of the importance of the question presented, we granted the writ. 445 U.S. 926 (1980). II Last Term in Diamond v. Chakrabarty, 447 U.S. 303 (1980), this Court discussed the historical purposes of the patent laws and in particular 35 U.S.C. § 101. As in Chakrabarty, we must here construe 35 U.S.C. § 101 which provides: "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 therefrom, subject to the conditions and requirements of this Title." 5

Respondents' application contained 11 different claims. Three examples are claims 1, 2, and 11 which provide: 1. A method of operating a rubber-molding press for precision molded compounds with the aid of a digital computer, comprising: providing said computer with a data base for said press including at least, natural logarithm conversion data (ln), the activation energy constant (C) unique to each batch of said compound being molded, and a constant (x) dependent upon the geometry of the particular mold of the press, initiating an interval timer in said computer upon the closure of the press for monitoring the elapsed time of said closure, constantly determining the temperature (Z) of the mold at a location closely adjacent to the mold cavity in the press during molding, constantly providing the computer with the temperature (Z), repetitively calculating in the computer, at frequent intervals during each cure, the Arrhenius equation for reaction time during the cure, which is ln v=CZ+x where v is the total required cure time, repetitively comparing in the computer at said frequent intervals during the cure each said calculation of the total required cure time calculated with the Arrhenius equation and said elapsed time, and opening the press automatically when a said comparison indicates equivalence.” 2. The method of claim 1 including measuring the activation energy constant for the compound being molded in the press with a rheometer and automatically updating said data base within the computer in the event of changes in the compound being molded in said press as measured by said rheometer. ....

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In cases of statutory construction, we begin with the language of the statute. Unless otherwise defined, "words will be interpreted as taking their ordinary, contemporary, common meaning," Perrin v. United States, 444 U.S. 37, 42 (1979), and, in dealing with the patent laws, we have more than once cautioned that "courts `should not read into the patent laws limitations and conditions which a legislature has not expressed.'" Diamond v. Chakrabarty, supra, at 308, quoting United States v. Dubilier Condenser Corp., 289 U.S. 178, 199 (1933). The Patent Act of 1793 defined statutory subject matter as "any new and useful art, machine, manufacture or composition of matter, or any new or useful improvement [thereof]." Act of Feb. 21, 1793, ch. 11, 1, § 1 Stat. 318. Not until the patent laws were recodified in 1952 did Congress replace the word "art" with the word "process." It is that latter word which we confront today, and in order to determine its meaning we may not be unmindful of the Committee Reports accompanying the 1952 Act which inform us that Congress intended statutory subject matter to "include anything under the sun that is made by man." S. Rep. No. 1979, 82d Cong., 2d Sess., 5 (1952); H. R. Rep. No. 1923, 82d Cong., 2d Sess., 6 (1952). Although the term "process" was not added to 35 U.S.C. § 101 until 1952, a process has historically enjoyed patent protection because it was considered a form of "art" as that term was used in the 1793 Act. In defining the nature of a patentable process, the Court stated: "That a process may be patentable, irrespective of the particular form of the instrumentalities used, cannot be disputed. . . . A process is a mode of treatment of certain materials to produce a given result. It is an act, or a series of acts, performed upon the subject-matter to be transformed and reduced to a different state or thing. If new and useful, it is just as patentable as is a piece of machinery. In the language of the patent law, it is an art. The machinery pointed out as suitable to perform the process may or may not be new or patentable; whilst the process itself may be altogether new, and produce an entirely new result. The process requires that certain things should be done with certain substances, and in a certain order; but the tools to be used in doing this may be of secondary consequence."

Cochrane v. Deener, 94 U.S. 780, 787-788 (1877). Analysis of the eligibility of a claim of patent protection for a "process" did not change with the addition of that term to § 101. Recently, in Gottschalk v. Benson, 409 U.S. 63 (1972), we repeated the above definition recited in Cochrane v. Deener, adding: "Transformation and reduction of an article `to a different state or thing' is the clue to the patentability of a process claim that does not include particular machines." 409 U.S., at 70. Analyzing respondents' claims according to the above statements from our cases, we think that a physical and chemical process for molding precision synthetic rubber products falls within the § 101 categories of possibly patentable subject matter. That respondents' claims involve the transformation of an article, in this case raw, uncured synthetic rubber, into a different state or thing cannot be disputed. The respondents' claims describe in detail a step-by-step method for accomplishing such, beginning with the loading of a mold with raw, uncured rubber and ending with the eventual opening of the press at the conclusion of the cure. Industrial processes such as this are the types which have historically been eligible to receive the protection of our patent laws. III Our conclusion regarding respondents' claims is not altered by the fact that in several steps of the process a mathematical equation and a programmed digital computer are used. This Court has undoubtedly recognized limits to § 101 and every discovery is not embraced within the statutory terms. Excluded from such patent protection are laws of nature, natural phenomena, and abstract ideas. See Parker v. Flook, 437 U.S. 584 (1978); Gottschalk v. Benson, supra, at 67; Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948). "An idea of itself is not patentable," Rubber-Tip Pencil Co. v. Howard, 20 Wall. 498, 507 (1874). "A principle, in the abstract, is a fundamental truth; an original

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cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right." Le Roy v. Tatham, 14 How. 156, 175 (1853). Only last Term, we explained: "[A] new mineral discovered in the earth or a new plant found in the wild is not patentable subject matter. 2 Likewise, Einstein could not patent his celebrated law that E=mc .; nor could Newton have patented the law of gravity. Such discoveries are `manifestations of . . . nature, free to all men and reserved exclusively to none.'" Diamond v. Chakrabarty, 447 U.S., at 309, quoting Funk Bros. Seed Co. v. Kalo Inoculant Co., supra, at 130.

Our recent holdings in Gottschalk v. Benson, supra, and Parker v. Flook, supra, both of which are computer-related, stand for no more than these long-established principles. In Benson, we held unpatentable claims for an algorithm used to convert binary code decimal numbers to equivalent pure binary numbers. The sole practical application of the algorithm was in connection with the programming of a general purpose digital computer. We defined "algorithm" as a "procedure for solving a given type of mathematical problem," and we concluded that such an algorithm, or mathematical formula, is like a law of nature, which cannot be the subject of a patent. Parker v. Flook, supra, presented a similar situation. The claims were drawn to a method for computing an "alarm limit." An "alarm limit" is simply a number and the Court concluded that the application sought to protect a formula for computing this number. Using this formula, the updated alarm limit could be calculated if several other variables were known. The application, however, did not purport to explain how these other variables were to be determined, nor did it purport "to contain any disclosure relating to the chemical processes at work, the monitoring of process variables, or the means of setting off an alarm or adjusting an alarm system. All that it provides is a formula for computing an updated alarm limit." 437 U.S., at 586. In contrast, the respondents here do not seek to patent a mathematical formula. Instead, they seek patent protection for a process of curing synthetic rubber. Their process admittedly employs a wellknown mathematical equation, but they do not seek to pre-empt the use of that equation. Rather, they seek only to foreclose from others the use of that equation in conjunction with all of the other steps in their claimed process. These include installing rubber in a press, closing the mold, constantly determining the temperature of the mold, constantly recalculating the appropriate cure time through the use of the formula and a digital computer, and automatically opening the press at the proper time. Obviously, one does not need a "computer" to cure natural or synthetic rubber, but if the computer use incorporated in the process patent significantly lessens the possibility of "overcuring" or "undercuring," the process as a whole does not thereby become unpatentable subject matter. Our earlier opinions lend support to our present conclusion that a claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula, computer program, or digital computer. In Gottschalk v. Benson we noted: "It is said that the decision precludes a patent for any program servicing a computer. We do not so hold." 409 U.S., at 71. Similarly, in Parker v. Flook we stated that "A process is not unpatentable simply because it contains a law of nature or a mathematical algorithm." 437 U.S., at 590. It is now commonplace that an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection. See, e. g., Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948); Eibel Process Co. v. Minnesota & Ontario Paper Co., 261 U.S. 45 (1923); Cochrane v. Deener, 94 U.S. 780 (1877); O'Reilly v. Morse, 15 How. 62 (1854); and Le Roy v. Tatham, 14 How. 156 (1853). As Justice Stone explained four decades ago: "While a scientific truth, or the mathematical expression of it, is not a patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be." Mackay Radio & Telegraph Co. v. Radio Corp. of America, 306 U.S. 86, 94 (1939).

We think this statement in Mackay takes us a long way toward the correct answer in this case. Arrhenius' equation is not patentable in isolation, but when a process for curing rubber is devised which incorporates in it a more efficient solution of the equation, that process is at the very least not barred at the threshold by § 101. Chapter 5 – Statutory Subject Matter & Practical Utility

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In determining the eligibility of respondents' claimed process for patent protection under § 101, their claims must be considered as a whole. It is inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the analysis. This is particularly true in a process claim because a new combination of steps in a process may be patentable even though all the constituents of the combination were well known and in common use before the combination was made. The "novelty" of any element or steps in a process, or even of the process itself, is of no relevance in determining whether the subject matter of a claim falls within the § 101 categories of possibly patentable subject matter. It has been urged that novelty is an appropriate consideration under § 101. Presumably, this argument results from the language in § 101 referring to any "new and useful" process, machine, etc. Section 101, however, is a general statement of the type of subject matter that is eligible for patent protection "subject to the conditions and requirements of this title." Specific conditions for patentability follow and § 102 covers in detail the conditions relating to novelty. The question therefore of whether a particular invention is novel is "wholly apart from whether the invention falls into a category of statutory subject matter." In re Bergy, 596 F.2d 952, 961 (CCPA 1979) (emphasis deleted). . . . **** IV We have before us today only the question of whether respondents' claims fall within the § 101 categories of possibly patentable subject matter. We view respondents' claims as nothing more than a process for molding rubber products and not as an attempt to patent a mathematical formula. We recognize, of course, that when a claim recites a mathematical formula (or scientific principle or phenomenon of nature), an inquiry must be made into whether the claim is seeking patent protection for that formula in the abstract. A mathematical formula as such is not accorded the protection of our patent laws, Gottschalk v. Benson, 409 U.S. 63 (1972), and this principle cannot be circumvented by attempting to limit the use of the formula to a particular technological environment. Parker v. Flook, 437 U.S. 584 (1978). Similarly, insignificant post-solution activity will not transform an unpatentable principle into a patentable process. Ibid.14 To hold otherwise would allow a competent draftsman to evade the recognized limitations on the type of subject matter eligible for patent protection. On the other hand, when a claim containing a mathematical formula implements or applies that formula in a structure or process which, when considered as a whole, is performing a function which the patent laws were designed to protect (e. g., transforming or reducing an article to a different state or thing), then the claim satisfies the requirements of § 101. Because we do not view respondents' claims as an attempt to patent a mathematical formula, but rather to be drawn to an industrial process for the molding of rubber products, we affirm the judgment of the Court of Customs and Patent Appeals.

14

Arguably, the claims in Flook did more than present a mathematical formula. The claims also solved the calculation in order to produce a new number or "alarm limit" and then replaced the old number with the number newly produced. The claims covered all uses of the formula in processes "comprising the catalytic chemical conversion of hydrocarbons." There are numerous such processes in the petrochemical and oil refinery industries and the claims therefore covered a broad range of potential uses. 437 U.S., at 586. The claims, however, did not cover every conceivable application of the formula. We rejected in Flook the argument that because all possible uses of the mathematical formula were not preempted, the claim should be eligible for patent protection. Our reasoning in Flook is in no way inconsistent with our reasoning here. A mathematical formula does not suddenly become patentable subject matter simply by having the applicant acquiesce to limiting the reach of the patent for the formula to a particular technological use. A mathematical formula in the abstract is nonstatutory subject matter regardless of whether the patent is intended to cover all uses of the formula or only limited uses. Similarly, a mathematical formula does not become patentable subject matter merely by including in the claim for the formula token postsolution activity such as the type claimed in Flook. We were careful to note in Flook that the patent application did not purport to explain how the variables used in the formula were to be selected, nor did the application contain any disclosure relating to chemical processes at work or the means of setting off an alarm or adjusting the alarm limit. Ibid. All the application provided was a "formula for computing an updated alarm limit." Ibid.

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JUSTICE STEVENS, with whom JUSTICE BRENNAN, JUSTICE MARSHALL, and JUSTICE BLACKMUN join, dissenting. The starting point in the proper adjudication of patent litigation is an understanding of what the inventor claims to have discovered. The Court's decision in this case rests on a misreading of the Diehr and Lutton patent application. Moreover, the Court has compounded its error by ignoring the critical distinction between the character of the subject matter that the inventor claims to be novel - the 101 issue—and the question whether that subject matter is in fact novel—the § 102 issue. I **** II As I stated at the outset, the starting point in the proper adjudication of patent litigation is an understanding of what the inventor claims to have discovered. Indeed, the outcome of such litigation is often determined by the judge's understanding of the patent application. This is such a case. In the first sentence of its opinion, the Court states the question presented as "whether a process for curing synthetic rubber . . . is patentable subject matter." Ante, at 177. Of course, that question was effectively answered many years ago when Charles Goodyear obtained his patent on the vulcanization process. The patent application filed by Diehr and Lutton, however, teaches nothing about the chemistry of the synthetic rubber-curing process, nothing about the raw materials to be used in curing synthetic rubber, nothing about the equipment to be used in the process, and nothing about the significance or effect of any process variable such as temperature, curing time, particular compositions of material, or mold configurations. In short, Diehr and Lutton do not claim to have discovered anything new about the process for curing synthetic rubber. As the Court reads the claims in the Diehr and Lutton patent application, the inventors' discovery is a method of constantly measuring the actual temperature inside a rubber molding press. As I read the claims, their discovery is an improved method of calculating the time that the mold should remain closed during the curing process. If the Court's reading of the claims were correct, I would agree that they disclose patentable subject matter. On the other hand, if the Court accepted my reading, I feel confident that the case would be decided differently. **** III The Court misapplies Parker v. Flook because, like the Court of Customs and Patent Appeals, it fails to understand or completely disregards the distinction between the subject matter of what the inventor claims to have discovered—the 101 issue—and the question whether that claimed discovery is in fact novel - the 102 issue. 34 If there is not even a claim that anything constituting patentable subject matter has been discovered, there is no occasion to address the novelty issue. Or, as was true in Flook, if the only concept that the inventor claims to have discovered is not patentable subject matter, § 101 requires that the application be rejected without reaching any issue under § 102; for it is irrelevant that unpatentable subject matter—in that case a formula for updating alarm limits—may in fact be novel.

34

The early cases that the Court of Customs and Patent Appeals refused to follow in Prater, Musgrave, and Benson had recognized the distinction between the 101 requirement that what the applicant claims to have invented must be patentable subject matter and the 102 requirement that the invention must actually be novel. See, e. g., In re Shao Wen Yuan, 38 C. C. P. A. (Pat.), at 973-976, 188 F.2d, at 382-383; In re Abrams , 38 C. C. P. A. (Pat.), at 951-952, 188 F.2d, at 169; In re Heritage, 32 C. C. P. A. (Pat.), at 1173-1174, 1176-1177, 150 F.2d, at 556, 558; Halliburton Oil Well Cementing Co. v. Walker, 146 F.2d, at 821, 823. The lower court's error in this case, and its unenthusiastic reception of Gottschalk v. Benson and Parker v. Flook, is, of course, consistent with its expansive reading of 101 in Tarczy-Hornoch, Prater, and their progeny.

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Proper analysis, therefore, must start with an understanding of what the inventor claims to have discovered—or phrased somewhat differently—what he considers his inventive concept to be. It seems clear to me that Diehr and Lutton claim to have developed a new method of programming a digital computer in order to calculate—promptly and repeatedly—the correct curing time in a familiar process. In the § 101 analysis, we must assume that the sequence of steps in this programming method is novel, unobvious, and useful. The threshold question of whether such a method is patentable subject matter remains. If that method is regarded as an "algorithm" as that term was used in Gottschalk v. Benson, 409 U.S. 63 (1972), and in Parker v. Flook, 437 U.S. 584 (1978), and if no other inventive concept is disclosed in the patent application, the question must be answered in the negative. In both Benson and Flook, the parties apparently agreed that the inventor's discovery was properly regarded as an algorithm; the holding that an algorithm was a "law of nature" that could not be patented therefore determined that those discoveries were not patentable processes within the meaning of § 101. As the Court recognizes today, Flook also rejected the argument that patent protection was available if the inventor did not claim a monopoly on every conceivable use of the algorithm but instead limited his claims by describing a specific postsolution activity—in that case setting off an alarm in a catalytic conversion process. In its effort to distinguish Flook from the instant case, the Court characterizes that post-solution activity as "insignificant," ante, at 191, or as merely "token" activity, ante, at 192, n. 14. As a practical matter, however, the post-solution activity described in the Flook application was no less significant than the automatic opening of the curing mold involved in this case. For setting off an alarm limit at the appropriate time is surely as important to the safe and efficient operation of a catalytic conversion process as is actuating the mold-opening device in a synthetic rubber curing process. In both cases, the post-solution activity is a significant part of the industrial process. But in neither case should that activity have any legal significance because it does not constitute a part of the inventive concept that the applicants claimed to have discovered. In Gottschalk v. Benson, we held that a program for the solution by a digital computer of a mathematical problem was not a patentable process within the meaning of § 101. In Parker v. Flook, we further held that such a computer program could not be transformed into a patentable process by the addition of postsolution activity that was not claimed to be novel. That holding plainly requires the rejection of Claims 1 and 2 of the Diehr and Lutton application quoted in the Court's opinion. Ante, at 179-180, n. 5. In my opinion, it equally requires rejection of Claim 11 because the presolution activity described in that claim is admittedly a familiar part of the prior art. Even the Court does not suggest that the computer program developed by Diehr and Lutton is a patentable discovery. Accordingly, if we treat the program as though it were a familiar part of the prior art—as well-established precedent requires—it is absolutely clear that their application contains no claim of patentable invention. Their application was therefore properly rejected under § 101 by the Patent Office and the Board of Patent Appeals. ****

The Federal Circuit and Section 101

In re Allapat 33 F.3d 1526; 31 USPQ2d 1545 (Fed. Cir. 1995) (in banc)

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Before ARCHER, Chief Judge, and RICH, NIES, NEWMAN, MAYER, MICHEL, PLAGER, LOURIE, CLEVENGER, RADER and SCHALL, Circuit Judges. RICH, Circuit Judge: **** II. THE MERITS[*] Our conclusion is that the appealed decision should be reversed because the appealed claims are directed to a "machine" which is one of the categories named in 35 U.S.C. § 101, as the first panel of the Board held. A. Alappat's Invention Alappat's invention relates generally to a means for creating a smooth waveform display in a digital oscilloscope. The screen of an oscilloscope is the front of a cathode-ray tube (CRT), which is like a TV picture tube, whose screen, when in operation, presents an array (or raster) of pixels arranged at intersections of vertical columns and horizontal rows, a pixel being a spot on the screen which may be illuminated by directing an electron beam to that spot, as in TV. Each column in the array represents a different time period, and each row represents a different magnitude. An input signal to the oscilloscope is sampled and digitized to provide a waveform data sequence (vector list), wherein each successive element of the sequence represents the magnitude of the waveform at a successively later time. The waveform data sequence is then processed to provide a bit map, which is a stored data array indicating which pixels are to be illuminated. The waveform ultimately displayed is formed by a group of vectors, wherein each vector has a straight line trajectory between two points on the screen at elevations representing the magnitudes of two successive input signal samples and at horizontal positions representing the timing of the two samples. Because a CRT screen contains a finite number of pixels, rapidly rising and falling portions of a waveform can appear discontinuous or jagged due to differences in the elevation of horizontally contiguous pixels included in the waveform. In addition, the presence of "noise" in an input signal can cause portions of the waveform to oscillate between contiguous pixel rows when the magnitude of the input signal lies between values represented by the elevations of the two rows. Moreover, the vertical resolution of the display may be limited by the number of rows of pixels on the screen. The noticeability and appearance of these effects is known as aliasing. To overcome these effects, Alappat's invention employs an anti-aliasing system wherein each vector making up the waveform is represented by modulating the illumination intensity of pixels having center points bounding the trajectory of the vector. The intensity at which each of the pixels is illuminated depends upon the distance of the center point of each pixel from the trajectory of the vector. Pixels lying squarely on the waveform trace receive maximum illumination, whereas pixels lying along an edge of the trace receive illumination decreasing in intensity proportional to the increase in the distance of the center point of the pixel from the vector trajectory. Employing this anti-aliasing technique eliminates any apparent discontinuity, jaggedness, or oscillation in the waveform, thus giving the visual appearance of a smooth continuous waveform. In short, and in lay terms, the invention is an improvement in an oscilloscope comparable to a TV having a clearer picture.

[*]

[Judges Newman, Lourie, Michel, Plager, and Roder joined this portion of the opinion. dissented. Judges Mayer, Clevenger, and Schall took no position.]

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**** D. Analysis **** (2) Section 101 The reconsideration Board majority affirmed the Examiner's rejection of claims 15-19 on the basis that these claims are not directed to statutory subject matter as defined in § 101, which reads: 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. [Emphasis ours.]

**** [C]laim 15, properly construed, claims a machine, namely, a rasterizer "for converting vector list data representing sample magnitudes of an input waveform into anti-aliased pixel illumination intensity data to be displayed on a display means," which machine is made up of, at the very least, the specific structures disclosed in Alappat's specification corresponding to the means-plus-function elements (a)(d) recited in the claim. According to Alappat, the claimed rasterizer performs the same overall function as prior art rasterizers, but does so in a different way, which is represented by the combination of four elements claimed in means-plus-function terminology. Because claim 15 is directed to a "machine," which is one of the four categories of patentable subject matter enumerated in § 101, claim 15 appears on its face to be directed to § 101 subject matter. This does not quite end the analysis, however, because the Board majority argues that the claimed subject matter falls within a judicially created exception to § 101 which the majority refers to as the "mathematical algorithm" exception. . . . (a) The plain and unambiguous meaning of § 101 is that any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may be patented if it meets the requirements for patentability set forth in Title 35, such as those found in §§ 102, 103, and 112. The use of the expansive term "any" in § 101 represents Congress's intent not to place any restrictions on the subject matter for which a patent may be obtained beyond those specifically recited in § 101 and the other parts of Title 35. Indeed, the Supreme Court has acknowledged that Congress intended § 101 to extend to "anything under the sun that is made by man." Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980), quoting S.Rep. No. 1979, 82nd Cong., 2nd Sess., 5 (1952); H.R.Rep. No. 1923, 82nd Cong., 2nd Sess., 6 (1952). Thus, it is improper to read into § 101 limitations as to the subject matter that may be patented where the legislative history does not indicate that Congress clearly intended such limitations. See Chakrabarty, 447 U.S. at 308, ("We have also cautioned that courts 'should not read into the patent laws limitations and conditions which the legislature has not expressed.' "), quoting United States v. Dubilier Condenser Corp., 289 U.S. 178, 199, (1933). Despite the apparent sweep of § 101, the Supreme Court has held that certain categories of subject matter are not entitled to patent protection. In Diamond v. Diehr, 450 U.S. 175 (1981), its most recent Chapter 5 – Statutory Subject Matter & Practical Utility

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case addressing § 101, the Supreme Court explained that there are three categories of subject matter for which one may not obtain patent protection, namely "laws of nature, natural phenomena, and abstract ideas." Diehr, 450 U.S. at 185. Of relevance to this case, the Supreme Court also has held that certain mathematical subject matter is not, standing alone, entitled to patent protection. See Diehr, 450 U.S. 175; Parker v. Flook, 437 U.S. 584; Gottschalk v. Benson, 409 U.S. 63. A close analysis of Diehr, Flook, and Benson reveals that the Supreme Court never intended to create an overly broad, fourth category of subject matter excluded from § 101. Rather, at the core of the Court's analysis in each of these cases lies an attempt by the Court to explain a rather straightforward concept, namely, that certain types of mathematical subject matter, standing alone, represent nothing more than abstract ideas until reduced to some type of practical application, and thus that subject matter is not, in and of itself, entitled to patent protection. Diehr also demands that the focus in any statutory subject matter analysis be on the claim as a whole. Indeed, the Supreme Court stated in Diehr: [W]hen a claim containing a mathematical formula [, mathematical equation, mathematical algorithm, or the like,] implements or applies that formula [, equation, algorithm, or the like,] in a structure or process which, when considered as a whole, is performing a function which the patent laws were designed to protect (e.g., transforming or reducing an article to a different state or thing), then the claim satisfies the requirements of § 101.

Diehr, 450 U.S. at 192 (emphasis added). In re Iwahashi, 888 F.2d at 1375, 12 USPQ2d at 1911; In re Taner, 681 F.2d 787, 789, 214 USPQ 678, 680 (CCPA 1982). It is thus not necessary to determine whether a claim contains, as merely a part of the whole, any mathematical subject matter which standing alone would not be entitled to patent protection. Indeed, because the dispositive inquiry is whether the claim as a whole is directed to statutory subject matter, it is irrelevant that a claim may contain, as part of the whole, subject matter which would not be patentable by itself. "A claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula, [mathematical equation, mathematical algorithm,] computer program or digital computer." Diehr, 450 U.S. at 187. (b) Given the foregoing, the proper inquiry in dealing with the so called mathematical subject matter exception to § 101 alleged herein is to see whether the claimed subject matter as a whole is a disembodied mathematical concept, whether categorized as a mathematical formula, mathematical equation, mathematical algorithm, or the like, which in essence represents nothing more than a "law of nature," "natural phenomenon," or "abstract idea." If so, Diehr precludes the patenting of that subject matter. That is not the case here. Although many, or arguably even all, of the means elements recited in claim 15 represent circuitry elements that perform mathematical calculations, which is essentially true of all digital electrical circuits, the claimed invention as a whole is directed to a combination of interrelated elements which combine to form a machine for converting discrete waveform data samples into anti-aliased pixel illumination intensity data to be displayed on a display means. This is not a disembodied mathematical concept which may be characterized as an "abstract idea," but rather a specific machine to produce a useful, concrete, and tangible result. The fact that the four claimed means elements function to transform one set of data to another through what may be viewed as a series of mathematical calculations does not alone justify a holding that the claim as a whole is directed to nonstatutory subject matter. See In re Iwahashi, 888 F.2d at 1375, 12 USPQ2d at 1911. Indeed, claim 15 as written is not "so abstract and sweeping" that it would "wholly pre-empt" the use of any apparatus employing the combination of mathematical calculations recited therein. See Benson, 409 U.S. at 68-72 (1972). Rather, claim 15 is limited to the use of a particularly claimed combination of elements performing the particularly claimed combination of calculations to transform, i.e., rasterize, digitized waveforms (data) into anti-aliased, pixel illumination data to produce a smooth waveform. Chapter 5 – Statutory Subject Matter & Practical Utility

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Furthermore, the claim preamble's recitation that the subject matter for which Alappat seeks patent protection is a rasterizer for creating a smooth waveform is not a mere field-of-use label having no significance. Indeed, the preamble specifically recites that the claimed rasterizer converts waveform data into output illumination data for a display, and the means elements recited in the body of the claim make reference not only to the inputted waveform data recited in the preamble but also to the output illumination data also recited in the preamble. Claim 15 thus defines a combination of elements constituting a machine for producing an anti-aliased waveform. **** CONCLUSION For the foregoing reasons, the appealed decision of the Board affirming the examiner's rejection is REVERSED. **** PAULINE NEWMAN, Circuit Judge, concurring. I I join the opinion authored for the court by Judge Rich. I write separately to state additional views on the basic question of this case: that of statutory subject matter. . . . II Phenomena of nature and abstract scientific and mathematical principles have always been excluded from the patent system. Some have justified this exclusion simply on the ground of lack of "utility"; some on the ground of lack of "novelty"; and some on the ground that laws of nature, albeit newly discovered, are the heritage of humankind. On whatever theory, the unpatentability of the principle does not defeat patentability of its practical applications. See, e.g., O'Reilly v. Morse, 56 U.S. (15 How.) 62 (1854). Most technologic inventions involve the application of scientific principles and phenomena of nature to specific purposes. It is these purposes that are the subject matter of 35 U.S.C. § 101, and we need not decide such interesting epistemological questions as whether mathematical formulae exist in nature, or are created by mathematicians in the way that chemical compounds are created by chemists. However, the distinction between principle and practice was not observed in the Board's decision on Mr. Alappat's invention. The theme underlying the Board's rejection of the Alappat claims was that since mathematical steps were involved, and were performable by computer, Alappat was claiming a mathematical algorithm such as was held unpatentable in Gottschalk v. Benson, 409 U.S. 63, 175 USPQ 673 (1972). However, as is explained by Judge Rich, Alappat is claiming a rasterizer of an oscilloscope and similar devices of applied technology. The flaw contained in the Board's premise as applied to Alappat was recognized in Diamond v. Diehr, 450 U.S. 175, 209 USPQ 1 (1981), the Court explaining that "A claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula, computer program or digital computer." Id. at 187, 209 USPQ at 8. It is conspicuous that the Board in its opinion cited only Benson, suggesting a failure of appreciation of the evolution in Supreme Court and this court's jurisprudence. **** Devices that work by way of digital electronics are not excluded from the patent system simply because their mechanism of operation can be represented by mathematical formulae. The output of an electronic device or circuit may be approximated to any required degree as a mathematical function of its current state and its inputs; some devices, such as the transistor, embody remarkably elementary mathematical functions. Principles of mathematics, like principles of chemistry, are "basic tools of scientific and technological work". Benson, 409 U.S. at 67. Such principles are indeed the subject matter of pure science. But they are also the subject matter of applied technology. Chapter 5 – Statutory Subject Matter & Practical Utility

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**** RADER, Circuit Judge, concurring. I join Judge Rich's opinion holding that this court has subject matter jurisdiction over this appeal and reversing the reconstituted Board of Patent Appeals and Interferences' decision on the merits. While I fully agree with Judge Rich that Alappat's claimed invention falls squarely within the scope of 35 U.S.C. § 101 (1988), I write to clarify that this conclusion does not hinge on whether Alappat's invention is classified as machine or process under section 101. **** Judge Rich, with whom I fully concur, reads Alappat's application as claiming a machine. In fact, whether the invention is a process or a machine is irrelevant. The language of the Patent Act itself, as well as Supreme Court rulings, clarifies that Alappat's invention fits comfortably within 35 U.S.C. § 101 whether viewed as a process or a machine. Section 101 of the Patent Act states: 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.

Any new and useful process, machine, article of manufacture, or composition of matter, including improvements, may thus receive patent protection. Section 101 explicitly covers both processes and machines. Furthermore, according to the Supreme Court, "any" is an expansive term encompassing " 'anything under the sun that is made by man.' " Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980) (quoting S.Rep. No. 1979, 82d Cong., 2d Sess. 5 (1952); H.R.Rep. No. 1923, 82d Cong., 2d Sess. 6 (1952)). Section 101 does not suggest that patent protection extends to some subcategories of processes or machines and not to others. The Act simply does not extend coverage to some new and useful inventions and deny it to others. Indeed, the Supreme Court has clarified that section 101 means what it says: any new and useful invention is entitled to patent protection, subject to the remaining statutory conditions for patentability. See Diamond v. Diehr, 450 U.S. 175, 182 (1981). In determining what qualifies as patentable subject matter, the Supreme Court has drawn the distinction between inventions and mere discoveries. On the unpatentable discovery side fall "laws of nature, natural phenomena, and abstract ideas." Diehr, 450 U.S. at 185. On the patentable invention side fall anything that is "not nature's handiwork, but [the inventor's] own." Chakrabarty, 447 U.S. at 310. While Judge Rich correctly applies these principles to machines, they apply with equal force to processes. **** The Supreme Court's Diehr doctrine in effect recognizes that inventors are their own lexicographers. Therefore, inventors may express their inventions in any manner they see fit, including mathematical symbols and algorithms. Whether an inventor calls the invention a machine or a process is not nearly as important as the invention itself. Thus, the inventor can describe the invention in terms of a dedicated circuit or a process that emulates that circuit. Indeed, the line of demarcation between a dedicated circuit and a computer algorithm accomplishing the identical task is frequently blurred and is becoming increasingly so as the technology develops. In this field, a software process is often interchangeable with a hardware circuit. Thus, the Board's insistence on reconstruing Alappat's machine claims as processes is misguided when the technology recognizes no difference and the Patent Act treats both as patentable subject matter. ****

State Street Bank & Trust Co. v. Signature Financial Group, Inc. 149 F.3d 1368 (Fed. Cir. 1998), cert. denied, 119 S. Ct. 851, 47 USPQ2d 1596 (1999) Before RICH, PLAGER, and BRYSON, Circuit Judges.

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RICH, Circuit Judge. Signature Financial Group, Inc. (Signature) appeals from the decision of the United States District Court for the District of Massachusetts granting a motion for summary judgment in favor of State Street Bank & Trust Co. (State Street), finding U.S. Patent No. 5,193,056 (the '056 patent) invalid on the ground that the claimed subject matter is not encompassed by 35 U.S.C. § 101 (1994). See State Street Bank & Trust Co. v. Signature Financial Group, Inc., 927 F. Supp. 502, 38 USPQ2d 1530 (D. Mass. 1996). We reverse and remand because we conclude that the patent claims are directed to statutory subject matter. BACKGROUND Signature is the assignee of the '056 patent which is entitled "Data Processing System for Hub and Spoke Financial Services Configuration." The '056 patent issued to Signature on 9 March 1993, naming R. Todd Boes as the inventor. The '056 patent is generally directed to a data processing system (the system) for implementing an investment structure which was developed for use in Signature's business as an administrator and accounting agent for mutual funds. In essence, the system, identified by the proprietary name Hub and Spoke®, facilitates a structure whereby mutual funds (Spokes) pool their assets in an investment portfolio (Hub) organized as a partnership. This investment configuration provides the administrator of a mutual fund with the advantageous combination of economies of scale in administering investments coupled with the tax advantages of a partnership. State Street and Signature are both in the business of acting as custodians and accounting agents for multi-tiered partnership fund financial services. State Street negotiated with Signature for a license to use its patented data processing system described and claimed in the '056 patent. When negotiations broke down, State Street brought a declaratory judgment action asserting invalidity, unenforceability, and noninfringement in Massachusetts district court, and then filed a motion for partial summary judgment of patent invalidity for failure to claim statutory subject matter under § 101. The motion was granted and this appeal followed. DISCUSSION . . . . We hold that declaratory judgment plaintiff State Street was not entitled to the grant of summary judgment of invalidity of the '056 patent under § 101 as a matter of law, because the patent claims are directed to statutory subject matter. **** The district court began its analysis by construing the claims to be directed to a process, with each "means" clause merely representing a step in that process. However, "machine" claims having "means" clauses may only be reasonably viewed as process claims if there is no supporting structure in the written description that corresponds to the claimed "means" elements. See In re Alappat, 33 F.3d 1526, 1540-41, 31 USPQ2d 1545, 1554 (Fed. Cir. 1994) (in banc). This is not the case now before us. When independent claim 1 is properly construed in accordance with § 112, ¶ 6, it is directed to a machine, as demonstrated below, where representative claim 1 is set forth, the subject matter in brackets stating the structure the written description discloses as corresponding to the respective "means" recited in the claims. 1. A data processing system for managing a financial services configuration of a portfolio established as a partnership, each partner being one of a plurality of funds, comprising: a. computer processor means [a personal computer including a CPU] for processing data; b. storage means [a data disk] for storing data on a storage medium; c. first means [an arithmetic logic circuit configured to prepare the data disk to magnetically store selected data] for initializing the storage medium;

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d. second means [an arithmetic logic circuit configured to retrieve information from a specific file, calculate incremental increases or decreases based on specific input, allocate the results on a percentage basis, and store the output in a separate file] for processing data regarding assets in the portfolio and each of the funds from a previous day and data regarding increases or decreases in each of the funds, [sic, funds'] assets and for allocating the percentage share that each fund holds in the portfolio; e. third means [an arithmetic logic circuit configured to retrieve information from a specific file, calculate incremental increases and decreases based on specific input, allocate the results on a percentage basis and store the output in a separate file] for processing data regarding daily incremental income, expenses, and net realized gain or loss for the portfolio and for allocating such data among each fund; f. fourth means [an arithmetic logic circuit configured to retrieve information from a specific file, calculate incremental increases and decreases based on specific input, allocate the results on a percentage basis and store the output in a separate file] for processing data regarding daily net unrealized gain or loss for the portfolio and for allocating such data among each fund; and g. fifth means [an arithmetic logic circuit configured to retrieve information from specific files, calculate that information on an aggregate basis and store the output in a separate file] for processing data regarding aggregate year-end income, expenses, and capital gain or loss for the portfolio and each of the funds.

Each claim component, recited as a "means" plus its function, is to be read, of course, pursuant to §112, ¶ 6, as inclusive of the "equivalents" of the structures disclosed in the written description portion of the specification. Thus, claim 1, properly construed, claims a machine, namely, a data processing system for managing a financial services configuration of a portfolio established as a partnership, which machine is made up of, at the very least, the specific structures disclosed in the written description and corresponding to the means-plus-function elements (a)-(g) recited in the claim. A "machine" is proper statutory subject matter under § 101. We note that, for the purposes of a § 101 analysis, it is of little relevance whether claim 1 is directed to a "machine" or a "process," as long as it falls within at least one of the four enumerated categories of patentable subject matter, "machine" and "process" being such categories. This does not end our analysis, however, because the court concluded that the claimed subject matter fell into one of two alternative judicially-created exceptions to statutory subject matter. The court refers to the first exception as the "mathematical algorithm" exception and the second exception as the "business method" exception. Section 101 reads: 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.

The plain and unambiguous meaning of § 101 is that any invention falling within one of the four stated categories of statutory subject matter may be patented, provided it meets the other requirements for patentability set forth in Title 35, i.e., those found in §§ 102, 103, and 112, ¶2. The repetitive use of the expansive term "any" in § 101 shows Congress's intent not to place any restrictions on the subject matter for which a patent may be obtained beyond those specifically recited in § 101. Indeed, the Supreme Court has acknowledged that Congress intended § 101 to extend to "anything under the sun that is made by man." Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980); see also Diamond v. Diehr, 450 U.S. 175, 182 (1981). Thus, it is improper to read limitations into § 101 on the subject matter that may be patented where the legislative history indicates that Congress clearly did not intend such limitations. See Chakrabarty, 447 U.S. at 308 ("We have also cautioned that courts 'should not read into the patent laws limitations and conditions which the legislature has not expressed.'" (citations omitted)). The "Mathematical Algorithm" Exception The Supreme Court has identified three categories of subject matter that are unpatentable, namely "laws of nature, natural phenomena, and abstract ideas." Diehr, 450 U.S. at 185. Of particular Chapter 5 – Statutory Subject Matter & Practical Utility

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relevance to this case, the Court has held that mathematical algorithms are not patentable subject matter to the extent that they are merely abstract ideas. See Diehr, 450 U.S. 175, passim; Parker v. Flook, 437 U.S. 584 (1978); Gottschalk v. Benson, 409 U.S. 63 (1972). In Diehr, the Court explained that certain types of mathematical subject matter, standing alone, represent nothing more than abstract ideas until reduced to some type of practical application, i.e., "a useful, concrete and tangible result." Alappat, 33 F.3d at 1544, 31 USPQ2d at 1557. Unpatentable mathematical algorithms are identifiable by showing they are merely abstract ideas constituting disembodied concepts or truths that are not "useful." From a practical standpoint, this means that to be patentable an algorithm must be applied in a "useful" way. In Alappat, we held that data, transformed by a machine through a series of mathematical calculations to produce a smooth waveform display on a rasterizer monitor, constituted a practical application of an abstract idea (a mathematical algorithm, formula, or calculation), because it produced "a useful, concrete and tangible result"--the smooth waveform. Similarly, in Arrythmia Research Technology Inc. v. Corazonix Corp., 958 F.2d 1053, 22 USPQ2d 1033 (Fed. Cir. 1992), we held that the transformation of electrocardiograph signals from a patient's heartbeat by a machine through a series of mathematical calculations constituted a practical application of an abstract idea (a mathematical algorithm, formula, or calculation), because it corresponded to a useful, concrete or tangible thing--the condition of a patient's heart. Today, we hold that the transformation of data, representing discrete dollar amounts, by a machine through a series of mathematical calculations into a final share price, constitutes a practical application of a mathematical algorithm, formula, or calculation, because it produces "a useful, concrete and tangible result"—a final share price momentarily fixed for recording and reporting purposes and even accepted and relied upon by regulatory authorities and in subsequent trades. The district court erred by applying the Freeman-Walter-Abele test to determine whether the claimed subject matter was an unpatentable abstract idea. The Freeman-Walter-Abele test was designed by the Court of Customs and Patent Appeals, and subsequently adopted by this court, to extract and identify unpatentable mathematical algorithms in the aftermath of Benson and Flook. See In re Freeman, 573 F.2d 1237, 197 USPQ 464 (CCPA 1978) as modified by In re Walter, 618 F.2d 758, 205 USPQ 397 (CCPA 1980). The test has been thus articulated: First, the claim is analyzed to determine whether a mathematical algorithm is directly or indirectly recited. Next, if a mathematical algorithm is found, the claim as a whole is further analyzed to determine whether the algorithm is "applied in any manner to physical elements or process steps," and, if it is, it "passes muster under § 101."

In re Pardo, 684 F.2d 912, 915, 214 USPQ 673, 675-76 (CCPA 1982) (citing In re Abele, 684 F.2d 902, 214 USPQ 682 (CCPA 1982)). After Diehr and Chakrabarty, the Freeman-Walter-Abele test has little, if any, applicability to determining the presence of statutory subject matter. As we pointed out in Alappat, 33 F.3d at 1543, 31 USPQ2d at 1557, application of the test could be misleading, because a process, machine, manufacture, or composition of matter employing a law of nature, natural phenomenon, or abstract idea is patentable subject matter even though a law of nature, natural phenomenon, or abstract idea would not, by itself, be entitled to such protection. The test determines the presence of, for example, an algorithm. Under Benson, this may have been a sufficient indicium of nonstatutory subject matter. However, after Diehr and Alappat, the mere fact that a claimed invention involves inputting numbers, calculating numbers, outputting numbers, and storing numbers, in and of itself, would not render it nonstatutory subject matter, unless, of course, its operation does not produce a "useful, concrete and tangible result." Alappat, 33 F.3d at 1544, 31 USPQ2d at 1557. After all, as we have repeatedly stated, every step-by-step process, be it electronic or chemical or mechanical, involves an algorithm in the broad sense of the term. Since § 101 expressly includes processes as a category of inventions which may be patented and § 100(b) further defines the word "process" as meaning "process, art or method,

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and includes a new use of a known process, machine, manufacture, composition of matter, or material," it follows that it is no ground for holding a claim is directed to nonstatutory subject matter to say it includes or is directed to an algorithm. This is why the proscription against patenting has been limited to mathematical algorithms . . . .

In re Iwahashi, 888 F.2d 1370, 1374, 12 USPQ2d 1908, 1911 (Fed. Cir. 1989) (emphasis in the original). The question of whether a claim encompasses statutory subject matter should not focus on which of the four categories of subject matter a claim is directed to—process, machine, manufacture, or composition of matter--but rather on the essential characteristics of the subject matter, in particular, its practical utility. Section 101 specifies that statutory subject matter must also satisfy the other "conditions and requirements" of Title 35, including novelty, nonobviousness, and adequacy of disclosure and notice. See In re Warmerdam, 33 F.3d 1354, 1359, 31 USPQ2d 1754, 1757-58 (Fed. Cir. 1994). For purpose of our analysis, as noted above, claim 1 is directed to a machine programmed with the Hub and Spoke software and admittedly produces a "useful, concrete, and tangible result." Alappat, 33 F.3d at 1544, 31 USPQ2d at 1557. This renders it statutory subject matter, even if the useful result is expressed in numbers, such as price, profit, percentage, cost, or loss. The Business Method Exception As an alternative ground for invalidating the '056 patent under § 101, the court relied on the judiciallycreated, so-called "business method" exception to statutory subject matter. We take this opportunity to lay this ill-conceived exception to rest. Since its inception, the "business method" exception has merely represented the application of some general, but no longer applicable legal principle, perhaps arising out of the "requirement for invention"--which was eliminated by § 103. Since the 1952 Patent Act, business methods have been, and should have been, subject to the same legal requirements for patentability as applied to any other process or method.10 The business method exception has never been invoked by this court, or the CCPA, to deem an invention unpatentable. Application of this particular exception has always been preceded by a ruling based on some clearer concept of Title 35 or, more commonly, application of the abstract idea exception based on finding a mathematical algorithm. Illustrative is the CCPA's analysis in In re Howard, 394 F.2d 869, 157 USPQ 615 (CCPA 1968), wherein the court affirmed the Board of Appeals' rejection of the claims for lack of novelty and found it unnecessary to reach the Board's section 101 ground that a method of doing business is "inherently unpatentable." Id. at 872, 157 USPQ at 617. Similarly, In re Schrader, 22 F.3d 290, 30 USPQ2d 1455 (Fed. Cir. 1994), while making reference to the business method exception, turned on the fact that the claims implicitly recited an abstract idea in the form of a mathematical algorithm and there was no "transformation or conversion of subject matter representative of or constituting physical activity or objects." 22 F.3d at 294, 30 USPQ2d at 1459 (emphasis omitted). State Street argues that we acknowledged the validity of the business method exception in Alappat when we discussed Maucorps and Meyer:

10

As Judge Newman has previously stated, [The business method exception] is . . . an unwarranted encumbrance to the definition of statutory subject matter in section 101, that [should] be discarded as error-prone, redundant, and obsolete. It merits retirement from the glossary of section 101. . . . All of the "doing business" cases could have been decided using the clearer concepts of Title 35. Patentability does not turn on whether the claimed method does "business" instead of something else, but on whether the method, viewed as a whole, meets the requirements of patentability as set forth in Sections 102, 103, and 112 of the Patent Act. In re Schrader, 22 F.3d 290, 298, 30 USPQ2d 1455, 1462 (Fed. Cir. 1994) (Newman, J., dissenting).

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Maucorps dealt with a business methodology for deciding how salesmen should best handle respective customers and Meyer involved a 'system' for aiding a neurologist in diagnosing patients. Clearly, neither of the alleged 'inventions' in those cases falls within any § 101 category.

Alappat, 33 F.3d at 1541, 31 USPQ2d at 1555. However, closer scrutiny of these cases reveals that the claimed inventions in both Maucorps and Meyer were rejected as abstract ideas under the mathematical algorithm exception, not the business method exception. See In re Maucorps, 609 F.2d 481, 484, 203 USPQ 812, 816 (CCPA 1979); In re Meyer, 688 F.2d 789, 796, 215 USPQ 193, 199 (CCPA 1982). Even the case frequently cited as establishing the business method exception to statutory subject matter, Hotel Security Checking Co. v. Lorraine Co., 160 F. 467 (2d Cir. 1908), did not rely on the exception to strike the patent. In that case, the patent was found invalid for lack of novelty and "invention," not because it was improper subject matter for a patent. The court stated "the fundamental principle of the system is as old as the art of bookkeeping, i.e., charging the goods of the employer to the agent who takes them." Id. at 469. "If at the time of [the patent] application, there had been no system of bookkeeping of any kind in restaurants, we would be confronted with the question whether a new and useful system of cash registering and account checking is such an art as is patentable under the statute." Id. at 472. This case is no exception. The district court announced the precepts of the business method exception as set forth in several treatises, but noted as its primary reason for finding the patent invalid under the business method exception as follows: If Signature's invention were patentable, any financial institution desirous of implementing a multi-tiered funding complex modeled (sic) on a Hub and Spoke configuration would be required to seek Signature's permission before embarking on such a project. This is so because the '056 Patent is claimed [sic] sufficiently broadly to foreclose virtually any computer-implemented accounting method necessary to manage this type of financial structure.

927 F. Supp. 502, 516, 38 USPQ2d 1530, 1542 (emphasis added). Whether the patent's claims are too broad to be patentable is not to be judged under § 101, but rather under §§ 102, 103 and 112. Assuming the above statement to be correct, it has nothing to do with whether what is claimed is statutory subject matter. In view of this background, it comes as no surprise that in the most recent edition of the Manual of Patent Examining Procedures (MPEP) (1996), a paragraph of § 706.03(a) was deleted. In past editions it read: Though seemingly within the category of process or method, a method of doing business can be rejected as not being within the statutory classes. See Hotel Security Checking Co. v. Lorraine Co., 160 F. 467 (2nd Cir. 1908) and In re Wait, 24 USPQ 88, 22 CCPA 822 (1934).

MPEP § 706.03(a) (1994). This acknowledgment is buttressed by the U.S. Patent and Trademark 1996 Examination Guidelines for Computer Related Inventions which now read: Office personnel have had difficulty in properly treating claims directed to methods of doing business. Claims should not be categorized as methods of doing business. Instead such claims should be treated like any other process claims.

Examination Guidelines, 61 Fed. Reg. 7478, 7479 (1996). We agree that this is precisely the manner in which this type of claim should be treated. Whether the claims are directed to subject matter within § 101 should not turn on whether the claimed subject matter does "business" instead of something else. CONCLUSION The appealed decision is reversed and the case is remanded to the district court for further proceedings consistent with this opinion. REVERSED and REMANDED.

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Questions, Comments, Problems 1. In State Street, the court threw off the antiquated exceptions that had grown up around the statute, and instead focused on the admittedly broad language of section 101. In light of the “safety net” provided by section 102 when an applicant claims her invention too broadly, and in light of the difficulties in making fine distinctions between what falls within a particular exception to section 101 and what falls without, is State Street the best way to handle the “statutory subject matter” issue? Is State Street’s almost-literal reading of section 101 at odds with the Supreme Court’s approach in Flook, where the Court rejected a “purely literal reading of 101” because the Benson Court had determined that an algorithm was unpatentable even though the algorithm was literally a process? Do the cases you have read use section 101 as an excuse to reject inventions on emerging technologies because the courts are uncomfortable with the technologies and because they are afraid to convey a broad monopoly in a quickly growing field lacking in prior art? Do the later cases, such as Chakrabarty on living organisms, Allapat on software, and State Street on business processes, reflect development in the technologies more than development in the law, in that the courts are confident their decisions will not wreak havoc? Obviously, when the issues first came up in the early cases, there would not have been much prior art (at least not much easy-to-find documentary prior art) in any of the emerging fields. Therefore, an applicant could potentially receive a patent having very broad claims, and could thereby preempt the development of a nascent industry for almost two decades. However, aren’t pioneering inventions and developments of entirely new fields precisely the types of contributions to society that we most want to reward? Would it be repugnant to the concepts of our patent system to give a patent to Sir Isaac Newton and Gottfried Wilhelm Leibniz if they developed calculus today? Calculus certainly has returned more to society in the last 300 years than it would have cost to let Newton and Leibniz maintain protection of it for 17 years. On the other hand, perhaps it is best to use section 101 as an excuse to deny patents during early development of an industry because many inventors simply pick the low-hanging fruit from a newly opened field. For example, is an application of an age-old method of commerce to the Internet deserving of patent protection? Are the judicially-created exceptions to patentability simply an attempt to prevent the patent monster from encroaching on areas that clearly should not be subject to patent protection? For example, much that is covered under copyright law would create an unworkable mess under patent law. How would a person write a claim to cover the plot line in a Stephen King novel? The opinion in State Street practically begs the reader to wonder what is not patentable. For instance, could Kevin Garnett of the Minnesota Timberwolves patent a new method of dunking a basketball that gives him an edge over the competition? See U.S. Patent No. 5,616,089, “Method of Putting,” which was issued to a Wausau, Wisconsin attorney, for a method in which the trailing hand grips a golf putter in a normal manner while the leading hand grips the wrist of the trailing hand. See also Robert G. Kramer, F. Scott Kieff, and Robert M. Kunstadt, A New Hook for IP Practice—Intellectual Property Protection for Sports Moves, Nat’l L.J., C1-C5 (May 20, 1996); Christopher Simon, Man With a Patented Putt Hopes Someone Shows Him the Green, Wall St. J., B1 (Aug. 18, 1997). Could a tax attorney patent a new method of structuring a business transaction that would avoid certain tax liabilities? 2. Printed Matter – The business method exception is not the only categorical exception to patentability. Things that are merely written or printed are not, by themselves, patentable. However, the printed matter can be part of a patentable claim if the physical structure on which the printed matter is placed has a new and useful feature, or if the physical structure relates in a new and useful way with the printed matter. The distinction is a fine one, and was examined closely in a group of cases near the turn of the century. The initial rule of unpatentability is stated in United States Credit System Co. v. American Credit Indemnity Co., 59 F. 139 (2d Cir. 1893), in which the patent was directed toward providing sheets of paper with appropriate headings, adapted to be used as historical records of certain business transactions, so as to insure merchants against bad-debt losses. The court stated: “There is nothing peculiar or novel in preparing a sheet of paper with headings generally appropriate to classes of facts to be recorded, and whatever peculiarity there may be about the headings in this case is a peculiarity resulting from the transactions theselves. . . . Given a series of transactions, there is no patentable novelty in recording them, where, as in this case, such record consists simply in setting down some of their details in an order or sequence common to each record.” Id. at 143. The exception, which imparts patentability when there is something new and useful about the physical structure, can be seen in three cases involving printed tickets, Benjamin Menu Card v. Rand, McNally & Co., 210 F. 285 (N.D. Ill. 1894), Rand, McNally & Co. v. Exchange Scrip-Book Co., 187 F. 984 (7th Cir. 1911), and Cincinnati Traction Co. v. Pope, 210 F. 443 (6th Cir. 1913). In Benjamin, the invention was a “combined menu and meal check” that prevented fraud by employees of railroad dining cards by ruining the menu when the checks were detached. Earlier systems used three attached checks that had to be turned in by the waiter, the cook, and the conductor. The earlier systems could be bypassed by collusion of the three employees, while the patented ticket required collusion by the passenger also. Because detachment of the checks rendered the menu useless for other passengers, the court held the ticket patentable: “The fact the structure may be of cardboard with printed matter

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upon it does not exclude the device from patentability.” The invention in Rand, McNally related to a book of detachable transportation coupons whose values were expressed in money instead of the prior art’s miles, so that the coupons could more easily be used by carriers with different mileage rates. The discussion of the court highlights the relationship between the printed matter exception and early development of the business methods exception: Nor do we think that this patented concept is nothing more than a business method. Its use is a part of a business method. The ticket patented is not a method at all, but a physical tangible facility, without which the method would have been impracticable, and with which it is practicable. 187 F. at 986. Cincinnati Traction is described as the “leading ‘exception’ case.” 1 Donald S. Chisum, Chisum on Patents § 1.02[4], at 1-19 (1998). There, the patent covered a transfer ticket for street railcars that had an attached coupon. A “morning” transfer was issued with the coupon detached, so that a conductor could not collude with morning passenger by issuing the passenger an “afternoon” transfer (presumably the conductor would have to account for the coupons at the end of the morning shift). In holding the invention patentable, the court stated: [W]hile the case is perhaps near the border line, we think the device should be classed an article to be used in the method of doing business, and thus a “manufacture.” . . . The device of the patent clearly involves physical structure. The claims themselves are, in a proper sense, limited to such structure. . . . [T]he alleged patentable novelty does not reside in the arrangement of the printed text, nor does such text constitute merely a printed agreement. . . . The specifications do not confine the construction to either the style or printed arrangement or language of the legends. The essential thing is that the required information be conveyed on the face of the ticket. 210 F. at 446-47. 3. Processes – Process claims have been a particular source of trouble for the courts, both before and after the term “process” was added to the patent laws in 1952. Process claims are common, however, because even a patent on a physical object, such as a machine, can include claims that cover a method or process for using the object. The Supreme Court defined the term before it even entered the statute, in Cochrane v. Deener, 94 U.S. 780, 788 (1877): “A process is a mode of treatment of certain materials to produce a given result. It is an act, or a series of acts, performed upon the subject-matter to be transformed and reduced to a different state or thing.” In In re Schrader, 22 F.3d 290, 30 USPQ2d 1455 (Fed. Cir. 1994), Circuit Judge Plager discussed some of the history behind the requirements for patentability of a process: When Congress approved the addition of the term “process” to the categories of patentable subject matter in 1952, it incorporated the definition of “process” that had evolved in the courts.11 As of 1952, that term included a requirement that there be a transformation or reduction of subject matter. We first see the requirement reflected in an early case, Cochrane v. Deener . . . . We then see it reflected, albeit imperfectly12, in Professor Robinson’s classic treatisde, written when the statute said art:

11

This conclusion is drawn from three sources. The first is 35 U.S.C. § 100(b), which defines “process” circularly as “process.” The second is the legislative history, which shows Congress approved the substitution of the term “process” for the term “art” used in all previous patent statutes because it had a more “readily grasped” meaning that had evolved in the courts. . . . The third is the presumption that when a statute uses a term of art, such as “process,” Congress intended it to have its established meaning. . . . 12

Professor Robinson cites to Cochrane for the above definition but inexplicably speaks in terms of changes to a physical “object” while Cochrane speaks in terms of changes to “subject matter.” The distinction is significant. In the Telephone Cases, 126 U.S. 1 (1887), the Court upheld the validity of a claim directed to a method for transmitting speech by impressing acoustic vibrations representative of speech onto electrical signals. If there was a requirement that a physical object be transformed or reduced, the claim would not have been patentable. The point was recognized by our predecessor court in In re Prater, 415 F.2d 1393, 162 USPQ 541, 549 (CCPA 1969): “[The Cochrane passage] has sometimes been misconstrued as a ‘rule’ or ‘definition’ requiring that all processes, to be patentable, must operate physically upon substances. Such a result misapprehends the nature of the passage.” Id. at 1403, 162 USPQ at 549. . . . Thus, it is apparent that changes to intangible subject matter representative of or constituting physical activity or objects are included in the definition. 22 F.3d at 295.

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An art or operation is an act or a series of acts performed by some physical agent upon some physical object, and producing in such object some change either of character or of condition. It is also called a “process.” . . . (Emphasis added) .... We also see it reflected, again imperfectly, in Benson, in which the Court stated: Transformation and reduction of an article “to a different state or thing” is the clue to the patentability of a process claim . . . . 409 U.S. at 70. [¶] Finally, we see it cited with approval in Diehr, 450 U.S. at 183-84. This basic requirement preceded and remains a part of the requirements incorporated in the 1952 Act. . . . 12. Professor Robinson cites to Cochrane for the above definition but inexplicably speaks in terms of changes to a physical “object” while Cochrane speaks in terms of changes to “subject matter.” The distinction is significant. In the Telephone Cases, 126 U.S. 1 (1887), the Court upheld the validity of a claim directed to a method for transmitting speech by impressing acoustic vibrations representative of speech onto electrical signals. If there was a requirement that a physical object be transformed or reduced, the claim would not have been patentable. The point was recognized by our predecessor court in In re Prater, 415 F.2d 1393, 162 USPQ 541, 549 (CCPA 1969): “[The Cochrane passage] has sometimes been misconstrued as a ‘rule’ or ‘definition’ requiring that all processes, to be patentable, must operate physically upon substances. Such a result misapprehends the nature of the passage.” Id. at 1403, 162 USPQ at 549. . . . Thus, it is apparent that changes to intangible subject matter representative of or constituting physical activity or objects are included in the definition. 22 F.3d at 295. It is also clear that processes can be based on the discovery of natural phenomena. The Court in Funk even acknowledged as much: If there is to be invention from such discovery [of a hitherto unknown phenomenon of nature], it must come from the application of the law of nature to a new and useful end. See Telephone Cases, 126 U.S. 1. . . . Dictum in the case of Le Roy v. Tatham, 55 U.S. (14 How.) 156 (1852), was to the same effect. There the inventors had discovered a property of lead that enabled them to make the first commercially practical wrought lead pipe, displacing cast lead pipe from the market. Unfortunately, they claimed their invention not as a process, but rather as the apparatus for achieving the result. The majority held that they had claimed the invention wrongly, but in dictum made clear that process claims using natural principles are patentable subject matter: The word principle is used by elementary writers on patent subjects, and sometimes in adjudications of courts, with such a want of precision in its application, as to mislead. It is admitted, that a principle is not patentable. A principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right. Nor can an exclusive right exist to a new power, should one be discovered in addition to those already known. Through the agency of machinery a new steam power may be said to have been generated. But no one can appropriate this power exclusively to himself, under the patent laws. The same may be said of electricity, and of any other power in nature, which is alike open to all, and may be applied to useful purposes by the use of machinery. In such cases, the processes used to extract, modify, and concentrate natural agencies, constitute the invention. The elements of the power exist; the invention is not in discovering them, but in applying them to useful objects. Whether the machinery used be novel, or consist of a new combination of parts known, the right of the inventor is secured against all who use the same mechanical power, or one that shall be substantially the same. Id. at 174-75. 4. Mental Steps – The mental steps doctrine is another exception to patentability that applies to claims for processes and often appears in computer software cases. The doctrine holds that mere steps that can be performed inside the human head are not statutory subject matter. There are at least three ideas lurking behind this doctrine. The first, discussed above, is that a process, to be patentable, must transform or operate physically upon substances. The second is that patentable processes are restricted to specific means that can be described with reasonable definiteness. Methods that require human judgment and choice do not meet this standard of definiteness. The third idea is that mental steps fall within the social sciences of the field of “liberal arts” rather than the industrial technologies of the patentable field of “useful arts.” See Chisum § 1.03[6], at 1-78.1.

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5. The Freeman-Walter-Abele 2-Step – In the computer area, the courts have struggled with the relationship of algorithms to mental steps. In a series of decisions attempting to resolve questions raised by the Supreme Court’s decisions in Benson, Flook, and Diehr, the Court of Customs and Patent Appeals set up a two-step test for patentability of computer-related inventions. First, the court asked whether the patent claim recited, directly or indirectly, a mathematical algorithm, formula, or mental step. If the claim did not, it covered statutory subject matter and satisfied section 101. If the claim recited a mathematical algorithm, the court then asked whether the claim involved application of the algorithm, method, or mental step to specific physical elements or processes. If so, the invention was directed toward statutory subject matter, and, if not, it was not directed toward statutory subject matter. This test came to be known as the Freeman-Walter-Abele test, in honor of the three cases that spawned it. See In re Freeman, 573 F.2d 1237, 197 USPQ 464 (CCPA 1978); In re Walter, 618 F.2d 758, 205 USPQ 397 (CCPA 1980); In re Abele, 684 F.2d 902, 214 USPQ 682 (CCPA1982). The Federal Circuit applied the Freeman-Walter-Abele test in Arrhythmia Research Technology, Inc. v. Corazonix Corp., 958 F.2d 1053 , 22 USPQ2d 1033 (Fed. Cir. 1992), a case involving a patent on human heart electrocardiographic signal analysis methods and apparatuses. In finding the claims patentable, the court assumed the claimed process involved a mathematical algorithm, and then found that claim steps that involved “converting,” “applying,” “determining,” and “comparing” in relation to certain electrical signals “are physical process steps that transform one physical, electrical signal into another.” The court rejected the argument that there is nothing physical about signals. The court further concluded that the process steps transformed one physical, electrical signal into another and provided an output that was not an abstract number, but was instead a signal related to the patient’s heart activity. 958 at 1059, 22 USPQ2d at 1038. How viable is the Freeman-Walter-Abele test after Allapat and State Street? What is the current procedure for analyzing the patentability of a method carried out by a computer or a method of doing business? How is this analysis affected by the holding in Benson? 6. Software Guidelines – The PTO published guidelines that became final in 1996, to be used by its examining corps to evaluate the patentability of computer-related inventions. The guidelines provide a detailed flow chart to follow in determining whether an invention falls inside or outside section 101. See http://www1.uspto.gov/web/offices/com/hearings/software/analysis/computer.html. 7. Medical Procedures – In the past decade, the medical community has raised concerns over the patenting of medical and surgical procedures. In particular, groups were concerned that patents on medical procedures could increase the cost of healthcare, restrict access to important life-saving procedures, interfere with peer review of new procedures, and intrude on patient privacy during efforts to enforce patents. Congress therefore passed legislation in 1996 to amend section 287(c) of the patent act, on infringement, to prevent patentees from receiving remedies against medical practitioners who perform “medical activities” covered by a patent. Although the term “medical activity” includes “the performance of a medical or surgical procedure on a body,” it does not include: (i) the use of a patented machine, manufacture, or composition of matter in violation of such patent, (ii) The practice of a patented use of a composition of matter in violation of such patent, or (iii) The practice of a process in violation of a biotechnology patent. See 35 U.S.C. § 287(c)(2). Thus, instead of using a dull jackknife to make medical procedures entirely unpatentable, Congress used a scalpel to make patents effectively unenforceable against a narrow range of activities. What are the practical differences between excluding medical procedures from section 101 and limiting remedies as Congress did? The concerns that led Congress to pass this legislation in 1996 may have been the motivation for the result in the famous “ether” case in 1862, Morton v. New York Eye Infirmary, 5 Blatchf. 116 (C.C.S.D.N.Y. 1862). The court there held the ether anesthesia process of Morton and Jackson to be unpatentable subject matter. The discovery that excess doses of ether caused total insensibility to pain was not, in the court’s view, an “art” or “improvement” on an art. While the court granted that an invention was, in the broad sense, an improvement in the art of surgery, the court did not believe that the statute was intended to cover what it believed was essentially a new principle. Interestingly, the court lauded the discovery, while invalidating the patent covering it: Its discoverer is entitled to be classed among the greatest benefactors of mankind. But the beneficent and imposing character of the discovery cannot change the legal principles upon which the law of patents is founded. . . . Do you see the Funk v. Kalo approach here? Do you agree with the result? 8. Overbreadth of Claims vs. Scientific Principles – The famous case of Samuel F.B. Morse’s invention of the telegraph, O’Reilly v. Morse, 56 U.S. (15 How.) 62 (1853), has been cited by the court frequently as a statutory subject matter case. See. e.g., Gottschalk v. Benson, Parker v. Flook, and Diamond v. Diehr. But is it? The Court

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sustained Morse’s first seven claims to a telegraph in his reissue patent, but struck down the broader claim 8, which read: . . . the use of the motive power of the electric or galvanic current, which I call electro-magnetism, however developed, for making or printing intelligible characters, letters, or signs, at any distance. . . . It is true that in dictum, the Court said “the discovery of a principle in natural philosophy or physical science, is not patentable.” Id. at 116. But the decision invalidating claim 8 appears to have been grounded on claim overbreadth, based on the predecessor to 35 U.S.C. § 112 (to be covered in Chapter 6) rather than nonstatutory subject matter. Chief Justice Taney wrote: But Professor Morse has not discovered, that the electric or galvanic current will always print at a distance, no matter what may be the form of the machinery or mechanical contrivances through which it passes. You may use electro-magnetism as a motive power, and yet not produce the described effect, that is, print at a distance intelligible marks or signs. To produce that effect, it must be combined with, and passed through, and operated upon, certain complicated and delicate machinery, adjusted and arranged upon philosophical principles, and prepared by the highest mechanical skill. And it is the high praise of Professor Morse, that he has been able, by a new combination of known powers, of which electro-magnetism is one, to discover a method by which intelligible marks or signs may be printed at a distance. And for the method or process thus discovered, he is entitled to a patent. But he has not discovered that the electro-magnetic current, used as motive power, in any other method, and with any other combination, will do as well. **** This court has decided, that the specification required by this law is part of the patent; and that the patent issues for the invention described in the specification. [¶] Now, whether the Telegraph is regarded as an art or machine, the manner or process of making or using it must be set forth in exact terms. The act of congress makes no difference in this respect between an art and a machine. An improvement in the art of making bar iron or spinning cotton must be so described; and so must the act of printing by the motive power of steam. And in all of these cases it has always been held that the patent embraces nothing more than the improvement described and claimed as new, and that any one who afterwards discovered a method of accomplishing the same object, substantially and essentially differing from the one described, had a right to use it. Can there be any good reason why the art of printing at a distance, by means of the motive power of electric or galvanic current, should stand on different principles? **** Indeed, if the eighth claim of the patentee can be maintained, there was no necessity for any specification, further than to say that he had discovered that, by using the motive power of electromagnetism, he could print intelligible characters at a distance. We presume it will be admitted on all hands, that no patent could have issued on such a specification. Yet this claim can derive no aid from the specification filed. It is outside of it, and the patentee claims beyond it. And if it stands, it must stand simply on the ground that the broad terms above mentioned were a sufficient description, and entitled him to a patent in terms equally broad. In our judgment the act of congress cannot be so construed. Id. at 422-425. Clearly, telegraphy was not a “scientific principle,” existing apart from the handiwork of man. Electro-magnetism may be part of nature, but telegraphy is not. The issue addressed by the Court was what was Morse’s contribution compared to his claim. Do we foster or hinder analysis under section 101 by using shorthand phrases such as “laws of nature”? The later Telephone Cases, 126 U.S. 1 (1888), illustrate the claim overbreadth/scientific principle distinction. The report of the litigation over Alexander Graham Bell’s telephone patent takes up the entire volume of 126 U.S. Reports. As in O’Reilly v. Morse, the Court upheld Bell’s narrower claims but wrestled with the validity of broader claim 5, which read: The method of, and apparatus for, transmitting vocal or other sounds telegraphically, as herein described, by causing electrical undulations, similar in form to the vibrations of the air accompanying the said vocal or other sounds, substantially as set forth. In distinguishing O’Reilly and upholding claim 5, Chief Justice Waite wrote for the Court: The effect of [the O’Reilly] decision was, therefore, that the use of magnetism as a motive power, without regard to the particular process with which it was connected in the patent, could not be claimed, but that its use in that connection could. [¶] In the present case the claim is not for the use of a current of electricity in its natural state as it comes from the battery, but for putting a continuous current in a

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closed circuit into a certain specified condition suited to the transmission of vocal and other sounds, and using it in that condition for that purpose. So far as at present known, without this peculiar change in its condition it will not serve as a medium for the transmission of speech, but with the change it will. Bell was the first to discover this fact, and how to put such a current in such a condition, and what he claims is its use in that condition for that purpose, just as Morse claimed his current in his condition for his purpose. We see nothing in Morse’s case to defeat Bell’s claim; on the contrary, it is in all respects sustained by that authority. It may be that electricity may not be used at all for the transmission of speech except in the way Bell has discovered, and that therefore, practically, his patent gives him its exclusive use for that purpose, but that does not make his claim for the use of electricity distinct from the particular process with which it is connected in his patent. It will, if true, show more clearly the great importance of his discovery, but it will not invalidate his patent. Id. at 534-35. Implicit in the Court’s decision is that claim 5 was proper statutory subject matter. 9. Is it Section 101 or Section 102? (revisited) – Again, in the non-biotech cases you see judges sparring about whether they are improperly mixing up the statutory subject matter issue of section 101 with the issue of novelty under section 102. See, e.g., Diamond v. Diehr, majority and dissent. Are the majority in Flook and the dissent in Diehr the ones who are doing the mixing? Does the approach in Flook of dissecting out the algorithm and treating it as “well known” really make the issue one of novelty rather than statutory subject matter? Is this the same approach taken in Funk? Interestingly, in Flook, the Court cites O’Reilly v. Morse for this dissection approach, but it quotes only the words of a English judge in a case cited in O’Reilly, Neilson v. Harford, which the O’Reilly court distinguished. As discussed above, there is a serious question as to whether O’Reilly is a subject matter case at all. 10. Mere Function of a Machine – The CCPA until 1968 applied a bizarre doctrine it had gleaned from 19th century Supreme Court opinions, namely, the “function of a machine” doctrine. This doctrine held process claims invalid if they were only the inherent “function of a machine” described in the patent. In 1968, the CCPA abolished the doctrine in In re Tarczy-Hornoch, 397 F.2d 856, 158 USPQ 141 (CCPA 1968). In an in-depth treatment of the precedent, Judge Rich, writing for the court, concluded that the doctrine made no sense. He summed it up this way: We feel that the basic rationale of the patent system demands the upholding of properly drawn claims for new, useful, and unobvious processes, regardless of whether the inventor has invented one, two, or more machines to carry them out. Cf. Waxman v. Smith[, 294 U.S. 20 (1934)]. Id. at 867. Interestingly, the dissent in Diehr seemed unhappy with the CCPA’s abolition of the doctrine. 450 U.S. at 198.

Practical Utility Under section 101, not only must an invention fall within one of the categories of patentable subject matter to receive a patent, it must also be “useful.” Likewise, the Constitution’s Intellectual Property Clause speaks of the “useful arts.” You may wonder how any invention could possibly be useless (especially when the applicant is willing to spend money and time to patent it). Nevertheless, this provision is invoked in certain policy-driven areas to ensure that a patent applicant delivers to society something that provides an actual benefit. See 1 William Robinson, Treatise on the Law of Patents 462 (1890). In the cases below, you will see application of the utility requirement to chemical inventions, which are often hard to describe in a written document and whose many uses might not be discerned until well after the chemical is invented.

Brenner v. Manson 383 U.S. 519, 148 USPQ 689 (1966) MR. JUSTICE FORTAS delivered the opinion of the Court. **** Chapter 5 – Statutory Subject Matter & Practical Utility

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In December 1957, Howard Ringold and George Rosenkranz applied for a patent on an allegedly novel process for making certain known steroids. They claimed priority as of December 17, 1956, the date on which they had filed for a Mexican patent. United States Patent No. 2,908,693 issued late in 1959. In January 1960, respondent Manson, a chemist engaged in steroid research, filed an application to patent precisely the same process described by Ringold and Rosenkranz. He asserted that it was he who had discovered the process, and that he had done so before December 17, 1956. Accordingly, he requested that an "interference" be declared in order to try out the issue of priority between his claim and that of Ringold and Rosenkranz. A Patent Office examiner denied Manson's application, and the denial was affirmed by the Board of Appeals within the Patent Office. The ground for rejection was the failure "to disclose any utility for" the chemical compound produced by the process. Letter of Examiner, dated May 24, 1960. This omission was not cured, in the opinion of the Patent Office, by Manson's reference to an article in the November 1956 issue of the Journal of Organic Chemistry, 21 J. Org. Chem. 1333-1335, which revealed that steroids of a class which included the compound in question were undergoing screening for possible tumor-inhibiting effects in mice, and that a homologue3 adjacent to Manson's steroid had proven effective in that role. Said the Board of Appeals, "It is our view that the statutory requirement of usefulness of a product cannot be presumed merely because it happens to be closely related to another compound which is known to be useful." The Court of Customs and Patent Appeals (hereinafter CCPA) reversed, Chief Judge Worley dissenting. 333 F.2d 234, 237-238. The court held that Manson was entitled to a declaration of interference since "where a claimed process produces a known product it is not necessary to show utility for the product," so long as the product "is not alleged to be detrimental to the public interest." Certiorari was granted, 380 U.S. 971, to resolve this running dispute over what constitutes "utility" in chemical process claims, as well as to answer the question concerning our certiorari jurisdiction. **** II. Our starting point is the proposition, neither disputed nor disputable, that one may patent only that which is "useful." In Graham v. John Deere Co., ante, p. 1, at 5-10, we have reviewed the history of the requisites of patentability, and it need not be repeated here. Suffice it to say that the concept of utility has maintained a central place in all of our patent legislation, beginning with the first patent law in 1790 and culminating in the present law's provision that "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."

As is so often the case, however, a simple, everyday word can be pregnant with ambiguity when applied to the facts of life. That this is so is demonstrated by the present conflict between the Patent Office and the CCPA over how the test is to be applied to a chemical process which yields an already known product whose utility—other than as a possible object of scientific inquiry—has not yet been evidenced. . . **** It is not remarkable that differences arise as to how the test of usefulness is to be applied to chemical processes. Even if we knew precisely what Congress meant in 1790 when it devised the "new and useful" phraseology and in subsequent re-enactments of the test, we should have difficulty in applying it

3

"A homologous series is a family of chemically related compounds, the composition of which varies from member to member by CH 2. (one atom of carbon and two atoms of hydrogen). . . . Chemists knowing the properties of one member of a series would in general know what to expect in adjacent members."

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in the context of contemporary chemistry where research is as comprehensive as man's grasp and where little or nothing is wholly beyond the pale of "utility"—if that word is given its broadest reach. Respondent does not—at least in the first instance—rest upon the extreme proposition, advanced by the court below, that a novel chemical process is patentable so long as it yields the intended product16 and so long as the product is not itself "detrimental." Nor does he commit the outcome of his claim to the slightly more conventional proposition that any process is "useful" within the meaning of § 101 if it produces a compound whose potential usefulness is under investigation by serious scientific researchers, although he urges this position, too, as an alternative basis for affirming the decision of the CCPA. Rather, he begins with the much more orthodox argument that his process has a specific utility which would entitle him to a declaration of interference even under the Patent Office's reading of § 101. The claim is that the supporting affidavits filed pursuant to Rule 204 (b), by reference to Ringold's 1956 article, reveal that an adjacent homologue of the steroid yielded by his process has been demonstrated to have tumor-inhibiting effects in mice, and that this discloses the requisite utility. We do not accept any of these theories as an adequate basis for overriding the determination of the Patent Office that the "utility" requirement has not been met. Even on the assumption that the process would be patentable were respondent to show that the steroid produced had a tumor-inhibiting effect in mice, we would not overrule the Patent Office finding that respondent has not made such a showing. The Patent Office held that, despite the reference to the adjacent homologue, respondent's papers did not disclose a sufficient likelihood that the steroid yielded by his process would have similar tumor-inhibiting characteristics. Indeed, respondent himself recognized that the presumption that adjacent homologues have the same utility has been challenged in the steroid field because of "a greater known unpredictability of compounds in that field." In these circumstances and in this technical area, we would not overturn the finding of the Primary Examiner, affirmed by the Board of Appeals and not challenged by the CCPA. The second and third points of respondent's argument present issues of much importance. Is a chemical process "useful" within the meaning of § 101 either (1) because it works—i.e., produces the intended product? or (2) because the compound yielded belongs to a class of compounds now the subject of serious scientific investigation? These contentions present the basic problem for our adjudication. Since we find no specific assistance in the legislative materials underlying § 101, we are remitted to an analysis of the problem in light of the general intent of Congress, the purposes of the patent system, and the implications of a decision one way or the other. In support of his plea that we attenuate the requirement of "utility," respondent relies upon Justice Story's well-known statement that a "useful" invention is one "which may be applied to a beneficial use in society, in contradistinction to an invention injurious to the morals, health, or good order of society, or frivolous and insignificant"—and upon the assertion that to do so would encourage inventors of new processes to publicize the event for the benefit of the entire scientific community, thus widening the search for uses and increasing the fund of scientific knowledge. Justice Story's language sheds little light on our subject. Narrowly read, it does no more than compel us to decide whether the invention in question is "frivolous and insignificant"—a query no easier of application than the one built into the statute. Read more broadly, so as to allow the patenting of any invention not positively harmful to society, it places such a special meaning on the word "useful" that we cannot accept it in the absence of evidence that Congress so intended. There are, after all, many things in this world which may not be considered "useful" but which, nevertheless, are totally without a capacity for harm. It is true, of course, that one of the purposes of the patent system is to encourage dissemination of information concerning discoveries and inventions. And it may be that inability to patent a process to 16

Respondent couches the issue in terms of whether the process yields a "known" product. We fail to see the relevance of the fact that the product is "known," save to the extent that references to a compound in scientific literature suggest that it might be a subject of interest and possible investigation.

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some extent discourages disclosure and leads to greater secrecy than would otherwise be the case. The inventor of the process, or the corporate organization by which he is employed, has some incentive to keep the invention secret while uses for the product are searched out. However, in light of the highly developed art of drafting patent claims so that they disclose as little useful information as possible—while broadening the scope of the claim as widely as possible—the argument based upon the virtue of disclosure must be warily evaluated. Moreover, the pressure for secrecy is easily exaggerated, for if the inventor of a process cannot himself ascertain a "use" for that which his process yields, he has every incentive to make his invention known to those able to do so. Finally, how likely is disclosure of a patented process to spur research by others into the uses to which the product may be put? To the extent that the patentee has power to enforce his patent, there is little incentive for others to undertake a search for uses. Whatever weight is attached to the value of encouraging disclosure and of inhibiting secrecy, we believe a more compelling consideration is that a process patent in the chemical field, which has not been developed and pointed to the degree of specific utility, creates a monopoly of knowledge which should be granted only if clearly commanded by the statute. Until the process claim has been reduced to production of a product shown to be useful, the metes and bounds of that monopoly are not capable of precise delineation. It may engross a vast, unknown, and perhaps unknowable area. Such a patent may confer power to block off whole areas of scientific development, without compensating benefit to the public. The basic quid pro quo contemplated by the Constitution and the Congress for granting a patent monopoly is the benefit derived by the public from an invention with substantial utility. Unless and until a process is refined and developed to this point—where specific benefit exists in currently available form—there is insufficient justification for permitting an applicant to engross what may prove to be a broad field. These arguments for and against the patentability of a process which either has no known use or is useful only in the sense that it may be an object of scientific research would apply equally to the patenting of the product produced by the process. Respondent appears to concede that with respect to a product, as opposed to a process, Congress has struck the balance on the side of non-patentability unless "utility" is shown. Indeed, the decisions of the CCPA are in accord with the view that a product may not be patented absent a showing of utility greater than any adduced in the present case. We find absolutely no warrant for the proposition that although Congress intended that no patent be granted on a chemical compound whose sole "utility" consists of its potential role as an object of use-testing, a different set of rules was meant to apply to the process which yielded the unpatentable product.24 That proposition seems to us little more than an attempt to evade the impact of the rules which concededly govern patentability of the product itself. This is not to say that we mean to disparage the importance of contributions to the fund of scientific information short of the invention of something "useful," or that we are blind to the prospect that what now seems without "use" may tomorrow command the grateful attention of the public. But a patent is not a hunting license. It is not a reward for the search, but compensation for its successful conclusion. “[A] patent system must be related to the world of commerce rather than to the realm of philosophy. . . ." The judgment of the CCPA is Reversed. MR. JUSTICE DOUGLAS, while acquiescing in Part I of the Court's opinion, dissents on the merits of the controversy for substantially the reasons stated by MR. JUSTICE HARLAN.

24

The committee reports which preceded enactment of the 1952 revision of the patent laws disclose no intention to create such a dichotomy, and in fact provide some evidence that the contrary was assumed. Sen. Rep. No. 1979, Committee on the Judiciary, 82d Cong., 2d Sess., 5, 17; H. R. Rep. No. 1923, Committee on the Judiciary, 82d Cong., 2d Sess., 6, 17. Cf. Hoxie, A Patent Attorney's View, 47 J. Pat. Off. Soc. 630, 636 (1965).

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MR. JUSTICE HARLAN, concurring in part and dissenting in part. While I join the Court's opinion on the issue of certiorari jurisdiction, I cannot agree with its resolution of the important question of patentability. Respondent has contended that a workable chemical process, which is both new and sufficiently nonobvious to satisfy the patent statute, is by its existence alone a contribution to chemistry and "useful" as the statute employs that term. Certainly this reading of "useful" in the statute is within the scope of the constitutional grant, which states only that "[t]o promote the Progress of Science and useful Arts," the exclusive right to "Writings and Discoveries" may be secured for limited times to those who produce them. Art. I, § 8. Yet the patent statute is somewhat differently worded and is on its face open both to respondent's construction and to the contrary reading given it by the Court. In the absence of legislative history on this issue, we are thrown back on policy and practice. Because I believe that the Court's policy arguments are not convincing and that past practice favors the respondent, I would reject the narrow definition of "useful" and uphold the judgment of the Court of Customs and Patent Appeals (hereafter CCPA). The Court's opinion sets out about half a dozen reasons in support of its interpretation. Several of these arguments seem to me to have almost no force. For instance, it is suggested that "[u]ntil the process claim has been reduced to production of a product shown to be useful, the metes and bounds of that monopoly are not capable of precise delineation" and "[i]t may engross a vast, unknown, and perhaps unknowable area". I fail to see the relevance of these assertions; process claims are not disallowed because the products they produce may be of "vast" importance nor, in any event, does advance knowledge of a specific product use provide much safeguard on this score or fix "metes and bounds" precisely since a hundred more uses may be found after a patent is granted and greatly enhance its value. The further argument that an established product use is part of "[t]he basic quid pro quo" for the patent or is the requisite "successful conclusion" of the inventor's search appears to beg the very question whether the process is "useful" simply because it facilitates further research into possible product uses. The same infirmity seems to inhere in the Court's argument that chemical products lacking immediate utility cannot be distinguished for present purposes from the processes which create them, that respondent appears to concede and the CCPA holds that the products are nonpatentable, and that therefore the processes are nonpatentable. Assuming that the two classes cannot be distinguished, a point not adequately considered in the briefs, and assuming further that the CCPA has firmly held such products nonpatentable, this permits us to conclude only that the CCPA is wrong either as to the products or as to the processes and affords no basis for deciding whether both or neither should be patentable absent a specific product use. More to the point, I think, are the Court's remaining, prudential arguments against patentability: namely, that disclosure induced by allowing a patent is partly undercut by patent-application drafting techniques, that disclosure may occur without granting a patent, and that a patent will discourage others from inventing uses for the product. How far opaque drafting may lessen the public benefits resulting from the issuance of a patent is not shown by any evidence in this case but, more important, the argument operates against all patents and gives no reason for singling out the class involved here. The thought that these inventions may be more likely than most to be disclosed even if patents are not allowed may have more force; but while empirical study of the industry might reveal that chemical researchers would behave in this fashion, the abstractly logical choice for them seems to me to maintain secrecy until a product use can be discovered. As to discouraging the search by others for product uses, there is no doubt this risk exists but the price paid for any patent is that research on other uses or improvements may be hampered because the original patentee will reap much of the reward. From the standpoint of the public interest the Constitution seems to have resolved that choice in favor of patentability.

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What I find most troubling about the result reached by the Court is the impact it may have on chemical research. Chemistry is a highly interrelated field and a tangible benefit for society may be the outcome of a number of different discoveries, one discovery building upon the next. To encourage one chemist or research facility to invent and disseminate new processes and products may be vital to progress, although the product or process be without "utility" as the Court defines the term, because that discovery permits someone else to take a further but perhaps less difficult step leading to a commercially useful item. In my view, our awareness in this age of the importance of achieving and publicizing basic research should lead this Court to resolve uncertainties in its favor and uphold the respondent's position in this case. This position is strengthened, I think, by what appears to have been the practice of the Patent Office during most of this century. While available proof is not conclusive, the commentators seem to be in agreement that until Application of Bremner, 37 C. C. P. A. (Pat.) 1032, 182 F.2d 216, in 1950, chemical patent applications were commonly granted although no resulting end use was stated or the statement was in extremely broad terms. Taking this to be true, Bremner represented a deviation from established practice which the CCPA has now sought to remedy in part only to find that the Patent Office does not want to return to the beaten track. If usefulness was typically regarded as inherent during a long and prolific period of chemical research and development in this country, surely this is added reason why the Court's result should not be adopted until Congress expressly mandates it, presumably on the basis of empirical data which this Court does not possess. Fully recognizing that there is ample room for disagreement on this problem when, as here, it is reviewed in the abstract, I believe the decision below should be affirmed.

Questions, Comments, Problems 1. The Federal Circuit in In re Brana, 51 F.3d 1560, 34 USPQ2d 1436 (Fed. Cir. 1995), established a twopart procedural framework for analyzing questions of practical utility before the PTO. The application in Brana was directed to chemical compounds for use as antitumor substances. The specification asserted that the claimed compounds had “a better action and a better action spectrum as anti-tumor substances” than prior similar compounds. The court analyzed whether the invention exhibited a practical utility under 35 U.S.C. § 112 ¶ 1, which, according to the court contains an implicit requirement for practical utility that is the same as that under section 101. In reversing the Board’s decision that the invention did not exhibit a practical utility, the court stated: The first basis for the Board's decision was that the applicants' specification failed to disclose a specific disease against which the claimed compounds are useful, and therefore, absent undue experimentation, one of ordinary skill in the art was precluded from using the invention. See Hybritech Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1384, 231 USPQ 81, 94 (Fed.Cir.1986), cert. denied, 480 U.S. 947 (1987). In support, the Commissioner argues that the disclosed uses in the '944 application, namely the "treatment of diseases" and "antitumor substances," are similar to the nebulous disclosure found insufficient in In re Kirk, 376 F.2d 936, 153 USPQ 48 (CCPA 1967). This argument is not without merit. In Kirk applicants claimed a new class of steroid compounds. One of the alleged utilities disclosed in the specification was that these compounds possessed "high biological activity." Id. at 938, 153 USPQ at 50. The specification, however, failed to disclose which biological properties made the compounds useful. Moreover, the court found that known specific uses of similar compounds did not cure this defect since there was no disclosure in the specification that the properties of the claimed compounds were the same as those of the known similar compounds. Id. at 942, 153 USPQ at 53. Furthermore, it was not alleged that one of skill in the art would have known of any specific uses, and therefore, the court concluded this alleged use was too obscure to enable one of skill in the art to use the claimed invention. See also Kawai v. Metlesics, 480 F.2d 880, 178 USPQ 158 (CCPA 1973). Kirk would potentially be dispositive of this case were the above-mentioned language the only assertion of utility found in the '944 application. Applicants' specification, however, also states that the claimed compounds have "a better action and a better action spectrum as antitumor substances" than known compounds, specifically those analyzed in Paull [the closest cited prior art]. As previously noted . . . Paull grouped various benzo[de]isoquinoline-1,3-diones, which had previously been tested in vivo for

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antitumor activity against two lymphocytic leukemia tumor models (P388 and L1210), into various structural classifications and analyzed the test results of the groups (i.e. what percent of the compounds in the particular group showed success against the tumor models). Since one of the tested compounds, NSC 308847, was found to be highly effective against these two lymphocytic leukemia tumor models, applicants' favorable comparison implicitly asserts that their claimed compounds are highly effective (i.e. useful) against lymphocytic leukemia. An alleged use against this particular type of cancer is much more specific than the vaguely intimated uses rejected by the courts in Kirk and Kawai. See, e.g., Cross v. Iizuka, 753 F.2d at 1048, 224 USPQ at 745 (finding the disclosed practical utility for the claimed compounds--the inhibition of thromboxane synthetase in human or bovine platelet microsomes-sufficiently specific to satisfy the threshold requirement in Kirk and Kawai.) The Commissioner contends, however, that P388 and L1210 are not diseases since the only way an animal can get sick from P388 is by a direct injection of the cell line. The Commissioner therefore concludes that applicants' reference to Paull in their specification does not provide a specific disease against which the claimed compounds can be used. We disagree. As applicants point out, the P388 and L1210 cell lines, though technically labeled tumor models, were originally derived from lymphocytic leukemias in mice. Therefore, the P388 and L1210 cell lines do represent actual specific lymphocytic tumors; these models will produce this particular disease once implanted in mice. If applicants were required to wait until an animal naturally developed this specific tumor before testing the effectiveness of a compound against the tumor in vivo, as would be implied from the Commissioner's argument, there would be no effective way to test compounds in vivo on a large scale. We conclude that these tumor models represent a specific disease against which the claimed compounds are alleged to be effective. Accordingly, in light of the explicit reference to Paull, applicants' specification alleges a sufficiently specific use. **** The second basis for the Board's rejection was that, even if the specification did allege a specific use, applicants failed to prove that the claimed compounds are useful. Citing various references, the Board found, and the Commissioner now argues, that the tests offered by the applicants to prove utility were inadequate to convince one of ordinary skill in the art that the claimed compounds are useful as antitumor agents. This court's predecessor has stated: [A] specification disclosure which contains a teaching of the manner and process of making and using the invention in terms which correspond in scope to those used in describing and defining the subject matter sought to be patented must be taken as in compliance with the enabling requirement of the first paragraph of § 112 unless there is reason to doubt the objective truth of the statements contained therein which must be relied on for enabling support. In re Marzocchi, 439 F.2d 220, 223, 169 USPQ 367, 369 (CCPA 1971). From this it follows that the PTO has the initial burden of challenging a presumptively correct assertion of utility in the disclosure. Id. at 224, 169 USPQ at 370. Only after the PTO provides evidence showing that one of ordinary skill in the art would reasonably doubt the asserted utility does the burden shift to the applicant to provide rebuttal evidence sufficient to convince such a person of the invention's asserted utility. See In re Bundy, 642 F.2d 430, 433, 209 USPQ 48, 51 (CCPA 1981).17 The PTO has not met this initial burden. The references ciited by the Board, Pazdur and Martin, do not question the usefulness of any compound as an antitumor agent or provide any other evidence to cause one of skill in the art to question the asserted utility of applicants' compounds. Rather, these references merely discuss the therapeutic predictive value of in vivo murine tests--relevant only if applicants must 17

See also In re Novak, 306 F.2d 924, 928, 134 USPQ 335, 337 (CCPA 1962) (stating that it is proper for the examiner to request evidence to substantiate an asserted utility unless one with ordinary skill in the art would accept the allegations as obviously valid and correct); In re Chilowsky, 229 F.2d 457, 462, 108 USPQ 321, 325 (CCPA 1956) ("[W]here the mode of operation alleged can be readily understood and conforms to the known laws of physics and chemistry ... no further evidence is required."). But see In re Marzocchi, 439 F.2d at 223, 169 USPQ at 369-70 ("In the field of chemistry generally there may be times when the well-known unpredictability of chemical reactions will alone be enough to create a reasonable doubt as to the accuracy of a particular broad statement put forward as enabling support for a claim. This will especially be the case where the statement is, on its face, contrary to generally accepted scientific principles.").

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prove the ultimate value in humans of their asserted utility. Likewise, we do not find that the nature of applicants' invention alone would cause one of skill in the art to reasonably doubt the asserted usefulness. The purpose of treating cancer with chemical compounds does not suggest an inherently unbelievable undertaking or involve implausible scientific principles. In re Jolles, 628 F.2d at 1327, 206 USPQ at 890. Modern science has previously identified numerous successful chemotherapeutic agents. In addition, the prior art, specifically Zee Cheng et al., discloses structurally similar compounds to those claimed by the applicants which have been proven in vivo to be effective as chemotherapeutic agents against various tumor models. Taking these facts--the nature of the invention and the PTO's proffered evidence--into consideration we conclude that one skilled in the art would be without basis to reasonably doubt applicants' asserted utility on its face. The PTO thus has not satisfied its initial burden. Accordingly, applicants should not have been required to substantiate their presumptively correct disclosure to avoid a rejection under the first paragraph of § 112. See In re Marzocchi, 439 F.2d at 224, 169 USPQ at 370. We do not rest our decision there, however. Even if one skilled in the art would have reasonably questioned the asserted utility, i.e., even if the PTO met its initial burden thereby shifting the burden to the applicants to offer rebuttal evidence, applicants proffered sufficient evidence to convince one of skill in the art of the asserted utility. In particular, applicants provided through Dr. Kluge's declaration test results showing that several compounds within the scope of the claims exhibited significant antitumor activity against the L1210 standard tumor model in vivo. Such evidence alone should have been sufficient to satisfy applicants' burden. The prior art further supports the conclusion that one skilled in the art would be convinced of the applicants' asserted utility. As previously mentioned, prior art--Zee Cheng et al. and Paull--disclosed structurally similar compounds which were proven in vivo against various tumor models to be effective as chemotherapeutic agents. Although it is true that minor changes in chemical compounds can radically alter their effects on the human body, Kawai, 480 F.2d at 891, 178 USPQ at 167, evidence of success in structurally similar compounds is relevant in determining whether one skilled in the art would believe an asserted utility. See Rey-Bellet v. Engelhardt, 493 F.2d 1380, 181 USPQ 453 (CCPA 1974); Kawai, 480 F.2d 880, 178 USPQ 158. The Commissioner counters that such in vivo tests in animals are only preclinical tests to determine whether a compound is suitable for processing in the second stage of testing, by which he apparently means in vivo testing in humans, and therefore are not reasonably predictive of the success of the claimed compounds for treating cancer in humans. The Commissioner, as did the Board, confuses the requirements under the law for obtaining a patent with the requirements for obtaining government approval to market a particular drug for human consumption. See Scott v. Finney, 34 F.3d 1058, 1063, 32 USPQ2d 1115, 1120 (Fed. Cir. 1994) ("Testing for the full safety and effectiveness of a prosthetic device is more properly left to the Food and Drug Administration (FDA). Title 35 does not demand that such human testing occur within the confines of Patent and Trademark Office (PTO) proceedings."). Our court's predecessor has determined that proof of an alleged pharmaceutical property for a compound by statistically significant tests with standard experimental animals is sufficient to establish utility. In re Krimmel, 292 F.2d 948, 953, 130 USPQ 215, 219 (CCPA 1961); see also In re Bergel, 292 F.2d 958, 130 USPQ 205 (CCPA 1961). In concluding that similar in vivo tests were adequate proof of utility the court in In re Krimmel stated: We hold as we do because it is our firm conviction that one who has taught the public that a compound exhibits some desirable pharmaceutical property in a standard experimental animal has made a significant and useful contribution to the art, even though it may eventually appear that the compound is without value in the treatment in humans. Krimmel, 292 F.2d at 953, 130 USPQ at 219. Moreover, NCI apparently believes these tests are statistically significant because it has explicitly recognized both the P388 and L1210 murine tumor models as standard screening tests for determining whether new compounds may be useful as antitumor agents. In the context of this case the Martin and Pazdur references, on which the Commissioner relies, do not convince us otherwise. Pazdur only questions the reliability of the screening tests against lung cancer;

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it says nothing regarding other types of tumors. Although the Martin reference does note that some laboratory oncologists are skeptical about the predictive value of in vivo murine tumor models for human therapy, Martin recognizes that these tumor models continue to contribute to an increasing human cure rate. In fact, the authors conclude that this perception (i.e. lack of predictive reliability) is not tenable in light of present information. On the basis of animal studies, and controlled testing in a limited number of humans (referred to as Phase I testing), the Food and Drug Administration may authorize Phase II clinical studies. See 21 U.S.C. § 355(i)(1); 21 C.F.R. § 312.23(a)(5), (a)(8) (1994). Authorization for a Phase II study means that the drug may be administered to a larger number of humans, but still under strictly supervised conditions. The purpose of the Phase II study is to determine primarily the safety of the drug when administered to a larger human population, as well as its potential efficacy under different dosage regimes. See 21 C.F.R. § 312.21(b). FDA approval, however, is not a prerequisite for finding a compound useful within the meaning of the patent laws. Scott, 34 F.3d 1058, 1063, 32 USPQ2d 1115, 1120. Usefulness in patent law, and in particular in the context of pharmaceutical inventions, necessarily includes the expectation of further research and development. The stage at which an invention in this field becomes useful is well before it is ready to be administered to humans. Were we to require Phase II testing in order to prove utility, the associated costs would prevent many companies from obtaining patent protection on promising new inventions, thereby eliminating an incentive to pursue, through research and development, potential cures in many crucial areas such as the treatment of cancer. In re Brana is a significant development in the patenting of pharmaceuticals because it adds stability to what had been a hotly debated and litigated area, namely, the requisites for proving pharmaceutical utility and the adequacy of the proof. Do you think the court’s differentiation of FDA approval from patentable utility makes sense? Will the court’s ruling foster research, as it contends, or foster filing of patent applications whose practical utility is speculative? 2. In the Spring of 1998, Stuart Newman, a cellular biologist at New York Medical College sought to touch off a great debate over the morality of patenting life forms by filing an application for a patent on a method of making chimera—creatures that are part human and part animal. Newman stated that his goal was to prevent anyone from receiving such a patent by forcing the PTO and the courts to reexamine whether such organisms should be patentable. See Rick Weiss, Patent Sought on Making Part-Human Creatures; Scientist Seeks to Touch Off Ethics Debate, Wash. Post A12 (Apr. 2, 1998). Newman succeeded in drawing attention, in particular from the PTO, which issued a “media advisory” entitled: “FACTS ON PATENTING LIFE FORMS HAVING A RELATIONSHIP TO HUMANS”: The Patent and Trademark Office (PTO) is charged with the responsibility of administering the patent laws of the United States, as interpreted by the Supreme Court and other courts. Thus, the PTO fully applies the law without discriminating against a particular field of technology. In accordance with patent laws, whoever invents a new and useful process, machine, manufacture or composition of matter, may obtain a patent if the statutory conditions and requirement are satisfied. No patent is granted for an invention that does not meet the strict patentability requirements set forth in patent laws contained in title 35 of the United States Code. These include requirements that the invention have utility, be novel and non-obvious, and be adequately described and disclosed so as to enable the making and using of the invention. The PTO will not, therefore, issue a patent for an invention of incredible or specious utility or for inventions whose utilization is not adequately disclosed in the application. Additionally, the courts have interpreted the utility requirement to exclude inventions deemed to be "injurious to the well being, good policy, or good morals of society." Lowell v. Lewis, Fed. Cas. No. 8568 (C.C. Mass. 1817) (Story, J.), quoted in Tol-O-Matic, Inc. v. Proma Product-und Marketing Gesellschaft M.b.H., 945 F.2d 1546, 1552, 20 USPQ2d 1332, 1338 (Fed. Cir. 1991). The Patent and Trademark Office is required by law to keep all patent applications in confidence until such time as a patent may be granted. However, the existence of a patent application directed to human/non-human chimera has recently been discussed in the news media. It is the position of the PTO that inventions directed to human/non-human chimera could, under certain circumstances, not be patentable because, among other things, they would fail to meet the public policy and morality aspects of the utility requirement.

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Is this interpretation of the utility requirement consistent with the discussions in the cases above? How does it compare to the position the Commissioner took in relation to the Harvard Mouse? The genesis of this aspect of the utility requirement can perhaps be traced to Justice Story’s early opinion in Bedford v. Hunt, 3 F. Cas. 37, 37 (C.C.D. Mass. 1817): “By useful invention, in the statute, is meant such a one as may be applied to some beneficial use in society, in contradistinction to an invention which is injurious to the morals, the health, or the good order of society.” Thus, section 101 has been used time and again to bar the patenting of gambling devices. See, e.g., Brewer v. Lichtenstein, 278 F. 512 (7th Cir. 1922) (punch board held not patentable because only apparent use was as a lottery device). In 1977, however, the Board of Patent Appeals & Interferences permitted the issuance of a patent covering a slot machine. See Ex Parte Murphy, 200 USPQ 801 (BPAI 1977). Should the test of utility shift with the attitude of the PTO and the courts toward certain activities and classes of inventions? 3. Perpetual Motion and Baldness Cures – What do these two things have in common? You may have answered that both are impossibilities. Many times in the past, the PTO has agreed, and has used the utility requirement of section 101 to reject inventions directed either toward perpetual motion machines or to baldness cures. See MPEP § 706.03(a) (“A rejection on the ground of lack of utility includes the more specific grounds of inoperativeness, involving perpetual motion, frivolous, fraudulent, and against public policy.”). Reflecting the PTO’s continuing hostility toward perpetual motion machines, such machines are the only remaining category of inventions in which the applicant must in all cases submit a “working” physical model of the invention. See MPEP § 608.03. However, the PTO is somewhat open-minded and has directed examiners not to maintain a lack of utility rejection “if the asserted utility for the claimed invention would be considered credible by a person of ordinary skill in the art in view of all evidence of record.” MPEP § 706.03(a)(1)(4). Thus, the issue of utility for baldness cures came to a head recently in In re Cortright, No. 98-1258, 165 F.3d 1353 49 USPQ2d 1464 (Fed. Cir. Jan. 11, 1999), where the Federal Circuit reversed the Board’s rejection of certain patent claims covering the application of Bag Balm® (a commercially available material used to soften cow udders) to the human scalp to reduce hair loss. The examiner had rejected claim 15 of the application under section 101, and the Board affirmed on an alternative ground—failure of the patent disclosure to enable a skilled artisan to practice the claimed invention under 35 U.S.C. § 112 (discussed in Chapter 6). In reversing, the Federal Circuit noted: A lack of enablement rejection under section 112, ¶ 1 is appropriate where the written description fails to teach those in the art to make and use the invention as broadly as it is claimed without undue experimentation. See In re Vaeck, 947 F.2d 488, 495-96, 10 USPQ2d 1438, 1444 (Fed. Cir. 1991). This rejection takes several forms. The PTO will make a scope of enablement rejection where the written description enables something within the scope of the claims, but the claims are not limited to that scope. See Manual of Patent Examining Procedures ("M.P.E.P.") § 706.03(c), form ¶ 7.31.03 (Rev. 3, July 1997). This type of rejection is marked by language stating that the specification does not enable one of ordinary skill to use the invention commensurate with the scope of the claims. On the other hand, if the written description does not enable any subject matter within the scope of the claims, the PTO will make a general enablement rejection, stating that the specification does not teach how to make or use the invention. See M.P.E.P. § 706.03(c), form ¶ 7.31.02. If the written description fails to illuminate a credible utility, the PTO will make both a section 112, ¶ 1 rejection for failure to teach how to use the invention and a section 101 rejection for lack of utility. See M.P.E.P. § 706.03(a), form ¶ 7.05.04. This dual rejection occurs because "[t]he how to use prong of section 112 incorporates as a matter of law the requirement of 35 U.S.C. § 101 that the specification disclose as a matter of fact a practical utility for the invention." In re Ziegler, 992 F.2d 1197, 1200, 26 USPQ2d 1600, 1603 (Fed. Cir. 1993). Thus, an applicant's failure to disclose how to use an invention may support a rejection under either section 112, ¶ 1 for lack of enablement as a result of "the specification's . . . failure to disclose adequately to one ordinarily skilled in the art 'how to use' the invention without undue experimentation," or section 101 for lack of utility "when there is a complete absence of data supporting the statements which set forth the desired results of the claimed invention." Environtech Corp. v. Al George, Inc., 730 F.2d 753, 762, 221 USPQ 473, 480 (Fed. Cir. 1984); see also In re Brana, 51 F.3d 1560, 1564 n.12, 34 USPQ2d 1436, 1439 n.12 (Fed. Cir. 1995) (The "absence of utility can be the basis of a rejection under both 35 U.S.C. § 101 and § 112 ¶ 1."); In re Fouche, 439 F.2d 1237, 1243, 169 USPQ 429, 434 (CCPA 1971) ("[I]f [certain] compositions are in fact useless, appellant's specification cannot have taught how to use them."). The PTO cannot make this type of rejection, however, unless it has reason to doubt the objective truth of the statements contained in the written description. See Brana, 51 F.3d at 1566, 34 USPQ2d at 1441 ("[T]he PTO has the initial burden of challenging a presumptively correct assertion of utility in the disclosure. Only after the PTO provides evidence showing that one of ordinary skill in the art would reasonably doubt the asserted utility does the burden shift to the applicant to provide rebuttal evidence

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sufficient to convince such a person of the invention's asserted utility.") (citations omitted); In re Marzocchi, 439 F.2d 220, 223, 169 USPQ 367, 369 (CCPA 1971) ("[A] specification disclosure which contains a teaching of the manner and process of making and using the invention in terms which correspond in scope to those used in describing and defining the subject matter sought to be patented must be taken as in compliance with the enabling requirement of the first paragraph of § 112 unless there is reason to doubt the objective truth of the statements contained therein which must be relied on for enabling support."). The PTO may establish a reason to doubt an invention's asserted utility when the written description "suggest[s] an inherently unbelievable undertaking or involve[s] implausible scientific principles." Brana, 51 F.3d at 1566, 34 USPQ2d at 1441; see also In re Eltgroth, 419 F.2d 918, 164 USPQ 221 (CCPA 1970) (control of aging process). Treating baldness was once considered an inherently unbelievable undertaking. See In re Ferens, 417 F.2d 1072, 1074, 163 USPQ 609, 611 (CCPA 1969); In re Oberwener, 115 F.2d 826, 829, 47 USPQ 455, 458 (CCPA 1940). Since then, however, treatments for baldness have gained acceptance. Rogaine® (minoxidil) and Propecia® are recognized as effective in treating baldness. See Doug Levy, FDA Approves New Treatment for Males Fighting Baldness, USA Today, Dec. 23, 1997, at A1; Pharmaceutical Companies Are Brushing up on Hair-Restorers Medicine, Los Angeles Times, Jun. 6, 1996, at D12. In addition, the PTO has granted approximately one hundred patents on methods of treating baldness. Some of these patents disclose applying an electric current to the scalp, see, e.g., U.S. Pat. No. 5,800,477, whereas others teach ingesting substances orally or applying a salve of some kind to the scalp, see, e.g., U.S. Pat. No. 5,777,134. Some patents disclose the active ingredient in chemical terms. See, e.g., U.S. Pat. No. 5,777,134 (5 alpha-reductase inhibitor); U.S. Pat. No. 5,767,152 (cyanocarboxylic acid derivatives); U.S. Pat. No. 4,139,619 (formula for minoxidil). Other patents, however, disclose baldness remedies made from more mundane materials, such as Dead Sea mud (U.S. Pat. No. 5,679,378); emu oil (U.S. Pat. No. 5,744,128); potato peelings and lantana leaves (U.S. Pat. No. 5,665,342); and vitamin D3 and aloe (U.S. Pat. No. 5,597,575).1 Do you think the panel’s ruling in this case was affected by the fact that each judge (Chief Judge Mayer, and Circuit Judges Newman and Rader) has a full head of hair? In a related vein, in several very old cases, deceptive or immoral inventions, such as slot machines, were denied protection under Section 101 for lack of utility. The issue recently reached the Federal Circuit in the context of a retail juice dispenser that used juice flowing down the insides of a large, transparent container to entice customers. The prior art dispensers pumped the actual juice around the container, but this sometimes created problems with freshness and sanitation. The patent solved these problems by pumping “fake” juice around the top container, and serving the actual juice from a post-mix dispenser under the counter. The district court agreed that the patent should not have been issued because its primary purpose was to deceive the public. In reversing, the Federal Circuit ruled that very little of the old “immoral or illegal” cases survived the 1952 Patent Act, and noted that many worthy inventions depend on deception (e.g., cubic zirconia, imitation hamburger, artificial fabrics). See Juicy Whip, Inc. v. Orange Bang, Inc., 185 F.3d 1364, 51 USPQ2d 1700 (Fed. Cir. 1999)

We have now covered the prerequisites for a patent—the claimed invention must be statutory subject matter, and have utility, novelty, and nonobviousness. We are ready now to tackle in the next chapter the issue of draftsmanship—the statutory requirements for the contents of the patent document.

________ 1 See also U.S. Pat. No. 5,674,510 (salve of garlic powder, brewer's yeast, grapefruit juice, acetic acid, and kelp), U.S. Pat. No. 5,750,108 (salves of tea tree oil; chlorine dioxide and acidic solution; saw palmetto berry extract), U.S. Pat. No. 5,695,748 (salves of sage, aloe, and nettles; castor oil, shea butter, wheat germ oil, and white iodine); U.S. Pat. No. 5,494,667 (salve of pine extract and bamboo extract or Japanese apricot).

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Chapter 6 The Patent Document Introduction The previous three chapters discussed the requirements that must be met by an invention to be entitled to U.S. patent protection. This chapter is directed toward the requirements for the patent application, apart from the qualities of the underlying invention. Congress has established these requirements because patents involve a quid pro quo: the public gives the patentee a limited term of exclusivity, for which the patentee gives the public a document (the patent) that teaches the public about the invention so that it may be enriched by the disclosure. When the patent expires, the public may use the patent disclosure to construct the patented invention without being excluded by the claims of the expired patent. Potential competitors may also study the patent document when the patent is still in force so that they may quickly introduce a competing product or process as soon as the patent expires, or may design a product or process that carefully avoids the claims of the patent (i.e., “designs around”) and (hopefully) brings an improvement to the public. The patent disclosure, and in particular the patent claims, helps competitors avoid infringement by giving notice to the public of the patent’s breadth. Congress has mandated an adequate patent disclosure since the first patent act, in 1790, in which the requirements were stated along with the purpose of those requirements. Section 2 of that Act required that an inventor file at the time the patent was granted: a specification . . . containing a description . . . of the thing . . . by him . . . invented . . . which specification shall be so particular . . . as not only to distinguish the invention . . . from other things before known and used, but also to enable a workman or other person skilled in the art of manufacture,

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whereof it is a branch, or wherewith it may be nearest connected, to make, construct or use the same, to the end that the public may have the full benefit thereof, after the expiration of the patent term.

The 1790 Act also included, in section 6, a defense to a charge of infringement upon a showing that the specification does not contain the whole of the truth concerning his invention [or] contains more than is necessary to produce the effect described [if either] shall appear to have been intended to mislead, or shall actually mislead the public, so as the effect described cannot be produced by the means specified.

These two provisions provide, respectively, an unmistakable version of what has come to be known as an “enablement requirement” and also a so-called “whole truth requirement.” In 1793, Congress modified the disclosure provision of section 2, and also added: “in the case of any machine, [the inventor] shall fully explain the principle, and the several modes in which he has contemplated the application of that principle or character, by which it may be distinguished from other inventions.” Under section 6, the “whole truth requirement” was maintained and modified slightly so that the “concealment or addition shall fully appear to have been made for the purpose of deceiving the public.” It is under this version of the patent act that the first case below, Grant v. Raymond, was decided. Limited changes were made between 1793 and 1952. Congress made minor changes in 1836, and eliminated the provision for declaring a patent “void” as the consequence that follows from a successful defense in an infringement action. In 1870, Congress made several subtle but important changes. First, the requirement that an inventor disclose his “several modes” of invention was changed to a requirement that he disclose his “best mode.” In addition, Congress in 1870 codified the “whole truth” requirement. The current disclosure requirements, enacted as part of the 1952 Act, maintain the enablement and best mode requirements, and add two other requirements, the written description requirement and the definiteness requirement. Those requirements are now located in section 112 of Title 35: The specification shall contain a written description of the invention, and of the manner of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention. [¶] The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention. . . .

These provisions, like those under section 102, set out numerous tests that are largely distinct from each other. In comparison to the prior law, these provisions removed the whole truth requirement because it was little used: it required proof of bad intent, and a defendant could have an equally valid defense simply by proving that the description was lacking, without a need to establish intent. Section 112 also restated the requirements for an adequate disclosure, and broadened, beyond inventions that involve machines, the requirement that a patent applicant disclose his best mode. The four requirements, which are reviewed in detail below, are: (1) the written description requirement, (2) the enablement requirement, (3) the best mode requirement, and (4) the definiteness requirement (i.e., that the inventor particularly point out and distinctly claim the subject matter of the invention). We begin with the second requirement, enablement.

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Enablement

Grant v. Raymond 31 U.S. (6 Pet.) 218 (1832) Mr. Chief Justice MARSHALL delivered the opinion of the Court. [The suit was brought for infringement of a patent issued in 1825. A previous patent had been issued in 1821 to the same person for the same invention, but hd been cancelled because it had a defective specification. The patent-in-suit disclosed an improvement in the mode of manufacturing hat bodies by the combination of rotary and revolving motions with vibrating or transverse motions to form two hat bodies and cross the wool from one extremity of the hat bodies to the other in one operation. The defendants averred that “said specification does not correctly or accurately describe the improvement claimed . . .; but said specification, and the drawings thereto annexed, are altogether defective in this, among other things, namely: in said specification no proportions, sizes, or distances, are given, and the bigness or size of none of the principal parts of said machine is given in said specification or drawings.” The trial court refused the defendants’ request to instruct the jury that if the defendants proved their averments, the jury must find for the defendants. Instead, the court instructed the jury that the patent would only be void of the defective or imperfect specification arose from design, and for the purpose of deceiving the public. The jury found for the patentee.] **** The third section [of the statute] requires, as preliminary to a patent, a correct specification and description of the thing discovered. This is necessary in order to give the public, after the privilege shall expire, the advantage for which the privilege is allowed, and is the foundation of the power to issue the patent. The necessary consequence of the ministerial character in which the secretary acts, is that the performance of the pre-requisites to a patent must be examinable in any suit brought upon it. If the case was of the first impression, we should come to this conclusion; but it is understood to be settled. The act of parliament concerning monopolies contains an exception on which the grants of patents for inventions have issued in that country. The construction of so much of that exception as connects the specification with the patent, and makes the validity of the latter dependent on the correctness of the former, is applicable, we think, to proceedings under the third section of the American act. The English books are full of cases in which it has been held that a defective specification is a good bar when pleaded to, or a sufficient defence when given in evidence on the general issue, on an action brought from the infringement of a patent right. They are very well summed up in Godson's Law of Patents, title Specification: and also in the chapter respecting the infringement of patents: also in Holroyd on Patents, where he treats of the specification, its form and requisites. It is deemed unnecessary to go through the cases, because there is no contrariety in them, and because the question is supposed to be substantially settled in this country. Pennock and Sellers v. Dialogue, 1 Peters, 1, was not, it is true, a case of defect in the specification or description required by the third section, but one in which the applicant did not bring himself within the provision of the first section, which requires that before a patent shall issue the petitioner shall allege that he has invented a new and useful art, machine, &c. “not known or used before the application.” This prerequisite of the first section, so far as a failure in it may affect the validity of the patent, is not distinguishable from a failure of the prerequisites of the third section. On the trial evidence was given to show that the patentee had permitted his invention to be used before he took out his patent. The court declared its opinion to the jury, that if an inventor makes his discovery public, he abandons the inchoate right to the exclusive use of the invention. “It is possible,” added the Chapter 6 – The Patent Document 249

court, “that the inventor may not have intended to give the benefit of his discovery to the public.” “But it is not a question of intention,” “but of legal inference, resulting from the conduct of the inventor, and affecting the interests of the public. It is for the jury to say whether the evidence brings this case within the principle which has been stated. If it does, the court is of opinion that the plaintiff is not entitled to a verdict.” The jury found a verdict for the defendants, an exception was taken to the opinion, and the judgment was affirmed by this court. This case affirms the principle that a failure on the part of the patentee, in those pre-requisites of the act which authorize a patent, is a bar to a recovery in an action for its infringement; and that the validity of this defense does not depend on the invention of the inventor, but is a legal inference upon his conduct. Upon these authorities and this reasoning we are of opinion that the instruction was erroneous, and that the judgment ought to be reversed and the cause remanded. . . . The judgment is reversed, and the cause remanded with directions to issue a venire facias de novo [new trial]. ****

Webster Loom Co. v. Higgins 105 U.S. (15 Otto) 580 (1882) MR. JUSTICE BRADLEY delivered the opinion of the court. [The patent was directed to improvements in a weaving loom. The description “would be incomprehensible to a person unacquainted with looms for weaving pile fabrics, but very plain to one who understood their construction and operation.” The prior art included early work by one Bigelow, with improvements by one Wield. The defendants used Bigelow looms and had obtained ownership of Wield’s patents.] With this mass of previous knowledge and nomenclature in their minds (as we must suppose it to have been), the language, the explanations, the drawings, and the claims of Webster's patent must have been perfectly intelligible to them. When an astronomer reports that a comet is to be seen with the telescope in the constellation of Auriga, in so many degrees of declination, and so many hours and minutes of right ascension, it is all Greek to the unskilled in science; but other astronomers will instantly direct their telescopes to the very point in the heavens where the stranger has made his entrance into our system. They understand the language of their brother scientist. If a mechanical engineer invents an improvement on any of the appendages of a steam-engine, such as the valve-gear, the condenser, the steam-chest, the walking-beam, the parallel motion, or what not, he is not obliged, in order to make himself understood, to describe the engine, nor the particular appendage to which the improvement refers, nor its mode of connection with the principal machine. These are already familiar to others skilled in that kind of machinery. He may begin at the point where his invention begins, and describe what he has made that is new, and what it replaces of the old. That which is common and well known is as if it were written out in the patent and delineated in the drawings. Applying these remarks to the specification before us, and recurring to the extract already made, setting forth the nature and object of the invention, it is easy to conceive that its meaning may be plain to those for whose use it is intended. They know at once what is meant by the terms, “reciprocating or driving slide,” “sliding-bar,” “withdrawing and inserting devices,” “trough,” wire,” “wire-box,” “lay,” &c. They also understand the movements referred to, and the objects to be attained by each device. Chapter 6 – The Patent Document

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In like manner, if we follow the specification in its description of the invention in detail, with the references to the drawings, and the closing summary of the patentee's claims, the same method of interpretation will be applicable. And as it cannot be expected that the court will possess the requisite knowledge for this purpose, it becomes necessary that it should avail itself of the light furnished by the evidence to enable it to understand the terms used in the patent and the devices and operations described or alluded to therein. This evidence, of which the record in this case furnishes an abundance, being resorted to, we have no difficulty in comprehending the patent, or the nature of the invention therein described. A great deal of testimony was introduced by the defendants to show that the patentee had failed to describe his invention in such full, clear, and exact terms as to enable persons skilled in the art to construct and use it. It seems to us that the attempt has failed. When the question is, whether a thing can be done or not, it is always easy to find persons ready to show how not to do it. But it stands confessed that the thing has been done, that is to say, the contrivance which Webster claims in his patent has been applied, and very successfully so, to pile-fabric looms, and, as the appellant's counsel well remarks, no one except Webster has ever appeared to claim a patent for doing it. If the thing could not be understood without the exercise of inventive power, it is a little strange that it should have been so easily adapted to the looms on which it has been used with such striking results. It is worthy of remark, in this connection, that the defendants, in their answer, state it as a fact, that, prior to the alleged invention of Webster, looms containing lays having shuttle-boxes rigidly attached were publicly known and described in certain English patents, which they specify; and that all the other parts and elements mentioned in the fifth claim of Webster's patent (being the claim relied on) were described in another English patent of one Birkbeck; and they aver and insist, as will be more fully noticed hereafter, that the application and use of the two things together, that is, the parts described in Birkbeck's patent, with the rigid lay and shuttle-box described in the other patents, were obvious and required no invention; and that, therefore, the alleged invention of Webster was well known, and constituted a part of the known state of the art. This averment in the answer, which of course is sworn to, does not seem to tally very well with the allegation that Webster has failed to point out, in his patent, how to use and apply his invention, and that it requires further invention to use and apply it. **** MR. JUSTICE BLATCHFORD did not sit in this case, nor take any part in deciding it.

Questions, Comments, Problems 1. Overbreadth and Enablement – In Chapters 3 and 4, you learned that the broader a patent claim is drafted, the more likely the claim will sweep in the prior art and be found anticipated or obvious. In addition, a claim can be so broad that it includes both material that is enabled by the specification and material that is not. The Court of Customs and Patent Appeals discussed this problem in In re Fisher, 427 F.2d 833, 166 USPQ 18 (CCPA 1970). There, the court was faced with an application for certain hormones useful in treating arthritis. While earlier treatments had potencies around 50% of a specified standard, Fisher’s application claimed all preparations having at least a potency of 100 percent, although it only disclosed a method of producing preparations having potencies from 111 percent to 230 percent. The court affirmed the rejection of the claims because the enablement was not commensurate with the scope of the claims. A disclosure of potencies as high as 230 percent did not “enable” an open-ended claim to all potencies above 100 percent. The court reasoned: It is apparent that [an inventor who was the first to achieve a potency above 100 percent] should be allowed to dominate the future patentable inventions of others where those inventions were based in some way on his teachings. Such improvement, while unobvious from his teachings, are still within his contribution, since the improvement was made possible by his work. It is equally apparent, however, that he must not be permitted to achieve this dominance by claims which are insufficiently supported. . . . [The first paragraph of section 112] requires that the scope of the claims must bear a reasonable correlation to the scope of enablement provided by the

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specification to persons of ordinary skill in the art. In cases involving predictable factors, such as mechanical or electrical elements, a single embodiment provides broad enablement in the sense that, once imagined, other embodiments can be made without difficulty and their performance characteristics predicted by resort to known scientific laws. In cases involving unpredictable factors, such as most chemical reactions and physiological activity, the scope of enablement obviously varies inversely with the degree of unpredictability of the factors involved. Thus, the permissible breadth of a claim under the enablement requirement will depend on the amount of disclosure in the specification and the degree of predictability in the relevant field of art. The connection between overbreadth and non-enablement can be traced back as far as the Telegraph Case, O’Reilly v. Morse, 56 U.S. (15 How.) 62 (1853), in which Morse was not permitted to exceed the enabling breadth of his disclosure even in a “predictable” field. Claim 8 of the Morse patent covered all means of using electromagnetism to communicate at a distance. Although the Court held valid other narrower claims of Morse’s patent directed to particular applications of electro-magnetism, it found claim 8 invalid: [I]f the eighth claim of the patentee can be maintained, there was no necessity for any specification, further than to say that he had discovered that, by using the motive power of electro-magnetism, he could print intelligible characters at any distance. We presume it will be admitted on all hands, that no patent could have issued on such a specification. Yet this claim can derive no aid from the specification filed. It is outside of it, and the patentee claims beyond it. And if it stands, it must stand simply on the ground that the broad terms above mentioned were a sufficient description, and entitled him to a patent in terms equally broad. In our judgment the act of Congress cannot be so construed. 56 U.S. (15 How.) at 119-20. Scope of enablement was explained clearly in The Incandescent Lamp Patent, 159 U.S. 465 (1895). In striking down claims of the Sawyer and Man patent directed to “fibrous or textile material” for use as the filament of an incandescent light while upholding a narrower claim to “carbonized paper” as the filament, the Court, through Justice Brown, stated: Is the complainant entitled to a monopoly of all fibrous and textile materials for incandescent conductors? If the patentees had discovered in fibrous and textile substances a quality common to them all, or to them generally, as distinguishing them from other materials, such as minerals, etc., and such quality or characteristic adapted them peculiarly to incandescent conductors, such claim might not be too broad. . . . Sawyer and Man supposed they had discovered in carbonized paper the best material for an incandescent conductor. Instead of confining themselves to carbonized paper, as they might properly have done, and in fact did in their third claim, they made a broad claim for every fibrous or textile material, when in fact an examination of over 6000 vegetable growths showed that none of them possessed the peculiar qualities that fitted them for that purpose. Was everybody then precluded by this broad claim from making further investigation? We think not. **** It is required by Rev. Stat. § 4888 that the application shall contain “a written description of the device and of the manner and process of making, constructing, compounding, and using it in such full, clear, concise, and exact terms as to enable any person, skilled in the art or science to which it appertains or with which it is most nearly connected, to make, construct, compound, and use the same”. . . . If the description be so vague and uncertain that no one can tell, except by independent experiments, how to construct the patented device, the patent is void. **** Applying this principle to the patent under consideration, how would it be possible for a person to know what fibrous or textile material was adapted to the purpose of an incandescent conductor, except by the most careful and painstaking experimentation? If, as before observed, there were some general quality, running through the whole fibrous and textile kingdom, which distinguished it from every other, and gave it a peculiar fitness for the particular purpose, the man who discovered such quality might justly be entitled to a patent; but that is not the case here. . . . [T]o hold that one, who had discovered that a certain fibrous or textile material answered the required purpose, should obtain the right to exclude everybody from the whole domain of fibrous and textile materials, and thereby shut out any further efforts to discover a better specimen of that class than the patentee had employed, would be an unwarranted extension of his monopoly, and operate rather to discourage than to promote invention. If Sawyer and Man had discovered that a certain carbonized paper would answer the purpose, their claim to all carbonized paper would,

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perhaps, not be extravagant; but the fact that paper happens to belong to the fibrous kingdom did not invest them with sovereignty over this entire kingdom, and thereby practically limit other experimenters to the domain of minerals. Two years later, the Second Circuit faced the scope of enablement problem in the context of a chemical genus case. In Matheson v. Campbell, 78 Fed. 910 (2d Cir. 1897), the district court had upheld a claim to a type of blue dye by construing the claim as limited to the dye example shown in the patent specification and then finding infringement under the doctrine of equivalents (to be discussed in Chapter 9). The court of appeals initially accepted, for the sake of argument, the district court’s narrow claim construction and reversed on the basis that infringement was not proven. Id at 920-21. In passing, the court noted with disfavor, in oft-quoted words, the fact that the patentee had urged a very broad claim construction that far exceeded his contribution to the art: Now, the evidence shows, and it is not disputed, that the phrase “any sulpho acid of any radical” . . . is a very broad one, covering over 100, possibly as many as 500, different sulpho acids. It is proved and conceded that very many, in fact nearly all, of these, will not, when treated according to the patentee’s process, produce the patentee’s color. In other words, when the inventors said, “If you take any sulpho acid of any radical, and treat it as we direct you, you will get a color producing black,” they made a false statement. . . . [¶] [H]aving himself experimented only with three or four bodies out of a group of hundreds, he proposes to set himself in the pathway of future experimenters with any or all of the other bodies, and, as the result of each new experiment is disclosed, will fire away at it, calculating to “hit it if it is a deer, and miss if it is a cow.” Id. at 915. On the patentee’s petition for rehearing, the court decided to construe the claim, and, in doing so, rejected the district court’s narrow construction and concluded that the claim was in fact for the broad chemical genus it had so vigorously criticized in its original opinion. As such, the claim was invalid because “the ‘discovery’ which they disclosed [and claimed] is not the ‘discovery’ they made, and it is for the discovery or invention which the patentee make and discloses that [a] patent issues.” Id. at 923 (emphasis added). The Supreme Court came out the same way in Corona Co. v. Dovan Corp., 276 U.S. 358 (1928), another chemical case. Chief Justice Taft invalidated broad genus claims to accelerators for vulcanizing rubber, as follows: We come then to the question of the validity of [the generic claims], which seek to appropriate to the patentee the process of treating rubber by combining with the rubber compound “a disubstitued guanidine” [as an accelerator]. Now the class of disubstituted guanidines includes not only D.P.G. [which was the subject of a species claim] but all other derivatives of guanidine in which two of the hydrogen atoms of the guanidine nucleus have been substituted by other groups. . . . [T]he experts show that there are between 50 and 100 substances which answer this description, of which there is quite a number that are not accelerators at all. Weiss could certainly not claim the entire group of such compounds. He makes no showing that there is any general quality common to disubstituted guanidines which makes them all effective as accelerators. Claims for their exclusive use cannot therefore be sustained. This is shown by the decision of this Court in this The Incandescent Lamp Patent, 159 U.S. 465, where the Court said, at page 475: “If, as before observed, there were some general quality, running through the whole fibrous and textile kingdom, which distinguished it from every other, and gave it a peculiar fitness for the particular purpose, the man who discovered such quality might justly be entitled to a patent; but that is not the case here.” Id. at 385. The Federal Circuit has softened the impact of these decisions somewhat by drawing a distinction between predictable and unpredictable technologies. In United States v. Telectronics, Inc., 857 F.2d 778, 8 USPQ2d 1217 (Fed. Cir. 1988), the court reversed a district court’s determination that the claims were not enabled. The claims broadly covered a system for electrical bone growth stimulation, not limited to a particular type of metal for the electrode or to specific current levels. The patent specification exemplified the use of stainless steel electrodes and the specific level of current to be used with those electrodes. The fact that some experimentation would be required to find the right current levels to make the invention work with non-stainless steel electrodes did not make the claims nonenabled, according to the Federal Circuit. The court explained its conclusion:

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The test of enablement is whether one reasonably skilled in the art could make or use the invention from the disclosures in the patent coupled with information known in the art without undue experimentation. . . . [¶] Since one embodiment is admittedly disclosed in the specification, along with the general manner in which its current range was ascertained, we are convinced that other permutations of the invention could be practiced by those skilled in the art without undue experimentation. . . . [¶] . . . Telectronics argues that the specification is enabling only for the use of stainless steel while the claims are not limited in the types of material from which the electrodes can be made. It contends that the scope of protection must bear a reasonable relationship to the scope of enablement, citing In re Fisher, 427 F.2d 833, 838-39 . . . ([CCPA] 1970). [Fisher] involved chemical reactions, recognized by our predecessor court as having a high degree of unpredictability and therefore requiring an increased enablement disclosure. . . . The only impediments [to enabling non-stainless steel electrodes and other current levels] are the time and cost of a dose response study, which the district court found could be performed by “those who were expert in the field and actually working with bone, doing electrical stimulation experiments . . .,” i.e., those skilled in the art. Moreover, as we have noted, Telectronic’s device using different electrode materials actually operated within the current parameters disclosed in the specification. Id. at 785-86, 8 USPQ2d at ___. Do you think the predictability vel non of an area of technology provides a satisfactory criterion for determining whether a given claim is broader then the scope of enablement in the specification? 2. Timing – At what point must the specification be enabling? If the patent is merely meant to teach the public how to make the invention, may a patent applicant add information to an application or rely on post-filing knowledge in the art to make the disclosure enabling before the patent issues? Is the public prejudiced by the applicant’s actions, since the public never knew of the patent when it was deficient? Under older versions of the patent statute, an enabling disclosure was not required until the patent issued. For example, the 1793 Act, which governed in Grant v. Raymond, required that an inventor deliver a specification “before he can receive a patent.” However, that is no longer the law, as explained by the Court of Customs and Patent Appeals in In re Glass, 492 F.2d 1228, 181 USPQ 31 (CCPA 1974): Appellant’s attempt to use the disclosures of the four patents which issued after his filing date raises a subsidiary question: If a disclosure is insufficient as of the time it is filed, can it be made sufficient, while the application is still pending, by later publications which add to the knowledge of the art so that the disclosure, supplemented by such publications, would suffice to enable the practice of the invention? We think it cannot. The sufficiency must be judged as of the filing date. . . . [Section 132 of Title 35] prohibits adding any “new matter” to the disclosure after filing. Moreover, the filing date becomes a date of constructive reduction to practice in determining priority of invention and this should not be the case unless at that time, without waiting for subsequent disclosures, any person skilled in the art could practice the invention from the disclosure of the application. If information to be found only in subsequent publications is needed for such enablement, it cannot be said that the disclosure in the application evidences a completed invention. . . . If [the applicant] cannot supply enabling information, he is not yet in a position to file. This passage thus indicates two concerns with the enablement requirement: that the applicant establish a constructive reduction to practice of the invention on the filing date and that the applicant adequately disclose the invention to the public. 3. Deposit as a Requirement for Enablement – In certain areas, such as biotechnology, it may be impossible, or at least very difficult, to enable an invention through simple words and diagrams. To meet the disclosure requirements in such situations, administrative guidelines and judicial decision have blessed a system of deposits of starting materials. The Federal Circuit discussed deposits in In re Wands, 858 F.2d 731, 8 USPQ2d 1400 (Fed. Cir. 1988): Where an invention depends on the use of living materials such as microorganisms or cultured cells, it may be impossible to enable the public to make the invention (i.e., to obtain these living materials) solely by means of a written disclosure. One means that has been developed for complying with the enablement requirement is to deposit the living materials in cell depositories which will distribute samples to the public who wish to practice the invention after the patent issues. . . . A deposit has been held necessary for enablement where the starting materials (i.e.,

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the living cells used to practice the invention, or cells from which the required cells can be produced) are not readily available to the public. Even when starting materials are available, a deposit has been necessary where it would require undue experimentation to make the cells of the invention from the starting materials. [¶] No deposit is necessary if the biological organisms can be obtained from readily available sources or derived from readily available starting materials through routine screening that does not require undue experimentation. 858 F.2d at 735-36, 8 USPQ2d at 1402-03. The use of deposits to meet the enablement requirement is also covered by PTO regulations. See 37 C.F.R. §§ 1.801-1.809. Combining the discussion of timing, above, with the need for a deposit, what is the result if a patentee deposits enabling materials before filing for a patent but requires that the depository only make the materials public after the patent has issued? The CCPA held the patent valid in such a case. See In re Argoudelis, 434 F.2d 1390, 168 USPQ 99 (CCPA). What if the patentee deposits the materials in an independent depository after the filing date but before issuance of the patent–is the patent “enabling” as of its filling date, as required by In re Glass? The Federal Circuit said yes in In re Lundak, 773 F.2d 1216, 227 USPQ 90 (Fed. Cir. 1985). As of the filing date, the applicant Lundak had deposited the materials in his own laboratory and those of his colleagues at the University of California. After the application was filed, but while it was pending, he had deposited the materials in an independent depository (the American Type Culture Collection (ATCC)) and amended his specification to identify the accession number and deposit date for the ATCC deposit. The Federal Circuit found this sufficient to comply with the enablement requirement. The court cited CCPA precedent (In re Argoudelis and In re Hawkins) referring to two functions of the enablement requirement–first, to ensure complete public disclosure of the invention upon issuance of the patent, and, second, to establish the application filing date as the prima facie date of the invention. The court found both functions met by Lundak’s actions. A patent is made public before it expires, and others may study the patent document so that they may “design around” the claims of the patent and produce noninfringing improvements to the patent. Suppose that the inventor of a new line of cells deposits those cells (which fall within the patent claims) rather than starting materials that do not fall within the patent claims. If a third-party obtains those cells, any use of the cells might constitute an infringement. Therefore, the patentee may have effectively removed the ability of others to “design around” the claimed invention by eliminating any real access to the invention until the patent expires. Is this fair? Can you think of a way that the third-party’s use of the deposited material would not be an infringement? 4. The Person Skilled in the Art – Is the skilled artisan under section 112 the same hypothetical person as the artisan of ordinary skill under section 103? In some ways he is, and in some he is not. First, under section 103 the pertinent field of art is defined by the problem to be solved, and the courts look for a person skilled in that field. But does that mean one field of technology? Not necessarily. Remember that we are talking about a hypothetical person, who may not actually exist. One district court, in a section 103 context, found the pertinent fields to be several, all of which the hypothetical person either had familiarity with, or would be expected to consult with, someone who did. Likewise, under section 112, the Court of Customs and Patent Appeals has suggested that an invention directed to more than one field may be enabled by looking to the knowledge of multiple specialists. For example, an invention that uses a computer program to operate a structure in a novel way may be enabled by the knowledge of both a computer programmer and an engineer in the appropriate field. See In re Naquin, 398 F.2d 863, 158 USPQ 317 (CCPA 1968). Second, under section 103, the artisan of ordinary skill is presumed to know about all of the relevant prior art in the pertinent field. That presumption is driven by the policy of imposing an absolute duty to research all of the prior art so as to avoid duplicative inventive activity and overlapping patents. In contrast, the policy behind section 112 is to make the invention available to the public without requiring a detailed search. See 3 Donald S. Chisum, Chisum on Patents § 7.03[2], at 7-28 to 7-29. Thus, in Webster Loom, the Court endowed the artisan under section 112 with knowledge of “[t]hat which is common and well known.” Hence, the omniscience of the hypothetical person under section 103 does not carry over totally to section 112. 5. Incorporation by Reference – Proving that patentees will find a way to stretch any rule, the applicant in In re Hawkins, 486 F.2d 569, 179 USPQ 157 (CCPA 1973), referred to several co-pending British applications to establish utility for the invention under sections 101 and 112. The examiner rejected the application on the grounds that reference to a foreign application was ineffective to meet the utility requirement. In response, the applicant amended his application to include substantially all of the text from the British applications. The examiner refused to enter the amendments, reasoning that they were impermissible “new matter.” The Board agreed with the examiner, but the court reversed.

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6. Experimentation – The cases say that a specification enables the claimed invention if the invention could be made or used through experimentation that is not “undue” or “unreasonable,” using the disclosures in the patent along with information known in the pertinent art. See Mineral Separation v. Hyde, 242 U.S. 261 (1916); see also United States v. Telectronics, Inc., 857 F.2d 778, 785, 8 USPQ2d 1217, 1223 (Fed. Cir. 1988). The Federal Circuit enumerated eight factors in In re Wands: (1) (2) (3) (4) (5) (6) (7) (8)

the quantity of experimentation necessary, the amount of direction or guidance presented, the presence or absence of working examples, the nature of the invention, the state of the prior art, the relative skill of those in the art, the predictability or unpredictability of the art, and the breadth of the claims.

In Wands, the invention was directed toward immunoassay methods for detecting hepatitis B surface antigens by use of high-affinity monoclonal antibodies. The PTO rejected the claims on the ground that the specification did not enable a person skilled in the art to make the monoclonal antibodies needed to practice the invention. No hard-and-fast rules can be extrapolated from the various cases that find either enablement or lack of enablement. Chisum catalogues many of the cases at § 7.03[4][a]-[b] of his treatise. 7. Biotechnology - The Federal Circuit has not lowered the requisites for enablement in the new, growing field of biotechnology. If anything, it has been concerned about efforts in this field to preempt further research through sketchy patent disclosures. One such case was Genentech, Inc. v. Novo Nordisk A/S, 108 F.3d 1361, 42 USPQ2d 1001 (Fed. Cir. 1997). There, the court on appeal invalidated a claim for lack of enablement where the claim was for a method of producing human growth hormone (“hGH”) that used a technique known as “cleavable fusion expression,” that at the time of filing had not been shown workable in this context. The court said: Genentech’s arguments, focused almost exclusively on the level of skill in the art, ignore the essence of the enablement requirement. Patent protection is granted in return for an enabling disclosure of an invention, not for vague intimations of general ideas that may or may not be workable. See Brenner v. Manson . . . (stating, in context of the utility requirement, that “a patent is not a hunting license. . . .”) Tossing out the mere germ of an idea does not constitute enabling disclosure. While every aspect of a generic claim certainly need not have been carried out by an inventor, or exemplified in the specification, reasonable detail must be provided in order to enable members of the public to understand and carry out the invention. That requirement has not been met in this specification with respect to the cleavable fusion expression of hGH. It is true, as Genentech argues, that a specification need not disclose what is well known in the art. . . . However, that general, oft-repeated statement is merely a rule of supplementation, not a substitute for a basic enabling disclosure. It means that the omission of minor details does not cause a specification to fail to meet the enablement requirement. However, when there is no disclosure of any specific starting material or of any of the conditions under which a process can be carried out, undue experimentation is required; there is a failure to meet the enablement requirement that cannot be rectified by asserting that all the disclosure related to the process is within the skill of the art. It is the specification, not the knowledge of one skilled in the art, that must supply the novel aspects of an invention in order to constitute adequate enablement. The specification provides only a starting point, a direction for further research. [¶] The specification indicates that it purports to solve a problem. . . . Genentech is attempting to bootstrap a vague statement of a problem into an enabling disclosure sufficient to dominate someone else's solution of the problem. This it cannot do. **** Where, as here, the claimed invention is the application of an unpredictable technology in the early stages of development, an enabling description in the specification must provide those skilled in the art with a specific and useful teaching. Genentech has not shown that the ‘199 patent provides that teaching. Id. at 1366-68. How broadly should one read this case–should all disclosures based on untried techniques be found not enabling, or is it the context of an unpredictable technology that makes the disclosure nonenabling?

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Written Description As noted at the beginning of the chapter, section 112 requires a “written description of the invention” in the specification. Although part of the same sentence as the enablement requirement, the written description requirement is distinct and has a different purpose. That purpose is to evidence the filing date as the prima facie date of invention by showing that the applicant was in full possession of the claimed subject matter on the filing date. See Fujikawa v. Wattanasin, 93 F.3d 1559, 39 USPQ2d 1895 (Fed. Cir. 1996). The written description requirement is raised when patent claims are added during prosecution that differ in scope from the originally-filed claims. Perhaps the applicant has discovered an improvement for her invention since filing her application and has added broader claims that cover both her original embodiment and the improvement. In such a situation, the written description requirement may prevent the applicant from claiming priority back to the date of her original application for the improvement. Original claims cannot violate the written description requirement because the claims were part of the original application and thus serve as their own written description. See In re Koller, 613 F.2d 819, 823-24, 204 USPQ 702, 706 (CCPA 1980). The following cases explore the policies that support the written description requirement.

Evans v. Eaton 20 U.S. (7 Wheat.) 356 (1822) Mr. Justice STORY delivered the opinion of the Court. **** We will consider the points in the same order in which they were reviewed by the Circuit Court. Was the patent of the plaintiff, so far as respects his improved Hopperboy, a patent for the whole machine as his own invention? It is not disputed that the specification does contain a good and sufficient description of the improved Hopperboy, and of the manner of constructing it; and if there had been any dispute on this subject, it would have been matter of fact for the jury, and not of law for the decision of the Court. The plaintiff, in his specification, after describing his Hopperboy, its structure, and use, sums up his invention as follows: “I claim as my invention, the peculiar properties or principles which this machine possesses, in the spreading, turning, and gathering the meal at one operation, and the rising and lowering of its arms by its motion, to accommodate itself to any quantity of meal it has to operate upon.”

From this manner of stating his invention, without any other qualification, it is apparent that it is just such a claim as would be made use of by the plaintiff, if the whole machine was substantially in its structure and combinations new. The plaintiff does not state it to be a specific improvement upon an existing machine, confining his claim to that improvement, but as an invention substantially original. In short, he claims the machine as substantially new in its properties and principles, that is to say, in the modus operandi. If this be true, and this has been the construction strongly and earnestly pressed upon this Court by the plaintiff's counsel, in the argument at the present term, what are the legal principles that flow from this doctrine? **** . . . [I]t is clear that the party cannot entitled himself to a patent for more than his own invention; and if his patent includes things before known, or before in use, as his invention, he is not entitled to recover, for his patent is broader than his invention. If, therefore, the patent be for the whole of a machine, the party can maintain a title to it only by establishing that it is substantially new in its structure and mode of operation. If the same combinations existed before in machines of the same nature, up to a certain point, and the party's invention consists in adding some new machinery, or some improved mode of Chapter 6 – The Patent Document

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operation, to the old, the patent should be limited to such improvement, for if it includes the whole machinery, it includes more than his invention, and the refore cannot be supported. This is the view of the law on this point, which was taken by the Circuit Court. That Court went into a full examination of the testimony, and also of the structure of Evans' Hopperboy, and Stouffer's Hopperboy, and left it to the jury to decide, whether, up to a certain point, the two machines were or were not the same in principle. If they were the same in principle, and merely differed in form and proportion, then it was declared that the plaintiff was not entitled to recover; or, to use the language of the Court, if the jury were of opinion that the plaintiff was not the inventor of the Hopperboy, he was not entitled to recover, unless his was a case excepted from the general operation of the act. We perceive no reason to be dissatisfied with this part of the charge; it left the fact open for the jury, and instructed them correctly as to the law. And the verdict of the jury negatived the right of the plaintiff, as the inventor of the whole machine. The next inquiry before the Circuit Court was, whether the plaintiff's case was excepted from the general operation of the act. Upon that it is unnecessary to say more than that the point was expressly decided by this Court in the negative, upon the former writ of error. And we think the opinion of this Court, delivered on that occasion, is correctly understood and expounded by the Circuit Court. It could never have been intended by this Court to declare, in direct opposition to the very terms of the patent act, that a party was entitled to recover, although he should be proved not to have been the inventor of the machine patented; or that he should be entitled to recover, notwithstanding the machine patented was in use prior to his alleged discovery. There is undoubtedly a slight error in drawing up the judgment of the Court upon the former writ of error; but it is immediately corrected by an attentive perusal of the opinion itself. And we do not think that it can be better stated or explained than in the manner in which the Circuit Court has expounded it. We are then led to the examination of the other point of view in which the plaintiff's counsel have attempted to maintain this patent. That is, by considering it, not as a patent for the whole of the machine or improved Hopperboy, but as an improvement of the Hopperboy. Considered under this aspect, the point presents itself which was urged by the defendant's counsel, viz. that if it be a patent for an improvement, it is void, because the nature and extent of the improvement is not stated in the specification. The Circuit Court went into an elaborate examination of the law applicable to this point, and into a construction of the terms of the patent itself, and came to the conclusion that no distinct improvement was specified in the patent; that such specification was necessary in a patent for an improvement, and that for this defect, the plaintiff was not entitled to recover, supposing his patent to be for an improvement only of an existing machine. It may be justly doubted, whether this point at all arises in the cause; for the very terms of the patent, as they have been already considered, and as they have been construed at the bar by the plaintiff's counsel, at the present argument, seem almost conclusively to establish, that the patent is for the whole machine, that is, for the whole of the improved Hopperboy, and not for a mere improvement upon the old Hopperboy. But, waiving this point, can the doctrine asserted at the bar be maintained, that no specification of an improvement is necessary in the patent; and that it is sufficient if it be made out and shown at the trial, or may be established by comparing the machine specified in the patent with former machines in use? That there is no specification of any distinct improvement in the present patent, is not denied; that the patent is good without it, is the subject of inquiry. Let this be decided by reference to the patent act. The third section of the patent act requires, as has been already stated, that the party “shall deliver a written description of his invention, in such full, clear, and exact terms, as to distinguish the same from all other things before known, and to enable any person skilled in the art or science, &c. &c. to make, compound, and use the same.” The specification, then, has two objects; one is to make known the manner of constructing the machine (if the invention is of a machine) so as to enable artizans to make and use it, and thus to give the public the full benefit of the discovery after the expiration of the patent. It is not pretended that the plaintiff's patent is not in this respect sufficiently exact and minute in the description. But whether it be so or not, is not material to the present inquiry. The other object of the specification is, to put the public in possession of what the party claims as his own invention, so as to ascertain if he claim any thing that is in common use, or is already known, and to guard against prejudice or injury from the use of an invention which the party may otherwise innocently suppose not Chapter 6 – The Patent Document 258

to be patented. It is, therefore, for the purpose of warning an innocent purchaser or other person using a machine, of his infringement of the patent; and at the same time of taking from the inventor the means of practising upon the credulity or the fears of other persons, by pretending that his invention is more than what it really is, or different from its ostensible objects, that the patentee is required to distinguish his invention in his specification. Nothing can be more direct than the very words of the act. The specification must describe the invention “in such full, clear, and distinct terms, as to distinguish the same from all other things before known.” How can that be a sufficient specification of an improvement in a machine, which does not distinguish what the improvement is, nor state in what it consists, nor how far the invention extends? Which describes the machine fully and accurately, as a whole, mixing up the new and old, but does not in the slightest degree explain what is the nature or limit of the improvement which the party claims as his own? It seems to us perfectly clear that such a specification is indispensable. We do not say that the party is bound to describe the old machine; but we are of opinion that he ought to describe what his own improvement is, and to limit his patent to such improvement. For another purpose, indeed, with the view of enabling artizans to construct the machine, it may become necessary for him to state so much of the old machine as will make his specification of the structure intelligible. But the law is sufficiently complied with in relation to the other point, by distinguishing, in full, clear, and exact terms, the nature and extent of his improvement only. We do not consider that the opinion of the Circuit Court differs, in any material respect, from this exposition of the patent act on this point; and if the plaintiff's patent is to be considered as a patent for an improvement upon an existing Hopperboy, it is defective in not specifying that improvement, and therefore the plaintiff ought not to recover. Upon the whole, it is the opinion of the majority of the Court, that the judgment of the Circuit Court ought to be affirmed with costs.

Mr. Justice LIVINGSTON dissented. At this late period, when the patentee is in his grave, and his patent has expired a natural death, we are called on to say, whether his patent ever had a legal existence, and it may seem not very important to the representatives of the patentee what may be the decision of this Court. But understanding that many other actions are pending for a violation of this part of the patent right, and that infractions have taken place for which actions may yet be commenced, and believing that the decision we are about to make will have a very extensive, if not a disastrous bearing on many other patents for improvements, and will in fact amount to a repeal of many of them, I have thought proper to assign my reasons for dissenting from the opinion just delivered. **** In the present case, the patent is for an improved Hopperboy; a particular description of which, and its uses, will be found in 3 Wheat. Rep. 466. It is not pretended that this machine, if made in conformity with the description given by Mr. Evans, could not in fact be distinguished from every thing else before known, when brought into comparison with it, nor that a skilful person, from its description, would not be able to make one like it; which would seem to satisfy every requisition of the law. But the defendant's counsel say this is not enough. It should not only in its organization and aggregate be different from every thing else, but every respect in which it differs in its construction or operation from other machines, should be minutely stated in the specification; or, in other words, that other machines heretofore used for similar purposes, should be either described or referred to therein, and the differences between the patented machines and those in former use, be carefully designated. The answer to this is, that the law does not require it—that it is impracticable, and would be of no use.

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We have seen already that the law prescribes no precise form of specification, which would have been impracticable, and imposes no obligation to describe, in any particular mode, the machine in question. Not a word is said as to showing in what particulars the improvement patented differs from all other machines for the same purpose then in use. If, on the whole description taken together, the machine of the plaintiff can be distinguished from other machines when compared with his, the words and the objects of the law are satisfied. The law appears to have nothing else in view, in requiring a specification, than the instruction of the public; that is, to guard them against a violation of the patented improvement, and to enable them, when the letters patent expire, from the specification filed, to make a machine similar to the one which had been patented. The only inquiry, therefore, ought to be, whether this obvious intention of the legislature has been answered by the particular specification which may be the subject of litigation; and if enough appears, either to prevent a person from encroaching on the right of the patentee, or to enable a skilful person to make a machine which shall not only resemble the one patented, but produce the like effect; more ought not to be required. Whether these ends be attained by a particular description of every part of the improved machine, or by describing in what respect it differs from other machines, can make no difference. The information to the public is as valuable and intelligible, if not more so, in the former case, than in the latter. If it be, taken altogether, an improved machine, for the purpose of producing certain results, and so described that it may be distinguished from other machines, and that others may be made on the same model, it is a literal compliance with all that the law requires. If the different parts of the machine, and their combination, or connexion, be accurately described, or intelligible set forth, why should it not be supported, although no reference be made to other machines dissimilar in construction, and which, although applied for the same purpose, are inferior in the beneficial results produced by them. To the objection, that it does not precisely appear in what the patent Hopperboy differs from those antecedently in use, the answer is, and it ought to be conclusive, that the patentee does not mean to abridge or restrain the public from using those or any other machines, so that they differ from the one described by him; and that any mechanic, on having his specification before him, can avoid an interference with his invention. . . . If the inventor of an improved Hopperboy is to discriminate, in his specification, between his improvements and any particular Hopperboy, which may be produced on that trial, and is to be nonsuited for not having done so, however correct and distinguishing it may be in every other respect, he must do the like as to all other Hopperboys; and if he must describe any, he must describe all others with which he may be acquainted; and, after all, some one may be introduced at the trial, of which he had never heard, or which he had never seen; and inasmuch as he had not stated in what respects it was improved by his machine, although this would immediately be seen on inspection, he must not only fail of recovering damages for a manifest violation of his right, but must have his patent declared void by the Court, without a trial by jury, and be deprived of the fruits of a most valuable improvement, not because he was not the bona fide inventor—not because he had not described his improvement with sufficient certainty, according to the act of Congress—but because something more was required of him, of which he had no means of information. . . . **** Mr. Justice JOHNSON, and Mr. Justice DUVALL, also dissented. Judgment affirmed with costs.

Vas-Cath Inc. v. Mahurkar 935 F.2d 1555, 19 USPQ2d 1111 (Fed.Cir. 1991) Before RICH, MICHEL and PLAGER, Circuit Judges. RICH, Circuit Judge.

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[The district court on summary judgment invalidated both of Mahurkar’s asserted utility patents on double lumen catheters after ruling that the patents were not entitled to benefit under 35 U.S.C. § 120, of the filing date of Makurkar’s earlier-filed design patent application because the application did not provide a “written description of the invention” as required by 35 U.S.C. § 112, first paragraph.] BACKGROUND Sakharam Mahurkar filed the '081 design application, also titled "Double Lumen Catheter," on March 8, 1982. The application was abandoned on November 30, 1984. Figures 1-6 of the '081 design application are reproduced below.

As shown, Mahurkar's catheter comprises a pair of tubes (lumens) designed to allow blood to be removed from an artery, processed in an apparatus that removes impurities, and returned close to the place of removal. Prior art catheters utilized concentric circular lumens, while Mahurkar's employs joined semi-circular tubes that come to a single tapered tip. Advantageously, the puncture area of Mahurkar's semicircular catheter is 42% less than that of a coaxial catheter carrying the same quantity of blood, and its conical tip yields low rates of injury to the blood. The prior art coaxial catheters are now obsolete; Mahurkar's catheters appear to represent more than half of the world's sales. 745 F.Supp. at 520, 17 USPQ2d at 1353-54. After filing the '081 design application, Mahurkar also filed a Canadian Industrial Design application comprising the same drawings plus additional textual description. On August 9, 1982, Canadian Industrial Design 50,089 (Canadian '089) issued on that application. [More than one year later Mahurkar filed two utility patent applications in the PTO, claiming the benefit of the filing date of the design application, as “continuations” of the design application. The PTO allowed the patents (the ‘329 and ‘141 patents) to issue. Both patents contained the same drawings as the design application.] Vas-Cath sued Mahurkar in June 1988, seeking a declaratory judgment that the catheters it manufactured did not infringe Mahurkar's '329 and '141 utility patents. Vas-Cath's complaint alleged, inter alia, that the '329 and '141 patents were both invalid as anticipated under 35 U.S.C. § 102(b) by Chapter 6 – The Patent Document

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[Mahurkar’s own] Canadian '089. Vas-Cath's anticipation theory was premised on the argument that the '329 and '141 patents were not entitled under 35 U.S.C. § 120 to the filing date of the '081 design application because its drawings did not provide an adequate "written description" of the claimed invention as required by 35 U.S.C. § 112, first paragraph. Mahurkar counterclaimed, alleging infringement. Both parties moved for summary judgment on certain issues, including validity. For purposes of the summary judgment motion, Mahurkar conceded that, if he could not antedate it, Canadian '089 would represent an enabling and thus anticipating § 102(b) reference against the claims of his '329 and '141 utility patents. 745 F. Supp. at 521, 17 USPQ2d at 1355. Vas-Cath conceded that the '081 design drawings enabled one skilled in the art to practice the claimed invention within the meaning of 35 U.S.C. § 112, first paragraph. Id. Thus, the question before the district court was whether the disclosure of the '081 design application, namely, the drawings without more, adequately meets the "written description" requirement also contained in § 112, first paragraph, so as to entitle Mahurkar to the benefit of the 1982 filing date of the '081 design application for his two utility patents and thereby antedates Canadian '089. Concluding that the drawings do not do so, and that therefore the utility patents are anticipated by Canadian ‘089, the district court held the '329 and '141 patents wholly invalid under 35 U.S.C. § 102(b), id. at 524, 17 USPQ2d at 1358, and subsequently granted Mahurkar's motion for entry of a partial final judgment under Fed.R.Civ.P. 54(b) on the validity issue. This appeal followed. DISCUSSION **** The "Written Description" Requirement of § 112 The first paragraph of 35 U.S.C. § 112 requires that [t]he specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.

(Emphasis added). Application of the "written description" requirement, derived from the portion of § 112 emphasized above, is central to resolution of this appeal. The district court, having reviewed this court's decisions on the subject, remarked that "[u]nfortunately, it is not so easy to tell what the law of the Federal Circuit is." 745 F. Supp. at 522, 17 USPQ2d at 1356. Perhaps that is so, and, therefore, before proceeding to the merits, we review the case law development of the "written description" requirement with a view to improving the situation. The cases indicate that the "written description" requirement most often comes into play where claims not presented in the application when filed are presented thereafter. Alternatively, patent applicants often seek the benefit of the filing date of an earlier-filed foreign or United States application under 35 U.S.C. § 119 or 35 U.S.C. § 120, respectively, for claims of a later-filed application. The question raised by these situations is most often phrased as whether the application provides "adequate support" for the claim(s) at issue; it has also been analyzed in terms of "new matter" under 35 U.S.C. § 132. The "written description" question similarly arises in the interference context, where the issue is whether the specification of one party to the interference can support the claim(s) corresponding to the count(s) at issue, i.e., whether that party "can make the claim" corresponding to the interference count. To the uninitiated, it may seem anomalous that the first paragraph of 35 U.S.C. § 112 has been interpreted as requiring a separate "description of the invention," when the invention is, necessarily, the subject matter defined in the claims under consideration. See In re Wright, 866 F.2d 422, 424, 9 USPQ2d 1649, 1651 (Fed. Cir. 1989). One may wonder what purpose a separate "written description" requirement serves, when the second paragraph of § 112 expressly requires that the applicant Chapter 6 – The Patent Document

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conclude his specification "with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention." One explanation is historical: the "written description" requirement was a part of the patent statutes at a time before claims were required. A case in point is Evans v. Eaton, 20 U.S. (7 Wheat.) 356 (1822), in which the Supreme Court affirmed the circuit court's decision that the plaintiff's patent was "deficient," and that the plaintiff could not recover for infringement thereunder. The patent laws then in effect, namely the Patent Act of 1793, did not require claims, but did require, in its 3d section, that the patent applicant "deliver a written description of his invention, and of the manner of using, or process of compounding, the same, in such full, clear and exact terms, as to distinguish the same from all things before known, and to enable any person skilled in the art or science of which it is a branch, or with which it is most nearly connected, to make, compound and use the same...." Id. at 430. In view of this language, the Court concluded that the specification of a patent had two objects, the first of which was "to enable artizans to make and use [the invention]...." Id. at 433. The second object of the specification was to put the public in possession of what the party claims as his own invention, so as to ascertain if he claims anything that is in common use, or is already known, and to guard against prejudice or injury from the use of an invention which the party may otherwise innocently suppose not to be patented. It is, therefore, for the purpose of warning an innocent purchaser, or other person using a machine, of his infringement of the patent; and at the same time, of taking from the inventor the means of practising upon the credulity or the fears of other persons, by pretending that his invention is more than what it really is, or different from its ostensible objects, that the patentee is required to distinguish his invention in his specification.

Id. at 434. A second, policy-based rationale for the inclusion in § 112 of both the first paragraph "written description" and the second paragraph "definiteness" requirements was set forth in Rengo Co. v. Molins Mach. Co., 657 F.2d 535, 551, 211 USPQ 303, 321 (3d Cir.), cert. denied, 454 U.S. 1055 (1981): [T]here is a subtle relationship between the policies underlying the description and definiteness requirements, as the two standards, while complementary, approach a similar problem from different directions. Adequate description of the invention guards against the inventor's overreaching by insisting that he recount his invention in such detail that his future claims can be determined to be encompassed within his original creation. The definiteness requirement shapes the future conduct of persons other than the inventor, by insisting that they receive notice of the scope of the patented device.

With respect to the first paragraph of § 112 the severability of its "written description" provision from its enablement ("make and use") provision was recognized by this court's predecessor, the Court of Customs and Patent Appeals, as early as In re Ruschig, 379 F.2d 990, 154 USPQ 118 (CCPA 1967). Although the appellants in that case had presumed that the rejection appealed from was based on the enablement requirement of § 112, id. at 995, 154 USPQ at 123, the court disagreed: [T]he question is not whether [one skilled in the art] would be so enabled but whether the specification discloses the compound to him, specifically, as something appellants actually invented.... If [the rejection is] based on section 112, it is on the requirement thereof that "The specification shall contain a written description of the invention * * *." (Emphasis ours.)

Id. at 995-96, 154 USPQ at 123 (first emphasis added). The issue, as the court saw it, was one of fact: "Does the specification convey clearly to those skilled in the art, to whom it is addressed, in any way, the information that appellants invented that specific compound [claimed]?" Id. at 996, 154 USPQ at 123. In a 1971 case again involving chemical subject matter, the court expressly stated that "it is possible for a specification to enable the practice of an invention as broadly as it is claimed, and still not describe that invention." In re DiLeone, 436 F.2d 1404, 1405, 168 USPQ 592, 593 (CCPA 1971) (emphasis added). As an example, the court posited the situation "where the specification discusses only compound A and contains no broadening language of any kind. This might very well enable one skilled Chapter 6 – The Patent Document

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in the art to make and use compounds B and C; yet the class consisting of A, B and C has not been described." Id. at 1405 n. 1, 168 USPQ 593 n. 1 (emphasis in original). . . . The CCPA also recognized a subtle distinction between a written description adequate to support a claim under § 112 and a written description sufficient to anticipate its subject matter under § 102(b). The difference between "claim-supporting disclosures" and "claim-anticipating disclosures" was dispositive in In re Lukach, 442 F.2d 967, 169 USPQ 795 (CCPA 1971), where the court held that a U.S. "grandparent" application did not sufficiently describe the later-claimed invention, but that the appellant's intervening British application, a counterpart to the U.S. application, anticipated the claimed subject matter. As the court pointed out, "the description of a single embodiment of broadly claimed subject matter constitutes a description of the invention for anticipation purposes . . ., whereas the same information in a specification might not alone be enough to provide a description of that invention for purposes of adequate disclosure. . .." Id. at 970, 169 USPQ at 797 (citations omitted). The purpose and applicability of the "written description" requirement were addressed in In re Smith and Hubin, 481 F.2d 910, 178 USPQ 620 (CCPA 1973), where the court stated: Satisfaction of the description requirement insures that subject matter presented in the form of a claim subsequent to the filing date of the application was sufficiently disclosed at the time of filing so that the prima facie date of invention can fairly be held to be the filing date of the application. This concept applies whether the case factually arises out of an assertion of entitlement to the filing date of a previously filed application under § 120 . .. or arises in the interference context wherein the issue is support for a count in the specification of one or more of the parties . . . or arises in an ex parte case involving a single application, but where the claim at issue was filed subsequent to the filing of the application. . . .

Id. at 914, 178 USPQ at 623-24 (citations omitted). The CCPA's "written description" cases often stressed the fact-specificity of the issue. See, e.g., In re Wertheim, 541 F.2d 257, 262, 191 USPQ 90, 96 (CCPA 1976) ("The primary consideration is factual and depends on the nature of the invention and the amount of knowledge imparted to those skilled in the art by the disclosure") (emphasis in original); In re Smith, 458 F.2d 1389, 1395, 173 USPQ 679, 683 (CCPA 1972) ("Precisely how close the description must come to comply with § 112 must be left to case-by-case development"); DiLeone, 436 F.2d at 1405, 168 USPQ at 593 ("What is needed to meet the description requirement will necessarily vary depending on the nature of the invention claimed"). The court even went so far as to state: [I]t should be readily apparent from recent decisions of this court involving the question of compliance with the description requirement of § 112 that each case must be decided on its own facts. Thus, the precedential value of cases in this area is extremely limited.

In re Driscoll, 562 F.2d 1245, 1250, 195 USPQ 434, 438 (CCPA 1977). Since its inception, the Court of Appeals for the Federal Circuit has frequently addressed the "written description" requirement of § 112. A fairly uniform standard for determining compliance with the "written description" requirement has been maintained throughout: "Although [the applicant] does not have to describe exactly the subject matter claimed, ... the description must clearly allow persons of ordinary skill in the art to recognize that [he or she] invented what is claimed." In re Gosteli, 872 F.2d 1008, 1012, 10 USPQ2d 1614, 1618 (Fed. Cir. 1989) (citations omitted). "[T]he test for sufficiency of support in a parent application is whether the disclosure of the application relied upon “reasonably conveys to the artisan that the inventor had possession at that time of the later claimed subject matter.” "Ralston Purina Co. v. Far-Mar-Co, Inc., 772 F.2d 1570, 1575, 227 USPQ 177, 179 (Fed. Cir. 1985) (quoting In re Kaslow, 707 F.2d 1366, 1375, 217 USPQ 1089, 1096 (Fed. Cir. 1983)). Our cases also provide that compliance with the "written description" requirement of § 112 is a question of fact, to be reviewed under the clearly erroneous standard. Gosteli, 872 F.2d at 1012, 10 USPQ2d at 1618; Utter v. Hiraga, 845 F.2d 993, 998, 6 USPQ2d 1709, 1714 (Fed.Cir.1988).

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There appears to be some confusion in our decisions concerning the extent to which the "written description" requirement is separate and distinct from the enablement requirement. For example, in In re Wilder, 736 F.2d 1516, 1520, 222 USPQ 369, 372 (Fed. Cir. 1984), cert. denied, 469 U.S. 1209 (1985), we flatly stated: "The description requirement is found in 35 U.S.C. § 112 and is separate from the enablement requirement of that provision." However, in a later case we said, "The purpose of the [written] description requirement [of section 112, first paragraph] is to state what is needed to fulfill the enablement criteria. These requirements may be viewed separately, but they are intertwined." Kennecott Corp. v. Kyocera Int'l, Inc., 835 F.2d 1419, 1421, 5 USPQ2d 1194, 1197 (Fed.Cir.1987), cert. denied, 486 U.S. 1008 (1988). "The written description must communicate that which is needed to enable the skilled artisan to make and use the claimed invention." Id. To the extent that Kennecott conflicts with Wilder, we note that decisions of a three-judge panel of this court cannot overturn prior precedential decisions. See UMC Elec. Co. v. United States, 816 F.2d 647, 652 n.6, 2 USPQ2d 1465, 1468 n.7 (Fed. Cir. 1987), cert. denied, 484 U.S. 1025 (1988). This court in Wilder (and the CCPA before it) clearly recognized, and we hereby reaffirm, that 35 U.S.C. § 112, first paragraph, requires a "written description of the invention" which is separate and distinct from the enablement requirement. The purpose of the "written description" requirement is broader than to merely explain how to "make and use"; the applicant must also convey with reasonable clarity to those skilled in the art that, as of the filing date sought, he or she was in possession of the invention. The invention is, for purposes of the "written description" inquiry, whatever is now claimed. The District Court's Analysis We agree with the district court's conclusion that drawings alone may be sufficient to provide the "written description of the invention" required by § 112, first paragraph. Several earlier cases, though not specifically framing the issue in terms of compliance with the "written description" requirement, support this conclusion. For example, we previously stated that "[t]here is no statutory prohibition against an applicant's reliance, in claiming priority under 35 U.S.C. § 120, on a disclosure in a design application if the statutory conditions are met." KangaROOS U.S.A., Inc. v. Caldor, Inc., 778 F.2d 1571, 1574, 228 USPQ 32, 33 (Fed. Cir. 1985). The question whether the applicant's claim to a pocket for athletic shoes was in fact entitled to the filing date of his earlier design application was not resolved in KangaROOS, however. Issues of intent to deceive the PTO were involved, as well as an error of law by the district court in construing the claims of the wrong application. Id. at 1574-75, 228 USPQ at 34-35. The district court's grant of partial summary judgment of inequitable conduct was vacated and the case remanded for trial. In re Berkman, 642 F.2d 427, 209 USPQ 45 (CCPA 1981) involved a claim under 35 U.S.C. § 120 to the benefit of the filing date of two earlier design patent applications that included drawings of a carrying and storage case for tape cartridges and cassettes. The invention claimed in the later-filed utility application was an "insert" of "compartmented form," adapted for use in the interior of the storage case. Id. at 429, 209 USPQ at 47. The court characterized the dispositive issue as "whether the design applications sufficiently disclose the invention now claimed in the ... utility application at bar." Id. at 429, 209 USPQ at 46. While specifically recognizing that "drawings may be used to satisfy the disclosure requirement," id. at 429, 209 USPQ at 46-47, the court held that Berkman's design applications "fail[ed] to disclose the claimed invention sufficiently to comply with the requirements of § 112 first paragraph." As the court explained: Nowhere in the design applications is the word "insert" used, nor is there any indication that the interiors of the cases are inserts. The drawings do not disclose how the insert can be used to accommodate either cassette or cartridge type tape enclosures. Berkman argues that one skilled in the art would readily recognize that the interiors of the cases illustrated in the design drawings are inserts. We do not agree. There is nothing shown in the drawings to lead one of ordinary skill to such a conclusion.

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The issue in In re Wolfensperger, 49 CCPA 1075, 302 F.2d 950, 133 USPQ 537 (1962) was whether the specification of the applicant's utility patent application disclosing a ball valve, and particularly the drawings thereof, supported a claim limitation that read: "having, in untensioned condition, a mean diameter corresponding approximately to the mean diameter of said chamber and a radial width smaller than the radial width of said chamber...." Id. at 1077, 302 F.2d at 952, 133 USPQ at 538. The court did not agree with the Board's conclusion that the "radial width" relationship was not supported by applicant's figure 5: The board's statement that "drawings alone cannot form the basis of a valid claim" is too broad a generalization to be valid and is, furthermore, contrary to well-settled and long-established Patent Office practice.... Consider, for one thing, that the sole disclosure in a design patent application is by means of a drawing.... For another thing, consider that the only informative and significant disclosure in many electrical and chemical patents is by means of circuit diagrams or graphic formulae, constituting "drawings" in the case.... ... The practical, legitimate enquiry in each case of this kind is what the drawing in fact discloses to one skilled in the art.... ... The issue here is whether there is supporting "disclosure" and it does not seem, under established procedure of long standing, approved by this court, to be of any legal significance whether the disclosure is found in the specification or in the drawings so long as it is there.

Id. at 1080-83, 302 F.2d at 955-56, 133 USPQ at 541-42. Employing a "new matter" analysis, the court in In re Heinle, 342 F.2d 1001, 145 USPQ 131 (CCPA 1965) reversed a PTO rejection of the applicant's claims to a "toilet paper core" as "including subject matter having no clear basis in the application as filed." Id. at 1003, 145 USPQ at 133. The claim limitation said to be without support required that the width of the apertures in the core be "approximately one-fourth of the circumference of said core." Id. at 1007, 145 USPQ at 136. Having reviewed the application drawings relied upon for support, the court stated: it seems to us that [the drawings] conform to the one-fourth circumference limitation almost exactly. But the claim requires only an approximation. Since we believe an amendment to the specification to state that one-fourth of the circumference is the aperture width would not violate the rule against "new matter," we feel that supporting disclosure exists. The rejection is therefore in error.

Id. These cases support our holding that, under proper circumstances, drawings alone may provide a "written description" of an invention as required by § 112. Whether the drawings are those of a design application or a utility application is not determinative, although in most cases the latter are much more detailed. In the instant case, however, the design drawings are substantially identical to the utility application drawings. Although we join with the district court in concluding that drawings may suffice to satisfy the "written description" requirement of § 112, we cannot agree with the legal standard that the court imposed for "written description" compliance, nor with the court's conclusion that no genuine issues of material fact were in dispute. With respect to the former, the district court stated that although the '081 design drawings in question "allowed practice" [i.e., enabled], they did not necessarily show what the invention is, when "the invention" could be a subset or a superset of the features shown. Is the invention the semi-circular lumens? The conical tip? The ratio at which the tip tapers? The shape, size, and placement of the inlets and outlets? You can measure all of these things from the diagrams in serial '081 and so can practice the device, but you cannot tell, because serial '081 does not say, what combination of these things is "the invention", and what range of variation is allowed without exceeding the scope of the claims. To show one example of an invention, even a working model, is not to describe what is novel or important.

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We find the district court's concern with "what the invention is" misplaced, and its requirement that the '081 drawings "describe what is novel or important" legal error. There is "no legally recognizable or protected “essential” element, “gist” or “heart” of the invention in a combination patent." Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336, 345 (1961). "The invention" is defined by the claims on appeal. The instant claims do not recite only a pair of semi-circular lumens, or a conical tip, or a ratio at which the tip tapers, or the shape, size, and placement of the inlets and outlets; they claim a double lumen catheter having a combination of those features. That combination invention is what the '081 drawings show. As the district court itself recognized, "what Mahurkar eventually patented is exactly what the pictures in serial '081 show." 745 F. Supp. at 523, 17 USPQ2d at 1357. We find the "range of variation" question, much emphasized by the parties, more troublesome. The district court stated that "although Mahurkar's patents use the same diagrams, [the claims] contain limitations that did not follow ineluctably [i.e., inevitably] from the diagrams." Id. at 524, 17 USPQ2d at 1357. As an example, the court stated (presumably with respect to independent claims 1 and 7 of the '329 patent) that the utility patents claim a return lumen that is "substantially greater than one-half but substantially less than a full diameter" after it makes the transition from semi-circular to circular cross-section, and the drawings of serial '081 fall in this range. But until the utility application was filed, nothing established that they had to--for that matter that the utility patent would claim anything other than the precise ratio in the diagrams....

Id. at 523, 17 USPQ2d at 1357. Mahurkar argues that one of ordinary skill in this art, looking at the '081 drawings, would be able to derive the claimed range. The declaration of Dr. Stephen Ash, submitted by Mahurkar, is directed to these concerns. Dr. Ash, a physician specializing in nephrology (the study of the kidney and its diseases) and chairman of a corporation that develops and manufactures biomedical devices including catheters, explains why one of skill in the art of catheter design and manufacture, studying the drawings of the '081 application in early 1982, would have understood from them that the return lumen must have a diameter within the range recited by independent claims 1 and 7 of the '329 patent. Dr. Ash explains in detail that a return (longer) lumen of diameter less than half that of the two lumens combined would produce too great a pressure increase, while a return lumen of diameter equal or larger than that of the two lumens combined would result in too great a pressure drop. "Ordinary experience with the flow of blood in catheters would lead directly away from any such arrangement," Ash states. Although the district court found this reasoning "logical," it noted that later patents issued to Mahurkar disclose diameter ratios closer to 1.0 (U.S. Patent No. 4,584,968) and exactly 0.5 (U.S. Des. Patent No. 272,651). If these other ratios were desirable, the district court queried, "how does serial '081 necessarily exclude the[m]?" 745 F. Supp. at 523, 17 USPQ2d at 1357. The district court erred in taking Mahurkar's other patents into account. Mahurkar's later patenting of inventions involving different range limitations is irrelevant to the issue at hand. Application sufficiency under § 112, first paragraph, must be judged as of the filing date. United States Steel Corp. v. Phillips Petroleum Co., 865 F.2d 1247, 1251, 9 USPQ2d 1461, 1464 (Fed. Cir. 1989). The court further erred in applying a legal standard that essentially required the drawings of the '081 design application to necessarily exclude all diameters other than those within the claimed range. We question whether any drawing could ever do so. At least with respect to independent claims 1 and 7 of the '329 patent and claims depending therefrom, the proper test is whether the drawings conveyed with reasonable clarity to those of ordinary skill that Mahurkar had in fact invented the catheter recited in those claims, having (among several other limitations) a return lumen diameter substantially less than 1.0 but substantially greater than 0.5 times the diameter of the combined lumens. Consideration of what the drawings conveyed to persons of ordinary skill is essential. See Ralston Purina, 772 F.2d at 1575, 227 USPQ at 179 (ranges found in applicant's claims need not correspond exactly to those Chapter 6 – The Patent Document

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disclosed in parent application; issue is whether one skilled in the art could derive the claimed ranges from parent's disclosure). Mahurkar submitted the declaration of Dr. Ash on this point; Vas-Cath submitted no technical evidence to refute Ash's conclusions. Although the district court considered Dr. Ash's declaration, we believe its import was improperly disregarded when viewed through the court's erroneous interpretation of the law. We hold that the Ash declaration and Vas-Cath's non-refutation thereof, without more, gave rise to a genuine issue of material fact inappropriate for summary disposition. . . . **** CONCLUSION The district court's grant of summary judgment, holding all claims of the '329 and '141 patents invalid under 35 U.S.C. § 102(b), is hereby reversed as to all claims, and the case remanded for further proceedings consistent herewith.

Gentry Gallery, Inc. v. Berkline Corp. 134 F.3d 1473, 45 USPQ2d 1498 (Fed.Cir. 1998) Before RICH, Circuit Judge, FRIEDMAN, Senior Circuit Judge, and LOURIE, Circuit Judge. LOURIE, Circuit Judge. **** BACKGROUND Gentry owns the '244 patent, which is directed to a unit of a sectional sofa in which two independent reclining seats ("recliners") face in the same direction. Sectional sofas are typically organized in an Lshape with "arms" at the exposed ends of the linear sections. According to the patent specification, because recliners usually have had adjustment controls on their arms, sectional sofas were able to contain two recliners only if they were located at the exposed ends of the linear sections. Due to the typical L-shaped configuration of sectional sofas, the recliners therefore faced in different directions. See '244 patent; col. 1, ll. 15-19. Such an arrangement was "not usually comfortable when the occupants are watching television because one or both occupants must turn their heads to watch the same [television] set. Furthermore, the separation of the two reclining seats at opposite ends of a sectional sofa is not comfortable or conducive to intimate conversation." Id. at col. 1, ll. 19-25. The invention of the patent solved this supposed dilemma by, inter alia, placing a "console" between two recliners which face in the same direction. This console "accommodates the controls for both reclining seats," thus eliminating the need to position each recliner at an exposed end of a linear section. Id. at col. 1, ll. 36-37. Accordingly, both recliners can then be located on the same linear section allowing two people to recline while watching television and facing in the same direction. Claim 1, which is the broadest claim of the patent, reads in relevant part: A sectional sofa comprising: a pair of reclining seats disposed in parallel relationship with one another in a double reclining seat sectional sofa section being without an arm at one end ..., each of said reclining seats having a backrest and seat cushions and movable between upright and reclined positions ..., a fixed console disposed in the double reclining seat sofa section between the pair of reclining seats and with the console and reclining seats together comprising a unitary structure,

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said console including an armrest portion for each of the reclining seats; said arm rests remaining fixed when the reclining seats move from one to another of their positions, and a pair of control means, one for each reclining seat; mounted on the double reclining seat sofa section ....

Id. at col. 4, line 68 to col. 5, ll. 1-27 (emphasis added to most relevant claim language). Claims 9, 10, 12-15, and 19-21 are directed to a sectional sofa in which the control means are specifically located on the console. In 1991, Gentry filed suit . . . alleging that Berkline infringed the patent by manufacturing and selling sectional sofas having two recliners facing in the same direction. In the allegedly infringing sofas, the recliners were separated by a seat which has a back cushion that may be pivoted down onto the seat, so that the seat back may serve as a tabletop between the recliners. . . . [The district court, relying on a statement by the patentee distinguishing the prior art in a Petition to Make Special, construed the term “fixed console” in the claims to exclude the drop-down trays used on the accused couch because they were the same as those in the prior art. The court then granted summary judgment of noninfringement. A bench trial was had on the issues of invalidity and inequitable conduct, after which the court held the relevant claims not invalid under sections 102, 103, and 112, paragraph 1. The court also fund that inequitable conduct had not been proven.] DISCUSSION A. Infringement **** B. Invalidity **** Berkline . . . argues that claims 1-8, 11, and 16-18 are invalid because they are directed to sectional sofas in which the location of the recliner controls is not limited to the console. According to Berkline, because the patent only describes sofas having controls on the console and an object of the invention is to provide a sectional sofa "with a console . . . that accommodates the controls for both the reclining seats," '244 patent, col. 1, ll. 35-37, the claimed sofas are not described within the meaning of § 112, ¶ 1. Berkline also relies on Sproule's testimony that "locating the controls on the console is definitely the way we solved it [the problem of building sectional sofa with parallel recliners] on the original group [of sofas]." Gentry responds that the disclosure represents only Sproule's preferred embodiment, in which the controls are on the console, and therefore supports claims directed to a sofa in which the controls may be located elsewhere. Gentry relies on Ethicon Endo-Surgery, Inc. v. United States Surgical Corp., 93 F.3d 1572, 1582 n.7, 40 USPQ2d 1019, 1027 n.7 (Fed. Cir. 1996), and In re Rasmussen, 650 F.2d 1212, 1214, 211 USPQ 323, 326 (CCPA 1981), for the proposition that an applicant need not describe more than one embodiment of a broad claim to adequately support that claim. We agree with Berkline that the patent's disclosure does not support claims in which the location of the recliner controls is other than on the console. Whether a specification complies with the written description requirement of § 112, ¶ 1, is a question of fact, which we review for clear error on appeal from a bench trial. See Vas-Cath Inc. v. Mahurkar, 935 F.2d 1555, 1563, 19 USPQ2d 1111, 1116 (Fed. Cir. 1991). To fulfill the written description requirement, the patent specification "must clearly allow persons of ordinary skill in the art to recognize that [the inventor] invented what is claimed." In re Gosteli, 872 F.2d 1008, 1012, 10 USPQ2d 1614, 1618 (Fed. Cir. 1989). An applicant complies with the written description requirement "by describing the invention, with all its claimed limitations." Lockwood v. American Airlines, Inc., 107 F.3d 1565, 1572, 41 USPQ2d 1961, 1966 (1997).

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It is a truism that a claim need not be limited to a preferred embodiment. However, in a given case, the scope of the right to exclude may be limited by a narrow disclosure. For example, as we have recently held, a disclosure of a television set with a keypad, connected to a central computer with a video disk player did not support claims directed to "an individual terminal containing a video disk player." See id. (stating that claims directed to a "distinct invention from that disclosed in the specification" do not satisfy the written description requirement); see also Regents of the Univ. of Cal. v. Eli Lilly & Co., 119 F.3d 1559, 1568, 43 USPQ2d 1398, 1405 (Fed. Cir. 1997) (stating that the case law does "not compel the conclusion that a description of a species always constitutes a description of a genus of which it is a part"). In this case, the original disclosure clearly identifies the console as the only possible location for the controls. It provides for only the most minor variation in the location of the controls, noting that the control "may be mounted on top or side surfaces of the console rather than on the front wall . . . without departing from this invention." '244 patent, col. 2, line 68 to col. 3, line 3. No similar variation beyond the console is even suggested. Additionally, the only discernible purpose for the console is to house the controls. As the disclosure states, identifying the only purpose relevant to the console, "[a]nother object of the present invention is to provide . . . a console positioned between [the reclining seats] that accommodates the controls for both of the reclining seats." Id. at col. 1, ll. 33-37. Thus, locating the controls anywhere but on the console is outside the stated purpose of the invention. Moreover, consistent with this disclosure, Sproule's broadest original claim was directed to a sofa comprising, inter alia, "control means located upon the center console to enable each of the pair of reclining seats to move separately between the reclined and upright positions." Finally, although not dispositive, because one can add claims to a pending application directed to adequately described subject matter, Sproule admitted at trial that he did not consider placing the controls outside the console until he became aware that some of Gentry's competitors were so locating the recliner controls. Accordingly, when viewed in its entirety, the disclosure is limited to sofas in which the recliner control is located on the console. Gentry's reliance on Ethicon is misplaced. It is true, as Gentry observes, that we noted that "an applicant . . . is generally allowed claims, when the art permits, which cover more than the specific embodiment shown." Ethicon, 93 F.3d at 1582 n.7, 40 USPQ2d at 1027 n.7 (quoting In re Vickers, 141 F.2d 522, 525, 61 USPQ2d 122, 125 (CCPA 1944)). However, we were also careful to point out in that opinion that the applicant "was free to draft claim[s] broadly (within the limits imposed by the prior art) to exclude the lockout's exact location as a limitation of the claimed invention" only because he "did not consider the precise location of the lockout to be an element of his invention." Id. Here, as indicated above, it is clear that Sproule considered the location of the recliner controls on the console to be an essential element of his invention. Accordingly, his original disclosure serves to limit the permissible breadth of his later-drafted claims. Similarly, In re Rasmussen does not support Gentry's position. In that case, our predecessor court restated the uncontroversial proposition that "a claim may be broader than the specific embodiment disclosed in a specification." 650 F.2d at 1215, 211 USPQ at 326. However, the court also made clear that "[a]n applicant is entitled to claims as broad as the prior art and his disclosure will allow." Id. at 1214, 650 F.2d 1212, 211 USPQ at 326 (emphasis added). The claims at issue in Rasmussen, which were limited to the generic step of "adheringly applying" one layer to an adjacent layer, satisfied the written description requirement only because "one skilled in the art who read [the] specification would understand that it is unimportant how the layers are adhered, so long as they are adhered." Here, on the contrary, one skilled in the art would clearly understand that it was not only important, but essential to Sproule's invention, for the controls to be on the console. In sum, the cases on which Gentry relies do not stand for the proposition that an applicant can broaden his claims to the extent that they are effectively bounded only by the prior art. Rather, they make clear that claims may be no broader than the supporting disclosure, and therefore that a narrow disclosure will limit claim breadth. Here, Sproule's disclosure unambiguously limited the location of the controls to the console. Chapter 6 – The Patent Document 270

Accordingly, the district court clearly erred in finding that he was entitled to claims in which the recliner controls are not located on the console. We therefore reverse the judgment that claims 1-8, 11, and 16-18, were not shown to be invalid. ****

Questions, Comments, Problems 1. Before Gentry Gallery, it was largely believed in the patent bar that there was not much bite in the written description requirement, especially in regard to mechanical inventions. However, Gentry Gallery shows that, in appropriate situations, a defendant may raise the defense to wipe out patent claims. However, how broad will Gentry Gallery be applied by courts in the future? Note the specific facts of the case: the original disclosure “clearly identifie[d] the console as the only possible location for the controls and “provide[d] for only the most minor variation in the location of the controls,” “the only discernible purpose for the console [was] to house the controls,” the broadest original claim required "control means located upon the center console,” and the inventor “admitted at trial that he did not consider placing the controls outside the console until he became aware that some of Gentry's competitors were so locating the recliner controls.” The court itself indicated that it was faced with a very special case. Does Gentry Gallery provide a way to challenge a so-called “submarine” patent, wherein the patent issues many years after the application is filed? Where the submarine patent attempts to cover new technologies that were clearly not within the contemplation of the inventor, does the patent fail the written description requirement? Or are the new technologies simply improvements to the core technology that the applicant contemplated, so that there need only be a written description of the core technology? A pending case (as of March, 1999) that may provide an answer is Lemelson Medical, Education & Research Foundation, LP v. Intel Corp., CIV-98-1413-PHX PGR(HRH) (D. Ariz.), in which the defendants have moved for summary judgment that the late Jerome Lemelson’s “auto ID” patents are invalid. These patents claim priority of a Lemelson patent application filed in 1963, which the defendants contend did not contain a written description of the inventions claimed in later applications that issued as patents in the early ‘90’s. If these applications are found not entitled to the 1963 priority date, defendants contend they are anticipated by intervening prior art. What is interesting is that the patents are being asserted against modern bar code scanning devices, where the technology described in the 1963 application bears little structural resemblance to such devices (the application shows a TV-type camera that transmits a video picture of a workpiece for comparison with a reference image of that object). 2. New Matter – The written description requirement is closely related to the concept under section 132 of Title 35 that an applicant cannot add “new matter” to a patent application. When some examiners began rejecting unsupported claims under section 132 rather than under section 112, the Court of Customs and Patent Appeals stepped in to correct their errors: Broadening a claim does not add new matter to the disclosure. Disclosure is that which is taught, not that which is claimed. An applicant is entitled to claims as broad as the prior art and his disclosure will allow. [¶] The proper basis for rejection of a claim amended to recite elements thought to be without support in the original disclosure, therefore, is § 112, first paragraph, not § 132. It is properly employed as a basis for objection to the amendments to the abstract, specifications, or drawings attempting to add new disclosure to that originally presented. In re Rasmussen, 650 F.2d at 1214-15, 211 USPQ 326 (CCPA 1981). 3. Enablement and Written Description – If a patent does not contain an adequate written description for an amended claim, why can’t a court simply reject the claim for lack of enablement, thus making the written description requirement redundant and unnecessary? That’s what Judge Markey, the Chief Judge of the Court of Customs and Patent Appeals, and the original Chief Judge of the Federal Circuit, thought of the two requirements. In In re Barker, the majority reviewed the entire history of the statutory disclosure requirement in concluding that the written description and enablement requirements were distinct. Judge Markey “heartily” dissented: The attempt to create historical and current statutory support for a “separate description” requirement, which was solely a judicial (and unnecessary) response to chemical cases in which appellants were arguing that those skilled in the art “might” make and use a claimed invention, is mistaken.

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There is no surplusage in saying, as the Congress in effect did, “. . . a written description of the invention . . . in such full, clear, concise, and exact terms as to enable,” and “(a written description) of the manner and process of making and using it in such full, clear, concise, and exact terms as to enable . . . .” On the contrary, Congress saved words by specifying, in a single prepositional phrase, that the description of the invention, and the description of the manner of making and using it, shall both be in “such full, clear, concise, and exact terms as to enable.” Section 112, first paragraph, is a simple sentence, with a comma after “it,” making the phrase “in such full . . . the same” a modifier of both objects of the verb “contain.” All before that comma prescribes what shall be described. The phrase following the comma prescribes how and for whom it shall be described. . . . [¶] I cannot see how one may, in “full, clear, concise and exact terms,” enable the skilled to practice an invention, and still have failed to “describe” it. 559 F.2d at 594-95, 194 USPQ at 475-76. Judge Rich filed a concurrence based on his view that the majority’s historical approach was unduly complicated: Considering the evolutionary history of the language of § 112, I do not subscribe to its interpretation through assumptions based on presumptions about usage of superfluous words and the like. The words are of ancient lineage and, in spite of the fact they are inappropriate in some situations, they were preserved, in writing the Patent Act of 1952, because they were familiar and had many times been construed. Some simplifications and clarifications were made, but the classic phrases were retained without regard to “superfluous words.” Mere reading of the successive statutes . . . shows that the words of § 112 derive from an era when it was the habit of the legal fraternity to indulge in redundancies. . . . [¶] Attention must be paid to the key words “such” and “as to” in the phrase “such full, clear, concise, and exact terms as to enable,” which compel case-by-case treatment of issues of the sufficiency of description and enablement which, I agree, are distinct though commingled requirements. Id. at 594, 194 USPQ at 475. As indicated by the cases you have read above, the courts still view the written description requirement as distinct from the enablement requirement. Regardless of the precise language of section 112, is such a distinction necessary or helpful? Remember that in Mahurkar, supra, Judge Rich pointed out that the written description requirement was part of the patent law before claims were required, so that in a sense, the written description served the purpose of a claim. In fact, the Patent Act of 1793, which was in effect at the time of Evans v. Eaton, contained the following italicized language, no longer in the patent statute: “a written description of his invention . . . , as to distinguish the same from all things before known . . . .” Did the elimination of the italicized words coupled with the addition of a requirement for claims (see current section 112, first and second paragraphs) mean that less was now required of the written description than was required in the days of Evans v. Eaton? If so, what was left of the description requirement? Is it accurately reflected in Mahurkar? 4. More Than One Invention – What if separate inventive concepts are described in the specification – would later added separate claims to each concept be considered properly “described?” One would have thought so, until a 1998 decision of the Federal Circuit, Tronzo v. Biomet, Inc., 156 F.3d 1154, 47 USPQ2d 1829 (Fed. Cir. 1998). There, the court was faced with whether a claim to a cup for holding a hip socket prosthesis that was silent as to the shape of the cup, but specified fins on the cup for digging into the bone and preventing rotation of the cup, was described in an earlier filed application that showed a frustoconical cup with fins. The general portions of the earlier application indicated that Dr. Tronzo had two inventive concepts: the use of fins on a cup and the use of a frustoconical cup. In the earlier application he had claimed both features in the same claim. In the later application, which became the patent in suit, he claimed the fin feature alone, without the frustoconical cup shape. The Federal Circuit held claims to the fins alone were not described in the earlier-filed specification. It appears that the court interpreted the earlier filed application so as to describe the fins and frustoconical cup shape as a combined inventive concept. Yet there were objects of the invention in the first specification separately directed to each feature. In another context, that of utility, the Federal Circuit stated that claims do not need to meet all the objects of the invention, but only just one. See Raytheon Co. v. Roper Corp., 724 F.2d 951, 958-59, 220 USPQ 592 (Fed. Cir. 1983). By analogy, should a separate object of the invention met by the fin structure be a sufficient “description” of the fin invention? Certainly the court focused on the fact that the embodiment shown in the first application had both fins and a frustoconical shape. However, the issue was not what Dr. Tronzo exemplified, but what he “possessed.” Did he “possess” two separate inventive concepts or only one combined one?

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5. Conception and the Written Description – In Fiers v. Revel, 984 F.2d 1164, 25 USPQ2d 1601 (Fed. Cir. 1993), a party (Revel) to a patent interference proceeding attempted to establish a priority date by relying on a foreign application that contained a claim that corresponded to the interference count. (A count is a made-up claim that is intended to correspond to the overlapping subject matter of two applications or an application and a patent in an interference proceeding). The count related to DNA which “encoded” for, or produced, human fibroblast beta-interferon, a protein that promotes viral resistance in tissue. While the foreign application disclosed only a method for isolating the DNA, the count covered DNA itself (rather than the process for isolating it). In affirming the Board’s denial of priority to the party, the Federal Circuit relied on the holding in Amgen, Inc. v. Chugai Pharmaceutical Co., 927 F.2d 1200, 18 USPQ2d 1016 (Fed. Cir. 1991), that an inventor cannot conceive of a DNA for encoding a protein without determining the DNA’s nucleotide sequence: An adequate written description of a DNA requires more than a mere statement that it is part of the invention and reference to a potential method for isolating it; what is required is a description of the DNA itself. Revel’s specification does not do that. . . . A bare reference to a DNA with a statement that it can be obtained by reverse transcription is not a description; it does not indicate that Revel was in possession of the DNA. . . . [¶] [S]uch a disclosure just represents a wish, or arguably a plan, for obtaining the DNA. If a conception of a DNA requires a precise definition, such as by structure, formula, chemical name, or physical properties, as we have held, then a description also requires that degree of specificity. To paraphrase the Board, one cannot describe what one has not conceived. 984 F.2d at 1170, 25 USPQ2d at 1606. Fiers and Amgen appear to treat DNA like any other chemical, applying the strict requirements of age-old precedent in chemical cases in terms of “written description.” But is that a fair way to view DNA? Is it more than a mere chemical? Does the fact that DNA acts as a template give it an added dimension not possessed by ordinary chemicals, even long-chained ones? If one does consider DNA in this different light, are the results in Fiers and Amgen supportable or do they represent a shortsighted, antiquated response to a new type of technology? 6. Drawing as “Written Description” – The Federal Circuit in Mahurkar, supra, was quite liberal in its view that a drawing in a design patent could be considered a written description of an inventive concept in a utility patent directed to the structure shown in the drawing. But in Mahurkar the court stressed the district court’s finding that “what Mahurkar eventually patented is exactly what the pictures [in the design patent] show.” 935 F.2d at 1565. What if such correspondence is lacking, i.e., what if the drawing shows the claimed feature among many other features and without singling it out? This was the situation in Permutit Co. v. Graver Corp., 284 U.S. 52 (1931). The inventive concept urged by the petitioner/patentee before the Court was that use of a “free bed” in a zeolite water softener apparatus made the zeolites far more effective in softening water than did the prior art “fixed bed.” The specification made no mention of fixed and free beds or of the advantages of the former. All that the patentee relied on was the drawing, which showed a free bed as part of the apparatus. This did not satisfy the written description requirement, in the view of Justice Brandeis, writing for the Court: The drawing annexed to the specification, it is true, shows a layer of sand or quartz at a point above the zeolites and an unoccupied space between it and the top of the zeolite bed. But there is no suggestion on the drawing or elsewhere that the upper plate bearing the layer of sand or quartz has any purpose except to serve as a mechanical filter through which “the water to be softened may be first filtered,” or that the unoccupied space has any other purpose than that of similar spaces in sand filters long familiar. Moreover, while drawings may be referred to for illustration and may be used as an aid in interpreting the specification or claim, they are of no avail where there is an entire absence of description of the alleged invention or a failure to claim it. The statute requires the patentee not only to explain the principle of his apparatus and to describe it in such terms that any person skilled in the art to which it appertains may construct and use it after the expiration of the patent, but also to inform the public during the life of the patent of the limits of the monopoly asserted, so that it may be known which features may be safely used or manufactured without a license and which may not. The free bed was neither described in the specification nor claimed in either Claim 1 or Claim 5. Id. at 59-60 (footnotes omitted). Obviously, the patentee failed on two counts—inadequate description and failure to claim the invention. But the noteworthy aspect to this case is the inadequacy of the particular drawing to serve as an adequate description of the invention.

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Best Mode Section 112, first paragraph, also requires that the application “set forth the best mode contemplated by the inventor of carrying out his invention.” As noted above, the only statutory references to a best mode before 1952 were the requirement that, for machines, the applicant explain the principle of the machine and the best mode contemplated by the applicant of applying the principle, and the requirement that the inventor tell “the whole of the truth” regarding the invention. Under the 1952 Act, all types of inventions (in addition to machines) were brought under the best mode requirement. The cases below set out the basics of the modern best mode requirement and also examine several special wrinkles that have appeared around the edges of the requirement as it has matured.

Chemcast Corp. v. Arco Industries Corp. 913 F.2d 923, 16 USPQ2d 1033 (Fed.Cir. 1990) Before ARCHER and MAYER, Circuit Judges, and GEORGE, District Judge.* MAYER, Circuit Judge. Chemcast Corporation appeals the judgment of the United States District Court for the Eastern District of Michigan that Claim 6 of United States Patent No. 4,081,879 ('879 patent), the only claim in suit, is invalid because of the inventor's failure to disclose the best mode as required by 35 U.S.C. § 112. See 12 USPQ2d 2005 (1989). We affirm. Background The '879 patent claims a sealing member in the form of a grommet or plug button that is designed to seal an opening in, for example, a sheet metal panel. Claim 6, the only claim in suit, depends from Claim 1. 1. A grommet for sealing an opening in a panel, said grommet comprising an annular base portion having a continuous circumferential and axial extending sealing band surface, an annular locking portion having a continuous circumferential and axial extending ridge portion approximately the same diameter as said sealing band surface, said sealing band surface constituting an axial extending continuation of said ridge portion, said locking portion and said base portion being in contact with each other and integrally bonded together, said base portion comprising an elastomeric material and said locking portion being more rigid than said base portion, whereby when the grommet is installed in a panel opening, the locking portion is inserted through the opening to a position on the opposite side of the panel from the base portion locking the grommet in place, and said sealing band surface forms a complete seal continuously around the entire inner periphery of the panel opening. 6. The grommet as defined in claim 1 wherein the material forming said base portion has a durometer hardness reading of less than 60 Shore A and the material forming said locking portion has a durometer hardness reading of more than 70 Shore A.

Chemcast Corp. v. Arco Indus. Corp., 5 USPQ2d 1225, 1227 (E.D.Mich.1987). The grommet of Claim 6 is referred to as a dual durometer grommet because it may be composed either of two materials that differ in hardness or of a single material that varies in hardness. In either case, the different hardnesses can be, and for a sufficiently large hardness differential must be,

*

Lloyd D. George, District Judge, United States District Court for the District of Nevada, sitting by designation.

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measured with different durometers: Shore A for the softer base portion and Shore D for the harder locking portion. The harder locking portion of the grommet is the focus of this case. Chemcast and its competitor Arco Industries Corporation are both engaged in the manufacture and sale of sealing members such as grommets, gaskets, and plug buttons. Both sell their products primarily to the automobile industry. Ex-Arco employee Phillip L. Rubright founded Chemcast in 1973 and subsequently conceived of and designed specifically for Oldsmobile, a Chemcast customer, the dual durometer '879 grommet. He filed a patent application together with an assignment of invention to Chemcast in January of 1976; the '879 patent issued in April of 1978. Chemcast subsequently sued Arco for infringement of Claim 6 of the '879 patent. Arco counterclaimed that the patent was invalid on several grounds, including Rubright's failure to comply with 35 U.S.C. § 112. The district court agreed. It held that, because the '879 patent did not either disclose the best mode contemplated by the inventor of carrying out the invention or particularly point out and distinctly claim the subject matter of the invention, Chemcast could not recover on its claim of infringement. 5 USPQ2d at 1238. Both parties appealed. We vacated the district court's best mode decision because, in reaching it, the court relied on an incorrect legal standard; reversed the court's holding that Claim 6 did not meet the claim particularity requirements of section 112; and affirmed the judgment on all other issues. Chemcast Corp. v. Arco Indus. Corp., 854 F.2d 1328 (Fed. Cir. 1988) (unpublished). We set out the appropriate legal standard for determining compliance with the best mode requirement as follows: Failure to comply with the best mode requirement amounts to concealing the preferred mode contemplated by the applicant at the time of filing. See Hybritech Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1384-85, 231 USPQ 81, 94 (Fed. Cir. 1986), cert. denied, 480 U.S. 947 (1987). In order for a district court to conclude that the best mode requirement is not satisfied, the focus must be, and the district court must determine, that the inventor knew of, i.e., "contemplated," and concealed a better mode than he disclosed. Id., 231 USPQ at 94. The focus for a best mode analysis is not simply on whether the patent discloses the most suitable material for carrying out the claimed invention.

Slip op. at 4. Accordingly, we remanded the case to the district court for a redetermination of the best mode issue. On remand, the court again invalidated the patent for failure to satisfy the best mode requirement. Chemcast Corp. v. Arco Indus. Corp., 12 USPQ2d 2005 (E.D. Mich. 1989). It made 47 factual findings detailing both what, at the time of filing the patent application, Rubright considered to be the best mode of practicing his claimed invention and what the specification as filed disclosed to one of ordinary skill in the art. According to the court, the principal shortcomings of the disclosure were its failure to specify (1) the particular type, (2) the hardness, and (3) the supplier and trade name, of the material used to make the locking portion of the grommet. Id. at 2008. Therefore, it held that the application as filed failed adequately to disclose the best mode of practicing the invention contemplated by Rubright. Id. Chemcast appeals. Discussion A. The first paragraph of 35 U.S.C. § 112 (1982) provides: The specification [A] shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and [B] shall set forth the best mode contemplated by the inventor of carrying out his invention.

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(emphasis added). We long ago drew and often have focused upon the critical distinction between requirement [A], "enablement," and requirement [B], "best mode." The essence of portion [A] is that a specification shall disclose an invention in such a manner as will enable one skilled in the art to make and utilize it. Separate and distinct from portion [A] is portion [B], the essence of which requires an inventor to disclose the best mode contemplated by him, as of the time he executes the application, of carrying out his invention. Manifestly, the sole purpose of this latter requirement is to restrain inventors from applying for patents while at the same time concealing from the public preferred embodiments of their inventions which they have in fact conceived. In re Gay, 309 F.2d 769, 772, 135 USPQ 311, 315 (1962), quoted in Spectra-Physics, Inc. v. Coherent, Inc., 827 F.2d 1524, 1532, 3 USPQ2d 1737, 1742 (Fed. Cir. 1987); see Dana Corp. v. IPC Limited Partnership, 860 F.2d 415, 419, 8 USPQ2d 1692, 1696 (Fed. Cir. 1988). The best mode inquiry focuses on the inventor's state of mind as of the time he filed his application—a subjective, factual question. But this focus is not exclusive. Our statements that "there is no objective standard by which to judge the adequacy of a best mode disclosure," and that "only evidence of concealment (accidental or intentional) is to be considered," In re Sherwood, 613 F.2d 809, 816, 204 USPQ 537, 544 (CCPA 1980), quoted in DeGeorge v. Bernier, 768 F.2d 1318, 1324, 226 USPQ 758, 763 (Fed. Cir. 1985); see Spectra-Physics, 827 F.2d at 1535, 3 USPQ2d at 1745, assumed that both the level of skill in the art and the scope of the claimed invention were additional, objective metes and bounds of a best mode disclosure. Of necessity, the disclosure required by section 112 is directed to those skilled in the art. Randomex Inc. v. Scopus Corp., 849 F.2d 585, 587, 7 USPQ2d 1050, 1053 (Fed. Cir. 1988) (citing W.L. Gore & Assocs., Inc. v. Garlock, Inc., 721 F.2d 1540, 1556, 220 USPQ 303, 315 (Fed. Cir. 1983)). Therefore, one must consider the level of skill in the relevant art in determining whether a specification discloses the best mode. We have consistently recognized that whether a best mode disclosure is adequate, that is, whether the inventor concealed a better mode of practicing his invention than he disclosed, is a function of not only what the inventor knew but also how one skilled in the art would have understood his disclosure. See, e.g., Dana Corp., 860 F.2d at 418, 8 USPQ2d at 1696 (best mode requirement violated because inventor failed to disclose whether to use specific surface treatment that he knew was necessary to the satisfactory performance of his invention, even though how to perform the treatment itself was known in the art. "Dana's argument that the best mode requirement may be met solely by reference to what was known in the prior art is incorrect.") (emphasis added); Spectra-Physics, 827 F.2d at 1536, 3 USPQ2d at 1745 (best mode violated where inventors of laser failed to disclose details of their preferred TiCuSil brazing method which were not contained in the prior art and were "contrary to criteria for the use of TiCuSil as contained in the literature."); W.L. Gore, 721 F.2d at 1556, 220 USPQ at 316 (no best mode violation where inventor did not disclose the only mode of calculating stretch rate that he used, because that "mode would have been employed by those of ordinary skill in the art at the time the application was filed. As indicated, Dr. Gore's disclosure must be examined for § 112 compliance in light of knowledge extant in the art on his application filing date."); Sherwood, 613 F.2d at 816, 204 USPQ at 544 (no best mode violation where specification disclosed underlying concepts and mathematical equations that, together with "the menial tools known to all who practice th[e] art," would yield the contemplated best mode digital computer program, even though "the inventor had more information in his possession concerning his contemplated best mode than he disclosed in the specification."). Thus, the level of skill in the art is a relevant and necessary consideration in assessing the adequacy of a best mode disclosure. The other objective limitation on the extent of the disclosure required to comply with the best mode requirement is, of course, the scope of the claimed invention. "It is concealment of the best mode of practicing the claimed invention that section 112 ¶ 1 is designed to prohibit." Randomex, 849 F.2d at 588, 7 USPQ2d at 1053; see Christianson v. Colt Indus. Oper. Corp., 870 F.2d 1292, 1301, 10 USPQ2d 1352, 1359 (7th Cir. 1989) ( "Again, the focus of the best mode requirement, as it was with the enablement requirement, is on the claimed invention. Thus, before determining whether there is Chapter 6 – The Patent Document 276

evidence of concealment, the scope of the invention must be delimited.") (citations omitted). Thus, in Randomex, the inventor's deliberate concealment of his cleaning fluid formula did not violate the best mode requirement because his "invention neither added nor claimed to add anything to the prior art respecting cleaning fluid." 849 F.2d at 590, 7 USPQ2d at 1054. Similarly, in Christianson, the inventor's failure to disclose information that would have enabled the claimed rifle parts to be interchangeable with all M-16 rifle parts did not invalidate his patents because "the best mode for making and using and carrying out the claimed inventions [did] not entail or involve either the M-16 rifle or interchangeability." 870 F.2d at 1302, 10 USPQ2d at 1360 (quoting Christianson v. Colt Indus. Oper. Corp., 822 F.2d 1544, 1563, 3 USPQ2d 1241, 1255 (Fed. Cir. 1987), vacated, 486 U.S. 800 (1988)). Finally, in DeGeorge we reversed a finding that an inventor's nondisclosure of unclaimed circuitry with which his claimed circuitry interfaced violated the best mode requirement: "Because the properly construed count does not include a word processor, failure to meet the best mode requirement here should not arise from an absence of information on the word processor." 768 F.2d at 1325, 226 USPQ at 763. In short, a proper best mode analysis has two components. The first is whether, at the time the inventor filed his patent application, he knew of a mode of practicing his claimed invention that he considered to be better than any other. This part of the inquiry is wholly subjective, and resolves whether the inventor must disclose any facts in addition to those sufficient for enablement. If the inventor in fact contemplated such a preferred mode, the second part of the analysis compares what he knew with what he disclosed—is the disclosure adequate to enable one skilled in the art to practice the best mode or, in other words, has the inventor "concealed" his preferred mode from the "public"? Assessing the adequacy of the disclosure, as opposed to its necessity, is largely an objective inquiry that depends upon the scope of the claimed invention and the level of skill in the art. Notwithstanding the mixed nature of the best mode inquiry, and perhaps because of our routine focus on its subjective portion, we have consistently treated the question as a whole as factual. "Compliance with the best mode requirement, because it depends on the applicant's state of mind, is a question of fact subject to the clearly erroneous standard of review." Spectra-Physics, 827 F.2d at 1535, 3 USPQ2d at 1745 (citing McGill, Inc. v. John Zink Co., 736 F.2d 666, 676, 221 USPQ 944, 951 (Fed. Cir. 1984)). We adhere to that standard here, and review the district court's best mode determination accordingly. B. Chemcast alleges that the trial court erred in its best mode analysis by failing to focus, as required, on the claimed invention and on whether the inventor, Rubright, concealed a better mode than he disclosed. Neither allegation has any merit. Chemcast first argues that, because the '879 patent does not claim any specific material for making the locking portion of the grommet, Rubright's failure to disclose the particular material that he thought worked the best does not violate the best mode requirement. This argument confuses best mode and enablement. A patent applicant must disclose the best mode of carrying out his claimed invention, not merely a mode of making and using what is claimed. A specification can be enabling yet fail to disclose an applicant's contemplated best mode. See Spectra-Physics, 827 F.2d at 1537, 3 USPQ2d at 1746. Indeed, most of the cases in which we have said that the best mode requirement was violated addressed situations where an inventor failed to disclose non-claimed elements that were nevertheless necessary to practice the best mode of carrying out the claimed invention. See, e.g., Dana, 860 F.2d at 419, 8 USPQ2d at 1695 (failure to disclose unclaimed fluoride surface treatment that was necessary for satisfactory performance of claimed seal violated best mode); Spectra-Physics, 827 F.2d at 1536, 3 USPQ2d at 1745 (failure to disclose specific braze cycle constituting preferred means of attachment violated best mode even though no particular attachment means claimed). Moreover, Chemcast is mistaken in its claim interpretation. While the critical limitation of Claim 6 is a hardness differential of 10 points on the Shore A scale between the grommet base and locking Chapter 6 – The Patent Document

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portions, and not a particular material type, some material meeting both this limitation and that of Claim 1, that "said base portion compris[e] an elastomeric material and said locking portion be[ ] more rigid than said base portion," is claimed. That the claim is broad is no reason to excuse noncompliance with the best mode requirement. Here, the information the applicant is accused of concealing is not merely necessary to practice the claimed invention, as in Dana fluoride surface treatment was "necessary to satisfactory performance" of the claimed valve stem seal, 860 F.2d at 418; it also describes the preferred embodiment of a claimed element, as in Spectra-Physics the undisclosed braze cycle was the preferred "means for attaching" and "securing" claimed in the patents at issue. 822 F.2d at 1527 n.2 & 1528 n.4. Chemcast's second argument is equally misplaced. The court devoted no fewer than 13 factual findings to what the inventor Rubright knew as of the filing date of the '879 application. Those findings focus, as did the parties, on the type, hardness, and supplier of the material used to make the locking portion of the grommet. The court found that Rubright selected the material for the locking portion, a rigid polyvinyl chloride (PVC) plastisol composition; knew that the preferred hardness of this material was 75+/-5 Shore D; and purchased all of the grommet material under the trade name R-4467 from Reynosol Corporation (Reynosol), which had spent 750 man-hours developing the compound specifically for Chemcast. 12 USPQ2d at 2006-08. Furthermore, the court found that at the time the '879 application was filed, the only embodiment of the claimed invention known to Rubright was a grommet composed of R-4467, a rigid PVC plastisol composition with a locking portion hardness of 75+/-5 Shore D. Id. at 2006. In light of what Rubright knew, the specification, as issued, was manifestly deficient. It disclosed the following: The annular locking portion [ ] of the sealing member [ ] is preferably comprised of a rigid castable material, such as a castable resinous material, either a thermoplastic or thermosetting resin, or any mixtures thereof, for example, polyurethane or polyvinyl chloride. The [locking] portion [ ] also should be made of a material that is sufficiently hard and rigid so that it cannot be radially compressed, such as when it is inserted in the opening [ ] in the panel [ ]. Materials having a durometer hardness reading of 70 Shore A or harder are suitable in this regard.

Col. 4, 11.53-63. The material hardness (75 Shore D) and supplier/trade name (Reynosol compound R-4467) are not explicitly disclosed here or anywhere else in the specification. Nor, in light of the level of skill in the art, are they implicitly disclosed. Given the specification, one skilled in the art simply could not divine Rubright's preferred material hardness. The court found that "the specification of the open-ended range of materials of “70 Shore A or harder” conceals the best mode 75 Shore D material in part because materials of Shore A and Shore D hardnesses are recognized as different types of materials with different classes of physical properties." 12 USPQ2d at 2008. As for the specific supplier and trade name designation of the preferred material, the court found that disclosing a list of generic potential materials was "not an adequate disclosure of the best mode PVC Re[y]nosol Compound R-4467." Id. We agree. That "at least eight other PVC composition suppliers [ ] could have formulated satisfactory materials for the dual durometer grommet," 5 USPQ2d at 1235, does not, as Chemcast urges, excuse Rubright's concealment of his preferred material, and the only one of which he was aware. Again Chemcast confuses enablement and best mode. The question is not whether those skilled in the art could make or use the '879 grommet without knowledge of Reynosol compound R-4467; it is whether they could practice Rubright's contemplated best mode which, the court found, included specifically the Reynosol compound. Rubright knew that Reynosol had developed R-4467 specifically for Chemcast and had expended several months and many hundred man-hours in doing so. 12 USPQ2d at 2007. Because Chemcast used only R-4467, because certain characteristics of the grommet material were claimed elements of the '879 invention, and because Rubright himself did not know the formula, Chapter 6 – The Patent Document

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composition, or method of manufacture of R-4467, section 112 obligated Rubright to disclose the specific supplier and trade name of his preferred material. Other facts Chemcast points to as obviating the need for Rubright's disclosure of "Reynosol R-4467" are simply irrelevant. That Reynosol considered the formulation of R-4467 a trade secret and that it offered the compound only to Chemcast, id., do not bear on the state of Rubright's knowledge or the quality of his disclosure. First, it is undisputed that Rubright did not know either the precise formulation or method of manufacture of R-4467; he knew only that it was a rigid PVC plastisol composition denominated "R-4467" by Reynosol. Whatever the scope of Reynosol's asserted trade secret, to the extent it includes information known by Rubright that he considered part of his preferred mode, section 112 requires that he divulge it. See White Consol. Indus. v. Vega Servo-Control, 713 F.2d 788, 791 (Fed. Cir. 1983). Second, whether and to whom Reynosol chooses to sell its products cannot control the extent to which Rubright must disclose his best mode. Were this the law, inventors like Rubright could readily circumvent the best mode requirement by concluding sole-user agreements with the suppliers of their preferred materials. Nor does the fact that Rubright developed his preferred mode with the requirements of a particular customer in mind excuse its concealment; compliance with section 112 does not turn on why or for whom an inventor develops his invention. An inventor need not disclose manufacturing data or the requirements of a particular customer if that information is not part of the best mode of practicing the claimed invention, see Christianson, 870 F.2d at 1302, 10 USPQ2d at 1360 (citing Christianson, 822 F.2d at 1563, 3 USPQ2d at 1255), but the converse also is true. Whether characterizable as "manufacturing data," "customer requirements," or even "trade secrets," information necessary to practice the best mode simply must be disclosed. Given the specification and the level of skill or understanding in the art, skilled practitioners could neither have known what Rubright's contemplated best mode was nor have carried it out. Indeed, on these facts, they would not even have known where to look. This is not a case, like Randomex, where the inventor indiscriminately disclosed his preferred mode along with other possible modes. See 849 F.2d at 589, 7 USPQ2d at 1054. Rubright did not disclose his preferred mode at all. His preferred material hardness, 75 Shore D, is three hardness scales removed from the 70 Shore A hardness mentioned in the specification. Neither his preferred source, Reynosol Compound R-4467, nor any other is disclosed. In this situation and on these facts, where the inventor has failed to disclose the only mode he ever contemplated of carrying out his invention, the best mode requirement is violated. See, e.g., Dana Corp., 860 F.2d at 418-20, 8 USPQ2d at 1695 (best mode violated where inventor concealed the only surface treatment used, and consequently the only one known to work, even though he disclosed several others); Spectra-Physics, 827 F.2d at 1531, 3 USPQ2d at 1741 (best mode violated where inventors failed to disclose only method of attachment used, a specific TiCuSil brazing cycle. "Because this approach worked, Coherent continued to use TiCuSil and never investigated the moly-manganese process or further experimented with soldering."). Conclusion Accordingly, the judgment of the district court is affirmed. AFFIRMED

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Before MARKEY, LOURIE and CLEVENGER, Circuit Judges. LOURIE, Circuit Judge. **** [The district court found that Amgen did not fail to meet the best mode requirement simply because Amgen did not provide a public deposit of its best mode “host cells.”] BACKGROUND Erythropoietin (EPO) is a protein consisting of 165 amino acids which stimulates the production of red blood cells. It is therefore a useful therapeutic agent in the treatment of anemias or blood disorders characterized by low or defective bone marrow production of red blood cells. The preparation of EPO products generally has been accomplished through the concentration and purification of urine from both healthy individuals and those exhibiting high EPO levels. A new technique for producing EPO is recombinant DNA technology in which EPO is produced from cell cultures into which geneticallyengineered vectors containing the EPO gene have been introduced. The production of EPO by recombinant technology involves expressing an EPO gene through the same processes that occur in a natural cell. THE PATENTS **** The other patent in this litigation is U.S. Patent 4,703,008, entitled "DNA Sequences Encoding Erythropoietin" (the '008 patent), issued on October 27, 1987, to Dr. Fu-Kuen Lin, an employee of Amgen. The claims of the '008 patent cover purified and isolated DNA sequences encoding erythropoietin and host cells transformed or transfected with a DNA sequence. The relevant claims are as follows: 2. A purified and isolated DNA sequence consisting essentially of a DNA sequence encoding human erythropoietin. 4. A procaryotic or eucaryotic host cell transformed or transfected with a DNA sequence according to claim 1, 2 or 3 in a manner allowing the host cell to express erythropoietin. 6. A procaryotic or eucaryotic host cell stably transformed or transfected with a DNA vector according to claim 5. 7. A purified and isolated DNA sequence consisting essentially of a DNA sequence encoding a polypeptide having an amino acid sequence sufficiently duplicative of that of erythropoietin to allow possession of the biological property of causing bone marrow cells to increase production of reticulocytes and red blood cells, and to increase hemoglobin synthesis or iron uptake. 8. A cDNA sequence according to claim 7. 23. A procaryotic or eucaryotic host cell transformed or transfected with a DNA sequence according to claim 7, 8, or 11 in a manner allowing the host cell to express said polypeptide. 24. A transformed or transfected host cell according to claim 23 which host cell is capable of glycosylating said polypeptide. 25. A transformed or transfected mammalian host cell according to claim 24. 26. A transformed or transfected COS cell according to claim 25. 27. A transformed or transfected CHO cell according to claim 25. 29. A procaryotic host cell stably transformed or transfected with a DNA vector according to claim 28.

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I. AMGEN's '008 PATENT (Lin) **** C. Best Mode Defendants argue that the district court erred in failing to hold the '008 patent invalid under 35 U.S.C. § 112, asserting that Lin failed to disclose the best mammalian host cells known to him as of November 30, 1984, the date he filed his fourth patent application. The district court found that the "best mode" of practicing the claimed invention was by use of a specific genetically-heterogeneous strain of Chinese hamster ovary (CHO) cells, which produced EPO at a rate greater than that of other cells. It further found that this strain was disclosed in Example 10 and that Lin knew of no better mode. GI argues that Lin's best mode was not adequately disclosed in Example 10 because one skilled in the art could not duplicate Lin's best mode without his having first deposited a sample of the specific cells in a public depository. The issue before us therefore is whether the district court erred in concluding that Example 10 of the '008 patent satisfied the best mode requirement as to the invention of the challenged claims and that a deposit of the preferred CHO cells was not necessary. **** This court has recently discussed the best mode requirement, pointing out that its analysis has two components. Chemcast Corp. v. Arco Indus. Corp., 913 F.2d 923, 927, 16 USPQ2d 1033, 1036 (Fed.Cir.1990). The first is a subjective one, asking whether, at the time the inventor filed his patent application, he contemplated a best mode of practicing his invention. If he did, the second inquiry is whether his disclosure is adequate to enable one skilled in the art to practice the best mode or, in other words, whether the best mode has been concealed from the public. The best mode requirement thus is intended to ensure that a patent applicant plays "fair and square" with the patent system. It is a requirement that the quid pro quo of the patent grant be satisfied. One must not receive the right to exclude others unless at the time of filing he has provided an adequate disclosure of the best mode known to him of carrying out his invention. Our case law has interpreted the best mode requirement to mean that there must be no concealment of a mode known by the inventor to be better than that which is disclosed. Hybritech Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1384-85, 231 USPQ 81, 94 (Fed.Cir.1986), cert. denied, 480 U.S. 947 (1987). Section 282 imposes on those attempting to prove invalidity the burden of proof. We agree that the district court did not err in finding that defendants have not met their burden of proving a best mode violation. As noted above, the district court found that the best mode of making the CHO cells was set forth in Example 10. As the district court stated, while it was not clear which of two possible strains Lin considered to be the best, the cell strain subjected to 1000 nanomolar MTX (methotrexate) or that subjected to 100 nanomolar MTX, the best mode was disclosed because both were disclosed. Defendants argue that this disclosure is not enough, that a deposit of the cells was required. Defendants contend that "[i]n the field of living materials such as microorganisms and cell cultures," we should require a biological deposit so that the public has access to exactly the best mode contemplated by the inventor. This presents us with a question of first impression concerning the best mode requirement for patents involving novel genetically-engineered biological subject matter. For many years, it has been customary for patent applicants to place microorganism samples in a public depository when such a sample is necessary to carry out a claimed invention. This practice arose out of the development of antibiotics, when microorganisms obtained from soil samples uniquely synthesized antibiotics which could not be readily prepared chemically or otherwise. In re Argoudelis, 434 F.2d 1390, 168 USPQ 99 (CCPA 1970). Such a deposit has been considered adequate to satisfy the enablement requirement of 35 U.S.C. § 112, when a written description alone would not place the invention in the hands of the public and physical possession of a unique biological material is required. ... Chapter 6 – The Patent Document

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The district court found that the claims at issue require the use of biological materials that were capable of being prepared in the laboratory from readily available biological cells, using the description in Example 10. The court also found that there were no starting materials that were not publicly available, that were not described, or that required undue experimentation for their preparation in order to carry out the best mode. The court noted that Lin testified that the isolation of the preferred strain was a "routine limited dilution cloning procedure[ ]" well known in the art. Dr. Simonsen, GI's own expert, testified that the disclosed procedures were "standard" and that: with the vectors and the sequences shown in Example 10, I have no doubt that someone eventually could reproduce—well, could generate cell lines [sic, strains] making some level of EPO, and they could be better, they could be worse in terms of EPO production.

The district court relied on this testimony, and, upon review, we agree with its determination. The testimony accurately reflects that the invention, as it relates to the best mode host cells, could be practiced by one skilled in the art following Example 10. Thus, the best mode was disclosed and it was adequately enabled. These materials are therefore not analogous to the biological cells obtained from unique soil samples. When a biological sample required for the practice of an invention is obtained from nature, the invention may be incapable of being practiced without access to that organism. Hence the deposit is required in that case. On the other hand, when, as is the case here, the organism is created by insertion of genetic material into a cell obtained from generally available sources, then all that is required is a description of the best mode and an adequate description of the means of carrying out the invention, not deposit of the cells. If the cells can be prepared without undue experimentation from known materials, based on the description in the patent specification, a deposit is not required. See Feldman v. Aunstrup, 517 F.2d 1351, 1354, 186 USPQ 108, 111 (CCPA 1975), ("No problem exists when the microorganisms used are known and readily available to the public."), cert. denied, 424 U.S. 912 (1976). Since the court found that that is the case here, we therefore hold that there is no failure to comply with the best mode requirement for lack of a deposit of the CHO cells, when the best mode of preparing the cells has been disclosed and the best mode cells have been enabled, i.e., they can be prepared by one skilled in the art from known materials using the description in the specification. **** Defendants also assert that the record shows that scientists were unable to duplicate Lin's geneticallyheterogeneous best mode cell strain. However, we have long held that the issue is whether the disclosure is "adequate," not that an exact duplication is necessary. Indeed, the district court stated that [t]he testimony is clear that no scientist could ever duplicate exactly the best mode used by Amgen, but that those of ordinary skill in the art could produce mammalian host cell strains or lines with similar levels of production identified in Example 10.

13 USPQ2d at 1774. What is required is an adequate disclosure of the best mode, not a guarantee that every aspect of the specification be precisely and universally reproducible. See In re Gay, 309 F.2d 769, 773, 135 USPQ 311, 316 (1962). Defendants finally argue that Lin's failure to deposit the transfected cells notwithstanding the fact that he was willing to deposit essentially worthless cell material was evidence of deliberate concealment. We have already stated that deposit of the host cells containing the rEPO gene was not necessary to satisfy the best mode requirement of Section 112. The best mode was disclosed and a deposit was not necessary to carry it out. Therefore, the fact that some cells were deposited, but not others, is irrelevant. ****

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Questions, Comments, Problems 1. How much does the applicant have to teach about her best mode? As seen in the cases above, the applicant must provide enough information about the best mode so as to enable a skilled artisan to practice it. Thus, when there is a subjective best mode, not only must the applicant enable the general bounds of the invention, but must also enable the specific implementation of it that is the applicant’s best mode. [C]ompliance with the best mode requirement focuses on a different matter than does compliance with the enablement requirement. Enablement looks to placing the subject matter of the claims generally in the possession of the public. If, however, the applicant develops specific instrumentalities or techniques which are recognized at the time of filing as the best way of carrying out the invention, then the best mode requirement imposes an obligation to disclose that information to the public as well. Spectra-Physics, Inc. v. Coherent, Inc., 827 F.2d 1524, 1532, 3 USPQ2d 1737, 1742 (Fed. Cir. 1987). 2. Timing – The cases make clear that the relevant time for measuring compliance with the best mode requirement is the filing date of the patent application. Therefore, if the inventor develops a better way of practicing the claimed invention while the patent application is pending, the inventor need not update the specification to include the newly discovered best mode. This is also the case with continuing applications under section 120 with respect to subject matter common to the earlier and later applications. See Transco Prods., Inc. v. Performance Contracting, Inc., 38 F.3d 551, 557, 32 USPQ2d 1077 (Fed. Cir. 1994) (“[T]he date for evaluating a best mode disclosure in a continuing application is the date of the earlier application with respect to common subject matter.”). In practical terms, Transco holds that when an applicant files a continuation application or a divisional application, she does not have to “update” her best mode. However, if she adds new matter, so that the new application is a continuation-in-part (CIP) application, she will have to update her best mode with respect to any claims that rely in part on the new matter and are not entitled to the benefit of the parent application’s filing date. See MPEP § 201.11. 3. The Subjective Component – For there to be a failure to disclose the best mode, the inventor or inventors must first contemplate a mode that they consider the best mode. What if an inventor selects a particular material to use in an invention because it is available in her cubicle when she first assembles the invention. In addition, what if, before the patent is filed, she determines that the material works pretty well, even though she has no reason to doubt that many other materials would work equally well. Does the inventor consider the material to be a best mode? In a similar situation, the Federal Circuit found that there was no violation for failing to disclose, in a patent for a computer modem, the particular firmware and other details of the patentee’s commercially-sold modem: Substantial evidence was introduced at trial in support of the conclusion that [the inventor] did not consider the specific firmware listing he used to implement his invention, either in its entirety or in its subparts, to be better than any other firmware listing that implemented his invention. Rather, he believed that the best mode of his invention was to store a firmware listing in firmware, and not that the various details of the specific firmware listing used in the Hayes SmartModem were the best mode. Thus, he was not required to disclose the details of the Hayes SmartModem firmware listing for a person of ordinary skill in the art to practice the invention. In re Hayes Microcomputer Prods. Inc. Patent Litigation, 982 F.2d 1527, 1537, 25 USPQ2d 1241, 1248 (Fed. Cir. 1992). 4. Foreign Priority Applications—The best mode requirement is unique to U.S. patent law; other countries generally do not require that a patent applicant enable any particular mode of an invention. This difference in laws requires particular attention from the patent practitioner when a patent is filed initially overseas. Because U.S. law requires that the best mode be disclosed as of the day the application is filed, where an applicant wants to claim priority of a foreign filing date under section 119, the initial application in the foreign country must have met the best mode requirement even if the foreign country did not require it. See Transco, 38 F.3d at 558. This may seem like a problem that may easily be worked around, but often, applications are filed in a foreign country before the applicants have any notion that they may ultimately want a U.S. patent.

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5. Routine Details – How much of the best mode must an applicant disclose? Generally, the disclosure must enable a skilled artisan to practice the best mode. However, not all aspects of the best mode must be disclosed. Certain details, referred to as “production details,” need not be disclosed. In Great Northern Corp. v. Henry Molded Products, Inc., 94 F.3d 1569, 39 USPQ2d 1977 (Fed. Cir. 1996), the Federal Circuit distinguished between the two senses with which the term “production details” had been used by the court: commercial considerations and routine details. As noted by the court: We have used the term [production details] to refer to commercial considerations such as the equipment on hand, or prior relationships with suppliers that were not satisfactory. . .. Such commercial considerations do not constitute a best mode of practicing the claimed invention because they do not relate to the quality or nature of the invention. Our cases have also used “production details” to refer to details which do relate to the quality or nature of the invention but which need not be disclosed because they are routine—i.e., details of production about which those of ordinary skill in the art would already know. In this latter scenario, the omitted detail constitutes a best mode but the disclosure is deemed adequate because the detail is routine. In Young Dental Manufacturing Co. v. Q3 Dental Products, Inc., 112 F.3d 1137, 42 USPQ2d 1589 (Fed. Cir. 1997), the court noted that the former sense of production details was the only one that involved “’true’ production details,” while the latter was properly labeled “routine details.” As to routine details, the court noted that they need not be disclosed “because, by definition, their disclosure is not required under the second inquiry of the best mode determination. In other words, to satisfy the second inquiry of the best mode test, an inventor need only disclose information about the best mode that would not have been apparent to one of ordinary skill in the art. Because routine details are apparent to one of ordinary skill, they need not be disclosed.” 6. Biotechnology – Amgen, in the context of biotechnology, in holding that a deposit of biological material was not required on the facts of that case to satisfy the best mode requirement, makes a very important point of more general practical application: [W]e have long held that the issue is whether disclosure [of the best mode] is “adequate”, not that an exact duplication is necessary. . . . What is required is an adequate disclosure of the best mode, not a guarantee that every aspect of the specification be precisely and universally reproducible. Id. at 1212. Of course, how does one measure “adequate?” The district court in Amgen found that by following Example 10, a person of ordinary skill could obtain EPO production levels “similar” to those identified in Example 10. Id. But how close must one come to be “similar?” Obviously, there is a fairness aspect to this. Is the public getting the full benefit of the best mode, or is it being cheated? In Amgen, did the failure to make the deposit give Amgen an unfair competitive edge? Apparently neither the district court nor the court of appeals thought so. 7. Software – If the best mode includes the details of the manner in which a patentee carries out the invention, does a software patent have to disclose every line of source code for the invention? To require such disclosure could be burdensome and unworkable, and, thankfully, the law does not require such a detailed disclosure. Rather, the Federal Circuit noted in Fonar Corp. v. General Electric Co., 107 F.3d 1543, 41 USPQ2d 1801 (Fed. Cir. 1997), that a less-detailed disclosure is required: As a general rule, where software constitutes part of a best mode of carrying out an invention, description of such a best mode is satisfied by a disclosure of the functions of the software. This is because, normally, writing code for such software is within the skill of the art, not requiring undue experimentation, once its functions have been disclosed. It is well established that what is within the skill of the art need not be disclosed to satisfy the best mode requirement as long as that mode is described. Stating the function of the best mode software satisfies that description test. We have so held previously and we so hold today. . .. Thus, flow charts or source code listings are not a requirement for adequately disclosing the functions of software. Id. at 1549. Of course, although flow charts are not required to establish an adequate best mode disclosure, inclusion of flow charts in an application can help ensure that the question never even gets to a jury (as it did in Fonar). Thus, flow charts are still common in software patent applications. 8. Intentional Concealment = Inequitable Conduct – The only subjective part of the best mode inquiry is the determination of whether the inventor contemplated a best mode. Thus, although the cases refer to

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concealment of the best mode by the applicant, the application will fail the best mode requirement whether that concealment is intentional or unintentional. In other words, concealment in the best mode context is equated with nondisclosure. When the concealment is intentional, however, the applicant may open itself up to a charge of inequitable conduct, through which a court may refuse to enforce a patent. See Consolidated Aluminum Corp. v. Foseco Int’l Ltd., 910 F.2d 804, 15 USPQ2d 1481 (Fed. Cir. 1990). You may ask what effect inequitable conduct may have if the claim must, by necessity, have been found invalid for failure to disclose the best mode. As you will see in a later chapter, inequitable conduct, when found, makes every claim in a patent unenforceable, and may even make claims in related patents unenforceable. In contrast, a best mode violation affects only a particular claim. See Amgen, 927 F.2d at 1209 n.5. 9. Isolating the Inventor From Later Developments – Remember that the best mode requirement is directed to the inventor, not the inventor’s company. So what is the result if, by the time of filing, the inventor’s company has come up with a better mode but has not told the inventor? Is the inventor deemed to have constructive knowledge of this better mode and therefore under an obligation to include it in his patent application? Absolutely not, according to the Federal Circuit. In Glaxo Inc. v. Novopharm Ltd., 52 F.3d 1043, 34 USPQ2d 1565 (Fed. Cir. 1995), the court affirmed a determination of no best mode violation where the inventor was unaware of his employer Glaxo’s use of an admittedly better mode at the time he filed his patent application. Judge Rich, writing for the court, strictly construed the statute, rejecting an imputed knowledge argument and rejecting an argument that if the inventor were deliberately “walled off” by his employer, that would constitute a best mode violation: [T]he practical reality is that inventors in most every corporate scenario cannot know all of the technology in which their employers are engaged. Therefore, whether intentionally or not, inventors will be effectively isolated from research no matter how relevant it is to the field in which they are working. Separating scenarios in which employers unintentionally isolate inventors from relevant research from instances in which employers deliberately set out to screen inventors from research, and finding a best mode violation in the latter case, would ignore the very words of § 112, first paragraph, and the case law as it has developed, which consistently has analyzed the best mode requirement in terms of knowledge of and concealment by the inventor. Congress was aware of the differences between inventors and assignees, see 35 U.S.C. §§ 100(d) and 152, and it specifically limited the best mode required to that contemplated by the inventor. We have no authority to extend the requirement beyond the limits set by Congress. Id. 1051-52. Judge Mayer dissented on the following basis: I would hold that if there truly was such a pattern of deliberate concealment of information that would otherwise have been known to the inventor, the knowledge of those who sought to conceal that information and who now attempt to enforce the patent may be imputed to the inventor. The district court can refuse to enforce the patent and should be given the opportunity to do so with a correct understanding of its powers. Id. at 1056. 10. The Claimed Invention and Best Mode – The best mode that must be disclosed is the best mode of the claimed invention. Thus, in Engel Industries, Inc. v. Lockformer Co., 946 F.2d 1528, 20 USPQ2d 1300 (Fed. Cir. 1990), the court stated: The best mode inquiry is directed toward what the applicant regards as the invention, which in turn is measured by the claims. Unclaimed subject matter is not subject to the disclosure requirements of § 112; the reasons are pragmatic: the disclosure would be boundless, and the pitfalls endless. Id. at 1531, 20 USPQ2d at 1302. In Chemcast, the court expanded the best mode requirement slightly to cover not only the claimed invention, but also features that are necessary to practice the best mode of the claimed invention. One district court recently cited Chemcast in invalidating a patent covering an electronic switching amplifier for use in a radio broadcaster. The amplifier output was “stepped,” and thus needed to be smoothed, or modulated, by a filter before it could be used in a transmitter. The district court ruled that the patentee had failed to disclose his best mode of modulating the output. In an unpublished opinion, the Federal Circuit reversed: Much of the confusion in this case is caused by the use of the term "amplifier" in the claim preamble. Although in general, an amplifier can include many components, such as a power supply, amplifying circuitry, smoothing circuitry, and other ancillary components, the amplifier claimed in the '944 patent has fewer functions. Thus, fine modulation is not necessary for the

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operation of the claimed invention, which is an amplifier defined by the circuitry required to carry out a novel switching scheme. Although fine modulation is needed before a human-discernible signal can be transmitted, such a result is not necessary for the claimed invention to achieve its purpose. Even without fine modulation, the amplifier produces an amplified output, albeit stepped, and does so in a way that spreads the switching events across all the switching stages. It is not enough merely to say that the amplifier will not "work" without fine modulation, as the district court did, because that conclusion presupposes that a "working" amplifier is supposed to achieve human discernible output. Many claimed inventions are components of a much larger system and, as components, are commercially feckless unless integrated into an operational system. Nonetheless, the components work as they are intended to work even if they do not produce an output that is immediately useful to the user. Although fine modulation may be necessary for the satisfactory performance of a broadcast transmitter or for the performance of an amplifier as viewed by the consumer, it is not necessary for the performance of the claimed amplifier. The claimed amplifier "works" even if its output is stepped. Thomcast A.G. v. Continental Electronics Corp., 132 F.3d 50 (Fed. Cir. Nov. 5, 1997); see also Applied Medical Resources Corp. v. United States Surgical Corp., 147 F.3d 1374, 47 USPQ2d 1289, ___ (Fed. Cir. 1998) (“[W]here the invention relates only to a part of, or one aspect of, a device, an applicant is not required to disclose a nonclaimed element necessary to the operation of the overall device, but not necessary to the operation of the invention to which the patent is directed.”). In more recent precedential opinions, the court has been careful to refine the situations in which modes of unclaimed elements must be disclosed. For example, in Northern Telecom Ltd. v. Samsung Elec. Co., 215 F.3d 1281, 55 USPQ2d 1065 (Fed. Cir. 2000), the court held that a preferred mode only needs to be disclosed if it is directly related to an element of a claimed invention. Later, in Eli Lilly and Co. v. Barr Labs., Inc., 222 F.3d 973, 55 USPQ2d 1609 (Fed. Cir. 2000), the court added a slight twist to the requirement, noting that a mode of an unclaimed element only needed to be disclosed if it was "novel and essential for carrying out the best mode of the invention." Is the requirement that the undisclosed mode be novel and essential add anything of substance to the previous case law? Is there a difference between asking whether something is “essential” and asking whether it is “necessary”?

Claim Language: We now turn to the end portion of the specification, the claims, to cover the statutory and judicial requirements for claim drafting.

Definiteness The definiteness requirement springs from the language in the second paragraph of section 112 that requires the specification to “conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.”

Eibel Process Co. v. Minnesota & Ontario Paper 261 U.S. 45 (1923) [Eibel’s patent covered an improvement in the well-known and widely-used “Fourdrinier” paper-making machines. The machines formed paper by dropping a wet mix of wood pulp from a “flow box” or “pond” onto a wide wire-mesh belt that was supported by, and rotated around, a series of rolls. The roll on the end at which the pulp was dropped was called the “beast roll.” The belt was shaken as it moved so that water fell from the pulp through the wire mesh. At the end of the belt, a pair of “couch rolls” pinched the pulp to further dry and strengthen the nascent sheet of paper. After leaving the belt, the sheet was pressed between more pairs of rolls. A gate, or “slice” on the flow box was moved up or down to control the volume of the pulp flow, and thick rubber bands, known as “deckle staps,” on the edge of Chapter 6 – The Patent Document

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the belt prevented excess pulp from escaping. Several “suction boxes” under the belt and spaced along its length help to suck water out of the pulp. A “dandy roll” above the belt was covered with wire cloth and pressed against the top of the pulp to give it a surface similar to the bottom of the roll.] ****

Messrs. Frederick P. Fish and Harrison F. Lyman, both of Boston, Mass., for petitioner. Mr. Amasa C. Paul, of Minneapolis, Minn., for respondent. Mr. Chief Justice TAFT, after stating the case as above, delivered the opinion of the Court. The evidence in the case establishes that, before Eibel entered the field, continued high speeds in the wire of the Fourdrinier machine much beyond 500 feet a minute resulted in defective paper. Eibel concluded that this was due to the disturbance and ripples in the stock as it was forming at a point between the breast roll and the first suction box, caused by the fact that at that point the wire was traveling much faster than the stock, and that if at that point the speed of the flowing stock could be increased approximately to the speed of the wire, the disturbance and rippling in the stock would cease, and the defects would disappear from the paper product. Accordingly he proposed to add to the former speed of the stock by substantially tilting up the wire and giving the stock the added force of the down hill flow. He thought that as long as he could thus maintain equality of speed between stock and wire at the crucial point, and prevent the disturbance and rippling there, a further increase in the speed of the wire would not result in a defective product. He confirmed this by actual trial. The first and most important question is whether this was a real discovery of merit. The Circuit Court of Appeals thought not. The prior art and the obvious application of the principle that water will run down hill in their opinion robbed it of novelty or discovery. The issue is one largely of evidence. The plaintiff below introduced the patent and some evidence of infringement, and a single expert to explain the discovery and invention, and rested. Then the defendant brought in a mass of evidence to show prior discovery and use, to impeach the utility of plaintiff's alleged invention, and to demonstrate the indefiniteness of specification and claims. The fact that the adjudication of the validity of the patent would impose a royalty on many of the paper manufacturers of the country who were not already licensees of the plaintiff led to the defendant's sending a circular letter to awaken the interest and secure the help of all so situated. This, as the record shows, had the effect to invoke offers of testimony on the critical points in the case from the unlicensed part of the trade. The plaintiff introduced a few witnesses in rebuttal as to particular details and the same expert as in chief. The plaintiff's case as presented on the record is largely the presumption of validity and novelty attaching to the patent and such evidence as comes from defendants' witnesses. A case that can be made out in all its elements by cross-examination of opposing witnesses is a strong case. Implication of facts and conditions falling from the mouths of witnesses when only collateral to the exact point of inquiry for which they are called is generally the most trustworthy evidence because the result of the natural, so to say, subconscious adherence to truth uninfluenced by a knowledge or perception of the bearing of the implication on the ultimate issue in the case. A thorough examination of the whole voluminous record produces a satisfying conviction first that for years news print paper makers and manufacturers of paper-making machinery were engaged in seeking a method of increasing the speed of the news print machines, and that they had succeeded by improving the stock and by strengthening the parts in bringing the speed of the wire and the delivered paper up to between 500 and 600 feet a minute, but that when these high speeds were attained and maintained for any length of time, though they served to enable manufacturers to advertise such maximums, their continued and regular operation showed defects in the paper, which were only overcome by a reduction of speed to something less than 500 feet. As against advertisement, and the exuberant memory of witnesses, the actual contemporaneous record of daily figures of production whenever brought to light justifies this conclusion. A leading manufacturer, one of the most enthusiastic witnesses on the subject of speed before Eibel produced a memorandum of a visit he Chapter 6 – The Patent Document

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made in October, 1904, less than two years before Eibel's application, to see the operation of a machine he had manufactured which he called “the banner installation of the world” and made an entry in his diary, “Grand sight-475 feet.” . . . What Eibel tried to do was to enable the paper maker to go to 600 or 700 feet and above in speed and retain a good product. Did he do it? Eibel was the superintendent of a paper mill at Rhinelander, Wis. Before August, 1906, he raised the pitch of the wire from 2 or 3 inches to 12 inches, and greatly increased the speed, with a satisfactory product, and in that month he applied for a patent. The defendant's witnesses without exception refer to that disclosure as something that surprised and startled the paper-making trade. It spread, to use the expression of one witness, like wildfire. There were those who hesitated to take the venturesome step to give such an unheard-of pitch to the wire, and waited until others assumed the risk, but the evidence is overwhelming that within a short interval of a year or two all of the fast machines were run with wires at a pitch of 12 inches and that this pitch has been increased to 15 and 18, and even 24, inches; that the speed of the machines with satisfactory product has increased to 600, 650, and even 700 feet, with plans now even for 1,000 feet and that the makers of two-thirds of the print paper of the country are licensees of Eibel. **** We think, then, that the Eibel patent is to be construed to cover a Fourdrinier machine in which the pitch of the wire is used as an appreciable factor, in addition to the factors of speed theretofore known in the machine, in bringing about an approximation to the equal velocity of the stock and the wire at the point where, but for such approximation, the injurious disturbance and ripples of the stock would be produced. The next objection to the patent, which prevailed in the Circuit Court of Appeals, is that its terms are too vague, because the extent of the factor of pitch is not defined, except by the terms “substantial” and “high.” The figure accompanying the specification and illustrating the improvement indicates an angle of 4 per cent., or an elevation of 12 inches, and the reference to the small elevations for drainage shown in earlier devices indicated that the patentee had in mind elevations substantial as compared with them, in order to achieve his purpose of substantially increasing the speed of the stock. It was difficult for him to be more definite, due to the varying conditions of speed and stock existing in the operations of Fourdrinier machines and the necessary variation in the pitch to be used to accomplish the purpose of his invention. Indefiniteness is objectionable, because the patent does not disclose to the public how the discovery, if there is one, can be made useful, and how its infringement may be avoided. We do not think any such consequences are involved here. This patent and its specifications were manifested to readers who were skilled in the art of paper making and versed in the use of the Fourdrinier machine. The evidence discloses that one, so skilled, had no difficulty, when his attention was called to their importance, in fixing the place of the disturbance and ripples to be removed, or in determining what was the substantial pitch needed to equalize the speeds of the stock and wire at that place. The immediate and successful use of the pitch for this purpose by the owners of the then fastest machines and by the whole trade is convincing proof that one versed in paper making could find in Eibel's specifications all he needed to know, to avail himself of the invention. Expressions quite as indefinite as “high” and “substantial,” in describing an invention or discovery, in patent specifications and claims, have been recognized by this court as sufficient. In Tilghman v. Proctor, 102 U.S. 707, the claim sustained was for “the manufacturing of fat acids and glycerine from fatty bodies by the action of water at a high temperature and pressure.” See also Rubber Co. v. Goodyear, 9 Wall. 788, 794; Mowry v. Whitney, 14 Wall. 620, 629; Lawther v. Hamilton, 124 U.S. 1, 9; Carnegie Steel Co. v. Cambria Iron Co., 185 U.S. 403, 436; Abercrombie & Fitch Co. v. Baldwin, 245 U.S. 198, 205. It is contended on behalf of the defendant that, whether Barrett and Horne perceived the advantage of speeding up the stock to an equality with the wire, yet the necessary effect of their devices was to achieve that result, and therefore their machine anticipated Eibel. In the first place, we find no evidence that any pitch of the wire, used before Eibel, had brought about such a result as that sought by him, and, in the second place, if it had done so under unusual conditions, accidental results, not intended Chapter 6 – The Patent Document

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and not appreciated, do not constitute anticipation. Tilghman v. Proctor, 102 U.S. 707, 711; Pittsburgh Reduction Co. v. Cowles Electric Co. 55 Fed. 301, 307; Andrews v. Carman, 13 Blatchford, 307, 323, Fed. Cas. No. 371. **** Question has been made whether these three claims are for a machine or a process. We think they are claims for a machine, i.e., for an improvement on a machine, and that the devices for such improvement, to wit, the elevation by a screw or other equivalent method, and the control of the speed of the wire, are shown by the specifications and the figures, together with a sufficient description of their operation. The seventh and eighth claims are for the same improvement, with the suction boxes changed from their usual position in the unimproved machine, to make them effectively function on the pitched wire. They are machine claims, and are infringed by the defendant. Their new adjustment is part of a new combination, and the words “substantially as described” limit them to a combination including the elements included in the first three claims. Claim No. 12 is as follows: “12. In a Fourdrinier machine, a downwardly moving paper-making wire, the declination and speed of which are so regulated that the velocity of the stock down the declining wire, caused by gravity, is so related to the velocity of the wire in the same direction that waves and ripples on the stock are substantially avoided and the fibers deposited with substantial uniformity on the wire, substantially as described.”

This comes nearer to being a process claim, but, whether it is or not, the defendant infringes it. **** The decree of the Circuit Court of Appeals, dismissing the bill, is reversed, and the decree of the District Court is affirmed.

General Electric Co. v. Wabash Appliance Corp. 304 U.S. 364 (1938) Mr. Justice REED, delivered the opinion of the Court. **** In incandescent lamps, the tungsten filament, through which the electric current passes, grows more luminous than the carbon filament of the early days of the art. There were faults of “offsetting” and “sagging,” however, affecting the efficiency of the first tungsten filaments. “Offsetting” occurs when, during heating in the use of the lamp, the filament forms crystals which extend their boundaries across the entire diameter of the filament, substantially perpendicular to its axis. The crystals in the filament thus come to have an appearance, somewhat analogous to the joints in a bamboo rod. Lateral slipping of the crystals reduces the cross-sectional area at the point of contact of the crystals with the result that the temperature at that point is increased, thus hastening the burnout, and the filament is weakened. “Sagging” is a change of position by the filament during incandescence. It elongates and thus is forced out of the plane it occupied between fixed supports. Sagging has many objections. The sagging filament may touch the glass and end the life of the lamp. In gas-filled lamps, when sagging causes the coils to spread apart, the gas flows in between the coils and unduly cools the filament. Combatting sagging by additional supports is also said to cool the filament, and reduce electrical efficiency. Pacz undertook to remedy these faults. He carried out many experiments, and his 218th effort, made while he was in the employ of [General Electric], yielded the discovery disclosed by the patent in suit. The specification asserts that by means of his invention “the sagging is substantially eliminated and Chapter 6 – The Patent Document

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“offsetting” of the filament is substantially prevented, during a normal or commercially useful life of the lamp.” He brings “into intimate association with tungsten a material (an alkaline silicate) which will have the desired influence upon the grain growth of the metal.” The specification continues as follows: “When the metal reaches the temperature at which extensive grain growth would ordinarily take place, the presence of this material intimately associated with the tungsten particles has a marked effect on the shape and size of the tungsten grains. The ingot of tungsten thus produced, whether it be due to the fact that the grains have not reached the equilibrium grain size or to other causes, is particularly susceptible to grain growth during subsequent heat treatments. “The probable reason why filaments made according to my invention do not sag, is that the structure is comparatively coarse grained. The coarse grained filament produced by means of my invention does not ‘offset' so as to cut short the life of the lamp appreciably.”

The District Court found that Pacz's patent exhibited novelty and invention; that Pacz produced large crystals early in the life of the lamp; that although coarse-grained, and thus non-sagging, filaments meant “offsetting” to the art, where it was “common knowledge” that grains large enough to extend across the filament induced slippage, Pacz procured a particular kind of coarse-grained filament which did not “offset” because of the nature of the boundaries of the grains, their contour being “a very important element.” The Circuit Court of Appeals held that the Pacz product was anticipated by Patent No. 1,082,933, issued December 30, 1913, to William D. Coolidge for a process of producing ductile tungsten for incandescent electric lamp filaments and for the product itself. The question before this Court is the validity of the claims in suit. Claim 25, which is typical, reads as follows: “25. A filament for electric incandescent lamps or other devices, composed substantially of tungsten and made up mainly of a number of comparatively large grains of such size and contour as to prevent substantial sagging and offsetting during a normal or commercially useful life for such a lamp or other device.”

We need not inquire whether Pacz exhibited invention, or whether his product was anticipated. The claim is invalid on its face. It fails to make a disclosure sufficiently definite to satisfy the requirements of R.S . § 4888, 35 U.S.C. § 33. That section requires that an applicant for a patent file a written description of his discovery or invention “in such full, clear, concise, and exact terms as to enable any person skilled in the art or science to which it appertains . . . to make, construct, compound, and use the same; . . . and he shall particularly point out and distinctly claim the part, improvement, or combination which he claims as his invention or discovery.” We may assume that Pacz has sufficiently informed those skilled in the art how to make and use his filament. The statute has another command. Recognizing that most inventions represent improvements on some existing article, process, or machine, and that a description of the invention must in large part set out what is old in order to facilitate the understanding of what is new, Congress requires of the applicant “a distinct and specific statement of what he claims to be new, and to be his invention.” Patents, whether basic or for improvements, must comply accurately and precisely with the statutory requirement as to claims of invention or discovery. The limits of a patent must be known for the protection of the patentee, the encouragement of the inventive genius of others, and the assurance that the subject of the patent will be dedicated ultimately to the public. The statute seeks to guard against unreasonable advantages to the patentee and disadvantages to others arising from uncertainty as to their rights. The inventor must “inform the public during the life of the patent of the limits of the monopoly asserted, so that it may be known which features may be safely used or manufactured without a license and which may not.” The claims “measure the invention.” Patentees may reasonably anticipate that claimed inventions, improvements, and discoveries, turning on points so refined as the granular structure of products, require precise descriptions of the new characteristic for which protection is sought. In a limited field the variant must be clearly defined. This was one in a series of patents. United States v. General Electric Co., 272 U.S. 476, 480.

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Pacz did not adequately set out “what he claims to be new.” The tungsten filament “made up mainly of a number of comparatively large grains,” differentiates the claimed invention from tungsten drawn into a single crystal (Schaller, No. 1,256,930), and from Coolidge’s fine-grained thoriated filament, but serves aptly to describe the product of earlier manufacture, with its large regular grains subject to offsetting. According to the District Court, the earliest, so-called “squirted,” tungsten filaments, also “consisted of comparatively large crystals, many of which were large enough to extend clear across the filament, but they shifted.” 17 F.Supp. 901, at page 902. The failure of the patentee to make claim to a distinct improvement is made clear by comparison of the language of the claims under consideration with descriptions of offset difficulties recognized by other inventors. The claim further states that the grains must be “of such size and contour as to prevent substantial sagging and offsetting” during a commercially useful life for the lamp. The clause is inadequate as a description of the structural characteristics of the grains. Apart from the statement with respect to their function, nothing said about their size distinguishes the earliest filaments, and nothing whatever is said which is descriptive of their contour (termed by the District Court a “very important element”), not even that they are irregular. The claim uses indeterminate adjectives which describe the function of the grains to the exclusion of any structural definition, and thus falls within the condemnation of the doctrine that a patentee may not broaden his product claims by describing he product in terms of function. Claim 25 vividly illustrates the vice of a description in terms of function. “As a description of the invention, it is insufficient, and, if allowed, would extend the monopoly beyond the invention.” The Court of Appeals for the Ninth Circuit relied on the fact that the description in the claims is not “wholly” functional. Anraku v. General Electric Co., 80 F.2d 958, 963. But the vice of a functional claim exists not only when a claim is “wholly” functional, if that is ever true, but also when the inventor is painstaking when he recites what has already been seen, and then uses conveniently functional language at the exact point of novelty. A limited use of terms of effect or result, which accurately define the essential qualities of a product to one skilled in the art, may in some instances be permissible and even desirable, but a characteristic essential to novelty may not be distinguished from the old art solely by its tendency to remedy the problems in the art met by the patent. And we may doubt whether the language used in claim 25, taken by itself, conveyed definite meaning to those skilled in the art of incandescent lighting. The Circuit Court of Appeals below suggested that “In view of the difficulty, if not impossibility, of describing adequately a number of microscopic and heterogeneous shapes of crystals, it may be that Pacz made the best disclosure possible . . . .” But Congress requires, for the protection of the public, that the inventor set out a definite limitation of his patent; that condition must be satisfied before the monopoly is granted. The difficulty of making adequate description may have some bearing on the sufficiency of the description attempted, but it cannot justify a claim describing nothing new except perhaps in functional terms. It may be doubted whether one who discovers or invents a product he knows to be new will ever find it impossible to describe some aspect of its novelty. The product claims here involved cannot be validated by reference to the specification. Assuming that in a proper case a claim may be upheld by reference to the descriptive part of the specification in order to give definite content to elements stated in the claim in broad or functional terms, the specification of the Pacz patent does not attempt in any way to describe the filament, except by mention of its coarsegrained quality. Even assuming that definiteness may be imparted to the product claim by that part of the specification which purportedly details only a method of making the product, the description of the Pacz process is likewise silent as to the nature of the filament product. Although in some instances a claim may validly describe a new product with some reference to the method of production, a patentee who does not distinguish his product from what is old except by reference, express or constructive, to the process by which he produced it, cannot secure a monopoly on the product by whatever means produced. “Every patent for a product or composition of matter must identify it so that it can be Chapter 6 – The Patent Document

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recognized aside from the description of the process for making it, or else nothing can be held to infringe the patent which is not made by that process.” Finally, the product claims may not be saved by a limitation to products produced in accordance with the process set out in the specification. This construction, though possibly of no avail against respondent, might add to the protection afforded petitioner by the process claims, if they are valid, in view of its application to filaments produced abroad. But putting aside questions as to the general propriety of such a construction, unless the claim uses language explicitly referring to the method of preparation, or describing the product in phrases suggestive of that process, to save the product claim in this fashion would constitute an improper importation into the claim of a factor nowhere described there. The claims in suit seek to monopolize the product however created, and may not be reworded, in an effort to establish their validity, to cover only the products of the process described in the specification, or its equivalent. For reasons set out, claims 25, 26, 27 are invalid. The judgment is affirmed. Mr. Justice CARDOZO took no part in the consideration or decision of this case.

United Carbon Co. v. Binney & Smith Co. 317 U.S. 228 (1942), 55 USPQ 381 Mr. Justice JACKSON delivered the opinion of the Court. Respondent sued for infringement of patent No. 1,889,429, issued to Weigand and Venuto, relating to carbon black in aggregated form and a process for its conversion to that form. Its complaint was particularized to apply only to claims 1 and 2 of the patent, which are product claims and not process claims. The District Court found these claims invalid as lacking novelty and invention and because they failed to define the product asserted to have been invented in such clear, definite, and exact terms as required by patent law. It also found no infringement. 37 F. Supp. 779. The Circuit Court of Appeals held to the contrary on each of these propositions and reversed. 4 Cir., 125 F.2d 255. The importance of the questions in the case prompted us to grant certiorari. 316 U.S. 657. Carbon black has been manufactured from natural gas since the 1870's. At present the most extensive of its many uses is as a binder in automobile tires. The particles of carbon black in its original form are extremely fine and dispersable. They are smaller than the length of a light wave, having a diameter of about one-millionth of an inch. One pound of them is said to present surfaces sufficient to cover 12 or 13 acres. Unprocessed carbon black weighs but ten pounds or less per cubic foot. The fineness and dispersability of the substance causes it to raise in clouds of dust when handled, with consequent losses, discomfort to workmen, and difficulties in manufacturing processes. Since 1915, when carbon black first came to be widely used in the manufacture of rubber, many attempts have been made to cope with the dust problem. In many cases mixing rooms were segregated at great expense from other parts of rubber factories, and the mills where the carbon black was mixed into the rubber were enclosed to confine the clouds of dust. Efforts were made to prevent as well as to control the dust. Compressing the carbon black to force out the air and increase its density met with some, but only indifferent, success. Attempts were made to prevent dust by the use of binders in the carbon black to make the particles adhere. These were not satisfactory, since the binders were unwanted and sometimes injurious substances and at best foreign matter to rubber formulas. Wetting and drying the carbon black also proved unsatisfactory, since this Chapter 6 – The Patent Document

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caused the particles to adhere in such manner that the aggregate product was not sufficiently friable (i.e. breakable) and dispersable when mixed with other substances. Weigand and Venuto experimented extensively, and the patent in litigation is the outcome. They mixed carbon black with a liquid such as water; displaced the water with another liquid such as gasoline which was substantially immiscible with the first and had a greater ability to wet the carbon particles; agitated the mixture until the water was substantially free from carbon; and finally removed the gasoline by evaporation. As it apparently must in order to assert invention and infringement, respondent argues that Weigand and Venuto solved the problem of carbon-black dust by a product consisting of carbon black aggregates formed without the use of any binder, sufficiently hard and flowable to prevent the formation of dust, yet sufficiently friable and dispersable for use as a component in the manufacture of rubber and other products. Manufacture was undertaken, one Glaxner being employed to put into use the process taught by this patent. He soon bettered his instruction by devising a simpler and much less expensive process employing but one liquid. His process was the subject of another patent, and at once superseded that of the patent in suit which thereupon became obsolete. Several other processes to achieve very similar results, including those used by the petitioner, have also been developed and patented. Commercial success of respondent's process was short-lived, and the really impressive commercial success has been achieved since the development of the Glaxner process. The product claims which respondent says the petitioner's product infringed, regardless of the process by which it was made, read as follows: “1. Sustantially (sic) pure carbon black in the form of commercially uniform, comparatively small, rounded, smooth aggregates having a spongy or porous interior. 2. As an article of manufacture, a pellet of approximately one-sixteenth of an inch in diameter and formed of a porous mass of substantially pure carbon black.” **** Here, as in many other cases, it is difficult for persons not skilled in the art to measure the inclusions or to appreciate the distinctions which may exist in the words of a claim when read in the context of the art itself. The clearest exposition of the significance which the terms employed in the claims had for those skilled in the art was given by the testimony of Weigand, one of the patentees, whom respondent called as its witness. Weigand was employed as Director of Research of the Columbian Carbon Company, whose stock respondent owned, and for whom respondent acted as sole selling agent. His testimony in this respect was given principally upon cross-examination, but it was in no wise impeached or contradicted, and is borne out by that of other witnesses. From it we learn that “substantially pure” refers, not to freedom from ash and other impurities, but rather to freedom from binders; “commercially uniform” means only the degree of uniformity demanded by buyers; “comparatively small” is not shown to add anything to the claims, for nowhere are we advised what standard is intended for comparisons; “spongy” and “porous” are synonymous, and relate to the density and gas content of aggregates of carbon black. Although sponginess or porosity is not a necessary attribute of a friable substance, it does contribute to the friability of aggregates of carbon black. It is of value only in that regard. A spongy or porous aggregate of carbon black may be so friable as to permit of the formation of dust; and, on the other hand, it is conceivable that it might not be sufficiently friable to mix satisfactorily with other substances such as those used in the manufacture of rubber products. The correct degree of friability can be ascertained only by testing the performance of the product in actual processes of manufacture of products of which carbon black is a component. A “pellet” of carbon black is “a spheroidal shaped aggregate that has substance and strength to it.” For “strength” “we have this rough and ready test: does it survive under gentle rubbing of the fingers. I would not say that is an adequate test to predicate rubber behavior on, but it is a rough and ready test;” and if it responds to that test it is a pellet within the meaning of the claim. Finally, what on first impression appears to be reasonable certainty of dimension disappears when we learn that “approximately one-sixteenth of an inch in diameter” includes a variation from approximately 1/4th to 1/100th of an inch. Chapter 6 – The Patent Document

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So read, the claims are but inaccurate suggestions of the functions of the product, and fall afoul of the rule that a patentee may not broaden his claims by describing the product in terms of function. Holland Furniture Co. v. Perkins Glue Co., 277 U.S. 245, 256-258; General Electric Co. v. Wabash Corp., supra, at 371-372. Respondent urges that the claims must be read in the light of the patent specification, and that as so read they are sufficiently definite. Assuming the propriety of this method of construction, cf. General Electric Co. v. Wabash Corp., supra, 304 U.S. at 373-375, it does not have the effect claimed, for the description in the specification is itself almost entirely in terms of function. It is therefore unnecessary to consider whether the rejection of certain claims by the Patent Office might in turn deprive the specification of any curative effect in this regard. Cf. Schriber-Schroth Co. v. Cleveland Trust Co., 311 U.S. 211, 312 U.S. 654; Exhibit Supply Co. v. Ace Patents Corp., 315 U.S. 126. The statutory requirement of particularity and distinctness in claims is met only when they clearly distinguish what is claimed from what went before in the art and clearly circumscribe what is foreclosed from future enterprise. A zone of uncertainty which enterprise and experimentation may enter only at the risk of infringement claims would discourage invention only a little less than unequivocal foreclosure of the field. Moreover, the claims must be reasonably clear-cut to enable courts to determine whether novelty and invention are genuine. Congress has provided that a patent may be awarded only for a new and useful manufacture “not patented or described in any printed publication in this or any foreign country, before his invention or discovery thereof.” R.S. § 4886, 35 U.S.C. § 31, 35 U.S.C.A. § 31. While we do not find it necessary to consider questions of novelty and invention, in the view we take of the claims in suit, a mere reading of prior art patents shows how, if they are read with the liberality and inclusiveness claimed for those in suit, they describe products, if not identical, at least of confusing similarity. Whether the vagueness of the claim has its source in the language employed or in the somewhat indeterminate character of the advance claimed to have been made in the art is not material. An invention must be capable of accurate definition, and it must be accurately defined, to be patentable. Cf. General Electric Co. v. Wabash Corp., supra, at 372, 373. We are of opinion that the claims in litigation are bad for indefiniteness, and have no occasion to consider questions of novelty, invention, and infringement. The judgment below is reversed.

Questions, Comments, Problems 1. Overbreadth and Definiteness – You learned earlier that overly broad claims can create problems under sections 102 and 103 by sweeping in the prior art, and under the enablement requirement by defining an invention so expansive in scope that it is not fully enabled by the specification. It is apparent that the Court in Wabash and United Carbon used the word “indefinite” in three different senses: first, that the claim term is too vague, that is, a skilled artisan would not know what the claim or term means, second, that the claim boundary is not known (“not definite”), and third, that the claim extends beyond the inventive concept. (In this third sense, the claim is not strictly indefinite, because the boundaries are known, but are simply too broad.) Is the Court’s problem with the claims in Wabash and United Carbon one of indefiniteness in the first sense, the second sense, the third sense, or all three? Interestingly, there is a sequel to United Carbon. The patentee, refusing to submit, went back to the patent office to seek a reissue patent to address the Supreme Court’s problems with the original claims. Reissue claims were granted, with claim 1 the broadest: 1. Substantially pure carbon black in the form of round smooth-surfaced aggregates less than one quarter of an inch in diameter, free from binders and porous throughout in such degree that approximately twice the number of pounds of aggregates of fairly uniform size can be placed in a container of a given size than in the case with the untreated black. The parties then joined issue again in a different district court, and the court held that the reissue claims had cured the indefiniteness problem, were not proved invalid, and were infringed by all of United Carbon’s processes except the Extension Process, which produced granules of irregular and non-uniform shape, and thus were neither “round” nor “smooth-surfaced.” See United Carbon Co. v. Carbon Black Research. Foundation, 59 F. Supp. 384, 64 USPQ 366 (D. Md. 1945). The district court clearly focused on the “vagueness” meaning of indefiniteness, and to some extent on the lack of boundary aspect, but not on the

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overbreadth meaning. Were these reissue claims still overbroad, in view of Weigand and Venuto’s inventive contribution? We will never know what a higher court thought, because the case then settled. 2. Definiteness and Written Description – The Third Circuit, in Rengo Co. v. Molins Machine Co., 657 F.2d 535, 211 USPQ 303 (3d Cir. 1981), noted that there is a “subtle relationship” between the policies behind the definiteness and written description requirements: [T]he two standards, while complementary, approach a similar problem from different directions. Adequate description of the invention guards against the inventor’s overreaching by insisting that he recount his invention in such detail that his future claims can be determined to be encompassed within his original creation. The definiteness requirement shapes the future conduct of persons other than the inventor, by insisting that they receive notice of the scope of the patented device. Id. at 551, 211 USPQ at 321. 3. Definiteness and Enablement – Although enablement and definiteness are clearly separate requirements, courts have sometimes confused the two, perhaps in part because both requirements were part of the same clause before 1952. For example, the Eibel Process Court stated: “Indefiniteness is objectionable because the patent does not disclose to the public how the discovery, if there is one, can be made useful and how its infringement may be avoided.” This passage indicates the purpose of the definiteness requirement, i.e., to make it possible to determine both whether a particular product infringes a claim and also to determine the validity vel non of the claim. The passage also indicates the purpose of the enablement requirement, i.e., to provide the public with the ability to make and use the claimed invention. Although it is the claimed invention that must be enabled, the enablement requirement brings into question the sufficiency of the disclosure rather than of the claim. 4. Relative Terms – Relative terms such as “substantial,” “substantially,” “high,” “about,” “smooth,” and the like do not necessarily raise indefiniteness problems. You saw that in Eibel, where the Court found that other claim language that set forth the purpose of the language in question (there, to bring the speed of the stock up to the speed of the roll) imbued the words with definiteness. The written description portion of the specification can also provide definiteness to relative terms in claims. When the description either defines the term or sets forth in detail its purpose, courts have held such a term acceptable. In Minnesota Mining & Manufacturing Co. v. Johnson & Johnson Orthopaedics, Inc., 976 F.2d 1559, 24 USPQ2d 1321 (Fed. Cir. 1992), the court ruled that the word “lubricated” and similar words were definite: What the patentee meant by the term “lubricant” and the phrase “pre-lubricated resin coated sheet” is evident from the specification. To speak of “a lubricant at a major surface of the coated sheet” or “a pre-lubricated curable resin-coated sheet,” especially in light of the specification’s emphasis on obtaining a slippery feel or slippery surface, means exactly what one would expect when a lubricant is placed on a surface—that the surface is slippery. . . . [Johnson & Johnson’s] next argument is that this interpretation renders the claims indefinite because it is impossible to know how “slippery” the product has to be. However, [J&J’s] argument is improperly framed in its use of the term “slippery” because this term is not used in the claims. The term “slippery” was used by the Master to define and explain what was meant by the term “lubricant.” The amount of lubrication required is laid out in the specification and should be sufficient to achieve the fundamental purpose of the invention—the ability to smooth and rub the casting materials during molding without the resin and tape sticking to the applicator’s hands. In addressing a similar issue, this court in Bausch & Lomb, Inc. v. Barnes-Hind/Hydrocurve, Inc., 796 F.2d 443, 450, 230 USPQ 416, 421 (Fed. Cir. 1986), ascertained the meaning of the term “smooth” based on a review of extrinsic evidence: Disputed issues such as the meaning of the term “smooth,” should be construed by resort to extrinsic evidence such as the specification, other claims, and the prosecution history. Here, resort to the specification clearly demonstrates that “smooth” meant that “the edges of the craters neither inflame nor irritate the eyelid of the lens wearer * * *.” . . . Testimony from Dr. Mandell, Bausch & Lomb’s expert in the field of contact lenses, indicates that to a person of ordinary skill in the art, smooth would mean an absence of “roughness or significant elevation” so that a wearer “would not feel it with the [eye]lid.” . . .

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We hold that smooth means smooth enough to serve the inventor’s purposes, i.e., not to inflame or irritate the eyelid of the wearer or be perceived by him at all when in place. [Emphasis ours.] Likewise, we do not perceive any difficulty or confusion in determining what is “lubricated” and what is not lubricated in terms of the Scholz patent. That is, lubricated products are products that can be rubbed and smoothed to allow molding of the cast without the resin and tape sticking to the applicator’s hands or gloves. 976 F.2d at 1567, 24 USPQ2d at 1328. Judge Learned Hand saw it the same way in upholding as not indefinite the following claim to an imitation olive oil in Musher Foundation v. Alba Trading Co., 150 F.2d 885, 66 USPQ 183 (2d Cir. 1945): 2. A substantially stabilized glyceride oil having novel flavor and odor characteristics containing a small amount of the glyceride oil soluble constituents derived from a dehydrated, low moisture containing, macerated olive paste, the oil being substantially free of the fibers of said olive paste. In reaching his conclusion, he looked to the written description (“specifications”): As in the case of any other claim, a product claim may, and indeed must, be read upon the specifications: its terms are no more than a shorthand from the fuller explanation which the specifications should contain. Whatever may have been the recent tendency of the Supreme Court to bear more heavily than in the past upon indefiniteness of diction in claims, there can be no doubt, at least in the case at bar, that all the terms used in Claim Two are anchored in the specifications, and do not speak in terms of function—the only reason given for rejecting reference to the specifications in the last decision upon the subject. United Carbon v. Binney . . . . To proceed to the details: the specifications define “substantially stabilized” in the following passage: “materially improved in keeping quality, and it is frequently possible to extend the life of the glyceride oil by three of four times”. . . . (“Substantially” is not of itself fatal to a claim; Eibel Process . . . .: indeed, it must always be implied in every claim, even when not introduced, and adds nothing when it is. Were this not true, few patents could be given any protection, for some departures from the precise disclosure are nearly always possible without losing the benefit of the invention.) The specifications several times describe the words “novel flavor and odor” . . .; indeed, they scarcely need any description, being themselves self-explanatory. Again, the specifications define the word “small” by limits in specific percentages. Finally, “substantially free of fibres” means “filtered” or “centrifuged”. . . . It is impossible to suppose that anyone who really wished to respect the patent would have any difficulty in identifying what the claim covered. Id. at 888-89. By interpreting relative terms in light of the invention’s purpose and the prior art, one may also avoid unduly narrow constructions. Thus, in Shamrock Technologies, Inc. v. Medical Sterilization, Inc., 903 F.2d 789, 14 USPQ2d 1729 (Fed. Cir. 1990), the court agreed with the district court’s construction of the claim phrase “uniformly irradiated” in a process and apparatus for irradiation of PTFE, a plastic material, as not requiring absolute or perfect uniformity. Rather, both courts concluded that the phrase required “more consistent exposure” of PTFE to radiation than the prior art’s uneven radiation (because the PTFE granules were mixed during the irradiation in the patent, but in the prior art were irradiated in trays so that upper layers received more radiation than lower layers). To have interpreted “uniformly irradiated” as requiring absolute or perfect uniformity would have, in both courts’ view, deprived the inventor of a claim as broad as the inventive contribution. 5. Functional Language – The Court in Wabash criticized the use of “conveniently functional language at the exact point of novelty.” 364 U.S. at 371. What does that mean? Is functional language that is keyed into the inventive concept a fatal defect? You will see in the next chapter how Congress dealt in part with this criticism by enacting the third (now sixth) paragraph of section 112 of Title 35 in 1952, to validate use of “means for” functional language, even at the point of novelty, and to overrule the Halliburton decision decided by the Court in 1946. Nonetheless, even where “means for” functional language is not used, courts have upheld functional claim language, if, not “at” the point of novelty (whatever that is), certainly in its vicinity. Two decisions of the CCPA, issued on the same day in 1963, have effectively established an important role for functional claim language: In re Caldwell, 319 F.2d 254, 138 USPQ 243 (CCPA 1963), and In re Fuetterer, 319 F.2d 259, 138 USPQ 217 (CCPA 1963). Judge Rich authored both opinions. In Caldwell, the invention lay in feeding aspirin to pigs (and other farm animals) to promote their growth. Claim 5 was representative of those rejected by the Patent Office:

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The method of stimulating growth of ruminants, poultry and swine, which comprises feeding animals rations supplying an effective amount of aspirin for growth stimulation. The written description and the other allowed claims gave specific dosage ranges for the aspirin as a percentage of the weight of the feed. The Patent Office had rejected the method claims as obvious over prior art (Gross) that stated that feeding aspirin to rats did not retard their growth, and gave no weight to the phrase “an effective amount . . . for growth stimulation” because it was functional. The court reversed, finding first that the claims were not obvious in view of the Gross textbook: Our view of the matter, with respect to the method claims, is that the real novelty is as defined in all of the appealed claims—stimulating the growth of ruminants, poultry, or swine by feeding them aspirin for that purpose. Gross obviously suggests no such method. On the contrary, that reference suggests that such a method is an impossibility, not merely as a theoretical proposition, moreover, but on the basis of laboratory tests and controlled experiments. We therefore disagree with the rejection on Gross, the only rejection made, and also with the corollary proposition that the “real novelty” must reside in the amount of aspirin fed, rather than in the feeding of aspirin for the stated purpose. Id. at 257, 138 USPQ at 246. The court then disposed of the Patent Office Solicitor’s argument that the claim was indefinite under the second paragraph of section 112: [T]he solicitor’s brief . . . indulges in the lengthy discussion of an irrelevancy, namely, the requirement of 35 U.S.C. 112, second paragraph, for definiteness in claims, citing our decision in In re Arbeit, 206 F.2d 947. Neither that statute nor that case has direct bearing on the issue here. We note, however, that in the Arbeit case this court expressly approved the use of terminology in claims, to which the Patent Office had objected as “functional.” Here appellant is alleging as unobvious the use of aspirin for growth promotion in named animals, not the amount used, which may be from the least effective amount to the amount beyond which no further beneficial effect is observed. In other words (unsuited to traditional patent claim terminology), enough to work but not too much. “Effective amount” admirably states what is to be derived from the disclosure of the specification as to amount and we can see nothing “critical” about the amount in determining the existence of patentable invention. Furthermore, and though we feel that there is no issue here as to the propriety of so-called “functional” definitions of uncritical amount, it may be helpful to note that such definitions are not only common but have been expressly approved in many cases [citations omitted]. Also, analogous “functional” limitations with respect to uncritical time or temperature have been approved in claims in [other cases]. Id. at 257-58, 138 USPQ at 246-47. In Fuetterer, the invention involved placing certain proteins and carbohydrates into rubber tire tread stock along with an inorganic salt, so that the resultant tire tread will grip better on wet or icy roads. The claims required a presence of each of the three ingredients “in an effective amount,” a limitation found indefinite by the Patent Office in part because the language would place “an undue burden . . . upon the public, to determine the operable proportions.” The claims also required an inorganic salt “capable of holding [the mixture] in colloidal suspension in water,” a limitation found both unduly broad and “functional.” The court reversed, ruling with respect to the “effective amount” limitations that the Patent Office’s rationale was inapplicable to claim indefiniteness under section 112, para. 2 and that a lack of enablement rejection was not sustainable: We think the examiner’s rejection of the instant claims as failing to enable the public “to determine operable proportions” is misplaced. Such is the function of the invention description and not that of the claims. Id. at 261, 138 USPQ 220. The court then explained why the claim rejections for functionality and undue breadth of the salt language were not supportable: “Functional” language in claims is not expressly condemned by the patent statutes. On the contrary, the only portion of Title 35, U.S.C., which makes any reference to the use of statements of function specifically authorizes such use [citing section 112, para. 3 (now para. 6)]. **** It was in the Wabash case that the Supreme Court condemned the use of “conveniently functional language at the exact point of novelty.” The “exact point of novelty” in the Wabash case resided in statements in the claims which “distinguished [the large grained tungsten filament there involved] from the old art solely by its tendency to remedy the problems in the art met by the

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patent.” Aside from such statements, the Supreme Court specifically held that the claims “aptly . . . describe the product of earlier manufacture.” In the instant case appellant’s “exact point of novelty” is a new combination of substances constituting a rubber tire tread stock. This combination is distinguishable “from the old art” in that, inter alia, it is new, i.e., no evidence exists that it describes a “product of earlier manufacture.” . . . It is true that appellant’s inorganic salt is defined in terms of “what it does” rather than “what it is.” We note, however, that the Supreme Court, in a seldom quoted passage in the Wabash case, stated: “A limited use of terms of effect or result, which accurately define the essential qualities of a product to one skilled in the art, may in some instances be permissible and even desirable. . . .” Appellant in the instant case has made just such a use of terms of result to define an essential quality of his inorganic salts. **** The undue breadth rejection phase of the instant case appears in the following posture. Appellant has described his invention as comprehending the use therein of any inorganic salt capable of performing a specific function in a specific combination and he has disclosed specifically four such salts which are capable of performing this function. The examiner and the board, believing that not all inorganic salts are capable of performing this function and that one skilled in the art would not know offhand which inorganic salts are capable of so functioning, have rejected the claims as "unduly broad.” **** We find the arguments of the board and the examiner relating to experimentation necessary to determine the suitability of undisclosed salts to operate in appellant’s claimed combination beside the point. Appellant’s invention is the combination claimed and not the discovery that certain inorganic salts have colloid suspending properties. We see nothing in patent law which requires appellant to discover which of all those salts have such properties and which will function properly in his combination. The invention description clearly indicates that any inorganic salt which has such properties is usable in his combination. If others in the future discover what inorganic salts additional to those enumerated do have such properties, it is clear appellant will have no control over them per se, and equally clear his claims should not be so restricted that they can be avoided merely by using some inorganic salt not named by appellant in his disclosure. The only “undue burden” which is apparent to us in the instant case is that which the Patent Office has attempted to place on the appellant. The Patent Office would require him to do research on the “literally thousands” of inorganic salts and determine which of these are suitable for incorporation into his claimed combination, apparently forgetting that he has not invented, and is not claiming, colloid suspension agents but tire tread stock composed of a combination of rubber and other ingredients. Clearly, the premise leading the court to uphold the claims was its focus on the invention as a concept of combining several ingredients to achieve a purpose, rather than as a discovery of a novel salt. 6. Saving the Claim – Like any writing, even the best claim can be imbued with some ambiguity when a clever attorney is paid to find some during litigation. Is invalidation the only way to remedy a problem of indefiniteness? Not necessarily. In Athletic Alternatives, Inc. v. Prince Mfg., Inc., 73 F.3d 1573, 37 USPQ2d 1365 (Fed. Cir. 1996), the patent claims covered an improved design for a tennis racket wherein certain of the strings were “splayed,” or offset slightly from the central plane defining the face of the racket. The claims recited that the offset distance of the strings “varies between” minimum distances for the outer strings and a maximum distance for a string between the outer strings. However, the specification did not define the phrase “varies between,” and the patent did not make clear whether the term required at least three offset values (which would result in noninfringement by Prince) or could encompass rackets with only two offset distances. The majority, consisting of Circuit Judges Plager and Clevenger, found that the choice between the two definitions was equal, so it used the narrower of the two definitions to further the fair notice function of the claims. Senior Circuit Judge Nies, in a concurrence, harshly criticized the majority for using section 112 to define a claim narrowly rather than to invalidate the claim: The majority analysis is illogical to me. Narrowness cannot be equated with indefiniteness. The majority, in effect, eviscerates the requirement of § 112, ¶ 2 for the patentee to particularly point out and distinctly claim his invention while purporting to rely on it.

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7. Claiming a Known Desirable Result – You have seen that there is a claim scope or overbreadth aspect to many of the supposed indefiniteness opinions (Wabash, United Carbon, Caldwell, and Fuetterer). Another way to approach some of these cases is to find the claim invalid, not because it is indefinite, but because it lacks novelty because it claims a known desirable result. Although the inventors may have discovered the first way to achieve the result, that may not entitle them to claim the product as such, thereby providing them exclusionary rights over all who make the product, regardless of how they make it. Arguably in each case the industry knew exactly what product it wanted; it simply had no idea how to get it. In Wabash, it is unclear whether Wabash infringed the process claims: “the defendant’s expert . . . declined to divulge to the court the formula of the filament manufactured by the defendants.” 17 F. Supp. at 906 (district court opinion). GE did not assert the process claims, and it may be that since the trial occurred before the 1938 adoption of the Federal Rules of Civil Procedure (esp. Rule 34), GE had difficulty discovering the accused process and could only test the accused product. The Court in Wabash addressed the product/manufacturing process distinction as follows: [A] patentee who does not distinguish his product from what is old except by reference, express or constructive, to the process by which he produced it, cannot secure a monopoly on the product by whatever means produced. Certainly the Pacz filament was “old” in the sense that it was a known desirable result, although none had ever been made and an enabling description for how to make one did not exist. Following the dictum in Cohn v. United States Corset Co., 93 U.S. (3 Otto) 366, 377 (1876), that “a description of the thing patented” is required for an anticipation, “not of the steps necessarily antecedent to its production,” one could argue that the GE product claims lacked novelty. The Supreme Court passed on deciding whether properly worded product-by-process claims would have been valid. In United Carbon, it was clear that the entire industry, including the patentee, quickly abandoned the process covered by the process claims in favor of more efficient processes, so that the patent’s value depended on the product claims. The Court reached the same result as in Wabash, but using different terminology: So read, the claims are but inaccurate suggestions of the functions of the product, and fall afoul of the rule that a patentee may not broaden his claims by describing the product in terms of function. Holland Furniture Co. v. Perkins Glue Co., 277 U.S. 245, 256-258; [Wabash, 304 U. S. at 371-72]. 317 U.S. at 234. The Court’s citation to Holland is noteworthy, because, of the three opinions (Wabash, United Carbon, and Holland), Holland is most clearly articulated as forbidding a claim to a known desirable result. In Holland, the Court invalidated three product claims directed to the first starch glue (as opposed to prior art animal glue) suitable for wood veneering and similar uses. The problem overcome by Perkins’ invention was the high water absorption of glues produced from starch, which caused them to be too viscous and require too much admixture of water for use successfully as a wood-veneering glue (high water content warps the wood). Perkins described a two step process of first, creating a “glue base” with lower water absorptivity than ordinary untreated starch by combining the basic raw material with oxidizing agents and subjecting them to heat. Although this general step was old, Perkins distinguished his process by the degree to which he degenerated the starch (almost to the point of conversion to dextrine, a product that is not useful in glue manufacture). Second, the process involved mixing one part of the glue base with three parts water, another old technique. The three claims in suit recited: “28. A glue comprising cassava carbohydrate rendered semifluid by digestion and having substantially the properties of animal glue.” “30. A wood and fiber glue formed of a starchy carbohydrate or its equivalent by union therewith of about 3 parts or less by weight of water and alkali metal hydroxid. “31. A wood and fiber glue containing amylaceous material as a base dissolved without acid in about three parts of water or less, and being viscous, semifluid and unjellified.” The patent as originally issued also contained process claims, which generally recited the two-step process just described. In an earlier litigation, a court held claims to the first step of the process, the second step of the process, and to the glue base invalid as anticipated, but sustained claims to the two-step process and to the ultimate product (claimed in claims 28, 30, and 31). Perkins thus filed a disclaimer of claims for the glue base and the first process step, and also disclaimed from the second process step “any process of making glue, excepting where the starch or starchy product or carbohydrate subjected to the process, is

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degenerated to the extent described (in the patent), whereby the process results in the good as animal glue described” in the patent. As described by the Court: The second-step process, as narrowed by the disclaimer, consists in the selection of a starch suitably degenerated, no matter how, and the treatment of it with an alkali . . ., but by the terms of the disclaimer only such starches are suitable, that is to say, fall within the range of selection, which, when treated by the second-step process, will produce a glue as good as animal glue for veneering. The use or function of the resultant glue is made the measure or test of the choice of its ingredients. Significant was the Court’s statement that the defendant had found what everyone had desired but had assumed could not be found—a starch that had naturally low water absorptivity—and therefore did not need to practice the first step of Perkins’ process, the degeneration step: Apparently no brand of raw starch which Perkins could procure in commercial quantities when conducting his experiments could be used as a glue base without the artificial degeneration of his first step. But it appears that the defendant has been able to purchase in such quantities a starch which is a natural agricultural product having a low-water absorptiveness and other characteristics making it suitable for use as a glue base. . . . **** It is the contention of the respondent [patentee], and the court below held, that its product claims 28, 30, and 31, concededly broad enough, as stated, to cover the petitioner's product, are valid, and, in effect, that all starch veneering glues, at least when mixed with three parts of water or less, having substantially the properties of animal glue, infringe the patent whether made by Perkins' process or otherwise. We take it, as the respondent argues, that product patents or patents of compositions of matter are distinct from patents of the process by which the product may be produced. . . . Had Perkins claimed only a glue made of starch dissolved in three parts of water with an alkali, he would not have advanced beyond the Gerard and Dornemann patents and subsequent practice. As his patent discloses, it was well known that ordinary starch treated in this manner produced a thick glue unsuitable for wood veneering if made with three parts of water, and a thin glue not strong enough for wood veneering if made with four parts or more of water. Perkins' real invention, apart from the combination of his first and second step processes, with which we are not now concerned, was that by the use of a particular kind of starch as an ingredient a new composition of matter was made for which he claimed his patent. Some description of this product was obviously essential to patentability, and Perkins in the reissued patent sought to meet this necessity in two ways. One was to describe the product by describing its characteristic ingredient with particularity. If we look at the specifications, as we may, he did this by indicating the range of water absorptivity or, stated in another way, the degeneration, of the starch ingredient in Perkins' glue. As described, the starch ingredient fell short of dextrine or soluble starch, but was of lower water absorptivity than petitioner's [defendant’s] glue base. The glue made of this ingredient within the specified range was a new product. This was invention of a new composition of matter, and was the real contribution Perkins made to the art. As such, it was entitled to the protection of a patent, but as thus described and limited petitioner's product does not infringe. **** Perkins' second way of describing the starch ingredient of his product was in terms of the use or function of the product itself. The chosen starch ingredient was to possess such qualities that, when combined with three parts of water and with alkali, it would produce a product “as good as animal glue” for veneering, or having the properties of animal glue; these properties being described in terms of its functions. The ingredient was thus described, not in terms of its own physical characteristics or chemical properties or those of the product, but wholly in terms of the manner of use of the product. Any glue made of a starch base, whatever its composition, water absorptiveness, or other properties, combined with alkali and three parts of water, which has substantially the properties of animal glue, or is as good as animal glue for use in the woodworking trades, is claimed as Perkins' glue. Thus the inventor who advances the art by discovery that a certain defined material may be combined in a product useful for certain purposes seeks to extend his monopoly to any product which may subsequently be made from materials not within any defined range described in the patent, but which is likewise useful for those purposes. But an inventor may not describe a particular starch glue which will perform the function of animal glue and then claim all starch glues which have those functions, or even all starch glues made

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with three parts of water and alkali, since starch glues may be made with three parts of water and alkali that do not have those properties. See the Incandescent Lamp Patent, 159 U.S. 465, 472. Revised Stat. § 4888 (35 USCA § 33), requires that the patent shall contain a description of the invention “and of the manner and process of making, constructing, compounding, and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art or science to which it appertains, or with which it is most nearly connected, to make, construct, compound, and use the same.” One attempting to use or avoid the use of Perkins' discovery as so claimed and described functionally could do so only after elaborate experimentation. Respondents say that laboratory tests would be insufficient, and that “the best and probably the only satisfactory test is to try it out on a large scale in a furniture or veneering gluing factory.” A claim so broad, if allowed, would operate to enable the inventor, who has discovered that a defined type of starch answers the required purpose, to exclude others from all other types of starch, and so foreclose efforts to discover other and better types. The patent monopoly would thus be extended beyond the discovery, and would discourage rather than promote invention. The Incandescent Lamp Patent, supra, 476. That the patentee may not by claiming a patent on the result or function of a machine extend his patent to devices or mechanisms not described in the patent is well understood. O'Reilly v. Morse, 15 How. 62, 112, 113; [further citations omitted]. Respondent argues that this principle, applicable to machine patents, is inapplicable to a patent for the composition of matter which is always a result of a process and concededly is patentable as such, but the attempt to broaden product claims by describing the product exclusively in terms of its use or function is subject to the same vice as is the attempt to describe a patentable device or machine in terms of its function. As a description of the invention, it is insufficient, and, if allowed, would extend the monopoly beyond the invention. . . . So far as respondent seeks to enlarge its product patent by subordinating the patent description of the starch ingredient which the patentee used, and which respondent does not use, to the vague and indefinite description in the three product claims now in suit the patent is subject to the same vice. Id. at 254-58. Although the Court referred to the enablement requirement in its analysis, and one could say that the case is like the case of The Incandescent Lamp Patent, supra, in that case, the claim was not to a known desirable result, but rather to a huge genus of incandescent light filaments based on a discovery that one species worked. Judge Rich acknowledged the “result” doctrine but found it inapplicable in In re Fuetterer, supra: Claims directed merely to a “desired result” have long been considered objectionable primarily because they cover any means which anyone may ever discover of producing the result. See, e.g., O’Reilly v. Morse, 15 How. 62. . . . The desired result of appellant’s invention is limiting the skidding of a tire tread stock on a wet surface. Appellant, in the claims before us, is not claiming this result. A myriad of alternative means for achieving this result can be easily thought of which would not require the particular combination of substances claimed by appellant. Insofar, therefore, as a “functional” claim may mean one which covers all means of arriving at the desired result, although the means by which such result is obtained is entirely different from that disclosed by the applicant, it is apparent that appellant’s claims are not “functional.” 319 F.2d at 263, 138 USPQ at 221. 8. “Subject matter which the applicant regards as his invention” – The focus until now has been on the first part of the description of claims in section 112, para. 2, namely, “particularly pointing out and distinctly claiming.” What is the significance of the second part—“the subject matter which the applicant regards as his invention”? As with the best mode requirement, the second paragraph’s claim description contains both subjective and objective components. Particularity and distinctiveness are determined by how the claim would be understood by a skilled artisan (the objective component), whereas the inventor (or the applicant, if not the inventor) determines what the invention is (the subjective component). Thus, an applicant who subjectively regards one thing as his invention but claims another violates the second paragraph. But how does one determine what the inventor’s subjective view of the invention is (or was)? Isn’t it often locked away in the inventor’s brain and unknowable to others? Oftentimes, that is true, and in In re Miller, 441 F.2d 689, 692, 169 USPQ 597 (CCPA 1971), the court said that in the absence of evidence to the contrary, it would presume that the claims define what the applicant regards as his invention. Sometimes, however, an inventor will reveal his views. Such was the case in In re Prater, 415 F.2d 1393, 1404-05, 162 USPQ 541 (CCPA 1969), where the applicants argued strenuously that their invention was limited to a computer

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implementation of a mathematical relationship. The court took them at their word and invalidated the claim under section 112, para. 2 because it covered carrying out the calculation with pencil and paper as well as with a computer. The CCPA has also said, in dictum, that extrinsic evidence to show that the claim does not correspond to what the applicant “regards as his invention” must come from outside of the specification. See In re Conley, 490 F.2d 972, 976, 180 USPQ 454 (CCPA 1974). Does that requirement make sense? What if there is a clear statement of what the invention is in the written description and the claims are inconsistent with that description? The court in Fuetterer, supra, found there was a match between the inventor’s subjective view and the claims: It is clear that the instant claims do not comprehend a class of inorganic salts of any greater breadth than is comprehended by the invention description. It is equally clear from this description and appellant’s brief that, in the words of the second paragraph of section 112, “applicant regards as his invention” the combination with his other tread ingredients of any inorganic salt capable of “maintaining the carbohydrate, the protein, or mixture thereof, in colloidal suspension. . . .” It is exactly this combination which appellant has particularly pointed out and distinctly claimed in compliance with the second paragraph of section 112. 319 F.2d at 265, 162 USPQ at ___. On the other hand, an inventor’s deposition testimony was the principal evidence that supported a summary judgment of invalidity under the “regards” requirement of section 112, para. 2 in Inpro, Inc. v. A.W. Chesterton Co., 657 F. Supp. 935, 942-45, 2 USPQ2d 1597 (N.D. Ill. 1987). 9. Overclaiming and “Old Combination” – The Supreme Court in Lincoln Engineering Co. v. StewartWarner Corp., 303 U.S. 545 (1938), applied a doctrine known as overclaiming, or “old combination,” to invalidate a claim to a system for lubricating bearings where the invention, according to the Court, was only one component of the system, the coupler, and the other components performed “no new function” in the claimed combination. Id. at 549. The statutory basis for the Court’s ruling is unclear. The Court may have felt that the claim lacked “invention” as an unpatentable “aggregation.” The enactment of section 103 in 1952 cast doubt on the aggregation analysis. However, could the case be viewed as a section 112, para. 2 case? The CCPA saw this reading as the only post-1952 relevance of Lincoln in In re Bernhart and Fetter, 417 F.2d 1395, 163 USPQ 611 (CCPA 1969), where the court reversed a rejection of claims as “drawn to an old combination of a programmed computer and a plotting device” which was shown by the prior art: The rationale of an old combination rejection is stated in MPEP 706.03(j) as follows: “The fact that an applicant has improved one element of a combination which may be per se patentable does not entitle him to a claim to the improved element in combination with old elements where the elements perform no new function in the combination.” This statement has the support of many cases. See, e.g., Lincoln Engineering Co. v. Stewart-Warner Corp., 303 U.S. 545 (1938). Why an applicant should not be so entitled is not clear. Many cases have said that the combination claim reciting only one new element with no new result is overclaiming or claiming more than the applicant invented. Such statements are indeed puzzling in view of the fact that the addition of elements to a claim narrows its scope and thereby creates a lesser monopoly. Others have said the combination is not new, or is obvious, if no new coaction or result is obtained. This too is unsound, since it is not the result which is to be patented but the recited machine, composition, etc. If the prior art does not show or suggest the improved element itself, it defies logical reasoning to say that the same prior art suggests the use of that improved element in a combination. Our primary concern, however, is not with the soundness of the underlying policy, if any, for old combination rejections; it is with whether such rejections are proper under the present statute. . . . We think that statutory language is the only proper basis for an old combination rejection, and in applying the rejection that language determines what an applicant has a right and an obligation to do. . . . [W]e do not see, and the examiner has not stated, how any of the claims would be made more particular or distinct by eliminating the plotting machine limitation from the body of the claim. Indeed the opposite appears to be true, since moving the recitation of the plotting machine to the preamble . . . would greatly increase the number of words in the preamble and impair, rather than enhance, the intelligibility of the claim. Neither would complete elimination of the plotting machine recitation make the claims more particular or distinct, since the monopoly defined by the claims would then be substantially broadened beyond the automatic drafting art. Id. at 1402-03. The Federal Circuit approved of In re Bernhart in Radio Steel & Mfg. Co. v. MTD Products, Inc., 731 F.2d 840, 844-45, 221 USPQ 657 (Fed. Cir. 1984).

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10. Late Claiming – By what time must an applicant insert a claim that is properly supported by the specification under para. 1 and that complies with para. 2? No time limit is set in the statute, and presumably such claims can be added at any time during prosecution. However, a doctrine called “late claiming” developed before the 1952 Act, as set forth in Muncie Gear Co. v. Outboard Co., 315 U.S. 759, 53 USPQ 1 (1942). In Muncie, the Court invalidated, under the predecessor of section 102(b), claims that were first presented to the Patent Office more than two years after outboard motors using the invention had gone on sale. The patent application filing date was well within the two years, but the court in effect refused to give the claims the benefit of the application’s filing date. There have been two different interpretations of Muncie by later courts. The Second Circuit, for example, regarded it as a pure late claiming case, whereby later-presented claims, whether or not covering subject matter within the original disclosure of the patent application, may be barred by an intervening public use or on-sale bar. See Kahn v. Dynamics Corp. of Am., 508 F.2d 939, 184 USPQ 260 (2d Cir. 1974). However, the facts of Muncie suggested that the original patent disclosure did not support the claims under the written description requirement of section 112, para. 1, and the amendment that presented the claims at issue also added to the specification a new description of a key element, arguably in violation of section 132’s requirement that “no amendment shall introduce new matter into the disclosure of the invention.” Consequently, a second view of Muncie simply treats it as a written description and new matter case, and refuses to recognize a doctrine of pure late claiming. Such was the view of the CCPA in Westphal v. Fawzi, 666 F.2d 575, 576-77, 212 USPQ 321 (CCPA 1981). The Federal Circuit approved the approach of Westphal in Correge v. Murphy, 705 F.2d 1326, 1329, 217 USPQ 753 (Fed. Cir. 1983), where the court stated: “In light of the sufficiency of the disclosure, Correge cannot raise any so-called ‘late claiming issue [citing Westphal].” 11. Criticality – Yet a third doctrine that has not survived the Federal Circuit, the doctrine of criticality, was applied by Judge Hand and later by his court of appeals. He explained the doctrine in Kwik Set v. Welch Grape Juice Co., 86 F.2d 945, 947, 32 USPQ 104, 106 (2d Cir. 1936): A patentee may not arbitrarily select [i.e., claim] a point in a progressive change and maintain a patent monopoly for all operations in that progressive change falling on one particular side of that arbitrarily selected point. It is not only where the selected point corresponds with the physical phenomenon and the patentee has discovered the point at which that physical phenomenon occurs that the maintenance of a patent monopoly is admissible. The Second Circuit followed Kwik Set twenty years later in Helene Curtis Industries v. Sales Affiliates, 233 F.2d 148, 154, 109 USPQ 159, 163-64 (2d Cir. 1956). The Federal Circuit rejected the notion of criticality as a separate requirement for claims apart from having to demonstrate nonobviousness under section 103 and compliance with the first and second paragraphs of section 112 in Andrew Corp. v. Gabriel Electronics, Inc., 847 F.2d 819, 822-23, 6 USPQ2d 2010 (Fed. Cir. 1988). Judge Newman wrote: The district court held that the outer limit of the claim scope must coincide precisely with the point at which the claimed invention comes into scientific being. The court referred to Brown-Bridge . . ., which quoted with approval the holding originating in Kwik-Set. . . . This erroneous theory [of Kwik-Set] would prevent a patentee from obtaining claims that do not coincide with, or claim less than, the exact point at which a change in the physical phenomenon occurs; it would require the patentee always to discover that point, no matter how prolonged or expensive the additional research; and would bar patent protection when the change is by nature gradual or incremental at its transition, whether or not it is unobvious in view of the prior art. Patentability is not measured against the closest point on the road to invention. Much technological change that meets the criterion of unobviousness, when viewed in light of the prior art, has a fuzzy boundary at its point of origin. Technological differences from the prior art usually become more pronounced with distance from the boundary, but the changes may become manifest gradually. Indeed, the location of the boundary may well change with the available precision of measurement. It is the prior public knowledge—the “prior art”—by which patentability is tested. A patentee may set the metes and bounds of that which is sought to be patented, and it is not material whether the phenomena just outside these claim limits are qualitatively different from that which is claimed. The patentee is not required to show that some technological discontinuity exists between the claimed invention and the subject matter just outside the claims, but only that the claimed subject matter would have been nonobvious in view of the prior art. 35 U.S.C. § 103. The law imposes no obligation on a patent applicant to determine what is going on in the technological gap between the claimed invention and the prior art, or to set the claim limits at the precise technological edge of the invention. A claim is not fatally indefinite for failing specifically

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to delineate the point at which the change in physical phenomenon occurs. See, for example, the extensive body of case law holding that a patentee may claim less than the entire invention. . . . 847 F.2d at 822-23.

Inventorship Since the first patent act, Congress has required that the inventor be the person who requests the grant of a patent. See Patent Act of 1790, § 1. There are, of course, exceptions when the inventor is unavailable or unwilling to do this. Nevertheless, the patent must in all cases be filed in the name of the inventor. Compare this practice with that of many other countries, such as Great Britain, which do not require that the inventor file for the patent, but instead permit a corporation to file. Why does the United States place such a focus on the inventor? The concept of inventorship by individuals is fundamental to the understanding of United States patent law and practice. We have already discussed inventorship priority disputes in Chapter 3. Inventorship itself is a complex subject, more so when there is more than one inventor for a particular invention. Notions of joint inventorship are often hard to distinguish from section 102(f) prior activity (derivation). There have been many cases on inventorship and joint inventorship over the last 200 years. Since 1952, Congress has made an effort to codify and make sense of it all. We set forth here the pertinent current statutory provisions on inventorship, some of which reflect amendments as recent as 1984, to dovetail with the addition in that year of section 103(c) regarding team research. Section 115. Oath of Applicant The applicant shall make oath that he believes himself to be the original and first inventor of the process, machine, manufacture, or composition of matter, or improvement thereof, for which he solicits a patent; and shall state of what country he is a citizen. . . . When the application is made as provided in this title by a person other than the inventor, the oath may be so varied in form that it can be made by him. Section 116. Inventors When an invention is made by two or more persons jointly, they shall apply for patent jointly and each make the required oath, except as otherwise provided in this title. Inventors may apply for a patent jointly even though (1) they did not physically work together or at the same time, (2) each did not make the same type or amount of contribution, or (3) each did not make a contribution to the subject matter of every claim of the patent. .... Whenever through error a person is named in an application for patent as the inventor, or through an error an inventor is not named in an application, and such error arose without any deceptive intention on his part, the Commissioner may permit the application to be amended accordingly, under such terms as he prescribes. Section 117. Death or Incapacity of Inventor Legal representatives of deceased inventors and of those under legal incapacity may make application for patent upon compliance with the requirements and on the same terms and conditions applicable to the inventor. Section 118. Filing by Other Than Inventor Whenever an inventor refuses to execute an application for patent, or cannot be found or reached after diligent effort, a person to whom the inventor has assigned or agreed in writing to assign the invention or who otherwise shows sufficient proprietary interest in the matter justifying such action, may make application for patent on behalf of and as agent for the inventor on proof of the pertinent facts and a showing that such action is necessary to preserve the rights of the parties or to prevent irreparable damage; and the Commissioner may grant a patent to such inventor upon such notice to him as the Commissioner deems sufficient, and on compliance with such regulations as he prescribes. Section 256. Correction of Named Inventor

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Whenever through error a person is named in an issued patent as the inventor, or through error an inventor is not named in an issued patent and such error arose without any deceptive intention on his part, the Commissioner may, on application of all the parties and assignees, with proof of the facts and such other requirements as may be imposed, issue a certificate correcting such error. The error of omitting inventors or naming persons who are not inventors shall not invalidate the patent in which such error occurred if it can be corrected as provided in this section. The court before which such matter is called in question may order correction of the patent on notice and hearing of all parties concerned and the Commissioner shall issue a certificate accordingly.

Now let’s see how the courts have applied the statutes and wrestled with these concepts.

Burroughs Wellcome Co. v. Barr Laboratories, Inc. 40 F.3d 1223, 32 USPQ2d 1915 (Fed. Cir. 1994) Before MAYER, LOURIE, and SCHALL, Circuit Judges. MAYER, Circuit Judge. Barr Laboratories, Inc., Novopharm, Inc., and Novopharm, Ltd., appeal the order of the United States District Court for the Eastern District of North Carolina, Burroughs Wellcome Co. v. Barr Lab., Inc., 828 F.Supp. 1208 (E.D.N.C.1993), granting the motion of Burroughs Wellcome Co. for judgment as a matter of law that six United States patents were not invalid and were infringed. We affirm in part, vacate in part, and remand. Background Burroughs Wellcome Co. is the owner of six United States patents that cover various preparations of 3'-azidothymidine (AZT) and methods for using that drug in the treatment of persons infected with the human immunodeficiency virus (HIV). Each of these patents names the same five inventors—JanetRideout, David Barry, Sandra Lehrman, Martha St. Clair, and Phillip Furman (Burroughs Wellcome inventors)—all of whom were employed by Burroughs Wellcome at the time the inventions were alleged to have been conceived. The defendants-appellants concede that all five are properly named as inventors on the patents. Burroughs Wellcome's patents arise from the same parent application filed on September 17, 1985. Five of the patents relate to the use of AZT to treat patients infected with HIV or who have acquired immunodeficiency syndrome (AIDS). The other patent, the '750 patent, covers a method of using AZT to increase the T-lymphocyte count of persons infected with HIV. In the early 1980s, scientists began to see patients with symptoms of an unknown disease of the immune system, now known as AIDS. The disease attacks and destroys certain white blood cells known as CD4 T-lymphocytes or T-cells, which form an important component of the body's immune system. The level of destruction eventually becomes so great that the immune system is no longer able to mount an effective response to infections that pose little threat to a healthy person. In mid-1984, scientists discovered that AIDS was caused by a retrovirus, known as HTLV III or, more commonly today, HIV. After the identification of HIV, Burroughs Wellcome began to search for a cure, screening compounds for antiretroviral activity using two murine (or mouse) retroviruses, the Friend leukemia virus and the Harvey sarcoma virus. At about this time, scientists at the National Institutes of Health (NIH), led by Samuel Broder, were looking for effective AIDS therapies as well. Unlike Burroughs Wellcome, Broder and his Chapter 6 – The Patent Document 305

colleagues used live HIV, and were able to develop a test that could demonstrate a compound's effectiveness against HIV in humans using a unique line of T-cell clones (the ATH8 cell line). The NIH scientists began to seek compounds from private pharmaceutical companies for screening in their cell line. After Burroughs Wellcome contacted Broder in the fall of 1984, he agreed to accept compounds from Burroughs Wellcome under code for testing against live HIV. Burroughs Wellcome's Rideout selected AZT and a number of other compounds for testing in the murine screens on October 29, 1984. The tests, performed at Burroughs Wellcome facilities by St. Clair, showed that AZT had significant activity against both murine retroviruses at low concentrations. In light of these positive results, the Burroughs Wellcome inventors met on December 5, 1984, to discuss patenting the use of AZT in the treatment of AIDS. Burroughs Wellcome's patent committee thereafter recommended that the company prepare a patent application for future filing. By February 6, 1985, the company had prepared a draft application for filing in the United Kingdom. The draft disclosed using AZT to treat patients infected with HIV, and set out various pharmaceutical formulations of the compound in an effective dosage range to treat HIV infection. Two days earlier, on February 4, 1985, Burroughs Wellcome had sent a sample of AZT, identified only as Compound S, to Broder at NIH. In an accompanying letter, Lehrman told Broder of the results of the murine retrovirus tests and asked that he screen the compound for activity against HIV in the ATH8 cell line. Another NIH scientist, Hiroaka Mitsuya, performed the test in midFebruary 1985, and found that Compound S was active against HIV. Broder informed Lehrman of the results by telephone on February 20, 1985. Burroughs Wellcome filed its patent application in the United Kingdom on March 16, 1985. After Burroughs Wellcome learned that AZT was active against HIV, it began the process of obtaining Food and Drug Administration (FDA) approval for AZT as an AIDS therapy. As a part of the clinical trials leading to FDA approval, Broder and another NIH scientist, Robert Yarchoan, conducted a Phase I human patient study which showed that treatment with AZT could result in an increase in the patient's T-cell count. Broder reported this result to Lehrman on July 23, 1985. In 1987, the FDA approved AZT for marketing by Burroughs Wellcome; Burroughs Wellcome markets the drug for treatment of HIV infection under the trademark Retrovir. On March 19, 1991, Barr Laboratories, Inc. (Barr) sought FDA approval to manufacture and market a generic version of AZT by filing an Abbreviated New Drug Application (ANDA) pursuant to 21 U.S.C. § 355(j) (1988). As part of the process, Barr certified to the FDA that Burroughs Wellcome's patents were invalid or were not infringed by the product described in its ANDA. After Barr informed Burroughs Wellcome of its action, Burroughs Wellcome commenced this case for patent infringement against Barr on May 14, 1991, alleging technical infringement of its patents under 35 U.S.C. § 271(e)(2)(A) (1988). Barr filed a counterclaim under 35 U.S.C. § 256 (1988) seeking correction of the patents to list Broder and Mitsuya as coinventors. Barr admitted that its AZT product would infringe the patents, but contended that it did not because Barr had obtained a license to manufacture and sell AZT from the government, which should be deemed the owner of the interest of coinventors Broder and Mitsuya in the AZT patents. Burroughs Wellcome denied that Broder and Mitsuya were coinventors and also responded that the assertion of any rights of Broder, Mitsuya, or the government in the patents was barred by laches, estoppel, and waiver. Thereafter, Novopharm, Ltd. filed an ANDA of its own, seeking approval to manufacture and market its generic version of AZT. Burroughs Wellcome filed infringement suits against Novopharm, Ltd. and its American subsidiary Novopharm, Inc., which were consolidated with the suit against Barr. Like Barr, Novopharm, Ltd. admitted that its AZT product would infringe the claims of the six patents, but for the failure of Burroughs Wellcome to name the NIH scientists as coinventors of the subject matter of the patents. Although Novopharm, Inc. agreed to be bound by any injunction issued against its parent, it argued that it had not infringed the patents because Chapter 6 – The Patent Document 306

it had not filed an ANDA and had no AZT product of its own. Novopharm contended that Broder and Mitsuya should have been named as inventors on five of the patents, and contended that Broder and Yarchoan were coinventors of the '750 patent. It maintained that the patents were invalid because of the alleged nonjoinder, and because Burroughs Wellcome had omitted the coinventors with deceptive intent, the patents were unenforceable for inequitable conduct. After more than three weeks of trial, while Burroughs Wellcome was still in the process of presenting its case, the district court granted Burroughs Wellcome's motion for judgment as a matter of law against all of the defendants, concluding that the Burroughs Wellcome inventors had conceived of the subject matter of the inventions at some time before February 6, 1985, without the assistance of Broder, Mitsuya, or Yarchoan. The court rejected the arguments of Barr and Novopharm that they should be allowed to present evidence that the Burroughs Wellcome inventors had no reasonable belief that the inventions would actually work—that AZT was in fact active against HIV—until they were told the results of the NIH testing. The court also rejected Novopharm's argument that the Burroughs Wellcome inventors had not conceived the invention of the '750 patent—the use of AZT to increase a patient's T-cell count—before July 23, 1985, when Broder reported the results of the NIH patient study to Lehrman. The court concluded that the increase in T-cell count was an obvious phenomenon known to the inventors that would result from administration of AZT. And the district court denied Barr's renewed motion for partial summary judgment on Burroughs Wellcome's equitable defenses to its counterclaim for correction of the patents under section 256. Discussion The arguments of both Barr and Novopharm are directed to when the inventors conceived the invention. Burroughs Wellcome says it was before they learned the results of the NIH tests; Barr and Novopharm say that confirmation of the inventions' operability, which came from the NIH tests, was an essential part of the inventive process. If Burroughs Wellcome is right, then the patents name the proper inventors, they are not invalid, and the appellants are liable for infringement. If Barr and Novopharm are correct, then Broder, Mitsuya, and Yarchoan should have been named as joint inventors and the resolution of Burroughs Wellcome's infringement suits is premature. The district court's grant of judgment as a matter of law under Rule 50(a) is subject to de novo review. Read Corp. v. Portec, Inc., 970 F.2d 816, 821, 23 USPQ2d 1426, 1431 (Fed. Cir. 1992). We must apply the same standard as did that court, examining the record in the light most favorable to the nonmovant and drawing inferences in that party's favor. We may affirm only if the judgment entered was the only one possible under the controlling law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). A joint invention is the product of a collaboration between two or more persons working together to solve the problem addressed. 35 U.S.C. § 116 (1988); Kimberly-Clark Corp. v. Procter & Gamble Distrib. Co., 973 F.2d 911, 917, 23 USPQ2d 1921, 1926 (Fed. Cir. 1992). People may be joint inventors even though they do not physically work on the invention together or at the same time, and even though each does not make the same type or amount of contribution. 35 U.S.C. § 116. The statute does not set forth the minimum quality or quantity of contribution required for joint inventorship. Conception is the touchstone of inventorship, the completion of the mental part of invention. Sewall v. Walters, 21 F.3d 411, 415, 30 USPQ2d 1356, 1359 (Fed. Cir. 1994). It is "the formation in the mind of the inventor, of a definite and permanent idea of the complete and operative invention, as it is hereafter to be applied in practice." Hybritech Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1376, 231 USPQ 81, 87 (Fed. Cir. 1986) (citation omitted). Conception is complete only when the idea is so clearly defined in the inventor's mind that only ordinary skill would be necessary to reduce the invention to practice, without extensive research or Chapter 6 – The Patent Document 307

experimentation. Sewall, 21 F.3d at 415, 30 USPQ2d at 1359; see also Coleman v. Dines, 754 F.2d 353, 359, 224 USPQ 857, 862 (Fed. Cir. 1985) (conception must include every feature of claimed invention). Because it is a mental act, courts require corroborating evidence of a contemporaneous disclosure that would enable one skilled in the art to make the invention. Coleman v. Dines, 754 F.2d at 359, 224 USPQ at 862. Thus, the test for conception is whether the inventor had an idea that was definite and permanent enough that one skilled in the art could understand the invention; the inventor must prove his conception by corroborating evidence, preferably by showing a contemporaneous disclosure. An idea is definite and permanent when the inventor has a specific, settled idea, a particular solution to the problem at hand, not just a general goal or research plan he hopes to pursue. See Fiers v. Revel, 984 F.2d 1164, 1169, 25 USPQ2d 1601, 1605 (Fed. Cir. 1993); Amgen, Inc. v. Chugai Pharmaceutical Co., 927 F.2d 1200, 1206, 18 USPQ2d 1016, 1021 (Fed. Cir. 1991) (no conception of chemical compound based solely on its biological activity). The conception analysis necessarily turns on the inventor's ability to describe his invention with particularity. Until he can do so, he cannot prove possession of the complete mental picture of the invention. These rules ensure that patent rights attach only when an idea is so far developed that the inventor can point to a definite, particular invention. But an inventor need not know that his invention will work for conception to be complete. Applegate v. Scherer, 332 F.2d 571, 573, 141 USPQ 796, 799 (CCPA 1964). He need only show that he had the idea; the discovery that an invention actually works is part of its reduction to practice. Id.; see also Oka v. Youssefyeh, 849 F.2d 581, 584 n.1, 7 USPQ2d 1169, 1171 n.1 (Fed. Cir. 1988). Barr and Novopharm suggest that the inventor's definite and permanent idea must include a reasonable expectation that the invention will work for its intended purpose. They argue that this expectation is of paramount importance when the invention deals with uncertain or experimental disciplines, where the inventor cannot reasonably believe an idea will be operable until some result supports that conclusion. Without some experimental confirmation, they suggest, the inventor has only a hope or an expectation, and has not yet conceived the invention in sufficiently definite and permanent form. But this is not the law. An inventor's belief that his invention will work or his reasons for choosing a particular approach are irrelevant to conception. MacMillan v. Moffett, 432 F.2d 1237, 1239, 167 USPQ 550, 552 (CCPA 1970). To support their reasonable expectation rule, Barr and Novopharm point to a line of cases starting with Smith v. Bousquet, 111 F.2d 157, 45 USPQ 347 (CCPA 1940), establishing the so-called doctrine of simultaneous conception and reduction to practice. Smith was an interference priority contest between alleged inventors of the use of two known compounds as insecticides. Both parties asserted priority based on testing of the compounds against selected insect species. Noting the unpredictability of the experimental sciences of chemistry and biology, in particular the uncertain relationship between chemical structure and biological activity, Smith declined to find conception until the invention had been reduced to practice by the filing of the first patent application. Id. at 162, 45 USPQ at 352. Barr and Novopharm read this and subsequent cases to establish, or at least support, their rule that conception of an invention in an unpredictable field occurs only when the inventor has reasonable grounds to believe the invention will work. But these cases do not stand for the proposition that an inventor can never conceive an invention in an unpredictable or experimental field until reduction to practice. In rejecting the asserted evidence of conception, Smith said as to one of the compounds: it is apparent from the record that neither [party] had in mind at the time the suggestions were originally made, nor at any time thereafter, until successful tests, if any, were made, what insects, if any, it might be effective against, or how it might be applied to produce the desired results. Accordingly, neither party had a definite idea of the "complete and operative invention" here involved prior to a successful reduction—actual or constructive—of it to practice.

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Id. Thus, in awarding priority to Smith based on his constructive reduction to practice, the court relied not on the inherent unpredictability of the science, but on the absence of any evidence to corroborate an earlier conception for either of the parties. It is undoubtedly true that "[i]n some instances, an inventor is unable to establish a conception until he has reduced the invention to practice through a successful experiment." Amgen, 927 F.2d at 1206, 18 USPQ2d at 1021; Alpert v. Slatin, 305 F.2d 891, 894, 134 USPQ 296, 299 (CCPA 1962) (no conception "where results at each step do not follow as anticipated, but are achieved empirically by what amounts to trial and error"). But in such cases, it is not merely because the field is unpredictable; the alleged conception fails because, as in Smith, it is incomplete. Then the event of reduction to practice in effect provides the only evidence to corroborate conception of the invention. Under these circumstances, the reduction to practice can be the most definitive corroboration of conception, for where the idea is in constant flux, it is not definite and permanent. A conception is not complete if the subsequent course of experimentation, especially experimental failures, reveals uncertainty that so undermines the specificity of the inventor's idea that it is not yet a definite and permanent reflection of the complete invention as it will be used in practice. See Amgen, 927 F.2d at 1207, 18 USPQ2d at 1021 (no conception until reduction to practice where others tried and failed to clone gene using suggested strategy); Rey-Bellet v. Engelhardt, 493 F.2d 1380, 1387, 181 USPQ 453, 457-58 (CCPA 1974) (focusing on nature of subsequent research as indicator that inventors encountered no perplexing intricate difficulties). It is this factual uncertainty, not the general uncertainty surrounding experimental sciences, that bears on the problem of conception. Barr and Novopharm argue for a broader reading of Amgen and Fiers in support of their reasonable expectation rule. Both of these cases involve conception of a DNA encoding a human protein—a chemical compound. Conception of a chemical substance includes knowledge of both the specific chemical structure of the compound and an operative method of making it. Fiers, 984 F.2d at 1169, 25 USPQ2d at 1604; Amgen, 927 F.2d at 1206, 18 USPQ2d at 1021; Oka, 849 F.2d at 583, 7 USPQ2d at 1171. The alleged inventors in Fiers and Amgen claimed conception of their respective inventions before they knew relevant chemical structure—the nucleotide sequence—so the courts found no conception until experimentation finally revealed that structure. Here, though, Burroughs Wellcome's inventions use a compound of known structure; the method of making the compound is also well known. We emphasize that we do not hold that a person is precluded from being a joint inventor simply because his contribution to a collaborative effort is experimental. Instead, the qualitative contribution of each collaborator is the key—each inventor must contribute to the joint arrival at a definite and permanent idea of the invention as it will be used in practice. Nor do we suggest that a bare idea is all that conception requires. The idea must be definite and permanent in the sense that it involves a specific approach to the particular problem at hand. It must also be sufficiently precise that a skilled artisan could carry out the invention without undue experimentation. And, of course, the alleged conception must be supported by corroborating evidence. On the facts before us, it is apparent that the district court correctly ruled against Barr and Novopharm as to five of the patents, but that the court's judgment as to the sixth, the '750 patent, was premature. The '232, '838, '130, '208, and '538 patents encompass compositions and methods of using AZT to treat AIDS. The Burroughs Wellcome inventors claim conception of these inventions prior to the NIH experiments, based on the draft British patent application. That document is not itself a conception, for conception occurs in the inventors' minds, not on paper. The draft simply corroborates the claim that they had formulated a definite and permanent idea of the inventions by the time it was prepared. Chapter 6 – The Patent Document

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The Burroughs Wellcome inventors set out with the general goal of finding a method to treat AIDS, but by the time Broder confirmed that AZT was active against HIV, they had more than a general hope or expectation. They had thought of the particular antiviral agent with which they intended to address the problem, and had formulated the idea of the inventions to the point that they could express it clearly in the form of a draft patent application, which Barr and Novopharm concede would teach one skilled in the art to practice the inventions. The draft expressly discloses the intended use of AZT to treat AIDS. It sets out the compound's structure, which, along with at least one method of preparation, was already well known. The draft also discloses in detail both how to prepare a pharmaceutical formulation of AZT and how to use it to treat a patient infected with HIV. The listed dosages, dose forms, and routes of administration conform to those eventually approved by the FDA. The draft shows that the idea was clearly defined in the inventors' minds; all that remained was to reduce it to practice—to confirm its operability and bring it to market. See Haskell v. Colebourne, 671 F.2d 1362, 1365-66, 213 USPQ 192, 194 (CCPA 1982) (enabling draft patent application sufficient to corroborate conception). An examination of the events that followed the preparation of Burroughs Wellcome's draft confirms the soundness of the conception. Broder and Mitsuya received from Burroughs Wellcome a group of compounds, known to Broder and Mitsuya only by code names, selected for testing by the Burroughs Wellcome inventors. They then tested those compounds for activity against HIV in their patented cell line. The test results revealed for the first time that one of the compounds, later revealed to be AZT, was exceptionally active against the virus. Here, though, the testing was brief, simply confirming the operability of what the draft application disclosed. True, the science surrounding HIV and AIDS was unpredictable and highly experimental at the time the Burroughs Wellcome scientists made the inventions. But what matters for conception is whether the inventors had a definite and permanent idea of the operative inventions. In this case, no prolonged period of extensive research, experiment, and modification followed the alleged conception. By all accounts, what followed was simply the normal course of clinical trials that mark the path of any drug to the marketplace. That is not to say, however, that the NIH scientists merely acted as a "pair of hands" for the Burroughs Wellcome inventors. Broder and Mitsuya exercised considerable skill in conducting the tests, using their patented cell line to model the responses of human cells infected with HIV. Lehrman did suggest initial concentrations to Broder, but she hardly controlled the conduct of the testing, which necessarily involved interpretation of results for which Broder and Mitsuya, and very few others, were uniquely qualified. But because the testing confirmed the operability of the inventions, it showed that the Burroughs Wellcome inventors had a definite and permanent idea of the inventions. It was part of the reduction to practice and inured to the benefit of Burroughs Wellcome. Barr and Novopharm allege error in the district court's refusal to hear their evidence of the poor predictive value of the murine retrovirus screens for activity against HIV. Regardless of the predictive value of the murine tests, however, the record shows that soon after those tests, the inventors determined, for whatever reason, to use AZT as a treatment for AIDS, and they prepared a draft patent application that specifically set out the inventions, including an enabling disclosure. Obviously, enablement and conception are distinct issues, and one need not necessarily meet the enablement standard of 35 U.S.C. § 112 to prove conception. See Fiers, 984 F.2d at 1169, 25 USPQ2d at 1605. But the enabling disclosure does suffice in this case to confirm that the inventors had concluded the mental part of the inventive process—that they had arrived at the final, definite idea of their inventions, leaving only the task of reduction to practice to bring the inventions to fruition. The question is not whether Burroughs Wellcome reasonably believed that the inventions would work for their intended purpose, the focus of the evidence offered by Barr and Novopharm, but whether the inventors had formed the idea of their use for that purpose in sufficiently final form that only the exercise of ordinary skill remained to reduce it to practice. See MacMillan v. Moffett, Chapter 6 – The Patent Document 310

432 F.2d at 1239, 167 USPQ at 552 (Inventor's "reasons or lack of reasons for including U-5008 are not relevant to the question of conception. The important thing is that he did think in definite terms of the method claimed."). Whether or not Burroughs Wellcome believed the inventions would in fact work based on the mouse screens is irrelevant. We do not know precisely when the inventors conceived their inventions, but the record shows that they had done so by the time they prepared the draft patent application that thoroughly and particularly set out the inventions as they would later be used. The district court correctly ruled that on this record, the NIH scientists were not joint inventors of these inventions. The '750 patent is another question. It claims "[a] method of increasing the number of Tlymphocytes in a human infected with the [HIV] virus comprising administering to said human an effective amount of" AZT. Novopharm argues that there is no evidence, under any test of inventorship, that the Burroughs Wellcome inventors conceived of this invention until after the Phase I patient study conducted by Broder and Yarchoan revealed that AZT could lead to increased levels of T-cells in AIDS patients. Novopharm is right that the record is devoid of any statement that the inventors thought AZT could raise a patient's T-cell levels, but evidence need not always expressly show possession of the invention to corroborate conception. The district court held that the record supported conception as a matter of law, concluding that "an increase in T-lymphocyte count was an “obvious,” natural phenomenon known to the [Burroughs Wellcome] inventors that would result from the inhibition of a retrovirus." Burroughs Wellcome Co. v. Barr Lab., Inc., 828 F. Supp. at 1213. Burroughs Wellcome argues that this conclusion was proper because increased T-cell count is simply an obvious property or use of the greater discovery at issue here, the treatment of HIV infection with AZT. Because an increase in T-lymphocytes follows inevitably from treatment of AIDS patients with AZT, Burroughs Wellcome says, Broder and Yarchoan merely observed that the method invented by the Burroughs Wellcome inventors had qualities that the inventors failed to perceive. Burroughs Wellcome says this is not an inventive contribution to the claims of any of the AZT patents. But even though all six patents arise from the same parent application and are subject to terminal disclaimers to avoid rejection for obviousness-type double patenting, each patent claims a different invention. See In re Longi, 759 F.2d 887, 892, 225 USPQ 645, 648 (Fed. Cir. 1985) (inventor can get only one patent for any single invention). It is true that the Patent Office determined that the method of the '750 patent would have been obvious to those skilled in the art in light of the inventions claimed in the other patents. That is, however, irrelevant to the question whether the Burroughs Wellcome inventors had conceived of the invention before they learned the results of the Phase I trials. For conception, we look not to whether one skilled in the art could have thought of the invention, but whether the alleged inventors actually had in their minds the required definite and permanent idea. Cf. Bosies v. Benedict, 27 F.3d 539, 543, 30 USPQ2d 1862, 1865 (Fed. Cir. 1994) (testimony of noninventor as to noninventor's understanding of inventor's written formula insufficient to prove conception). The record does not now support resolution of this question as a matter of law. The alleged conception is supported by testimony of Burroughs Wellcome's experts, Burroughs Wellcome's draft Phase I protocol, and the same draft patent application that corroborates conception of the other five inventions. The experts testified that those skilled in the art at the time expected increased immune function to accompany inhibition of HIV. The draft patent application discloses that HIV preferentially destroys T-cells, that AIDS is associated with progressive depletion of T-cells, and that AZT is an effective treatment for HIV infection. Finally, the draft protocol directs the administrators of the Phase I study to monitor patients' T-lymphocyte count. This evidence supports an inference that the Burroughs Wellcome inventors did have the necessary definite and permanent idea, for, given the virus' effect on T-lymphocytes, it seems logical to conclude that stopping the virus might reverse the process of T-cell destruction and Chapter 6 – The Patent Document

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restore the body's immune system to a pre-infection state. If this were the only evidence in the record, the court's judgment would be sustained. But Novopharm offered evidence suggesting that one skilled in the art would not have expected T-cell count to rise. On deposition, Broder testified that prior to the first patient study, "no one knew whether there was such a thing as recovery" of T-cells, based on the NIH's experience with suramin, a drug that entered clinical trials before AZT. Although suramin showed some activity against HIV, inhibition of the retrovirus apparently was not accompanied by increases in T-cell count or restoration of immune functions. Of course, there might be any number of other explanations for the results of the suramin trials; but they might suggest that although those skilled in the art recognized the significance of T-lymphocyte levels in HIV infection and AIDS, they might have expected inhibition of the virus simply to halt the continuing destruction of T-cells, not to increase T-cell count and restore immune function. This could support an inference that the inventors themselves did not conceive the invention prior to the Phase I study. Novopharm also contends that Burroughs Wellcome prepared its Phase I protocol in collaboration with Broder and the NIH, possibly from a draft protocol prepared by Broder and Yarchoan pursuant to their study of suramin. These contentions are relevant to the conception inquiry for they tend to undermine the corroborative value of the draft protocol, and might even support joint inventorship based on that draft. See Coleman v. Dines, 754 F.2d at 360, 224 USPQ at 863 (document's co-author cannot be considered sole inventor of invention disclosed in document without further proof). Because under Rule 50(a) all inferences must be taken against the moving party, the court's ruling on the '750 patent was inappropriate, and we vacate the judgment to that extent and remand for further proceedings. **** LOURIE, Circuit Judge, concurring-in-part and dissenting-in-part. I concur in the majority's decision with respect to the '232, '838, '130, ' 208, and '538 patents, and join the opinion except for the following: I do not agree that reduction to practice is corroboration of conception and that the completeness of a conception is affected by subsequent experimental success or failure. These statements confuse the idea of conception with both corroboration and reduction to practice. A conception must be judged as to its completeness in relation to the invention being claimed. It must also be corroborated by evidence independent of the inventor. If subsequent experimentation shows that an invention that was only conceived does not work, that fact does not vitiate the earlier conception. A conception not later reduced to practice may have little significance, but it is important that we not confuse concepts. The conception was still a conception. It is of course possible for an invention to be reduced to practice constructively, i.e., by filing a patent application, rather than actually, by doing the work, in which case the reduction to practice clearly says nothing about the completeness of the conception. Moreover, what matters, in addition to the completeness of a conception, is its date. Corroboration must be of the date of the conception. If the only "corroboration" of the conception is its reduction to practice, corroboration has not occurred concerning the alleged date of conception. Finally on this point, reduction to practice by the inventor is not corroboration because corroboration must be independent of the inventor. Corroboration is not a demonstration that the conceived invention works; it is evidentiary proof that the mental act of invention occurred on a certain date. I also believe that the issue of joint inventorship is irrelevant here and therefore confusing. If the Burroughs Wellcome inventors had a complete conception, as we hold, then the NIH scientists were not inventors because the invention had already been made, not because of any shortcomings in their inventive contributions. Thus, there is no need to discuss joint inventorship at all. Chapter 6 – The Patent Document

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**** The trial court's decision should be affirmed across the board because it correctly found that the Burroughs Wellcome inventors solely conceived and are entitled to the inventive benefit of all the claimed inventions.

Ethicon, Inc. v. United States Surgical Corp. 135 F.3d 1456, 45 USPQ2d 1545 (Fed. Cir. 1998) Before NEWMAN, Circuit Judge, SKELTON, Senior Circuit Judge, and RADER, Circuit Judge. RADER, Circuit Judge. **** I. BACKGROUND The '773 patent relates to trocars, an essential tool for endoscopic surgery. A trocar is a surgical instrument which makes small incisions in the wall of a body cavity, often the abdomen, to admit endoscopic instruments. Trocars include a shaft within an outer sleeve. One end of the shaft has a sharp blade. At the outset of surgery, the surgeon uses the blade to puncture the wall and extend the trocar into the cavity. The surgeon then removes the shaft, leaving the hollow outer sleeve, through which the surgeon may insert tiny cameras and surgical instruments for the operation. Conventional trocars, however, pose a risk of damage to internal organs or structures. As the trocar blade punctures the cavity wall, the sudden loss of resistance can cause the blade to lunge forward and injure an internal organ. The '773 patent claims a trocar that alleviates this danger. In one embodiment, the invention equips the trocar with a blunt, spring-loaded rod. As the trocar pierces the cavity wall, the rod automatically springs forward to precede the blade and shield against injury. A second embodiment has a retractable trocar blade that springs back into a protective sheath when it passes through the cavity wall. The patent also teaches the use of an electronic sensor in the end of the blade to signal the surgeon at the moment of puncture. Yoon is a medical doctor and inventor of numerous patented devices for endoscopic surgery. In the late 1970s, Yoon began to conceive of a safety device to prevent accidental injury during trocar incisions. Yoon also conceived of a device to alert the surgeon when the incision was complete. In 1980, Yoon met Choi, an electronics technician, who had some college training in physics, chemistry, and electrical engineering, but no college degree. Choi had worked in the research and development of electronic devices. After Choi had demonstrated to Yoon some of the devices he had developed, Yoon asked Choi to work with him on several projects, including one for safety trocars. Choi was not paid for his work. In 1982, after collaborating for approximately eighteen months, their relationship ended. Choi believed that Yoon found his work unsatisfactory and unlikely to produce any marketable product. For these reasons, Choi withdrew from cooperation with Yoon. In the same year, however, Yoon filed an application for a patent disclosing various embodiments of a safety trocar. Without informing Choi, Yoon named himself as the sole inventor. In 1985, the Patent and Trademark Office issued the '773 patent to Yoon, with fifty-five claims. Yoon thereafter granted an exclusive license under this patent to Ethicon. Yoon did not inform Choi of the patent application or issuance. In 1989, Ethicon filed suit against U.S. Surgical for infringement of claims 34 and 50 of the '773 patent. In 1992, while this suit was still pending, U.S. Surgical became aware of Choi, and contacted him regarding his involvement in Yoon's safety trocar project. When Choi confirmed his role in the safety Chapter 6 – The Patent Document

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trocar project, U.S. Surgical obtained from Choi a "retroactive license" to practice "Choi's trocar related inventions." Under the license, Choi agreed to assist U.S. Surgical in any suit regarding the '773 patent. For its part, U.S. Surgical agreed to pay Choi contingent on its ultimate ability to continue to practice and market the invention. With the license in hand, U.S. Surgical moved to correct inventorship of the '773 patent under 35 U.S.C. § 256, claiming that Choi was a co-inventor of claims 23, 33, 46, and 47. Following an extensive hearing, the district court granted U.S. Surgical's motion, finding that Choi had contributed to the subject matter of claims 33 and 47. U.S. Surgical next moved for dismissal of the infringement suit, arguing that Choi, as a joint owner of the patent, had granted it a valid license under the patent. By its terms, the license purported to grant rights to use the patent extending retroactively back to its issuance. The district court granted U.S. Surgical's motion and dismissed the suit. Ethicon appeals the district court's finding of co-inventorship and its dismissal of the complaint. Specifically, Ethicon contends that (1) Choi supplied insufficient corroboration for his testimony of coinvention; (2) Choi presented insufficient evidence to show co-invention of claims 33 and 47 clearly and convincingly; (3) Choi accepted illegal payment for his factual testimony which the court should therefore have excluded from the proceedings; (4) the terms of the license agreement limit it to only that part of the invention to which Choi contributed, not the entire patent; and (5) even if the agreement licenses the entire patent, it cannot release U.S. Surgical from liability for past infringement. II. CO-INVENTORSHIP Patent issuance creates a presumption that the named inventors are the true and only inventors. See Hess v. Advanced Cardiovascular Sys., Inc., 106 F.3d 976, 980, 41 USPQ2d 1782, 1785-86 (Fed. Cir.), cert. denied (1997). Inventorship is a question of law, which this court reviews without deference. See Sewall v. Walters, 21 F.3d 411, 415, 30 USPQ2d 1356, 1358 (Fed. Cir. 1994). However, this court reviews the underlying findings of fact which uphold a district court's inventorship determination for clear error. See Hess, 106 F.3d at 980. A patented invention may be the work of two or more joint inventors. See 35 U.S.C. § 116 (1994). Because "[c]onception is the touchstone of inventorship," each joint inventor must generally contribute to the conception of the invention. Burroughs Wellcome Co. v. Barr Lab., Inc., 40 F.3d 1223, 1227-28, 32 USPQ2d 1915, 1919 (Fed. Cir. 1994). "Conception is the 'formation in the mind of the inventor, of a definite and permanent idea of the complete and operative invention, as it is hereafter to be applied in practice.'" Hybritech, Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1376, 231 USPQ 81, 87 (Fed. Cir. 1986) (quoting 1 Robinson on Patents 532 (1890)). An idea is sufficiently "definite and permanent" when "only ordinary skill would be necessary to reduce the invention to practice, without extensive research or experimentation." Burroughs Wellcome, 40 F.3d at 1228. The conceived invention must include every feature of the subject matter claimed in the patent. See Sewall, 21 F.3d at 415. Nevertheless, for the conception of a joint invention, each of the joint inventors need not "make the same type or amount of contribution" to the invention. 35 U.S.C. § 116. Rather, each needs to perform only a part of the task which produces the invention. On the other hand, one does not qualify as a joint inventor by merely assisting the actual inventor after conception of the claimed invention. See Sewall, 21 F.3d at 416-17; Shatterproof Glass Corp. v. Libbey-Owens Ford Co., 758 F.2d 613, 624, 225 USPQ 634, 641 (Fed. Cir. 1985) ("An inventor 'may use the services, ideas and aid of others in the process of perfecting his invention without losing his right to a patent.'" (quoting Hobbs v. U.S. Atomic Energy Comm'n, 451 F.2d 849, 864, 171 USPQ 713, 724 (5th Cir. 1971))). One who simply provides the inventor with well-known principles or explains the state of the art without ever having "a firm and definite idea" of the claimed combination as a whole does not qualify as a joint inventor. See Hess, 106 F.3d at 981 (citing O'Reilly v. Morse, 56 U.S. (15 How.) 62, 111 (1853)). Moreover, depending on the scope of a patent's claims, one of ordinary skill in the art who Chapter 6 – The Patent Document

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simply reduced the inventor's idea to practice is not necessarily a joint inventor, even if the specification discloses that embodiment to satisfy the best mode requirement. See Sewall, 21 F.3d at 416. Furthermore, a co-inventor need not make a contribution to every claim of a patent. See 35 U.S.C. § 116. A contribution to one claim is enough. See SmithKline Diagnostics, Inc. v. Helena Lab. Corp., 859 F.2d 878, 888, 8 USPQ2d 1468, 1476 (Fed. Cir. 1988). Thus, the critical question for joint conception is who conceived, as that term is used in the patent law, the subject matter of the claims at issue. 35 U.S.C. § 256 provides that a co-inventor omitted from an issued patent may be added to the patent by a court "before which such matter is called in question." To show co-inventorship, however, the alleged co-inventor or co-inventors must prove their contribution to the conception of the claims by clear and convincing evidence. See Hess, 106 F.3d at 980. However, "an inventor's testimony respecting the facts surrounding a claim of derivation or priority of invention cannot, standing alone, rise to the level of clear and convincing proof." Price v. Symsek, 988 F.2d 1187, 1194, 26 USPQ2d 1031, 1036 (Fed. Cir. 1993). The rule is the same for an alleged co-inventor's testimony. See Hess, 106 F.3d at 980. Thus, an alleged co-inventor must supply evidence to corroborate his testimony. See Price, 988 F.2d at 1194. Whether the inventor's testimony has been sufficiently corroborated is evaluated under a "rule of reason" analysis. Id. at 1195. Under this analysis, "[a]n evaluation of all pertinent evidence must be made so that a sound determination of the credibility of the [alleged] inventor's story may be reached." Id. Corroborating evidence may take many forms. Often contemporaneous documents prepared by a putative inventor serve to corroborate an inventor's testimony. See id. at 1195-96. Circumstantial evidence about the inventive process may also corroborate. See Knorr v. Pearson, 671 F.2d 1368, 1373, 213 USPQ 196, 200 (CCPA 1982) ("[S]ufficient circumstantial evidence of an independent nature can satisfy the corroboration rule."). Additionally, oral testimony of someone other than the alleged inventor may corroborate. See Price, 988 F.2d at 1195-96. A. Claim 33 The district court determined that Choi contributed to the conception of the subject matter of claim 33. Claim 33 (with emphasis to highlight relevant elements) reads: A surgical instrument for providing communication through an anatomical organ structure, comprising: means having an abutment member and shaft longitudinally accommodatable within an outer sleeve, longitudinal movement of said shaft inside said sleeve being limited by contact of said abutment member with said sleeve, said shaft having a distal end with a distal blade surface tapering into a sharp distal point, said distal blade surface being perforated along one side by an aperture, for puncturing an anatomical organ structure when subjected to force along the longitudinal axis of said shaft; means having a blunt distal bearing surface, slidably extending through said aperture, for reciprocating through said aperture while said abutment member is in stationary contact with said sleeve; means positionable between said puncturing means and said reciprocating means for biasing a distal section of said reciprocating means to protrude beyond said aperture and permitting said distal section of said reciprocating means to recede into said aperture when said bearing surface is subject to force along its axis . . . ; and means connectible to the proximal end of said puncturing means for responding to longitudinal movement of said reciprocating means relative to said puncturing means and creating a sensible signal having one state upon recision of said distal section of said reciprocating means into said aperture and another state upon protrusion of said distal section of said reciprocating means from said aperture.

To determine whether Choi made a contribution to the conception of the subject matter of claim 33, this court must determine what Choi's contribution was and then whether that contribution's role appears in Chapter 6 – The Patent Document

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the claimed invention. If Choi in fact contributed to the invention defined by claim 33, he is a joint inventor of that claim. Figures 18 and 19 of the '773 patent illustrate an embodiment of claim 33. These figures show a trocar blade with an aperture through which a blunt rod can extend. When the trocar blade penetrates the inner wall of a cavity, a spring releases the rod, which juts out past the end of the trocar blade and prevents the blade from cutting further. The embodiment also includes a structure that gives the surgeon aural and visual signals when the blade nears penetration. The district court found that Yoon conceived of the use of a blunt probe. However, the court found that Choi conceived of and thereby contributed two features contained in the embodiment shown in figures 18 and 19: first, Choi conceived of locating the blunt probe in the trocar shaft and allowing it to pass through an aperture in the blade surface; second, Choi conceived of the "means . . . for . . . creating a sensible signal." If Choi did indeed conceive of "locating the blunt probe in the shaft and allowing it to pass through an aperture in the blade surface," he contributed to the subject matter of claim 33. Claim 33 requires that the "distal blade surface" be "perforated along one side by an aperture" and requires the "shaft" to be "longitudinally accommodatable within [the] outer sleeve." Properly construed, claim 33 includes the elements that Choi contributed to the invention according to the district court's findings. In making this finding, the district court relied extensively on Choi's testimony. Choi testified that the idea of extending the blunt probe through an aperture in the trocar blade itself was his idea. To corroborate this testimony, Choi produced a series of sketches he created while working with Yoon. One sketch shows a probe inside the shaft of a trocar blade, extending through an opening in the side of the end of the blade. To rebut Choi's showing, Yoon presented a drawing dated July 1973, which disclosed elements of claim 33. The district court determined, however, that Dr. Yoon had altered this drawing. In fact, according to the district court, it had originally depicted a device from an entirely different patent. Due to its suspicious origins, the trial court rejected it as unreliable. The court also discounted Yoon's testimony for lack of credibility. Indeed the record supports the trial court's conclusion that Yoon altered and backdated documents to make it appear that he had independently invented trocars, shields, and electronics. Moreover, Yoon's trial testimony clashed with his earlier deposition testimony. For instance, before learning of Choi's role in the case, Yoon falsely testified at his deposition that (1) he had worked with Choi as early as 1975 and (2) the sketches at issue in this case had been drawn completely by him. However, the two did not meet until 1980, and when later questioned about authorship of the documents, Yoon replied, "If I said [that] at that time, then maybe I was confused." The district court justifiably discounted Yoon's testimony. In sum, after full consideration of the relevant evidence, the district court determined that Choi conceived part of the invention recited in claim 33. This court detects no cause to reverse this determination. B. Claim 47 **** C. Corroboration As corroboration for his testimony of co-invention, Choi proffers sketches of his work. These sketches were in Yoon's possession since their creation. The parties do not dispute, however, that Choi in fact created the sketches. Instead, Yoon contends that he first disclosed the invention to Choi, who then made the sketches to illustrate what he learned from Yoon. Absent sufficient corroboration, Chapter 6 – The Patent Document

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inventorship would turn solely on a credibility contest between Yoon and Choi. The district court, however, found sufficient corroboration. Taken together, the alleged co-inventor's testimony and the corroborating evidence must show inventorship "by clear and convincing evidence." This requirement is not to be taken lightly. Under the "rule of reason" standard for corroborating evidence, Holmwood v. Sugavanam, 948 F.2d 1236, 123839, 20 USPQ2d 1712, 1714 (Fed. Cir. 1991), the trial court must consider corroborating evidence in context, make necessary credibility determinations, and assign appropriate probative weight to the evidence to determine whether clear and convincing evidence supports a claim of co-inventorship. Accordingly, there need not be corroboration for every factual issue contested by the parties. For example, in Price, the junior party in an interference proceeding proffered drawings of his conceived invention, his affidavit that he had conceived the invention before the critical date, and an affidavit from a third person stating that she had seen one of the drawings before that time. However, the junior party lacked corroborating evidence that it was he who had created the drawings because the third party could not attribute the drawings to him. This court held that "all of the evidence put forth" should have been considered and acknowledged that "an inventor can conceivably prove prior conception by clear and convincing evidence although no one piece of evidence in and of itself establishes the prior conception." Price, 988 F.2d at 1196. In this case, Choi's sketches show the invention. The parties agree that Choi made the sketches. The contest involves whether Choi conceived of the material in the sketches or merely drew what Yoon conceived. The district count noted many circumstantial factors further corroborating Choi's conception claim: (1) Yoon's need for a person with expertise in electronics; (2) Choi's background in electronics, (3) Yoon's proposal that he and Choi should work together to develop new products, including safety trocars, (4) their informal business relationship, (5) the length of time they worked together, (6) the absence of any pay to Choi for his work, (7) the similarity between Choi's sketches and the patent figures, and (8) the letter in which Choi stated that he could no longer be a "member" of Yoon's business. Additionally, U.S. Surgical introduced expert testimony that some of the sketches dealt with sophisticated concepts that only an electrical engineer or technician would understand. Consequently, the district court found that Choi was presenting ideas to Yoon as the sketches were drawn, rather than the other way around. On appeal, this court declines to reweigh the evidence. Instead, this court determines that the record shows that corroboration evidence in this case satisfies the "rule of reason." Thus, this court must only further assess whether the district court's factual conclusions, given the clear and convincing evidence standard, were clearly erroneous. Here, given the sketches, Choi's testimony, and the established circumstances, in contrast with Yoon's testimony, expressly found to lack credibility by the trial court, this court discerns no clear error. In reaching this determination, this court has also considered alleged inconsistencies in Choi's testimony. In August 1992, U.S. Surgical's counsel first sent Choi a copy of the '773 patent. Choi circled figures and claims describing that which he claimed to have contributed. Choi circled some claims that he does not now assert to have had a role in inventing. He also did not circle claims he now claims to have co-invented. However, the district court could have reasonably found that a layman, untrained in the language of the patent law, may reasonably err in interpreting claim language. Moreover, Choi might well have confused the legal distinction between conception (which justifies a finding of inventorship) and reduction to practice (which does not). In any event, this court affirms the district court's holding that Choi was a co-inventor of claims 33 and 47. III. ADMISSIBILITY ISSUES **** IV. SCOPE OF THE CHOI-U.S. SURGICAL LICENSE Chapter 6 – The Patent Document

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Questions of patent ownership are distinct from questions of inventorship. See Beech Aircraft Corp. v. EDO Corp., 990 F.2d 1237, 1248, 26 USPQ2d 1572, 1582 (Fed. Cir. 1993). In accordance with this principle, this court has nonetheless noted that "an invention presumptively belongs to its creator." Teets v. Chromalloy Gas Turbine Corp., 83 F.3d 403, 406, 38 USPQ2d 1695, 1697 (Fed. Cir.), cert. denied, 117 S. Ct. 513 (1996). Indeed, in the context of joint inventorship, each co-inventor presumptively owns a pro rata undivided interest in the entire patent, no matter what their respective contributions. Several provisions of the Patent Act combine to dictate this rule. 35 U.S.C. § 116, as amended in 1984, states that a joint inventor need not make a contribution "to the subject matter of every claim of the patent." In amending section 116 as to joint inventorship, Congress did not make corresponding modifications as to joint ownership. For example, section 261 continues to provide that "patents shall have the attributes of personal property." This provision suggests that property rights, including ownership, attach to patents as a whole, not individual claims. Moreover, section 262 continues to speak of "joint owners of a patent," not joint owners of a claim. Thus, a joint inventor as to even one claim enjoys a presumption of ownership in the entire patent. This rule presents the prospect that a co-inventor of only one claim might gain entitlement to ownership of a patent with dozens of claims. As noted, the Patent Act accounts for that occurrence: "Inventors may apply for a patent jointly even though . . . each did not make a contribution to the subject matter of every claim." 35 U.S.C. § 116 (emphasis added). Thus, where inventors choose to cooperate in the inventive process, their joint inventions may become joint property without some express agreement to the contrary. In this case, Yoon must now effectively share with Choi ownership of all the claims, even those which he invented by himself. Thus, Choi had the power to license rights in the entire patent. This court next examines the extent to which Choi exercised that power. . . . **** [I]n context, Choi's grant meant to license all of his rights as a joint owner under the '773 patent. Thus, the district court's interpretation of the Choi license was correct as a matter of law. V. RETROACTIVE LICENSURE Finally, Ethicon argues that even if the license agreement is enforceable as to the entire patent, it should still be allowed to proceed against U.S. Surgical to recover damages for pre-license infringement. Ethicon contends that to hold otherwise would contravene the decision in Schering Corp. v. Roussel-UCLAF SA, 104 F.3d 341, 41 USPQ2d 1359 (Fed. Cir. 1997). This court agrees with Ethicon's challenge to the retroactive effect of Choi's license, but must affirm the dismissal of the case based on Choi's refusal to join as plaintiff in the suit. In Schering, Roussel and Schering, the two co-owners of the patent in suit, entered into an agreement whereby each granted the other a unilateral right to sue third parties for infringement. Schering then sued to enjoin Zeneca, Inc. from proceeding with planned sales of an allegedly infringing product. Schering joined Roussel in the action as an involuntary plaintiff. Two weeks later, Roussel granted Zeneca a license to practice the patented invention. The district court dismissed Schering's suit. Schering appealed. On appeal, Schering argued that because Roussel had granted Schering a unilateral right to sue, Roussel could not now grant a license to Zeneca. Schering contended that one grant was incompatible with the other. The court rejected Schering's argument, reasoning that "[t]he right to license and the unilateral right to sue are . . . not incompatible, and the granting of one does not necessarily imply the relinquishment of the other." Id. at 345. This court acknowledged the critical distinction that a license to a third party only operates prospectively. Absent agreement to the contrary, Chapter 6 – The Patent Document

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a co-owner cannot grant a release of another co-owner's right to accrued damages. Consequently, a co-owner who has granted a unilateral right to sue to another co-owner may also license a third party. Nevertheless, by virtue of the unilateral right to sue, the second co-owner can still force the first coowner to join an infringement action against the licensee to recover the second co-owner's accrued damages for past infringement. Thus, a prospective license is not per se incompatible with a unilateral right to sue, and, barring any other applicable contractual provision, Schering could not prevent Roussel from granting a license to Zeneca: [T]he grant of a license by one co-owner cannot deprive the other co-owner of the right to sue for accrued damages for past infringement. That would require a release, not a license, and the rights of a patent co-owner, absent agreement to the contrary, do not extend to granting a release that would defeat an action by other co-owners to recover damages for past infringement.

Id. at 345. Thus, Choi's "retroactive license" to U.S. Surgical attempts to operate as the combination of a release and a prospective license. Nonetheless Choi cannot release U.S. Surgical from its liability for past accrued damages to Ethicon, only from liability to himself. One more settled principle governs this case, however. An action for infringement must join as plaintiffs all co-owners. See Waterman v. Mackenzie, 138 U.S. 252, 255 (1891) ("The patentee or his assigns may, by instrument in writing, assign, grant, and convey, either (1) the whole patent . . .; or (2) an undivided part or share of that exclusive right; or (3) the exclusive right under the patent within and throughout a specified part of the United States. A transfer of either of these three kinds of interests is an assignment, properly speaking, and vests in the assignee a title in so much of the patent itself, with a right to sue infringers. In the second case, jointly with the assignor. In the first and third cases, in the name of the assignee alone." (emphasis added)); Moore v. Marsh, 74 U.S. 515, 520 (1868) ("[W]here [an] assignment is of an undivided part of the patent, the action should be brought for every infringement committed subsequent to the assignment, in the joint names of the patentee and assignee, as representing the entire interest."). Further, as a matter of substantive patent law, all co-owners must ordinarily consent to join as plaintiffs in an infringement suit. Consequently, "one co-owner has the right to impede the other co-owner's ability to sue infringers by refusing to voluntarily join in such a suit." Schering, 104 F.3d at 345. This rule finds support in section 262 of the Patent Act: In the absence of any agreement to the contrary, each of the joint owners of a patent may make, use, offer to sell, or sell the patented invention within the United States, or import the patented invention into the United States, without the consent of and without accounting to the other owners.

This freedom to exploit the patent without a duty to account to other co-owners also allows co-owners to freely license others to exploit the patent without the consent of other co-owners. Schering, 104 F.3d at 344 ("Each co-owner's ownership rights carry with them the right to license others, a right that also does not require the consent of any other co-owner."). Thus, the congressional policy expressed by section 262 is that patent co-owners are "at the mercy of each other." Willingham v. Lawton, 555 F.2d 13 40, 1344, 194 USPQ 249, 252 (6th Cir. 1977). Although in this case, the result is effectively no different than if Choi could grant a release to U.S. Surgical of any liability to Ethicon, it should be emphasized that the principle that governs this case is not incompatible with the principle enunciated in Schering. In Schering, this court noted that the granting of a unilateral right to sue is not incompatible with the right to grant a license. Similarly, this court notes that the inability to grant a release is not incompatible with the right to refuse to consent to an infringement suit. It is true that, in some circumstances, the decision of one co-owner to not join an infringement suit may have the same effect as granting a release, but this is not true in all cases. For example, when co-owners have granted each other a unilateral right to sue, each has waived his right Chapter 6 – The Patent Document 319

not to join an infringement suit, and either of them can force the other to join a suit to collect accrued infringement damages. Because Choi did not consent to an infringement suit against U.S. Surgical and indeed can no longer consent due to his grant of an exclusive license with its accompanying "right to sue," Ethicon's complaint lacks the participation of a co-owner of the patent. Accordingly, this court must order dismissal of this suit. **** PAULINE NEWMAN, Circuit Judge, dissenting. I respectfully dissent, for whether or not Mr. Choi made an inventive contribution to two of the fifty-five claims of the '773 patent, he is not a joint owner of the other fifty-three claims of the patent. Neither the law of joint invention nor the law of property so requires, and indeed these laws mandate otherwise. The district court found that Mr. Choi made a contribution to two claims of the '773 patent. Although precedent would as readily place Mr. Choi's work in the category whereby "an inventor `may use the services, ideas and aid of others in the process of perfecting his invention without losing his right to a patent,'" Shatterproof Glass Corp. v. Libbey-Owens Ford Co., 758 F.2d 613, 624, 225 USPQ 634, 641 (Fed. Cir. 1985) (quoting Hobbs v. United States Atomic Energy Comm'n, 451 F.2d 849, 864, 171 USPQ 713, 724 (5th Cir. 1971)), the district court's finding as to the two claims is not clearly in error. That conclusion is not my primary concern. My primary concern is with the failure of the court to recognize, in deciding ownership rights, the effect on these rights of the 1984 amendment of 35 U.S.C. §116, which markedly changed the law of naming inventors on patents, and authorized the "joint invention" here adjudicated. Before the statutory change made in 1984 Mr. Choi could not have been named a "joint inventor" of the '773 patent, for he had not jointly conceived and contributed to the entire invention. It is not disputed that his contribution is limited to elements of two of the fifty-five patent claims. Such a person was not a "joint inventor" under pre-1984 law. That law required that joint invention be the "simultaneous production of the genius and labor of both parties." Stearns v. Barrett, 22 F. Cas. 1175, 1181 (C.C.D. Mass. 1816) (Story, J.). Joint ownership, in turn, was based on this principle of joint invention. Those assistants who worked on an invention at the behest of the originator of the idea did not achieve the legal status of "joint inventor." Having no legal status as an inventor, such assistants acquired no property right in the invention by virtue of their contributions. See Collar Co. v. Van Dusen, 90 U.S. (23 Wall.) 530, 563-64 (1874) (ancillary discoveries of assistant belong to person who conceived original principle unless they "constitute the whole substance of the improvement"); Agawam Co. v. Jordan, 74 U.S. (7 Wall.) 583, 602-4 (1868) (same). In Agawam the Court explained that one less than a true joint inventor was forbidden from "appropriat[ing] to himself the entire result of the ingenuity and toil of the originator, or put[ing] it in the power of any subsequent infringer to defeat the patent." 74 U.S. at 604. The 1984 amendment of 35 U.S.C. § 116 permitted the naming as an inventor of all persons who assisted in the development of an idea, or parts thereof, that originated with others. Such naming, however, does not automatically endow the assistant with full and common ownership of the entire invention, including the contributions of all others including the originator. That is not a reasonable consequence of the change in the law of naming inventors that occurred in 1984. A. The Law of Joint Invention The purpose of the amendment of § 116 was to remedy the increasing technical problems arising in team research, for which existing law, deemed to require simultaneous conception as well as shared contribution by each named inventor to every claim, was producing pitfalls for patentees, to no public Chapter 6 – The Patent Document

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purpose. As stated in its legislative history, the amendment to 35 U.S.C. § 116 "recognizes the realities of modern team research." 130 Cong. Rec. 28,069-71 (1984) (statement of Rep. Kastenmeier). Before 1984 precedent did not permit naming as an inventor a person who did not share in the conception of the invention and who did not contribute to all of the claims of the patent. See In re Sarett, 327 F.2d 1005, 1010 n.7, 140 USPQ 474, 479 n.7 (CCPA 1964) ("It should be clear that the patent could not legally contain a claim to Sarett's sole invention under existing law because it would not have been the invention of the joint patentees." (emphases in original)); In re Hamilton, 37 F.2d 758, 759, op. den. reh'g, 38 F.2d 889, 890 (CCPA 1930) (joint patent could not issue on portion of invention made by single inventor). If different persons made an inventive contribution to various parts of an invention or to different claims of a patent, the legalistic problems that arose were not readily soluble, even by the complex, expensive, and often confusing expedient of filing separate patent applications on separate claims. The progress of technology exacerbated the inventorship problems. Patents were invalidated simply because all of the named inventors did not contribute to all the claims; and patents were also invalidated when there were contributors to some of the claims who were not named. See Jamesbury Corp. v. United States, 518 F.2d 1384, 1395, 187 USPQ 720 (Ct. Cl. 1975) (inclusion of more or less than the true inventors renders patent void and invalid); Amax Fly Ash Corp. v. United States, 514 F.2d 1041, 1050, 182 USPQ 210, 217 (Ct. Cl. 1975) ("Where more or less than the true inventors are named, the patent is void."); Hobbs, 451 F.2d at 864-65, 171 USPQ at 724 (patent on joint invention issued to one inventor is invalid); Iowa State Univ. Research Found., Inc. v. Sperry Rand Corp., 444 F.2d 406, 408, 170 USPQ 374, 376 (4th Cir. 1971) ("the law has been strictly construed to grant patents only to the true inventors"); Pointer v. Six Wheel Corp., 177 F.2d 153, 157-58, 83 USPQ 43, 4648 (9th Cir. 1949) (patent issued to only one of the inventors is void); Shreckhise v. Ritchie, 160 F.2d 593, 595, 73 USPQ 138, 140-41 (4th Cir. 1947) (same, citing cases); Thropp & Sons Co. v. DeLaski & Thropp Circular Woven Tire Co., 226 F. 941, 947-48 (3d Cir. 1915) (joint patent on invention of one is invalid as to all); Rival Mfg. Co. v. Dazey Prods. Co., 358 F. Supp. 91, 101, 177 USPQ 432, 439-40 (W.D. Mo. 1973) (patent issued to one is invalid for failure to join others); Stewart v. Tenk, 32 F. 665, 666 (C.C.S.D. Ill. 1887) (claim to sole invention is invalid in joint patent); Worden v. Fisher, 11 F. 505, 508-9 (C.C.E.D. Mich. 1882) (when two persons invent distinct parts of machine they should take out separate patents). Indeed, at the time the '773 patent application was filed in 1982, most practitioners believed that a separate application was required if it was desired to present, for example, the two claims that contain Mr. Choi's contribution. See generally John F. Pearne, Must Each Inventor Named in a Patent Application Have Made an Inventive Contribution to Each of the Claims Thereof?, 58 J. Pat. Off. Soc'y 205 (1976) (discussing then-proposed amendments to § 116). As team research increased with the growth of technology-based industry, so did the dilemma, for the rules of joint inventorship were not readily adaptable to the development of complex inventions. It became apparent that legislative remedy was needed. The amendment of 35 U.S.C. §116 provided a simple solution to a complex problem: §116 [second sentence] Inventors may apply for a patent jointly even though (1) they did not physically work together or at the same time, (2) each did not make the same type or amount of contribution, or (3) each did not make a contribution to the subject matter of every claim of the patent.

Pub. L. 98-622, §104, 98 Stat. 3384, Nov. 8, 1984. The amendment identified the three major pitfalls that had arisen, and removed them. This amendment did not also deal with the laws of patent ownership, and did not automatically convey ownership of the entire patent to everyone who could now be named as an inventor, whatever the contribution. The amendment simply permitted persons to be named on the patent document, whether as minor contributors to a subordinate embodiment, or full partners in the creation and development of the invention. The ownership relationships among the persons who, under § 116, could now be Chapter 6 – The Patent Document

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recognized as contributors to the invention, is irrelevant to the purpose of the amendment of § 116, and to its consequences. Section 116 has nothing to do with patent ownership. B. The Law of Joint Ownership The pre-1984 rule of joint ownership of joint inventions can be readily understood in its historical context, for a legally cognizable "joint invention" required mutuality of interaction and a real partnership in the creation and development of the invention. On this foundation, a "joint inventor" was also, justly and legally, an equal owner of the idea and of any patent thereon. Pointer, 177 F.2d at 157-58, 83 USPQ at 46-48 ("as the cases just cited show clearly, in order that an invention be truly called a joint invention, it must appear by clear and convincing proof that the two inventors collaborated in evolving the patented device"); see 1 Donald S. Chisum, Chisum on Patents § 202[2] & n.2 (rel. May 1987) ("Only where the same single, unitary idea of means is the product of two or more minds, working pari passu, and in communication with each other, is the conception truly joint and the result a joint invention," quoting 1 William C. Robinson, The Law of Patents for Useful Inventions § 396 (1890)). The law of patent ownership has its roots in the common law of property—although a patent has its own peculiar character, for it deals with intangibles. See Crown Die & Tool Co. v. Nye Tool & Machine Works, 261 U.S. 24, 40 (1923) (a patent is a creature of statute); Gayler v. Wilder, 51 U.S. (10 How.) 477, 494 (1850). Certain incidents of patent ownership have been created or clarified by statute, see 35 U.S.C. § 262, yet the common law provided the basic rules, as manifested in the concepts of tenancy in common and undivided interests that courts have drawn upon in patent ownership disputes. The jurisprudence governing property interests is generally a matter of state law. Even when the property is the creation of federal statute, private rights are usually defined by state laws of property. This has long been recognized with respect to patent ownership and transfers. See Jim Arnold Corp. v. Hydrotech Sys., Inc., 109 F.2d 1567, 1572, 42 USPQ2d 1119, 1123 (Fed. Cir. 1997) ("the question of who owns the patent right and on what terms typically is a question exclusively for state courts"); Roach v. Crouch, 524 N.W.2d 400, 33 USPQ2d 1361 (Iowa 1994) (patent ownership issue properly triable in state court). It is equally established that inventorship and patent ownership are separate issues. Beech Aircraft Corp. v. EDO Corp., 990 F.2d 1237, 1248-49, 26 USPQ2d 1572, 1582 (Fed. Cir. 1993). Most of the disputes concerning patent ownership that reached the Supreme Court dealt not with joint invention, but assignments and other transfers. The oft-cited case of Waterman v. MacKenzie, 138 U.S. 252 (1891) dealt with a dispute among the inventor's spouse and various assignees concerning ownership of the fountain pen patent, not inventorship. Occasionally an issue of ownership of patent property arose based on whether the claimant actually shared fully in the creation of the invention. In such cases, as cited supra, the decision on "joint invention" also decided the issue of ownership, for a person who had fully shared in the creation of the invention was deemed to be a joint owner of the entire patent property. On this premise each joint inventor was deemed to occupy the entirety of the patented subject matter, on a legal theory of tenancy in common. See 7 Richard R. Powell, Powell on Real Property ¶ 602[5] (1997) ("undivided fractional shares held by tenants in common are usually equal and are presumed equal unless circumstances indicate otherwise"). As patent property became viewed more precisely as personal property, see 35 U.S.C. § 261, the concept of tenancy in common was adjusted to that of an undivided interest, although with no substantial change in legal rights. After the major change that the 1984 amendment to § 116 made in "joint invention," by authorizing the naming of any contributor to any claim of a patent, the legal premise that each named person had made a full and equal contribution to the entire patented invention became obsolete. See SmithKline Diagnotics, Inc. v. Helena Labs. Corp., 859 F.2d 878, 888-89, 8 USPQ2d 1468, 1477 (Fed. Cir. 1988) (collecting cases). It is not an implementation of the common law of property, or its statutory embodiments, to treat all persons, however minor their contribution, as full owners of the entire property as a matter of law. The law had never given a contributor to a minor portion of an invention a full share in the originator's patent. Chapter 6 – The Patent Document 322

By amending § 116 in order to remove an antiquated pitfall whereby patents were being unjustly invalidated, the legislators surely did not intend to create another inequity. Apparently no one foresaw that judges might routinely transfer pre-1984 ownership concepts into the changed inventorship law. I have come upon no discussion of this anomaly in various scholarly articles on the amended § 116. See, e.g., David W. Carstens, Joint Inventorship under 35 U.S.C. § 116, 73 J. Pat. Off. Soc'y 616 (1991) (discussing amended §116); W. Fritz Fasse, The Muddy Metaphysics of Joint Inventorship: Cleaning Up After the 1984 Amendments to 35 U.S.C. § 116, 5 Harv. J.L. & Tech. 153 (1992), at 201-2 (citing PTO rules implementing amended § 116 and referring to the possibility of lack of common ownership of the subject matter, in the sense of assignment obligations of separately-employed inventors to distinct employers, yet overlooking other divided ownership problems). In the case at bar, the district court recognized that Dr. Yoon originated the fundamental concept and the major aspects of its implementation. The court, however, construed the law as requiring that since Mr. Choi was named as a "joint inventor" (in accordance with the retroactivity legislated for the amendment to §116) he automatically owned an undivided interest in the entire patent, and had the unencumbered and unfettered right to alienate an interest in the entire patent. Thus Mr. Choi, who would not pass the pre-1984 test of joint inventor, was nonetheless awarded full property rights in the entire invention and patent, as if he had been a true joint inventor of all the claims. The panel majority, confirming this error, holds that Mr. Choi's contribution to two claims means and requires that Yoon "must now effectively share with Choi ownership of all the claims, even those which he invented by himself." That is incorrect. As I have discussed, the law of shared ownership was founded on shared invention, a situation that admittedly does not here prevail. Whether or not Mr. Choi is now properly named under §116 because of his contribution to two claims, he is not a joint owner. and he does not have the right to grant a license under all fifty-five claims. No theory of the law of property supports such a distortion of ownership rights. Thus I must, respectfully, dissent from the decision of the panel majority. C. Issues of Joinder, Rule 19 The panel majority holds that although Mr. Choi's grant of a license under all fifty-five claims of the '773 patent does not have retroactive effect and thus does not relieve U.S. Surgical of liability for past infringement, Dr. Yoon is powerless to recover for past infringement because Mr. Choi as joint inventor refuses to join in the suit. Precedent and the Federal Rules do not support this ruling. Schering Corp. & Roussel-UCLAF S.A. v. Zeneca, Inc., 104 F.3d 341, 41 USPQ2d 1359 (Fed. Cir. 1997), relied on by the panel majority, does not bar Dr. Yoon's suit for past infringement and does not bar the joinder of Mr. Choi as an involuntary party in accordance with Fed. R. Civ. P. 19. Nor do Waterman v. Mackenzie, 138 U.S. at 255, Moore v. Marsh, 74 U.S. 515, 520 (1868), or the other cases cited by the majority. There is no barrier to the involuntary joinder of a joint inventor and/or co-owner under Rule 19, if such is needed to bring before the court all persons deemed necessary to the suit. See also Howes v. Medical Components, Inc., 698 F. Supp. 574, 576 (E.D. Pa. 1988) ("Rule 19 `makes inappropriate any contention that patent co-owners are per se indispensable in infringement suits'"). Further, Mr. Choi is already before the court as a party, having voluntarily intervened, by general appearance. Thus I must also dissent from this ruling of my colleagues.

Questions, Comments, Problems 1. Co-Inventorship - Quality and Quantity of Inventorship – How much does a person have to contribute to an invention before that person will be considered a co-inventor? That question was addressed by the Federal Circuit in Fina Oil & Chemical Co. v. Ewen, 123 F.3d 1466, 43 USPQ2d 1935 (Fed. Cir. 1997). Dr. John Ewen operated a chemical laboratory for Fina and was searching for an improved catalyst to assist in the production of certain plastics. He directed a lab technician to prepare a compound that may have been the same as the compound that was later patented. However, the technician destroyed what he had made before he could verify what it was. Dr. Ewen later hired Dr. Abbas Razavi, who, within

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months, was able to synthesize the desired catalyst. Fina received a patent for the catalyst which named both Dr. Ewen and Dr. Razavi as inventors. Drs. Ewen and Razavi ultimately had a contentious falling out, and Dr. Razavi left Fina. Dr. Ewen later claimed in a state court lawsuit that he was the proper owner of the patent. Fina brought suit in federal court for a declaration that the patent properly named Drs. Ewen and Razavi as inventors, and the district court ruled that Dr. Razavi was the sole inventor (after Dr. Razavi intervened in the case). The Federal Circuit vacated: Conception is the touchstone to determining inventorship. See Sewall v. Walters, 21 F.3d 411, 415, 30 USPQ2d 1356, 1358 (Fed. Cir. 1994). Conception of a chemical substance requires knowledge of both the specific chemical structure of the compound and an operative method of making it. Burroughs Wellcome Co. v. Barr Labs., Inc., 40 F.3d 1223, 1229, 32 USPQ2d 1915, 1921 (Fed. Cir. 1994). The issue of joint inventorship is governed by 35 U.S.C. § 116, which states, in relevant part: When an invention is made by two or more persons jointly, they shall apply for patent jointly and each make the required oath, except as otherwise provided in this title. Inventors may apply for a patent jointly even though (1) they did not physically work together or at the same time, (2) each did not make the same type or amount of contribution, or (3) each did not make a contribution to the subject matter of every claim of the patent. This provision sets no explicit lower limit on the quantum or quality of inventive contribution required for a person to qualify as a joint inventor. Rather, a joint invention is simply the product of a collaboration between two or more persons working together to solve the problem addressed. Burroughs Wellcome, 40 F.3d at 1227, 32 USPQ2d at 1919. The determination of whether a person is a joint inventor is fact specific, and no bright-line standard will suffice in every case. Nonetheless, our precedent provides guidance as to what types of acts are, or are not, sufficient in quantum and quality to establish joint inventorship. One need not alone conceive of the entire invention, for this would obviate the concept of joint inventorship. However, a joint inventor must contribute in some significant manner to the conception of the invention. See Pro-Mold & Tool Co. v. Great Lakes Plastics, Inc., 75 F.3d 1568, 1575, 37 USPQ2d 1626, 1632 (Fed. Cir. 1996) (citing Sewall, 21 F.3d at 415, 30 USPQ2d at 1358-59). As such, “each inventor must contribute to the joint arrival at a definite and permanent idea of the invention as it will be used in practice.” Burroughs Wellcome, 40 F.3d at 1229, 32 USPQ2d at 1921. If a person supplies the required quantum of inventive contribution, that person does not lose his or her status as a joint inventor just because he or she used the services, ideas, and aid of others in the process of perfecting the invention. See Shatterproof Glass Corp. v. Libbey-Owens Ford Co., 758 F.2d 613, 624, 225 USPQ 634, 641 (Fed. Cir. 1985). However, those others may also in appropriate circumstances become joint inventors by their contributions. In addition, a person is not precluded from being a joint inventor simply because his or her contribution to a collaborative effort is experimental. See Burroughs Wellcome, 40 F.3d at 1229, 32 USPQ2d at 1921. The basic exercise of the normal skill expected of one skilled in the art, without an inventive act, also does not make one a joint inventor. See Sewall, 21 F.3d at 416, 30 USPQ2d at 1359. Therefore, a person will not be a co-inventor if he or she does no more than explain to the real inventors concepts that are well known and the current state of the art. See Hess, 106 F.3d at 981, 41 USPQ2d at 1787. The case law thus indicates that to be a joint inventor, an individual must make a contribution to the conception of the claimed invention that is not insignificant in quality, when that contribution is measured against the dimension of the full invention. In reaching its conclusion that Dr. Ewen is not a joint inventor of the subject matter claimed in the ‘851 patent, the district court relied on the doctrine of simultaneous conception and reduction to practice. That doctrine states that in some instances, an inventor may only be able to establish a conception by pointing to a reduction to practice through a successful experiment. See Amgen Inc. v. Chugai Pharmaceutical Co., 927 F.2d 1200, 1206, 18 USPQ2d 1016, 1021 (Fed. Cir. 1991). Applying the doctrine, the district court looked to the 1987 Jones experiment as a potential reduction to practice that could be used to establish Dr. Ewen’s conception. Because the product of that experiment was destroyed before it could be analyzed, however, the court found insufficient evidence that there had had been a reduction to practice or a conception by Dr. Ewen.

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The district court’s analysis of joint inventorship in this case effectively required Dr. Ewen to show that he was the sole inventor of the ‘851 patent. That was error. The doctrine of simultaneous conception and reduction to practice applies to the conception of the entire invention. . . . Conception and reduction to practice of the entire claimed invention may be relevant to establish that a first person conceived of an invention before another person entered the scene, and that the first person is therefore the sole inventor. However, the doctrine cannot be used, as the district court did here, to show that because the first person did not conceive or reduce to practice the entire claimed invention, he or she did not at least contribute in some significant way to the ultimate conception. Of course, every putative inventor must nonetheless provide corroborating evidence of any asserted contributions to the conception of the invention. Like conception of the entire invention, a contribution to conception is a mental act which cannot be accurately verified without corroboration. See Price v. Symsek, 988 F.2d 1187, 1194, 26 USPQ2d 1031, 1036-37 (Fed. Cir. 1993); Linkow v. Linkow, 517 F.2d 1370, 1373, 186 USPQ 223, 225 (CCPA 1975). In this case, there are clearly genuine disputes about whether the respective contributions of Dr. Ewen and Dr. Razavi to the claimed invention were not insignificant in character. For example, there is a dispute over what was produced by the Jones experiment, and thus a dispute over whether that experiment helps prove that Dr. Ewen made some inventive contribution to the conception of the invention. The parties also dispute the roles of Dr. Ewen and Dr. Razavi in selecting methylene chloride as a chlorinated solvent. In addition, there is a dispute concerning the level of collaboration between Dr. Ewen and Dr. Razavi. Thus, it is unclear from the record before us whether Dr. Ewen, through his experimentation conducted before hiring Dr. Razavi and his subsequent alleged collaboration with Dr. Razavi, made some not insignificant contribution to the conception of the invention. Any party wishing to challenge the ‘851 patent’s current inventorship must ultimately come forward with clear and convincing evidence of facts that support its contentions. Dr. Razavi did not meet his burden of establishing undisputed facts to show that Dr. Ewen made no contribution to the conception of the invention claimed in the ‘851 patent or a contribution that was qualitatively insignificant. Dr. Ewen also averred facts that could establish his contribution to the conception of the claimed invention. We therefore vacate the summary judgment and remand for further proceedings consistent with this opinion. What does it means to speak of the quantum or quality of an inventive contribution? Are quantum and quality two different things? Is the court’s test of a “not insiginificant contribution” a flexible test? Is it so flexible that it lacks any structure? How could a party meet its burden at trial on this issue? 2. Simultaneous Conception and Reduction to Practice - You may have noticed the reference in Fina to simultaneous conception and reduction to practice. In Amgen, Inc. v. Chugai Pharmaceutical Co., 927 F.2d 1200 (Fed. Cir. 1991), the Federal Circuit discussed this concept, in which an invention (typically of the biological or chemical variety) simply cannot be conceived until it exists in physical form reduced to practice. The invention in Amgen related to DNA sequences, as to which the court noted: In some instances, an inventor is unable to establish a conception until he has reduced the invention to practice through a successful experiment. This situation results in a simultaneous conception and reduction to practice. See 3 D. Chisum, Patents § 10.04[5] (1990). We agree with the district court that that is what occurred in this case. **** A gene is a chemical compound, albeit a complex one, and it is well established in our law that conception of a chemical compound requires that the inventor be able to define it so as to distinguish it from other materials, and to describe how to obtain it. . . . Conception does not occur unless one has a mental picture of the structure of the chemical, or is able to define it by its method of preparation, its physical or chemical properties, or whatever characteristics sufficiently distinguish it. It is not sufficient to define it solely by its principal biological property, e.g., encoding human erythropoetin, because an alleged conception having no more specificity than that is simply a wish to know the identity of any material with the biological property. We hold that when an inventor is unable to envision the detailed constitution of a gene so as to distinguish it

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from other materials, as well as a method for obtaining it, conception has not been achieved until reduction to practice has occurred, i.e., until after the gene has been isolated. Id. at 1206. In what other areas (outside the biological and chemical arts) might simultaneous conception and reduction to practice be possible? 3. Applying both Fina and Amgen, suppose that a laboratory technician, acting under general orders of a research director, programs a machine to mix various pharmaceutical chemicals in different ways in an effort to find a mixture that will be efficacious against a certain disease. Operating overnight, the machine produces a breakthrough drug, which the technician notices upon coming into work the next day. Who is the inventor (or inventors)? Suppose instead that none of the resulting mixtures had any pharmaceutical properties, but that that one glowed with a beautiful green hue, and the technician took note of it. If the company later files a patent application for a chemical that can be used in glow-in-the-dark novelties, who should it name as an inventor? The research director, who was never trying to produce a glow-in-the-dark product and never instructed anyone to do so? The technician, who was merely acting under orders, and also was not trying to produce anything other than a drug? The machine? No one? Does the second sentence of section 103(a) have any bearing on the analysis? 4. Burdens of Proof - If you are inclined to become a litigator, you may be wondering how you could ever prove that your client invented a device or process before a particular date. You might not be surprised to learn that a special procedure is used by many technology companies to provide credible proof of invention dates. In particular, many companies require researchers to record their progress in invention notebooks, date the entries consecutively in the notebooks, and have co-workers who understand the content of the notebook read and verify the entries. The reason for this complicated procedure can best be understood after reading about the requirements for establishing a date of invention as set out in Mahurkar v. C.R. Bard, Inc., 79 F.3d 1572, 38 USPQ2d 1288 (Fed. Cir. 1996). In that case, Dr. Mahurkar had obtained a patent on a dual-lumen catheter for use in transfusion procedures. Bard asserted that the patent was invalid because of an anticipating catalog published by Cook, Inc. In determining that Dr. Mahurkar had established that his date of invention was before the publication date of the Cook catalog, the court discussed the burdens that Dr. Mahurkar had met: Section 102(a) of title 35 defines one class of prior art. . . . As a printed publication, the Cook catalog fits within some terms of 35 U.S.C. § 102(a). Section 102(a) also requires, however, that the catalog description appear before the invention. In ex parte patent prosecution, an examiner may refer to a document published within one year before the filing date of a patent application as prior art. However, this label only applies until the inventor comes forward with evidence showing an earlier date of invention. Once the inventor shows an earlier date of invention, the document is no longer prior art under section 102(a). Any suggestion that a document is prior art because it appears before the filing date of a patent ignores the requirements of section 102(a). Section 102(a) explicitly refers to invention dates, not filing dates. Thus, under section 102(a), a document is prior art only when published before the invention date. For the Cook catalog to constitute prior art, therefore, it must have been published before Dr. Mahurkar's invention date. Resolution of this point turns on procedural rules regarding burdens of proof as well as several rules of law borrowed from the interference context. Bard offered into evidence at trial a document published about three months before the filing date of Dr. Mahurkar's patent disclosing each and every element of the claimed invention. Dr. Mahurkar then had the burden to offer evidence showing he invented the subject matter of his patent before the publication date of the document. . . . Had Dr. Mahurkar not come forward with evidence of an earlier date of invention, the Cook catalog would have been anticipatory prior art under section 102(a) because Dr. Mahurkar's invention date would have been the filing date of his patent, Vas-Cath Inc. v. Mahurkar, 935 F.2d 1555, 1562, 19 USPQ2d 1111, 1115 (Fed. Cir. 1991). However, Dr. Mahurkar offered evidence at trial to show that he invented the subject matter of the patent before publication of the Cook reference. He met his burden of production. Consequently, this court turns to an evaluation of the evidence offered by Dr. Mahurkar under the proper burden of persuasion in this infringement action and the rules of law relating to invention dates. Section 102(g) of title 35 contains the basic rule for determining priority. 35 U.S.C. § 102(g) (1994). Section 102(g) also provides basic protection for the inventive process, shielding in particular the creative steps of conception and reduction to practice. In the United States, the

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person who first reduces an invention to practice is "prima facie the first and true inventor." Christie v. Seybold, 55 F. 69, 76 (6th Cir. 1893) (Taft, J.). However, the person "who first conceives, and, in a mental sense, first invents . . . may date his patentable invention back to the time of its conception, if he connects the conception with its reduction to practice by reasonable diligence on his part, so that they are substantially one continuous act." Id. Stated otherwise, priority of invention "goes to the first party to reduce an invention to practice unless the other party can show that it was the first to conceive the invention and that it exercised reasonable diligence in later reducing that invention to practice." Price v. Symsek, 988 F.2d 1187, 1190, 26 USPQ2d 1031, 1033 (Fed. Cir. 1993). To have conceived of an invention, an inventor must have formed in his or her mind "a definite and permanent idea of the complete and operative invention, as it is hereafter to be applied in practice." Burroughs Wellcome Co. v. Barr Labs., Inc., 40 F.3d 1223, 1228, 32 USPQ2d 1915, 1919 (Fed. Cir. 1994) (citations omitted). The idea must be "so clearly defined in the inventor's mind that only ordinary skill would be necessary to reduce the invention to practice, without extensive research or experimentation." Id. This court has developed a rule requiring corroboration where a party seeks to show conception through the oral testimony of an inventor. Price, 988 F.2d at 1195. This requirement arose out of a concern that inventors testifying in patent infringement cases would be tempted to remember facts favorable to their case by the lure of protecting their patent or defeating another's patent. Eibel Process Co. v. Minnesota & Ontario Paper Co., 261 U.S. 45, 60 (1923); accord Deering v. Winona Harvester Works, 155 U.S. 286, 300-01 (1894); The Barbed Wire Patent, 143 U.S. 275, 284-85 (1892); Gasser Chair Co. v. Infanti Chair Mfg. Corp., 60 F.3d 770, 776, 34 USPQ2d 1822, 1826 (Fed. Cir. 1995); New Idea Farm Equip. Corp. v. Sperry Corp., 916 F.2d 1561, 1567, 16 USPQ2d 1424, 1430 (Fed. Cir. 1990). While perhaps prophylactic in application given the unique abilities of trial court judges and juries to assess credibility, the rule provides a bright line for both district courts and the PTO to follow in addressing the difficult issues related to invention dates. In assessing corroboration of oral testimony, courts apply a rule of reason analysis. Price, 988 F.2d at 1195. Under a rule of reason analysis, "[a]n evaluation of all pertinent evidence must be made so that a sound determination of the credibility of the inventor's story may be reached." Id. This court does not require corroboration where a party seeks to prove conception through the use of physical exhibits. Id. The trier of fact can conclude for itself what documents show, aided by testimony as to what the exhibit would mean to one skilled in the art. Id. Reduction to practice follows conception. To show actual reduction to practice, an inventor must demonstrate that the invention is suitable for its intended purpose. Scott v. Finney, 34 F.3d 1058, 1061, 32 USPQ2d 1115, 1118 (Fed. Cir. 1994). Depending on the character of the invention and the problem it solves, this showing may require test results. Id. at 1062; Manville Sales Corp. v. Paramount Sys., Inc., 917 F.2d 544, 550, 16 USPQ2d 1587, 1592 (Fed. Cir. 1990). Less complicated inventions and problems do not demand stringent testing. Scott, 34 F.3d at 1062. In fact, some inventions are so simple and their purpose and efficacy so obvious that their complete construction is sufficient to demonstrate workability. Id.; King Instrument Corp. v. Otari Corp., 767 F.2d 853, 861, 226 USPQ 402, 407 (Fed. Cir. 1985). Where a party is first to conceive but second to reduce to practice, that party must demonstrate reasonable diligence toward reduction to practice from a date just prior to the other party's conception to its reduction to practice. Griffith v. Kanamaru, 816 F.2d 624, 625-26, 2 USPQ2d 1361, 1362 (Fed. Cir. 1987). Bard bears the burden of persuasion on the status of the Cook catalog as prior art. Bard must persuade the trier of fact by clear and convincing evidence that the Cook catalog was published prior to Dr. Mahurkar's invention date. At trial, Dr. Mahurkar offered evidence to demonstrate prior invention in two ways. He offered evidence to show he conceived and reduced to practice his invention before publication of the catalog. He also offered evidence to show that he conceived of his invention prior to the date of publication of the Cook catalog and that he proceeded with reasonable diligence from a date just prior to publication of the catalog to his filing date. Bard, in turn, challenged Dr. Mahurkar's evidence. With all of the evidence from both sides before the jury, Bard must persuade the jury by clear and convincing evidence that its version of the facts is true. In other words, Bard must persuade the jury that Dr. Mahurkar did not invent prior to publication of the catalog. This is because (1) he did

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not conceive and reduce his invention to practice before the publication date and (2) that he did not conceive and thereafter proceed with reasonable diligence as required to his filing date. If Bard fails to meet this burden, the catalog is not prior art under section 102(a). Viewing the evidence of record below in the light most favorable to Bard, this court concludes that no reasonable jury could have found clear and convincing evidence that the Cook catalog was prior art. Dr. Mahurkar testified that he conceived and began work on dual-lumen, flexible, hemodialysis catheters, including the '155 catheter, in 1979. From late 1980 through early 1981, Dr. Mahurkar constructed polyethylene prototype catheters in his kitchen. He bought tubing and various machines for making and testing his catheters. During this time period, he also tested polyethylene prototypes and used them in flow and pressure drop tests in his kitchen. These tests used glycerine to simulate blood. These tests showed, to the limit of their design, the utility of his claimed invention. Dr. Mahurkar designed these tests to show the efficiency of his structure knowing that polyethylene catheters were too brittle for actual use with humans. But, he also knew that his invention would become suitable for its intended purpose by simple substitution of a soft, biocompatible material. Dr. Mahurkar adequately showed reduction to practice of his less complicated invention with tests which "[did] not duplicate all of the conditions of actual use." Gordon v. Hubbard, 347 F.2d 1001, 1006, 146 USPQ 303, 307 (CCPA 1965). Dr. Mahurkar provided corroboration for his testimony. Dr. Mahurkar confidentially disclosed the catheter prototype tips of his '155 invention to Geoffrey Martin, President of Vas-Cath Inc. in 1981, and Brian L. Bates of Cook, Inc. Mr. Martin testified that he received the polyethylene prototype tips from Dr. Mahurkar in 1981. Dr. Mahurkar also produced a letter from Stephen Brushey, an employee of Vas-Cath, dated April 21, 1981, that described several of his catheters. Additionally, Dr. Mahurkar presented a letter from Brian L. Bates of Cook, Inc., dated October 23, 1981. In this letter, Cook was "impressed with the thought and technology which has gone into the fabrication of the prototype material." In addition to evidence of actual reduction to practice before publication of the Cook catalog, Dr. Mahurkar also showed reasonable diligence from his conception date through the filing of his patent application. From conception to filing, Dr. Mahurkar continuously sought to locate companies capable of extruding his tubing with the soft, flexible materials necessary for human use. On this record and with the applicable burden of persuasion, no reasonable jury could have found that Bard proved the Cook catalog was prior art. Consequently, the court properly granted Dr. Mahurkar's motion for JMOL of non-anticipation of claim 1 of the '155 patent. 5. Correcting Inventorship – “without deceptive intent” – When a co-inventor has been left off a patent, does section 256 permit a district court to add that person to the patent if the originally named inventors acted with deceptive intent in leaving the person off? The Federal Circuit announced “yes,” as long as the omitted co-inventor had no deceptive intent related to the naming issue, in Stark v. Advanced Magnetics, Inc., 119 F.3d 1551, 43 USPQ2d 1321 (Fed. Cir. 1997). In dictum, the court said that the situation of misjoinder of someone who was not a true inventor could be cured by a court under section 256 whether the error leading to the misjoinder occurred by deception or by innocent mistake. Id. at 1555. Does this mean that deceptive acts of adding false inventors or leaving off true inventors may not harm the patent? Not necessarily. The court added a caveat at the end of the majority opinion: While irrelevant to the question of correcting inventorship, Stark’s [the omitted co-inventor] allegations of fraud may (and this court stresses “may” because it has no factual findings to reach any conclusion) have implications under the inequitable conduct doctrine. Id. at 1556. We shall see in a later chapter that inequitable conduct (colloquially referred to as “fraud on the Patent Office”) is a defense that can render all of the claims of a patent unenforceable (even if the conduct relates only to some of the claims). Thus, the owner of a patent in a case like Stark might find little solace if it is left with a valid, but unenforceable, patent.

We now turn to a subject that has recently come to the forefront of patent litigation, with a rapidly growing body of case law as a result of the Supreme Court’s Markman decision—claim construction.

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University of Pennsylvania Law School

Intellectual Property:

Patent Law

Law 677 | Spring 2001 Professor Wagner

COURSE M AT E R I A L S Part 2

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University of Pennsylvania Law School 2001

Patents A Historical Perspective Frank P. Porcelli Fish & Richardson P.C. Boston, Massachusetts

John A. Dragseth Fish & Richardson P.C., P.A. Minneapolis, Minnesota

Ver. 0.4a Copyright © 1999,, 2000, 2001 by John A. Dragseth and Frank P. Porcelli Modifications by R. Polk Wagner, 2001.

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Table of Contents I Introduction Chapter 1: Introduction to Patents................................................................1 Chapter 2: The Edges of Patent Law .........................................................19 II Requirements for Patentability Chapter 3 Novelty & Statutory Bars............................................................47 Chapter 4: Nonobviousness......................................................................133 Chapter 5: Statutory Subject Matter & Practical Utility.............................195 Chapter 6: The Patent Document.............................................................247

III Patent Scope and Enforcement Chapter 7: Claim Construction..................................................................329 Chapter 8: Doctrine of Equivalents Infringement .....................................397 Chapter 9: Dimensions of Patent Coverage.............................................493 Chapter 10: Defenses and Counterclaims ................................................tbd Chapter 11: Remedies ...............................................................................tbd

IV Other Issues Chapter 12: Post-Issuance Activities.........................................................tbd Chapter 13: Design Patents.......................................................................tbd

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Section III

Patent Scope & Enforcement

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Chapter 7 Claim Construction Introduction It should be clear to you by now that almost every patent issue revolves around the patent claims. That the claims measure the scope of invention is uncontested and, over time, the courts have placed more and more focus on the patent claims. From a patent infringement or validity standpoint, it is not technically relevant what the inventor actually invented. Rather, what is relevant is the scope of exclusion provided by the claims of the patent. If this scope of exclusion is narrower or broader than the true scope of the invention, then the inventor must suffer the mistakes of her patent practitioner. Of course, as you shall see, as a practical matter what the inventor actually invented may well be considered by a court when it interprets or “construes” the patent claims. This centrality of the claims is important both for chapters you have already covered and chapters yet to come. The claims must be construed before determining whether the invention defined by the claims was anticipated (Chapter 3), would have been obvious (Chapter 4), is statutory subject matter and has utility (Chapter 5), or is indefinite or unsupported by the patent disclosure from either the enablement or written description aspects, or lacks a best mode corresponding to each claim (Chapter 6). You will soon see that claim construction is also the first of two steps in an infringement analysis. (The second step is application of the properly construed claims to the accused product or process.) Claims did not always receive the same attention that courts now give them. Claims were not recognized by statute until the Act of 1836, and claims were not required by statute until the Act of 1870. In early days, patentees generally described the invention in the written description and then Chapter 7 – Claim Construction

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claimed the invention by referring to the written description, for example, by claiming the invention as “substantially herein described.” This practice was called “central” claiming. See Ridsdale Ellis, Patent Claims § 4 (1949). For an excellent history of the evolution of claim practice under U.S. law, you should read the dissenting opinion of the late Judge Helen Nies in Hilton Davis Chemical Co. v. Warner-Jenkinson Co., 62 F.3d 1512, 1563-70, 35 USPQ2d 1641, 1683-89. See also Hilton Davis, 62 F.3d at 1530, 35 USPQ2d at 1655-56 (Newman, J., concurring). Although courts were not always happy with this vague method of claiming, it nonetheless existed into the early 1900s. In construing such claims, the courts, of necessity and according to the “substantially” language of certain claims, permitted claim coverage beyond the precise disclosure of the patent. This practice was discussed by the Supreme Court in O’Reilly v. Morse, 56 U.S. (15 How.) 62, 123 (1953): It is a well-settled principle of law, that the mere change in the form of the machinery (unless a particular form is specified as the means by which the effect described is produced) or an alteration in some of its unessential parts; or in the use of known equivalent powers, not varying essentially the machine, or its mode of operation or organization, will not make the new machine a new invention. It may be an improvement upon the former, but that will not justify its use without the consent of the first patentee.

Today, claims are construed to determine their precise and proper meaning so as to place metes and bounds on the scope of the right to exclude. This is called “peripheral” claiming. See Ellis, supra § 4; Hilton Davis, 62 F.3d at 1530 n.2, 1565-66, 35 USPQ2d at 1655 n.2, 1685-86. Thus, a claim will not expand to cover even minor changes. However, under the doctrine of equivalents, which you will study in Chapter 9, even a claim that does not envelop an accused product or process can be infringed if the differences between each claim limitation and the corresponding element on the accused product or process are insubstantially different. Thus, although the claim scope is determined once, the claim can be found to cover something outside its literal scope. For now, we will stick with the first step of the infringement process: claim construction. While later sections cover the substance of claim construction, this first section looks at two basic procedural issues: (1) who, between the judge or the jury, should construe the claims, and (2) where, among the specification, dictionaries, or experts, should one refer when construing a claim.

Bischoff v. Wethered 76 U.S. (9 Wall.) 812 (1869) **** This patent was granted to Newton on the 25th of May, 1853, and was for certain improvements in the generation of steam, consisting of an accessory steam-pipe carried from the boiler through the fire or chimney, so as to cause the steam conveyed therein to become superheated; and from thence carried to the steam-chest, or to an intermediate pipe, there to connect with the ordinary steam-pipe which conveys the steam from the boiler to the engine, so as to mix the superheated steam with the ordinary steam as it comes from the boiler. The effect of this mixture is described to be that the superheated steam converts into steam all the remaining watery particles, froth and foam, contained in the ordinary steam, and thus dries and rarefies the whole mass, and makes it more effective. The plaintiff having put in evidence the assignment containing the covenant declared on, and the letters patent granted to Newton, in order to show the breach of covenant, put in evidence a prior English patent, granted to one Poole, in 1844, for an invention which the plaintiff claimed was identical with that patented to Newton. The plaintiff then called upon the court to compare the two specifications, and to instruct the jury that the patent to Newton was not a valid and unimpeachable patent, inasmuch as the invention therein described was not novel, but was already substantially described in the specification of Poole; and that under the covenants contained in the assignment, the plaintiffs were entitled to recover 500 [PoundsSterling], the amount of purchase-money paid, with interest. This the court refused to do, and the plaintiffs excepted. Chapter 7 – Claim Construction

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The defendant then prayed the court to instruct the jury, amongst other things, that there is not on the face of the respective patents of Newton and Poole such an identity as authorizes the court to pronounce that they are for one and the same invention, and that for that reason the patent granted to Newton is invalid; and such invalidity being necessary to support the plaintiffs’ claim, and being wanting, the verdict must be for the defendant. The court granted this prayer, and instructed the jury accordingly, and a verdict was found for the defendant. The plaintiffs excepted to this instruction. **** Mr. Justice BRADLEY delivered the opinion of the court. **** It is undoubtedly the common practice of the United States Circuit Courts, in actions at law, on questions of priority of invention, where a patent under consideration is attempted to be invalidated by a prior patent, to take the evidence of experts as to the nature of the various mechanisms or manufactures described in the different patents produced, and as to the identity or diversity between them; and to submit all the evidence to the jury under general instructions as to the rules by which they are to consider the evidence. A case may sometimes be so clear that the court may feel no need of an expert to explain the terms of art or the descriptions contained in the respective patents, and may, therefore, feel authorized to leave the question of identity to the jury, under such general instructions as the nature of the documents seems to require. And in such plain cases the court would probably feel authorized to set aside a verdict unsatisfactory to itself, as against the weight of evidence. But in all such cases the question would still be treated as a question of fact for the jury, and not as a question of law for the court. And under this rule of practice, counsel would not have the right to require the court, as matter of law, to pronounce upon the identity or diversity of the several inventions described in the patents produced. Such, we think, has been the prevailing rule in this country, and we see no sufficient reason for changing it. The control which the courts can always exercise over unsatisfactory verdicts will enable them to prevent any wrong or injustice arising from the action of juries; whereas, if the courts themselves were compellable to decide on these often recondite and difficult questions, without the aid of scientific persons familiar with the subjects of the inventions in question, they might be led into irremediable errors, which would produce great injustice to suitors. We are disposed to think that the practice adopted by our courts is, on the whole, the safest and most conducive to justice. It may be objected to this view that it is the province of the court, and not the jury, to construe the meaning of documentary evidence. This is true. But the specifications of patents for inventions are documents of a peculiar kind. They profess to describe mechanisms and complicated machinery, chemical compositions and other manufactured products, which have their existence in pais, outside of the documents themselves; and which are commonly described by terms of the art or mystery to which they respectively belong; and these descriptions and terms of art often require peculiar knowledge and education to understand them aright; and slight verbal variations, scarcely noticeable to a common reader, would be detected by an expert in the art, as indicating an important variation in the invention. Indeed, the whole subject-matter of a patent is an embodied conception outside of the patent itself, which, to the mind of those expert in the art, stands out in clear and distinct relief, whilst it is often unperceived, or but dimly perceived, by the uninitiated. This outward embodiment of the terms contained in the patent is the thing invented, and is to be properly sought, like the explanation of all latent ambiguities arising from the description of external things, by evidence in pais [i.e., extrinsic evidence]. We are, therefore, of opinion that the Circuit Court was justified in refusing to give the instructions demanded by the plaintiffs, and in giving that which was asked by the defendant. The precise question has recently undergone considerable discussion in England, and has finally resulted in the same conclusion to which we have arrived. The cases will be found collected in the last edition of Curtis on Patents. It was at first decided in the cases of Bovill v. Pimm, Betts v. Menzies, and Bush v. Fox, that it was the province and duty of the court to compare the documents and decide on Chapter 7 – Claim Construction

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the identity or diversity of the inventions. But in 1862, Lord Westbury, in two very elaborate judgments, one of which was delivered in the House of Lords on occasion of overruling the decision in Betts v. Menzies, held that it belonged to the province of evidence, and not that of construction, to determine this question. “In all cases, therefore,” he concludes, “where the two documents profess to describe an external thing, the identity of signification between the two documents containing the same description, must belong to the province of evidence, and not that of construction.” Lord Westbury very justly remarks, that two documents using the same words, if of different dates, may intend very diverse things, as, indeed, was actually decided by this court in the case of The Bridge Proprietors v. The Hoboken Company. The court, in that case, said: “It does not follow that when a newly invented or discovered thing is called by some familiar word, which comes nearest to expressing the new idea, that the thing so styled is really the thing formerly meant by the familiar word.” And the decision was that the word “bridge,” in an old bridge law, passed in 1790, did not mean the same thing as the same word meant when applied to the modern structure of a railroad bridge. This view of the case is not intended to, and does not, trench upon the doctrine that the construction of written instruments is the province of the court alone. It is not the construction of the instrument, but the character of the thing invented, which is sought in questions of identity and diversity of inventions. JUDGMENT AFFIRMED.

Market Street Railway Co. v. Rowley 155 U.S. 621 (1895) MR. JUSTICE SHIRAS, after stating [the case], delivered the opinion of the Court. Did the court below err in refusing to instruct the jury to find a verdict for the defendant on the ground that the patent sued on was void for want of novelty? The defendant put in evidence a number of patents prior in date to the plaintiff’s, and asked the court to compare the inventions and devices therein described with those claimed by the plaintiff. No extrinsic evidence was given or needed to explain terms of art, or to apply the description to the subject-matter, so that the court was able, from mere comparison, to say what was the invention described in each, and to affirm from such mere comparison whether the inventions were or were not the same. The question was, then, one of pure construction and not of evidence, and consequently was matter of law for the court, without any auxilliary fact to be passed upon by the jury. If, upon the state of the art as shown to exist by the prior patents, and upon a comparison of the older devices with those described in the patent in suit, it should appear that the patented claims are not novel, it becomes the duty of the court to so instruct the jury. . . . **** In view, then, of the state of the art as manifested by several prior patents, we think it is plain that the patent of Lyon and Munro is void for want of patentable novelty, and that the court below erred in not so instructing the jury.

Markman v. Westview Instruments, Inc. 517 U.S. 370, 38 USPQ2d 1461 (1996) JUSTICE SOUTER delivered the opinion of the Court.

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The question here is whether the interpretation of a so-called patent claim, the portion of the patent document that defines the scope of the patentee's rights, is a matter of law reserved entirely for the court, or subject to a Seventh Amendment guarantee that a jury will determine the meaning of any disputed term of art about which expert testimony is offered. We hold that the construction of a patent, including terms of art within its claim, is exclusively within the province of the court. I The Constitution empowers Congress "[t]o 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." U.S. Const., Art I, § 8, cl. 8. Congress first exercised this authority in 1790, when it provided for the issuance of "letters patent," Act of Apr. 10, 1790, ch. 7, § 1, 1 Stat. 109, which, like their modern counterparts, granted inventors "the right to exclude others from making, using, offering for sale, selling, or importing the patented invention," in exchange for full disclosure of an invention, H. Schwartz, Patent Law and Practice 1, 33 (2d ed. 1995). It has long been understood that a patent must describe the exact scope of an invention and its manufacture to "secure to [the patentee] all to which he is entitled, [and] to apprise the public of what is still open to them." McClain v. Ortmayer, 141 U.S. 419, 424 (1891). Under the modern American system, these objectives are served by two distinct elements of a patent document. First, it contains a specification describing the invention "in such full, clear, concise, and exact terms as to enable any person skilled in the art . . . to make and use the same." 35 U.S.C. § 112; see also 3 E. Lipscomb, Walker on Patents § 10:1, pp. 183-184 (3d ed. 1985) (Lipscomb) (listing the requirements for a specification). Second, a patent includes one or more "claims," which "particularly poin[t] out and distinctly clai[m] the subject matter which the applicant regards as his invention." 35 U.S.C. § 112. "A claim covers and secures a process, a machine, a manufacture, a composition of matter, or a design, but never the function or result of either, nor the scientific explanation of their operation." 6 Lipscomb 21:17, at 315-316. The claim "define[s] the scope of a patent grant," 3 id., § 11:1, at 280, and functions to forbid not only exact copies of an invention, but products that go to "the heart of the invention but avoid the literal language of the claim by making a noncritical change," Schwartz, supra, at 82.1 In this opinion, the word "claim" is used only in this sense peculiar to patent law. Characteristically, patent lawsuits charge what is known as infringement, Schwartz, supra, at 75, and rest on allegations that the defendant "without authority ma[de], use[d] or [sold the] patented invention, within the United States during the term of the patent therefor . . . ." 35 U.S.C. § 271(a). Victory in an infringement suit requires a finding that the patent claim "covers the alleged infringer's product or process," which in turn necessitates a determination of "what the words in the claim mean." Schwartz, supra, at 80; see also 3 Lipscomb, § 11:2, at 288-290. Petitioner in this infringement suit, Markman, owns United States Reissue Patent No. 33,054 for his "Inventory Control and Reporting System for Drycleaning Stores." The patent describes a system that can monitor and report the status, location, and movement of clothing in a dry-cleaning establishment. The Markman system consists of a keyboard and data processor to generate written records for each transaction, including a bar code readable by optical detectors operated by employees, who log the progress of clothing through the dry-cleaning process. Respondent Westview's product also includes a keyboard and processor, and it lists charges for the dry-cleaning services on bar-coded tickets that can be read by portable optical detectors. Markman brought an infringement suit against Westview and Althon Enterprises, an operator of drycleaning establishments using Westview's products (collectively, Westview). Westview responded that Markman's patent is not infringed by its system because the latter functions merely to record an 1

Thus, for example, a claim for a ceiling fan with three blades attached to a solid rod connected to a motor would not only cover fans that take precisely this form, but would also cover a similar fan that includes some additional feature, e.g., such a fan with a cord or switch for turning it on and off, and may cover a product deviating from the core design in some noncritical way, e.g., a three-bladed ceiling fan with blades attached to a hollow rod connected to a motor. H. Schwartz, Patent Law and Practice 81-82 (2d ed. 1995).

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inventory of receivables by tracking invoices and transaction totals, rather than to record and track an inventory of articles of clothing. Part of the dispute hinged upon the meaning of the word "inventory," a term found in Markman's independent claim 1, which states that Markman's product can "maintain an inventory total" and "detect and localize spurious additions to inventory." The case was tried before a jury, which heard, among others, a witness produced by Markman who testified about the meaning of the claim language. After the jury compared the patent to Westview's device, it found an infringement of Markman's independent claim 1 and dependent claim 10. The District Court nevertheless granted Westview's deferred motion for judgment as a matter of law, one of its reasons being that the term "inventory" in Markman's patent encompasses "both cash inventory and the actual physical inventory of articles of clothing." 772 F. Supp. 1535, 1537-38 (E.D. Pa. 1991). Under the trial court's construction of the patent, the production, sale, or use of a tracking system for dry cleaners would not infringe Markman's patent unless the product was capable of tracking articles of clothing throughout the cleaning process and generating reports about their status and location. Since Westview's system cannot do these things, the District Court directed a verdict on the ground that Westview's device does not have the "means to maintain an inventory total" and thus cannot "detect and localize spurious additions to inventory as well as spurious deletions therefrom," as required by claim 1. Id., at 1537. Markman appealed, arguing it was error for the District Court to substitute its construction of the disputed claim term “inventory” for the construction the jury had presumably given it. The United States Court of Appeals for the Federal Circuit affirmed, holding the interpretation of claim terms to be the exclusive province of the court and the Seventh Amendment to be consistent with that conclusion. 52 F.3d 967 (1995). Markman sought our review on each point, and we granted certiorari. 515 U.S. ___ (1995). We now affirm. II The Seventh Amendment provides that "[i]n Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved . . . ." U.S. Const., Amdt. 7. Since Justice Story's day, United States v. Wonson, 28 F. Cas. 745, 750 (No. 16,750) (CC Mass. 1812), we have understood that "[t]he right of trial by jury thus preserved is the right which existed under the English common law when the Amendment was adopted." Baltimore & Carolina Line, Inc. v. Redman, 295 U.S. 654, 657 (1935). In keeping with our long-standing adherence to this "historical test," Wolfram, The Constitutional History of the Seventh Amendment, 57 Minn. L. Rev. 639, 640-643 (1973), we ask, first, whether we are dealing with a cause of action that either was tried at law at the time of the Founding or is at least analogous to one that was, see, e.g., Tull v. United States, 481 U.S. 412, 417 (1987). If the action in question belongs in the law category, we then ask whether the particular trial decision must fall to the jury in order to preserve the substance of the common-law right as it existed in 1791. See infra, at 6-9. [The Court first determined that patent cases were tried to a jury at the time of the founding. The Court then declined to decide directly whether a “mongrel practice” like claim construction is itself necessarily a jury issue, and instead looked for an analogy in early practice. The closest analogy the Court could find was in the construction of patent specifications, which showed no early, established jury practice. The Court could find no other relevant analogies in which juries were normally used.] **** III Since evidence of common law practice at the time of the Framing does not entail application of the Seventh Amendment's jury guarantee to the construction of the claim document, we must look elsewhere to characterize this determination of meaning in order to allocate it as between court or jury. We accordingly consult existing precedent and consider both the relative interpretive skills of judges and juries and the statutory policies that ought to be furthered by the allocation.

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A The two elements of a simple patent case, construing the patent and determining whether infringement occurred, were characterized by the former patent practitioner, Justice Curtis. "The first is a question of law, to be determined by the court, construing the letters-patent, and the description of the invention and specification of claim annexed to them. The second is a question of fact, to be submitted to a jury." Winans v. Denmead, 15 How., at 338; see Winans v. New York & Erie R. Co., 21 How., at 100; Hogg v. Emerson, supra, at 484; cf. Parker v. Hulme, supra, at 1140. In arguing for a different allocation of responsibility for the first question, Markman relies primarily on two cases, Bischoff v. Wethered, 9 Wall. 812 (1870), and Tucker v. Spalding, 13 Wall. 453 (1872). These are said to show that evidence of the meaning of patent terms was offered to 19th-century juries, and thus to imply that the meaning of a documentary term was a jury issue whenever it was subject to evidentiary proof. That is not what Markman's cases show, however. In order to resolve the Bischoff suit implicating the construction of rival patents, we considered "whether the court below was bound to compare the two specifications, and to instruct the jury, as a matter of law, whether the inventions therein described were, or were not, identical." 9 Wall., at 813 (statement of the case). We said it was not bound to do that, on the ground that investing the court with so dispositive a role would improperly eliminate the jury's function in answering the ultimate question of infringement. On that ultimate issue, expert testimony had been admitted on "the nature of the various mechanisms or manufactures described in the different patents produced, and as to the identity or diversity between them." Id., at 814. Although the jury's consideration of that expert testimony in resolving the question of infringement was said to impinge upon the well-established principle "that it is the province of the court, and not the jury, to construe the meaning of documentary evidence," id., at 815, we decided that it was not so. We said that "the specifications . . . profess to describe mechanisms and complicated machinery, chemical compositions and other manufactured products, which have their existence in pais, outside of the documents themselves; and which are commonly described by terms of the art or mystery to which they respectively belong; and these descriptions and terms of art often require peculiar knowledge and education to understand them aright . . . . Indeed, the whole subject-matter of a patent is an embodied conception outside of the patent itself . . . . This outward embodiment of the terms contained in the patent is the thing invented, and is to be properly sought, like the explanation of all latent ambiguities arising from the description of external things, by evidence in pais."

Ibid. Bischoff does not then, as Markman contends, hold that the use of expert testimony about the meaning of terms of art requires the judge to submit the question of their construction to the jury. It is instead a case in which the Court drew a line between issues of document interpretation and product identification, and held that expert testimony was properly presented to the jury on the latter, ultimate issue, whether the physical objects produced by the patent were identical. The Court did not see the decision as bearing upon the appropriate treatment of disputed terms. As the opinion emphasized, the Court's "view of the case is not intended to, and does not, trench upon the doctrine that the construction of written instruments is the province of the court alone. It is not the construction of the instrument, but the character of the thing invented, which is sought in questions of identity and diversity of inventions." Id., at 816 (emphasis added). Tucker, the second case proffered by Markman, is to the same effect. Its reasoning rested expressly on Bischoff, and it just as clearly noted that in addressing the ultimate issue of mixed fact and law, it was for the court to "lay down to the jury the law which should govern them." Tucker, supra, at 455. If the line drawn in these two opinions is a fine one, it is one that the Court has drawn repeatedly in explaining the respective roles of the jury and judge in patent cases, and one understood by commentators writing in the aftermath of the cases Markman cites. Walker, for example, read Bischoff Chapter 7 – Claim Construction

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as holding that the question of novelty is not decided by a construction of the prior patent, "but depends rather upon the outward embodiment of the terms contained in the [prior patent]; and that such outward embodiment is to be properly sought, like the explanation of latent ambiguities arising from the description of external things, by evidence in pais." A. Walker, Patent Laws § 75, p. 68 (3d ed. 1895). He also emphasized in the same treatise that matters of claim construction, even those aided by expert testimony, are questions for the court: "Questions of construction are questions of law for the judge, not questions of fact for the jury. As it cannot be expected, however, that judges will always possess the requisite knowledge of the meaning of the terms of art or science used in letters patent, it often becomes necessary that they should avail themselves of the light furnished by experts relevant to the significance of such words and phrases. The judges are not, however, obliged to blindly follow such testimony."

Id., § 189, at 173 (footnotes omitted). Virtually the same description of the court's use of evidence in its interpretive role was set out in another contemporary treatise: "The duty of interpreting letters-patent has been committed to the courts. A patent is a legal instrument, to be construed, like other legal instruments, according to its tenor. . . . Where technical terms are used, or where the qualities of substances or operations mentioned or any similar data necessary to the comprehension of the language of the patent are unknown to the judge, the testimony of witnesses may be received upon these subjects, and any other means of information be employed. But in the actual interpretation of the patent the court proceeds upon its own responsibility, as an arbiter of the law, giving to the patent its true and final character and force."

2 W. Robinson, Law of Patents 732, pp. 481-483 (1890) (emphasis added). In sum, neither Bischoff nor Tucker indicates that juries resolved the meaning of terms of art in construing a patent, and neither case undercuts Justice Curtis's authority. B Where history and precedent provide no clear answers, functional considerations also play their part in the choice between judge and jury to define terms of art. We said in Miller v. Fenton, 474 U.S. 104, 114 (1985), that when an issue "falls somewhere between a pristine legal standard and a simple historical fact, the fact/law distinction at times has turned on a determination that, as a matter of the sound administration of justice, one judicial actor is better positioned than another to decide the issue in question." So it turns out here, for judges, not juries, are the better suited to find the acquired meaning of patent terms. The construction of written instruments is one of those things that judges often do and are likely to do better than jurors unburdened by training in exegesis. Patent construction in particular "is a special occupation, requiring, like all others, special training and practice. The judge, from his training and discipline, is more likely to give a proper interpretation to such instruments than a jury; and he is, therefore, more likely to be right, in performing such a duty, than a jury can be expected to be." Parker v. Hulme, 18 F. Cas., at 1140. Such was the understanding nearly a century and a half ago, and there is no reason to weigh the respective strengths of judge and jury differently in relation to the modern claim; quite the contrary, for "the claims of patents have become highly technical in many respects as the result of special doctrines relating to the proper form and scope of claims that have been developed by the courts and the Patent Office." Woodward, Definiteness and Particularity in Patent Claims, 46 Mich. L. Rev. 755, 765 (1948). Markman would trump these considerations with his argument that a jury should decide a question of meaning peculiar to a trade or profession simply because the question is a subject of testimony requiring credibility determinations, which are the jury's forte. It is, of course, true that credibility judgments have to be made about the experts who testify in patent cases, and in theory there could be Chapter 7 – Claim Construction

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a case in which a simple credibility judgment would suffice to choose between experts whose testimony was equally consistent with a patent's internal logic. But our own experience with document construction leaves us doubtful that trial courts will run into many cases like that. In the main, we expect, any credibility determinations will be subsumed within the necessarily sophisticated analysis of the whole document, required by the standard construction rule that a term can be defined only in a way that comports with the instrument as a whole. See Bates v. Coe, 98 U.S. 31, 38 (1878); 6 Lipscomb § 21:40, at 393; 2 Robinson, supra, § 734, at 484; Woodward, supra, at 765; cf. U.S. Industrial Chemicals, Inc. v. Carbide & Carbon Chemicals Co., 315 U.S. 668, 678 (1942); cf. 6 Lipscomb at § 21:40, at 393. Thus, in these cases a jury's capabilities to evaluate demeanor, cf. Miller, supra, at 114, 117, to sense the "mainsprings of human conduct," Commissioner v. Duberstein, 363 U.S. 278, 289 (1960), or to reflect community standards, United States v. McConney, 728 F.2d 1195, 1204 (9th Cir. 1984) (en banc), are much less significant than a trained ability to evaluate the testimony in relation to the overall structure of the patent. The decisionmaker vested with the task of construing the patent is in the better position to ascertain whether an expert's proposed definition fully comports with the specification and claims and so will preserve the patent's internal coherence. We accordingly think there is sufficient reason to treat construction of terms of art like many other responsibilities that we cede to a judge in the normal course of trial, notwithstanding its evidentiary underpinnings. C Finally, we see the importance of uniformity in the treatment of a given patent as an independent reason to allocate all issues of construction to the court. As we noted in General Elec. Co. v. Wabash Appliance Corp., 304 U.S. 364, 369 (1938), "[t]he limits of a patent must be known for the protection of the patentee, the encouragement of the inventive genius of others and the assurance that the subject of the patent will be dedicated ultimately to the public." Otherwise, a "zone of uncertainty which enterprise and experimentation may enter only at the risk of infringement claims would discourage invention only a little less than unequivocal foreclosure of the field," United Carbon Co. v. Binney & Smith Co., 317 U.S. 228, 236 (1942), and "[t]he public [would] be deprived of rights supposed to belong to it, without being clearly told what it is that limits these rights." Merrill v. Yeomans, 94 U.S. 568, 573 (1877). It was just for the sake of such desirable uniformity that Congress created the Court of Appeals for the Federal Circuit as an exclusive appellate courts for patent cases, H. R. Rep. No. 97-312, pp. 2023 (1981), observing that increased uniformity would "strengthen the United States patent system in such a way as to foster technological growth and industrial innovation." Id., at 20. Uniformity would, however, be ill served by submitting issues of document construction to juries. Making them jury issues would not, to be sure, necessarily leave evidentiary questions of meaning wide open in every new court in which a patent might be litigated, for principles of issue preclusion would ordinarily foster uniformity. Cf. Blonder-Tongue Laboratories, Inc. v. University of Ill. Foundation, 402 U.S. 313 (1971). But whereas issue preclusion could not be asserted against new and independent infringement defendants even within a given jurisdiction, treating interpretive issues as purely legal will promote (though it will not guarantee) intrajurisdictional certainty through the application of stare decisis on those questions not yet subject to interjurisdictional uniformity under the authority of the single appeals court. **** Accordingly, we hold that the interpretation of the word "inventory" in this case is an issue for the judge, not the jury, and affirm the decision of the Court of Appeals for the Federal Circuit. It is so ordered.

Markman v. Westview Instruments, Inc. 52 F.3d 967, 34 USPQ2d 1321 (Fed. Cir. 1995) (in banc)

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Before ARCHER, Chief Judge, and RICH, NIES, NEWMAN, MAYER, MICHEL, PLAGER, LOURIE, CLEVENGER, RADER, and SCHALL, Circuit Judges. Opinion for the Court filed by Chief Judge ARCHER, in which Circuit Judges RICH, NIES, MICHEL, PLAGER, LOURIE, CLEVENGER, and SCHALL join. Concurring opinions filed by Circuit Judges MAYER, and RADER. Dissenting opinion filed by Circuit Judge NEWMAN. ARCHER, Chief Judge. Herbert Markman and Positek, Inc. (collectively referred to as Markman) appeal from the judgment of the United States District Court for the Eastern District of Pennsylvania, Civil Action No. 91-0940 (entered Oct. 1, 1991), that Westview Instruments, Inc. and Althon Enterprises, Inc. (collectively referred to as Westview) did not infringe claims 1 or 10 of United States Reissue Patent No. 33,054, notwithstanding the jury's verdict to the contrary. We have ordered that this case be reheard in banc. We affirm the judgment of noninfringement. In doing so, we conclude that the interpretation and construction of patent claims, which define the scope of the patentee's rights under the patent, is a matter of law exclusively for the court. Thus, in this case the district court properly discharged its obligation to delineate the scope of the claim on motion for judgment as a matter of law when the jury had rendered a verdict that was incompatible with a proper claim construction. **** III. **** B. Notwithstanding the apparent inconsistencies in our opinions [discussed in omitted portion above], the Supreme Court has repeatedly held that the construction of a patent claim is a matter of law exclusively for the court. . . . Time and again the Supreme Court has itself resolved disputes over the construction of claims as a matter of law. **** The reason that the courts construe patent claims as a matter of law and should not give such task to the jury as a factual matter is straightforward: It has long been and continues to be a fundamental principle of American law that "the construction of a written evidence is exclusively with the court." Levy v. Gadsby, 7 U.S. (3 Cranch) 180, 186, 2 L.Ed. 404 (1805) (Marshall, C.J.); Eddy v. Prudence Bonds Corp., 165 F.2d 157, 163 (2d Cir.1947) (Learned Hand, J.) ("[A]ppellate courts have untrammelled power to interpret written documents."); 4 Samuel Williston, Williston on Contracts § 601, at 303 (3d ed. 1961) (hereinafter Williston on Contracts) ("Upon countless occasions, the courts have declared it to be the responsibility of the judge to interpret and construe written instruments, whatever their nature.") (footnotes omitted). The patent is a fully integrated written instrument. By statute, the patent must provide a written description of the invention that will enable one of ordinary skill in the art to make and use it. 35 U.S.C. §112, para. 1. Section 112, para. 2, also requires the applicant for a patent to conclude the specification with claims "particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention." It follows, therefore, from the general rule applicable to written instruments that a patent is uniquely suited for having its meaning and scope determined entirely by a court as a matter of law. **** There is much wisdom to the rule that the construction of a patent should be a legal matter for a court. A patent is a government grant of rights to the patentee. 35 U.S.C. § 154. By this grant, the patentee owns the rights for a limited time to exclude others from making, using, or selling the invention as claimed. Id.; see Bloomer v. McQuewan, 55 U.S. (14 How.) 539, 548, (1852). Infringement of the Chapter 7 – Claim Construction

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patentee's right to exclude carries with it the potential for serious consequences: The infringer may be enjoined and required to pay increased damages, costs and attorney fees. See 35 U.S.C. §§ 283-285. When a court construes the claims of the patent, it "is as if the construction fixed by the court had been incorporated in the specification," Curtis on Patents, supra, § 452, at 609, and in this way the court is defining the federal legal rights created by the patent document. Further, it is only fair (and statutorily required) that competitors be able to ascertain to a reasonable degree the scope of the patentee's right to exclude. . . . They may understand what is the scope of the patent owner's rights by obtaining the patent and prosecution history--"the undisputed public record," . . . and applying established rules of construction to the language of the patent claim in the context of the patent. Moreover, competitors should be able to rest assured, if infringement litigation occurs, that a judge, trained in the law, will similarly analyze the text of the patent and its associated public record and apply the established rules of construction, and in that way arrive at the true and consistent scope of the patent owner's rights to be given legal effect. Arriving at a true and consistent scope of the claims also works to the benefit of the patentee, as Professor Robinson eloquently observed: To treat the nature of the patented invention as a matter of fact, to be inquired of and determined by a jury, would at once deprive the inventor of the opportunity to obtain a permanent and universal definition of his rights under the patent, and in each case of infringement it would subject him to the danger of false interpretation, from the consequences of which he could not escape. By confiding this duty to the court, however, its decision as to the nature of the patented invention becomes reviewable to the same extent as any other legal question, and when his patent has received the interpretation of the Supreme Court of the United States the inventor can maintain his privilege, as thus interpreted, against all opponents without further controversy in reference to its true limitations.

2 Robinson on Patents, supra, § 733, at 483-84. We therefore settle inconsistencies in our precedent and hold that in a case tried to a jury, the court has the power and obligation to construe as a matter of law the meaning of language used in the patent claim. As such, "[a] patent covers the invention or inventions which the court, in construing its provisions, decides that it describes and claims." 3 Robinson on Patents, supra, § 1019, at 247. Because claim construction is a matter of law, the construction given the claims is reviewed de novo on appeal. Accordingly, Markman's principal argument that the district court erred in taking the issue of claim construction away from the jury is itself legally erroneous. **** V. **** B. The dissenting and one of the concurring opinions attempt to make the case that construing claims is analogous to construing and interpreting contracts, deeds, and wills. Traditionally courts have treated the construction of these documents as being a legal question for the court, but have stated that under certain circumstances the interpretation of an agreement may raise jury triable questions. Thus, by analogy, the argument is made that although claim construction may indeed be a question of law for the court, it also involves (or, in the argument of the concurrence, may involve) triable issues of fact. The analogy of a patent to a contract may appear to some extent to be an appropriate way of describing the circumstances surrounding the issuance of a patent. The inventor is required to make full disclosure of his invention to the Patent and Trademark Office (PTO) and to the public in his patent specification, which he is otherwise not obligated to do. In return, the law allows the government to confer a property right to exclude anyone else from making, using, or selling the invention covered by the claims for seventeen years, which it is otherwise not obligated to do.

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The analogy of a patent to a contract is not useful, however, in the context of a patent infringement suit. Patents are not contracts per se and patent infringement actions have never been viewed as breach of contract actions. Patent infringement has often been described as a tort. In a patent infringement suit, the inventor sues a competitor for infringing upon his right to exclude. The competitor is never a party to the so-called "contract" between the government and the inventor. . . . Nor does the competitor ever breach this contract between the government and the inventor by making, using, or selling the accused devices. Questions of fact may arise in construing contracts, deeds, or wills in two contexts. First, the document may not reflect the agreement between, or the intent of, the two parties. Thus, unless the document is fully integrated and the parol evidence rule (or its equivalent in the other areas of law) applies, extrinsic evidence may be offered to demonstrate different or additional terms. There is no parol evidence rule in patent law for obvious reasons. It is axiomatic that the invention protected by the patent must be covered by the claims, otherwise it is lost. Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502 (1917). Parol or other extrinsic evidence cannot add, subtract, or vary the limitations of the claims. A question of fact may also arise in construing contracts, deeds, or wills when there is an ambiguous term. In this situation, the parol evidence rule does not apply and extrinsic evidence may be offered to demonstrate what the parties intended when they used the term. Thus the factual inquiry for the jury in these cases focuses on the subjective intent of the parties when they entered into the agreement. No inquiry as to the subjective intent of the applicant or PTO is appropriate or even possible in the context of a patent infringement suit. The subjective intent of the inventor when he used a particular term is of little or no probative weight in determining the scope of a claim (except as documented in the prosecution history). . . . In fact, commonly the claims are drafted by the inventor's patent solicitor and they may even be drafted by the patent examiner in an examiner's amendment (subject to the approval of the inventor's solicitor). . . . While presumably the inventor has approved any changes to the claim scope that have occurred via amendment during the prosecution process, it is not unusual for there to be a significant difference between what an inventor thinks his patented invention is and what the ultimate scope of the claims is after allowance by the PTO. . . . Of course the views of the other party to the "patent contract," the government, are generally not obtainable, except as reflected in the prosecution history. . . . Thus the focus in construing disputed terms in claim language is not the subjective intent of the parties to the patent contract when they used a particular term. Rather the focus is on the objective test of what one of ordinary skill in the art at the time of the invention would have understood the term to mean. Moreover, ideally there should be no "ambiguity" in claim language to one of ordinary skill in the art that would require resort to evidence outside the specification and prosecution history. Section 112 of Title 35 requires that specifications "contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same ..." and requires that the specification "shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention." . . . This statutory language has as its purpose the avoidance of the kind of ambiguity that allows introduction of extrinsic evidence in the contract law analogy. . . . Patent applications, unlike contracts, are reviewed by patent examiners, quasi-judicial officials trained in the law and presumed to "have some expertise in interpreting the [prior art] references and to be familiar from their work with the level of skill in the art and whose duty it is to issue only valid patents." . . . If the patent's claims are sufficiently unambiguous for the PTO, there should exist no factual ambiguity when those same claims are later construed by a court of law in an infringement action. . . .

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This does not mean there is never a need for extrinsic evidence in a patent infringement suit. A judge is not usually a person conversant in the particular technical art involved and is not the hypothetical person skilled in the art to whom a patent is addressed. Extrinsic evidence, therefore, may be necessary to inform the court about the language in which the patent is written. But this evidence is not for the purpose of clarifying ambiguity in claim terminology. It is not ambiguity in the document that creates the need for extrinsic evidence but rather unfamiliarity of the court with the terminology of the art to which the patent is addressed. Accordingly, the contract, deed, and will cases relied upon in the dissenting and concurring opinions serve only to highlight the differences between claim construction in a patent infringement case and contract interpretation in a breach of contract suit or construction/interpretation of a will in a will contest. **** C. The more appropriate analogy for interpreting patent claims is the statutory interpretation analogy. Statutory interpretation is a matter of law strictly for the court. There can be only one correct interpretation of a statute that applies to all persons. Statutes are written instruments that all persons are presumed to be aware of and are bound to follow. Statutes, like patents, are enforceable against the public, unlike private agreements between contracting parties. When interpreting statutes, a court looks to the language of the statute and construes it according to the traditional tools of statutory construction, including certain well known canons of construction. United States v. John C. Grimberg Co., 702 F.2d 1362, 1365, 1368 (Fed. Cir. 1983). A court may also find it necessary to review the legislative history of the statute, which is itself a matter of public record, just as the specification and prosecution history of a patent are public records. Id. at 1369. While a court may seek from the public record to ascertain the collective intent of Congress when it interprets a statute, the subjective intent of any particular person involved in the legislative process is not determinative. Thus the members of Congress, or staff persons who draft legislation, are not deposed or called on to testify in actions involving statutory interpretation. Similarly, the subjective meaning that a patentee may ascribe to claim language is also not determinative. Thus, it is from the public record that a court should seek in a patent infringement case to find the meaning of claim language. There are, of course, differences between a statute and a patent. But because both of these public instruments may create liability in third persons who were not participants in the legislative process or the PTO proceedings, as the case may be, we conclude that the statutory interpretation model is a more accurate model than the contractual one for purposes of determining whether constitutional protections are transgressed by assigning claim construction exclusively to judges. **** MAYER, Circuit Judge, concurring in the judgment. Today the court jettisons more than two hundred years of jurisprudence and eviscerates the role of the jury preserved by the Seventh Amendment of the Constitution of the United States; it marks a sea change in the course of patent law that is nothing short of bizarre. Sadly, this decision represents a secession from the mainstream of the law. It portends turbulence and cynicism in patent litigation. For this is not just about claim language, it is about ejecting juries from infringement cases. All these pages and all these words cannot camouflage what the court well knows: to decide what the claims mean is nearly always to decide the case. But today's action is of a piece with a broader bid afoot to essentially banish juries from patent cases altogether. If it succeeds juries will be relegated, in those few cases where they have any presence at all, to rubber stamps, their verdicts preordained by "legal" and "equitable" determinations that brook only one "reasonable" result. Indeed, this movement would vest authority over patent disputes in legislative courts, unconstrained by Article III and the Seventh Amendment. . . . Declaiming that the jury is a "black box" incapable of a "reasoned decision", several judges of the court have already advised that they are aboard this campaign. . . . The quest to free patent litigation from the Chapter 7 – Claim Construction

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"unpredictability" of jury verdicts, and generalist judges, results from insular dogmatism inspired by unwarrantable elitism; it is unconstitutional. The question is whether the interpretation of patent claims is a purely legal exercise—always decided by the judge as a matter of law and never raising a question of fact—or rather a mixed question of law and fact, in which some factual matters might need to be resolved by the factfinder on the way to construing the claims as a matter of law. The answer is critical to how questions of claim interpretation are decided at the trial level and how we review them on appeal. The ultimate issue of patent scope, depending as it does on the legal effect of the words of the claims, is a question of law. But it does not necessarily follow that the judge is to decide every question that arises during the course of claim construction as a matter of law. . . . 383 U.S. 1, 17 (1966) (obviousness is a legal conclusion with underlying factual determinations). Instead, characterization of claim construction as "legal" begs the questions whether fact issues may arise subsidiary to the ultimate legal conclusion, how such issues are to be decided, and by whom. Contrary to what it says today, this court (including the judges in the majority) has always held that claim interpretation is a matter of law depending on underlying factual inquiries. . . . So it is remarkable that the court so casually changes its collective mind, especially when the just cited precedent was compelled by the Seventh Amendment and not the mere preference of a sufficient number of judges. The court's revisionist reading of precedent to loose claim interpretation from its factual foundations will have profoundly negative consequences for the well-established roles of trial judges, juries, and our court in patent cases. **** RADER, Circuit Judge, concurring in the judgment. The result in this case is the same whether or not claim construction may sometimes involve subsidiary fact issues. **** To dispose of this case, this court need not decide whether subsidiary fact issues may sometimes arise. Markman cannot manufacture a fact issue where none exists. This court's extensive examination of subsidiary fact issues is dicta. **** PAULINE NEWMAN, Circuit Judge, dissenting. I INTRODUCTION The issue is the role of the jury in patent infringement cases. The majority opinion resolves the issue by designating, as law, factual disputes about the meaning and scope of the technologic terms and words of art used to define patented inventions. By holding that these disputed technologic questions are matters of law, the court holds that issues of patent infringement, previously triable to a jury as of right, will now be decided by the trial judge and then re-decided de novo by this court on appeal. **** This holding not only raises a constitutional issue of grave consequence, but the court creates a litigation system that is unique to patent cases, unworkable, and ultimately unjust. Thus I must, respectfully, dissent. I shall discuss three principal concerns: 1.

The Meaning of Disputed Technologic Terms and Words of Art

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Patents are technologic disclosures, written by and for the technologically experienced: those "of skill in the art." The meaning and scope of the terms that define the patented technology is often in dispute in infringement litigation, for it often decides the case. In resolving such dispute the trier of fact often makes findings that depend on the weight, credibility, and probative value of conflicting evidence, such as that offered on behalf of Markman and Westview. Heretofore, the disputed meaning of technologic terms and words of art has been treated by Federal Circuit precedent as an "underlying fact" on which the legal effect of the patent is based. The majority now simply rules that these are not "underlying factual inquiries." However, the meaning and scope of disputed technologic and other terms of art in particular usage are classical questions of fact. Their nature as fact does not change because their finding, like most findings in litigation, has a legal consequence. By redesignating fact as "law" the court has eliminated the jury right from most trials of patent infringement. 2.

The Trial and Appellate Roles in Technologic Disputes

The trial process is the vehicle for determining truth. Thus the trier of fact is present in the courtroom along with the witnesses, the advocates, the exhibits, and the demonstrations. Indeed, when the technologic issues are complex, appellate fact finding is probably the least effective path to accurate decisionmaking. And if a factual question is technologically simple, it is not thereby transformed into a matter of law and removed from the trial process. Even were there no constitutional infirmity, I doubt that the correct resolution of technologic or scientific disputes is more likely to be achieved by removing disputed facts from the procedures of trial and consigning them to the appellate court. Appellate briefs and fifteen minutes per side of attorney argument are not designed for de novo findings of disputed technologic questions. 3.

The Constitution

Jury trial in patent cases is protected by the Seventh Amendment. Elimination of the jury is not this court's choice to make. The constitutional right alone bars the majority's new rule. The majority today denies 200 years of jury trial of patent cases in the United States, preceded by over 150 years of jury trial of patent cases in England, by simply calling a question of fact a question of law. The Seventh Amendment is not so readily circumvented. II FACT AND LAW IN PATENT INFRINGEMENT A.

LEGAL "CONSTRUCTION" v. FACTUAL "INTERPRETATION"

The majority's explanation for removing these factual issues from the jury is that it is "construing" the patent claims, and that the "construction" of documents is a matter of law. The legal construction of documents—patent documents and other documents—is indeed a matter of law. The legal effect of the patent claim is to establish the metes and bounds of the patent right to exclude; this is a matter of law. But this does not deprive the underlying facts of their nature as fact. These facts are found on evidence that includes the patent specification, relevant prior art, the prosecution history, the testimony of experts in the field, and other relevant evidence such as tests and demonstrations, all as I shall discuss post. These findings do not become rules of law because they relate to a document whose legal effect follows from the found facts. **** In patent infringement litigation there is often a factual dispute as to the meaning and scope of the technical terms or words of art as they are used in the particular patented invention. When such dispute arises its resolution is not a ruling of law, but a finding of fact. Such findings of meaning, scope, and usage have been called the "interpretation" of disputed terms of a document, as contrasted with the "construction" or legal effect of a document. Professor Corbin has explained this distinction, in the Chapter 7 – Claim Construction

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context of contracts, as reflecting the difference between "language" and the "legal operation" of language: It may be helpful to note that the word interpretation is commonly used with respect to language itself--to the symbols (the words and acts) of expression. In about the same degree, we speak of the construction of a contract. It is true that we also speak of construing language and of interpreting a contract; but by the latter phrase is certainly meant interpreting the words of a contract. The word "contract" has been variously defined; but it is seldom identified with mere symbols of expression. By "interpretation of language" we determine what ideas that language induces in other persons. By "construction of the contract," as that term will be used here, we determine its legal operation—its effect upon the action of courts and administrative officials.

3 Arthur L. Corbin, Corbin on Contracts §534 (1960) (footnotes omitted). **** It is indeed well understood that the legal effect or construction of the terms of a document, a matter of law, is not to be confused with resolution of disputes concerning the factual meaning of the terms. The former is for the court, the latter for the jury. That the thing whose terms require interpretation is a patent, instead of a deed or a will or a contract, does not convert the finding of disputed facts into a matter of law. Factual findings concerning a particular patented invention do not become matters of law simply because the patent document serves a legal purpose. **** Implementing this court's departure from the established appellate role, in reviewing Markman's case on this appeal the majority does not mention the jury instructions, or discuss whether a reasonable jury could have reached the verdict that was reached on the evidence adduced, or decide whether there was substantial credible evidence of such content and weight as could support the jury's verdict. The majority finds for itself the disputed fact of whether the term "inventory" includes the invoices of the Westview system, without any deference to the trial process. Whether or not this court believes that it is a superior finder of technologic fact, that is not our place in the judicial structure. I wonder how this new system will work. The majority states that the trial judge should have decided the meaning of "inventory" before giving the case to the jury, but that the error was harmless since the trial judge reached the correct meaning "as a matter of law" after the jury verdict. There was no return to the jury after the trial judge re-decided what "inventory" meant, making the jury superfluous. The Federal Circuit now decides de novo whether "inventory" includes "invoices," ignoring the trial. What of the trial process, if trial judge and jury are ciphers upon appellate review?

Cybor Corp. v. Fas Technologies, Inc. 138 F.3d 1448, 46 USPQ2d 1169 (Fed. Cir. 1998) (in banc) Before MAYER, Chief Judge, RICH, NEWMAN, Circuit Judges, ARCHER, Senior Circuit Judge, MICHEL, PLAGER, LOURIE, CLEVENGER, RADER, SCHALL, BRYSON, and GAJARSA, Circuit Judges. Opinion for the court filed by Senior Circuit Judge ARCHER, in which Circuit Judges RICH, MICHEL, PLAGER, LOURIE, CLEVENGER, SCHALL, BRYSON, and GAJARSA join; Circuit Judge RADER joins as to part IV. Concurring opinions filed by Circuit Judges PLAGER and BRYSON. Opinions concurring in the judgment filed by Chief Judge MAYER, which Circuit Judge NEWMAN joins, and Circuit Judge RADER. Additional views filed by Circuit Judge NEWMAN, which Chief Judge MAYER joins. ARCHER, Senior Circuit Judge.

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Cybor Corporation (Cybor) appeals from the judgment of the United States District Court for the Northern District of California, 93-CV-20712 (Oct. 31, 1995), that Cybor pump, Model 5226, infringes the claims of U.S. Patent No. 5,167,837 (the '837 patent), currently owned by FAStar, Ltd. and exclusively licensed to FAS Technologies, Inc. (collectively FAS). FAS cross-appeals the judgment as to the damages calculation, the denial of enhanced damages, and the refusal to declare the case exceptional and to award attorney fees. A panel heard oral argument on January 29, 1997. Before its opinion issued, however, this court sua sponte on September 5, 1997 ordered that this case be decided in banc. We affirm the district court's judgment in its entirety. In so doing, we conclude that the Supreme Court's unanimous affirmance in Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996) (Markman II), of our in banc judgment in that case fully supports our conclusion that claim construction, as a purely legal issue, is subject to de novo review on appeal. See Markman v. Westview Instruments, Inc., 52 F.3d 967, 979, 34 USPQ2d 1321, 1329 (Fed. Cir. 1995) (in banc) (Markman I). BACKGROUND The '837 patent discloses a device and method for accurately dispensing industrial liquids. The primary use of the patented inventions is to dispense small volumes of liquid onto semiconductor wafers. Claim 1 is representative and reads: 1. In a device for filtering and dispensing fluid in a precisely controlled manner, the combination of: first pumping means; second pumping means in fluid communication with said first pumping means; and filtering means between said first and second pumping means, whereby said first pumping means pumps the fluid through said filtering means to said second pumping means; in which each of said first and second pumping means includes surfaces that contact the fluid, said surfaces being of materials that are non-contaminating to industrial fluids which are viscous and/or high purity and/or sensitive to molecular shear; and comprising means to enable said second pumping means to collect and/or dispense the fluid, or both, at rates or during periods of operation, or both, which are independent of rates or periods of operation, or both, respectively, of said first pumping means. ****

The dual stage pump manufactured by Cybor is used for the same purpose as that of the patented invention—application of liquid in precise, small volumes onto semiconductor wafers. . . . **** On September 23, 1993, Cybor sued FAS for a declaratory judgment of non-infringement, invalidity, and unenforceability of the '837 patent. FAS counterclaimed for infringement of all twenty claims and sought damages and injunctive relief. The case proceeded to trial, and the jury found by special verdict that the claims were not invalid, that Cybor literally infringed all the claims except 11, 12, and 16, and that these three remaining claims were infringed under the doctrine of equivalents. The jury determined the infringement to be willful for all claims except claim 16. After the jury rendered its liability verdict, the district court denied Cybor's renewed motion for Judgment as a Matter of Law (JMOL) that it did not infringe the '837 patent, and also denied FAS's motion for an exceptional case award of attorney fees pursuant to 35 U.S.C. § 285 (1994). Prior to the entry of final judgment, however, this court decided Markman I, which held that claim construction is a matter of law to be determined exclusively by the judge. Cybor then filed a motion for reconsideration of its JMOL motion in light of that decision, but the district court denied reconsideration. **** Chapter 7 – Claim Construction

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DISCUSSION I. **** An infringement analysis involves two steps. First, the court determines the scope and meaning of the patent claims asserted, see Markman II, 517 U.S. at 371-73, and then the properly construed claims are compared to the allegedly infringing device, see Read Corp., 970 F.2d at 821, 23 USPQ2d at 1431. Although the law is clear that the judge, and not the jury, is to construe the claims, this case presents the issue of the proper role of this court in reviewing the district court's claim construction. In Markman I, we held that, because claim construction is purely a matter of law, this court reviews the district court's claim construction de novo on appeal. See Markman I, 52 F.3d at 979, 981, 34 USPQ2d at 1329, 1331. In reaching this conclusion, we recognized that [t]hrough this process of construing claims by, among other things, using certain extrinsic evidence that the court finds helpful and rejecting other evidence as unhelpful, and resolving disputes en route to pronouncing the meaning of claim language as a matter of law based on the patent documents themselves, the court is not crediting certain evidence over other evidence or making factual evidentiary findings. Rather, the court is looking to the extrinsic evidence to assist in its construction of the written document, a task it is required to perform. The district court's claim construction , enlightened by such extrinsic evidence as may be helpful, is still based upon the patent and prosecution history. It is therefore still construction, and is a matter of law subject to de novo review.

Id. at 981, 34 USPQ2d at 1331 (emphasis in original and footnote omitted). After the Supreme Court's decision in Markman II, panels of this court have generally followed the review standard of Markman I. . . . In some cases, however, a clearly erroneous standard has been applied to findings considered to be factual in nature that are incident to the judge's construction of patent claims. We ordered that this case be decided in banc to resolve this conflict, and we conclude that the de novo standard of review as stated in Markman I remains good law. B. The Supreme Court framed the question before it in Markman II in the alternative: "whether the interpretation of a so-called patent claim . . . is a matter of law reserved entirely for the court, or subject to a Seventh Amendment guarantee that a jury will determine the meaning of any disputed term of art about which expert testimony is offered." Markman II, 116 S. Ct. at 1387 (emphasis added). When it answered that question by stating that "[w]e hold that the construction of a patent, including terms of art within its claim, is exclusively within the province of the court," id., the Court held that the totality of claim construction is a legal question to be decided by the judge. Nothing in the Supreme Court's opinion supports the view that the Court endorsed a silent, third option—that claim construction may involve subsidiary or underlying questions of fact. To the contrary, the Court expressly stated that "treating interpretive issues as purely legal will promote (though not guarantee) intrajurisdictional certainty through the application of stare decisis on those questions not yet subject to interjurisdictional uniformity under the authority of the single appeals court." Id. at 1396 (emphasis added); see also id. at 1394 ("'Questions of construction are questions of law for the judge, not questions of fact for the jury"' (quoting A. Walker, Patent Laws § 75 at 173 (3d ed. 1895))). Indeed, the sentence demonstrates that the Supreme Court endorsed this court's role in providing national uniformity to the construction of a patent claim, a role that would be impeded if we were bound to give deference to a trial judge's asserted factual determinations incident to claim construction. The opinions in some of our cases suggesting that there should be deference to what are asserted to be factual underpinnings of claim construction assert support from the language in Markman II stating that "construing a term of art after receipt of evidence" is a "mongrel practice," id. at 1390, and that the issue may "'fall[] somewhere between a pristine legal standard and a simple historical fact,'" id. at 1395 (quoting Miller v. Fenton, 474 U.S. 104, 114 (1985)). These characterizations, however, are only Chapter 7 – Claim Construction

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prefatory comments demonstrating the Supreme Court's recognition that the determination of whether patent claim construction is a question of law or fact is not simple or clear cut; they do not support the view that the Court held that while construction is a legal question for the judge, there may also be underlying fact questions. To the contrary, the court noted that when an issue "falls somewhere between a pristine legal standard and a simple historical fact, the fact/law distinction at times has turned on a determination that, as a matter of sound administration of justice, one judicial actor is better positioned than another to decide the issue in question."

Id. (quoting Miller v. Fenton, 474 U.S. 104, 114 (1985)) (emphasis added). Thus, the Supreme Court was addressing under which category, fact or law, claim construction should fall and not whether it should be classified as having two components, fact and law. Further supporting the conclusion that claim construction is a pure issue of law is the Supreme Court's analysis of the role of expert testimony in claim construction. Generally, the Court has recognized the important role played by juries in evaluating the credibility of a witness, a key consideration in determining the appropriate judicial actor to decide an issue. See Miller, 474 U.S. at 114. In the context of claim construction, however, the Court reasoned that, while credibility determinations theoretically could play a role in claim construction, the chance of such an occurrence is "doubtful" and that "any credibility determinations will be subsumed within the necessarily sophisticated analysis of the whole document, required by the standard construction rule that a term can be defined only in a way that comports with the instrument as a whole." Markman II, 116 S. Ct. at 1395; see also id. at 1394-95 ("'[T]he testimony of witnesses may be received . . . . But in the actual interpretation of the patent the court proceeds upon its own responsibility, as an arbiter of the law, giving to the patent its true and final character and force.'" (quoting 2 W. Robinson, Law of Patents § 732 at 481-83 (1890))). Such a conclusion is consistent with the view that claim construction, as a form of "document construction," id. at 1395, is solely a question of law subject to de novo review, as noted above. See Markman I, 52 F.3d at 981, 34 USPQ2d at 1331. Moreover, while the Supreme Court's opinion conclusively and repeatedly states that claim construction is purely legal, another view of the Court's decision also demonstrates that our standard of review remains intact. The Court's primary concern in Markman II was the Seventh Amendment issue of whether a right to a jury trial on claim construction inured to a party due to any potential factual issues involved. Because the Court did not discuss the appellate standard of review, Markman II can be read as addressing solely the respective roles of the judge and jury at the trial level and not the relationship between the district courts and this court. Although our conclusion in Markman I that claim construction is a matter of law was affirmed in all respects, even this narrower view of Markman II leaves Markman I as the controlling authority regarding our standard of review. Thus, we conclude that the standard of review in Markman I, as discussed above, was not changed by the Supreme Court's decision in Markman II, and we therefore reaffirm that, as a purely legal question, we review claim construction de novo on appeal including any allegedly fact-based questions relating to claim construction. Accordingly, we today disavow any language in previous opinions of this court that holds, purports to hold, states, or suggests anything to the contrary, see, e.g., Fromson, 132 F.3d at 1444, 45 USPQ2d at 1274 ("The district court's findings of scientific/technological fact were material to the issue of construction of the term 'anodizing.'"); Eastman Kodak, 114 F.3d at 1555-56, 42 USPQ2d at 1742 (affirming district court's claim construction "recognizing both the trial court's “trained ability to evaluate [expert] testimony in relation to the overall structure of the patent” and the trial court's “better position to ascertain whether an expert's proposed definition fully comports with the specification and claims . . . .” (quoting Markman II, 116 S. Ct. at 1395)); Wiener, 102 F.3d at 539, 41 USPQ2d at 1026 (citing Markman II as controlling our standard of review and parenthetically quoting language from Markman II that claim construction "'falls somewhere between a pristine legal standard and a simple historical fact.'"); Metaullics, 100 F.3d at 939, 40 USPQ2d at 1799 ("[B]ecause claim construction is a mixed question of law and fact, we may be required to defer to a trial court's factual findings. Where a

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district court makes findings of fact as part of claim construction, we may not set them aside absent clear error." (citations omitted)). **** PLAGER, Circuit Judge, concurring. The concerned reader of the several opinions in this case might be led to believe that there is more to this case than there is. This otherwise unremarkable case was taken in banc for the sole purpose of laying to rest any residual doubts about how, in claim construction, the verbalizations surrounding the familiar "fact-law" dichotomy should be understood. I join the court's opinion and judgment, eliminating the unnecessary obfuscation that seems to have emerged since our decision in Markman v. Westview Instruments, Inc., 52 F. 3d 967, 34 USPQ2d 1321 (Fed. Cir. 1995) (in banc) (hereinafter Markman I). In Markman I we held that "claim construction is a matter of law," and that "the construction given the claims is reviewed de novo on appeal." Id. at 979. The Supreme Court agreed with our view, and concluded that the Seventh Amendment right to trial by jury was not an obstacle. Markman v. Westview Instruments, Inc., 517 U.S. 370, 379-86 (1996) (Markman II). At the trial stage of a patent infringement suit, this means that the trial judge is obligated to determine the meaning of the claims, and, if a jury is used for the infringement phase, to instruct the jury accordingly. In the course of seeking to understand the nature and scope of the invention set forth in the claims, it is standard doctrine that the judge focuses on the language of the claims, as explained by the patent's written description, and as constrained by the course of the patent's prosecution. If need be, the trial judge may seek understanding outside the patent proper, from relevant texts and materials, and from experts in the art. None of this involves "fact-finding" in the sense of the traditional fact-law dichotomy. See, for example, the Supreme Court's effort to decide whether a tomato was a "fruit" or a "vegetable." Regarding the meaning of those words, the Court said: "Of that meaning the court is bound to take judicial notice, as it does in regard to all words in our own tongue; and upon such a question dictionaries are admitted, not as evidence, but only as aids to the memory and understanding of the court." Nix v. Hedden, 149 U.S. 304, 306-07 (1893). The effort is to understand the meaning of the terms in the claims. To the extent that involves delving into factual matters, such materials simply become part of the process of understanding. It hardly seems necessary to state that the point of seeking understanding of the terms in which the claims are cast is not for the sake of understanding in the abstract, but to ensure as much as the intrinsic nature of language permits that the court's interpretation is a correct one. On appeal, this court has the benefit of the trial judge's considered view, and the record of the effort made at trial to assist the judge in understanding the terms of the claim. Though we review that record "de novo," meaning without applying a formally deferential standard of review, common sense dictates that the trial judge's view will carry weight. That weight may vary depending on the care, as shown in the record, with which that view was developed, and the information on which it is based. **** BRYSON, Circuit Judge, concurring. While I join the opinion of the court without reservation, I think it important to note that our adoption of the rule that claim construction is an issue of law does not mean that we intend to disregard the work done by district courts in claim construction or that we will give no weight to a district court's conclusion as to claim construction, no matter how the court may have reached that conclusion. Simply because a particular issue is denominated a question of law does not mean that the reviewing court will attach no weight to the conclusion reached by the tribunal it reviews. In fact, reviewing courts often acknowledge that as to particular legal issues lower tribunals have special competence and their judgments on those legal issues should be accorded significant weight. Chapter 7 – Claim Construction

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**** That does not mean that we defer to a district court on legal matters unless we find that the court has committed clear error with respect to an issue that should be characterized as factual. What it means is that we approach the legal issue of claim construction recognizing that with respect to certain aspects of the task, the district court may be better situated than we are, and that as to those aspects we should be cautious about substituting our judgment for that of the district court.

MAYER, Chief Judge, with whom PAULINE NEWMAN, Circuit Judge, joins, concurring in the judgment. I am compelled to concur in the judgment of the court, but I respectfully disagree with the opinion because it profoundly misapprehends Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996). The Supreme Court concluded there that the historical record is insufficiently firm to declare that juries construed patent claims in England when the Seventh Amendment to the Constitution was adopted in 1791. So it decided as a matter of policy that judges, not juries, are better able to perform this task given the complexity of evidence and documentation. This was a perilous decision of last resort. **** I. STANDARD OF REVIEW **** Our review of claim construction is controlled by the Supreme Court's judgment in Markman, 517 U.S. 370, not the opinion of this court it reviewed, 52 F.3d 967, 34 USPQ2d 1321 (Fed. Cir. 1995); the Supreme Court did not adopt this court's reasoning as its own. Though it could have done so easily, the Court chose not to accept our formulation of claim construction: as a pure question of law to be decided de novo in all cases on appeal. If it had, there would have been no need for its extensive exegesis about the Seventh Amendment and whether juries must construe claims that have evidentiary underpinnings or whether the importance of uniformity is best served by giving these evidentiary questions of meaning to a judge. It would have been a simple matter for the Court to give short shrift to this argument by proclaiming construction purely, solely, and always a matter of law that would never have gone to the jury. The Supreme Court recognized that in some cases there will be conflicting evidence that has to be resolved—where there are factual determinations that are more than just incident to claim construction—such as the understanding of one skilled in the art at the time the patent application was filed. In these cases, all that Markman stands for is that the judge will do the resolving, not the jury. Wisely, the Supreme Court stopped short of authorizing us to find facts de novo when evidentiary disputes exist as part of the construction of a patent claim and the district court has made these findings without committing clear error. **** Sometimes it may be necessary for an appellate court to pronounce new legal principles during an appeal. However, even if this court identifies a question of claim construction as one of law—though its resolution is relevant to only the particular litigation or document—it cannot elevate the activity to one of determining legal principles, as is for example, statutory construction. . . . Thus, regardless of the labels we attach to these questions, without the benefit of a full record from the trial court, it is neither the function of this court nor is it within our capacity as an appellate court to adopt new interpretations, most especially not if the interpretation under review is of terms informed by conflicting evidence. Such indiscriminate and conclusive review deprives the parties of important substantive and procedural mechanisms provided in the trial courts, where interpretation can be informed by additional discovery and expert testimony, and where it can be checked by appellate review as a matter of right. If claim Chapter 7 – Claim Construction

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construction is only a question of law to be reviewed by this court de novo, then the absence of review as a matter of right over our claim constructions, which may be new and unsupported by legal analysis, or may never have been tested by the adversarial process, would transform this court into a trial court of first and usually last resort. **** RADER, Circuit Judge, dissenting from the pronouncements on claim interpretation in the en banc opinion, concurring in the judgment, and joining part IV of the en banc opinion. **** I. The question of the proper standard of review seems an esoteric legal topic of interest only to law professors and appellate judges. In most cases, however, the review standard influences greatly both the trial judges who preside over the trial process and patent practitioners who must advise clients to accommodate their business plans to an uncertain legal regime. From the vantage point of trial judges, Markman I dictates many deviations from the normal procedural course for litigation.2 Perhaps the central deviation, however, affects the trial court's discretion to use expert testimony. When confronted with sophisticated technology, district court judges often seek testimony from experts to help them understand and interpret the claim. Under the guise of setting standards for claim construction, this court instructs experienced trial judges that they may use experts to understand, but not to interpret, the claim terms. As a matter of logic, this instruction is difficult to grasp. What is the distinction between a trial judge's understanding of the claims and a trial judge's interpretation of the claims to the jury? Don't judges instruct the jury in accordance with their 2

The following is an incomplete list of procedural deviations required by Markman I: 1. Multiple trials, problem I: If hearings are necessary to interpret complex claims, the trial court must set aside time in its crowded docket for one proceeding to interpret claims and a second (potentially with a jury) to determine infringement and other issues. 2. Claim interpretation, problem I: Fearing that it may not receive the opportunity to supplement expert reports or reopen discovery after the judge's interpretation, a party often argues alternative claim construction theories from the outset of litigation. This extends the time and expense of the claim interpretation proceedings. 3. Bias toward summary judgments: In practical terms, Markman I directs the proceedings toward summary judgment on the central issue of the litigation at a potentially premature stage of issue development. Prematurely addressing issues, even at the appellate level, can result in expensive repetition of effort. See CVI/Beta Ventures, Inc. v. Tura LP, 112 F.3d 1146, 1157-58, 1160 n.7, 42 USPQ2d 1577, 1585, 1587 n.7 (Fed. Cir. 1997) (finding error in a claim construction that had been affirmed in an earlier appeal), cert. denied, 118 S. Ct. 1039 (1998). 4. Claim interpretation, problem II: As soon as the trial court issues a claim interpretation, both sides often seek to shift their original claim interpretations to accommodate the judge's views. Thus, the parties seek to revise expert reports or reopen discovery to account for the judge's interpretation. This maneuvering leads to procedural battles over surprise and motions for additional time to prepare for trial. See Loral Fairchild Corp. v. Victor Co., 906 F. Supp. 798 (E.D.N.Y. 1995) (interpreting claims); Loral Fairchild Corp. v. Victor Co., 911 F. Supp 76, 80-81 (E.D.N.Y. 1996) (preventing plaintiff from changing theory of infringement in response to claim interpretation). 5. The new evidence dilemma: As a result of the new and perhaps somewhat unexpected interpretation, the parties scramble to create and acquire new evidence for their infringement arguments. 6. The learning curve problem: Like all human endeavors, claim interpretation is a learning process. The trial judge makes every effort to state the precise scope of the claims at the close of the initial proceeding, but often, with the additional learning during the infringement trial, realizes that the initial interpretation was too broad or too narrow in some respects. The judge then faces the dilemma of changing the rules in the middle of the game. 7. The judge as a trial issue: With the judge's claim interpretation central to the issues of infringement, trial counsel will try to exploit the judge's stature with the jury to show that the court is on their side. 8. Multiple trials, problem II: In the words of United States District Court Judge Roderick McKelvie: "[I]n spite of a trial judge's ruling on the meaning of disputed words in a claim, should a three-judge panel of the Federal Circuit disagree, the entire case could be remanded for retrial on [a] different [claim interpretation]." Elf Atochem North Am., Inc. v. Libbey-Owens-Ford Co., 894 F. Supp. 844, 857, 37 USPQ2d 1065, 1075 (D. Del. 1995). Trial judges can often address each of the above with careful case management, but at the cost of expending scarce trial court resources.

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understanding of the claims? In practice, how does this court's lofty appellate logic work? As this court acknowledges, a trial court must often resort to experts to learn complex new technologies. . . . What happens when that learning influences a trial judge's interpretation of the claim terms? Are trial judges supposed to disguise the real reasons for their interpretation? How will this perverse incentive to "hide the ball" improve appellate review? **** District courts have already expressed their frustration with the strictures of Markman I: When two experts testify differently as to the meaning of a technical term, and the court embraces the view of one, the other, or neither while construing a patent claim as a matter of law, the court has engaged in weighing evidence and making credibility determinations . . . . But when the Federal Circuit Court of Appeals states that the trial court does not do something that the trial court does and must do to perform the judicial function, the court knowingly enters a land of sophistry and fiction.

Lucas Aerospace, Ltd. v. Unison Indus., LP, 890 F. Supp. 329, 333-34 n.7, 36 USPQ2d 1235, 1239 n.7 (D. Del. 1995); see also Elf Atochem North Am., Inc. v. Libbey-Owens-Ford Co., 894 F. Supp. 844, 857, 37 USPQ2d 1065, 1075 (D. Del. 1995); In re Mahurkar Double Lumen Hemodialysis Catheter Patent Litigation, 831 F. Supp. 1354, 1359, 28 USPQ2d 1801, 1805 (N.D. Ill. 1993) ("[J]udges should not pretend that all nominally 'legal' issues may be resolved without reference to facts. . . . What seems clear to a judge may read otherwise to [one skilled in the art]."). II. From the patent practitioner's standpoint, this court's enthusiastic assertion of its unfettered review authority has the potential to undercut the benefits of Markman I. Markman I potentially promised to supply early certainty about the meaning of a patent claim. This certainty, in turn, would prompt early settlement of many, if not most, patent suits. Once the parties know the meaning of the claims, they can predict with some reliability the likelihood of a favorable judgment, factor in the economics of the infringement, and arrive at a settlement to save the costs of litigation. Markman I promised to provide this benefit early in the trial court process. To provide fairness under the Markman I regime, trial judges would provide claim interpretations before the expense of trial. Patent practitioners would then be armed with knowledge of the probable outcome of the litigation and could facilitate settlement. The problem with this plan was in its implementation because as a question of law, claim interpretation is subject to free review by the appellate court. The Federal Circuit, according to its own official 1997 statistics, reversed in whole or in part 53% of the cases from district courts (27% fully reversed; 26% reversed-in-part). Granted this figure deals with all issues in cases with many issues. Nonetheless, one study shows that the plenary standard of review has produced reversal, in whole or in part, of almost 40% of all claim constructions since Markman I. A reversal rate in this range reverses more than the work of numerous trial courts; it also reverses the benefits of Markman I. In fact, this reversal rate, hovering near 50%, is the worst possible. Even a rate that was much higher would provide greater certainty. Instead, the current Markman I regime means that the trial court's early claim interpretation provides no early certainty at all, but only opens the bidding. The meaning of a claim is not certain (and the parties are not prepared to settle) until nearly the last step in the process—decision by the Court of Appeals for the Federal Circuit. To get a certain claim interpretation, parties must go past the district court's Markman I proceeding, past the entirety of discovery, past the entire trial on the merits, past post trial motions, past briefing and argument to the Federal Circuit—indeed past every step in the entire course of federal litigation, except Supreme Court review. In implementation, a de novo review of claim interpretations has postponed the point of certainty to the end of the litigation process, at which point, of course, every outcome is certain anyway. In practical terms, this implementation record has other perverse effects. Trial attorneys must devote much of their trial strategy to positioning themselves for the "endgame"—claim construction on appeal. Chapter 7 – Claim Construction

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As the focus shifts from litigating for the correct claim construction to preserving ways to compel reversal on appeal, the uncertainty, cost, and duration of patent litigation only increase. Thus, the en banc court's de novo regime belies the purpose and promise of Markman I. **** PAULINE NEWMAN, Circuit Judge, with whom Chief Judge MAYER joins; additional views. As this case illustrates, perfection is elusive in the aftermath of the Federal Circuit's decision in [Markman I]. . . . The expectation of greater stability in the application of patent law—thus enhancing consistency in result, reducing the cost of litigation, and indeed reducing litigation by diminishing the uncertainties of jury trials—has not been well achieved. **** By continuing the fiction that there are no facts to be found in claim interpretation, we confound rather than ease the litigation process. Without doubt, factual disputes arise and must be resolved in order to interpret the claims. Such facts are normally resolved at trial—yet we now deny ourselves the opportunity even to consider the findings of the trial court. . . . The court today not only rejects the opportunity to give normal appellate deference to the proceedings and findings of trial, but also rejects the opportunity to consider them at all. In Markman the en banc court took the position that in patent cases, unlike any other area of law, a disputed question of the meaning, scope, and usage of terms of technologic art is not a question of fact, or even of law based on underlying fact, but is pure law. However, the Supreme Court has relieved us of adherence to this fiction, by its recognition of the factual component of claim interpretation. Further, the Court's affirmation that claim interpretation "is exclusively within the province of the court," 517 U.S. at 371-73, 38 USPQ2d at 1463, did not shut out the trial judge along with the jury. In declining to affirm the Federal Circuit's fact/law theory, the Court opened the door for retreat from this artificial construct. I urge us to do so, for experience shows that unforeseen and undesired consequences are flowing from its rigidity. Now that this fact/law rigor is no longer necessary for constitutional combat, let us review these consequences and accept this invitation to advance our procedures. **** A fresh view of fact and law would also ameliorate the constraints we have placed on the presentation of extrinsic evidence on the issue of claim interpretation. Patent litigation now often starts with a preliminary hearing to interpret the disputed claim terms, and often produces an early summary judgment, a path perhaps fostered by our foreclosure of the certified question. This preliminary ruling can be dispositive of the dispute, for the scope of the claim often decides whether there can be literal infringement. Thus I add to my concerns the position of the Federal Circuit, here reaffirmed, that extrinsic evidence is of strictly limited availability in claim interpretation. Such evidence should be encouraged, not restrained, if summary deposition is at hand. **** [A] return to the traditional trial/appellate relationship would achieve several important results. It would rationalize the admissibility of relevant extrinsic evidence, appellate deference would be restored instead of disavowed, and appellate review would be in accordance with the rules. The processes of both trial and appeal would benefit. This is particularly important because the evidence involved in claim interpretation, whether intrinsic or extrinsic, is often scientific or technologic. The evidence of what the invention is, how it works, what the technical words meant to persons in the field at some past time, can be of extreme complexity. When there is a dispute as to what a term of technical art or usage means or encompasses, such evidence is relevant and often is indispensable. Why would our court foreclose, or place obstacles in the path of, adducing and considering such evidence? Surely the better view is to encourage judicial access to scientific evidence and findings based thereon. The ultimate beneficiary would be the parties, for the courts would be less restricted in the search for Chapter 7 – Claim Construction

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the correct and just result in patent cases. Thus I must, respectfully, dissent from the court's rulings on these issues.

Questions, Comments, Problems 1. When is a Fact Not a Fact? – You can see that there is still disagreement within the Federal Circuit about the scope of appellate review two years after the Supreme Court’s Markman decision. Perhaps Judge Bryson’s concurring opinion in Cybor reflects what most of the Federal Circuit judges really feel. The fact that an appellate court has the power to exercise de novo review in the strictest sense does not mean that it always will. 2.

In Bischoff, the Court noted: "the specifications . . . profess to describe mechanisms and complicated machinery, chemical compositions and other manufactured products, which have their existence in pais, outside of the documents themselves; and which are commonly described by terms of the art or mystery to which they respectively belong; and these descriptions and terms of art often require peculiar knowledge and education to understand them aright . . . . Indeed, the whole subject-matter of a patent is an embodied conception outside of the patent itself . . . . This outward embodiment of the terms contained in the patent is the thing invented, and is to be properly sought, like the explanation of all latent ambiguities arising from the description of external things, by evidence in pais."

76 U.S. at 815. Pointing to this quote, the Markman Court distinguished Bischoff as a case that “drew the line between issues of document interpretation and product identification, and held that expert testimony was properly presented to the jury in the latter, ultimate issue, whether the physical objects produced by the patent were identical.” The Markman Court recognized that it was drawing a fine distinction in distinguishing Bischoff. Is the distinction too fine? 3. In his dissent in Cybor, Judge Rader criticizes the majority for increasing the uncertainty in patent litigation by pushing the claim construction to the appellate level—very late in the litigation process. Does this analysis focus too narrowly on a single litigation, and ignore the certainty that a single, court-provided claim construction provides for later disputes over a patent? On the other hand, might a high percentage of the patents produce only a single dispute (i.e., a single potential infringer), so that down-the-road certainty is of little benefit?

The Process of Claim Construction With the splintering in the Federal Circuit you have just seen over who is to construe claims and what is to be considered, you can only imagine the problems encountered when it comes time to actually construe a claim. Thayer, in A PRELIMINARY TREATISE ON EVIDENCE (1898), expressed an ideal not present in the patent law: [a] lawyer’s Paradise, where all words have a fixed, precisely ascertained meaning; where men may express their purposes, not only with accurracy, but with fullness; and where, if the writer has been careful, a lawyer, having a document referred to him, may sit in his chair, inspect the text, and answer all questions without raising his eyes.

This land is even more fantastical when populated with patents, for a patent attempts to combine the particular challenges of a specialized field of technology with the separate challenges of a particularized field of law. The Supreme Court recognized the difficulty of patent drafting over a century ago when it observed: The specification and claims of a patent, particularly if the invention be at all complicated, constitute one of the most difficult legal instruments to draw with accuracy. . . .

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Topliff v. Topliff, 145 U.S. 156, 171 (1892). The following recent opinions of the Federal Circuit demonstrate that court’s post-Markman efforts to bring order to the claim construction process.

Vitronics v. Conceptronics 90 F.3d 1576, 39 USPQ2d 1573 (Fed. Cir. 1996) Before MICHEL and LOURIE, Circuit Judges, and FRIEDMAN, Senior Circuit Judge. MICHEL, Circuit Judge. Vitronics and Conceptronic both manufacture ovens used in the production of printed circuit boards. The ovens are used to solder electrical devices (such as resistors, capacitors and integrated circuits) to the boards. Several methods of soldering devices to boards have been developed; the '502 patent, assigned to Vitronics, is directed to one of those methods. Specifically, the '502 patent is directed to a method for the reflow soldering of surface mounted devices to a printed circuit board in which the circuit board is moved by a conveyor through a multizone oven. Prior to trial, the parties stipulated that every limitation of claim 1 of the '502 patent was met by the HVC series of ovens, except the limitation requiring the utilization of "nonfocused infrared panel emitters" and the limitation that the temperature of the devices must be maintained below the "solder reflow temperature." Vitronics contended that, as used in the claim, solder reflow temperature means peak reflow temperature, i.e., a temperature approximately 20°C above the liquidus temperature, at which the solder is completely melted and moves freely. Conceptronic, on the other hand, contended that solder reflow temperature means 183°C, i.e., the liquidus temperature of a particular type of solder known as 63/37 (Sn/Pb) solder. The district court delayed construing the disputed language until the close of testimony, at which time it ruled in favor of Conceptronic and concluded that the term "solder reflow temperature" as used in claim 1 refers to 183°C. Vitronics then conceded that the court was required to grant judgment as a matter of law in favor of Conceptronic, as Vitronics had not presented any evidence of infringement under the court's interpretation of solder reflow temperature. This appeal followed. Claim Construction Aids Before the District Court The Patent Specification Vitronics relied heavily upon the patent itself to support its asserted claim construction. Although Vitronics conceded that the term "solder reflow temperature" may be ambiguous when considered in isolation, it argued that the specification clearly shows that, as used in the claim, solder reflow temperature means peak reflow temperature rather than the liquidus temperature. In particular, Vitronics pointed to that part of the specification that describes a preferred embodiment: A preferred embodiment of the invention for reflow soldering of surface mounted devices to printed circuit boards will now be described. The printed circuit boards are typically made of epoxy-glass, such as fire retardant 4(FR-4), or polyamide glass. These boards typically degrade above temperatures of 225°C. The solder may be, for example, 60/40 (Sn/Pb), 63/37 (Sn/Pb), or 62/36/2 (Sn/Pb/Ag), all of which have a liquidus temperature (i.e. begin to melt) of about 190°C and a peak reflow temperature of about 210-218°C. Thus, to effect reflow soldering without damaging the board, the solder must be allowed to reach a temperature of at least 210°C, but the board cannot reach a temperature of 225°C.

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The board is then sent into a fifth zone 5 to bring the temperature of the board up to a temperature of approximately 210°C, the devices up to approximately 195°C, and the solder up to approximately 210°C for a period of time of from about 10 to about 20 seconds to cause the solder to flow. Because the devices are cooler than the board, the solder flows up the devices. . . . The board spends approximately 60 seconds in the fifth zone, but only about 10 to 20 seconds at 210°C. Thus, the board is at the solder reflow temperature for only a short period of time and the devices never reach the solder reflow temperature.

Vitronics pointed out that, in the example described as the preferred embodiment, the temperature of the solder is raised to 210°C, the peak reflow temperature, and the temperature of the devices is raised to 195°C, 5° above the 190°C liquidus temperature. Thus, as argued by Vitronics, the term "solder reflow temperature" must be construed so that it refers to the peak reflow temperature because the claim requires that the temperature of the devices be maintained below "said solder reflow temperature"; if solder reflow temperature were construed to refer to liquidus temperature, the preferred embodiment would not be covered by the patent claims. Expert Testimony Conceptronic relied heavily on the expert testimony of Dr. Rothe. Dr. Rothe testified that the meaning of the term "solder reflow temperature" in claim 1 is synonymous with liquidus temperature. Dr. Rothe further testified that the solder reflow temperature for 63/37 (Sn/Pb) is 183°C. Dr. Rothe likewise testified at trial that several technical articles written by those skilled in the art supported his view that solder reflow temperature refers to liquidus temperature. The Testimony of Mr. Hall Conceptronic also relied on the testimony of Mr. Hall, the Chief Engineer at Vitronics. At trial, Mr. Hall confirmed that during his deposition he had testified that the reflow temperature of solder was 183°C. Mr. Hall also testified that, during his deposition, he had used solder reflow temperature to refer to liquidus temperature. However, at another point in his trial testimony, Hall explained that, while in his earlier deposition testimony he had used solder reflow temperature to refer to liquidus temperature, he did not suggest that was how the term was used in the patent. Rather, Hall testified the patent uses the term to refer to the peak reflow temperature. Paper Written By Former Vitronics Employee Conceptronic also introduced into evidence a paper written by Phillip Zarrow, a former employee of Vitronics, defining solder reflow temperature in the following manner: "As the temperature of the solder paste on the interconnect passes the solder alloy's melting point and the solder enters a molten state, the assembly enters the reflow region of the process. For 63 Sn/37 Pb, a eutectic solder and the most common SMT alloy, reflow occurs at 183°C." Phillip Zarrow, Convection/Infrared and Convection Dominant Reflow Soldering of Fine Pitch SMT Devices, § 10.3.3 (1994). However, that same paper later describes the solder reflow process as taking the temperature of the solder above liquidus: "Most solder manufacturers recommend bringing the interconnection temperature approximately 15 to 25°C above the alloy melting point to achieve full liquidus and assure good solder flow and aid fillet formation." Id. Memorandum of Plaintiff Vitronics Corporation in Opposition to Motion for Summary Judgment of Defendant Conceptronic Corporation and In Support of Plaintiff's Cross- Motion for Summary Judgment of Patent Validity and Infringement In its brief supporting its proposed construction of claim 1, both at the trial court level and here on appeal, Conceptronic similarly relied on a memorandum written by Vitronics which contains the following language: "Tin/lead solders commonly used by the electronic products industry have a Chapter 7 – Claim Construction

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“liquidus” or “reflow” temperature in the order of 183°C, or about 361°F." However, this phrase is in the background section of the memorandum and later in the same memorandum, Vitronics discussed the issue of infringement as being whether the temperature of the devices was maintained below "the temperatures of the leads at which the solder is reflowing." Without indicating which evidence it relied upon, the district court simply ruled that solder reflow temperature meant 183°C. The Use of Intrinsic and Extrinsic Evidence in Claim Construction A literal patent infringement analysis involves two steps: the proper construction of the asserted claim and a determination as to whether the accused method or product infringes the asserted claim as properly construed. . . . The first step, claim construction, is a matter of law, which we review de novo. Claim construction is the only step in the infringement analysis at issue in this appeal. In determining the proper construction of a claim, the court has numerous sources that it may properly utilize for guidance. These sources have been detailed in our previous opinions, as discussed below, and include both intrinsic evidence (e.g., the patent specification and file history) and extrinsic evidence (e.g., expert testimony). It is well-settled that, in interpreting an asserted claim, the court should look first to the intrinsic evidence of record, i.e., the patent itself, including the claims, the specification and, if in evidence, the prosecution history. Such intrinsic evidence is the most significant source of the legally operative meaning of disputed claim language. First, we look to the words of the claims themselves, both asserted and nonasserted, to define the scope of the patented invention. Although words in a claim are generally given their ordinary and customary meaning, a patentee may choose to be his own lexicographer and use terms in a manner other than their ordinary meaning, as long as the special definition of the term is clearly stated in the patent specification or file history. Thus, second, it is always necessary to review the specification to determine whether the inventor has used any terms in a manner inconsistent with their ordinary meaning. The specification acts as a dictionary when it expressly defines terms used in the claims or when it defines terms by implication. As we have repeatedly stated, "[c]laims must be read in view of the specification, of which they are a part." Markman. The specification contains a written description of the invention which must be clear and complete enough to enable those of ordinary skill in the art to make and use it. Thus, the specification is always highly relevant to the claim construction analysis. Usually, it is dispositive; it is the single best guide to the meaning of a disputed term. Third, the court may also consider the prosecution history of the patent, if in evidence. This history contains the complete record of all the proceedings before the Patent and Trademark Office, including any express representations made by the applicant regarding the scope of the claims. As such, the record before the Patent and Trademark Office is often of critical significance in determining the meaning of the claims. Southwall Tech., Inc. v. Cardinal IG Co., 54 F.3d 1570, 1576, 34 USPQ2d 1673, 1676 (Fed. Cir. 1995) ("The prosecution history limits the interpretation of claim terms so as to exclude any interpretation that was disclaimed during prosecution.") (citations omitted). Included within an analysis of the file history may be an examination of the prior art cited therein. Autogiro Co. of America v. United States, 384 F.2d 391, 399, 155 USPQ 697, 704 (Ct. Cl. 1967) ("In its broader use as source material, the prior art cited in the file wrapper gives clues as to what the claims do not cover."). In most situations, an analysis of the intrinsic evidence alone will resolve any ambiguity in a disputed claim term. In such circumstances, it is improper to rely on extrinsic evidence. In those cases where the public record unambiguously describes the scope of the patented invention, reliance on any Chapter 7 – Claim Construction

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extrinsic evidence is improper. The claims, specification, and file history, rather than extrinsic evidence, constitute the public record of the patentee's claim, a record on which the public is entitled to rely. In other words, competitors are entitled to review the public record, apply the established rules of claim construction, ascertain the scope of the patentee's claimed invention and, thus, design around the claimed invention. Allowing the public record to be altered or changed by extrinsic evidence introduced at trial, such as expert testimony, would make this right meaningless. See Southwall, 54 F.3d at 1578, 34 USPQ2d at 1678 ("A patentee may not proffer an interpretation for the purposes of litigation that would alter the indisputable public record consisting of the claims, the specification and the prosecution history, and treat the claims as a “nose of wax”). The same holds true whether it is the patentee or the alleged infringer who seeks to alter the scope of the claims. The Proper Construction of the Claim Term "Solder Reflow Temperature" As can be readily seen from those portions of the specification set forth above, the meaning of the disputed term "solder reflow temperature" in claim 1 of the '502 patent is clear from a reading of the claim itself and the patent specification. The "peak reflow temperature" and "liquidus temperature" are clearly defined in the specification as having distinctly different meanings. Specifically, for the solders described in the specification, liquidus temperature is about 190°C and the peak reflow temperature is about 210 to 218°C. Moreover, in the preferred embodiment described in the patent, the solder is heated to a temperature of 210°C but the temperature of the devices is maintained at approximately 195°C, i.e., below the peak reflow temperature (210°C) but above the liquidus temperature (190°C). Therefore, in order to be consistent with the specification and preferred embodiment described therein, claim 1 must be construed such that the term "solder reflow temperature" means the peak reflow temperature, rather than the liquidus temperature. Indeed, if "solder reflow temperature" were defined to mean liquidus temperature, a preferred (and indeed only) embodiment in the specification would not fall within the scope of the patent claim. Such an interpretation is rarely, if ever, correct and would require highly persuasive evidentiary support, which is wholly absent in this case. The District Court's Reliance on Extrinsic Evidence Since the claim, read in light of the patent specification, clearly uses the term "solder reflow temperature" to mean the peak reflow temperature, rather than the liquidus temperature, that should have been the end of the trial court's analysis. Only if there were still some genuine ambiguity in the claims, after consideration of all available intrinsic evidence, should the trial court have resorted to extrinsic evidence, such as expert testimony, in order to construe claim 1. Moreover, even if the judge permissibly decided to hear all the possible evidence before construing the claim, the expert testimony, which was inconsistent with the specification and file history, should have been accorded no weight. . . . . Here, the trial judge considered not only the specification, but also expert testimony and other extrinsic evidence, such as the paper written by the former Vitronics employee. No doubt there will be instances in which intrinsic evidence is insufficient to enable the court to determine the meaning of the asserted claims, and in those instances, extrinsic evidence, such as that relied on by the district court, may also properly be relied on to understand the technology and to construe the claims. Extrinsic evidence is that evidence which is external to the patent and file history, such as expert testimony, inventor testimony, dictionaries, and technical treatises and articles.6 However, as we have recently reemphasized, extrinsic evidence in general, and expert testimony in particular, may be used only to help the court come to the proper understanding of the claims; it may not be used to vary or contradict the claim language. Nor may it contradict the import of other parts of the specification. Indeed, where the patent documents are unambiguous, expert testimony regarding the meaning of a claim is entitled to no weight. Any other rule would be unfair to competitors who must be able to rely on the patent 6

Although technical treatises and dictionaries fall within the category of extrinsic evidence, as theyk do not form a part of an integrated patent document, they are worthy of special note. Judges are free to consult such resources at any time in order to better understand the underlying technology and may also rely on dictionary definitions when construing claim terms, so long as the dictionary definition does not contradict any definition found in or ascertained by a reading of the patent documents.

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documents themselves, without consideration of expert opinion that then does not even exist, in ascertaining the scope of a patentee's right to exclude. Such testimony cannot guide the court to a proper interpretation when the patent documents themselves do so clearly. In addition, a court in its discretion may admit and rely on prior art proffered by one of the parties, whether or not cited in the specification or the file history. This prior art can often help to demonstrate how a disputed term is used by those skilled in the art. Such art may make it unnecessary to rely on expert testimony and may save much trial time. As compared to expert testimony, which often only indicates what a particular expert believes a term means, prior art references may also be more indicative of what all those skilled in the art generally believe a certain term means. Once again, however, reliance on such evidence is unnecessary, and indeed improper, when the disputed terms can be understood from a careful reading of the public record. Nor may it be used to vary claim terms from how they are defined, even implicitly, in the specification or file history.

Johnson Worldwide v. Zebco 175 F.3d 985 (Fed. Cir. 1999) Before MAYER, Chief Judge, CLEVENGER, and GAJARSA, Circuit Judges. CLEVENGER, Circuit Judge. I Johnson is the holder of the '835 patent, which is generally directed to a steering control apparatus for small outboard motors, such as electric trolling motors. Trolling motors are an alternate propulsion source for small watercraft, generally intended for use while actively fishing--when the noise, vibration, and speed caused by larger or more powerful motors would diminish the chances of enticing fish to the proffered bait. A In broad terms, the invention of the '835 patent is a form of autopilot, described in the patent as a "heading lock," enabling directional control over the watercraft to be maintained without constant manipulation of trolling motor controls. The preferred embodiment of the '835 patent, as set forth in the written description and figures, employs a compass mounted to the head of the "heading lock" unit, which monitors the direction of the thrust motor, specifically noting that the direction of the thrust motor is considered to be the same as the direction of the boat, as the trolling motor is mounted on the bow of the boat. See '835 patent, col. 4, lines 48-51. Claim 1 of the '835 patent, the only independent claim alleged to be infringed, provides as follows: 1.

A heading lock coupled to a trolling motor producing a thrust disposed to pull a watercraft, said heading lock comprising: a steering motor coupled to said trolling motor, said steering motor being disposed to affect the orientation of said trolling motor in response to input signals; a steering circuit electrically coupled to said steering motor, said steering circuit [being] disposed to generate said input signals to said steering motor in response to heading signals; and a heading detector electrically coupled to said steering circuit, said heading detector being disposed to transmit said heading signals to said steering circuit.

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Zebco sells a product under the trade name "AutoGuide" that maintains directional control of a trolling motor by use of a magnetometer located in a foot pedal. The foot pedal also contains the user controls. A microprocessor in the foot pedal sends steering signals to the steering motor through wires connecting the foot pedal to the trolling motor unit. The location of the magnetometer (in the foot pedal) is thus distinct from the location of the compass (fixed to the trolling motor head) depicted in the preferred embodiment of the '835 patent. Whether this fact is sufficient for Zebco to escape infringement of the '835 patent is the subject of this appeal. II As we alluded to above, the crux of Zebco's argument is that the '835 patent covers only those trolling motor-autopilot systems that include a compass or other directional indicator physically attached to the trolling motor. . . . While Zebco recognizes that claim 1, the broadest claim at issue, does not explicitly require that the "heading detector" be mechanically coupled to the trolling motor, it nonetheless suggests [**8] that a proper interpretation of the terms "heading signal" and "coupled" in the language of claim 1 compels such a limited claim scope. In doing so, Zebco points out that Figure 1 of the '835 patent, and at least some of the language in the written description, suggest that the preferred embodiment of the invention includes a compass mechanically attached to the trolling motor. This case, then, presents the question of when it is permissible to narrow the scope of broad claim language by reference to embodiments described and depicted in the balance of the specification.

A We begin, as with all claim interpretation analyses, with the language of the claims. . . . The general rule is, of course, that terms in the claim are to be given their ordinary and accustomed meaning. . . . General descriptive terms will ordinarily be given their full meaning; modifiers will not be added to broad terms standing alone. See, e.g., Virginia Panel Corp. v. MAC Panel Co., 133 F.3d 860, 865-66, 45 U.S.P.Q.2D (BNA) 1225, 1229 (Fed. Cir. 1997) (unmodified term "reciprocating" not limited to linear reciprocation); Bell Communications, 55 F.3d at 621-22, 34 U.S.P.Q.2D (BNA) at 1821 (unmodified term "associating" not limited to explicit association); Specialty Composites v. Cabot Corp., 845 F.2d 981, 987, 6 U.S.P.Q.2D (BNA) 1601, 1606 (Fed. Cir. 1988) (unmodified term "plasticizer" given full range of ordinary and accustomed meaning). In short, a court must presume that the terms in the claim mean what they say, and, unless otherwise compelled, give full effect to the ordinary and accustomed meaning of claim terms. . . .

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In order to overcome this heavy presumption in favor of the ordinary meaning of claim language, it is clear that "a party wishing to use statements in the written description to confine or otherwise affect a patent's scope must, at the very least, point to a term or terms in the claim with which to draw in those statements." Renishaw, 158 F.3d at 1248, 48 U.S.P.Q.2D (BNA) at 1121. That is, claim terms cannot be narrowed by reference to the written description or prosecution history unless the language of the claims invites reference to those sources. See, e.g., McCarty v. Lehigh Valley R.R., 160 U.S. 110, 116, 40 L. Ed. 358, 16 S. Ct. 240 (1895) ("If we once begin to include elements not mentioned in the claim in order to limit such claim . . ., we should never know where to stop."); Renishaw, 158 F.3d at 1249, 48 U.S.P.Q.2D (BNA) at 1121. In other words, there must be a textual reference in the actual language of the claim with which to associate a proffered claim construction. Our case law demonstrates two situations where a sufficient reason exists to require the entry of a definition of a claim term other than its ordinary and accustomed meaning. The first arises if the patentee has chosen to be his or her own lexicographer by clearly setting forth an explicit definition for a claim term. . . . . The second is where the term or terms chosen by the patentee so deprive the claim of clarity that there is no means by which the scope of the claim may be ascertained from the language used. . . . . In these two circumstances, a term or terms used in the claim invites--or indeed, requires-reference to intrinsic, or in some cases, extrinsic, evidence, see Vitronics (reference to extrinsic evidence is proper when intrinsic evidence cannot resolve ambiguity in claim language), to determine the scope of the claim language. B Here, Zebco's primary claim interpretation argument is that the term "heading" in the phrase "heading signal" refers only to the direction of the trolling motor, thus requiring that the heading detector, "being disposed to transmit said heading signals," must be affixed to the trolling motor. Zebco, of course, recognizes that the ordinary and accustomed meaning of "heading" connotes only direction, rather than being limited to the direction of the trolling motor. Thus Zebco argues, as it must, for a more limited scope of "heading," to overcome the presumption in favor of the ordinary--and, in this case, broader-meaning. Because Zebco does not suggest that the phrase "heading signal" lacks clarity as it is used in the claim, in order to establish a reason to import a narrow definition of the term, it must instead argue that the term "heading" has been given a particular meaning by the patentee. To this end, Zebco argues that language throughout the written description and prosecution history of the '835 patent demonstrates that "heading" in the context of the '835 patent is limited to the direction of the trolling motor. We find this unpersuasive, as did the district court. First, the written description does not describe "with reasonable clarity, deliberateness, and precision" the definition of "heading" proposed by Zebco. . . . . Indeed, the many uses of the term throughout the '835 patent are consistent with a broader definition, one encompassing the directions of both the boat and the trolling motor unit. Compare, e.g., '835 patent, col. 3, lines 58-62 ("The electronic steering system of the present invention continues to monitor the current heading of the thrust motor" (emphasis added)) with '835 patent, col. 7, lines 37-39 ("Heading detector 204 continuously monitors the current heading of the boat" (emphasis added)). Varied use of a disputed term in the written description demonstrates the breadth of the term rather than providing a limited definition. . . . . That the term "heading" is used at various points in the written description to refer to both the direction of the trolling motor and the [**15] boat is simply not "a special and particular definition created by the patent applicant," Renishaw, and is thus an insufficient reason to limit the scope of the term. . . . .We therefore agree with the district court that the ordinary and accustomed meaning of "heading signal" controls. C Zebco's second interpretive argument is that the term "coupled" in the phrase "[a] heading lock coupled to a trolling motor" found in the preamble of claim 1 is limited to a mechanical or physical coupling. We Chapter 7 – Claim Construction

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are unpersuaded. Even assuming--as did the district court and Zebco--that the language of the preamble of claim 1 constitutes limitations on the claim rather than mere description, see Bell Communications, 55 F.3d at 620, 34 U.S.P.Q.2D (BNA) at 1820 (Fed. Cir. 1995) ("When the claim drafter chooses to use both the preamble and the body to define the subject matter of the claimed invention, the invention so defined, and not some other, is the one the patent protects."), Zebco cannot demonstrate that a limitation to the broad and general term "coupled" must be read into the claim. As with "heading signal," Zebco (a) recognizes that the unmodified term "coupled" generically describes a connection, and does not require a mechanical or physical coupling; and (b) does not suggest that "coupled," as used in the preamble, lacks clarity. Instead, Zebco points to passages of the written description implying the relationship between elements of the preferred embodiment, and argues [**19] that such language constitutes a special (and limited) definition of "coupled." For example, Zebco argues that the phrase "feedback means for providing a feedback signal to the control means, wherein the feedback signal is indicative of the direction of thrust," '825 patent, col. 2, lines 3234, defines "coupled" to mean "mechanically coupled." However, just as the preferred embodiment itself does not limit claim terms, mere inferences drawn from the description of an embodiment of the invention cannot serve to limit claim terms, as they are insufficient to require a narrower definition of a disputed term. . . .Because Zebco has not shown a sufficient reason to alter the clear meaning of the term "coupled," we agree with the district court that the term is not limited to a mechanical or physical coupling. AFFIRMED

Questions, Comments, Problems 1. The Vitronics opinion is currently the most-cited opinion on claim construction at the Federal Circuit, and respresents the general analytical process for construing claims. Everything you ever needed to know about an uncomplicated claim construction analysis is in Vitronics (of course, very seldom is a claim construction uncomplicated). In Vitronics, the patentee was arguing for a broader construction of the claims than was the accused infringer because the patentee was attempting to cover the accused infringer’s method with its claims. However, claim breadth cuts both ways: a patent applicant must keep its claims sufficiently narrow to avoid sweeping in the prior art, but sufficiently broad to encompass the accused devices or processes. Often, the applicant must do this before it is aware of all the relevant prior art and before the accused device even exists. The patent claim that achieves both these goals will make the patentee wealthy, but the claim that fails will set the accused infringer free. Luckily, a patent applicant receives more than one shot at drafting the perfect claim. An applicant may, and should, submit many claims of differing breadth, and the patentee may choose to sue on any of the claims in the patent. In his usual style, then-District Judge Hand discussed the practice of differentiating an invention from the prior art by drafting claims of varying breadth: There is nothing improper, so far as I can see, in first putting your claims as broadly as in good faith you can, and then, ex abundanti cautela, following them successively with narrower claims designed to protect you against possible anticipations of which you are not yet aware. Indeed, the very case upon which the defendant relies (Matheson v. Campbell, 78 Fed. 910, 917, 24 C.C.A. 384) shows the necessity of claims as broad as one can honestly support. If any one of the specified differentia of the claim is missing, the defendant's product does not infringe; if any anticipation includes all the differentia, the claim is bad. To pass between this Scylla and the Charybdis, I think a patentee may fairly be entitled to bend sails upon many yards. The question as to whether or not he is acting colorably is not answerable on general principles. He may, of course, attempt to monopolize more than was fairly his due, but in this case I have already said that I do not think he did so, especially as he was the first person who had ever isolated a nonsalt substance relatively pure. Parke-Davis & Co. v. H.K. Mulford Co., 189 F. 95 (C.C.S.D.N.Y. 1911)

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2. Extrinsic Evidence – The Vitronics intrinsic/extrinsic approach puts limits on what evidence the district court may consider. However, does that mean that the district court may not even hear extrinsic evidence if the claim is unambiguous based on the intrinsic evidence, or just that the court may not rely on it in construing the claim? Judge Rader, who dissented from the majority pronouncements in Cybor, supra, would give the district court latitude with respect to hearing extrinsic evidence, as seen by his majority opinion in a pre-Cybor case, Eastman Kodak Co. v. Goodyear Tire & Rubber Co., 114 F.3d 1547, 1555, 42 USPQ2d 1737 (Fed. Cir. 1997): Accordingly, the district court properly consulted extrinsic evidence relevant to claim meaning. As a general rule, the construing court interprets words in a claim as one of skill in the art at the time of invention would understand them. See Intellicall, Inc. v. Phonometrics, Inc., 952 F.2d 1384, 1387, 21 USPQ2d 1383, 1386 (Fed. Cir. 1992). Therefore, the testimony of one skilled in the art about the meaning of claim terms at the time of the invention will almost always qualify as relevant evidence. Fed. R. Evid. 401; Markman, 52 F.3d at 981 (In "pronouncing the meaning of claim language as a matter of law based on the patent documents themselves. . . the court is looking to the extrinsic evidence [i.e., testimony of one skilled in the art] to assist in its construction of the written document, a task it is required to perform."). If, of course, the meaning of the claims is clear from their language in view of the context provided by the specification and the prosecution history, the trial court should limit its consideration of extrinsic evidence. See Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1583, 39 USPQ2d 1573, 1577 (Fed. Cir. 1996). Extrinsic evidence—whether providing context for the claims or explaining claim meaning to one of skill in the art—cannot contradict claim language. Id. The trial court is best situated to gauge the relevance and need for additional evidence to explicate claim terms. See International Communication Materials, Inc. v. Ricoh Co., 108 F.3d 316, 318-19, 41 USPQ2d 1957, 1958 (Fed. Cir. 1997) (allowing the trial judge “to complete the picture” by developing a “more complete record”). Judge Lourie dissented-in-part, reasoning that “[t]he claim is clear on its face, when read in light of the specification,” and concluding that the majority used the expert testimony to contradict the clear meaning of the claim. A district court may end-run the limitation in Vitronics and Cybor on extrinsic evidence when such evidence would not be needed to construe the claims by stating that the court is considering the evidence only to better understand the technology involved in a suit. Thus, in Mantech Environmental Corp. v. Hudson Environmental Services., Inc., 47 USPQ2d 1732, 152 F.3d 1368 (Fed. Cir. 1998), an opinion authored, like Vitronics, by Circuit Judge Michel, the court stated: In this case, the district court was legally correct both in admitting and accepting the testimony of the parties’ expert witnesses “for the purpose of background in the technical area at issue” . . . and then basing its claim construction solely upon the intrinsic evidence. Id. at 1372-73. 3. The Role of Dictionaries – Did Vitronics go too far in admonishing the District Court for receiving “extrinsic” evidence? Unless every claim term is specifically defined in the written description, won’t the court be relying on “extrinsic” evidence (e.g., common knowledge) to determine the meaning of undefined terms. For example, isn’t the meaning of a common term like the word “coupled” at issue in Johnson Worldwide extrinsic to the patent document? The Vitronics court appears to have been aware of this, by setting forth, in footnote 6, the rule that court may consult and rely upon dictionary definititions of terms (as long as they don’t conflict with a definition given in the patent document). But doesn’t this “rule” conflict with the thrust of Vitronics? What, then, do you think the court’s real concern was in Vitronics?

4. Canons of Claim Construction – Much like statutory construction, courts often look to various canons for assistance in construing patent claims. For instance, courts will apply the oridinary meaning of a word unless it appears that the applicant intended a different meaning. Courts will also interpret a claim term consistently throughout the claims of a patent if possible. In the broader context of statutory construction, Professor Llewellyn considered the application of canons of construction, and came to the conclusion that many canons are unhelpful because they often may be countered by oppositely pointing canons. Llewellyn thus compiled a number of thrusts and parries of canons of statutory construction, some of which are included below:

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Thrust

Parry

1

A statute may not go beyond its text.

To effect its purpose a statute may be implemented beyond its text.

8

Where design has been distinctly stated no place is left for construction.

Courts have the power to inquire into real—as ditinct from ostensible—purpose.

9

Definitions and rules of construction contained in an interpretation clause are part of the law and binding.

Definitions and rules of construction in a statute will not be extended beyond their necessary import nor allowed to defeat intention otherwise manifested.

11

Titles do not control meaning; preambles do not expand scope; section headings do not change language.

The title may be consulted as a guide when there is doubt or obscurity in the body; preambles may be consulted to determine rationale, and thus the true construction of terms; section headings may be looked upon as part of the statute itself.

12

If language is plain and unambiguous it must be given effect.

Not when literal interpretation would lead to absurd or mischievous consequences or thwart manifest purpose.

13

Words and phrases which have received judicial construction before enactment are to be understood according to that construction.

Not if the statute clearly requires them to have a different meaning.

15

Words are to be taken in their ordinary meaning unless they are technical terms or words of art.

Popular words may bear a technical meaning and technical words may have a popular signification and they should be so construed as to agree with evident intention or to make the statute operative.

16

Every word and clause must be given effect.

If inadvertantly inserted or if repugnant to the rest of the statute, they may be rejected as surplusage.

17

The same language used repeatedly in the same connection is presumed to bear the same meaning throughout the statute.

This presumption will be disregarded where it is necessary to assign different meanings to make the statute consistent.

20

Expression of one thing excludes another.

The language may fairly comprehend many different cases where some only are expressly mentioned by way of example.

21

General terms are to receive a general construction.

They may be limited by specific terms with which they are associated or by the scope and purpose of the statute.

Karl N. Llewellyn, Remarks on the Theory of Appellate Decision and the Rules of Canons About How Statutes are to be Construed, 3 Vand. L. Rev. 395, 401-06 (1950); see also William N. Eskridge, Jr. and Philip P. Frickey, Legislation: Statutes and the Creation of Public Policy 639-696 (1988). How do each of these canons apply in the patent context? There has been very little scholarship since Markman that has looked outside the patent arena for guidance on claim construction. Perhaps such an article, comparing patent construction in light of Markman to construction of other written instruments, would be well-received. 4. The Hardest “Easy” Issue in Patent Law – The two most commonly applied canons of claim construction are presented as a dual rule: one should construe claims in light of the written description, but one should never read a limitation into the claims from the written description. As stated, the rule appears to be straightforward, and is simply a recognition that, although the claim terms are paramount, they cannot be viewed in isolation. As noted in a famous remark by Oliver W. Holmes, Jr.: A word is not a crystal, transparent and unchanged, it is the skin of a living thought and may vary greatly in color and content according to the circumstances and the time in which it is used. Towne v. Eisner, 245 U.S. 418, 425 (1918). Thus, in the context of the peculiarities of patents and complex technologies, a rule simply stated is laboriously applied. It is typically difficult to determine in any given case when the written description is being used to sharpen the definition of a claim term or is instead being used improperly to limit that term. Johnson Worldwide reflects one attempt to bring structure to the application of

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these canons, by establishing a presumption in favor of the “ordinary” meaning of a claim term. Do you this is likely to be successful? Is it consistent with Vitronics? Another similar effort, undertaken prior to Johnson Worldwide (and, interestingly, by the author of that opinion – Judge Clevenger) can be seen in Renishaw plc v. Marposs Societa’ per Azioni, 158 F.3d 1243, 48 USPQ2d 1117 (Fed. Cir. 1998): Absent a special and particular definition created by the patent applicant, terms in a claim are to be given their ordinary and accustomed meaning. . . . Thus, when a claim term is expressed in general descriptive words, we will not ordinarily limit the term to a numerical range that may appear in the written description or in other claims. . . . Nor may we, in the broader situation, add a narrowing modifier before an otherwise general term that stands unmodified in a claim. . . . For example, if an apparatus claim recites a general structure (e.g., a noun) without limiting that structure to a specific subset of structures (e.g., with an adjective), we will generally construe the claim to cover all known types of that structure that are supported by the patent disclosure. . . . However, a common meaning, such as one expressed in a relevant dictionary, that flies in the face of the patent disclosure is undeserving of fealty. As one of our predecessor courts stated in Liebscher v. Boothroyd, 258 F.2d 948 (CCPA 1958): Indiscriminate reliance on definitions found in dictionaries can often produce absurd results. . . . One need not arbitrarily pick and choose from the various accepted definitions of a word to decide which meaning was intended as the word is used in a given claim. The subject matter, the context, etc., will more often than not lead to the correct conclusion. Id. at 951. . . . Thus, where there are several common meanings for a claim term, the patent disclosure serves to point away from the improper meanings and toward the proper meaning. Ultimately, the interpretation to be given a term can only be determined and confirmed with a full understanding of what the inventors actually invented and intended to envelop with the claim. . . . The construction that stays true to the claim language and most naturally aligns with the patent's description of the invention will be, in the end, the correct construction. . . . A claim construction is persuasive, not because it follows a certain rule, but because it defines terms in the context of the whole patent. Id. at 1248-49, 48 USPQ2d at 1120-21. In making its statement that logic, rather than rote adherence to canons, must guide claim construction, the Federal Circuit cited Llewellyn’s article, where he stated: Plainly, to make any canon take hold in a particular instance, the construction contended for must be sold, essentially, by means other than the use of canon: The good sense of the situation and a simple construction of the available language to achieve that sense, by tenable means, out of the statutory language. Llewellyn, supra, at 401. Judge Hand recognized this same problem three-quarters’ of a century ago in Dorsey v. Pilot Electric Co., 32 F.2d 211 (2d Cir. 1929), and there reached a similar conclusion: The critical question in claim 1 is the phrase “a bearing designed to hold the cover plate against movement away from the panel,” and in claim 3, the phrase “said knob also serves to exert a pressure which is transmitted to the cover plate for holding it in place.” It is not enough merely to read the language of the claims; they must be construed with the disclosure. While it is, of course, true that they should not be exactly confined to it, it is equally true that they do not extend beyond its functional significance. There is no high road between these two alternatives, and most patent litigation consists in picking one's way. As in any other written instrument, words are capable of many meanings; we must translate them into the underlying purpose of their user. We have here to ascertain, so far as we can, what Driggs meant, and confine his monopoly to that. With even the courts recognizing the imprecision, do you think the dual canons, which are central to almost every claim construction problem, are helpful? Or do they simply provide a cover for a claim construction that the court has already reached? Can you think of a better way to analyze the relationship between the claims and the written description? 5. Claim Differentiation – In the leading opinion on the subject of claim differentiation, written by thenChief Judge Markey for an in banc court, the Federal Circuit explained the doctrine: The district court thus read, via the specification, the “45°” limitation of narrower claim 2, and the ”vertical” limitation of narrower claim 3, into broader claim 1 and the other asserted claims. It is

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settled law that when a patent claim does not contain a certain limitation and another claim does, that limitation cannot be read into the former claim in determining either validity or infringement. [citations omitted] The reason for the rule is well illustrated here. Non-asserted claim 3 is specifically drawn to the structure of Figure 1. To interpret the asserted claims as though they were also drawn to that structure (or to its manner of operation) would be to render the asserted claims superfluous. In interpreting the asserted claims in light of the specification, the district court read limitations into them from other claims. That was error as a matter of law. SRI International v. Matsushita Elec. Corp., 775 F.2d 1107, 1122, 227 USPQ 577, 586-87 (Fed. Cir. 1985) (in banc). How rigid is this doctrine? Chief Judge Markey, in the same year SRI was decided, noted that the doctrine “enjoys an immutable and universally applicable status comparatively rare among rules of law.” D.M.I., Inc. v. Deere & Co., 755 F.2d 1570, 1574, 225 USPQ 236, 239 (Fed. Cir. 1985). Later panels of the Federal Circuit have not held the doctrine in such high regard and have found ways to sidestep it. In Tandon Corp. v. United States Int’l Trade Comm’n, 831 F.2d 1017, 1028, 4 USPQ2d 1283, 1292 (Fed. Cir. 1987), the court (per Judge Newman) commented that “the doctrine of claim differentiation does not allow unrestrained expansion of claims beyond the description of the invention in the specification, and explanations and representations made to the PTO in order to obtain allowance of the claims.” The court added that “two claims which read differently can cover the same subject matter.” Id. at 1023, 4 USPQ2d at 1288. In O.I. Corp. v. Tekmar Co., 115 F.3d 1576, 42 USPQ2d 1777 (Fed. Cir. 1997), the court held that “the [written] description provides a clear meaning for the language of the claim in this case and . . . it trumps the doctrine of claim differentiation.” The doctrine normally applies between claims linked by dependency, but has been applied as between two independent claims. See Grain Processing Corp. v. American Maize-Prods. Corp., 840 F.2d 902, 911, 5 USPQ2d 1788, 1795 (Fed. Cir. 1988). 6. Lexicography – It is well established that a patentee may be her own lexicographer. In other words, she may coin new words or new definitions for old words to describe her invention or parts of her invention. However, it the patentee wishes to be her own lexicographer, she must do so "with reasonable clarity, deliberateness, and precision." What level of clarity is reasonable clarity? How would you determine whether a definition was supplied deliberately? If a definition is supplied with reasonable clarity and deliberateness, but is hopelessly imprecise (even though there may already be a common, well-understood meaning for the relevant term), what is a court to do? 7. Product-by-Process Claims – Product-by-process claims are product claims that are limited by the process of manufacturing the product. A simple example is “glass made by the Pilkington float glass process.” This claim would not cover the Pilkington float glass process nor would it cover glass made by any other process. Such a claim is used when it is difficult to describe a product and distinguish it from other products by its structure or properties alone, particularly where the structure or other characteristics are not clearly known. Describing a product by the process of making it is thus an empirical and safe way to comply with the second paragraph of section 112 and the enablement requirement. However, there are drawbacks to the use of product-by-process claims. First, they do not allow one to claim known or obvious products merely because the inventor has discovered a new process of making them. That was the holding of In re Thorpe, 777 F.2d 695, 227 USPQ 964 (Fed. Cir. 1985), an early decision of the Federal Circuit. Thus, process of manufacture limitations do not count for validity if the product itself is known or would have been obvious from the prior art. Thinking that the same principle should apply to infringement, the Federal Circuit in Scripps Clinic & Research Foundation v. Genentech, Inc., 927 F.2d 1565, 1583-84, 18 USPQ2d 1001, 1015-16 (Fed. Cir. 1991), held that for infringement purposes, product-byprocess claims are not limited to products prepared by the process set forth in the claims. Although a precedential decision of one Federal Circuit panel is binding on later panels, the court in Atlantic Thermoplastics Co. v. Faytex Corp., 970 F.2d 834, 23 USPQ2d 1481 (Fed. Cir. 1992), request for reharing in banc declined, 974 F.2d 1279, 23 USPQ2d 1801, 974 F.2d 1299, 24 USPQ2d 1138 (Fed. Cir. 1992), effectively achieved the same result by refusing to follow Scripps on the ground that Scripps conflicted with old decisions of the Supreme Court. According to the panel in Atlantic Thermoplastics, even though process limitations cannot be relied on to allow repatenting an old product, they must always be considered for infringement purposes. The panel’s decision prompted Judge Rich to decry a “mutiny.” Nevertheless, the refusal of the court to take Atlantic Thermoplastics in banc probably means a majority of the court agrees with Atlantic Thermoplastic, not Scripps. Thus, one must be wary of adding process limitations to product claims. It may be that they are necessary in view of what is known about the product or difficulties in describing the product without reference to the process of making it. But they may create difficult

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infringement issues (e.g., requiring discovery of the infringer’s manufacturing process) with no benefit on the validity side. 8. Recipe Claims v. Composition Claims – In what came as a blow to many chemical patent practitioners, the Federal Circuit in 1995 handed down Exxon Chemical Patents, Inc. v. Lubrizol Corp., 35 USPQ2d 1801, 64 F.3d 1553 (Fed. Cir. 1995). Until Exxon, a typical way to claim a chemical composition was as a “recipe” of its ingredients, or, put another way, a mixture of its ingredients. This, of course, meant that infringement was determined by focussing on what was put into the chemical reaction pot, not by what resulted when the ingredients chemically reacted with each other and transformed into new chemicals. Such a claim was, in effect, a product-by-process claim to a chemical composition resulting from the mixing together of specified ingredients in specified amounts. Perhaps practitioners had gotten so used to claiming compositions this way that they took for granted that pertinent readers of the patents would so understand the claims. Not so for two judges of the Federal Circuit. Over a rigorous dissent by the late Judge Nies, Judges Clevenger and Plager disagreed with a district court’s claim construction that Exxon’s claim to a lubricating oil was a classic recipe claim, and instead held that it was a claim to a chemical composition. Because Exxon’s infringement proofs were based on the construction of the claim as a recipe claim, namely, proof of what Lubrizol put into the reaction pot and mixed together, as opposed to what was actually in the pot at any point in time, the Federal Circuit reversed a jury verdict of literal infringement for insufficient evidence and with it, a $90 million damages award and $27.3 million in attorney fees. Moreover, the court refused Exxon’s request for a remand to let it present evidence of literal infringement under the court’s new claim construction, which was similar to, but slightly different from, the construction proposed by Lubrizol at trial. The claim in question required the lubricating oil composition to have, as one of its ingredients, “ashless nitrogen or ester containing dispersant compounds.” The case turned on whether Exxon had proven that the accused lubricating oil had an ashless dispersant in the claimed amount of “about 1 to 10 wt. %.” Exxon proved that Lubrizol added that much ashless dispersant to the reactor, but failed to prove how much, if any, was left once the reaction began. Judge Clevenger, writing the majority opinion, stated: . . . Exxon's claims are drawn to a specific product which has particularly defined ingredients. Nothing in the claims, the specification, or the prosecution history suggests that Exxon's claims are not drawn to a product that contains particular ingredients. Indeed, to the contrary, the title to the '890 patent reads, with the emphasis added, "Lubricating Oil Compositions Containing Ashless Dispersant, [ZDDP], Metal Detergent and a Copper Compound." [citation omitted] The language of claim 1 refers to "added" copper and to a detergent "additive." The specification demonstrates that those claim references aim at a chemical composition to which ingredients are being introduced. We must give meaning to all the words in Exxon's claims. [citation omitted] In addition, the text of the '890 specification includes over twenty references to "containing" in reference to the ingredients claimed in the composition. Furthermore, during prosecution of the applications that resulted in the '890 patent, Exxon repeatedly emphasized that the genius of its invention lay "in the previously unknown synergism of this material [copper] with ZDDP in the presence of an ashless dispersant of the type described in the application . . . ." In sum, a review of the claims, the specification, and the prosecution history all point to the conclusion that Exxon claims a product, not merely a recipe for making whatever product results from the use of the recipe ingredients. This conclusion respects that which is claimed, namely a chemical composition. The chemical composition exists at the moment the ingredients are mixed together. Before creation of the mixture, the ingredients exist independently. The particular proportions specified in the claims simply define the characteristics of the claimed composition. Id. at 1557-58, 35 USPQ2d at 1204. Judge Plager concurred: . . . In retrospect, it would appear that Exxon wishes it had product-by-process claims, and thus a "recipe." But we are not free to read the claims as they might have been drafted, even if as drafted they do not accomplish what the inventor may have intended. Claim drafting is itself an art, an art on which the entire patent system today depends. The language through which claims are expressed is not a nose of wax to be pushed and shoved into a form that pleases and that produces a particular result a court may desire. The public generally, and in particular, the patentee's competitors, are entitled to clear and specific notice of what the inventor claims as his invention. That is not an easy assignment for those who draft claims, but the law requires it, and our duty demands that we enforce the requirement. There is no room in patent claim interpretation for the equivalent of the cy pres [as near as possible]

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doctrine; that would leave the claiming process too indefinite to serve the purposes which lie at the heart of the patent system. Id. at 1563, 35 USPQ2d at 1808. Judge Nies dissented: Contrary to conventional wisdom in the art, Exxon discovered that small amounts of copper in automobile motor oil acts as an antioxidant, and it developed a highly successful commercial product using that discovery. . . . Lubrizol's motor oil contains the required additives in the required amounts. To hold that the final product does not "comprise" those ingredients because of their possible reaction with each other upon mixing seems to me nothing short of double speak. The claims can be interpreted as the majority does only by reading them in isolation from the context of the patent. Moreover, the majority's interpretation gratuitously provides grounds for invalidation of the patent under section 112, because the specification does not describe nor enable one skilled in the art to make a product containing the claimed ingredients in the claimed amounts except as starting ingredients, not mixed ingredients. The majority focuses principally on the claimed "ashless dispersant" which must remain in its view "ashless" in the required amount in the composition. I interpret "ashless dispersant" as simply the name or designation of an ingredient required as one of the additives. It does not mean the ingredient must remain inert. **** The patent specification discusses the invention in terms of an additive for motor oil which does not interfere with the function of other additives. The particular focus is on addition of the copper compound as an antioxidant and the amount of it that is employed. Moreover, the amounts specified in the working examples and other parts of the specification are identified as the amount of the additives, not the amounts in the final product after mixing. There is no analysis anywhere in the specification of the identity of intermediate or final "complexation" products produced by combining the ingredients specified in the claims, or of their amounts. In light of those omissions, to say that one of ordinary skill in the art would nevertheless conclude that the proportions must be measured in the pot is divorced from reality. Id. at 1563-64, 1565, 35 USPQ2d at 1808, 1810. Although a suggestion for rehearing in banc was declined, two judges had Cassandran comments. Judge Mayer began in a concurrence: This is another example of the predicted mischief of Markman v. Westview Instruments, Inc., 52 F.3d 967, 34 USPQ2d 1321 (Fed. Cir.), cert. granted (1995). Two judges have divined an interpretation of the claim that occurred to no one else in this extensive litigation. None of the parties or the trial court offered the interpretation that these two judges chose, and none of the extensive extrinsic evidence about how those skilled in the art would understand the claim supports it. After Markman, apparently the meaning of a claim has very little to do with the parties' theories of the case and the record made in support, and everything to do with what at least two judges here prefer regardless of the record. Judge Newman dissented: [The panel’s decision] is gravely incorrect. It is incorrect as a matter of law, as a matter of chemistry, and as a matter of patent practice. **** Most or all chemicals interact to some extent in solution, wherein ions and molecules rearrange based on forces of various kinds. Under the court's new law, table salt dissolved in water will not be an adequate description of the composition for infringement purposes, since the sodium chloride molecule no longer "exists": in dissolution the sodium and chloride ions will have broken their bonds to each other, in interaction with molecules of water. For the Exxon lubricant composition the interactions in the pot were exceedingly complex. However, like salt in water, there is no uncertainty as to what was made and what was infringed. When the invention is adequately described and claimed by listing the ingredients of the composition, and is understood by persons of skill in the field of the invention, the law demands no more. To require inventors to identify and include in their claims the chemical interaction products formed in such a complex mixture is not necessary in order distinctly to state what the inventor regards as his invention. ****

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The standard way of claiming chemical compositions is by their ingredients. Naming the chemicals and their amounts is the clearest, most accurate, and most comprehensible way of describing such inventions. Often there is no other way of describing chemical compositions. **** Whether there is interaction among the ingredients after they are placed in the container does not affect the specificity of the description of what has been invented. It is not necessary to know what physical or chemical interactions occur in the container in order to describe this invention, which resides in the combination of listed ingredients. The law requires that the claims "reasonably apprise those skilled in the art both of the utilization and scope of the invention," and that "the language is as precise as the subject matter permits." Shatterproof Glass Corp. v. Libbey-Owens Ford Co., 758 F.2d 613, 624, 225 USPQ 634, 641 (Fed. Cir. 1985). That requirement was plainly met by the claims in suit, for they were written as lubricant formulators would write them and understand them, by listing the ingredients of the composition. Whatever the scientific nature of the chemical interactions inside the container, the established and probably only way of describing such formulations is by their ingredients. The court creates a scientific burden that is totally unnecessary and perhaps impossible to meet. 77 F.3d 450, 37 USPQ2d 1767. Is Exxon out of luck? Not yet. It convinced the Federal Circuit, in a second appeal, to let it move in the district court for a new trial on the doctrine of equivalents. See Exxon Chem. Patents, Inc. v. Lubrizol Corp., 137 F.3d 1475, 45 USPQ2d 1865 (Fed. Cir. 1998). What is the moral of the Exxon story? Clearer claim drafting makes money, for one thing. (If the claim had been clearly worded as a product-by-process claim, Exxon’s $90+ million verdict no doubt would have withstood the first appeal). Also, since the Federal Circuit might adopt a claim construction that is not identical to that urged by either party or by the court below, a litigant may want, as a protective measure, to present infringement (and validity) proofs under all reasonably conceivable claim constructions, a “Markman Matrix,” as it were. One of the authors of this book employed a “Markman Matrix” approach in a bench trial in BASF Corp. v. Eastman Chemical Corp., Civ. No. 95-746-RRM (D. Del. Mar. 24, 1998), appeal dismissed, No. 98-1323 (Fed. Cir. July 8, 1998). Although the district court judgment was favorable to the author’s client, the wisdom vel non of the Markman Matrix approached was never tested, as the case settled before the other side’s appeal was heard. Moreover, its practicality in a jury trial is open to question. Finally, Exxon as a tactical matter chose not to present a case for infringement under the doctrine of equivalents to the jury, withdrawing its proposed jury instruction on that point at the eleventh hour. In addition, the district court in Exxon did not construe the claims until the end of trial, and Exxon had made a further strategic decision to present evidence only under its own proffered claim construction. In addition, the Federal Circuit’s claim construction was very similar to the construction pushed by Lubrizol, so it is not as if the court picked a new claim construction out of thin air. In the end, perhaps it is enough that a party present proof under both its and its opponent’s claim construction theories if it wants to maintain its arguments on appeal. 9. Sometimes patent applicants can get out of control with their claim drafting. Although the PTO levies a per claim charge for patent claims in excess of twenty and a charge for each independent claim in excess of three (37 CFR § 1.16(b), (c)), applicants nevertheless often feel that their broad claims are not sufficient to cover all possible variations of their invention. They therefore present numerous claims to the patent examiner just to be safe Then-District Judge Hand expressed a pointed annoyance with both this practice and the problem of submarine patents (before there were submarines): Patent 1,060,550 was in the office more than 10 years, and the claims in suit were interjected into the application after the patent had been once allowed, and after the defendant's machine had appeared upon the market. Just how it can happen that a patentee can hold an invention secreted for so long, and can then adapt it so as to cover the subsequent art, does not appear. The result is, assuming that the claims do not constitute a new invention, that the patentee has got from 8 to 9 added years to his monopoly from the time when he would otherwise have been obliged to leave the art unhampered. To let him reserve his patent till the trade independently develops, and then to pounce upon it for a full term, would seem to violate the conditions upon which his grant depends, and to convert the system into a mere means of checking industry. This is especially true where, as here, a fundamental patent like the Berliner protected the whole invention until 1912. The case certainly suggests a purpose to monopolize that invention still further by reserving in the Patent Office patents upon other similar machines known long before. Whether this be true or not, the practice is so obviously mischievous that the courts should

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discourage it as much as possible, as well as the practice which permits 48 claims upon a simple and perfectly obvious machine like this. Such claims violate the very purpose of any claims at all, which is to define the forbidden field. In such a waste of abstract verbiage it is quite impossible to find any guide. It takes the scholastic ingenuity of a St. Thomas with the patience of a yogi to decipher their meaning, as they stand. quoted in Victor Talking Machine Co. v. Edison, 229 F. 999, 1000-01 (2d Cir. 1916) (affirming on the opinion of the district court).

Claim Format You read about the legal requirements for claims in Chapter 6 and, so far in this chapter, how courts construe them. But how do you write claims? While this book does not purport to include a tutorial on claim drafting, the present section will cover claim structure and format, and special kinds of claims that have developed over the years in practice before the PTO. Claims are either independent, dependent, or multiply dependent. An independent claim stands on its own and refers to no other claim (for example, “1. A chair comprising, a back, a seat, and a plurality of legs.”) The independent claim is the direct object of a sentence that begins “I claim,” or “We claim,” or “what is claimed is.” A dependent claim refers to another claim and thereby incorporates by reference the text of the other claim (for example, “2. The chair of claim 1 further comprising a pair of armrests.”). A dependent claim can depend from an independent claim, as just shown, or from another dependent claim (for example, “3. The chair of claim 2 wherein the armrests are attached to the back.”). In both examples of dependent claims, they may be rewritten, for analysis, as if the entire text of the claim or claims on which they depend were written out with them. You can see the possibilities of many optional inventive features resulting in numerous claim permutations, leading to a slew of dependent claims. To alleviate that problem somewhat, Congress in 1975 added the fifth paragraph of section 112 to provide for multiple dependent claims. These are dependent claims that refer, in the alternative, to more than one claim previously set forth. For example, “4. The chair of claim 1, 2, or 3 wherein the back, seat, and legs are made of wood.” You can see that this multiple dependent claim actually takes the place of writing three separate dependent claims. However, it really does not save the practitioner claim fees because the PTO charges for multiple dependent claims as if they were separate dependent claims. Thus, although multiple dependent claims make patents shorter and more readable, you do not see them used very often. All claims (whether independent, dependent, or multiply dependent) are a single sentence (no matter how long or awkward) and have three parts: a preamble, a transitional phrase, and a body. In the first example above, we can rewrite the claim as follows: 1. A Chair Comprising:

PREAMBLE TRANSITIONAL PHRASE

a back a seat, and

BODY

a plurality of legs.

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Claim Preamble The preamble introduces the general area of the invention. Much case law has developed over the last 70 years as to whether a claim preamble is a “limitation” of a claim, both for purposes of distinguishing the claimed invention from the prior art and for proving infringement. Originally, so many cases decided by the old CCPA (which ceased to exist upon the creation of the Federal Circuit on October 1, 1982) went each way that the court in Kropa v. Robie, 187 F.2d 150, 88 USPQ 478 (CCPA 1951), actually attached a list of 37 cases covering the previous 20 years as an appendix to its opinion. Id. at 155-59, 88 USPQ at 483-87. The court provided the following rationale to make sense of all the opinions: Of the thirty-seven cases of this court we have reviewed with respect to this problem it appears that the preamble has been denied the effect of a limitation where the claim or count was drawn to a structure and the portion of the claim following the preamble was a self-contained description of the structure not depending for completeness upon the introductory clause; or where the claim or count was drawn to a product and the introductory clause merely recited a property inherent in the old composition defined by the remaining part of the claim. In those cases, the claim or count apart from the introductory clause completely defined the subject matter, and the preamble merely stated a purpose or intended use of that subject matter. On the other hand, in those ex parte and interference cases where the preamble to the claim or count was expressly or by necessary implication given the effect of a limitation, the introductory phrase was deemed essential to point out the invention defined by the claim or count. In the latter class of cases, the preamble was considered necessary to give life, meaning and vitality to the claims or counts. Usually, in those cases, there inhered in the article specified in the preamble a problem which transcended that before prior artisans and the solution of which was not conceived by or known to them. The nature of the problem characterized the elements comprising the article, and recited in the body of the claim or count following the introductory clause, so as to distinguish the claim or count over the prior art.

187 F.2d at 152, 88 USPQ at 480-81 (emphasis added). In the case at bar, the court held that the preamble phrase “An abrasive article” did constitute a claim limitation since the “term calls forth a distinct relationship between the proportion of grain and resin [both elements being in the body of the claim]” and therefore gave “life and meaning” to the claim. Id. at 152, 88 USPQ at 481. Even preamble statements of intended use have been given weight in obviousness determinations. Thus in In re Duva, 387 F.2d 402, 156 USPQ 90 (CCPA 1967), the court gave weight to the underlined portion of the following preamble in reversing an obviousness rejection: “As a composition for chemically depositing gold, an aqueous solution . . .” The “life and meaning” test of Kropa generally has been followed, explicitly or implicitly, over the years both in appeals from the Patent Office and in infringement actions. See, e.g., In re Stencel, 828 F.2d 751, 4 USPQ2d 1071 (Fed. Cir. 1987) (implicitly); Loctite Corp. v. Ultraseal Ltd., 781 F.2d 861, 864-68, 228 USPQ 90, 91-94 (Fed. Cir. 1985) (“anaerobic” held a limitation because it “breathes life and meaning” into claims; on the other hand, “adapted to remain in a liquid state . . .” held not a limitation because it is “merely language of intended use.”). The Federal Circuit did express some skepticism about the Kropa “life and meaning” formulation a few years later in Corning Glass Works v. Sumitomo Electric U.S.A., 868 F.2d 1251, 9 USPQ2d 1962 (Fed. Cir. 1989). While holding that the preamble term “optical waveguide” was a claim limitation and not just a statement of intended use, the court (per Judge Nies) commented on its approach: No litmus test can be given with respect to when the introductory words of a claim, the preamble, constitute a statement of purpose for a device or are, in themselves, additional structural limitations of a claim. To say that a preamble is a limitation if it gives “meaning to the claim” may merely state the problem rather than lead one to the answer. The effect preamble language should be given can be resolved only on review of the entirety of the patent to gain an understanding of what the inventors actually invented and intended to encompass by the claim. Here, the ‘915 specification makes clear

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that the inventors were working on the particular problem of an effective optical communication system not on general improvements in conventional fiber optics. To read the claim in light of the specification indiscriminately to cover all types of optical fibers would be divorced from reality. The invention is restricted to those fibers that work as waveguides as defined in the specification, which is not true with respect to fibers constructed with the limitations of paragraphs (a) and (b) [of the claim] only. Thus, we conclude that the claim preamble in this instance does not merely state a purpose or intended use for the claimed structure. See Kropa v. Robie . . . . Rather, these words do give “life and meaning” and provide further positive limitations to the invention claimed.

Id. at 1257, 9 USPQ2d at 1966 (emphasis added). One thing is sure. When the body of the claim refers back to the preamble language, the preamble language will normally be considered a claim limitation. Claim Transitional Phrases As with any profession, practitioners who “prosecute” patent applications have developed their own special jargon, often referred to as patentese. “Comprising” is part of that jargon. It has a special meaning in patent law, in that it is an “open-ended” transitional phrase. Thus, a claim that “comprises” three things, called elements, does not foreclose infringement if additional elements are added to an accused device (as long as the device has the three elements). Thus, an infringer whose chair has all three of the required elements (back, seat, and legs) does not avoid infringement if she adds arms or padding to the chair. Because of its non-limiting, open-ended nature, “comprising” is the most common transitional phrase, particularly in the mechanical and electrical arts. Two other transitional phrases are commonly used: “consisting of” and “consisting essentially of.” “Consisting of” is a “closed” transitional phrase because it affirmatively excludes the presence of additional elements. Had the claim above recited “A chair consisting of . . .,” then a person could avoid infringement by adding arms to the chair. You can see why closed-end transitions are not often used in claims covering mechanical devices. The other possibility, “consisting essentially of,” is a hybrid of “comprising” and “consisting of.” It is closed to an element that would affect the “basic and novel characteristics of the claim,” but open to any element that would not. Two recent court decisions illustrate employment of “consisting essentially of.” In BASF Corp. v. Eastman Chemical Co., Civ. No. 95-746-RRM (D. Del. Mar. 24, 1998), appeal dismissed, No. 98-1323 (Fed. Cir. July 8, 1998), the district court construed process claim 6, which included the following language: “the process . . . consists essentially of the rearrangement being catalyzed by a system which contains components A and C.” The district court, contrasting this claim with another one in the patent, claim 1, which recited “the process . . . comprises the rearrangement being catalyzed by a system which contains components A, B, and C,” concluded that claim 6 was drafted to affirmatively exclude B (which was a solubilizer). The district court noted as further support for its interpretation the fact that the patent examiner during prosecution had referred to claim 6 as directed to a “no solubilizer” embodiment of the patent. Because the defendant, Eastman, was able to prove that its process used a solubilizer B, the court found no infringement of claim 6. A few months later, the Federal Circuit decided a different case that construed “consisting essentially of” consistently with the district court’s construction in BASF, resulting in an affirmance of a jury verdict of noninfringement. See PPG Indus. v. Guardian Indus. Corp., 156 F.3d 1351, 48 USPQ2d 1351 (Fed. Cir. 1998). PPG’s claim was to a “green, tinted ultraviolet absorbing glass having . . . a colorant portion consisting essentially of” cerium oxide and iron oxides in specific amounts and exhibiting ultraviolet transmittance and luminous transmittance within certain ranges. The accused glass, made by Guardian, had all of the requisite elements and transmittances, but also had, as a colorant, iron sulfide. The Federal Circuit implied from the jury’s verdict of noninfringement a jury finding of fact that the iron sulfide had a “material effect on the basic and novel characteristics of the claimed glass.” Id. at 1354,

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48 USPQ2d at 1354. Judge Michel in dissent believed the issue of “material effect” should not have gone to the jury: No reasonable jury could hold that an alteration in the dominant wavelength of the glass from approximately 500 to approximately 503 nanometers, and alterations in the ultraviolet and visible light transmittance on the order of 0.5% represent a material effect on the properties of the glass considered in light of the patent.

Id. at 1358, 48 USPQ2d at 1357. The lesson is to be careful when using partly closed phrases, to be especially careful when using wholly closed phrases, and to have some explanation, either in the specification or in the prosecution history, of what a partly closed phrase is intended to exclude and why. The Claim Body Not much need be said about the body. It is the meat of the claim, and is often written in an outline form, with lettering and/or numbering of elements, sub-elements, and other claim limitations. See, for example, the claim in Exxon v. Lubrizol, supra, 64 F.3d at 1562. We turn now to two special types of claims created as a result of Patent Office practice—Jepson claims and Markush claims. Special Claim Forms 1.

Jepson Claims

You may recall the discussion in Chapter 6 of overclaiming and the Supreme Court’s invalidation of certain bearing lubrication system claims on that ground in Lincoln Engineering, supra, 303 U.S. 545 (1938). Twenty-one years before Lincoln was decided, the Commissioner of Patents had approved of a form of claim that probably would have avoided the bad result for the patentee in Lincoln—had the patentee used that form. The Commissioner’s decision was reported in Ex parte Jepson, 1917 C.D. 62, 243 O.G. 525 (Comm. Pats. 1917). The invention involved adding a certain solenoid-coil in a certain way to an old and well-known apparatus for operating the lights of a car from a storage battery, and for charging the battery from a variable-speed generator driven from the axle of the car. The two claims at issue were: 16. In an electrical system of distribution of the class wherein a variable speed generator charges a storage battery and when the battery becomes sufficiently charged a voltage coil becomes effective to regulate the generator for constant potential, the combination with said voltage coil of a coil traversed by current flowing to the battery which is acted upon by decreasing battery current to reduce the potential maintained constant by the voltage coil. 17. An electrical system of distribution wherein a generator charges a storage battery until the battery reaches some desired state of charge whereupon a voltage coil becomes effective to regulate the generator for constant potential, characterized by the fact that there is combined with said voltage cell a coil traversed by current flowing to the battery which is acted upon by decreasing battery current to reduce the potential maintained constant by the voltage coil.

(Emphasis added). The examiner had sought instructions from the Commissioner’s Office as to whether the format of these two claims was proper. Assistant Commissioner Clay wrote an excellent opinion approving the form of both claims. The form of claim 16 has come to be known as a “Jepson claim.” It generally starts with the word “In.” The preamble then describes the whole old combination and the transitional phrase is something like “the combination with . . . of . . . “ or “the improvement comprising . . .,” with the improvement then set forth in the body. Claim 17 is written in the German

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form. “Characterized by . . .“ as the transitional phrase is a translation of the German transitional phrase “dadurch gekennzeichnet.” The Assistant Commissioner wrote: If an invention could be defined in complete and operable form by simply stating its new elements or combinations alone, mentioning nothing of the old art, the problem would be easy and the rule could be absolute that no preamble imported any limitation into the claim. Indeed, no preamble would be needed. But the fact is that in many complicated inventions, and especially inventions which are mere improvements added to old structures, no complete statement of structure can be made without reference to something that is old. In the instant case the fundamental structure was all old and the invention resided in the use of a particular coil in a particular relation. In order that the use of this coil be made clear, it is necessary to state with what it coacts and how its function affects the function of other apparatus, which was old. The whole apparatus upon which the applicant’s invention is engrafted is not a part of his invention, and yet it must be considered and is as essential as the pedestal of a statue is essential to the statue, although it is no part of it. I agree with the applicant’s contention that the old elements should not be catalogued with equal emphasis with the new and that the claim should be so written as to make at once apparent a clear line of demarcation between the old structure and those elements which really constitute the invention. . . . **** I can see no reason why the preamble of the claim should not perform the double function of completing the setting of the real invention claimed and also disclaiming the old parts of the apparatus, which constitute nothing but setting. This is, in effect, what this applicant attempts to do. I have no doubt it would meet with the approval of the courts, because it seems to me nothing can be so important as to remove all uncertainty as to the exact location of the forbidden field covered by a patent. The Supreme Court very early emphasized this duty in Evans v. Eaton, (7 Wheat., 336). **** The common German and English practice is to state briefly the old general structure in the claim, followed by such an expression as “characterized by” the certain particular structure which constitutes the patentee’s invention. This language is much like that in our own statutes of 1790 and 1836 – “that principle or character by which it may be distinguished.” In the particular case before me I think this form of claim makes it unnecessary to analyze the claim in order to find out what is the life and essence of the invention. The claim is at once self-analyzing and self-classifying and, above all, it does what to my mind is the primary requirement of the statute and the essential condition of the contract between the inventor and the public – namely, it points out what parts of the described apparatus are and what parts are not the subject-matter of the patent monopoly. I see no real basis for the Examiner’s expressed fear that such a form of claim for apparatus might leave it open to the patentee to contend that the structure in the preamble is or is not a limitation of the patented invention, as he may find convenient. On the contrary, the placing in the preamble of those parts of the structure which are admittedly old makes it doubly certain that they are not of the essence of the invention, whether or not they must necessarily be present in order to make the function or structure of the invented apparatus complete. This latter question the courts must be left to decide. To my mind many of the present difficulties of our patent system, including the difficulty of classification and of avoiding errors in declaring interferences, would virtually disappear if inventors could be induced to confine their descriptions to the essential invention and its necessary setting and their claims to a particular and distinct pointing out of the invention itself as distinguished from the setting. When an applicant presents a claim, as in this case, which does particularly point out his exact invention, there is certainly nothing in the law to interdict his doing it by including the old parts of the structure in a preamble and set apart from the structure which constitutes the real invention.

Id. at 67-70. The Assistant Commissioner’s confident prediction that this claim form “would meet with the approval of the courts” came to pass. After striking down combination claims in 1938 in Lincoln Engineering, supra, that were not in Jepson form, the court four years later upheld Jepson and similar claims in Chapter 7 – Claim Construction

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Williams Co. v. Shoe Mach. Corp., 316 U.S. 364 (1942). Justice Roberts, who also authored Lincoln, wrote as follows for the six justice majority: The petitioner [alleged infringer Williams Co.], however, contends that the breadth of the claims in suit is such that, instead of patenting the combinations claimed as improvements over the prior art, and restricting the claims to the improvements, the patentee sought to blanket every machine which combines the old bed laster with the equally old automatic tacking device. It is said that our decisions in Bassick Mfg. Co. v. R. M. Hollingshead Co., 298 U.S. 415, and Lincoln Engineering Co. v. StewartWarner Corp., 303 U.S. 545, forbid any such extension of the patent monopoly. We think, however, that each of the claims is confined to a combination of specified means applicable only to a restricted portion and function of the whole machine. In stating his claims, the patentee sometimes says “a machine of the class described having, in combination, . . ." Obviously, no machine will infringe which does not have in combination the means specified in each of the claims for accomplishing the particular portion of the total operation covered by the claim. Other claims refer to “a lasting mechanism of the class described having, in combination, . . .” The same comment is applicable. Other claims read: “In a machine of the class described, the combination . . . .” Such preliminary statement is commonly and properly used to specify the type of machine in which the claimed subsidiary combination of elements works an improvement over the prior art. In describing the novel combinations embodied in the claims, it was necessary to make reference to certain portions of the machine in connection with which the new combinations were to operate and with which they were to dovetail, but, in mentioning these other mechanical parts, the claim does not purport to embody them as elements of the claimed combination. To construe such a claim for a combination of new elements intended to be embodied in some well recognized mechanical aggregation, such as a sewing machine or a washing machine, as a claim covering all the mechanical details, or all the well known parts of the machine, would be to nullify every patent for an improvement in a type of machine long in use and would invalidate thousands of patents for improvements in standard machines. It would be difficult to describe an improvement in a washing machine without naming such a machine as the thing to which the patent is addressed, and equally difficult to refrain from referring to various parts of the machine, such as the tub or the motor which actuates the washer. But it has never been thought that a claim limited to an improvement in some element of the machine is, by such reference, rendered bad as claiming a monopoly of tubs or motors used in washing machines. Bassick Mfg. Co. v. R. M. Hollingshead Co., supra, and Lincoln Engineering . . ., supra, lend no support to the petitioner’s argument . . . . **** The present suit for infringement is not for the use of an automatic bed lasting and tacking machine as such. It is for the use in such a machine of improvements of certain features of the machine. The respondent does not pretend to fix liability on the petitioner for contributory infringement by reason of the use of an automatic power driven lasting and tacking machine which does not employ the novel improvements of the combinations claimed, and could not do so. It is admitted, as it must be, that the petitioner is free to use the machine shown in the first McFeely patent, which has expired, or any other automatic lasting and tacking machine which does not embody the three improvements covered by the claims in suit. It is not free, however, to use such a machine if it embodies any one of the three combinations embraced in those claims respectively. The use of these combinations is the basis of its liability for infringement.

Id. at 368-71. In what bordered on a tirade, Justice Black dissented, joined by Justices Douglas and Murphy, criticizing patentee United Shoe Machinery’s claims as prolix (there were a total of 137, though only five were at issue in the suit) and subject to the same defects as those struck down in Bassick and Lincoln. See id. at 371-80. Sounding a bit like Thurman Arnold, Justice Black then accused the Massachusetts shoe machinery giant of crushing competition with an arsenal of patents based on minor improvements and containing a plethora of claims. See id. at 380-82. Finally, he argued that all five patent claims in suit were invalid for want of invention. See id. at 383-94.

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The PTO has codified its approval of Jepson and similar “improvement-type” claim formats. Rule 75(e), first promulgated in 1966, states: Where the nature of the case admits, as in the case of an improvement, any independent claim should contain in the following order: (1) A preamble comprising a general description of all the elements or steps of the claimed combination which are conventional or known, (2) a phrase such as “wherein the improvement comprises,” and (3) those elements, steps and/or relationships which constitute that portion of the claimed combination which the applicant considers as the new or improved portion.

37 CFR § 1.75(e). Notwithstanding this rule, most combination claims are not written in Jepson form by patent practitioners. As pointed out in Chapter 6, the Federal Circuit has taken a very narrow view of Lincoln. Furthermore, after the enactment of a restrictive contributory infringement provision in 1952 (35 USC § 271(c)), which we shall cover in a later chapter, the abuse of the contributory infringement charge reflected in Bassick and Lincoln, supra, is a thing of the past.

2.

Markush Claims

Just as inventor Jepson became immortalized as the name of a patent claim, inventor Markush enjoyed the same fate. Markush had discovered that certain groupings of chemicals produced exceptionally fast dyes. There was no one generic chemical term that properly described them all, without including many which would not work (cf. Corona v. Dovan, supra). Markush then proposed the following claim phrase: material selected from the group consisting of aniline, homologues of aniline and halogen substitutes of aniline

Ex parte Markush, 1925 C.D. 126, 127, 340 O.G. 839 (Comm’r Pat.). The examiner objected to this form as “alternative,” which was a traditional Patent Office rejection of claim phrases such as “wood or metal.” First Assistant Commissioner Kinnan ordered withdrawal of the objection, reasoning as follows: The original claims included a diazotized solution of aniline or its homologues or halogen substitutes. The Examiner objected to these claims as being alternative. Thereupon there was substituted, in place of the expression above referred to, the term “mono-amine.” The Examiner objected to the amended claims as being too broad, because the term “mono-amine” would cover aliphatic mono-amines, pyridine mono-amines, etc., which would not work in the combination stated. . . . Thereupon the phrase was substituted “material selected from the group consisting of aniline, homologues of aniline and halogen substitutes of aniline.” It is to this last phrase that the objection was made from which the petition is brought. In his answer the Examiner states that the term objected to is a mere evasion of the alternative form without avoiding the real alternativeness, and the expression is not a generic one. This holding is based on the ground that a genus is a broad class name based on some general distinguishing properties or characteristics possessed in common by a class of things or substances and embraces all other substances possessing these characteristics—for example, acid and alkali—and that this is not true of the expression in question. There are many instances in which a generic term covering a number of substances cannot properly be employed in a claim, because many of the substances included under that broad generic term can not be used in the combination stated. The term “mono-amine,” which the Examiner admits is a true generic expression, is an example of such an expression, for, as stated above, the Examiner has held that the term includes aliphatic mono-amines, and pyridine mono-amines, which will not work in the combination stated.

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. . . In place of the expression originally used, which the Examiner objected to as alternative, applicant substituted a generic term, which was objected to as too broad, and he is now attempting to coin a subgeneric expression—viz, a group comprising certain substances. It is not seen in what other way an applicant, in a case such as the present, may cover his real invention without filing a number of applications, and it may well be that the substances named are so closely related that they would not support a series of patents. An applicant should be entitled to adequately cover his invention and not be forced to rely upon the doctrine of equivalents for his proper protection. . . Nor is it seen that in principle these claims are any different from the claims which were allowed in Patent No. 901,675, in which the letter R is used in a chemical formula as standing for CH3, or COOH, and it is understood that claims of the type shown in that patent have frequently been allowed.

Id. at 127-29. Markush claims have become an established part of chemical patent practice. However, they bring with them a whole host of substantive and procedural issues which it is beyond the scope of this book to pursue. But cf. In re Ruscetta, 255 F.2d 687, 118 USPQ 101 (CCPA 1958) (discussing a validity booby trap inherent in the use of these claims). The CCPA summed up Markush claim practice as follows: The practice of describing a class of chemical compounds in terms of a structural formula wherein the substituents thereof are defined as “a member selected from the group consisting of A, B, C, D * * * “ was sanctioned by implication in Ex parte Markush, 1925 C.D. 126, 340 O.G. 839, the first decision to consider the propriety of claims so expressed – hence, the name “Markush group.” It is generally understood that in thus describing a class of compounds an applicant is, in effect, asserting that the members of the Markush group do not fall within any recognized generic class, but are alternatively usable for the purposes of the invention, and therefore, regardless of which of the alternatives is substituted on the basic structure, the compound as a whole will exhibit the disclosed utility.

In re Driscoll, 562 F.2d 1245, 1249, 195 USPQ 434, 437 (CCPA 1977). After this lengthy discussion of claim format, there is yet one very important claim format we have not covered. That format, regarding statutorily-authorized “means-plus-function” claim elements, is explored in the next section.

Means-Plus-Function When you were studying section 112 of the patent act in chapter 6, you may have wondered what was meant by the last paragraph (paragraph 6) of that section: An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claims shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.

This provision, which stands apart from the other provisions of section 112, provides patent applicants with an alternative way to draft patent claims. Added as part of the ’52 Act, the provision permits an applicant to claim an invention in functional, rather than structural, terms. An applicant need not invoke paragraph 6; its provisions are completely voluntarily. However, when invoked, the paragraph sharply changes the claim construction process. Rather than looking for the claim meaning entirely within the claim language (with limited help from the written description), an analysis of a means-plus-function clase requires resort to the written description to find structure that corresponds to the claimed “means.” An example may best explain the operation of section 112, para. 6. Suppose that a patent discloses an invention relating to a picture frame and mounting system, with a claim limitation reciting “means for connecting the frame to a vertical surface.” Suppose further that the written description shows and Chapter 7 – Claim Construction

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describes nails, screws, and hooks as the corresponding “connecting means.” If the accused product was a picture frame attached to a wall with large sheet of Velcro®, would the patent claim cover it? Probably not. Under section 112, para. 6, the claim is construed to cover structures that are equivalent to those corresponding to the connecting means, i.e., nails, screws, and hooks. Each of these structures provides a “point contact” connection. In contrast, the sheet of Velcro® provides a broad base of contact and thus is arguably a much different structure. (Of course, it could be argued that Velcro® is simply a large number of very small hooks, and thus is similar to the disclosed hook structure). In contrast, if the written description had also disclosed an adhesive sheet as one of the corresponding “means for connecting,” the situation may be very different because an adhesive provides a broad base of support, just like Velcro®. In this way, section 112 para. 6 can be seen as a device for broadening claims: the claim for a “connecting means” is broader than any claim reciting one of the structures (nail, screw, hook) in the specification. However, section 112, para. 6 is generally seen as a narrowing option. It narrows where a term is available that is broader than any of the corresponding means disclosed in the written description. Thus, in the example above, the patentee could simply recite a “connector attached to the frame and a vertical surface.” In doing so, the applicant will generally be allowed coverage for any type of connector that is supported by the specification even if it is not specifically disclosed in the specification. Such coverage would be broader than just structures that are equivalent to nails, screws, and hooks. As you read the opinions below, ask yourself whether the patent attorney could have better claimed the invention and perhaps have avoided section 112, para. 6. Many patent practitioners do not fully understand this part of the law, and simply place “mean-plus-function” limitations in claims because it is an easy way to claim an invention. Read the cases below carefully, and you will avoid those problems. The first case below, Halliburton, was written before section 112, para. 6 was added in 1952. The later cases explore how the Federal Circuit has treated section 112, para. 6; they indicate that the hardest issue for the courts has been determining whether a particular claim falls within paragraph 6 or without.

Halliburton Oil Well Cementing Co. v. Walker 329 U.S. 1, 71 USPQ 175 (1946) Mr. Justice BLACK delivered the opinion of the Court. Cranford P. Walker, owner of Patent No. 2,156,519, and the other respondents, licensees under the patent, brought this suit in a federal district court alleging that petitioner, Halliburton Oil Well Cementing Company, had infringed certain of the claims of the Walker patent. The district court held the claims in issue valid and infringed by Halliburton. The circuit court of appeals affirmed, 146 F.2d 817, and denied Halliburton's petition for rehearing. 149 F.2d 896. Petitioner's application to this Court for certiorari urged, among other grounds, that the claims held valid failed to make the “full, clear, concise, and exact” description of the alleged invention required by Rev.Stat. 4888, 35 U.S.C. § 33, as that statute was interpreted by us in General Electric Co. v. Wabash Electric Co., 304 U.S. 364. This statutory requirement of distinctness and certainty in claims is important in patent law. We granted certiorari to consider whether it was correctly applied in this case. 326 U.S. 705. The patent in suit was sustained as embodying an improvement over a past patent of Lehr and Wyatt (No. 2,047,974) upon an apparatus designed to facilitate the pumping of oil out of wells which do not have sufficient natural pressures to force the oil to gush. An outline of the background and setting of these patents is helpful to an understanding of the problem presented. [Placement of a pump relative to the surface of the fluid in an oil well is crucial to the efficient operation of the pump, so the accurate measurement of the distnce to the fluid surface became important. It had Chapter 7 – Claim Construction

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been known to measure the amount of time for a sound echo to return to its source as an indicator of distance, and the oil industry soon began experimenting with this technique. An early patent to Lehr and Wyatt showed a machine for generating a noise, sensing an echo, and producing a representation of the elapse time between the two. The patent made the erroneous assumption, however, that sound travels the same speed in a pipe as it does in open air. Walker sought a way to solve this problem and theorized that he could calculate the oil depth by measuring echoes of known irregularities in the pipe, including collars or shoulders between pipe sections, and projections known as “tube catchers.” The Lehr and Wyatt machine could record the relevant echoes, but they had never thought to use each of the echoes and to combine them in a particular way. The only structure added by Walker was a resonator (which took the form of an acoustical pipe) which would make the echoes from the shoulders easier to see by tuning into particular frequencies that matched the length of pipe sections being used.] The District Court held the claims here in suit valid upon its finding that Walker's “apparatus differs from and is an improvement over the prior art in the incorporation in such apparatus of a tuned acoustical means which performs the functions of a sound filter ....” The circuit court of appeals affirmed this holding, stating that the trial court had found “that the only part of this patent constituting invention over the prior art is the “tuned acoustical means which performs the functions of a sound filter." For our purpose in passing upon the sufficiency of the claims against prohibited indefiniteness we can accept without ratifying the findings of the lower court that the addition of “(a) tuned acoustical means” performing the “functions of a sound filter” brought about a new patentable combination, even though it advanced only a narrow step beyond Lehr and Wyatt’s old combination. We must, however, determine whether, as petitioner charges, the claims here held valid run afoul of Rev.Stat. 4888 because they do not describe the invention but use “conveniently functional language at the exact point of novelty.” General Electric Co. v. Wabash Electric Co., supra, 304 U.S., at page 371. Walker, in some of his claims, e.g., claims 2 and 3, does describe the tuned acoustical pipe as an integral part of his invention, showing its structure, its working arrangement in the alleged new combination, and the manner of its connection with the other parts. But no one of the claims on which this judgment rests has even suggested the physical structure of the acoustical resonator. No one of these claims describes the physical relation of the Walker addition to the old Lehr and Wyatt machine. No one of these claims describes the manner in which the Walker addition will operate together with the old Lehr and Wyatt machine so as to make the “new” unitary apparatus perform its designed function. Thus the claims failed adequately to depict the structure, mode, and operation of the parts in combination. A claim typical of all of those held valid only describes the resonator and its relation with the rest of the apparatus as “means associated with said pressure responsive device for tuning said receiving means to the frequency of echoes from the tubing collars of said tubing section to clearly distinguish the echoes of said couplings from each other.” The language of the claim thus describes this most crucial element in the “new” combination in terms of what it will do rather than in terms of its own physical characteristics or its arrangement in the new combination apparatus. We have held that a claim with such a description of a product is invalid as a violation of Rev.Stat. 4888. Holland Furniture Co. v. Perkins Glue Co. , 277 U.S. 245, 256, 257; General Electric Co. v. Wabash Electric Co., supra. We understand that the circuit court of appeals held that the same rigid standards of description required for product claims is not required for a combination patent embodying old elements only. We have a different view. Rev.Stat. 4888 pointedly provides that “in the case of a machine, he (the patentee) shall explain the principle thereof, and the best mode in which he has contemplated applying that principle, so as to distinguish it from other inventions; and he shall particularly point out and distinctively claim the part, improvement, or combination which he claims as his invention or discovery.” It has long been held that the word “machine” includes a combination. Corning et al. v. Burden, 15 How. 252, 267. We are not

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persuaded that the public and those affected by patents should lose the protection of this statute merely because the patented device is a combination of old elements. Patents on machines which join old and well-known devices with the declared object of achieving new results, or patents which add an old element to improve a pre-existing combination, easily lend themselves to abuse. And to prevent extension of a patent's scope beyond what was actually invented, courts have viewed claims to combinations and improvements or additions to them with very close scrutiny. Cf. Lincoln Engineering Co. v. Stewart Warner Corporation, 303 U.S. 545, 549-551. For the same reason, courts have qualified the scope of what is meant by the equivalent of an ingredient of a combination of old elements. Gill v. Wells, 22 Wall. 1, 28, 29; Fuller v. Yentzer, 94 U.S. 288, 297, 298. It is quite consistent with this strict interpretation of patents for machines which combine old elements to require clear description in combination claims. . . . **** This patent and the infringement proceedings brought under it illustrate the hazards of carving out an exception to the sweeping demand Congress made in Rev. Stat. 4888. Neither in the specification, the drawing, nor in the claims here under consideration, was there any indication that the patentee contemplated any specific structural alternative for the acoustical resonator or for the resonator's relationship to the other parts of the machine. Petitioner was working in a field crowded almost, if not completely, to the point of exhaustion. In 1920, Tucker, in Patent No. 1,451,356, had shown a tuned acoustical resonator in a sound detecting device which measured distances. Lehr and Wyatt had provided for amplification of their waves. Sufficient amplification and exaggeration of all the different waves which Lehr and Wyatt recorded on their machine would have made it easy to distinguish the tubing catcher and regular shoulder waves from all others. For, even without this amplification, the echo waves from tubing collars could by proper magnification have been recorded and accurately counted, had Lehr and Wyatt recognized their importance in computing the velocity. Cf. General Electric Co. v. Jewel Incandescent Lamp Co., 326 U.S. 242. Under these circumstances the broadness, ambiguity, and overhanging threat of the functional claim of Walker become apparent. What he claimed in the court below and what he claims here is that his patent bars anyone from using in an oil well any device heretofore or hereafter invented which combined with the Lehr and Wyatt machine performs the function of clearly and distinctly catching and recording echoes from tubing joints with regularity. Just how many different devices there are of various kinds and characters which would serve to emphasize these echoes, we do not know. The Halliburton device, alleged to infringe, employs an electric filter for this purpose. In this age of technological development there may be many other devices beyond our present information or indeed our imagination which will perform that function and yet fit these claims. And unless frightened from the course of experimentation by broad functional claims like these, inventive genius may evolve many more devices to accomplish the same purpose. See United Carbon Co. et al. v. Binney & Smith Co., 317 U.S. 228, 236; Burr v. Duryee, 1 Wall. 531, 568; O'Reilly et al. v. Morse et al., 15 How. 62, 112, 113. Yet if Walker's blanket claims be valid, no device to clarify echo waves, now known or hereafter invented, whether the device be an actual equivalent of Walker's ingredient or not, could be used in a combination such as this, during the life of Walker's patent. Had Walker accurately described the machine he claims to have invented, he would have had no such broad rights to bar the use of all devices now or hereafter known which could accent waves. For had he accurately described the resonator together with the Lehr and Wyatt apparatus, and sued for infringement, charging the use of something else used in combination to accent the waves, the alleged infringer could have prevailed if the substituted device (1) performed a substantially different function; (2) was not known at the date of Walker's patent as a proper substitute for the resonator; or (3) had been actually invented after the date of the patent. Fuller v. Yentzer, supra, 94 U.S. at pages 296, 297; Gill v. Wells, supra, 22 Wall. at page 29. Certainly, if we are to be consistent with Rev.Stat. 4888, a patentee cannot obtain greater coverage by failing to describe his invention than by describing it as the statute commands.

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**** Mr. Justice FRANKFURTER concurs with the Court's opinion in so far as it finds this claim lacking in the definiteness required by Rev.Stat. 4888, 35 U.S.C. § 33, but reserves judgment as to considerations that may be peculiar to combination patents in satisfying that requirement. Mr. Justice BURTON dissents.

Cole v. Kimberly-Clark Corp. 102 F.3d 524, 41 USPQ2d 1001 (Fed. Cir. 1996), cert. denied, __ U.S. __ (1997) Before RICH, NEWMAN, and RADER, Circuit Judges. Opinion for the court filed by Circuit Judge RICH. Dissenting opinion filed by Circuit Judge RADER. RICH, Circuit Judge. Plaintiff-appellant Shelley K. Cole (Cole) appeals from a judgment of the U.S. District Court for the District of Arizona in a patent infringement case, Cole v. Kimberly-Clark Corp., No. CIV 93-2010 (D. Ariz. filed 27 July 1995). The district court entered the judgment against Cole following its grant of a summary judgment motion by defendant-appellee Kimberly-Clark Corporation (K-C). The district court held that K-C's accused products do not literally infringe Cole’s U.S. Patent No. 4,743,239 ('239 patent), and that Cole's claims for infringement under the doctrine of equivalents are barred by prosecution history estoppel. We affirm. I BACKGROUND The '239 patent issued 10 May 1988 and is entitled, "Disposable Brief Having an Area of Relatively Thin Absorbent Material and an Area of Relatively Thick Absorbent Material." Briefs are close-fitting, legless underpants. The claimed invention consists of a disposable brief for use during toilet training. Among other features, the claimed brief has a combination of three separate absorbent layers of varying thickness and sides that can be easily torn open so that a soiled brief can be removed without pulling it over the legs. The only independent claim of Cole's `239 patent reads, with our emphasis, as follows: 1. A disposable training brief comprising, in combination: outer impermeable layer means; first absorbent layer means, including a first relatively thin outer absorbent layer and a first relatively thin inner absorbent layer, substantially coextensive with the outer impermeable layer; second absorbent layer means including a relatively thick absorbent layer secured to the first absorbent layer means and disposed between the first outer absorbent layer and the first inner absorbent layer for providing a relatively highly absorbent layer; waist band means for securing the training brief to the user; leg band means through which the user's legs extend; perforation means extending from the leg band means to the waist band means through the outer impermeable layer means for tearing the outer impermeable layer means for removing the training brief in case of an accident by the user, and side zones on the outer impermeable layer means adjacent to the perforation means at which the first absorbent layer means terminates.

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On 1 December 1986, slightly less than one month after she had filed her patent application, Cole sent a copy of it to K-C with a letter explaining her idea for disposable training briefs. K-C, however, was developing its own disposable training brief and was apparently not interested in Cole’s brief. In 1989, K-C began marketing disposable training briefs that have three absorbent layers of varying thickness and sides that can be easily torn open. Cole filed suit against K-C on 19 October 1993, alleging that K-C’s Huggies®,. Pull-Ups®, Huggies®, and GoodNites® (accused products) infringe the ‘239 patent. Both Cole’s claimed design and K-C’s accused products can be torn apart along the sides. K-C filed a motion for summary judgment of noninfringement on 28 July 1994. By an order entered 31 March 1995, the district court ruled that K-C was entitled to summary judgment on Cole’s literal infringement claim, but not on her claim of infringement under the doctrine of equivalents. As to the literal infringement claim, the district court found that there was no genuine issue of material fact with respect to Cole’s contention that K-C's training briefs employ "perforation means." It found that “[t]he only reasonable reading of this language is that the sides of her invention tear by means of a perforation, but K-C’s accused products do not have perforations." Instead, K-C's training briefs “have seams which have been bonded together and are capable of tearing. When the side seams are torn, it becomes obvious that the sides are not held together by perforations as they leave a jagged tear line.” The district court thus granted summary judgment of no literal infringement by K-C after first concluding that, “as used in Cole’s patent, a “perforation means” is a perforation,” and then concluding that none of K-C's accused products includes perforations. **** Both Cole and K-C moved for reconsideration. By an order entered 20 June 1995, the district court granted K-C’s motion and denied Cole’s. On the issue of literal infringement, Cole argued that the district court erred because the "perforation means . . . for tearing" element of her claims was a "means-plus-function" element under 35 U.S.C. § 112, ¶ 6, and thus must be construed to encompass all embodiments disclosed in the specification and their equivalents. The specification of the Cole patent refers to scoring, scored sides, and perforations. The court found, however, that the "perforation means" element cannot qualify as a means-plus-function element under section 112, ¶ 6, because it includes the word "perforation" and therefore refers to a definite structure to perform the tearing function. Thus, it adhered to its prior grant of K-C’s motion for summary judgment of no literal infringement. **** II INFRINGEMENT **** A. Claim Construction The ‘239 patent includes nine product claims, and claim 1, quoted in its entirety above, is the only independent claim. The following three subsections recount prosecution history, and the fourth subsection contains our construction of the claimed “perforation means.” 1. Prosecution of the Application Leading to the ‘239 Patent On 18 March 1987, the patent examiner rejected claims 1, 2, 5-8, and 10 of Cole's application under 35 U.S.C. § 102(a) or (e) as anticipated by Roberts. Additionally, claims 3, 4, and 9 were rejected under 35 U.S.C. § 103 as being unpatentable over Roberts in view of Johnson. The Roberts patent describes the problem of removing soiled training pants by sliding them down the child's legs. It solves that problem "by providing side portions with a perforate seam or a chain stitched Chapter 7 – Claim Construction

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seam . . . so that the seams can be readily split apart from the waistband to the leg band on both sides thereby providing for easy removal of the training pants." The “perforate side seam . . . is formed by overlapping and using a side edge portion . . . of the outer lining . . . with similar edge portion . . . then providing perforations . . . to allow separation of the fused area by tearing same." Separation of the chain stitch seam is accomplished by pulling the stitches out and separating the front overlap of the back portion of the brief. The Johnson patent was not at issue in the district court and, accordingly, we will not discuss it further here. In an amendment dated 16 June 1987, Cole responded to the rejections by amending her claims to include more details about the absorbent layers of her training pants. Cole also discussed Roberts as follows: It will be noted that the Roberts patent discloses overlapping edges at the sides between the waist bands [sic] and the leg bands, and the overlapping layers are stitched together. The stitched seams can not be readily torn apart in the Roberts patent, but the apparatus of the present invention utilizes perforations to allow the training brief to be readily torn so as to expedite the removal of the training brief. It is respectfully submitted that this feature of the training briefs of the present invention is neither suggested nor taught by the Roberts patent. It will also be noted that the Examiner made no specific comment concerning this feature in his rejection.

On 5 August 1987, the examiner issued a notice of allowance of Cole's application as amended, without comment. 2. The 1991 Request for Reexamination of the ‘239 Patent On 25 April 1991, Cole submitted a first request for reexamination of her patent. Cole cited the Strohbeen patent as well as the four patents cited during the prosecution of the Strohbeen patent, including the Repke patent. The other three patents cited were not at issue in the district court and consequently will not be discussed here. The Strohbeen patent issued in September 1986 to two K-C employees. The patent describes their invention as an improvement over the disposable brief disclosed in U.S. Patent No. 4,641,381 (the Heran patent). The Heran patent discloses a disposable brief with the inner layer and outer layer of the cover "bonded to one another by any means appropriate for the specific materials selected for the two layers." Heran explains that a useful construction for the side seals is a manually tearable seam. "This can be obtained by bonding the contacting side edge portions along a narrow bond within the side seam portions." Heran goes on to say that "[o]ne way to make a seam of this type is to bond the contacting side portions by suitably controlled sonic sealing . . . ." The Strohbeen invention improved on the Heran design by turning the side seams outward, away from the wearer's body, which simplified the manufacturing process and removed a potential source of skin irritation to the wearer. As in Heran, the Strohbeen side seams could be formed by sonic sealing. The patent states: "A particularly preferred system for the invention is found to be ultrasonic sealing. It has been found that an ultrasonic sealing anvil having a plurality of lines closely spaced together such that four sealing lines may be fit within the preferred space between 1/8 to 3/16" is particularly desirable. The sealing lines may be discontinuous, forming dashed lines." The ultrasonic-bonded seams can be torn to permit removal of the training pant. In her reexamination petition, Cole addressed Strohbeen as material “only to the extent that both patents [‘239 and Strohbeen] deal with disposable underpants garments and multiple absorbent layers. Structurally, the [Strohbeen] patent is not believed to be material to the claimed subject matter of the instant patent except for multiple absorbent layers." Cole further stated that the Strohbeen patent “appears to be drawn primarily to the side seams,” but concluded that "[t]he side seams of the [Strohbeen] patent are substantially different from the side seams of the instant `239 patent." This was Cole’s only statement regarding the side seams of the Strohbeen patent. Chapter 7 – Claim Construction

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Cole's 25 April 1991 reexamination request also addressed the Repke patent, which is assigned to Johnson & Johnson and discloses a disposable brief with separable sides. The Repke specification identifies a number of techniques for forming the side seams of its brief, including adhesive bonding and sonically sealed strips. Both methods of forming side seams allow tearing of the seams for removal when the brief becomes soiled. Cole commented on Repke's side seams in her reexamination request as follows: Side seams [of the Repke patent], which extend between leg cutout portions and the waist, are adhesively secured together. Several different embodiments of side seam constructions are illustrated. The different side seam embodiments including dovetailing, and butting, and variations thereof. A common characteristic of the side seams is that there are continuous adhesive beads [sic, bonds] of some type of adhesive, hot-melt elastic, or the like.

She also stated that Repke was "not believed to be pertinent, structurally, to any of the claims in [her] ‘239 patent.” On 10 July 1991, the examiner denied Cole's first request for reexamination. The examiner stated that the patents cited by Cole "are not material to the examination of the instant patent claims since the essential features of the claims . . . are not present in the cited patents." More specifically, the examiner stated that, inter alia, the "perforation means" are not disclosed in the cited patents. 3. The 1993 Request for Reexamination of the ‘239 Patent On 4 January 1993, Cole filed a second request for reexamination citing the Heran patent, described above, which is assigned to K-C. Cole stated, “[s]tructurally, the [Heran] patent is not believed to be material to the claimed subject matter of the [‘239] patent except possibly for having tearable side seams.” On 23 February 1993, the examiner denied Cole's second request for reexamination, stating that "although Heran et al does disclose the garment as having tearable side seams they do not include perforation means extending from the leg band means to the waist band means through the outer impermeable layer." In its decision, the district court did not specifically rely upon the second reexamination request and Cole’s comments about the Heran patent. 4. Construction of “Perforation Means” For purposes of this appeal, we focus our attention on the fifth element of claim 1, which reads, perforation means extending from the leg band means to the waist band means through the outer impermeable layer means for tearing the outer impermeable layer means for removing the training brief in case of an accident by the user.

The district court correctly ruled that the claimed “perforation means . . . for tearing” is not a meansplus-function element under § 112, ¶ 6, which reads as follows: An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.

35 U.S.C. § 112, ¶ 6 (1994). To invoke this statute, the alleged means-plus-function claim element must not recite a definite structure which performs the described function. Patent drafters conventionally achieved this by using only the words “means for” followed by a recitation of the function performed. Merely because a named element of a patent claim is followed by the word “means,” however, does not automatically make that element a “means-plus-function” element under 35 U.S.C. Chapter 7 – Claim Construction

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§ 112, ¶ 6. Laitram Corp. v. Rexnord, Inc., 939 F.2d 1533, 19 USPQ2d 1367 (Fed. Cir. 1991), cited in the dissenting opinion, creates no presumption to the contrary. The converse is also true; merely because an element does not include the word “means” does not automatically prevent that element from being construed as a means-plus-function element. See, e.g., Raytheon Co. v. Roper Corp., 724 F.2d 951, 957, 220 USPQ 592, 597 (Fed. Cir. 1983) (construing functional language introduced by “so that” to be equivalent to “means for” claim language), cert. denied, 469 U.S. 835 (1984); 1162 O.G. 59, 59 (17 May 1994) (examination guidelines stating that the term “means” is not required to invoke § 112, ¶ 6). We decide on an element-by-element basis, based upon the patent and its prosecution history, whether § 112, ¶ 6 applies. See Palumbo, 762 F.2d at 975, 226 USPQ at 8 (Fed. Cir. 1985) (courts should consider prosecution history when construing “means-plus-function” claims). The drafter of claim 1 in the ‘239 patent was clearly enamored of the word “means”: six of seven elements in that claim include the word “means,” which occurs in the claim fourteen times. We find, however, no reason to construe any of the claim language in claim 1 as reciting means-plus-function elements within the meaning of § 112, ¶ 6. For example, the “perforation means . . . for tearing” element of Cole’s claim fails to satisfy the statute because it describes the structure supporting the tearing function (i.e., perforations). The claim describes not only the structure that supports the tearing function, but also its location (extending from the leg band to the waist band) and extent (extending through the outer impermeable layer). An element with such a detailed recitation of its structure, as opposed to its function, cannot meet the requirements of the statute. Here, the claim drafter’s perfunctory addition of the word “means” did nothing to diminish the precise structural character of this element. It definitely did not somehow magically transform this element into a § 112, ¶ 6, “means-plusfunction” element. The district court correctly recognized that words in a patent claim are construed as they would be understood by a reader skilled in the relevant art unless it appears that the inventor used the words differently. Since there is no evidence to suggest that “perforation” has any meaning other than the dictionary definition accepted by the court, we look to that definition, which reads as follows: a hole, or one of a number of holes, bored or punched through something, as those between individual postage stamps of a sheet to facilitate separation.

Webster’s Encyclopedic Unabridged Dictionary (1989). We construe the “perforation means . . . for tearing” to mean “perforations” as did the district court. We further construe “perforations” in view of the above dictionary definition. Cole is also bound by her representations to the PTO during the prosecution of the ‘239 patent. Therefore, we next consider what effect the prosecution history of the ‘239 patent has, if any, on our construction of “perforation means.” Subsection II(A)(1) above discusses how Cole distinguished the Roberts patent. We believe Cole erred in her response to the first office action when she stated that “[t]he stitched seams can not be readily torn apart in the Roberts patent . . . .” The stitched seams in Roberts are designed to be readily torn apart by “grabbing the chain stitch and pulling same which disassociates edges 18 and 19.” Further, Roberts’ preferred embodiment uses a perforate seam rather than a chain stitch seam. We do not, however, agree with the district court’s interpretation of what Cole surrendered when distinguishing the Roberts patent in her first office action. The only thing Cole expressly surrendered when distinguishing the Roberts patent was stitched seams when she argued that perforations are not stitched seams. As noted above in subsection II(A)(2), in Cole’s first request for reexamination, she stated, “The side seams of the [Strohbeen] patent are substantially different from the side seams of the instant [Cole] patent.” The Strohbeen patent notes, however, that ultrasonic sealing is a “particularly preferred system for the [Strohbeen] invention.” Cole made similar arguments regarding the significance of the Repke patent. The district court found that an estoppel arose from Cole's distinction of the Strohbeen Chapter 7 – Claim Construction

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and Repke patent. We agree. When Cole distinguished these references, she thereby surrendered any argument that her “perforation means” encompasses ultrasonic bonded seams. This estoppel was bolstered when Cole distinguished the Heran patent in her second request for reexamination. As noted above in subsection II(A)(3), Cole stated that the Heran patent was not pertinent structurally, except possibly for having tearable side seams. Heran, however, discloses ultrasonic bonding to make its seams. See subsection II(A)(2). In summary, we believe the district court correctly concluded that the “perforation means” element is not a means-plus-function element under § 112, ¶ 6. We also believe the district court correctly interpreted the prosecution history to require that the “perforation means” limitation cannot be construed to include ultrasonic bonded seams. Cole surrendered ultrasonic bonded seams in her requests for reexamination. **** RADER, Circuit Judge, dissenting. In my view, the district court granted summary judgment in the face of disputed factual issues over both literal infringement and infringement by equivalents. Therefore, I respectfully dissent. My divergence on literal infringement focuses on the term “perforation means” in the fifth element of claim one. Under the statutory regime of 35 U.S.C. § 112, ¶ 6, a means-plus-function format has significant implications. Because the “perforation means . . . for tearing” claim also recites some structure, this court avoided addressing those implications. The recitation of some structure, however, does not remove a claim from the scope of section 112, ¶ 6. Laitram Corp. v. Rexnord, Inc., 939 F.2d 1533, 1536, 19 USPQ2d 1367, 1369 (Fed. Cir. 1991). Mere invocation of the word “means” also does not magically conjure all the implications of means-plus-function claiming, but Laitram suggests that the use of “means” creates at least a presumption in favor of section 112, ¶ 6. See id.; see also York Prods. Inc. v. Central Tractor Farm & Family Ctr., 99 F.3d 1568, 40 USPQ2d 1619, 1623 (Fed. Cir. 1996) (“[T]he use of the word “means” triggers a presumption that the inventor used the term advisedly to invoke the statutory mandates for means-plus-function clauses.”) (citing Greenberg v. Ethicon EndoSurgery, Inc., 91 F.3d 1580, 1584, 39 USPQ2d 1783, 1787 (Fed. Cir. 1996)). Some claim language describing the location of the structure should not be sufficient to over-come this presumption. Nor does the word “perforation” provide enough structure to negate the import of the very next word — “means.” I would honor the presumption and construe this claim under the statutory guidance of section 112. To literally infringe a means-plus-function claim, an accused device must employ means identical to or the equivalent of the structures described in the patent specification. Valmont Indus. v. Reinke Mfg. Co., 983 F.2d 1039, 1042, 25 USPQ2d 1451, 1454 (Fed. Cir. 1993). The final inquiry as to whether an accused element is an “equivalent” is a question of fact. D.M.I., Inc. v. Deere & Co., 755 F.2d 1570, 1575, 225 USPQ 236, 239 (Fed. Cir. 1985). This court specifically refused to revisit this issue in Markman v. Westview Instruments, Inc., 52 F.3d 967, 977 n.8, 34 USPQ2d 1321, 1327 n.8 (Fed. Cir. 1995), aff’d, (1996). Because the district court did not address any structural equivalents under § 112, ¶ 6, genuine issues of material fact remain on the literal infringement issue. Further, the parties hotly dispute the prosecution history. Cole herself twice requested reexamination, citing the Repke, Strohbeen, and Heran patents. Both times her lawyer stated that these patents were not pertinent, structurally, to any of the claims in the Cole patent. In particular, Cole pointed out differences between the absorbent structures in the prior art and those recited in her claims. With regard to seams, Cole surrendered only coverage of “stitched seams.” Cole did not change her claims to escape coverage of any prior art. See Pall Corp. v. Micron Separations, Inc., 66 F.3d 1211, 1219, 36 USPQ2d 1225, 1230 (Fed. Cir. 1995) (“Prosecution history estoppel normally arises when a change of claim scope is made in order to overcome an examiner’s rejection based on prior art.”). Thus, Chapter 7 – Claim Construction

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prosecution history estoppel should only pose a bar to her infringement case if her statements were “unmistakable.” Athletic Alternatives, Inc. v. Prince Mfg., Inc., 73 F.3d 1573, 1582, 37 USPQ2d 1365, 1373 (Fed. Cir. 1996); Texas Instruments Inc. v. United States Int’l Trade Comm’n, 988 F.2d 1165, 1174, 26 USPQ2d 1018, 1025 (Fed. Cir. 1993); accord Southwall Techs., Inc. v. Cardinal IG Co., 54 F.3d 1570, 1580, 34 USPQ2d 1673, 1680 (Fed. Cir.), cert. denied, (1995). This ambiguous record does not provide “unmistakable” evidence of Cole’s intent to surrender coverage. Thus, genuine issues of material fact remain preventing summary judgment on infringement by equivalents.

Personalized Media Communications, L.L.C. v. International Trade Comm’n 161 F.3d 696, 48 USPQ2d 188 (Fed. Cir. 1998) Before RICH, MICHEL and LOURIE, Circuit Judges. LOURIE, Circuit Judge. **** BACKGROUND A. The Patented Technology PMC is the assignee of United States Patent 5,335,277, which pertains generally to systems for use in television broadcasting. The '277 patent specification is quite long; it spans 328 columns and 22 drawing sheets, and contains numerous embodiments of the claimed inventions. Only those embodiments that are necessary to understand the claims at issue are described herein. The system of the '277 patent includes a unique receiver station that detects and manipulates digital control signals that are embedded in a complex broadcast or cablecast transmission. The specification highlights several benefits that result from the detection and use of the control signals. For example, the control signals can be detected by receiver stations and used to select a specific program from a multi-channel programming transmission. . . . The control signals can alternatively be used to remotely control the operation of peripheral devices such as VCRs. . . . As explained in the specification, a given broadcast can contain several control signals which appear at varying "locations" within the broadcast: In programming transmissions, given signals may run and repeat, for periods of time, continuously or at regular intervals. Or they may run only occasionally or only once. They may appear in various and varying locations. In television they may appear on one line in the video portion of the transmission such as line 20 of the vertical interval, or on a portion of one line, or on more than one line, and they will probably lie outside the range of the television picture displayed on a normally tuned television set. In television and radio they may appear in a portion of the audio range that is not normally rendered in a form audible to the human ear. . . . In all cases, signals may convey information in discrete words, transmitted at separate times or in separate locations, that [the] receiver apparatus must assemble in order to receive one complete instruction.

. . . Because the location of a given control signal can vary within the transmission, a controller within the system can be programmed or "preinformed" with this location information or other information concerning the control signal in order to identify only the relevant control signal while disregarding other signals. This is also explained in the specification, which notes that "the pattern of the composition, timing, and location of embedded signals may vary in such fashions that only receiving apparatus that are [sic] preinformed regarding the patterns that obtain at any given time will be able to process the signals correctly." . . .

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These aspects of the disclosure are addressed in asserted claims 6 and 7 of the '277 patent, which read as follows: 6 A system for identifying a predetermined signal in a television program transmission in which a plurality of signal types are transmitted[,] said signal being transmitted in a varying location or a varying timing pattern, said television program transmission being separately defined from standard analog video and audio television, said system comprising: a digital detector for receiving said transmission and detecting said predetermined signal in said transmission based on either a specific location or a specific time; and a controller operatively connected to said detector for causing said detector to detect said predetermined signal based on either a specific location or time, said controller being programmed with either the varying locations or the varying timing pattern of said signal. 7. A system for locating or identifying a specific signal in a television program transmission that contains digital information and for assembling information contained in said specific signal, said transmission being separately defined from standard analog video and audio television, said system comprising: a digital detector for receiving at least some information of said transmission and detecting said specific signal at a specific location or time; a storage device operatively connected to said digital detector for receiving detected digital information of said specific signal and assembling at least some of said digital information into either information or instruction message units; and a controller operatively connected to said detector and said storage device for causing said detector to locate, detect or output said signal and for controlling a technique used by said storage device to assemble message units, said controller being programmed with information of the composition of said signal or with either the varying location or the varying timing pattern of said signal.

**** B. The Proceedings Before the Commission PMC filed a complaint with the Commission asserting that the various Intervenors herein were importing Digital Satellite Systems (DSSs) that infringed claims 6, 7, and 44 of PMC's '277 patent in violation of 19 U.S.C. § 1337(a) (1994) ("Section 337"). In response, the Commission instituted an investigation on December 18, 1996, see 61 Fed. Reg. 66695-96 (1996), which culminated in a 450page Initial Determination in which the Administrative Law Judge (ALJ) recommended that the Commission conclude that Section 337 had not been violated. Specifically, the ALJ concluded that: (1) the asserted claims were invalid as indefinite under 35 U.S.C. § 112, ¶ 2; (2) the asserted claims were invalid as not enabled under 35 U.S.C. § 112, ¶ 1; (3) claim 7 is invalid as anticipated under 35 U.S.C. § 102; and (4) no asserted claim was infringed. PMC petitioned the Commission to review the Initial Determination. The Commission determined not to review, and thereby adopted, the ALJ's various claim constructions and his conclusions that the claims were indefinite and not infringed. See Final Determination at 2. However, the Commission took "no position" on the remaining issues addressed in the Initial Determination. See id. Accordingly, only the ALJ's claim construction, indefiniteness, and noninfringement determinations are before this court. 1. Indefiniteness The ALJ's indefiniteness determination turned upon his conclusion that the claim limitation "digital detector for . . . ," a limitation appearing in all of the asserted claims, constituted a means-plus-function limitation to be construed in accordance with 35 U.S.C. § 112, ¶ 6 (1994). The ALJ interpreted this limitation to be "a functional phrase, not limited to particular structure." Initial Determination at 82. The ALJ first consulted dictionary definitions, but found that "dictionary definitions of 'detector,' digital,' and 'digital circuit' do not resolve the question whether the entire phrase digital detector conveys specific structure to one of ordinary skill in the art." Id. at 67. The ALJ also found that the specification lacked a "specific structure" for a "digital detector," but instead merely described a digital detector in functional Chapter 7 – Claim Construction

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terms, i.e., as a device that "acts to detect the digital signal information embedded in [the information which constitutes the video transmission]." Id. at 70 (citing '277 patent, col. 21, ll. 46-47). Finally, the ALJ referenced the testimony of various experts to the effect that while one of ordinary skill would understand a "digital detector" to refer to a detector of digital information, the phrase lacked a specific structure and could not be built by those of ordinary skill. See id. at 73-82. Having concluded that the scope of the term "digital detector" was governed by § 112, ¶ 6, the ALJ consulted the specification to determine whether it contained corresponding structure, but, as already mentioned, found none. Accordingly, and relying on In re Dossel, 115 F.3d 942, 42 USPQ2d 1881 (Fed. Cir. 1997),5 the ALJ concluded that the term "digital detector" was indefinite and held the claims invalid. **** PMC appealed the judgment to this court. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(6) (1994). DISCUSSION We review factual findings of the Commission under the "substantial evidence" standard. . . . Under this standard, we will not disturb the Commission's factual findings if they are supported by "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." **** "An infringement analysis entails two steps. The first step is determining the meaning and scope of the patent claims asserted to be infringed. The second step is comparing the properly construed claims to the device accused of infringing." . . . The first step, claim construction, is a question of law which we review de novo. . . . The second step is factual. . . . When construing a claim, a court principally consults the evidence intrinsic to the patent, viz., the claims themselves, the written description portion of the specification, and the prosecution history. . . . Whether certain claim language invokes 35 U.S.C. § 112, ¶ 6 is an exercise in claim construction and is therefore a question of law, reviewable de novo by this court. . . . Likewise, whether a claim is indefinite under 35 U.S.C. § 112, ¶ 2 is also a question of law, reviewable de novo by this court. . . . A. Applicability of 35 U.S.C. § 112, ¶ 6 PMC argues that the Commission erred in construing the "digital detector" limitation as a means-plusfunction limitation under 35 U.S.C. § 112, ¶ 6. In support, PMC contends that the term "digital detector" recites sufficiently definite structure to prevent the application of § 112, ¶ 6 under our case law. PMC also points out that our case law makes clear that § 112, ¶ 6 should not be invoked merely because this structure takes its name in accordance with its function. Finally, PMC argues that the lack of the term "means" in this limitation invokes a presumption that § 112, ¶ 6 does not apply. The Commission responds that the evidence of record makes it clear that one of ordinary skill in the electrical arts would not have understood the term "digital detector" to connote a definite structure, and therefore that this limitation is defined entirely by the functional language that follows the language "digital detector for . . . ." Accordingly, they contend that § 112, ¶ 6 is applicable to this limitation. 5

In Dossel, we stated that a claim containing a means-plus-function element will generally be held indefinite if the specification does not contain an adequate disclosure of structure corresponding to the function of the claims. See Dossel, 115 F.3d at 946, 42 USPQ2d at 1885 (citing In re Donaldson Co., 16 F.3d 1189, 1195, 29 USPQ2d 1845, 1850 (Fed. Cir. 1994) (en banc)). Despite this general rule, in Dossel we held, on "specific facts," a means-plus-function claim not invalid for indefiniteness under § 112, ¶ 2 even though the algorithmic structure corresponding to "means for reconstructing" was not specifically disclosed in the written description. See id. at 946-47, 42 USPQ2d at 1885 ("Neither the written description nor the claims uses the magic word 'computer,' nor do they quote the computer code that may be used in the invention. . . . [However, w]hile the written description does not disclose exactly what mathematical algorithm will be used to compute the end result, it does state that 'known algorithms' can be used to solve standard equations which are known in the art."). The ALJ here found Dossel's "specific facts" distinguishable from the present case. See Initial Determination at 140.

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Section § 112, ¶ 6 provides that [a]n element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.

35 U.S.C. § 112, ¶ 6 (1994) (emphasis added). Thus, § 112, ¶ 6 operates to restrict claim limitations drafted in such functional language to those structures, materials, or acts disclosed in the specification (and their equivalents) that perform the claimed function. We have had several recent opportunities to assess whether certain claim language has invoked § 112, ¶ 6. In Greenberg v. Ethicon Endo-Surgery, Inc., 91 F.3d 1580, 39 USPQ2d 1783 (Fed. Cir. 1996), we were presented with the claim language "detent mechanism defining conjoint rotation of said shafts." In deciding that § 112, ¶ 6 was not invoked, we stated [T]he fact that a particular mechanism—here "detent mechanism"—is defined in functional terms is not sufficient to convert a claim element containing that term into a "means for performing a specified function" within the meaning of [§ 112, ¶ 6]. Many devices take their names from the functions they perform. The examples are innumerable, such as "filter," "brake," "clamp," "screwdriver," or "lock." . . . . "Detent" (or its equivalent "detent mechanism") is just such a term. Dictionary definitions make clear that the noun "detent" denotes a type of device with a generally understood meaning in the mechanical arts, even though the definitions are expressed in functional terms. It is true that "detent" does not call to mind a single well-defined structure, but the same could be said of other commonplace structural terms such as "clamp" or "container." What is important is not simply that a "detent" or "detent mechanism" is defined in terms of what it does, but that the term, as the name for structure, has a reasonably well understood meaning in the art.

Greenberg, 91 F.3d at 1583, 39 USPQ2d at 1786 (citations omitted). We also made clear that use of the term "means" is central to the analysis: "the use of the term 'means' has come to be so closely associated with 'means-plus-function' claiming that it is fair to say that the use of the term 'means' (particularly as used in the phrase 'means for') generally invokes [§ 112, ¶ 6] and that the use of a different formulation generally does not." Id. at 1584, 39 USPQ at 1787. Subsequent cases have clarified that use of the word "means" creates a presumption that § 112, ¶ 6 applies, see York Prods., Inc. v. Central Tractor, 99 F.3d 1568, 1574, 40 USPQ2d 1619, 1623 (Fed. Cir. 1996) ("In determining whether to apply the statutory procedures of [§ 112, ¶ 6], the use of the word 'means' triggers a presumption that the inventor used this term advisedly to invoke the statutory mandates for means-plus-function clauses."),9 and that the failure to use the word "means" creates a presumption that § 112, ¶ 6 does not apply, see Mas-Hamilton, 156 F.3d at 1213, 48 USPQ2d at 1016. These presumptions can be rebutted if the evidence intrinsic to the patent and any relevant extrinsic evidence so warrant. See, e.g., Cole v. Kimberly-Clark Corp., 102 F.3d at 524, 531, 41 USPQ2d 1001, 1006 (Fed. Cir. 1996) (noting that whether § 112, ¶ 6 is invoked involves an analysis of the "patent and the prosecution history," and consulting a dictionary definition of "perforation" to understand if one of skill in the art would understand this term to connote structure). In deciding whether either presumption has been rebutted, the focus remains on whether the claim as properly construed recites sufficiently definite structure to avoid the ambit of § 112, ¶ 6. See Sage Prods. v. Devon Indus., Inc., 126 F.3d 1420, 1427-28, 44 USPQ2d 1103, 1109 (Fed. Cir. 1997) ("[W]here a claim recites a function, but then goes on to elaborate sufficient structure, material, or acts within the claim itself to perform entirely the 9

See also Unidynamics Corp. v. Automatic Prods. Int'l, Ltd., 157 F.3d 1311, 1319, 48 USPQ2d 1099, 1104 (Fed. Cir. 1998) (holding that the claim language "spring means tending to keep the door closed" invokes § 112, ¶ 6: "the recitation of 'spring,' which is structural language, [does not take] the limitation out of the ambit of the construction dictate of § 112, ¶ 6."); Serrano v. Tellular Corp., 111 F.3d 1578, 1582, 42 USPQ2d 1538, 1541 (Fed. Cir. 1997) (holding that the claim language "determination means . . . for determining" invokes § 112, ¶ 6); Laitram Corp. v. Rexnord, Inc., 939 F.2d 1533, 1536, 19 USPQ2d 1367, 1369 (Fed. Cir. 1991) (holding that the claim language "means for joining said pluralities [of link ends] to one another so that the axes of [certain holes are arranged in certain configurations]" invokes § 112, ¶ 6: "The recitation of some structure in a means-plus-function element does not preclude the applicability of [§ 112, ¶ 6 when it] merely serves to further specify the function of the means. The recited structure tells only what the means-for-joining does, not what it is structurally.") (emphasis in original).

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recited function, the claim is not in means-plus-function format" even if the claim uses the term "means"). Taking these principles into consideration, we agree with PMC that the Commission erred in construing the term "digital detector" as a means-plus-function limitation. The "digital detector" limitation does not use the word "means," and therefore this limitation is presumed not to invoke § 112, ¶ 6. Neither intrinsic nor extrinsic evidence rebuts this presumption because the term "detector" is a sufficient recitation of structure. "Detector" is not a generic structural term such as "means," "element," or "device"; nor is it a coined term lacking a clear meaning, such as "widget" or "ram-a-fram."11 Instead, as noted by the ALJ by reference to dictionary definitions, "detector" had a well-known meaning to those of skill in the electrical arts connotative of structure, including a rectifier or demodulator.12 No other extrinsic evidence, including the expert testimony, and no evidence intrinsic to the patent casts doubt on this conclusion. Moreover, neither the fact that a "detector" is defined in terms of its function, nor the fact that the term "detector" does not connote a precise physical structure in the minds of those of skill in the art detracts from the definiteness of structure. See Greenberg, 91 F.3d at 1583, 39 USPQ2d at 1786 (quoted supra). Even though the term "detector" does not specifically evoke a particular structure, it does convey to one knowledgeable in the art a variety of structures known as "detectors." We therefore conclude that the term "detector" is a sufficiently definite structural term to preclude the application of § 112, ¶ 6. Much of the ALJ's analysis (and the Commission's arguments to this court) centered around the ambiguity raised by the phrase "digital detector." However, an adjectival qualification ("digital") placed upon otherwise sufficiently definite structure ("detector") does not make the sufficiency of that structure any less sufficient for purposes of § 112, ¶ 6. Instead, it further narrows the scope of those structures covered by the claim and makes the term more definite. The use of the word "digital" in conjunction with the word "detector" merely places an additional functional constraint (extraction of digital information) on a structure (detector) otherwise adequately defined. See, e.g., '277 patent, col. 21, ll. 46-47 (defining "digital detector" as a device that "acts to detect the digital signal information" in other information). Accordingly, we hold that the "digital detector" limitations in asserted claims 6, 7, and 44 recite sufficiently definite structure and therefore do not come within the ambit of § 112, ¶ 6. B. Indefiniteness Having decided that § 112, ¶ 6 does not apply to the "digital detector" limitation of the asserted claims, much of the support for the ALJ's rationale for declaring the claims invalid under Donaldson and Dossel disappears. See note 5, supra. However, the Commission still contends that the term "digital detector" is indefinite irrespective of the applicability of § 112, ¶ 6. Specifically, it contends that the evidence of record, particularly the expert testimony relied on by the ALJ, shows that the term "digital detector" has no well-understood meaning in the art and is therefore indefinite. PMC disagrees with the Commission's assessment of the evidence and argues that the term "digital detector" has a wellunderstood meaning in the art. PMC also contends that the specification clearly apprises one of ordinary skill of the scope of the term. As mandated by the definiteness requirement of 35 U.S.C. § 112, ¶ 2, a specification shall include claims "particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention" (emphasis added). Determining whether a claim is definite requires an analysis of "whether one skilled in the art would understand the bounds of the claim when read in light of the specification . . . . If the claims read in light of the specification reasonably apprise those skilled in the art of the scope of the invention, § 112 demands no more." Miles Lab., Inc. v. Shandon, Inc., 997 F.2d 11

The latter of these terms was creatively coined by Judge Michel at oral argument in this case. For example, the ALJ quoted the following dictionary definition of "detector": "'(1) : a device for determining the presence of a signal (2) : a rectifier of high-frequency current (as a cat whisker and crystal or a vacuum tube) (3) : a device for extracting the intelligence from a signal (4) DEMODULATOR 1.'" Initial Determination at 66 (citation to Webster's omitted). 12

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870, 875, 27 USPQ2d 1123, 1126 (Fed. Cir. 1993). A determination of claim indefiniteness is a legal conclusion that is drawn from the court's performance of its duty as the construer of patent claims. Cf. North Am. Vaccine, Inc. v. American Cyanamid Co., 7 F.3d 1571, 1579, 28 USPQ2d 1333, 1339 (Fed. Cir. 1993) ("[W]hile the parties in the midst of a dispute have disagreed concerning the meaning of the claims, the claims are not so lacking in clarity as to be invalid [as indefinite]."). We agree with PMC and conclude that the Commission erred in holding the asserted claims to be indefinite. Here, the written description of the specification is sufficient to inform one skilled in the art of the meaning of the claim language "digital detector." It explicitly defines a "digital detector" as a device that "acts to detect the digital signal information" in another stream of information. See '277 patent, col. 21, ll. 46-47 (detection of digital signal in video transmission); id. at ll. 59-60 (detection of digital signal in audio transmission); id. at ll. 63-65 (detection of digital signal in "any other information portion of said television signal.”). **** The expert testimony relied upon by the parties does not alter this conclusion. Extrinsic evidence may not be relied upon during claim construction when the intrinsic evidence unambiguously defines the disputed claim language. See Bell & Howell Document Management Prods. Co. v. Altek Sys., 132 F.3d 701, 706, 45 USPQ2d 1033, 1038 (Fed. Cir. 1997). Accordingly, because the meaning of the term "digital detector" is unambiguously set forth in the specification, the expert testimony on this issue is irrelevant to the issue of indefiniteness and cannot serve to inject ambiguity where none exists. The Commission makes much of the fact that the specification is otherwise silent concerning the structure of a "digital detector," and it notes that the "digital detectors" of the circuit diagrams do not reveal circuit elements constituting such a device, but only portray these devices as mere functional blocks. . . . Moreover, the Commission relies on expert testimony stating generally that a "digital detector" was not adequately disclosed in the patent and could not be built by those of ordinary skill. See, e.g., Initial determination at 77 (testimony of Ciciora: "there is no clue that any engineer of ordinary skill . . . could begin to put pencil to paper and say here is how I would build the contents of [the digital detector] block. It is completely underspecified."); id. at 79 (testimony of Williams: "[The patent] shows a digital detector. It does not go into detail of how it may work . . . ."). We conclude that the evidence relied upon by the Commission does not indicate imprecision of the claims. Instead, it is relevant, if at all, only to the sufficiency of the written description to enable the practice of the invention of the claims, which is a ground of invalidity under § 112, ¶ 1. See In re Borkowski, 422 F.2d 904, 909, 164 USPQ 642, 645-46 (CCPA 1970) (noting that a claim of clear scope that is not adequately supported by an enabling disclosure commensurate with that scope is objectionable under § 112, ¶ 1, not § 112, ¶ 2. . . . We are aware that the ALJ held the claims invalid under § 112, ¶ 1 for lack of enablement, specifically focusing on the "digital detector" limitation. However, we express no opinion on any theory of invalidity under § 112, ¶ 1 because such a ground of decision is not before us as it was not reviewed by the Commission. See note 3, supra, and accompanying text. In any event, citation of evidence bearing solely on § 112, ¶ 1 infirmities does not aid the Commission in supporting the ALJ's indefiniteness holding under § 112, ¶ 2, and this holding is therefore reversed. **** CONCLUSION The Commission erred in concluding that the "digital detector" limitations in the asserted claims rendered these claims invalid for indefiniteness under § 112, ¶ 2. The Commission also erred in concluding that claim 7 was not infringed, and we vacate this ruling and remand for further consideration of this issue. The Commission, however, did not err in concluding that claim 6 was not

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infringed. We decline to address PMC's argument in support of infringement of claim 44 because it was not raised below. The decision of the Commission is therefore AFFIRMED-IN-PART, REVERSED-IN-PART, VACATED-IN-PART and REMANDED.

Questions, Comments, Problems 1. Means-Plus-Function Before the PTO – Through the 1980s and into the 1990s, a schism developed between construction of means-plus-function clauses in infringement actions and in the PTO. While the Federal Circuit was rigorously enforcing the narrowing construction of means-plus-function clauses required by section 112, para. 6 on appeals from district court infringement actions and from International Trade Commission patent proceedings, the PTO was applying a different principle of claim construction and was basically ignoring section 112, para. 6. That principle was a longstanding PTO rule that, in the PTO, claims are to be given the broadest interpretation they can reasonably bear. The rationale was that, since applicants still had the opportunity to amend their claims, reading claims broadly in the PTO would cause the applicants to amend their claims or add new, narrower claims to avoid the prior art with the result of lessening the possibility that after the patent is granted, the claims may be interpreted as giving broader coverage than is justified. See In re Prater, 415 F.2d 1393, 1404-05, 162 USPQ 541, 550-51 (CCPA 1969). The Federal Circuit put an end to the schism in 1994 in an in banc decision, In re Donaldson Co., 16 F.3d 1189, 29 USPQ2d 1845 (Fed. Cir. 1994) (in banc). The court held that the PTO must apply section 112, para. 6 in exactly the same way as done by the courts in infringement actions, following the mandate of the statute. No longer could patent examiners read means-plus-function clauses as covering any structure that performs the function, not just the structure described in the specification and equivalents. The court rejected the PTO’s reliance on the “broadest reasonable interpretation” rule as any excuse for disregarding section 112, para. 6. Can you see how, before In re Donaldson, patentees could be whipsawed between the PTO and the district courts when they used means-plus-function clauses? 2. The “Means” Presumption – What does the court mean when it says that use of the term “means” in a claim limitation raises a presumption that the limitaiton is a means-plus-function limitation? What kind of presumption is the court discussing? Because claim construction is a legal analysis to be conducted by the court, the presumption cannot be a classic factual evidentiary presumption. Perhaps the court is saying that the burden of raising an argument rests on one party or the other based on whether the claim mentions a “means.” However, as noted by the court in Exxon, supra, the court is tasked with discerning the proper construction of a claim regardless of the arguments raised by the parties. Thus, isn’t the question whether the claim recites a function without adequate supporting structure? Will the answer to this question differ based on whether the claim recites or fails to recite a “means”? Thus, does the court’s emphasis on a socalled presumption simply detract from the relevant means-plus-function analysis? 3. The Means-Plus-Function Minefield – So many cases have come out over the past few years that it can be very difficult to keep track of them. The following table attempts to bring the disparate facts and conclusions into focus. Case Cite

Claim Element

112/6 ?

Reason

Interspiro Inc. v. Figgie Int'l, 815 F. Supp. 1488 (D. Del. 1993), aff'd, 18 F.3d 927 (Fed. Cir. 1994), Greenberg v. Ethicon EndoSurgery, Inc., 91 F.3d 1580 (Fed. Cir. 1996)

"detent means…for moving and maintaining [the] movable member" in a breathing regulator for a fireman's mask. “detent mechanism defining the conjoint rotation of said shafts in predetermined intervals”

Yes.

It used classic means-plus-function format, which made it clear the patentee had elected to use section 112, para. 6.

No.

York Prods., Inc. v. Central Tractor Farm & Family Center, 99 F.3d 1568 (Fed. Cir. 1996)

Means formed on the upwardly extending liner sidewall portions including a plurality of spaced apart, vertically extending ridge members protruding from the liner

No.

It is not enough that the mechanism is defined in functional terms. “[T]he term, as the name for structure, has a reasonably well understood meaning in the art.” Although use of the word “means,” triggers a presumption, the word is followed by a “detailed recitation of structure.”

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Cole v Kimberly-Clark, 102 F.3d 524 (Fed. Cir. Dec. 6, 1996)

Sage Prods. v. Devon Indus., 126 F.3d 1420 (Fed. Cir. 1997) Mas-Hamilton Group v. LaGard, Inc., 156 F.3d 1206 (Fed. Cir. 1998)

Unidynamics Corp. v. Automatic Prods., 157 F.3d 1311 (Fed. Cir. Sept. 18, 1998)

sidewall portions and forming load locks…, said load locks having a depth sufficient to anchor… “perforation means extending from the leg band means to the waist band means through the outer impermeable layer means for tearing the outer impermeable layer means for removing the training brief in case of an accident by the user.” “closure means pivotably associated with said plate means and being movable with respect to said slot means for controlling access thereto” “a substantially non-resilient lever moving element for moving the lever from its disengaged position for engaging the protrusion of the lever with the cam surface” “spring means tending to keep the door closed.”

No.

The element describes the structure supporting the tearing function and also the location of the structure.

Yes.

The element recites a “means” and a function, “controlling.” It does not recite any structure for performing the function.

Yes.

Although the element does not recite a “means,” the district court properly found that "lever moving element" lacks a reasonably well understood meaning as a structure in the relevant lock art. The use of “means” indicates an intent to invoke 112/6, and recitation of “spring” is insufficient to change the outcome since it is the only non-functional language. Cole, in contrast, also described the location and extent of the structure. The element does not recite “means,” and “detector” has a well-known meaning to skilled artisans, and is not a “generic structural term” or a “coined term lacking a clear meaning.” The adjective “digital” does not change things, because “detector” is adequate structure by itself. They do not contain the term “means,” and although they recite a function, they also recite some structure.

Yes.

Personalized Media Comm. v. ITC, 161 F.3d 696 (Fed. Cir. Nov. 28, 1998)

“digital detector operatively connected to a mass medium receiver for detecting…and transferring…

No.

Al-Site Corp. v. VSI Int’l, Inc., 174 F.3d 1308 (Fed. Cir. Mar. 30, 1999)

“eyeglass hanger member . . . made from flat sheet metal [and having] an opening means formed . . . below [its] upper edge” and “eyeglass hangers having an attaching portion attached to a portion of the frame of an associated pair of eyeglasses.” “positioning means for moving said transducer means…, said positioning means including [a list of structural sub-elements]”

No.

“means for generating control signals,” “ink delivery means,” and “means for controlling said ink delivery means” “charge sink means . . . buried within said semiconductor”

Yes.

“rotary means”

Yes.

“memory selection second switch means being adapted to select [two positions].”

Yes.

“attachment means for removably securing [a cover to a housing, the cover] including means for increasing the pressure.” “interface means,” “indicator means,” and “feed rate adjust means”

Yes.

Rodime PLC v. Seagate Tech., --- F.3d ---- (Fed. Cir. Apr. 13, 1999)

Signtech USA, Ltd. v. Vutek, Inc., 174 F.3d 1352 (Fed. Cir. Apr. 9, 1999) Loral Fairchild Corp. v. Sony Corp., 181 F.3d 1313 (Fed. Cir. June 8, 1999) Odetics v. Storage Technology Corp., 185 F.3d 1259 (Fed. Cir. July 6, 1999) Overhead Door Corp. v. Chamberlain Group, Inc., 194 F.3d 1261 (Fed. Cir. Oct. 13, 1999) Toro Co. v. White Consolidated Indus., Inc., 199 F.3d 1295 (Fed. Cir. Dec. 10, 1999) IMS Technology, Inc. v. Hass Automation, Inc., 206 F.3d 1422 (Fed. Cir. Mar. 27, 2000)

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No.

No.

The element recites a “means” and a function, “moving.” However, the detailed recitation of structural subelements takes the claim element out of 112/6. “ink delivery means” is really the same as “means for ink delivery"

The element contains both structure and location of the structure.

Yes.

393

Kemco Sales, Inc. v. Control Papers Co., 208 F.3d 1352 (Fed. Cir. Apr. 7, 2000) Envirco Corp. v. Clestra Cleanroom, Inc., 209 F.3d 1360 (Fed. Cir. Apr. 18, 2000)

“plastic envelope closing means”

Yes.

No effective discussion.

“second baffle means”

No.

“Means” presumption is overcome by the recitation of structure (a baffle) and subsequent recital of location and other structure

4. Step-Plus-Function – Because courts have long upheld the breadth of process claims as not limited to any particular apparatus, it is rare to see section 112, para. 6 invoked by use of “step-plus-function” phrases in method claims. In one case, the court strongly refused to place a method claim under section 112, para. 6: [Method claim 1] includes a determining step rather than a determination means, but it is not drafted in “step plus function” form. That is because it does not recite a function. See 35 U.S.C. § 112, ¶ 6 (1994). Rather, it recites only the act of determining a last-dialed digit. Therefore, we must simply apply the claim language to the accused devices free from the limiting requirements of section 112, ¶ 6. Serrano v. Telular Corp., 111 F.3d 1578, 1583, 42 USPQ2d 1538, 1542 (Fed. Cir. 1997). To the same effect was O.I. Corp. v. Tekmar Co., 115 F.3d 1576, 42 USPQ2d 1777 (Fed. Cir. 1997) (“the step[s] of . . . passing the analyte slug through a passage” did not invoke section 112, para. 6). 5. Corresponding Structure – What is the relationship between the claimed “means” and the corresponding structure in the patent? Section 112 simply states that the means-plus-function element “shall be construed to cover the corresponding structure . . . described in the specification.” Thus, in In re Donaldson Co., 16 F.3d 1189, 29 USPQ2d 1845 (Fed. Cir. 1994) (in banc), the Federal Circuit stated that means-plus-function claims, though worded functionally, are subject to the definiteness requirement of the patent law: [I]f one employs means-plus-function language in a claim, one must set forth in the specification an adequate disclosure showing what is meant by that language. If an applicant fails to set forth an adequate disclosure, the applicant has in effect failed to particularly point out and distinctly claim the invention as required by the second paragraph of section 112. Id. at 1195, 29 USPQ2d at 1850. A panel of the court went further in B. Braun Medical, Inc. v. Abbott Laboratories, 124 F.3d 1419, 43 USPQ2d 1896 (Fed. Cir. 1997). There, the court stated: We hold that, pursuant to this provision [section 112, para. 6], structure disclosed in the specification is “corresponding” structure only if the specification or prosecution history clearly links or associates that structure to the function recited in the claim. This duty to link or associate structure to function is the quid pro quo for the convenience of employing §112, ¶ 6. Id. at 1424, 43 USPQ2d at 1900. Although this requirement should not be difficult for a competent patent draftsperson to meet, it will probably throw an obstacle in front of any litigator trying to assert a patent drafted by someone who does not understand even the basics of means-plus-function claiming. Of course, it also provides a new opportunity to those who challenge such claims. Do you believe the “clearly links or associates” requirement is a good idea from a policy standpoint? 6. The Function – To have a means-plus-function clause cover an accused device, the device must first of all perform the identical function set forth in the means clause. This was the holding of the majority of the Federal Circuit in the in banc decision in Pennwalt Corp. v. Durand-Wayland, Inc., 833 F.2d 931, 4 USPQ2d 1737 (Fed. Cir. 1987) (in banc). The late Judge Jean Bissell stated for the court: The statute [§112, ¶ 6] means exactly what it says: To determine whether a claim limitation is met literally, where expressed as a means for performing a stated function, the court must compare the accused structure with the disclosed structure, and must find equivalent structure as well as identity of claimed function for that structure. [Citations omitted] **** We need not, and do not, determine whether the district court correctly found no equivalency in structure because the district court also found that the accused devices, in any event, did not perform the same functions specified in the claim. For example, the district court found that the

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accused devices had no position indicating means which tracked the location of the item being sorted. That finding negates the possibility of finding literal infringement. 7. Looking Forward – Don’t feel bad if you still could not categorize any particular claim element as means-plus-function or not (especially where the claim element is poorly drafted). Clearly, a patent drafter should understand the effect of section 112, para. 6 on a claim, should invoke it only with a definite goal in mind, and should then make it clear that section 112, para. 6 is the intended course for a claim. However, as long as the section 112, para. 6 analysis of the Federal Circuit lets drafters be sloppy, they will. With the court’s analysis of this issue becoming increasingly complex and unclear, the issue is heading straight for an en banc clarification by the full court. Consider the following: •

The Federal Circuit could apply a traditional, confusing analysis to the case that is taken en banc and to cases involving patents that issue before the en banc case issues. This note does not speak to the analysis the court should apply to those cases. The Federal Circuit could then announce a different, and hopefully, simplified, analysis to apply prospectively.

•

The new analysis would be premised upon the idea that Congress provided patent applicants with section 112, para. 6 as a voluntary provision. Because patent applicants have the option to invoke the provision, they should be clear when they intend to do so.

•

Under the new analysis, patent applicants may invoke the provision only through the use of the term “means.” That term should be reserved for invocation of section 112, para. 6 much like certain terms are reserved in computer languages (e.g., GOTO and PRINT). The term “means” may not be preceded by any modifying terms and must be followed immediately by the term “for.” The term “for” must be followed immediately by a function.

•

Under the analysis, any claim that uses the term “means” but does not follow these other requirements is indefinite as a matter of law. Any claim limitation that does not use the term “means” cannot be a means-plus-function limitation, and, if worded purely in terms of function, is in danger of being indefinite.

•

This approach is consistent with the statute, and probably more so than the court’s current analysis. Therefore, no action by Congress is required to analyze claims in this manner. The Federal Circuit could, on its own, bring greater certainty to the means-plus-function analysis and save companies and individuals both money and frustration without requiring any congressional intervention. The statute is there, and the court need only take it and run with it.

Would such an analysis simplify the means-plus-function problem? Is it workable? What problems does it fail to address? 8. Claim Differentiation and Means-Plus-Function – You learned earlier that under the doctrine of claim differentiation, the inclusion of a dependent claim that recites a specific embodiment of a feature can result in a broader construction of the independent claim on which the dependent claim depends. In addition, one independent claim can provide another independent claim with a broader interpretation. You may think that the doctrine of claim differentiation could provide a convenient way to circumvent the requirements of section 112, para. 6. For example, suppose that an independent claim recites a “fastening means” and the written description discloses only nails as fasteners. Assume further that a claim that is dependent on the “fastening means” claim recites “wherein the fastening means is a nail.” Under the doctrine of claim differentiation, can the independent claim be construed to cover all types of fasteners so as to avoid complete overlap between it and the dependent claim? The answer is no, as it should be. The Federal Circuit so held in Laitram Corp. v. Rexnord, Inc., 939 F.2d 1533, 19 USPQ2d 1367 (Fed. Cir. 1991): Simply stated, the judicially developed guide to claim interpretation known as “claim differentiation” cannot override the statute. A means-plus-function limitation is not made openended by the presence of another claim specifically claiming the disclosed structure which underlies the means clause or an equivalent of that structure. If Laitram’s argument were adopted, it would provide a convenient way of avoiding the express mandate of section 112(6). We hold that one cannot escape that mandate by merely adding a claim or claims specifically reciting such structure or structures. Id. at 1538, 19 USPQ2d at 1371. 9. ITC Actions – The Personalized Media decision was an appeal, not from a district court infringement action, but from an agency in Washington named the International Trade Commission (“ITC”).

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We will cover ITC actions in more detail in a later chapter. Suffice it to say here that 19 U.S.C. §1337(a) provides the Congressional authorization for this agency to hold judicial hearings regarding blocking importation of products that infringe U.S. product patents or are made by processes abroad that infringe U.S. process patents. The Administrative Law Judges who conduct these hearings are not Article III judges. Nevertheless, since the Trade Reform Act of 1974, they can issue initial determinations on issues of patent validity as well as infringement. Hence, as seen in Personalized Media, they construe claims as part of their function. 10. Claim Construction Under 112(6) – For Court or Jury? - It is clear from the Federal Circuit precedent we have covered (e.g., Cole and Personalized Media) that the court determines whether a particular phrase invokes section 112, para. 6. However, the Federal Circuit in Markman expressly reserved the question of who, as between court and jury, should decide the question of structural equivalence under section 112, para. 6. See 52 F.3d at 977 n.8, 34 USPQ2d at 1327 n.8 (“As that issue is not before us today, we express no opinion on the issue of whether a determination of equivalents under § 112, ¶ 6, is a question of law or fact.”). Recently, the Federal Circuit has indicated that the court must determine what structures in the written description correspond to the claimed “means” and what functions are performed by those structures, while the jury must determine the question of whether the accused structures are equivalent to those disclosed in the patent. See WMS Gaming Inc. v. International Game Technology, 184 F.3d 1339, 51 USPQ2d 1385 (Fed. Cir. July 20, 1999); Smith Indus. Med. Sys., Inc. v. Vital Signs, Inc., 183 F.3d 1347, 51 USPQ2d 1415 (Fed. Cir. July 14, 1999) ("The determination of the contours of the corresponding structure in a means-plus-function claim, as contrasted with the question of whether an accused structure is equivalent to such a corresponding structure, is a matter of law for courts to decide because it is a question of claim construction.").

You have gone through the history, scope, and mechanics of claim construction. In the next chapter, you will see how courts, having construed claims to determine their literal scope, can find infringements beyond that literal scope, under the Doctrine of Equivalents.

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Chapter 8 Doctrine of Equivalents Infringement Introduction Claim construction, discussed in the previous chapter, is simply the set-up for an infringement analysis. A claim construction without the second step—comparing the claims to an accused device or process—is simply an empty shell. Under the second step, there is literal infringement if each limitation, or element, of a claim can be found in the accused device or process. Thus, if a claim to a pencil calls for “a writing device comprising an elongated cylindrical wooden member defining an inner passage and a elongated graphite member disposed within the passage,” any pencil having these two elements would literally infringe the claim. Even a pencil having an eraser would infringe, because it would still have both a elongated wooden member and an elongated graphite member. See A.B. Dick Co. v. Burroughs Corp., 713 F.2d 700, 703, 218 USPQ 965, 967-68 (Fed. Cir. 1983) ("It is fundamental that one cannot avoid infringement merely by adding elements if each element recited in the claims is found in the accused device."). The opposite would be true, of course, if the transitional phrase were “consisting of.” The general question of literal infringement vel non is factual and usually does not raise many interesting legal issues by itself. However, in the next chapter, you will see many interesting legal problems that lurk around the periphery of the literal infringement inquiry. In contrast, this chapter covers infringement under the judicially-created doctrine of equivalents. Under this doctrine, even when a claim element is not met literally by an accused device or process, it can still be infringed if the two differ insubstantially. Thus, a claim can be infringed if all its elements are infringed literally, if some are infringed literally and some under the doctrine Chapter 8 – Doctrine of Equivalents Infringement

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equivalents, or if all are infringed under the doctrine of equivalents. Using the example above, if a competitor of the pencil patentee produced a standard graphite pencil that used a plastic member rather than a wood member, it would not literally infringe the pencil claim because the “elongated wooden member” claim element is not literally met (even though the graphite element is literally met). However, the plastic pencil could infringe under the doctrine of equivalents if the difference between a wooden member and a plastic member is small enough. The doctrine was created to prevent accused infringers from practicing a fraud on the patent by making minor changes that escape literal infringement by the thinnest of margins. As you will see in the cases below, however, the courts have made clear and repeated attempts, since forming the doctrine, to rein it in and provide predictability to competitors of a patentee.

Winans v. Denmead 56 U.S. (15 How.) 330 (1853) Mr. Justice CURTIS delivered the opinion of the court. This is a writ of error to the Circuit Court of the United States, for the District of Maryland. The plaintiff in error brought his action in that court for an infringement of the exclusive right to make, use, and sell 'an improvement in cars for the transportation of coal,' &c., granted to him by letterspatent, bearing date on the 26th day of June, 1847; and, the judgment of that court being for the defendants, he has brought the record here by this writ of error. It appears, by the bill of exceptions, that the letters-patent declared on were duly issued, and that their validity was not questioned; but the defendants denied that they had infringed upon the exclusive right of the plaintiff. On such a trial, two questions arise. The first is, what is the thing patented; the second, has that thing been constructed, used, or sold by the defendants. The first is a question of law, to be determined by the court, construing the letters-patent, and the description of the invention and specification of claim annexed to them. The second is a question of fact, to be submitted to a jury. In this case it is alleged the court construed the specification of claim erroneously, and thereby withdrew from the jury questions which it was their province to decide. This renders it necessary to examine the letters-patent, and the schedule annexed to them, to see whether their construction by the Circuit Court was correct. In this, as in most patent cases, founded on alleged improvements in machines, in order to determine what is the thing patented, it is necessary to inquire. 1. What is the structure or device, described by the patentee, as embodying his invention. 2. What mode of operation is introduced and employed by this structure or device. 3. What result is attained by means of this mode of operation. 4. Does the specification of claim cover the described mode of operation by which the result is attained.

Without going into unnecessary details, or referring to drawings, it may be stated that the structure, described by this patent, is the body of a burden railroad car, made of sheet iron, the upper part being cylindrical, and the lower part in the form of a frustum of a cone, the under edge of which has a flange secured upon it, to which flange a movable bottom is attached. This bottom is made movable, in order to discharge the load through the aperture left by removing it. Chapter 8 – Doctrine of Equivalents Infringement

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To understand the mode of operation introduced and employed by means of this form of the car body, it is only necessary to state, what appears on the face of the specification, and was testified to by experts at the trial as correct, that, by reason of the circular form of the car body, the pressure of the load outwards was equal in every direction, and thus the load supported itself in a great degree; that, by making the lower part conical, this principle of action operated throughout the car, with the exception of the small space to which the movable bottom was attached; that, being conical, the lower part of the car could be carried down below the truck, between the wheels, thus lowering the centre of gravity of the load; that the pressure outwards upon all parts of the circle being equal, the tensile strength of the iron was used to a much greater degree than in a car of a square form; and, finally, that this form of the lower part of the car facilitated the complete discharge of the load through the aperture, when the bottom was removed. It thus appears that, by means of this change of form, the patentee has introduced a mode of operation not before employed in burden cars, that is to say, nearly equal pressure in all directions by the entire load, save that small part which rests on the movable bottom; the effects of which are, that the load, in a great degree, supports itself, and the tensile strength of the iron is used, while at the same time, by reason of the same form, the centre of gravity of the load is depressed, and its discharge facilitated. The practical result attained by this mode of operation is correctly described by the patentee; for the uncontradicted evidence at the trial showed that he had not exaggerated the practical advantage of his invention. The specification states: 'The transportation of coal, and all other heavy articles in lumps, has been attended with great injury to the cars, requiring the bodies to be constructed with great strength to resist the outward pressure on the sides, as well as the vertical pressure on the bottom, due not only to the weight of the mass, but the mobility of the lumps among each other tending to 'pack,' as it is technically termed. Experience has shown that cars, on the old mode of construction, cannot be made to carry a load greater than its own weight; but, by my improvement, I am enabled to make cars of greater durability than those heretofore made, which will transport double their own weight of coal,' &c.

Having thus ascertained what is the structure described, the mode of operation it embodies, and the practical result attained, the next inquiry is, does the specification of claim cover this mode of operation, by which this result is effected? It was upon this question the case turned at the trial in the Circuit Court. The testimony showed that the defendants had made cars similar to the plaintiff's, except that the form was octagonal instead of circular. There was evidence tending to prove that, considered in reference to the practical uses of such a car, the octagonal car was substantially the same as the circular. Amongst other witnesses upon this point was James Millholland, who was called by the defendants. He testified. 'That the advantage of a reduced bottom of the car was obtained, whether the car was conical or octagonal; that the strengthening of the bottom, due to the adoption of a conical form, was the same when the octagonal form was adopted, or the circular. That the circular form was the best to resist the pressure, as, for instance, in a steam boiler, and an octagonal one better than the square form; that the octagonal car was not better than the conical car; that, for practical purposes, one was as good as the other; that a polygon of many sides would be equivalent to a circle; that the octagon car, practically, was as good as the conical ones; and and that, substantially, the witness saw no difference between the two.'

The district judge, who presided at the trial, ruled,----

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That while the patent is good for what [is] described therein, a conical body, in whole or in part, supported in any of the modes indicated for a mode of sustaining a conical body on a carriage or truck, and drawing the same, and to those principles which were due alone to conical vehicles, and not to rectilinear bodies, and it being admitted that the defendants' car was entirely rectilinear, that there was no infringement of the plaintiff's patent.

The substance of this ruling was, that the claim was limited to the particular geometrical form mentioned in the specification; and as the defendants had not made cars in that particular form, there could be no infringement, even if the cars made by the defendants attained the same result by employing, what was in fact, the same mode of operation as that described by the patentee. We think this ruling was erroneous. Under our law a patent cannot be granted merely for a change of form. The act of February 21, 1793, § 2, so declared in express terms; and though this declaratory law was not reenacted in the Patent Act of 1836, it is a principle which necessarily makes part of every system of law, granting patents for new inventions. Merely to change the form of a machine is the work of a constructor, not of an inventor; such a change cannot be deemed an invention. Nor does the plaintiff's patent rest upon such a change. To change the form of an existing machine, and by means of such change to introduce and employ other mechanical principles or natural powers, or, as it is termed, a new mode of operation, and thus attain a new and useful result, is the subject of a patent. Such is the basis on which the plaintiff's patent rests. Its substance is a new mode of operation, by means of which a new result is obtained. It is this new mode of operation which gives it the character of an invention, and entitles the inventor to a patent; and this new mode of operation is, in view of the patent law, the thing entitled to protection. The patentee may, and should, so frame his specification of claim as to cover this new mode of operation which he has invented; and the only question in this case is, whether he has done so; or whether he has restricted his claim to one particular geometrical form. There being evidence in the case tending to show that other forms do in fact embody the plaintiff's mode of operation, and, by means of it, produce the same new and useful result, the question is, whether the patentee has limited his claim to one out of the several forms which thus embody his invention. Now, while it is undoubtedly true, that the patentee may so restrict his claim as to cover less than what he invented, or may limit it to one particular form of machine, excluding all other forms, though they also embody his invention, yet such an interpretation should not be put upon his claim if it can fairly be construed otherwise, and this for two reasons: 1. Because the reasonable presumption is, that, having a just right to cover and protect his whole invention, he intended to do so. Haworth v. Hardcastle, Web. P. C. 484. 2. Because specifications are to be construed liberally, in accordance with the design of the Constitution and the patent laws of the United States, to promote the progress of the useful arts, and allow inventors to retain to their own use, not any thing which is matter of common right, but what they themselves have created. Grant v. Raymond, 6 Pet. 218; Ames v. Howard, 1 Sumn. 482, 485; Blanchard v. Sprague, 3 Id. 535, 539; Davoll v. Brown, 1 Wood. & Minot, 53, 57; Parker v Haworth, 4 McLean's R. 372; Le Roy v. Tatham, 14 How. 181, and opinion of Parke, Baron, there quoted; Neilson v. Harford, Web. P. C. 341; Russell v. Cowley, Id. 470; Burden v. Winslow, (decided at the present term,) 15 Howard. The claim of the plaintiff is in the following words: 'What I claim as my invention, and desire to secure by letters-patent, is making the body of a car for the transportation of coal, &c., in the form of a frustum of a cone, substantially as herein

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described, whereby the force exerted by the weight of the load presses equally in all directions, and does not tend to change the form thereof, so that every part resists its equal proportion, and by which, also, the lower part is so reduced as to pass down within the truck frame and between the axles, to lower the centre of gravity of the load without diminishing the capacity of the car as described. 'I also claim extending the body of the car below the connecting pieces of the truck frame, and the line of draught, by passing the connecting bars of the truck frame, and the draught bar, through the body of the car, substantially as described.'

It is generally true, when a patentee describes a machine, and then claims it as described, that he is understood to intend to claim, and does by law actually cover, not only the precise forms he has described, but all other forms which embody his invention; it being a familiar rule that, to copy the principle or mode of operation described, is an infringement, although such copy should be totally unlike the original in form or proportions. Why should not this rule be applied to this case? It is not sufficient to distinguish this case to say, that here the invention consists in a change of form, and the patentee has claimed one form only. Patentable improvements in machinery are almost always made by changing some one or more forms of one or more parts, and thereby introducing some mechanical principle or mode of action not previously existing in the machine, and so securing a new or improved result. And, in the numerous cases in which it has been held, that to copy the patentee's mode of operation was an infringement, the infringer had got forms and proportions not described, and not in terms claimed. If it were not so, no question of infringement could arise. If the machine complained of were a copy, in form, of the machine described in the specification, of course it would be at once seen to be an infringement. It could be nothing else. It is only ingenious diversities of form and proportion, presenting the appearance of something unlike the thing patented, which give rise to questions; and the property of inventors would be valueless, if it were enough for the defendant to say, your improvement consisted in a change of form; you describe and claim but one form; I have not taken that, and so have not infringed. The answer is, my improvement did not consist in a change of form, but in the new employment of principles or powers, in a new mode of operation, embodied in a form by means of which a new or better result is produced; it was this which constituted my invention; this you have copied, changing only the form; and that answer is justly applicable to this patent. Undoubtedly there may be cases in which the letters-patent do include only the particular form described and claimed. Davis v. Palmer, 2 Brock. 309, seems to have been one of those cases. But they are in entire accordance with what is above stated. The reason why such a patent covers only one geometrical form, is not that the patentee has described and claimed that form only; it is because that form only is capable of embodying his invention; and, consequently, if the form is not copied, the invention is not used. Where form and substance are inseparable, it is enough to look at the form only. Where they are separable; where the whole substance of the invention may be copied in a different form, it is the duty of courts and juries to look through the form for the substance of the invention--for that which entitled the inventor to his patent, and which the patent was designed to secure; where that is found, there is an infringement; and it is not a defence, that it is embodied in a form not described, and in terms claimed by the patentee.

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Patentees sometimes add to their claims an express declaration, to the effect that the claim extends to the thing patented, however its form or proportions may be varied. But this is unnecessary. The law so interprets the claim without the addition of these words. The exclusive right to the thing patented is not secured, if the public are at liberty to make substantial copies of it, varying its form or proportions. And, therefore, the patentee, having described his invention, and shown its principles, and claimed it in that form which most perfectly embodies it, is, in contemplation of law, deemed to claim every form in which his invention may be copied, unless he manifests an intention to disclaim some of those forms. Indeed it is difficult to perceive how any other rule could be applied, practicably, to cases like this. How is a question of infringement of this patent to be tried? It may safely be assumed, that neither the patentee nor any other constructer has made, or will make, a car exactly circular. In practice, deviations from a true circle will always occur. How near to a circle, then, must a car be, in order to infringe? May it be slightly elliptical, or otherwise depart from a true circle, and, if so, how far? In our judgment, the only answer that can be given to these questions is, that it must be so near to a true circle as substantially to embody the patentee's mode of operation, and thereby attain the same kind of result as was reached by his invention. It is not necessary that the defendant's cars should employ the plaintiff's invention to as good advantage as he employed it, or that the result should be precisely the same in degree. It must be the same in kind, and effected by the employment of his mode of operation in substance. Whether, in point of fact, the defendant's cars did copy the plaintiff's invention, in the sense above explained, is a question for the jury, and the court below erred in not leaving that question to them upon the evidence in the case, which tended to prove the affirmative. The judgment of the court below must be reversed. Mr. Chief Justice TANEY, Mr. Justice CATRON, Mr. Justice DANIEL, and Mr. Justice CAMPBELL, dissented. Mr. Justice CAMPBELL. I dissent from the opinion of the court in this case. The plaintiff claims to have designed and constructed a car for the transportation of coal on railroads which shall carry the heaviest load, in proportion to its own weight. His design consists in the adoption of the 'conical form' 'for the body of the car,' 'whereby the weight of the load presses equally in all directions;' does not 'tend to change the form of the car;' permits it 'to extend down within the truck,' lowering 'the centre of gravity of the load,' and by its reduced size at the bottom adding to its strength and durability. He claims as his invention, and it is the whole of the change which he has made in the manufacture of cars, 'the making of the body of the car in the form of the frustum of a cone.' It is agreed that a circle contains a greater area than any figure of the same perimeter; that the conical form is best suited to resist pressure from within, and that the reduced size at the bottom of the car is favorable to its strength. The introduction of the cars of the plaintiff, upon the railroad, for the transportation of coal, was attended by a great increase of the loads in proportion to the weight of the car. The merits of the design are frankly conceded. Nevertheless, it is notorious, that there does exist a very great variety of vessels in common domestic use, 'of a conical form,' or, 'of the form of the frustum of a cone,' for the reception and transportation of articles of prime necessity and constant demand, such as water, coal, food, clothing, &c. It is also true that the properties of the circle, and of circular forms alluded to in the patent of the plaintiff, are Chapter 8 – Doctrine of Equivalents Infringement

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understood, and appreciated, and have been applied in every department of mechanic art. One cannot doubt that a requisition from the transportation companies for cars of a diminished weight, and an increased capacity, upon the machinists and engineers connected with the business, would have been answered promptly by a suggestion of a change in the form of the car. The merit of the plaintiff seems to consist in the perfection of his design, and his clear statement of the scientific principle it contains. There arises in my mind a strong if not insuperable objection to the admission of the claim, in the patent for 'the conical form,' or the form of the frustum of a cone,' as an invention. Or that any machinist or engineer can appropriate by patent a form whose properties are universally understood, and which is in very common use, in consequence of those properties, for purposes strictly analogous. The authority of adjudged cases seems to me strongly opposed to the claim. Hotchkiss v. Greenwood, 11 How. 249; Losh v. Hague, Web. Pat. Cas. 207; Winans v. Providence Railroad Company, 2 Story, 412; 2 Id. 190; 2 Car. & Kir. 1022; 3 W. H. & Gord. 427. Conceding, however, that the invention was patentable, and this seems to have been conceded in the Circuit Court, the inquiry is, what is the extent of the claim? The plaintiff professes to have made an improvement in the form of a vehicle, which has been a long time in use, and exists in a variety of forms. He professes to have discovered the precise form most fitted for the objects in view. He describes this form, as the matter of his invention, and the principle he develops applies to no other form. For this he claims his patent. We are authorized to conclude, that his precise and definite specification and claim were designed to ascertain exactly the limits of his invention. Davis v. Palmer, 2 Brock. 298. The car of the defendants is of an octagonal form, with an octagonal pyramidical base. There was no contradiction, in the evidence given at the trial, in reference to its description, nor as to the substantial effects of its use and operation. In the size, thickness of the metal employed in its construction, weight, and substantial and profitable results, the one car does not materially vary from the other. The difference consists in the form, and in that, it is visible and palpable. The Circuit Court, acting upon these facts, of which there was no dispute, instructed the jury that an infringement of the plaintiff's patent had not taken place. I do not find the question before the court a compound question of law and fact. The facts were all ascertained, and upon no construction of those facts was the plaintiff, in my opinion, entitled to a judgment. In theory, the plaintiff's car is superior to all others. His car displays the qualities which his specification distinguishes. The equal pressure of the load in all directions; the tendency to preserve the form, notwithstanding the pressure of the load; the absence of the cross strain; the lowering of the centre of the gravity of the load,--are advantages which it possesses in a superior degree to that of the defendants.' Yet the experts say that there is no appreciable difference in the substantial results afforded by the two. The cause for this must be looked for in a source extrinsic to the mere form of the vehicles. Nor is it difficult to detect the cause for this identity in the results in such a source. The coarse, heavy, cumbrous operations of coal transportation do not admit of the manufacture of cars upon nice mathematical formulas, nor can the loads be adjusted with much reference to exactness. There is a liability to violent percussion's and extraordinary strains, which must be provided for by an excess in the weight and thickness of the material used. Then, unless the difference in the weight of the load is great, there will be no correspondent difference in the receipts of the transportation companies. The patentee, not exaggerating the theoretical superiority of the form of his car, overlooked those facts which reduced its practical value to the level of cars of a form widely variant from his own. Chapter 8 – Doctrine of Equivalents Infringement

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The object of this suit is to repair that defect of observation. It is, that this court shall extend, by construction, the scope and operation of his patent, to embrace every form which in practice will yield a result substantially equal or approximate to his own. In the instruction asked for by the plaintiff, 'form and circumstances' are treated as more or less immaterial, but the verdict is claimed if the defendants have constructed cars 'which, substantially on the same principle and in the same mode of operation, accomplish the same result.' The principle stated in the patent applies only to circular forms. The modes of operation in coal transportation have experienced no change from the skill of the plaintiff, except by the change from the rectilineal figure to the circular. The defendant adheres to the rectilineal form. The result accomplished by the use of the two cars is the same--a more economical transportation of coal. This result it is that the plaintiff desires to appropriate, but this cannot be permitted. Curtis on Patents, § 4, 26, 27, 86, 87, 88; 2 Story, 408, 411. In the case of Aiken v. Bemis, 3 Wood. & M. 349, the learned judge said, 'When a patentee chooses to cover with his patent the material of which a part of his machine is composed, he entirely endangers his right to prosecute when a different and inferior material is employed, and one which he himself, after repeated experiment, had rejected.' The plaintiff confines his claim to the use of the conical form, and excludes from his specification any allusion to any other. He must have done so advisedly. He might have been unwilling to expose the validity of his patent, by the assertion of a right to any other. Can he abandon the ground of his patent, and ask now, for the exclusive use of all cars which, by experiment, shall be found to yield the advantages which he anticipated for conical cars only? The claim of today is, that an octagonal car is an infringement of this patent. Will this be the limit to that claim? Who can tell the bounds within which the mechanical industry of the country may freely exert itself? What restraints does this patent impose in this branch of mechanic art? To escape the incessant and intense competition which exists in every department of industry, it is not strange that persons should seek the cover of the patent act, for any happy effort of contrivance or construction; nor that patents should be very frequently employed to obstruct invention, and to deter from legitimate operations of skill and ingenuity. This danger was foreseen, and provided for, in the patent act. The patentee is obliged, by law, to describe his invention, in such full, clear, and exact terms, that from the description, the invention may be constructed and used. Its principle and modes of operation must be explained; and the invention shall particularly 'specify and point' out what he claims as his invention. Fullness, clearness, exactness, preciseness, and particularity, in the description of the invention, its principle, and of the matter claimed to be invented, will alone fulfil the demands of Congress or the wants of the country. Nothing, in the administration of this law, will be more mischievous, more productive of oppressive and costly litigation, of exorbitant and unjust pretensions and vexatious demands, more injurious to labor, than a relaxation of these wise and salutary requisitions of the act of Congress. In my judgment, the principles of legal interpretation, as well as the public interest, require, that this language of this statute shall have its full significance and import. In this case the language of the patent is full, clear, and exact. The claim is particular and specific. Neither the specification nor the claim, in my opinion, embrace the workmanship of the defendants. I therefore respectfully dissent from the judgment of the court, which implies the contrary. Chapter 8 – Doctrine of Equivalents Infringement

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Claude Neon Lights v. E. Machlett & Son 36 F.2d 574 (2d Cir. 1929) Before L. HAND, SWAN, and AUGUSTUS N. HAND, Circuit Judges. L. HAND, Circuit Judge. **** However far-reaching Claude's invention might have been, we should have some pause in holding that the claims could be stretched so far [as the plaintiff attempts to stretch them]. The doctrine of equivalents, though well settled for many years, is anomalous, if the claim is measured only by its words, and for this reason we once went so far as to say that it means no more than that the language of claims shall be generously construed. Motion Pictures Co. v. Independent Co., 200 F. 411 (CCA 2). Such a limitation is however irreconcilable with those extremely numerous decisions which have extended a claim to structures which by no possibility it could cover, judged by any tenable canons of documentary interpretation. . . . In Winans v. Denmead, 15 How. 343 (1853), the Supreme Court, apparently for the first time, laid down the doctrine over a strong dissent, and based it upon the theory that the claim was not intended to be verbally definitive, but to cover the 'invention' which should, to some extent anyway, be gathered from the disclosure at large. It is plain that such latitude violates in theory the underlying and necessary principle that the disclosure is open to the public save as the claim forbids, and that it is the claim and that alone which measures the monopoly. . . . The vacillation in the decisions is a necessary consequence of this inconsistency in theory, somewhat analogous to the similar inconsistency which pervades reissues and amendments. It is the claim which singles out from the complex disclosed those elements which constitute the 'invention,' and substantially the whole work of the Patent Office lies in determining, not whether the disclosure is new because all of it never is, but whether the claims proposed are. Strictly the disclosure should be used therefore only as the setting of the claims and to find what the words employed really mean. Otherwise courts would have to assume the duties of the office afresh and compose such claims as the prior art might have allowed, had the patentee been foresighted enough to include all possible variants of his meaning. Such a result the decisions have repeatedly repudiated, and it would result in an intolerable burden upon the public, which would be charged not only with a knowledge of the prior art at the time of the application and often earlier, but with a right conclusion as to how much room was left for invention, seldom an easy question. On the one hand, therefore, the claim is not to be taken at its face—however freely construed—but its elements may be treated as examples of a class which may be extended more or less broadly as the disclosure warrants, the prior art permits, and the originality of the discovery makes desirable. On the other, it is not to be ignored as a guide in ascertaining those elements of the disclosure which constitute the 'invention,' and without which there could be no patent at all. It is obviously impossible to set any theoretic limits to such a doctrine, which indeed its origin forbids, since it is in misericordiam [ in mercy] to relieve those who have failed to express their complete meaning. Somewhat the same process is indeed inherent in the interpretation of any verbal expression, and perhaps the best that can be said is that in the case of patent claims much greater liberties are taken than would be allowed elsewhere. Each case is inevitably a matter of degree, as so often happens, and other decisions have little or no value. The usual ritual, which is so often repeated and which has so little meaning, that the same result must follow by substantially the same means, does not help much in application; it is no more than a way of stating the problem. Any decision is therefore bound to have an arbitrary color, as in all close cases of interpretation, and it is difficult to give it greater authority than an appeal to the sympathetic understanding of an impartial reader. Chapter 8 – Doctrine of Equivalents Infringement

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****

Graver Tank & Mfg. Co. v. Linde Air Products Co. 339 U.S. 605, 85 USPQ 328 (1950) MR. JUSTICE JACKSON delivered the opinion of the Court. Linde Air Products Co., owner of the Jones patent [No. 2,043,960] for an electric welding process and for fluxes to be used therewith, brought an action for infringement against Lincoln and the two Graver companies. The trial court held four flux claims valid and infringed and certain other flux claims and all process claims invalid. 75 USPQ 231. The Court of Appeals affirmed findings of validity and infringement as to the four flux claims but reversed the trial court and held valid the process claims and the remaining contested flux claims. 167 F.2d 531. We granted certiorari, 335 U.S. 810, and reversed the judgment of the Court of Appeals insofar as it reversed that of the trial court, and reinstated the District Court decree. 336 U.S. 271. Rehearing was granted, limited to the question of infringement of the four valid flux claims and to the applicability of the doctrine of equivalents to findings of fact in this case. 337 U.S. 910. At the outset it should be noted that the single issue before us is whether the trial court's holding that the four flux claims have been infringed will be sustained. Any issue as to the validity of these claims was unanimously determined by the previous decision in this Court and attack on their validity cannot be renewed now by reason of limitation on grant of rehearing. The disclosure, the claims, and the prior art have been adequately described in our former opinion and in the opinions of the courts below. In determining whether an accused device or composition infringes a valid patent, resort must be had in the first instance to the words of the claim. If accused matter falls clearly within the claim, infringement is made out and that is the end of it. But courts have also recognized that to permit imitation of a patented invention which does not copy every literal detail would be to convert the protection of the patent grant into a hollow and useless thing. Such a limitation would leave room for--indeed encourage--the unscrupulous copyist to make unimportant and insubstantial changes and substitutions in the patent which, though adding nothing, would be enough to take the copied matter outside the claim, and hence outside the reach of law. One who seeks to pirate an invention, like one who seeks to pirate a copyrighted book or play, may be expected to introduce minor variations to conceal and shelter the piracy. Outright and forthright duplication is a dull and very rare type of infringement. To prohibit no other would place the inventor at the mercy of verbalism and would be subordinating substance to form. It would deprive him of the benefit of his invention and would foster concealment rather than disclosure of inventions, which is one of the primary purposes of the patent system. The doctrine of equivalents evolved in response to this experience. The essence of the doctrine is that one may not practice a fraud on a patent. Originating almost a century ago in the case of Winans v. Denmead, 15 How. 330, it has been consistently applied by this Court and the lower federal courts, and continues today ready and available for utilization when the proper circumstances for its application arise. "To temper unsparing logic and prevent an infringer from stealing the benefit of an invention"1 a patentee may invoke this doctrine to proceed against the producer of a device "if it performs substantially the same function in substantially the same way to obtain the same result." Sanitary Refrigerator Co. v. Winters, 280 U.S. 30, 42. The theory on which it is founded is that "if two devices do the same work in substantially the same way, and 1

L. Hand in Royal Typewriter Co. v. Remington Rand, 168 F.2d 691, 692.

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accomplish substantially the same result, they are the same, even though they differ in name, form, or shape." Machine Co. v. Murphy, 97 U.S. 120, 125. The doctrine operates not only in favor of the patentee of a pioneer or primary invention, but also for the patentee of a secondary inventi on consisting of a combination of old ingredients which produce new and useful results, Imhaeuser v. Buerk, 101 U.S. 647, 655, although the area of equivalence may vary under the circumstances. See Continental Paper Bag Co. v. Eastern Paper Bag Co., 210 U.S. 405, 414415, and cases cited; Seymour v. Osborne, 11 Wall. 516, 556; Gould v. Rees, 15 Wall. 187, 192. The wholesome realism of this doctrine is not always applied in favor of a patentee but is sometimes used against him. Thus, where a device is so far changed in principle from a patented article that it performs the same or a similar function in a substantially different way, but nevertheless falls within the literal words of the claim, the doctrine of equivalents may be used to restrict the claim and defeat the patentee's action for infringement. Westinghouse v. Boyden Power Brake Co., 170 U.S. 537, 568. In its early development, the doctrine was usually applied in cases involving devices where there was equivalence in mechanical components. Subsequently, however, the same principles were also applied to compositions, where there was equivalence between chemical ingredients. Today the doctrine is applied to mechanical or chemical equivalents in compositions or devices. See discussions and cases collected in 3 Walker on Patents (Deller's ed. 1937) §§ 489-492; Ellis, Patent Claims (1949) §§ 59-60. What constitutes equivalency must be determined against the context of the patent, the prior art, and the particular circumstances of the case. Equivalence, in the patent law, is not the prisoner of a formula and is not an absolute to be considered in a vacuum. It does not require complete identity for every purpose and in every respect. In determining equivalents, things equal to the same thing may not be equal to each other and, by the same token, things for most purposes different may sometimes be equivalents. Consideration must be given to the purpose for which an ingredient is used in a patent, the qualities it has when combined with the other ingredients, and the function which it is intended to perform. An important factor is whether persons reasonably skilled in the art would have known of the interchangeability of an ingredient not contained in the patent with one that was. A finding of equivalence is a determination of fact. Proof can be made in any form: through testimony of experts or others versed in the technology; by documents, including texts and treatises; and, of course, by the disclosures of the prior art. Like any other issue of fact, final determination requires a balancing of credibility, persuasiveness and weight of evidence. It is to be decided by the trial court and that court's decision, under general principles of appellate review, should not be disturbed unless clearly erroneous. Particularly is this so in a field where so much depends upon familiarity with specific scientific problems and principles not usually contained in the general storehouse of knowledge and experience. In the case before us, we have two electric welding compositions or fluxes: the patented composition, Unionmelt Grade 20, and the accused composition, Lincolnweld 660. The patent under which Unionmelt is made claims essentially a combination of alkaline earth metal silicate and calcium fluoride; Unionmelt actually contains, however, silicates of calcium and magnesium, two alkaline earth metal silicates. Lincolnweld's composition is similar to Unionmelt's, except that it substitutes silicates of calcium and manganese--the latter not an alkaline earth metal--for silicates of calcium and magnesium. In all other respects, the two compositions are alike. The mechanical methods in which these compositions are employed are similar. They are identical in operation and produce the same kind and quality of weld. The question which thus emerges is whether the substitution of the manganese which is not an alkaline earth metal for the magnesium which is, under the circumstances of this case, and in view of the technology and the prior art, is a change of such substance as to make the doctrine of equivalents inapplicable; or conversely, whether under the circumstances the change was so insubstantial that the trial court's invocation of the doctrine of equivalents was justified. Chapter 8 – Doctrine of Equivalents Infringement

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Without attempting to be all-inclusive, we note the following evidence in the record: Chemists familiar with the two fluxes testified that manganese and magnesium were similar in many of their reactions (R. 287, 669). There is testimony by a metallurgist that alkaline earth metals are often found in manganese ores in their natural state and that they serve the same purpose in the fluxes (R. 831-832); and a chemist testified that "in the sense of the patent" manganese could be included as an alkaline earth metal (R. 297). Much of this testimony was corroborated by reference to recognized texts on inorganic chemistry (R. 332). Particularly important, in addition, were the disclosures of the prior art, also contained in the record. The Miller patent, No. 1,754,566, which preceded the patent in suit, taught the use of manganese silicate in welding fluxes (R. 969, 971). Manganese was similarly disclosed in the Armor patent, No. 1,467,825, which also described a welding composition (R. 1346). And the record contains no evidence of any kind to show that Lincolnweld was developed as the result of independent research or experiments. It is not for this Court to even essay an independent evaluation of this evidence. This is the function of the trial court. And, as we have heretofore observed, "To no type of case is this . . . more appropriately applicable than to the one before us, where the evidence is largely the testimony of experts as to which a trial court may be enlightened by scientific demonstrations. This trial occupied some three weeks, during which, as the record shows, the trial judge visited laboratories with counsel and experts to observe actual demonstrations of welding as taught by the patent and of the welding accused of infringing it, and of various stages of the prior art. He viewed motion pictures of various welding operations and tests and heard many experts and other witnesses." 336 U.S. 271, 274-275. The trial judge found on the evidence before him that the Lincolnweld flux and the composition of the patent in suit are substantially identical in operation and in result. He found also that Lincolnweld is in all respects equivalent to Unionmelt for welding purposes. And he concluded that "for all practical purposes, manganese silicate can be efficiently and effectively substituted for calcium and magnesium silicates as the major constituent of the welding composition." These conclusions are adequately supported by the record; certainly they are not clearly erroneous. It is difficult to conceive of a case more appropriate for application of the doctrine of equivalents. The disclosures of the prior art made clear that manganese silicate was a useful ingredient in welding compositions. Specialists familiar with the problems of welding compositions understood that manganese was equivalent to and could be substituted for magnesium in the composition of the patented flux and their observations were confirmed by the literature of chemistry. Without some explanation or indication that Lincolnweld was developed by independent research, the trial court could properly infer that the accused flux is the result of imitation rather than experimentation or invention. Though infringement was not literal, the changes which avoid literal infringement are colorable only. We conclude that the trial court's judgment of infringement respecting the four flux claims was proper, and we adhere to our prior decision on this aspect of the case. Affirmed. MR. JUSTICE MINTON took no part in the consideration or decision of this case. MR. JUSTICE BLACK, with whom MR. JUSTICE DOUGLAS concurs, dissenting. I heartily agree with the Court that "fraud" is bad, "piracy" is evil, and "stealing" is reprehensible. But in this case, where petitioner is not charged with any such malevolence, these lofty principles do not justify the Court's sterilization of Acts of Congress and prior decisions, none of which are even mentioned in today's opinion.

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The only patent claims involved here describe respondent's product as a flux "containing a major proportion of alkaline earth metal silicate." The trial court found that petitioner used a flux "composed principally of manganese silicate." Finding also that "manganese is not an alkaline earth metal," the trial court admitted that petitioner’s flux did not "literally infringe" respondent's patent. Nevertheless it invoked the judicial "doctrine of equivalents" to broaden the claim for "alkaline earth metals" so as to embrace "manganese." On the ground that "the fact that manganese is a proper substitute . . . is fully disclosed in the specification" of respondent's patent, it concluded that "no determination need be made whether it is a known chemical fact outside the teachings of the patent that manganese is an equivalent . . . ." Since today's affirmance unquestioningly follows the findings of the trial court, this Court necessarily relies on what the specifications revealed. In so doing, it violates a direct mandate of Congress without even discussing that mandate. R. S. § 4888, as amended, 35 U.S.C. § 33, provides that an applicant "shall particularly point out and distinctly claim the part, improvement, or combination which he claims as his invention or discovery." We have held in this very case that this statute precludes invoking the specifications to alter a claim free from ambiguous language, since "it is the claim which measures the grant to the patentee." Graver Mfg. Co. v. Linde Co., 336 U.S. 271, 277. What is not specifically claimed is dedicated to the public. See, e. g., Miller v. Brass Co., 104 U.S. 350, 352. For the function of claims under R. S. § 4888, as we have frequently reiterated, is to exclude from the patent monopoly field all that is not specifically claimed, whatever may appear in the specifications. See, e. g., Marconi Wireless Co. v. United States, 320 U.S. 1, 23, and cases there cited. Today the Court tacitly rejects those cases. It departs from the underlying principle which, as the Court pointed out in White v. Dunbar, 119 U.S. 47, 51, forbids treating a patent claim "like a nose of wax which may be turned and twisted in any direction, by merely referring to the specification, so as to make it include something more than, or something different from, what its words express. . . . The claim is a statutory requirement, prescribed for the very purpose of making the patentee define precisely what his invention is; and it is unjust to the public, as well as an evasion of the law, to construe it in a manner different from the plain import of its terms." Giving this patentee the benefit of a grant that it did not precisely claim is no less "unjust to the public" and no less an evasion of R. S. § 4888 merely because done in the name of the "doctrine of equivalents." In seeking to justify its emasculation of R.S. § 4888 by parading potential hardships which literal enforcement might conceivably impose on patentees who had for some reason failed to claim complete protection for their discoveries, the Court fails even to mention the program for alleviation of such hardships which Congress itself has provided. 35 U.S.C. § 64 authorizes reissue of patents where a patent is "wholly or partly inoperative" due to certain errors arising from "inadvertence, accident, or mistake" of the patentee. And while the section does not expressly permit a patentee to expand his claim, this Court has reluctantly interpreted it to justify doing so. Miller v. Brass Co., 104 U.S. 350, 353-354. That interpretation, however, was accompanied by a warning that "Reissues for the enlargement of claims should be the exception and not the rule." Id. at 355. And Congress was careful to hedge the privilege of reissue by exacting conditions. It also entrusted the Patent Office, not the courts, with initial authority to determine whether expansion of a claim was justified,3 and barred suits for retroactive infringement based on such expansion. Like the Court's opinion, this congressional plan adequately protects patentees from "fraud," "piracy," and "stealing." Unlike the Court's opinion, it also protects businessmen from 3

"This provision was inserted in the law for the purpose of relieving the courts from the duty of ascertaining the exact invention of the patentee by inference and conjecture, derived from a laborious examination of previous inventions, and a comparison thereof with that claimed by him. This duty is now cast upon the Patent Office. There his claim is, or is supposed to be, examined, scrutinized, limited, and made to conform to what he is entitled to. If the office refuses to allow him all that he asks, he has an appeal. But the courts have no right to enlarge a patent beyond the scope of its claim as allowed by the Patent Office, or the appellate tribunal to which contested applications are referred. When the terms of a claim in a patent are clear and distinct (as they always should be), the patentee, in a suit brought upon the patent, is bound by it. Merrill v. Yeomans, 94 U.S. 568." Keystone Bridge Co. v. Phoenix Iron Co., 95 U.S. 274, 278.

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retroactive infringement suits and judicial expansion of a monopoly sphere beyond that which a patent expressly authorizes. The plan is just, fair, and reasonable. In effect it is nullified by this decision undercutting what the Court has heretofore recognized as wise safeguards. See Milcor Steel Co. v. Fuller Co., 316 U.S. 143, 148. One need not be a prophet to suggest that today's rhapsody on the virtue of the "doctrine of equivalents" will, in direct contravention of the Miller case, supra, make enlargement of patent claims the "rule" rather than the "exception." Whatever the merits of the "doctrine of equivalents" where differences between the claims of a patent and the allegedly infringing product are de minimis, colorable only, and without substance, that doctrine should have no application to the facts of this case. For the differences between respondent's welding substance and petitioners' claimed flux were not nearly so slight. The claims relied upon here did not involve any mechanical structure or process where invention lay in the construction or method rather than in the materials used. Rather they were based wholly on using particular materials for a particular purpose. Respondent's assignors experimented with several metallic silicates, including that of manganese. According to the specifications (if these are to be considered) they concluded that while several were "more or less efficacious in our process, we prefer to use silicates of the alkaline earth metals." Several of their claims which this Court found too broad to be valid encompassed manganese silicate; the only claims found valid did not. Yet today the Court disregards that crucial deficiency, holding those claims infringed by a composition of which 88.49% by weight is manganese silicate. In view of the intense study and experimentation of respondent's assignors with manganese silicate, it would be frivolous to contend that failure specifically to include that substance in a precise claim was unintentional. Nor do respondents attempt to give that or any other explanation for its omission. But the similar use of manganese in prior expired patents, referred to in the Court's opinion, raises far more than a suspicion that its elimination from the valid claims stemmed from fear that its inclusion by name might result in denial or subsequent invalidation of respondent's patent. Under these circumstances I think petitioners had a right to act on the belief that this Court would follow the plain mandates of Congress that a patent's precise claims mark its monopoly boundaries, and that expansion of those claims to include manganese could be obtained only in a statutory reissue proceeding. The Court's ruling today sets the stage for more patent "fraud" and "piracy" against business than could be expected from faithful observance of the congressionally enacted plan to protect business against judicial expansion of precise patent claims. Hereafter a manufacturer cannot rely on what the language of a patent claims. He must be able, at the peril of heavy infringement damages, to forecast how far a court relatively unversed in a particular technological field will expand the claim's language after considering the testimony of technical experts in that field. To burden business enterprise on the assumption that men possess such a prescience bodes ill for the kind of competitive economy that is our professed goal. The way specific problems are approached naturally has much to do with the decisions reached. A host of prior cases, to some of which I have referred, have treated the 17-year monopoly authorized by valid patents as a narrow exception to our competitive enterprise system. For that reason, they have emphasized the importance of leaving business men free to utilize all knowledge not preempted by the precise language of a patent claim. E.g., Sontag Stores Co. v. Nut Co., 310 U.S. 281, and cases there cited. In the Sontag case Mr. Justice McReynolds, speaking for a unanimous Court, said in part: "In the case under consideration the patentee might have included in the application for the original patent, claims broad enough to embrace petitioner's accused machine, but did not. This `gave the public to understand' that whatever was not claimed `did not come within his patent and might rightfully be made by anyone.'" Id. at 293.

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The Court's contrary approach today causes it to retreat from this sound principle. The damages retroactively assessed against petitioners for what was authorized until today are but the initial installment on the cost of that retreat.

MR. JUSTICE DOUGLAS, dissenting. The Court applies the doctrine of equivalents in a way which subverts the constitutional and statutory scheme for the grant and use of patents. The claims of the patent are limited to a flux "containing a major proportion of alkaline earth metal silicate." Manganese silicate, the flux which is held to infringe, is not an alkaline earth metal silicate. It was disclosed in the application and then excluded from the claims. It therefore became public property. See Mahn v. Harwood, 112 U.S. 354, 361. It was, to be sure, mentioned in the specifications. But the measure of the grant is to be found in the claims, not in the specifications. Milcor Steel Co. v. Fuller Co., 316 U.S. 143, 145, 146. The specifications can be used to limit but never to expand the claim. See McClain v. Ortmayer, 141 U.S. 419, 424. The Court now allows the doctrine of equivalents to erase those time-honored rules. Moreover, doctrine which is said to protect against practicing "a fraud on a patent" is used to extend a patent to a composition which could not be patented. For manganese silicate had been covered by prior patents, now expired. Thus we end with a strange anomaly: a monopoly is obtained on an unpatented and unpatentable article.

Warner-Jenkinson Co. v. Hilton Davis Chemical Co. 520 U.S. 117, 41 USPQ2d 1865 (1997) Justice Thomas delivered the opinion of the Court. Nearly 50 years ago, this Court in Graver Tank & Mfg. Co. v. Linde Air Products Co., 339 U.S. 605 (1950), set out the modern contours of what is known in patent law as the "doctrine of equivalents." Under this doctrine, a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is "equivalence" between the elements of the accused product or process and the claimed elements of the patented invention. Id., at 609. Petitioner, which was found to have infringed upon respondent's patent under the doctrine of equivalents, invites us to speak the death of that doctrine. We decline that invitation. The significant disagreement within the Court of Appeals for the Federal Circuit concerning the application of Graver Tank suggests, however, that the doctrine is not free from confusion. We therefore will endeavor to clarify the proper scope of the doctrine. I The essential facts of this case are few. Petitioner Warner-Jenkinson Co. and respondent Hilton Davis Chemical Co. manufacture dyes. Impurities in those dyes must be removed. Hilton Davis holds United States Patent No. 4,560,746 ('746 patent), which discloses an improved purification process involving "ultrafiltration." The '746 process filters impure dye through a porous membrane at certain pressures and pH levels, resulting in a high purity dye product. The '746 patent issued in 1985. As relevant to this case, the patent claims as its invention an improvement in the ultrafiltration process as follows: Chapter 8 – Doctrine of Equivalents Infringement

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"In a process for the purification of a dye . . . the improvement which comprises: subjecting an aqueous solution . . . to ultrafiltration through a membrane having a nominal pore diameter of 5-15 Angstroms under a hydrostatic pressure of approximately 200 to 400 p.s.i.g., at a pH from approximately 6.0 to 9.0, to thereby cause separation of said impurities from said dye . . . ." App.

36-37 (emphasis added). The inventors added the phrase "at a pH from approximately 6.0 to 9.0" during patent prosecution. At a minimum, this phrase was added to distinguish a previous patent (the "Booth" patent) that disclosed an ultrafiltration process operating at a pH above 9.0. The parties disagree as to why the low end pH limit of 6.0 was included as part of the claim.2 In 1986, Warner-Jenkinson developed an ultrafiltration process that operated with membrane pore diameters assumed to be 5-15 Angstroms, at pressures of 200 to nearly 500 p.s.i.g., and at a pH of 5.0. Warner-Jenkinson did not learn of the '746 patent until after it had begun commercial use of its ultrafiltration process. Hilton Davis eventually learned of Warner-Jenkinson's use of ultrafiltration and, in 1991, sued Warner-Jenkinson for patent infringement. As trial approached, Hilton Davis conceded that there was no literal infringement, and relied solely on the doctrine of equivalents. Over Warner-Jenkinson's objection that the doctrine of equivalents was an equitable doctrine to be applied by the court, the issue of equivalence was included among those sent to the jury. The jury found that the '746 patent was not invalid and that WarnerJenkinson infringed upon the patent under the doctrine of equivalents. The jury also found, however, that Warner-Jenkinson had not intentionally infringed, and therefore awarded only 20% of the damages sought by Hilton Davis. The District Court denied Warner-Jenkinson's post-trial motions, and entered a permanent injunction prohibiting Warner-Jenkinson from practicing ultrafiltration below 500 p.s.i.g. and below 9.01 pH. A fractured en banc Court of Appeals for the Federal Circuit affirmed. 62 F. 3d 1512 (CA Fed. 1995). The majority below held that the doctrine of equivalents continues to exist and that its touchstone is whether substantial differences exist between the accused process and the patented process. Id. at 1521-22. The court also held that the question of equivalence is for the jury to decide and that the jury in this case had substantial evidence from which it could conclude that the WarnerJenkinson process was not substantially different from the ultrafiltration process disclosed in the '746 patent. Id. at 1525. There were three separate dissents, commanding a total of 5 of 12 judges. Four of the five dissenting judges viewed the doctrine of equivalents as allowing an improper expansion of claim scope, contrary to this Court's numerous holdings that it is the claim that defines the invention and gives notice to the public of the limits of the patent monopoly. Id. at 1537-38 (Plager, J., dissenting). The fifth dissenter, the late Judge Nies, was able to reconcile the prohibition against enlarging the scope of claims and the doctrine of equivalents by applying the doctrine to each element of a claim, rather than to the accused product or process "overall." Id. at 1574 (Nies, J., dissenting). As she explained it, "[t]he `scope' is not enlarged if courts do not go beyond the substitution of equivalent elements." Ibid. All of the dissenters, however, would have found that a much narrowed doctrine of equivalents may be applied in whole or in part by the court. Id. at 1540-1542 (Plager, J., dissenting); id. at 1579 (Nies, J., dissenting). We granted certiorari, 516 U. S. ___ (1996), and now reverse and remand.

2

Petitioner contends that the lower limit was added because below a pH of 6.0 the patented process created "foaming" problems in the plant and because the process was not shown to work below that pH level. . . . Respondent counters that the process was successfully tested to pH levels as low as 2.2 with no effect on the process because of foaming, but offers no particular explanation as to why the lower level of 6.0 pH was selected. . ..

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II In Graver Tank we considered the application of the doctrine of equivalents to an accused chemical composition for use in welding that differed from the patented welding material by the substitution of one chemical element. 339 U.S. at 610. The substituted element did not fall within the literal terms of the patent claim, but the Court nonetheless found that the "question which thus emerges is whether the substitution [of one element for the other] . . . is a change of such substance as to make the doctrine of equivalents inapplicable; or conversely, whether under the circumstances the change was so insubstantial that the trial court's invocation of the doctrine of equivalents was justified." Ibid. The Court also described some of the considerations that go into applying the doctrine of equivalents: "What constitutes equivalency must be determined against the context of the patent, the prior art, and the particular circumstances of the case. Equivalence, in the patent law, is not the prisoner of a formula and is not an absolute to be considered in a vacuum. It does not require complete identity for every purpose and in every respect. In determining equivalents, things equal to the same thing may not be equal to each other and, by the same token, things for most purposes different may sometimes be equivalents. Consideration must be given to the purpose for which an ingredient is used in a patent, the qualities it has when combined with the other ingredients, and the function which it is intended to perform. An important factor is whether persons reasonably skilled in the art would have known of the interchangeability of an ingredient not contained in the patent with one that was." Id. at 609.

Considering those factors, the Court viewed the difference between the chemical element claimed in the patent and the substitute element to be "colorable only," and concluded that the trial court's judgment of infringement under the doctrine of equivalents was proper. Id. at 612. A Petitioner's primary argument in this Court is that the doctrine of equivalents, as set out in Graver Tank in 1950, did not survive the 1952 revision of the Patent Act, 35 U.S.C. § 100 et seq., because it is inconsistent with several aspects of that Act. In particular, petitioner argues: (1) the doctrine of equivalents is inconsistent with the statutory requirement that a patentee specifically "claim" the invention covered by a patent, 35 U.S.C. § 112; (2) the doctrine circumvents the patent reissue process--designed to correct mistakes in drafting or the like--and avoids the express limitations on that process, 35 U.S.C. §§ 251-252; (3) the doctrine is inconsistent with the primacy of the Patent and Trademark Office (PTO) in setting the scope of a patent through the patent prosecution process; and (4) the doctrine was implicitly rejected as a general matter by Congress' specific and limited inclusion of the doctrine in one section regarding "means" claiming, 35 U.S.C. § 112 ¶ 6. All but one of these arguments were made in Graver Tank in the context of the 1870 Patent Act, and failed to command a majority. The 1952 Patent Act is not materially different from the 1870 Act with regard to claiming, reissue, and the role of the PTO. Compare, e.g., 35 U.S.C. § 112 ("The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention") with The Consolidated Patent Act of 1870, ch. 230, §26, 16 Stat. 198, 201 (the applicant "shall particularly point out and distinctly claim the part, improvement, or combination which he claims as his invention or discovery"). Such minor differences as exist between those provisions in the 1870 and the 1952 Acts have no bearing on the result reached in Graver Tank, and thus provide no basis for our overruling it. In the context of infringement, we have already held that pre-1952 precedent survived the passage of the 1952 Act. See Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336, 342 (1961) (new section defining infringement "left intact the entire body of case law on direct infringement"). We see no reason to reach a different result here.

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Petitioner's fourth argument for an implied congressional negation of the doctrine of equivalents turns on the reference to "equivalents" in the "means" claiming provision of the 1952 Act. Section 112, ¶ 6, a provision not contained in the 1870 Act, states: "An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof." (Emphasis added.)

Thus, under this new provision, an applicant can describe an element of his invention by the result accomplished or the function served, rather than describing the item or element to be used (e.g., "a means of connecting Part A to Part B," rather than "a two-penny nail"). Congress enacted §112, ¶ 6 in response to Halliburton Oil Well Cementing Co. v. Walker, which rejected claims that "do not describe the invention but use `conveniently functional language at the exact point of novelty,' " 329 U.S. 1, 8 (1946) (citation omitted). See In re Donaldson Co., 16 F. 3d 1189, 1194 (CA Fed. 1994) (Congress enacted predecessor of §112, ¶ 6 in response to Halliburton); In re Fuetterer, 319 F. 2d 259, 264, n.11 (CCPA 1963) (same); see also, 2 D. Chisum, Patents § 8.04[2], at 63-64 (1996) (discussing 1954 commentary of then Chief Patent Examiner P. J. Federico). Section 112, ¶ 6 now expressly allows so called "means" claims, with the proviso that application of the broad literal language of such claims must be limited to only those means that are "equivalent" to the actual means shown in the patent specification. This is an application of the doctrine of equivalents in a restrictive role, narrowing the application of broad literal claim elements. We recognized this type of role for the doctrine of equivalents in Graver Tank itself. 339 U.S., at 608-09. The added provision, however, is silent on the doctrine of equivalents as applied where there is no literal infringement. Because §112, ¶ 6 was enacted as a targeted cure to a specific problem, and because the reference in that provision to "equivalents" appears to be no more than a prophylactic against potential side effects of that cure, such limited congressional action should not be overread for negative implications. Congress in 1952 could easily have responded to Graver Tank as it did to the Halliburton decision. But it did not. Absent something more compelling than the dubious negative inference offered by petitioner, the lengthy history of the doctrine of equivalents strongly supports adherence to our refusal in Graver Tank to find that the Patent Act conflicts with that doctrine. Congress can legislate the doctrine of equivalents out of existence any time it chooses. The various policy arguments now made by both sides are thus best addressed to Congress, not this Court. B We do, however, share the concern of the dissenters below that the doctrine of equivalents, as it has come to be applied since Graver Tank, has taken on a life of its own, unbounded by the patent claims. There can be no denying that the doctrine of equivalents, when applied broadly, conflicts with the definitional and public notice functions of the statutory claiming requirement. Judge Nies identified one means of avoiding this conflict: "[A] distinction can be drawn that is not too esoteric between substitution of an equivalent for a component in an invention and enlarging the metes and bounds of the invention beyond what is claimed. ..... "Where a claim to an invention is expressed as a combination of elements, as here, `equivalents' in the sobriquet `Doctrine of Equivalents' refers to the equivalency of an element or part of the invention with one that is substituted in the accused product or process. .....

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"This view that the accused device or process must be more than `equivalent' overall reconciles the Supreme Court's position on infringement by equivalents with its concurrent statements that `the courts have no right to enlarge a patent beyond the scope of its claims as allowed by the Patent Office.' [Citations omitted.] The `scope' is not enlarged if courts do not go beyond the substitution of equivalent elements." 62 F.3d at 1573-1574 (Nies, J., dissenting) (emphasis

in original). We concur with this apt reconciliation of our two lines of precedent. Each element contained in a patent claim is deemed material to defining the scope of the patented invention, and thus the doctrine of equivalents must be applied to individual elements of the claim, not to the invention as a whole. It is important to ensure that the application of the doctrine, even as to an individual element, is not allowed such broad play as to effectively eliminate that element in its entirety. So long as the doctrine of equivalents does not encroach beyond the limits just described, or beyond related limits to be discussed infra, we are confident that the doctrine will not vitiate the central functions of the patent claims themselves. III Understandably reluctant to assume this Court would overrule Graver Tank, petitioner has offered alternative arguments in favor of a more restricted doctrine of equivalents than it feels was applied in this case. We address each in turn. A Petitioner first argues that Graver Tank never purported to supersede a well-established limit on non literal infringement, known variously as "prosecution history estoppel" and "file wrapper estoppel." See Bayer Aktiengesellschaft v. Duphar Int'l Research B.V., 738 F.2d 1237, 1238 (Fed. Cir. 1984). According to petitioner, any surrender of subject matter during patent prosecution, regardless of the reason for such surrender, precludes recapturing any part of that subject matter, even if it is equivalent to the matter expressly claimed. Because, during patent prosecution, respondent limited the pH element of its claim to pH levels between 6.0 and 9.0, petitioner would have those limits form bright lines beyond which no equivalents may be claimed. Any inquiry into the reasons for a surrender, petitioner claims, would undermine the public's right to clear notice of the scope of the patent as embodied in the patent file. We can readily agree with petitioner that Graver Tank did not dispose of prosecution history estoppel as a legal limitation on the doctrine of equivalents. But petitioner reaches too far in arguing that the reason for an amendment during patent prosecution is irrelevant to any subsequent estoppel. In each of our cases cited by petitioner and by the dissent below, prosecution history estoppel was tied to amendments made to avoid the prior art, or otherwise to address a specific concern--such as obviousness--that arguably would have rendered the claimed subject matter unpatentable. Thus, in Exhibit Supply Co. v. Ace Patents Corp., Chief Justice Stone distinguished inclusion of a limiting phrase in an original patent claim from the "very different" situation in which "the applicant, in order to meet objections in the Patent Office, based on references to the prior art, adopted the phrase as a substitute for the broader one" previously used. 315 U.S. 126, 136 (1942) (emphasis added). Similarly, in Keystone Driller Co. v. Northwest Engineering Corp., 294 U.S. 42 (1935), estoppel was applied where the initial claims were "rejected on the prior art," id. at 48, n.6, and where the allegedly infringing equivalent element was outside of the revised claims and within the prior art that formed the basis for the rejection of the earlier claims, id. at 48. It is telling that in each case this Court probed the reasoning behind the Patent Office's insistence upon a change in the claims. In each instance, a change was demanded because the claim as otherwise written was viewed as not describing a patentable invention at all—typically because Chapter 8 – Doctrine of Equivalents Infringement

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what it described was encompassed within the prior art. But, as the United States informs us, there are a variety of other reasons why the PTO may request a change in claim language. Brief for the United States as Amicus Curiae 22-23 (counsel for the PTO also appearing on the brief). And if the PTO has been requesting changes in claim language without the intent to limit equivalents or, indeed, with the expectation that language it required would in many cases allow for a range of equivalents, we should be extremely reluctant to upset the basic assumptions of the PTO without substantial reason for doing so. Our prior cases have consistently applied prosecution history estoppel only where claims have been amended for a limited set of reasons, and we see no substantial cause for requiring a more rigid rule invoking an estoppel regardless of the reasons for a change. In this case, the patent examiner objected to the patent claim due to a perceived overlap with the Booth patent, which revealed an ultrafiltration process operating at a pH above 9.0. In response to this objection, the phrase "at a pH from approximately 6.0 to 9.0" was added to the claim. While it is undisputed that the upper limit of 9.0 was added in order to distinguish the Booth patent, the reason for adding the lower limit of 6.0 is unclear. The lower limit certainly did not serve to distinguish the Booth patent, which said nothing about pH levels below 6.0. Thus, while a lower limit of 6.0, by its mere inclusion, became a material element of the claim, that did not necessarily preclude the application of the doctrine of equivalents as to that element. See Hubbell v. United States, 179 U.S. 77, 82 (1900) ("`[A]ll [specified elements] must be regarded as material,' " though it remains an open " `question whether an omitted part is supplied by an equivalent device or instrumentality' " (citation omitted)). Where the reason for the change was not related to avoiding the prior art, the change may introduce a new element, but it does not necessarily preclude infringement by equivalents of that element. We are left with the problem, however, of what to do in a case like the one at bar, where the record seems not to reveal the reason for including the lower pH limit of 6.0. In our view, holding that certain reasons for a claim amendment may avoid the application of prosecution history estoppel is not tantamount to holding that the absence of a reason for an amendment may similarly avoid such an estoppel. Mindful that claims do indeed serve both a definitional and a notice function, we think the better rule is to place the burden on the patent holder to establish the reason for an amendment required during patent prosecution. The court then would decide whether that reason is sufficient to overcome prosecution history estoppel as a bar to application of the doctrine of equivalents to the element added by that amendment. Where no explanation is established, however, the court should presume that the PTO had a substantial reason related to patentability for including the limiting element added by amendment. In those circumstances, prosecution history estoppel would bar the application of the doctrine of equivalents as to that element. The presumption we have described, one subject to rebuttal if an appropriate reason for a required amendment is established, gives proper deference to the role of claims in defining an invention and providing public notice, and to the primacy of the PTO in ensuring that the claims allowed cover only subject matter that is properly patentable in a proffered patent application. Applied in this fashion, prosecution history estoppel places reasonable limits on the doctrine of equivalents, and further insulates the doctrine from any feared conflict with the Patent Act. Because respondent has not proffered in this Court a reason for the addition of a lower pH limit, it is impossible to tell whether the reason for that addition could properly avoid an estoppel. Whether a reason in fact exists, but simply was not adequately developed, we cannot say. On remand, the Federal Circuit can consider whether reasons for that portion of the amendment were offered or not and whether further opportunity to establish such reasons would be proper. B Petitioner next argues that even if Graver Tank remains good law, the case held only that the absence of substantial differences was a necessary element for infringement under the doctrine of equivalents, not that it was sufficient for such a result. . . . Relying on Graver Tank's references to Chapter 8 – Doctrine of Equivalents Infringement

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the problem of an "unscrupulous copyist" and "piracy," 339 U.S., at 607, petitioner would require judicial exploration of the equities of a case before allowing application of the doctrine of equivalents. To be sure, Graver Tank refers to the prevention of copying and piracy when describing the benefits of the doctrine of equivalents. That the doctrine produces such benefits, however, does not mean that its application is limited only to cases where those particular benefits are obtained. Elsewhere in Graver Tank the doctrine is described in more neutral terms. And the history of the doctrine as relied upon by Graver Tank reflects a basis for the doctrine not so limited as petitioner would have it. In Winans v. Denmead, 15 How. 330, 343 (1854), we described the doctrine of equivalents as growing out of a legally implied term in each patent claim that "the claim extends to the thing patented, however its form or proportions may be varied." Under that view, application of the doctrine of equivalents involves determining whether a particular accused product or process infringes upon the patent claim, where the claim takes the form--half express, half implied--of "X and its equivalents." Machine Co. v. Murphy, 97 U.S. 120, 125 (1878), on which Graver Tank also relied, offers a similarly intent neutral view of the doctrine of equivalents: "[T]he substantial equivalent of a thing, in the sense of the patent law, is the same as the thing itself; so that if two devices do the same work in substantially the same way, and accomplish substantially the same result, they are the same, even though they differ in name, form, or shape."

If the essential predicate of the doctrine of equivalents is the notion of identity between a patented invention and its equivalent, there is no basis for treating an infringing equivalent any differently than a device that infringes the express terms of the patent. Application of the doctrine of equivalents, therefore, is akin to determining literal infringement, and neither requires proof of intent. Petitioner also points to Graver Tank's seeming reliance on the absence of independent experimentation by the alleged infringer as supporting an equitable defense to the doctrine of equivalents. The Federal Circuit explained this factor by suggesting that an alleged infringer's behavior, be it copying, designing around a patent, or independent experimentation, indirectly reflects the substantiality of the differences between the patented invention and the accused device or process. According to the Federal Circuit, a person aiming to copy or aiming to avoid a patent is imagined to be at least marginally skilled at copying or avoidance, and thus intentional copying raises an inference--rebuttable by proof of independent development--of having only insubstantial differences, and intentionally designing around a patent claim raises an inference of substantial differences. This explanation leaves much to be desired. At a minimum, one wonders how ever to distinguish between the intentional copyist making minor changes to lower the risk of legal action, and the incremental innovator designing around the claims, yet seeking to capture as much as is permissible of the patented advance. But another explanation is available that does not require a divergence from generally objective principles of patent infringement. In both instances in Graver Tank where we referred to independent research or experiments, we were discussing the known interchangeability between the chemical compound claimed in the patent and the compound substituted by the alleged infringer. The need for independent experimentation thus could reflect knowledge--or lack thereof--of interchangeability possessed by one presumably skilled in the art. The known interchangeability of substitutes for an element of a patent is one of the express objective factors noted by Graver Tank as bearing upon whether the accused device is substantially the same as the patented invention. Independent experimentation by the alleged infringer would not always reflect upon the objective question whether a person skilled in the art would have known of the interchangeability between two elements, but in many cases it would likely be probative of such knowledge. Chapter 8 – Doctrine of Equivalents Infringement

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Although Graver Tank certainly leaves room for petitioner's suggested inclusion of intent based elements in the doctrine of equivalents, we do not read it as requiring them. The better view, and the one consistent with Graver Tank's predecessors and the objective approach to infringement, is that intent plays no role in the application of the doctrine of equivalents. C Finally, petitioner proposes that in order to minimize conflict with the notice function of patent claims, the doctrine of equivalents should be limited to equivalents that are disclosed within the patent itself. A milder version of this argument, which found favor with the dissenters below, is that the doctrine should be limited to equivalents that were known at the time the patent was issued, and should not extend to after arising equivalents. As we have noted, supra, at 17, with regard to the objective nature of the doctrine, a skilled practitioner's knowledge of the interchangeability between claimed and accused elements is not relevant for its own sake, but rather for what it tells the fact finder about the similarities or differences between those elements. Much as the perspective of the hypothetical "reasonable person" gives content to concepts such as "negligent" behavior, the perspective of a skilled practitioner provides content to, and limits on, the concept of "equivalence." Insofar as the question under the doctrine of equivalents is whether an accused element is equivalent to a claimed element, the proper time for evaluating equivalency--and thus knowledge of interchangeability between elements-- is at the time of infringement, not at the time the patent was issued. And rejecting the milder version of petitioner's argument necessarily rejects the more severe proposition that equivalents must not only be known, but must also be actually disclosed in the patent in order for such equivalents to infringe upon the patent. IV The various opinions below, respondents, and amici devote considerable attention to whether application of the doctrine of equivalents is a task for the judge or for the jury. However, despite petitioner's argument below that the doctrine should be applied by the judge, in this Court petitioner makes only passing reference to this issue. . . . **** Petitioner's comments go more to the alleged inconsistency between the doctrine of equivalents and the claiming requirement than to the role of the jury in applying the doctrine as properly understood. Because resolution of whether, or how much of, the application of the doctrine of equivalents can be resolved by the court is not necessary for us to answer the question presented, we decline to take it up. The Federal Circuit held that it was for the jury to decide whether the accused process was equivalent to the claimed process. There was ample support in our prior cases for that holding. See, e.g., Machine Co. v. Murphy, 97 U. S., at 125 ("in determining the question of infringement, the court or jury, as the case may be, . . . are to look at the machines or their several devices or elements in the light of what they do, or what office or function they perform, and how they perform it, and to find that one thing is substantially the same as another, if it performs substantially the same function in substantially the same way to obtain the same result"); Winans v. Denmead, 15 How., at 344 ("[It] is a question for the jury" whether the accused device was "the same in kind, and effected by the employment of [the patentee's] mode of operation in substance"). Nothing in our recent Markman decision necessitates a different result than that reached by the Federal Circuit. Indeed, Markman cites with considerable favor, when discussing the role of judge and jury, the seminal Winans decision. Markman v. Westview Instruments, Inc., 517 U. S. ___ (1996) (slip op., at 14). Whether, if the issue were squarely presented to us, we would reach a different conclusion than did the Federal Circuit is not a question we need decide today.8

8

With regard to the concern over unreviewability due to black box jury verdicts, we offer only guidance, not a specific mandate. Where the evidence is such that no reasonable jury could determine two elements to be

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All that remains is to address the debate regarding the linguistic framework under which "equivalence" is determined. Both the parties and the Federal Circuit spend considerable time arguing whether the so called "triple identity" test--focusing on the function served by a particular claim element, the way that element serves that function, and the result thus obtained by that element--is a suitable method for determining equivalence, or whether an "insubstantial differences" approach is better. There seems to be substantial agreement that, while the triple identity test may be suitable for analyzing mechanical devices, it often provides a poor framework for analyzing other products or processes. On the other hand, the insubstantial differences test offers little additional guidance as to what might render any given difference "insubstantial." In our view, the particular linguistic framework used is less important than whether the test is probative of the essential inquiry: Does the accused product or process contain elements identical or equivalent to each claimed element of the patented invention? Different linguistic frameworks may be more suitable to different cases, depending on their particular facts. A focus on individual elements and a special vigilance against allowing the concept of equivalence to eliminate completely any such elements should reduce considerably the imprecision of whatever language is used. An analysis of the role played by each element in the context of the specific patent claim will thus inform the inquiry as to whether a substitute element matches the function, way, and result of the claimed element, or whether the substitute element plays a role substantially different from the claimed element. With these limiting principles as a backdrop, we see no purpose in going further and micro-managing the Federal Circuit's particular word choice for analyzing equivalence. We expect that the Federal Circuit will refine the formulation of the test for equivalence in the orderly course of case-by-case determinations, and we leave such refinement to that court's sound judgment in this area of its special expertise. VI Today we adhere to the doctrine of equivalents. The determination of equivalence should be applied as an objective inquiry on an element-by-element basis. Prosecution history estoppel continues to be available as a defense to infringement, but if the patent holder demonstrates that an amendment required during prosecution had a purpose unrelated to patentability, a court must consider that purpose in order to decide whether an estoppel is precluded. Where the patent holder is unable to establish such a purpose, a court should presume that the purpose behind the required amendment is such that prosecution history estoppel would apply. Because the Court of Appeals for the Federal Circuit did not consider all of the requirements as described by us today, particularly as related to prosecution history estoppel and the preservation of some meaning for each element in a claim, we reverse and remand for further proceedings consistent with this opinion. It is so ordered. Justice Ginsburg , with whom Justice Kennedy joins, concurring.

equivalent, district courts are obliged to grant partial or complete summary judgment. See Fed. Rule Civ. Proc. 56; Celotex Corp. v. Catrett, 477 U.S. 317, 322-323 (1986). If there has been a reluctance to do so by some courts due to unfamiliarity with the subject matter, we are confident that the Federal Circuit can remedy the problem. Of course, the various legal limitations on the application of the doctrine of equivalents are to be determined by the court, either on a pretrial motion for partial summary judgment or on a motion for judgment as a matter of law at the close of the evidence and after the jury verdict. Fed. Rule Civ. Proc. 56; Fed. Rule Civ. Proc. 50. Thus, under the particular facts of a case, if prosecution history estoppel would apply or if a theory of equivalence would entirely vitiate a particular claim element, partial or complete judgment should be rendered by the court, as there would be no further material issue for the jury to resolve. Finally, in cases that reach the jury, a special verdict and/or interrogatories on each claim element could be very useful in facilitating review, uniformity, and possibly postverdict judgments as a matter of law. See Fed. Rule Civ. Proc. 49; Fed. Rule Civ. Proc. 50. We leave it to the Federal Circuit how best to implement procedural improvements to promote certainty, consistency, and reviewability to this area of the law.

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I join the opinion of the Court and write separately to add a cautionary note on the rebuttable presumption the Court announces regarding prosecution history estoppel. I address in particular the application of the presumption in this case and others in which patent prosecution has already been completed. The new presumption, if applied woodenly, might in some instances unfairly discount the expectations of a patentee who had no notice at the time of patent prosecution that such a presumption would apply. Such a patentee would have had little incentive to insist that the reasons for all modifications be memorialized in the file wrapper as they were made. Years after the fact, the patentee may find it difficult to establish an evidentiary basis that would overcome the new presumption. The Court's opinion is sensitive to this problem, noting that "the PTO may have relied upon a flexible rule of estoppel when deciding whether to ask for a change" during patent prosecution. Ante, at 13, n.6. Because respondent has not presented to this Court any explanation for the addition of the lower pH limit, I concur in the decision to remand the matter to the Federal Circuit. On remand, that court can determine--bearing in mind the prior absence of clear rules of the game--whether suitable reasons for including the lower pH limit were earlier offered or, if not, whether they can now be established.

Questions, Comments, Problems 1. Division Within the Federal Circuit – Justice Thomas in Warner-Jenkinson, supra, made a point of noting the “significant disagreement within . . . the Federal Circuit concerning the application of Graver Tank. . . .” 520 U.S. at ___, 41 USPQ2d at 1868. He noted further that the Federal Circuit’s vote was 7-5, with three separate dissenting opinions. See Hilton Davis Chemical Co. v. WarnerJenkinson Co., 62 F.3d 1512, 35 USPQ2d 1641 (Fed. Cir. 1995) (in banc). The five dissenters (Circuit Judges Lourie, Rich, Plager, Chief Judge Archer, and the late Judge Nies) in various ways wanted to place more restraints on the doctrine. In the aftermath of the Supreme Court’s ruling, has the disagreement among the Federal Circuit judges ended? To some extent it has, although philosophical differences still surface in various panel opinions. Perhaps the most significant area of remaining disagreement relates to interpreting what the Supreme Court said on prosecution history estoppel. See Litton Sys., Inc. v. Honeywell Inc., 140 F.3d 1449, 46 USPQ2d 1321 (Fed. Cir. 1997) (Newman, J. dissenting-in-part), suggestion for rehearing in banc declined, ___ F.3d ____ (Clevenger and Gajarsa, JJ. dissenting). We shall discuss this area later in the chapter. 2. Summary Judgment of No Equivalents – The Supreme Court wrote an important footnote to its opinion in Warner-Jenkinson. This was footnote 8, which invites district courts to dispose by summary judgment of inadequate showings of equivalents. See 520 U.S. at ___ n.8, 41 USPQ2d at 1875 n.8. The invitation has been embraced with open arms both by district judges and the Federal Circuit. Coupled with the effect of the Markman decisions (which left claim construction to the court), footnote 8 has sparked a surge of summary judgment motions of no literal infringement and no infringement under the doctrine of equivalents. The Federal Circuit has affirmed many of these summary judgments. See, e.g., Moore U.S.A., Inc. v. Standard Register Co., ___ F.3d ___, 56 USPQ2d 1225 (Fed. Cir. 2000); Cultor Corp. v. A.E. Staley Mfg. Co., 224 F.3d 1328, 56 USPQ2d 1208 (Fed. Cir. 2000); CAE Screenplates, Inc. v. Heinrich Fiedler GmbH & Co. KG, 224 F.3d 1308, 55 USPQ2d 1804 (Fed. Cir. 2000); Vehicular Technologies Corp. v. Titan Wheel Int'l, Inc., 212 F.3d 1377, 54 USPQ2d 1841 (Fed. Cir. 2000); Bayer AG v. Elan Pharmaceutical Research Corp., 212 F.3d 1241, 54 USPQ2d 1710 (Fed. Cir. 2000); Kemco Sales, Inc. v. Control Papers Co., 208 F.3d 1352, 54 USPQ2d 1308 (Fed. Cir. 2000); Cortland Line Co. v. The Orvis Co., 203 F.3d 1351, 53 USPQ2d 1734 (Fed. Cir. 2000). The result is that asserting infringement under the doctrine of equivalents is no longer a free ticket to get an infringement claim before a jury. Query whether both district courts and the Federal Circuit have gone too far in disposing of equivalents claims as a matter of law. 3. If the accused infringer has received a patent on the product or process accused of infringing, should that affect the doctrine of equivalents analysis? On the one hand, perhaps the defendant’s patent is relevant since the obviousness requirement for obtaining a patent appears in many ways to be similar to the insubstantial differences test. On the other hand, where the patentable feature of the defendant’s product or process is unrelated to the invention claimed by the plaintiff, the separate

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patentability is simply irrelevant. The late Judge Helen W. Nies of the Federal Circuit reviewed the issue succintcly in her “additional views” to a 1996 opinion: . . . I would also give significance to the fact that Stanley obtained a patent on its device over the prior art Roton patent. It is a truism that the fact that an accused device is itself patented does not preclude a finding that such device infringes an earlier patent of another. However, the fact of a second patent, depending on its subject matter, may be relevant to the issue of whether the changes are substantial. . . . If the second patent requires practice of the first i.e., the second merely adds an element "D" to a patented combination A+B+C, the combination A+B+C+D clearly infringes. Conversely, if the second patent is granted for A+B+D over one claiming A+B+C, the change from C to D must not have been obvious to be validly patented. Evidence of a patent covering the change, in my view, is clearly relevant unless the patent is invalid. A substitution in a patented invention cannot be both nonobvious and insubstantial. I would apply nonobviousness as the test for the "insubstantial change" requirement of Hilton Davis. Roton Barrier, Inc. v. The Stanley Works, 79 F.3d 1112, 37 USPQ2d 1816 (Fed. Cir. 1996) (Nies “additional views”). However, see the more conservative view of the relevance of a patent held by the infringer in Atlas Powder Co. v. E.I. Du Pont deNemours, 750 F.2d 1569, 1580-81, 224 USPQ 409, 416-17 (Fed. Cir. 1984). 4. “Diclosed but Unclaimed” Subject Matter - An interesting issue under the doctrine of equivalents was raised by a panel of the Federal Circuit in Maxwell v. J. Baker, Inc., 86 F.3d 1098, 39 USPQ2d 1001 (Fed. Cir. 1996), cert. denied (1997). There, Ms. Maxwell, an employee of Target® stores, had invented a plastic filament to connect to a tab in each shows for connecting pairs of shoes together so they would not separate while they were on display in a discount store (where shoes are not typically sold in boxes). Ms. Maxwell’s asserted claim recited, in part: “each of said shoes further having a fastening tab and means for securing said tab between said inner and outer soles, said fastening tab being an integral sheet with two parts, the first of said parts comprising one end of the elongated tab extending horizontally between the inside surfaces of the outer sole and inner sole of the shoe and firmly secured thereto with said securing means.” Some of J. Baker’s accused fastening systems did not secure the fastening tabs between the inner and outer soles of the shoes,” and thus did not infringe the claims literally. Maxwell argued, however, that J. Baker’s attachment systems, some of which attached the tab to the top lining of the shoe, were equivalent to the claim’s element that required the tab to extend between the outer and inner soles. Maxwell, relying on Graver Tank, pointed to a single sentence of disclosure in her written description to argue that the two attachment systems were equivalent: "Alternatively, the tabs may be stitched into a lining seam of the shoes at the sides or back of the shoes." Although Maxwell had disclosed this altrernative mode of attachment, she never claimed it. The Federal Circuit held that this statement precluded infringement under the doctrine of equivalents. However, the court did not reason that the statement was insufficient to establish equivalence. Rather, the court (per Judge Lourie) held that the statement was, in effect, overly sufficient, in that it resulted in a surrender of the non-claimed attachment system to the public: In Unique Concepts, Inc. v. Brown, 939 F.2d 1558, 19 USPQ2d 1500 (Fed. Cir. 1991), we reiterated the well-established rule that "subject matter disclosed but not claimed in a patent application is dedicated to the public." 939 F.2d at 1562-63, 19 USPQ2d at 1504. . . . We have frequently applied this rule to prohibit a finding of literal infringement when an accused infringer practices disclosed but unclaimed subject matter. E.g., Environmental Instruments, Inc. v. Sutron Corp., 877 F.2d 1561, 1564, 11 USPQ2d 1132, 1134 (Fed. Cir. 1989). This rule, however, applies equally to prevent a finding of infringement under the doctrine of equivalents. A patentee may not narrowly claim his invention and then, in the course of an infringement suit, argue that the doctrine of equivalents should permit a finding of infringement because the specification discloses the equivalents. Such a result would merely encourage a patent applicant to present a broad disclosure in the specification of the application and file narrow claims, avoiding examination of broader claims that the applicant could have filed consistent with the specification. See Genentech, Inc. v. Wellcome Found. Ltd., 29 F.3d 1555, 1564, 31 USPQ2d 1161, 1167 (Fed. Cir. 1994) ("An applicant should not be able deliberately to narrow the scope of examination to avoid during prosecution scrutiny by the PTO of subject matter . . . and then, obtain in court, either literally or under the doctrine of equivalents, a scope of protection which encompasses that subject matter."); International Visual Corp. v. Crown Metal Mfg. Co., 991 F.2d 768, 775, 26 USPQ2d 1588, 1593 (Fed. Cir. 1993) (doctrine of equivalents should not extend to disclosed, but unexamined, subject matter) (Lourie, J., concurring). This is clearly contrary to 35 U.S.C. §

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112, which requires that a patent applicant "particularly point[] out and distinctly claim[] the subject matter which the applicant regards as his invention." 35 U.S.C. § 112 (1994). It is also contrary to our system of patent examination, in which a patent is granted following careful examination of that which an applicant claims as her invention. Thus, we agree with J. Baker that subject matter disclosed in the specification, but not claimed, is dedicated to the public. The Supreme Court's decision in Graver Tank is not to the contrary. In Graver Tank, the Court affirmed a district court's finding that the defendant infringed composition claims 18, 20, 22, and 23 of U.S. Patent 2,043,960, which claimed a composition for electric welding containing "a major portion of alkaline earth metal silicate." The accused material contained manganese silicate, which is not an alkaline earth metal silicate. The specification, however, disclosed that manganese silicate, among other silicates, could also be used in the composition, but that the inventors preferred to use alkaline earth metal silicates. The Court affirmed a finding of infringement under the doctrine of equivalents based on the district court's finding that "for all practical purposes, manganese silicate can be efficiently and effectually substituted for [alkaline earth metal silicates] as the major constituent of the welding composition." Graver Tank, 339 U.S. at 612, 85 USPQ at 331. Despite its reliance on the patentee's disclosure in the specification of the use of manganese in the welding composition to support a finding of infringement under the doctrine of equivalents, the Court in Graver Tank was not confronted with the same factual situation as we are here. As issued, the '960 patent included broad composition claims drawn to a welding material comprising "metallic silicate and calcium fluoride." In other words, contrary to the situation here, the patentee in Graver Tank claimed the use of manganese silicate. However, the Court affirmed the district court's decision in which it held these broad claims to be invalid on the ground that many metal silicates embraced by the claims, but not disclosed in the specification, were inoperative. Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 336 U.S. 271, 276-77, 80 USPQ 451, 453 (1949). Thus, by filing claims in the patent application that encompassed a welding composition containing metal silicates, including manganese silicates as disclosed in the specification, the patentee could not be said to have dedicated such an embodiment of the invention to the public, even if the broad claims encompassing the embodiment were later held invalid. Here, Maxwell limited her claims to fastening tabs attached between the inner and outer soles. She disclosed in the specification, without claiming them, alternatives in which the fastening tabs could be "stitched into the lining seam of the shoes." Col. 2, l. 42. By failing to claim these alternatives, the Patent and Trademark Office was deprived of the opportunity to consider whether these alternatives were patentable. A person of ordinary skill in the shoe industry, reading the specification and prosecution history, and interpreting the claims, would conclude that Maxwell, by failing to claim the alternate shoe attachment systems in which the tabs were attached to the inside shoe lining, dedicated the use of such systems to the public. Does the Maxwell decision adequately distinguish Graver Tank? Does the extension of the concept that subject matter is dedicated to the public when it is disclosed but not claimed from literal infringement to doctrinal infringement occur as easily as the Maxwell panel would have it? Is Maxwell too hard on people who draft patents for a living? Another Federal Circuit panel recently restricted Maxwell, by noting that it applies only to situations in which a patent claims one embodiment of an invention and discloses, but does not claim, another embodiment of the invention. In YBM Magnex, Inc. v. Intrernational Trade Commission, 145 F.3d 1317, 46 USPQ2d 1843 (Fed. Cir. 1998), the invention related to alloy magnets having a claimed range of oxygen content (6,000 to 35,000 parts per million). The accused infringers produced magnets having oxygen contents outside the claimed range, but near levels that were disclosed, but not claimed, in the patent. The International Trade Commission did not find itself blocked by Maxwell in reaching a finding of infringement under the doctrine of equivalents, and the Federal Circuit (per Judge Newman) agreed: YBM argues that the Commission's interpretation of Maxwell places Maxwell into direct conflict with Supreme Court and Federal Circuit precedent. YBM argues that the facts of Maxwell are narrow, and that the apparently broad statement made by the Federal Circuit in its opinion is properly viewed in connection with the facts of that case, and is not properly applied to all other cases, broadly and without discrimination. Indeed, the facts in Maxwell are not the routine facts of an equivalency determination. Maxwell disclosed two distinct alternative ways in which pairs of shoes are attached for sale, and claimed only one of

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them. Both embodiments were fully described in the patent. The court in its opinion observed that by this action Maxwell avoided examination of the unclaimed alternative, which was distinct from the claimed alternative. In view of the distinctness of the two embodiments, both of which were fully described in the specification, the Federal Circuit denied Maxwell the opportunity to enforce the unclaimed embodiment as an equivalent of the one that was claimed. The Commission stresses, as new law, the court's general statement in Maxwell that the doctrine of equivalents is not applicable to subject matter that is disclosed but not claimed. However, the Commission errs in deeming it now to be irrelevant whether there is probative evidence of insubstantial differences, or substantial identity of function, way, and result. The statement made in Maxwell must be received, as it was given, in light of precedent and its context. The Commission's interpretation of Maxwell would place Maxwell into conflict with Supreme Court and Federal Circuit precedent. The Supreme Court's guidance in Warner-Jenkinson Co. v. Hilton Davis Chemical Co., 520 U.S. 17, 41 USPQ 1865 (1997) and Graver Tank & Mfg. Co. v. Linde Air Products Co., 339 U.S. 605, 85 USPQ 328 (1950) does not permit the blanket rule that everything disclosed but not claimed is barred from access to the doctrine of equivalents, whatever the facts, circumstances, and evidence. Maxwell accords with the Court's precedent only when its decision is understood and applied in light of its particular facts. In Graver Tank, for example, the asserted equivalent, manganese silicate, had itself been disclosed in the specification; the district court had relied on this disclosure as supporting equivalency, not negating it: Accordingly, it is concluded that the patent itself fully discloses that welding compositions composed chiefly of manganese silicate and prepared according to the teachings of the patent are equivalent to those in which the alkaline earth metals are the principal constituents. Linde Air Prods. Co. v. Graver Tank & Mfg. Co., 86 F. Supp. 191, 199-200, 75 USPQ 231, 238 (N.D. Ind. 1947). The Supreme Court sustained this conclusion against the Court's dissenters, who urged that "what is not specifically claimed is dedicated to the public." . . . This specific issue was presented and resolved in Graver Tank, the explicit dissents illuminating that this point of law had been considered and rejected by the Court. In Warner-Jenkinson the Court again acted in preservation of the doctrine of equivalents. Responding to the issue in that case, the Court "reject[ed] the more severe proposition that equivalents must not only be known, but must be actually disclosed in the patent in order for such equivalents to infringe upon the patent." 520 U.S. 17, 41 USPQ2d at 1874. In recognizing that equivalents are not limited to what is disclosed in the patent, the Court necessarily recognized that equivalents may indeed be disclosed in the patent. Because the Court rejected the proposition that subject matter that is disclosed but not claimed is always deemed dedicated to the public, that position is not available as a general rule of law. Some factual situations may indeed warrant rejection of an asserted equivalent on this ground, as the Federal Circuit held in Maxwell; but to enlarge Maxwell to a broad and new rule of law, as did the Commission, is not only an incorrect reading of Maxwell but would bring it into direct conflict with Supreme Court precedent. **** In a great variety of situations the courts have applied the criteria of equivalency to the particular facts, sometimes finding equivalency and sometimes not. The doctrine of equivalents seeks to establish a just balance between the purpose of claims to define and give notice of what is patented, and the judicial responsibility to avoid a "fraud on the patent" based on insubstantial changes from the patented invention. The fundamentals of the law of equivalency implement these premises, and were not changed by Maxwell as applied to all situations. Maxwell did not displace the wealth of precedent that permits determination of equivalency, vel non, as to subject matter included in the written description but not claimed. . . . Thus the Commission's interpretation of Maxwell as creating a new rule of law that applies in all cases and to all facts is incorrect. Certainly, YBM is careful to avoid running head-on into the holding of Maxwell. Nevertheless, does YBM gut the reasoning that supports Maxwell—that subject matter that is disclosed but not claimed in

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a patent (whether part of a range or part of separate embodiments) is dedicated to the public? One pre-YBM Federal Circuit panel, also considering a case in which the patentee was asserting equivalence for a item which fell within a numerical range that was disclosed in the written description but was not claimed, was unable to distinguish Maxwell: Despite Brunswick's [the patentee’s] attempt to attack the factual underpinnings of the trial court's conclusion—one drawn from a mass of evidence both favoring and disfavoring Brunswick's position—we conclude that we are bound by the holding in Maxwell . . ., to affirm the court's judgment of no infringement by equivalents. See UMC Elecs. Co. v. United States, 816 F.2d 647, 652 n.6, 2 USPQ2d 1465, 1468 n.7 (Fed. Cir. 1987) ("A panel of this court is bound by prior precedential decisions unless and until overturned en banc."). In Maxwell, this court cited the age-old rule that subject matter that is disclosed in the specification, but not claimed, is dedicated to the public. See id. at 1106, 39 USPQ2d at 1006. Maxwell held that the rule applies equally, when an accused infringer practices disclosed but unclaimed subject matter, to prevent a finding of infringement under the doctrine of equivalents as it does to prohibit a finding of literal infringement. See id. at 1107, 39 USPQ2d at 1006. The dissenting opinion argues that, applied in this case, the rule of Maxwell is inconsistent with earlier precedent of this court and at odds with the Supreme Court's decision in Warner-Jenkinson Co. v. Hilton Davis Chemical Co., 41 USPQ2d 1865 (1997). We disagree. While the Supreme Court dismissed the argument that equivalents are limited to what is disclosed in the patent, its decision does not grant the patentee the right to claim as an equivalent that which is disclosed but unclaimed in the patent and therefore dedicated to the public. Nor do we understand the rule of Maxwell, supported by the broad concept of dedication to the public of disclosed but unclaimed matter, to be any less applicable to a case in which a clear, definite numerical limitation is placed on a claimed range than to a case in which an alternative configuration of an article is disclosed but not claimed. In any event, this case certainly does not mean that all subject matter outside the literal claims, of whatever nature, is dedicated to the public in all situations. Brunswick Corp. v. United States, 152 F.3d 946 (table), 46 USPQ2d 1446 (Fed. Cir. Mar. 31, 1998). Judge Newman was on the Brunswick panel and dissented. You may wonder how the YBM decision was able to work its way around the holding in Brunswick. The answer is tricky. A panel of the Federal Circuit is required to follow an earlier decision only if the earlier decision is announced in a precedential opinion. However, the court also issues nonprecedential opinions, which are binding only on the parties before the court, and may not be cited as precedent. Brunswick was a nonprecedential opinion. Thus, the YBM panel never had to concern itself with Brunswick. This story continues to play on today. In Moore v. Standard Register, 229 F.3d 1091 (Fed. Cir. 2000), the patent-at-issue concerned a bulk mailer, where the claim required, among other limitations, an adhesive to cover “a majority” of the length of one side of the mailer. The accused product had adhesive covering about 49% of the length. The court, Judge Michel, joined by Judge Clevenger, rejected (over a dissent by Judge Newman) Moore’s argument that the doctrine of equivalents allowed coverage of the non-majority aspects of the accused device: Likewise, while Moore argues that the written description's teaching that the length of the first and second strips may be about "half of the length" of the longitudinal marginal portions gives rise to a scope of equivalents that would cover a "minority," our case law reveals that Moore is mistaken. In Maxwell v. J. Baker, we explained the contrary principle that "subject matter disclosed in the specification, but not claimed, is dedicated to the public" in determining infringement under the doctrine of equivalents. Having fully disclosed two distinct embodiments, one in which the first and second longitudinal strips extend a majority of the length of the longitudinal marginal portions, and one in which they do not, Moore is not entitled to "enforce the unclaimed embodiment as an equivalent of the one that was claimed." YBM Magnex, Inc. v. International Trade Comm'n. . . . Accordingly, we hold that the district court appropriately granted summary judgment of no infringement by equivalents. In January 2001, the Federal Circuit set a course to resolve the issue, taking the unusual step of sua sponte taking a case, Johnson & Johnston v. R.E. Service, for en banc resolution. The court requested that the parties brief the following issue: (1) Whether and under what circumstances a patentee can rely upon the doctrine of equivalents with respect to unclaimed subject matter disclosed in the specification.

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Accordingly, we can expect a definitive ruling on this issue relatively soon. What would you advise the court to decide?

The All Elements Rule You may think that it was the Supreme Court that first announced the “all elements” rule in Warner-Jenkinson. Not so. Although the Court did not cite to, or in any way acknowledge, it, the Federal Circuit had handed down this rule ten years before in the en banc decision in Pennwalt Corp. v. Durand-Wayland, Inc., 833 F.2d 931, 4 USPQ2d 1737 (Fed. Cir. 1987) (in banc). Regardless of who gets the credit as originator, the rule is solidly in place. But how does the rule really work in practice? Read the next case to see.

Dolly, Inc. v. Spaulding & Evenflo Cos. 16 F.3d 394, 29 USPQ2d 1767 (Fed. Cir. 1994) Before ARCHER, PLAGER, and RADER, Circuit Judges. RADER, Circuit Judge. Dolly, Inc. (Dolly) sued Spalding & Evenflo Companies, Inc. (Evenflo) in the United States District Court for the Southern District of Ohio (Western Division) for unfair competition and infringement of U.S. Patent No. 4,854,638 (the '638 patent). On an earlier appeal in this same case, Dolly, Inc. v. Spalding & Evenflo Cos., 954 F.2d 734, 23 USPQ2d 1555 (Fed.Cir.1992), this court vacated the district court's preliminary injunction because the trial court had improperly construed the patent claims. On remand, the district court determined that Evenflo infringed the '638 patent under the doctrine of equivalents. Due to improper application of the doctrine of equivalents, this court reverses. BACKGROUND The '638 patent discloses a portable, adjustable child's chair that also serves as a booster seat or a highchair. The '638 patent carries the title "Portable Adjustable Child's Chair." The claimed chair has a series of channels into which the seat panels slide, thereby adjusting the seat height to accommodate a growing child. The chair also has a detachable tray, means for retaining the child in the seat, and means for securing the chair to a standard kitchen chair for use as a highchair. Claim 19, the only claim at issue, is dependent upon claims 16 and 17. Claims 16, 17, and 19 state: 16. A portable adjustable child's chair, comprising: (a) a contoured seat panel; (b) a contoured back panel; (c) two side panels having on their inner surfaces facing each other a plurality of generally horizontal grooves or channels to slidably receive said seat panel whereby said seat panel may be raised or lowered; and (d) a stable rigid frame which is formed in part from said side panels and which along with said seat panel and said back panel provides a body supporting feature, said stable rigid frame being self-supporting and free-standing, whereby said child's chair is readily portable and easily stored. 17. The portable adjustable child's chair of claim 16 further comprising: a serving tray; and means for removably attaching said tray to said child's chair.

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19. The portable adjustable child's chair of claim 17 further comprising means for retaining the occupant in said child's chair and means for securely attaching said child's chair to an existing chair or other support.

Evenflo produces the "Snack & Play" chair, a portable adjustable child's chair which also converts into a booster seat or highchair. The Snack & Play chair consists of four interlocking panels, a tray, and two sets of straps. The Snack & Play chair completely disassembles for easy portability and storage. Indeed Evenflo sells its chair disassembled. The purchaser assembles the components to form a chair. In disassembled form, the Snack & Play chair consists of four panels--a back panel, a seat panel, and two side panels. During assembly, the back panel tabs slide into receiving grooves on the side panels, the seat slides into one of three slots on the side panels and engages a receiving slot on the back panel to make a stable chair. The seat height adjusts because the assembler can choose from among three slots on the side panels when attaching the seat panel. The Snack & Play has no additional frame or components supporting the side, back, and seat panels. In granting Dolly's motion for a preliminary injunction on January 8, 1991, the district court held that the Snack & Play infringes claim 19 both literally and under the doctrine of equivalents. The trial court read paragraph (d) of claim 16 to mean that the back and seat panels can be part of the stable rigid frame. See Dolly, Inc. v. Spalding & Evenflo Cos., 18 USPQ2d 1737, 1748, 1991 WL 117061 (S. D. Ohio 1991). On appeal, this court vacated the injunction and remanded. This court stated: "[T]he claim language requires that the stable rigid frame must be formed independent of the seat and back panels." Dolly, 954 F.2d at 734, 23 USPQ2d at 1556. On remand, Dolly withdrew its claim for literal infringement. The Snack & Play lacks a stable rigid frame separate from the seat and back panels as required by claim 16. Dolly continued to assert infringement under the doctrine of equivalents. Both Evenflo and Dolly filed motions for summary judgment. Evenflo sought a judgment of non-infringement; Dolly sought reinstatement of the injunction. The district court granted Dolly's motion for summary judgment, permanently enjoining Evenflo from infringing the '638 patent. The district court held that the Snack & Play infringes Claim 19 of the '638 patent under the doctrine of equivalents. The trial court reasoned that the Snack & Play's assembly of a frame from the back, seat, and side panels is the equivalent of the stable rigid frame limitation in claim 16. Evenflo appeals the district court's determination that the Snack & Play infringes under the doctrine of equivalents. DISCUSSION The determination of infringement is a two-step process: First, the court interprets the claim to determine its scope and meaning; second, the court determines whether the accused device is within the scope of the properly construed claim. Becton Dickinson & Co. v. C.R. Bard, Inc., 922 F.2d 792, 796, 17 USPQ2d 1097, 1099 (Fed. Cir. 1990). To show infringement, the plaintiff must establish that the accused device includes every limitation of the claim or an equivalent of each limitation. Id. An accused device may infringe a claim under the doctrine of equivalents if it performs substantially the same overall function or work, in substantially the same way, to produce substantially the same overall result as the claimed invention. Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 608, (1950); Pennwalt Corp. v. Durand-Wayland, Inc., 833 F.2d 931, 934, 4 USPQ2d 1737, 1739 (Fed. Cir. 1987) (in banc), cert. denied 485 U.S. 961, 485 U.S. 1009 (1988). "To be a[n] ... 'equivalent,' the element substituted in the accused device for the element set forth in the claim must not be such as would substantially change the way in which the function of the claimed invention is performed." Perkin-Elmer Corp. v. Westinghouse Elec. Corp., 822 F.2d 1528, 1533, 3 USPQ2d 1321, 1325 (Fed. Cir. 1987).

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On remand, the district court determined that the Snack & Play contained an equivalent to the missing separate stable rigid frame: The stable rigid frame which exists when the Snack and Play side panels, back panel, and seat panel are assembled performs substantially the same function as the stable rigid frame in the claimed chair because the side panels are interconnected through the back panel and through the seat panel. The seat panel and back panel of the Snack and Play chair, like the tubular supports and tie rods in the '638 Patent's preferred embodiment connect the side panels so that they are upright, parallel to each other, and rigidly and uniformly spaced apart from each other, forming a stable rigid frame which is self-supporting and free standing and which also provides a body supporting feature.

Dolly, Inc. v. Spalding & Evenflo Cos., No. C-3-90-226, slip op. at 5 (S. D. Ohio Feb. 9, 1993). The court thus held that the Snack & Play's stable rigid frame, assembled from the various panels, is the substantial equivalent of the separate stable rigid frame in claim 16. In addition, the district court found that the Snack & Play's stable rigid frame provides the body supporting feature without the addition of other components. The district court erred by disregarding a specific limitation in claim 16. Although the Snack & Play chair, assembled from seat, back, and side panels, is itself a stable rigid frame, the '638 claim requires a stable rigid frame apart from the back and seat panels. The Snack & Play chair has no separate stable rigid frame. The doctrine of equivalents cannot extend or enlarge the scope of the claims. Wilson Sporting Goods Co. v. David Geoffrey & Assocs., 904 F.2d 677, 684, 14 USPQ2d 1942, 1948 (Fed. Cir.), cert. denied, 498 U.S. 992 (1990). "The claims--i.e. the scope of patent protection as defined by the claims--remain the same and application of the doctrine expands the right to exclude to 'equivalents' of what is claimed." Id. The doctrine of equivalents is not a license to ignore claim limitations. See Pennwalt Corp., 833 F.2d at 935. Claim 16's language requiring a stable rigid frame independent of seat and back panels is not a requirement solely for literal infringement. This limitation applies under the doctrine of equivalents as well. "Under the doctrine of equivalents, the accused device and the claimed invention cannot work in 'substantially the same way' if a limitation (including its equivalent) is missing." Valmont Indus. v. Reinke Mfg., 983 F.2d 1039, 1043 n.2, 25 USPQ2d 1451, 1455 n.2 (Fed. Cir. 1993). The Snack & Play chair lacks a stable rigid frame separate from the panels. The Snack & Play also lacks a structure to which additional components are added to form the body supporting feature. Rather, the Snack & Play chair achieves its function without a stable rigid frame independent of the various panels. In the absence of the stable rigid frame limitation or its equivalent, the Snack & Play chair does not infringe. The doctrine of equivalents does not require a one-to-one correspondence between components of the accused device and the claimed invention. Intel Corp. v. International Trade Comm'n, 946 F.2d 821, 832, 20 USPQ2d 1161, 1171 (Fed. Cir. 1991); see also Vaupel Textilmaschinen KG v. Meccanica Euro Italia S.P.A., 944 F.2d 870, 882, 20 USPQ2d 1045, 1054 (Fed. Cir. 1991). An accused device may infringe under the doctrine of equivalents even though a combination of its components performs a function performed by a single element in the patented invention. Intel Corp., 946 F.2d at 832. The accused device must nevertheless contain every limitation or its equivalent. Id. Contrary to Dolly's assertions, Intel Corp. and Vaupel Textilmaschinen do not apply here. In those cases, more than a single element in the accused device performed the function of a single limitation in the claimed invention. Every limitation or its equivalent, however, was present in the accused device. Equivalency thus can exist when two components of the accused device perform a single function of the patented invention. In this case, however, a vital limitation of the claim is absent from the accused device. Chapter 8 – Doctrine of Equivalents Infringement

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Equivalency can also exist when separate claim limitations are combined into a single component of the accused device. See Sun Studs, Inc. v. ATA Equip. Leasing Inc., 872 F.2d 978, 10 USPQ2d 1338 (Fed. Cir. 1989), overruled on other grounds, A.C. Aukerman Co. v. R.L. Chaides Constr. Co., 960 F.2d 1020, 1038-39, 22 USPQ2d 1321, 1333 (Fed. Cir. 1992). In the instant case, one element of the accused device fulfills two functions of the claimed chair--the Snack & Play's panels serve as both the stable rigid frame and the body supporting feature. Contrary to Dolly's contention, however, Sun Studs does not apply here. In Sun Studs, the patent claimed log processing equipment, comprising, inter alia, "aligning means for receiving and holding a log at a reference location," and "charger means for releasably gripping said log at said reference location and transporting the log past said scanning means." Sun Studs, 872 F.2d at 988. The district court held that the accused device, lacking a separate aligning means, did not infringe either literally or under the doctrine of equivalents. On appeal, this court reversed: It was legal error to hold that the aligning and charging steps must be performed by separate elements in the apparatus. One-to-one correspondence of components is not required, and elements or steps may be combined without ipso facto loss of equivalency. Each case must be decided in light of the nature and extent of the differences between the accused device and the claimed invention, on the equitable principles of the doctrine of equivalents.

Id. at 989. Sun Studs does not apply here because the claim in Sun Studs merely recited aligning and charging means without any additional limitation regarding the relationship of the two means to one another. In contrast, claim 16 specifically requires a stable rigid frame formed of components other than the seat and back panels. Such a stable rigid frame does not exist in the accused device. This court cannot "convert a multi-limitation claim to one of [fewer] limitations to support a finding of equivalency." Perkin-Elmer Corp., 822 F.2d at 1532. The Snack & Play stable rigid frame assembled from the panels is not the equivalent of the claimed stable rigid frame which specifically excludes the seat and back panels. Finally, Corning Glass Works v. Sumitomo Elec. U.S.A., Inc., 868 F.2d 1251, 9 USPQ2d 1962 (Fed. Cir. 1989), does not support an application of the doctrine of equivalents to find infringement in this case. In Corning Glass, the inventions related to optical fibers which transmit light for optical communications. The optical fiber, according to the claims, features a core with a positive dopant in excess of that in the cladding layer around the core. Thus, the core's index of refraction is greater than that of the cladding layer. This refraction differential channels the light signals through the core. The accused fibers contained no dopant in the core. These fibers, instead, contained a negative dopant in the cladding layer. The refractive index of the core remained different from that of the cladding layer to channel the light signals. This court upheld the district court's determination that the addition of a negative dopant to the cladding layer was the equivalent of the addition of a positive dopant to the core. The Corning Glass court rejected the accused infringer's argument that the accused fibers could not infringe under the doctrine of equivalents because they lacked a claimed "element," the core dopant. This court noted the confusion about the term "element": "Element" may be used to mean a single limitation, but it has also been used to mean a series of limitations which, taken together, make up a component of the claimed invention. In the [Pennwalt ] All Elements rule, "element" is used in the sense of a limitation of a claim.... An equivalent must be found for every limitation of the claim somewhere in an accused device, but not necessarily in a corresponding component, although that is generally the case.

Corning Glass, 868 F.2d at 1259. This language, however, did not alter the Pennwalt rule to create a more expansive test for infringement under the doctrine of equivalents. This language in Corning Glass did not substitute a broader limitation-by-limitation comparison for the doctrine of equivalents than the element-by-element comparison in Pennwalt. Rather, the Corning Glass court merely clarified the meaning of the term "element" in the context of the Pennwalt rule. Corning Glass reaffirmed that the rule requires an equivalent for every limitation of the claim, even

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though the equivalent may not be present in the corresponding component of the accused device. Corning Glass, 868 F.2d at 1259. In Corning Glass, this court upheld the finding of infringement under the doctrine of equivalents: The use of ... a [negative] dopant in the cladding thus performs substantially the same function in substantially the same way as the use of a [positive] dopant in the core to produce the same result of creating the refractive index differential between the core and cladding of the fiber which is necessary for the fiber to function as an optical waveguide.

Id. at 1260 (alterations in original) (quoting Corning Glass Works v. Sumitomo Elec. U.S.A., Inc., 671 F. Supp. 1369, 1387, 5 USPQ2d 1545, 1559 (S.D.N.Y. 1987)). The accused device achieved the same refractive index differential by the addition of dopant, as required by the claim. The accused device only added a negative dopant to a different component. This court noted that this insubstantial change merely substituted a known alternative way to achieve the same result and perform the same function of achieving a refractive index differential. Id. In the case at bar, the difference between the accused chair and the claimed invention is more fundamental. The Snack & Play chair did not merely substitute a known alternative to a stable rigid frame independent of seat and back panels to achieve the same body supporting function as the claimed invention. The difference here was not "insubstantial" at all. See Charles Greiner & Co. v. Mari-Med Mfg., 962 F.2d 1031, 1036, 22 USPQ2d 1526, 1529 (Fed. Cir. 1992). To perform its body supporting function, the claimed invention adds panels to a separate stable rigid frame. The Snack & Play has no stable rigid frame or equivalent structure to support additional panels. The Snack & Play disassembles completely into its flat panel components. An "equivalent" of a claim limitation cannot substantially alter the manner of performing the claimed function. Pennwalt, 833 F.2d at 935. Where an accused device performs substantially the same function to achieve substantially the same result but in a substantially different manner, there is no infringement under the doctrine of equivalents. Perkin-Elmer Corp., 822 F.2d at 1531 n.6. In Corning Glass, the accused device retained both a core and cladding layer and the relationship of their respective refractive indices. In contrast, the Snack & Play chair lacks both a separate stable rigid frame and the claimed relationship between that frame and the seat and back panels to perform the body supporting function. See Perkin-Elmer Corp., 822 F.2d at 1532. In short, the concept of equivalency cannot embrace a structure that is specifically excluded from the scope of the claims. A stable rigid frame assembled from the seat and back panels is not the equivalent of a separate stable rigid frame which the claim language specifically limits to structures exclusive of seat and back panels. The district court erred by failing to give effect to this claim limitation in applying the doctrine of equivalents to the Snack & Play chair. ****

Questions, Comments, Problems 1. How does the holding in Dolly relate to the Supreme Court’s statements regarding vitiation in Warner-Jenkinson? Dolly tiptoes around cases, such as Sun Studs, which hold that infringement cannot be avoided simply by combining two claim elements into a single component in the accused product or process. Perhaps Dolly stands for the proposition that, when one of the claim elements is totally subsumed into the other element in the accused product or process, such that it cannot be identified apart from the other element, it cannot support a finding of infringement due to the All Elements rule. For example, in Dolly, the frame and panels of the accused high chair were not only combined into a single structural piece, but the frame could not even be identified apart from the panels. Thus, the accused chair either had panels or it had a frame, but it did not have both, so it was lacking at least one claim element entirely. Or, perhaps the patent claim in Dolly recited the invention in a very specific manner that actually did positively exclude the construction that the plaintiff had urged. What do you think?

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2. Dolly is generally believed to have been joined by two later sister cases that purport to follow the rule presented in Dolly. The first case is Weiner v. NEC Electronics, 102 F.3d 534, 41 USPQ2d 1023 (Fed. Cir. 1996). In Weiner, the patent was for a device for addressing a memory array or matrix in a read-only memory (ROM) device, and the claims called for ”columns.” The court construed the term “columns” to conclude that the columns were structures on the data matrix of the memory chip. In contrast, the accused devices retrieved information from a data register, which was outside and isolated from the data matrix. The devices therefore did not literally infringe. The court also found that the devices did not infringe under the doctrine of equivalents because, like the claim in Dolly, which explicitly recited a “stable rigid frame,” Weiner’s claim explicitly required columns, which the court had construed to be located on the data matrix. Because the accused device did not call on columns in the data matrix even if it called on columns somewhere else, the court concluded that the required structure was “specifically excluded” from the claims. Id. at 541, 41 USPQ2d at 1029. In the second case, Sage Products, Inc. v. Devon Industries, Inc., 126 F.3d 1420, 44 USPQ2d 1103 (Fed. Cir. 1997), the invention was for a secure medical instrument disposal container. The claimed container contained two slotted baffles to permit a person to get waste into the container without contacting sharp objects already in the container. The asserted claim called for a “barrier means” next to “an elongated slot at the top of the container body.” The accused product had a slot, if at all, within the container body and not at its top. Referring to the “top of the container” limitation and citing Dolly, the court held that Sage would need to remove entirely the limitation since the accused device clearly did not have a slot at its top. In Ethicon Endo-Surgery, Inc. v. United States Surgical Corp., 149 F.3d 1309, 47 USPQ2d 1272 (Fed. Cir. 1998), United States Surgical (USSC) had obtained a summary judgment of no infringement under the doctrine of equivalents and pushed Dolly, Weiner, and Sage on appeal as supporting the district court’s ruling. Ethicon’s patent covered a surgical stapler, and the asserted claim (claim 6) called for an improvement comprising a “lockout mechanism connected to . . . logitudinal slots” in a staple cartridge to prevent attempts to discharge staples from an empty staple cartridge. Although the lockout mechanism in USSC’s staplers was not connected to the slots, there was record testimony that it played substantially the same role as the claimed mechanism and a skilled artisan would have recognized the two mechanisms as interchangeable. Nevertheless, the district court held that, under Sage, the accused product was “specifically excluded” from the claims. The Federal Circuit disagreed: Ethicon argues that the district court's reliance on Dolly and Weiner, as well as USSC's reliance on Sage, is misplaced because those cases are factually distinguishable, and in any event no language in claim 6 "directly addresses and specifically excludes" a lockout positioned as in USSC's staplers. Ethicon also argues that the statements relied upon by the district court and USSC, if read broadly, would thoroughly undermine the doctrine of equivalents and specifically contradict Corning Glass Works v. Sumitomo Electric U.S.A., Inc., 868 F.2d 1251, 1259, 9 USPQ2d 1962, 1968 (Fed. Cir. 1989) ("An equivalent must be found for every limitation of the claim somewhere in an accused device, but not necessarily in a corresponding component, although that is generally the case."). . . . USSC responds that Dolly, Weiner, and Sage require summary judgment of noninfringement of claim 6. USSC asserts that Ethicon's theory vitiates the "in a staple cartridge" and "connected to said longitudinal slots" limitations by construing too broadly the function that these limitations perform. . . . The discussion of our case law by both parties, as well as the district court, requires that we place the cited decisions in perspective, as well as in the context of Warner-Jenkinson. We agree with Ethicon that, if read as argued by USSC, the above-quoted statements from Dolly, Weiner, and Sage would force the All Elements rule to swallow the doctrine of equivalents, reducing the application of the doctrine to nothing more than a repeated analysis of literal infringement. Once a negative determination of literal infringement is made, that failure to meet a limitation would preclude a finding of infringement under the doctrine. The doctrine of equivalents would thus be rendered superfluous under USSC's view, because a finding of non-infringement would be foreordained when a court has already found that the accused subject matter does not literally fall within the scope of the asserted claim. However, any analysis of infringement under the doctrine of equivalents necessarily deals with subject matter that is "beyond," "ignored" by, and not included in the literal scope of a claim. Such subject matter is not necessarily "specifically excluded" from coverage under the doctrine unless its inclusion is somehow inconsistent with the language of the claim. Literal failure to meet a claim limitation does not necessarily amount to "specific exclusion." . . .

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**** Dolly, Weiner, and Sage were decided on their facts, and were consistent with both our precedent and with the Supreme Court's recent express adherence to the doctrine of equivalents as a viable alternative to literal infringement. They simply explained that on the facts presented, no reasonable finder of fact could have found infringement by equivalents because the differences between the allegedly infringing devices and the claimed inventions were plainly not insubstantial. See Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 609, 85 USPQ 328, 330 (1950) ("What constitutes equivalency must be determined against the context of the patent, the prior art, and the particular circumstances of the case."). But they did not read the doctrine of equivalents out of existence when a claim limitation is not expressly met by an accused device. (Emphasis added). Is the court’s distinction of Dolly, Weiner, and Sage satisfactory? Is precedent of any value if it can be cast away as limited to its facts? Is the approach taken in Ethicon similar to that taken in YBM, i.e., limiting to its facts an opinion that was being applied too broadly? 3. The holding in Sage raises an additional concern. The relevant phrase from the claim recited “an elongated slot at the top of the container body for permitting access to the interior of the container body.” The court, however, referred to the “top of the container body” claim limitation, and found that the accused container’s slot at the body’s middle was not equivalent to that limitation. Did the court parse the claim limitation too thinly? This question is important because the level of abstraction that a court takes in parsing out claim limitations (also referred to as elements) can change the result in any given case. For example, suppose that the claim limitation above recited “a thin, rectangular slot at the top of the container” and that the accused product had a thin, rectangular slot at the middle of the container. If the claim limitation is “a thin, rectangular slot at the top of the container,” the patentee is 2-for-3 when arguing about the similarities of the two structures, i.e., both are thin and rectangular. However, if the limitation is “at the top,” the patentee is 0-for-0 because the slot is not “at the top,” and the patentee risks being hung up on a “vitiation” theory. At least in a literal infringement sense, every narrowing word that is added to a claim could be viewed as a claim limitation. However, if every word in a claim is an “element” under the doctrine of equivalents, the doctrine quickly collapses into literal infringement. Unfortunately, the Federal Circuit has provided no guidance whatsoever on how to parse out claim elements from patent claims for purposes of the all-elements rule. The court has also used the terms “element” and “limitation” interchangeably. There is a footnote in Perkin-Elmer Corp. v. Westinghouse Elec. Corp., 822 F.2d 1528, 1533 n.9, 3 USPQ2d 1321, 1325 n.9 (Fed. Cir. 1987), which attempts to explain the difference between the two terms, but it is a less than satisfactory explanation. The ambiguity was compounded by the court’s explanation in Corning Glass Works v. Sumitomo Elec., U.S.A., Inc., 868 F.2d 1251, 1259, 9 USPQ2d 1962, 1968 (Fed. Cir. 1989). See also Ethicon, 149 F.3d at 1317 n., 47 USPQ2d at 1277 n.

The Doctrine and Means-Plus-Function Claim Elements

Al-Site Corp. v. VSI International, Inc. 174 F.3d 1308, 50 USPQ2d 1161 (Fed. Cir. Mar. 30, 1999) Before MAYER, Chief Judge, RICH, and RADER, Circuit Judges. RADER, Circuit Judge. Magnivision and VSI both sell non-prescription eyeglasses. Magnivision is the assignee of U.S. Patent Nos. 4,976,532 (the ‘532 patent), 5,144,345 (the ‘345 patent), 5,260,726 (the ‘726 patent), and 5,521,911 (the ‘911 patent). These patents claim technology for displaying eyeglasses on racks. The claimed inventions allow consumers to try on eyeglasses and return them to the rack without removing them from their display hangers.

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The jury determined that the [accused] hanger tag literally infringes claims 8, 9, 14, 15, and 17 of the ‘532 patent. Claim 8, the independent claim from which the other infringed claims depend, claims the combination of a pair of eyeglasses and a hanger means for removably mounting the eyeglasses on a cantilevered support. The claim itself gives some structural definition of the hanger means as “including a body having aperture means adapted” for suspending the hanger and eyeglasses on the cantilevered support. Additionally, the hanger means includes an extension projecting from the bottom edge portion of the hanger body. This extension encircles the nose bridge of the eyeglasses. The claim specifies that “fastening means in engagement with said extension” hold the extension in a closed loop. Figure 1 from the ‘532 patent illustrates these claimed features:

The district court determined that the “fastening means” was a means-plus- function element subject to the interpretation requirements of 35 U.S.C. § 112, ¶ 6 (1994). Consistent with that determination, the trial court instructed the jury that “the fastening means . . . is either a rivet or a button and hole arrangement as shown in the ’532 patent or the structural equivalents thereof.” Neither party challenges this part of the district court’s claim construction. On appeal, VSI contends that its Version 1 hanger tag does not infringe because it does not include the “fastening means” required by claim 8. VSI’s Version 1 hanger tag is a one-piece paper sticker having two large portions connected by a narrow extension. The entire back of the tag, including the extension, is coated with an adhesive. Backing paper covers the adhesive to prevent undesired adhesion. In use, a merchant removes the backing paper from the large portions of the tag. The extension (still covered with backing paper) then wraps around the nose bridge of the glasses. This wrapping glues the large portions together. In use, therefore, glue secures the two large portions of the tag to each other, leaving the narrow extension of the tag wrapped around the bridge of the eyeglasses. The adhesive used by VSI is not identical to the fastening structure (namely, a rivet or button) described in the ’532 patent. The jury, however, applying the rules of §112, ¶ 6, determined that the VSI adhesive was equivalent to the structure disclosed in the specification. Accordingly, the

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jury returned a verdict of literal infringement of the ‘532 patent. VSI argues that substantial evidence does not support the jury’s finding of literal infringement. VSI first challenges the jury determination that adhesive is structurally equivalent to the mechanical fasteners disclosed in the specification of the ‘532 patent. [However,] Magnivision’s technical expert, Mr. Anders, testified that, for one of ordinary skill in the art, it would be an insubstantial change “to substitute a rivet for a staple or for glue or for any other method that’s standard in the [point of purchase] industry to maintain this loop as a closed loop.” . . . This testimony constitutes sufficient evidence to sustain the jury’s verdict that persons of ordinary skill in the art consider glue an equivalent structure to those disclosed in the specification for maintaining a closed loop. As a fallback position, VSI argues that, even if the glue is an equivalent of the rivet or button, Magnivision presented no evidence that the glue was “in engagement” with the extension as claim 8 requires. . . . . VSI’s argument is unpersuasive. The claims of the ‘532 patent only require that the fastening means be “in engagement with” the extension. As noted above, VSI coats the extension of its Version 1 hanger tag with glue – the fastening means identified by Mr. Anders. Furthermore, Mr. Anders’ testimony explains that the extension and the glued portions are one integral piece. The jury could have interpreted his testimony to mean that the extension includes more than the narrow, middle portion of the Version 1 tag. Under this interpretation, the extension would also directly engage the glue fastening means. Alternatively, the jury could have determined that the extension is only the narrow portion of the Version 1 tag, but that the fastening means includes one of the two portions of the tag body in addition to the glue. Under any of these reasonable views of the accused product, the extension of the Version 1 hanger tag is in engagement with the glue fastening means as required by the claims. As the finder of fact, the jury receives deference for its function of weighing witness demeanor, credibility, and meaning. See Anderson v. City of Bessemer City, North Carolina, 470 U.S. 564, 575 (1985) (factfinder entitled to deference on credibility determinations). Substantial evidence therefore supports the jury’s verdict that VSI’s Version 1 hanger tag literally infringes the ’532 patent. [The Version 2 Hanger Tag] The jury determined that VSI’s Version 2 hanger tag and display rack did not literally infringe claim 1 of the ’345 patent; nevertheless, [the juty] found infringement of [this] claim under the doctrine of equivalents. [Claim 1 of the ‘345 patent includes a “means for securing” element; the district court judge, however, did not instruct the jury as to the doctrine of equivalents in the 112 ¶ 6 context, but instead instructed the jury as if the claim was written in traditional form.] The “means for securing” claim element is in conventional means-plus-function format without specific recital of structure and therefore invokes § 112, ¶ 6. The jury’s finding of infringement of claim 1 of the ‘345 patent under the doctrine of equivalents indicates that the jury found every element of the claim literally or equivalently present in the accused device. The question before this court, therefore, is whether the jury’s finding that the accused structure was equivalent to the “means for securing” element under the doctrine of equivalents, also indicates that it is equivalent structure under § 112, ¶ 6. This court has on several occasions explicated the distinctions between the term “equivalents” found in § 112, ¶ 6 and the doctrine of equivalents. See, e.g., Valmont Indus., Inc. v. Reinke Mfg. Co., 983 F.2d 1039, 1042-44, 25 USPQ2d 1451, 1453-56 (Fed. Cir. 1993); Chiuminatta, 145 F.3d at 1310; Alpex Computer Corp. v. Nintendo Co., 102 F.3d 1214, 1222, 40 USPQ2d 1667, 167374 (Fed. Cir. 1996); Dawn Equip. Co. v. Kentucky Farms Inc., 140 F.3d 1009, 1018-23, 46 USPQ2d 1109, 1115-18 (Fed. Cir. 1998) (Plager, J., additional views) (Newman, J., additional Chapter 8 – Doctrine of Equivalents Infringement

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views) (Michel, J., additional views). Indeed, the Supreme Court recently acknowledged distinctions between equivalents as used in § 112, ¶ 6 and the doctrine of equivalents. See Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 27, 41 USPQ2d 1865, 1870-71 (1997) ("[Equivalents under § 112, ¶ 6] is an application of the doctrine of equivalents in a restrictive role, narrowing the application of broad literal claim elements. [Section 112, ¶ 6] was enacted as a targeted cure to a specific problem . . . . The added provision, however, is silent on the doctrine of equivalents as applied where there is no literal infringement.”) Section 112, ¶ 6 recites a mandatory procedure for interpreting the meaning of a means- or stepplus-function claim element. These claim limitations “shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.” 35 U.S.C. § 112, ¶ 6. Thus, § 112, ¶ 6 procedures restrict a functional claim element’s “broad literal language . . . to those means that are ‘equivalent’ to the actual means shown in the patent specification.” Warner-Jenkinson, 117 S. Ct. at 1048. Section 112, ¶ 6 restricts the scope of a functional claim limitation as part of a literal infringement analysis. See Pennwalt Corp. v. DurandWayland, Inc., 833 F.2d 931, 934, 4 USPQ2d 1737, 1739 (Fed. Cir. 1987). Thus, an equivalent under § 112, ¶ 6 informs the claim meaning for a literal infringement analysis. The doctrine of equivalents, on the other hand, extends enforcement of claim terms beyond their literal reach in the event “there is ‘equivalence’ between the elements of the accused product or process and the claimed elements of the patented invention.” Warner-Jenkinson, 117 S. Ct. at 1045. One important difference between § 112, ¶ 6 and the doctrine of equivalents involves the timing of the separate analyses for an “insubstantial change.” As this court has recently clarified, a structural equivalent under §112 must have been available at the time of the issuance of the claim. See Chiuminatta, 145 F.3d at 1310. An equivalent structure or act under § 112 cannot embrace technology developed after the issuance of the patent because the literal meaning of a claim is fixed upon its issuance. An “after arising equivalent” infringes, if at all, under the doctrine of equivalents. See Warner-Jenkinson, 117 S. Ct. at 1052; Hughes Aircraft Co. v. U.S., 140 F.3d 1470, 1475, 46 USPQ2d 1285, 1289 (Fed. Cir. 1998). Thus, the temporal difference between patent issuance and infringement distinguish an equivalent under § 112 from an equivalent under the doctrine of equivalents. See Chiuminatta, 145 F.3d at 1310. In other words, an equivalent structure or act under § 112 for literal infringement must have been available at the time of patent issuance while an equivalent under the doctrine of equivalents may arise after patent issuance and before the time of infringement. See Warner-Jenkinson, 117 S. Ct. at 1053. An “after-arising” technology could thus infringe under the doctrine of equivalents without infringing literally as a §112, ¶ 6 equivalent. 3 Furthermore, under § 112, ¶ 6, the accused device must perform the identical function as recited in the claim element while the doctrine of equivalents may be satisfied when the function performed by the accused device is only substantially the same. See Cybor, 138 F.3d at 1456; Hughes Aircraft, 140 F.3d at 1475. Although § 112, ¶ 6 and the doctrine of equivalents are different in purpose and administration, “a finding of a lack of literal infringement for lack of equivalent structure under a means-plus-function limitation may preclude a finding of equivalence under the doctrine of equivalents.” Chiuminatta, 145 F.3d at 1311. Both equivalence analyses, after all, apply “similar analyses of insubstantiality 3

These principles, as explained in Chiuminatta Concrete Concepts, Inc. v. Cardinal Indus., Inc., 145 F.3d 1303, 46 USPQ2d 1752 (Fed. Cir. 1998), suggest that title 35 will not produce an “equivalent of an equivalent” by applying both § 112, ¶ 6 and the doctrine of equivalents to the structure of a given claim element. A proposed equivalent must have arisen at a definite period in time, i.e., either before or after patent issuance. If before, a § 112, ¶ 6 structural equivalents analysis applies and any analysis for equivalent structure under the doctrine of equivalents collapses into the § 112, ¶ 6 analysis. If after, a non-textual infringement analysis proceeds under the doctrine of equivalents. Patent policy supports application of the doctrine of equivalents to a claim element expressed in means-plus-function form in the case of “after-arising” technology because a patent draftsman has no way to anticipate and account for later developed substitutes for a claim element. Therefore, the doctrine of equivalents appropriately allows marginally broader coverage than § 112, ¶ 6.

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of the differences.” Id. This confluence occurs because infringement requires, either literally or under the doctrine of equivalents, that the accused product or process incorporate each limitation of the claimed invention. See Warner-Jenkinson, 117 S. Ct. at 1049; Pennwalt, 833 F.2d at 935. Therefore, if an accused product or process performs the identical function and yet avoids literal infringement for lack of a § 112, ¶ 6 structural equivalent, it may well fail to infringe the same functional element under the doctrine of equivalents. See Chiuminatta, 145 F.3d at 1311. This same reasoning may be applied in reverse in certain circumstances. Where, as here, there is identity of function and no after-arising technology, a means-plus-function claim element that is found to be infringed only under the doctrine of equivalents due to a jury instruction failing to instruct on § 112, ¶ 6 structural equivalents is also literally present in the accused device. VSI’s Version 2 hanger tag has a central body and two arms, with one arm extending from each side of the body. Each arm has a hole near the end for receipt of an eyeglasses temple. The body also has an aperture through which a cantilever rod can be placed so the hanger tag can be hung from a display rack. VSI’s Version 2 hanger tag is the subject of U.S. Patent No. 5,141,104 (the ‘104 patent). Figure 4 of the ‘104 patent illustrates these features.

As noted above, the doctrine of equivalents and structural equivalents under § 112, ¶ 6, though different in purpose and administration, can at times render the same result. In this case, the jury found infringement under the doctrine of equivalents. This finding presupposes that the jury found an equivalent for each element of the claimed invention, including the “means for securing.” The holes in the arms of VSI’s Version 2 hanger tag secure a portion of the eyeglasses frame (the temples) to the hanger member and therefore perform the identical function of the claim element in question. The jury was instructed that the “means for securing” disclosed in the ‘345 patent “is a mechanically fastened loop that . . . can be formed from a separate extension or integral extension and includes either the rivet fastener or the button and hole fastener.” Based on this instruction, the jury found that the holes in the arms of the Version 2 hanger tag were equivalent to the mechanically fastened loop of the ‘345 patent under the doctrine of equivalents.

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The parties do not dispute that the holes in the arms of the accused device perform a function identical to the extension of the patented device. Furthermore, the holes do not constitute an after-arising technology. Because the functions are identical and the holes are not an after-arising technology, the jury’s finding of infringement under the doctrine of equivalents indicates that the jury found insubstantial structural differences between the holes in the arms of the Version 2 hanger tag and the loop of the ‘345 patent claim element. That finding is also sufficient to support the inference that the jury considered these to be structural equivalents under § 112, ¶ 6. For these reasons, any perceived error in the district court’s jury instruction regarding the “means for securing” is, at most, harmless.

Chiuminatta Concrete Concepts v. Cardinal Industries 145 F.3d 1303; 46 U.S.P.Q.2D (BNA) 1752 (Fed. Cir. 1998) Before MICHEL, PLAGER, and LOURIE, Circuit Judges. LOURIE, Circuit Judge. [On summary judgment,] the district court found that Cardinal infringed claim 11, an apparatus claim, of U.S. Patent B1 5,056,499 . . . . Chiuminatta owns two patents, the '499 patent and the '675 patent relating to an apparatus and method, respectively, for cutting concrete before it has completely cured to a hardened condition. The apparatus claims are directed to a rotary saw that has two significant features. First, the leading edge of the saw rotates in an upward direction so as to prevent the accumulation of displaced wet concrete in the groove created behind the saw. Second, a support surface applies downward pressure at the point where the saw blade emerges from the concrete in order to prevent the upwardly rotating blade from damaging the concrete (commonly referred to as raveling, chipping, spalling, or cracking). Claim 11 of the '499 patent (the sole apparatus claim on appeal) reads, with emphasis added, as follows: A saw for cutting concrete even before the concrete has hardened to its typical, rock-like hardness, comprising: a circular concrete cutting blade having sides and a leading cutting edge; a motor connected to rotate the concrete cutting blade in an up-cut rotation; means connected to the saw for supporting the surface of the concrete adjacent the leading edge of the cutting blade to inhibit chipping, spalling, or cracking of the concrete surface during cutting; wheel means for movably supporting the saw on the surface of the concrete during cutting.

As illustrated in the following figure adapted from the patent, the only structure disclosed for supporting the surface of the concrete is a skid plate.

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The written description summarizes the invention, stating: An apparatus is provided for cutting a groove in soft concrete. The apparatus can cut the concrete anytime after the concrete is finished and before the concrete attains its rock like hardness . . . . The soft concrete saw has a base plate [12] on which are mounted two wheels and a skid plate [24], each of which contacts the concrete to provide three point support on the concrete. . . . The saw blade [34] extends through a . . . slot in the skid plate, in order to project into and cut the concrete below the skid plate. The dimensions of the slot in the skid plate are selected to support the concrete immediately adjacent the saw blade so as to prevent cracking of the concrete as it is cut.

'499 patent, col. 3, ll. 8-27. Cardinal manufactures and sells the accused device, the Green Machine (R) saw. It, too, uses a rotary blade that rotates upward at its leading edge. Additionally, as illustrated above, the accused device has two small wheels [14] mounted adjacent to the leading edge of the saw blade [12]. Cardinal concedes that these wheels support the surface of the concrete in order to prevent chipping, spalling, or cracking. A. The '499 Patent 1. Literal Infringement Cardinal concedes that the accused device meets every claim limitation except the "means . . . for supporting the surface of the concrete." However, Cardinal argues that under a proper analysis, that means limitation should be construed as corresponding only to the disclosed skid plate and to structures that are equivalent to that skid plate. An equivalent structure, argues Cardinal, is one that includes the essential structural components of the disclosed apparatus. Cardinal [**8] identifies in its brief the key essential structural component as a "hard plate fixedly mounted to the base of the saw," although Cardinal concedes that the particular shape of the plate and its means for attachment are not essential.

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Chiuminatta responds that the limitation was properly construed as being broader than the disclosed skid plate to encompass any "support surface." Chiuminatta asserts that the court correctly premised its infringement finding on the observation that "both [the structure in the patent and the wheels of the accused device] consist of flat planes on either side of the saw blade which hold the concrete in place." We must determine whether the district court erred in concluding that the means limitation reads on the accused device as a matter of law. Neither party argues that there are disputed fact questions regarding the accused device. Both parties agree that the means-plus-function clause is the only limitation in dispute and that all other limitations [**9] are met by the accused device. What they dispute is whether the scope of the means clause is broad enough to encompass wheels such as those on the accused device. A means-plus-function limitation contemplated by 35 U.S.C. ß 112, ¶ 6 (1994) recites a function to be performed rather than definite structure or materials for performing that function. Such a limitation [*1308] must be construed "to cover the corresponding structure, material, or acts described in the specification and equivalents thereof." Id. "To determine whether a claim limitation is met literally, where expressed as a means for performing a stated function, the court must compare the accused structure with the disclosed structure, and must find equivalent structure as well as identity of claimed function for that structure." Pennwalt Corp. v. DurandWayland, Inc., 833 F.2d 931, 934, 4 U.S.P.Q.2D (BNA) 1737, 1739 (Fed. Cir. 1987) (in banc) (emphasis in original). A determination of the claimed function, being a matter of construction of specific terms in the claim, is a question of law, reviewed de novo. See Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 46 U.S.P.Q.2D (BNA) 1169 (Fed. Cir. 1998) (in banc); Markman v. Westview Instruments, Inc., 52 F.3d 967, 979, 34 U.S.P.Q.2D (BNA) 1321, 1329 (Fed. Cir. 1995) (in banc), aff'd, 517 U.S. 370, 38 U.S.P.Q.2D (BNA) 1461, 134 L. Ed. 2d 577, 116 S. Ct. 1384 (1996). Likewise, the "means" term in a means-plus-function limitation is essentially a generic reference for the corresponding structure disclosed in the specification. Accordingly, a determination of corresponding structure is a determination of the meaning of the "means" term in the claim and is thus also a matter of claim construction. See B. Braun Med., Inc. v. Abbott Lab., 124 F.3d 1419, 1424-25, 43 U.S.P.Q.2D (BNA) 1896, 1899-1900 (Fed. Cir. 1997) (determining de novo which structures disclosed in the specification corresponded to the means limitation); cf. Markman, 52 F.3d at 977 n.8, 34 U.S.P.Q.2D (BNA) at 1327 n.8 (reserving only the question whether a determination of equivalence under § 112, ¶ 6 is a question of law or fact). Cardinal argues that the district court erroneously identified as the disclosed structure broad functional language in the specification rather than physical structure. Chiuminatta responds that the passage identified by the district court, a "support surface or plate . . . in movable contact with the surface of the concrete," is indeed structure. We agree with Cardinal that the court misidentified the corresponding structure. The function recited in the means clause of claim 11 is "supporting the surface of the concrete adjacent to the leading edge of the cutting blade to inhibit chipping, spalling, or cracking of the concrete surface during cutting." The specification clearly identifies the structure performing that function as the skid plate, which is the only embodiment of the "support surface" disclosed in the specification: A support surface or plate is in movable contact with the surface of the concrete 13 in order to support the surface of the concrete immediately adjacent the groove being cut in the concrete 13. In the illustrated embodiment, this surface takes the form of a skid plate 24 which depends from the base plate 12 in the direction of the concrete 13.

The structure of the skid plate is broadly described in the specification of the '499 patent as follows:

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a generally rectangular strip of metal having rounded ends 26 and 28 between which is a flat piece 30. The flat piece 30 is generally parallel to the base plate 12 . . ..

'499 patent, col. 5, ll. 5-19. Having identified the corresponding structure of the recited means, the next question is whether the wheels of the accused device are equivalent to that structure. "Section 112, paragraph 6, rules out the possibility that any and every means which performs the function specified in the claim literally satisfies that limitation." Pennwalt. The proper test is whether the differences between the structure in the accused device and any disclosed in the specification are insubstantial. Cardinal argues that the wheels of its device are not equivalent to the disclosed skid plate because they are rotatably mounted. It asserts that for a structure to be equivalent to a skid plate, it must include substantially all of the structural features of a skid plate, and thus must be hard, flat, and fixedly attached to the saw. Chiuminatta responds that the district court properly held the wheels of the accused device to be within the scope of the claims. Chiuminatta asserts that the differences between the skid plate and wheels are insubstantial, and that an equivalent structure need not be flat or fixedly attached. Chiuminatta argues that the wheels of the accused device are equivalent because "in use, the [accused] wheels compress to form flattened planes on each side of the saw blade, coinciding with the structure of a skid plate." The fundamental flaw in Chiuminatta's argument is that "flattened planes" are not structure. The undisputed structure that produces the concededly identical function of supporting the concrete consists of soft round wheels that are rotatably mounted onto the saw. The assertedly equivalent structures are wheels, and the differences between the wheels and the skid plate are not insubstantial. The former support the surface of the concrete by rolling over the concrete while the latter skids. The former are soft, compressible, and round; the latter is hard and predominantly flat (albeit with rounded edges to prevent gouging of the concrete). Additionally, the wheels rotate as opposed to skid as the saw moves across the concrete and thus have a different impact on the concrete. Since the wheels and the skid plate are substantially different from each other, they cannot be equivalent, and no reasonable jury could so find. Chiuminatta also argues that the wheels are equivalent to the skid plate because they are interchangeable; the alleged infringer's saw may be outfitted with a skid plate and the patentee's saw may be outfitted with the accused wheels. This argument is not persuasive. Almost by definition, two structures that perform the same function may be substituted for one another. The question of known interchangeability is not whether both structures serve the same function, but whether it was known that one structure was an equivalent of another. Moreover, a finding of known interchangeability, while an important factor in determining equivalence, is certainly not dispositive. Such evidence does not obviate the statutory mandate to compare the accused structure to the corresponding structure. Because the wheels of the accused device are not equivalent to the skid plate disclosed in the '499 patent, the accused structure is not within the scope of the claim. Accordingly, the district court erred by granting Chiuminatta's motion for summary judgment of literal infringement. 2. Doctrine of Equivalents Infringement Chiuminatta argues that, should we rule against it on the question of literal infringement, we may affirm the district court under the doctrine of equivalents. Although the district court did not reach the issue because it found literal infringement, Chiuminatta argues that the undisputed evidence of record conclusively establishes that the wheels of the accused device differ from the patented

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invention only insubstantially. Such an assertion cannot succeed given our determination regarding literal infringement under § 112, ¶ 6. Although an equivalence analysis under § 112, ¶ 6, and the doctrine of equivalents are not coextensive (for example, § 112, ¶ 6, requires identical, not equivalent function) and have different origins and purposes, their tests for equivalence are closely related. Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 117 S. Ct. 1040, 1048, 41 U.S.P.Q.2D (BNA) 1865, 187071, 137 L. Ed. 2d 146 (1997) ("[Equivalents under § 112, ¶ 6] is an application of the doctrine of equivalents in a restrictive role, narrowing the application of broad literal claim elements. We recognized this type of role for the doctrine of equivalents in Graver Tank itself."). Both § 112, ¶ 6, and the doctrine of equivalents protect the substance of a patentee's right to exclude by preventing mere colorable differences or slight improvements from escaping infringement, the former, by incorporating equivalents of disclosed structures into the literal scope of a functional claim limitation, and the latter, by holding as infringements equivalents that are beyond the literal scope of the claim. They do so by applying similar analyses of insubstantiality of the differences. Thus, a finding of a lack of literal infringement for lack of equivalent structure under a means-plusfunction limitation may preclude a finding of equivalence under the doctrine of equivalents. There is an important difference, however, between the doctrine of equivalents and § 112, ¶ 6. The doctrine of equivalents is necessary because one cannot predict the future. Due to technological advances, a variant of an invention may be developed after the patent is granted, and that variant may constitute so insubstantial a change from what is claimed in the patent that it should be held to be an infringement. Such a variant, based on after-developed technology, could not have been disclosed in the patent. Even if such an element is found not to be a § 112, ¶ 6, equivalent because it is not equivalent to the structure disclosed in the patent, this analysis should not foreclose it from being an equivalent under the doctrine of equivalents. That is not the case here, where the equivalence issue does not involve later-developed technologies, but rather involves technology that predates the invention itself. In such a case, a finding of non-equivalence for § 112, ¶ 6, purposes should preclude a contrary finding under the doctrine of equivalents. This is because, as we have already determined, the structure of the accused device differs substantially from the disclosed structure, and given the prior knowledge of the technology asserted to be equivalent, it could readily have been disclosed in the patent. There is no policy-based reason why a patentee should get two bites at the apple. If he or she could have included in the patent what is now alleged to be equivalent, and did not, leading to a conclusion that an accused device lacks an equivalent to the disclosed structure, why should the issue of equivalence have to be litigated a second time? As indicated, this consideration does not necessarily apply regarding variants of the invention based on after-developed technologies. Our case law clearly provides that equivalence under the doctrine of equivalents requires that each claim limitation be met by an equivalent element in the accused device. Because this requirement is not met for § 112, ¶ 6, purposes with respect to one limitation, it is therefore not met in this case for doctrine of equivalents purposes. An element of a device cannot be "not equivalent" and equivalent to the same structure. In this case there can also be no doctrine of equivalents infringement because, as we have explained, the structure in the accused device, the wheels, operates in a substantially different way compared with the structure of the claimed device, the skid plate. The former support the surface of the concrete by rolling over the concrete while the latter skids. The former are soft, compressible, and round; the latter is hard and predominantly flat (albeit with rounded edges to prevent gouging of the concrete). Additionally, the wheels rotate as opposed to skid as the saw moves across the concrete and thus have a different impact on the concrete. The wheels flatten slightly, applying more localized pressure against the concrete than that produced by a hard flat

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skid plate. Accordingly, for this additional reason, it cannot be an equivalent under the doctrine of equivalents and the district court is directed to enter summary judgment of non-infringement.

Odetics V. Storage Technology Corporation 185 F.3d 1259; 51 U.S.P.Q.2D (BNA) 1225 (Fed. Cir. 1999). Before LOURIE, CLEVENGER, and SCHALL, Circuit Judges. Opinion for the court filed by Circuit Judge CLEVENGER. Dissenting opinion filed by Circuit Judge LOURIE. CLEVENGER, Circuit Judge. On March 27, 1998, a jury impaneled in the United States District Court for the Eastern District of Virginia concluded that automated storage library systems manufactured and sold by Storage Technology Corporation (“STK”) infringed United States Patent No. 4,779,151 ("the '151 patent") owned by the plaintiff, Odetics, Inc. ("Odetics"). Finding willful infringement, the jury awarded $ 70.6 million in damages. After initially denying STK's renewed motion for Judgment as a Matter of Law ("JMOL"), the district court sua sponte reconsidered, granting the JMOL and ordering that judgment be entered in favor of STK. The district court deemed its reconsidered decision to be "mandated" by "the analytical framework established" by this court's opinion in Chiuminatta Concrete Concepts, Inc. v. Cardinal Industries . . . Odetics appeals the reconsideration judgment. I This patent infringement action, making its second appearance before this court, concerns robotic tape storage systems, which are typically used to store, organize, and retrieve videotapes or computer data tapes. The storage systems generally consist of a large, generally cylindrical housing with a pivoting retrieval mechanism, such as a robotic arm, located in the center of the housing. Acting on commands to retrieve certain tapes, the robotic arm can selectively grip the desired tape, removing it from its storage shelf and placing it on another shelf or in a tape player/recorder. These systems are highly automated and are especially useful in situations where large quantities of data must be easily and quickly retrieved from storage. A At issue are claims 9 and 14 of the '151 patent. Claim 9 reads as follows (emphasis supplied to highlight disputed limitation): 9. A tape cassette handling system comprising: a plurality of tape transports; a housing including a cassette storage library having a plurality of storage bins and at least one cassette access opening for receiving cassettes to be moved to the storage bins or to the tape transports, or for receiving cassettes to be removed from the library or from the tape transports; a rotary means rotatably mounted within the library adjacent the access opening for providing access to the storage library, the rotary means having one or more holding bins each having an opening for receiving a cassette, wherein the rotary means is rotatable from a first position in which the opening of at least one holding bin is accessible from outside of the housing to a second position in which the opening of at least one holding bin is accessible from inside of the housing; and

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cassette manipulator means located within the housing for selectively moving cassettes between the rotary means, said storage bins and said tape transports.

Claim 14 is identical in all relevant aspects. The critical "rotary means" claim element is in means-plus-function form, requiring that it "be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof." 35 U.S.C. § 112, ¶ 6 (1994). In Odetics II, this court held that the structure corresponding to the "rotary means" element was "the components that receive the force and rotate as a result of that force (i.e., the rod, gear, and rotary loading and loading mechanisms)." 1997 WL 357598, at *6. This court noted that this structure could be seen in Fig. 3 of the '151 patent, except that the structure did not include the motor (52) or its gear (54).

Thus, the structure corresponding to the "rotary means" element, as depicted in Fig. 3 of the '151 patent, is a set of tape holders or bins, a rod providing the axis of rotation, and a gear capable of receiving a force sufficient to cause the structure to accomplish the claimed "rotary" function.

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STK manufactures and sells Library Storage Modules ("libraries") to companies, such as Visa and Crestar, that require large quantities of automated data storage. Library systems sold by STK are scaleable: that is, additional libraries may be added to increase the amount of storage space. When libraries are added, STK uses a device known as a "pass-thru port" to link the libraries, allowing data tapes to be passed from library to library. The pass-thru ports bridge the gaps between the libraries using a "bin array"--a box-like set of tape slots or holders--that slides linearly along a short track. As the bin arrays move from library to library, they rotate to allow tapes to be manipulated from within the library housings. This rotation is accomplished by the use of "cam followers," or pins, that are affixed to the bottom of the bin array. As a bin array moves along its track, the pins come into contact with angled structures, or "cams," that exert force against the pins, causing the bin array to rotate about a rod that forms its axis. The "bin array" in the accused devices, then, comprises a set of tape holders or bins, a rod, and pins. . . . II We review a grant of JMOL without deference to the district court. Entry of JMOL is inappropriate unless the jury's verdict is unsupported by substantial evidence or premised on incorrect legal standards. A Because the district court explicitly premised its grant of STK's JMOL motion on the "mandate" resulting from its review of the Chiuminatta opinion, we must first decide whether, in the words of the district court, Chiuminatta "announced a significant change in the proper mode of infringement analysis under § 112, ¶ 6." Odetics VII, 14 F. Supp. 2d at 811. Indeed, the crux of the district court's reading of Chiuminatta is that statutory equivalence under § 112, ¶ 6 requires "component by component" equivalence between the relevant structure identified in the patent and the portion of the accused device asserted to be structurally equivalent. Id. at 814 n.12 ("It should be noted that the jury's conclusion is perhaps explained by the fact that it was not specifically instructed to compare the two [structures], component by component . . . . Thus, the jury may erroneously have thought it was sufficient to compare the two structures in gross, thereby leading to a conclusion contrary to law."). This reading of Chiuminatta misapprehends § 112, ¶ 6 infringement analysis and is therefore incorrect. A claim limitation written in means-plus-function form, reciting a function to be performed rather than definite structure, is subject to the requirements of 35 U.S.C. § 112, ¶ 6 (1994). As such, the limitation must be construed "to cover the corresponding structure, material, or acts described in the specification and equivalents thereof." See 35 U.S.C. § 112, ¶ 6. Literal infringement of a § 112, ¶ 6 limitation requires that the relevant structure in the accused device perform the identical function recited in the claim and be identical or equivalent to the corresponding structure in the specification. See, e.g., Pennwalt. Functional identity and either structural identity or equivalence are both necessary. See Pennwalt. Structural equivalence under § 112, ¶ 6 is, as noted by the Supreme Court, "an application of the doctrine of equivalents . . . in a restrictive role." Warner-Jenkinson. As such, "their tests for equivalence are closely related," Chiuminatta, 145 F.3d at 1310, involving "similar analyses of insubstantiality of differences." In the doctrine of equivalents context, the following test is often used: if the "function, way, or result" of the assertedly substitute structure is substantially different from that described by the claim limitation, equivalence is not established. See, e.g., WarnerJenkinson. As we have noted, this tripartite test developed for the doctrine of equivalents is not wholly transferable to the § 112, ¶ 6 statutory equivalence context. See Alpex Computer Corp. v. Nintendo Co., 102 F.3d 1214, 1222, 40 U.S.P.Q.2D (BNA) 1667, 1673 (Fed. Cir. 1996); Valmont, 983 F.2d at 1043, 25 U.S.P.Q.2D (BNA) at 1455; D.M.I., Inc. v. Deere & Co., 755 F.2d 1570, 1575, 225 U.S.P.Q. (BNA) 236, 239 (Fed. Cir. 1985). Instead, the statutory equivalence analysis, Chapter 8 – Doctrine of Equivalents Infringement

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while rooted in similar concepts of insubstantial differences as its doctrine of equivalents counterpart, is narrower. See Al-Site, 174 F.3d at 1320 n.2, 50 U.S.P.Q.2D (BNA) at 1168 n.2. This is because, under § 112, ¶ 6 equivalence, functional identity is required; thus the equivalence (indeed, identity) of the "function" of the assertedly substitute structure, material, or acts must be first established in order to reach the statutory equivalence analysis. See 35 U.S.C. § 112, ¶ 6. The content of the test for insubstantial differences under § 112, ¶ 6 thus reduces to "way" and "result." That is, the statutory equivalence analysis requires a determination of whether the "way" the assertedly substitute structure performs the claimed function, and the "result" of that performance, is substantially different from the "way" the claimed function is performed by the "corresponding structure, acts, or materials described in the specification," or its "result." Structural equivalence under § 112, ¶ 6 is met only if the differences are insubstantial, see Chiuminatta; that is, if the assertedly equivalent structure performs the claimed function in substantially the same way to achieve substantially the same result as the corresponding structure described in the specification. See 35 U.S.C. § 112, ¶ 6 (means-plus function claim literally covers "the corresponding structure, material, or acts described in the specification and equivalents thereof"). The similar analysis of equivalents under § 112, ¶ 6 and the doctrine of equivalents does not, however, lead to the conclusion that Pennwalt and Warner-Jenkinson command a componentby-component analysis of structural equivalence under § 112, ¶ 6. It is of course axiomatic that "each element contained in a patent claim is deemed material to determining the scope of the patented invention." Warner-Jenkinson. Thus a claim limitation written in § 112, ¶ 6 form, like all claim limitations, must be met, literally or equivalently, for infringement to lie. See, e.g., Pennwalt. As we noted above, such a limitation is literally met by structure, materials, or acts in the accused device that perform the claimed function in substantially the same way to achieve substantially the same result. The individual components, if any, of an overall structure that corresponds to the claimed function are not claim limitations. Rather, the claim limitation is the overall structure corresponding to the claimed function. This is why structures with different numbers of parts may still be equivalent under § 112, ¶ 6, thereby meeting the claim limitation. See, e.g., Al-Site, 174 F.3d at 1321-22 (upholding jury verdict of § 112, ¶ 6equivalence between "a mechanicallyfastened loop . . including either the rivet fastener or the button and hole fastener" and "holes in the arms [of an eyeglass hanger tag]"). The appropriate degree of specificity is provided by the statute itself; the relevant structure is that which "corresponds" to the claimed function. See, e.g., Chiuminatta, (structure "unrelated to the recited function" disclosed in the patent is irrelevant to § 112, ¶ 6. Further deconstruction or parsing is incorrect. Rather than altering this well-worn path of the law, Chiuminatta confirms it. After determining that the structure corresponding to the "means . . . for supporting the surface of the concrete" was a "skid plate" or "generally rectangular strip of metal having rounded ends between which is a flat piece," 145 F.3d at 1307, the court proceeded to analyze the differences between the skid plate and the assertedly equivalent structure in the accused device, a set of soft rubber wheels. See id. at 1309. In finding "not insubstantial" differences between the wheels and skid plate, the court noted that the way the structures performed the claimed function were substantially different: while the wheels roll or rotate across the surface, the skid plate "skids as the saw moves across the concrete and thus has a different impact on the concrete." Id. At no point did the Chiuminatta court deconstruct the skid plate structure into component parts in order to analyze equivalence. Cf. Odetics VII, 14 F. Supp. 2d at 814 ("To prove equivalent structure, Odetics had to prove that the bin array [disclosed in the '151 patent] was equivalent to the bin array [in the accused device]; and this meant, essentially, that Odetics had to prove that the gear [disclosed in the '151 patent] was equivalent to the cam followers [in the accused device]."). Instead, Chiuminatta simply applied the well-established law of insubstantial differences to the particular structures at issue. See 145 F.3d at 1309. The component-by-component analysis used by the district court finds no support in the law. B Chapter 8 – Doctrine of Equivalents Infringement

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Although we have determined that the premise of the district court's reconsidered grant of JMOL is incorrect, our inquiry is not at an end. . . . STK contends that the jury's verdict of infringement was unsupported by substantial evidence. Whether an accused device infringes a § 112, ¶ 6 claim as an equivalent is a question of fact. See [long string of citations]. The grant of a motion for JMOL is permissible only when "there is no legally sufficient basis for a jury to find for [the non-moving] party." Fed. R. Civ. P. 50(a)(1). In order to determine whether a legally sufficient basis in fact exists, "the trial court must consider all the evidence in a light most favorable to the non-mover, must draw reasonable inferences favorable to the non-mover, must not determine the credibility of witnesses, and must not substitute its choice for that of the jury." If, after this analysis, substantial evidence, being that minimum quantum of evidence from which a jury might reasonably afford relief, exists to support the jury's verdict, then the motion for JMOL must be denied. See Anderson v. Liberty Lobby. STK asserts that Odetics did not present substantial evidence that the "bin array" of the accused device is equivalent to the '151 patent's "rotary means" claim element and corresponding structure in the specification. A review of the record, however, overwhelmingly proves otherwise. [The court described how Odetic’s expert testified as to structural equivalence no less than eight times during the trial.] . . . Given the clear, consistent, and oft-repeated evidence that the "rotary means" structure in the '151 patent and the "bin array" structure in the accused devices were equivalent, the district court, announcing its initial ruling against JMOL, stated: "the jury could find infringement, as it did, based on Dr. McCarthy's testimony of literal infringement. So STK's motion for Judgment as a Matter of Law must be denied." We agree. Odetics introduced substantial evidence that the rotary means and bin array structures were equivalent; a reasonable jury was therefore entitled to find infringement. STK's argument that the testimony of Dr. McCarthy relates only to the functional identity of the two structures--and is thus insufficient to demonstrate structural equivalence--is unavailing. Dr. McCarthy testified repeatedly about the structural similarities, noting that, overall, the two structures "match directly," and that "the entire [bin array] structure surely is equivalent." Dr. McCarthy also stated that the way that the two structures accomplish the claimed "rotary" function, and the result of that function, is substantially equivalent: "[the depiction of the rotary means structure] represents the way this system is actuated. That's the point [at which] the force is applied to rotate. Any equivalent way of rotating, is what's captured in this drawing." Therefore, when the question is whether substantial evidence supports the jury verdict, Dr. McCarthy's testimony answers that question against STK, as the district court correctly noted in the initial denial of the renewed motion for JMOL. Contrary to STK's argument, the "bin array" structure (the rod, bin, and pins) is not precluded from being equivalent, under § 112, ¶ 6, to the '151 patent's "rotary means" structure (the rod, bin, and gear) by the fact that the "bin array" structure would not be able to perform unrelated functions, such as "meshing with a gear motor." A claim limitation written according to § 112, ¶ 6 recites a function to be performed. See 35 U.S.C. § 112, ¶ 6. The scope of that functional limitation is, of course, limited to the "corresponding structure, material, or acts described in the specification and equivalents thereof." Id. The "corresponding" structure is the structure disclosed as performing the function. See, e.g., Chiuminatta. That two structures may perform unrelated--and, more to the point, unclaimed--functions differently or not at all is simply not pertinent to the measure of § 112, ¶ 6 equivalents. See Chiuminatta (structure that "reduces wobbling" and "supports the weight of the cutting blade" is unrelated to the claimed function of "'supporting the surface of the concrete' and accordingly are not to be read as limiting the scope of the means clause"). In this case, Dr. McCarthy testified that the structural equivalence between the "rotary means" and the "bin array" derives from the capacity of both structures to perform the identical function in the same way: to receive the force necessary to accomplish the "rotary" function. . . . . [W]e reverse the grant of JMOL in favor of STK and order the jury's verdict reinstated. Chapter 8 – Doctrine of Equivalents Infringement

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LOURIE, Circuit Judge, dissenting. I respectfully dissent both from the holding that an analysis of equivalent structure under § 112, ¶ 6, does not permit dissection of the structure corresponding to a recited means and from the conclusion that substantial evidence supports the jury's finding that the accused structure corresponding to the means was equivalent in this case. If one is to determine whether the disclosed structure of a claimed means is equivalent to the corresponding structure of an accused device, I do not see how it is possible to do so without looking at what components the structures consist of, i.e., by deconstructing or dissecting the structures. This is the only way to discern whether any significant difference in structural details exists between the claimed and accused structures. For example, in this case, structural equivalence is assessed by comparing the disclosed rotary means (the rod, bin, and the toothed gear) with the accused bin array (the rod, bin, and pins (cam followers)). The only relevant structural difference is between the toothed gear and the pins, and therefore it is the significance of this structural difference that must be assessed in determining whether the claimed means is equivalent to the bin array. My difference with the majority essentially arises from my belief that it misunderstands the meaning of the word "structure." The structure of a house consists of its components, i.e., its floor, walls, roof, etc. The structure of an automobile consists of its components, i.e., its chassis, motor, wheels, body, seats, etc. The structure of a chemical compound consists of the names of its component constituents or a pictorial representation thereof. The structure of an electronic circuit consist of transistors, resistors, capacitors, etc. Analyzing any of these structures for comparison with other structures requires analysis of their component parts. We need to focus on the real meaning of this statutory term if we are to serve our function of clarifying the law. I also disagree with the majority's conclusion that substantial evidence supports the jury's finding of equivalence. The majority finds substantial evidence in the testimony of Dr. McCarthy to support the jury verdict of infringement, but I disagree, as did Judge Ellis, that this testimony was relevant to structural equivalency under § 112, ¶ 6. Instead, McCarthy's testimony served only to prove that the claimed gear and the cam followers performed the same function--viz., to turn the bin array to "provide access to the storage library." The portions of McCarthy's testimony quoted by the majority make this point clear: "you can push on a pin as well as you can push on a gear tooth. . . . For this application, this is completely equivalent, pushing on these pins and pushing on these gear teeth, . . ."; "take the gear off, put those pins on . . . . [The accused bin array structure] is completely equivalent . . . ." These are all assertions of functional equivalence. McCarthy did not, presumably because he could not, testify that the smooth pins were structurally equivalent to the toothed gear of the claimed means. McCarthy's bare assertion that the two structures were structurally equivalent does not make it so without substantial evidence to back up that assertion. Proving whether a means-plus-function limitation is literally met by a structure in an accused device requires proof of (1) identicality of function between the accused structure and the claimed function, and (2) equivalency of the accused and disclosed structures. See Pennwalt. The prongs of this two-part test are distinct, and reliance merely on functional identicality to prove literal infringement erroneously expands § 112, ¶ 6, beyond its intended limits. McCarthy's testimony concerning functional identicality did not serve the dual role of also proving structural equivalency. See Chiuminatta (noting that infringement under § 112, ¶ 6, was not necessarily established merely because the accused device admittedly performed the function of the claim; equivalency of structure must also be shown). Nor was McCarthy's testimony that the toothed gear and the pins were interchangeable sufficient to prove structural equivalency. See id.

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In any event, this is not the sort of case in which expert testimony on structural equivalency is particularly helpful. The technology involved with respect to the structure of "rotary means" is relatively straightforward. As aptly summarized by Judge Ellis: "In the disclosed structure, the gear is a disc or cylinder with teeth that fit the teeth of another gear, thus enabling the disclosed gear to move in conjunction with the bin array, whereas the cam followers are smooth pins attached to the array by a stem, and turn independently from the array." Odetics, Inc. v. Storage Tech. Corp., 14 F. Supp. 2d 807, 814 (E.D. Va. 1998). That is a structural analysis. Even at the appellate level, we are easily able to understand the structures that are at issue, and expert testimony is therefore not necessary on this issue. A reasonable jury, properly instructed to consider structural equivalency under § 112, ¶ 6, without exclusive focus on similarity of function, should have concluded that the disclosed and claimed structures were not structurally equivalent.1 I therefore think that judgment as a matter of law was properly granted, despite the jury's verdict of infringement, and therefore respectfully dissent in part.

Questions, Comments, Problems 1. Chiuminatta and Odetics reflect two approaches to considering the distinction between literal infringement under § 112, ¶ 6 (which, of course, can inclue “equivalents”), and doctrine of equivalents infringement of a means-plus-function claim element. First, consider whether the cases are consistent? The problem that both cases appear to address is articulating a framework that avoids the messy problem of asking courts to analyze an “equivalent of an equivalent” in these § 112, ¶ 6 cases. How does Chiuminatta avoid the “equivalent of an equivalent” problem? What about Odetics? Which do you think is the better approach. 2. Chiuminatta – Does it Go too Far? – Chiuminatta, supra, established a special rule that when a variant technology was known to the inventor and could have been, but was not, included in the specification (i.e., was “after arising technology”), the inventor if unsuccessful in proving § 112, ¶ 6 statutory equivalence by a user of that variant, may not get a second opportunity under the doctrine of equivalents. Does this make sense? What policy is being fostered by penalizing an inventor for not disclosing alternative structures in her patent application? The statute only requires disclosure of the “best” mode, not every alternative mode known to the inventor.

Prosecution History Estoppel In Warner-Jenkinson, you saw the Supreme Court discuss the concept of prosecution history estoppel, whereby statements made by a patent applicant to the patent office during prosecution can limit the range of equivalents ultimately allowed under the patent. A question of law which may be freely reviewed by appellate courts, prosecution history estoppel has received a good amount of discussion over the years, especially in recent attempts by the Federal Circuit to explain the Warner-Jenkinson presumption. As you read the cases below, consider the extent to which the courts attempt to balance a patentee’s interest in receiving an equitable application of its claims with the accused infringer’s right to rely on statements made by the patentee during prosecution.

1

Moreover, because cam followers are not an after-arising technology in relation to the patent, infringement under the doctrine of equivalents is also precluded. See Chiuminatta Concrete Concepts.

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Exhibit Supply Co. v. Ace Patents Corp. 315 U.S. 126, 52 USPQ 275 (1942) Mr. Chief Justice STONE delivered the opinion of the Court. Respondent began the present litigation as three separate suits against the respective petitioners for infringement of the Nelson Patent No. 2,109,678 of March 1, 1938, for a 'contact switch for ball rolling games.' The defenses were non-invention in view of the prior art, anticipation by prior publication, use and sale, non-infringement and a file wrapper estoppel. The three suits were consolidated and tried together. Upon full consideration of the issues the District Court and the Circuit Court of Appeals for the Seventh Circuit held Claim 4 of the patent valid and infringed. 119 F.2d 349. We granted certiorari, 314 U.S. 702, on a petition which challenged only the decree of infringement below, on the ground that it enlarged the scope of the patent as defined by the claim, by resort to the doctrine of equivalents, and that Nelson, the patentee, by the amendment of his claims in the Patent Office, had surrendered Claim 4 so far as it would otherwise read upon the alleged infringing devices. Neither in their petition nor in their brief and argument in this Court have petitioners contended that the patent is invalid for want of invention. Although there is no conflict of decision, we were moved to grant the petition by the nature of the questions presented, together with a showing that the industry affected by the patent is located in the seventh circuit so that litigation in other circuits resulting in a conflict of decision would not be likely to occur. The patent relates to the structure of a resilient switch or circuit closer, so disposed on the board of a game table as to serve as a target which, when struck by a freely rolling ball, will momentarily close an electrical circuit. Specifications and drawings disclose a target or switch comprising a conductor standard mounted in the table and carrying a coil spring having a leg pendantly disposed in a conductor ring located in the table and slightly offset from the standard. The standard and ring are wired in a circuit with a relay coil and a source of electrical energy. When a ball rolling on the table bumps the coil spring from any direction, the leg of the spring is deflected momentarily bringing it into contact with the ring, so as to close the circuit for operating the relay coil and any connected auxiliary game device. Any desired number of targets may be placed on the board in a suitably spaced relationship; in pin ball games a single ball may successively bump and close a number of the switch devices. In describing his invention the patentee declared it to be his intention 'to cover all changes and modifications of the example of the invention herein chosen for purposes of the disclosure, which do not constitute departures from the spirit and scope of the invention.' The prior art as disclosed by the record shows no device in which the coil spring serves both as a target and a switch. The advantages of the device are said to be that the combination is peculiarly adapted to use in pin ball games; that the coil spring structure is so organized as to form both a switch for operating auxiliary recording or signalling devices and a target which is accessible from any direction. Claim 4 claims as the elements of the invention the conductor standard anchored in the table, the coil spring surrounding the standard which carries the spring pendantly from its top, with the spring spaced from the standard to enable the spring to be resiliently flexed, 'and conductor means in said circuit and embedded in the table at a point spaced from the standard and engageable by a portion of the spring when it is flexed to close the aforementioned circuit.' The drawings of the patent show the 'conductor means' last mentioned in the form of a ring or ferrule set in the table with its axis at right angles to the table and with its flange projecting slightly above the surface of the table. The leg pending from the coil spring is so disposed at the center of the

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annular ferrule that a ball striking the spring in any direction will bring the pendant leg into contact with the ring so as to close the circuit. The six devices alleged to infringe the patent differ from the particular claim of the invention described in the specifications, only in the specific form and method of supporting the 'conductor means' which is 'engageable by a portion of the spring when it is flexed'. In two of the accused devices, plaintiff's Exhibits 5 and 7, there is substituted for the ring conductor set in the table a nail or pin driven into the table and surrounded near its upper end by a ring attached to the end of the resilient coil spring, or formed there of the coil wire. When the spring is struck the circuit is closed by the contact of ring and nail at a point above the table. This arrangement contrasts with that of the conductors as shown in the patent drawings, in which a ring set in the table and the pendant leg of the coil form the contact at a point near or below the surface of the table. In the one case the ring conductor is supported by the table and the complementary conductor is attached to or is formed of the wire of the spring at its end. In the other, the locations of the ring and of the complementary conductor are reversed. Two others of the accused devices, plaintiff's Exhibits 6 and 10, show a further alteration. In Exhibit 6, the nail or pin, instead of being driven directly into the table, is affixed to and supported by a metal plate resting on the upper surface of the table with the coil spring standard passing through it and holding it firmly on the table. The conductor extends to the wire connection through a hole in the table underneath the plate. In Exhibit 10 the conductor is insulated from the plate, which is rigidly anchored to the coil spring standard, which in turn is anchored to the table. In the remaining two accused devices, plaintiff's Exhibits 8 and 9, an insulating core or sleeve surrounds the coil standard and supports an annular or enveloping conductor wired in the circuit, spaced and insulated from the coil standard so that the circuit is closed by contact of the conductor and the coil when it is flexed. In Exhibit 8 the sleeve is electrically connected with a metal plate, held in position on the top of the table by the standard which passes through the plate. A wire leading from the plate passes through a hold in the table underneath the plate. In Exhibit 9 the annular conductor is located above the table top and a wire leading from it passes through a hole in the table. Comparison of the several accused devices shows that in all but Exhibits 5 and 7 the conductor means complementary to the coil spring is not embedded in the table, but is supported by an insulated plate resting on the table or an insulating core held in position by the standard. In Exhibits 6 and 10 the conductor means passes to its wire connection through a hole in the table underneath the plate. In Exhibit 8 the connecting wire passes through a hole in the table to a metal plate resting on its surface, and in Exhibit 9 to the conductor means located above the surface of the table. Petitioners insist that respondent is estopped to assert infringement by the file wrapper record in the Patent Office and in any event that estoppel can be avoided and infringement established only by resort to the doctrine of equivalents, which they assert is incompatible with the statutory requirements for the grant of a patent and with the doctrine that the patent claims measure the patented invention. The file wrapper history, so far as now relevant, relates to Claim 7 which, after amendment, was allowed as Claim 4 now in issue. The original Claim 7 with its amendments is set forth as follows: (Matter added by amendment in parenthesis; matter stricken in italics and underscored.) (4) 7. In a ball rolling game having a substantially horizontal table over which balls are rollable, the combination with said table of a substantially vertical standard anchored in said table with its lower end carrying on the underside of the table a lead for an

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A1 electric circuit and its upper end extending a substantial distance above the top surface of the table, a coil spring surrounding the standard, means carrying said spring pendantly from the upper portion of the per C standard (ABOVE THE TABLE) with the coils of the spring spaced from the per C standard and the lower end of the coil spring terminating per C at a distance above the top surface of the table to enable the spring to be resiliently flexed when bumped by a ball rolling on the table, said spring being in the aforementioned circuit and constituting a conductor, and per B other conductor means (IN SAID CIRCUIT AND EMBEDDED IN) carried by the table at a point spaced from the standard and engageable by a portion of the spring when it is flexed to close the aforementioned circuit.

The original application contained six claims, all of which the examiner rejected because he thought no patentable significance had been shown. The inventor submitted certain amendments, and two new claims, 7 and 8, and induced the examiner to reconsider the patentability of the invention. Four of the claims were then allowed, but the examiner rejected Claim 7 as failing to claim the invention. He said: 'It is old in the art to make an electrical contact by flexing a coil spring as shown by the art already cited in the case. In order to distinguish over the references therefor, the applicant's particular type of contact structure, comprising an extension to the coil spring adapted to engage an annular contact embedded in the table, must appear in the claims. ...' Applicant rejected the examiner's suggestion that the 'contact structure' be adapted to engage 'an annular contact embedded in the table'. Instead he cancelled 'other' from the claim and substituted for 'carried by' the phrase, 'in said circuit and enbedded in', saying Claim 7 has been 'significantly amended' 'to define the complementary conductor contact as being embedded in the table'. He added that 'it is too far to go to state that the specific leg 19 must be defined', and 'the allowed claims can it seems, be very simply avoided by taking the leg 19, separating it from the spring 18 and embedding it as a pin in the table so that the spring when flexed would contact the pin. ... Claim 7 covers such alternative form and ... in justice to applicant ... should be allowed.' The examiner in reply recognized as 'true' applicant's suggestion that if the leg pendant from the spring 'were removed from the spring and embedded in the table an operative device would result', but pointed out that the device claimed by the amendment 'would be inoperative as the coil spring could not both terminate at a distance above the table and extend into a ferrule embedded therein.' Thereupon the applicant added to the claim the words 'above the table' and cancelled the phrase, 'and the lower end of the coil spring terminating at a distance above the top surface of the table.' The claim as amended was then allowed as Claim 4. The claim before amendment plainly read on plaintiff's Exhibits 5 and 7 in which the nail or pin conductor is driven into the table, since the nail or pin is a 'conductor means carried by the table' 'engageable by a portion of the spring when flexed'. The claim thus read is for an operative device since the nail or pin projects above the table and may be engaged by the coil spring 1

'4. In a ball rolling game having a substantially horizontal table over which balls are rollable, the combination with said table of a substantially vertical standard anchored in said table with its lower end carrying on the underside of the table a lead for an electric circuit and its upper end extending a substantial distance above the top surface of the table, a coil spring surrounding the standard, means carrying said spring pendantly from the upper portion of the standard above the table with the coils of the spring spaced from the standard to enable the spring to be resiliently flexed when bumped by a ball rolling on the table, said spring being in the aforementioned circuit and constituting a conductor, and conductor means in said circuit and embedded in the table at a point spaced from the standard and engageable by a portion of the spring when it is flexed to close the aforementioned circuit.'

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similarly located. The claim, as amended and allowed as Claim 4, likewise reads on plaintiff's Exhibits 5 and 7 if the nail or pin conductor which is driven into the table is 'embedded in the table'. Petitioners do not seriously assert here that it is not so embedded. In fact their brief expressly states that 'we pass this contention'. They could not well do otherwise, for the pin or nail even though it protrudes above or below the table not only conforms to the dictionary definition of 'embed', 'To set solidly as in a bed', Webster; 'To fix firmly in a surrounding mass of some solid material', Oxford Dictionary, but examination of the drawings and specifications indicates clearly enough that the claim was not intended to be limited to a complementary conductor located wholly between the upper and nether surfaces of the table. The specifications and drawings express no such limitation, and it is clear that the use of the word 'embedded' in the claim as finally amended, when read in its context of claim and specifications, does not indicate such a limitation. The patent drawings show the embedded ring conductor extending slightly both above and below the table. The examiner in his second rejection of Claim 7, in saying that if the leg pendant from the spring were removed from the spring and 'embedded' in the table an operative device would result, could not have referred to the embedded leg or nail as being wholly located below the surface of the table, since the pin so disposed would not be 'engageable' 'by a portion of the spring when it is flexed' by a ball rolling in any direction. The term is to be read as used in a permissible sense which would conform to the drawings and the function which the conductor to which the term was applied was obviously intended to perform. We think that the word 'embedded' as applied in Claim 4, must be taken to embrace any conductor means solidly set or firmly fixed in the table, whether or not it protrudes above or below the surface. Claim 7 before amendment read on the accused devices, plaintiff's Exhibits 5 and 7, which exhibit the nail or pin embedded in the table but protruding above its surface. Consequently the patentee by amending the claim so as to define the conductor means as embedded in the table did not exclude from the amended claim devices exemplified by these exhibits and they must be deemed to be infringements. There remains the question whether respondent may rely upon the doctrine of equivalents to establish infringement by the four other accused devices. Respondent concedes that the conductor means in the four devices are not literally 'embedded in the table', but insists that the changes in structure which they exhibit over that of plaintiff's Exhibits 5 and 7 are but the mechanical equivalents of the 'conductor means embedded in the table' called for by the amended claim, and so are entitled to the protection afforded by the doctrine of equivalents. Petitioners do not seriously urge that the conductor means in the four accused devices are not mechanical equivalents of the conductor means embedded in the table which the patent claims. Instead they argue that the doctrine should be discarded because it does not satisfy the demands of the statute that the patent shall describe the invention. R.S. Sec. 4888, 35 U.S.C. § 33, 35 U.S.C.A. § 33. We do not find it necessary to resolve these contentions here. Whatever may be the appropriate scope and application of the doctrine of equivalents, where a claim is allowed without a restrictive amendment, it has long been settled that recourse may not be had to that doctrine to recapture claims which the patentee has surrendered by amendment. Assuming that the patentee would have been entitled to equivalents embracing the accused devices had he originally claimed a 'conductor means embedded in the table', a very different issue is presented when the applicant in order to meet objections in the Patent Office, based on references to the prior art, adopted the phrase as a substitute for the broader one 'carried by the table'. Had Claim 7 been allowed in its original form it would have read upon all the accused devices since in all the conductor means complementary to the coil spring are 'carried by the Chapter 8 – Doctrine of Equivalents Infringement

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table'. By striking that phrase from the claim and substituting for it 'embedded in the table' the applicant restricted his claim to those combinations in which the conductor means, though carried on the table, is also embedded in it. By the amendment he recognized and emphasized the difference between the two phrases and proclaimed his abandonment of all that is embraced in that difference. Hubbell v. United States, 179 U.S. 77, 83; Weber Electric Co. v. E. H. Freeman Electric Co., 256 U.S. 668, 677; I.T.S. Rubber Co. v. Essex Rubber Co., 272 U.S. 429, 440; Smith v. Magic City Kennel Club, 282 U.S. 784, 789; Schriber-Schroth Co. v. Cleveland Trust Co., 311 U.S. 211; cf. in case of disclaimer Altoona Theatres v. American Tri-Ergon Corp., 294 U.S. 477, 492. The difference which he thus disclaimed must be regarded as material, and since the amendment operates as a disclaimer of that difference it must be strictly construed against him. Smith v. Magic City Kennel Club, supra, 282 U.S. page 790; Shepard v. Carrigan, 116 U.S. 593, 598; Goodyear Dental Vulcanite Co. v. Davis, 102 U.S. 222, 228. As the question is one of construction of the claim it is immaterial whether the examiner was right or wrong in rejecting the claim as filed. Hubbell v. United States, supra, 179 U.S. page 83; I.T.S. Rubber Co. v. Essex Rubber Co., supra, 272 U.S. page 443. It follows that what the patentee, by a strict construction of the claim, has disclaimed--conductors which are carried by the table but not embedded in it-cannot now be regained by recourse to the doctrine of equivalents, which at most operates, by liberal construction, to secure to the inventor the full benefits, not disclaimed, of the claims allowed. **** Mr. Justice ROBERTS took no part in the consideration or decision of this case. Mr. Justice BLACK, dissenting, with whom Mr. Justice DOUGLAS concurs. I think the judgments below should be reversed in full. There can be no infringement of a void patent, and a patent which shows neither invention nor discovery is void. The mere application of an old mechanical instrument to new use is not an invention and therefore not patentable. The combination patented here contains not a single new element. The whole device is nothing more than an electric switch mounted on a table, which closes and opens with the flexing and reflexing of an ordinary coil spring when hit by a rolling ball. The spring, standing upright on the table, serves as a target in a pin ball game, its resiliency being utilized not only to make and break the circuit but to make the ball rebound. The Constitution authorizes the granting of patent privileges only to inventors who make 'discoveries.' And the statute provides for the granting of patents only to those who have 'invented or discovered' something 'new'. 35 U.S.C.A. § 31. To call the device here an invention or discovery such as was contemplated by the Constitution or the statute is, in my judgment, to degrade the meaning of those terms. Patentees have rights given them by law. 'But the public has rights also. The rights of both should be upheld and enforced by an equally firm hand, wherever they come under judicial consideration.' By failing to assign error on the issue of patentability, parties to an infringement suit should not be permitted to foreclose a court from protecting the public interest. And here, as in other cases where there is plain error, we should notice it.

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Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd. ___ F.3d ___ (Nov. 29, 2000) (en banc) Before MAYER, Chief Judge, NEWMAN, MICHEL, PLAGER, LOURIE, CLEVENGER, RADER, SCHALL, BRYSON, GAJARSA, LINN, and DYK, Circuit Judges. SCHALL, Circuit Judge. This is an appeal from the judgment of the United States District Court for the District of Massachusetts that Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd. (also known as SMC Corporation) and SMC Pneumatics, Inc. (collectively, “SMC”) infringed U.S. Patent No. 4,354,125 (the “Stoll patent”) and U.S. Patent No. B1 3,779,401 (the “Carroll patent”), both owned by Festo Corporation (“Festo”), under the doctrine of equivalents. We took the case en banc to resolve certain issues relating to the doctrine of equivalents that remained in the wake of the Supreme Court’s decision in Warner-Jenkinson Co. v. Hilton Davis Chemical Co., 520 U.S. 17 (1997). Specifically, we asked the parties to brief the following five questions for rehearing en banc: 1. For the purposes of determining whether an amendment to a claim creates prosecution history estoppel, is “a substantial reason related to patentability,” Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 33 (1997), limited to those amendments made to overcome prior art under § 102 and § 103, or does “patentability” mean any reason affecting the issuance of a patent? 2. Under Warner-Jenkinson, should a “voluntary” claim amendment—one not required by the examiner or made in response to a rejection by an examiner for a stated reason—create prosecution history estoppel? 3. If a claim amendment creates prosecution history estoppel, under Warner-Jenkinson what range of equivalents, if any, is available under the doctrine of equivalents for the claim element so amended? 4. When “no explanation [for a claim amendment] is established,” Warner-Jenkinson, 520 U.S. at 33, thus invoking the presumption of prosecution history estoppel under Warner-Jenkinson, what range of equivalents, if any, is available under the doctrine of equivalents for the claim element so amended? 5. Would a judgment of infringement in this case violate Warner-Jenkinson's requirement that the application of the doctrine of equivalents “is not allowed such broad play as to eliminate [an] element in its entirety,” 520 U.S. at 29. In other words, would such a judgment of infringement, post Warner-Jenkinson, violate the “all elements” rule?

Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 187 F.3d 1381, 1381-82, 51 USPQ2d 1959, 1959-60 (Fed. Cir. 1999) (“Festo V”). We begin with a brief synopsis of our answers to the en banc questions and a summary of how those answers affect the disposition of this appeal. In response to En Banc Question 1, we hold that “a substantial reason related to patentability” is not limited to overcoming prior art, but includes other reasons related to the statutory requirements for a patent. Therefore, an amendment that narrows the scope of a claim for any reason related to the statutory requirements for a patent will give rise to prosecution history estoppel with respect to the amended claim element. In response to En Banc Question 2, we hold that “voluntary” claim amendments are treated the same as other claim amendments; therefore, any voluntary amendment that narrows the scope of a claim for a reason related to the statutory requirements for a patent will give rise to Chapter 8 – Doctrine of Equivalents Infringement

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prosecution history estoppel with respect to the amended claim element. In response to En Banc Question 3, we hold that when a claim amendment creates prosecution history estoppel, no range of equivalents is available for the amended claim element. In response to En Banc Question 4, we hold that “unexplained” amendments are not entitled to any range of equivalents. We do not reach En Banc Question 5, for reasons which will become clear in our discussion of the specific case before us. **** DISCUSSION I.

The Doctrine of Equivalents and Prosecution History Estoppel

The doctrine of equivalents prevents an accused infringer from avoiding liability for infringement by changing only minor or insubstantial details of a claimed invention while retaining the invention’s essential identity. Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 608 (1950). The doctrine of equivalents is utilized “‘[t]o temper unsparing logic and prevent an infringer from stealing the benefit of the invention.’” Id. (quoting Royal Typewriter Co. v. Remington Rand, Inc., 168 F.2d 691, 692, 77 USPQ 517, 518 (2d Cir. 1948) (Hand, J.)). In pursuing these goals, the doctrine attempts to strike a balance between ensuring that the patentee enjoys the full benefit of his patent and ensuring that the claims give “fair notice” of the patent’s scope. London v. Carson Pirie Scott & Co., 946 F.2d 1534, 1538, 20 USPQ2d 1456, 1458-59 (Fed. Cir. 1991). This balance can be easily upset, however, because “the doctrine of equivalents, when applied broadly, conflicts with the definitional and public-notice functions of the statutory claiming requirement.” Warner-Jenkinson, 520 U.S. at 29. Prosecution history estoppel is one tool that prevents the doctrine of equivalents from vitiating the notice function of claims. Charles Greiner & Co. v. Mari-Med Mfg., Inc., 962 F.2d 1031, 1036, 22 USPQ2d 1526, 1529-30 (Fed. Cir. 1992). Actions by the patentee, including claim amendments and arguments made before the Patent Office, may give rise to prosecution history estoppel. Pharmacia & Upjohn Co. v. Mylan Pharms., Inc., 170 F.3d 1373, 1376-77, 50 USPQ2d 1033, 1036 (Fed. Cir. 1999). “Prosecution history estoppel precludes a patentee from obtaining under the doctrine of equivalents coverage of subject matter that has been relinquished during the prosecution of its patent application.” Id. at 1376, 50 USPQ2d at 1036. Therefore, “[t]he doctrine of equivalents is subservient to . . . [prosecution history] estoppel.” Autogiro Co. v. United States, 384 F.2d 391, 400-01, 155 USPQ 697, 705 (Ct. Cl. 1967). The logic of prosecution history estoppel is that the patentee, during prosecution, has created a record that fairly notifies the public that the patentee has surrendered the right to claim particular matter as within the reach of the patent. II.

Warner-Jenkinson

[The majority provided a quick review of the Supreme Court’s ruling in Warner-Jenkinson.] III.

Answers to the En Banc Questions

A.

Question 1

For the purposes of determining whether an amendment to a claim creates prosecution history estoppel, is “a substantial reason related to patentability,” Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17 (1997), limited to those amendments made to overcome prior art under § 102 and § 103, or does “patentability” mean any reason affecting the issuance of a patent? We answer Question 1 as follows: For the purposes of determining whether an amendment gives rise to prosecution history estoppel, a “substantial reason related to patentability” is not limited to Chapter 8 – Doctrine of Equivalents Infringement

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overcoming or avoiding prior art, but instead includes any reason which relates to the statutory requirements for a patent. Therefore, a narrowing amendment made for any reason related to the statutory requirements for a patent will give rise to prosecution history estoppel with respect to the amended claim element. It is true that in Warner-Jenkinson the Supreme Court focused on claim amendments made to overcome or avoid prior art. Warner-Jenkinson, 520 U.S. at 30-34. However, there are a number of statutory requirements that must be satisfied before a valid patent can issue and that thus relate to patentability. In addition to satisfying the novelty and non-obviousness requirements of 35 U.S.C. §§ . . . 102 and 103, the claims must be directed to patentable subject matter and the claimed invention must be useful, as set forth in 35 U.S.C. § 101 (1994). Additionally, the first paragraph of 35 U.S.C. § 112 requires that the patent specification describe, enable, and set forth the best mode of carrying out the invention, 35 U.S.C. § 112, ¶ 1 (1994), while the second paragraph of section 112 requires that the claims set forth the subject matter that the applicant regards as his invention and that the claims particularly point out and distinctly define the invention, 35 U.S.C. § 112, ¶ 2 (1994). The Patent Office will reject a patent application that fails to satisfy any one of these statutory requirements. See Man. Pat. Exam. P. 2100-1 to -173 (7th ed. rev. 1 1998). And any one of these requirements may be a ground for invalidating an issued patent. . . . The law has been clear that amendments made to avoid prior art give rise to prosecution history estoppel. E.g., Warner-Jenkinson, 520 U.S. at 30-31 (discussing Exhibit Supply Co. v. Ace Patents Corp., 315 U.S. 126 (1942), and Keystone Driller Co. v. Northwest Eng’g Corp., 294 U.S. 42 (1935)). In view of the functions of prosecution history estoppel—preserving the notice function of the claims and preventing patent holders from recapturing under the doctrine of equivalents subject matter that was surrendered before the Patent Office—we see no reason why prosecution history estoppel should not also arise from amendments made for other reasons related to patentability, as described above. Indeed, the functions of prosecution history estoppel cannot be fully satisfied if substantial reasons related to patentability are limited to a narrow subset of patentability issues. Rather, substantial reasons related to patentability include 35 U.S.C. §§ 101 and 112 issues, as well as 35 U.S.C. §§ 102 and 103 issues. While we do not believe that the Supreme Court itself answered this question in WarnerJenkinson, we do believe that our answer is not inconsistent with Warner-Jenkinson. WarnerJenkinson describes prior cases as applying prosecution history estoppel “typically because what [was previously claimed] . . . was encompassed within the prior art,” 520 U.S. at 31 (emphasis added), but no language in Warner-Jenkinson limits prosecution history estoppel to amendments made to avoid prior art. See also Crawford v. Heysinger, 123 U.S. 589, 606 (1887) (finding prosecution history estoppel to arise from amendments made in response to operability rejections). Moreover, our approach is consistent with Warner-Jenkinson's requirement that an amendment “does not necessarily preclude infringement by equivalents of that element.” Id. at 33. Thus, if a patent holder can show from the prosecution history that a claim amendment was not motivated by patentability concerns, the amendment will not give rise to prosecution history estoppel. B.

Question 2

Under Warner-Jenkinson, should a “voluntary” claim amendment—one not required by the examiner or made in response to a rejection by an examiner for a stated reason—create prosecution history estoppel? We answer Question 2 as follows: Voluntary claim amendments are treated the same as other amendments. Therefore, a voluntary amendment that narrows the scope of a claim for a reason

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related to the statutory requirements for a patent will give rise to prosecution history estoppel as to the amended claim element. Both voluntary amendments and amendments required by the Patent Office signal to the public that subject matter has been surrendered. There is no reason why prosecution history estoppel should arise if the Patent Office rejects a claim because it believes the claim to be unpatentable, but not arise if the applicant amends a claim because he believes the claim to be unpatentable. Our answer to this question is consistent with the doctrine of argument-based estoppel. Arguments made voluntarily during prosecution may give rise to prosecution history estoppel if they evidence a surrender of subject matter. . . . [citations omitted] There is no reason why an amendment-based surrender of subject matter should be given less force than an argumentbased surrender of subject matter. We also believe that our answer to this question is consistent with Warner-Jenkinson. Although the Supreme Court spoke of “required” amendments, the claim amendment at issue in WarnerJenkinson, the addition of the lower pH limit of 6, was not “required” by the prior art rejection. The original claim recited an ultrafiltration process. Warner-Jenkinson, 520 U.S. at 21. The asserted prior art reference taught an ultrafiltration process conducted at a pH of above 9. Id. at 22. The amended claim recited an ultrafiltration process conducted “at a pH from approximately 6.0 to 9.0.” Id. The parties did not dispute that the upper pH limit of 9.0 was added to distinguish the prior art. Id. at 32. The Court, however, was unable to discern the reason for the addition of the lower pH limit of 6. Id. at 32-33. Accordingly, the amendment at issue in Warner-Jenkinson appears to have been voluntary with respect to the lower pH limit. Nevertheless, the Court held that the amendment adding the lower pH limit could give rise to prosecution history estoppel. Id. at 34. C.

Question 3

If a claim amendment creates prosecution history estoppel, under Warner-Jenkinson what range of equivalents, if any, is available under the doctrine of equivalents for the claim element so amended? We answer Question 3 as follows: When a claim amendment creates prosecution history estoppel with regard to a claim element, there is no range of equivalents available for the amended claim element. Application of the doctrine of equivalents to the claim element is completely barred (a “complete bar”). We think it is fair to say that the question of the scope of equivalents available when prosecution history estoppel applies to a claim element has not been directly addressed or answered by the Supreme Court, at least in circumstances where the claim was amended for a known patentability reason. In Warner-Jenkinson, the Court focused its attention more on the circumstances under which prosecution history estoppel arises than on the range of equivalents that might generally be available despite the existence of prosecution history estoppel. Warner-Jenkinson, 520 U.S. at 30-34. The Court did not discuss the upper pH limit of 9.0, other than to note that the upper limit, which narrowed the claim, was selected to overcome prior art. Id. at 32. The range of equivalents, if any, that could be asserted for the upper pH limit was not discussed by the Court. The only statements in Warner Jenkinson as to the range of equivalents that is available when prosecution history estoppel applies are found in the Court’s discussion of unexplained amendments. Id. at 33-34. For those amendments, the Court held that “prosecution history estoppel would bar the application of the doctrine [of] equivalents as to that element.” Id. at 33. 1. In cases before Warner-Jenkinson, the Supreme Court applied prosecution history estoppel to preclude a finding of infringement under the doctrine of equivalents, but the Court did Chapter 8 – Doctrine of Equivalents Infringement

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not analyze the actual scope of equivalents that might be available when prosecution history estoppel applied, i.e., the extent of the subject matter surrendered by amendment. . . . [The majority then discusses several cases in detail.] In short, the range of equivalents available to an amended claim element simply was not before the Supreme Court in the cases Judge Michel cites [in his dissent], and the Supreme Court did not discuss the issue presented in En Banc Question 3. Although a court must follow “explicit and carefully considered” language of the Supreme Court, see Stone Container Corp. v. United States, 229 F.3d 1345, 1350 (Fed. Cir. 2000), none of the language cited by Judge Michel constitutes explicit and carefully considered language regarding the range of equivalents available when a claim amendment gives rise to prosecution history estoppel. 2. Because the Supreme Court has not fully addressed the range of equivalents that is available once prosecution history estoppel applies, we must independently decide the issue. Congress specifically created the Federal Circuit to resolve issues unique to patent law, . . . such as those regarding prosecution history estoppel, which is a judicially created doctrine, . . .. Congress contemplated that the Federal Circuit would “strengthen the United States patent system in such a way as to foster technological growth and industrial innovation.” Markman, 517 U.S. at 390. Issues such as the one before us in this case are properly reserved for this court to answer with “its special expertise.” Warner-Jenkinson, 520 U.S. at 40 (reserving explicitly for the Federal Circuit the task of formulating the proper test(s) for infringement under the doctrine of equivalents). The Federal Circuit first addressed the range of equivalents that is available when prosecution history applies in Hughes Aircraft Co. v. United States, 717 F.2d 1351, 219 USPQ 473 (Fed. Cir. 1983) (“Hughes I”). In that case, we recognized that, prior to creation of the Federal Circuit, some regional circuits had followed a flexible bar approach to prosecution history estoppel, whereas others had applied a strict rule of complete surrender when prosecution history estoppel applied. Id. at 1362-63, 219 USPQ at 481-82. We decided to apply prosecution history estoppel as a flexible bar, stating that prosecution history estoppel “may have a limiting effect” on the doctrine of equivalents “within a spectrum ranging from great to small to zero.” Id. at 1363, 219 USPQ at 481-82. **** Less than a year after Hughes I, however, a five-judge panel of this court decided Kinzenbaw v. Deere & Co., 741 F.2d 383, 222 USPQ 929 (Fed. Cir. 1984). The claimed invention in Kinzenbaw was “[a]n apparatus for forming seed planting furrows.” Id. at 388, 222 USPQ at 932. The claim element at issue related to “a pair of depth gauge compacting wheels” that controlled the depth of the furrow created by the planter. Id. During prosecution, in order to overcome an examiner’s rejection and to obtain his patent, the inventor narrowed his claims by specifying, among other things, that the gauge wheels had to have a radius less than that of the radius of the blades of the planter (called “discs”). Id. On the accused device, the gauge wheels had a radius greater than that of the discs. Id. at 388-89, 222 USPQ at 932. Consequently, the accused device could not literally infringe. As a result, the patentee (Deere) sought to prove infringement under the doctrine of equivalents. Id. at 389, 222 USPQ at 932. The district court concluded that prosecution history estoppel precluded Deere from relying upon the doctrine of equivalents. Id., 222 USPQ at 933. The court determined that, as far as the gauge wheels were concerned, the inventor had intentionally narrowed his claims, and it refused to permit Deere to avoid, through the doctrine of equivalents, the limitation that the inventor had placed on his claims. Id. On appeal, Deere urged that prosecution history estoppel did not apply because the inventor’s limitation of his claims to devices in which the gauge wheels had a smaller radius than that of the discs was unnecessary to distinguish the prior art. Id. Specifically, Deere contended that only that portion of the claim that provided that the radius of the gauge wheels had to exceed the Chapter 8 – Doctrine of Equivalents Infringement

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distance from the axes of the wheels to the rear edges of the discs was necessary in order to render the claims patentable over the prior art. Id. The five-judge panel rejected Deere’s argument. It stated: “We decline to undertake the speculative inquiry whether, if . . . [the inventor] had made only that narrowing limitation in his claim, the examiner nevertheless would have allowed it.” Id. The court therefore affirmed the district court’s judgment of noninfringement. Id. at 391, 222 USPQ at 934. The approach to prosecution history estoppel that was followed in Kinzenbaw prompted the following observation by Professor Chisum: “Beginning shortly after its creation in 1982, the Federal Circuit developed two lines of authority on the scope of an estoppel based on an amendment or argument that distinguished the prior art. One line followed a strict approach, according to which a court refused to speculate whether a narrower amendment would have been allowed. The other line followed a flexible or spectrum approach, which recognized that amendments did not invariably preclude all equivalence . . . .” 5A Donald S. Chisum, Chisum on Patents § 18.05[3][b], at 18-492 (1998). Soon after Hughes I and Kinzenbaw were decided they were the subject of comment in the American University Law Review, which annually reviews the work of the Federal Circuit. The commentators stated that the Federal Circuit’s “two divergent lines of authority dealing with prosecution history estoppel,” the Hughes I line and the Kinzenbaw line, had given rise to ever-increasing “uncertainty and confusion” in patent litigation. Douglas A. Strawbridge et al., Area Summary, Patent Law Developments in the United States Court of Appeals for the Federal Circuit During 1986, 36 Am. U. L. Rev. 861, 887-88 (1987). The commentary that began after Hughes I and Kinzenbaw were decided has continued. See, e.g., Gregory J. Smith, The Federal Circuit’s Modern Doctrine of Equivalents in Patent Infringement, 29 Santa Clara L. Rev. 901, 921 (1989) (noting that there is at least an “apparent conflict” between Hughes I and Kinzenbaw); Note, To Bar or Not to Bar: Prosecution History Estoppel After WarnerJenkinson, 111 Harv. L. Rev. 2330, 2336 (1998) (stating that the Hughes I line of cases “appear[s] to be irreconcilable” with the Kinzenbaw line of cases). Since Warner-Jenkinson, panels of this court have continued to visit the question of the range of equivalents that is available after prosecution history estoppel has been determined to exist. Two cases in particular were remanded by the Supreme Court for further consideration in light of Warner-Jenkinson. Honeywell, Inc. v. Litton Sys., Inc., 520 U.S. 1111 (1997); United States v. Hughes Aircraft Co., 520 U.S. 1111 (1997). In Litton Systems, Inc. v. Honeywell, Inc., 140 F.3d 1449, 1455-57, 46 USPQ2d 1321, 1325 (Fed. Cir. 1998), this court determined that WarnerJenkinson had not changed the “longstanding doctrine that an estoppel only bars recapture of that subject matter actually surrendered during prosecution.” The court noted that “the Supreme Court did not reach the question of the proper scope of estoppel for an amended limitation,” and thus concluded that Warner-Jenkinson did not affect our already established jurisprudence on the issue. Id. at 1457, 46 USPQ2d at 1327. A similar analysis and conclusion were set forth in Hughes Aircraft Co. v. United States, 140 F.3d 1470, 1476-77, 46 USPQ2d 1285, 1289-90 (Fed. Cir. 1998) (“Hughes II”). The alleged infringer in that case argued that Warner-Jenkinson mandated that prosecution history estoppel act as a complete bar and preclude any finding of infringement under the doctrine of equivalents. Hughes II, 140 F.3d at 1476, 46 USPQ2d at 1289. In rejecting this argument, this court stated that there must be a determination as to the exact “subject matter the patentee actually surrendered.” Id. at 1476-77, 46 USPQ2d at 1290. Because the accused device did not “fall within the range of subject matter surrendered,” infringement under the doctrine of equivalents was not barred. Id. The court denied rehearing en banc in both Litton and Hughes II, over dissents from the denials. Litton Sys., Inc. v. Honeywell, Inc., 145 F.3d 1472, 47 USPQ2d 1106 (Fed. Cir. 1998); Hughes Aircraft Co. v. United States, 148 F.3d 1384, 47 USPQ2d 1542 (Fed. Cir. 1998). Both Litton and Hughes II follow the Hughes I flexible bar approach to prosecution history estoppel. In that regard, they are consistent with Professor Chisum’s observation that “[m]ost Federal Circuit panel decisions from 1984 to 1997 followed the flexible approach, which had been Chapter 8 – Doctrine of Equivalents Infringement

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initiated in 1983 by the Hughes Aircraft [Hughes I] decision . . . .” Chisum, supra, § 18.05[3][b][i], at 18-497. Nevertheless, this court has neither repudiated Kinzenbaw nor reconciled the inconsistency between the Hughes I and Kinzenbaw lines of authority. Under these circumstances, it is unclear whether in any given case the court will apply the Kinzenbaw approach as opposed to the more generally accepted Hughes I approach. Just as importantly, even if the Hughes I approach is applied, there is uncertainty as to the extent of the surrender that will be held to exist. Thus, Professor Chisum has discussed two Federal Circuit cases, Sun Studs, Inc. v. ATA Equip. Leasing, Inc., 872 F.2d 978, 10 USPQ2d 1338 (Fed. Cir. 1989), and Environmental Instruments, Inc. v. Sutron Corp., 877 F.2d 1561, 11 USPQ2d 1132 (Fed. Cir. 1989), as illustrating the “predictive difficulties of the flexible approach.” Chisum, supra, § 18.05[3][b][ii], at 18-505 to 18-506. In a like vein, it has been stated that “the criteria used by the court to determine the effect of an estopping amendment have not been set forth in any clear or systematic way” and that “[t]he Federal Circuit’s well-known observation that ‘[d]epending on the nature and purpose of an amendment, it may have a limiting effect from great to small to zero,’ for example, tells little about what the relationship is between the ‘nature and purpose’ of an amendment and its limiting effect.” Ted Apple, Enablement Estoppel: Should Prosecution History Estoppel Arise When Claims Are Amended To Overcome Enablement Rejections?, 13 Santa Clara Computer & High Tech L.J. 107, 128 (1997) (footnotes omitted). 3. Today, we revisit the question we first addressed in Hughes I and come to a different conclusion as to the proper scope of equivalents that is available when prosecution history estoppel applies than we did in that case. We hold that prosecution history estoppel acts as a complete bar to the application of the doctrine of equivalents when an amendment has narrowed the scope of a claim for a reason related to patentability. Our decision to reject the flexible bar approach adopted in Hughes I comes after nearly twenty years of experience in performing our role as the sole court of appeals for patent matters. In those years, the notice function of patent claims has become paramount, and the need for certainty as to the scope of patent protection has been emphasized. A problem with the flexible bar approach is that it is virtually impossible to predict before the decision on appeal where the line of surrender is drawn. The patentee would draw the line just at or slightly short of the prior art, leaving a wide range of equivalents untouched by prosecution history estoppel. The accused infringer, however, would draw the line close to the literal terms of the claims, leaving little or no range of equivalents. These considerations, we think, contribute to the difficulty under the flexible bar approach in predicting with any degree of certainty the scope of surrender that will be found when prosecution history estoppel applies. In reaching our holding, we are mindful of the Supreme Court’s teaching that binding precedent is not to be lightly discarded. The Court has stated that stare decisis “promotes the evenhanded, predictable, and consistent development of legal principles, fosters reliance on judicial decisions and contributes to the actual and perceived integrity of the judicial process.” Payne v. Tennessee, 501 U.S. 808, 827 (1991). The Court also has stated that while from time to time it has overruled governing decisions that are “unworkable or are badly reasoned,” it has rarely done so “on grounds not advanced by the parties.” United States v. Int’l Bus. Machs. Corp., 517 U.S. 843, 856 (1996) (citations omitted). We believe that the current state of the law regarding the scope of equivalents that is available when prosecution history estoppel applies is “unworkable.” In patent law, we think that rules qualify as “workable” when they can be relied upon to produce consistent results and give rise to a body of law that provides guidance to the marketplace on how to conduct its affairs. After our long experience with the flexible bar approach, we conclude that its “workability” is flawed. . . . We also believe that the flexible bar approach “poses a direct obstacle to the realization of important objectives.” Patterson v. McClean Credit Union, 491 U.S. 164, 173 (1989) (setting forth the “traditional justification[s] for overruling a prior case”). These objectives include giving effect, when prosecution history estoppel arises, to a narrowing amendment’s operation as a disclaimer Chapter 8 – Doctrine of Equivalents Infringement

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of subject matter, see, e.g., Exhibit Supply, 315 U.S. at 136-37, preserving the notice function of patent claims, see, e.g., Warner-Jenkinson, 520 U.S. at 29, and promoting certainty in patent law, see, e.g., Markman, 517 U.S. at 390. The realization of these objectives cannot help but be frustrated by the uncertainty inherent in the flexible bar approach. By making prosecution history estoppel act as a complete bar, we enforce the disclaimer effect of a narrowing claim amendment. By narrowing his claims, a patentee disclaims subject matter encompassed by the original claims. E.g., Exhibit Supply, 315 U.S. at 136-37; Magic City Kennel Club, 282 U.S. at 790; Shepard, 116 U.S. at 598 (noting that a patentee who has narrowed a claim during prosecution cannot “enlarge her patent by argument so as to cover elements not falling within its terms, and which she had explicitly abandoned”). As the Supreme Court has stated, “By amendment [the patentee] recognize[s] and emphasize[s] the difference between the” original claim and amended claim “and proclaim[s] . . . abandonment of all that is embraced in that difference.” Exhibit Supply, 315 U.S. at 136. Amendments “must be strictly construed against the inventor and in favor of the public, and looked upon as in the nature of disclaimers.” Hubbell, 179 U.S. at 83-84. In order to construe such amendments strictly against the patentee, no scope of equivalents can be afforded to a claim element that was narrowed because of patentability concerns. Although we do not understand older Supreme Court cases to have spoken directly to the question before us, we think the language used in those cases suggesting a strict measurement of the scope of equivalents is consistent with our answer to this question. Allowing some range of equivalents gives the patentee some benefit of the doubt as to what was disclaimed, a benefit that comes at the public’s expense. A complete bar therefore best serves the notice and definitional function of patent claims. “The object of the patent law in requiring the patentee [to specifically define his invention] is not only to secure to him all to which he is entitled, but to apprise the public of what is still open to them.” McClain v. Ortmayer, 141 U.S. 419, 424 (1891). But “the doctrine of equivalents, when applied broadly, conflicts with the definitional and public-notice functions of the statutory claiming requirement.” Warner-Jenkinson, 520 U.S. at 29. If prosecution history estoppel acts as a complete bar to application of the doctrine of equivalents, both the patentee and the public are on notice as to the scope of protection provided by a claim element narrowed for a reason related to patentability. The patentee and the public can look to the prosecution history, a public record, to determine if any prosecution history estoppel arises as to any claim element. If so, that element’s scope of protection is clearly defined by its literal terms. The Supreme Court recognized the value of a complete bar in Warner-Jenkinson when it discussed the presumption that prosecution history estoppel applies when an amendment is unexplained. The Court, keeping in mind “that claims do indeed serve both a definitional and a notice function,” held that if the presumption was not rebutted, “prosecution history estoppel would bar the application of the doctrine [of] equivalents as to that element.” Id. at 33 (emphasis added); see also infra Answer to En Banc Question 4. A complete bar to the doctrine of equivalents for unexplained amendments would give, as the Court stated, “proper deference to the role of claims in defining an invention and providing public notice,” Warner-Jenkinson, 520 U.S. at 33. A complete bar similarly serves the definitional and notice functions when explained amendments give rise to prosecution history estoppel. Regardless of whether the amendment is explained or unexplained, if the amendment narrows the scope of the claim for a reason related to patentability, a complete bar to the doctrine of equivalents provides the public and the patentee with definite notice as to the scope of the claimed invention. A complete bar also eliminates the public’s need to speculate as to the subject matter surrendered by an amendment that narrows a claim for a reason related to patentability. There are several aspects of the prosecution history estoppel inquiry where speculation is not allowed. The Supreme Court has noted that we need not inquire into the correctness of the examiner’s rejection that led to a claim amendment. Warner-Jenkinson, 520 U.S. at 33 n.7 (citing Magic City Kennel Club, 282 U.S. at 789-90). Even if the rejection is improper, the amendment may still give Chapter 8 – Doctrine of Equivalents Infringement

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rise to prosecution history estoppel. Id. In addition, we do not speculate as to whether any given amendment was material to the prosecution of the patent because “[t]he patentee makes them all material by the restricted form of his claim.” Hubbell, 179 U.S. at 84 (citations omitted). In view of the reluctance to entertain speculative inquiries in other aspects of prosecution history estoppel, a speculative inquiry should not be required to determine the scope of equivalents still available for a claim element narrowed for a reason related to patentability. A complete bar avoids such an inquiry. Under the flexible bar approach, however, the exact range of equivalents when prosecution history estoppel applies is virtually unascertainable, with only the prior art marking the outer limits of the claim’s scope. There is no precise metric to determine what subject matter was given up between the original claim and the amended claim. Consider, for example, a claim that originally recited a value “less than twenty” that was amended to recite a value “less than five” in light of a rejection over prior art disclosing a value of fifteen. What subject matter was abandoned under the flexible approach? Is the patentee limited to values that are closer to five than fifteen, or can he reach any value less than fifteen? Can the patentee encompass by equivalents a value of ten, or would that recapture part of the surrendered subject matter? Put simply, it is impossible, even under this basic example, for the public or the patentee to determine the precise range of equivalents available under the flexible bar approach. This creates a “zone of uncertainty which enterprise and experimentation may enter only at the risk of infringement claims . . . [and which] discourage[s] invention only a little less than unequivocal foreclosure of the field.” Markman, 517 U.S. at 390 (quoting United Carbon Co. v. Binney & Smith Co., 317 U.S. 228, 236 (1942)). “The public [would] be deprived of rights supposed to belong to it, without being clearly told what it is that limits these rights.” Markman, 517 U.S. at 390 (quoting Merrill v. Yeomans, 94 U.S. 568, 573 (1876)). A complete bar, unlike a flexible bar, thus lends certainty to the process of determining the scope of protection afforded by a patent. With a complete bar, both the public and the patentee know that once an element of a claim is narrowed by amendment for a reason related to patentability, that element’s scope of coverage will not extend beyond its literal terms. There is no speculation or uncertainty as to the exact range of equivalents that might be available. This certainty aids both the public and the patentee in ascertaining the true scope and value of the patent without having to resort to litigation to obtain a case by case analysis of what subject matter the claims can cover. With a complete bar, neither the public nor the patentee is required to pay the transaction costs of litigation in order to determine the exact scope of subject matter the patentee abandoned when the patentee amended the claim. Thus, under the complete bar approach, technological advances that would have lain in the unknown, undefined zone around the literal terms of a narrowed claim under the flexible bar approach will not go wasted and undeveloped due to fear of litigation. The public will be free to improve on the patented technology and design around it without being inhibited by the threat of a lawsuit because the changes could possibly fall within the scope of equivalents left after a claim element has been narrowed by amendment for a reason related to patentability. This certainty will stimulate investment in improvements and design-arounds because the risk of infringement will be easier to determine. In general, the difficulty in counseling the public and the patentee on the scope of protection provided by an amended element is greatly reduced under the complete bar approach due to the certainty and predictability such a bar produces. Finally, we see no overriding benefit to the flexible bar approach. Although a flexible bar affords the patentee more protection under the doctrine of equivalents, we do not believe that the benefit outweighs the costs of uncertainty. The Supreme Court noted in Warner-Jenkinson that the doctrine of equivalents has “taken on a life of its own, unbounded by the patent claims.” WarnerJenkinson, 520 U.S. at 28-29. A complete bar reins in the doctrine of equivalents, making claim scope more discernible and preserving the notice function of claims. The Court indicated that the Chapter 8 – Doctrine of Equivalents Infringement

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application of a complete bar allowed prosecution history estoppel to place “reasonable limits on the doctrine of equivalents, and further insulate[] the doctrine from any feared conflict with the Patent Act.” Id. The application of a complete bar to the doctrine of equivalents whenever a claim amendment gives rise to prosecution history estoppel similarly reduces the conflict and tension between the patent protection afforded by the doctrine of equivalents and the public’s ability to ascertain the scope of a patent. D.

Question 4

When “no explanation [for a claim amendment] is established,” Warner-Jenkinson, 520 U.S. at 33, thus invoking the presumption of prosecution history estoppel under Warner-Jenkinson, what range of equivalents, if any, is available under the doctrine of equivalents for the claim element so amended? We answer Question 4 as follows: When no explanation for a claim amendment is established, no range of equivalents is available for the claim element so amended. This question is answered by Warner-Jenkinson: Where no explanation is established, . . . . prosecution history estoppel would bar the application of the doctrine [of] equivalents as to that element.

Warner-Jenkinson, 520 U.S. at 33 (emphasis added). In answering this question, we affirm what we stated in Sextant, 172 F.3d at 832, 49 USPQ2d at 1875: when “the Warner-Jenkinson presumption is applicable, . . . the prosecution history estoppel arising therefrom is total and completely ‘bars’ the application of the doctrine of equivalents as to the amended limitation.” E.

Question 5

Would a judgment of infringement in this case violate Warner-Jenkinson's requirement that the application of the doctrine of equivalents “is not allowed such broad play as to eliminate [an] element in its entirety,” 520 U.S. at 29. In other words, would such a judgment of infringement, post Warner-Jenkinson, violate the “all elements” rule? We do not need to reach this question for reasons which will become clear in our discussion of the specific case before us. Accordingly, we leave for another day any discussion of the “all elements” rule. IV.

Infringement of Festo’s Patents ****

1. When infringement is alleged to occur under the doctrine of equivalents, two primary legal limitations on the doctrine “are to be determined by the court, either on a dispositive pretrial motion or on a motion for judgment as a matter of law at the close of evidence and after the jury verdict.” Warner-Jenkinson, 520 U.S. at 39 n.8. Those legal limitations are prosecution history estoppel and the “all elements” rule. Id. The first legal limitation a court should consider is prosecution history estoppel, because prosecution history estoppel may completely bar the application of the doctrine of equivalents to a given claim element. The first step in a prosecution history estoppel analysis is to determine which claim elements are alleged to be met by equivalents. Then, the court must determine whether the elements at issue were amended during prosecution of the patent. If they were not, amendment-based estoppel will not bar the application of the doctrine of equivalents. However, the court still may need to consider whether statements made during prosecution give rise to argument-based estoppel. See e.g., Pharmacia & Upjohn, 170 F.3d at 1377, 50 USPQ2d at 1036. Chapter 8 – Doctrine of Equivalents Infringement

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If the claim elements at issue were amended, the court first must determine whether the amendment narrowed the literal scope of the claim. If so, prosecution history estoppel will apply unless the patent holder establishes that the amendment was made for a purpose unrelated to patentability. Warner-Jenkinson, 520 U.S. at 40-41. If the patent holder fails to do so, prosecution history estoppel will bar the application of the doctrine of equivalents to that claim element. In Warner-Jenkinson, the Supreme Court explained the purpose of placing on the patent holder the burden of establishing the reason for an amendment: allocating the burden in this manner “gives proper deference to the role of claims in defining an invention and providing public notice.” Id. at 33. Public notice considerations also have been fundamental to our decisions regarding the scope of prosecution history estoppel. E.g., Pharmacia & Upjohn, 170 F.3d at 1377, 50 USPQ2d at 1036 (“To determine what subject matter has been relinquished, an objective test is applied, inquiring whether a competitor would reasonably believe that the applicant had surrendered the relevant subject matter.” (citation and quotations omitted)). In order to give due deference to public notice considerations under the Warner-Jenkinson framework, a patent holder seeking to establish the reason for an amendment must base his arguments solely upon the public record of the patent’s prosecution, i.e., the patent’s prosecution history. To hold otherwise—that is, to allow a patent holder to rely on evidence not in the public record to establish a reason for an amendment—would undermine the public notice function of the patent record. If the reasons for the amendment do not appear in the public record of the patent’s prosecution, the reasons in most cases will be known only to the patent holder. We therefore hold that a narrowing amendment will give rise to prosecution history estoppel unless the prosecution history of the patent reveals that the amendment was made for a purpose unrelated to patentability concerns. If prosecution history estoppel does not bar the application of the doctrine of equivalents, the court should consider the second legal limitation on the doctrine, the “all elements” rule, see, e.g., Pennwalt Corp. v. Durand-Wayland, Inc., 833 F.2d 931, 4 USPQ2d 1737 (Fed. Cir. 1987) (en banc) (holding that there can be no infringement under the doctrine of equivalents if even one element of a claim or its equivalent is not present in the accused device). If the court determines that a finding of infringement under the doctrine of equivalents “would entirely vitiate a particular claim element,” then the court should rule that there is no infringement under the doctrine of equivalents. Warner-Jenkinson, 520 U.S. at 39 n.8. 2. The jury found that claim 1 of the Stoll patent was infringed under the doctrine of equivalents. Festo I (Special Verdict Form). The two elements found to be infringed by equivalents were the “cylindrical sleeve made of a magnetizable material,” and the “first sealing rings located axially outside . . . [the] guide rings.” Id. Both of these elements were added during prosecution of the patent. Following the methodology outlined above, we conclude that prosecution history estoppel bars the application of the doctrine of equivalents to these claim elements. In view of this determination, we do not reach the “all elements” rule. **** To determine whether a claim amendment gives rise to prosecution history estoppel, we first must determine whether the amendment narrowed the literal scope of the claim. Here we are presented with the situation where the added claim element was introduced through a new claim, instead of through an amendment to an original claim. Nevertheless, the addition of the magnetizable sleeve claim element can be said to have narrowed the scope of the original claim because the new claim replaced the original claim. Specifically, the only original independent claim, which did not recite a magnetizable sleeve, was replaced with an independent claim which does recite a magnetizable sleeve. Because the amendment narrowed the literal scope of the claim, we must determine whether Festo has established that it was made for a reason unrelated to patentability.

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[The court determined that the reason for the amendment was not clear, so that estoppel applied. The “sealing ring” element had originally been worded in means-plus-function format, but the “means” term had been replaced during prosecution with a positive recitation of the structure corresponding to the term. The amendment was narrowing, because before the amendment, the element literally covered the corresponding structure plus equivalent structures.] **** PLAGER, Circuit Judge, concurring. I concur in and join the opinion and judgment of the court. It is a second-best solution to an unsatisfactory situation. Under our preexisting law, a count for infringement under the doctrine of equivalents became a routine part of a patent infringement suit. The game was to convince the trier of fact, typically a jury, that even if an accused product does not infringe the claims as written, the claimed invention and the accused product have only “insubstantial differences,” a wonderfully indeterminate phrase, lending itself to making every decision under the doctrine an individualistic choice, if not simply a flip of the coin. . . . A better solution would be to declare the doctrine of equivalents—a judge-made rule in the first place—to have its roots firmly in equity, and to acknowledge that when and in what circumstances it applies is a question of equitable law, a question for which judges bear responsibility. . . . Were this court to openly acknowledge that the doctrine of equivalents can only be legitimated by its equitable roots and should be treated as an equitable doctrine, important consequences would flow. Trial courts, sitting as courts of equity, would be responsible for deciding whether the doctrine of equivalents should be applied, not unlike the practice regarding the doctrine of inequitable conduct. On appeal to this court, we would review a trial court’s determination under the deferential standard of abuse of discretion. **** LOURIE, Circuit Judge, concurring. I fully join the majority opinion. However, I write separately to respond to comments and concerns of supporters of the flexible bar rule. **** It has been said that there is no hard evidence showing that the so-called “flexible” bar impairs predictability. While it is true that empirical data may not be available, powerful evidence may be garnered from the experience of this court, which monthly reviews appeals in which infringement is asserted under the doctrine of equivalents even though the accused product is clearly not within the literal scope of the asserted claims. Many of these appeals involve prosecution histories in which amendments for patentability reasons have been made. Yet, equivalence is argued in the hope that one panel might find equivalence where another would not. That surely is persuasive evidence that the current flexible bar is not working. Our court was created with the opportunity and mandate to observe such problems in the law and to act upon a possible solution. See Warner-Jenkinson, 520 U.S. at 39 n.8, 40, 41 USPQ2d at 1875 n.8, 1876 (“We expect that the Federal Circuit will refine the formulation of the test for equivalence in the orderly course of caseby-case determinations, and we leave such refinement to that court’s sound judgment in this area of its special expertise.”). That is why we have been given exclusive jurisdiction over patent appeals. 28 U.S.C. § 1295(a). It has been suggested that there are settled expectations in the bar and innovation community regarding the present rule. The only settled expectation currently existing is the expectation that clever attorneys can argue infringement outside the scope of the claims all the way through this court of appeals. Such a settled expectation should become unsettled. Surely, when prosecuting Chapter 8 – Doctrine of Equivalents Infringement

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a patent, patent practitioners have no settled expectations of being able to assert the doctrine of equivalents. Any patent attorney who fails to claim all that his inventor has invented, and that is patentable, is ill-advised to settle for a narrower claim than he considers justified on the assumption that he can rely on the doctrine of equivalents for broader coverage. Such reliance is a highly risky prospect given that the patent statute requires precise claims. 35 U.S.C. § 112, ¶ 2. When a patent applicant is faced with a rejection, or expects a rejection, he (or she) is master of his claims. He can stand his ground and appeal, or amend the claims. If the latter course of action is chosen, such conduct, which is known to the world, should bind the applicant. The fact that the applicant may have to appeal an unjustified rejection, incurring loss of time and expense, does not mean that we should refrain from adding clarity to the meaning of claims by holding patent applicants to their actions in the Patent and Trademark Office (“PTO”). **** Finally, one of the dissenters fears that today’s ruling provides would-be copiers with a free pass to appropriate the essence of an invention and yet escape infringement. That is theoretically true. In the future, a competitor may more closely approach the limits of the claims in a patent in which a narrowing amendment has been made without fear of liability. Occasional injustices may occur. However, I believe that such occasional injustices will be greatly outnumbered by competitors who will be able to introduce innovative products outside the scope of claims without fear of unjustified, protracted, and expensive litigation. In today’s world, the specter of unpredictable equivalence claims haunts too many business decisions, while the overwhelming majority of equivalence claims ultimately fail. It is more than justified to lessen this fear and hold patent applicants to the consequences of their public prosecution decisions. The rule we announce today should encourage innovation, lessen uncertainty, and diminish the volume of unnecessary litigation, while providing patentees with protection commensurate with the disclosed and allowed scope of their inventions. **** MICHEL, Circuit Judge, concurring-in-part, dissenting-in-part, with whom Circuit Judge RADER joins. I join the majority opinion with respect to the disposition of Questions 1, 2, 4, and 5. However, I must dissent from the majority’s response to Question 3 because I believe it contradicts Supreme Court precedent and policy. In Warner-Jenkinson Co., Inc. v. Hilton Davis Chemical Co., 520 U.S. 17, 40 (1996), the Supreme Court encouraged our court to “refine the formulation of the test for equivalence.” I am convinced, however, that the majority’s new “complete bar rule,” far from being merely such a refinement, contravenes consistent Supreme Court authority. Not only does the majority’s new rule directly contradict one Supreme Court holding, but it undermines the legal standard that the Supreme Court has consistently articulated in seven other cases for determining the scope of such estoppel. Moreover, because most patents contain claims that were amended during prosecution, the majority’s holding effectively strips most patentees of their rights to assert infringement under the doctrine of equivalents, despite the Supreme Court’s unanimous adherence to the doctrine in Warner-Jenkinson. The majority’s new rule constitutes a rejection of the policy advanced by the Supreme Court in Warner-Jenkinson that the all-elements rule and prosecution history estoppel are sufficient to balance the competing needs of granting meaningful protection to patentees and of notifying the public of the effective scope of a patentee’s claims. I. The Majority’s Rule Upsets the Balance Struck by the Supreme Court Through Warner-Jenkinson Between the Competing Needs for Meaningful Patent Protection and Adequate Public Notice. ****

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In Warner-Jenkinson, the Supreme Court reiterated that under the all-elements rule and prosecution history estoppel, the public receives adequate notice as to the enforceable scope of patent claims. . . . Moreover, the Warner-Jenkinson Court reaffirmed that, although limiting its application, the all-elements rule still accommodates the right of patentees to assert infringement of some equivalents. . . . Under the all-elements rule, the claims themselves provide considerable notice to the public as to the effective scope of the patent (i.e., a patentee cannot assert infringement by a device that lacks an equivalent of one or more limitations of the claim, as issued), while preserving for the patentee a scope of protection under the doctrine of equivalents to prevent copying. When a patent applicant narrows his claims during prosecution by adding a limitation to traverse a prior art rejection, the substance of the communications between the applicant and the examiner may further notify the public as to additional limits on the enforceable scope of the patent claims. Depending on factors such as the breadth of the examiner’s rejection, the manner in which the patent applicant amends his claims to overcome the objection, and the nature of the technology at issue, a reasonable competitor might construe the applicant’s remarks and amendments to evince a surrender of claim scope greater than the all-elements rule would require. . . . We describe this doctrine as “prosecution history estoppel,” precisely because a hypothetical reasonable competitor should be able to rely on the applicant’s representations and amendments as a surrender of subject matter. The doctrine of prosecution history estoppel supplements the all-elements rule by providing a set of rules for notifying the public whether, and to what extent, the scope of protection is even narrower than what the all-elements rule would allow. . . . In contrast to the doctrine of prosecution history estoppel we have applied until today, the majority’s new complete bar rule does not supplement the all-elements rule as a way to further clarify the scope of equivalents available to the patentee. Rather than attempt to “refine” our case law as to how the added claim limitations should be enforced in light of the substance of the communications between examiner and applicant, the majority’s new rule simply forecloses all application of the doctrine of equivalents for any amended claim limitation. This approach bypasses the all-elements rule altogether…. The majority’s concept of prosecution history estoppel is hardly an “estoppel” at all. The majority’s approach gives no consideration to whether a reasonable competitor would rely on the nature of the rejections and of the amendments and statements between the applicant and the examiner as evidence of a surrender of subject matter. According to the majority, once there has been a limiting amendment, no consideration may be given to the breadth of the rejection, the closeness of the prior art, the manner of the applicant’s remarks and amendments, or the nature of the technology. All equivalents of that limitation are foreclosed by the mere fact of amendment. The majority’s rule might more aptly be called “bar by amendment” rather than “estoppel,” which has always been measured by what a reasonable competitor would understand the applicant to have surrendered in order to procure his patent. I believe that looking solely to the fact of amendment, rather than the substance of communications between the applicant and the examiner, is contrary to the principles that the Supreme Court (and our court) has always applied in determining the scope of estoppel. II.

Supreme Court Precedent

The majority asserts that the Supreme Court has never “addressed or answered” the question as to whether a scope of equivalents remains after a claim limitation has been added or amended for a reason relating to patentability. The majority quotes language from six Supreme Court cases dealing with prosecution history estoppel, and asserts that in these six cases, “the Court did not analyze the actual scope of equivalents that might be available when prosecution history estoppel applied.” The Court thereby posits that “[w]e think it is fair to say” that this question remains open. I agree with the majority that, in four of these six cases, the Supreme Court did not address the question presently at bar. As to the other two cases, Hubbell v. United States, 179 U.S. 77 Chapter 8 – Doctrine of Equivalents Infringement

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(1900), and Shepard v. Carrigan, 116 U.S. 593 (1886), the majority and I draw different conclusions. Most importantly, however, I can hardly agree with my colleagues that, upon a review of only these six Supreme Court cases, they can rightfully draw the conclusion that never has the Court “answered or addressed” today’s question. [Judge Michel then reviews various Supreme Court cases in detail and notes that WarnerJenkinson reaffirmed the flexible approach to estoppel from those cases when it directed courts to look for “the reason for” an amendment.] **** III.

Federal Circuit Authority

As noted above, I recognize that today’s en banc court has the authority to overrule prior decisions of this court, and thus that our prior decisions applying flexible or measured estoppel are not binding on the en banc court. I present the following review of our case law, however, to highlight the magnitude of today’s sudden shift, and to suggest that the approach of today’s majority is contrary to any notion that judge-made law should evolve in a consistent, gradual, and predictable fashion. A. Our Adoption of Flexible Estoppel in 1983 Established the Only True “Line of Authority” in This Circuit. Consistent with Goodyear, Hurlbut, and the other Supreme Court cases reviewed above, this court has held in over fifty decisions that the scope of estoppel is measured by the scope of surrender. In [Hughes I], this court rejected a “wooden application of estoppel,” and held that the application of prosecution history estoppel does not strip a patentee of all resort to the doctrine of equivalents. Id. The court stated: Depending on the nature and purpose of an amendment, it may have a limiting effect within a spectrum ranging from great to small to zero. The effect may or may not be fatal to application of a range of equivalents broad enough to encompass a particular accused product. It is not fatal to application of the doctrine itself.

Id. (emphasis added). Today’s majority, however, suggests that since Hughes I, this court has established two “lines of authority” adopting “inconsistent” views on the scope of prosecution history estoppel: one school originating with Hughes I favoring flexible estoppel; and a second school originating with [Kinzenbaw], favoring a complete bar. I disagree with that assessment. In my opinion, there is only one “line of authority.” While the majority correctly notes that Professor Chisum opines that there are “two lines of authority,” it neglects to mention that the second “line” consists of only two cases. See Chisum, supra, § 18.05[3][b][i], at 18-496 (“Two Federal Circuit panel decisions articulated the strict approach to estoppel.”) (emphasis added). Kinzenbaw and Prodyne Enterprises, Inc. v. Julie Pomerantz, 743 F.2d 1581, 223 USPQ 477 (Fed. Cir. 1984) (Rich, Friedman, Cowen), however, do not hold that the mere fact of amendment triggers a complete estoppel; they simply stand for the rule that courts will not undertake a “speculative inquiry” into whether a claim amendment was necessary. Kinzenbaw, 741 F.2d at 389, 222 USPQ at 933; Prodyne, 743 F.2d at 1583, 223 USPQ at 478. It is true that Kinzenbaw and Prodyne contain language which, taken alone, is arguably consistent with the complete bar imposed by the court today. On its face, however, neither opinion departs from our seminal ruling only the year before in Hughes I. In fact, each opinion purports to follow and quotes Hughes I. . . .

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Further, a close reading of the opinion in each case shows that rather than substituting a complete bar for flexible estoppel based on actual surrender, the panels did indeed look to the exact scope of surrender. They simply found that the surrender covered the accused subject matter. See Kinzenbaw, 741 F.2d at 389, 222 USPQ at 933 (“Instead, [the accused infringer] adopted the very element that [the patentee] had eliminated for the stated purpose of avoiding the examiner’s rejection and obtaining the patent.”); Prodyne, 743 F.2d at 1583, 223 USPQ at 478 (“Prodyne is estopped from now broadening the description of a claim element limited during prosecution so as to encompass a structure which a competitor should reasonably be entitled to believe is not within the legal boundaries of the patent claims in suit.”). In light of the holdings of these two cases, apart from the language the majority relies on, I cannot agree with my colleagues that we have established two conflicting lines of authority regarding prosecution history estoppel. B. This Court’s Original Interpretation of Warner-Jenkinson Was Sound, and the Majority Has Not Explained Why We Should Overrule Our Earlier Cases. This court has issued a series of decisions since Warner-Jenkinson in which we have consistently interpreted Supreme Court law to require flexible estoppel. Today’s majority, however, fails to provide a satisfactory explanation as to why we should overrule our earlier cases. In Litton Sys., Inc. v. Honeywell, Inc., 140 F.3d 1449, 46 USPQ2d 1321 (Fed. Cir. 1998) (Rader, Newman, Bryson), one of the three cases remanded to us in light of the Supreme Court’s ruling in WarnerJenkinson, this court, in 1998, most emphatically adhered to the “longstanding doctrine that an estoppel only bars recapture of that subject matter actually surrendered during prosecution.” Litton, 140 F.3d at 1455, 46 USPQ2d at 1325. Our court clearly stated that “the application of prosecution history estoppel does not necessarily limit a patentee to the literal language of the amended element -- even when an amendment has been made to overcome the prior art.” Id. We reasoned that the Warner-Jenkinson Court did not intend to “change so substantially the rules of the game” concerning the scope of estoppel. Id. at 1457, 46 USPQ2d at 1326 (citation omitted). We further noted that “the entire context of the Warner-Jenkinson opinion shows that the Supreme Court approved the PTO’s practice of requesting amendments with the understanding that the doctrine of equivalents would still apply to the amended language.” Id. at 1456-57, 46 USPQ2d at 1326. Similarly, in Hughes Aircraft Co. v. United States, 140 F.3d 1470, 46 USPQ2d 1285 (Fed. Cir. 1998) (Archer, Rader, Bryson) (“Hughes II”), issued the same day as Litton, a different panel of this court indicated that “the key to prosecution history estoppel is the surrender or disclaimer of the subject matter by the patentee, which the patentee is then unable to reclaim through the doctrine of equivalents.” Id. at 1476, 46 USPQ2d at 1290 (referring to Exhibit Supply, 315 U.S. at 136; Sutter, 119 U.S. at 541). While amendments “serve to narrow the range of equivalents,” not all equivalents are precluded. Id. We interpreted Warner-Jenkinson as supporting the proposition that courts may inquire into the reason for an amendment in order to “determine what subject matter the patentee actually surrendered.” Hughes II, 140 F.3d at 1470, 46 USPQ2d at 1290 (citing Warner-Jenkinson 520 U.S. at 33 n.7). Indeed, the very same year, in Cybor Corp. v. FAS Tech., Inc., 138 F.3d 1448, 46 USPQ2d 1169 (Fed. Cir. 1998) (en banc) (Archer), our court, sitting en banc, stated that “[t]he relevant inquiry is whether a competitor would reasonably believe that the applicant had surrendered the relevant subject matter.” Id. at 1457, 46 USPQ2d at 1178. I fail to see how the majority will stabilize application of the doctrine of equivalents by overrruling an en banc decision that is only two years old. **** In my opinion, today’s majority has not set forth a credible explanation as to why it is overruling our prior case law interpreting Warner-Jenkinson. The majority merely asserts, citing only “our long experience with the flexible bar approach,” that the standard we have applied until now is Chapter 8 – Doctrine of Equivalents Infringement

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“unworkable.” I feel that we owe greater deference to our past interpretations of Supreme Court law, or a better explanation of why our case law is suddenly seen as “unworkable.” C. From 1983 to 2000, This Court Has Consistently Applied Flexible, or Measured, Estoppel. Panels of this court have consistently followed Hughes I and flexible estoppel. Indeed, in a parade of cases, from each year of this court’s eighteen-year history, successive and randomlyselected panels of this court have unanimously applied the flexible bar rule, and done so without mention of its newly-discovered “unworkability.” As the list below indicates, our court has embraced flexible estoppel in more than fifty cases. Ironically, these cases were decided by panels including nearly every member of today’s majority. In fact, most of the members of today’s majority have written an opinion, and indeed have done so since Warner-Jenkinson, supporting flexible preclusion. [Judge Michel then provides a year-by-year string cite of the case, with a listing of the panel members for each opinion.] **** IV. The Majority's Rule Likely Will Have Unintended and Adverse Consequences that Undermine the Policies Advanced by the Supreme Court’s Interpretation of the Doctrine of Equivalents. **** A. Today’s Ruling Provides Copyists with a Fail-Safe Method to Avoid Liability for Infringement. The majority discusses the unpredictability of prosecution history estoppel under a flexible approach, and how its complete bar “eliminates the public’s need to speculate as to the subject matter surrendered by a narrowing claim amendment.” As a solution to this problem of the doctrine of equivalents, today’s ruling simply denies any resort to the doctrine, for amended claim limitations. Today’s ruling will allow copyists to readily avoid liability despite practicing the substantial equivalent of the claimed invention. Anyone seeking to lawfully copy a patented technology will only have to adopt the following method: (1) read the prosecution history to identify amendments made for patentability reasons; (2) copy every other limitation exactly, but substitute any known interchangeable structure, matter, or step for any limitation that has been amended. Any change, no matter how “unimportant and insubstantial,” to even one amended limitation will be sufficient to avoid liability under the majority’s rule. Prosecution history estoppel, moreover, is an equitable doctrine. By its very purpose, equity jurisprudence provides a remedy individually tailored to the circumstances of the dispute at hand. As stated by the Supreme Court: The essence of equity jurisdiction has been the power of the Chancellor to do equity and to mould each decree to the necessities of the particular case. Flexibility rather than rigidity has distinguished it. The qualities of mercy and practicality have made equity the instrument for nice adjustment and reconciliation between the public interest and private needs as well as between competing private claims.

Hecht Co. v. Bowles, 321 U.S. 321, 329-30 (1944) (emphasis added). Today’s ruling, however, imposes a rigid legal rule upon the application of the equitable doctrine of prosecution history estoppel. The complete bar eliminates the flexibility that equity demands. Without this flexibility, courts are precluded from protecting patentees from copyists. Chapter 8 – Doctrine of Equivalents Infringement

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B. The Ability of Copyists to Avoid Liability Under the Complete Bar Will Be Particularly Severe in Certain Types of Technology. [Judge Michel discussed the application of the majority’s rule in certain biotechnology situations.] C. Amending Claims for Patentability Reasons Is a Common Practice That Should Not Trigger a Complete Bar. The majority gives no hint of the magnitude of the effects that will ensue from its new rule. The vast majority of patent applications contain claims that are initially rejected in view of the prior art, and are only allowed after being amended. Patent prosecution is an iterative process in which the applicant typically submits claims that are thought to be allowable, the examiner rejects the claims in view of the prior art, and the applicant then amends the claims to traverse the examiner's patentability rejections…. Today’s ruling may prove impractical because it provides that the mere act of amendment to traverse a patentability rejection eliminates all protection under the doctrine of equivalents, even for equivalents that were not the subject of the amendment. This is ill-suited to the iterative process by which patent applications are prosecuted. In Warner-Jenkinson, the Supreme Court refused to apply prosecution history estoppel regardless of the reason for amendment expressly because to do so would “subvert the various balances” inherent in the process of rejection followed by amendment. 520 U.S. at 32 n.6. In holding that any amendment made for patentability reasons triggers a complete bar to protection under the doctrine of equivalents, today’s ruling will “subvert the various balances” inherent in the process of patent prosecution. Id. Rather than acquiesce to patentabilty rejections and thereby surrender all recourse to the doctrine of equivalents, applicants will be increasingly likely to file administrative and judicial appeals. The PTO Board of Patent Appeals and Interferences is already backlogged and often takes years to decide an appeal. Neither the PTO, nor our court, is prepared to handle any significant increase in such appeals. Such an increase could result in a significant lengthening in the average time and cost required to prosecute an application to issuance. Furthermore, this court’s imposition of a complete bar creates a perverse incentive for patent applicants, particularly those who are financially unable to invoke the appeals process, to simply abandon their applications. In many cases, it may be more effective to protect an invention by maintaining it as a trade secret than by accepting a patent that will publicize the invention, but provide protection only from literal infringement…. As a result, the public may be deprived of useful teachings contained in patent applications that are simply abandoned after a rejection is made regarding a critical claim limitation. D. Today’s Ruling Will Significantly, and Unfairly, Reduce the Value of All Unexpired Patents That Were Amended for Patentability Reasons. The effect of today’s ruling upon previously-issued but unexpired patents may be dramatic. While I cannot predict all the consequences that may flow from today’s decision, I think it is safe to say that the majority’s rule will reduce the effective scope, and thus, the value, of most of the 1,200,000 patents that are unexpired and enforceable. Wholly apart from other long-term effects of the majority’s rule, I feel that today’s ruling will be unfairly disruptive of existing commercial relations. Today’s ruling offers no “grandfathering” provision for the vast numbers of unexpired patents that contain amended claim limitations, and thus that will become increasingly susceptible to copying under today’s new rule. Patent applicants who prosecuted their claims under the rule of a flexible bar will have protection limited now by our new rule of complete estoppel. As today's adoption of the complete bar was utterly unpredictable, these applicants had no way to avoid the harm that now befalls them. I think that today’s ruling might most directly impact untold numbers of licensing agreements that are predicated on the assumption that patent claims with an amended limitation are still entitled to Chapter 8 – Doctrine of Equivalents Infringement

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a range of equivalents. Licensees will be tempted to exploit today's ruling using the method for liability-free copying discussed above. A licensee could make a minor substitution of a known interchangeable element for an amended claim limitation, and then correctly claim that it is no longer practicing the patentedand licensedinvention. The licensor would then be powerless to enforce the license because the amended claim or claims simply would not cover the licensee’s newly-modified product or process. ****

RADER, Circuit Judge, concurring-in-part, dissenting-in-part A primary justification for the doctrine of equivalents is to accommodate after-arising technology. Without a doctrine of equivalents, any claim drafted in current technological terms could be easily circumvented after the advent of an advance in technology. A claim using the terms “anode” and “cathode” from tube technology would lack the “collectors” and “emitters” of transistor technology that emerged in 1948. Thus, without a doctrine of equivalents, infringers in 1949 would have unfettered license to appropriate all patented technology using the out-dated terms “cathode” and “anode”. Fortunately, the doctrine of equivalents accommodates that unforeseeable dilemma for claim drafters. Indeed, in Warner-Jenkinson Co., Inc. v. Hilton Davis Chemical Co., 520 U.S. 17, 37 (1997), the Supreme Court acknowledged the doctrine’s role in accommodating after-arising technology. Unfortunately, by barring all application of the doctrine of equivalents for amended claims, this court does not account at all for the primary role of the doctrine. All patent protection for amended claims is lost when it comes to after-arising technology, while the doctrine of equivalents will continue to accommodate after-arising technology in unamended claims. For a reason far more important than disparate treatment of claims, however, this result defies logic. Prosecution history estoppel is an estoppel doctrine. Estoppel prevents a litigant from denying an earlier admission upon which another has already relied.* BLACK’S LAW DICTIONARY 570 (7th ed. 1999). In the case of patent law, the admission is the applicant’s surrender of claim scope to acquire the patent. Today’s rule forfeits all protection of the doctrine of equivalents whenever applicants amend their claims, regardless of whether they in fact surrendered coverage. By definition, applicants could not have surrendered something that did not even exist at the time of the claim amendment, namely after-arising technology. The court reasons today that it will not inquire about the scope of an estoppel because it cannot with certainty ascertain the scope of the applicant’s surrender. Although that premise is questionable for the reasons enunciated by Judges Michel and Linn, one thing is beyond question: That premise does not apply to after-arising technology. Because after-arising technology was not in existence during the patent application process, the applicant could not have known of it, let alone surrendered it. Nonetheless, the court would apply an estoppel where none exists and defeat the doctrine of equivalents.

LINN, Circuit Judge, concurring-in-part, dissenting-in-part, in which Circuit Judge RADER joins. … In my opinion, the majority’s new rigid bright line rule, eliminating all flexibility in the scope afforded certain claim limitations amended for a statutory purpose just because they were amended for a statutory purpose, goes too far. The reasons expressed by the majority do not justify this dramatic policy shift.

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With all due respect to my colleagues in the majority, the new bright line rule, as simple as it is hoped to be in application, wrongfully sets in place a regime that increases the cost and complexity of patent prosecution to the detriment of individual inventors, start-up companies, and others unable to bear these increased costs. The new regime also places greater emphasis on literary skill than on an inventor’s ingenuity; gives unscrupulous copyists a free ride on the coattails of legitimate inventors; and changes the rules under which prosecution strategies were formulated for thousands of extant patents no longer subject to correction. I find particularly apt here the concerns expressed by the Supreme Court in Warner-Jenkinson when it considered the petitioner’s request for a bright line rule precluding “recapture” of any part of surrendered subject matter under the doctrine of equivalents: “[t]o change so substantially the rules of the game now could very well subvert the various balances the PTO sought to strike when issuing the numerous patents which have not yet expired and which would be affected by our decision.” WarnerJenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 32 n.6 (1997). In my opinion, the approach to prosecution history estoppel as articulated by the Supreme Court and long followed by this court should remain the rule. As long as the reason for an amendment is explained, an estoppel by amendment should only bar recapture of the subject matter actually surrendered, as discerned from the amended claim language and the reasons articulated by the applicant for the change. The mere fact that an amendment to a claim is made pursuant to a statutory requirement is insufficient in and of itself to conclude that all subject matter beyond the literal scope of the amended claim language has been surrendered, even where the amendment is made to overcome prior art. Both by taking an expansive view of what constitutes a “substantial reason relating to patentability” and by applying prosecution history estoppel as a complete bar to any reliance on the doctrine of equivalents for claim limitations narrowed by amendment, the majority unfairly tips the balance away from patentees and toward competitors by constraining the legitimate rights of patentees to their inventions, even where competitors can reasonably determine the reasons for any amendments and the scope of any subject matter surrendered. In my view, this is an illadvised major policy shift that is neither compelled nor justified at this time. DISCUSSION **** Claims Use Ordinary Language to Capture Concepts To protect an invention through the United States patent laws, an inventor must use patent “claims.” See 35 U.S.C. § 112, second paragraph (1994). The purpose of this requirement is to give notice of the technology that the patent controls…. There is no disputing that an inventor is free to craft claims any way he sees fit to “particularly point[] out and distinctly claim[] the subject matter [that he] regards as his invention.” 35 U.S.C. § 112, second paragraph. However, a claim is a linguistic description of a mental concept. Due to the inherent limitations of language, the fit between the description and the concept is almost always inexact…. In addition to the inexact fit caused by the inherent limitations of language, the language itself may not be adequately developed at the early stages when patent applications typically are filed, particularly in rapidly evolving research fields. Besides the foregoing language issues, the early patent application filings encouraged by the U.S. patent laws give rise to additional difficulties in crafting a claim that particularly points out the subject matter that the inventor regards as his invention. For inventions in rapidly evolving fields, application filings are often made while the inventions are still in their nascent stages, i.e., early in the evolutionary process, necessitating inevitable and sometimes considerable fine tuning of claim language after the initial application filings have been made. Moreover, while an inventor is often Chapter 8 – Doctrine of Equivalents Infringement

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aware of relevant prior art relating to the area he is developing, he is not always fully cognizant of all of the relevant prior art until after his application has been filed, thus again necessitating some fine tuning of claim language after the initial application filing has been made. As a consequence of the foregoing, it is quite difficult for claim drafters to draft initial claims that adequately and accurately cover the “invention” on the day the patent application is filed. Consequently, claims are commonly amended during prosecution to more particularly point out and distinctly claim that which is regarded to be the invention…. While the majority opinion is very clear that the court’s new bright line rule applies only to claim limitations narrowed by amendment, it does not articulate with like clarity what it considers to be a “narrowing” amendment. In drafting an original claim of a patent application, the writer sets out the metes and bounds of the invention using words in their ordinary sense or in any special sense ascribed to those words in the written description. When the claim drafter amends the terms used in the original claims, such as by adding an adjective or choosing a different word than originally used, such changes will serve to more distinctly point out that which is the invention and ordinarily, though not inevitably, will signify a difference in intended claim coverage. If the change is merely the substitution of one synonymous word for another or the mere clarification of language from a foreign translation, the claim drafter may intend no change whatsoever in claim scope; but the drafter’s word choice may be construed after grant of the patent to imply a different scope simply because changes to claim language are not made merely for aesthetic reasons. However, just because the claim drafter amends a claim limitation, does not mean he “intends” to narrow the scope of his claim coverage or to give up all subject matter beyond the literal scope of the amended language. The only inference one should draw from the mere fact alone that an amendment was made is that the claim drafter “intends” the patent to be issued…. Doctrine of Equivalents: Borne of Equity “That the claims of a patent should be clear and should control the determination of infringement has been emphasized by the Supreme Court for over a century.” [citations omitted] Nevertheless, the Supreme Court has recognized that “strict and literal adherence to the written claim in determining the scope of protection [to afford to a patentee] can invite subversion of a valuable right and substantially diminish the economic value of patents.” [citations omitted] In other words, a system of protection for patentees limited to literal infringement subjects the patentee to the mercy of verbalism and “would convert the protection of the patent grant into a hollow and useless thing.” Graver Tank, 339 U.S. at 607. Thus, “[t]o temper unsparing logic and prevent an infringer from stealing the benefit of the invention” and thereby ensure that the patent grant is not converted into a useless thing by being subject to the mercy of verbalism, the Supreme Court embraced the doctrine of equivalents. Id. at 608 (quoting Judge Learned Hand in Royal Typewriter Co. v. Remington Rand, 168 F.2d 691, 692 (2d. Cir. 1948)). This doctrine was borne of equity to allow room for justice to the patentee against those who manage to avoid the letter of the invention as it was claimed in the patent through “unimportant and insubstantial changes.” Id. at 607. While it is generally agreed that the doctrine of equivalents stands at the intersection of justice to the patentee and notice to competitors of the patentee’s rights, the United States patent law embraces this conflict to provide an inventor with security in the patent rights granted by the law and to stimulate technological progress…. The problems noted above regarding the inherent limitations of language and the early stage of filing applications have provided justification for the lengthy history of applying the doctrine of equivalents to all claim language to adequately protect the patentee’s right to his invention, despite the public notice function the claim terms serve. Even with the majority’s new rule, these Chapter 8 – Doctrine of Equivalents Infringement

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concepts continue to provide justification for the application of the doctrine of equivalents to original claim language. In my opinion, the majority’s new bright line rule eliminating all flexibility in the scope of claim limitations amended for a statutory purpose reflects an unjustified faith in the draftsperson to select language to perfectly describe a new and unobvious invention at an early stage of the development process. The same limitations of language noted in selecting words to describe an invention in the first instance are no less present in selecting words to avoid an examiner’s rejection of that original language for one statutory reason or another. Furthermore, the majority’s new rule will substantially increase the cost of obtaining patent protection, and may in fact become prohibitively high for individual inventors and start-up companies. It will require applicants to undertake exhaustive pre-filing searches, which will not only be costly but also time consuming. It will also require applicants to file in an original application numerous “narrow” claims or, if “broad” claims are sought, to be prepared to argue to the patent examiner, to the board of appeals, and to this court the impropriety of all rejections for patentability reasons, rather than to amend those claims, given the harsh consequences of amendments under the majority’s new bright line rule. It will also deter applicants from attempting to expedite prosecution and attain early allowance by making minor or clarifying amendments to the claims, either in anticipation of the initial office action or at subsequent times during prosecution, for fear of triggering a complete bar to later reliance on the doctrine of equivalents. This will result in protracted prosecution and dramatically increased costs for many applications. These increases in costs and complexity will also come at a time when greater prosecution investments may be hard for many applicants to justify because the commercial value of the inventions covered may not then be fully apparent. In my view, this will most detrimentally impact individual inventors and start-up companies, and may have the effect of impeding, not advancing, technological progress, contrary to the purpose of the patent system. Warner-Jenkinson’s Effect on the Doctrine of Equivalents **** If the doctrine of equivalents is completely barred when no reason for an amendment can be discerned from the prosecution history, and it is likewise completely barred when a reason is stated, what is the point of exploring the “reason (right or wrong) for the [examiner’s rejection of the claim prior to its being amended] and the manner in which the amendment addressed and avoided that [rejection?]” [Warner-Jenkinson, 520 U.S.] at 33 n.7. Thus, adoption of a rebuttable presumption of estoppel for an amendment that was made for an unknown reason necessarily presupposes the possibility that no estoppel will apply where the reason for the amendment is known, or where the presumption is rebutted. The petitioner argued to the Supreme Court in Warner-Jenkinson that “any surrender of subject matter during patent prosecution, regardless of the reason for such surrender, precludes recapturing any part of that subject matter, even if it is equivalent to the matter expressly claimed.” Id. at 30. The Supreme Court rejected that argument. See id. I think it is fair to conclude that Warner-Jenkinson reaffirmed the long standing principle applied by this court before today that to determine the scope of prosecution history estoppel, if any, to be applied to an amended claim limitation with reasons extant in the prosecution file, one must look to the exchange between the examiner and the patentee in the prosecution file to determine that which was surrendered by the patentee in making the amendment. In applying the majority’s new rule, a court does not explore the exchange that occurred between the examiner and the patentee during the prosecution of the patent to elucidate the construction the patentee intended to disavow. Thus, the majority’s new rule, invoking a complete estoppel

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with no flexibility for a narrowing amendment made for a statutory purpose, effectively disregards the “reason” for a change, in contravention of Warner-Jenkinson. Public Policy The majority contends that the disclaimer effect, the notice function, and the need for certainty in patent law are supporting public policies for its new strict rule regarding amended limitations…. The majority asserts that by amending a claim for any reason related to a statutory requirement for obtaining a patent, the patentee disclaims subject matter encompassed by the original claim. In view of this disclaimer, the majority contends that it must be strictly construed against the inventor in favor of the public, otherwise the benefit of the doubt as to what was disclaimed comes at the public’s expense…. But the same arguments can be made for originally filed claim limitations, which, like amended claim limitations, are a disclaimer of certain subject matter. As mentioned previously, 35 U.S.C. § 112, second paragraph, requires that the patentee specifically claim the invention covered by the patent. The purpose of this statutory requirement to notify the public of the scope of conduct forbidden by the patent is applicable whether a limitation is originally presented by the applicant or added by amendment for any reason related to one of the statutory requirements for obtaining a patent. The majority does not explain why a new bright line rule is compelled to strictly construe the inventor’s choice of words in amendments but is not similarly compelled for original claim limitations. Certainly, the benefit of the doubt as to what was disclaimed comes at the public’s expense in either case. Paradoxically, the scope and meaning of claim limitations may be more easily discerned for amended limitations, as compared with originally drafted claim limitations, based on the record developed during prosecution. First-action allowances, with no real interchange or substantive commentary between the applicant and the examiner regarding any of the originally drafted claim limitations, provide no notice of the scope and meaning of those limitations beyond the words themselves as used in the written description and claims. Thus, in some ways, the public-notice function may be better served by explained amended language than by unexplained original claim language, yet the majority’s new rule favors the latter by leaving the doctrine of equivalents unrestrained for claim limitations that are not amended. **** Promoting Free Riders v. Promoting Progress of the Useful Arts The majority contends that the certainty provided by the complete bar approach to amended limitations “will stimulate investment in improvements and design-arounds because the risk of infringement will be easier to determine.” Maj. op. at 28. However, in my opinion, limiting the patentee to protection of only the literal language of an amended claim limitation is not likely to promote the progress of the useful arts. Rather, the majority’s new bright line rule, by constraining limitations amended for a statutory purpose to their literal terms, is likely to encourage insubstantial changes to an established product, rather than investment in break-through technological advancements. Such a rule, therefore, promotes free riding and undercuts the return on a patentee’s investment. In other words, the majority’s new rule hands the unscrupulous copyist a free ride on potentially valuable patented technology, as long as the copyist merely follows the prosecution history road map and makes a change, no matter how trivial or insubstantial, to an element otherwise covered by such a narrowed claim limitation. Every other detail of the patented invention may be imitated with impunity. Such an “unscrupulous copyist” appropriates the substance of the invention while avoiding the letter of the claims, yet adds nothing to the technology. The copyist, transformed as a lawful competitor, can take refuge in the excuse that if the patentee wanted better coverage, the claims should have been prosecuted more competently. Chapter 8 – Doctrine of Equivalents Infringement

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As our predecessor court aptly stated: “[t]o allow literality to satisfy the test for infringement would force the patent law to reward literary skill and not mechanical creativity.” Autogiro Co. of Am. v. United States, 384 F.2d 391, 399 (Ct. Cl. 1967). I do not think that is how our patent system or any patent system was intended to work. Patent laws seek to benefit the inventor's genius, not the scrivener's talents. See id. The majority’s new rule, which sanctions the behavior of the copyist who avoids the letter of the claims and adds nothing to the technology, is likely to be a disincentive for inventors to bear the commercial risk in developing and disclosing new technology. **** Subject Matter Surrendered **** I agree that the extent to which the patentee would be deprived of equivalents according to our past precedent necessarily involves the often arduous task of reviewing difficult and complex prosecution histories, as well as difficult and complex technologies. I also agree that these difficulties may give rise to differing opinions as to what subject matter is within the scope of the claim and what has been surrendered. However, the mere fact that this court’s new rule is a brighter line for determining whether a patentee is estopped from asserting infringement by equivalents, cannot be justification for adopting a rule that so substantially changes the rules of the game and discounts the intrinsic worth in treating more fairly the individual inventor whose patent right is under administrative scrutiny and is subject to the inherent limitations of language. The Supreme Court in Warner-Jenkinson saw no “substantial cause for requiring a more rigid rule invoking an estoppel [as a complete bar with no flexibility] regardless of the reason for a change.” Warner-Jenkinson, 520 U.S. at 32. Likewise, I find that the majority’s opinion lacks substantial cause for its rigid rule. **** NEWMAN, Circuit Judge, concurring in part, dissenting in part. This appeal returns to the Federal Circuit on GVR from the Supreme Court, with instructions to reconsider our prior decision in accordance with the law announced in [Warner-Jenkinson]. Two major issues are presented for our review on remand: (1) application of the Court's new rebuttable presumption and any ensuing estoppel to the claims of Festo's Carroll and Stoll patents; and (2) application of the all-elements rule to the sealing rings of the Carroll and Stoll patents and the magnetizable sleeve of the Stoll patent. For the first remand issue, today's majority opinion departs from the holdings of Warner-Jenkinson in three important ways. First, the majority holds that all equivalency is barred as to any claim element that is narrowed or added for reasons relating to patentability; access to the doctrine of equivalents is barred whether or not the Court's new rebuttable presumption arises and whether or not it is rebutted. Second, the majority denies consideration to any rebuttal evidence that is not already in the prosecution record, thereby converting the rebuttable presumption into an irrebuttable fiat. Third, the majority's inappropriately broad definition of "reasons related to patentability" further limits a patentee's access to equivalency, and exacerbates the conflict with the holdings of Warner-Jenkinson. The result is to negate infringement by equivalents, as a matter of law, thereby providing a blueprint for ready imitation of patented products. **** I CONFLICTS WITH THE LAW OF WARNER-JENKINSON Prosecution History Estoppel [Judge Newman discussed the holding in Warner-Jenkinson and posited that a flexible bar is a requirement of the order to consider the reason an amendment was made.] Chapter 8 – Doctrine of Equivalents Infringement

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The Rebuttable Presumption As part of its reinforcement of the notice function of claims, the Court established a new rebuttable presumption. In accordance with this presumption, when the prosecution record is silent as to the reason for a change to the claims, the presumption arises that the change was made for "a substantial reason related to patentability." Warner-Jenkinson, 520 U.S. at 33, 41 USPQ2d at 1873. This new presumption and ensuing estoppel are carefully designed controls that require consideration of the "reasoning behind the Patent Office's insistence upon a change in the claims." Id. at 32, 41 USPQ2d at 1872. The Court recognized that estoppel does not arise from every change, but depends on whether the change was made for patentability reasons: Where the reason for the change was not related to avoiding the prior art, the change may introduce a new element, but it does not necessarily preclude infringement by equivalents of that element.

Id. The patentee may then come forward with evidence to rebut the presumption. Id. at 33, 41 USPQ2d at 1873. The majority holds that the presumption can only be rebutted by evidence that is already present in the prosecution record. Maj. op. at 48 ("a patent holder seeking to establish the reason for an amendment must base his arguments solely upon the public record of the patent's prosecution, i.e., the patent's prosecution history"). Thus the majority holds that the rebuttable presumption concerning the reason for an amendment, which presumption arises when the prosecution record is silent as to the reason for the amendment, can not be rebutted with evidence outside of the prosecution record. The rebuttable presumption thereby becomes irrebuttable, because the prosecution record is necessarily silent in order for the presumption to arise at all. This impossibility of rebuttal was surely not contemplated by the Court in creating "[t]he presumption we have described, one subject to rebuttal if an appropriate reason for a required amendment is established . . . ." Warner-Jenkinson, 520 U.S. at 33, 41 USPQ2d at 1873. The nature of a presumption is that it is not sacrosanct on the grounds on which it arose, but can be countered by evidence. See Fed. R. Evid. 301 ("a presumption imposes on the party against whom it is directed the burden of going forward with evidence to rebut or meet the presumption"). A presumption is a procedural expedient whereby a conclusion of law or ultimate fact is deemed established upon the proof of certain evidentiary or historical facts. An opposing party may rebut the presumption by coming forward with evidence sufficient to negate the conclusion or its factual premises. See generally 21 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure §5124 (3d ed. 1998). The majority's ruling confuses the grounds on which a presumption arises with the grounds on which it is subject to rebuttal. The role of the prosecution record is to establish whether the presumption arises at all, not whether it has been rebutted. **** "Reasons Related to Patentability" **** The [Supreme] Court's emphasis on a "limited set of reasons" [related to patentability creating an estoppel] is in striking contrast to the unconstrained estoppel established by the majority for any change made in connection with any provision of the Patent Act. In Warner-Jenkinson the Court unequivocally rejected this position, stating that the petitioner "reaches too far in arguing that the reason for an amendment during patent prosecution is irrelevant to any subsequent estoppel." 520 U.S. at 30, 41 USPQ2d at 1867. The Court stated: "That petitioner's rule might provide a brighter line for determining whether a patentee is estopped under certain circumstances is not a sufficient reason for adopting such a rule." Id. at 32 n.6, 41 USPQ2d at 1872 n.6. The majority now adopts this rejected position.

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Supreme Court and Federal Circuit precedent have well recognized that prosecution history estoppel flows from amendments on substantive grounds of patentability. The principal statutory provisions involved during examination for patentability are 35 U.S.C. §102 and §103; parts of §112 may also give rise to estoppel. However, not every rejection based on the Patent Act is concerned with substantive grounds of patentability, as the Court also recognized. An illustration is the Stoll claims, which were rejected not on prior art but as being in improper multiple dependent form, another provision of §112; Stoll's claims amended in response to this ground of rejection are today held barred from access to the doctrine of equivalents. The majority discards as "unworkable," maj. op. at 27, the vast body of precedent which holds that determination of the extent of estoppel requires consideration of the reason for the amendment…. Instead, the majority adopts the brighter line that the Court rejected. Thus although I concur with the majority's answer to Question 1 in that precedent holds that estoppel may arise on substantive grounds of patentability in addition to those of §102 and §103, I do not share the majority's application of this answer to include any amendment responding to a rejection under any provision of the Patent Act. **** The "Notice Function" of Claims The Supreme Court, reviewing its precedent on equivalency since Winans v. Denmead, 56 U.S. (15 How.) 330 (1854), recognized the long-standing tension between equivalency and the "notice function" of patent claims. The Court acted to reinforce the "notice function" by imposing a new combination of criteria for equivalency, comprising (1) the new rebuttable presumption for unexplained amendments, (2) the all-elements rule, and (3) the obligation to examine "the role played by each element in the context of the specific patent claim." Warner-Jenkinson, 520 U.S. at 40, 41 USPQ2d at 1875. Discussing the rebuttable presumption, the Court stated that "The presumption we have described . . . gives proper deference to the role of claims in defining an invention and providing public notice . . . ." Id. at 33-34, 41 USPQ2d at 1873. The Court also explained that the allelements rule secures the "central functions of the patent claims themselves," id. at 30, 41 USPQ2d at 1871, while prosecution history estoppel, reinforced by the new rebuttable presumption, "further insulates the doctrine from any feared conflict with the Patent Act." Id. at 34, 41 USPQ2d at 1873. The Court also mentioned factors such as known interchangeability and other criteria relevant to the determination of equivalency. The notice function of claims was thereby enhanced, for there can be no liability for infringement, even by a clear technologic equivalent, unless every claimed element of the patented device is appropriated and used, in the same role as in the claim, without encountering estoppel. A device that does not meet all of these legal and factual criteria does not incur liability despite technologic equivalency. However, a device that is unable to omit or substantially change even one claimed element, and that is not released by the prosecution history, has notice of probable liability for infringement. Thus the Court acted to preserve the purpose of the doctrine of equivalents to prevent "fraud on the patent," while taking specific steps to reinforce the notice function of patent claims. The majority opinion remains silent on this important action to sharpen application of the doctrine of equivalents while preserving the principle of its availability. Instead, the majority relies on its "experience" as justification for its changes of law, but makes no mention of the Court's careful balance of controls, or explain why it is inadequate. See maj. op. at 26 ("Our decision to reject the flexible bar approach adopted in Hughes I comes after nearly twenty years of experience in performing our role as the sole court of appeals for patent matters.") We should use that

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experience to refine the criteria of equivalency, as the Court expected, instead of eliminating it entirely, a ruling that bars remedy to the deserving and undeserving alike. In the complex of risk-laden concerns and uncertainties involving inventions, entrepreneurship, and competition, the doctrine of equivalents weighs on the side of the patentee, for it provides the possibility of protection against close copies which merely skirt the patent's claims. In this way it adds weight to the patent system as an innovation incentive. The majority of this court apparently views the existing balance between inventor and imitator as disadvantageous to the nation, for the court now sets as "paramount" the "notice function" to the would-be competitor. However, the optimum balance between innovator and imitator in a technology-dependent economy involves many considerations in addition to the primacy of notice. **** II INNOVATION AND COMPETITION POLICY **** The modern industrial economy is driven by technologic innovation. It has long been understood that technological advance and industrial vigor flow from legal and economic policies that encourage invention and support investment in the products of invention. The extensive scholarship in this area is founded on the classical studies of Joseph A. Schumpeter, Capitalism, Socialism and Democracy, Harper, New York (3d ed. 1950) (recognizing the economic impact of patent-based innovation as new industries and new goods displace the old), and has been broadly explored, e.g., Kenneth J. Arrow, Economic Welfare and the Allocation of Resources for Invention (1962) (discussing intellectual property rights in a free enterprise economy); Robert Solow, Technical Change and the Aggregate Production Function, 39 Rev. Econ. & Stat. 312 (1957). The encouragement of invention and investment in new ideas and their embodiments is a primary function of patent systems, aimed at the national purpose of development of new industries, improved productivity, increased employment, and overall economic growth as well as technologic advance. There is burgeoning modern scholarship directed to studies of invention, investment, and patent systems, generally building on the work of William D. Nordhaus, Invention, Growth, and Welfare: A Theoretical Treatment of Technological Change, M.I.T. Press, Cambridge (1969), and other scholars such as Kenneth M. Dam, The Economic Underpinnings of Patent Law, 23 J. Leg. Studies 247 (1994); David Silverstein, Patents, Science and Innovation: Historical Linkages and Implications for Global Technological Competitiveness, 17 Rutgers Computer & Tech. L.J. 261 (1991); and Friedrich-Karl Beier, The Significance of the Patent System for Technical, Economic and Social Progress, 11 Int'l Rev. Indus. Prop. & Copyright L. 563 (1980). Critical attention has been given to aspects such as the nature of the technology, the rate of technologic change in the particular field, the maturity of the field, the cost of invention and development for various technologies, market risks and competitive structures, the ease and cost of imitation, and the choice between disclosure in patents and maintaining the technology in secrecy. International patenting and trade aspects have been explored, as well as the cost of patenting and the cost of enforcement. E.g., Nancy T. Gallini, Patent Policy and Costly Imitation, 32 RAND J. Econs. 56 (1992) (discussing factors such as licensing policy and technological difficulties); Richard J. Gilbert & David M. G. Newberry, Preemptive Patenting and the Persistence of Monopoly, 72 Am. Econ. Rev. 514, 519, 522 (1982) (industry-specific conditions such as the existence of patentable substitutes and cross-licensing, as well as costs of litigation, affect strategic behavior). The field of innovation study has evolved to include such complexities as "sequential" innovation, wherein one invention follows from the disclosure of another, e.g., Jerry R. Green and Suzanne Scotchmer, On the Division of Profit in Sequential Innovation, 26 RAND J. Econs. 20 (1995) Chapter 8 – Doctrine of Equivalents Infringement

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(pointing out that patent length and breadth play a different role when innovation is sequential); G. M. Grossman and E. Helpman, Quality Ladders in the Theory of Growth, 58 Rev. Econ. Stud. 43 (1991) (discussing how investment in sequential innovation drives economic growth). It is well recognized that all of these aspects have varying weights, and that the circumstances surrounding the development and utilization of intellectual property are extremely diverse. Indeed, commentators complain that a single patent policy and patent law are unsuited to the range of scientific and commercial activity in today's economy. Thus scholarship is providing rigor to understanding the role of intellectual property in innovation/competition policy, even as the limitations of economic models of invention, risk, and investment are recognized. Scholars writing in this field tend to introduce their analyses with a salute to complexity and an apology for their simplifications. However, within the growing body of scholarship, studies of the relationship between industrial innovation and optimal patent policy weigh against the majority's policy decision here. A paper entitled Optimal Patent Design and the Diffusion of Innovations, Carmen Matutes, Pierre Regibeau & Katherine Rockett, 27 RAND J. Econs. 60, 78 (1996), concludes that "the optimal scope policy implies that inventors of basic innovations obtain protection on applications that they have not yet fully worked out. This would probably require a more lenient review of claims than is the current practice." Edmund W. Kitch in The Nature and Function of the Patent System, 20 J. L. & Econ. 265 (1977) proposes that optimum patent policy should provide sufficiently broad scope to the inventor who opens a new field, to provide adequate economic incentives while avoiding duplication of effort and discouraging recourse to secrecy. D.G. McFetridge and M. Rafiquzzaman in The Scope and Duration of the Patent Right and the Nature of Research Rivalry, 8 Research in Law & Economics: The Economics of Patents and Copyrights 91, 104 (1986) discuss how the existence of non-infringing substitutes alters the benefit gained by an inventor, necessarily skewing incentives to invest. It is generally agreed that long-term economic growth requires a policy framework that encourages the creation and commercialization of new technologies, as contrasted with a policy that facilitates appropriation of the creative product, lest the creative product dry up in the face of too-easy appropriation. "Knowledge capital," secured by intellectual property rights, now rivals the traditional economic components of labor productivity, capital formation, and natural resources, as the foundation of economic growth. The inventor and the imitator are affected by quite different economic considerations. The innovator takes the risk of commercial success or failure of new things in new markets -- the risk of unfulfilled expectations, obsolescence, regulation, technologic failure. The imitator bears none of these risks; he is interested only in the successful products, not in the failures; he is interested only in the profitable products, not the marginal ones; he moves in only after the invention has been made and tested and the market developed, and can operate at lower margins. The patent system provides weight on the side of the innovator, aided by the doctrine of equivalents and its inhibition of close copying, establishing an incentive whose value has been tested by time. However, it is also well recognized that competition is essential to a healthy economy. Achieving the optimum balance of these factors is of vital national importance. A major policy change in the foundational law affecting innovation and competition should not be made without adequate study of its consequences. Although there is burgeoning literature on technologic intellectual property rights, the doctrine of equivalents has not, of itself, been a major focus of legal and economic scholarship. I suspect this is due to the complexity of the issue, the variety of factual applications, the diversity of technologies, the breadth of interacting influences on patentees' and competitors' activities, and the complex nuances of competition at the edge of the products of others. A few authors, however, have critically considered the doctrine of equivalents. For example, Robert P. Merges & Chapter 8 – Doctrine of Equivalents Infringement

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Richard R. Nelson, in On the Complex Economics of Claim Scope, 90 Colum. L. Rev. 839 (1990), observe that the doctrine of equivalents tends to diminish incentives for competitors, but point out that the doctrine also encourages competitors to make "leapfrogging" advances instead of simply copying at the edge of the claims. The questions raised by the doctrine of equivalents are not quite the same as those of patent "scope." The issue of "scope" is directed to aspects of literal claim breadth, as discussed by Kitch, supra. The question of equivalency is quite different. Infringement under the doctrine of equivalents is available only against what is indeed the same invention with only insubstantial change, as contrasted with issues of broad claims for broad but undeveloped concepts. Equivalency is a judgemade response to the pernicious literalism of the system of claiming, not an enlargement of the scope of the invention. My colleagues in the majority make the error of the "simplified model," which assumes a continuing supply of new products, and ignores the prior steps of invention and commercialization. The majority concludes that the elimination of liability for infringement based on equivalency will be of public benefit: "The public will be free to improve on the patented technology and design around it . . . . [C]ertainty will stimulate investment in improvements and design-arounds." Maj. op. at 32. However, the assumption that placing new technology in the public domain is always the optimum path to industrial growth is not supported by experience. Empirical studies have added rigor to the common sense knowledge that reduced profit opportunity affects the supply of capital to launch a new technology, and often the creation of the technology itself. See, e.g., Joshua Lerner, The Importance of Patent Scope: an Empirical Analysis, 25 RAND J. of Econ. 319 (1994) (reviewing 173 venture-backed biotechnology firms and reported that an increase of one standard deviation in average patent scope produced a 21% increase in the firm's value). The present patent law has supported a blossoming of technology-based industry in a competitive environment that is conspicuous for its entrepreneurial vigor. The balance among inventor, investor, competitor, and consumer, and the effect of the doctrine of equivalents on that balance, is not explored in the parties' briefs and had sparse amicus participation, for it was not at issue. Of course no patentee would choose to rely on the doctrine of equivalents to support commercial investment. The public and private interests served by the doctrine of equivalents derive from its deterrence of close imitation, thereby helping to assure to the patentee the benefit of the invention, while obliging would-be competitors to advance the technology instead of simply skirting the edge of the claims. Although its influence is not easy to quantify, it is generally accepted that the doctrine contributes to an industrial policy that seeks to support technologic innovation. ****

Questions, Comments, Problems 1.

What Did Warner-Jenkinson Really Say About Prosecution History Estoppel? –

2. Law and Economics? -- Unbridled by anything that it considered to be precedent, the majority in Festo looked to public policy reasons in reaching its decision to impose a bright line rule for scope of estoppel. At the same time, the dissenters looked to countervailing policy to reach the opposite conclusion. Both sides would no doubt consider their positions to be pro-patent—or at least pro-competition. But both cannot be correct. Did the majority fail to balance policy interests by setting the scope of estoppel where it did? Could the majority have reached a more balanced result by placing the burden to establish the proper scope of estoppel on the patentee with a “clear and convincing evidence” standard of proof? Is the argument that a bright line rule will spur innovation by preventing zones of uncertainty around a patent too static an analysis, since it does not take into account the fact that second-comers may see no point in designing around a patent with an improved product where they can expect little patent coverage themselves? Or are the dissenters improperly attempting to place the burden of resolving uncertainty in a patent on the party least able to do so—the accused infringer?

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3. Estoppel by Argument – What is the status of estoppel by argument after Warner-Jenkinson and Festo? Although the Supreme Court discussed prosecution history estoppel only in the context of amendment of claims, the Federal Circuit has long held that there can be estoppel by argument alone, without amending the claims. This followed the CCPA’s view, established in appeals from the ITC. See Coleco Indus. v. United States Int’l Trade Comm’n, 573 F.2d 1247, 1257, 197 USPQ 472, 480 (CCPA 1978) (“A patentee having argued a narrow construction for his claims before the . . . PTO . . . should be precluded from arguing a broader construction for the purposes of infringement.”). In Texas Instruments v. United States Int’l Trade Comm’n, 988 F.2d 1165, 26 USPQ2d 1018 (Fed. Cir. 1993), the Federal Circuit stated: As a general proposition, prosecution history estoppel is based upon a showing that an applicant amended a claim to avoid a cited prior art reference. . . . TI correctly states that none of the references cited by the examiner disclosed same-side gating and the inventors never amended claim 12 to add the opposite-side gating limitation to distinguish and overcome a prior art reference. Amendment of a claim in light of a prior art reference, however, is not the sine qua non to establish prosecution history estoppel. Unmistakable assertions made by the applicant to the Patent and Trademark Office (PTO) in support of patentability, whether or not required to secure allowance of the claim, also may operate to preclude the patentee from asserting equivalency between a limitation of the claim and a substituted structure or process step. . . . Application of this test requires, in each case, examination of the prosecution history taken as a whole. **** By expressly stating that claim 12 was patentable because of the opposite-side gating limitation, particularly in light of their previous admission that same-side gating was known in the art, the inventors unmistakably excluded the same-side gating as an equivalent. Having represented that same-side gating does not work, and having distinguished cited prior art as not teaching the functional opposite-side gated process, TI cannot foreclose reliance upon its unambiguous surrender of subject matter. . . Such foreclosure is impermissible because “other players in the marketplace are entitled to rely on the record made in the Patent Office in determining the meaning and scope of the patent.” Id. at 1174, 1175, 26 USPQ2d at 1025, 1026. In Festo, the majority used the concept of estoppel by argument to buttress its conclusion that voluntary claim amendments should create an estoppel. Clearly, the pitfalls of gratuitous arguments and comments during prosecution are apparent. Thus, one should not be too surprised if the Federal Circuit extends the hard-line rule of Festo to estoppel by argument cases. Nevertheless, consider the Federal Circuit’s position in light of this statement by Judge Hand: The defendant, however, insists that the distinction which the applicant made of Brown's patent to the examiner should estop him here. It is true that on May 4, 1904, the applicant did distinguish Brown's 'strikers,' which turn only axially from his own pivoted vertically swinging 'strikers'; but we attach no significance to his action, for no change in the claims accompanied it. For whatever reason it may have arisen, it is of course true that a patent, unlike other formal instruments of the sort, although it is the final embodiment of the purposes of the parties, is subject in its interpretation to the prior negotiations of the parties in a single instance. Whether or not this is legally an anomaly, so far as we know there is no decision which goes further than to hold that, where the applicant has assented to changes in a claim upon a reference in the Patent Office, he may not, by subsequent construction, resort to the elements which he has thus abandoned. We are far from being willing to establish a rule that arguments made in the Patent Office by the applicant to the examiner are to be taken as a measure of his patent. We read the claims as they are written, like the language of any other formal statement drawn up as the final memorial of the parties' intentions, and we decline to consider what was said arguendo during the passage of the case through the Patent Office, or any other of the preliminary negotiations which the patent itself was intended to subsume. Auto Pneumatic Action Co. v. Kindler & Collins, 247 F. 323 (2d Cir. 1917). Is it better to let the claims do the talking, as in Auto Pneumatic, or would that place too high a burden on an already overworked PTO, in requiring that examiners make sure all limitations show up in the claims? Regarding the scope of estoppel, is there any reason to have a total bar in the context of argument based estoppel, when the argument that creates the estoppel presumably tells an observer what the estoppel is and what its scope is?

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4. Estoppel by Specification Statements – Statements and amendments suring prosecution have clear and negative consequences. But what effect should statements by the patentee in the written description of the patent as-filed have on the range of equivalents that are permitted? The Federal Circuit addressed that issue in Vehicular Technologies Corp. v. Titan Wheel International, Inc., 141 F.3d 1084 (Fed. Cir. 1998), issued the same day as both Litton and Hughes. In Vehicular, the invention was for a “locking differential” for installation in the rear axle of a pick-up truck. Such differentials generally consisted of a pair of plates that were pushed outward under force from springs that pushed on pins mounted between the plates. In the prior art, a flat disc was placed between the end of the spring and the end of the pin. However, the pesky disc was hard to position and often got lost. Thus, the patent used, as an improvement, a “spring assembly consisting of two concentric springs bearing against one end of said pin.” In contrast, Titan’s accused differentials replaced the disk with a plug that fit into the end of an outer spring and stuck in place. Because Titan’s devices did not have an inner spring, there could be no literal infringement. Thus, the issue became whether Titan’s plug was equivalent to Vehicular’s inner spring. As the Supreme Court recently stated: "Each element contained in a patent claim is deemed material to defining the scope of the patented invention, and thus the doctrine of equivalents must be applied to individual elements of the claim, not to the invention as a whole." Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 117 S. Ct. 1040, 1049, 41 USPQ2d 1865, 1871 (1997); see also Pennwalt Corp., 833 F.2d at 935, 4 USPQ2d at 1739. Consequently, a claim is infringed only if each limitation in the claim is found in the accused device, either literally or by a substantial equivalent. The focus in this case is on the question of whether the captured plug in the accused device can be a substantial equivalent to the claimed inner spring. To answer that question, we follow the guidance given by the Supreme Court in WarnerJenkinson: An analysis of the role played by each element in the context of the specific patent claim will thus inform the inquiry as to whether a substitute element matches the function, way and result of the claimed element, or whether the substitute element plays a role substantially different from the claimed element. 117 S. Ct. at 1054, 41 USPQ2d at 1875. In other words, if a claim limitation must play a role in the context of the specific claim language, then an accused device which cannot play that role, or which plays a substantially different role, cannot infringe under the doctrine of equivalents. The question of whether an explicit function has been identified with a claim limitation entails an examination of the claim and the explanation of it found in the written description of the patent. . . . In some cases, the patent's prosecution history also may reveal the identification of a specific function relating to claimed structure. This may result from an amendment to claim language that was made to overcome, for example, a prior art rejection by the examiner. In such cases, the judicial analysis of whether structure and its associated function has been surrendered is conducted under the rubric of prosecution history estoppel. This, however, is not such a case, because PowerTrax did not amend the claims of the '015 patent insofar as the spring assembly limitation is concerned. The available scope of protection of a patent under the doctrine of equivalents is not, however, limited solely by prosecution history estoppel, the continuing vitality, rigors, and parameters of which the Supreme Court addressed in its Warner-Jenkinson decision. In addition, a separate body of case law confirms that a patentee may otherwise lose the right to assert coverage of allegedly equivalent structure or matter. The case law to which we refer establishes that, through statements made during prosecution of a patent application, it can become evident that an asserted equivalent is beyond coverage under the doctrine of equivalents. See, e.g., . . . Applied Materials, 98 F.3d at 1574, 40 USPQ2d at 1489-90 (written description demonstrated that a certain function must be performed by claimed process, and accused process that did not perform that function could not be asserted as an equivalent); Texas Instruments Inc. v. United States Int'l Trade Comm'n, 988 F.2d 1165, 1174, 26 USPQ2d 1018, 1025 (Fed. Cir. 1993) (unmistakable assertions made by the applicant preclude assertion of equivalency). The majority thus concluded that certain statements in the written description indicated that the claimed inner spring was important to the invention because it performed a “back-up function,” since it

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would serve to hold the pin in place if the outer spring broke. Because Titan’s disc performed no such back-up function, the majority reasoned that Vehicular had not established a reasonable likelihood of success on the merits of its infringement claim so as to support a preliminary injunction. Is the majority’s approach an extension of the two other types of prosecution history estoppel? In particular, “estoppel by amendment” applies whenever there is an amendment. This may be so because amendments are typically narrowly-focused on a well-defined problem, so the patent drafter should be on guard. It is also not too much of a burden to require that the drafter be careful with amendments because they typically involve such a narrow portion of an invention. Under the second category, estoppel only applies when statements are clear and unmistakable. Thus, although any little claim amendment will create an estoppel, only special types of arguments will. Perhaps that is because patent drafters say (or write) many things during prosecution and are not as “on guard” regarding what they write. The drafters also should not be forced to fear that an estoppel will be created by any statement, since full discussion with the examiner is preferred. In contrast, the “estoppel” in Vehicular appears to be much softer since it applies to statements made in the written description, before prosecution begins. Thus, drafters are permitted to make many statements in the written description and need not be unnecessarily on guard when describing an invention got the first time. However, where statements are clear, they may not create a full estoppel, but they will at least narrow the range of equivalents available to a patentee. Perhaps the previous paragraph gives the majority opinion in Vehicular too charitable a reading. Judge Newman, who dissented from the majority opinion, certainly would think so: By imposing a new rule of law that overrides the facts of equivalency, the panel majority bars liability for infringement by an equivalent device if the equivalent does not possess the unclaimed advantages or functions described in the specification. This new rule of law is contrary to the law of claim interpretation and it is contrary to the precedent of equivalency. It greatly narrows the scope of potential equivalents, and limits the findings available to be made by the trier of fact. In seeking optimum judicial administration of a judge-made doctrine whose purpose is to prevent fraud upon the patent, this new rule weighs heavily against patentees whose inventions have been copied. Whether continuing judicial withdrawal of the availability of the doctrine of equivalents is in the national interest is a complex question of economic policy and property theory. In Warner-Jenkinson, however, the Court reaffirmed the viability of the doctrine. Now it is time for this court to lay to rest the tensions that have been resolved, and implement the law as it has been entrusted to us. **** It is the claims that define the invention. . . . Advantages described in the body of the specification, if not included in the claims, are not per se limitations to the claimed invention. ... What do you think of Judge Newman’s criticism of the majority opinion? Did the majority hold that, as a matter of law, differentials using a captured plug could not infringe for failure to perform a back-up function? Did the majority read a functional limitation into the claim or did it simply interpret the term “spring” that was already in the claim? Did the majority confuse a claim construction analysis (first step) with an analysis of infringement under the doctrine of equivalents (second step)? In light of the Supreme Court’s command to look to the role played by a claim element in determining equivalence, what is the proper role between claim construction and the doctrine of equivalents? Can you think of a way to present the analysis of the majority in jury instructions? The Vehicular reached the district court on remand, and the district court judge, perhaps getting the message from the Federal Circuit granted summary judgment of noninfringement on the “backup function” basis. The Federal Circuit affirmed. Vehicular Technologies Corp. v. Titan Wheel Int'l, Inc., 212 F.3d 1377, 54 USPQ2d 1841 (Fed. Cir. 2000). 5. Do Section 112 Rejections Relate to “Patentability”? – Whether amendments to overcome rejections under section 112, first or second paragraph, create an estoppel has been a subject in the Federal Circuit almost since its creation, see Caterpillar Tractor Co. v. Berco, S.p.A., 714 F.2d 1110, 219 USPQ 185 (Fed. Cir. 1983), but never clearly resolved until Festo, see Pall Corp. v. Micron Separations, Inc., 66 F.3d 1211, 36 USPQ2d 1225 (Fed. Cir. 1995). The Supreme Court used the term “patentability” in Warner-Jenkinson to refer to the entire area of estoppels. The choice of this language was unfortunate because the term has different meanings depending on the context. Just what did the Court mean by “patentability”? Did it mean that an estoppel may arise from a section 112

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rejection as well as a section 102/103, or prior art, rejection (since a patent will not issue if any of sections 102, 103, or 112 are not met)? Or did it mean that only prior art-type rejections create an estoppel? The frequent references in the Court’s opinion to prior art rejections would seem to suggest that it meant that only prior art rejections create such an estoppel. Perhaps the best support for this view is the Court’s citation to pages 22-23 of the Government’s amicus brief as pointing to rejections that do not raise estoppels. These two pages refer to section 112, para. 1 (enablement) and 2 (indefiniteness) rejections. In spite of this, the Federal Circuit in Festo said the matter was not resolved by the Supreme Court. In any event, can you think of policies that favor creating an estoppel relating to amendments to overcome prior art rejections that do not apply to section 112 rejections? Keep in mind that the Court in Warner-Jenkinson, by citing to the Government’s amicus brief, was noting that the PTO, when it made section 112 rejections, did not believe they would create estoppel in later infringement litigation. Should what the PTO thinks in this regard matter?

Prior Art as a Limit on the Doctrine of Equivalents

Wilson Sporting Goods Co. v. David Geoffrey & Associates 904 F.2d 677, 14 USPQ2d 1942 (Fed. Cir. 1990) Before MARKEY, Chief Judge, RICH, Circuit Judge, and COWEN, Senior Circuit Judge. RICH, Circuit Judge. These appeals, consolidated by agreement, are from judgments of the United States District Court for the District of South Carolina in two actions brought by Wilson Sporting Goods Co. (Wilson) for infringement of United States Patent 4,560,168 ('168), entitled "Golf Ball." Trial was before a United States Magistrate by consent. In the first action, the magistrate entered judgment of liability against Dunlop Slazenger Corporation (Dunlop) upon jury verdicts of patent validity and willful infringement. In the second action, the magistrate entered summary judgment of liability against David Geoffrey & Associates (DGA) under the doctrine of collateral estoppel, holding that DGA had been effectively represented by Dunlop in the first action. Our jurisdiction is under 28 U.S.C. §§ 1292(c)(2) (1982) and 1295(a)(1) (1982). We reverse in part and vacate in part each judgment. BACKGROUND A.

The Proceedings

Wilson is a full-line sporting goods company and is one of about six major competitors in the golf ball business. Among its well-known balls are the ProStaff and Ultra. Dunlop is also a major player in the golf ball business. It competes head-to-head with Wilson by selling the Maxfli Tour Limited and Slazenger balls. It sells the Maxfli Tour Limited ball to numerous distributors, but sells the Slazenger ball only to DGA, which distributes the ball to U.S. customers. On August 2, 1988, Wilson separately sued Dunlop and DGA for patent infringement in the United States District Court for the District of South Carolina. Wilson accused Dunlop of infringing claims 1, 7, 15-16, and 19-22 of its '168 patent, and made a general accusation of infringement against DGA. The Dunlop case went to trial in late February, 1989. After a five day jury trial on the issue of liability, the jury returned special interrogatories finding the asserted claims "valid" (i.e., not proved invalid) and willfully infringed. Judgment was entered upon the verdict, Dunlop's motion for JNOV was denied, and Dunlop appealed. Wilson then moved for summary judgment of liability in the DGA case. It argued that DGA's interests in the second action had been effectively represented Chapter 8 – Doctrine of Equivalents Infringement

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by Dunlop in the jury trial, and that Wilson was therefore entitled to summary judgment on the basis of collateral estoppel. The magistrate agreed, Order of May 15, 1989, and entered judgment. DGA appealed. B.

The Technology

For more than a century, golfers have been searching for a "longer" ball. As one of the parties put it, "distance sells." Inventors have experimented with numerous aspects of ball design over the years, but as United States Golf Association (U.S.G.A.) rules began to strictly control ball size, weight, and other parameters, inventors focused their efforts on the "dimples" in the ball's surface. According to one witness, new dimple designs provide the only real opportunity for increasing distance within the confines of U.S.G.A. rules. Dimples create surface turbulence around a flying ball, lessening drag and increasing lift. In lay terms, they make the ball fly higher and farther. While this much is clear, "dimple science" is otherwise quite complicated and inexact: dimples can be numerous or few, and can vary as to shape, width, depth, location, and more. Wilson's '168 patent claims a certain configuration of dimples on a golf ball cover. The shape and width of the dimples in the '168 patent is for the most part immaterial. What is critical is their location on the ball. The goal is to create a more symmetrical distribution of dimples. Generally speaking, the dimples in the patent are arranged by dividing the cover of a spherical golf ball into 80 imaginary spherical triangles and then placing the dimples (typically several hundred) into strategic locations in the triangles. The triangles are constructed as follows. First, the ball is divided into an imaginary "icosahedron," as shown in Figure 1. An icosahedral golf ball is completely covered by 20 imaginary equilateral triangles, 5 of which cover each pole of the ball and ten of which surround its equator. Second, the midpoints of each of the sides of each of the 20 icosahedral triangles are located, as shown in Figure 2. Third, the midpoints are joined, thus subdividing each icosahedral triangle into four smaller triangles.1

The resulting 80 imaginary triangles are shown in Figure 3. Critically important are the light lines which join the midpoints. As can be seen from Figure 3, they form the arcs of circles which pass completely around the widest part of the ball. There are six such circles, referred to in the patent as "great circles." All of the claims of the '168 patent require this basic golf ball having eighty sub-triangles and six great circles. Particular claims require variations on the placement of dimples in the triangles, with one common theme--the dimples must be arranged on the surface of the ball so that no dimple intersects any great circle. Equivalently stated, the dimples must be arranged on the surface of the ball so that no dimple intersects the side of any central triangle. See Figure 4, below. When 1

The central sub-triangles are referred to in the patent claims as "central triangles" (we have labeled one "A"), whereas the three sub-triangles surrounding each central triangle are referred to as "apical triangles." The latter are so named because each of them contains an apex or tip of the larger icosahedral triangle.

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the dimples are arranged in this manner, the ball has six axes of symmetry, compared to prior balls which had only one axis of symmetry.2 C.

Patent and Trademark Office (PTO) Proceedings

Wilson employee Steven Aoyama filed his patent application on April 27, 1984. Twenty seven claims were presented. All were allowed on the first action without comment by the examiner. The patent issued on December 24, 1985, to Wilson as assignee of Aoyama. Claim 1, the only independent claim, reads: 1. A golf ball having a spherical surface with a plurality of dimples formed therein and six great circle paths which do not intersect any di[m]ples, the dimples being arranged by dividing the spherical surface into twenty spherical triangles corresponding to the faces of a regular icosahedron, each of the twenty triangles being sub-divided into four smaller triangles consisting of a central triangle and three apical triangles by connecting the midpoints [of the sides] of each of said twenty triangles along great circle paths, said dimples being arranged so that the dimples do not intersect the sides of any of the central triangles. [Bracketed insertions ours.]

The remaining 26 claims are dependent upon claim 1. They contain further limitations as to the number and location of dimples in the sub-triangles. Claim 7, for example, requires that all "central triangles [have] the same number of dimples." Other dependent claims locate dimples on the perimeter of the apical triangles, so that dimples are shared by adjacent apical triangles. See Figure 5.

D.

The Prior Art

The most pertinent prior art is a 1932 British patent to Pugh, which was cited by the examiner. Pugh teaches that a golf ball can be divided into any regular polyhedron, including an icosahedron. Pugh also discloses sub-dividing each of the twenty icosahedral triangles into smaller triangles. As an example, shown in Figure 6, Pugh divides each icosahedral triangle into sixteen sub-triangles, in contrast to the four sub-triangles required by the '168 patent. (The dimples in Pugh are triangular.) Nonetheless, Figure 6 (which is Figure 3 of the Pugh patent) makes clear that Pugh's sixteen sub-triangles are merely further divisions of four larger subtriangles. Claim 3 of Pugh explains his invention (our emphasis): 3. A method of distributing a pattern with substantial uniformity over the surface of a sphere, such as a golf ball, which consists in ... form[ing] equilateral triangles in the case of the ... icosahedron ..., dividing the sides of the triangles so found into the same number of equal or substantially equal parts and finally joining corresponding points in each pair of sides of each triangle by a series of arcs of great circles, substantially as described.

The prior art also includes several patents to Uniroyal and a Uniroyal golf ball sold in the 1970's. The Uniroyal ball is an icosahedral ball having six great circles with 30 or more dimples

2

This is Wilson's view of the prior art, which is disputed by Dunlop. The parties agree, however, that every golf ball has at least one great circle which is not intersected by dimples. It is the "mold parting line," a seam around the ball which is created where the two halves of the mold used to make the ball are joined.

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intersecting the great circles by about 12-15 thousandths of an inch.3 We discuss it extensively below. E.

The Accused Balls

There are four accused products, all of which the jury found to infringe. The following table summarizes the characteristics of each accused ball: Ball Dimples Cover Infringer ____________________________________________________________ Maxfli Tour Limited MD

432

Surlyn

Dunlop

Maxfli Tour Limited HT

432

Balata

Dunlop

Slazenger Interlock 480 (S)

480

Surlyn

Dunlop & DGA

Slazenger Interlock 480 (B)

480

Balata

Dunlop & DGA

____________________________________________________________

The accused balls (collectively "Dunlop's balls") have dimples which are arranged in an icosahedral pattern having six great circles, but the six great circles are not dimple-free as the claims literally require. The number of dimples which intersect great circles and the extent of their intersection were disputed by the parties, but the evidence most favorable to appellee Wilson can be summarized as follows (units of last two columns are 0.001"): Ball

Dimples Dimples Intersected

Dimple Radius

Extent of Intersection

___________________________________________________________ MD HT Interlock (S) Interlock (B)

432 432 480 480

60 60 60 60

60-80 60-80 60-80 60-80

7.5 8.7 4.0 4.0

**** OPINION **** Denial of JNOV On Infringement

B. 1.

Dunlop's Argument

The only theory of liability presented to the jury by Wilson was infringement under the doctrine of equivalents. Dunlop's argument for reversal is straightforward. It contends that there is no principled difference between the balls which the jury found to infringe and the prior art Uniroyal ball; thus to allow the patent to reach Dunlop's balls under the doctrine of equivalents would improperly ensnare the prior art Uniroyal ball as well. 2.

Independent Claim 1

Infringement may be found under the doctrine of equivalents if an accused product "performs substantially the same overall function or work, in substantially the same way, to obtain substantially the same overall result as the claimed invention." Pennwalt Corp. v. DurandWayland, Inc., 833 F.2d 931, 934, 4 USPQ2d 1737, 1739 (Fed.Cir.1987) (en banc). . . . Even if this test is met, however, there can be no infringement if the asserted scope of equivalency of what is literally claimed would encompass the prior art. Id.; Senmed, Inc. v. Richard-Allan Medical Indus., 888 F.2d 815, 821, 12 USPQ2d 1508, 1513 (Fed.Cir.1989). This issue—whether 3

Although no physical embodiment of the Uniroyal ball was admitted, there was extensive testimony on its characteristics.

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an asserted range of equivalents would cover what is already in the public domain—is one of law, which we review de novo, Loctite Corp. v. Ultraseal Ltd., 781 F.2d 861, 870, 228 USPQ 90, 96 (Fed.Cir.1985), but we presume that the jury resolved underlying evidentiary conflicts in Wilson's favor, see DMI, Inc. v. Deere & Co., 802 F.2d 421, 425, 231 USPQ 276, 279 (Fed.Cir.1986). This court on occasion has characterized claims as being "expanded" or "broadened" under the doctrine of equivalents. See, e.g., Intervet America v. Kee-Vet Laboratories, 887 F.2d 1050, 1054, 12 USPQ2d 1474, 1477 (literal meaning of claim is expanded under the doctrine of equivalents); Brenner v. United States, 773 F.2d 306, 308, 227 USPQ 159, 161 (Fed.Cir.1985) (describing doctrine of equivalents as "broadening" claims); Thomas & Betts Corp. v. Litton Sys., Inc., 720 F.2d 1572, 1582, 220 USPQ 1, 7 (Fed.Cir.1983) (claims have a "broadened scope"); Carman Indus., Inc. v. Wahl, 724 F.2d 932, 942, 220 USPQ 481, 489 (Fed.Cir.1983) ("Even with this expansion in the scope of the claims ..."). Precisely speaking, these characterizations are inaccurate. To say that the doctrine of equivalents extends or enlarges the claims is a contradiction in terms. The claims—i.e., the scope of patent protection as defined by the claims—remain the same and application of the doctrine expands the right to exclude to "equivalents" of what is claimed. The doctrine of equivalents, by definition, involves going beyond any permissible interpretation of the claim language; i.e., it involves determining whether the accused product is "equivalent" to what is described by the claim language. This distinction raises an interesting question: If the doctrine of equivalents does not involve expanding the claims, why should the prior art be a limitation on the range of permissible equivalents? It is not because we construe claims narrowly if necessary to sustain their validity. E.g., Lewmar Marine, Inc. v. Barient, Inc., 827 F.2d 744, 749, 3 USPQ2d 1766, 1770 (Fed.Cir.1987). As we have said, the doctrine of equivalents does not involve expansion of the claims. Nor is it because to hold otherwise would allow the patentee to preempt a product that was in the public domain prior to the invention. The accused products here, as in most infringement cases, were never "in the public domain." They were developed long after the invention and differ in several respects from the prior art. The answer is that a patentee should not be able to obtain, under the doctrine of equivalents, coverage which he could not lawfully have obtained from the PTO by literal claims. The doctrine of equivalents exists to prevent a fraud on a patent, Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 608 (1950), not to give a patentee something which he could not lawfully have obtained from the PTO had he tried. Thus, since prior art always limits what an inventor could have claimed, it limits the range of permissible equivalents of a claim. Whether prior art restricts the range of equivalents of what is literally claimed can be a difficult question to answer. To simplify analysis and bring the issue onto familiar turf, it may be helpful to conceptualize the limitation on the scope of equivalents by visualizing a hypothetical patent claim, sufficient in scope to literally cover the accused product. The pertinent question then becomes whether that hypothetical claim could have been allowed by the PTO over the prior art. If not, then it would be improper to permit the patentee to obtain that coverage in an infringement suit under the doctrine of equivalents. If the hypothetical claim could have been allowed, then prior art is not a bar to infringement under the doctrine of equivalents. Viewing the issue in this manner allows use of traditional patentability rules and permits a more precise analysis than determining whether an accused product (which has no claim limitations on which to focus) would have been obvious in view of the prior art. Compare with Ryco, Inc. v. AgBag Corp., 857 F.2d 1418, 1426, 8 USPQ2d 1323, 1330 (Fed.Cir.1988) (comparing accused product with prior art). In fact, the utility of this hypothetical broader claim may explain why "expanded claim" phraseology, which we now abandon, had crept into our jurisprudence. See Chapter 8 – Doctrine of Equivalents Infringement

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Carman Indus., Inc. v. Wahl, 724 F.2d 932, 942, 220 USPQ 481, 489 (Fed.Cir.1983) (affirming finding of infringement because claims as "expand[ed]" would not have been obvious in view of prior art). Finally, it reminds us that Wilson is seeking patent coverage beyond the limits considered by the PTO examiner. In this context it is important to remember that the burden is on Wilson to prove that the range of equivalents which it seeks would not ensnare the prior art Uniroyal ball. The patent owner has always borne the burden of proving infringement, see Under Sea Indus., Inc. v. Dacor Corp., 833 F.2d 1551, 1557, 4 USPQ2d 1772, 1776 (Fed.Cir.1987), and there is no logical reason why that burden should shift to the accused infringer simply because infringement in this context might require an inquiry into the patentability of a hypothetical claim. Any other approach would ignore the realities of what happens in the PTO and violate established patent law. Leaving this burden on Wilson does not, of course, in any way undermine the presumed validity of Wilson's actual patent claims. In the present situation, Wilson's claims will remain valid whether or not Wilson persuades us that it is entitled to the range of equivalents sought here. The specific question before us, then, is whether Wilson has proved that a hypothetical claim, similar to claim 1 but broad enough to literally cover Dunlop's balls, could have been patentable. As we have explained above, Dunlop's balls are icosahedral balls with six great circles, five of which are intersected by dimples. The balls contain 432 to 480 dimples, 60 of which intersect great circles in amounts from 4 to 9 thousandths of an inch. In order for a hypothetical claim to cover Dunlop's balls, its limitations must permit 60 dimples to intersect the great circles by at least 9 thousandths of an inch. Thus, the issue is whether a hypothetical claim directed to an icosahedral ball having six great circles intersected by 60 dimples in amounts up to 9 thousandths of an inch could have been patentable in view of the prior art Uniroyal ball. On the Uniroyal ball, the extent to which the dimples intersect the great circles is from 12 to 15 thousandths of an inch. Stated as a percentage of dimple radius, the intersection permitted in the hypothetical claim is 13% or less, and the dimples on the Uniroyal ball intersect by 17% to 21%. The number of dimples which intersect the great circles is also similar for the hypothetical claim and the prior art Uniroyal ball. The pertinent hypothetical claim limitation reads on any ball having 60 or less intersecting dimples. This limitation reads on the prior art Uniroyal ball, which has 30 intersecting dimples. If viewed in relative terms, the hypothetical claim limitation reads on any ball which has less than 14% of its dimples intersecting great circles. Roughly 12% of the dimples on the Uniroyal ball intersect great circles. We hold that these differences are so slight and relatively minor that the hypothetical claim--which permits twice as many intersecting dimples, but with slightly smaller intersections--viewed as a whole would have been obvious in view of the Uniroyal ball. As Dunlop puts it, there is simply "no principled difference" between the hypothetical claim and the prior art Uniroyal ball. Accordingly, Wilson's claim 1 cannot be given a range of equivalents broad enough to encompass the accused Dunlop balls. 3.

Dependent Claims

Before separately analyzing the asserted dependent claims, we should first explain why we are bothering to do so. This court has stated: "It is axiomatic that dependent claims cannot be found infringed unless the claims from which they depend have been found to have been infringed." Wahpeton Canvas Co., Inc. v. Frontier, Inc., 870 F.2d 1546, 1553 & n.9, 10 USPQ2d 1201, 1208 & n.9 (Fed.Cir.1989). While this proposition is no doubt generally correct, it does not apply in the circumstances of this case. Here, we have reversed the judgment of infringement of independent claim 1 solely because the asserted range of equivalents of the claim limitations would encompass the prior art Uniroyal ball. The dependent claims, of course, are narrower than claim 1; therefore, it does not automatically Chapter 8 – Doctrine of Equivalents Infringement

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follow that the ranges of equivalents of these narrower claims would encompass the prior art, because of their added limitations. In contrast, in Wahpeton Canvas the court affirmed the judgment of noninfringement of the independent claims because the accused products did not include particular claim limitations or their substantial equivalents. 870 F.2d at 1552, 10 USPQ2d at 1207. Where that is the reason for noninfringement of the independent claim, it follows that, for the same reason, the dependent claims will not be infringed. But that is not true here and we therefore turn to the asserted dependent claims, to determine whether they can be infringed under the doctrine of equivalents. Implicit in the jury's conclusion that the Dunlop balls infringe the asserted dependent claims is a finding that the Dunlop balls have, in addition to the features we have described above, the further limitations of the dependent claims. Each dependent claim contains a small variation on the theme of an icosahedral ball having six great circles. We have considered each asserted dependent claim and conclude that none could be given a range of equivalents broad enough to encompass Dunlop's balls because that would extend Wilson's patent protection beyond hypothetical claims it could lawfully have obtained from the PTO. The jury found that the central triangles of each Dunlop ball have "the same number of dimples," which is the additional limitation of claim 7. This feature, however, is shown in the Pugh patent. See Figure 6, above. The jury also found, as required by claim 15, that some dimples on each Dunlop ball reside completely within the apical triangles and some dimples intersect two of the sides of the apical triangles. This arrangement again is disclosed in the Pugh patent, as well as in Uniroyal patent 4,141,559 (U.S.), Uniroyal patent 1,402,273 (British), and Uniroyal patent 1,407,730 (British). Necessarily implied in the above findings, the jury found that each Dunlop ball has the combined features of claims 7 and 15, which is what claim 16 requires. Yet Wilson has failed to persuade us that the range of equivalents sought for any of these claims could be broad enough to encompass Dunlop's balls without also encompassing the Uniroyal ball and other cited prior art. The jury also found that the Dunlop balls (except for the "480" balls, not accused) have a one-fifth dimple at the apexes of their apical triangles, as required by claim 19. This arrangement, as is the arrangement in which each apical triangle has some half dimples (claim 20), is again disclosed by each of the three Uniroyal patents. Wilson has failed to persuade us that the range of equivalents sought for these claims, as for claims 21 and 22 (which contain further variations on the number and/or fractions of the dimples in the apical triangles), could be broad enough to encompass Dunlop's balls without encompassing the Uniroyal ball and other prior art of record.

Questions, Comments, Problems 1. There is a maxim of patent law that says that patent claims must be construed the same way for validity as for infringement. Is Wilson Sporting Goods simply an application of that principle to the doctrine of equivalents? In other words, if a patentee were to assert coverage under the doctrine of equivalents that would sweep in something that was obvious from the prior art, then such a hypothetical claim would have been obvious (and invalid). Thus, perhaps Wilson Sporting Goods simply provides a gloss and some structure to a commonsense rule. 2. Think of the two other limitations on the doctrine of equivalents that we have discussed: the all-elements rule and prosecution history estoppel. What is the rationale for applying these limiting doctrines in the way they are applied? With regard to the all-elements rule, what is wrong with applying a claimed invention generally to an accused product or process? Is the all-elements rule simply a convenient way to put some recognizable limits on the doctrine of equivalents? Nevertheless, does the rule have a positive effect as long as practitioners are aware of it and work around it? Likewise, is there any particular reason why prosecution history estoppel must limit equivalents rather than simply changing the literal scope of a patent and still permitting full (or almost full) coverage by

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equivalents? Again, perhaps such estoppel furthers the public interest in certainty regarding patent scope and does not prejudice anyone who knows how the doctrine operates. 3. Many opinions note that a pioneering invention will be given a very broad range of equivalents. How does this rule differ from the prohibition against providing a range of equivalents that wouild encompass something in the prior art?

The Reverse Doctrine of Equivalents The reverse doctrine of equivalents forces a finding of noninfringement of a claim even though the accused product or process literally meets all of the claim limitations, where the accused product or process is sufficiently different from the claimed invention (despite the literal correspondence). The doctrine received its genesis in Boyden Power Brake Co. v. Westinghouse, 170 U.S. 537 (1898), where the Court stated: But, even if it be conceded that the Boyden device corresponds with the letter of the Westinghouse claims, that does not settle conclusively the question of infringement. We have repeatedly held that a charge of infringement is sometimes made out, though the letter of the claims be avoided. . . . The converse is equally true. The patentee may bring the defendant within the letter of his claims, but if the latter has so far changed the principle of the device that the claims of the patent, literally construed, have ceased to represent his actual invention, he is as little subject to be adjudged an infringer as one who has violated the letter of a statute has to be convicted, when he has done nothing in conflict with its spirit and intent. 'An infringement,' says Mr. Justice Grier in Burr v. Duryee, 1 Wall. 531, 572, 'involves substantial identity, whether that identity be described by the terms, 'same principle,' same 'modus operandi,' or any other. ... The argument used to show infringement assumes that every combination of devices in a machine which is used to produce the same effect is necessarily an equivalent for any other combination used for the same purpose. This is a flagrant abuse of the term 'equivalent."

Even with this explanation, the reverse doctrine may seem anamolous, for if the claims measure the invention, how can the claims cease to represent the actual invention? It seems that the proper resolution of a case in which the claims exceed the scope of the disclosed invention is to hold the claims invalid as lacking enablement or a written description. The Federal Circuit discussed the rationale for the reverse doctrine as follows: The reverse doctrine of equivalents is invoked when claims are written more broadly than the disclosure warrants. The purpose of restricting the scope of such claims is not only to avoid a holding of infringement when a court deems it appropriate, but often is to preserve the validity of claims with respect to their original intended scope.

Texas Instruments Inc. v. United States Int’l Trade Comm’n, 846 F.2d 1369, 1372, 6 USPQ2d 1886 (Fed. Cir. 1988) (denial of rehearing). Thus, perhaps the reverse doctrine actually helps the patentee, in that it gives the patentee half-a-loaf rather than no loaf at all (in much the same way that Judge Learned Hand used to hold claims not infringed rather than invalid, see, e.g., H.K. Regar, supra). Does a patentee that overclaims deserve such protection? Apparently, such help is not often needed, because the authors are aware of no Federal Circuit opinion that actually applies the reverse doctrine to find noninfringement. The closest the court came was the in banc decision in SRI International v. Matsushita Electric Corp. of America, 775 F.2d 1107, 227 USPQ 577 (Fed. Cir. 1985) (in banc), which, in a 6-5 vote, reversed a summary judgment of noninfringement based on the reverse doctrine of equivalents, finding issues of fact and remanding for trial on the issue. The five dissenters believed that noninfringement based on the reverse doctrine had been established as a matter of law. Thus, all eleven judges at the time believed the doctrine was alive and well.

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Chapter 9 Dimensions of Patent Coverage Introduction Now that you have your claim construed, what are you going to do with it? As you saw in chapters 3 and 4, you can analyze whether the claim “reads on” or would have been obvious in light of the prior art. In this chapter, however, we will study the flip side of that consideration, i.e., whether the accused infringer is doing what is prohibited by the patent laws. At present, the right of a patentee to sue for infringement of its patent springs from section 154 of Title 35: [a] patent shall contain . . . a grant . . . of the right to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States .

From this provision, Congress has defined infringement in section 271, and in particular, subsection (a): Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.

As discussed in the first chapter, these provisions grant the patentee the right to exclude others, but do not grant the patentee a positive right to make, use, sell, offer to sell, or import. For example, if the patentee claims only an improvement for a technology that is covered by another extant patent owned by another party, the patentee is prevented by that “blocking” patent from building its product unless it obtains a license from the other party.

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Although the patent statutes have always paired a definition of the patent right with an explanation of the patent remedy, it was not until 1952 that the statute made explicit that the patentee had only a right to exclude others, and not a positive right. The 1790 Act referred to the “exclusive right and liberty of making, constructing, using and vending to others to be used,” and imposed liability on one who would “devise, make, construct, use, employ, or vend” a patented invention. The 1793 Act used almost identical language, while the 1836 Act shortened things up by granting an “exclusive right and liberty of making, using, and vending to others to be used,” and provided a legal “action for damages for making, using, or selling.” The 1870 Act represented a high water mark in brevity, providing an “exclusive right to make, use, and vend,” and stating “that damages for the infringement of any patent may be recovered by action on the case.” Despite this constant reference to a positive right, the Supreme Court recognized from well before 1952 that a patent conveys the right to exclude others. See, e.g., Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502, 510 (1917). In this chapter, we will first review the types of acts in section 271 that constitute infringement: (1) making, (2) using, (3) selling and offering to sell, and (4) importing. We will then investigate the temporal and geographic dimensions of the patent grant, for a patent may only be infringed during its term and inside the United States. The next section discusses potential liability for altering a patented device that was already legitimately acquired. After that, we will discuss liability for “indirect” infringement, wherein a party may be guilty as an infringer if it aids and abets the (direct) infringement of another party. Finally, we wrap up with an issue that has received considerable attention lately—infringement by government (federal and state) entities. Before you reach any of those issues, perhaps it would be helpful to review issues common to several of the various infringement issues. In Van Kannell, Judge Hand makes clear that the statute sets out the acts that are prohibited under the patent laws, and that infringement is not established when someone merely diminishes the value of another person’s patent.

Van Kannell Revolving Door Co. v. Revolving Door & Fixture Co. 293 F. 261 (S.D.N.Y. 1920) LEARNED HAND, District Judge. **** The defendant presses only exceptions II, IV, V, and VI. Exception II goes to the question whether it was an infringement for the defendant to take away from the plaintiff a contract calling for a door covered by the patent, and later to change the structure so that it did not infringe. The exception raises merely a point of law. That point is whether it was itself an infringement to propose to a third person to sell an infringing door, and before installing it to induce him to modify his requirements, so that it shall not infringe. The defendant under these circumstances neither made, sold, nor used the patented door. Now a patent confers an exclusive right upon the patentee, limited in those terms. He may prevent any one from making, selling, or using a structure embodying the invention, but the monopoly goes no further than that. It restrains every one from the conduct so described, and it does not restrain him from anything else. If, therefore, any one says to a possible customer of a patentee, 'I will make the article myself; don't buy of the patentee,' while he may be doing the patentee a wrong, and while equity will forbid his carrying out his promise, the promise itself is not part of the conduct which the patent forbids; it is not a 'subtraction' from the monopoly. If it injures the plaintiff, though never performed, perhaps it is a wrong, like a slander upon his title; but certainly it is not an infringement of the patent. Luten v. Town of Lee (D.C.) 206 Fed. 904. And while equity forbids the carrying out of the promise, equity does not thereby adjudge the promise to be a wrong, but only evidence of a proximate wrong; i.e., infringement. To procure an adjudication that the promise is a wrong, and its accompanying injunction, the plaintiff must rest his case, not upon any subtraction from the monopoly, but upon an injury analogous to injuries arising from similar conduct which affects the value of any kind of property. Chapter 9 – Dimensions of Patent Coverage

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**** Yet on all these jobs it appears that the defendant did not finally need to use the invention in order to hold the job, because, while he did in fact secure the contract by offering to infringe, he persuaded the owner to accept an innocent substitute. The plaintiff, on whom the burden of proof rests, must therefore show that it was the invention, and not a substitute, whose acceptance he later induced, which determined the defendant's success. This must generally remain a doubtful conclusion, unless the defendant tried to get the contract without that element, and failed. To this the plaintiff answers that it is entitled to the presumption, whatever may have been the event, that the defendant could not originally have got the contract, had he not bid upon the specifications as submitted. But this I think is a conclusion which is by no means necessary in cases where the owners eventually consent to the substitute. It seems to me impossible in such cases to say a priori whether the defendant would or would not have been able originally to persuade the owners to accept a contract without the invention. This uncertainty, which is inherent in respect of some, at least, of these contracts, necessarily makes it doubtful whether the defendant took away from the plaintiff those contracts because the invention was a condition precedent to his success. It is not necessary to do more than throw a doubt upon this aspect of the exception, nor have I examined the evidence with a view of learning in respect of which jobs the plaintiff has carried the burden of showing that the defendant could not have got the contracts without promising to infringe, because I think the inquiry immaterial to an accounting for damages for infringement. If the plaintiff chooses to amend its bill, so as to include this new aspect of the case, it is possible that the jurisdictional features may exist, and that it may be even now incorporated into this litigation; but upon the record as it stands the second exception is sustained. ****

Questions, Comments, Problems 1. The Intent Element - Patent infringement is a strict liability offense: if you fall within the claims of a valid and enforceable patent, you are guilty as an infringer whether you knew about the patent or not and whether you copied the patentee’s product or developed your own product independently. See Hilton Davis Chem. Co. v. Warner-Jenkinson Co., 62 F.3d 1512, 1523, 1527, 35 USPQ2d 1641, 1649, 1653 (Fed. Cir. 1995) (en banc). You could even be liable as a consumer for using an item that you purchased at a store if the item was patented and you did not buy it from the patentee or under license from the patentee. Thus, patent infringement differs from copyright infringement, which does not impose liability if the accused infringer’s development is independent from the copyrighted article, even if it is identical. However, you will see later in this chapter that there is an intent element to indirect infringement, whether of the induced or contributory form. You will also see in a later chapter that increased damages may be awarded as a deterrent where infringement is willful and intentional. 2. The Patent “Monopoly” – Does a patent, through its grant of a right to exclude others, provide the patentee with a monopoly? On the one hand, the patentee, if it does not encounter a blocking patent, may be able to maintain a 100% market share of whatever is claimed by the patent. On the other hand, “monopoly” has come to be a term of art with close relation to a “relevant market” defined by consumer demand rather than by a patent document. In addition, the patentee is granted the right to exclude in exchange for bringing to the public a new invention. Although many opinions (including Supreme Court opinions) have, through loose language, referred to a patent monopoly, other more careful opinions have taken offense at the linking of such a pejorative term to the patent grant. Now retired Judge Markey, the Federal Circuit’s first chief judge, and a champion of patents, responded to one party’s description of its opponent as a “German monopolist” as follows: That denigration, whether inserted in a vain hope of prejudicing the court or otherwise, has no support in the present record. Disclosure of an invention found to have revolutionized an industry is but a classic example of the ideal working of the patent system. If a patentee or licensee enjoys widespread sales, that too is but an example of the incentive-useful arts promoting element in the patent system. Patents and licenses are exemplifications of property rights. Further, and happily, participation in the U.S. patent system, as patentees and as licensees, is available to citizens and non-citizens alike. ****

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A patent, under the statute, is property. 35 U.S.C. § 261. Nowhere in any statute is a patent described as a monopoly. The patent right is but the right to exclude others, the very definition of “property.” That the property right represented by a patent, like other property rights, may be used in a scheme violative of antitrust laws, creates no “conflict” between laws establishing any of those property rights and the antitrust laws. The antitrust laws, enacted long after the original patent laws, deal with appropriation of what should belong to others. A valid patent gives the public what it did not earlier have. . . . It is but an obfuscation to refer to a patent as “the patent monopoly” or to describe a patent as an “exception to the general rule against monopolies.” Carl Schenck, A.G. v. Nortron Corp., 713 F.2d 782, 784, 786 n.3, 218 USPQ 698, 699, 701 n.3 (Fed. Cir. 1983). Do you believe patents deserve the praise that Judge Markey gives them? Judge Markey was simply echoing the views of the Supreme Court over a century earlier in the famous case of Seymour v. Osborne, 78 U.S. (11 Wall.) 516 (1870): Letters patent are not to be regarded as monopolies, created by the executive authority at the expense and to the prejudice of all the community except the persons therein named as patentees, but as public franchises granted to the inventors of new and useful improvements for the purpose of securing to them, as such inventors, for the limited term therein mentioned, the exclusive right and liberty to make and use and vend to others to be used their own inventions, as tending to promote the progress of science and the useful arts, and as matter of compensation to the inventors for their labor, toil, and expense in making the inventions, and reducing the same to practice for the public benefit, as contemplated by the Constitution and sanctioned by the laws of Congress. Id. at 533-34. 3. Offer for Sale – As you will see below, in 1996 Congress for the first time expanded the patent's exclusionary right to cover "offering for sale." Does this statutory amendment overrule Van Kannell?

Making Both section 154(a)(1) and section 271(a) speak of making or using or offering for sale or selling. Therefore, an unauthorized making of an item covered by a patent is an infringement even if the item is not used or sold. Although “make” is not defined in the staute, the Supreme Court has described it as clearly “embrac[ing] the construction of the thing invented.” Bauer & Cie v. O’Donnell, 229 U.S. 1 (1913). Despite the seeming simplicity of the scope of “make,” litigants have found ways to probe the edges of the term. In Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 173 USPQ 769 (1972), the patent covered a shrimp deveining machine, and the accused infringer sought to make the parts for a machine and ship them overseas for quick assembly. The appellate court refused to give “makes” an “artificial, technical construction,” and held that the defendant’s acts would infringe. The Supreme Court reversed, holding that a combination patent “protects only against the operable assembly of the whole and not the manufacture of its parts.” Id. at 528, 173 USPQ at 773. As you will see in a later section, the holding in Deepsouth was altered by Congress in 1984, with the addition of section 271(f), which provides an infringement remedy for the export of unassembled parts. Both Whittemore and Bloomer, below, explore the meaning of “making,” while Paper Converting discusses the effect that the 1984 amendment to section 271 had on the Deepsouth holding.

Whittemore v. Cutter 29 F. Cas. 1120 (C.C.D. Mass. 1813) STORY, Circuit Justice. Chapter 9 – Dimensions of Patent Coverage

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**** Another objection is to the direction, that the making of a machine fit for use, and with a design to use it for profit, was an infringement of the patent right, for which an action was given by the statute. This limitation of the making was certainly favorable to the defendant, and it was adopted by the court from the consideration, that it could never have been the intention of the legislature to punish a man, who constructed such a machine merely for philosophical experiments, or for the purpose of ascertaining the sufficiency of the machine to produce its described effects. It is now contended by the defendant's counsel, that the making of a machine is, under no circumstances, an infringement of the patent. The first section of the act of 1793 expressly gives to the patentee &c. 'the full and exclusive right and liberty of making, constructing, using, and vending to others to be used' the invention or discovery. The fifth section of the same act gives an action against any person, who 'shall make, devise, and use or sell' the same. From some doubt, whether the language of the section did not couple the making and using together to constitute an offence, so that making without using, or using without making, was not an infringement, the legislature saw fit to repeal that section; and by the third section of the act of April 17, 1800, c. 25 [2 Stat. 37], gave the action against any person, who should 'make, devise, use or sell' the invention. We are not called upon to examine the correctness of the original doubt, but the very change in the structure of the sentence affords a strong presumption, that the legislature intended to make every one of the enumerated acts a substantive ground of action. It is argued, however, that the words are to be construed distributively, and that 'making' is meant to be applied to the case of a composition of matter, and not to the case of a machine. That it is clear, that the use of certain compositions (as patented pills) could not be an infringement, and unless making were so there would be no remedy in such cases. We cannot feel the force of this distinction. The word 'making' is equally as applicable to machines, as to compositions of matter; and we see no difficulty in holding, that the using or vending of a patented composition is a violation of the right of the proprietor. It is further argued, that the making of a machine cannot be an offence, because no action lies, except for actual damage, and there can be no actual damages, or even a rule for damages, for an infringement by making a machine. We are however of opinion, that where the law gives an action for a particular act, the doing of that act imports of itself a damage to the party. Every violation of a right imports some damage, and if none other be proved, the law allows a nominal damage. On the whole, we see no reason for departing from the plain import of the language of the statute, and this objection also must be overruled. ****

Bloomer v. Gilpin 3 F.Cas. 726 (C.C.S.D.Ohio 1859) LEAVITT, District Judge. This was a bill for an injunction to restrain the defendants from infringing the plaintiff's exclusive right to the invention known as “'Woodworth's Patent Planing Machine,” and for an account of profits. It avers, that on December, 27, 1828, a patent issued to William Woodworth, for a machine for 'planing, tonguing, and grooving boards, planks, and other materials.' . . . The bill then avers that the defendants, about July 1, 1853, at Cincinnati, 'without any legal grant or license therefor, and in violation and defiance of the patent rights aforesaid, did make and construct, or cause to be made and constructed, and set up and put in operation, a machine, or machines, for planing, tonguing, and grooving, etc., in all material parts, substantially like, and upon the plan of the machines invented, made, and put in operation by said Woodworth, and described, in said letters Chapter 9 – Dimensions of Patent Coverage

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patent; by reason of which infringement, the plaintiff alleges, he has been greatly injured, and the defendants have made profit, to an amount not less than five thousand dollars.' **** In their answer the defendants admit that, since September 2, 1853, they have had in operation, at Cincinnati, a Woodworth planing machine, complete in all its parts, in virtue of a license granted by said Wilson to Bicknell & Jenkins, under a contract executed between the said parties, April 21, 1846; which license has legally vested in them by assignment. The defendants deny that they have made for sale, or sold, any of said patented machines. They admit that they have, in some cases, received payment for the work done by said machine in lumber, but deny that they have ever charged or received less than seven dollars the thousand feet for such work [so as to breach a term in their contract]. But they admit that they have erected and used a machine for planing the surfaces of boards, without the appendages for tonguing and grooving, constructed on the plan and principle of the Woodworth patent, which is entirely distinct from the complete machine, and which they have never used when the other was in operation. This, they aver, has been done merely to avoid the inconvenience and loss of time resulting from the adjustment of the entire machine for the single operation of planing the surface of boards; and they say it is not a violation of the plaintiff's exclusive right, or of any of the conditions of the license under which they claim. **** And the only inquiry which remains, is whether the defendants infringed the plaintiff's rights under the patent, by the construction and use of a second machine for the purpose merely of planing the surfaces of boards, without the machinery for tonguing and grooving. On this point there is no controversy as to the facts. The allegations of the bill are admitted by the answer, and the making and use of the second machine is justified under the license held by the defendants. It seems to be a clear proposition that such a right was not granted by the license, and that the construction and use of the second machine was an infringement of the plaintiff's rights under the patent. The license grants the right to build and use one machine, and can by no construction be held to extend to two. It is well settled that the mere making of a patented machine, though it is neither used nor sold, is an infringement of the right of the patentee, for which an action may be maintained. The defendants in this case not only constructed, but used, the machine, and they are not relieved from liability by the fact asserted, that both were never in operation at the same time. The second was made and used for their convenience and benefit, and it is not to be doubted that it aided in increasing their profits. And on the theory of the contract between Wilson and Bicknell & Jenkins, it lessened correspondingly the value of the plaintiff's patent. ****

Paper Converting Machine Co. v. Magna-Graphics Corp. 745 F.2d 11, 223 U.S.P.Q. 591 (Fed. Cir. 1984) Before RICH, Circuit Judge, NICHOLS, Senior Circuit Judge, and NIES, Circuit Judge. NICHOLS, Senior Circuit Judge. This appeal is from a judgment of the United States District Court for the Eastern District of Wisconsin (Reynolds, C.J.), 576 F. Supp. 967, entered on December 1, 1983, and awarding plaintiff Paper Converting Machine Company (Paper Converting) $893,064 as compensation for defendant MagnaGraphics Corporation's (Magna-Graphics) willful infringement of United States Patent No. Re. 28,353. We affirm-in-part and vacate-in-part. I

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Although the technology involved here is complex, the end product is one familiar to most Americans. The patented invention relates to a machine used to manufacture rolls of densely wound ("hardwound") industrial toilet tissue and paper toweling. The machine, commonly known as an automatic rewinder, unwinds a paper web continuously under high tension at speeds up to 2,000 feet per minute from a large-diameter paper roll—known as the parent roll or bedroll—and simultaneously rewinds it onto paperboard cores to form individual consumer products. Before the advent of automatic rewinders, toilet tissue and paper towel producers used "stop-start" rewinders. With these machines, the entire rewinding operation had to cease after a retail-sized "log" was finished so that a worker could place a new mandrel (the shaft for carrying the paperboard core) in the path of the paper web. In an effort to increase production, automatic rewinders were introduced in the early 1950's. These machines automatically moved a new mandrel into the path of the paper web while the machine was still winding the paper web onto another mandrel, and could operate at a steady pace at speeds up to about 1,200 feet per minute. In 1962, Nystrand, Bradley, and Spencer invented the first successful "sequential" automatic rewinder, a machine which not only overcame previous speed limitations, but also could handle two-ply tissue. This rewinder simultaneously cut the paper web and impaled it on pins against the parent roll. Then, after a new mandrel was automatically moved into place, a "pusher" would move the paper web away from the parent roll and against a glue-covered paperboard core to begin winding a new paper log. On April 20, 1965, United States Patent No. 3,179,348 (the '348 patent) issued, giving to Paper Converting (to whom rights in the invention had been assigned) patent protection for machines incorporating the sequential rewinding approach. On September 1, 1972, Paper Converting applied to have the claims of the '348 patent narrowed by reissue, and on March 4, 1975, United States Patent No. Re. 28,353 (the '353 patent) issued on this application. The '353 patent, like the original '348 patent on which it is based, received an expiration date of April 20, 1982. Claim 1 of the '353 patent defines the improvement in the web-winding apparatus as an improvement comprising: (C) means for transversely severing said web to provide a free leading edge on said web for approaching a mandrel on which said web is to be wound in said path, and (D) pin means extensibly mounted on said roll for maintaining a web portion spaced from said edge in contact with said roll, and pusher means extensibly mounted on said roll to urge said maintained web portion against an adjacent mandrel.

Paper Converting achieved widespread commercial success with its patented automatic rewinder. Although there are not many domestic producers of toilet tissue and paper toweling, Paper Converting has sold more than 500 machines embodying the invention. In 1979, Paper Converting brought the present action against Magna-Graphics for infringement of the '353 patent. After a trial concerning only issues of liability, the district court held the '353 patent valid and found it willfully infringed, 211 USPQ 788 (E.D. Wis. 1981). It awarded treble damages, finding that Magna-Graphics had acted without the advice of counsel as to the change it made in its machines to avoid infringement. The Seventh Circuit affirmed, 680 F.2d 483 (7th Cir. 1982). The parties commendably raise no issues here which the Seventh Circuit has already decided as to MagnaGraphics' liability. When the district court held the accounting for damages (after the Seventh Circuit had affirmed it on the liability portion of the case), it found that Magna-Graphics had made two sales of infringing rewinders and associated equipment: one to the Fort Howard Paper Company (Fort Howard) under circumstances to be described, and one to the Scott Paper Company (Scott). The court awarded to Paper Converting $112,163 for Magna-Graphics' sale to Scott, and $145,583 for Magna-Graphics' sale to Fort Howard. The court then trebled these damages, and added $119,826 as prejudgment interest on the untrebled award. This appeal is from the judgment awarding damages. Chapter 9 – Dimensions of Patent Coverage

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II Magna-Graphics asserts reversible error in virtually every element of the district court's "accounting" or award of damages. In particular, Magna-Graphics contends that the district court erred in (1) finding the sale, substantial manufacture, and delivery of the Fort Howard rewinder to be an infringement, . . . [W]e are not persuaded that the district court made any reversible error in its lengthy and detailed analysis of its accounting. III A Magna-Graphics first argues that it should bear no liability whatsoever for its manufacture, sale, or delivery of the Fort Howard rewinder because that machine was never completed during the life of the '353 patent. We disagree. In early 1980 Fort Howard became interested in purchasing a new high-speed rewinder line. Both Paper Converting and Magna-Graphics offered bids. Because Magna-Graphics offered to provide an entire rewinder line for about 10 percent less than did Paper Converting, it won the contract. Delivery would have been before the '353 patent expired. Magna-Graphics began to build the contracted for machinery, but before it completed the rewinder, on February 26, 1981, the federal district court in Wisconsin determined that a similar Magna-Graphics rewinder built for and sold to Scott infringed the '353 patent. The court enjoined Magna-Graphics from any future infringing activity. Because at the time of the federal injunction the rewinder intended for Fort Howard was only 80 percent complete, Magna-Graphics sought a legal way to fulfill its contract with Fort Howard rather than abandon its machine. First, Magna-Graphics tried to change the construction of the rewinder so as to avoid infringement. It submitted to Paper Converting's counsel three drawings illustrating three proposed changes, and asked for an opinion as to whether the changes would avoid infringement. Paper Converting's counsel replied, however, that until a fully built and operating machine could be viewed, no opinion could be given. Magna-Graphics, believing such a course of action unfeasible because of the large risks in designing, engineering, and building a machine without knowing whether it would be considered an infringement, instead negotiated with Fort Howard to delay the final assembly and delivery of an otherwise infringing rewinder until after the '353 patent expired in April 1982. Magna-Graphics thereafter continued to construct the Fort Howard machine, all the while staying in close consultation with its counsel. After finishing substantially all of the machine, Magna-Graphics tested it to ensure that its moving parts would function as intended at a rate of 1,600 feet of paper per minute. Although Magna-Graphics normally fully tested machines at its plant before shipment, to avoid infringement in this instance, Magna-Graphics ran its tests in two stages over a period of several weeks in July and August of 1981. To understand Magna-Graphics' testing procedure, it is necessary to understand the automatic transfer operation of the patented machine. First, from within a 72-inch long "cutoff" roll, a 72-inch blade ejects to sever the continuous web of paper which is wound around the bedroll. Then, pins attached to the bedroll hold the severed edge of the web while pushers, also attached to the bedroll, transfer the edge of the web towards the mandrel (the roll on which the paperboard core is mounted). In the first stage of its test, Magna-Graphics checked the bedroll to determine whether the pushers actuated properly. It installed on the bedroll two pusher pads instead of the thirty pads normally used in an operating machine. It greased the pads and operated the bedroll to determine whether the pads, when unlatched, would contact the core on the mandrel. (Magna-Graphics greased the pads so as to provide a visual indication that they had touched the core.) During this stage of tests, no cutoff blades or pins were installed.

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In the second stage of the test, Magna-Graphics checked the cutoff roll to determine whether the cutting blade actuated as intended. It tested the knife actuating mechanism by installing into the cutoff roll a short 4-inch section of cutter blade rather than the 72-inch blade normally used. After taping a 4inch wide piece of paper to the outer surface of the cutoff roll, Magna- Graphics operated the cutoff roll to determine whether the latch mechanism would eject the blade to cut the paper. During this phase of the testing, no pins or pusher pads were installed. At no time during the tests were the pins, pushers, and blade installed and operated together. To further its scheme to avoid patent infringement, Magna-Graphics negotiated special shipment and assembly details with Fort Howard. Under the advice of counsel, Fort Howard and Magna-Graphics agreed that the rewinder's cutoff and transfer mechanism would not be finally assembled until April 22, 1982, two days after the expiration of the '353 patent. With this agreement in hand, Magna-Graphics shipped the basic rewinder machine to Fort Howard on September 17, 1981, and separately shipped the cutoff roll and bedroll on October 23, 1981. The rewinder machine was not assembled or installed at the Fort Howard plant until April 26, 1982. B With this case we are once again confronted with a situation which tests the temporal limits of the American patent grant. . . . We must decide here the extent to which a competitor of a patentee can manufacture and test during the life of a patent a machine intended solely for post-patent use. MagnaGraphics asserts that no law prohibits it from soliciting orders for, substantially manufacturing, testing, or even delivering machinery which, if completely assembled during the patent term, would infringe. We notice, but Magna-Graphics adds that it is totally irrelevant, that Paper Converting has lost, during the term of its patent, a contract for the patented machine which it would have received but for the competitor's acts. Clearly, any federal right which Paper Converting has to suppress Magna-Graphics' patent-term activities, or to receive damages for those activities, must be derived from its patent grant, and thus from the patent statutes. "Care should be taken not to extend by judicial construction the rights and privileges which it was the purpose of Congress to bestow." Bauer v. O'Donnell, 229 U.S. 1, 10 (1913). The Supreme Court, in Brown v. Duchesne, 60 U.S. (19 How.) 183, 195 (1856), stated that: [T]he right of property which a patentee has in his invention, and his right to its exclusive use, is derived altogether from these statutory provisions; * * * an inventor has no right of property in his invention, upon which he can maintain a suit, unless he obtains a patent for it, according to the acts of Congress; and * * * his rights are to be regulated and measured by these laws, and cannot go beyond them.

The disjunctive language of the patent grant gives a patentee the "right to exclude others from making, using or selling" a patented invention during the 17 years of the patent's existence. 35 U.S.C. § 154. See also 35 U.S.C. § 271. Congress has never deemed it necessary to define any of this triad of excludable activities, however, leaving instead the meaning of "make," "use," and "sell" for judicial interpretation. . . . Nevertheless, by the terms of the patent grant, no activity other than the unauthorized making, using, or selling of the claimed invention can constitute direct infringement of a patent, no matter how great the adverse impact of that activity on the economic value of a patent. Judge Learned Hand stated, in Van Kannell Revolving Door Co. v. Revolving Door & Fixture Co., 293 F. 261, 262 (S.D.N.Y.1920), that irrespective of where the equities may lie: [A] patent confers an exclusive right upon the patentee, limited in those terms. He may prevent any one from making, selling, or using a structure embodying the invention, but the monopoly goes no further than that. It restrains every one from the conduct so described, and it does not restrain him from anything else. If, therefore, any one says to a possible customer of a patentee, "I will make the article myself; don't buy of the patentee," while he may be doing the patentee a wrong, and while equity will forbid his carrying out his promise, the promise itself is not part of the conduct which the patent forbids; it is not a "subtraction" from the monopoly. If it injures the plaintiff, though never performed, perhaps it is a wrong, like a slander upon his title, but certainly it is not an infringement of the patent.

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Here, the dispositive issue is whether Magna-Graphics engaged in the making, use, or sale of something which the law recognizes as embodying an invention protected by a patent. MagnaGraphics relies on Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 173 USPQ 769 (1972). That case dealt with a "combination patent" covering machinery for shrimp deveining. The only active issue was whether certain export sales were properly prohibited in the district court's injunction and whether damages should include compensation for past infringement by these exports. The infringer had put in effect a practice of selling the machines disassembled for export, but with the subassemblies so far advanced, and with such instructions, that the foreign consignee could put them together on receipt in operable condition with an hour's work. The Supreme Court's five to four holding that these exports did not infringe was interwoven of three strands of thought: (1) that the patent laws must be construed strictly because they create a "monopoly" in the patentee; (2) that a "combination patent" is not infringed until its elements are brought together into an "operable assembly;" and (3) that an attempt to enforce the patent against a machine assembled abroad was an attempt to give it extraterritorial application and to invade improperly the sovereignty of the country where the final assembly and the intended use occurred. Magna-Graphics' effort to apply Deepsouth as precedential runs into the obvious difficulty that the element of extraterritoriality is absent here, yet it obviously was of paramount importance to the Deepsouth Court. We must be cautious in extending five to four decisions by analogy, United States v. Kennesaw Mountain Battlefield Ass'n, 99 F.2d 830, 833-34 (5th Cir.), cert. denied, 306 U.S. 646 (1938). The analysis of where infringement occurs is applicable, Magna-Graphics says, to determining when an infringement occurs, whether before or after a patent expires. We have not found any case that has so held, and are not cited to any. It does not at all necessarily follow, for the Deepsouth analysis is made to avert a result, extraterritoriality, that would not occur whatever analysis was made in the instant case. Although in Deepsouth the Court at times used broad language in reaching its decision, it is clear that Deepsouth was intended to be narrowly construed as applicable only to the issue of the extraterritorial effect of the American patent law. The Court so implied not only in Deepsouth ("[A]t stake here is the right of American companies to compete with an American patent holder in foreign markets. Our patent system makes no claim to extraterritorial effect, * * *" 406 U.S. at 531 (emphasis added)), but in a subsequent decision as well ("The question under consideration [in Deepsouth] was whether a patent is infringed when unpatented elements are assembled into the combination outside the United States." Dawson Chemical Co. v. Rohm & Haas Co., 448 U.S. 176, 216, 206 USPQ 385, 405 (1980) (emphasis added)). Moreover, in Decca Limited v. United States, 544 F.2d 1070 (Ct. Cl. 1976), the Court of Claims considered the worldwide system of electronic navigation aids called "Omega," which employs as a means of fixing the locations of ships and planes "master" and "slave" transmission stations, and receivers making computer printouts on board the ships and planes to be guided. The government relied on Deepsouth to establish that the involved patent, if enforced against it, would be given an extraterritorial application. The Court of Claims held that the application was not extraterritorial and therefore Deepsouth was not implicated. The Court of Claims viewed Deepsouth as simply and wholly a decision against extraterritorial application of United States patent laws. Id. at 1072-74. While there is thus a horror of giving extraterritorial effect to United States patent protection, there is no corresponding horror of a valid United States patent giving economic benefits not cut off entirely on patent expiration. Thus, we hold that the expansive language used in Deepsouth is not controlling in the present case. The facts in Deepsouth are not the facts here. Because no other precedent controls our decision here, however, we nevertheless look to Deepsouth and elsewhere for guidance on the issue of whether what Magna-Graphics did is an infringement of the '353 patent. A further examination of the Deepsouth opinion reveals that the Court stated what was for it a most unusual reliance on a precedent established in an inferior court, the case being Radio Corporation of America v. Andrea, 79 F.2d 626 (2d Cir. 1935). The reason for this was the eminently logical one that when in 1952 the Congress recodified the patent law, and specifically § 271, the most relevant Chapter 9 – Dimensions of Patent Coverage

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precedent was Andrea as to the legal effect of exporting, unassembled, components that if exported assembled would infringe a "combination patent." Presumably the Congress accepted and enacted Judge Swan's interpretation in Andrea, absent any relevant pronouncement by our highest court. Judge Swan's opinion on the appeal from a preliminary injunction is, indeed, a rather dramatic application of the view of the law he announced. The patents related to radio receiving sets. The alleged infringer, Andrea, exported them complete except for vacuum tubes exported in the same package, but not in their sockets. All the buyer had to do to have a patented set was, therefore, to put the tube in the socket designed to receive it. Swan's opinion does not mention any horror of extraterritoriality. Rather, the analysis is that the sale in this condition, even to domestic users, is not a direct infringement, but is only a contributory infringement. Thus, the practical impact of the Swan opinion, but not its reasoning, is limited to export sales, where contributory infringement is not logically applicable. Swan notes, however, as possible direct infringement evidence, that the alleged infringer put the tubes in their sockets to test them, and the sets generally, and then disassembled for export, and the reversal leaves it open to the trial court to look into this. The trial court thereafter made further findings and entered its final judgment (then called its decree) and the case came up again, same name, 90 F.2d 612 (2d Cir. 1937). Where previously the panel had consisted of only Swan and the subsequently ill-famed Manton, this time Circuit Judge Chase was added and Manton authored the opinion. The matter of testing was now clarified, and it was also now clear to the panel: The purchaser to connect the tube needs only insert it in the socket. No adjustment is required; no screw or nut need be tightened. Where the elements of an invention are thus sold in substantially unified and combined form, infringement may not be avoided by a separation or division of parts which leaves to the purchaser a simple task of integration. Otherwise a patentee would be denied adequate protection.

[Id. at 613.] The court further noted that in part the sets were fully assembled for testing in the United States and that the sales of the completed though partly disassembled sets were made in the United States. The main problem dealt with in the second Andrea opinion was what "implied license" the infringer acquired when it bought the tubes separately. Swan dissented, saying the holding that the sale of the disassembled parts in this country was an infringement overruled the decision in 79 F.2d 626. This history was, of course, not overlooked in the Supreme Court and is mentioned by Justice Blackmun in his dissent in Deepsouth. What are we to make of all this? It does seem as if the concept of an "operable assembly" put forward by Justice White in his majority opinion is probably something short of a full and complete assembly; thus, if the infringer makes an "operable assembly" of the components of the patented invention, sufficient for testing, it need not be the same thing as the complete and entire invention. The other thing is, if the infringer has tested his embodiment of the invention sufficiently to satisfy him, this may be a "use," because as held in Roche Products, Inc. [v. Bolar Pharmaceutical Co., 733 F.2d 858, 221 USPQ 937 (Fed. Cir. 1984)], "use" includes use for the purpose of testing. Apparently, this was also a factor in the second Andrea decision, though given the confusing way Manton put his opinion together, it is hard to be sure. Swan also may be right that Manton is simply overruling the interlocutory 79 F.2d 626 decision. If so, apparently the Supreme Court majority liked the first holding better. That is, the part quoted above of the second decision is not law. But there is no apparent difference between Swan and the rest of the second panel as to the legal effect of testing and sale. In any case, we would not be justified in thinking Justice White and the Supreme Court majority intended to hold, or to be understood as holding, that the second Andrea decision in 90 F.2d 612, was

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not before Congress just as much as the first Andrea decision in 79 F.2d 626, or was not just as much to be considered in interpreting § 271, as reenacted in 1952. Whether Magna-Graphics' rewinder infringed the '353 patent is a question of fact which the Federal Rules leave to the district court to decide. The question is not always so simply decided as the dissent makes it out to be. In particular, where it is necessary to decide whether a complex mechanical contraption infringes a claim in a patent, the district court is often faced with a difficult chore. To require that in all situations the district court must decide a complicated factual issue within the narrow confines of a simple bright-line test makes the district judge's function nothing more than that of a master assigned to set out simple facts. The dissent's argument is based on the utopian belief that a copier "should be able to look to the patent claims and know whether his [or her] activity infringes or not." Although this may be a desirable goal for the patent laws, it is not the law as it exists. In particular, the doctrine of equivalents has been judicially created to ensure that a patentee can receive full protection for his or her patented ideas by making it difficult for a copier to maneuver around a patent's claims. In view of this doctrine, a copier rarely knows whether his product "infringes" a patent or not until a district court passes on the issue. We see no difference in putting a copier into the same position here. It is undisputed that Magna-Graphics intended to finesse Paper Converting out of the sale of a machine on which Paper Converting held a valid patent during the life of that patent. Given the amount of testing performed here, coupled with the sale and delivery during the patent-term of a "completed" machine (completed by being ready for assembly and with no useful noninfringing purpose), we are not persuaded that the district court committed clear error in finding that the Magna-Graphics' machine infringed the '353 patent. To reach a contrary result would emasculate the congressional intent to prevent the making of a patented item during the patent's full term of 17 years. If without fear of liability a competitor can assemble a patented item past the point of testing, the last year of the patent becomes worthless whenever it deals with a long lead-time article. Nothing would prohibit the unscrupulous competitor from aggressively marketing its own product and constructing it to all but the final screws and bolts, as Magna-Graphics did here. We rejected any reduction to the patent-term in Roche; we cannot allow the inconsistency in the patent law which would exist if we permitted it here. Magna-Graphics built and tested a patented machine, albeit in a less than preferred fashion. Because an "operable assembly" of components was tested, this case is distinguishable from Interdent Corp. v. United States, 531 F.2d 547, 552 (Ct. Cl. 1976) (omission of a claimed element from the patented combination avoids infringement) and Decca Ltd. v. United States, 640 F.2d 1156, 1168, 209 USPQ 52, 61 (Ct. Cl. 1980) (infringement does not occur until the combination has been constructed and available for use). Where, as here, significant, unpatented assemblies of elements are tested during the patent term, enabling the infringer to deliver the patented combination in parts to the buyer, without testing the entire combination together as was the infringer's usual practice, testing the assemblies can be held to be in essence testing the patented combination and, hence, infringement. That the machine was not operated in its optimum mode is inconsequential: imperfect practice of an invention does not avoid infringement. We affirm the district court's finding that "[d]uring the testing of the Fort Howard machine in July and August 1981, Magna-Graphics completed an operable assembly of the infringing rewinder." **** NIES, Circuit Judge, dissenting-in-part. I dissent from the majority's holding that Magna-Graphics' activities in connection with the Fort Howard machine constitute direct infringement of any claim of Paper Converting's patent. The majority's

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conclusion necessitates giving a meaning to "patented invention" contrary to the definition set forth by the Supreme Court in Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 173 USPQ 769 (1972). The analysis must begin with the statutory language of 35 U.S.C. § 271(a): Except as otherwise provided in this title, whoever without authority makes, uses or sells any patented invention, within the United States during the term of the patent therefor, infringes the patent. [Emphasis added.]

The majority holds that incomplete assembly of the patented invention is making, testing of subassemblies is using, and a sale of an unassembled machine is selling the patented invention within the meaning of the above section. The majority reasons that a contrary result would emasculate the congressional intent to prevent the making of a patented item during the patent's full term of 17 years. It could be said with equal validity that, given the lead time necessary to make the invention here, the majority effectively extends the patentee's right of exclusivity beyond the statutory 17 years. I do not see in Deepsouth that the Supreme Court's only concern was the extraterritorial operation of our patent laws. The activities of Deepsouth under attack were all performed in the United States and were found not to result in direct or contributory infringement of the patent. That the activities of final assembly occurred abroad merely precluded a holding that Deepsouth's activities constituted contributory infringement. Contributory infringement cannot arise without a direct infringement. Mercoid Corp. v. Mid-Continent Investment Co., 320 U.S. 661, 677, 60 USPQ 21, 29 (1944). The situation in Deepsouth is exactly comparable to the one at hand. That the activities of final assembly occurred after the patent expired precludes holding Magna-Graphics to be a contributory infringer, there being no direct infringement by another to which the charge can be appended. Thus, we are back to the dispositive direct infringement issue in Deepsouth, which is the same as the issue here. What is the meaning of "patented invention" in 35 U.S.C. § 271(a)? The alleged infringer, in each case, made and sold something, but was it the "patented invention"? The relevant facts in Deepsouth were as follows: Laitram Corp. held two U.S. patents, which together constituted a commercial shrimp deveining machine. Each patented component was, as in all but the simplest machines, a combination of elements. Deepsouth made all of the parts for an infringing machine, assembled them but for two elements, and sold the assembled and unassembled parts as a unit. Deepsouth advertised to its customers that final assembly was of no importance and, in fact, required less than an hour. Indeed, the partially assembled equipment and parts were sold at the same price at which Deepsouth previously had sold fully assembled machines held to be infringements. Admittedly, its course of conduct was, in the words of the majority here, a "scheme" to avoid infringement. Deepsouth's "scheme" was, however, ultimately successful. Following precedent of the Second, Third and Seventh Circuits, the district court had held that Deepsouth could not be prohibited from exporting elements of the patented invention even when those elements could, and predictably would, be combined to form the whole. Laitram Corp. v. Deepsouth Packing Co., Inc., 310 F. Supp. 926, 165 USPQ 147 (E.D. La. 1970). The Fifth Circuit, to which the case was appealed, reversed, finding the construction of the statute by the other circuits "artificial" and "technical". In its view, "The Constitutional mandate cannot be limited to just manufacturing and selling in the United States." Accordingly, the court held "substantial manufacture" to be a sufficient basis for direct infringement. Laitram Corp. v. Deepsouth Packing Co., 443 F.2d 936, 170 USPQ 196 (5th Cir. 1971). In reversing, Justice White wrote: We cannot endorse the view that the "substantial manufacture of the constituent parts of a machine" constitutes direct infringement when we have so often held that a combination patent protects only against the operable assembly of the whole and not the manufacture of its parts. [Emphasis added.]

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406 U.S. at 528, 173 USPQ at 773. Nothing in Justice White's opinion in Deepsouth indicates that the concept of an operable assembly is "probably something short of a full and complete assembly," as the majority states. The Court had before it the Fifth Circuit opinion which had analyzed just such less-than-full-assembly situations. Repeatedly, the Court emphasized that the "patented invention" means that all of its claimed elements must be united. Thus, if the claimed invention comprises the elements A, B, C and D, it is only the combination in its entirety that is protected. The making of the lesser combination A, B and D falls short of direct infringement, even though the missing element C is also supplied by the alleged infringer. This conclusion follows, in the Court's analysis, from the principles expressed in Mercoid Corp. v. Minneapolis-Honeywell Regulator Co., 320 U.S. 680, 684, 60 USPQ 30, 32 (1944) and other precedent, that "a patent on a combination is a patent on the assembled or functioning whole, not on the separate parts." 406 U.S. at 528. The Deepsouth opinion also reiterates the following language from Radio Corp. of America v. Andrea, 79 F.2d 626, 628, 27 USPQ 364, 366 (2d Cir. 1935): [The] relationship is the essence of the patent. ... No wrong is done the patentee until the combination is formed. His monopoly does not cover the manufacture or sale of separate elements capable of being, but never actually, associated to form the invention. Only when such association is made is there a direct infringement of his monopoly....

406 U.S. at 529, 173 USPQ 773. It must also be noted that the Supreme Court discounted Deepsouth's sales activity in the following words: [Laitram's] argument that Deepsouth sells the machines—based primarily on Deepsouth's sales rhetoric and related indicia such as price—cannot carry the day unless it can be shown that Deepsouth is selling the "patented invention." The sales question thus resolves itself into the question of manufacture: did Deepsouth "make" (and then sell) something cognizable under the patent law as the patented invention, or did it "make" (and then sell) something which fell short of infringement?

406 U.S. at 527, 173 USPQ at 773 (footnote omitted). It is not surprising that Magna-Graphics' counsel read Deepsouth as permitting the course of conduct condemned here. The majority opinion is no less than a reversal of Deepsouth. Regardless of the reasonableness of the alternative interpretation of § 271(a) given by the majority, we are bound by the Supreme Court's decision. No greater prerogative to modify it accrues to us from a 5-4 vote than from a unanimous decision. Change must be left to Congress, or the Court itself. In Deepsouth the extension of patent protection which had been urged was viewed as a matter for a legislative directive: In sum: the case and statutory law resolves this case against the respondent. When so many courts have so often held what appears so evident—a combination patent can be infringed only by combination—we are not prepared to break the mold and begin anew. And were the matter not so resolved, we would still insist on a clear congressional indication of intent to extend the patent privilege before we could recognize the monopoly here claimed. Such an indication is lacking.

406 U.S. at 532, 173 USPQ at 774.

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Such indication is still lacking. We cannot assume that the present Court would find reason to depart from Deepsouth in the face of congressional inaction over the twelve years since the decision was handed down.3 Indeed, the Deepsouth decision is not without redeeming virtue. This is one of the few areas of patent law where a bright line can be, and has been, drawn. That consideration in itself has merit. A competitor should be able to look to the patent claims and know whether his activity infringes or not. Here, the majority provides no guidance to industry or the district courts. One cannot tell from the opinion whether testing and sales activity must also accompany substantial assembly, as it appears to hold, or whether simply substantially making the device preparatory to selling after the patent expires would be sufficient. Given the disjunctive language of the statute, no basis appears for "summing up" partial making with the testing of partial assemblies and with sales made by the alleged infringer. Those activities do not, in some nebulous way, supply the missing physical elements of the "patented invention." The determinative factor in Deepsouth was that the alleged infringer had never made, used or sold the "patented invention." Its activities fell short of direct infringement because the court rejected the view that direct infringement required anything less than "the operable assembly of the whole and not the manufacture of its parts." In this case as well, no operable assembly of the whole was ever made by Magna-Graphics. If the patented invention was not made, a fortiori, it could not have been used or sold. Thus, there is no direct infringement. ****

Questions, Comments, Problems 1. Does Paper Converting Fly in the Face of Deepsouth? Is the dissent of the late Judge Nies in Paper Converting right? While it is true that the Supreme Court adverted to the extraterritoriality issue, the crux of its analysis seems founded, not on that factor, but on the principle that "a combination patent protects only against the operable assembly of the whole and not the manufacture of its parts." 406 U.S. at 528; see also id. at 528-29 (discussing the issue). Is there an analytical difference between making something outside the geographical as opposed to temporal scope of a patent? 2. Capability v. Actuality – Although you will study “use” in the next section, there is a question whether the making of an object that is capable of both infringing use and noninfringing use is itself a making of an infringing object. The Federal Circuit has indicated that manufacture of such an object will be an infringement. See Bell Communications Research, Inc. v. Vitalink Communications Corp., 55 F.3d 615, 62223, 34 USPQ2d 1816, 1822 (Fed. Cir. 1995). Certainly that cannot mean, however, that a computer loaded with a programming language, such as BASIC, infringes all software patents since it can be used in an infringing manner if properly programmed. Thus, courts look, not to uses to which a device might possibly be put, but to uses to which it would reasonably be put or of which it is reasonably capable. Federal Circuit decisions generally look to what is required of the claims. If a claim requires only capability to perform a function, manufacture of a device with that capability will infringe, while if the claim requires actual performance of the function, manufacture of the device will not infringe. Compare Intel Corp. v. U.S. International Trade Comm'n, 946 F.2d 821, 830-32, 20 USPQ2d 1161, 1169-71 (Fed. Cir. 1991) (claim's requirement of "programmable selection means" meant that the accused device, to be infringing, need only be capable of operation in the page mode; actual page mode operation was not required) with High Tech Medical Instrumentation, Inc. v. New Image Industries, Inc., 49 F.3d 1551, 33 USPQ2d 2005 (Fed. Cir. 1995) (“[A] device does not infringe simply because it is possible to alter it in a way that would satisfy all the limitations of a patent claim.”). 3

Legislative efforts to overrule Deepsouth have been extensive. However, the thrust of proposed legislation has not been directed to changing the meaning of "patented invention." For example, pending H.R. 4526, 98th Congress, 1st Session, provides in relevant part: (f) Whoever without authority supplies or causes to be supplied in the United States the material components of a patented invention, where such components are uncombined in whole or in part, intending that such components will be combined outside of the United States, and knowing that if such components were combined within the United States the combination would be an infringement of the patent, shall be liable as an infringer.

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This issue differs when the patent covers a process rather than a product for carrying out the process. The Federal Circuit has stated in clear terms that a patent cannot be infringed directly by the manufactures (or sale) of a product that is capable of performing a patented process: That the sale of equipment to perform a process is not a direct infringement of the process within the meaning of section 271(a) is . . . highlighted by 35 U.S.C. § 271(c) . . . which provides in pertinent part that such a sale may be a contributory infringement. To hold that the sale of equipment which performs a patented process is itself a direct infringement would make that portion of section 271(c) relating to the sale of an apparatus for use in practicing a patented process meaningless. Joy Technologies, Inc. v. Flakt, Inc., 6 F.3d 770, 773-74, 28 USPQ2d 1378, 1381-82 (Fed. Cir. 1993).

Using Difficult issues with regard to “use” are rare in the patent case law, whether the invention involves a product or a process. See Black & Decker (U.S.), Inc. v. Home Prod. Marketing, Inc., 929 F. Supp. 1114, 1121 (N.D. Ill. 1996) (“[F]ew cases discuss the question of whether a particular use is an infringing use under § 271(a), although some cases intimate that ‘use’ has never been taken to its ‘utmost possible scope.’”). The issues that have come up are covered below.

Beedle v. Bennett 122 U.S. 71, 7 S.Ct. 1090 (1887) MR. JUSTICE MATTHEWS delivered the opinion of the court. This is a bill in equity filed by the appellees, May 15, 1883, to restrain the alleged infringement of reissued letters patent No. 4,372, issued to Nelson W. Green, for a driven well. The cause was heard, by stipulation between the parties, upon an agreed statement of facts set out in the record, as follows: [The single reissue claim stated: “The process of constructing wells by driving or forcing an instrument into the ground until it is projected into the water without removing the earth upward, as it is in boring, substantially as herein described.”] ****

Upon the question of infringement, the agreed statement of facts shows the following: 'That the defendants have had in use on their farm for the past seven or eight years one or more driven wells, which wells were put down for the defendants by an ordinary well-driver in the following manner: A tube, of which the lower portion was perforated with small holes, and the lower end provided with a point, was driven into the ground until it projected into the water, without removing the earth upwards, as in boring. The water then entered the tube through the perforations, and was pumped up through the tube by an ordinary pump. That the defendants have never driven wells for themselves, except as above described, or for other purposes; never have sold or offered for sale driven wells, or the materials for driving them, but have simply used their own wells for their personal use on their farms.' It is now contended, on the part of the appellant, that the claim of the patent is for the process of driving the well, and not for the use of the well after it has been driven, and that consequently the appellant is not shown to have infringed; but, as has been shown in the case of Eames v. Andrews, the patent covers the process of drawing water from the earth by means of a well driven in the manner prescribed in the patent. The use of a well so constructed is therefore a continuing infringement, as every time water is drawn from it the patented process is necessarily used. As was said by Mr. Justice Blatchford in Andrews v. Cross, 19 Blatchf. 294, 305, 8 Fed. Rep. 269: 'Under this construction the defendant has infringed by using the pump in a driven well, constructed in a house hired by him, to obtain a supply of

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water for the use of his family, although he may not have paid for driving the well, or have procured it to be driven. Such use of the well was a use of the patented process.' The decree of the circuit court is accordingly affirmed. BRADLEY, FIELD, and GRAY, JJ., dissenting.

Zinn v. Weiss 7 F. 914 (C.C.E.D. N.Y. 1881) BENEDICT, D.J. This case comes before the court upon a motion for a preliminary injunction to restrain the defendant from making a certain form of pocket-book clasp, which, as the plaintiffs contend, infringe upon certain patents owned by them. The bill sets forth three patents—One, No. 47,135, issued to Charles Seaver, April 4, 1865, and assigned to the plaintiffs Zinn and Messer, October 18, 1879; another, re-issue No. 8,106, dated February 26, 1878, issued to Zinn and Messer, assignees of Louis Messer; and another, re-issue No. 8,123, dated March 12, 1878, issued to the same parties. The invention described in the Seaver patent is therein stated to consist in'A metallic plate, to be applied to the under lap or portion of the article of wearing apparel, and provided with a projecting pin or stud and a hinged cover or button, as it may be termed; the whole being so made and applied that the cover shall shut down upon the top of the stud, and enclosed under it the upper lap or portion of the coat or garment, which is to be provided with a hole or recess to put down over the stud.'

The claim is for an'Improved clothes-fastening attachment, the same consisting of the plates a and d, and the stud f, they being constructed and to operate in connection with an eyelet or hole in the outer flap of the garment, substantially in manner as hereinbefore explained.'

In respect to this patent the defendants sayFirst. That it is limited by the terms of the specification to a mode of fastening for garments, and inasmuch as the defendants make a clasp intended to be used on pocket-books, and nothing else, they do not infringe. The answer to this position is that the Seaver patent secures the combination or machine therein described, without regard to the purposes for which the fastening is intended; and if the defendant's clasp is in substance the same as that described in the Seaver patent, it constitutes an infringement of that patent, notwithstanding it is intended to be employed for a purpose not mentioned in the patent. The next position taken by the defendant isThat is the Seaver patent is held to cover the device therein described, without regard to the purposes for which it may be applicable, then the invention is anticipated by the ordinary corset fastening and the ordinary hand-bag fastening, of which specimens are put in evidence. But the corset fastening and the hand-bag fastening differ from the Seaver clasp in this: that in the Seaver clasp the button or cap is connected with, and hinged upon, the base, and the clasp operates by retaining between the cap and the base the article intended to be clasped; while in the corset fastening and the hand-bag fastening the two plates are not connected together, or hinged one upon the other, and the fastening is accomplished by attaching one plate to one side of the corset, or

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bag-opening, and the other to the other side, and then slipping an eyelet placed in one plate over a stud placed on the other plate. The difference between the two devices is plain and substantial. ****

Questions, Comments, Problems 1. Zinn indicates that use for a purpose that differs from that in the patent can still constitute infringement. However, the defendant’s use cannot be entirely disconnected from the concept underlying the claimed invention. As noted by one panel of the Second Circuit, alluding to an example suggested by counsel: [O]ne who constructs a patented wall safe but uses it only as the anchor for his boat would not be a patent infringer since such use would not be for the purpose of utilizing the teachings of the patent. Kaz Mfg. Co. v. Cheeseborough-Ponds, Inc., 317 F.2d 679, 137 USPQ 588 (2d Cir. 1963). 2. Demonstrations – The Federal Circuit has held that a patentee who manufactured and sold an apparatus that carried out a patented method, and demonstrated the apparatus to customers at annual open houses, infringed the method claims. See Mendenhall v. Cedarapids Inc., 5 F.3d 1557, 1579, 28 USPQ2d 1081, 1100 (Fed. Cir. 1993). But cf. Quantum Corp. v. Sony Corp., 16 USPQ2d 1447, 1450 (N.D. Calif. 1990) (“’[U]se’ . . . does not include the mere displaying of a device for promotional purposes.“). 3. Export – Suppose that you have manufactured a device but a patent has just issued that covers the device. What can you do with the device? You clearly cannot operate the device because that would be an infringing use. However, could you export the device to a country in which it is not patented? The Federal Circuit answered in the affirmative in Johns Hopkins University v. Cellpro, Inc., 152 F.3d 1342, 47 USPQ2d 1705 (Fed. Cir. 1998), where the patent covered suspensions of blood cells and monoclonal antibodies to make the suspensions. Cellpro had manufactured 100 vials of “hybridoma” material covered by the patent before the patent issued, and then exported six of them to a Canadian partner after the patent issued. As part of a larger injunction, the district court ordered the repatriation of those vials and products made from them after it had found that Cellpro undertook certain infringing actions related to other similar materials during the term of the patent. The Federal Circuit reversed: Section 283 of the Patent Code empowers the courts to "grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable." 35 U.S.C. § 283 (1994). In accordance with the clear wording of this section, "an injunction is only proper to the extent it is 'to prevent the violation of any right secured by patent.'" Eli Lilly & Co. v. Medtronic, Inc., 915 F.2d 670, 674, 16 USPQ2d 2020, 2024 (Fed. Cir. 1990) (quoting 35 U.S.C. § 283). A "necessary predicate" for the issuance of a permanent injunction is therefore a determination of infringement. Id. When deciding whether a district court abused the discretion provided by Section 283, we are mindful of the fact that the district courts are in the best position to fashion an injunction. . . . However, judicial restraint of lawful noninfringing activities must be avoided. See id. (citing Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 529-31, 173 USPQ 769, 773-74 (1972)). We agree with CellPro that the district court abused its discretion in ordering the repatriation and destruction of the exported vials. The repatriation aspect of the order does not enjoin activities that either have infringed the '204 patent or are likely to do so and thus does not prevent infringement—the proper purpose of an injunction under Section 283. It is clear that the six vials standing alone have not infringed the '204 patent. Mere possession of a product which becomes covered by a subsequently issued patent does not constitute an infringement of that patent until the product is used, sold, or offered for sale in the United States during the term of the patent. . . . Likewise, neither export from the United States nor use in a foreign country of a product covered by a United States patent constitutes infringement. See 35 U.S.C. § 271(a) (1994) . . . . That CellPro used other vials from the cell bank in an infringing manner in the United States does not taint the six exported vials with infringement. The exported vials were not "guilty by association." One may consider the pre-issuance manufacture of two machines, one of which is used after the patent is issued and the other of which is exported. An injunction requiring return of the exported machine, which was never made, used, or sold during the term of the patent in the United States, is beyond the scope of Section 283 and hence an abuse of discretion. The same principle applies here to the vials exported to Canada. Accordingly, the court's conclusion

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that use of some of the vials of the cell bank constituted a use of the cell bank "as a whole" as a means of justifying its repatriation order was an abuse of discretion. Moreover, there is also no evidentiary basis for concluding that the district court's order was necessary to prevent CellPro from committing further infringing activities. An injunction under Section 283 can reach extraterritorial activities such as those at issue here, even if these activities do not themselves constitute infringement. It is necessary however that the injunction prevent infringement of a United States patent. For example, in Spindelfabrik Suessen-Schurr v. Schubert & Salzer, 903 F.2d 1568, 14 USPQ2d 1913 (Fed. Cir. 1990), the infringer argued that the district court's injunction "impermissibly extend[ed] the reach of American patent law beyond the boundaries of the United States" because it prohibited the infringer from making, in Germany, machines "for use in the United States" and machines "destined for delivery to the United States." This court held that the injunction was "a reasonable and permissible endeavor to prevent infringement in the United States and not a prohibited extra-territorial application of American patent law. They were well within the district court's authority." Id. at 1578, 14 USPQ2d at 1921 (emphasis added). The record in this case does not, as in Spindelfabrik, suggest that the exported vials will be used in a manner which will infringe the patent. CellPro has stipulated, and Hopkins does not refute, that Biomira [Cellpro’s Canadian partner] intended to produce antibodies for CellPro in Canada "for use in products to be sold outside of the United States." . . . Because the record is devoid of evidence upon which the district court could have concluded that its order would prevent further infringement, there was no basis for the court to order the exported hybridomas and its byproducts to be shipped to the United States. Id. at 1365-67, 47 USPQ2d at 1723-24. 4. The Experimental Purpose Doctrine – In chapter 2, you learned about the experimental use doctrine—a doctrine that prevents pre-critical date uses by the patentee from triggering the one-year clock for filing a patent. The experimental purpose doctrine (also sometimes confusingly referred to as the experimental use doctrine) is the corollary to the experimental use doctrine. It provides a safe harbor, not for the patentee, but for an accused infringer. It grants an infringer immunity if the infringement was simply to satisfy a fancy or for research and experimentation and not for profit. The doctrine was alluded to in Whittemore v. Cutter, supra, as follows: Another objection is to the direction, that the making of a machine fit for use, and with a design to use it for profit, was an infringement of the patent right, for which an action was given by the statute. This limitation of the making was certainly favorable to the defendant, and it was adopted by the court from the consideration, that it could never have been the intention of the legislature to punish a man, who constructed such a machine merely for philosophical experiments, or for the purpose of ascertaining the sufficiency of the machine to produce its described effects. The Court in Sawin v. Guild, infra, cited this portion of Whittemore in stating: “[T]he making of a patented machine to be an offence within the purview of it, must be the making with an intent to use for profit, and not for the mere purpose of philosophical experiment, or to ascertain the verity and exactness of the specification.” The “no harm/no foul” basis for the doctrine is explained by Professor Robinson: The interest of the patentee is represented by the emoluments which he does or might receive from the practice of the invention by himself or others. These, though not always taking the shape of money, are of a pecuniary character. . . . Hence acts of infringement must attack the right of the patentee to these emoluments, and either turn them aside into other channels or prevent them from accruing in favor of any one. An unauthorized sale of the invention is always such an act. But the manufacture or the use of the invention may be intended only for other purposes, and produce no pecuniary result. Thus where it is made or used as an experiment, whether for the gratification of scientific tastes, or for curiosity, or for amusement, the interests of the patentee are not antagonized, the sole effect being of an intellectual character in the promotion of the employer’s knowledge or the relaxation afforded to his mind. But if the products of the experiment are sold, or used for the convenience of the experimentor, or if the experiments are conducted with a view to the adaptation of the invention to the experimenter’s business, the acts of making or of use are violations of the rights of the inventor and infringements of his patents. 3 Robinson, The Law of Patents for Useful Inventions § 898 (1890). Professor Chisum provides a thorough listing of the cases that have considered experimental purpose over the years. See 5 Donald S. Chisum, Chisum on Patents § 16.03[1][b].

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The issue of experimental purpose reached the Federal Circuit in Roche Products, Inc. v. Bolar Pharmaceutical Co., 733 F.2d 858, 221 USPQ 937 (Fed. Cir. 1984), where the defendant Bolar wanted to market a generic version of Roche’s patented drug upon the expiration of Roche’s patent, and argued that limited testing and investigation of the drug for FDA approval during the last six months of the patent’s term was excused as an infringement. The Federal Circuit (per the late Judge Nichols) disagreed: When Congress enacted the current revision of the Patent Laws of the United States, the Patent Act of 1952, ch. 950, 66 Stat. 792 (codified at 35 U.S.C.), a statutory definition of patent infringement existed for the first time since section 5 of the Patent Act of 1793 was repealed in 1836. Title 35 U.S.C. § 271(a) incorporates the disjunctive language of the statutory patent grant which gives a patentee the "right to exclude others from making, using, or selling" a patented invention, 35 U.S.C. § 154. Congress states in section 271(a): [W]hoever without authority makes, uses or sells any patented invention, within the United States during the term of the patent therefore, infringes the patent. It is beyond argument that performance of only one of the three enumerated activities is patent infringement. It is well-established, in particular, that the use of a patented invention, without either manufacture or sale, is actionable. . . . Section 271(a) prohibits, on its face, any and all uses of a patented invention. Of course, as Judge Learned Hand observed in Cabell v. Markham, 148 F.2d 737, 739 (2d Cir.), aff'd, 326 U.S. 404 (1945): [I]t is true that the words used, even in their literal sense, are the primary, and ordinarily the most reliable, source of interpreting the meaning of any writing: be it a statute, a contract, or anything else. But it is one of the surest indexes of a mature and developed jurisprudence not to make a fortress out of the dictionary; but to remember that statutes always have some purpose or object to accomplish, whose sympathetic and imaginative discovery is the surest guide to their meaning. Because Congress has never defined use, its meaning has become a matter of judicial interpretation. Although few cases discuss the question of whether a particular use constitutes an infringing use of a patented invention, they nevertheless convincingly lead to the conclusion that the word "use" in section 271(a) has never been taken to its utmost possible scope. . . . **** The so-called experimental use defense to liability for infringement generally is recognized as originating in an opinion written by Supreme Court Justice Story while on circuit in Massachusetts. In Whittemore v. Cutter, 29 Fed.Cas. 1120, 1121, (C.C.D. Mass. 1813) (No. 17,600), Justice Story sought to justify a trial judge's instruction to a jury that an infringer must have an intent to use a patented invention for profit, stating: [I]t could never have been the intention of the legislature to punish a man who constructed such a machine merely for philosophical experiments, or for the purpose of ascertaining the sufficiency of the machine to produce its described effects. Despite skepticism, see, e.g., Byam v. Bullard, 4 Fed.Cas. 934 (C.C.D. Mass. 1852) (No. 2,262) (opinion by Justice Curtis), Justice Story's seminal statement evolved until, by 1861, the law was "well-settled that an experiment with a patented article for the sole purpose of gratifying a philosophical taste, or curiosity, or for mere amusement is not an infringement of the rights of the patentee." Peppenhausen v. Falke, 19 Fed.Cas. 1048, 1049 (C.C.S.D.N.Y. 1861) (No. 11,279). . .. **** . . . Bolar concedes, as it must, that its intended use of flurazepam hcl does not fall within the "traditional limits" of the experimental use exception as established in these cases [from the Court of Claims] or those of other circuits. Its concession here is fatal. Despite Bolar's argument that its tests are "true scientific inquiries" to which a literal interpretation of the experimental use exception logically should extend, we hold the experimental use exception to be truly narrow, and we will not expand it under the present circumstances. Bolar's argument that the experimental use rule deserves a broad construction is not justified. ****

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Bolar's intended "experimental" use is solely for business reasons and not for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry. Bolar's intended use of flurazepam hcl to derive FDA required test data is thus an infringement of the '053 patent. Bolar may intend to perform "experiments," but unlicensed experiments conducted with a view to the adaption of the patented invention to the experimentor's business is a violation of the rights of the patentee to exclude others from using his patented invention. It is obvious here that it is a misnomer to call the intended use de minimis. It is no trifle in its economic effect on the parties even if the quantity used is small. It is no dilettante affair such as Justice Story envisioned. We cannot construe the experimental use rule so broadly as to allow a violation of the patent laws in the guise of "scientific inquiry," when that inquiry has definite, cognizable, and not insubstantial commercial purposes. Id. at 861-63, 221 USPQ at 939-41. The Federal Circuit then rejected Bolar’s second argument that the court should excuse Bolar’s infringement so as to avoid a conflict between the policies and purposes of the Federal Food, Drug, and Cosmetic Act and those of the Patent Act. The court concluded that such adjustments should be left to Congress. As you will learn in a coming section on the temporal dimension of the patent grant, Congress did respond in 1984, by providing certain protections from infringement for companies seeking FDA approval. Few cases that address experimental purpose have appeared since Roche. In one recent case, Giese v. Pierce Chemical Co., 29 F. Supp.2d 33, 49 USPQ2d 1498 (D. Mass. 1998), the patentee asserted that the defendants were infringing his patent on a method of attaching layers of chemical to one another. The defendants used and sold kits for detecting certain types of cells, such as cancer cells. The defendants sought summary judgment of no infringement under the experimental purpose exception as to kits that they sold to non-profit institutional, educational, and academic researchers. Although the court denied the motion because the defendants had failed to establish undisputed material facts to prove their defense, it nevertheless left open the possibility that they could later prevail on the issue. Interestingly, the court ruled that it was not relevant whether the defendants profited on the sale of the kits. That is because the patent covered a method that was allegedly practiced through use of the kits, so that only buyers of the kits could directly infringe the patent. The court therefore held that the experimental use inquiry had to be directed toward the end users of the kits. In Embrex, Inc. v. Service Engineering Corp., ___ F.3d ___, __ USPQ2d ___ (Fed. Cir. June 28, 2000), the court rejected an accused infringer’s argument that its infringement in its laboratory should have been excused as de minimus. Although the use may have been for scientific inquiry, observed the court, it nonetheless ultimately had a commercial purpose. In concurrence, Judge Rader expressed his opinion that there should be no de minimus or experimental use exception to infringement. On the former, he noted that under the patent statute, a patentee can prevent any "use" (without limitation) of the patented invention. He stated that the amount of use can be addressed when calculating damages. On experimental use, he noted that intent is not relevant to infringement, and at most, an experimental use defense should only survive if there is no commercial implication at all.

Selling and Offering to Sell From the layperson's standpoint, the most recognizable act of patent infringement of the "make, use, or sell" trilogy is sell. That is because a sale is clearly a commercial use, that often (but not always) causes direct financial harm in the form of lost profits to those patentees who practice their own patents or who compete with the infringer by using another technology. Even for non-manufacturing, nonselling patentees, one can quickly accept their entitlement to a "reasonable royalty" on sales by the infringer. For two centuries, however, there was no sanction under U.S. patent law for attempted sales as acts of direct infringement. To be sure, an eager salesperson's attempts to sell her wares could be considered an act of active inducement of infringement, a type of indirect infringement you will cover later in this chapter. However, every form of indirect infringement by one person requires a completed act of direct infringement by another. Hence, in the above hypothetical, the customer would have to obtain the

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device and use it to become a direct infringer, and by then, the likely means of affecting that transfer, a sale, would have made our hypothetical salesperson a direct infringer anyway. All of this made the timing of patent enforcement, including issues of venue and personal jurisdiction, difficult and not entirely in sync with modern commercial reality. This changed with Congressional action in 1994 to harmonize U.S. patent laws with those of many other countries, pursuant to the Uruguay Round Negotiations on Trade (see infra, this chapter). One of the critical changes in U.S. law was the addition, effective January 1, 1996, of "offering for sale" to section 154 as part of the exclusionary patent right and "offers to sell" to section 271(a) as an act of direct infringement. Now an attempt at making a sale is an act of direct patent infringement. One of the interesting ramifications of this change may be in the field of insurance for patent infringers. Traditionally, insurer's commercial liability policies did not mention patent infringement, but did cover "advertising injury." Until 1996, accused infringers seeking the help of insurers had great difficulty trying to shoe-horn patent infringement into the category of "advertising injury." But with offers for sale now considered patent infringement, to the extent that advertising is an offer to sell, one could envision the insurers having to pay up. Time will tell.

Sawin v. Guild 21 F. Cas. 554 (C.C.D. Mass. 1813) STORY, Circuit Justice. This is an action on the case for the infringement of a patent-right of the plaintiffs, obtained in February, 1811, for a machine for cutting brad nails. From the statement of facts agreed by the parties, it appears that the defendant is a deputy sheriff of the county of Norfolk, and having an execution in his hands against the plaintiffs for the sum of $567.27 debt and costs, by virtue of his office, seized and sold, on said execution, the materials of three of said patented machines, which were at the time complete and fit for operation, and belonged to the plaintiffs. The purchaser, at the sheriff's sale, has not, at any time since, put either of the said machines in operation; and the whole infringement of the patent consists in the seizure and sale by the defendant as aforesaid. The question submitted to the court is, whether the complete materials, of which a patented machine is composed, can, while such machine is in operation by the legal owner, be seized and sold on an execution against him. The plaintiffs contend, that it cannot be so seized and sold, and they rely on the language of the third section of the act of the 17th of April, 1800, c. 25, which declares that if 'any person, without the consent of the patentee, his or her executors, &c., first obtained in writing, shall make, devise, use, or sell the thing, whereof the exclusive right is secured to the said patentee, such person, so offending, shall forfeit,' &c. It is a sound rule of law, that every statute is to have a reasonable construction; and its language is not to be interpreted so as to introduce public mischiefs, or manifest incongruities, unless the conclusion be unavoidable. If the plaintiffs are right in their construction of the section above stated, it is practicable for a party to lock up his whole property, however great, from the grasp of his creditors, by investing it in profitable patented machines. This would undoubtedly be a great public mischief, and against the whole policy of the law, as to the levy of personal property in execution. And upon the same construction, this consequence would follow, that every part of the materials of the machine might, when separated, be seized in execution, and yet the whole could not be, when united; for the exemption from seizure is claimed, only when the whole is combined and in actual operation under the patent.

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We should not incline to adopt such a construction, unless we could give no other reasonable meaning to the statute. By the laws of Massachusetts, property like this is not exempted from seizure in execution; and an officer who neglected to seize, would expose himself to an action for damages, unless some statute of the United States should contain a clear exception. No such express exception can be found; and it is inferred to exist only by supposing, that the officer would, by the sale, make himself a wrong-doer, within the clause of the statute above recited. But within the very words of that clause, it would be no offence to seize the machine in execution. Hesse v. Stevenson, 3 Bos. & P. 565 (s. p.) The whole offence must consist in a sale. It would therefore follow, that the officer might lawfully seize; and if so, it would be somewhat strange, if he could not proceed to do those acts, which alone by law could make his seizure effectual. This court has already had occasion to consider the clause in question, and upon mature deliberation, it has held that the making of a patented machine to be an offence within the purview of it, must be the making with an intent to use for profit, and not for the mere purpose of philosophical experiment, or to ascertain the verity and exactness of the specification. Whittemore v. Cutter[, 29 F. Cas. 1120 (C.C.D. Mass. 1813)]. In other words, that the making must be with an intent to infringe the patent-right, and deprive the owner of the lawful rewards of his discovery. In the present case, we think that a sale of a patented machine, within the prohibitions of the same clause, must be a sale not of the materials of a machine, either separate or combined, but of a complete machine, with the right, express or implied, of using the same in the manner secured by the patent. It must be a tortious sale, not for the purpose merely of depriving the owner of the materials, but of the use and benefit of his patent. There is no pretence, in the case before us, that the officer had either sold or guaranteed a right to use the machine in the manner pointed out in the patent-right. He sold the materials as such, to be applied by the purchaser as he should by law have a right to apply them. The purchaser must therefore act on his own peril, but in no respect can the officer be responsible for his conduct. Conformably to the agreement of the parties, a nonsuit must be entered.

Questions, Comments, Problems 1. ITC: “Sale for importation” – You have seen that patentees may bring suit before the International Trade Commission (ITC) to block importation of infringing items into the United States. Section 337 of the Tariff Act requires an “importation” or a “sale for importation” before the ITC may exercise jurisdiction over a case. The Federal Circuit considered the meaning of “sale” in the section 337 context recently in Enercon GmbH v. International Trade Commission, 151 F.3d 1376, 47 USPQ2d 1725 (Fed. Cir. 1998). There, an American company (NWP) had bid on the construction of a wind farm project in Texas after requesting a price quote and receiving an open offer from Enercon for its wind turbines. In its bid, NWP expressed its intent to use Enercon’s turbines. NWP eventually received the contract, further work on the project continued with Enercon listed as the turbine supplier, and NWP displayed posters of Enercon’s turbines and discussed their expected use in the project at an industry conference. The Federal Circuit ruled that these facts supported a finding by the ITC that a jurisdiction-conferring “sale for importation” had been made. Judge Gajarsa wrote for the court: Enercon argues that the ITC erroneously based its interpretation of the term "sale" in section 337 upon the definition of "sale" in U.C.C. § 2-106(1) and that the ITC should have interpreted the term "sale" to require a "delivery" of the goods to the purchaser. Enercon asserts that under this more restrictive definition of "sale," the ITC does not have jurisdiction over Enercon's wind turbines since there was never a "delivery" of the turbines to NWP. As the ITC correctly pointed out, the term "sale" is not defined within section 337. There is also no explicitly stated definition of the term "sale" in the legislative history of section 337. We therefore believe that Congress intended to give the term its ordinary meaning, thereby making an explicit definition unnecessary. Black's Law Dictionary defines the term "sale" as "[a] contract between two parties, called, respectively, the 'seller' (or vendor) and the 'buyer' (or purchaser), by which the former, in

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consideration of the payment or promise of payment of a certain price in money, transfers to the latter the title and the possession of the property." Black's Law Dictionary (6th ed. 1990). Webster's Dictionary defines the term "sale" as "the act of selling: a contract transferring the absolute or general ownership of property from one person . . . to another for a price . . . ." Webster's Third New International Dictionary 2003 (1986). Plainly, the common, or usual meaning of the term sale includes those situations in which a contract has been made between two parties who agree to transfer title and possession of specific property for a price. The U.C.C. has been recognized as the general law governing the sale of goods and is another useful, though not authoritative, source in determining the ordinary commercial meaning of the term "sale." Section 2-106, which defines the various terms used throughout the U.C.C., states that a "'[c]ontract for sale' includes both a present sale of goods and a contract to sell goods at a future time." Section 2-106 further states that a "'present sale' means a sale which is accomplished by the making of the contract." Id. Therefore, the U.C.C. is in accordance with the above referenced dictionaries in defining the term "sale" as having been accomplished when a contract for the transfer of goods has been completed. There is nothing in section 337 to contradict this interpretation. Enercon argues that the term "sale" as used in section 337 inherently requires that title in specific goods pass from the buyer to the seller and that without such "delivery" of the goods, no "sale" within the meaning of section 337 has occurred. In particular, Enercon reads the phrase "[a] sale consists in the passing of title in specific existing goods from the seller to the buyer for a price" in section 2-106 as requiring a "delivery" of control of the goods to a U.S. domiciliary desiring to import them, even if the goods are not physically sent to the buyer. Thus, Enercon argues that before the ITC may assume jurisdiction under the phrase "sale for importation," there must be: 1) delivery of title and control of the goods to the buyer; and 2) a buyer who is a U.S. domiciliary intending to import the goods into the U.S. We detect no such restrictions on the term "sale." It is common for a "sale" to be completed even though delivery is to be made in the future. . . . The term "sale" in section 337 therefore does not require an immediate "delivery" of the goods in order for the ITC to assume jurisdiction. **** The ITC's determination that the phrase "sale for importation" includes the situation in which a contract for goods has been formed in accordance with section 2-204(1) of the U.C.C. is a reasonable interpretation of 19 U.S.C. § 1337 that we must uphold under the standards set forth by the Supreme Court in Chevron. We must next review whether substantial evidence supports the ITC's finding that a contract has been formed between Enercon and NWP for the sale of the accused goods thereby bringing those goods within the jurisdiction of the ITC under section 337. Section 2-204(1) of the U.C.C. provides that "a contract for [the] sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract . . . even though the moment of its making is undetermined." The ITC found that the writings and conduct of Enercon and NWP demonstrated, by more than a preponderance of the evidence, that NWP and Enercon had entered into a contract for the sale of Enercon's wind turbines for importation into the United States. In support, the ITC pointed to compelling evidence that NWP bid on the Big Springs project using the price quoted to it by Enercon and specifically stated that it would use Enercon's E-40 wind turbines. The ITC also found persuasive Enercon's documents that demonstrated an intent to deliver the turbines to NWP once Enercon learned that NWP's bid on the Big Springs project had been accepted by TU. The ITC concluded from the totality of the written documentation and contemporaneous conduct by the parties that there was a clear intent by both Enercon and NWP to enter into a contract for the sale of Enercon's E-40 wind turbines. Enercon argues that the ITC failed to consider evidence that in late 1995, after the ITC began its investigation of Enercon, Enercon's managing director, Mr. Wobben, orally informed NWP that Enercon would not supply NWP with wind turbines for the Big Springs project. Enercon argues that this statement effectively cancelled any oral contract that may have been formed, thereby precluding the ITC from assuming jurisdiction in this case. The ITC plainly considered this evidence, but rejected Enercon's assertion, explaining that despite this statement, the evidence did not support a conclusion that Enercon would refrain from sending the accused products into the United States. In addition, this evidence is directly contrary to the deposition testimony of Mr. John Kuhns who stated that Mr. Wobben never indicated that he would not supply the wind turbines to NWP. We believe that the evidence presented fully supports a conclusion that a contract had been formed between Enercon and NWP, thereby

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bringing the accused devices within the ITC's jurisdiction under section 337. We therefore affirm the determination of the ITC that it had jurisdiction over the accused wind turbines. Id. at 1381-82, 1383, 47 USPQ2d at 1729-30, 1730-31. Do you agree that a contract was formed between the two parties? If the sale was conditional on NWP’s getting the bid, would that have meant no ITC jurisdiction attached until the bid was awarded to NWP? Could Enercon have sued NWP if NWP had decided not use Enercon turbines in the project? Is it likely that the court’s analysis of “sale” under the U.C.C. will be applied outside the context of the ITC? Is “on sale” in section 102(b) a broader concept than “sale”? 2. In the last section on “use” as an infringement, one note mentioned that although operation of an infringing device as part of a demonstration could constitute infringement, some courts have held that mere display of an infringing device is not an infringement. Perhaps the addition of “offer to sell” as an act of infringement provides a new avenue for a patentee to pursue those who merely display a product (or makes proof of infringement easier when it is hard to establish that a device was actually sold).

The Temporal Dimension 1.

The Patent Term

Most people agree that it is a good idea to provide inventors with a reward for disclosing their inventions to the public. It is also generally agreed, and the Constitution commands, that an exclusive right with respect to the invention for a limited time is the appropriate reward. However, the policy argument still rages regarding how to fine tune the disclosure/reward equation. As you saw in chapter 4 on nonobviousness, the courts have struggled in defining the extent to which an inventor must contribute to the art before being eligible for a patent. In contrast, Chapter 8 on doctrine of equivalents infringement showed the struggle the courts have had in determining how broadly to apply a patent. We now reach a third gray area, which has been worked out in Congress rather than in the courts: patent term. The original 1790 Act followed the English Statute of Monopolies, which awarded patents of fourteen years or less, thus provided protection at a maximum for two seven-year apprenticeships. Although the fourteen-year term was retained in the 1836 Act, it also provided for a seven-year extension that could be obtained from the Patent Board (consisting of the Secretary of State, the Patent Office Commissioner, and the Solicitor of the Treasury) if “without neglect of fault” on the patentee’s part, he had “failed to obtain, from the use and sale of his invention, a reasonable renumeration for the time, ingenuity, and expense bestowed upon the same, and the introduction thereof into use.” Act of July 4, 1836, ch. 357, § 18. In the 1861 Act, Congress eliminated the provisions for term extension and simply set the patent term at “seventeen years from the date of issue.” Act of Mar. 2, 1861, ch. 88, § 16. The seventeen-year term stayed fixed through the 1870 and 1952 Acts. After more than 130 years of seventeen-year patent terms, and after three decades of debates regarding problems caused by calculating patent terms from issuance, Congress made a major change to patent term computation in 1994. The years of debate often focused on problematic “submarine patents,” a pejorative term for patents that issue after years or decades in the patent office, and upon issuance, pop up in the middle of advanced industries with billions of dollars in profits (and potential infringement damages). In the debates, it was often alleged that parties filed patent applications on speculative inventions and deliberately delayed the prosecution of the patents. By measuring the patent term from the filing date, rather than the issue date, the argument went, the problem of submarine patents could be eliminated. See President’s Comm’n on the Patent System, “To Promote the Progress of . . . Useful Arts” in an Age of Exploding Technology 33-34 (1966) (quoted in 5 Donald S. Chisum, Chisum on Patents § 16.04[1].

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The immediate incentive for Congress’ action in 1994, however, was provided, not by the debate over submarine patents, but by a need for international harmonization of patent laws. The Uruguay Round negotiations on trade under the General Agreement on Tariffs and Trade (GATT), established the World Trade Organization (WTO) and added an Agreement on Trade-Related Aspects of Intellectual Property (TRIPs). TRIPs set forth standards for all types of intellectual property protection, and provided in Article 33 on patents: “The term of protection available shall not end before the expiration of a period of twenty years counted from the filing date.” In early 1994, Japan and the United States also reached an agreement that Japan would permit filing of patent applications in English in Japan if the United States would adopt a patent term measured 20 years from the filing date. The patent changes were submitted to Congress by the Clinton administration as part of a comprehensive GATT bill, and after tweaking and political wrangling, were signed into law on December 8, 1994, and became effective on June 8, 1995. The changes were implemented by amending section 154(a)(2) of the Patent Code to read: Term. – Subject to the payment of fees under this title, such grant shall be for a term beginning on the date on which the patent issues and ending 20 years from the date on which the application for the patent was filed in the United States, or, if the application contains a specific reference to an earlier filed application or applications under section 120, 121, or 365(c) of this title, from the date on which the earliest such application was filed.

This provision applies only to applications filed on or after June 8, 1995. For applications filed before that date, the term is the greater of 17 years from the issue date or 20 years from the filing date of the earliest referenced application. You can imagine the number of applications that were filed on June 7, 1995 to take advantage of this provision. To be fair to patentees that pushed their applications quickly through the PTO, section 154(c) was also amended to provide a similar term (i.e., greater of 17-fromissue or 20-from-filing) for patents that were in force on June 8, 1995, and had issued less than three years after their applications were filed. Some remedies for this “delta” period are limited, however.

2.

Patent Term Extensions

Another important point regarding patent terms relates to technologies that are subject to FDA approval. After the Federal Circuit’s 1984 decision in Roche Products, Inc. v. Bolar Pharmaceutical Co., which held that infringement of a drug patent by a generic drug manufacturer during FDA approval was not excused, Congress passed the Drug Price Competition and Patent Restoration Act of 1984, and its Title II, popularly referred to as the “Hatch-Waxman Act.” In a complex statutory scheme, the Act added section 271(e) to Title 35: (e) (1) It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention (other than a new animal drug or veterinary biological product (as those terms are used in the Federal Food, Drug, and Cosmetic Act and the Act of March 4, 1913) which is primarily manufactured using recombinant DNA, recombinant RNA, hybridoma technology, or other processes involving site specific genetic manipulation techniques) solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products. (2) It shall be an act of infringement to submit (A) an application under section 505(j) of the Federal Food, Drug, and Cosmetic Act or described in section 505(b)(2) of such Act for a drug claimed in a patent or the use of which is claimed in a patent, or (B) an application under section 512 of such Act or under the Act of March 4, 1913 (21 U.S.C. 151-158) for a drug or veterinary biological product which is not primarily manufactured using recombinant DNA, recombinant RNA, hybridoma technology, or other processes involving site

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specific genetic manipulation techniques and which is claimed in a patent or the use of which is claimed in a patent, if the purpose of such submission is to obtain approval under such Act to engage in the commercial manufacture, use, or sale of a drug or veterinary biological product claimed in a patent or the use of which is claimed in a patent before the expiration of such patent. (3) In any action for patent infringement brought under this section, no injunctive or other relief may be granted which would prohibit the making, using, offering to sell, or selling within the United States or importing into the United States of a patented invention under paragraph (1). (4) For an act of infringement described in paragraph (2) (A) the court shall order the effective date of any approval of the drug or veterinary biological product involved in the infringement to be a date which is not earlier than the date of the expiration of the patent which has been infringed, (B) injunctive relief may be granted against an infringer to prevent the commercial manufacture, use, offer to sell, or sale within the United States or importation into the United States of an approved drug or veterinary biological product, and (C) damages or other monetary relief may be awarded against an infringer only if there has been commercial manufacture, use, offer to sell, or sale within the United States or importation into the United States of an approved drug or veterinary biological product. The remedies prescribed by subparagraphs (A), (B), and (C) are the only remedies which may be granted by a court for an act of infringement described in paragraph (2), except that a court may award attorney fees under section 285.

(Emphasis added.) With this provision and others, Congress provided extensions of patent terms for patents on products subject to FDA review, an extra infringement remedy specifically for those patents, and abbreviated new drug applications (ANDAs) for companies wishing to make an equivalent of an FDA-approved product. The legislation generally responded to two “distortions” in patent protection for products subject to FDA approved products. First, patentees often received their patents several years before they received FDA approval, so that the clock was running against their patent term when they could do nothing with their product. Second, manufacturers that wanted to compete with patentees immediately upon expiration of the relevant patent could not do so because any testing of the product would be an infringement of the patent, so they could not even begin testing until the patent expired. Congress in 1984 removed both distortions, by granting patent term extensions for patents on inventions that had received extensive regulatory delays (section 201 of the Act), and by allowing competitors, before a patent’s expiration, to engage in activities necessary for regulatory approval without facing infringement charges (section 202 of the Act). The determination of term extension is very complicated and involves both FDA and PTO involvement. A patentee might not recover the entire amount of the patent term that is lost to FDA approval, because: (1) where patents issued and testing began before 1984, the total extension is limited to two years (and is otherwise limited to five years); (2) the effective patent term (even with extension) cannot exceed fourteen years following FDA approval; (3) there may be only one extension of a patent term; and (4) the restoration applies only to the product on which extension is based, and not to all products covered by the patent. See Merck & Co., Inc. v. Kessler, 80 F.3d 1543, 38 USPQ2d 1347 (Fed. Cir. 1996). Various conditions for obtaining a term extension are laid out in section 156(a) of the Patent Code. The Hatch-Waxman Act also provided a rather complex system for adjudicating patent infringement in cases where a second-comer, such as a maker of a generic drug, not only wants to begin the FDA approval process during the patent term, but also wants to market and sell the drug. Although section Chapter 9 – Dimensions of Patent Coverage

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271(e)(1) exempts activities under the FDA approval process from infringement, section 271(e)(2) expressly makes it an act of infringement to submit certain applications, such as ANDAs, under the Federal Food, Drug, and Cosmetics Act (FDCA). Interestingly, the interpretation of section 271(e) first reached the Supreme Court, not in a drug case, but in a medical device case. In Eli Lilly and Co. v. Medtronic, Inc., 496 U.S. 661, 15 USPQ2d 1121 (1990), the issue was whether the use of an implantable cardiac defibrillator—which is not a drug but may be regulated by the FDA under the Federal Food Drug and Cosmetic Act (FDCA)—to develop and submit information for marketing approval under the FDCA, came within the safe harbor of section 271(e)(1) on the ground that the FDCA is a “Federal law which regulates the manufacture, use, or sale of drugs.” The Supreme Court affirmed the Federal Circuit in holding that the exemption from infringement under section 271(e) applies to medical devices in addition to drugs. In the process the Court (per Justice Scalia) nicely summarized the procedural framework for infringement challenges under section 271(e): The function of the paragraphs in question [sections 271(e)(2) and 271(e)(4)] is to define a new (and somewhat artificial) act of infringement for a very limited and technical purpose that relates only to certain drug applications. As an additional means of eliminating the de facto extension at the end of the patent term in the case of drugs, and to enable new drugs to be marketed more cheaply and quickly, § 101 of the 1984 Act amended § 505 of the FDCA, 21 U.S.C. § 355, to authorize abbreviated new drug applications (ANDA's), which would substantially shorten the time and effort needed to obtain marketing approval. An ANDA may be filed for a generic drug that is the same as a so-called "pioneer drug" previously approved, see § 355(j)(2)(A), or that differs from the pioneer drug in specified ways, see § 355(j)(2)(C). The ANDA applicant can substitute bioequivalence data for the extensive animal and human studies of safety and effectiveness that must accompany a full new drug application. Compare § 355(j)(2) (A)(iv) with § 355(b)(1). In addition, § 103 of the 1984 Act amended § 505(b) of the FDCA, § 355(b), to permit submission of a so-called paper new drug application (paper NDA), an application that relies on published literature to satisfy the requirement of animal and human studies demonstrating safety and effectiveness. See § 355(b)(2). Like ANDA's, paper NDA's permit an applicant seeking approval of a generic drug to avoid the costly and time-consuming studies required for a pioneer drug. These abbreviated drug-application provisions incorporated an important new mechanism designed to guard against infringement of patents relating to pioneer drugs. Pioneer drug applicants are required to file with the FDA the number and expiration date of any patent which claims the drug that is the subject of the application, or a method of using such drug. See § 355(b)(1). ANDA's and paper NDA's are required to contain one of four certifications with respect to each patent named in the pioneer drug application: (1) "that such patent information has not been filed," (2) "that such patent has expired," (3) "the date on which such patent will expire," or (4) "that such patent is invalid or will not be infringed by the manufacture, use, or sale of the new drug for which the application is submitted." § 355(b)(2)(A), § 355(j)(2)(A)(vii). This certification is significant, in that it determines the date on which approval of an ANDA or paper NDA can be made effective, and hence the date on which commercial marketing may commence. If the applicant makes either the first or second certification, approval can be made effective immediately. See § 355(c)(3)(A), § 355(j)(4)(B)(i). If the applicant makes the third certification, approval of the application can be made effective as of the date the patent expires. See § 355(c)(3)(B), § 355(j)(4)(B)(ii). If the applicant makes the fourth certification, however, the effective date must depend on the outcome of further events triggered by the Act. An applicant who makes the fourth certification is required to give notice to the holder of the patent alleged to be invalid or not infringed, stating that an application has been filed seeking approval to engage in the commercial manufacture, use, or sale of the drug before the expiration of the patent, and setting forth a detailed statement of the factual and legal basis for the applicant's opinion that the patent is not valid or will not be infringed. See § 355(b)(3)(B), § 355(j)(2)(B)(ii). Approval of an ANDA or paper NDA containing the fourth certification may become effective immediately only if the patent owner has not initiated a lawsuit for infringement within 45 days of receiving notice of the certification. If the owner brings such a suit, then approval may not be made effective until the court rules that the patent is not infringed or until the expiration of (in general) 30 months, whichever first occurs. See § 355(c)(3)(C), § 355(j)(4)(B)(iii). This scheme will not work, of course, if the holder of the patent pertaining to the pioneer drug is disabled from establishing in court that there has been an act of infringement. And that was precisely the disability that the new 35 U.S.C. § 271(e)(1) imposed with regard to use of his patented invention only for the purpose of obtaining premarketing approval. Thus, an act of infringement had to be created for

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these ANDA and paper NDA proceedings. That is what is achieved by § 271(e)(2)—the creation of a highly artificial act of infringement that consists of submitting an ANDA or a paper NDA containing the fourth type of certification that is in error as to whether commercial manufacture, use, or sale of the new drug (none of which, of course, has actually occurred) violates the relevant patent. Not only is the defined act of infringement artificial, so are the specified consequences, as set forth in subsection (e)(4). Monetary damages are permitted only if there has been "commercial manufacture, use, or sale." § 271(e)(4)(C). Quite obviously, the purpose of subsections (e)(2) and (e)(4) is to enable the judicial adjudication upon which the ANDA and paper NDA schemes depend. It is wholly to be expected, therefore, that these provisions would apply only to applications under the sections establishing those schemes—which (entirely incidentally, for present purposes) happen to be sections that relate only to drugs and not to other products. *** No interpretation we have been able to imagine can transform § 271(e)(1) into an elegant piece of statutory draftsmanship. To construe it as the Court of Appeals [for the Federal Circuit] decided, one must posit a good deal of legislative imprecision; but to construe it as petitioner would, one must posit that and an implausible substantive intent as well. The judgment of the Court of Appeals is affirmed, and the case is remanded for further proceedings consistent with this opinion.

Id. at 676-79.

3.

Activities Before A Patent Issues

A patent cannot be asserted or infringed until it issues. Therefore, anyone may make, use, offer to sell, or sell an invention covered by the claims in a pending patent application without liability. However, post-issuance use of a device that was made or acquired while a patent was pending can constitute infringement of the patent.

4.

Activities After a Patent Expires

A patent has no effect once it has expired, but activities that occurred during the patent term may nevertheless support a post-expiration infringement suit. See Roche Prods., supra (injunctive relief may be warranted after expiration). Actions taken by a party during the patent term in preparation for post-expiration “infringement” will not support a charge of infringement if they do not themselves constitute the making, using, offering to sell, or selling of the patented invention. Where the patent claims only a process or method, a party may, during the patent term, even enter into and perform contracts for building plants or equipment for carrying out the method or process as long as the method or process itself is not offered for sale, sold, or practiced. See Joy Technologies, Inc. v. Flakt, Inc., 6 F.3d 770, 28 USPQ2d 1378 (Fed. Cir. 1993). But cf. Paper Converting, supra.

The Geographic Dimension 1.

Exportation

As you saw from the Federal Circuit’s discussion of the 1972 Deepsouth decision in Paper Converting, supra, U.S. patents are limited to U.S. territory. However, the technical harshness of Deepsouth caused Congress to overrule it in 1984 by the addition of subsection (f) to section 271. The new provision states:

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(f) (1) Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer. (2) Whoever without authority supplies or causes to be supplied in or from the United States any component of a patented invention that is especially made or especially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial noninfringing use, where such component is uncombined in whole or in part, knowing that such component is so made or adapted and intending that such component will be combined outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.

Not much case law on subsection (f) has developed since its enactment in 1984. The subsection in effect proscribes “substantial” infringement in this country that is completed outside of its borders. Are principles of territoriality and international comity violated by it? The Federal Circuit assumed, without holding, that the statute was not retroactive in Amstar Corp. v. Envirotech Corp., 823 F.2d 1538, 1546, 3 USPQ2d 1412, 1417 (Fed. Cir. 1987). A few years later, a district court construed subsection (f)(1) to include the possibility that an exporter could infringe this provision by "actively inducing" itself to infringe when the exporter also did the assembly outside the U.S. See T.D. Williamson Inc. v. Laymon, 723 F. Supp. 587, 13 USPQ2d 1417 (N.D. Okla. 1989), aff’d, 923 F.2d 871, 18 USPQ2d 1575 (Fed. Cir. 1990) (unpublished). Another twist was whether the exported components need to have been manufactured in the U.S. to invoke the subsection. One district court in dictum suggested that they did, relying on the need to show that “making” occurred in the U.S. because of its view of how subsection(f) overruled Deepsouth. See Windsurfing Int’l, Inc. v. Fred Ostermann GmbH, 668 F. Supp. 812, 820-21, 4 USPQ2d 1429, 1436-37 (S.D.N.Y. 1987),

2.

Importation

The Process Patents Amendment Act of 1988 (“PPAA”) added subsection (g) to section 271, and effective 1996, Congress amended the new subsection to include offers for sale in addition to simple sales. The result is the following language, in effect since January 1996: (g) Whoever without authority imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer, if the importation, offer to sell, sale, or use of the product occurs during the term of such process patent. In an action for infringement of a process patent, no remedy may be granted for infringement on account of the noncommercial use or retail sale of a product unless there is no adequate remedy under this title for infringement on account of the importation or other use, offer to sell, or sale of that product. A product which is made by a patented process will, for purposes of this title, not be considered to be so made after (1) it is materially changed by subsequent processes; or (2) it becomes a trivial and nonessential component of another product.

Congress made corresponding amendments to section 287 in 1988 and 1996. Subsection (b) was added to section 287 to establish an elaborate set of procedures for determining the level of remedies available against different categories of infringing importers. For example, the relative good faith of an importer as ascertained by its compliance (or lack of compliance) with certain investigatory Chapter 9 – Dimensions of Patent Coverage

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requirements may affect the scope of the remedies available to the patentee. For example, an importer that returns to its manufacturer for information about the manufacturing process can lessen the potential remedies. The interesting Federal Circuit decisions deal with different aspects of the complex statutory structure established by the PPAA. In Bio-Technology General Corp. v. Genentech, Inc., 80 F.3d 1553, 38 USPQ2d 1321 (Fed. Cir. 1996), the court stressed that infringement under section 271(g) is not the making of a product by a process patented in the U.S., but rather the importation, offer to sell, sale, or use of the product made by such a process. Liability arises if the importation, etc. occurs during the term of the patent even if the making occurred before the effective date of the new statute. The court construed the Grandfather Clause (i.e., for sale or use in the U.S. or preparations for same before January 1, 1988) as not saving the importer Bio-Technology General Corp. because the importer’s investment was outside the U.S. and thus equitable relief in favor of the importer was not warranted. Finally, the court held that the imported human growth hormone (“hGH”) was “made by” the patented process for making a replicable cloning vehicle (i.e., a “plasmid”). It rejected the argument that the “materially changed by subsequent processes” exception of section 271(g)(1) applied to the situation in which the plasmid produced by a patented process was then used to generate (“express”) the intended protein—hGH. It relied on legislative history for that interpretation. One month later, the Federal Circuit decided Eli Lilly & Co. v. American Cyanamid Co., 82 F.3d 1568, 38 USPQ2d 1705 (Fed. Cir. 1996), and came out the other way on the “materially changed by subsequent processes” exception in a quite different factual context. In Lilly, the patented covered a process for making a biochemical “intermediate” that, with four subsequent steps, would become the valuable antibiotic, ceflacor. Because the importers imported ceflacor, and not the intermediate, the court (per Judge Bryson) affirmed the denial of patentee Lilly’s motion for a preliminary injunction on the ground that it was likely that ceflacor would be found after trial to involve a “material change.” The court conducted a thorough review of the legislative history supporting its view. One may ask what the big deal is with section 271(g), when the International Trade Commission (ITC) has for years been able to block importation of products produced by patented processes practiced abroad pursuant to 19 U.S.C. § 1337. The answer is essentially twofold: (1) the ITC cannot award damages (it may instead only block importation), and (2) a complainant at the ITC, to establish the right to an “exclusion order,” must first prove that there is a “domestic industry” associated with the asserted U.S. patent. The latter is not always easy, especially when the complainant is itself a foreign company.

Other Limits on Patent Enforcement Under the statute, only a party that makes, uses, offers to sell, sells or imports “without authority” is an infringer. Although a patentee may grant someone an express license to practice a patented invention, the patentee may also give up its rights impliedly, for example, by giving or selling an item covered by the patent to another party. Generally, a patent can lose its rights in this way either under the “first sale” or “exhaustion” doctrine, where the patentee sells without limitation an embodiment of the patented invention, or under an “implied license,” where the patentee sells without limitation a component that is useful in practicing the invention.

United States v. Univis Lens Co. 316 U.S. 241, 53 USPQ 404 (1942) Mr. Chief Justice STONE delivered the opinion of the Court. Chapter 9 – Dimensions of Patent Coverage

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**** Appellee, Univis Lens Company, was the owner of a number of patents and two trademarks relating to multifocal lenses. In 1931 it organized appellee, Univis Corporation. The Lens Company then acquired and now holds a majority of the stock of the Corporation. The individual appellees are the principal stockholders of the Lens Company. They are stockholders in the Corporation and are the principal officers of both corporations, which may for the purposes of this suit be treated as though they were a single corporation. Upon the organization of the Corporation, the Lens Company transferred to it all its interest in the patents and trademarks presently involved, and the Corporation then proceeded to set up and has since maintained the licensing system which the Government now assails. The relevant features of the system are as follows: The Corporation licenses the Lens Company to manufacture lens blanks and to sell them to designated licensees of the Corporation, upon the Lens Company's payment to the Corporation of an agreed royalty of 50 cents a pair. The lens blanks are rough opaque pieces of glass of suitable size, design and composition for use, when ground and polished, as multifocal lenses in eyeglasses. Each blank is composed of two or more pieces of glass of different refractive power, of such size, shape, and composition and so disposed that when fused together in the blank it is said to conform to the specifications and claims of some one of the Corporation's patents. **** The Corporation pursues the policy of issuing licenses to 'qualified licensees' who, it is said, are required to maintain 'high standards of practice' and to be skilled in the performance of the services which they undertake to render. According to the Corporation's instructions to its field representatives, 'price cutters' are not eligible as prescription retailer licensees. Inquiry is made to ascertain whether prospective licensees advertise prices, and whether they are considered in their communities to be price cutters. The Corporation cancels licenses principally because of the failure of licensees to adhere to the price fixing provisions but also because they advertise prices or the acceptance of installment payments, or for other forms of advertising objectionable to it; for selling Univis lenses to customers other than those designated by the Corporation; for not giving a certain percentage of the licensees' multifocal lens business to Univis; because the licensee is located in a drug, department or jewelry store, or because the licensee engaged in price cutting in the sale of the products of other manufacturers. **** The record gives no account of the prior art and does not provide us with other material to which, if available, resort might appropriately be had in determining the nature of an alleged invention and the validity and scope of the patent claims founded upon it. In any event we find it unnecessary, in the circumstances of this case, to decide whether, as the court below held, the patent claims can rightly be said to include the finishing of the blanks. As appellees concede, the invention of only a single lens patent is utilized in making each blank and finishing it as a lens. We therefore put to one side questions which might arise if the finisher of a particular lens blank utilized the invention of some patent other than the patent which was practiced in part by the manufacture of the blank. And we assume for present purposes, without deciding, that the patent is not fully practiced until the finishing licensee has ground and polished the blank so that it will serve its purpose as a lens. But merely because the licensee takes the final step in the manufacture of the patented product, by doing work on the blank which he has purchased from the patentee's licensee, it does not follow that the patentee can control the price at which the finished lens is sold. Notwithstanding the assumption which we have made as to the scope of the patent, each blank, as appellees insist, embodies essential features of the patented device and is without utility until it is ground and polished as the finished lens of the patent. We may assume also, as appellees contend, that sale of the blanks by an unlicensed manufacturer to an unlicensed finisher for their completion would constitute contributory infringement by the seller. . . .

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But in any case it is plain that where the sale of the blank is by the patentee or his licensee—here the Lens Company—to a finisher, the only use to which it could be put and the only object of the sale is to enable the latter to grind and polish it for use as a lens by the prospective wearer. An incident to the purchase of any article, whether patented or unpatented, is the right to use and sell it, and upon familiar principles the authorized sale of an article which is capable of use only in practicing the patent is a relinquishment of the patent monopoly with respect to the article sold. Leitch Mfg. Co. v. Barber Co., 302 U.S. 458, 460; B. B. Chemical Co. v. Ellis, 314 U.S. 495. Sale of a lens blank by the patentee or by his licensee is thus in itself both a complete transfer of ownership of the blank, which is within the protection of the patent law, and a license to practice the final stage of the patent procedure. In the present case the entire consideration and compensation for both is the purchase price paid by the finishing licensee to the Lens Company. We have no question here of what other stipulations, for royalties or otherwise, might have been exacted as a part of the entire transaction, which do not seek to control the disposition of the patented article after the sale. The question is whether the patentee or his licensee, no longer aided by the patent, may lawfully exercise such control. The declared purpose of the patent law is to promote the progress of science and the useful arts by granting to the inventor a limited monopoly, the exercise of which will enable him to secure the financial rewards for his invention. . . . The full extent of the monopoly is the patentee's 'exclusive right to make use, and vend the invention or discovery'. The patentee may surrender his monopoly in whole by the sale of his patent or in part by the sale of an article embodying the invention. His monopoly remains so long as he retains the ownership of the patented article. But sale of it exhausts the monopoly in that article and the patentee may not thereafter, by virtue of his patent, control the use or disposition of the article. Bloomer v. McQuewan, 14 How. 539, 549, 550; Adams v. Burke, 17 Wall. 453; Hobbie v. Jennison, 149 U.S. 355. Hence the patentee cannot control the resale price of patented articles which he has sold, either by resort to an infringement suit, or, consistently with the Sherman Act (unless the Miller-Tydings Act applies), by stipulating for price maintenance by his vendees. . . . **** Our decisions have uniformly recognized that the purpose of the patent law is fulfiled with respect to any particular article when the patentee has received his reward for the use of his invention by the sale of the article, and that once that purpose is realized the patent law affords no basis for restraining the use and enjoyment of the thing sold. . . . In construing and applying the patent law so as to give effect to the public policy which limits the granted monopoly strictly to the terms of the statutory grant, Morton Salt Co. v. G. S. Suppiger Co., 314 U.S. 488, the particular form or method by which the monopoly is sought to be extended is immaterial. The first vending of any article manufactured under a patent puts the article beyond the reach of the monopoly which that patent confers. Whether the licensee sells the patented article in its completed form or sells it before completion for the purpose of enabling the buyer to finish and sell it, he has equally parted with the article, and made it the vehicle for transferring to the buyer ownership of the invention with respect to that article. To that extent he has parted with his patent monopoly in either case, and has received in the purchase price every benefit of that monopoly which the patent law secures to him. If he were permitted to control the price at which it could be sold by others he would extend his monopoly quite as much in the one case as in the other, and he would extend it beyond the fair meaning of the patent statutes and the construction which has hitherto been given to them. ****

Mitchell v. Hawley 83 U.S. (16 Wall.) 544 (1872) **** Patentees acquire by their letters-patent the exclusive right to make and use their patented inventions and to vend the same to others to be used for the period of time specified in the patent, but when they have made one or more of the things patented, and have vended the same to others to be used, they have parted to that extent with their exclusive right, as they are never entitled to but one royalty for a Chapter 9 – Dimensions of Patent Coverage

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patented machine, and consequently a patentee, when he has himself constructed a machine and sold it without any conditions, or authorized another to construct, sell, and deliver it, or to construct and use and operate it, without any conditions, and the consideration has been paid to him for the thing patented, the rule is well established that the patentee must be understood to have parted to that extent with all his exclusive right, and that he ceases to have any interest whatever in the patented machine so sold and delivered or authorized to be constructed and operated. Where such circumstances appear, the owner of the machine, whether he built it or purchased it, if he has also acquired the right to use and operate it during the lifetime of the patent, may continue to use it until it is worn out, in spite of any and every extension subsequently obtained by the patentee or his assigns. **** Purchasers of the exclusive privilege of making or vending the patented machine hold the whole or a portion of the franchise which the patent secures, depending upon the nature of the conveyance, and of course the interest which the purchaser acquires terminates at the time limited for its continuance by the law which created the franchise, unless it is expressly stipulated to the contrary. But the purchaser of the implement or machine for the purpose of using it in the ordinary pursuits of life stands on different grounds, as he does not acquire any right to construct another machine either for his own use or to be vended to another for any purpose. Complete title to the implement or machine purchased becomes vested in the vendee by the sale and purchase, but he acquires no portion of the franchise, as the machine, when it rightfully passes from the patentee to the purchaser, ceases to be within the limits of the monopoly. Patented implements or machines sold to be used in the ordinary pursuits of life become the private individual property of the purchasers, and are no longer specifically protected by the patent laws of the State where the implements or machines are owned and used. Sales of the kind may be made by the patentee with or without conditions, as in other cases, but where the sale is absolute, and without any conditions, the rule is well settled that the purchaser may continue to use the implement or machine purchased until it is worn out, or he may repair it or improve upon it as he pleases, in same manner as if dealing with property of any other kind.

Questions, Comments, Problems 1. First Sale/Exhaustion – A patentee is generally given one shot to make money off each patented product, and that shot comes when the patentee first sells the product. Therefore, anyone who buys the product from the patentee (or from a licensee of the patentee) is generally given a right to enjoy the product to its full use, and may use it or resell it free from any limitations applied by the patentee. Also, the buyer may make general repairs to the product, but may not entirely reconstruct it (because otherwise, the patent would be of little use). 2. Implied License - An implied license may arise, not when the actual patented device is sold, but instead when a component that is designed to be used in a device or to perform a process is sold. Thus, the court noted in Univis, supra, that the patentee could not control resale prices because “the unauthorized sale of an article which is capable of use only in practicing the patent is a relinquishment of the patent monopoly with respect to the article sold.” 316 U.S. at 249. The Federal Circuit follows a two-step test in determining whether an implied license has been granted. First, the equipment involved must have no noninfringing uses. Second, the circumstances of the sale must “plainly indicate that the grant of a license should be inferred.” Met-Coil Sys. Corp. v. Korners Unlimited, Inc., 803 F.2d 684, 686, 231 USPQ 474, 476 (Fed. Cir. 1986). What does it mean that the equipment must have “no noninfringing uses”? The Federal Circuit considered this question in Glass Equipment Development, Inc. v. Besten, Inc., 174 F.3d 1337, 50 USPQ2d 1300 (Fed. Cir. 1999). First, the court faulted the district court for looking only to the availability of noninfringing use at the time of the infringement rather than at any time. More importantly, the Federal Circuit also faulted the district court for requiring that any potential noninfringing use be “commercially viable” (i.e., that it permit the user to sell the resulting device at a profit and "afford the development and continuation of an ongoing business") in order for an implied license to arise. Rather, the Federal Circuit held that a “legally acceptable

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noninfringing use need not be as profitable as the patented method--it need only be reasonable.” Id., slip op. at 8. The grant of the implied license is also not a black-or-white binary issue; instead, the license can have varying breadth and duration depending on what the parties’ reasonably intended based on the circumstances of the sale. The Federal Circuit has stated that “[u]nless the circumstances indicate otherwise, an implied license arising from sale of a component to be used in a patented combination extends only for the life of the component whose sale and purchase created the license.” Carborundum Co. v. Molten Metal Equipment Innovations, Inc., 72 F.3d 872, 879, 37 USPQ2d 1169, 1173 (Fed. Cir. 1995).

Repair and Reconstruction The last points under each of the two notes just above provide a nice segue into this section of the chapter. In particular, both notes indicate that the buyer of a patented product or of a component for use in a patented product or process generally receives the ability to use the product or process until it wears out. Thus, the buyer is not allowed to replace the item from a source that is not approved by the patentee. If it could, there would be little sense in patenting inexpensive items because the patentee could sell only one to each buyer, after which the buyers could purchase cheaper knock-offs from anyone else (or make and use their own). On the other hand, the buyer should at least be allowed to conduct some maintenance on a patented product for which it has paid good money. The doctrine of “repair and reconstruction,” discussed by the Supreme Court in the Aro I case, below, attempts to balance these concerns by permitting a certain level of repair of a patented product but not permitting wholesale reconstruction of the product.

Aro Manufacturing Co. v. Convertible Top Replacement Co. [“Aro I”] 365 U.S. 336, 128 USPQ 354 (1961) MR. JUSTICE WHITTAKER delivered the opinion of the Court. On April 17, 1956, respondent, Convertible Top Replacement Co., Inc., acquired a "Territorial Grant" (coextensive with "the Commonwealth of Massachusetts") of all rights in Letters Patent No. 2,569,724, commonly known as the Mackie-Duluk patent, and 10 days later commenced this action against petitioners, Aro Manufacturing Co., Inc., and several of its officers, to enjoin the alleged infringement and contributory infringement of the patent and for an accounting of profits. The patent—one for a "Convertible Folding Top with Automatic Seal at Rear Quarter"—covers the combination, in an automobile body, of a flexible top fabric, supporting structures, and a mechanism for sealing the fabric against the side of the automobile body in order to keep out the rain. Tops embodying the patent have been installed by several automobile manufacturers in various models of convertibles. The components of the patented combination, other than the fabric, normally are usable for the lifetime of the car, but the fabric has a much shorter life. It usually so suffers from wear and tear, or so deteriorates in appearance, as to become "spent," and normally is replaced, after about three years of use. The consequent demand for replacement fabrics has given rise to a substantial industry, in which petitioner, Aro Manufacturing Co., is a national leader. It manufactures and sells replacement fabrics designed to fit the models of convertibles equipped with tops embodying the combination covered by the patent in suit. After trial without a jury, the court held that the patent was valid, infringed and contributorily infringed by petitioners. It accordingly enjoined them from further manufacture, sale or use of these replacement fabrics, and appointed a master to hear evidence concerning, and to report to the court on, the matter of damages. The Court of Appeals affirmed, 270 F.2d 200, and we granted certiorari, 362 U.S. 902.

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**** Validity of the patent is not challenged in this Court. The principal, and we think the determinative, question presented here is whether the owner of a combination patent, comprised entirely of unpatented elements, has a patent monopoly on the manufacture, sale or use of the several unpatented components of the patented combination. More specifically, and limited to the particular case here, does the car owner infringe (and the supplier contributorily infringe) the combination patent when he replaces the spent fabric without the patentee's consent? The fabric with which we deal here is an unpatented element of respondent's combination patent, which covers only the combination of certain components, one of which is a "flexible top material." The patent makes no claim to invention based on the fabric or on its shape, pattern or design. Whether the fabric or its shape might have been patentable is immaterial, for the fact is that neither the fabric nor its shape has been patented. No claim that the fabric or its shape, pattern or design constituted the invention was made in the application or included in the patent. **** This Court's decisions specifically dealing with whether the replacement of an unpatented part, in a patented combination, that has worn out, been broken or otherwise spent, is permissible "repair" or infringing "reconstruction," have steadfastly refused to extend the patent monopoly beyond the terms of the grant. Wilson v. Simpson, 9 How. 109—doubtless the leading case in this Court that deals with the distinction—concerned a patented planing machine which included, as elements, certain cutting knives which normally wore out in a few months' use. The purchaser was held to have the right to replace those knives without the patentee's consent. The Court held that, although there is no right to "rebuild" a patented combination, the entity "exists" notwithstanding the fact that destruction or impairment of one of its elements renders it inoperable; and that, accordingly, replacement of that worn-out essential part is permissible restoration of the machine to the original use for which it was bought. 9 How., at 123. The Court explained that it is "the use of the whole" of the combination which a purchaser buys, and that repair or replacement of the worn-out, damaged or destroyed part is but an exercise of the right "to give duration to that which he owns, or has a right to use as a whole." Ibid. The distilled essence of the Wilson case was stated by Judge Learned Hand in United States v. Aluminum Co. of America, 148 F.2d 416, 425 (C.A. 2d Cir.): "The [patent] monopolist cannot prevent those to whom he sells from . . . reconditioning articles worn by use, unless they in fact make a new article." Instead of applying this plain and practical test, the courts below focused attention on operative facts not properly determinative of the question of permissible repair versus forbidden reconstruction. The Court of Appeals found that the fabric "is not a minor or relatively inexpensive component" of the patented combination, or an element that would expectedly wear out after a very short period of use—although its "expectable life span" is shorter than that of the other components—and, for these reasons, concluded that "an owner would [not] rationally believe that . . . he was making only a minor repair" in replacing the worn-out fabric, but that, instead, the replacement "would be counted a major reconstruction." 270 F.2d, at 205. We think that test was erroneous. Respondent has strenuously urged, as an additional relevant factor, the "essentialness" of the fabric element to the combination constituting the invention. It argues that the particular shape of the fabric was the advance in the art—the very "heart" of the invention—which brought the combination up to the inventive level, and, therefore, concludes that its patent should be held to grant it a monopoly on the fabric. The rule for which respondent contends is: That when an element of a patented machine or combination is relatively durable—even though not so durable as the entire patented device which the owner purchased—relatively expensive, relatively difficult to replace, and is an "essential" or "distinguishing" part of the patented combination, any replacement of that element, when it wears out or is otherwise spent, constitutes infringing "reconstruction," and, therefore, a new license must be obtained from, and another royalty paid to, the patentee for that privilege.

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We cannot agree. For if anything is settled in the patent law, it is that the combination patent covers only the totality of the elements in the claim and that no element, separately viewed, is within the grant. See the Mercoid cases, supra, 320 U.S., at 667; 320 U.S., at 684.10 The basic fallacy in respondent's position is that it requires the ascribing to one element of the patented combination the status of patented invention in itself. Yet this Court has made it clear in the two Mercoid cases that there is no legally recognizable or protected "essential" element, "gist" or "heart" of the invention in a combination patent. In Mercoid Corp. v. Mid-Continent Co., supra, the Court said: "That result may not be obviated in the present case by calling the combustion stoker switch the `heart of the invention' or the `advance in the art.' The patent is for a combination only. Since none of the separate elements of the combination is claimed as the invention, none of them when dealt with separately is protected by the patent monopoly."

320 U.S., at 667. And in Mercoid Corp. v. Minneapolis-Honeywell Co., supra, the Court said: "The fact that an unpatented part of a combination patent may distinguish the invention does not draw to it the privileges of a patent. That may be done only in the manner provided by law. However worthy it may be, however essential to the patent, an unpatented part of a combination patent is no more entitled to monopolistic protection than any other unpatented device."

320 U.S., at 684. No element, not itself separately patented, that constitutes one of the elements of a combination patent is entitled to patent monopoly, however essential it may be to the patented combination and no matter how costly or difficult replacement may be. While there is language in some lower court opinions indicating that "repair" or "reconstruction" depends on a number of factors, it is significant that each of the three cases of this Court, cited for that proposition, holds that a license to use a patented combination includes the right "to preserve its fitness for use so far as it may be affected by wear or breakage." Leeds & Catlin Co. v. Victor Talking Machine Co., 213 U.S. 325, 336; Heyer v. Duplicator Mfg. Co., supra, at 102; and Wilson v. Simpson, supra, at 123. We hold that maintenance of the "use of the whole" of the patented combination through replacement of a spent, unpatented element does not constitute reconstruction. The decisions of this Court require the conclusion that reconstruction of a patented entity, comprised of unpatented elements, is limited to such a true reconstruction of the entity as to "in fact make a new article." United States v. Aluminum Co. of America, supra, at 425, after the entity, viewed as a whole, has become spent. In order to call the monopoly, conferred by the patent grant, into play for a second time, it must, indeed, be a second creation of the patented entity, as, for example, in Cotton-Tie Co. v. Simmons, supra. Mere replacement of individual unpatented parts, one at a time, whether of the same part repeatedly or different parts successively, is no more than the lawful right of the owner to repair his property. Measured by this test, the replacement of the fabric involved in this case must be characterized as permissible "repair," not "reconstruction." MR. JUSTICE BLACK, concurring. I fully concur in the judgment of reversal and with the opinion of the Court but want to express some additional views because of the concurring opinion of my Brother Brennan and the dissenting opinion of my Brother Harlan. The latter two opinions, in my judgment, attempt to introduce wholly unnecessary and undesirable confusions, intricacies and complexities into what has been essentially a very simple question under the opinions of this Court, and that is: How can a court decide whether a person who has bought and owns a patented commodity composed of a combination of unpatented elements is actually making a new one so as to infringe the patent, rather than merely replacing a worn-out part or

10

Although the Mercoid cases involve the doctrine of patent misuse, which is not an issue in this case, they also specifically delimit the character of a combination patent monopoly and it is upon that matter that they are relevant here.

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parts necessary to continue the use of the commodity, which does not constitute patent infringement? . .. . . . Note immediately that if it is an infringement it must be because the owner of the top, in doing nothing but replacing the worn-out fabric, "makes" the patented invention which is the top with all its parts. Common sense and prior decisions of this Court require us to hold that an automobile owner does not "make" a whole top when he merely replaces its worn-out fabric cover. **** None of this Court's cases relied upon by my Brothers Harlan and Brennan justifies adoption of the supposed guides and standards referred to in their opinions. Deciding whether a patented article is "made" does not depend on whether an unpatented element of it is perishable, or how long some of the elements last, or what the patentee's or a purchaser's intentions were about them. . . . The holdings of prior cases in this Court have not actually rested on such minor and insignificant factors in determining when an article has been "made" and when it has not. A case in which only a minimal component has been omitted from a "making" of the combination, such as the extreme example of omission of a single bolt from a patented machine or a button from a patented garment, might call upon this Court to articulate some rather obvious refinements to this simple test of "making."6 But this is by no means such a case and it is dangerously misleading to suggest that so clear a case as this one requires the application of a Pandora's flock of insignificant standards, especially when it is recognized, as it must be upon analysis, that consistent application of the standards suggested would actually change the basic test from "making" to something not satisfactorily defined but indisputably different. And surely the scope of a patent should never depend upon a psychoanalysis of the patentee's or purchaser's intentions, a test which can only confound confusion. The common sense of the whole matter is, as recognized in the Wilson case and again in the opinion of the Court today, that in none but the most extraordinary case—difficult even to imagine—will a court ever have to invoke specially contrived evidentiary standards to determine whether there has actually been a new "making" of the patented article. Neither Leeds & Catlin Co. v. Victor Talking Machine Co., 213 U.S. 325, nor Cotton-Tie Co. v. Simmons, 106 U.S. 89, nor any other cases of this Court that have treated this subject, depart from this common-sense rule of Wilson v. Simpson. In fact, as Mr. Justice Holmes pointed out in Heyer v. Duplicator Mfg. Co., supra, the question in Leeds & Catlin did not concern "a right to substitute worn out parts" and "[t]he authority of Wilson v. Simpson and the cases that have followed it was fully recognized [in Leeds & Catlin] and must be recognized here." 263 U.S., at 102. The Cotton-Tie case likewise contains no support for holding that replacing the fabric in this top amounts to a "making" or even a "remaking" of the whole convertible top. The patent involved there was a cotton bale tie. Marked on each, for whatever it was worth, was "Licensed to use once only." After these ties had been used once and broken off the cotton bales, the old tie material, along with the buckles, was sold as scrap, then rerolled, straightened, riveted together, and cut into proper lengths and attached to an old buckle. It was this making of completely new ties out of the discarded scrap material that was held to amount to a making of the patented device and therefore an infringement. . . . In my judgment it would create mischievous results for a majority of this Court to create or approve ambiguous evidentiary standards which could only obfuscate the simple fact of whether a person is "making" a patented article composed of old unpatentable elements. For example, there should be no attempt to decide whether there is a making by comparing the time that the different elements of such a patent normally will exist if let alone. The owner is under no obligation to let them alone. Every owner 6

This point was made by Mr. Rich in the course of the hearings as follows: "If the part he is supplying is in substance the very thing which was invented, it seems to me personally, that he is an infringer, and he should not be let off on some little technicality that there is something minor in the whole apparatus that he is not supplying." Hearings, supra, note 1, at 153. (Emphasis supplied.) Of course, as Mr. Rich well knew, "the very thing" which is invented in any combination patent is the combination itself and not any unpatented component part of it—in this case, the whole convertible top, not the fabric used in it.

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has the right to repair and patch each part of the property he bought and paid for in order to make it last as long as he can. **** This case is of great importance in our competitive economy. The record shows that petitioner is but one of many small business enterprises filling a useful place in manufacturing the comparatively smaller parts of larger products like automobiles. It is quite right and in keeping with our patent system that small business enterprises should no more than large enterprises be allowed to infringe the patents of others. But businessmen are certainly entitled to know when they are committing an infringement. It is for that reason that the patent statutes require applicants to define with particularity and claim without ambiguity the subject matter which is regarded to be an invention. 35 U.S.C. § 112, 154. In the absence of suits like this how could a businessman even suspect that he might be infringing a patent by marketing an unpatented and unpatentable part of a combination like this fabric top? **** A fundamental error underlying the misleading standards suggested by my Brothers Harlan and Brennan is the notion that in a case of this kind a court is obliged to search for the alleged "heart" or "core" of the combination patent. This misconception, which has unequivocally been rejected in our prior decisions, is nothing but an unwarranted transformation and expansion of a combination patent, which was correctly described by Mr. Justice Jackson as conferring only a ". . . right in an abstruse relationship between things in which individually there is no right." A patented combination is no more than that, a novel relationship brought to bear on what presumably are familiar elements already in the public domain. Such familiar elements are not removed from the public domain merely because of their use, however crucial, in the novel combination. Of course, if novelty should inhere in one of the parts as well as in the whole, then that novel "heart" or "core" can be separately patented and separately protected. But in the absence of such a separate patent, which in this case would presumably be some sort of patent on the utility of the shape of the fabric, the public has the right to make, use and vend each part subject only to the established limitation of contributory infringement: that a part may not be knowingly supplied for use by an unauthorized person in a new making of what is in effect the whole combination. **** MR. JUSTICE BRENNAN, concurring in the result. I agree that the replacement of the top was "repair" and not "reconstruction," but I cannot agree that the test suggested by my Brother Whittaker for determination of that question is the correct one. My Brother Harlan’s dissent cogently states the reasons why I also think that is too narrow a standard of what constitutes impermissible "reconstruction." For there are circumstances in which the replacement of a single unpatented component of a patented combination short of a second creation of the patented entity may constitute "reconstruction." Leeds & Catlin Co. v. Victor Talking Machine Co., 213 U.S. 325; Davis Electrical Works v. Edison Electric Light Co., 60 F. 276; cf. Williams v. Hughes Tool Co., 186 F.2d 278. These holdings applied the long-established standard for determination of "repair" or "reconstruction." Under that standard there is no single test to which all must yield; rather the determination is to be based upon the consideration of a number of factors. Wilson v. Simpson, 9 How. 109; Heyer v. Duplicator Mfg. Co., 263 U.S. 100.1 Appropriately to be considered are the life of the part 1

The standard has been variously expressed. See, e. g., "Whether the bounds of legitimate repair have been exceeded must be determined upon the facts of each case as it is presented." Morrin v. Robert White Engineering Works, 143 F. 519, 520. "In the absence of a crucial test to which all must yield, the only aid comes from various minor or incidental considerations, and their combined effect." Davis Electrical Works v. Edison Electric Light Co., 60 F. 276, 280. "The right, in our view, must depend in every case upon the special facts of the case as they show the relation of the two classes of parts—those supplied and those remaining in the original construction—to the patented unit. . . . there might be a structure where the putting in of a certain number of new parts would be `reconstruction,' whereas the putting in of a smaller number would be `repair,' or even where the putting in of one new part would be reconstruction but the putting in of two or three would not be, depending in each case upon whether, after the replacement, the structure as a whole could reasonably be said to be a new structure or the old one." Automotive Parts Co. v. Wisconsin Axle Co., 81 F.2d 125, 127. "Each case, as it arises, must be decided in the light of all the facts and circumstances presented, and with an intelligent

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replaced in relation to the useful life of the whole combination, the importance of the replaced element to the inventive concept, the cost of the component relative to the cost of the combination, the common sense understanding and intention of the patent owner and the buyer of the combination as to its perishable components, whether the purchased component replaces a worn-out part or is bought for some other purpose, and other pertinent factors. **** MR. JUSTICE HARLAN, whom MR. JUSTICE FRANKFURTER and MR. JUSTICE STEWART join, dissenting. For more than a hundred years it has been the law that the owner of a device covered by a combination patent can, without infringing, keep the device in good working order by replacing, either himself or through any source he wishes, unpatented parts, but that he may not, without rendering himself liable for infringement, reconstruct the device itself, whether because of its deterioration or for any other reason, and even though all of the component parts of the device are themselves unpatented. Wilson v. Simpson, 9 How. 109; Cotton-Tie Co. v. Simmons, 106 U.S. 89; Morgan Envelope Co. v. Albany Perforated Wrapping Paper Co., 152 U.S. 425; Leeds & Catlin Co. v. Victor Talking Machine Co., 213 U.S. 325; Heyer v. Duplicator Mfg. Co., 263 U.S. 100. The underlying rationale of the rule is of course that the owner's license to use the device carries with it an implied license to keep it fit for the use for which it was intended, but not to duplicate the invention itself. Correlatively, one who knowingly participates in an impermissible reconstruction of a patented combination is guilty of contributory infringement. "Direct" and "contributory" infringements are now codified in 271 of the Patent Act of 1952. 35 U.S.C. § 271. In this case the District Court and the Court of Appeals upon full consideration have concurred in finding that Aro's replacement-supplying of the fabric portion of respondent's convertible automobile tops contributorily infringed the latter's territorial rights under the valid Mackie-Duluk combination patent, in that such activity constituted a deliberate participation on Aro's part in a forbidden reconstruction of the patented combination. In reversing, the Court holds that there can be no direct infringement (and hence, of course, no contributory infringement) of a combination patent by replacement of any of the components of the patented entity unless (1) such component is itself separately patented or (2) the entire entity is rebuilt at one time. Since the fabric cover component of the Mackie-Duluk top was not itself separately patented, and since it constituted but one part of the patented combination, the Court concludes that Aro's supplying of such covers for replacement on cars equipped with respondent's tops did not as a matter of law constitute contributory infringement. My Brother Brennan's opinion, while disagreeing with that conclusion, would reverse because on its view of the record, untrammeled by the contrary findings and conclusions of the two lower courts, it is concluded that what here took place constituted "repair" and not "reconstruction" of the Mackie-Duluk tops. I am unable to subscribe to either of these views. I. **** The cases cited above amply demonstrate that there is no single yardstick for determining whether particular substitutions of new for original unpatented parts of a patented combination amount to permissible repair or forbidden reconstruction. The matter is to be resolved "on principles of common sense applied to the specific facts" of a given case, Heyer, supra, at 102. The single simple rule of comprehension of the scope, nature, and purpose of the patented invention, and the fair and reasonable intention of the parties." Goodyear Shoe Machinery Co. v. Jackson, 112 F. 146, 150. "The dividing line between repairs and a making over cannot be verbally located. What has been done can with more or less confidence be pronounced to be one or the other, but neither the one nor the other can be defined." Hess-Bright Mfg. Co. v. Bearings Co., 271 F. 350, 352.

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"reconstruction" which the Court finds in those cases can, in my view, only be divined at the expense of reconstructing the decisions themselves. The leading case is Wilson v. Simpson, supra. There, in holding that the owner of a planing machine covered by a combination patent could replace from any source he desired the unpatented cutting knives thereof, the Court said, p. 125: "The right of the assignee [the owner of the machine] to replace the cutter-knives is not because they are of perishable materials, but because the inventor of the machine has so arranged them as a part of its combination, that the machine could not be continued in use without a succession of knives at short intervals. Unless they were replaced, the invention would have been but of little use to the inventor or to others. The other constituent parts of this invention, though liable to be worn out, are not made with reference to any use of them which will require them to be replaced. These, without having a definite duration, are contemplated by the inventor to last so long as the materials of which they are formed can hold together in use in such a combination. No replacement of them at intermediate intervals is meant or is necessary. They may be repaired as the use may require. With such intentions, they are put into the structure. So it is understood by a purchaser, and beyond the duration of them a purchaser of the machine has not a longer use. But if another constituent part of the combination is meant to be only temporary in the use of the whole, and to be frequently replaced, because it will not last as long as the other parts of the combination, its inventor cannot complain, if he sells the use of his machine, that the purchaser uses it in the way the inventor meant it to be used, and in the only way in which the machine can be used."

In the Cotton-Tie case, supra, the question was whether combination patents for the making of ties for cotton bales, consisting of a metal buckle and band, were infringed by one who bought as scrap metal such ties and bands after severance from cotton bales, and resold them for further use as baling ties after piecing together several segments of the old bands and reconnecting the resulting single band with the original buckle. In holding that this was an impermissible reconstruction of the patented combination, the Court said: "Whatever right the defendants could acquire to the use of the old buckle, they acquired no right to combine it with a substantially new band, to make a cotton-bale tie. They so combined it when they combined it with a band made of the pieces of the old band in the way described. What the defendants did in piecing together the pieces of the old band was not a repair of the band or the tie, in any proper sense. The band was voluntarily severed by the consumer at the cotton-mill because the tie had performed its function of confining the bale of cotton in its transit from the plantation or the press to the mill. Its capacity for use as a tie was voluntarily destroyed. As it left the bale it could not be used again as a tie. As a tie the defendants reconstructed it, although they used the old buckle without repairing that. The case is not like putting new cutters into a planing-machine in place of those worn out by use, as in Wilson v. Simpson, 9 How. 109. The principle of that case was, that temporary parts wearing out in a machine might be replaced to preserve the machine, in accordance with the intention of the vendor, without amounting to a reconstruction of the machine." At 93-94.

In Morgan Envelope, supra, the Court found no contributory infringement on the part of one supplying toilet paper rolls specially designed for use in a patented combination, comprising a dispenser and the paper rolls themselves. Remarking (p. 433) that there "are doubtless many cases to the effect that the manufacture and sale of a single element of a combination, with intent that it shall be united to the other elements, and so complete the combination, is an infringement," the Court found the situation before it distinguishable in that "the element [paper roll] made by the alleged infringer is an article of manufacture perishable in its nature, which it is the object of the mechanism [the dispenser] to deliver, and which must be renewed periodically, whenever the device is put to use." Ibid. On similar grounds the Court in Heyer, supra, found no contributory infringement in the intentional supplying of unpatented gelatine bands for use in a duplicating machine covered by a combination patent, of which one element was the gelatine band.

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On the other hand, in Leeds & Catlin, supra, the intentional supplying of phonograph records for use on respondent's talking machines, which were protected by a combination patent covering both machine and records, was held to be contributory infringement, it being found that records were the "operative ultimate tool of the invention," that respondent's records were not inherently "perishable" in nature, and that the supplying of the competitor's records was not to replace records "deteriorated by use" or which had suffered "breakage." (P. 336.) These cases destroy the significance of two factors on which the Court heavily relies for its conclusion in the present case: first, that the fabric top was an unpatented element of the Mackie-Duluk invention, and, second, that Aro's tops constituted a replacement of but one part of the patented combination. For as was said in Leeds & Catlin (p. 333), "[i]t can make no difference as to the infringement or noninfringement of a combination that one of its elements or all of its elements are unpatented"; and in all of these cases the claimed infringing replacement involved only one of the elements of the patented combination. Further, the different results reached in the cases, two finding "reconstruction" and three only "repair," also vitiate the reasoning of the Court, in that they show that the issue of reconstruction vel non turns not upon any single factor, but depends instead upon a variety of circumstances, differing from case to case. The true rule was well put by this same Court of Appeals in its earlier decision in Goodyear Shoe Machinery Co. v. Jackson, 112 F. 146, 150: "It is impracticable, as well as unwise, to attempt to lay down any rule on this subject, owing to the number and infinite variety of patented inventions. Each case, as it arises, must be decided in the light of all the facts and circumstances presented, and with an intelligent comprehension of the scope, nature, and purpose of the patented invention, and the fair and reasonable intention of the parties. Having clearly in mind the specification and claims of the patent, together with the condition of decay or destruction of the patented device or machine, the question whether its restoration to a sound state was legitimate repair, or a substantial reconstruction or reproduction of the patented invention, should be determined less by definitions or technical rules than by the exercise of sound common sense and an intelligent judgment."

More particularly, none of the past cases in this Court or in the lower federal courts remotely suggests that "reconstruction" can be found only in a situation where the patented combination has been rebuilt de novo from the ground up. The reference which the Court makes to the Mercoid cases, 320 U.S. 661, 320 U.S. 680, is, in my opinion, entirely inapposite, since those cases, as the Court recognizes, p. 344, n.10, supra, dealt with the issue of patent misuse, an issue which specifically is not before the Court at this time. I realize that some of the language in the first Mercoid case (320 U.S., at 667-669), and more particularly its disapproving remarks about Leeds & Catlin (id., 668), may be said to cast doubt on what it appears to me the contributory infringement cases plainly establish. Yet I cannot believe that Mercoid is properly to be read as throwing into discard all the teaching of the repair-reconstruction cases. What was said in Mercoid about contributory infringement must be read in the context of Mercoid's claim, found to have been established, that Mid-Continent had misused its combination patent by attempting in effect to wield it as a weapon to monopolize the sale of an unpatented element, a claim which is not here made. **** . . . Mercoid, far from modifying the doctrine of the Wilson line of cases as to what constitutes contributory infringement, assumed that doctrine and defined the special circumstances when the court would refuse to give a patentee the benefit of that doctrine. Those circumstances are not present in this case. ****

Questions, Comments, Problems 1. Repair with Modification – What is the result when the buyer of a patented machine, in the course of repairing it, modifies it in some way? The Supreme Court addressed this issue after Aro I in Wilbur-Ellis

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v. Kuther, 377 U.S. 422, 141 USPQ 703 (1964). In a succinct, four-page opinion, Justice Douglas wrote for an eight-judge majority, reversing the Ninth Circuit’s and the district court’s determination that the defendant had made an infirnging reconstruction. The patent covered a fish canning machine. The defendant/respondent Wilbur-Ellis Co. bought four second-hand licensed machines that packed one-pound cans. Three of the machines were corroded, rusted, and inoperative, and all required cleaning and sandblasting to render them usable. The respondent did all that, but also modified some of the parts so that the machines could pack fish into smaller five-ounce cans. The Court held that such refurbishing and modification was still within the ambit of noninfringing repair: Whatever view may be taken of the holding in the first Aro case, the majority believe that it governs the present one. These four machines were not spent; they had years of usefulness remaining though they needed cleaning and repair. Had they been renovated and put to use on the “1-pound” cans, there could be no question but that they were “repaired,” not “reconstructed,” within the meaning of the cases. When six of the 35 elements of the combination patent were resized or relocated, no invasion of the patent resulted, for as we have said the size of cans serviced by the machine was no part of the invention; nor were characteristics of size, location, shape and construction of the six elements in question patented. Petitioners in adapting the old machines to a related use were doing more than repair in the customary sense; but what they did was kin to repair for it bore on the useful capacity of the old combination, on which the royalty had been paid. . . . The adaptation made in the six nonpatented elements improved the usefulness of these machines. That does not, however, make the adaptation “reconstruction” within the meaning of the cases. We are asked in substance to treat the case as if petitioners had a license for use of the machines on “1-pound” cans only. But the sales here were outright, without restriction. Adams v. Burke, 17 Wall. 453, 456, therefore controls: “. . . when the patentee, or the person having his rights, sells a machine or instrument whose sole value is in its use, he receives the consideration for its use and he parts with the right to restrict that use.” And see United States v. Univis Lens Co., 316 U.S. 241, 250. 2. Drill Tips v. Ink Jet Cartridges – Two decision of the Federal Circuit handed down six days apart and having two judges in common (Lourie, J. and Archer, C.J.) shed significant light on what constitutes infringing reconstruction and what constitutes noninfringing repair. In Aktiebolag v. E.J. Co., 121 F.3d 669, 43 USPQ2d 1620 (Fed. Cir. 1997), the court held that the act of retipping drill bits with new carbide tips was infringing reconstruction (noninfringing repair was simply resharpening the old bits; here the accused infringer subjected the bits to an elaborate process of removing the old tip, attaching new tip stock and then shaping it to the form of the old tip). On the other hand, in Hewlett-Packard v. Repeat-O-Type Stencil, 123 F.3d 1445, 43 USPQ2d 1650 (Fed. Cir. 1997), the court held that the defendant's practice of buying brand new ink jet cartridges manufactured by plaintiff HP and modifying their caps to make them refillable was, in the words of Wilbur-Ellis, supra, "kin to repair" and hence noninfringing. Id. at 1452. The court suggested that HP should have tried to protect itself from such cartridge modification by contract (e.g., label license), had it wanted to stop the defendant's practice, id. at 1453. Clearly the defendant's noninfringing "repair" created a market in and of itself in the sale of ink refills for these modified cartridges, which were previously for "one time only" use. Judge Lourie wrote for the court: Generally, when a seller sells a product without restriction, it in effect promises the purchaser that in exchange for the price paid, it will not interfere with the purchaser's full enjoyment of the product purchased. The buyer has an implied license under any patents of the seller that dominate the product or any uses of the product to which the parties might reasonably contemplate the product will be put. See Mitchell v. Hawley, 83 U.S. (16 Wall.) 544, 548 (1872). . .. The authority to use and sell a purchased device, however, does not include the right to make a new device or to reconstruct one which has been spent. Reconstruction, i.e., the re-creation of a patented combination, is an infringement because such activity is beyond the implied authorization to use and sell a patented device. As the Supreme Court has stated: The decisions of this Court require the conclusion that reconstruction of a patented entity, comprised of unpatented elements, is limited to such a true reconstruction of the entity as to 'in fact make a new article,' after the entity, viewed as a whole, has become spent. In order to call the monopoly, conferred by the patent grant, into play for a second time, it must, indeed, be a second creation of the patented entity. . . . Mere replacement of

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individual unpatented parts, one at a time, whether of the same part repeatedly or different parts successively, is no more than the lawful right of the owner to repair his property. Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336, 346, 128 USPQ 354, 359 (1961) ("Aro I") (citations omitted). On the other hand, one does have authority to repair a patented device that he has purchased. This case raises the question whether the modification of the HP cartridges by ROT is repair, as the district court implicitly held, or is tantamount to reconstruction, as HP urges. **** HP also argues that the boundary between "permissible repair" and "impermissible reconstruction" turns on the intention of the patentee. HP contends that it has clearly manifested its intent that the ink jet cartridges be non-refillable. The package insert accompanying the cartridges suggests that the cartridges be discarded once they are empty; HP does not sell refillable cartridges, and HP does not sell ink refills. Because it has always manifested an intent that its cartridges be discarded, it argues, the creation of refillable or refilled cartridges are unauthorized acts which constitute an infringement of its patents. HP in effect argues that any change to a patented product that is not intended by the patentee constitutes reconstruction. In support of its theory, HP cites Wilson, 50 U.S. (9 How.) at 125-126, as establishing an "intent-ofthe-patentee analysis" for determining whether conduct is to be considered a "repair" or a "reconstruction." We do not agree; HP has misread Wilson. Although at times speaking in terms of the intention of the inventor, the Court focused on the nature of the device sold, and specifically on the fact that the machine was designed such that one group of components, the knives, would wear out long before the remaining components: The proof in the case is, that one of [the inventor's] machines, properly made, will last in use for several years, but that its cutting-knives will wear out and must be replaced at least every sixty or ninety days. ... [If such a] part of the combination is meant to be . . . frequently replaced, because it will not last as long as the other parts of the combination, its inventor cannot complain. Wilson [v. Simpson, 50 U.S. (9 How.) 109, 125-26 (1850)]. Although HP cites American CottonTie Co. v. Simmons, 106 U.S. (6 Otto.) 89, 94 (1882), as additional support for its "intent-of-thepatentee" theory, the Supreme Court, in Aro I, referred to American Cotton-Tie by noting that "the fact that the [devices] were marked 'licensed to use once only' was deemed of importance by the Court." Aro I, 365 U.S. at 343 n.9, 128 USPQ at 358 n.9. Thus, absent a restriction having contractual significance, a purchase carries with it the right to modify as long as reconstruction of a spent product does not occur. . . . The question is not whether the patentee at the time of sale intended to limit a purchaser's right to modify the product. Rather the purchaser's freedom to repair or modify its own property is overridden under the patent laws only by the patentee's right to exclude the purchaser from making a new patented entity. Each case turns on its own particular facts, but a seller's intent, unless embodied in an enforceable contract, does not create a limitation on the right of a purchaser to use, sell, or modify a patented product as long as a reconstruction of the patented combination is avoided. A noncontractual intention is simply the seller's hope or wish, rather than an enforceable restriction. Id at 1451, 1453, 43 USPQ2d at ___. 3. Has the heart of the invention stopped beating? – The majority in Aro I was quite claim-conscious, making the point emphatically that "There is no legally recognizable or protected 'essential' element, 'gist' or 'heart' of the invention in a combination patent.” 365 U.S. at 345. Hence, the focus must be on the language of the claims in conducting a repair/reconstruction analysis. See id. at 344-46. The Federal Circuit in its early years strayed from this view in analyzing doctrine of equivalents issues. In Atlas Powder Co. v. E. I. DuPont de Nemours, 750 F.2d 1569, 1582, 224 USPQ 409, 418 (Fed. Cir. 1984), Judge Baldwin noted that the "essence" or "heart" of the invention analysis can be applicable in a determination of infringement under the doctrine of equivalents, citing dictum in Medtronics, Inc. v. Cardiac Pacemakers, Inc., 721 F.2d 1563, 1567, 220 USPQ 97, 101 (Fed. Cir. 1983). But, in going to the “All Elements” rule for equivalents analysis, the court quickly retreated from heart-of-the-invention analysis. Thus, in Perkin-Elmer Corp. v. Westinghouse Elec. Corp., 822 F.2d 1528, 3 USPQ2d 1321 (Fed. Cir. 1987), Chief Judge Markey essentially rang the doctrine's death knell: We are aware of dicta that state consideration of the "essence", "gist", or "heart" of the invention may be helpful in determining infringement under the doctrine of equivalents. [citation omitted] That dicta may not be read as implying that specific claim limitations can be ignored as

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insignificant or immaterial in determining infringement. It must be read as shorthand for the considerations set forth in Graver Tank, i.e., that the infringer should not appropriate the invention by making substitutions for those limitations, when the substitutions do not substantially change the function performed, or the way it is performed, by the invention. Id. at 1533, n.8, 3 USPQ2d at 1325, n.8. What is regrettable is that the pendulum may have swung too far—by shying away from the "heart" of the invention, courts may blur the distinction between inventive concept and embodiment and, in effect, fail to see the forest for the trees.

Indirect Infringement Until now, you have seen how important precise element-by-element patent claim analysis is, both for validity and infringement analyses. But what happens when someone indirectly causes patent infringement, either by doing only part of what a claim covers and leaving it for someone else to "complete" the infringement, or by motivating someone else to do the infringement? These sorts of acts, described under the rubric of "indirect infringement", have come under judicial sanction since at least the late 1800s. It was not until 1952, however, that they were codified as subsections (b) and (c) of section 271: (b) Whoever actively induces infringement of a patent shall be liable as an infringer. (c) Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.

Subsection (c) was amended in 1996 to add the acts of offering for sale and importation. Subsection (b) is called "active inducement of infringement", and subsection (c) "contributory infringement." The Report of the House Committee on the Judiciary, May 12, 1952, states: Paragraphs (b), (c), and (d) relate to the subject referred to as contributory infringement. The doctrine of contributory infringement has been part of our law for about 80 years. It has been applied to enjoin those who sought to cause infringement by supplying someone else with the means and directions for infringing a patent. One who makes a special device constituting the heart of a patented machine and supplies it to others with directions (specific or implied) to complete the machine is obviously appropriating the benefit of the patented invention. It is for this reason that the doctrine of contributory infringement, which prevents appropriating another man's patented invention has been characterized as "an expression both of law and morals." Considerable doubt and confusion as to the scope of contributory infringement has resulted from a number of decisions of the courts in recent years. The purpose of this section is to codify in statutory form principles of contributory infringement and at the same time eliminate this doubt and confusion.

The Revision Notes to section 271 state: Paragraphs (b) and (c) define and limit contributory infringement of a patent and paragraph (d) is ancillary to these paragraphs, see preliminary general description of bill. One who actively induces infringement as by aiding and abetting the same is liable as an infringer, and so is one who sells a component part of a patented invention or material or apparatus for use therein knowing the same to be especially made or especially adapted for use in the infringement of the patent except in the case of a staple article or commodity of commerce having other uses. . . .

We begin with an early decision grappling with the question of what to do with a person who sells an unpatented element for use in a patented combination. One can almost see the light go on in Judge Woodruff's head on how to deal with the suppliers of burners for the lamps.

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Wallace v. Holmes 29 F. Cas. 74 (C.C.D. 1871) WOODRUFF, Circuit Judge. The complainants sue, as the assignees and owners of letters patent granted September 19th, 1865, to Michael H. Collins, for an improvement in lamps for an alleged infringement by the defendants, praying an injunction and an account of the gains and profits made by the defendants by the unlawful manufacture and sale of the invention so patented. . . . Upon the trial, the defendants rested their defence solely upon two grounds—want of sole title in the plaintiffs, and the non-infringement of the patent by the defendants. . . . **** 2. The ground upon which alone the defendants claimed, on the trial, that they had not infringed the patent, is this—that the patent is for a combination of several parts, together constituting the improved lamp described in the patent; and that the defendants have only made and sold some of the parts of that combination, and cannot, therefore, be charged as infringers. The patent is, in terms, for 'a new and useful improvement in lamps.' The specification describes 'the main purpose of the invention, or the principal part thereof,' to be, not only to keep the lower part of the glass chimney of the lamp cool, so that it may readily be removed by the hand, but, also, to support the chimney without the use of a spring catch, or other devices, such as are ordinarily used. It thereupon proceeds to describe what is ordinarily called the burner of the lamp, namely, that portion which holds the wick tube, and which is to be screwed into the cap of the reservoir or body of the lamp, containing the oil or fluid used for combustion, consisting of an 'air induction annular plate' at the bottom, convex, and provided with holes, to admit the air, and turned slightly up at the outer edge, to receive and sustain the chimney. The wick tube rises above it, and near, but just above the top, is surrounded by an 'umbelliferous cone, or deflector,' which extends outward to the sides of the chimney, and, the outer edge being cut or slit radially, the divided edge forms springs, which press against the interior of the chimney, and sustain it firmly in its upright position. The parts of the deflector between the slits being inclined downward, and being elastic, are adapted to receive the chimney, though there be irregularities and differences in the interior dimensions of chimneys which may be used. Other details are given pertaining to the construction, mode of operation, and uses of the parts, which it is not necessary to mention. It must suffice to say, that what is called the burner embraces all the metallic portion of the lamp containing, surrounding, or placed above the wick, and to be screwed into the cap of the reservoir. The specification also describes the glass chimney to be used, thus: 'The lower part of the chimney, or that portion which extends from the deflector to the chimney rest, is constructed tubular and cylindrical. Above this part, the chimney bulges out, and finally is contracted to its top, in manner as shown in the drawings;' and, in the operation of the lamp, stress is laid upon the effect of perforations in the chimney rest, in its convex sides, through which the air, passing in currents, is alleged to impinge against the inner surface of the cylindrical portion of the chimney between the deflector and the chimney rest, and keep that part of the chimney cool, so that it may readily be seized between the thumb and finger, when it is desired to remove it. The claim is as follows: 'I claim the improved lamp, as not only constructed with its cone or deflector, F, and its chimney rest, D, and chimney, arranged with respect to each other as described, but as having the said deflector provided with peripheral springs, or the same, or the slits, h, h, and the rest, D, made concavo-convex, and provided with an annular groove or lip at the bottom, for supporting the chimney, the whole being substantially as described or represented.' The proof shows, that the defendants from the fall of 1867, have been engaged in the manufacture and sale of lamp burners, called the 'Comet Burners,' which were not claimed on the trial to differ in any material particular from the patented invention, the principal apparent difference being in the substitution of a spiral elastic wire wound into the edges of the deflector, to press against the interior of the chimney and maintain its upright position, Chapter 9 – Dimensions of Patent Coverage

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instead of the slit edge of the deflector itself, formed into springs, performing the same office. This however, was not claimed to be a substantial difference, but was treated by both parties, for the purposes of the case, as (which, I think, it unquestionably is) an equivalent device, operating in the same manner and producing the same effect. But, although it is proved that the defendants used their burners, so manufactured, in their store, with chimneys placed thereon, to exhibit their burners to customers, in order to make sales, and to demonstrate their superiority over other burners, there is no proof that the defendants ever manufactured or sold a chimney; and, hence, they insist, that, having made and sold only some of the parts included in the patented combination, they are not liable in this suit. It is quite obvious, that the distinguishing feature of the invention of Collins is the burner, with its chimney rest, a deflector having peripheral springs, to sustain the chimney without the aid of a catch or screw, and with air passages operating, when in use, to keep the lower part of the chimney cool, and, obviously, tending, by this means, and by the greater elevation of the flame, to prevent the lower portion of the burner, and top of the reservoir, from becoming unduly heated. It is, also, clear, and was proved, that the burner alone, or the burner attached to the reservoir, is utterly useless. A chimney must be applied, in order to its operation. So, also, a chimney without a burner is wholly useless. It was claimed, in behalf of the complainants, that the chimney is no material part of the invention, as patented, and, therefore, that the defendants have made and sold all that is material in the patent. I incline, however, strongly to the opinion, that the patentee, in his specification and claim, instead of claiming the burner as new, and securing the exclusive right in respect to that, has claimed it in combination with a chimney, and must stand by his patent under that construction. In that view of the construction of the patent, the case stands thus: The complainants having a patent for an improved burner in combination with a chimney, the defendants have manufactured and sold extensively the burner, leaving the purchasers to supply the chimney, without which such burner is useless. They have done this for the express purpose of assisting, and making profit by assisting, in a gross infringement of the complainants' patent. They have exhibited their burner furnished with a chimney, using it in their sales room, to recommend it to customers, and prove its superiority, and, therefore, as a means of inducing the unlawful use of the complainants' invention. And now it is urged, that, having made and sold burners only, they are not infringers, even though they have distributed them throughout the country in competition with the complainants', and have, to their utmost ability, occupied the market, with the certain knowledge that such burners are to be used, as they can only be used, by the addition of a chimney. Manifestly, there is no merit in this defence, and it must be regretted if the law be not such as will protect the complainants against this palpable interference. If the complainants were to succeed in finding those who manufactured chimneys for the express purpose of selling them to be used on these burners, the latter could clearly urge the same, if not a better, defence, to a prosecution; and so the complainants would be driven to the task of searching out the individual purchasers for use who actually place the chimney on the burner and use it—a consequence which, considering the small value of each separate lamp, and the trouble and expense of prosecution, would make the complainants helpless and remediless. The rule of law invoked by the defendants is this--that, where a patent is for a combination merely, it is not infringed by one who uses one or more of the parts, but not all, to produce the same results, either by themselves, or by the aid of other devices. This rule is well settled, and is not questioned on this trial. The rule is fully stated by Chief Justice Taney, in Prouty v. Ruggles, 16 Pet. [41 U. S.] 336, 341, and in other cases cited by the ounsel. Byam v. Farr [Case No. 2,264]; Foster v. Moore [Id. 4,978]; Vance v. Campbell, 1 Black [66 U. S.] 427; Eames v. Godfrey, 1 Wall. [68 U. S.] 78, 79. But I am not satisfied that this rule will protect these defendants. If, in actual concert with a third party, with a view to the actual production of the patented improvement in lamps, and the sale and use thereof, they consented to manufacture the burner, and such other party to make the chimney, and, in such concert, they actually make and sell the burner, and he the chimney, each utterly useless without the other, and each intended to be used, and actually sold to be used, with the other, it cannot be doubtful, that they must be deemed to be joint infringers of the complainants' patent. . . . In such case, all are tort-feasors, engaged in a common purpose to infringe the patent, and actually, by their concerted action, producing that result. . . . Here, the actual concert with others is a certain inference from the nature of the case, Chapter 9 – Dimensions of Patent Coverage

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and the distinct efforts of the defendants to bring the burner in question into use, which can only be done by adding the chimney. The defendants have not, perhaps, made an actual pre-arrangement with any particular person to supply the chimney to be added to the burner; but, every sale they make is a proposal to the purchaser to do this, and his purchase is a consent with the defendants that he will do it, or cause it to be done. The defendants are, therefore, active parties to the whole infringement, consenting and acting to that end, manufacturing and selling for that purpose. . . . Nor is it any excuse, that parties desiring to use the burner have all the glass manufacturers in the world from whom to procure the chimneys.

Aro Manufacturing Co. v. Convertible Top Replacement Co. [“Aro I”] 365 U.S. 336 (1961) The fabric with which we deal here is an unpatented element of respondent's combination patent, which covers only the combination of certain components, one of which is a "flexible top material." The patent makes no claim to invention based on the fabric or on its shape, pattern or design. Whether the fabric or its shape might have been patentable is immaterial, for the fact is that neither the fabric nor its shape has been patented. No claim that the fabric or its shape, pattern or design constituted the invention was made in the application or included in the patent. Since the patentees never claimed the fabric or its shape as their invention, and the claims made in the patent are the sole measure of the grant, the fabric is no more than an unpatented element of the combination which was claimed as the invention, and the patent did not confer a monopoly over the fabric or its shape. In Mercoid Corp. v. Mid-Continent Co., 320 U.S. 661, 667, this Court ruled the point as follows: "The patent is for a combination only. Since none of the separate elements of the combination is claimed as the invention, none of them when dealt with separately is protected by the patent monopoly."

And in Mercoid Corp. v. Minneapolis-Honeywell Co., 320 U.S. 680, 684, the Court said: "The fact that an unpatented part of a combination patent may distinguish the invention does not draw to it the privileges of a patent. That may be done only in the manner provided by law. However worthy it may be, however essential to the patent, an unpatented part of a combination patent is no more entitled to monopolistic protection than any other unpatented device."

See also McClain v. Ortmayer, 141 U.S. 419, 423-424; Pennock v. Dialogue, 2 Pet. 1, 16. It follows that petitioners' manufacture and sale of the fabric is not a direct infringement under 35 U.S.C. § 271 (a). . . . But the question remains whether petitioners' manufacture and sale of the fabric constitute a contributory infringement of the patent under 35 U.S.C. § 271(c). It is admitted that petitioners know that the purchasers intend to use the fabric for replacement purposes on automobile convertible tops which are covered by the claims of respondent's combination patent, and such manufacture and sale with that knowledge might well constitute contributory infringement under § 271(c), if, but only if, such a replacement by the purchaser himself would in itself constitute a direct infringement under § 271(a), for it is settled that if there is no direct infringement of a patent there can be no contributory infringement. In Mercoid v. Mid-Continent, supra, it was said: "In a word, if there is no infringement of a patent there can be no contributory infringer," 320 U.S., at 677, and that "if the purchaser and user could not be amerced as an infringer certainly one who sold to him . . . cannot be amerced for contributing to a non-existent infringement." Id., at 674. It is plain that § 271(c)—a part of the Patent Code enacted in 1952—made no change in the fundamental precept that there can be no contributory infringement in the absence of a direct infringement. That section defines contributory infringement in terms of direct infringement—namely the sale of a component of a patented combination or machine for use "in an infringement of such patent." And § 271(a) of the new Patent Chapter 9 – Dimensions of Patent Coverage

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Code, which defines "infringement," left intact the entire body of case law on direct infringement. The determinative question, therefore, comes down to whether the car owner would infringe the combination patent by replacing the worn-out fabric element of the patented convertible top on his car, or even more specifically, whether such a replacement by the car owner is infringing "reconstruction" or permissible "repair."

Aro Manufacturing Co. v. Convertible Top Replacement Co. [“Aro II”] 377 U.S. 476, 141 USPQ 681 (1964) Charles Hieken argued the cause for petitioners. With him on the briefs was David Wolf. Elliott I. Pollock argued the cause and filed a brief for respondent. MR. JUSTICE BRENNAN delivered the opinion of the Court. **** CTR brought this action against Aro in 1956 to enjoin the alleged infringement and contributory infringement, and to obtain an accounting, with respect to replacement fabrics made and sold by Aro for use in both the General Motors and the Ford cars embodying the patented structures. The interlocutory judgment entered for CTR by the District Court for the District of Massachusetts, 119 U.S. P. Q. 122, and affirmed by the Court of Appeals for the First Circuit, 270 F.2d 200, was reversed here. Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336 ("Aro I"). . . . Our decision dealt, however, only with the General Motors and not with the Ford cars. . . . The reconstruction-repair distinction is decisive, however, only when the replacement is made in a structure whose original manufacture and sale have been licensed by the patentee, as was true only of the General Motors cars; when the structure is unlicensed, as was true of the Ford cars, the traditional rule is that even repair constitutes infringement. Thus, the District Court had based its ruling for CTR with respect to the Ford cars on the alternative ground that, even if replacement of the fabric portions constituted merely repair, the car owners were still guilty of direct infringement, and Aro of contributory infringement, as to these unlicensed and hence infringing structures. 119 USPQ 122, 124. This aspect of the case was not considered or decided by our opinion in Aro I. On remand, however, another judge in the District Court read our opinion as requiring the dismissal of CTR's complaint as to the Ford as well as the General Motors cars, and entered judgment accordingly. CTR appealed the dismissal insofar as it applied to the Ford cars, and the Court of Appeals reinstated the judgment in favor of CTR to that extent. 312 F.2d 52. In our view the Court of Appeals was correct in holding that its "previous decision in this case was not reversed insofar as unlicensed Ford cars are concerned." 312 F.2d, at 57. However, we granted certiorari, 372 U.S. 958, to consider that question, and to consider also the issue that had not been decided in Aro I: whether Aro is liable for contributory infringement, under 35 U.S.C. § 271(c), with respect to its manufacture and sale of replacement fabrics for the Ford cars. I.3 CTR contends, and the Court of Appeals held, that since Ford infringed the patent by making and selling the top-structures without authority from the patentee, persons who purchased the automobiles from Ford likewise infringed by using and repairing the structures; and hence Aro, by supplying replacement fabrics specially designed to be utilized in such infringing repair, was guilty of contributory infringement under 35 U.S.C. § 271(c). . . .

3

This Part of the opinion—with the exception of the point discussed at p. 488 and note 8, infra—expresses the views of Justices Harlan, Brennan, Stewart, White, and Goldberg.

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**** [W]e must first determine whether the car owners, by replacing the worn-out fabric element of the patented top-structures, committed direct infringement. We think it clear, under § 271(a) of the Patent Code and the "entire body of case law on direct infringement" which that section "left intact," that they did. Section 271 (a) provides that "whoever without authority makes, uses or sells any patented invention . . . infringes the patent." It is not controverted—nor could it be—that Ford infringed by making and selling cars embodying the patented top-structures without any authority from the patentee. If Ford had had such authority, its purchasers would not have infringed by using the automobiles, for it is fundamental that sale of a patented article by the patentee or under his authority carries with it an "implied license to use." Adams v. Burke, 17 Wall. 453, 456; United States v. Univis Lens Co., 316 U.S. 241, 249, 250251. But with Ford lacking authority to make and sell, it could by its sale of the cars confer on the purchasers no implied license to use, and their use of the patented structures was thus "without authority" and infringing under § 271(a).5 Not only does that provision explicitly regard an unauthorized user of a patented invention as an infringer, but it has often and clearly been held that unauthorized use, without more, constitutes infringement. [citations omitted] If the owner's use infringed, so also did his repair of the top-structure, as by replacing the worn-out fabric component. Where use infringes, repair does also, for it perpetuates the infringing use. "No doubt . . . a patented article may be repaired without making the repairer an infringer, . . . but not where it is done for one who is. It is only where the device in patented form has come lawfully into the hands of the person for or by whom it is repaired that this is the case. In other words, if one without right constructs or disposes of an infringing machine, it affords no protection to another to have merely repaired it; the repairer, by supplying an essential part of the patented combination, contributing by so much to the perpetuation of the infringement." Union Special Mach. Co. v. Maimin, 161 F. 748, 750 (C. C. E. D. Pa. 1908), aff'd, 165 F. 440 (C. A. 3d Cir. 1908).

Consequently replacement of worn-out fabric components with fabrics sold by Aro, held in Aro I to constitute "repair" rather than "reconstruction" and thus to be permissible in the case of licensed General Motors cars, was not permissible here in the case of unlicensed Ford cars. Here, as was not the case in Aro I, the direct infringement by the car owners that is prerequisite to contributory infringement by Aro was unquestionably established. We turn next to the question whether Aro, as supplier of replacement fabrics for use in the infringing repair by the Ford car owners, was a contributory infringer under § 271(c) of the Patent Code. That section provides: "Whoever sells a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer."

We think Aro was indeed liable under this provision. Such a result would plainly have obtained under the contributory-infringement case law that § 271(c) was intended to codify. Indeed, most of the law was established in cases where, as here, suit was brought to hold liable for contributory infringement a supplier of replacement parts specially designed

5

We have no need to consider whether the car owners, if sued for infringement by the patentee, would be entitled to indemnity from Ford on a breach of warranty theory. In fact they were not sued, and were released from liability by the agreement between Ford and AB. See infra, at 493-495.

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for use in the repair of infringing articles. In Union Tool Co. v. Wilson, supra, 259 U.S., at 113-114, the Court held that where use of the patented machines themselves was not authorized, "There was, consequently, no implied license to use the spare parts in these machines. As such use, unless licensed, clearly constituted an infringement, the sale of the spare parts to be so used violated the injunction [enjoining infringement]."

As early as 1897, Circuit Judge Taft, as he then was, thought it "well settled" that "where one makes and sells one element of a combination covered by a patent with the intention and for the purpose of bringing about its use in such a combination he is guilty of contributory infringement and is equally liable to the patentee with him who in fact organizes the complete combination."

Thomson-Houston Elec. Co. v. Ohio Brass Co., 80 F. 712, 721 (C. A. 6th Cir. 1897). While conceding that in the case of a machine purchased from the patentee, one "may knowingly assist in assembling, repairing, and renewing a patented combination by furnishing some of the needed parts," Judge Taft added: "but, when he does so, he must ascertain, if he would escape liability for infringement, that the one buying and using them for this purpose has a license, express or implied, to do so." Id., at 723. . . . These cases are all authority for the proposition that "The right of one, other than the patentee, furnishing repair parts of a patented combination, can be no greater than that of the user, and he is bound to see that no other use of such parts is made than that authorized by the user's license." National Malleable Casting Co. v. American Steel Foundries, 182 F. 626, 641 (C. C. D. N. J. 1910). In enacting § 271(c), Congress clearly succeeded in its objective of codifying this case law. The language of the section fits perfectly Aro's activity of selling "a component of a patented . . . combination . . ., constituting a material part of the invention, . . . especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use." Indeed, this is the almost unique case in which the component was hardly suitable for any noninfringing use.7 On this basis both the District Court originally, 119 U.S.P.Q., at 124, and the Court of Appeals in the instant case, 312 F.2d, at 57, held that Aro was a contributory infringer within the precise letter of § 271(c). See also Aro I, 365 U.S., at 341. However, the language of § 271(c) presents a question, apparently not noticed by the parties or the courts below, concerning the element of knowledge that must be brought home to Aro before liability can be imposed. It is only sale of a component of a patented combination "knowing the same to be especially made or especially adapted for use in an infringement of such patent" that is contributory infringement under the statute. Was Aro "knowing" within the statutory meaning because—as it admits, and as the lower courts found—it knew that its replacement fabrics were especially designed for use in the 1952-1954 Ford convertible tops and were not suitable for other use? Or does the statute require a further showing that Aro knew that the tops were patented, and knew also that Ford was not licensed under the patent so that any fabric replacement by a Ford car owner constituted infringement? On this question a majority of the Court is of the view that § 271(c) does require a showing that the alleged contributory infringer knew that the combination for which his component was especially designed was both patented and infringing.8 With respect to many of the replacement-fabric sales involved in this case, Aro clearly had such knowledge. For by letter dated January 2, 1954, AB informed Aro that it held the Mackie-Duluk patent; that it had granted a license under the patent to General Motors but to no one else; and that "It is obvious, from the foregoing and from an inspection of the convertible automobile sold by the Ford Motor Company, that anyone selling ready-made 7

Aro's factory manager admitted that the fabric replacements in question not only were specially designed for the Ford convertibles but would not, to his knowledge, fit the top-structures of any other cars. 8 This view is held by the Chief Justice and Justices Black, Douglas, Clark and White. See the opinion of Mr. Justice Black, post, pp. 524-528, and of Mr. Justice White, post, p. 514.

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replacement fabrics for these automobiles would be guilty of contributory infringement of said patents." Thus the Court's interpretation of the knowledge requirement affords Aro no defense with respect to replacement-fabric sales made after January 2, 1954. It would appear that the overwhelming majority of the sales were in fact made after that date, since the oldest of the cars were 1952 models and since the average life of a fabric top is said to be three years. With respect to any sales that were made before that date, however, Aro cannot be held liable in the absence of a showing that at that time it had already acquired the requisite knowledge that the Ford car tops were patented and infringing. When the case is remanded, a finding of fact must be made on this question by the District Court, and, unless Aro is found to have had such prior knowledge, the judgment imposing liability must be vacated as to any sales made before January 2, 1954. As to subsequent sales, however, we hold, in agreement with the lower courts, that Aro is liable for contributory infringement within the terms of § 271(c). In seeking to avoid such liability, Aro relies on the Mercoid cases. . . . Since those cases involved essentially an application of the doctrine of patent misuse, which is not an issue in this case, they are not squarely applicable to the contributory infringement question here. On the other hand, they are hardly irrelevant. The Court in Mercoid said, among other things, that the principle that "he who sells an unpatented part of a combination patent for use in the assembled machine may be guilty of contributory infringement" could no longer prevail "against the defense that a combination patent is being used to protect an unpatented part from competition." 320 U.S., at 668. As the Court recognized, its definition of misuse was such as "to limit substantially the doctrine of contributory infringement" and to raise a question as to "what residuum may be left." 320 U.S., at 669. See Report of the Attorney General's National Committee to Study the Antitrust Laws (1955), at 252. The answer to Aro's argument is that Congress enacted § 271 for the express purpose of reinstating the doctrine of contributory infringement as it had been developed by decisions prior to Mercoid, and of overruling any blanket invalidation of the doctrine that could be found in the Mercoid opinions. . . . Hence, where Aro's sale of replacement fabrics for unlicensed Ford cars falls squarely within § 271(c), and where Aro has not properly invoked the misuse doctrine as to any other conduct by CTR or AB, Mercoid cannot successfully be employed to shield Aro from liability for contributory infringement. **** MR. JUSTICE WHITE, concurring. I agree with my Brother BLACK that the plain language and legislative history of § 271(c) require the alleged contributory infringer to have knowledge of the infringing nature of the combination to which he is contributing a part. Otherwise I share Mr. Justice Brennan's view of this case. Section 271(a) imposes no comparable requirement of knowledge in the case of the direct infringer who makes or uses the patented combination and § 287 does not say that one who makes or uses without knowledge is not infringing. It specifies that the "infringer" is not liable for damages until notice of the "infringement." In any event, § 287, as my Brother Brennan says, is not applicable here under Wine Ry. Appliance Co. v. Enterprise Ry. Equipment Co., 297 U.S. 387, because the patentee has not manufactured the article and has had no opportunity to mark it in accordance with § 287. Here the patentee gave notice to Aro and I think it is liable on Ford tops sold by it after that date, but not before, unless it had knowledge from other sources. After the notice date, the knowledge requirement of § 271(c) was satisfied and the use of Ford cars by the owners thereof was direct infringement providing the necessary predicate for contributory infringement under § 271(c). MR. JUSTICE BLACK, with whom THE CHIEF JUSTICE, MR. JUSTICE DOUGLAS and MR. JUSTICE CLARK join, dissenting. For a number of reasons I would reverse the judgment, and reinstate the order of dismissal of the District Court. **** Chapter 9 – Dimensions of Patent Coverage

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II. The Court now holds that although the fabric used on these car tops was unpatented and clearly unpatentable, the combination-patentee nevertheless is free to expand its monopoly beyond the patent's boundaries through preventing the sales of that single element, the unpatented fabric. The new majority relies largely on 35 U.S.C. § 271(c), as did Mr. Justice Harlan, Mr. Justice Frankfurter, Mr. Justice Stewart and Mr. Justice Brennan the first time this case was here. As I said, I am satisfied with the answers given to the new majority's interpretation of § 271(c) by what was said in Mr. Justice Whittaker's opinion for the Court and in my concurrence. But since the new majority is now giving Convertible a legal monopoly over the unpatented fabric cover, I find it necessary to reach the constitutional question urged by Aro. Article I, § 8 of the Constitution gives Congress the 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." The granting of patent monopolies under this constitutional authority represents a very minor exception to the Nation's traditional policy of a competitive business economy, such as is safeguarded by the antitrust laws. When articles are not patentable and therefore are in the public domain, as these fabric covers were, to grant them a legally protected monopoly offends the constitutional plan of a competitive economy free from patent monopolies except where there are patentable "Discoveries." And the grant of a patent monopoly to the fabrics can no more be justified constitutionally by calling their sale by competitors "contributory infringement" than by giving it any other label. Cf. Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234; Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225. III. The Court holds, quite properly I think, that a patentee can get only one recovery for one infringement, no matter how many different persons take part in the infringement. In this case Ford, allegedly a direct infringer of the Convertible patent, made a settlement with Convertible for all past infringements in making its cars and obtained a license to use the patent in the future. The Court holds that while there can be only one recovery for the alleged infringement which Ford turned loose on the trade, Convertible should nevertheless have an opportunity to try to prove, if it can, that it settled with Ford for less than the full amount of its damages. This, I think, brings about an unjust result which the patent law does not compel. Here Ford, the principal infringer, obtained a complete release from all damages for its infringement, and I would hold that innocent purchasers of Ford cars containing the infringing devices are entitled to be released just as Ford has been. There is considerable merit and fairness in the idea that completely releasing from liability one of several persons, all of whom are obligated to another, releases them all. This is particularly so in the area of patent law, where the doctrine of contributory infringement is rested on the belief that a direct infringer may sometimes be collection-proof, and that in such a situation the patentee should be given a chance to collect its damages from a more solvent company which knowingly aided the infringement. The original infringement, if there was infringement here, was Ford's. Fairness would require that if recovery can be had from the chief wrongdoer, here Ford, the first obligation of the injured person is to try to hold Ford completely responsible. This should be particularly true in instances like this, where one company infringes a patent and sells goods which enter into the channels of trade throughout the Nation, thereby subjecting an untold number of innocent dealers, future purchasers, and even repairmen to damages. The statutory right to sue for infringement—involving treble damages, punitive damages, attorney's fees, etc.—should not be construed in a way that permits unnecessary harassment of people who have bought their goods in the open market place. I can think of nothing much more unfair than to visit the infringement sins of a large manufacturer upon the thousands of ultimate purchasers who buy or use its goods. IV. For the foregoing reasons I believe that Aro should not be held liable for any damages at all and that the District Court should be ordered to dismiss the case. A majority of the Court, however, remands the case for determination of whether and to what extent Aro is liable for damages. Whether Aro is liable Chapter 9 – Dimensions of Patent Coverage

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for any damages at all depends on whether it and the persons to whose infringement Aro is alleged to have contributed can be held liable for damages even though they may have had no knowledge that a patent covered the top or that their conduct infringed or helped to infringe that patent. I would hold that unless there was such knowledge, there can be no infringement or contributory infringement. Section 271(c), the section dealing with contributory infringers (which Aro is alleged to be), provides that whoever sells a component of a patented combination "constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent . . . shall be liable as a contributory infringer." Usually the word "knowing" means "knowing," and I am unwilling to say that in § 271(c) it means "unknowing." This statute to me means rather plainly that in order to violate it, one who sells an article must know that the article is to be used "in an infringement of such patent" and that it is "especially made or especially adapted" for that purpose. Furthermore, the legislative history of the statute confirms this interpretation. As originally drafted § 271(c) provided: "Whoever knowingly sells a component of a patented . . . combination . . ., especially made or especially adapted for use in an infringement of such patent . . . shall be liable as a contributory infringer."

Several times the House Committee considering the bill was told that because of the position of the word "knowingly" in the section it was not clear exactly how much a person had to be shown to have known before he could be held liable as a contributory infringer. Some witnesses expressed fear that the section might be construed to mean that a person could be held liable for selling an article even though he did not know that it was adapted for use in a patented device and that it would be used in an infringement. On the other hand, advocates of a broad liability for contributory infringement said that there should be required only knowledge that an article was to be used in a particular device—that a person would be liable as a contributory infringer even if he did not know of the existence of any patent and of any likely infringement. After hearing both sides the House Committee changed the language of the bill to read, as § 271(c) now provides: "Whoever sells a component of a patented . . . combination . . ., knowing the same to be especially made or especially adapted for use in an infringement of such patent . . . shall be liable as a contributory infringer."

Both the House and Senate reports explained that "This latter paragraph is much more restricted than many proponents of contributory infringement believe should be the case. The sale of a component of a patented machine, etc., must constitute a material part of the invention and must be known to be especially made or especially adapted for use in the infringement before there can be contributory infringement . . . ."

The House Committee thus attempted to make clear that innocent persons, who acted without any knowledge that the goods they sold were adapted for use in the infringement of a patent which they knew about, could not be held liable as contributory infringers. It is hard to believe that Congress intended to hold persons liable for acts which they had no reason to suspect were unlawful, and as I have pointed out the legislative history shows Congress did not. Therefore I am wholly unwilling to construe the section as meaning that one who sells an unpatented and unpatentable piece of fabric to be used to repair an automobile top can be held liable for treble damages as a contributory infringer even though he had absolutely no knowledge that there was a patent on the top and that the top had been sold without a license, and could not, because of this lack of knowledge, have sold the top "knowing the same to be especially made or especially adapted for use in an infringement of such patent." Furthermore, to justify its result the Court today in defining "contributory infringement" expands the coverage of § 271(a), which deals with "direct infringement," so as to make every consumer or repairman who innocently buys or repairs an unmarked article which infringes a patent liable for Chapter 9 – Dimensions of Patent Coverage

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damages as a direct infringer. In order for there to be contributory infringement, the Court admits, there must be a direct infringement which the alleged contributory infringer has aided. Here Ford was a direct infringer, but Aro sold nothing to Ford. And so, in order to find a direct infringer who used Aro fabrics, and thereby justify its result, the Court says that any individual who buys a product such as an automobile from an infringing manufacturer and devotes it to his personal use is without more is liable as a direct infringer of the patent under § 271(a)—even though he did not know that the manufacturer of the product had infringed some patent, indeed, even though he perhaps did not know what a patent is. The Court's interpretation of § 271(a) concerning the lack of necessity for knowledge before a person can be mulcted in damages for direct infringement is strangely inconsistent with another provision of the patent code, 35 U.S.C. § 287, which states in unequivocal, easily understood language that "no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter." Yet the Court here is holding, with no support in any judicial precedent and certainly none in common sense or justice, that innocent consumers of patented products and those who equally innocently do no more than repair worn-out parts can be subjected to punitive or treble damages even though they neither knew nor suspected that any patent forbade them to buy, use or repair those products. It would be one thing to require those who sell new inventions for profit to check the records of the Patent Office. It is quite another to hold, as the Court now does, that every housewife, plumber, and auto repairman must do so. **** . . . I cannot believe that Congress intended to subject to damages thousands of ultimate consumers who do not know and have no reason to suspect that lawsuits are lurking in every patented contrivance concealed somewhere within the hidden recesses of their automobiles. I would reverse the judgment of the Court of Appeals and send the case back to the District Court with instructions to dismiss it.

Questions, Comments, Problems 1. Active Inducement – Judge Newman nicely summarized the tort of active inducement of infringement in National Presto Industries, Inc. v. West Bend Co., 76 F.3d 1185, 37 USPQ2d 1685 (Fed. Cir. 1996), as follows: The statutory liability for inducement of infringement derives from the common law, wherein acts that the actor knows will lead to the commission of a wrong by another, place shared liability for the wrong on the actor. See Sims v. Western Steel Co., 551 F.2d 811, 817 (10th Cir. 1977) (comparing inducer of infringement to an accessory before the fact). . . . [W]e have recognized that 35 U.S.C. § 271(b) provides a remedy against "actively and knowingly aiding and abetting another's direct infringement." Water Technologies Corp. v. Calco, Ltd., 850 F.2d 660, 668, 7 USPQ2d 1097, 1103 (Fed. Cir. 1988). 76 F.3d at 1194-95, 37 USPQ2d at ----. 2. Active Inducement – The Intent Element. Plainly, subsection (b) has an intent requirement. One who “actively induces” is not acting innocently or inadvertently. But what level of intent is required? The Federal Circuit first attempted to answer this question in Water Technologies Corp. v. Calco, Ltd., 850 F.2d 660, 668, 7 USPQ2d 1097, 1103 (Fed. Cir. 1988): The patent statute provides that “[w]hoever actively induces infringement of a patent shall be liable as an infringer.” 35 U.S.C. § 271(b) (1982). Thus, a person infringes by actively and knowingly aiding and abetting another’s direct infringement. Although section 271(b) does not use the word “knowing,” the case law and legislative history uniformly assert such a requirement. 4 D. Chisum, supra, §§ 17.04[2], [3] (and cases cited therein).

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Gartner argues that no proof of a specific, knowing intent to induce infringement exists. While proof of intent is necessary, direct evidence is not required; rather, circumstantial evidence may suffice. [citation omitted] Two years later, in Hewlett-Packard Co. v. Bausch & Lomb, Inc., 909 F.2d 1464, 15 USPQ2d 1525 (Fed. Cir. 1990), the court had this to say (per Judge Rich): At the outset, we feel that it is necessary to make clear the distinction, often confused, between active inducement of infringement under § 271(b) and contributory infringement under § 271(c). Prior to the enactment of the Patent Act of 1952, there was no statute which defined what constituted infringement. However, infringement was judicially divided into two categories: “direct infringement,” which was the unauthorized making, using or selling of the patented invention, and “contributory infringement,” which was any other activity where, although not technically making, using or selling, the defendant displayed sufficient culpability to be held liable as an infringer. See, e.g., Henry v. A.B. Dick Co., 224 U.S. 1, 33-34, . . .(1912); [citation omitted]. Such liability was under a theory of joint tortfeasance, wherein one who intentionally caused, or aided and abetted, the commission of a tort by another was jointly and severally liable with the primary tortfeasor. [citation omitted] The most common pre-1952 contributory infringement cases dealt with the situation where a seller would sell a component which was not itself technically covered by the claims of a product or process patent but which had no other use except with the claimed product or process. In such cases, although a plaintiff was required to show intent to cause infringement in order to establish contributory infringement, many courts held that such intent could be presumed because the component had no substantial non-infringing use. See Henry v. A.B. Dick, 224 U.S. at 48 . . . . The legislative history of the Patent Act of 1952 indicates that no substantive change in the scope of what constituted “contributory infringement” was intended by the enactment of § 271. [citations omitted] However, the single concept of “contributory infringement” was divided between §§ 271(b) and 271(c) into “active inducement” (a type of direct infringement) and “contributory infringement,” respectively. Section 271(c) codified the prohibition against the common type of contributory infringement referred to above, and made clear that only proof of a defendant’s knowledge, not intent, that his activity cause infringement was necessary to establish contributory infringement. Section 271(b) codified the prohibition against all other types of activity which, prior to 1952, had constituted “contributory infringement.” That, however, leaves open the question of what level of knowledge or intent is required to find active inducement under § 271(b). On its face, § 271(b) is much broader than § 271(c) and certainly does not speak of any intent requirement to prove active inducement. However, in view of the very definition of “active inducement” in pre-1952 case law and the fact that § 271(b) was intended as merely a codification of pre-1952 law, we are of the opinion that proof of actual intent to cause the acts which constitute the infringement is a necessary prerequisite to finding active inducement. Id. at 1468-69, 15 USPQ2d at 1528-29. A few months later the Federal Circuit addressed the “actual intent” issue in the context of deciding whether corporate officers could be liable for actively inducing infringement by their employer. Thus, in Manville Sales Corp. v. Paramount Systems, Inc., 917 F.2d 544, 553-54, 16 USPQ2d 1587, 1594 (Fed. Cir. 1990), the court (per Judge Michel) spoke of a “specific intent” requirement: Section 271(b) provides that “[w]hoever actively induces infringement of a patent shall be liable as an infringer.” Under this section, corporate officers who actively assist with their corporation’s infringement may be personally liable for inducing infringement regardless of whether the circumstances are such that a court should disregard the corporate entity and pierce the corporate veil. [citation omitted] The alleged infringer must be shown, however, to have knowingly induced infringement. [citation omitted] It must be established that the defendant possessed specific intent to encourage another’s infringement and not merely that the defendant had knowledge of the acts alleged to constitute inducement. The plaintiff has the burden of showing that the alleged infringer’s actions induced infringing acts and that he knew or should have known his actions would induce actual infringements. [citations omitted] In the instant case, the district court determined, pursuant to section 271(b), that Butterworth and DiSimone were liable for inducing infringement. The court did so, however, after finding that like Paramount, Butterworth and DiSimone were not aware of Manville’s patent until suit was filed and that Paramount’s subsequent infringing acts continued upon Butterworth’s and DiSimone’s “good

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faith belief,” based on advice of counsel, that Paramount’s product did not infringe. Manville, 14 USPQ2d at 1298. Based on the district court’s own findings and the record presented to us, we conclude that the district court’s decision to hold Butterworth and DiSimone liable under section 271(b) was contrary to law. There is simply neither compelling evidence nor any findings that the officers had specific intent to cause another to infringe. We therefore reverse as to the liability of the officers in their individual capacities with respect to infringement under section 271(b). What are the ramifications of Manville? Is the court equating proof of active inducement with proof of willful infringement, a subject you shall cover in a later chapter? Is the Manville court requiring more than Congress had in mind when it enacted section 271(b)? 3. In an earlier section, you learned that a patent cannot be infringed before it issues. However, can a company that makes and sells a product before a patent issues be liable for inducement of infringement for use of the product by the company’s customers after issuance? In National Presto Industries, Inc. v. West Bend Co., supra, the Federal Circuit held, as a matter of law, that such activities could not support a finding of inducement: Although the tort of inducement is itself prospective, in that the direct infringement will not have occurred until after the acts of inducement, when no patent has issued at the time of the inducement there can not be a violation of § 271(b). The principle of liability for “aiding and abetting” the wrongful acts of others is not imposed retrospectively, to make illegal an act that was not illegal when it was done. That is, if the thing that was abetted was not illegal at the time of the abetment, but depended on some future event that might not occur (such as issuance of the patent) liability can not be retroactively imposed. . . . We take note of the thoughtful district court decisions to the contrary, with reference to particularly egregious actions by the party charged. In Procter & Gamble, 3 USPQ2d 1207 (D. Del. 1985) the court referred to misappropriation of confidential information and illicit delay of patent issuance by the accused inducer, and other misconduct of the nature of fraud and unfair competition. We do not hold that such improper actions are insulated from remedy. However, we hold that the general rule is that inducement of infringement under § 271(b) does not lie when the acts of inducement occurred before there existed a patent to be infringed. Id. at 1196, 37 USPQ2d at 1693.

Governmental Infringement Infringement by the United States government presents a special infringement problem because, because the government is immune from liability unless Congress says otherwise. Congress has done so in 28 U.S.C. § 1498, by providing, as the exclusive remedy for a party aggrieved by infringement by the U.S. government (or one of its contractors), a suit for money damages in the United States Court of Federal Claims, and not a suit in federal district court. Under that section: Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner’s remedy shall be by action against the United States in the United States Court of Federal Claims for the recovery of his reasonable and entire compensation for such use and manufacture.

**** For the purpose of this section, the use or manufacture of an invention described in and covered by a patent of the United States by a contractor, a subcontractor, or any person, firm, or corporation for the Government and with the authorization or consent of the Government, shall be construed as use or manufacture for the United states.

This section, therefore, provides a remedy for a patentee whose patent has been, in effect, taken by the federal government. See W.L. Gore & Assocs., Inc. v. Garlock, Inc., 842 F.2d 1275, 1283, 6 USPQ2d 1277, ___ (Fed. Cir. 1988); see also Leesona Corp. v. United States, 599 F.2d 958, 202 Chapter 9 – Dimensions of Patent Coverage

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USPQ 424 (Ct. Cl. 1979). In suits under section 1498, the Court of Federal Claims holds bench (nonjury) trials, with appeal to the Federal Circuit, in the same manner that “normal” patent infringement cases are appealed from the district courts. A more interesting, and difficult, issue has been raised recently with respect to patent infringement by a U.S. state or an entity of a state. As you will see in Florida Prepaid, Congress has recently expressed a clear intent that patentees have the ability to sue states (or entities of states) for patent infringement. However, the question still remains whether Congress could properly exercise that power under the Constitution, and in particular, in light of the Eleventh Amendment immunity from suit that is provided the states.

Florida Prepaid Postsecondary Educ. Expense Bd. v. College Sav. Bank ___ U.S. ___, 51 USPQ2d 10 (June 23, 1999) Chief Justice Rehnquist delivered the opinion of the Court. In 1992, Congress amended the patent laws and expressly abrogated the States’ sovereign immunity from claims of patent infringement. Respondent College Savings then sued the State of Florida for patent infringement, and the Court of Appeals held that Congress had validly abrogated the State’s sovereign immunity from infringement suits pursuant to its authority under § 5 of the Fourteenth Amendment. We hold that, under City of Boerne v. Flores, 521 U.S. 507 (1997), the statute cannot be sustained as legislation enacted to enforce the guarantees of the Fourteenth Amendment’s Due Process Clause, and accordingly reverse the decision of the Court of Appeals. I Since 1987, respondent College Savings Bank, a New Jersey chartered savings bank located in Princeton, New Jersey, has marketed and sold certificates of deposit known as the CollegeSure CD, which are essentially annuity contracts for financing future college expenses. College Savings obtained a patent for its financing methodology, designed to guarantee investors sufficient funds to cover the costs of tuition for colleges. Petitioner Florida Prepaid Postsecondary Education Expenses Board (Florida Prepaid) is an entity created by the State of Florida that administers similar tuition prepayment contracts available to Florida residents and their children. See Fla. Stat. § 240.551(1) (Supp. 1998). College Savings claims that, in the course of administering its tuition prepayment program, Florida Prepaid directly and indirectly infringed College Savings’ patent. College Savings brought an infringement action under 35 U.S.C. § 271(a) against Florida Prepaid in the United States District Court for the District of New Jersey in November 1994. By the time College Savings filed its suit, Congress had already passed the Patent and Plant Variety Protection Remedy Clarification Act (Patent Remedy Act), 35 U.S.C. §§ 271(h), 296(a). Before this legislation, the patent laws stated only that “whoever” without authority made, used, or sold a patented invention infringed the patent. 35 U.S.C. § 271(a) (1988 ed.). Applying this Court’s decision in Atascadero State Hosp. v. Scanlon, 473 U.S. 234, 242-43 (1985), the Federal Circuit had held that the patent laws failed to contain the requisite statement of intent to abrogate state sovereign immunity from infringement suits. See, e.g., Chew v. California, 893 F.2d 331 (1989). In response to Chew and similar decisions, Congress enacted the Patent Remedy Act to “clarify that States, instrumentalities of States, and officers and employees of States acting in their official capacity, are subject to suit in Federal court by any person for infringement of patents and plant variety protections.” Pub. L. 102-560, preamble, 106 Stat. 4230; see also H. R. Rep. No. 101-960, pt. 1, pp. 7, 33 (1990) (hereinafter H. R. Rep.); S. Rep. No. 102-280, pp. 1, 5-6 (1992) (hereinafter S. Rep.). Section 271(h) now states: “As used in this section, the term ‘whoever’ includes any State, any instrumentality of a State, and any officer or employee of a State or instrumentality of a State acting in his official capacity.” Section 296(a) addresses the sovereign immunity issue even more specifically:

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“Any State, any instrumentality of a State, and any officer or employee of a State or instrumentality of a State acting in his official capacity, shall not be immune, under the eleventh amendment of the Constitution of the United States or under any other doctrine of sovereign immunity, from suit in Federal court by any person … for infringement of a patent under section 271, or for any other violation under this title.”

Relying on these provisions, College Savings alleged that Florida Prepaid had willfully infringed its patent under § 271, as well as contributed to and induced infringement. College Savings sought declaratory and injunctive relief as well as damages, attorney’s fees, and costs. After this Court decided Seminole Tribe of Fla v. Florida, 517 U.S. 44 (1996), Florida Prepaid moved to dismiss the action on the grounds of sovereign immunity. Florida Prepaid argued that the Patent Remedy Act was an unconstitutional attempt by Congress to use its Article I powers to abrogate state sovereign immunity. College Savings responded that Congress had properly exercised its power pursuant to § 5 of the Fourteenth Amendment to enforce the guarantees of the Due Process Clause in § 1 of the Amendment. The United States intervened to defend the constitutionality of the statute. Agreeing with College Savings, the District Court denied Florida Prepaid’s motion to dismiss, 948 F. Supp. 400 (N. J. 1996), and the Federal Circuit affirmed, 148 F.3d 1343 (1998). The Federal Circuit held that Congress had clearly expressed its intent to abrogate the States’ immunity from suit in federal court for patent infringement, and that Congress had the power under §5 of the Fourteenth Amendment to do so. Id., at 1347. The court reasoned that patents are property subject to the protections of the Due Process Clause and that Congress’ objective in enacting the Patent Remedy Act was permissible because it sought to prevent States from depriving patent owners of this property without due process. See id., at 1349-50. The court rejected Florida Prepaid’s argument that it and other States had not deprived patent owners of their property without due process, and refused to “deny Congress the authority to subject all states to suit for patent infringement in the federal courts, regardless of the extent of procedural due process that may exist at any particular time.” Id., at 1351. Finally, the court held that the Patent Remedy Act was a proportionate response to state infringement and an appropriate measure to protect patent owners’ property under this Court’s decision in City of Boerne, 521 U.S., at 519. The court concluded that significant harm results from state infringement of patents, 148 F.3d, at 1353-54, and “[t]here is no sound reason to hold that Congress cannot subject a state to the same civil consequences that face a private party infringer,” id., at 1355. We granted certiorari, 525 U.S. __ (1999), and now reverse. II The Eleventh Amendment provides: “The Judicial Power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.”

As the Court recently explained in Seminole Tribe, supra, at 54: “Although the text of the Amendment would appear to restrict only the Article III diversity jurisdiction of the federal courts, ‘we have understood the Eleventh Amendment to stand not so much for what it says, but for the presupposition . . . which it confirms.’ That presupposition, first observed over a century ago in Hans v. Louisiana, 134 U.S. 1 (1890), has two parts: first, that each State is a sovereign entity in our federal system; and second, that ‘ “[i]t is inherent in the nature of sovereignty not to be amenable to the suit of an individual without its consent.” ’ Id., at 13 (emphasis deleted), quoting the Federalist No. 81 . . . . For over a century we have reaffirmed that federal jurisdiction over suits against unconsenting States ‘was not contemplated by the Constitution when establishing the judicial power of the United States.’ Hans, supra, at 15.”

Here, College Savings sued the State of Florida in federal court and it is undisputed that Florida has not expressly consented to suit. College Savings and the United States argue that Florida has impliedly waived its immunity under Parden v. Terminal R. Co. of Ala. Docks Dept., 377 U.S. 184 (1964). That argument, however, is foreclosed by our decision in the companion case overruling the constructive

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waiver theory announced in Parden. See College Savings Bank v. Florida Prepaid, Postsecondary Ed. Expense Bd., 52_ U.S. __ (1999). College Savings and the United States nonetheless contend that Congress’ enactment of the Patent Remedy Act validly abrogated the States’ sovereign immunity. To determine the merits of this proposition, we must answer two questions: “first, whether Congress has ‘unequivocally expresse[d] its intent to abrogate the immunity,’ … and second, whether Congress has acted ‘pursuant to a valid exercise of power.’ ” Seminole Tribe, supra, at 55. We agree with the parties and the Federal Circuit that in enacting the Patent Remedy Act, Congress has made its intention to abrogate the States’ immunity “ ‘unmistakably clear in the language of the statute.’ ” Dellmuth v. Muth, 491 U.S. 223, 228 (1989). Indeed, Congress’ intent to abrogate could not have been any clearer. See 35 U.S.C. § 296(a) (“Any State . . . shall not be immune, under the eleventh amendment of the Constitution of the United States or under any other doctrine of sovereign immunity, from suit in federal court . . . for infringement of a patent.”). Whether Congress had the power to compel States to surrender their sovereign immunity for these purposes, however, is another matter. Congress justified the Patent Remedy Act under three sources of constitutional authority: the Patent Clause, Art. I, § 8, cl. 8; the Interstate Commerce Clause, Art. I, § 8, cl. 3; and §5 of the Fourteenth Amendment. See S. Rep., at 7-8; H. R. Rep., at 39-40. In Seminole Tribe, of course, this Court overruled the plurality opinion in Pennsylvania v. Union Gas Co., 491 U.S. 1 (1989), our only prior case finding congressional authority to abrogate state sovereign immunity pursuant to an Article I power (the Commerce Clause). 517 U.S., at 72-73. Seminole Tribe makes clear that Congress may not abrogate state sovereign immunity pursuant to its Article I powers; hence the Patent Remedy Act cannot be sustained under either the Commerce Clause or the Patent Clause. Ibid. The Federal Circuit recognized this, and College Savings and the United States do not contend otherwise. Instead, College Savings and the United States argue that the Federal Circuit properly concluded that Congress enacted the Patent Remedy Act to secure the Fourteenth Amendment’s protections against deprivations of property without due process of law. The Fourteenth Amendment provides in relevant part: “Section 1. . . . No State shall . . . deprive any person of life, liberty, or property, without due process of law. . . . . “Section 5. The Congress shall have power to enforce, by appropriate legislation, the provisions of this article.”

While reaffirming the view that state sovereign immunity does not yield to Congress’ Article I powers, this Court in Seminole Tribe also reaffirmed its holding in Fitzpatrick v. Bitzer, 427 U.S. 445 (1976), that Congress retains the authority to abrogate state sovereign immunity pursuant to the Fourteenth Amendment. Our opinion explained that in Fitzpatrick, “we recognized that the Fourteenth Amendment, by expanding federal power at the expense of state autonomy, had fundamentally altered the balance of state and federal power struck by the Constitution.” Seminole Tribe, supra, at 59. The Court further described Fitzpatrick as holding that “through the Fourteenth Amendment, federal power extended to intrude upon the province of the Eleventh Amendment and therefore that §5 of the Fourteenth Amendment allowed Congress to abrogate the immunity from suit guaranteed by that Amendment.” Seminole Tribe, supra, at 59. College Savings and the United States are correct in suggesting that “appropriate” legislation pursuant to the Enforcement Clause of the Fourteenth Amendment could abrogate state sovereignty. Congress itself apparently thought the Patent Remedy Act could be so justified: “[T]he bill is justified as an acceptable method of enforcing the provisions of the fourteenth amendment. The Court in Lemelson v. Ampex Corp. [372 F. Supp. 708 (ND Ill. 1974)] recognized that a patent is a form of property, holding that a right to compensation exists for patent infringement. Additionally, because courts have continually recognized patent rights as property, the fourteenth amendment

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prohibits a State from depriving a person of property without due process of law.” S. Rep., at 8 (footnotes omitted).

We have held that “[t]he ‘provisions of this article,’ to which § 5 refers, include the Due Process Clause of the Fourteenth Amendment.” City of Boerne v. Flores, 521 U.S., at 519. But the legislation must nonetheless be “appropriate” under § 5 as that term was construed in City of Boerne. There, this Court held that the Religious Freedom Restoration Act of 1993 (RFRA), 107 Stat. 1488, 42 U.S.C. § 2000bb et seq., exceeded Congress’ authority under § 5 of the Fourteenth Amendment, insofar as RFRA was made applicable to the States. RFRA was enacted “in direct response to” this Court’s decision in Employment Div., Dept. of Human Resources of Ore. v. Smith, 494 U.S. 872 (1990), which construed the Free Exercise Clause of the First Amendment to hold that “neutral, generally applicable laws may be applied to religious practices even when not supported by a compelling governmental interest.” City of Boerne, supra, at 512, 514. Through RFRA, Congress reinstated the compelling governmental interest test eschewed by Smith by requiring that a generally applicable law placing a “substantial burden” on the free exercise of religion must be justified by a “compelling governmental interest” and must employ the “least restrictive means” of furthering that interest. 521 U.S., at 515-16. In holding that RFRA could not be justified as “appropriate” enforcement legislation under § 5, the Court emphasized that Congress’ enforcement power is “remedial” in nature. Id., at 519. We recognized that “[l]egislation which deters or remedies constitutional violations can fall within the sweep of Congress’ enforcement power even if in the process it prohibits conduct which is not itself unconstitutional and intrudes into ‘legislative spheres of autonomy previously reserved to the States.’ ” Id., at 518 (citation omitted). We also noted, however, that “ ‘[a]s broad as the congressional enforcement power is, it is not unlimited,’ ” ibid, and held that “Congress does not enforce a constitutional right by changing what the right is. It has been given the power ‘to enforce,’ not the power to determine what constitutes a constitutional violation,” id., at 519. Canvassing the history of the Fourteenth Amendment and case law examining the propriety of Congress’ various voting rights measures,5 the Court explained: “While the line between measures that remedy or prevent unconstitutional actions and measures that make a substantive change in the governing law is not easy to discern, and Congress must have wide latitude in determining where it lies, the distinction exists and must be observed. There must be a congruence and proportionality between the injury to be prevented or remedied and the means adopted to that end. Lacking such a connection, legislation may become substantive in operation and effect.”

Id., at 519-20. We thus held that for Congress to invoke § 5, it must identify conduct transgressing the Fourteenth Amendment’s substantive provisions, and must tailor its legislative scheme to remedying or preventing such conduct. RFRA failed to meet this test because there was little support in the record for the concerns that supposedly animated the law. Id., at 530-31. And, unlike the measures in the voting rights cases, RFRA’s provisions were “so out of proportion to a supposed remedial or preventive object” that it could not be understood “as responsive to, or designed to prevent, unconstitutional behavior.” Id., at 532; see also id., at 534 (“Simply put, RFRA is not designed to identify and counteract state laws likely to be unconstitutional”). Can the Patent Remedy Act be viewed as remedial or preventive legislation aimed at securing the protections of the Fourteenth Amendment for patent owners? Following City of Boerne, we must first identify the Fourteenth Amendment “evil” or “wrong” that Congress intended to remedy, guided by the principle that the propriety of any § 5 legislation “must be judged with reference to the historical experience … it reflects.” Id., at 525. The underlying conduct at issue here is state infringement of 5

See South Carolina v. Katzenbach, 383 U.S. 301 (1966); Katzenbach v. Morgan, 384 U.S. 641 (1966); Oregon v. Mitchell, 400 U.S. 112 (1970); City of Rome v. United States, 446 U.S. 156 (1980).

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patents and the use of sovereign immunity to deny patent owners compensation for the invasion of their patent rights. See H. R. Rep., at 37-38 (“[P]atent owners are effectively denied a remedy for damages resulting from infringement by a State or State entity”); S. Rep., at 6 (“[P]laintiffs in patent infringement cases against a State are foreclosed from damages, regardless of the State conduct”). It is this conduct then—unremedied patent infringement by the States—that must give rise to the Fourteenth Amendment violation that Congress sought to redress in the Patent Remedy Act. In enacting the Patent Remedy Act, however, Congress identified no pattern of patent infringement by the States, let alone a pattern of constitutional violations. Unlike the undisputed record of racial discrimination confronting Congress in the voting rights cases, see City of Boerne, supra, at 525-27, Congress came up with little evidence of infringing conduct on the part of the States. The House Report acknowledged that “many states comply with patent law” and could provide only two examples of patent infringement suits against the States. See H. R. Rep., at 38. The Federal Circuit in its opinion identified only eight patent-infringement suits prosecuted against the States in the 110 years between 1880 and 1990. See 148 F.3d, at 1353-54. Testimony before the House Subcommittee in favor of the bill acknowledged that “states are willing and able to respect patent rights. The fact that there are so few reported cases involving patent infringement claims against states underlies the point.” Patent Remedy Clarification Act: Hearing on H. R. 3886 before the Subcommittee on Courts, Intellectual Property, and the Administration of Justice of the House Committee on the Judiciary, 101st Cong., 2d Sess., 56 (1990) (hereinafter House Hearings) (statement of William S. Thompson); id., at 32 (statement of Robert Merges) (“[S]tates do occasionally find themselves in patent infringement suits”). Even the bill’s sponsor conceded that “[w]e do not have any evidence of massive or widespread violation of patent laws by the States either with or without this State immunity.” Id., at 22 (statement of Rep. Kastenmeier).6 The Senate Report, as well, contains no evidence that unremedied patent infringement by States had become a problem of national import. At most, Congress heard testimony that patent infringement by States might increase in the future, see House Hearings 22 (statement of Jeffrey Samuels); id., at 36-37 (statement of Robert Merges); id., at 57 (statement of William Thompson), and acted to head off this speculative harm. See H. R. Rep., at 38. College Savings argues that by infringing a patent and then pleading immunity to an infringement suit, a State not only infringes the patent, but deprives the patentee of property without due process of law and “takes” the property in the patent without paying the just compensation required by the Fifth Amendment.7 The United States declines to defend the Act as based on the Just Compensation Clause, but joins in College Savings’ defense of the Act as designed to prevent a State from depriving a patentee of property without due process of law. College Savings contends that Congress may not invoke § 5 to protect property interests that it has created in the first place under Article 1. Patents, however, have long been considered a species of property. See Brown v. Duchesne, 19 How. 183, 197 (1857) (“For, by the laws of the United States, the rights of a party under a patent are his private 6

Representative Kastenmeier made this statement in the course of questioning Jeffrey M. Samuels, Acting Commissioner of Patents and Trademarks, U.S. Department of Commerce. The discussion continued: “MR. KASTENMEIER: . . . Accordingly, could one argue that this legislation may be premature. We really do not know whether it will have any affect [sic] or not. “MR. SAMUELS: Well, you are right, Mr. Chairman. There have not been many cases that have raised this issue. I guess our feeling is that it is a step that should be taken now because the possibility exists in light of Atascadero and in light of the Chew case that more States will get involved in infringing patents. “I guess as a general policy statement, we believe that those engaged–those who do engage in patent infringement should be subject to all the remedies that are set forth in the Patent Act and that the rights of a patent owner should not be dependent upon the identity of the entity who is infringing, whether it be a private individual, or corporation, or State. “So just as a general philosophical matter, we believe that this law needs to be passed.” 7 There is no suggestion in the language of the statute itself, or in the House or Senate Reports of the bill which became the statute, that Congress had in mind the Just Compensation Clause of the Fifth Amendment. Since Congress was so explicit about invoking its authority under Article I and its authority to prevent a State from depriving a person of property without due process of law under the Fourteenth Amendment, we think this omission precludes consideration of the Just Compensation Clause as a basis for the Patent Remedy Act.

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property”); cf., Consolidated Fruit-Jar Co. v. Wright, 94 U.S. 92, 96 (1877) (“A patent for an invention is as much property as a patent for land”). As such, they are surely included within the “property” of which no person may be deprived by a State without due process of law. And if the Due Process Clause protects patents, we know of no reason why Congress might not legislate against their deprivation without due process under § 5 of the Fourteenth Amendment. Though patents may be considered “property” for purposes of our analysis, the legislative record still provides little support for the proposition that Congress sought to remedy a Fourteenth Amendment violation in enacting the Patent Remedy Act. The Due Process Clause provides, “nor shall any State deprive any person of life, liberty, or property, without due process of law.” U.S. Const., Amdt. 14, § 1 (emphasis added). This Court has accordingly held that “[i]n procedural due process claims, the deprivation by state action of a constitutionally protected interest . . . is not in itself unconstitutional; what is unconstitutional is the deprivation of such an interest without due process of law.” Zinermon v. Burch, 494 U.S. 113, 125 (1990) (emphasis deleted). Thus, under the plain terms of the Clause and the clear import of our precedent, a State’s infringement of a patent, though interfering with a patent owner’s right to exclude others, does not by itself violate the Constitution. Instead, only where the State provides no remedy, or only inadequate remedies, to injured patent owners for its infringement of their patent could a deprivation of property without due process result. See Parratt v. Taylor, 451 U.S. 527, 529-31 (1981); Hudson v. Palmer, 468 U.S. 517, 532-33 (1984); id., at 539 (O’Connor, J., concurring) (“[I]n challenging a property deprivation, the claimant must either avail himself of the remedies guaranteed by state law or prove that the available remedies are inadequate … . When adequate remedies are provided and followed, no … deprivation of property without due process can result”). Congress, however, barely considered the availability of state remedies for patent infringement and hence whether the States’ conduct might have amounted to a constitutional violation under the Fourteenth Amendment. It did hear a limited amount of testimony to the effect that the remedies available in some States were uncertain. The primary point made by these witnesses, however, was not that state remedies were constitutionally inadequate, but rather that they were less convenient than federal remedies, and might undermine the uniformity of patent law. See, e.g., House Hearings, at 43 (statement of Robert Merges) (“[U]niformity again dictates that that sovereign immunity is a mistake in this field because of the variance among the State’s laws”), id., at 34, 41 (Merges); id., at 58 (statement of William Thompson).9 Congress itself said nothing about the existence or adequacy of state remedies in the statute or in the Senate Report, and made only a few fleeting references to state remedies in the House Report, essentially repeating the testimony of the witnesses. See H. R. Rep., at 37, n. 158 (“[T]he availability of a State remedy is tenuous and could vary significantly State to State”); id., at 38 (“[I]f patentees turn to the State courts for alternative forms of relief from patent infringement, the result will be a patchwork of State laws, actually undermining the goal of national uniformity in our patent system”). The need for uniformity in the construction of patent law is undoubtedly important, but that is a factor which belongs to the Article I patent-power calculus, rather than to any determination of whether a state plea of sovereign immunity deprives a patentee of property without due process of law. We have also said that a state actor’s negligent act that causes unintended injury to a person’s property does not “deprive” that person of property within the meaning of the Due Process Clause. See Daniels v. Williams, 474 U.S. 327, 328 (1986). Actions predicated on direct patent infringement, however, do 9

It is worth mentioning that the State of Florida provides remedies to patent owners for alleged infringement on the part of the State. Aggrieved parties may pursue a legislative remedy through a claims bill for payment in full, Fla. Stat. §11.065 (1997), or a judicial remedy through a takings or conversion claim, see Jacobs Wind Electric Co. v. Florida Dept. of Transp., 626 So. 2d 1333 (Fla. 1993).

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not require any showing of intent to infringe; instead, knowledge and intent are considered only with respect to damages. See 35 U.S.C. § 271(a) (1994 ed., Supp. III); 5 D. Chisum, Patents §16.02[2], p. 16-31 (rev. ed. 1998) (“ ‘It is, of course, elementary, that an infringement may be entirely inadvertent and unintentional and without knowledge of the patent’ ”). Congress did not focus on instances of intentional or reckless infringement on the part of the States. Indeed, the evidence before Congress suggested that most state infringement was innocent or at worst negligent. See S. Rep., at 10 (“ ‘It is not always clear that with all the products that [government] buy[s], that anyone is really aware of the patent status of any particular invention or device or product’ ”); H. R. Rep., at 39 (“[I]t should be very rare for a court to find . . . willful infringement on the part of a State or State agency”). Such negligent conduct, however, does not violate the Due Process Clause of the Fourteenth Amendment. The legislative record thus suggests that the Patent Remedy Act does not respond to a history of “widespread and persisting deprivation of constitutional rights” of the sort Congress has faced in enacting proper prophylactic § 5 legislation. City of Boerne, 521 U.S., at 526. Instead, Congress appears to have enacted this legislation in response to a handful of instances of state patent infringement that do not necessarily violate the Constitution. Though the lack of support in the legislative record is not determinative, see id., at 531, identifying the targeted constitutional wrong or evil is still a critical part of our § 5 calculus because “[s]trong measures appropriate to address one harm may be an unwarranted response to another, lesser one,” id., at 530. Here, the record at best offers scant support for Congress’ conclusion that States were depriving patent owners of property without due process of law by pleading sovereign immunity in federal-court patent actions. Because of this lack, the provisions of the Patent Remedy Act are “so out of proportion to a supposed remedial or preventive object that [they] cannot be understood as responsive to, or designed to prevent, unconstitutional behavior.” Id., at 532. An unlimited range of state conduct would expose a State to claims of direct, induced, or contributory patent infringement, and the House Report itself cited testimony acknowledging “ ‘it[’]s difficult for us to identify a patented product or process which might not be used by a state.’ ” H. R. Rep., supra, at 38.10 Despite subjecting States to this expansive liability, Congress did nothing to limit the coverage of the Act to cases involving arguable constitutional violations, such as where a State refuses to offer any state-court remedy for patent owners whose patents it had infringed. Nor did it make any attempt to confine the reach of the Act by limiting the remedy to certain types of infringement, such as nonnegligent infringement or infringement authorized pursuant to state policy; or providing for suits only against States with questionable remedies or a high incidence of infringement. Instead, Congress made all States immediately amenable to suit in federal court for all kinds of possible patent infringement and for an indefinite duration. Our opinion in City of Boerne discussed with approval the various limits that Congress imposed in its voting rights measures, see 521 U.S., at 53233, and noted that where “a congressional enactment pervasively prohibits constitutional state action in an effort to remedy or to prevent unconstitutional state action, limitations of this kind tend to ensure Congress’ means are proportionate to ends legitimate under § 5,” id., at 533. The Patent Remedy Act’s indiscriminate scope offends this principle, and is particularly incongruous in light of the scant support for the predicate unconstitutional conduct that Congress intended to remedy. In sum, it simply cannot be said that “many of [the acts of infringement] affected by the congressional enactment have a significant likelihood of being unconstitutional.” Id., at 532.

10

The relevant testimony stated in full: “The comments regarding copyright centered on substantial use of copyrighted textbooks by state universities as well as state use of copyrighted music and computer software. State use of patented products is more diverse and more substantial. Patented inventions are involved in all manner of commonly used machines, tools, instruments, chemicals, compounds, materials, and devices of all description and purpose. Furthermore, patented processes are commonplace. States and state instrumentalities own and operate hospitals, universities, prisons, and libraries. States build and maintain roads. States provide facilities and equipment for large numbers of employees who perform all manner of state supported activities. It[’]s difficult for us to identify a patented product or process which might not be used by a state.” House Hearings 55 (statement of William Thompson).

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The historical record and the scope of coverage therefore make it clear that the Patent Remedy Act cannot be sustained under § 5 of the Fourteenth Amendment. The examples of States avoiding liability for patent infringement by pleading sovereign immunity in a federal-court patent action are scarce enough, but any plausible argument that such action on the part of the State deprived patentees of property and left them without a remedy under state law is scarcer still. The statute’s apparent and more basic aims were to provide a uniform remedy for patent infringement and to place States on the same footing as private parties under that regime.11 These are proper Article I concerns, but that Article does not give Congress the power to enact such legislation after Seminole Tribe. The judgment of the Court of Appeals is reversed, and the case is remanded for proceedings consistent with this opinion. It is so ordered.

Justice Stevens, with whom Justice Souter, Justice Ginsburg, and Justice Breyer join, dissenting. The Constitution vests Congress with plenary authority over patents and copyrights. U.S. Const., Art. I, § 8, cl. 8. Nearly 200 years ago, Congress provided for exclusive jurisdiction of patent infringement litigation in the federal courts. See Campbell v. Haverhill, 155 U.S. 610, 620 (1895). In 1992 Congress clarified that jurisdictional grant by an amendment to the patent law that unambiguously authorizes patent infringement actions against States, state instrumentalities, and any officer or employee of a State acting in his official capacity. Pub. L. 102-560, 106 Stat. 4230, 35 U.S.C. § 271(h). Given the absence of effective state remedies for patent infringement by States and the statutory pre-emption of such state remedies, the 1992 Patent and Plant Variety Protection Remedy Clarification Act (Patent Remedy Act) was an appropriate exercise of Congress’ power under §5 of the Fourteenth Amendment to prevent state deprivations of property without due process of law. This Court’s recent decision in City of Boerne v. Flores, 521 U.S. 507 (1997), amply supports congressional authority to enact the Patent Remedy Act, whether one assumes that States seldom infringe patents, see ante, at 11-13, 17, or that patent infringements potentially permeate an “unlimited range of state conduct,” see ante, at 18. Before discussing City of Boerne, however, I shall comment briefly on the principle that undergirds all aspects of our patent system: national uniformity. I In his commentaries on the Federal Constitution, Justice Story said of the Patent and Copyright Clauses: “It is beneficial to all parties, that the national government should possess this power; to authors and inventors, because, otherwise, they would be subjected to the varying laws and systems of the different states on this subject, which would impair, and might even destroy the value of their rights; to the public, as it will promote the progress of science and the useful arts, and admit the people at large, after a short interval, to the full possession and enjoyment of all writings and inventions without restraint.”

J. Story, Commentaries on the Constitution of the United States §502, p. 402 (R. Rotunda & J. Nowak eds. 1987).

11

See 35 U.S.C. § 271(h) (stating that States and state entities “shall be subject to the provisions of this title in the same manner and to the same extent as any nongovernmental entity”); see also H. R. Rep., at 40 (“The Committee believes that the full panoply of remedies provided in the patent law should be available to patentees whose legitimate rights have been infringed by States or State entities”); S. Rep., at 14. Thus, contrary to the dissent’s intimation, see post, at 16, the Patent Remedy Act does not put States in the same position as the United States. Under the Patent Remedy Act, States are subject to all the remedies available to plaintiffs in infringement actions, which include punitive damages and attorney’s fees, see 35 U.S.C. § 284 285, as well as injunctive relief, see §283. In waiving its own immunity from patent infringement actions in 28 U.S.C. § 1498(a) (1994 ed. and Supp. III), however, the United States did not consent to either treble damages or injunctive relief, and allowed reasonable attorney’s fees only in a narrow class of specified instances.

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James Madison said of the same Clause, “The utility of this power will scarcely be questioned … . The States cannot separately make effectual provision for either [copyrights or patents], and most of them have anticipated the decision of this point, by laws passed at the instance of Congress.” The Federalist No. 43, p. 267 (H. Lodge ed. 1908) (J. Madison). Sound reasons support both Congress’ authority over patents and its subsequent decision in 1800 to vest exclusive jurisdiction over patent infringement litigation in the federal courts. The substantive rules of law that are applied in patent infringement cases are entirely federal. From the beginning, Congress has given the patentee the right to bring an action for patent infringement. § 4, 1 Stat. 111. There is, accordingly, a strong federal interest in an interpretation of the patent statutes that is both uniform and faithful to the constitutional goals of stimulating invention and rewarding the disclosure of novel and useful advances in technology. See Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 9 (1966). Federal interests are threatened, not only by inadequate protection for patentees, but also when overprotection may have an adverse impact on a competitive economy. See Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 162-63 (1989). Therefore, consistency, uniformity, and familiarity with the extensive and relevant body of patent jurisprudence are matters of overriding significance in this area of the law. Patent infringement litigation often raises difficult technical issues that are unfamiliar to the average trial judge. That consideration, as well as the divergence among the federal circuits in their interpretation of patent issues, provided support for the congressional decision in 1982 to consolidate appellate jurisdiction of patent appeals in the Court of Appeals for the Federal Circuit. Although that court has jurisdiction over all appeals from federal trial courts in patent infringement cases, it has no power to review state court decisions on questions of patent law. See 28 U.S.C. § 1295. The reasons that motivated the creation of the Federal Circuit would be undermined by any exception that allowed patent infringement claims to be brought in state court. Today the Court first acknowledges that the “need for uniformity in the construction of patent law is undoubtedly important,” ante, at 16, but then discounts its significance as merely “a factor which belongs to the Article I patent-power calculus, rather than to any determination of whether a state plea of sovereign immunity deprives a patentee of property without due process of law.” Ibid. But the “Article I patent-power calculus,” is directly relevant to this case because it establishes the constitutionality of the congressional decision to vest exclusive jurisdiction over patent infringement cases in the federal courts. That basic decision was unquestionably appropriate. It was equally appropriate for Congress to abrogate state sovereign immunity in patent infringement cases in order to close a potential loophole in the uniform federal scheme, which, if undermined, would necessarily decrease the efficacy of the process afforded to patent holders. II Our recent decision in City of Boerne v. Flores, 521 U.S. 507 (1997), sets out the general test for determining whether Congress has enacted “appropriate” legislation pursuant to § 5 of the Fourteenth Amendment. “There must be a congruence and proportionality between the injury to be prevented or remedied and the means adopted to that end.” Id., at 520. The first step of the inquiry, then, is to determine what injury Congress sought to prevent or remedy with the relevant legislation. As the Court recognizes, Congress’ authority under § 5 of the Fourteenth Amendment extends to enforcing the Due Process Clause of that Amendment. Ante, at 9. Congress decided, and I agree, that the Patent Remedy Act was a proper exercise of this power. The Court acknowledges, as it must, that patents are property. Ante, at 14; see also Consolidated Fruit-Jar Co. v. Wright, 94 U.S. 92, 96 (1877). Every valid patent “gives the patentee or his assignee the ‘exclusive right to make, use, and vend the invention or discovery’ for a limited period.” TransparentWrap Machine Corp. v. Stokes & Smith Co., 329 U.S. 637, 643 (1947). The Court suggests, however, that a State’s infringement of a patent does not necessarily constitute a “deprivation” within the Chapter 9 – Dimensions of Patent Coverage

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meaning of the Due Process Clause, because the infringement may be done negligently. Ante, at 1617. As part of its attempt to stem the tide of prisoner litigation, and to avoid making “the Fourteenth Amendment a font of tort law to be superimposed upon whatever systems may already be administered by the States,” Daniels v. Williams, 474 U.S. 327, 332-34 (1986), this Court has drawn a constitutional distinction between negligent and intentional misconduct. Injuries caused by the mere negligence of state prison officials–in leaving a pillow on the stairs of the jail, for example—do not “deprive” anyone of liberty or property within the meaning of the Due Process Clause of that Amendment. Ibid. On the other hand, willful misconduct, and perhaps “recklessness or gross negligence,” may give rise to such a deprivation. Id., at 334. While I disagree with the Court’s assumption that this standard necessarily applies to deprivations of patent rights, the Daniels line of cases has only marginal relevance to this case: Respondent College Savings Bank has alleged that petitioner’s infringement was willful. The question presented by this case, then, is whether the Patent Remedy Act, which clarified Congress’ intent to subject state infringers to suit in federal court, may be applied to willful infringement.5 As I read the Court’s opinion, its negative answer to that question has nothing to do with the facts of this case. Instead, it relies entirely on perceived deficiencies in the evidence reviewed by Congress before it enacted the clarifying amendment. “In enacting the Patent Remedy Act … Congress identified no pattern of patent infringement by the States, let alone a pattern of constitutional violations.” Ante, at 11. It is quite unfair for the Court to strike down Congress’ Act based on an absence of findings supporting a requirement this Court had not yet articulated. The legislative history of the Patent Remedy Act makes it abundantly clear that Congress was attempting to hurdle the then-most-recent barrier this Court had erected in the Eleventh Amendment course–the “clear statement” rule of Atascadero State Hospital v. Scanlon, 473 U.S. 234 (1985).6 Nevertheless, Congress did hear testimony about inadequate state remedies for patent infringement when considering the Patent Remedy Act. The leading case referred to in the congressional hearing was Chew v. California, 893 F.2d 331 (CA Fed. 1990). In fact, Chew prompted Congress to consider the legislation that became the Patent Remedy Act. See H. R. Rep. No. 101-960, pt. 1, p. 7, and n.20 (1990). The Federal Circuit held in that case that congressional intent to abrogate state sovereign immunity under the patent laws was not “unmistakably clear,” as this Court had required in Atascadero. Chew, 893 F.2d, at 334. The facts of Chew clearly support both Congress’ decision and authority to enact the Patent Remedy Act. Marian Chew had invented a method for testing automobile engine exhaust emissions and secured a patent on her discovery. Her invention was primarily used by States and other governmental 5

As a practical matter, infringement actions based on mere negligence rarely arise. Most patent infringers are put on notice that their conduct may be actionable before an infringement suit is filed. “The first step in enforcing a patent is usually to send a cease-and-desist or charge-of-infringement letter.” Pokotilow & Siegal, Cease and Desist Letters: The Legal Pitfalls for Patentees, Intellectual Property Strategist, Dec. 1997, 1. 6 The Chairman of the House Subcommittee considering the Patent Remedy Act, Representative Kastenmeier, engaged in the following dialogue with William Thompson, President of the American Intellectual Property Law Association, about whether States were definitively immune from suit under the Eleventh Amendment following the Federal Circuit’s recent decision in Chew v. California, 893 F.2d 331 (1990): “MR. KASTENMEIER. ‘You mentioned that you do not see the likelihood of further cases in this area since the Atascadero and Chew cases seem to be fairly definitive on this question, unless there were in fact remedial legislation. Do you anticipate that remedial legislation, such as the bill before us, if passed into law, would be the subject of litigation? MR. THOMPSON. ‘No, I think it would be very clear. Your legislation is very clearly drawn. It seems to match the tests set forth in Atascadero of making it very clear that the patent statute is one that would qualify as an abrogation area [sic] in the 11th amendment. “I can never guarantee exactly how attorneys are going to read statutes, Mr. Chairman, but all of the sane ones would not bring an action.’” Hearing before the Subcommittee on Courts, Intellectual Property, and the Administration of Justice of the House Committee on the Judiciary, 101st Cong., 2d Sess., 60 (1990) (House Hearing).

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entities. In 1987, Chew, an Ohio resident, sued the State of California in federal court for infringing her patent. California filed a motion to dismiss on Eleventh Amendment grounds, which the District Court granted. The Federal Circuit affirmed, id., at 332, expressly stating that the question whether Chew had a remedy under California law “is a question not before us.” Nevertheless, it implied that its decision would have been the same even if Chew were left without any remedy. Id., at 336. During its hearing on the Patent Remedy Act, Congress heard testimony about the Chew case. Professor Merges stated that Chew might not have been able to draft her infringement suit as a tort claim. “This might be impossible, o[r] at least difficult, under California law. Consequently, relief under [state statutes] may be not be a true alternative avenue of recovery.” House Hearing 33.7 Congress heard other general testimony that state remedies would likely be insufficient to compensate inventors whose patents had been infringed. The Acting Commissioner of Patents stated: “If States and their instrumentalities were immune from suit in federal court for patent infringement, patent holders would be forced to pursue uncertain, perhaps even non-existent, remedies under State law.” Id., at 15. The legislative record references several cases of patent infringement involving States. See Paperless Accounting, Inc. v. Mass Transit Administration, Civil No. HAR 84-2922 (D. Md. 1985) (cited in House Hearing, at 56); Hercules, Inc. v. Minnesota State Highway Dept., 337 F. Supp. 795 (Minn. 1972) (House Hearing at 51); Lemelson v. Ampex Corp., 372 F. Supp. 708 (ND Ill. 1974) (same). In addition, Congress found that state infringement of patents was likely to increase. H. R. Rep. No. 101-960, pt. 1, p. 38 (1990). The Court’s opinion today dismisses this rationale: “At most, Congress heard testimony that patent infringement by States might increase in the future and acted to head off this speculative harm.” Ante, at 13 (citations omitted). In fact, States and their instrumentalities, especially state universities, have been involved in many patent cases since 1992. See Regents of Univ. of Minn. v. Glaxo Wellcome, Inc., ___ F. Supp. 2d ___, No. 98-2465 (Minn. 1999) (declaratory judgment action filed by the University of Minnesota); University of Colo. Foundation, Inc. v. American Cyanamid Co., 974 F. Supp. 1339 (Colo. 1997) (patent infringement action filed by University of Colorado); Gen-Probe, Inc. v. Amoco Corp., Inc., 926 F. Supp. 948 (SD Cal. 1996) (suit filed against various parties, alleging, inter alia, that Regents of the University of California induced patent infringement by Amoco); Genentech v. Regents of Univ. of Cal., 143 F.3d 1446 (CA Fed. 1998) (declaratory judgment suit filed by Genentech); Ciba-Geigy v. Alza Corp., 804 F. Supp. 614 (NJ 1992) (counterclaim brought by Alza against Regents of the University of California). Furthermore, States and their instrumentalities are heavily involved in the federal patent system. The United States Patent and Trademark Office issued more than 2,000 patents to universities (both public and private) in 1986 alone. Chakansky, Patent Profiles, 13 Computer Law Strategist, No. 9, p. 8 (1997). Royalty earnings from licenses at United States universities totaled $273.5 million in 1995, a 12% increase over the prior year. 2 Eckstrom’s Licensing in Foreign and Domestic Operations § 11.06 (D. Epstein ed. 1998). The State of Florida has obtained over 200 United States patents since the beginning of 1995. Brief for New York Intellectual Property Law Association as Amicus Curiae 2. All 50 States own or have obtained patents. Brief for United States 44. It is true that, when considering the Patent Remedy Act, Congress did not review the remedies available in each State for patent infringements and surmise what kind of recovery a plaintiff might obtain in a tort suit in all 50 jurisdictions. See ante, at 15. But, it is particularly ironic that the Court should view this fact as support for its holding. Given that Congress had long ago pre-empted state jurisdiction over patent infringement cases, it was surely reasonable for Congress to assume that such remedies simply did not exist. Furthermore, it is well known that not all States have waived their 7

Merges continued: “Another problem with this approach is that it assumes that such state law remedies will be available in every state in which the patentee’s product is sold. This may or may not be true. In any event, requiring a potential plaintiff (patentee) to ascertain the validity of her claims under the differing substantive and procedural laws of the fifty states may well prove a very substantial disincentive to the commencement of such suits. Moreover, it would vitiate a major goal of the federal intellectual property system: national uniformity. In short, these remedies are simply no substitute for patent infringement actions.” Id., at 34.

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sovereign immunity from suit, and among those States that have, the contours of this waiver vary widely. Even if such remedies might be available in theory, it would have been “appropriate” for Congress to conclude that they would not guarantee patentees due process in infringement actions against state defendants. State judges have never had the exposure to patent litigation that federal judges have experienced for decades, and, unlike infringement actions brought in federal district courts, their decisions would not be reviewable in the Court of Appeals for the Federal Circuit. Surely this Court would not undertake the task of reviewing every state court decision that arguably misapplied patent law.13 And even if 28 U.S.C. § 1338 is amended or construed to permit state courts to entertain infringement actions when a State is named as a defendant, given the Court’s opinion in Alden v. Maine, it is by no means clear that state courts could be required to hear these cases at all. Post, at ____ (slip op., at 2). Even if state courts elected to hear patent infringement cases against state entities, the entire category of such cases would raise questions of impartiality. This concern underlies both the constitutional authorization of diversity jurisdiction and the statutory provisions for removal of certain cases from state to federal courts, 28 U.S.C. § 1441 et al. The same concern justified John Marshall’s narrow construction of the Eleventh Amendment in Cohens v. Virginia, 6 Wheat. 264 (1821). As he there noted, when there is a conflict between a State’s interest and a federal right, it “would be hazarding too much to assert, that the judicatures of the states will be exempt from the prejudices by which the legislatures and people are influenced, and will constitute perfectly impartial tribunals.” Id., at 386. Finally, this Court has never mandated that Congress must find “ ‘widespread and persisting deprivation of constitutional rights,’ ” ante, at 17, in order to employ its § 5 authority. It is not surprising, therefore, that Congress did not compile an extensive legislative record analyzing the due process (or lack thereof) that each State might afford for a patent infringement suit retooled as an action in tort. In 1992, Congress had no reason to believe it needed to do such a thing; indeed, it should not have to do so today. III In my view, Congress had sufficient evidence of due process violations, whether actual or potential, to meet the requirement we expressed in City of Boerne that Congress can act under § 5 only to “remedy or prevent unconstitutional actions.” See 521 U.S., at 519. The Court’s opinion today threatens to read Congress’ power to pass prophylactic legislation out of § 5 altogether; its holding is unsupported by City of Boerne and in fact conflicts with our reasoning in that case. In City of Boerne we affirmed the well-settled principle that the broad sweep of Congress’ enforcement power encompasses legislation that deters or remedies constitutional violations, even if it prohibits conduct that is not itself unconstitutional, and even if it intrudes into spheres of autonomy previously reserved to the States. Id., at 518. Nevertheless, we held that the enactment of the Religious Freedom Restoration Act of 1993 (RFRA) was not an “appropriate” exercise of Congress’ enforcement power under § 5 of the Fourteenth Amendment. Id., at 536. By enacting RFRA Congress sought to change the meaning of the Free Exercise Clause of the First Amendment as it had been interpreted by this Court, rather than to remedy or to prevent violations of the Clause as we had interpreted it. We held that RFRA had crossed “the line between measures that remedy or prevent unconstitutional actions and measures that make a substantive change in the governing law.” Id., at 519-20. Congress’ § 5 power is “corrective or preventive, not definitional.” Id., at 525. Our extensive review of the legislative history of RFRA made it clear that the statute could not be fairly characterized as a remedial measure, but rather was a legislative attempt “to interpret and 13

In the House Report advocating the creation of the Federal Circuit, Congress noted, “The infrequency of Supreme Court review of patent cases leaves the present judicial system without any effective means of assuring even-handedness nationwide in the administration of the patent laws.” H. R. Rep. No. 97-312, p. 22 (1981).

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elaborate on the meaning” of the Free Exercise Clause. By doing so, Congress had violated the principle that the “power to interpret the Constitution in a case or controversy remains in the Judiciary.” Id., at 524. The difference between the harm targeted by RFRA and the harm that motivated the enactment of the Patent Remedy Act is striking. In RFRA Congress sought to overrule this Court’s interpretation of the First Amendment. The Patent Remedy Act, however, was passed to prevent future violations of due process, based on the substantiated fear that States would be unable or unwilling to provide adequate remedies for their own violations of patent-holders’ rights. Congress’ “wide latitude” in determining remedial or preventive measures, see id., at 520, has suddenly become very narrow indeed. City of Boerne also identified a “proportionality” component to “appropriate” legislation under § 5. Our opinion expressly recognized that “preventive rules are sometimes appropriate” if there is “a congruence between the means used and the ends to be achieved. The appropriateness of remedial measures must be considered in light of the evil presented. See South Carolina v. Katzenbach, 383 U.S., at 308. Strong measures appropriate to address one harm may be an unwarranted response to another, lesser one. Id., at 334.” Id., at 530.

In RFRA we found no such congruence, both because of the absence of evidence of widespread violations that were in need of redress, and because the sweeping coverage of the statute ensured “its intrusion at every level of government, displacing laws and prohibiting official actions of almost every description and regardless of subject matter.” Id., at 532. Again, the contrast between RFRA and the Act at issue in this case could not be more stark. The sole purpose of this amendment is to abrogate the States’ sovereign immunity as a defense to a charge of patent infringement. It has no impact whatsoever on any substantive rule of state law, but merely effectuates settled federal policy to confine patent infringement litigation to federal judges. There is precise congruence between “the means used” (abrogation of sovereign immunity in this narrow category of cases) and “the ends to be achieved” (elimination of the risk that the defense of sovereign immunity will deprive some patentees of property without due process of law). That congruence is equally precise whether infringement of patents by state actors is rare or frequent. If they are indeed unusual, the statute will operate only in those rare cases. But if such infringements are common, or should become common as state activities in the commercial arena increase, the impact of the statute will likewise expand in precise harmony with the growth of the problem that Congress anticipated and sought to prevent. In either event the statute will have no impact on the States’ enforcement of their own laws. None of the concerns that underlay our decision in City of Boerne are even remotely implicated in this case. The Patent Remedy Act merely puts States in the same position as all private users of the patent system,14 and in virtually the same posture as the United States. “When Congress grants an exclusive right or monopoly, its effects are pervasive; no citizen or State may escape its reach.” Goldstein v. California, 412 U.S. 546, 560 (1973) (analyzing Copyright Clause). Recognizing the injustice of sovereign immunity in this context, the United States has waived its immunity from suit for patent violations. In 1910, Congress enacted a statute entitled, “An Act to provide additional protection for owners of patents of the United States.” Ch. 423, 36 Stat. 851. The Act provided that owners of patents infringed by the United States “may recover reasonable compensation for such use by suit in the Court of Claims.” The United States has consistently maintained this policy for the last 90 years. See 28 U.S.C. § 1498.

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As the Senate said in its Report on the Act, “the current state of the law leaves the protection afforded to patent and trademark holders dependant on the status of the infringing party. A public school such as UCLA can sue a private school such as USC for patent infringement, yet USC cannot sue UCLA for the same act.” S. Rep. No. 102-280, p. 9 (1992).

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In my judgment, the 1992 Act is a paradigm of an appropriate exercise of Congress’ §5 power.16 IV For these reasons, I am convinced that the 1992 Act should be upheld even if full respect is given to the Court’s recent cases cloaking the States with increasing protection from congressional legislation. I do, however, note my continuing dissent from the Court’s aggressive sovereign immunity jurisprudence; today, this Court once again demonstrates itself to be the champion of States’ rights. In this case, it seeks to guarantee rights the States themselves did not express any particular desire in possessing: during Congress’ hearings on the Patent Remedy Act, although invited to do so, the States chose not to testify in opposition to the abrogation of their immunity. The statute that the Court invalidates today was only one of several “clear statements” that Congress enacted in response to the decision in Atascadero State Hospital v. Scanlon, 473 U.S. 234 (1985). In each of those clarifications Congress was fully justified in assuming that it had ample authority to abrogate sovereign immunity defenses to federal claims, an authority that the Court squarely upheld in Pennsylvania v. Union Gas Co., 491 U.S. 1 (1989). It was that holding—not just the “plurality opinion,”—that was overruled in Seminole Tribe of Fla. v. Florida, 517 U.S. 44 (1996). The full reach of that case’s dramatic expansion of the judge-made doctrine of sovereign immunity is unpredictable; its dimensions are defined only by the present majority’s perception of constitutional penumbras rather than constitutional text. See id., at 54 (acknowledging “we have understood the Eleventh Amendment to stand not so much for what it says” (citation omitted)). Until this expansive and judicially crafted protection of States’ rights runs its course, I shall continue to register my agreement with the views expressed in the Seminole dissents and in the scholarly commentary on that case. I respectfully dissent.

Questions, Comments, Problems 1. Note that the Florida Prepaid case was decided 5-4. In another 5-4 decision, the Supreme Court decided a companion case along with Florida Prepaid. In the other case, entitled College Savings Bank v. Florida Prepaid Postsecondary Education Expense Board, __ U.S. ___ (June 23, 1999), between the same two parties, College Savings Bank had alleged that statements made by Florida’s education board with regard to its savings plan constituted prohibited false advertising under Section 43(a) of the Lanham Trademark Act (15 U.S.C. § 1125(a)). The trademark aspect of the case had been appealed through the Third Circuit, which affirmed the district court’s dismissal of the suit on Eleventh Amendment grounds. The Supreme Court affirmed. The Court first determined that, although Congress' intent to abrogate was clear, Congress could not legislate under the 14th Amendment because rights to be free from false advertising or to be secure in one's business interests were not property rights. The Court reasoned that those rights bear little relation to the hallmark of property--the right to exclude. Thus, in the trademark suit, the Court focused on whether the State of Florida had waived its immunity from suit. In reaching its conclusion that there was no waiver, the Court expressly overruled Parden v. Terminal R. Co. of Ala. Docks Dept., 377 U. S. 184 (1964). Parden had held that a state may implicitly waive its immunity in certain situations, e.g., by participating as a market participant in a private market and thus subjecting itself to suit as a private party. The majority viewed the Parden doctrine as an aberration and at odds with other Constitutional doctrines. The dissent of Breyer (with Stevens, Souter, and Ginsburg), in contrast, viewed Parden as consistent with precedent and with the Constitution. (The dissent of Stevens also viewed false advertising as a form of property recognized under the 14th Amendment.) Both cases exhibit, in the specialized field of intellectual property, a broader dispute in the Court regarding evolving views on federalism. 2. In Florida Prepaid, the Court left open the possibility that Congress could abrogate state immunity for patent infringement if it laid the proper foundation. What do you believe Congress would have to do to satisfy the Court? What additional evidence would Congress have to cite? In what ways would Congress

16

I am also persuaded that a State like Florida that has invoked the benefits of the federal patent system should be deemed to have waived any defense of sovereign immunity in patent litigation. The reasoning in Justice Breyer’s dissent in College Savings Bank v. Florida Prepaid Postsecondary Ed. Expense Bd., post at ___ , applies with special force to this case.

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have to temper any proposed legislation? How quickly do you think Congress could pass new legislation if it were so inclined?

Addendum – 35 U.S.C. § 271

Sec. 271. Infringement of patent (a) Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent. (b) Whoever actively induces infringement of a patent shall be liable as an infringer. (c) Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer. (d) No patent owner otherwise entitled to relief for infringement or contributory infringement of a patent shall be denied relief or deemed guilty of misuse or illegal extension of the patent right by reason of his having done one or more of the following: (1) derived revenue from acts which if performed by another without his consent would constitute contributory infringement of the patent; (2) licensed or authorized another to perform acts which if performed without his consent would constitute contributory infringement of the patent; (3) sought to enforce his patent rights against infringement or contributory infringement; (4) refused to license or use any rights to the patent; or (5) conditioned the license of any rights to the patent or the sale of the patented product on the acquisition of a license to rights in another patent or purchase of a separate product, unless, in view of the circumstances, the patent owner has market power in the relevant market for the patent or patented product on which the license or sale is conditioned. (e) (1) It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention (other than a new animal drug or veterinary biological product (as those terms are used in the Federal Food, Drug, and Cosmetic Act and the Act of March 4, 1913) which is primarily manufactured using recombinant DNA, recombinant RNA, hybridoma technology, or other processes involving site specific genetic manipulation techniques) solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products. (2) It shall be an act of infringement to submit (A) an application under section 505(j) of the Federal Food, Drug, and Cosmetic Act or described in section 505(b)(2) of such Act for a drug claimed in a patent or the use of which is claimed in a patent, or (B) an application under section 512 of such Act or under the Act of March 4, 1913 (21 U.S.C. 151-158) for a drug or veterinary biological product which is not primarily manufactured using recombinant DNA, recombinant RNA, hybridoma technology, or other processes involving site specific genetic manipulation techniques and which is claimed in a patent or the use of which is claimed in a patent,

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if the purpose of such submission is to obtain approval under such Act to engage in the commercial manufacture, use, or sale of a drug or veterinary biological product claimed in a patent or the use of which is claimed in a patent before the expiration of such patent. (3) In any action for patent infringement brought under this section, no injunctive or other relief may be granted which would prohibit the making, using, offering to sell, or selling within the United States or importing into the United States of a patented invention under paragraph (1). (4) For an act of infringement described in paragraph (2) (A) the court shall order the effective date of any approval of the drug or veterinary biological product involved in the infringement to be a date which is not earlier than the date of the expiration of the patent which has been infringed, (B) injunctive relief may be granted against an infringer to prevent the commercial manufacture, use, offer to sell, or sale within the United States or importation into the United States of an approved drug or veterinary biological product, and (C) damages or other monetary relief may be awarded against an infringer only if there has been commercial manufacture, use, offer to sell, or sale within the United States or importation into the United States of an approved drug or veterinary biological product. The remedies prescribed by subparagraphs (A), (B), and (C) are the only remedies which may be granted by a court for an act of infringement described in paragraph (2), except that a court may award attorney fees under section 285. (f) (1) Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer. (2) Whoever without authority supplies or causes to be supplied in or from the United States any component of a patented invention that is especially made or especially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial noninfringing use, where such component is uncombined in whole or in part, knowing that such component is so made or adapted and intending that such component will be combined outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer. (g) Whoever without authority imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer, if the importation, offer to sell, sale, or use of the product occurs during the term of such process patent. In an action for infringement of a process patent, no remedy may be granted for infringement on account of the noncommercial use or retail sale of a product unless there is no adequate remedy under this title for infringement on account of the importation or other use, offer to sell, or sale of that product. A product which is made by a patented process will, for purposes of this title, not be considered to be so made after (1) it is materially changed by subsequent processes; or (2) it becomes a trivial and nonessential component of another product. (h) As used in this section, the term ''whoever'' includes any State, any instrumentality of a State, and any officer or employee of a State or instrumentality of a State acting in his official capacity. Any State, and any such instrumentality, officer, or employee, shall be subject to the provisions of this title in the same manner and to the same extent as any nongovernmental entity.

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(i) As used in this section, an ''offer for sale'' or an ''offer to sell'' by a person other than the patentee, or any designee of the patentee, is that in which the sale will occur before the expiration of the term of the patent.

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University of Pennsylvania Law School

Intellectual Property:

Patent Law

Law 677 | Spring 2001 Professor Wagner

COURSE M AT E R I A L S Part 3

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Chapter 10 Defenses & Counterclaims Introduction In earlier chapters, you learned of the burden that is placed on the patentee to prove infringement by a preponderance of the evidence. You also learned of the hurdles a patent applicant must clear to receive a patent such as showing novelty, nonobviousness, and enablement. This chapter focuses instead on the corresponding burdens that face an accused infringer in defending against a charge of patent infringement. The most evident defense is to assert that the patent claim is invalid for failure to meet one of the statutory requirements for patentability that were discussed in earlier chapters, such as novelty and nonobviousness. This can be a difficult burden because it effectively requires proof that the PTO erred in issuing the patent. Because we want to believe that public servants, such as Patent Office examiners, do their jobs properly, a patent is presumed valid, see 35 U.S.C. § 282, and the courts have required that an accused infringer establish facts that support a claim of invalidity by clear and convincing evidence, rather than be a mere preponderance of the evidence. See Kahn v. General Motors Corp., 135 F.3d 1472, 45 USPQ2d 1608 (Fed. Cir. 1998). The analysis under any such defense generally follows the form you have seen in earlier chapters, except that the burden is placed on the challenger of the patent. Other options are also open to an accused infringer. Because a patentee can cause serious economic damage by brandishing against its competitor’s patent that truly is invalid but that has not yet been declared invalid by a court, the Supreme Court has established a number of procedural rules related to patentability that protect the public interest and also help accused infringers. For example, the Court has held that the Federal Circuit normally should review whether a patent is valid or not even if the court determines that the patent is not infringed (such that the dispute between the parties before the court would be technically moot). See Cardinal Chem. Co. v. Morton Int’l, Inc., 508 U.S. 83 (1993). Furthermore, the Court has held that licensees under a patent may challenge the patent’s validity even if they have agreed in their license not to make such a challenge, because licensees may be the only members of the public who are in a position to challenge an invalid patent. See Lear, Inc. v. Adkins, Chapter 10 – Defenses & Counterclaims

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395 U.S. 653 (1969). Also consistent with the goal of protecting the public from assertion of invalid patents is the Court’s holding that a patentee is bound by principles of res judicata from asserting a patent claim that has already been held invalid, even if the patentee later sues a different defendant. See Blonder-Tongue Labs., Inc. v. University of Illinois Foundation, 402 U.S. 313 (1970) (overruling Triplett v. Lowell, 297 U.S. 638 (1936)). You have already seen how the courts analyze whether a patent meets the statutory requirements. In this chapter we discuss other, more distant, defenses. For example, an accused infringer can assert that a patent cannot be enforced, either because it was fraudulently procured (i.e., through “inequitable conduct”) or was misused by the patentee after it was procured. In addition, an accused infringer may assert that it should not be fully liable because of action or inaction by the patentee that raises the defenses of laches or estoppel. We take up each of these issues, and the issue of whether uncompetitive conduct by the patentee can provide an accused infringer with an antitrust claim, in order. There are, of course, other defenses and counterclaims that arise from time to time in patent litigation, but we leave those to your curiosity and research.

The “Experimental Use” Exception

Can you think of a set of circumstances that would call for the disallowance of patent protection? Many commentators believe that the class of uses characterized as “experimental” is one where we should disallow patent infringement. Why?

The materials for this section are excerpts, as follows:

Robert Patrick Merges, PATENT LAW AND POLICY: CASES AND MATERIALS 966-72 (1995). Donald S. Chisum et. al, PRINCIPLES OF PATENT LAW: CASES AND MATERIALS 1017-1022 (1998).

As you read them, consider whether you think the case has been made for an “experimental use” exception. What are the pros and cons? What is the cost? Who bears it?

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Unclean Hands and Inequitable Conduct Because a patent is “infected with the public interest,” the Patent & Trademark Office imposes a duty of candor and good faith on all who are associated with the filing and prosecution of a patent application. 35 CFR § 1.56. This duty of candor includes a duty to disclose all information known to be material to patentability of the invention claimed in the patent application. However, there is no duty to submit information that is not material to patentability of an existing claim. A breach of this duty of candor and good faith is called “inequitable conduct,” or colloquially, “fraud on the Patent Office.” The Patent Act of 1790 provided for an action to repeal a patent “obtained surreptitiously by, or upon false suggestion” if the action was filed “within one year after issuing the said patent, but not afterwards.” A similar provision appeared in the 1793 Act and extended the time for filing an action to three years. However, the provision was dropped from the 1836 Act and has never returned to the statute. Nevertheless, that has not prevented the courts from fashioning a solution similar to repeal of the patent. The solution selected by the courts is analogous to that used in Shelley v. Kraemer, 344 U.S. 1 (1948), where the U.S. Supreme Court ruled that, although it could not prevent people from entering into racially restrictive covenants, it would, under the Constitution, refuse to enforce such covenants. Likewise, in the absence of statutory authority to invalidate a patent for inequitable conduct, the courts have simply refused to enforce such a patent. As you will see in the cases below, this subtle distinction between invalidity and unenforceability can result in important differences.

Keystone Driller Co. v. General Excavator Co. 290 U.S. 240 (1933) Mr. Justice BUTLER delivered the opinion of the Court. The question presented is whether the Circuit Court of Appeals rightly applied the maxim, He who comes into equity must come with clean hands. Petitioner owns five patents which may be conveniently identified as the Clutter patent and the four Downie patents. They all cover devices constituting parts of a ditching machine operated on the principle of a mechanical hoe or mattock. The Clutter patent is basic and the Downie patents are for claimed improvements. **** At the trial of these cases, defendants introduced evidence that plaintiff did not come into court with clean hands. It was sufficient to sustain findings of fact made by both courts, in substance as follows: On June 27, 1921, Downie filed the application on which was issued his first patent. In the preceding winter he had learned of a possible prior use at Joplin, Mo., by Bernard R. Clutter. The latter is a brother of the patentee of the Clutter patent and had then recently been in the service of plaintiff as demonstrator in the use of ditching machinery. Downie made the application and assigned his rights to plaintiff, of which he was secretary and general manager. The patent issued, and plaintiff, contemplating the bringing of an infringement suit thereon against the Byers Machine Company, was advised that the prior use at Joplin was sufficient to cast doubt upon the validity of the patent. Downie then went to Bernard R. Clutter and for valuable considerations– which are described in the opinion of the Circuit Court of Appeals, 62 F.(2d) 48, and need not be detailed here – obtained from Clutter an affidavit prepared by Downie to the effect that Clutter's use of the device was an abandoned experiment, and also obtained Clutter's agreement to assign plaintiff any rights he might have as Chapter 10 – Defenses & Counterclaims

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inventor, to keep secret the details of the prior use, and, so far as he was able, to suppress the evidence. No proof of such use was produced at the trial of that case [an earlier case against the Byers Machine Company, in which the patentee prevailed]. The defendants in these suits took Clutter's deposition early in 1930. He did not then disclose his arrangement with plaintiff for concealment of evidence in the Byers Case. Their suspicions being aroused by his testimony, defendants in the latter part of that year again examined him and secured facts upon which they were able to compel the plaintiff to furnish the details of the corrupt transaction. The district court characterized Downie's conduct as highly reprehensible, and found that his purpose was to keep Clutter silent. But it also found that the plaintiff did nothing to suppress evidence in these cases. It expressed the opinion that matters pertaining to the motion for preliminary injunction had no bearing upon the merits, and that plaintiff's use of the Byers decree was not a fraud upon the court. And it ruled the maxim did not apply. The Circuit Court of Appeals held the contrary, reversed the decrees of the District Court, and remanded the cases, with instructions to dismiss the complaints without prejudice. . . . Plaintiff contends that the maxim does not apply unless the wrongful conduct is directly connected with and material to the matter in litigation, and that, where more than one cause is joined in a bill and plaintiff is shown to have come with unclean hands in respect of only one of them, the others will not be dismissed. The meaning and proper application of the maxim are to be considered. As authoritatively expounded, the words and the reasons upon which it rests extend to the party seeking relief in equity. “It is one of the fundamental principles upon which equity jurisprudence is founded, that before a complainant can have a standing in court he must first show that not only has he a good and meritorious cause of action, but he must come into court with clean hands. He must be frank and fair with the court, nothing about the case under consideration should be guarded, but everything that tends to a full and fair determination of the matters in controversy should be placed before the court.” Story's Equity Jurisprudence (14th Ed.) 98. The governing principle is “that whenever a party who, as actor, seeks to set the judicial machinery in motion and obtain some remedy, has violated conscience, or good faith, or other equitable principle, in his prior conduct, then the doors of the court will be shut against him in limine; the court will refuse to interfere on his behalf, to acknowledge his right, or to award him any remedy.” Pomeroy, Equity Jurisprudence (4th Ed.) 397. This court has declared: “It is a principle in chancery, that he who asks relief must have acted in good faith. The equitable powers of this court can never be exerted in behalf of one who has acted fraudulently, or who by deceit or any unfair means has gained an advantage. To aid a party in such a case would make this court the abetter of iniquity.” Bein v. Heath, 6 How. 228, 247. And again: “A court of equity acts only when and as conscience commands; and, if the conduct of the plaintiff be offensive to the dictates of natural justice, then, whatever may be the rights he possesses, and whatever use he may make of them in a court of law, he will be held remediless in a court of equity.” Deweese v. Reinhard, 165 U.S. 386, 390. But courts of equity do not make the quality of suitors the test. They apply the maxim requiring clean hands only where some unconscionable act of one coming for relief has immediate and necessary relation to the equity that he seeks in respect of the matter in litigation. They do not close their doors because of plaintiff's misconduct, whatever its character, that has no relation to anything involved in the suit, but only for such violations of conscience as in some measure affect the equitable relations between the parties in respect of something brought before the court for adjudication. Story, Id., 100. Pomeroy, Id., 399. They apply the maxim, not by way of punishment for extraneous transgressions, but upon considerations that make for the advancement of right and justice. They are not bound by formula or restrained by any limitation that tends to trammel the free and just exercise of discretion. Neither the plaintiff's corruption of Clutter in respect of the first Downie patent nor its use in these cases of the Byers decree can fairly be deemed to be unconnected with causes of action based on the other patents. Chapter 10 – Defenses & Counterclaims

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Its bills show the devices covered by the five patents to be important, if not essential, parts of the same machine. And its claims warrant the inference that each supplements the others. This is made plain by mere reference to the things patented. The Clutter device is for the hoe or mattock arrangement. The first Downie is for an improvement designed, by a drop bottom scoop and other means, to permit more accurate dumping. The second Downie had for its main purpose the elimination of a 'blind spot' in the unloading operation. The third Downie makes possible and convenient the use of scoops of different widths upon the same machine. The fourth Downie device consists of detachable rake teeth for a scoop. Had the corruption of Clutter been disclosed at the trial of the Byers Case, the court undoubtedly would have been warranted in holding it sufficient to require dismissal of the cause of action there alleged for the infringement of the Downie patent. Promptly after the decision in that case plaintiff brought these suits and immediately applied for injunctions pendente lite. It used the decree of validity there obtained in support, if not indeed as the basis, of its applications. And plaintiff's misconduct in the Byers suit remaining undisclosed, that decree was given weight on the motions for preliminary injunctions. Leeds & Catlin v. Victor Talking Mach. Co., 213 U.S. 301, 312, 1 Walker on Patents (6th Ed.) 704 et seq. As the litigation was to continue for years and the use of the devices in question was essential to the ditching machinery, it is clear that the injunctions would have been a burdensome detriment to defendants. The amounts of the bonds required in lieu of injunctions attest the importance of the advantage obtained by use of the decree. While it is not found, as reasonably it may be inferred from the circumstances, that from the beginning it was plaintiff's intention through suppression of Clutter's evidence to obtain decree in the Byers Case for use in subsequent infringement suits against these defendants and others, it does clearly appear that the plaintiff made the Byers Case a part of his preparation in these suits. The use actually made of that decree is sufficient to show that plaintiff did not come with clean hands in respect of any cause of action in these cases. The relation between the device covered by the first Downie patent and those covered by the other patents, taken in connection with the use to which plaintiff put the Byers decree, is amply sufficient to bring these cases within the maxim. . . . Decrees affirmed.

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Molins PLC v. Textron, Inc. 48 F.3d 1172, 33 USPQ2d 1823 (Fed. Cir. 1995) LOURIE, Circuit Judge. In 1965, Molins' Research Director, Dr. David Williamson, developed a method for improving batch machining involving a plurality of machine tools arranged to accommodate the manual transport of pallet-mounted workpieces to and from the machine tools (the "batch process"). In 1966, Williamson invented a fully automated machining system that allows several related families of parts to be machined simultaneously (the "system 24"). [Molins applied for patents on the bath process and system 24 inventions in a number of countries, including the United States in 1966-67. The two inventions were combined into a single US Application in 1967.] The '563 patent later matured from a continuation-in-part of the combined U.S. application. Before the patent issued in January of 1983, however, the batch process claims were cancelled and only claims drawn to the system 24 apparatus issued. Between the fall of 1967 and April 1968, while the relevant U.S. patent applications were pending, Whitson -- the manager of Molins' patent department -- became aware of prior art referred to here as the "Wagenseil reference." Upon evaluating the Wagenseil reference, the Whitson concluded that it fully anticipated the "batch process" claims that Molins initially filed in the United Kingdom and in many other countries including the United States. Accordingly, in 1968 and 1969, Molins abandoned all the foreign patent applications to the batch process. However, the company decided not to abandon the pending U.S. application because it contained both batch process and system 24 claims. Prosecution of the U.S. and foreign system 24 applications continued. Wagenseil was cited to and by several foreign patent offices, but was not cited by Molins to the PTO. In 1975, Molins [manager] told [the US patent counsel, Smith] that there were oppositions to the German system 24 patent application, but he did not inform Smith of the art cited in Germany, which included the Wagenseil reference. Eventually, Molins abandoned all foreign system 24 applications. In the United States, the '563 patent issued in January of 1983, after Molins prevailed in an interference with two other parties. The '410 patent issued from a divisional application and is directed to the system 24 method of machining. Later in 1983, [Molins’ new in-house patent attorney, Hirsh] reviewed the files of the foreign system 24 applications, all of which had been abandoned in the late 1970s. Hirsh found the references that had been cited in the foreign patent prosecution, but not the PTO, including the Wagenseil reference. Hirsh also found [earlier] correspondence relating to the references and to their citation to and by foreign patent offices. Hirsh then informed Smith of the foreign citations. Together, they consulted with outside counsel and, on September 21, 1984, although the '563 patent had already issued, filed a lengthy prior art statement under 37 C.F.R. ß 1.501 (Rule 501) on behalf of Molins, listing the Wagenseil reference together with all other prior art references that had been cited during the foreign prosecution. [In 1984-86, the ‘563 patent underwent reexamination. The Wagenseil reference was referred to the examiner, and the examiner apparently reviewed it in connection with the reexamination proceeding.] No claims were rejected based on Wagenseil during the reexamination. Re-Examination Certificate B1 4,369,563 was issued on May 13, 1986. Late in 1986, Molins filed suit against Textron, Incorporated, Kearney & Trecker, and Avco Corporation (collectively "Textron"), alleging infringement of the '563 [] patent[]. In February of 1989, after approximately three years of discovery, Textron filed a summary judgment motion asserting that the patents were unenforceable due to inequitable conduct in connection with the prosecution of the '563 patent, in particular, concealment of Wagenseil and other information from the PTO. The motion was denied. After more discovery, in June of 1990, Textron again moved for summary judgment, adding Chapter 10 – Defenses & Counterclaims

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new allegations of inequitable conduct relating to Smith's failure to disclose to the PTO allegedly material information regarding a copending patent application in the name of Jerome Lemelson, whom Smith also represented. Again, the court denied summary judgment. The court severed the issue of inequitable conduct, and held a bench trial. On November 24, 1992, the court held that both patents were unenforceable due to inequitable conduct. The court found the case to be "exceptional" within the meaning of 35 U.S.C. ß 285 and ordered further briefing on whether attorney fees should be awarded. On December 30, 1993, the court held Molins and Smith jointly and severally liable for all the defendants' attorney fees, costs, and expenses. Id. DISCUSSION A. Inequitable Conduct Applicants1 for patents are required to prosecute patent applications in the PTO with candor, good faith, and honesty. See Precision Instrument Mfg. Co. v. Automotive Maintenance Mach. Co., 324 U.S. 806, 818, 89 L. Ed. 1381, 65 S. Ct. 993 (1945). This duty extends also to the applicant's representatives. See FMC Corp. v. Manitowoc Co., 835 F.2d 1411, 1415 n.8, 5 U.S.P.Q.2D (BNA) 1112, 1115 n.8 (Fed. Cir. 1987) (the knowledge and actions of an applicant's representative are chargeable to the applicant). A breach of this duty constitutes inequitable conduct. Inequitable conduct includes affirmative misrepresentation of a material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive. See J.P. Stevens & Co. v. Lex Tex, Ltd., 747 F.2d 1553, 1559, 223 U.S.P.Q. (BNA) 1089, 1092 (Fed. Cir. 1984), cert. denied, 474 U.S. 822 (1985). One who alleges inequitable conduct arising from a failure to disclose prior art must offer clear and convincing proof of the materiality of the prior art, knowledge chargeable to the applicant of that prior art and of its materiality, and the applicant's failure to disclose the prior art, coupled with an intent to mislead the PTO. FMC, 835 F.2d at 1415, 5 U.S.P.Q.2D (BNA) at 1115. The withholding of information must meet thresholds of both materiality and intent. Allen Organ Co. v. Kimball Int'l, Inc., 839 F.2d 1556, 1567, 5 U.S.P.Q.2D (BNA) 1769, 1778 (Fed. Cir.) ("Materiality does not presume intent, which is a separate and essential component of inequitable conduct."), cert. denied, 488 U.S. 850 (1988). Once threshold findings of materiality and intent are established, the court must weigh them to determine whether the equities warrant a conclusion that inequitable conduct occurred. J.P. Stevens, 747 F.2d at 1559-60, 223 U.S.P.Q. (BNA) at 1092. In light of all the circumstances, an equitable judgment must be made concerning whether the applicant's conduct is so culpable that the patent should not be enforced. LaBounty Mfg., Inc. v. International Trade Comm'n, 958 F.2d 1066, 1070, 22 U.S.P.Q.2D (BNA) 1025, 1028 (Fed. Cir. 1992). The ultimate determination of inequitable conduct is committed to the trial judge's discretion and is reviewed by this court under an abuse of discretion standard. Kingsdown Medical Consultants, Ltd. v. Hollister, Inc., 863 F.2d 867, 876, 9 U.S.P.Q.2D (BNA) 1384, 1392, (Fed. Cir. 1988), cert. denied, 490 U.S. 1067 (1989). To overturn such a determination, the appellant must establish that the ruling is based on clearly erroneous findings of fact or on a misapplication or misinterpretation of applicable law, or evidences a clear error of judgment on the part of the district court. Id.

1

Under PTO rules, the duty to disclose information material to patentability rests on the inventor, on each attorney or agent who prepares or prosecutes an application and on every other individual who is substantively involved in the preparation or prosecution of the application and who is associated with the inventor, with the assignee, or with anyone to whom there is an obligation to assign the application. See 37 C.F.R. ß 1.56 (1983). For convenience, we simply refer to "applicant" in this opinion.

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1. Nondisclosure of Wagenseil During Original Prosecution

Calling this case "the exceptional case among exceptional cases," the district court concluded that Whitson, Molins' in-house patent agent, had engaged in inequitable conduct in the procurement of the '563 patent because he failed to disclose Wagenseil to the PTO, even though he knew it was highly material. The court stated that "although [Textron has] not produced direct evidence of Whitson's intent to deceive, i.e. there are no 'smoking memos' implicating bad faith on the part of Whitson, the overwhelming circumstantial evidence presented in this case leaves little doubt that Whitson intentionally concealed the Wagenseil reference from the U.S. PTO knowing that it was highly material to the U.S. applications." Although Molins concedes that Wagenseil is highly material to the batch process invention, Molins asserts that the court erred in finding that Wagenseil was material to the '563 patent claims, which relate only to the system 24 invention. Molins points out that, although Wagenseil was cited to and considered by the examiner during reexamination of the '563 patent and during examination of the divisional '410 patent, Wagenseil was not relied upon by the examiner to reject pending claims. According to Molins, Wagenseil was ipso facto not material. Information is "material" when there is a substantial likelihood that a reasonable examiner would have considered the information important in deciding whether to allow the application to issue as a patent. In re Jerabek, 789 F.2d 886, 890, 229 U.S.P.Q. (BNA) 530, 533 (Fed. Cir. 1986).2 If the information allegedly withheld is not as pertinent as that considered by the examiner, or is merely cumulative to that considered by the examiner, such information is not material. See Scripps Clinic & Research Found. v. Genentech, Inc., 927 F.2d 1565, 1582, 18 U.S.P.Q.2D (BNA) 1001, 1014-15 (Fed. Cir. 1991). We have held that the result of a PTO proceeding that assesses patentability in light of information not originally disclosed can be of strong probative value in determining whether the undisclosed information was material. See J.P. Stevens, 747 F.2d at 1562, 223 U.S.P.Q. (BNA) at 1094 (reasonable rejection of claims in reliance on a reference during reissue proceeding established materiality of that reference). However, the standard to be applied in determining whether a reference is "material" is not whether the particular examiner of the application at issue considered the reference to be important; rather, it is that of a "reasonable examiner." Western Electric Co. v. Piezo Tech., Inc., 860 F.2d 428, 433, 8 U.S.P.Q.2D (BNA) 1853, 1857 (Fed. Cir. 1988). Nor is a reference immaterial simply because the claims are 2

The duty to disclose information material to patentability has been codified in 37 C.F.R. ß 1.56 (Rule 56), which was promulgated pursuant to 35 U.S.C. ß ß 6 and 131. From 1977 to 1992, Rule 56 defined information as "material" when "there is a substantial likelihood that a reasonable examiner would consider it important in deciding whether to allow the application to issue as a patent." We have adopted this standard as the threshold standard of materiality. See LaBounty Mfg., Inc. v. United States Int'l Trade Comm'n, 958 F.2d 1066, 1074, 22 U.S.P.Q.2D (BNA) 1025, 1031 (Fed. Cir. 1992). In 1992, the PTO changed Rule 56 to provide that information is material to patentability when it is not cumulative to information already of record or being made of record in the application, and (1) It establishes, by itself or in combination with other information, a prima facie case of unpatentability of a claim; or (2) It refutes, or is inconsistent with, a position the applicant takes in: (i) Opposing an argument of unpatentability relied on by the Office, or (ii) Asserting an argument of patentability. 37 C.F.R. ß 1.56 (1992). "Administrative rules will not be construed to have retroactive effect unless their language requires this result." Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208, 102 L. Ed. 2d 493, 109 S. Ct. 468 (1988); see also 57 Fed. Reg. 2021 (Jan. 17, 1992) (PTO notice of final rulemaking stating that new Rule 56 will be applicable to all applicants and reexamination proceedings pending or filed after March 16, 1992). We thus make no comment regarding the meaning of new Rule 56.

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eventually deemed by an examiner to be patentable thereover. Merck & Co. v. Danbury Pharmacal, Inc., 873 F.2d 1418, 1421, 10 U.S.P.Q.2D (BNA) 1682, 1686 (Fed. Cir. 1989) ("That the claimed invention may have been superior . . . to both the cited and withheld prior art may be a basis for patentability; it cannot serve automatically to render the withheld prior art either cumulative or immaterial."); A.B. Dick [*1180] Co. v. Burroughs Corp., 798 F.2d 1392, 1396, 230 U.S.P.Q. (BNA) 849, 854 (Fed. Cir. 1986) (that the claims may be patentable over the withheld prior art is not the test for materiality). Thus, the fact that the examiner did not rely on Wagenseil to reject the claims under reexamination or the '410 method claims is not conclusive concerning whether the reference was material. The court found that Wagenseil was material because, among other things, it showed a storage and retrieval system in combination with a transfer system, a combination for which the examiner had relied upon two, separate references to reject the '563 patent application claims. See In re Jerabek, 789 F.2d at 890, 229 U.S.P.Q. (BNA) at 533 (withheld reference was highly material when no single piece of cited prior art taught the combination present in the reference). Moreover, the court found that Wagenseil disclosed relevant features beyond that shown in the prior art; in particular, Wagenseil disclosed a capability for workpieces to recirculate into a machining system and for workpieces to bypass certain machine tools within the system. None of the other prior art systems taught the "recirculate" and "bypass" features taught by Wagenseil. See LaBounty, 958 F.2d at 1075-76, 22 U.S.P.Q.2D (BNA) at 1032 (undisclosed prior art items are material when they disclose more relevant features than cited items). The court further based its finding of materiality on extensive evidence showing that Whitson indicated during foreign prosecution that Wagenseil was the most relevant prior art to the corresponding foreign system 24 applications of which he was aware.3 Also, the evidence showed that patent examiners in several foreign countries considered Wagenseil material to the system 24 claims and that Whitson had amended and distinguished system 24 claims in foreign patent offices over Wagenseil. In this regard, the court was mindful of the risk in relying on foreign patent prosecution in light of differences in disclosure requirements, claim practice, form of application, and standard of patentability. Cf. Heidelberger Druckmaschinen AG v. Hantscho Commercial Prods., Inc., 21 F.3d 1068, 1072 n.2, 30 U.S.P.Q.2D (BNA) 1377, 1379 n.2 (Fed. Cir. 1994) [**21] ("The theories and laws of patentability vary from country to country, as do examination practices."); but see Manual of Patent Examining Procedure ("MPEP") n10 ß 2001.06(a) (4th ed., rev. 8, Oct. 1981) ("Applicants . . . have a duty to bring to the attention of the Office any material prior art or other information cited or brought to their attention in any related foreign application. The inference that such prior art or other information is material is especially strong where it is the only prior art cited or where it has been used in rejecting the claims in the foreign application."). On the evidence presented, even that independent of the admissions in the foreign prosecution, we cannot say that the court clearly erred in finding that a reasonable examiner would have considered Wagenseil important in deciding the patentability of the pending system 24 claims in the U.S. application.

Molins next argues that the court erred in finding that Whitson possessed the requisite intent to deceive the PTO. "Intent" commonly means: "Design, resolve, or determination with which [a] person acts[; a] state of mind in which a person seeks to accomplish a given result through a course of action." Black's Law Dictionary at 810 (6th ed. 1990). Intent need not be proven by direct evidence; it is most often proven by a showing of acts, the natural consequences of which are presumably intended by the actor. Kansas Jack, Inc. v. Kuhn, 719 F.2d 1144, 1151, 219 U.S.P.Q. (BNA) 857, 861 (Fed. Cir. 1983). Generally, intent must be inferred from the [*1181] facts and circumstances surrounding the 3

In a response to the German Patent Office, for example, Whitson cited a number of prior art references, including others cited in the United States, and stated that, "in the opinion of the applicant, the [Wagenseil reference] comes closest to the subject of the application."

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applicant's conduct. Paragon Podiatry Lab., Inc. v. KLM Lab., Inc., 984 F.2d 1182, 1189-90, 25 U.S.P.Q.2D (BNA) 1561, 1567 (Fed. Cir. 1993). "The drawing of inferences, particularly in respect of an intent-implicating question . . . is peculiarly within the province of the fact finder that observed the witnesses." Rolls-Royce Ltd. v. GTE Valeron Corp., 800 F.2d 1101, 1110, 231 U.S.P.Q. (BNA) 185, 192 (Fed. Cir. 1986). Since the fact-finder has personally heard the testimony and observed the demeanor of the witnesses, we accord deference to the fact-finder's assessment of a witness's credibility and character. See General Electro Music Corp. v. Samick Music Corp., 19 F.3d 1405, 1411, 30 U.S.P.Q.2D (BNA) 1149, 1154 (Fed. Cir. 1994). However, "given the ease with which a relatively routine act of patent prosecution can be portrayed as intended to mislead or deceive, clear and convincing evidence of conduct sufficient to support an inference of culpable intent is required." Northern Telecom, Inc. v. Datapoint Corp., 908 F.2d 931, 939, 15 U.S.P.Q.2D (BNA) 1321, 1327 [**24] (Fed. Cir.), cert. denied, 498 U.S. 920 (1990). See also Tol-OMatic, Inc. v. Proma Produkt-Und Marketing Gesellschaft m.b. H., 945 F.2d 1546, 1554, 20 U.S.P.Q.2D (BNA) 1332, 1339 (Fed. Cir. 1991) ("Forfeiture [of enforceability] is not favored as a remedy for actions not shown to be culpable."). While intent to deceive the PTO may be found as a matter of inference from circumstantial evidence, circumstantial evidence cannot indicate merely gross negligence. Kingsdown, 863 F.2d at 876, 9 U.S.P.Q.2D (BNA) at 1392 ("[A] finding that particular conduct amounts to 'gross negligence' does not of itself justify an inference of intent to deceive; the involved conduct, viewed in light of all the evidence, including evidence indicative of good faith, must indicate sufficient culpability to require a finding of intent to deceive."). "Courts must view the involved conduct 'in light of all the evidence' and must then determine whether that conduct in its totality manifests a sufficiently culpable state of mind to warrant a determination that it was inequitable." Consolidated Aluminum Corp. v. Foseco Int'l, Ltd., 910 F.2d 804, 809, 15 U.S.P.Q.2D (BNA) 1481, 1484 (Fed. Cir. 1990). Thus, the alleged conduct must not amount merely to the improper performance of, or omission of, an act one ought to have performed. Rather, clear and convincing evidence must prove that an applicant had the specific intent to accomplish an act that the applicant ought not to have performed, viz., misleading or deceiving the PTO. In a case involving nondisclosure of information, clear and convincing evidence must show that the applicant made a deliberate decision to withhold a known material reference. The court based its finding of intent on the following evidence. Whitson, a seasoned patent practitioner, who was aware of the duty to disclose material information to the PTO, knew of a highly material reference but did not cite it, or any other reference, to the PTO during the entire 13 years in which he was involved in prosecuting the U.S. patent applications that led to the '563 patent. During the time the applications were pending, Whitson represented to foreign patent offices that Wagenseil was the closest prior art. Whitson was on several occasions reminded of Wagenseil's materiality through its prominence in the prosecution of several foreign counterpart applications with which Whitson was intimately involved. The court rejected Molins' argument that Whitson had acted in good faith and simply overlooked Wagenseil, since he or his associates had focused on that reference several times during more than ten years of foreign prosecution and never cited Wagenseil during 13 years of prosecution. Under these circumstances, we cannot say that the court improperly inferred that Whitson made a deliberate decision to withhold a known, material reference. Failure to cite to the PTO a material reference cited elsewhere in the world justifies a strong inference that the withholding was intentional. Issues of inequitable conduct are most difficult both for trial courts and reviewing appellate courts. One who has engaged in inequitable conduct has inflicted damage on the patent examining system, obtaining a statutory period of exclusivity by improper means, and on the public, which must face an unlawfully-granted patent. Loss of one's patent and damage to reputation are justified penalties for such conduct. On the other hand, unjustified accusations of inequitable conduct are offensive and Chapter 10 – Defenses & Counterclaims

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unprofessional. They have been called a "plague" on the patent system. See Burlington Indus., Inc. v. Dayco Corp., 849 F.2d 1418, 1422, 7 U.S.P.Q.2D (BNA) 1158, 1161 (Fed. Cir. 1988) ("The habit of charging inequitable conduct in almost every major patent case has become an absolute plague."). Unjustified accusations may deprive patentees of their earned property rights and impugn fellow professionals. They should be condemned. Separating one from the other is a difficult task assigned to trial courts, who have the opportunity to find facts, hear witnesses, and judge credibility. Were we to have been in the trial court's shoes in this case, we do not know how we would have come out. We are, however, "only" the reviewing court, obligated to determine whether the court misapplied the law, made clearly erroneous findings of fact, or abused its discretion. We do not believe it committed any of these errors with regard to Whitson's failure to cite Wagenseil. We are mindful of the complexities of conducting a worldwide patent prosecution in a crowded art, attempting to represent one's client or company properly, and yet fulfill one's duty to various patent offices. Things can "fall through the floorboards" and not arise from an intent to deceive. We recognize that Wagenseil and other references from the foreign prosecution were cited eventually to the PTO and that the examiner initialed them and passed the reexamination application to issue thereafter. However, the references were not cited when they should have been. There were findings that Wagenseil was known to be material, and the trial court heard testimony and judged matters of credibility concerning intent. Those who are not "up front" with the PTO run the risk that, years later, a fact-finder might conclude that they intended to deceive. That is what appears to have happened here and we must affirm the trial court with respect to Whitson's behavior. Molins has not persuaded us that the trial court, which conducted a thorough and careful analysis of the case, clearly erred in determining that Whitson knew of a material reference and that he intentionally withheld it from the PTO. We therefore conclude that the court did not make clear errors of fact and did not abuse its discretion in determining that Whitson's nondisclosure of Wagenseil amounted to inequitable conduct. Having determined that inequitable conduct occurred in the procurement of the '563 patent, all claims of that patent are accordingly unenforceable. See Kingsdown, 863 F.2d at 877, 9 U.S.P.Q.2D (BNA) at 1392. The court also concluded that the inequitable conduct in the prosecution of the '563 patent extended to the '410 [**30] patent, since that patent "relied on the '563 patent." See Keystone Driller Co. v. General Excavator Co., 290 U.S. 240, 245-47, 78 L. Ed. 293, 54 S. Ct. 146 (1933); Driscoll v. Cebalo, 731 F.2d 878, 884-85, 221 U.S.P.Q. (BNA) 745, 750 (Fed. Cir. 1984). This determination has not been challenged by appellants. Thus, the '410 patent is unenforceable as well.

Questions, Problems, Comments 1. In the introduction to this section, you saw that the first patent statutes provided for the invalidation of a patent for inequitable conduct. In contrast, modern cases merely declare the patent unenforceable. Is there any practical difference? Generally, the answer is “no”; an unenforceable patent is no more effective than an invalid patent. However, there is one important distinction between the reach of a finding of invalidity and one of unenforceability. A finding of invalidity applies only to the patent claims being litigated. Thus, a patentee may assert some claims in litigation and have some claims remain valid even if the asserted claims are invalidated. In contrast, a finding of unenforceability extends to the entire patent, and can even render related patents unenforceable, as discussed below. 2.

Intent – Can you commit inequitable conduct by mistake?

Kingsdown Medical Consultants, Ltd. v. Hollister, Inc., 863 F.2d 867, 9 ULSPQ2d 1384 (Fed. Cir. 1998) (in banc):

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"To be guilty of inequitable conduct, one must have intended to act inequitably." FMC Corp. v. Manitowoc Co., Inc., 835 F.2d 1411, 1415, 5 USPQ2d 1112, 1115 (Fed. Cir. 1987). Kingsdown's attorney testified that he was not aware of the error until Hollister mentioned it in March 1987, and the experts for both parties testified that they saw no evidence of deceptive intent. As above indicated, the district court's finding of Kingsdown's intent to mislead is based on the alternative grounds of: (a) gross negligence; and (b) acts indicating an intent to deceive. Neither ground, however, supports a finding of intent in this case. a. Negligence The district court inferred intent based on what it perceived to be Kingsdown's gross negligence. Whether the intent element of inequitable conduct is present cannot always be inferred from a pattern of conduct that may be described as gross negligence. That conduct must be sufficient to require a finding of deceitful intent in the light of all the circumstances. We are not convinced that deceitful intent was present in Kingsdown's negligent filing of its continuation application or, in fact, that its conduct even rises to a level that would warrant the description "gross negligence." **** "Gross Negligence" and The Intent Element of Inequitable Conduct Some of our opinions have suggested that a finding of gross negligence compels a finding of an intent to deceive. In re Jerabek, 789 F.2d 886, 891, 229 USPQ 530, 533 (Fed. Cir.1986); Driscoll v. Cebalo, 731 F.2d 878, 885, 221 USPQ 745, 751 (Fed. Cir.1984). Others have indicated that gross negligence alone does not mandate a finding of intent to deceive. FMC Corp. v. Manitowoc Co., 835 F.2d 1411, 1415 n.9, 5 USPQ2d 1112, 1116 n.9 (Fed. Cir.1987). "Gross negligence" has been used as a label for various patterns of conduct. It is definable, however, only in terms of a particular act or acts viewed in light of all the circumstances. We adopt the view that a finding that particular conduct amounts to "gross negligence" does not of itself justify an inference of intent to deceive; the involved conduct, viewed in light of all the evidence, including evidence indicative of good faith, must indicate sufficient culpability to require a finding of intent to deceive. See Norton v. Curtiss, 433 F.2d 779, 167 USPQ 532 (CCPA 1970). If mere gross negligence alone will not trigger a finding of inequitable conduct, but an accused infringer is not required or even expected to present direct evidence of deceptive intent, what kind of evidence will suffice or will not suffice? • Multiform Desiccants, Inc. v. Medzam, Ltd., 133 F.3d 1473, 45 USPQ2d 1429 (Fed. Cir. 1998): The alleged inequitable conduct was submitting to the Examiner the dictionary definition of one term (degrade) but not of another relevant term (degradeable). The Federal Circuit found no inequitable conduct: “[D]irect evidence of fraudulent intent is not easy to come by, [but] inference without any probative evidence is insufficient to show culpable intent.”

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Antitrust & Patent Misuse

The materials for this section are excerpts, as follows:

Robert Patrick Merges, PATENT LAW (1995).

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Chapter 11 Remedies | Calculation of Damages Introduction The remedies for patent infringement are established by statute: 35 U.S.C. 283 -- Injunction. The several courts having jurisdiction of cases under this title may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.

35 U.S.C. 284 -- Damages. Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement but in no event less that a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court. When the damages are not found by a jury, the court shall assess them. In either event the court may increase the damages up to three times the amount found or assessed. Increased damages under this paragraph shall not apply to provisional rights under section 154(d) of this title. The court may receive expert testimony as an aid to the determination of damages or of what royalty would be reasonable under the circumstances.

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As a nearly-universal rule, once patent infringement is found, an injunction must be entered in favor of the patentee: The very nature of the patent right is the right to exclude others. Once the patentee’s patents have been held to be valid and infringed, he should be entitled to the full enjoyment and protection of his patent rights. The infringer should not be allowed to continue his infringement in the face of such a holding. A court should not be reluctant to use its equity powers once a party has so clearly established his patent rights. Smith Int’l v. Hughes Tool Co. 718 F.2d 1573 (Fed. Cir. 1983). Generally, the entering of injunctions does not raise especially difficult issues specific to patent law. This is not the case, however, for the calculation of damages. Section 284, noted above, establishes that a patentee is entitled to “adequate [ ] compensat[ion], and in no event less than a reasonable royalty.” Thus, the calculation of patent damages typically requires the determination of what compensation would be “adequate” as well as the determination of a “reasonable royalty,” with the patentee receiving the higher of the two. There are several difficult issues relating to these calculations, including the question of whether “adequate” compensation might in some cases include damages for sales of products not covered by the patents at issue.

Rite-Hite Corporation v. Kelley Company, Inc 56 F.3d 1538; 35 U.S.P.Q.2D (BNA) 1065 (Fed. Cir. 1995) Opinion of the court filed by Circuit Judge LOURIE, in which Circuit Judges RICH, MICHEL, PLAGER, CLEVENGER, and SCHALL join; Chief Judge ARCHER, Senior Circuit Judge SMITH, and Circuit Judges NIES and MAYER join as to part AIII; and Circuit Judges NEWMAN and RADER join as to parts AI and B. Circuit Judge NIES filed an opinion, joined by Chief Judge ARCHER, Senior Circuit Judge SMITH, and Circuit Judge MAYER, dissenting as to parts AI and AIV and concurring in result as to part AII. Circuit Judge NEWMAN filed an opinion, joined by Circuit Judge RADER, concurring in part as to part AIV and dissenting as to parts AII and AIII.

LOURIE, Circuit Judge. Kelley Company appeals from a decision of the United States District Court for the Eastern District of Wisconsin, awarding damages for the infringement of U.S. Patent 4,373,847, owned by Rite-Hite Corporation. The district court determined, inter alia, that Rite-Hite was entitled to lost profits for lost sales of its devices that were in direct competition with the infringing devices, but which themselves were not covered by the patent in suit. The appeal has been taken in banc to determine whether such damages are legally compensable under 35 U.S.C. ß 284. BACKGROUND On March 22, 1983, Rite-Hite sued Kelley, alleging that Kelley's "Truk Stop" vehicle restraint infringed Rite-Hite's U.S. Patent 4,373,847 ("the '847 patent"). n2 The '847 patent, issued February 15, 1983, is directed to a device for securing a vehicle to a loading dock to prevent the vehicle from separating from the dock during loading or unloading. Any such separation would create a gap between the vehicle and dock and create a danger for a forklift operator. Chapter 11 – Remedies

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Rite-Hite distributed all its products through its wholly-owned and operated sales organizations and through independent sales organizations (ISOs). During the period of infringement, the Rite-Hite sales organizations accounted for approximately 30 percent of the retail dollar sales of Rite-Hite products, and the ISOs accounted for the remaining 70 percent. Rite-Hite sued for its lost profits at the wholesale level and for the lost retail profits of its own sales organizations. Shortly after this action was filed, several ISOs moved to intervene, contending that they were "exclusive licensees" of the '847 patent by virtue of "Sales Representative Agreements" and "Dok-Lok Supplement" agreements between themselves and Rite-Hite. The court determined that the ISOs were exclusive licensees and accordingly, on August 31, 1984, permitted them to intervene. n3 The ISOs sued for their lost retail profits. The district court bifurcated the liability and damage phases of the trial and, on March 5, 1986, held the '847 patent to be not invalid and to be infringed by the manufacture, use, and sale of Kelley's Truk Stop device. The court enjoined further infringement. On remand, the damage issues were tried to the court. Rite-Hite sought damages calculated as lost profits for two types of vehicle restraints that it made and sold: the "Manual Dok-Lok" model 55 (MDL55), which incorporated the invention covered by the '847 patent, and the "Automatic Dok-Lok" model 100 (ADL-100), which was not covered by the patent in suit. The ADL-100 was the first vehicle restraint Rite-Hite put on the market and it was covered by one or more patents other than the patent in suit. The Kelley Truk Stop restraint was designed to compete primarily with Rite-Hite's ADL-100. Both employed an electric motor and functioned automatically, and each sold for $ 1,000-$ 1,500 at the wholesale level, in contrast to the MDL-55, which sold for one-third to one-half the price of the motorized devices. Rite-Hite does not assert that Kelley's Truk Stop restraint infringed the patents covering the ADL-100. Of the 3,825 infringing Truk Stop devices sold by Kelley, the district court found that, "but for" Kelley's infringement, Rite-Hite would have made 80 more sales of its MDL-55; 3,243 more sales of its ADL100; and 1,692 more sales of dock levelers, a bridging platform sold with the restraints and used to bridge the edges of a vehicle and dock. The court awarded Rite-Hite as a manufacturer the wholesale profits that it lost on lost sales of the ADL-100 restraints, MDL-55 restraints, and restraint-leveler packages. It also awarded to Rite-Hite as a retailer and to the ISOs reasonable royalty damages on lost ADL-100, MDL-55, and restraint-leveler sales caused by Kelley's infringing sales. Finally, prejudgment interest, calculated without compounding, was awarded. Kelley's infringement was found to be not willful. On appeal, Kelley contends that the district court erred as a matter of law in its determination of damages. Kelley does not contest the award of damages for lost sales of the MDL-55 restraints; however, Kelley argues that (1) the patent statute does not provide for damages based on Rite-Hite's lost profits on ADL-100 restraints because the ADL-100s are not covered by the patent in suit; (2) lost profits on unpatented dock levelers are not attributable to demand for the '847 invention and, therefore, are not recoverable losses; (3) the ISOs have no standing to sue for patent infringement damages; and (4) the court erred in calculating a reasonable royalty based as a percentage of ADL-100 and dock leveler profits. Rite-Hite and the ISOs challenge the district court's refusal to award lost retail profits and its award of prejudgment interest at a simple, rather than a compound, rate. In order to prevail on appeal on an issue of damages, an appellant must convince us that the determination was based on an erroneous conclusion of law, clearly erroneous factual findings, or a clear error of judgment amounting to an abuse of discretion.

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I. Lost Profits on the ADL-100 Restraints The district court's decision to award lost profits damages pursuant to 35 U.S.C. ß 284 turned primarily upon the quality of Rite-Hite's proof of actual lost profits. The court found that, "but for" Kelley's infringing Truk Stop competition, Rite-Hite would have sold 3,243 additional ADL-100 restraints and 80 additional MDL-55 restraints. The court reasoned that awarding lost profits fulfilled the patent statute's goal of affording complete compensation for infringement and compensated Rite-Hite for the ADL-100 sales that Kelley "anticipated taking from Rite-Hite when it marketed the Truk Stop against the ADL100." The court stated, "the rule applied here therefore does not extend Rite-Hite's patent rights excessively, because Kelley could reasonably have foreseen that its infringement of the '847 patent would make it liable for lost ADL-100 sales in addition to lost MDL-55 sales." The court further reasoned that its decision would avoid what it referred to as the "whip-saw" problem, whereby an infringer could avoid paying lost profits damages altogether by developing a device using a first patented technology to compete with a device that uses a second patented technology and developing a device using the second patented technology to compete with a device that uses the first patented technology. Kelley maintains that Rite-Hite's lost sales of the ADL-100 restraints do not constitute an injury that is legally compensable by means of lost profits. It has uniformly been the law, Kelley argues, that to recover damages in the form of lost profits a patentee must prove that, "but for" the infringement, it would have sold a product covered by the patent in suit to the customers who bought from the infringer. Under the circumstances of this case, in Kelley's view, the patent statute provides only for damages calculated as a reasonable royalty. Rite-Hite, on the other hand, argues that the only restriction on an award of actual lost profits damages for patent infringement is proof of causation-in-fact. A patentee, in its view, is entitled to all the profits it would have made on any of its products "but for" the infringement. Each party argues that a judgment in favor of the other would frustrate the purposes of the patent statute. Whether the lost profits at issue are legally compensable is a question of law, which we review de novo. Our analysis of this question necessarily begins with the patent statute. Implementing the constitutional power under Article I, section 8, to secure to inventors the exclusive right to their discoveries, Congress has provided in 35 U.S.C. ß 284 as follows: Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court. The statute thus mandates that a claimant receive damages "adequate" to compensate for infringement. Section 284 further instructs that a damage award shall be "in no event less than a reasonable royalty"; the purpose of this alternative is not to direct the form of compensation, but to set a floor below which damage awards may not fall. Thus, the language of the statute is expansive rather than limiting. It affirmatively states that damages must be adequate, while providing only a lower limit and no other limitation. The Supreme Court spoke to the question of patent damages in General Motors, stating that, in enacting ß 284, Congress sought to "ensure that the patent owner would in fact receive full compensation for 'any damages' [the patentee] suffered as a result of the infringement." Thus, while the statutory text states tersely that the patentee receive "adequate" damages, the Supreme Court has interpreted this to mean that "adequate" damages should approximate those damages that will fully compensate the patentee for infringement. Further, the Court has cautioned against imposing limitations on patent infringement damages, stating: "When Congress wished to limit an element of recovery in a patent infringement action, it said so explicitly." General Motors, 461 U.S. at 653 (refusing to impose limitation on court's authority to award interest). Chapter 11 – Remedies

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In Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476, 141 U.S.P.Q. (BNA) 681, 12 L. Ed. 2d 457, 84 S. Ct. 1526 (1964), the Court discussed the statutory standard for measuring patent infringement damages, explaining: The question to be asked in determining damages is "how much had the Patent Holder and Licensee suffered by the infringement. And that question [is] primarily: had the Infringer not infringed, what would the Patentee Holder-Licensee have made?" This surely states a "but for" test. In accordance with the Court's guidance, we have held that the general rule for determining actual damages to a patentee that is itself producing the patented item is to determine the sales and profits lost to the patentee because of the infringement. To recover lost profits damages, the patentee must show a reasonable probability that, "but for" the infringement, it would have made the sales that were made by the infringer. Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575 F.2d 1152, 197 U.S.P.Q. (BNA) 726 (6th Cir. 1978), articulated a four-factor test that has since been accepted as a useful, but non-exclusive, way for a patentee to prove entitlement to lost profits damages. The Panduit test requires that a patentee establish: (1) demand for the patented product; (2) absence of acceptable non-infringing substitutes; (3) manufacturing and marketing capability to exploit the demand; and (4) the amount of the profit it would have made. A showing under Panduit permits a court to reasonably infer that the lost profits claimed were in fact caused by the infringing sales, thus establishing a patentee's prima facie case with respect to "but for" causation. A patentee need not negate every possibility that the purchaser might not have purchased a product other than its own, absent the infringement. Id. The patentee need only show that there was a reasonable probability that the sales would have been made "but for" the infringement. Id. When the patentee establishes the reasonableness of this inference, e.g., by satisfying the Panduit test, it has sustained the burden of proving entitlement to lost profits due to the infringing sales. The burden then shifts to the infringer to show that the inference is unreasonable for some or all of the lost sales. Applying Panduit, the district court found that Rite-Hite had established "but for" causation. In the court's view, this was sufficient to prove entitlement to lost profits damages on the ADL-100. Kelley does not challenge that Rite-Hite meets the Panduit test and therefore has proven "but for" causation; rather, Kelley argues that damages for the ADL-100, even if in fact caused by the infringement, are not legally compensable because the ADL-100 is not covered by the patent in suit. Preliminarily, we wish to affirm that the "test" for compensability of damages under ß 284 is not solely a "but for" test in the sense that an infringer must compensate a patentee for any and all damages that proceed from the act of patent infringement. Notwithstanding the broad language of ß 284, judicial relief cannot redress every conceivable harm that can be traced to an alleged wrongdoing. For example, remote consequences, such as a heart attack of the inventor or loss in value of shares of common stock of a patentee corporation caused indirectly by infringement are not compensable. Thus, along with establishing that a particular injury suffered by a patentee is a "but for" consequence of infringement, there may also be a background question whether the asserted injury is of the type for which the patentee may be compensated. We believe that under ß 284 of the patent statute, the balance between full compensation, which is the meaning that the Supreme Court has attributed to the statute, and the reasonable limits of liability encompassed by general principles of law can best be viewed in terms of reasonable, objective foreseeability. If a particular injury was or should have been reasonably foreseeable by an infringing competitor in the relevant market, broadly defined, that injury is generally compensable absent a persuasive reason to the contrary. Here, the court determined that Rite-Hite's lost sales of the ADL-100, a product that directly competed with the infringing product, were reasonably foreseeable. We agree with that conclusion. Being responsible for lost sales of a competitive product is surely foreseeable; such losses constitute the full compensation set forth by Congress, as interpreted by the Supreme Chapter 11 – Remedies

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Court, while staying well within the traditional meaning of proximate cause. Such lost sales should therefore clearly be compensable. Recovery for lost sales of a device not covered by the patent in suit is not of course expressly provided for by the patent statute. Express language is not required, however. Statutes speak in general terms rather than specifically expressing every detail. Under the patent statute, damages should be awarded "where necessary to afford the plaintiff full compensation for the infringement." General Motors. Thus, to refuse to award reasonably foreseeable damages necessary to make Rite-Hite whole would be inconsistent with the meaning of ß 284. Kelley asserts that to allow recovery for the ADL-100 would contravene the policy reason for which patents are granted: "To promote the progress of . . . the useful arts." U.S. Const., art. I, ß 8, cl. 8. Because an inventor is only entitled to exclusivity to the extent he or she has invented and disclosed a novel, nonobvious, and useful device, Kelley argues, a patent may never be used to restrict competition in the sale of products not covered by the patent in suit. In support, Kelley cites antitrust case law condemning the use of a patent as a means to obtain a "monopoly" on unpatented material. See, e.g., Ethyl Gasoline Corp. v. United States, 309 U.S. 436, 459, 84 L. Ed. 852, 60 S. Ct. 618 (1940) ("The patent monopoly of one invention may no more be enlarged for the exploitation of a monopoly of another than for the exploitation of an unpatented article, or for the exploitation or promotion of a business not embraced within the patent."); Leitch Mfg. Co. v. Barber Co., 302 U.S. 458, 463, 82 L. Ed. 371, 58 S. Ct. 288 (1938) ("Every use of a patent as a means of obtaining a limited monopoly on unpatented material is prohibited . . . whatever the nature of the device by which the owner of the patent seeks to effect unauthorized extension of the monopoly."). These cases are inapposite to the issue raised here. The present case does not involve expanding the limits of the patent grant in violation of the antitrust laws; it simply asks, once infringement of a valid patent is found, what compensable injuries result from that infringement, i.e., how may the patentee be made whole. Rite-Hite is not attempting to exclude its competitors from making, using, or selling a product not within the scope of its patent. The Truk Stop restraint was found to infringe the '847 patent, and Rite-Hite is simply seeking adequate compensation for that infringement; this is not an antitrust issue. Allowing compensation for such damage will "promote the Progress of . . . the useful Arts" by providing a stimulus to the development of new products and industries. See 1 Ernest B. Lipscomb III, Walker on Patents 65 (3d ed. 1984) (quoting Simonds, Summary of the Law of Patents 9 (1883)) ("The patent laws promote the progress in different ways, prominent among which are by protecting the investment of capital in the development and working of a new invention from ruinous competition till the investment becomes remunerative."). Kelley further asserts that, as a policy matter, inventors should be encouraged by the law to practice their inventions. This is not a meaningful or persuasive argument, at least in this context. A patent is granted in exchange for a patentee's disclosure of an invention, not for the patentee's use of the invention. There is no requirement in this country that a patentee make, use, or sell its patented invention. If a patentee's failure to practice a patented invention frustrates an important public need for the invention, a court need not enjoin infringement of the patent. See 35 U.S.C. ß 283 (1988) (courts may grant injunctions in accordance with the principles of equity). Accordingly, courts have in rare instances exercised their discretion to deny injunctive relief in order to protect the public interest. See, e.g., Hybritech, Inc. v. Abbott Lab., 4 U.S.P.Q.2D (BNA) 1001 (C.D. Cal. 1987) (public interest required that injunction not stop supply of medical test kits that the patentee itself was not marketing), aff'd, 849 F.2d 1446, 7 U.S.P.Q.2D (BNA) 1191 (Fed. Cir. 1988); Vitamin Technologists, Inc. v. Wisconsin Alumni Research Found., 64 U.S.P.Q. (BNA) 285 (9th Cir. 1945) (public interest warranted refusal of injunction on irradiation of oleomargarine); City of Milwaukee v. Activated Sludge, Inc., 21 U.S.P.Q. (BNA) 69 (7th Cir. 1934) (injunction refused against city operation of sewage disposal plant because of public health danger). Whether a patentee sells its patented invention is not crucial in determining lost profits damages. Normally, if the patentee is not selling a product, by definition there can be no lost profits.

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However, in this case, Rite-Hite did sell its own patented products, the MDL-55 and the ADL-100 restraints. Kelley next argues that to award lost profits damages on Rite-Hite's ADL-100s would be contrary to precedent. Citing Panduit, Kelley argues that case law regarding lost profits uniformly requires that "the intrinsic value of the patent in suit is the only proper basis for a lost profits award." Kelley argues that each prong of the Panduit test focuses on the patented invention; thus, Kelley asserts, Rite-Hite cannot obtain damages consisting of lost profits on a product that is not the patented invention. Generally, the Panduit test has been applied when a patentee is seeking lost profits for a device covered by the patent in suit. However, Panduit is not the sine qua non for proving "but for" causation. If there are other ways to show that the infringement in fact caused the patentee's lost profits, there is no reason why another test should not be acceptable. Moreover, other fact situations may require different means of evaluation, and failure to meet the Panduit test does not ipso facto disqualify a loss from being compensable. In any event, the only Panduit factor that arguably was not met in the present fact situation is the second one, absence of acceptable non-infringing substitutes. Establishment of this factor tends to prove that the patentee would not have lost the sales to a non-infringing third party rather than to the infringer. That, however, goes only to the question of proof. Here, the only substitute for the patented device was the ADL-100, another of the patentee's devices. Such a substitute was not an "acceptable, non-infringing substitute" within the meaning of Panduit because, being patented by Rite-Hite, it was not available to customers except from Rite-Hite. Rite-Hite therefore would not have lost the sales to a third party. The second Panduit factor thus has been met. If, on the other hand, the ADL-100 had not been patented and was found to be an acceptable substitute, that would have been a different story, and Rite-Hite would have had to prove that its customers would not have obtained the ADL-100 from a third party in order to prove the second factor of Panduit. Kelley's conclusion that the lost sales must be of the patented invention thus is not supported. Kelley's concern that lost profits must relate to the "intrinsic value of the patent" is subsumed in the "but for" analysis; if the patent infringement had nothing to do with the lost sales, "but for" causation would not have been proven. However, "but for" causation is conceded here. The motive, or motivation, for the infringement is irrelevant if it is proved that the infringement in fact caused the loss. We see no basis for Kelley's conclusion that the lost sales must be of products covered by the infringed patent. Kelley has thus not provided, nor do we find, any justification in the statute, precedent, policy, or logic to limit the compensability of lost sales of a patentee's device that directly competes with the infringing device if it is proven that those lost sales were caused in fact by the infringement. Such lost sales are reasonably foreseeable and the award of damages is necessary to provide adequate compensation for infringement under 35 U.S.C. ß 284. Thus, Rite-Hite's ADL-100 lost sales are legally compensable and we affirm the award of lost profits on the 3,283 sales lost to Rite-Hite's wholesale business in ADL-100 restraints. II. Damages on the Dock Levelers Based on the "entire market value rule," the district court awarded lost profits on 1,692 dock levelers that it found Rite-Hite would have sold with the ADL-100 and MDL-55 restraints. Kelley argues that this award must be set aside because Rite-Hite failed to establish that the dock levelers were eligible to be included in the damage computation under the entire market value rule. We agree. When a patentee seeks damages on unpatented components sold with a patented apparatus, courts have applied a formulation known as the "entire market value rule" to determine whether such components should be included in the damage computation, whether for reasonable royalty purposes, or for lost profits purposes. Early cases invoking the entire market value rule required that for a Chapter 11 – Remedies

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patentee owning an "improvement patent" to recover damages calculated on sales of a larger machine incorporating that improvement, the patentee was required to show that the entire value of the whole machine, as a marketable article, was "properly and legally attributable" to the patented feature. Subsequently, our predecessor court held that damages for component parts used with a patented apparatus were recoverable under the entire market value rule if the patented apparatus "was of such paramount importance that it substantially created the value of the component parts." Marconi Wireless Telegraph Co. v. United States, 99 Ct. Cl. 1, 53 U.S.P.Q. (BNA) 246, 250 (Ct. Cl. 1942), aff'd in part and vacated in part, 320 U.S. 1 (1943). We have held that the entire market value rule permits recovery of damages based on the value of a patentee's entire apparatus containing several features when the patent-related feature is the "basis for customer demand." The entire market value rule has typically been applied to include in the compensation base unpatented components of a device when the unpatented and patented components are physically part of the same machine. The rule has been extended to allow inclusion of physically separate unpatented components normally sold with the patented components. However, in such cases, the unpatented and patented components together were considered to be components of a single assembly or parts of a complete machine, or they together constituted a functional unit. In Paper Converting, this court articulated the entire market value rule in terms of the objectively reasonable probability that a patentee would have made the relevant sales. See 745 F.2d at 23, 223 U.S.P.Q. (BNA) at 599-600. Furthermore, we may have appeared to expand the rule when we emphasized the financial and marketing dependence of the unpatented component on the patented component. See id. In Paper Converting, however, the rule was applied to allow recovery of profits on the unpatented components only because all the components together were considered to be parts of a single assembly. The references to "financial and marketing dependence" and "reasonable probability" were made in the context of the facts of the case and did not separate the rule from its traditional moorings. Specifically, recovery was sought for the lost profits on sales of an entire machine for the high speed manufacture of paper rolls comprising several physically separate components, only one of which incorporated the invention. The machine was comprised of the patented "rewinder" component and several auxiliary components, including an "unwind stand" that supported a large roll of supply paper to the rewinder, a "core loader" that supplied paperboard cores to the rewinder, an "embosser" that embossed the paper and provided a special textured surface, and a "tail sealer" that sealed the paper's trailing end to the finished roll. Although we noted that the auxiliary [**31] components had "separate usage" in that they each separately performed a part of an entire rewinding operation, the components together constituted one functional unit, including the patented component, to produce rolls of paper. The auxiliary components derived their market value from the patented rewinder because they had no useful purpose independent of the patented rewinder. Similarly, our subsequent cases have applied the entire market value rule only in situations in which the patented and unpatented components were analogous to a single functioning unit. See, e.g., Kalman v. Berlyn Corp., 914 F.2d 1473, 1485, 16 U.S.P.Q.2D (BNA) 1093, 1102 (Fed. Cir. 1990) (affirming award of damages for filter screens used with a patented filtering device); TWM, 789 F.2d at 901, 229 U.S.P.Q. (BNA) at 528 (affirming award of damages for unpatented wheels and axles sold with patented vehicle suspension system); Kori Corp. v. Wilco Marsh Buggies & Draglines, Inc., 761 F.2d 649, 656, 225 U.S.P.Q. (BNA) 985, 989 (Fed. Cir.) (affirming an award of damages for unpatented uppers of an improved amphibious vehicle having a patented pontoon structure), cert. denied, 474 U.S. 902, 88 L. Ed. 2d 229, 106 S. Ct. 230 (1985). Thus, the facts of past cases clearly imply a limitation on damages, when recovery is sought on sales of unpatented components sold with patented components, to the effect that the unpatented components must function together with the patented component in some manner so as to produce a desired end product or result. All the components together must be analogous to components of a single assembly Chapter 11 – Remedies

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or be parts of a complete machine, or they must constitute a functional unit. Our precedent has not extended liability to include items that have essentially no functional relationship to the patented invention and that may have been sold with an infringing device only as a matter of convenience or business advantage. We are not persuaded that we should extend that liability. Damages on such items would constitute more than what is "adequate to compensate for the infringement." The facts of this case do not meet this requirement. The dock levelers operated to bridge the gap between a loading dock and a truck. The patented vehicle restraint operated to secure the rear of the truck to the loading dock. Although the two devices may have been used together, they did not function together to achieve one result and each could effectively have been used independently of each other. The parties had established positions in marketing dock levelers long prior to developing the vehicle restraints. Rite-Hite and Kelley were pioneers in that industry and for many years were primary competitors. Although following Rite-Hite's introduction of its restraints onto the market, customers frequently solicited package bids for the simultaneous installation of restraints and dock levelers, they did so because such bids facilitated contracting and construction scheduling, and because both RiteHite and Kelley encouraged this linkage by offering combination discounts. The dock levelers were thus sold by Kelley with the restraints only for marketing reasons, not because they essentially functioned together. We distinguish our conclusion to permit damages based on lost sales of the unpatented (not covered by the patent in suit) ADL-100 devices, but not on lost sales of the unpatented dock levelers, by emphasizing that the Kelley Truk Stops were devices competitive with the ADL-100s, whereas the dock levelers were merely items sold together with the restraints for convenience and business advantage. It is a clear purpose of the patent law to redress competitive damages resulting from infringement of the patent, but there is no basis for extending that recovery to include damages for items that are neither competitive with nor function with the patented invention. Promotion of the useful arts, see U.S. Const., art. I, ß 8, cl. 8, requires one, but not the other. These facts do not establish the functional relationship necessary to justify recovery under the entire market value rule. Therefore, the district court erred as a matter of law in including them within the compensation base. Accordingly, we vacate the court's award of damages based on the dock leveler sales. IV. Computation of Reasonable Royalty The district court found that Rite-Hite as a manufacturer was entitled to an award of a reasonable royalty on 502 infringing restraint or restraint-leveler sales for which it had not proved that it contacted the Kelley customer prior to the infringing Kelley sale. The court awarded a royalty equal to approximately fifty percent of Rite-Hite's estimated lost profits per unit sold to retailers. Further, the court found that Rite-Hite as a retailer was entitled to a reasonable royalty amounting to approximately onethird its estimated lost distribution income per infringing sale. Kelley challenges the amount of the royalty as grossly excessive and legally in error. A patentee is entitled to no less than a reasonable royalty on an infringer's sales for which the patentee has not established entitlement to lost profits. 35 U.S.C. ß 284 (1988); Hanson v. Alpine Valley Ski Area, Inc., 718 F.2d 1075, 1078, 219 U.S.P.Q. (BNA) 679, 681-82 (Fed. Cir. 1983) ("If actual damages cannot be ascertained, then a reasonable royalty must be determined."). The royalty may be based upon an established royalty, if there is one, or if not, upon the supposed result of hypothetical negotiations between the plaintiff and defendant. The hypothetical negotiation requires the court to envision the terms of a licensing agreement reached as the result of a supposed meeting between the patentee and the infringer at the time infringement began. Id. "One challenging only the court's finding as to amount of damages awarded under the 'reasonable royalty' provision of ß 284, therefore, must show that the award is, in view of all the evidence, either so outrageously high or so outrageously low as to be unsupportable as an estimation of a reasonably royalty." Lindemann Maschinenfabrik GmbH v. American Hoist & Derrick Co., 895 F.2d 1403, 1406, 13 U.S.P.Q.2D (BNA) 1871, 1874 (Fed. Cir. 1990).

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The district court here conducted the hypothetical negotiation analysis. It determined that Rite-Hite would have been willing to grant a competitor a license to use the '847 invention only if it received a royalty of no less than one-half of the per unit profits that it was foregoing. In so determining, the court considered that the '847 patent was a "pioneer" patent with manifest commercial success; that Rite-Hite had consistently followed a policy of exploiting its own patents, rather than licensing to competitors; and that Rite-Hite would have had to forego a large profit by granting a license to Kelley because Kelley was a strong competitor and Rite-Hite anticipated being able to sell a large number of restraints and related products. It was thus not unreasonable for the district court to find that an unwilling patentee would only license for one-half its expected lost profits and that such an amount was a reasonable royalty. The fact that the award was not based on the infringer's profits did not make it an unreasonable award. Furthermore, the fact that the award was based on and was a significant portion of the patentee's profits also does not make the award unreasonable. The language of the statute requires "damages adequate to compensate," which does not include a royalty that a patentee who does not wish to license its patent would find unreasonable. Moreover, what an infringer would prefer to pay is not the test for damages. We conclude that the district court made no legal error and was not clearly erroneous in determining the reasonable royalty rate. Accordingly, we affirm the trial court's calculation of a reasonable royalty rate. However, because we vacate the court's decision to include dock levelers in the royalty base, we remand for a redetermination of damages based only on the sale of the infringing restraints and not on the restraint-leveler packages.

NIES, Circuit Judge, with whom ARCHER, Chief Judge, SMITH, Senior Circuit Judge, and MAYER, Circuit Judge join, dissenting-in-part. The majority uses the provision in 35 U.S.C. ß 284 for "damages" as a tool to expand the property rights granted by a patent. I dissent. No one disputes that Rite-Hite is entitled to "full compensation for any damages suffered as a result of the infringement." General Motors Corp. v. Devex Corp., 461 U.S. 648, 653-54, 76 L. Ed. 2d 211, 103 S. Ct. 2058 (1983). "Damages," however, is a word of art. "Damages in a legal sense means the compensation which the law will award for an injury done." Recovery in Patent Infringement Suits: Hearings on H.R. 5231 [later H.R. 5311] Before the Committee on Patents, 79th Cong., 2nd Sess. 9 (1946) (statement of Conder C. Henry, Asst. Comm'r of Patents) (hereinafter "House Hearings"). Thus, the question is, "What are the injuries for which full compensation must be paid?". The majority divorces "actual damages" from injury to patent rights.1 The majority holds that a patentee is entitled to recover its lost profits caused by the infringer's competition with the patentee's business in ADL restraints, products not incorporating the invention of the patent in suit but assertedly protected by other unlitigated patents. Indeed, the majority states a broader rule for the award of lost profits on any goods of the patentee with which the infringing device competes, even products in the public domain. I would hold that the diversion of ADL-100 sales is not an injury to patentee's property rights granted by the '847 patent. To constitute legal injury for which lost profits may be awarded, the infringer must interfere with the patentee's property right to an exclusive market in goods embodying the invention of 1

The term "actual damages" is used to distinguish from an award based on a hypothetical reasonable royalty. In the majority view, this dissent "confuses" the patent right to exclude with the separate determination of actual damages for patent infringement. Contrary to the majority, both determinations depend on injury to patent rights. The patent defines the metes and bounds of legal injury. As the Supreme Court stated in Continental Paper Bag Co. v. Eastern Paper Bag Co., 210 U.S. 405, 430, 52 L. Ed. 1122, 28 S. Ct. 748 (1908): "From the character of the right of the patentee we may judge of his remedies." The majority and the dissent do not merely quibble over "line- drawing" by reason of "remoteness" of an injury but rather fundamentally disagree over the legal scope of the market protected by a patent.

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the patent in suit. The patentee's property rights do not extend to its market in other goods unprotected by the litigated patent. Rite-Hite was compensated for the lost profits for 80 sales associated with the MDL-55, the only product it sells embodying the '847 invention. That is the totality of any possible entitlement to lost profits. Under 35 U.S.C. ß 284, therefore, Rite-Hite is entitled to "damages" calculated as a reasonable royalty on the remainder of Kelley's infringing restraints. I also disagree that the calculations of a reasonable royalty may be based on a percentage of RiteHite's lost profits. Under 35 U.S.C. ß 284, a reasonable royalty must be attributed to Kelley's "use of the invention." A royalty must be based on the value of the patented hook, not on other features in the infringing device, e.g., the motors, which form no part of the patented invention used by Kelley. Further, the trial court discounted or excluded significant evidence and otherwise improperly calculated a reasonable royalty rate. Accordingly, for the reasons more fully presented below, I dissent from the majority on these issues.

NEWMAN, Circuit Judge, with whom Circuit Judge RADER joins, concurring in part and dissenting in part. The court today takes an important step toward preserving damages as an effective remedy for patent infringement. Patent infringement is a commercial tort, and the remedy should compensate for the actual financial injury that was caused by the tort. Thus I concur in the majority's result with respect to entitlement to damages for lost sales of the ADL-100. Yet the court draws a new bright line, adverse to patentees and the businesses built on patents, declining to make the injured claimants whole. The majority now restricts en banc the patentee's previously existing, already limited right to prove damages for lost sales of collateral items -- the socalled "convoyed" sales. Such remedy is now eliminated entirely unless the convoyed item is "functionally" inseparable from the patented item. The court thus propounds a legally ambivalent and economically unsound policy, authorizing damages for the lost sales of the ADL-100 but not those dock levelers that were required to be bid and sold as a package with the MDL-55 and the ADL-100. The district court, in contrast, took a straightforward approach to the damages determination. The district court awarded compensatory damages for (1) Rite-Hite's lost sales of the MDL-55 and the ADL100 models of truck restraint, recognizing the commercial and competitive relationships of these models and the infringing device; (2) Rite-Hite's lost sales of 1,692 dock levelers that were bid and sold in packages with the truck restraints, recognizing that the dock leveler business was a significant factor in Kelley's infringing activity; and (3) the sales-level losses incurred by the independent sales organizations (the ISOs), recognizing their position as geographically exclusive selling arms of the patentee. The majority affirms only the first of these three areas of pecuniary injury, reversing the district court's damages award in the other two areas. I know of no law or policy served by eliminating recovery of actual damages when patents are involved. In holding that those injured by the infringement shall not be made whole, the value of the patent property is diminished. The majority's half-a-loaf award, wherein the patentee and the other plaintiffs are denied recovery of a significant portion or all of their proven damages, is an important policy decision. Thus, although I join Parts A-I and B of the majority opinion, I must dissent from Parts A-II and A-III.

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Grain Processing Corporation, v. American Maize-Products Company 979 F. Supp. 1233; 44 U.S.P.Q.2D (BNA) 1782 (N.D. Ind. 1997) EASTERBROOK, Circuit Judge. [sitting by designation] American Maize Products Co. (AMP) infringed Claim 12 of U.S. Patent No. 3,849,194. A reasonable royalty for the patented product would have been 3% of sales, yielding an award of approximately $ 2.5 million to plaintiff Grain Products Corporation (GPC). What is now before the court, following remand from the Federal Circuit, is whether a calculation from a lost-profits perspective would produce a higher award. [The patented invention was a food-additive, with the key characteristics that the “dextrose equivalent” (D.E.) was between .5 and 2.5, and a “descriptive ratio” greater than “about 2.” The earlier proceedings of the case had determined that “Lo-Dex 10,” one of AMP's line of low-dextrose malto-dextrins with a D.E. of 10, infringed the patent, but that AMP's products with higher and lower D.E. values did not infringe.] After a damages trial to the bench in 1995, I concluded that AMP could have produced a non-infringing product (as it ultimately did) with a D.R. reliably less than 1.9, and that it infringed the patent only because it misunderstood which test would be used to measure the D.E. Value, the denominator in the fraction that defines the D.R. value. After analyzing the production methods available to AMP during the period of infringement, I wrote: "My conclusion that AMP has carried its burden of establishing that it could have produced a non-infringing product no later than October 1979 scotches GPC's request for lost-profits damages." 893 F. Supp. at 1392. The court of appeals [reversed the denial of lost profits damages, on the grounds that “to be an acceptable noninfringing substitute, the product or process must have been available or on the market at the time of infringement”.] I do not wish to be presumptuous, but it seems to me that my opinion did what the court of appeals believes ought to have been done. That is, I found as a matter of fact that a "noninfringing product" was available "no later than October 1979". The Federal Circuit did not conclude that this finding was clearly erroneous; instead it believed that there had been a legal blunder. Yet, as the court of appeals wrote, "to be an acceptable noninfringing substitute, the product or process must have been available or on the market at the time of infringement" (emphasis added). I found and reiterate (a) that noninfringing substitutes for the patented product were on the market at the time of infringement, and (b) that AMP had "available" at the critical time a process that would have ensured that its own product did not infringe the patent. Proposition (a) is common ground between the parties and therefore was not expressly identified as a "finding": GPC itself makes a variety of [additives] that fall outside the patent; so does AMP (this was established at an earlier stage of the case); firms other than GPC and AMP likewise do so. It is easy to make such a product. Moreover, GPC faced competition from non-infringing [additives] that AMP made[ ]. Lo-Dex 5 and Lo-Dex 15, which for many end products are substitutes for the infringing LoDex 10, did not infringe. Other firms in the industry also made [roughly equivalent additives] that did not infringe the patent. GPC believes that A.E. Staley, one of these rivals, did infringe, though this was never established in litigation; at all events, GPC does not contend that all competing [additives] infringed. So noninfringing substitutes were on sale. GPC did not argue otherwise at the damages trial. What it did argue is that AMP could not have made a non-infringing D.E. 10 product, that D.E. 10 malto-dextrin occupies a market apart from the D.E. 5 and D.E. 15 products, and that if AMP had dropped out of the D.E.10 line all of its sales would have gone to GPC rather than to the other producers. It is obvious in retrospect that my discussion of proposition (b) was not as clear as it needed to be. I set out to articulate a finding that although, until 1991, AMP did not sell a non-infringing D.E. 10 maltoChapter 11 – Remedies

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dextrin, such a product was "available" in the way the Federal Circuit uses that word. AMP did not have to "invent around" the patent; all it had to do was use a [glucoamylase, a well-known chemical enzyme in the industry]. Until 1991 AMP had not used this enzyme, but the sole reason was economic: glucoamylase is more expensive than the alpha amylase enzyme that AMP had been using. The chemical effects of glucoamylase have been known for a long time; my opinion cites a 1967 textbook and the pre-1974 advertising of enzyme manufacturers, which touted that glucoamylase could be used to achieve the effect (breaking starch molecules in hydrolysis at the end of the chain rather than in the middle) that would reduce DP1-6, the numerator in the fraction that yields the D.R. value. By reducing the numerator while holding the denominator (the D.E. value) constant, AMP produced Lo-Dex 10 with a D.R. value reliably less than 1.9. It could have done this at any time during the period for which GPC is entitled to damages, I concluded, and did not do so only because of a legal error. AMP believed, after using the Lane-Eynon test to determine the D.E. value, that Lo-Dex lo made by Process II and Process III did not infringe the patent; only when the Federal Circuit held in 1991 that the Schoorl test was the right benchmark did AMP recognize the need to change production processes. It was able to do so within two weeks of the Federal Circuit's decision, which for large-scale production is practically instantaneous. I did not, and do not, say that the simple fact of switching established the availability of a non-infringing substitute; my finding of availability was based on a number of subsidiary findings about the technology of enzyme-assisted starch hydrolysis that the court of appeals did not mention. To the extent the federal circuit believed that I made such a leap from the switch to earlier availability, I trust that this clarification will set things straight. I am confident that the court of appeals did not mean to say that a particular product must be sold contemporaneously with the infringement to count as an "available" non-infringing substitute. Lostprofits damages are designed to give the patent holder the economic benefits it would have enjoyed had its intellectual property been respected. This rule calls for a reconstruction of the way the market would have developed in the absence of infringement. Reconstruction takes account not only of substitutes actually produced but also what would have been produced, had it been economically advantageous to do so. This is the point of the Federal Circuit's statement that "to be an acceptable noninfringing substitute, the product or process must have been available or on the market at the time of infringement" (emphasis added). A product that is within a firm's existing production abilities but not on the market--in this case, Lo-Dex 10 made by Process IV--effectively constrains the patent holder's profits. Potential competition can be as powerful as actual competition in constraining price. William J. Baumol, John C. Panzar & Robert D. Willig, Contestable Markets and the Theory of Industry Structure (1982). See also George J. Stigler, The Theory of Price 203-10 (4th ed. 1987). To see this, consider two examples. The dominant storage medium for digital data today is the Winchester drive mechanism, the basic technology behind modern hard disks. Bits are encoded as magnetic domains on a metal oxide and read by a head on a mechanical arm as a platter spins beneath it. One rival on the horizon is holograms stored in crystal lattices, read by lasers. See Demetri Psaltis & Fai Mok, Holographic Memories, 273 Scientific American 70 (Nov. 1995). Suppose this technology is patented and brought to market. It is likely to be more reliable (it has fewer moving parts), faster (beams of light can be deflected faster than arms can move or disks turn), and cheaper (light can encode more data per unit of area, and the crystal can store in three dimensions while the magnetic disk stores in only two). Suppose that hard disks can be manufactured for 10 [cents] per megabyte, while holographic memory costs 6 [cents]; consumers accordingly turn to crystals, and hard disks vanish from the market. Next suppose that someone infringes the patent on holographic crystal memory. What will be the patent holder's lost profits? Although they could be less than 4 [cents] per megabyte of memory sold, they cannot be more-for if the patent holder put its devices on the market at 11 [cents] per megabyte, it would pay to bring Winchester drives back into production. (The patent holder's implicit threat to engage in limit pricing in response to entry could be defeated by long-term contracts, a strategy Baumol and colleagues discuss.) The profit could well be less than 4 [cents] per megabyte: improvements in hard disk technology might make reentry at a price below 10 [cents] attractive, and at all events even a monopolist might find than the profit-maximizing price (where marginal cost equals marginal revenue) is Chapter 11 – Remedies

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less than 10 [cents] per megabyte. All that matters for current purposes, however, is that a product missing from the market can strongly affect, if not determine, the price a patent holder can obtain, and therefore the profit lost by infringement. The computer-memory example assumed that the product was patented. Suppose instead that a process patent covers the most economical way of producing an unpatented product. The gasoline cracking patent case, Standard Oil Co. (Indiana) v. United States, 283 U.S. 163, 75 L. Ed. 926, 51 S. Ct. 421 (1931); see Ward S. Bowman, Jr., Patent and Antitrust Law 203-18 (1973), provides the inspiration for this second example. Gasoline used to be made by simple distillation, which converts only a small portion of crude oil into the lighter fractions such as gasoline and kerosene that consumers value highly. Catalytic cracking of the residue left after simple distillation produces a much higher yield per barrel of oil. An antitrust problem arose when holders of different patented cracking technologies pooled their patents; the effects of this merger depended on whether the patents were competitive or blocking. That dispute does not matter for current purposes. Suppose there was only one patented cracking technology, and that the unpatented distillation technologies remained available. At what price could the owner of the cracking patent sell a gallon of gasoline? Not for a penny more than gasoline made by the old technology, because gasoline is fungible. Thus the maximum lost profit, in the event of infringement of the cracking patent, would have been the difference between the actual price of gasoline and the price a manufacturer using the old distillation technology would have charged. GPC was in the same economic position as the holder of the cracking patent in this second example. The economically-significant product--gasoline or low-dextrose malto-dextrin--is unpatented. True enough, GPC's patent covers a product rather than a process, but as I have emphasized before and will again, the patent claims a particular attribute of waxy starch hydrolysates (a D.R. value greater than "about 2") that consumers do not value. What they want is low-dextrose malto-dextrin, which like gasoline does not infringe a patent. So GPC's patent, although in terms a product patent, has the same economic consequences as a process patent, like the gasoline cracking patent. Low-dextrose maltodextrins made by some processes will have D.R. values greater than "about 2" and will infringe if they satisfy its other elements; low-dextrose malto-dextrins made by other methods (starting with non-waxy feedstocks, or hydrolyzed using glucoamylase enzymes) will not have infringing D.R. values. The patent effectively forecloses the least-cost method of turning waxy starch into low-dextrose maltodextrin, and therefore the profit lost from infringement is the cost and market price difference attributable to using glucoamylase. Now I leave hypothetical reconstructions behind and approach the lost-profits question from a different angle. Suppose that for formal reasons the only proper way to look at the patent is strictly as a product claim. Panduit and, more pertinently, Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538, 1545-46 (Fed. Cir. 1995) (en banc), identify demand for the patented product as an essential element of the patent holder's lost-profits claim. (Rite-Hite is more pertinent than Panduit because GPC did not practice its patent. Lost-profits damages therefore depend on the approach Rite-Hite articulated for such cases.) Is there a demand for the product covered by the patent? To answer this question, it is essential to be precise about what the patented product is. GPC emphasizes that there is a substantial demand for D.E. 10 malto-dextrins, which no one doubts. It also contends that D.E. 5 and 15 malto-dextrins are not good substitutes for D.E. 10 products, which is a hotly contested issue. Assume that D.E. 10 malto-dextrin is an economically significant product, at least in the short run. (Over a longer run, food producers that now use D.E. 10 products could reformulate their products so that other binders and fillers would serve their needs. GPC has never attempted to estimate the long-run elasticity of substitution among different dextrose equivalents. Given the conclusion that follows, the elasticity does not matter.) Still, GPC does not have a patent on D.E. 10 malto-dextrin [itself. Rather, it claims a specific version of D.E. 10 malto-dextrin]. The question is whether there is an economically significant demand for a product having all of these attributes. To this the answer is no. Two of the essential elements of this claim--that the starch be Chapter 11 – Remedies

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"waxy" and that the "descriptive ratio [be] greater than about 2"--are irrelevant to consumers. There is no demand, none at all, for the patented product; the demand is for low-dextrose malto-dextrins of which the patented product is just one exemplar, functionally identical to its unpatented rivals in the marketplace. This is why the patent's value rests on its effect on manufacturing processes. Suppose that in lieu of the descriptive ratio clause the patent read "glows when subjected to ultraviolet radiation". That change would be irrelevant to the food industry. Suppose further that the cheapest method of hydrolysis used to make a D.E. 10 malto-dextrin just happens to produce fluorescence under ultraviolet radiation. Buyers of malto-dextrins would not care, but firms such as AMP would have to eliminate this attribute to avoid infringement. The higher manufacturing cost of doing so would enable the patent holder to charge a royalty for a license. But the lack of any demand for an ultraviolet-sensitive malto-dextrin would show that the patent holder did not suffer lost profits from the diversion of sales. And so it is with GPC's patent. There is no demand for low-dextrose malto-dextrins with a D.R. value greater than about 2, because the D.R. value is irrelevant to purchasers of the product. GPC does not have a patent on D.E. 10 malto-dextrins, the economically significant product, and therefore cannot recover lostprofits damages on account Of AMP'S competition. I anticipate the response that defining the product as the precise combination of attributes claimed in the patent would have knocked out an award of damages in Rite-Hite itself, but this is not so. Rite-Hite and Kelley sold competing devices for securing a truck to a loading dock, in order to prevent the vehicle from moving while loading or unloading was in progress. Kelley's device infringed Rite-Hite's patent-but there were other ways of securing trucks to docks, and another of Rite-Hite's models, not covered by the patent in suit, was foremost among them. The court of appeals held that there could be an economically significant demand for the patented product even though there were other ways to achieve consumers' objectives. It was important to the finding of lost profits that the principal "other way", Rite-Hite's own device, also was patented. Rite-Hite's patents collectively entitled it to sell the whole market's demand, and therefore to collect profits lost by infringement that siphons sales. In other words, Rite-Hite treats the "patented product" for purposes of lost-profits analysis as including the attributes of all of the plaintiff's multiple patents, and not just the attributes of the patent in suit. That approach does not assist GPC, because products that are perfect substitutes for waxy low-dextrose malto-dextrins with a D.R. greater than about 2 are not covered by any patent, let alone by a patent GPC owns. Unlike Rite-Hite, GPC did not have a legal right to prevent competition from other products that consumers deemed identical to the patented product. GPC's lost-profits claim is flawed in several other respects. Its failure to offer any evidence concerning the elasticity of substitution among D.E. 5, D.E. 10, and D.E. 15 malto-dextrins makes it impossible to know how far (and how fast) consumers would shift to these other products if the price of D.E. 10 malto-dextrin rose. Its lost-profits study is unrealistic: it treats the malto-dextrin business as a highmargin endeavor but is not based on an economically sound means of determining which of its costs are fixed over the relevant time dimension. GPC's offer to license a portfolio of patents, including the one in suit, for less than a 5% royalty means that its own business managers believed that its long-run margins are low--for otherwise the license would be disastrous. (It would be folly to exchange a 40% profit from the sale of a pound of malto-dextrin for a 5% royalty on the sale of that pound by a competitor.) But because I have concluded that there is no economic demand for the patented product, I need not elaborate on these additional obstacles to GPC's lost-profits claim.

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University of Pennsylvania Law School

Intellectual Property:

Patent Law

Law 677 | Spring 2001 Professor Wagner

COURSE M AT E R I A L S Part 4

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Chapter 12 The Subject Matter of Patents Introduction In the previous chapters, we investigated the hurdles an invention must clear to be patentable, as well as the scope and enforcement of patents once issued. We did so without reference to the type of invention – i.e., the category or subject matter. In this, final, chapter, we look at the kinds, or classes, of things that can be patented, whether or not they are new and nonobvious, and irrespective of their scope or content. For example, a new and improved widget on a machine may certainly receive a patent. In contrast, the way a story is expressed in a novel is equally ineligible for a patent (although it may be copyrighted). A closer case might involve an algorithm that runs on a computer and generates a novel from a user’s input. The classes of things that may be patented are derived from the Constitution’s express terms, in Article I, section 8: 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.

The focus of the patent laws is the “useful arts.” Thus, it is not enough merely to identify a problem; rather, to receive a patent, a person must develop a concrete solution for the problem. In addition, speculative or theoretical ideas fail the test if they are not connected to some practical result. To set out protection for the useful arts, Congress provided, in 35 U.S.C. § 100(b): The term “process” means process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material.

and, in section 101: 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.

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The materials below explore the edges of the statutory and constitutional grants, including some of the quite recent controversy surrounding patents to “business models” or other internet-related inventions. Perhaps more so than any are of patent law, the section 101 inquiry requires the courts to grapple with the pace of technological developments, and the competing interests that are bound up with the decision to allow the scope of patent law to encompass some new technology or field of endeavour.

The materials are split into two broad areas. The first is biotechnology, starting with the Supreme Court’s earliest pronouncements, and tracing the issue to today’s debate relating to the patentability of genetic information. The second is grouped under the heading of software and business methods, and relates to the ways that patent law (and patenting behavior) has responded to the increasingly computer-centric economy. As you review the cases and other materials, consider the extent to which the aspect of patent law we’ve already explored – the rules limiting patentability, and the rules of enforcement and scope – play into the court’s and commentators’ views on the scope of allowable subject matter.

Practical Utility Under section 101, not only must an invention fall within one of the categories of patentable subject matter to receive a patent, it must also be “useful.” Likewise, the Constitution’s Intellectual Property Clause speaks of the “useful arts.” You may wonder how any invention could possibly be useless (especially when the applicant is willing to spend money and time to patent it). Nevertheless, this provision is invoked in certain policy-driven areas to ensure that a patent applicant delivers to society something that provides an actual benefit. See 1 William Robinson, Treatise on the Law of Patents 462 (1890). In the cases below, you will see application of the utility requirement to chemical inventions, which are often hard to describe in a written document and whose many uses might not be discerned until well after the chemical is invented.

Brenner v. Manson 383 U.S. 519, 148 USPQ 689 (1966) MR. JUSTICE FORTAS delivered the opinion of the Court. **** In December 1957, Howard Ringold and George Rosenkranz applied for a patent on an allegedly novel process for making certain known steroids. They claimed priority as of December 17, 1956, the date on which they had filed for a Mexican patent. United States Patent No. 2,908,693 issued late in 1959. In January 1960, respondent Manson, a chemist engaged in steroid research, filed an application to patent precisely the same process described by Ringold and Rosenkranz. He asserted that it was he who had discovered the process, and that he had done so before December 17, 1956. Accordingly, he requested that an "interference" be declared in order to try out the issue of priority between his claim and that of Ringold and Rosenkranz. A Patent Office examiner denied Manson's application, and the denial was affirmed by the Board of Appeals within the Patent Office. The ground for rejection was the failure "to disclose any utility for" the chemical compound produced by the process. Letter of Examiner, dated May 24, 1960. This omission was not cured, in the opinion of the Patent Office, by Manson's reference to an article in the November 1956 issue of the Journal of Organic Chemistry, 21 J. Org. Chem. 1333-1335, which revealed that steroids of a class which included the compound in question were undergoing screening for possible Chapter 12 – The Subject Matter of Patents

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tumor-inhibiting effects in mice, and that a homologue3 adjacent to Manson's steroid had proven effective in that role. Said the Board of Appeals, "It is our view that the statutory requirement of usefulness of a product cannot be presumed merely because it happens to be closely related to another compound which is known to be useful." The Court of Customs and Patent Appeals (hereinafter CCPA) reversed, Chief Judge Worley dissenting. 333 F.2d 234, 237-238. The court held that Manson was entitled to a declaration of interference since "where a claimed process produces a known product it is not necessary to show utility for the product," so long as the product "is not alleged to be detrimental to the public interest." Certiorari was granted, 380 U.S. 971, to resolve this running dispute over what constitutes "utility" in chemical process claims, as well as to answer the question concerning our certiorari jurisdiction. **** II. Our starting point is the proposition, neither disputed nor disputable, that one may patent only that which is "useful." In Graham v. John Deere Co., ante, p. 1, at 5-10, we have reviewed the history of the requisites of patentability, and it need not be repeated here. Suffice it to say that the concept of utility has maintained a central place in all of our patent legislation, beginning with the first patent law in 1790 and culminating in the present law's provision that "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."

As is so often the case, however, a simple, everyday word can be pregnant with ambiguity when applied to the facts of life. That this is so is demonstrated by the present conflict between the Patent Office and the CCPA over how the test is to be applied to a chemical process which yields an already known product whose utility—other than as a possible object of scientific inquiry—has not yet been evidenced. . . **** It is not remarkable that differences arise as to how the test of usefulness is to be applied to chemical processes. Even if we knew precisely what Congress meant in 1790 when it devised the "new and useful" phraseology and in subsequent re-enactments of the test, we should have difficulty in applying it in the context of contemporary chemistry where research is as comprehensive as man's grasp and where little or nothing is wholly beyond the pale of "utility"—if that word is given its broadest reach. Respondent does not—at least in the first instance—rest upon the extreme proposition, advanced by the court below, that a novel chemical process is patentable so long as it yields the intended product16 and so long as the product is not itself "detrimental." Nor does he commit the outcome of his claim to the slightly more conventional proposition that any process is "useful" within the meaning of § 101 if it produces a compound whose potential usefulness is under investigation by serious scientific researchers, although he urges this position, too, as an alternative basis for affirming the decision of the CCPA. Rather, he begins with the much more orthodox argument that his process has a specific utility which would entitle him to a declaration of interference even under the Patent Office's reading of § 101. The claim is that the supporting affidavits filed pursuant to Rule 204 (b), by reference to Ringold's 1956 article, reveal that an adjacent homologue of the steroid yielded by his process has been demonstrated to have tumor-inhibiting effects in mice, and that this discloses the requisite utility. We do not accept

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"A homologous series is a family of chemically related compounds, the composition of which varies from member to member by CH 2. (one atom of carbon and two atoms of hydrogen). . . . Chemists knowing the properties of one member of a series would in general know what to expect in adjacent members." 16 Respondent couches the issue in terms of whether the process yields a "known" product. We fail to see the relevance of the fact that the product is "known," save to the extent that references to a compound in scientific literature suggest that it might be a subject of interest and possible investigation.

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any of these theories as an adequate basis for overriding the determination of the Patent Office that the "utility" requirement has not been met. Even on the assumption that the process would be patentable were respondent to show that the steroid produced had a tumor-inhibiting effect in mice, we would not overrule the Patent Office finding that respondent has not made such a showing. The Patent Office held that, despite the reference to the adjacent homologue, respondent's papers did not disclose a sufficient likelihood that the steroid yielded by his process would have similar tumor-inhibiting characteristics. Indeed, respondent himself recognized that the presumption that adjacent homologues have the same utility has been challenged in the steroid field because of "a greater known unpredictability of compounds in that field." In these circumstances and in this technical area, we would not overturn the finding of the Primary Examiner, affirmed by the Board of Appeals and not challenged by the CCPA. The second and third points of respondent's argument present issues of much importance. Is a chemical process "useful" within the meaning of § 101 either (1) because it works—i.e., produces the intended product? or (2) because the compound yielded belongs to a class of compounds now the subject of serious scientific investigation? These contentions present the basic problem for our adjudication. Since we find no specific assistance in the legislative materials underlying § 101, we are remitted to an analysis of the problem in light of the general intent of Congress, the purposes of the patent system, and the implications of a decision one way or the other. In support of his plea that we attenuate the requirement of "utility," respondent relies upon Justice Story's well-known statement that a "useful" invention is one "which may be applied to a beneficial use in society, in contradistinction to an invention injurious to the morals, health, or good order of society, or frivolous and insignificant"—and upon the assertion that to do so would encourage inventors of new processes to publicize the event for the benefit of the entire scientific community, thus widening the search for uses and increasing the fund of scientific knowledge. Justice Story's language sheds little light on our subject. Narrowly read, it does no more than compel us to decide whether the invention in question is "frivolous and insignificant"—a query no easier of application than the one built into the statute. Read more broadly, so as to allow the patenting of any invention not positively harmful to society, it places such a special meaning on the word "useful" that we cannot accept it in the absence of evidence that Congress so intended. There are, after all, many things in this world which may not be considered "useful" but which, nevertheless, are totally without a capacity for harm. It is true, of course, that one of the purposes of the patent system is to encourage dissemination of information concerning discoveries and inventions. And it may be that inability to patent a process to some extent discourages disclosure and leads to greater secrecy than would otherwise be the case. The inventor of the process, or the corporate organization by which he is employed, has some incentive to keep the invention secret while uses for the product are searched out. However, in light of the highly developed art of drafting patent claims so that they disclose as little useful information as possible—while broadening the scope of the claim as widely as possible—the argument based upon the virtue of disclosure must be warily evaluated. Moreover, the pressure for secrecy is easily exaggerated, for if the inventor of a process cannot himself ascertain a "use" for that which his process yields, he has every incentive to make his invention known to those able to do so. Finally, how likely is disclosure of a patented process to spur research by others into the uses to which the product may be put? To the extent that the patentee has power to enforce his patent, there is little incentive for others to undertake a search for uses. Whatever weight is attached to the value of encouraging disclosure and of inhibiting secrecy, we believe a more compelling consideration is that a process patent in the chemical field, which has not been developed and pointed to the degree of specific utility, creates a monopoly of knowledge which should be granted only if clearly commanded by the statute. Until the process claim has been reduced to production of a product shown to be useful, the metes and bounds of that monopoly are not capable of precise delineation. It may engross a vast, unknown, and perhaps unknowable area. Such a patent Chapter 12 – The Subject Matter of Patents

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may confer power to block off whole areas of scientific development, without compensating benefit to the public. The basic quid pro quo contemplated by the Constitution and the Congress for granting a patent monopoly is the benefit derived by the public from an invention with substantial utility. Unless and until a process is refined and developed to this point—where specific benefit exists in currently available form—there is insufficient justification for permitting an applicant to engross what may prove to be a broad field. These arguments for and against the patentability of a process which either has no known use or is useful only in the sense that it may be an object of scientific research would apply equally to the patenting of the product produced by the process. Respondent appears to concede that with respect to a product, as opposed to a process, Congress has struck the balance on the side of non-patentability unless "utility" is shown. Indeed, the decisions of the CCPA are in accord with the view that a product may not be patented absent a showing of utility greater than any adduced in the present case. We find absolutely no warrant for the proposition that although Congress intended that no patent be granted on a chemical compound whose sole "utility" consists of its potential role as an object of use-testing, a different set of rules was meant to apply to the process which yielded the unpatentable product.24 That proposition seems to us little more than an attempt to evade the impact of the rules which concededly govern patentability of the product itself. This is not to say that we mean to disparage the importance of contributions to the fund of scientific information short of the invention of something "useful," or that we are blind to the prospect that what now seems without "use" may tomorrow command the grateful attention of the public. But a patent is not a hunting license. It is not a reward for the search, but compensation for its successful conclusion. “[A] patent system must be related to the world of commerce rather than to the realm of philosophy. . . ." The judgment of the CCPA is Reversed. MR. JUSTICE DOUGLAS, while acquiescing in Part I of the Court's opinion, dissents on the merits of the controversy for substantially the reasons stated by MR. JUSTICE HARLAN. MR. JUSTICE HARLAN, concurring in part and dissenting in part. While I join the Court's opinion on the issue of certiorari jurisdiction, I cannot agree with its resolution of the important question of patentability. Respondent has contended that a workable chemical process, which is both new and sufficiently nonobvious to satisfy the patent statute, is by its existence alone a contribution to chemistry and "useful" as the statute employs that term. Certainly this reading of "useful" in the statute is within the scope of the constitutional grant, which states only that "[t]o promote the Progress of Science and useful Arts," the exclusive right to "Writings and Discoveries" may be secured for limited times to those who produce them. Art. I, § 8. Yet the patent statute is somewhat differently worded and is on its face open both to respondent's construction and to the contrary reading given it by the Court. In the absence of legislative history on this issue, we are thrown back on policy and practice. Because I believe that the Court's policy arguments are not convincing and that past practice favors the respondent, I would reject the narrow definition of "useful" and uphold the judgment of the Court of Customs and Patent Appeals (hereafter CCPA).

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The committee reports which preceded enactment of the 1952 revision of the patent laws disclose no intention to create such a dichotomy, and in fact provide some evidence that the contrary was assumed. Sen. Rep. No. 1979, Committee on the Judiciary, 82d Cong., 2d Sess., 5, 17; H. R. Rep. No. 1923, Committee on the Judiciary, 82d Cong., 2d Sess., 6, 17. Cf. Hoxie, A Patent Attorney's View, 47 J. Pat. Off. Soc. 630, 636 (1965).

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The Court's opinion sets out about half a dozen reasons in support of its interpretation. Several of these arguments seem to me to have almost no force. For instance, it is suggested that "[u]ntil the process claim has been reduced to production of a product shown to be useful, the metes and bounds of that monopoly are not capable of precise delineation" and "[i]t may engross a vast, unknown, and perhaps unknowable area". I fail to see the relevance of these assertions; process claims are not disallowed because the products they produce may be of "vast" importance nor, in any event, does advance knowledge of a specific product use provide much safeguard on this score or fix "metes and bounds" precisely since a hundred more uses may be found after a patent is granted and greatly enhance its value. The further argument that an established product use is part of "[t]he basic quid pro quo" for the patent or is the requisite "successful conclusion" of the inventor's search appears to beg the very question whether the process is "useful" simply because it facilitates further research into possible product uses. The same infirmity seems to inhere in the Court's argument that chemical products lacking immediate utility cannot be distinguished for present purposes from the processes which create them, that respondent appears to concede and the CCPA holds that the products are nonpatentable, and that therefore the processes are nonpatentable. Assuming that the two classes cannot be distinguished, a point not adequately considered in the briefs, and assuming further that the CCPA has firmly held such products nonpatentable, this permits us to conclude only that the CCPA is wrong either as to the products or as to the processes and affords no basis for deciding whether both or neither should be patentable absent a specific product use. More to the point, I think, are the Court's remaining, prudential arguments against patentability: namely, that disclosure induced by allowing a patent is partly undercut by patent-application drafting techniques, that disclosure may occur without granting a patent, and that a patent will discourage others from inventing uses for the product. How far opaque drafting may lessen the public benefits resulting from the issuance of a patent is not shown by any evidence in this case but, more important, the argument operates against all patents and gives no reason for singling out the class involved here. The thought that these inventions may be more likely than most to be disclosed even if patents are not allowed may have more force; but while empirical study of the industry might reveal that chemical researchers would behave in this fashion, the abstractly logical choice for them seems to me to maintain secrecy until a product use can be discovered. As to discouraging the search by others for product uses, there is no doubt this risk exists but the price paid for any patent is that research on other uses or improvements may be hampered because the original patentee will reap much of the reward. From the standpoint of the public interest the Constitution seems to have resolved that choice in favor of patentability. What I find most troubling about the result reached by the Court is the impact it may have on chemical research. Chemistry is a highly interrelated field and a tangible benefit for society may be the outcome of a number of different discoveries, one discovery building upon the next. To encourage one chemist or research facility to invent and disseminate new processes and products may be vital to progress, although the product or process be without "utility" as the Court defines the term, because that discovery permits someone else to take a further but perhaps less difficult step leading to a commercially useful item. In my view, our awareness in this age of the importance of achieving and publicizing basic research should lead this Court to resolve uncertainties in its favor and uphold the respondent's position in this case. This position is strengthened, I think, by what appears to have been the practice of the Patent Office during most of this century. While available proof is not conclusive, the commentators seem to be in agreement that until Application of Bremner, 37 C. C. P. A. (Pat.) 1032, 182 F.2d 216, in 1950, chemical patent applications were commonly granted although no resulting end use was stated or the statement was in extremely broad terms. Taking this to be true, Bremner represented a deviation from established practice which the CCPA has now sought to remedy in part only to find that the Patent Office does not want to return to the beaten track. If usefulness was typically regarded as inherent during a long and prolific period of chemical research and development in this country, surely this is Chapter 12 – The Subject Matter of Patents

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added reason why the Court's result should not be adopted until Congress expressly mandates it, presumably on the basis of empirical data which this Court does not possess. Fully recognizing that there is ample room for disagreement on this problem when, as here, it is reviewed in the abstract, I believe the decision below should be affirmed.

Questions, Comments, Problems 1. The Federal Circuit in In re Brana, 51 F.3d 1560, 34 USPQ2d 1436 (Fed. Cir. 1995), established a twopart procedural framework for analyzing questions of practical utility before the PTO. The application in Brana was directed to chemical compounds for use as antitumor substances. The specification asserted that the claimed compounds had “a better action and a better action spectrum as anti-tumor substances” than prior similar compounds. The court analyzed whether the invention exhibited a practical utility under 35 U.S.C. § 112 ¶ 1, which, according to the court contains an implicit requirement for practical utility that is the same as that under section 101. In reversing the Board’s decision that the invention did not exhibit a practical utility, the court stated: The first basis for the Board's decision was that the applicants' specification failed to disclose a specific disease against which the claimed compounds are useful, and therefore, absent undue experimentation, one of ordinary skill in the art was precluded from using the invention. See Hybritech Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1384, 231 USPQ 81, 94 (Fed.Cir.1986), cert. denied, 480 U.S. 947 (1987). In support, the Commissioner argues that the disclosed uses in the '944 application, namely the "treatment of diseases" and "antitumor substances," are similar to the nebulous disclosure found insufficient in In re Kirk, 376 F.2d 936, 153 USPQ 48 (CCPA 1967). This argument is not without merit. In Kirk applicants claimed a new class of steroid compounds. One of the alleged utilities disclosed in the specification was that these compounds possessed "high biological activity." Id. at 938, 153 USPQ at 50. The specification, however, failed to disclose which biological properties made the compounds useful. Moreover, the court found that known specific uses of similar compounds did not cure this defect since there was no disclosure in the specification that the properties of the claimed compounds were the same as those of the known similar compounds. Id. at 942, 153 USPQ at 53. Furthermore, it was not alleged that one of skill in the art would have known of any specific uses, and therefore, the court concluded this alleged use was too obscure to enable one of skill in the art to use the claimed invention. See also Kawai v. Metlesics, 480 F.2d 880, 178 USPQ 158 (CCPA 1973). Kirk would potentially be dispositive of this case were the above-mentioned language the only assertion of utility found in the '944 application. Applicants' specification, however, also states that the claimed compounds have "a better action and a better action spectrum as antitumor substances" than known compounds, specifically those analyzed in Paull [the closest cited prior art]. As previously noted . . . Paull grouped various benzo[de]isoquinoline-1,3-diones, which had previously been tested in vivo for antitumor activity against two lymphocytic leukemia tumor models (P388 and L1210), into various structural classifications and analyzed the test results of the groups (i.e. what percent of the compounds in the particular group showed success against the tumor models). Since one of the tested compounds, NSC 308847, was found to be highly effective against these two lymphocytic leukemia tumor models, applicants' favorable comparison implicitly asserts that their claimed compounds are highly effective (i.e. useful) against lymphocytic leukemia. An alleged use against this particular type of cancer is much more specific than the vaguely intimated uses rejected by the courts in Kirk and Kawai. See, e.g., Cross v. Iizuka, 753 F.2d at 1048, 224 USPQ at 745 (finding the disclosed practical utility for the claimed compounds--the inhibition of thromboxane synthetase in human or bovine platelet microsomes-sufficiently specific to satisfy the threshold requirement in Kirk and Kawai.) The Commissioner contends, however, that P388 and L1210 are not diseases since the only way an animal can get sick from P388 is by a direct injection of the cell line. The Commissioner therefore concludes that applicants' reference to Paull in their specification does not provide a specific disease against which the claimed compounds can be used. We disagree. As applicants point out, the P388 and L1210 cell lines, though technically labeled tumor models, were originally derived from lymphocytic leukemias in mice. Therefore, the P388 and L1210 cell lines do represent actual specific lymphocytic tumors; these models will produce this particular disease once implanted in mice. If applicants were required to wait until an animal naturally developed this specific tumor before testing the effectiveness of a compound against the tumor in vivo, as would be implied

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from the Commissioner's argument, there would be no effective way to test compounds in vivo on a large scale. We conclude that these tumor models represent a specific disease against which the claimed compounds are alleged to be effective. Accordingly, in light of the explicit reference to Paull, applicants' specification alleges a sufficiently specific use. **** The second basis for the Board's rejection was that, even if the specification did allege a specific use, applicants failed to prove that the claimed compounds are useful. Citing various references, the Board found, and the Commissioner now argues, that the tests offered by the applicants to prove utility were inadequate to convince one of ordinary skill in the art that the claimed compounds are useful as antitumor agents. This court's predecessor has stated: [A] specification disclosure which contains a teaching of the manner and process of making and using the invention in terms which correspond in scope to those used in describing and defining the subject matter sought to be patented must be taken as in compliance with the enabling requirement of the first paragraph of § 112 unless there is reason to doubt the objective truth of the statements contained therein which must be relied on for enabling support. In re Marzocchi, 439 F.2d 220, 223, 169 USPQ 367, 369 (CCPA 1971). From this it follows that the PTO has the initial burden of challenging a presumptively correct assertion of utility in the disclosure. Id. at 224, 169 USPQ at 370. Only after the PTO provides evidence showing that one of ordinary skill in the art would reasonably doubt the asserted utility does the burden shift to the applicant to provide rebuttal evidence sufficient to convince such a person of the invention's asserted utility. See In re Bundy, 642 F.2d 430, 433, 209 USPQ 48, 51 (CCPA 1981).17 The PTO has not met this initial burden. The references ciited by the Board, Pazdur and Martin, do not question the usefulness of any compound as an antitumor agent or provide any other evidence to cause one of skill in the art to question the asserted utility of applicants' compounds. Rather, these references merely discuss the therapeutic predictive value of in vivo murine tests--relevant only if applicants must prove the ultimate value in humans of their asserted utility. Likewise, we do not find that the nature of applicants' invention alone would cause one of skill in the art to reasonably doubt the asserted usefulness. The purpose of treating cancer with chemical compounds does not suggest an inherently unbelievable undertaking or involve implausible scientific principles. In re Jolles, 628 F.2d at 1327, 206 USPQ at 890. Modern science has previously identified numerous successful chemotherapeutic agents. In addition, the prior art, specifically Zee Cheng et al., discloses structurally similar compounds to those claimed by the applicants which have been proven in vivo to be effective as chemotherapeutic agents against various tumor models. Taking these facts--the nature of the invention and the PTO's proffered evidence--into consideration we conclude that one skilled in the art would be without basis to reasonably doubt applicants' asserted utility on its face. The PTO thus has not satisfied its initial burden. Accordingly, applicants should not have been required to substantiate their presumptively correct disclosure to avoid a rejection under the first paragraph of § 112. See In re Marzocchi, 439 F.2d at 224, 169 USPQ at 370. We do not rest our decision there, however. Even if one skilled in the art would have reasonably questioned the asserted utility, i.e., even if the PTO met its initial burden thereby shifting the burden to the applicants to offer rebuttal evidence, applicants proffered sufficient evidence to convince one of skill in the art of the asserted utility. In particular, applicants provided through Dr. Kluge's declaration test 17

See also In re Novak, 306 F.2d 924, 928, 134 USPQ 335, 337 (CCPA 1962) (stating that it is proper for the examiner to request evidence to substantiate an asserted utility unless one with ordinary skill in the art would accept the allegations as obviously valid and correct); In re Chilowsky, 229 F.2d 457, 462, 108 USPQ 321, 325 (CCPA 1956) ("[W]here the mode of operation alleged can be readily understood and conforms to the known laws of physics and chemistry ... no further evidence is required."). But see In re Marzocchi, 439 F.2d at 223, 169 USPQ at 369-70 ("In the field of chemistry generally there may be times when the well-known unpredictability of chemical reactions will alone be enough to create a reasonable doubt as to the accuracy of a particular broad statement put forward as enabling support for a claim. This will especially be the case where the statement is, on its face, contrary to generally accepted scientific principles.").

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results showing that several compounds within the scope of the claims exhibited significant antitumor activity against the L1210 standard tumor model in vivo. Such evidence alone should have been sufficient to satisfy applicants' burden. The prior art further supports the conclusion that one skilled in the art would be convinced of the applicants' asserted utility. As previously mentioned, prior art--Zee Cheng et al. and Paull--disclosed structurally similar compounds which were proven in vivo against various tumor models to be effective as chemotherapeutic agents. Although it is true that minor changes in chemical compounds can radically alter their effects on the human body, Kawai, 480 F.2d at 891, 178 USPQ at 167, evidence of success in structurally similar compounds is relevant in determining whether one skilled in the art would believe an asserted utility. See Rey-Bellet v. Engelhardt, 493 F.2d 1380, 181 USPQ 453 (CCPA 1974); Kawai, 480 F.2d 880, 178 USPQ 158. The Commissioner counters that such in vivo tests in animals are only preclinical tests to determine whether a compound is suitable for processing in the second stage of testing, by which he apparently means in vivo testing in humans, and therefore are not reasonably predictive of the success of the claimed compounds for treating cancer in humans. The Commissioner, as did the Board, confuses the requirements under the law for obtaining a patent with the requirements for obtaining government approval to market a particular drug for human consumption. See Scott v. Finney, 34 F.3d 1058, 1063, 32 USPQ2d 1115, 1120 (Fed. Cir. 1994) ("Testing for the full safety and effectiveness of a prosthetic device is more properly left to the Food and Drug Administration (FDA). Title 35 does not demand that such human testing occur within the confines of Patent and Trademark Office (PTO) proceedings."). Our court's predecessor has determined that proof of an alleged pharmaceutical property for a compound by statistically significant tests with standard experimental animals is sufficient to establish utility. In re Krimmel, 292 F.2d 948, 953, 130 USPQ 215, 219 (CCPA 1961); see also In re Bergel, 292 F.2d 958, 130 USPQ 205 (CCPA 1961). In concluding that similar in vivo tests were adequate proof of utility the court in In re Krimmel stated: We hold as we do because it is our firm conviction that one who has taught the public that a compound exhibits some desirable pharmaceutical property in a standard experimental animal has made a significant and useful contribution to the art, even though it may eventually appear that the compound is without value in the treatment in humans. Krimmel, 292 F.2d at 953, 130 USPQ at 219. Moreover, NCI apparently believes these tests are statistically significant because it has explicitly recognized both the P388 and L1210 murine tumor models as standard screening tests for determining whether new compounds may be useful as antitumor agents. In the context of this case the Martin and Pazdur references, on which the Commissioner relies, do not convince us otherwise. Pazdur only questions the reliability of the screening tests against lung cancer; it says nothing regarding other types of tumors. Although the Martin reference does note that some laboratory oncologists are skeptical about the predictive value of in vivo murine tumor models for human therapy, Martin recognizes that these tumor models continue to contribute to an increasing human cure rate. In fact, the authors conclude that this perception (i.e. lack of predictive reliability) is not tenable in light of present information. On the basis of animal studies, and controlled testing in a limited number of humans (referred to as Phase I testing), the Food and Drug Administration may authorize Phase II clinical studies. See 21 U.S.C. § 355(i)(1); 21 C.F.R. § 312.23(a)(5), (a)(8) (1994). Authorization for a Phase II study means that the drug may be administered to a larger number of humans, but still under strictly supervised conditions. The purpose of the Phase II study is to determine primarily the safety of the drug when administered to a larger human population, as well as its potential efficacy under different dosage regimes. See 21 C.F.R. § 312.21(b). FDA approval, however, is not a prerequisite for finding a compound useful within the meaning of the patent laws. Scott, 34 F.3d 1058, 1063, 32 USPQ2d 1115, 1120. Usefulness in patent law, and in particular in the context of pharmaceutical inventions, necessarily includes the expectation of further research and development. The stage at which an invention in this field becomes useful is well before it is ready to be administered to humans. Were we to require Phase II testing in order to prove utility, the associated costs would prevent many companies from obtaining patent protection on promising new

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inventions, thereby eliminating an incentive to pursue, through research and development, potential cures in many crucial areas such as the treatment of cancer. In re Brana is a significant development in the patenting of pharmaceuticals because it adds stability to what had been a hotly debated and litigated area, namely, the requisites for proving pharmaceutical utility and the adequacy of the proof. Do you think the court’s differentiation of FDA approval from patentable utility makes sense? Will the court’s ruling foster research, as it contends, or foster filing of patent applications whose practical utility is speculative? 2. In the Spring of 1998, Stuart Newman, a cellular biologist at New York Medical College sought to touch off a great debate over the morality of patenting life forms by filing an application for a patent on a method of making chimera—creatures that are part human and part animal. Newman stated that his goal was to prevent anyone from receiving such a patent by forcing the PTO and the courts to reexamine whether such organisms should be patentable. See Rick Weiss, Patent Sought on Making Part-Human Creatures; Scientist Seeks to Touch Off Ethics Debate, Wash. Post A12 (Apr. 2, 1998). Newman succeeded in drawing attention, in particular from the PTO, which issued a “media advisory” entitled: “FACTS ON PATENTING LIFE FORMS HAVING A RELATIONSHIP TO HUMANS”: The Patent and Trademark Office (PTO) is charged with the responsibility of administering the patent laws of the United States, as interpreted by the Supreme Court and other courts. Thus, the PTO fully applies the law without discriminating against a particular field of technology. In accordance with patent laws, whoever invents a new and useful process, machine, manufacture or composition of matter, may obtain a patent if the statutory conditions and requirement are satisfied. No patent is granted for an invention that does not meet the strict patentability requirements set forth in patent laws contained in title 35 of the United States Code. These include requirements that the invention have utility, be novel and non-obvious, and be adequately described and disclosed so as to enable the making and using of the invention. The PTO will not, therefore, issue a patent for an invention of incredible or specious utility or for inventions whose utilization is not adequately disclosed in the application. Additionally, the courts have interpreted the utility requirement to exclude inventions deemed to be "injurious to the well being, good policy, or good morals of society." Lowell v. Lewis, Fed. Cas. No. 8568 (C.C. Mass. 1817) (Story, J.), quoted in Tol-O-Matic, Inc. v. Proma Product-und Marketing Gesellschaft M.b.H., 945 F.2d 1546, 1552, 20 USPQ2d 1332, 1338 (Fed. Cir. 1991). The Patent and Trademark Office is required by law to keep all patent applications in confidence until such time as a patent may be granted. However, the existence of a patent application directed to human/non-human chimera has recently been discussed in the news media. It is the position of the PTO that inventions directed to human/non-human chimera could, under certain circumstances, not be patentable because, among other things, they would fail to meet the public policy and morality aspects of the utility requirement. Is this interpretation of the utility requirement consistent with the discussions in the cases above? How does it compare to the position the Commissioner took in relation to the Harvard Mouse? The genesis of this aspect of the utility requirement can perhaps be traced to Justice Story’s early opinion in Bedford v. Hunt, 3 F. Cas. 37, 37 (C.C.D. Mass. 1817): “By useful invention, in the statute, is meant such a one as may be applied to some beneficial use in society, in contradistinction to an invention which is injurious to the morals, the health, or the good order of society.” Thus, section 101 has been used time and again to bar the patenting of gambling devices. See, e.g., Brewer v. Lichtenstein, 278 F. 512 (7th Cir. 1922) (punch board held not patentable because only apparent use was as a lottery device). In 1977, however, the Board of Patent Appeals & Interferences permitted the issuance of a patent covering a slot machine. See Ex Parte Murphy, 200 USPQ 801 (BPAI 1977). Should the test of utility shift with the attitude of the PTO and the courts toward certain activities and classes of inventions? 3. Perpetual Motion and Baldness Cures – What do these two things have in common? You may have answered that both are impossibilities. Many times in the past, the PTO has agreed, and has used the utility requirement of section 101 to reject inventions directed either toward perpetual motion machines or to baldness cures. See MPEP § 706.03(a) (“A rejection on the ground of lack of utility includes the more specific grounds of inoperativeness, involving perpetual motion, frivolous, fraudulent, and against public policy.”). Reflecting the PTO’s continuing hostility toward perpetual motion machines, such machines are the only remaining category of inventions in which the applicant must in all cases submit a “working” physical model of the invention. See MPEP § 608.03. However, the PTO is somewhat open-minded and has directed examiners not to maintain a lack of utility rejection

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“if the asserted utility for the claimed invention would be considered credible by a person of ordinary skill in the art in view of all evidence of record.” MPEP § 706.03(a)(1)(4). Thus, the issue of utility for baldness cures came to a head recently in In re Cortright, No. 98-1258, 165 F.3d 1353 49 USPQ2d 1464 (Fed. Cir. Jan. 11, 1999), where the Federal Circuit reversed the Board’s rejection of certain patent claims covering the application of Bag Balm® (a commercially available material used to soften cow udders) to the human scalp to reduce hair loss. The examiner had rejected claim 15 of the application under section 101, and the Board affirmed on an alternative ground—failure of the patent disclosure to enable a skilled artisan to practice the claimed invention under 35 U.S.C. § 112 (discussed in Chapter 6). In reversing, the Federal Circuit noted: A lack of enablement rejection under section 112, ¶ 1 is appropriate where the written description fails to teach those in the art to make and use the invention as broadly as it is claimed without undue experimentation. See In re Vaeck, 947 F.2d 488, 495-96, 10 USPQ2d 1438, 1444 (Fed. Cir. 1991). This rejection takes several forms. The PTO will make a scope of enablement rejection where the written description enables something within the scope of the claims, but the claims are not limited to that scope. See Manual of Patent Examining Procedures ("M.P.E.P.") § 706.03(c), form ¶ 7.31.03 (Rev. 3, July 1997). This type of rejection is marked by language stating that the specification does not enable one of ordinary skill to use the invention commensurate with the scope of the claims. On the other hand, if the written description does not enable any subject matter within the scope of the claims, the PTO will make a general enablement rejection, stating that the specification does not teach how to make or use the invention. See M.P.E.P. § 706.03(c), form ¶ 7.31.02. If the written description fails to illuminate a credible utility, the PTO will make both a section 112, ¶ 1 rejection for failure to teach how to use the invention and a section 101 rejection for lack of utility. See M.P.E.P. § 706.03(a), form ¶ 7.05.04. This dual rejection occurs because "[t]he how to use prong of section 112 incorporates as a matter of law the requirement of 35 U.S.C. § 101 that the specification disclose as a matter of fact a practical utility for the invention." In re Ziegler, 992 F.2d 1197, 1200, 26 USPQ2d 1600, 1603 (Fed. Cir. 1993). Thus, an applicant's failure to disclose how to use an invention may support a rejection under either section 112, ¶ 1 for lack of enablement as a result of "the specification's . . . failure to disclose adequately to one ordinarily skilled in the art 'how to use' the invention without undue experimentation," or section 101 for lack of utility "when there is a complete absence of data supporting the statements which set forth the desired results of the claimed invention." Environtech Corp. v. Al George, Inc., 730 F.2d 753, 762, 221 USPQ 473, 480 (Fed. Cir. 1984); see also In re Brana, 51 F.3d 1560, 1564 n.12, 34 USPQ2d 1436, 1439 n.12 (Fed. Cir. 1995) (The "absence of utility can be the basis of a rejection under both 35 U.S.C. § 101 and § 112 ¶ 1."); In re Fouche, 439 F.2d 1237, 1243, 169 USPQ 429, 434 (CCPA 1971) ("[I]f [certain] compositions are in fact useless, appellant's specification cannot have taught how to use them."). The PTO cannot make this type of rejection, however, unless it has reason to doubt the objective truth of the statements contained in the written description. See Brana, 51 F.3d at 1566, 34 USPQ2d at 1441 ("[T]he PTO has the initial burden of challenging a presumptively correct assertion of utility in the disclosure. Only after the PTO provides evidence showing that one of ordinary skill in the art would reasonably doubt the asserted utility does the burden shift to the applicant to provide rebuttal evidence sufficient to convince such a person of the invention's asserted utility.") (citations omitted); In re Marzocchi, 439 F.2d 220, 223, 169 USPQ 367, 369 (CCPA 1971) ("[A] specification disclosure which contains a teaching of the manner and process of making and using the invention in terms which correspond in scope to those used in describing and defining the subject matter sought to be patented must be taken as in compliance with the enabling requirement of the first paragraph of § 112 unless there is reason to doubt the objective truth of the statements contained therein which must be relied on for enabling support."). The PTO may establish a reason to doubt an invention's asserted utility when the written description "suggest[s] an inherently unbelievable undertaking or involve[s] implausible scientific principles." Brana, 51 F.3d at 1566, 34 USPQ2d at 1441; see also In re Eltgroth, 419 F.2d 918, 164 USPQ 221 (CCPA 1970) (control of aging process). Treating baldness was once considered an inherently unbelievable undertaking. See In re Ferens, 417 F.2d 1072, 1074, 163 USPQ 609, 611 (CCPA 1969); In re Oberwener, 115 F.2d 826, 829, 47 USPQ 455, 458 (CCPA 1940). Since then, however, treatments for baldness have gained acceptance. Rogaine® (minoxidil) and Propecia® are recognized as effective in treating baldness. See Doug Levy, FDA Approves New Treatment for Males Fighting Baldness, USA Today, Dec. 23, 1997, at A1; Pharmaceutical Companies Are Brushing up on Hair-Restorers Medicine, Los Angeles Times, Jun. 6, 1996, at D12. In addition, the PTO has granted approximately one hundred patents on methods of treating baldness. Some of these patents disclose applying an electric current to the scalp, see, e.g., U.S. Pat. No. 5,800,477, whereas others teach ingesting substances orally or applying a salve of some kind to the scalp, see, e.g., U.S. Pat. No. 5,777,134. Some patents disclose the active ingredient in chemical terms. See, e.g., U.S. Pat.

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No. 5,777,134 (5 alpha-reductase inhibitor); U.S. Pat. No. 5,767,152 (cyanocarboxylic acid derivatives); U.S. Pat. No. 4,139,619 (formula for minoxidil). Other patents, however, disclose baldness remedies made from more mundane materials, such as Dead Sea mud (U.S. Pat. No. 5,679,378); emu oil (U.S. Pat. No. 5,744,128); potato peelings and lantana leaves (U.S. Pat. No. 5,665,342); and vitamin D3 and aloe (U.S. Pat. No. 5,597,575).1 Do you think the panel’s ruling in this case was affected by the fact that each judge (Chief Judge Mayer, and Circuit Judges Newman and Rader) has a full head of hair? In a related vein, in several very old cases, deceptive or immoral inventions, such as slot machines, were denied protection under Section 101 for lack of utility. The issue recently reached the Federal Circuit in the context of a retail juice dispenser that used juice flowing down the insides of a large, transparent container to entice customers. The prior art dispensers pumped the actual juice around the container, but this sometimes created problems with freshness and sanitation. The patent solved these problems by pumping “fake” juice around the top container, and serving the actual juice from a post-mix dispenser under the counter. The district court agreed that the patent should not have been issued because its primary purpose was to deceive the public. In reversing, the Federal Circuit ruled that very little of the old “immoral or illegal” cases survived the 1952 Patent Act, and noted that many worthy inventions depend on deception (e.g., cubic zirconia, imitation hamburger, artificial fabrics). See Juicy Whip, Inc. v. Orange Bang, Inc., 185 F.3d 1364, 51 USPQ2d 1700 (Fed. Cir. 1999)

________ 1 See also U.S. Pat. No. 5,674,510 (salve of garlic powder, brewer's yeast, grapefruit juice, acetic acid, and kelp), U.S. Pat. No. 5,750,108 (salves of tea tree oil; chlorine dioxide and acidic solution; saw palmetto berry extract), U.S. Pat. No. 5,695,748 (salves of sage, aloe, and nettles; castor oil, shea butter, wheat germ oil, and white iodine); U.S. Pat. No. 5,494,667 (salve of pine extract and bamboo extract or Japanese apricot).

Biological Inventions

Funk Bros. Seed Co. v. Kalo Inoculant Co. 333 U.S. 127, 76 USPQ 280 (1948) Mr. Justice DOUGLAS delivered the opinion of the Court. This is a patent infringement suit brought by respondent. The charge of infringement is limited to certain product claims of Patent No. 2,200,532 issued to Bond on May 14, 1940. . . . The question of validity is the only question presented by this petition for certiorari. Through some mysterious process leguminous plants are able to take nitrogen from the air and fix it in the plant for conversion to organic nitrogenous compounds. The ability of these plants to fix nitrogen from the air depends on the presence of bacteria of the genus Rhizobium which infect the roots of the plant and form nodules on them. These root-nodule bacteria of the genus Rhizobium fall into at least six species. No one species will infect the roots of all species of leguminous plants. But each will infect well-defined groups of those plants. Each species of root-nodule bacteria is made up of distinct strains which vary in efficiency. Methods of selecting the strong strains and of producing a bacterial culture from them have long been known. The bacteria produced by the laboratory methods of culture are placed in a powder or liquid base and packaged for sale to and use by agriculturists in the inoculation of the seeds of leguminous plants. This also has long been well known.

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It was the general practice, prior to the Bond patent, to manufacture and sell inoculants containing only one species of root-nodule bacteria. The inoculant could therefore be used successfully only in plants of the particular cross-inoculation group corresponding to this species. Thus if a farmer had crops of clover, alfalfa, and soy beans he would have to use three separate inoculants. There had been a few mixed cultures for field legumes. But they had proved generally unsatisfactory because the different species of the Rhizobia bacteria produced an inhibitory effect on each other when mixed in a common base, with the result that their efficiency was reduced. Hence it had been assumed that the different species were mutually inhibitive. Bond discovered that there are strains of each species of root-nodule bacteria which do not exert a mutually inhibitive effect on each other. He also ascertained that those mutually non-inhibitive strains can, by certain methods of selection and testing, be isolated and used in mixed cultures. Thus he provided a mixed culture of Rhizobia capable of inoculating the seeds of plants belonging to several cross-inoculation groups. It is the product claims which disclose that mixed culture that the Circuit Court of Appeals had held valid. We do not have presented the question whether the methods of selecting and testing the non-inhibitive strains are patentable. We have here only product claims. Bond does not create state of inhibition or of non-inhibition in the bacteria. Their qualities are the work of nature. Those qualities are of course not patentable. For patents cannot issue for the discovery of the phenomena of nature. See Le Roy v. Tatham, 14 How. 156, 175. The qualities of these bacteria, like the heat of the sun, electricity, or the qualities of metals, are part of the storehouse of knowledge of all men. They are manifestations of laws of nature, free to all men and reserved exclusively to none. He who discovers a hitherto unknown phenomenon of nature has no claim to a monopoly of it which the law recognizes. If there is to be invention from such a discovery, it must come from the application of the law of nature to a new and useful end. . . . The Circuit Court of Appeals thought that Bond did much more than discover a law of nature, since he made an new and different composition of non—inhibitive strains which contributed utility and economy to the manufacture and distribution of commercial inoculants. But we think that that aggregation of species fell short of invention within the meaning of the patent statutes. Discovery of the fact that certain strains of each species of these bacteria can be mixed without harmful effect to the properties of either is a discovery of their qualities of non-inhibition. It is no more than the discovery of some of the handiwork of nature and hence is not patentable. The aggregation of select strains of the several species into one product is an application of that newly-discovered natural principle. But however ingenious the discovery of that natural principle may have been, the application of it is hardly more than an advance in the packaging of the inoculants. Each of the species of rootnodule-bacteria contained in the package infects the same group of leguminous plants which it always infected. No species acquires a different use. The combination of species produces no new bacteria, no change in the six species of bacteria, and no enlargement of the range of their utility. Each species has the same effect it always had. The bacteria perform in their natural way. Their use in combination does not improve in any way their natural functioning. They serve the ends nature originally provided and act quite independently of any effort of the patentee. There is, of course, an advantage in the combination. The farmer need not buy six different packages for six different crops. He can buy one package and use it for any or all of his crops of leguminous plants. And, as respondent says, the packages of mixed inoculants also hold advantages for the dealers and manufacturers by reducing inventory problems and the like. But a product must be more than new and useful to be patented; it must also satisfy the requirements of invention or discovery. Cuno Engineering Cor. v. Automatic Devices Corp., 314 U.S. 84, 90, 91, 40, 41, and cases cited; 35 U.S.C. § 31, 35 U.S.C.A. 31, R.S. § 4886. The application of this newly-discovered natural principle to the problem of packaging of inoculants may well have been an important commercial advance. But once nature's secret of the non-inhibitive quality of certain strains of the species of Rhizobium was discovered, the state of the art made the production of a mixed inoculant a simple step. Even though it may have been the product of skill, it certainly was not the product of invention. There is no way in which we could call it such unless we borrowed invention from the discovery of the natural principle itself. That is to say, there is no invention here unless the discovery that certain strains of the several Chapter 12 – The Subject Matter of Patents

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species of these bacteria are non-inhibitive and may thus be safely mixed is invention. But we cannot so hold without allowing a patent to issue on one of the ancient secrets of nature now disclosed. All that remains, therefore, are advantages of the mixed inoculants themselves. They are not enough. Since we conclude that the product claims do not disclose an invention or discovery within the meaning of the patent statutes, we do not consider whether the other statutory requirements contained in 35 U.S.C. § 31, 35 U.S.C.A. 31, R.S. § 4886 are satisfied. Reversed. Mr. Justice FRANKFURTER, concurring. . . .Insofar as the court below concluded that the packaging of a particular mixture of compatible strains is an invention and as such patentable, I agree, provided not only that a new and useful property results from their combination, but also that the particular strains are identifiable and adequately identified. I do not find that Bond's combination of strains satisfies these requirements. The strains by which Bond secured compatibility are not identified and are identifiable only by their compatibility. Unless I misconceive the record, Bond makes no claim that Funk Brothers used the same combination of strains that he had found mutually compatible. He appears to claim that since he was the originator of the idea that there might be mutually compatible strains and had practically demonstrated that some such strains exist, everyone else is forbidden to use a combination of strains whether they are or are not identical with the combinations that Bond selected and packaged together. It was this claim that, as I understand it, the District Court found not to be patentable, but which, if valid, had been infringed. **** It only confuses the issue, however, to introduce such terms as 'the work of nature' and the 'laws of nature.' For these are vague and malleable terms infected with too much ambiguity and equivocation. Everything that happens may be deemed 'the work of nature,' and any patentable composite exemplifies in its properties 'the laws of nature.' Arguments drawn from such terms for ascertaining patentability could fairly be employed to challenge almost every patent. On the other hand, the suggestion that 'if there is to be invention from such a discovery, it must come from the application of the law of nature to a new and useful end' may readily validate Bond's claim. Nor can it be contended that there was no invention because the composite has no new properties other than its ingredients in isolation. Bond's mixture does in fact have the new property of multi-service applicability. Multipurpose tools, multivalent vaccines, vitamin complex composites, are examples of complexes whose sole new property is the conjunction of the properties of their components. Surely the Court does not mean unwittingly to pass on the patentability of such products by formulating criteria by which future issues of patentability may be prejudged. In finding Bond's patent invalid I have tried to avoid a formulation which, while it would in fact justify Bond's patent, would lay the basis for denying patentability to a large area within existing patent legislation.

Mr. Justice BURTON, with whom Mr. Justice JACKSON concurs, dissenting. On the grounds stated by the Circuit Court of Appeals the judgment should be affirmed. When the patentee discovered the existence of certain strains of bacteria which, when combined with certain other strains of bacteria, would infect two or more leguminous plants without loss of their respective nitrogen-fixing efficiencies, and utilized this discovery by segregating some of these mutually non-inhibitive strains and combining such strains into composite inoculants, we agree with Mr. Justice FRANKFURTER that the combinations so produced satisfied the statutory requirements of invention or

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discovery. These products were a prompt and substantial commercial success, filling a long-sought and important agricultural need. However, we do not agree that the patent issued for such products is invalid for want of a clear, concise description of how the combinations were made and used. . . . . .In the present case, the patentee has defined the combinations in terms of their mutually inhibiting and non-inhibiting effects upon their respective abilities to take free nitrogen from the air and place it in the soil. These combinations were discovered by observation of these effects—they are in practice identified by these effects for the commercial uses for which they are made. It is these effects that differentiate them from the other bacteria heretofore generally identified only as common members of the same species and not commercially valuable for use with leguminous plants of more than one of the groups named in the opinion of the Court. The identification of the strains stated in the patent is that which the patentee used in making the novel combinations of them that have been shown to be highly useful. There appears to be no question but that the petitioners are now able to identify and use the strains in the manner described in the patent. The record thus indicates that the description is sufficiently full, clear, concise and exact to enable persons skilled in the art or science to which this discovery appertains or with which it is most nearly connected to make, construct, compound and use the same. There is no suggestion as to how it would be reasonably possible to describe the patented product more completely. The patent covers all composite cultures of bacterial strains of the species described which do not inhibit each other's ability to fix nitrogen. Bacteriologists, skilled in the applicable art, will not have difficulty in selecting the non-inhibitive strains by employing such standard and recognized laboratory tests as are described in the application for this patent. The statute itself shows that Congress has recognized the inherent difficulty presented. While this patent may not be technically a 'plant patent' in the precise sense in which that term is used in this Section, the references in the Section to the differences in descriptions expected in mechanical patents and plant patents obviously support the position here taken. An inventor should not be denied a patent upon an otherwise patentable discovery merely because the nature of the discovery defies description in conventional terms. Terms ordinarily unsuitable to describe and distinguish products that are capable of description and distinction by their appearance may be the most appropriate in which to describe and distinguish other products that are not reasonably possible of identification by their appearance, but which are easily identified by their effects when being sought for or described by those skilled in the art.

Diamond v. Chakrabarty 447 U.S. 303, 206 USPQ 193 (1980) Mr. Chief Justice BURGER delivered the opinion of the Court. We granted certiorari to determine whether a live, human-made micro-organism is patentable subject matter under 35 U.S.C. § 101. I In 1972, respondent Chakrabarty, a microbiologist, filed a patent application, assigned to the General Electric Co. The application asserted 36 claims related to Chakrabarty's invention of "a bacterium from the genus Pseudomonas containing therein at least two stable energy-generating plasmids, each of said plasmids providing a separate hydrocarbon degradative pathway." This human-made, genetically engineered bacterium is capable of breaking down multiple components of crude oil. Because of this property, which is possessed by no naturally occurring bacteria, Chakrabarty's invention is believed to have significant value for the treatment of oil spills.

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Chakrabarty's patent claims were of three types: first, process claims for the method of producing the bacteria; second, claims for an inoculum comprised of a carrier material floating on water, such as straw, and the new bacteria; and third, claims to the bacteria themselves. The patent examiner allowed the claims falling into the first two categories, but rejected claims for the bacteria. His decision rested on two grounds: (1) that micro-organisms are "products of nature," and (2) that as living things they are not patentable subject matter under 35 U.S.C. § 101. Chakrabarty appealed the rejection of these claims to the Patent Office Board of Appeals, and the Board affirmed the Examiner on the second ground. Relying on the legislative history of the 1930 Plant Patent Act, in which Congress extended patent protection to certain asexually reproduced plants, the Board concluded that § 101 was not intended to cover living things such as these laboratory created micro-organisms. [The Court of Customs and Patent Appeals, by a divided vote, reversed.] **** II The question before us in this case is a narrow one of statutory interpretation requiring us to construe 35 U.S.C. § 101, which provides: "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."

Specifically, we must determine whether respondent's micro—organism constitutes a "manufacture" or "composition of matter" within the meaning of the statute. III [T]his Court has read the term "manufacture" in § 101 in accordance with its dictionary definition to mean "the production of articles for use from raw materials prepared materials by giving to these materials new forms, qualities, properties, or combinations, whether by hand-labor or by machinery." Similarly, "composition of matter" has been construed consistent with its common usage to include "all compositions of two or more substances and . . . all composite articles, whether they be the results of chemical union, or of mechanical mixture, or whether they be gases, fluids, powders or solids." In choosing such expansive terms as "manufacture" and "composition of matter," modified by the comprehensive "any," Congress plainly contemplated that the patent laws would be given wide scope. The relevant legislative history also supports a broad construction. The Patent Act of 1793, authored by Thomas Jefferson, defined statutory subject matter as "any new and useful art, machine, manufacture, or composition of matter, or any new or useful improvement [thereof]." The Act embodied Jefferson's philosophy that "ingenuity should receive a liberal encouragement." Subsequent patent statutes in 1836, 1870 and 1874 employed this same broad language. In 1952, when the patent laws were recodified, Congress replaced the word "art" with "process," but otherwise left Jefferson's language intact. The Committee Reports accompanying the 1952 act inform us that Congress intended statutory subject matter to "include anything under the sun that is made by man." S. Rep. No. 1979, 82d Cong., 2d Sess., 5 (1952); H. R. Rep. No. 1923, 82d Cong., 2d Sess., 6 (1952). This is not to suggest that § 101 has no limits or that it embraces every discovery. The laws of nature, physical phenomena, and abstract ideas have been held not patentable. See Parker v. Flook, 437 U.S. 584 (1978); Gottschalk v. Benson, 409 U.S. 63, 67 (1972); Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948); O'Reilly v. Morse, 15 How. 62, 112-121 (1854); Le Roy v. Tatham, 14 How. 156, 175 (1853). Thus, a new mineral discovered in the earth or a new plant found in the wild is not patentable subject matter. Likewise, Einstein could not patent his celebrated law that E=mc2; nor

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could Newton have patented the law of gravity. Such discoveries are "manifestations of . . . nature, free to all men and reserved exclusively to none." Funk. Judged in this light, respondent's micro-organism plainly qualifies as patentable subject matter. His claim is not to a hitherto unknown natural phenomenon, but to a nonnaturally occurring manufacture or composition of matter—a product of human ingenuity "having a distinctive name, character [and] use." The point is underscored dramatically by comparison of the invention here with that in Funk. There, the patentee had discovered that there existed in nature certain species of root-nodule bacteria which did not exert a mutually inhibitive effect on each other. He used that discovery to produce a mixed culture capable of inoculating the seeds of leguminous plants. Concluding that the patentee had discovered "only some of the handiwork of nature," the Court ruled the product nonpatentable: Each of the species of root-nodule bacteria contained in the package infects the same group of leguminous plants which it always infected. No species acquires a different use. The combination of the six species produces no new bacteria, no change in the six bacteria, and no enlargement of the range of their utility. Each species has the same effect it always had. The bacteria perform in their natural way. Their use in combination does not improve in any way their natural functioning. They serve the ends nature originally provided and act quite independently of any effort of the patentee.

Here, by contrast, the patentee has produced a new bacterium with markedly different characteristics from any found in nature and one having the potential for significant utility. His discovery is not nature's handiwork, but his own; accordingly it is patentable subject matter under § 101. IV Two contrary arguments are advanced, neither of which we find persuasive. A [The Court first rejected the argument that the 1930 Plant Patent Act and 1970 Plant Variety Protection Act, protecting asexually and sexually reproduced plants, respectively, evinced a Congressional understanding that the terms "manufacture" or "composition of matter" do not include living things, because if they did, the two plant acts would be unnecessary.] B The Government's second argument is that microorganisms cannot qualify as patentable subject matter until Congress expressly authorizes such protection. Its position rests on the fact that genetic technology was unforeseen when Congress enacted 101. From this it is argued that resolution of the patentability of inventions such as respondent's should be left to Congress. The legislative process, the Government argues, is best equipped to weigh the competing economic, social, and scientific considerations involved, and to determine whether living organisms produced by genetic engineering should receive patent protection. In support of this position, the Government relies on our recent holding in Parker v. Flook, 437 U.S. 584 (1978), and the statement that the judiciary "must proceed cautiously when . . . asked to extend patent rights into areas wholly unforeseen by Congress." Id., at 596. It is, of course, correct that Congress, not the courts, must define the limits of patentability; but it is equally true that once Congress has spoken it is "the province and duty of the judicial department to say what the law is." Marbury v. Madison, 1 Cranch 137, 177 (1803). Congress has performed its constitutional role in defining patentable subject matter in § 101; we perform ours in construing the language Congress has employed. In so doing, our obligation is to take statutes as we find them, guided, if ambiguity appears, by the legislative history and statutory purpose. Here, we perceive no ambiguity. The subject-matter provisions of the patent law have been cast in broad terms to fulfill the constitutional and statutory goal of promoting "the Progress of Science and the useful Arts" with all that means for the social and economic benefits envisioned by Jefferson. Broad general language is not necessarily ambiguous when congressional objectives require broad terms. Chapter 12 – The Subject Matter of Patents

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Nothing in Flook is to the contrary . . . Flook did not announce a new principle that inventions in areas not contemplated by Congress when the patent laws were enacted are unpatentable per se. To read that concept into Flook would frustrate the purposes of the patent law. This Court frequently has observed that a statute is not to be confined to the "particular application[s] . . . contemplated by the legislators." This is especially true in the field of patent law. A rule that unanticipated inventions are without protection would conflict with the core concept of the patent law that anticipation undermines patentability. Mr. Justice Douglas reminded that the inventions most benefiting mankind are those that "push back the frontiers of chemistry, physics, and the like." Congress employed broad general language in drafting § 101 precisely because such inventions are often unforeseeable.10 To buttress its argument, the Government, with the support of amicus, points to grave risks that may be generated by research endeavors such as respondent's. The briefs present a gruesome parade of horribles. Scientists, among them Nobel laureates, are quoted suggesting that genetic research may pose a serious threat to the human race, or, at the very least, that the dangers are far too substantial to permit such research to proceed apace at this time. We are told that genetic research and related technological developments may spread pollution and disease, that it may result in a loss of genetic diversity, and that its practice may tend to depreciate the value of human life. These arguments are forcefully, even passionately, presented; they remind us that, at times, human ingenuity seems unable to control fully the forces it creates—that, with Hamlet, it is sometimes better "to bear those ills we have than fly to others that we know not of." It is argued that this Court should weigh these potential hazards in considering whether respondent's invention is patentable subject matter under 101. We disagree. The grant or denial of patents on microorganisms is not likely to put an end to genetic research or to its attendant risks. The large amount of research that has already occurred when no researcher had sure knowledge that patent protection would be available suggests that legislative or judicial fiat as to patentability will not deter the scientific mind from probing into the unknown any more than Canute could command the tides. Whether respondent's claims are patentable may determine whether research efforts are accelerated by the hope of reward or slowed by want of incentives, but that is all. What is more important is that we are without competence to entertain these arguments—either to brush them aside as fantasies generated by fear of the unknown, or to act on them. The choice we are urged to make is a matter of high policy for resolution within the legislative process after the kind of investigation, examination, and study that legislative bodies can provide and courts cannot. That process involves the balancing of competing values and interests, which in our democratic system is the business of elected representatives. Whatever their validity, the contentions now pressed on us should be addressed to the political branches of the government, the Congress and the Executive, and not to the courts. We have emphasized in the recent past that "[o]ur individual appraisal of the wisdom or unwisdom of a particular [legislative] course . . . is to be put aside in the process of interpreting a statute." Our task, rather, is the narrow one of determining what Congress meant by the words it used in the statute; once that is done our powers are exhausted. Congress is free to amend § 101 so as to exclude from patent protection organisms produced by genetic engineering. Cf. 42 U.S.C. § 2181 (a), exempting from patent protection inventions "useful solely in the utilization of special nuclear material or atomic energy in an atomic weapon." Or it may choose to craft a statute specifically designed for such living things. But, until Congress takes such action, this Court must construe the language of § 101 as it is. The language of that section fairly embraces respondent's invention. 10

Even an abbreviated list of patented inventions underscores the point: telegraph (Morse, No. 1,647); telephone (Bell, No. 174,465); electric lamp (Edison, No. 223,898); airplane (the Wrights, No. 821,393); transistor (Bardeen & Brattain, No. 2,524,035); neutronic reactor (Fermi & Szilard, No. 2,708,656); laser (Schawlow & Townes, No. 2,929,922). See generally Revolutionary Ideas, Patents & Progress in America, United States Patent and Trademark Office (1976).

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Accordingly, the judgment of the Court of Customs and Patent Appeals is Affirmed. MR. JUSTICE BRENNAN, with whom MR. JUSTICE WHITE, MR. JUSTICE MARSHALL, and MR. JUSTICE POWELL join, dissenting. . . . Because I believe the Court has misread the applicable legislation, I dissent. **** In this case, . . . we do not confront a complete legislative vacuum. The sweeping language of the Patent Act of 1793, as re-enacted in 1952, is not the last pronouncement Congress has made in this area. In 1930 Congress enacted the Plant Patent Act affording patent protection to developers of certain asexually reproduced plants. In 1970 Congress enacted the Plant Variety Protection Act to extend protection to certain new plant varieties capable of sexual reproduction. Thus, we are not dealing—as the Court would have it—with the routine problem of "unanticipated inventions." Ante, at 316. In these two Acts Congress has addressed the general problem of patenting animate inventions and has chosen carefully limited language granting protection to some kinds of discoveries, but specifically excluding others. These Acts strongly evidence a congressional limitation that excludes bacteria from patentability. ****

Questions, Comments, Problems 1. “Anything Under the Sun” – The Court’s statement that Congress intended to permit patenting of “anything under the sun that is made by man” is very sweeping. Can it be taken at face value? Would the court allow someone to patent the melody in a song? 2. International Harmonization – As you can imagine, attitudes toward patenting human-engineered life forms vary widely throughout the world. Not all countries are as open to the patenting of living organisms as is the United States (though the U.S. “attitude” could be more attributable to inertia, i.e., Congressional failure to modify a decades-old statute, than to an affimative view on the issue). On December 8, 1994, President Clinton signed legislation that implemented the General Agreement on Trade and Tariffs (GATT) (P.L. 103-465). GATT includes the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs), which sets out patentable subject matter in Article 27: 1.

2.

Subject to the provisions of paragraphs 2 and 3, patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application. . . . Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law.

Article 27 also permits member countries to exclude from patenting: (a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals; (b) plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof. The freedom given to member countries in subsection (b) to exclude plants and animals other than microorganisms from patenting and the latitude to enact broader public policy based proscriptions as set forth in (2) above are reflective of the traditions in many countries of not permitting patents on e.g., pharmaceuticals (Italy is a notable example).

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3. Living Things – The Court in Chakrabarty rejected the argument that all living things are unpatentable because Congress showed, through its passage of the 1930 Plant Act and the 1970 Plant Variety Protection Act (PVPA), that the terms "manufacture" or "composition of matter" do not include living things. The 1930 Act provided protection for non-sexually reproducing plants, while the 1970 Act provided protection for sexually reproducing plants. Does Chakrabarty leave open the possibility that sexually reproducing plants (as opposed to all living things) are unpatentable under § 101 because Congress provided for their patentability instead in the PVPA? The Board of Patent Appeals and Interferences rejected this possibility in Ex Parte Hibberd, 227 USPQ 443 (BPAI 1985), and held that sexually-reproducing plants may be patented. The Board reasoned that neither act explicitly excluded plants from receiving utility patents. The Board also noted that Chakrabarty had upheld the patentability of man-made life forms, and the legislative history of the acts indicated no Congressional intent to limit the scope of patentable subject matter under section 101. The Board noted that “[t]here is ample precedent that the availability of one form of statutory protection does not preclude (or irreconcilably conflict with) the availability of protection under another form.” Id. at 446. The Board cited In re Yardley, 493 F.2d 1389, 181 USPQ 331 (CCPA 1974), for this proposition. Yardley, discussed in Chapter 2, supra, had permitted a design patent on subject matter that was already subject to a registered federal claim of copyright. Because the Board held that sexually-reproducing plants were patentable, there was no need for the applicant to appeal to the Federal Circuit, which still has not ruled on this issue. However, one party being sued for patent infringement by corn producer Pioneer Hi-Bred International recently argued that the Board erred in Hibberd because it overlooked a key statement in the legislative history to the PVPA. In the House Report, that statement notes: Under patent law, protection is presently limited to those varieties of plants which reproduce asexually, that is, by such methods as grafting or budding. No protection is available to those varieties of plants which reproduce sexually, that is, generally by seeds. Thus, patent protection is not available with respect to new varieties of most of the economically important agricultural crops, such as cotton or soybeans. The district court ruled that the statement did not prevent the patenting of sexually reproducing plants. See Pioneer Hi-Bred-International v. J.E.M. Ag Supply, No. C98-4016-DEO (N.D. Iowa Aug. 19, 1998) (Order). On appeal, the Federal Circuit affirmed, relying largely on the “anything under the sun” rationale, and, disappointingly, doing little to reconcile the legislative history of the PVPA. Pioneer Hi-Bred Int'l, Inc. v. J.E.M. Ag Supply, Inc., 200 F.3d 1374, 53 USPQ2d 1440 (Fed. Cir. 2000). 4. Patenting Animals – Relying on Chakrabarty and Hibberd, the PTO Board of Appeals reversed, in Ex parte Allen, 2 USPQ2d 1425 (BPAI 1987), aff’d 846 F.2d 77 (Fed. Cir. 1988) (nonpublished), a “living entities” rejection by an examiner of a claim to sterile, year-round edible oysters produced by a particular process. The PTO shortly afterwards, on April 12, 1988, issued a patent covering a transgenic mouse, Leder and Stewart U.S. Patent No. 4,736,866. Claim 1 of that patent states: A transgenic, non-human mammal all of whose germ cells and somatic cells contain a recombinant activated oncogene sequence introduced into said mammal, or an ancestor of said mammal, at an embryonic stage. Dependent claim 12 states that the mammal is a mouse. Because Harvard University owns this patent, the subject of the patent has been called the Harvard Mouse. Because of the public controversy created by the decision in Ex parte Allen, the PTO Commissioner issued a Policy Statement on Patentability of Animals on April 7, 1987. In it, the Commissioner made clear that humans could not be patented: “The position of the PTO is that the grant of a limited, but exclusive property right in a human being is prohibited by the Constitution.” But the Commissioner went on to say that patent claims directed to non-human, nonnaturally occurring manufactures or compositions of matter, including new animals, will not be rejected under 35 USC § 101 as being directed to non-statutory subject matter. The Animal Legal Defense Fund and other animal rights, animal husbandry, and farm organizations unsuccessfully sought to challenge the Commissioner’s Policy Statement by judicial review. Animal Legal Defense Fund v. Quigg, 932 F.2d 920, 18 USPQ2d 1677 (Fed. Cir. 1977) (holding that plaintiffs lacked standing). 5. Products of Nature – Courts reject attempts to patent products of nature by reasoning that such products are not machines, compositions of matter, or manufactures. However, how can a product of nature not be a composition of matter? And, how can section 101 explicitly apply to things that are invented or discovered if it does not cover discoveries of naturally-occurring compositions? Would it be more satisfactory simply to admit that products of nature fit within section 101, and then to reject any claims to products in their natural state under section 102(f), which denies a patent if the applicant “did not himself invent the subject matter sought to be patented”? Judge Evans, of the Seventh Circuit, saw no reason to prevent a patent from issuing under either rationale when he wrote, in Dennis v. Pitner:

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It would seem to be an unjustifiable distinction to recognize as patentable a machine or other product which puts into novel combination a plurality of old elements producing a new and useful article, and deny to one working in a research field the protection of his discovery, because in his search he finds that a certain article, which we will call a chemical, will act, when taken into the human system or applied to the earth or upon some mineral found therein, in a beneficial way hitherto unknown to man. Clearly the patent law was enacted to benefit society by encouraging discoveries and inventions. That is accomplished by the Government’s giving to the inventor or discoverer a patent. . . . 42 USPQ 248, 251 (7th Cir. 1939) (dictum; claims to extract of cube root as insecticide invalid for lack of novelty and not infringed). In In re Kratz, 592 F.2d 1169, 201 USPQ 71 (CCPA 1979), the court held that claims to a product and process that imparted strawberry flavor by adding certain “synthetically produced” and “substantially pure” acids were patentable subject matter even though the acid is a naturally occurring product of strawberries. The court noted: Some prior dicta exist which would seem to support the proposition that a claim broadly reciting a naturally occurring chemical compound may be rejected as unpatentable over a naturally occurring composition containing that compound even though the compound’s existence is not known. . . . It should be clear that an anticipation rejection in such a case is necessarily based on a dual footing. First, the natural composition must inherently contain the naturally occurring compound. Secondly, the claim must be of sufficient breadth to encompass both the known natural composition and the naturally occurring compound. Id. at 1173, 201 USPQ at 75-76. The court held that the second part of the test was not met because the claims required that the acid be “substantially pure,” which was not the case, of course, with strawberries. The court also rejected an attack for obviousness on the ground that the prior art did not show that this acid was a significant strawberry flavor ingredient. Id. at 1175. Both sides of the issue were explored by the majority and dissent in Schering Corp. v. Gilbert, 153 F.2d 428, 68 USPQ 84 (2d Cir. 1946), involving a patent on a new compound that did not occur in nature. The majority ruled that the compound was patentable subject matter: They say that this new and useful composition of matter is not patentable because Claim 2 covers a new molecule and that a molecule is the inevitable result of the action of so-called laws of nature which are immutable by man and remain free for the use of all unrestricted by patent law. If this were wholly true the corrolary would be that the process by which a result is reached, involving as it does the application of natural laws, would be likewise unpatentable and that there could be no valid patents for new compositions of matter. Similarly, there could be no valid patents for new machines or for new methods for making them since so-called natural laws of physics, such as those relating to gravity and friction, to mention only two, always play their part. Obviously, such an advanced position cannot be maintained in the face of the patent statute and the multitude of authoritative decisions to the contrary. Yet there is a certain amount of plausibility in the argument and its interest lies in the fact that it is in effect the antithesis of the usual attack on patents based on the simplicity of the change from old to new. Now the deep-seated, fundamental character of the change is relied on to exclude credit to human ingenuity and give it all to natural forces, regardless of what it took on the part of the inventors to control and direct those natural forces. We cannot believe that this negatives invention though we agree that the so-called laws of nature cannot be patented per se. . . . Claim 2 does describe what in chemical parlance is a molecule though it is equally correct to call it a compound; but, however labelled, it is none the less a new composition of matter. 68 USPQ at 88. The dissent, of course, disagreed: A claim for a mere product, regardless of the process for producing it, is, I think, virtually a claim to what has sometimes been described as a “principle” or “idea,” held not to be patentable. It is indeed something of a paradox, but, nevertheless, doubtless wise, that our patent law gives no reward to the discoverers of scientific principles, while it protects the discoveries and inventions of lesser minds, who find new, original and useful applications of such principles. No Prometheus is welcome in the Patent Office. Id. at 90-91. 6. Processes – Although one may not patent a product of nature, one may patent a process that uses a newly discovered product of nature. See Ansonia Brass & Copper Co. v. Electric Supply, 144 U.S. 11, 18 (1892)

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(dicta: “[I]f an old device or process be put to a new use which is not analogous to the old one, and the adaptation of such process to the new use is of such a character as to require the exercise of inventive skill to produce it, such new use will not be denied the merit of patentability.”). This was not clear, however, until the mid-1900’s, and in particular, until the addition of the term “process in the 1952 Act. As noted in P.J. Federico’s Commentary on that Act: The decision of the Court of Customs and Patent Appeals in In re Thuau, 135 F.2d 344, has not been overruled by the statute. The holding of this decision is simply that an old material cannot be patented as a composition of matter, because it is an old material, and the fact that the inventor or discoverer may have discovered a new use for the old material does not make the material patentable. . . . It is believed that the primary significance of the definition of method above referred to is merely that a method claim is not vulnerable to attack, on the ground of not being within the field of patentable subject matter, merely because it may recite steps conventional from a procedural standpoint and the novelty resides in the recitation of the particular substance, which is old as such, used in the process. . . . The reference to the new use of a known machine or manufacture in the definition [35 U.S.C. § 100] merely means that the processes may utilize old machines or manufactures and the reference to the new use of a known process simply indicates that the procedural steps in a patentable process might be old. P.J. Federico, “Commentary on the New Patent Act,” reprinted in J. Pat. Off. Soc. 161 (Mar. 1993). Of course, a patent claim on a new use for a product does not cover the product itself or all uses of the product. 7. Is it Section 101 or Section 102? – You may already have noticed that much of the reasoning under section 101 sounds like rejections of novelty under section 102. For example, in Funk Bros., Justice Douglas noted: “The qualities of these bacteria . . . are part of the storehouse of knowledge of all men.” Does Justice Frankfurter have a better approach, when he reasons that the claims, although they meet the section 101 requirement, are nevertheless so broad that they impermissibly go beyond what Bond discovered? Or do you agree with the dissent that the claims were not impermissibly broad? We shall cover the overbreadth issue in more detail in the next chapter. Judge Haynsworth, of the Fourth Circuit, had an interesting comment on this 101/102(and /103) point: A product of nature which is not a "new and useful . . . machine, manufacture, or composition of matter," is not patentable, for it is not within the statutory definition of those things which may be patented. Even though it be a new and useful composition of matter it still may be unpatentable if the subject matter as a whole was obvious within the meaning of § 103 . . . In dealing with such considerations, unpatentable products have been frequently characterized as ‘products of nature.’ See Funk Brothers. . . . But where the requirements of the Act are met, patents upon products of nature are granted and their validity sustained. . . . To the extent that the ‘product of nature’ defense has validity, as urged here, it is a contention that the patented compositions are not ‘new and useful . . . compositions of matter’ within the meaning of § 101 of the Act. This defense may be separated into two doctrines, (1) that a patent may not be granted upon an old product though it be derived from a new source by a new and patentable process, and (2) that every step in the purification of a product is not a patentable advance, except, perhaps as to the process, if the new product differs from the old ‘merely in degree, and not in kind.’ Merck & Co. v. Olin Mathieson Chem. Corp., 253 F.2d 156, 162, 116 USPQ 484 (4th Cir. 1958). The Court in Merck found that neither part of the “product of nature” defense applied in the case before it. The Court sustained the validity of claims to vitamin B-12 produced by a fermentation process over the argument that this vitamin already existed in the livers of cattle. The fermentation product was far purer and less toxic than liver extracts, and before the invention of the patent in suit, no one knew that vitamin B-12 was the anemia medicine in these extracts. 8. Manufacture – The Court in Chakrabarty quoted the definition of “manufacture” used in American Fruit Growers, Inc. v. Brogdex Co, 283 U.S. 1, 11 (1931): The production of articles for use from raw or prepared materials by giving to these materials new forms, qualities, properties, or combinations, whether by hand labor or by machinery. The Court in Chakrabarty referred to “manufacture” as an “expansive” term. 447 U.S. at 308. Yet in American Fruit Growers, the Court concluded that the definition above did not cover a claim to an orange whose rind had been treated with borax for mold resistance. 283 U.S. 11-13. Clearly an orange is a “raw material” and the borax gave the orange the new “quality” of mold resistance. The Court did not see it that way, stating: Addition of borax to the rind of natural fruit does not produce from the raw material an article for use which possesses a new or distinctive form, quality or property. The added substance only protects the

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natural article against deterioration by inhibiting development of extraneous spores upon the rind. There is no change in the name, appearance, or general character of the fruit. It remains a fresh orange fit only for the same beneficial uses as heretofore. Id. at 11-12. Isn’t this a rather narrow view of what the Court 50 years later considered an expansive term?

Biotechnology: Modern Problems

Homestead 2000: The Genome Ken Garber SIGNALS March 3, 2000 [original at http://www.signalsmag.com] DNA patents have grabbed headlines in recent months. Most newspaper articles have focused on issues involving genetic tests for breast cancer and a rare brain disorder (Canavan disease) -- because the patent-holders for these genes are clamping down on others providing testing services. Such behavior prompted the American College of Medical Genetics to demand broad licensing of gene patents on reasonable terms. But its statement, which echoes the sentiments of many, went much further: "Genes and their mutations are naturally occurring substances that should not be patented." Like it or not, gene patents are here to stay. And while access to genetic tests is a legitimate public health issue, it's not the one dominating shop talk in the labs and executive suites of the pharmaceutical and biotech industries (and even in academia). Beyond the headlines, there's a deeper worry: Too many patents issued for DNA sequences will discourage research and stunt product development. Academics and government scientists, for the most part, are the only ones making this argument in public. "You don't want to put toll booths on basic science," said Human Genome Project director Francis Collins in a talk last year. "Because…nobody wants to travel the road any more. There are so many tolls, there are so many complicated patent and licensing arrangements, there are so many royalty fees attached, that doing any really interesting experiments, where you may want to draw several discoveries together, and push yourself a little further down the road, just isn't worth it any more." And, according to Collins, "the vast majority of pharmaceutical companies" share this concern. "We're creating a lot of patent rights early on that are going to reach far downstream into product development, and are going to create obstacles to product development," says Rebecca Eisenberg, a University of Michigan law professor and expert on biotech patent law. The filing of patent applications for expressed sequence tags (ESTs) is one thing that worries Eisenberg. At least three million of these DNA sequences are in the patent pipeline [See table]. Most will probably never see the light of day, but a great many are likely to receive patent protection. Will products using these sequences infringe the EST patents? Is this prospect already slowing or inhibiting drug and diagnostics development in biotech and in big pharma? Drug companies aren't talking. Signals requested interviews with Merck & Co. Inc., Glaxo Wellcome plc, Pfizer Inc., Warner-Lambert Co., Pharmacia & Upjohn Inc., Wyeth-Ayerst (the pharmaceutical division of American Home Products Corp.), Bristol-Myers Squibb Co. and Amgen Inc. All our queries were either ignored or rejected. Obviously, no company is eager to publicly admit that it faces such a far-reaching and fundamental problem. But comments made during a panel discussion at January's Chase H&Q Healthcare Conference shine at least a thin beam of light on the vast, dark and increasingly dangerous patent landscape.

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"The analogy that I would use is that of a minefield," said Bob Levy, senior VP of science and technology for American Home Products. "We are spending an incredible amount of time now, when we find exciting targets and begin to validate them, in trying to define who has rights to what. And we're finding, in almost every product that we look at, that someone has patented the protein, the gene, a fragment, a diagnostic test." Levy noted that untangling patent rights, and determining which patents are dominant, are increasingly time-consuming and expensive tasks. And patent-holders must be paid. "The royalties that will be involved soon in some of the products that we are bringing to market, they're already up into the ten, fourteen, fifteen percent [range]," said Levy. "And that may increase with time." (See also the Signals article, "Is The Alliance Deck Becoming 'Anti-Stacked' Against Innovators?" for further discussion of the impact of stacking royalties on biotech alliances with pharmaceutical companies.) "We're living in this era of 'stacking royalties,'" agreed Joffre Baker, VP of research and discovery for Genentech Inc. "There are more patents than ever out there around processes, methods, various tricks. The royalties just keep on stacking up and up." The problem will only grow as more genes and ESTs are patented. "Everybody's fighting over the last scrap of real estate in terms of the remaining human genes," said Baker. To many, it seems wrong that DNA should be patentable at all, since no one invented it. Patenting DNA, it follows, is an act of arrogance and hubris; it confers ownership to something that should not be commodified; and it lets individuals and corporations own our common genetic heritage. None of these arguments, however, have made the slightest dent in U.S. patent law, which rests on the 1980 Supreme Court decision, Diamond v. Chakrabarty, which determined that genetically modified bacteria were patentable inventions. Other court cases have battered the "product of nature" doctrine that holds that natural products aren't patentable, so that today the U.S. Patent and Trademark Office (PTO) and the courts view even "natural" DNA as a chemical compound that, once isolated and purified, is patentable. "I don't think anyone is going to challenge it [in the courts]," says University of Pennsylvania bioethicist Jon Merz. "That ship has sailed." To date the PTO has issued about 2,000 patents on full-length genes (all species included). But that number is not important. What's crucial is the number of DNA sequences in patent applications, since the application date, not the issue date, determines who owns what. And that number runs into the millions, thanks to ESTs. So the DNA patent land grab is almost over, even though only a few patents have issued. The frontier is closing fast. The PTO ruled that ESTs -- short sequences of coding DNA derived, assembly-line style, from messenger RNA extracted from cells -- were patentable in the early '90s. That led to a deluge of patent applications by genomics companies. Incyte Pharmaceuticals Inc., Human Genome Sciences Inc. and (later) Hyseq Inc. filed almost as fast as they could make and sequence their cDNA clones. "Their business model was, 'file early and often,'" remarks Steve Holtzman, chief business officer for Millennium Pharmaceuticals Inc. Millennium and other companies tossed in their own ESTs for good measure. No one knows how many ESTs are in line waiting for patents -- not even the PTO. "We quit tracking them," says John Doll, the PTO's director of biotechnology examination. "We had about a half a million, and that was about four years ago." Critics of gene patents hope public sequence databases will pre-empt many of these claims, but that's not likely to happen. The majority of EST applications were filed before much sequence data made it into the open databases of Merck and The Institute for Genomic Research (TIGR). And sequences placed in GenBank by the Human Genome Project are almost all coming too late to nullify EST patents.

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Whole genes are also adding up. Human Genome Sciences has filed applications encompassing 7,500 full-length human genes, according to chairman and CEO Bill Haseltine. Incyte has at least 6,500 genes waiting. Celera Genomics, before it stopped releasing patent numbers, accounted for another 6,500 partial and complete genes. Hyseq has disclosed filings for over 5,000 full-length genes. Bill HaseltineFrench genomics company Genset SA is also a major player. As of last October, it had generated over 90,000 sequences of 5-prime untranslated region (UTR) sequence tags of human fulllength cDNA clones -- each tag belonging to a different gene. Patent applications will be filed on all of them, if they're not already. Although Genset CEO Pascal Brandys won't disclose the number of gene patents his company has pending, documents filed with the U.S. Securities and Exchange Commission (SEC) state that "it is the company's intention to file patent applications covering all such full-length cDNA sequences." Even without full-length genes, as long as possession of the 5-prime UTR sequence is enough to claim, or "dominate" (in patent law parlance) the gene, then Genset already has most of the 100,000-plus human genes accounted for in its patent applications. Counting ESTs, patent applications now blanket the entire human genome many times over. "We've filed patents that describe…up to 140,000 human genes," says Haseltine. "We're reasonably confident we were the first to find 80 to 90 percent." For its part, Incyte claims patent filings "covering over 50,000 unique genes." Hyseq CEO Lewis Gruber says his company now has "30,000 novel genes" in the patent pipeline. Incredibly, the same sequence can be patented more than once. It can be in an EST, and also in the full-length gene; each is patentable. PTO guidelines allow EST applicants, if they come first, to claim "dominance" over the full gene (implicitly, through use of legal language). But the final verdict on such broad EST claims will not be in for years. "That's only going to be solved by the courts," says the PTO's Doll. Since only five EST patents have issued to date, the PTO has kept companies guessing on other issues. Most important: How much about EST function must be known in order to patent it? The PTO recently tightened up requirements for documenting such EST "utility." (It's no longer enough just to say an EST can be used to find a gene or help map a chromosome.) But how much information will be enough remains an open question. Doll says that about one-third of EST patent applications won't meet the current guidelines. Still, that leaves over a million patentable ESTs. That's alarming, says University of Michigan's Eisenberg, especially if a drug company needs a license from the owner of an EST patent in order to use the full-length gene. Making and sequencing ESTs, she notes, is a trivial (and largely automated) lab exercise, but the patent system has been treating each EST as a separate "invention." "That's very problematic," she says. "Because it seems like people are making the most trivial or no contribution to 'the art,' and at the same time claiming broad patent rights that will allow them to capture more than their share of future research by other people." Eisenberg offers this scenario: Somebody gets a patent on an EST; someone else patents the fulllength gene; another party patents a variant in that gene; and then someone patents a diagnostic test to test for variants predisposing for disease. "Each of these people could have their own patents," she points out. "And somebody who wants to bring that test to market will need licenses from all of them." Eisenberg says the proliferation of early patent rights is leading to an "anticommons," in which companies seeking to develop useful products will be discouraged by a proliferation of patents on gene fragments. Even worse, the diagnostic test seller might not be aware of some of some patents until too late. In the U.S., patent applications remain secret until the patent is issued. (Europe publishes applications 18 months after submission.) "You can lay low, nobody knows that your patent application is pending, and then you come out of the water with an issued patent, after somebody else has figured out a use for your sequence, and you have somebody to charge royalties of," says Eisenberg. Such "submarine Chapter 12 – The Subject Matter of Patents

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patents" can lead to heavy licensing costs, infringement penalties, or even product withdrawal, so a conceivable outcome is that certain products simply won't be developed unless all patent-holders are identified -- something hard to do with millions of ESTs lurking underwater. Hyseq's Gruber applies the submarine strategy. His company selectively revises some patent applications (thus delaying PTO review), while letting others go forward, based on others' use of Hyseq's DNA. "If we find someone using our ESTs, we can accelerate that process and get [our patents] to issue quicker," he says. Unethical? Gruber points out that Hyseq (which develops some of its own drugs) is itself vulnerable to submarining. "We have the same bad effect from that that everyone else does, because our competitors have submarine patents," he says. So, any criticism, in his view, is misplaced. "[It's] a case of people blaming the patent applicant for something that has not been corrected in the system," Gruber says. He suggests changing PTO rules to force quick publication of patent applications: "I'd be very happy if everybody put their cards on the table." Genomics company executives dismiss Eisenberg's anticommons argument and drug companies' fears of royalty stacking. "Anytime there is a complex intellectual property portfolio that has been developed, industry generally responds by setting up beneficial cross-licensing arrangements," says Haseltine. "The electronics business is bedeviled by that problem. Yet it manages to survive quite well." The PTO's John Doll is confident that biotech will thrive, not in spite of layers of DNA patents, but because of them. "A company wants to make money on [its] patents," he says. "Licensing them, and selling them, for a reasonable royalty is the way they make money and the way they fund further research." Doll points out that every computer maker uses hundreds of parts that require licenses, yet PC prices have dropped dramatically and sales are booming. "When we look back at… emerging technologies and breakthroughs in that technology, the licensing and cross-licensing has always happened in a rational manner," he says. John DollIt's true that genomics companies aren't planning to hoard most genes. Instead, they're promising to nonexclusively license DNA databases for reasonable royalties. "Our view is, get them into peoples' hands broadly," said Incyte CEO Randy Scott at the Chase H&Q conference. Once Human Genome Sciences' exclusive partnership with a five-company consortium expires next year, "we plan a very aggressive licensing program to make sure that others use our intellectual property to create products," says HGS' Bill Haseltine. Celera Genomics has also promised nonexclusive licenses, except for a few hundred genes to be patented and exclusively licensed to pharmaceutical companies. "Nobody, it seems, especially us, wants to see broad 'blocking' patenting," said Celera's Craig Venter at a recent talk at the University of Michigan. But offering broad database access (for drug discovery purposes) doesn't address the royalty stacking problem for actual products. Incyte's Randy Scott says he understands the drug companies' complaints. "If the genomics industry doesn't hear that and listen to it, and back off, to keep the royalties at a [reasonable] rate, then we're just taking money out of our own pockets," he said, since drug companies will simply avoid developing products based on inaccessible patents. Rebecca Eisenberg doesn't expect the biotech industry to come together amicably to widely crosslicense patents and otherwise ease product development. "I haven't seen any signs of that," she says. "I mean, every biotechnology product that has come to market has been accompanied by litigation -- to the death." Biotech litigators have certainly thrived. Genentech sued Amgen over use of vectors for expressing cloned genes. Amgen sued Transkaryotic Therapeutics Inc. for infringing its erythropoietin patents. Hyseq and Affymetrix Inc. sued each other over DNA chip technology, and Affymetrix also sued Incyte and Synteni Inc. (which Incyte acquired in Jan. 1998). Human growth hormone has spawned several Chapter 12 – The Subject Matter of Patents

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lawsuits, involving Genentech, Novo Nordisk and others. Insulin and t-PA have also been heavily litigated. Hyseq's Gruber argues that the lawsuits will diminish as the industry matures. "There are over 1,500 biotech companies, and basically a lot of their value is based upon their intellectual property -- they don't have product," he says. "Any exacerbation of litigation here I think [is] coming from the fact that it's still a relatively young industry." The optimists also point to PCR, the OncoMouse and cre-lox transgenic mice as examples of vital research tools that are widely available at reasonable rates. (See the Signals articles on the OncoMouse and cre-lox controversies for more details.) But the cre-lox issue "was [only] resolved after huge, high-level resources were brought to bear on it," Eisenberg points out. "We're more at risk not for the highly salient controversies that get written up in Science and get the attention of the director of the NIH, but the more mundane transfers that get bogged down in disputes over the terms of agreements…I haven't seen any signs that the problem is abating." One possible future flash point is DNA chips. Lewis Gruber says chip companies should license Hyseq's EST library for use as probes. "That way they're protected when one of our patents issues," he says. "[So] they don't have to worry that they're going to have a product on the market, only to suddenly infringe someone's patent." Some chip systems now include tens of thousands of probes, so Gruber's scenario could be a nightmare for chip companies, since they'd have to track down the patent-holders (or future patent-holders) of at least some sequences and then pay royalties. Gruber says that certain important sequences might not even be available later if chip companies don't act now. That's a red herring, contends Affymetrix general counsel Vern Noviel. Affymetrix expression chip probes are only 20 bases long, he points out, so it should be easy to work around patented ESTs. Hyseq "might have a…200-base snippet of EST out of a thousand-base gene," says Noviel. "We can live with that. We just pick probes out of the other part." Or, if necessary, take the gene off the chip. "We have 40,000 genes and ESTs on our chips right now, and it's almost more than people can handle," says Noviel. "And putting that next Hyseq gene on there -- give me a break. Incrementally, [it's] not much more valuable." But no one knows for sure how EST patents will affect chip makers. It's just one more uncertainty that companies must consider as they move forward with product development.

Incyte Pharma

Human Genome Sciences

Celera Genomics

Hyseq

Genset

Millenium Pharma

Filed

1.2 M

Undisclosed(1)

None

900,000

90,000(2)

Undisclosed

Issued

1

None

None

None

None

1

Full

Filed

6,500+

7,500+

6,500+(3)

5,000+

2,500+(4)

Undisclosed

Genes

Issued

490

112

None

None

50+

50 (approx.)

ESTs

Footnotes:

1. Total ESTs generated: 2.5M (approx.) 2. 5' UTR ESTs (approx.). Other ESTs: Undisclosed 3. As of 10/20/99. Described as "new gene fragments. Included…are receptors, ion channels and secreted proteins." 4. Full-length cDNA

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The market for SNP genotyping chips, for example, could explode if and when individual genetic profiling catches on. But SNPs, like ESTs, are patentable. (The PTO says that about twenty patents on SNPs have been issued to date.) Will SNP chip makers have to worry about licensing their SNP probes? Not to worry, says Noviel. "Let's assume that one or two of them one day would end up being patented," he says. "The amount of effort required to take those off [the chip] is less than…it is to figure it out." Nevertheless, Affymetrix is taking the precaution of filing its own SNP patents -- between ten and twenty thousand so far, says Noviel. "We send them in [to the PTO] in boxes," he says. "Literally we're trying to figure out how to get these patents filed on CD-ROMs, because they're so big." The prospect of SNP patents led ten major pharmaceutical companies to create the SNP Consortium in April, 1999. The Consortium's goal is to place 300,000 SNPs, evenly spaced throughout the genome, in the public domain. (To date, about 10,000 have been released.) That's to facilitate whole-genome disease gene association studies, considered the key to unlocking the genetic roots of complex diseases like diabetes, heart disease and schizophrenia. But SNPs have other, more directly lucrative uses, including disease diagnosis and genetic profiling for pharmacogenomics. "Annotated" SNPs -- those known to be markers for disease, drug response, or important traits -- are likely to be far more valuable than the random SNPs used in association studies. "It's probably more important to have detailed data on 50,000 SNPs, rather than generate half a million," says Genset's Brandys. It was Genset's SNP discovery partnership with Abbott Laboratories that first alarmed other drug companies and led to the formation of the SNP consortium. Brandys won't say how many SNPs Genset has filed patent applications on, but the eventual total is likely to be large. "For every major patent issued on genes, we expect to have several SNPs involved," he says. As for random "generic" SNPs, "we're still trying to devise the most appropriate strategy on "generic" SNPs," Brandys says. "It's something that's not completely settled in-house, to tell you the truth." Some genomics companies aren't bothering to patent SNPs at all. "Patenting SNPs is like patenting grains of sand on the beach," says Haseltine. "There are so many potentially useful SNPs…I would guess in excess of several hundred million, that any one collection is likely to be gotten around by any other collection." Simple economics should limit the number of SNP and EST patent applications that companies actually proceed with. "From soup to nuts, to get a U.S. patent issued [takes] ten to fifteen thousand dollars," says Millennium's Holtzman. That amount grows with the addition of other countries. According to Holtzman, a single patent, issued in the 10 major market countries, would cost over $200,000. In 1996 the PTO limited the number of ESTs per review to 10, and Doll now says that his examiners will -- in most cases -- only look at one at a time. That means a separate $1,000 application fee for each one. So companies will have to be selective, and only proceed with the most valuable applications. Because of money and because the PTO is tightening up the utility requirement, argues Millennium's chief patent counsel Mark Boshar, genomics companies that have focused on quality patents as opposed to quantity will emerge as the ultimate winners in the paper chase. "We never did put all our eggs in the gene discovery basket of 'turning the crank, let's discover genes for discovery's sake,'" says Boshar. Millennium has focused on specific disease pathways, patenting genes along the way, including detailed functional information Chapter 12 – The Subject Matter of Patents

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on their protein products and, when possible, their specific therapeutic use. "Those who have just pursued a gene discovery approach, with the help of bioinformatics and computers, may find themselves with their IP strategy somewhat at risk," says Boshar. "We've got a patent strategy, particularly on the use side, that's ironclad." Other genomics companies don't concede that their patent applications are inferior. HGS' Haseltine, for example, boasts of testing his gene products in 130 cell types, measuring 200 different parameters, and thus generating detailed functional information. But Millennium's approach -- focus on a disease and identify its genetic causes -- seems more likely to yield detailed, nuanced biological knowledge than Human Genome Sciences' automated screening approach. Still, it's very possible that quantity will ultimately be rewarded at the expense of quality. On Feb. 15, 2000, the PTO issued a patent to Human Genome Sciences for the CCR5 gene, which was found in 1996 to be a co-receptor for HIV entry into T cells. Human Genome Sciences did not know this when it filed in 1995, but the company can now demand royalties on AIDS drugs that target this receptor. Gruber doesn't expect all 900,000 of Hyseq's ESTs to be patented -- although he contends the courts will decide that, not the PTO -- but says he'll emerge a winner anyway. "Of the 900,000, if we have even a thousand patents that are valuable that we can have others pay us for, that'll be fine," he says. "We'll keep the patents pending and we'll see what's happening in the industry. If it turns out that certain genes are particularly important, for arrays or for products, those are the ones, of course, we'll keep and pursue." No one knows yet whether the Incyte/HGS/Hyseq numbers approach or the Millennium disease-based patent strategy will ultimately be vindicated in the marketplace. EST legal issues alone could take the courts a decade or more to resolve. In the meantime, pharmaceutical companies should be able to freely use most DNA targets to develop small molecule drugs, which themselves might be clear of DNA patent claims by the time most of these patents are issued and their scope clarified by the courts. "That, at this point, is the big hope for the irrelevance of these patents," says Eisenberg. "They may block the therapeutic protein, they may block some DNA diagnostic products, but they're probably not going to block the [small molecule] therapeutic products." Ultimately, the biggest loser may not be big pharma but the small biotech firm that lacks "trading currency" for the cross-licensing orgy that genomics companies say will take place once the industry "matures." A few aggressive firms have now secured patent rights to the entire coding region of the human genome many times over. A newcomer with a novel gene runs the risk of being "submarined" and, at best, will have to license DNA from one or more patent-holders. And if the newcomer is small and lacks something of value to trade, it might be denied the gene altogether. By controlling access to the industry's lifeblood -- human DNA -- the genomics giants of today may be guaranteeing their primacy, and that of their rich partners, forever.

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Can Patents Deter Innovation? The Anticommons in Biomedical Research Michael A. Heller, Rebecca S. Eisenberg 280 Science 698 (May 1998) Thirty years ago in Science, Garrett Hardin introduced the metaphor "tragedy of the commons" (1) to help explain overpopulation, air pollution, and species extinction. People often overuse resources they own in common because they have no incentive to conserve. Today, Hardin's metaphor is central to debates in economics, law, and science and is a powerful justification for privatizing commons property (2). Although the metaphor highlights the cost of overuse when governments allow too many people to use a scarce resource, it overlooks the possibility of underuse when governments give too many people rights to exclude others. Privatization can solve one tragedy but cause another (3). Since Hardin's article appeared, biomedical research has been moving from a commons model toward a privatization model (4). Under the commons model, the federal government sponsored premarket or "upstream" research and encouraged broad dissemination of results in the public domain. Unpatented biomedical discoveries were freely incorporated in "downstream" products for diagnosing and treating disease. In 1980, in an effort to promote commercial development of new technologies, Congress began encouraging universities and other institutions to patent discoveries arising from federally supported research and development and to transfer their technology to the private sector (5). Supporters applaud the resulting increase in patent filings and private investment(6), whereas critics fear deterioration in the culture of upstream research (7). Building on Heller's theory of anticommons property (3), this article identifies an unintended and paradoxical consequence of biomedical privatization: A proliferation of intellectual property rights upstream may be stifling life-saving innovations further downstream in the course of research and product development. The Tragedy of the Anticommons Anticommons property can best be understood as the mirror image of commons property (3, 8). A resource is prone to overuse in a tragedy of the commons when too many owners each have a privilege to use a given resource and no one has a right to exclude another (9). By contrast, a resource is prone to underuse in a "tragedy of the anticommons" when multiple owners each have a right to exclude others from a scarce resource and no one has an effective privilege of use. In theory, in a world of costless transactions, people could always avoid commons or anticommons tragedies by trading their rights (10). In practice, however, avoiding tragedy requires overcoming transaction costs, strategic behaviors, and cognitive biases of participants (11), with success more likely within close-knit communities than among hostile strangers (12-14). Once an anticommons emerges, collecting rights into usable private property is often brutal and slow (15). Privatization in postsocialist economies starkly illustrates how anticommons property can emerge and persist (3). One promise of the transition to a free market was that new entrepreneurs would fill stores that socialist rule had left bare. Yet after several years of reform, many privatized storefronts remained empty, while flimsy metal kiosks, stocked full of goods, mushroomed on the streets. Why did the new merchants not come in from the cold? One reason was that transition governments often failed to endow any individual with a bundle of rights that represents full ownership. Instead, fragmented rights were distributed to various socialist-era stakeholders, including private or quasi-private enterprises, workers' collectives, privatization agencies, and local, regional, and federal governments. No one could set up shop without first collecting rights from each of the other owners. Privatization of upstream biomedical research in the United States may create anticommons property that is less visible than empty storefronts but even more economically and socially costly. In this setting, privatization takes the form of intellectual property claims to the sorts of research results that, in an earlier era, would have been made freely available in the public domain. Responding to a shift in U.S. Chapter 12 – The Subject Matter of Patents

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government policy (4) in the past two decades, research institutions such as the National Institutes of Health (NIH) and major universities have created technology transfer offices to patent and license their discoveries. At the same time, commercial biotechnology firms have emerged in research and development (R&D) niches somewhere between the proverbial "fundamental" research of academic laboratories and the targeted product development of pharmaceutical firms (7). Today, upstream research in the biomedical sciences is increasingly likely to be "private" in one or more senses of the term--supported by private funds, carried out in a private institution, or privately appropriated through patents, trade secrecy, or agreements that restrict the use of materials and data. In biomedical research, as in postsocialist transition, privatization holds both promises and risks. Patents and other forms of intellectual property protection for upstream discoveries may fortify incentives to undertake risky research projects and could result in a more equitable distribution of profits across all stages of R&D. But privatization can go astray when too many owners hold rights in previous discoveries that constitute obstacles to future research (16). Upstream patent rights, initially offered to help attract further private investment, are increasingly regarded as entitlements by those who do research with public funds. A researcher who may have felt entitled to coauthorship or a citation in an earlier era may now feel entitled to be a coinventor on a patent or to receive a royalty under a material transfer agreement. The result has been a spiral of overlapping patent claims in the hands of different owners, reaching ever further upstream in the course of biomedical research. Researchers and their institutions may resent restrictions on access to the patented discoveries of others, yet nobody wants to be the last one left dedicating findings to the public domain. The problem we identify is distinct from the routine underuse inherent in any well-functioning patent system. By conferring monopolies in discoveries, patents necessarily increase prices and restrict use--a cost society pays to motivate invention and disclosure. The tragedy of the anticommons refers to the more complex obstacles that arise when a user needs access to multiple patented inputs to create a single useful product. Each upstream patent allows its owner to set up another tollbooth on the road to product development, adding to the cost and slowing the pace of downstream biomedical innovation. How a Biomedical Anticommons May Arise Current examples in biomedical research demonstrate two mechanisms by which a government might inadvertently create an anticommons: either by creating too many concurrent fragments of intellectual property rights in potential future products or by permitting too many upstream patent owners to stack licenses on top of the future discoveries of downstream users. Concurrent fragments. The anticommons model provides one way of understanding a widespread intuition that issuing patents on gene fragments makes little sense. Throughout the 1980s, patents on genes generally corresponded closely to foreseeable commercial products, such as therapeutic proteins or diagnostic tests for recognized genetic diseases (17). Then, in 1991, NIH pointed the way toward patenting anonymous gene fragments with its notorious patent applications on expressed sequence tags (ESTs) (18). NIH subsequently abandoned these patent applications and now takes a more hostile position toward patenting ESTs and raw genomic DNA sequences (19). Meanwhile, private firms have stepped in where NIH left off, filing patent applications on newly identified DNA sequences, including gene fragments, before identifying a corresponding gene, protein, biological function, or potential commercial product. The Patent and Trademark Office (PTO), in examining these claims (20), could create or avoid an anticommons. Although a database of gene fragments is a useful resource for discovery, defining property rights around isolated gene fragments seems at the outset unlikely to track socially useful bundles of property rights in future commercial products. Foreseeable commercial products, such as therapeutic proteins or genetic diagnostic tests, are more likely to require the use of multiple fragments. A proliferation of patents on individual fragments held by different owners seems inevitably to require costly future

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transactions to bundle licenses together before a firm can have an effective right to develop these products (21). Patents on receptors useful for screening potential pharmaceutical products demonstrate another potential "concurrent fragment" anticommons in biomedical research. To learn as much as possible about the therapeutic effects and side effects of potential products at the preclinical stage, firms want to screen products against all known members of relevant receptor families. But if these receptors are patented and controlled by different owners, gathering the necessary licenses may be difficult or impossible. A recent search of the Lexis patent database disclosed more than 100 issued U.S. patents with the term "adrenergic receptor" in the claim language. Such a proliferation of claims presents a daunting bargaining challenge. Unable to procure a complete set of licenses, firms choose between diverting resources to less promising projects with fewer licensing obstacles or proceeding to animal and then clinical testing on the basis of incomplete information. More thorough in vitro screening could avoid premature clinical testing that exposes patients to unnecessary risks. Long delays between the filing and issuance of biotechnology patents aggravate the problem of concurrent fragments. During this period of pendency, there is substantial uncertainty as to the scope of patent rights that will ultimately issue. Although U.S. patent law does not recognize enforceable rights in pending patent applications, firms and universities typically enter into license agreements before the issuance of patents, and firms raise capital on the basis of the inchoate rights preserved by patent filings. In effect, each potential patent creates a specter of rights that may be larger than the actual rights, if any, eventually conferred by the PTO. Worked into the calculations of both risk-taking investors and risk-averse product developers, these overlapping patent filings may compound the obstacles to developing new products. Stacking licenses. The use of reach-through license agreements (RTLAs) on patented research tools illustrates another path by which an anticommons may emerge. As we use the term, an RTLA gives the owner of a patented invention, used in upstream stages of research, rights in subsequent downstream discoveries. Such rights may take the form of a royalty on sales that result from use of the upstream research tool, an exclusive or nonexclusive license on future discoveries, or an option to acquire such a license. In principle, RTLAs offer advantages to both patent holders and researchers. They permit researchers with limited funds to use patented research tools right away and defer payment until the research yields valuable results. Patent holders may also prefer a chance at larger payoffs from sales of downstream products rather than certain, but smaller, upfront fees. In practice, RTLAs may lead to an anticommons as upstream owners stack overlapping and inconsistent claims on potential downstream products. In effect, the use of RTLAs gives each upstream patent owner a continuing right to be present at the bargaining table as a research project moves downstream toward product development. So far, RTLAs have had a mixed reception as a mechanism for licensing upstream biomedical research patents, but they appear to be becoming more prevalent. When Cetus Corporation initially proposed RTLAs on any products developed through the use of the polymerase chain reaction (PCR) in research, they met strong resistance from downstream users concerned with developing commercial products (22). Later, Hoffmann-La Roche acquired the rights to PCR and offered licenses that do not include reach-through obligations (23). The resulting pay-as-you-go approach increases the upfront cost of a license to use PCR, but it decreases the likelihood of an anticommons emerging. More recently, some universities and other nonprofit research institutions have balked at terms DuPont Corporation has offered for licenses to use patented oncomouse (24) and cre-lox (25) technologies, although others have acquiesced to the license terms (26). These patents cover genetically engineered mice useful in research that could result in products falling outside the scope of the patent claims. DuPont has offered noncommercial research licenses and sublicenses on terms that seem to require licensees to return to DuPont for further approval before any new discoveries or materials resulting from the use of licensed mice are passed along to others or used for commercial purposes (27). Chapter 12 – The Subject Matter of Patents

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DuPont thereby gains the right to participate in future negotiations to develop commercial products that fall outside the scope of their patent claims. In effect, the license terms permit DuPont to leverage its proprietary position in upstream research tools into a broad veto right over downstream research and product development. As RTLAs to use patented research tools multiply, researchers will face increasing difficulties conveying clear title to firms that might develop future discoveries. If a particularly valuable commercial product is in view, downstream product developers might be motivated and able to reach agreements with multiple holders of RTLAs. But if the prospects for success are more uncertain or the expected commercial value is small, the parties may fail to bargain past the anticommons. Transition or Tragedy? Is a biomedical anticommons likely to endure once it emerges? Recent empirical literature suggests that communities of intellectual property owners who deal with each other on a recurring basis have sometimes developed institutions to reduce transaction costs of bundling multiple licenses (28). For example, in the music industry, copyright collectives have evolved to facilitate licensing transactions so that broadcasters and other producers may readily obtain permission to use numerous copyrighted works held by different owners. Similarly, in the automobile, aircraft manufacturing, and synthetic rubber industries, patent pools have emerged, sometimes with the help of government, when licenses under multiple patent rights have been necessary to develop important new products (28). When the background legal rules threaten to waste resources, people often rearrange rights sensibly and create order through private arrangements (12-14). Perhaps some of the problems caused by proliferating upstream patent rights in biomedical research will recede as licensors and licensees gain experience with intellectual property rights and institutions evolve to help owners and users reach agreements. The short-term costs from delayed development of new treatments for disease may be worth incurring if fragmented privatization allows upstream research to pay its own way and helps to ensure its long-run viability. Patent barriers to product development may be a transitional phenomenon rather than an enduring tragedy. On the other hand, there may be reasons to fear that a patent anticommons could prove more intractable in biomedical research than in other settings. Because patents matter more to the pharmaceutical and biotechnology industries than to other industries, firms in these industries may be less willing to participate in patent pools that undermine the gains from exclusivity (29). Moreover, the lack of substitutes for certain biomedical discoveries (such as patented genes or receptors) may increase the leverage of some patent holders, thereby aggravating holdout problems. Rivals may not be able to invent around patents in research aimed at understanding the genetic bases of diseases as they occur in nature. More generally, three structural concerns caution against uncritical reliance on markets and norms to avoid a biomedical anticommons tragedy: the transaction costs of rearranging entitlements, heterogeneous interests of owners, and cognitive biases among researchers. Transaction costs of bundling rights. High transaction costs may be an enduring impediment to efficient bundling of intellectual property rights in biomedical research. First, many upstream patent owners are public institutions with limited resources for absorbing transaction costs and limited competence in fast-paced, market-oriented bargaining. Second, the rights involved cover a diverse set of techniques, reagents, DNA sequences, and instruments. Difficulties in comparing the values of these patents will likely impede development of a standard distribution scheme. Third, the heterogeneity of interests and resources among public and private patent owners may complicate the emergence of standard license terms, requiring costly case-by-case negotiations. Fourth, licensing transaction costs are likely to arise early in the course of R&D when the outcome of a project is uncertain, the potential gains are speculative, and it is not yet clear that the value of downstream products justifies the trouble of overcoming the anticommons. Chapter 12 – The Subject Matter of Patents

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Even when upstream owners see potential gains from cooperation and are motivated to devise mechanisms for reducing transaction costs, they may be deterred by other legal constraints, such as antitrust laws. Patent pools have been a target of antitrust scrutiny in the past (30), which may explain why few, if any, such pools exist today. Although antitrust law may be less hostile to patent pools today than it was in 1975 when a consent decree dismantled the aircraft patent pool (31), the antitrust climate changes from one administration to the next (32). Even a remote prospect of facing treble damages and an injunction may give firms pause about entering into such agreements. Heterogeneous interests of rights holders. Intellectual property rights in upstream biomedical research belong to a large, diverse group of owners in the public and private sectors with divergent institutional agendas. Sometimes heterogeneity of interests can facilitate mutually agreeable allocations (you take the credit, I'll take the money) (33, 34), but in this setting, there are reasons to fear that owners will have conflicting agendas that make it difficult to reach agreement. For example, a politically accountable government agency such as NIH may further its public health mission by using its intellectual property rights to ensure widespread availability of new therapeutic products at reasonable prices. When NIH sought to establish its co-ownership of patent rights held by Burroughs-Wellcome on the use of azidothymidine (AZT) to treat the human immunodeficiency virus (HIV) (35), its purpose was to lower the price of AZT and promote public health rather than simply to maximize its financial return. By contrast, a private firm is more likely to use intellectual property to maintain a lucrative product monopoly that rewards shareholders and funds future product development. When owners have conflicting goals and each can deploy its rights to block the strategies of the others, they may not be able to reach an agreement that leaves enough private value for downstream developers to bring products to the market. A more subtle conflict in agendas arises between owners that pursue end-product development and those that focus primarily on upstream research. The goal of end-product development may be better served by making patented research tools widely available on a nonexclusive basis, whereas the goal of procuring upstream research funding may be better served by offering exclusive licenses to sponsors or research partners. Differences among patent owners in their tolerance for transaction costs may further complicate the emergence of informal licensing norms. Universities may be ill equipped to handle multiple transactions for acquiring licenses to use research tools. Delays in negotiating multiple agreements to use patented processes, reagents, and gene fragments could stifle the creative giveand-take of academic research. Yet academic researchers who fail to adopt new discoveries and instead rely on obsolete public domain technologies may find themselves losing grant competitions. Large corporations with substantial legal departments may have considerably greater resources for negotiating licenses on a case-by-case basis than public sector institutions or small start-up firms. This asymmetry may make it difficult to identify mutually advantageous cross-licensing arrangements. Patent owners are also likely to differ in the time frames they can tolerate for recouping current investments in transaction costs. Owners are also likely to differ in their willingness and ability to infringe the patents of others, resulting in asymmetrical motivations to negotiate cross-licenses. Use of a patented invention in an academic laboratory or a small start-up firm may be inconspicuous, at least if not described in a publication or at a scientific meeting. Patent owners may be more reluctant to sue public sector investigators than they are to sue private firms. Differences in institutional cultures may make academic laboratories and biotechnology firms more tolerant of patent infringement than large pharmaceutical firms. Owners who do not feel vulnerable to infringement liability may be less motivated to enter into reasonable crosslicenses than owners who worry more about being sued. Cognitive biases. People consistently overestimate the likelihood that very low probability events of high salience will occur (36). For example, many travelers overestimate the danger of an airplane crash relative to the hazards of other modes of transportation. We suspect that a similar bias is likely to cause owners of upstream biomedical research patents to overvalue their discoveries. Imagine that one of a set of 50 upstream inventions will likely be the key to identifying an important new drug, the rest of the Chapter 12 – The Subject Matter of Patents

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set will have no practical use, and a downstream product developer is willing to pay $10 million for the set. Given the assumption that no owner knows ex ante which invention will be the key, a rational owner should be willing to sell her patent for the probabilistic value of $200,000. However, if each owner overestimates the likelihood that her patent will be the key, then each will demand more than the probabilistic value, the upstream owners collectively will demand more than the aggregate market value of their inputs, the downstream user will decline the offers, and the new drug will not be developed. Individuals trained in deterministic rather than probabilistic disciplines are particularly likely to succumb to this sort of error (37).

A related "attribution bias" suggests that people systematically overvalue their assets and disparage the claims of their opponents when in competition with others (38). We suspect that the attribution bias is pervasive among scientists because it is likely adaptive for the research enterprise as a whole. Overcommitment by individuals to particular research approaches ensures that no hypothesis is dismissed too quickly, and skepticism toward rivals' claims ensures that they are not too readily accepted. But this bias can interfere with clear-headed bargaining, leading owners to overvalue their own patents, undervalue others' patents, and reject reasonable offers. Institutional ownership could mitigate these biases, but technology transfer offices rely on scientists to evaluate their discoveries. When two or more patent owners each hope to dominate the product market, the history of biotechnology patent litigation suggests a likelihood that bargaining will fail (39). Conclusion Like the transition to free markets in postsocialist economies, the privatization of biomedical research offers both promises and risks. It promises to spur private investment but risks creating a tragedy of the anticommons through a proliferation of fragmented and overlapping intellectual property rights. An anticommons in biomedical research may be more likely to endure than in other areas of intellectual property because of the high transaction costs of bargaining, heterogeneous interests among owners, and cognitive biases of researchers. Privatization must be more carefully deployed if it is to serve the public goals of biomedical research. Policy-makers should seek to ensure coherent boundaries of upstream patents and to minimize restrictive licensing practices that interfere with downstream product development. Otherwise, more upstream rights may lead paradoxically to fewer useful products for improving human health.

REFERENCES AND NOTES 1. G. Hardin, Science 162, 1243 (1968) . 2. H. Demsetz, Am. Econ. Rev. 57, 347 (1967) . 3. M. Heller, Harvard Law Rev. 111, 621 (1998). 4. R. Eisenberg, Va. Law Rev. 82, 1663 (1996). 5. 35 U.S.C.A. §§ 200-11 (West 1984 and Suppl. 1992). 6. Senate Committee on the Judiciary, Subcommittee on Patents, Copyrights, and Trademarks, The BayhDole Act, A Review of Patent Issues in Federally Funded Research: Hearings on Pub. L. No. 96-517, 103d Cong., 2nd sess., 1-2 (1994). 7. M. Kenney, Biotechnology: The University-Industrial Complex (Yale Univ. Press, New Haven, CT, 1986). 8. F. Michelman, Nomos 24, 3 (1982). 9. W. N. Hohfeld, Fundamental Legal Conceptions as Applied in Judicial Reasoning and Other Legal Essays (Yale Univ. Press, New Haven, CT, 1923). This work introduced the now standard vocabulary of "privileges of use" and "rights of exclusion." 10. R. Coase, J. Law Econ. 3, 1 (1960). 11. ___, The Firm, The Market and The Law (Univ. of Chicago Press, Chicago, 1988), p. 174. "The world of zero transaction costs has often been described as a Coasian world. Nothing could be further from the truth. It is the world of modern economic theory, one which I was hoping to persuade economists to leave."

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12. R. C. Ellickson, Order Without Law: How Neighbors Settle Disputes (Harvard Univ. Press, Cambridge, MA, 1991). 13. E. Ostrom, Governing the Commons: The Evolution of Institutions for Collective Action (Cambridge Univ. Press, Cambridge, UK, 1990). 14. C. Rose, Univ. Chicago Law Rev. 53, 711 (1986). 15. D. Baird, R. Gertner, R. Picker, Game Theory and the Law (Harvard Univ. Press, Cambridge, MA, 1994). 16. R. Merton, The Sociology of Science (Univ. of Chicago Press, Chicago, 1973). 17. R. Eisenberg, Emory Law J. 39, 721 (1990). 18. R. Eisenberg and R. Merges, AIPLA Q. J. 23, 1 (1995). 19. National Human Genome Research Institute (NHGRI), Policy on availability and patenting of human genomic DNA sequence produced by NHGRI pilot projects (funded under RFA 95-005) (NHGRI, Bethesda, MD, 1996). 20. U.S. Patent and Trademark Office, BNA Pat. Trademark Copyright J. 52, 732 (1996). 21. R. Merges and R. Nelson, Columbia Law Rev. 90, 839 (1990) [ISI] . 22. "Cetus to exact royalties from PCR sales; probe absolves convicted rapist," Biotechnology Newswatch 8, 7 (5 September 1988). 23. National Research Council, Intellectual Property Rights and Research Tools in Molecular Biology (National Academy Press, Washington, DC, 1997). 24. Harvard University, U.S. Patent 4,736,866, 1988; U.S. Patent 5,087,571, 1988. DuPont, as research sponsor, holds an exclusive license under these patents. 25. DuPont, U.S. Patent 4,959,317, 1990. 26. Non-commercial research license agreement between E. I. DuPont de Nemours and Company and Howard Hughes Medical Institute (24 June 1996) (on file with authors). 27. This interpretation requires careful parsing of inartfully drafted licenses, on file with the authors. 28. R. Merges, Calif. Law Rev. 84, 1293 (1996). 29. R. Levin, A. Klevorick, R. Nelson, S. Winter, Brookings Pap. Econ. Activ. 1987, 783 (1987). 30. G. Bittlingmayer, J. Law Econ. 31, 227 (1988). 31. U.S. v. Manufacturers Aircraft Assn., 1975 U.S. Dist. LEXIS 15333; 1976-1 Trade Cas. (CCH) ¶ 60,810 (S.D.N.Y. 1975). 32. J. Gould and J. Langenfeld, IDEA J. Law Technol. 37, 449 (1997). 33. G. D. Libecap, Contracting for Property Rights (Cambridge Univ. Press, Cambridge, UK, 1989). 34. D. Fundenberg and E. Maskin, Econometrica 54, 533 (1986). 35. Burroughs-Wellcome v. Barr Laboratories, 40 F. 3d 1223 (Fed. Cir. 1994). 36. A. Tversky and D. Kahneman, J. Risk Uncertainty 5, 297 (1992). 37. D. Lehman, R. Lempert, R. Nisbett, Am. Psychol. 43, 431 (1988) [ISI] . 38. L. Ross and C. A. Anderson, in Judgment under Uncertainty: Heuristics and Biases, D. Kahneman et al., Eds. (Cambridge Univ. Press, Cambridge, UK, 1982), pp. 129-152. 39. Amgen v. Chugai Pharmaceutical Co., 927 F. 2d 1200 (Fed. Cir. 1991) (erythropoietin); Scripps Clinic & Research Found. v. Genentech, 927 F. 2d 1565 (Fed. Cir. 1991) (factor VIII:C); Genentech v. Wellcome Found., 29 F. 2d 1555 (Fed. Cir. 1994) (tissue plasminogen activator); Hormone Research Found. v. Genentech, 904 F. 2d 1558 (Fed. Cir. 1990) (human growth hormone); Genentech v. Eli Lilly & Co., 998 F. 2d 931 (Fed. Cir. 1993) (human growth hormone); Bio-Technology General v. Genentech, 80 F. 3d 1553 (Fed. Cir. 1996) (human growth hormone); Genentech v. Novo Nordisk, 108 F. 3d 1361 (Fed. Cir. 1997) (human growth hormone); Genentech v. Chiron, 112 F. 3d 495 (Fed. Cir. 1997) (insulin-like growth factor); Regents of the Univ. of Calif. v. Eli Lilly, 119 F. 3d 1559 (Fed. Cir. 1997). 40. Supported by the Cook Endowment at the University of Michigan Law School and the Office of Health and Environmental Research of the U.S. Department of Energy. We thank I. Cockburn, F. Collins, R. Cook-Deegan, S. Cullen, R. Ellickson, P. Goldstein, D. Hanahan, E. Jordan, K. Paigen, R. Nelson, N. Netanel, E. Posner, H. Varmus, anonymous reviewers for Science, and workshop participants at the National Bureau of Economic Research and the University of Michigan, Stanford University, and George Washington University law schools for reading and commenting on earlier versions of this manuscript.

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Questions, Comments, Problems 1.

Researcher vs. Researcher. As you have seen from the pieces excerpted above, many in the scientific and academic community feel that patenting genomic material (genes, gene fragments, etc.) is bad public policy. Nonetheless, many in both the scientific and commercial research community continue to file patent applications at a rapid pace. How do you account for this distinction? Simple commercial greed or opportunitism? Fear of becoming victim to these new patents? What do you think?

2.

Justifications and Their Source. Try to analyze what the real objection to genomic patents is. Consider the following possibilities: • • • •

Blocking research: allowing patents on such early-stage work will prevent substantial further research and commercialization. Lack of Invention: genes exist in nature; patenting them or their fragments would violate our long-held views that objects of nature cannot be patented. Lack of Utility: most of the time, applicants have only a vague and tenuous notion of the utility of their genomic inventions. Breadth: alloing genenomic patents will confer too much commercial advantage to the patentees, in consideration of the work invested.

Can you think of any others? Which, if any of these are unique to genomics and/or biotechnology? Can the same objections be made to new developments in any field? 3.

Solutions? The Utility Approach. The PTO, responding to increased criticism for entertaining and issueing gene and gene fragment patents,. Has responded by issuing new utility guidelines for Examioners. As you read them, and the example, consider whether this may resolve many of the concerns expressed by the commentators: Interim Utility Training Guidelines United States Patent and Trademark Office, March 2000 It is assumed at this point in the analysis that the specification has been reviewed and an appropriate search of the claimed subject matter has been conducted. It is also assumed that some “utility” is disclosed in the specification or is recognized to be well-established in the art. The examiner should determine whether any asserted utility is specific and substantial, and if so, determine whether such asserted utility is credible. In determining credibility the examiner should consider whether or not there currently are similar or equivalent materials and/or procedures available for achieving that utility. If there are, the utility is credible and no rejection under 35 U.S.C. § 101 should be made. Guidance for Various Examination Situations I) a) For method claims that recite more than one utility, if at least one utility is credible, specific, and substantial, a rejection under 35 U.S.C. § 101 should not be made. If any utility in such a claim is not a specific and substantial credible utility, i.e., the claim encompasses at least one utility that does not meet the requirements of 35 U.S.C. §101, the rejection of the claim should be addressed under 35 U.S.C. § 112, first paragraph, scope of enablement. b) For product claims that do not recite any utilities, disclosure or assertion of one specific, substantial and credible utility meets the criteria of 35 U.S.C. § 101. II) If no credible, specific, and substantial utility is asserted in the specification and none is well established, a rejection under 35 U.S.C. § 101 would be proper. III) Cure or prevention - Utilities that constitute curing or preventing a condition are sometimes not credible to one of skill in the art and thus may raise a question under 35 U.S.C. § 101. However, any rejection based on lack of credible utility must be supported by documentary evidence or sound technical reasoning. IV) Treatment - Since most diseases or conditions can be treated, rejections under 35 U.S.C. § 101 for treatment claims should rarely be made. V) Vaccines - Since vaccines are regularly prepared to combat various viruses and organisms, vaccines would have a credible utility to one of skill in the art. Thus, vaccines, including those for small pox, should not raise a question under 35 U.S.C. § 101. VI) Materials to be used for research, or methods of using those materials for research, raise issues of whether the utilities require or constitute carrying out further research to identify or reasonably

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confirm a "real world" context of use. See, e.g., Brenner v. Manson, 383 U.S. 519, 148 USPQ 689 (Sup. Ct. 1966) wherein a research utility was not considered a "substantial utility." Definitions “Credible utility” – Where an applicant has specifically asserted that an invention has a particular utility, that assertion cannot simply be dismissed by Office personnel as being “wrong”. Rather, Office personnel must determine if the assertion of utility is credible (i.e., whether the assertion of utility is believable to a person of ordinary skill in the art based on the totality of evidence and reasoning provided). An assertion is credible unless (A) the logic underlying the assertion is seriously flawed, or (B) the facts upon which the assertion is based are inconsistent with the logic underlying the assertion. Credibility as used in this context refers to the reliability of the statement based on the logic and facts that are offered by the applicant to support the assertion of utility. A credible utility is assessed from the standpoint of whether a person of ordinary skill in the art would accept that the recited or disclosed invention is currently available for such use. For example, no perpetual motion machines would be considered to be currently available. However, nucleic acids could be used as probes, chromosome markers, or forensic or diagnostic markers. Therefore, the credibility of such an assertion would not be questioned, although such a use might fail the specific and substantial tests (see below). “Specific utility” – A utility that is specific to the subject matter claimed. This contrasts with a general utility that would be applicable to the broad class of the invention. For example, a claim to a polynucleotide whose use is disclosed simply as a “gene probe” or “chromosome marker” would not be considered to be specific in the absence of a disclosure of a specific DNA target. Similarly, a general statement of diagnostic utility, such as diagnosing an unspecified disease, would ordinarily be insufficient absent a disclosure of what condition can be diagnosed. "Substantial utility" - a utility that defines a "real world" use. Utilities that require or constitute carrying out further research to identify or reasonably confirm a "real world" context of use are not substantial utilities. For example, both a therapeutic method of treating a known or newly discovered disease and an assay method for identifying compounds that themselves have a "substantial utility" define a "real world" context of use. An assay that measures the presence of a material which has a stated correlation to a predisposition to the onset of a particular disease condition would also define a "real world" context of use in identifying potential candidates for preventive measures or further monitoring. On the other hand, the following are examples of situations that require or constitute carrying out further research to identify or reasonably confirm a "real world" context of use and, therefore, do not define "substantial utilities": A. Basic research such as studying the properties of the claimed product itself or the mechanisms in which the material is involved. B. A method of treating an unspecified disease or condition. (Note, this is in contrast to the general rule that treatments of specific diseases or conditions meet the criteria of 35 U.S.C. § 101.) C. A method of assaying for or identifying a material that itself has no "specific and/or substantial utility". D. A method of making a material that itself has no specific, substantial and credible utility. E. A claim to an intermediate product for use in making a final product that has no specific, substantial and credible utility. Note that “throw away” utilities do not meet the tests for a specific or substantial utility. For example, using transgenic mice as snake food is a utility that is neither specific (all mice could function as snake food) nor substantial (using a mouse costing tens of thousands of dollars to produce as snake food is not a “real world” context of use). Similarly, use of any protein as an animal food supplement or a shampoo ingredient are “throw away” utilities that would not pass muster as specific or substantial utilities under 35 U.S.C. §101. This analysis should, of course, be tempered by consideration of the context and nature of the invention. For example, if a transgenic mouse was generated with the specific provision of an enhanced nutrient profile, and disclosed for use as an animal food, then the test for specific and substantial asserted utility would be considered to be met. "Well established utility" - a specific, substantial, and credible utility which is well known, immediately apparent, or implied by the specification’s disclosure of the properties of a material, alone or taken with the knowledge of one skilled in the art. "Well established utility" does not encompass any "throw away" utility that one can dream up for an invention or a nonspecific utility that would apply to virtually every member of a general class of materials, such as proteins or DNA. If this were the case, any product or apparatus, including perpetual motion machines, would have a "well established utility" as landfill, an amusement device, a toy, or a paper weight; any carbon containing molecule would have a "well established utility" as a fuel since it can be burned; and any protein would have well established utility as a protein supplement for animal food. This is not the intention of the statute.

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[ . . .] Example 9 -- DNA Fragments Specification: The specification discloses 4332 nucleic acid sequences that were obtained from a human cDNA library that was formed using human epithelial cells. The sequences, SEQ ID NOS: 1-4332, are believed by applicant to be fragments of full length genes. Thus, the specification discloses that all of the sequences comprise at least part of the coding sequence for a protein that is actually produced in the human cells. The specification discloses how to use each of the 4332 nucleic acid sequences as a probe to obtain the full length genes that correspond to the nucleic acid sequences, which full length genes can be used to recombinantly make the corresponding proteins, which can then be used to study the cellular mechanisms and activities in which the proteins are involved. There is a generic disclosure of how to recombinantly make the corresponding protein from each of the sequences. The sequences vary in length. Some of the sequences are long enough to encode functional proteins, i.e., these sequences could be open reading frames. No use is disclosed for any of the putative proteins other than the possibility of using them to identify and study the cellular mechanisms and activities in which the proteins are involved. Claim 1. A cDNA consisting of the sequence set forth in SEQ ID NO: 1. Analysis: The following analysis includes the questions that need to be asked according to the guidelines and the answers to those questions based on the above facts: 1) Based on the record, is there a "well established utility" for the claimed invention? The specification as filed does not disclose or provide any evidence that points to an activity for the cDNA or the proteins that can be obtained using the cDNA such that another non-asserted utility would be well established. Additionally, there is no art of record that discloses or provides any evidence that points to an activity for the target cDNA or the proteins that might be obtained using the target cDNA to be obtained such that another non-asserted utility would be well established. Consequently, the answer to the question is no. 2) Has the applicant made any assertion of utility for the specifically claimed invention? Here, there is an asserted utility, i.e., each cDNA can be used as a probe to obtain the full length gene that corresponds to the cDNA molecule, which full length gene can be used to recombinantly make the corresponding protein, which can then be used to study the cellular mechanisms and activities in which the protein is involved. 3) Is the asserted utility specific? The answer to this question is no. The use of the claimed nucleic acid is not particular to the sequence being claimed because it would be applicable to the general class of cDNAs. Any partial nucleic acid prepared from any cDNA may be used to as a probe in the preparation and or identification of a full-length cDNA. 4) Is the asserted utility substantial? The answer to this question is no. As seen in 2) above, the asserted utility for the claimed cDNA is a method of making the corresponding protein. Thus, to determine whether or not this method has a "substantial utility," it must be determined whether or not the corresponding protein, has a "substantial utility." Here, the only utility asserted for the protein is for identifying and studying the properties of the protein itself or the mechanisms in which the protein is involved. This does not define a "real world" context of use. Since the asserted utility for the protein (identifying and studying the properties of the protein itself or the mechanisms in which the protein is involved) does not define a "real world" context of use, a method of making that protein also could not define a "real world" context of use. In fact, both utilities would require or constitute carrying out further research to identify or reasonably confirm a "real world" context of use. Thus, the conclusion reached from this analysis is that both a 35 U.S.C. § 101 rejection and a 35 U.S.C. § 112, first paragraph, utility rejection should be made. What do you think? Has the PTO solved the problem? What, if any, other steps should be taken?

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Software and Business Models: The Supreme Court

Gottschalk v. Benson 409 U.S. 63, 175 USPQ 673 (1972) MR. JUSTICE DOUGLAS delivered the opinion of the Court. Respondents filed in the Patent Office an application for an invention which was described as being related "to the processing of data by program and more particularly to the programmed conversion of numerical information" in general-purpose digital computers. They claimed a method for converting binary-coded decimal (BCD) numerals into pure binary numerals. The claims were not limited to any particular art or technology, to any particular apparatus or machinery, or to any particular end use. They purported to cover any use of the claimed method in a general purpose digital computer of any type. Claims 8 and 13 were rejected by the Patent Office but sustained by the Court of Customs and Patent Appeals, ___ C. C. P. A. (Pat.) ___, 441 F.2d 682, 169 USPQ 548. The case is here on a petition for a writ of certiorari. 405 U.S. 915, 172 USPQ 577. The question is whether the method described and claimed is a "process" within the meaning of the Patent Act. A digital computer, as distinguished from an analog computer, is that which operates on data expressed in digits, solving a problem by doing arithmetic as a person would do it by head and hand. Some of the digits are stored as components of the computer. Others are introduced into the computer in a form which it is designed to recognize. The computer operates then upon both new and previously stored data. The general purpose computer is designed to perform operations under many different programs. The representation of numbers may be in the form of a time-series of electrical impulses, magnetized spots on the surface of tapes, drums, or discs, charged spots on cathode ray tube screens, or the presence or absence of punched holes on paper cards, or other devices. The method or program is a sequence of coded instructions for a digital computer. The patent sought is on a method of programming a general purpose digital computer to convert signals from binary coded decimal form into pure binary form. A procedure for solving a given type of mathematical problem is known as an "algorithm." The procedures set forth in the present claims are of that kind; that is to say, they are a generalized formulation for programs to solve mathematical problems of converting one form of numerical representation to another. From the generic formulation, programs may be developed as specific applications. **** . . .The method sought to be patented varies the ordinary arithmetic steps a human would use by changing the order of the steps, changing the symbolism for writing the multiplier used in some steps, and by taking subtotals after each successive operation. The mathematical procedures can be carried out in existing computers long in use, no new machinery being necessary. And, as noted, they can also be performed without a computer. The Court stated in Mackay Co. v. Radio Corp., 306 U.S. 86, 94, that "[w]hile a scientific truth, or the mathematical expression of it, is not a patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be." That statement followed the longstanding rule that "[a]n idea of itself is not patentable." Rubber-Tip Pencil Co. v. Howard, 20 Wall. 498, 507. "A principle, in the abstract, is a fundamental truth; an original cause; a motive; and these cannot be patented, as no Chapter 12 – The Subject Matter of Patents

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one can claim in either of them an exclusive right." Le Roy v. Tatham, 14 How. 156, 175. Phenomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work. As we stated in Funk Bros. Seed Co. v. Kalo Co., 333 U.S. 127, 130, "He who discovers a hitherto unknown phenomenon of nature has no claim to a monopoly of it which the law recognizes. If there is to be invention from such a discovery, it must come from the application of the law of nature to a new and useful end." We dealt there with a "product" claim, while the present case deals with a "process" claim. But we think the same principle applies. Here the "process" claim is so abstract and sweeping as to cover both known and unknown uses of the BCD to pure binary conversion. The end use may (1) vary from the operation of a train to verification of drivers' licenses to researching the law books for precedents and (2) be performed through any existing machinery or future-devised machinery or without any apparatus. ****

Transformation and reduction of an article "to a different state or thing" is the clue to the patentability of a process claim that does not include particular machines. So it is that a patent in the process of "manufacturing fat acids and glycerine from fatty bodies by the action of water at a high temperature and pressure" was sustained in Tilghman v. Proctor, 102 U.S. 707, 721. The Court said, "The chemical principle or scientific fact upon which it is founded is, that the elements of neutral fat require to be severally united with an atomic equivalent of water in order to separate from each other and become free. This chemical fact was not discovered by Tilghman. He only claims to have invented a particular mode of bringing about the desired chemical union between the fatty elements and water." Id., at 729. **** It is argued that a process patent must either be tied to a particular machine or apparatus or must operate to change articles or materials to a "different state or thing." We do not hold that no process patent could ever qualify if it did not meet the requirements of our prior precedents. It is said that the decision precludes a patent for any program servicing a computer. We do not so hold. It is said that we have before us a program for a digital computer but extend our holding to programs for analog computers. We have, however, made clear from the start that we deal with a program only for digital computers. It is said we freeze process patents to old technologies, leaving no room for the revelations of the new, onrushing technology. Such is not our purpose. What we come down to in a nutshell is the following. It is conceded that one may not patent an idea. But in practical effect that would be the result if the formula for converting binary code numerals to pure binary were patented in this case. The mathematical formula involved here has no substantial practical application except in connection with a digital computer, which means that if the judgment below is affirmed, the patent would wholly pre-empt the mathematical formula and in practical effect would be a patent on the algorithm itself. Reversed. MR. JUSTICE STEWART, MR. JUSTICE BLACKMUN, and MR. JUSTICE POWELL took no part in the consideration or decision of this case.

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Parker v. Flook 437 U.S. 584, 198 USPQ 193 (1978) MR. JUSTICE STEVENS delivered the opinion of the Court. Respondent applied for a patent on a "Method For Updating Alarm Limits." The only novel feature of the method is a mathematical formula. In Gottschalk v. Benson 409 U.S. 63, 175 USPQ 673 (1972) we held that the discovery of a novel and useful mathematical formula may not be patented. The question in this case is whether the identification of a limited category of useful, though conventional, postsolution applications of such a formula makes respondent's method eligible for patent protection. I An "alarm limit" is a number. During catalytic conversion processes, operating conditions such as temperature, pressure, and flow rates are constantly monitored. When any of these "process variables" exceeds a predetermined "alarm limit," an alarm may signal the presence of an abnormal condition indicating either inefficiency or perhaps danger. Fixed alarm limits may be appropriate for a steady operation, but during transient operating situations, such as start-up, it may be necessary to "update" the alarm limits periodically. Respondent's patent application describes a method of updating alarm limits. In essence, the method consists of three steps: an initial step which merely measures the present value of the process variable (e. g., the temperature); an intermediate step which uses an algorithm to calculate an updated alarmlimit value; and a final step in which the actual alarm limit is adjusted to the updated value. The only difference between the conventional methods of changing alarm limits and that described in respondent's application rests in the second step—the mathematical algorithm or formula. Using the formula, an operator can calculate an updated alarm limit once he knows the original alarm base, the appropriate margin of safety, the time interval that should elapse between each updating, the current temperature (or other process variable), and the appropriate weighting factor to be used to average the original alarm base and the current temperature. The patent application does not purport to explain how to select the appropriate margin of safety, the weighting factor, or any of the other variables. Nor does it purport to contain any disclosure relating to the chemical processes at work, the monitoring of process variables, or the means of setting off an alarm or adjusting an alarm system. All that it provides is a formula for computing an updated alarm limit. Although the computations can be made by pencil and paper calculations, the abstract of disclosure makes it clear that the formula is primarily useful for computerized calculations producing automatic adjustments in alarm settings. The patent claims cover any use of respondent's formula for updating the value of an alarm limit on any process variable involved in a process comprising the catalytic chemical conversion of hydrocarbons. Since there are numerous processes of that kind in the petrochemical and oil-refining industries, the claims cover a broad range of potential uses of the method. They do not, however, cover every conceivable application of the formula. [...] III This case turns entirely on the proper construction of § 101 of the Patent Act, which describes the subject matter that is eligible for patent protection. It does not involve the familiar issues of novelty and obviousness that routinely arise under § 102 and § 103 when the validity of a patent is challenged. For

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the purpose of our analysis, we assume that respondent's formula is novel and useful and that he discovered it. We also assume, since respondent does not challenge the examiner's finding, that the formula is the only novel feature of respondent's method. The question is whether the discovery of this feature makes an otherwise conventional method eligible for patent protection. The plain language of § 101 does not answer the question. It is true, as respondent argues, that his method is a "process" in the ordinary sense of the word.9 But that was also true of the algorithm, which described a method for converting binary-coded decimal numerals into pure binary numerals, that was involved in Gottschalk v. Benson. The holding that the discovery of that method could not be patented as a "process" forecloses a purely literal reading of § 101. Reasoning that an algorithm, or mathematical formula, is like a law of nature, Benson applied the established rule that a law of nature cannot be the subject of a patent. Quoting from earlier cases, we said: "`A principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right.' Le Roy v. Tatham, 14 How. 156, 175. Phenomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work." 409 U.S., at 67.

The line between a patentable "process" and an unpatentable "principle" does not always shimmer with clarity. Both are "conception[s] of the mind, seen only by [their] effects when being executed or performed." Tilghman v. Proctor, 102 U.S. 707, 728. In Benson we concluded that the process application in fact sought to patent an idea, noting that : "[T]he mathematical formula involved here has no substantial practical application except in connection with a digital computer, which means that if the judgment below is affirmed, the patent would wholly preempt the mathematical formula and in practical effect would be a patent on the algorithm itself." 409 U.S., at 71-72.

Respondent correctly points out that this language does not apply to his claims. He does not seek to "wholly preempt the mathematical formula," since there are uses of his formula outside the petrochemical and oil refining industries that remain in the public domain. And he argues that the presence of specific "post-solution" activity—the adjustment of the alarm limit to the figure computed according to the formula—distinguishes this case from Benson and makes his process patentable. We cannot agree. The notion that post-solution activity, no matter how conventional or obvious in itself, can transform an unpatentable principle into a patentable process exalts form over substance. A competent draftsman could attach some form of post-solution activity to almost any mathematical formula; the Pythagorean Theorem would not have been patentable, or partially patentable, because a patent application contained a final step indicating that the formula, when solved, could be usefully applied to existing surveying techniques.11 The concept of patentable subject matter under § 101 is not "like a nose of wax which may be turned and twisted in any direction . . . ." White v. Dunbar, 119 U.S. 47, 51. Yet it is equally clear that a process is not unpatentable simply because it contains a law of nature or a mathematical algorithm. See Eibel Process Co. v. Minnesota & Ontario Paper Co., 261 U.S. 45; 9

The statutory definition of "process" is broad. See n. 8, supra. An argument can be made, however, that this Court has only recognized a process as within the statutory definition when it either was tied to a particular apparatus or operated to change materials to a "different state or thing." See Cochrane v. Deener, 94 U.S. 780, 787-788. As in Benson, we assume that a valid process patent may issue even if it does not meet one of these qualifications of our earlier precedents. 409 U.S., at 71. 11 It should be noted that in Benson there was a specific end use contemplated for the algorithm - utilization of the algorithm in computer programming. See In re Chatfield, 545 F.2d 152, 161 (CCPA 1976) (Rich, J., dissenting). Of course, as the Court pointed out, the formula had no other practical application; but it is not entirely clear why a process claim is any more or less patentable because the specific end use contemplated is the only one for which the algorithm has any practical application.

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Tilghman v. Proctor, supra. For instance, in Mackay Radio & Telegraph Co. v. Radio Corp. of America, 306 U.S. 86, the applicant sought a patent on a directional antenna system in which the wire arrangement was determined by the logical application of a mathematical formula. Putting the question of patentability to one side as a preface to his analysis of the infringement issue, Mr. Justice Stone, writing for the Court, explained: "While a scientific truth, or the mathematical expression of it, is not patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be." Id., at 94.

Funk Bros. Seed Co. v. Kalo Co., 333 U.S. 127, 130, expresses a similar approach: "He who discovers a hitherto unknown phenomenon of nature has no claim to a monopoly of it which the law recognizes. f there is to be invention from such a discovery, it must come from the application of the law of nature to a new and useful end."

Mackay Radio and Funk Bros. point to the proper analysis for this case: The process itself, not merely the mathematical algorithm, must be new and useful. Indeed, the novelty of the mathematical algorithm is not a determining factor at all. Whether the algorithm was in fact known or unknown at the time of the claimed invention, as one of the "basic tools of scientific and technological work," see Gottschalk v. Benson, 409 U.S., at 67, it is treated as though it were a familiar part of the prior art. **** Respondent argues that this approach improperly imports into § 101 the considerations of "inventiveness" which are the proper concerns of § 102 and § 103. This argument is based on two fundamental misconceptions. First, respondent incorrectly assumes that if a process application implements a principle in some specific fashion, it automatically falls within the patentable subject matter of § 101 and the substantive patentability of the particular process can then be determined by the conditions of § 102 and § 103. This assumption is based on respondent's narrow reading of Benson, supra and is as untenable in the § context of 101 as it is in the context of that case. It would make the determination of patentable subject matter depend simply on the draftsman's art and would ill serve the principles underlying the prohibition against patents for "ideas" or phenomena of nature. The rule that the discovery of a law of nature cannot be patented rests, not on the notion that natural phenomena are not processes, but rather on the more fundamental understanding that they are not the kind of "discoveries" that the statute was enacted to protect. The obligation to determine what type of discovery is sought to be patented must precede the determination of whether that discovery is, in fact, new or obvious. Second, respondent assumes that the fatal objection to his application is the fact that one of its components—the mathematical formula—consists of unpatentable subject matter. In countering this supposed objection, respondent relies on opinions by the Court of Customs and Patent Appeals which reject the notion "that a claim may be dissected, the claim components searched in the prior art, and, if the only component found novel is outside the statutory classes of invention, the claim may be rejected under 35 U.S.C. 101." In re Chatfield, 545 F.2d 152, 158 (CCPA 1976). Our approach to respondent's application is, however, not at all inconsistent with the view that a patent claim must be considered as a whole. Respondent's process is unpatentable under § 101, not because it contains a mathematical algorithm as one component, but because once that algorithm is assumed to be within the prior art, the application, considered as a whole, contains no patentable invention. Even though a phenomenon of nature or mathematical formula may be well known, an inventive application of the principle may be patented. Conversely, the discovery of such a phenomenon cannot support a patent unless there is some other inventive concept in its application. Here it is absolutely clear that respondent's application contains no claim of patentable invention. The chemical processes involved in catalytic conversion of hydrocarbons are well known, as are the practice of monitoring the chemical process variables, the use of alarm limits to trigger alarms, the Chapter 12 – The Subject Matter of Patents

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notion that alarm limit values must be recomputed and readjusted, and the use of computers for "automatic monitoring-alarming." Respondent's application simply provides a new and presumably better method for calculating alarm limit values. If we assume that that method was also known, as we must under the reasoning in Morse, then respondent's claim is, in effect, comparable to a claim that the formula 2(pi)r can be usefully applied in determining the circumference of a wheel. As the Court of Customs and Patent Appeals has explained, "if a claim is directed essentially to a method of calculating, using a mathematical formula, even if the solution is for a specific purpose, the claimed method is nonstatutory." In re Richman, 563 F.2d 1026, 1030 (1977). **** Reversed. MR. JUSTICE STEWART, with whom THE CHIEF JUSTICE and MR. JUSTICE REHNQUIST join, dissenting. It is commonplace that laws of nature, physical phenomena, and abstract ideas are not patentable subject matter. A patent could not issue, in other words, on the law of gravity, or the multiplication tables, or the phenomena of magnetism, or the fact that water at sea level boils at 100 degrees centigrade and freezes at zero—even though newly discovered. Le Roy v. Tatham, 14 How. 156, 175; O'Reilly v. Morse, 15 How. 62, 112-121; Rubber-Tip Pencil Co. v. Howard, 20 Wall. 498, 507; Tilghman v. Proctor, 102 U.S. 707; Mackay Radio & Telegraph Co. v. Radio Corp. of America, 306 U.S. 86, 94; Funk Bros. Seed Co. v. Kalo Co., 333 U.S. 127, 130. The recent case of Gottschalk v. Benson, 409 U.S. 63, 175 USPQ 673 stands for no more than this long-established principle, which the Court there stated in the following words: "Phenomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work." Id., at 67.

In Benson the Court held unpatentable claims for an algorithm that "were not limited to any particular art or technology, to any particular apparatus or machinery, or to any particular end use." Id., at 64. A patent on such claims, the Court said, "would wholly pre-empt the mathematical formula and practical effect would be a patent on the algorithm itself." Id., at 72. The present case is a far different one. The issue here is whether a claimed process loses its status of subject matter patentability simply because one step in the process would not be patentable subject matter if considered in isolation. The Court of Customs and Patent Appeals held that the process is patentable subject matter, Benson being inapplicable since "[t]he present claims do not preempt the formula or algorithm contained therein, because solution of the algorithm, per se, would not infringe the claims." In re Flook, 559 F.2d 21, 23. That decision seems to me wholly in conformity with basic principles of patent law. Indeed, I suppose that thousands of processes and combinations have been patented that contained one or more steps or elements that themselves would have been unpatentable subject matter.3 Eibel Process Co. v. Minnesota & Ontario Paper Co., 261 U.S. 45, is a case in point. There the Court upheld the validity of an improvement patent that made use of the law of gravity, which by itself was clearly unpatentable. See also, e. g., Tilghman v. Proctor, supra. The Court today says it does not turn its back on these well-settled precedents, ante, at 594, but it strikes what seems to me an equally damaging blow at basic principles of patent law by importing into its inquiry under 35 U.S.C. § 101 the criteria of novelty and inventiveness. Section 101 is concerned 3

In Gottschalk v. Benson, the Court equated process and product patents for the purpose of its inquiry: "We dealt there with a `product' claim, while the present case deals with a `process' claim. But we think the same principle applies." 409 U.S., at 67-68.

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only with subject matter patentability. Whether a patent will actually issue depends upon the criteria of §§ 102 and 103, which include novelty and inventiveness, among many others. It may well be that under the criteria of §§ 102 and 103 no patent should issue on the process claimed in this case, because of anticipation, abandonment, obviousness, or for some other reason. But in my view the claimed process clearly meets the standards of subject-matter patentability of § 101. In short, I agree with the Court of Customs and Patent Appeals in this case, and with the carefully considered opinions of that court in other cases presenting the same basic issue. See In re Freeman, 573 F.2d 1237; In re Richman, 563 F.2d 1026; In re De Castelet, 562 F.2d 1236; In re Deutsch, 553 F.2d 689; In re Chatfield, 545 F.2d 152. Accordingly, I would affirm the judgment before us.

Diamond v. Diehr 450 U.S. 175, 209 USPQ 1 (1981) JUSTICE REHNQUIST delivered the opinion of the Court. We granted certiorari to determine whether a process for curing synthetic rubber which includes in several of its steps the use of a mathematical formula and a programmed digital computer is patentable subject matter under 35 U.S.C. § 101. I The patent application at issue was filed by the respondents on August 6, 1975. The claimed invention is a process for molding raw, uncured synthetic rubber into cured precision products. The process uses a mold for precisely shaping the uncured material under heat and pressure and then curing the synthetic rubber in the mold so that the product will retain its shape and be functionally operative after the molding is completed. Respondents claim that their process ensures the production of molded articles which are properly cured. Achieving the perfect cure depends upon several factors including the thickness of the article to be molded, the temperature of the molding process, and the amount of time that the article is allowed to remain in the press. It is possible using well-known time, temperature, and cure relationships to calculate by means of the Arrhenius equation when to open the press and remove the cured product. Nonetheless, according to the respondents, the industry has not been able to obtain uniformly accurate cures because the temperature of the molding press could not be precisely measured, thus making it difficult to do the necessary computations to determine cure time. Because the temperature inside the press has heretofore been viewed as an uncontrollable variable, the conventional industry practice has been to calculate the cure time as the shortest time in which all parts of the product will definitely be cured, assuming a reasonable amount of mold-opening time during loading and unloading. But the shortcoming of this practice is that operating with an uncontrollable variable inevitably led in some instances to overestimating the mold-opening time and overcuring the rubber, and in other instances to underestimating that time and undercuring the product. Respondents characterize their contribution to the art to reside in the process of constantly measuring the actual temperature inside the mold. These temperature measurements are then automatically fed into a computer which repeatedly recalculates the cure time by use of the Arrhenius equation. When the recalculated time equals the actual time that has elapsed since the press was closed, the computer signals a device to open the press. According to the respondents, the continuous measuring of the temperature inside the mold cavity, the feeding of this information to a digital computer which constantly recalculates the cure time, and the signaling by the computer to open the press, are all new in the art.

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The patent examiner rejected the respondents' claims on the sole ground that they were drawn to nonstatutory subject matter under 35 U.S.C. 101.5 He determined that those steps in respondents' claims that are carried out by a computer under control of a stored program constituted nonstatutory subject matter under this Court's decision in Gottschalk v. Benson, 409 U.S. 63 (1972). The remaining steps—installing rubber in the press and the subsequent closing of the press—were "conventional in nature and necessary to the process and cannot be the basis of patentability." The examiner concluded that respondents' claims defined and sought protection of a computer program for operating a rubber-molding press. The Patent and Trademark Office Board of Appeals agreed with the examiner, but the Court of Customs and Patent Appeals reversed. In re Diehr, 602 F.2d 892 (1979). The court noted that a claim drawn to subject matter otherwise statutory does not become nonstatutory because a computer is involved. The respondents' claims were not directed to a mathematical algorithm or an improved process of calculation but rather recited an improved process for molding rubber articles by solving a practical problem which had arisen in the molding of rubber products. The Government sought certiorari arguing that the decision of the Court of Customs and Patent Appeals was inconsistent with prior decisions of this Court. Because of the importance of the question presented, we granted the writ. 445 U.S. 926 (1980). II Last Term in Diamond v. Chakrabarty, 447 U.S. 303 (1980), this Court discussed the historical purposes of the patent laws and in particular 35 U.S.C. § 101. As in Chakrabarty, we must here construe 35 U.S.C. § 101 which provides: "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 therefrom, subject to the conditions and requirements of this Title."

In cases of statutory construction, we begin with the language of the statute. Unless otherwise defined, "words will be interpreted as taking their ordinary, contemporary, common meaning," Perrin v. United States, 444 U.S. 37, 42 (1979), and, in dealing with the patent laws, we have more than once cautioned that "courts `should not read into the patent laws limitations and conditions which a legislature has not expressed.'" Diamond v. Chakrabarty, supra, at 308, quoting United States v. Dubilier Condenser Corp., 289 U.S. 178, 199 (1933). The Patent Act of 1793 defined statutory subject matter as "any new and useful art, machine, manufacture or composition of matter, or any new or useful improvement [thereof]." Act of Feb. 21, 1793, ch. 11, 1, § 1 Stat. 318. Not until the patent laws were recodified in 1952 did Congress replace 5

Respondents' application contained 11 different claims. Three examples are claims 1, 2, and 11 which provide: 1. A method of operating a rubber-molding press for precision molded compounds with the aid of a digital computer, comprising: providing said computer with a data base for said press including at least, natural logarithm conversion data (ln), the activation energy constant (C) unique to each batch of said compound being molded, and a constant (x) dependent upon the geometry of the particular mold of the press, initiating an interval timer in said computer upon the closure of the press for monitoring the elapsed time of said closure, constantly determining the temperature (Z) of the mold at a location closely adjacent to the mold cavity in the press during molding, constantly providing the computer with the temperature (Z), repetitively calculating in the computer, at frequent intervals during each cure, the Arrhenius equation for reaction time during the cure, which is ln v=CZ+x where v is the total required cure time, repetitively comparing in the computer at said frequent intervals during the cure each said calculation of the total required cure time calculated with the Arrhenius equation and said elapsed time, and opening the press automatically when a said comparison indicates equivalence.” 2. The method of claim 1 including measuring the activation energy constant for the compound being molded in the press with a rheometer and automatically updating said data base within the computer in the event of changes in the compound being molded in said press as measured by said rheometer. ....

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the word "art" with the word "process." It is that latter word which we confront today, and in order to determine its meaning we may not be unmindful of the Committee Reports accompanying the 1952 Act which inform us that Congress intended statutory subject matter to "include anything under the sun that is made by man." S. Rep. No. 1979, 82d Cong., 2d Sess., 5 (1952); H. R. Rep. No. 1923, 82d Cong., 2d Sess., 6 (1952). Although the term "process" was not added to 35 U.S.C. § 101 until 1952, a process has historically enjoyed patent protection because it was considered a form of "art" as that term was used in the 1793 Act. In defining the nature of a patentable process, the Court stated: "That a process may be patentable, irrespective of the particular form of the instrumentalities used, cannot be disputed. . . . A process is a mode of treatment of certain materials to produce a given result. It is an act, or a series of acts, performed upon the subject-matter to be transformed and reduced to a different state or thing. If new and useful, it is just as patentable as is a piece of machinery. In the language of the patent law, it is an art. The machinery pointed out as suitable to perform the process may or may not be new or patentable; whilst the process itself may be altogether new, and produce an entirely new result. The process requires that certain things should be done with certain substances, and in a certain order; but the tools to be used in doing this may be of secondary consequence."

Cochrane v. Deener, 94 U.S. 780, 787-788 (1877). Analysis of the eligibility of a claim of patent protection for a "process" did not change with the addition of that term to § 101. Recently, in Gottschalk v. Benson, 409 U.S. 63 (1972), we repeated the above definition recited in Cochrane v. Deener, adding: "Transformation and reduction of an article `to a different state or thing' is the clue to the patentability of a process claim that does not include particular machines." 409 U.S., at 70. Analyzing respondents' claims according to the above statements from our cases, we think that a physical and chemical process for molding precision synthetic rubber products falls within the § 101 categories of possibly patentable subject matter. That respondents' claims involve the transformation of an article, in this case raw, uncured synthetic rubber, into a different state or thing cannot be disputed. The respondents' claims describe in detail a step-by-step method for accomplishing such, beginning with the loading of a mold with raw, uncured rubber and ending with the eventual opening of the press at the conclusion of the cure. Industrial processes such as this are the types which have historically been eligible to receive the protection of our patent laws. III Our conclusion regarding respondents' claims is not altered by the fact that in several steps of the process a mathematical equation and a programmed digital computer are used. This Court has undoubtedly recognized limits to § 101 and every discovery is not embraced within the statutory terms. Excluded from such patent protection are laws of nature, natural phenomena, and abstract ideas. See Parker v. Flook, 437 U.S. 584 (1978); Gottschalk v. Benson, supra, at 67; Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130 (1948). "An idea of itself is not patentable," Rubber-Tip Pencil Co. v. Howard, 20 Wall. 498, 507 (1874). "A principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right." Le Roy v. Tatham, 14 How. 156, 175 (1853). Only last Term, we explained: "[A] new mineral discovered in the earth or a new plant found in the wild is not patentable subject matter. 2 Likewise, Einstein could not patent his celebrated law that E=mc .; nor could Newton have patented the law of gravity. Such discoveries are `manifestations of . . . nature, free to all men and reserved exclusively to none.'" Diamond v. Chakrabarty, 447 U.S., at 309, quoting Funk Bros. Seed Co. v. Kalo Inoculant Co., supra, at 130.

Our recent holdings in Gottschalk v. Benson, supra, and Parker v. Flook, supra, both of which are computer-related, stand for no more than these long-established principles. In Benson, we held unpatentable claims for an algorithm used to convert binary code decimal numbers to equivalent pure Chapter 12 – The Subject Matter of Patents

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binary numbers. The sole practical application of the algorithm was in connection with the programming of a general purpose digital computer. We defined "algorithm" as a "procedure for solving a given type of mathematical problem," and we concluded that such an algorithm, or mathematical formula, is like a law of nature, which cannot be the subject of a patent. Parker v. Flook, supra, presented a similar situation. The claims were drawn to a method for computing an "alarm limit." An "alarm limit" is simply a number and the Court concluded that the application sought to protect a formula for computing this number. Using this formula, the updated alarm limit could be calculated if several other variables were known. The application, however, did not purport to explain how these other variables were to be determined, nor did it purport "to contain any disclosure relating to the chemical processes at work, the monitoring of process variables, or the means of setting off an alarm or adjusting an alarm system. All that it provides is a formula for computing an updated alarm limit." 437 U.S., at 586. In contrast, the respondents here do not seek to patent a mathematical formula. Instead, they seek patent protection for a process of curing synthetic rubber. Their process admittedly employs a wellknown mathematical equation, but they do not seek to pre-empt the use of that equation. Rather, they seek only to foreclose from others the use of that equation in conjunction with all of the other steps in their claimed process. These include installing rubber in a press, closing the mold, constantly determining the temperature of the mold, constantly recalculating the appropriate cure time through the use of the formula and a digital computer, and automatically opening the press at the proper time. Obviously, one does not need a "computer" to cure natural or synthetic rubber, but if the computer use incorporated in the process patent significantly lessens the possibility of "overcuring" or "undercuring," the process as a whole does not thereby become unpatentable subject matter. Our earlier opinions lend support to our present conclusion that a claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula, computer program, or digital computer. In Gottschalk v. Benson we noted: "It is said that the decision precludes a patent for any program servicing a computer. We do not so hold." 409 U.S., at 71. Similarly, in Parker v. Flook we stated that "A process is not unpatentable simply because it contains a law of nature or a mathematical algorithm." 437 U.S., at 590. It is now commonplace that an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection. See, e. g., Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127 (1948); Eibel Process Co. v. Minnesota & Ontario Paper Co., 261 U.S. 45 (1923); Cochrane v. Deener, 94 U.S. 780 (1877); O'Reilly v. Morse, 15 How. 62 (1854); and Le Roy v. Tatham, 14 How. 156 (1853). As Justice Stone explained four decades ago: "While a scientific truth, or the mathematical expression of it, is not a patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be." Mackay Radio & Telegraph Co. v. Radio Corp. of America, 306 U.S. 86, 94 (1939).

We think this statement in Mackay takes us a long way toward the correct answer in this case. Arrhenius' equation is not patentable in isolation, but when a process for curing rubber is devised which incorporates in it a more efficient solution of the equation, that process is at the very least not barred at the threshold by § 101. In determining the eligibility of respondents' claimed process for patent protection under § 101, their claims must be considered as a whole. It is inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the analysis. This is particularly true in a process claim because a new combination of steps in a process may be patentable even though all the constituents of the combination were well known and in common use before the combination was made. The "novelty" of any element or steps in a process, or even of the process itself, is of no relevance in determining whether the subject matter of a claim falls within the § 101 categories of possibly patentable subject matter.

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It has been urged that novelty is an appropriate consideration under § 101. Presumably, this argument results from the language in § 101 referring to any "new and useful" process, machine, etc. Section 101, however, is a general statement of the type of subject matter that is eligible for patent protection "subject to the conditions and requirements of this title." Specific conditions for patentability follow and § 102 covers in detail the conditions relating to novelty. The question therefore of whether a particular invention is novel is "wholly apart from whether the invention falls into a category of statutory subject matter." In re Bergy, 596 F.2d 952, 961 (CCPA 1979) (emphasis deleted). . . . **** IV We have before us today only the question of whether respondents' claims fall within the § 101 categories of possibly patentable subject matter. We view respondents' claims as nothing more than a process for molding rubber products and not as an attempt to patent a mathematical formula. We recognize, of course, that when a claim recites a mathematical formula (or scientific principle or phenomenon of nature), an inquiry must be made into whether the claim is seeking patent protection for that formula in the abstract. A mathematical formula as such is not accorded the protection of our patent laws, Gottschalk v. Benson, 409 U.S. 63 (1972), and this principle cannot be circumvented by attempting to limit the use of the formula to a particular technological environment. Parker v. Flook, 437 U.S. 584 (1978). Similarly, insignificant post-solution activity will not transform an unpatentable principle into a patentable process. Ibid.14 To hold otherwise would allow a competent draftsman to evade the recognized limitations on the type of subject matter eligible for patent protection. On the other hand, when a claim containing a mathematical formula implements or applies that formula in a structure or process which, when considered as a whole, is performing a function which the patent laws were designed to protect (e. g., transforming or reducing an article to a different state or thing), then the claim satisfies the requirements of § 101. Because we do not view respondents' claims as an attempt to patent a mathematical formula, but rather to be drawn to an industrial process for the molding of rubber products, we affirm the judgment of the Court of Customs and Patent Appeals.

JUSTICE STEVENS, with whom JUSTICE BRENNAN, JUSTICE MARSHALL, and JUSTICE BLACKMUN join, dissenting. The starting point in the proper adjudication of patent litigation is an understanding of what the inventor claims to have discovered. The Court's decision in this case rests on a misreading of the Diehr and Lutton patent application. Moreover, the Court has compounded its error by ignoring the critical distinction between the character of the subject matter that the inventor claims to be novel - the 101 issue—and the question whether that subject matter is in fact novel—the § 102 issue.

14

Arguably, the claims in Flook did more than present a mathematical formula. The claims also solved the calculation in order to produce a new number or "alarm limit" and then replaced the old number with the number newly produced. The claims covered all uses of the formula in processes "comprising the catalytic chemical conversion of hydrocarbons." There are numerous such processes in the petrochemical and oil refinery industries and the claims therefore covered a broad range of potential uses. 437 U.S., at 586. The claims, however, did not cover every conceivable application of the formula. We rejected in Flook the argument that because all possible uses of the mathematical formula were not preempted, the claim should be eligible for patent protection. Our reasoning in Flook is in no way inconsistent with our reasoning here. A mathematical formula does not suddenly become patentable subject matter simply by having the applicant acquiesce to limiting the reach of the patent for the formula to a particular technological use. A mathematical formula in the abstract is nonstatutory subject matter regardless of whether the patent is intended to cover all uses of the formula or only limited uses. Similarly, a mathematical formula does not become patentable subject matter merely by including in the claim for the formula token postsolution activity such as the type claimed in Flook. We were careful to note in Flook that the patent application did not purport to explain how the variables used in the formula were to be selected, nor did the application contain any disclosure relating to chemical processes at work or the means of setting off an alarm or adjusting the alarm limit. Ibid. All the application provided was a "formula for computing an updated alarm limit." Ibid.

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[...] In the first sentence of its opinion, the Court states the question presented as "whether a process for curing synthetic rubber . . . is patentable subject matter." Ante, at 177. Of course, that question was effectively answered many years ago when Charles Goodyear obtained his patent on the vulcanization process. The patent application filed by Diehr and Lutton, however, teaches nothing about the chemistry of the synthetic rubber-curing process, nothing about the raw materials to be used in curing synthetic rubber, nothing about the equipment to be used in the process, and nothing about the significance or effect of any process variable such as temperature, curing time, particular compositions of material, or mold configurations. In short, Diehr and Lutton do not claim to have discovered anything new about the process for curing synthetic rubber. As the Court reads the claims in the Diehr and Lutton patent application, the inventors' discovery is a method of constantly measuring the actual temperature inside a rubber molding press. As I read the claims, their discovery is an improved method of calculating the time that the mold should remain closed during the curing process. If the Court's reading of the claims were correct, I would agree that they disclose patentable subject matter. On the other hand, if the Court accepted my reading, I feel confident that the case would be decided differently. **** III The Court misapplies Parker v. Flook because, like the Court of Customs and Patent Appeals, it fails to understand or completely disregards the distinction between the subject matter of what the inventor claims to have discovered—the 101 issue—and the question whether that claimed discovery is in fact novel - the 102 issue. 34 If there is not even a claim that anything constituting patentable subject matter has been discovered, there is no occasion to address the novelty issue. Or, as was true in Flook, if the only concept that the inventor claims to have discovered is not patentable subject matter, § 101 requires that the application be rejected without reaching any issue under § 102; for it is irrelevant that unpatentable subject matter—in that case a formula for updating alarm limits—may in fact be novel. Proper analysis, therefore, must start with an understanding of what the inventor claims to have discovered—or phrased somewhat differently—what he considers his inventive concept to be. It seems clear to me that Diehr and Lutton claim to have developed a new method of programming a digital computer in order to calculate—promptly and repeatedly—the correct curing time in a familiar process. In the § 101 analysis, we must assume that the sequence of steps in this programming method is novel, unobvious, and useful. The threshold question of whether such a method is patentable subject matter remains. If that method is regarded as an "algorithm" as that term was used in Gottschalk v. Benson, 409 U.S. 63 (1972), and in Parker v. Flook, 437 U.S. 584 (1978), and if no other inventive concept is disclosed in the patent application, the question must be answered in the negative. In both Benson and Flook, the parties apparently agreed that the inventor's discovery was properly regarded as an algorithm; the holding that an algorithm was a "law of nature" that could not be patented therefore determined that those discoveries were not patentable processes within the meaning of § 101.

34

The early cases that the Court of Customs and Patent Appeals refused to follow in Prater, Musgrave, and Benson had recognized the distinction between the 101 requirement that what the applicant claims to have invented must be patentable subject matter and the 102 requirement that the invention must actually be novel. See, e. g., In re Shao Wen Yuan, 38 C. C. P. A. (Pat.), at 973-976, 188 F.2d, at 382-383; In re Abrams , 38 C. C. P. A. (Pat.), at 951-952, 188 F.2d, at 169; In re Heritage, 32 C. C. P. A. (Pat.), at 1173-1174, 1176-1177, 150 F.2d, at 556, 558; Halliburton Oil Well Cementing Co. v. Walker, 146 F.2d, at 821, 823. The lower court's error in this case, and its unenthusiastic reception of Gottschalk v. Benson and Parker v. Flook, is, of course, consistent with its expansive reading of 101 in Tarczy-Hornoch, Prater, and their progeny.

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As the Court recognizes today, Flook also rejected the argument that patent protection was available if the inventor did not claim a monopoly on every conceivable use of the algorithm but instead limited his claims by describing a specific postsolution activity—in that case setting off an alarm in a catalytic conversion process. In its effort to distinguish Flook from the instant case, the Court characterizes that post-solution activity as "insignificant," ante, at 191, or as merely "token" activity, ante, at 192, n. 14. As a practical matter, however, the post-solution activity described in the Flook application was no less significant than the automatic opening of the curing mold involved in this case. For setting off an alarm limit at the appropriate time is surely as important to the safe and efficient operation of a catalytic conversion process as is actuating the mold-opening device in a synthetic rubber curing process. In both cases, the post-solution activity is a significant part of the industrial process. But in neither case should that activity have any legal significance because it does not constitute a part of the inventive concept that the applicants claimed to have discovered. In Gottschalk v. Benson, we held that a program for the solution by a digital computer of a mathematical problem was not a patentable process within the meaning of § 101. In Parker v. Flook, we further held that such a computer program could not be transformed into a patentable process by the addition of postsolution activity that was not claimed to be novel. That holding plainly requires the rejection of Claims 1 and 2 of the Diehr and Lutton application quoted in the Court's opinion. Ante, at 179-180, n. 5. In my opinion, it equally requires rejection of Claim 11 because the presolution activity described in that claim is admittedly a familiar part of the prior art. Even the Court does not suggest that the computer program developed by Diehr and Lutton is a patentable discovery. Accordingly, if we treat the program as though it were a familiar part of the prior art—as well-established precedent requires—it is absolutely clear that their application contains no claim of patentable invention. Their application was therefore properly rejected under § 101 by the Patent Office and the Board of Patent Appeals. ****

Software and Business Models: The Federal Circuit

In re Allapat 33 F.3d 1526; 31 USPQ2d 1545 (Fed. Cir. 1995) (en banc) Before ARCHER, Chief Judge, and RICH, NIES, NEWMAN, MAYER, MICHEL, PLAGER, LOURIE, CLEVENGER, RADER and SCHALL, Circuit Judges. RICH, Circuit Judge: Our conclusion is that the appealed decision should be reversed because the appealed claims are directed to a "machine" which is one of the categories named in 35 U.S.C. § 101, as the first panel of the Board held. A. Alappat's Invention Alappat's invention relates generally to a means for creating a smooth waveform display in a digital oscilloscope. The screen of an oscilloscope is the front of a cathode-ray tube (CRT), which is like a TV picture tube, whose screen, when in operation, presents an array (or raster) of pixels arranged at intersections of vertical columns and horizontal rows, a pixel being a spot on the screen which may be illuminated by directing an electron beam to that spot, as in TV. Each column in the array represents a Chapter 12 – The Subject Matter of Patents

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different time period, and each row represents a different magnitude. An input signal to the oscilloscope is sampled and digitized to provide a waveform data sequence (vector list), wherein each successive element of the sequence represents the magnitude of the waveform at a successively later time. The waveform data sequence is then processed to provide a bit map, which is a stored data array indicating which pixels are to be illuminated. The waveform ultimately displayed is formed by a group of vectors, wherein each vector has a straight line trajectory between two points on the screen at elevations representing the magnitudes of two successive input signal samples and at horizontal positions representing the timing of the two samples. Because a CRT screen contains a finite number of pixels, rapidly rising and falling portions of a waveform can appear discontinuous or jagged due to differences in the elevation of horizontally contiguous pixels included in the waveform. In addition, the presence of "noise" in an input signal can cause portions of the waveform to oscillate between contiguous pixel rows when the magnitude of the input signal lies between values represented by the elevations of the two rows. Moreover, the vertical resolution of the display may be limited by the number of rows of pixels on the screen. The noticeability and appearance of these effects is known as aliasing. To overcome these effects, Alappat's invention employs an anti-aliasing system wherein each vector making up the waveform is represented by modulating the illumination intensity of pixels having center points bounding the trajectory of the vector. The intensity at which each of the pixels is illuminated depends upon the distance of the center point of each pixel from the trajectory of the vector. Pixels lying squarely on the waveform trace receive maximum illumination, whereas pixels lying along an edge of the trace receive illumination decreasing in intensity proportional to the increase in the distance of the center point of the pixel from the vector trajectory. Employing this anti-aliasing technique eliminates any apparent discontinuity, jaggedness, or oscillation in the waveform, thus giving the visual appearance of a smooth continuous waveform. In short, and in lay terms, the invention is an improvement in an oscilloscope comparable to a TV having a clearer picture.

•

***

The reconsideration Board majority affirmed the Examiner's rejection of claims 15-19 on the basis that these claims are not directed to statutory subject matter as defined in § 101, which reads: 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. [Emphasis ours.]

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**** [C]laim 15, properly construed, claims a machine, namely, a rasterizer "for converting vector list data representing sample magnitudes of an input waveform into anti-aliased pixel illumination intensity data to be displayed on a display means," which machine is made up of, at the very least, the specific structures disclosed in Alappat's specification corresponding to the means-plus-function elements (a)(d) recited in the claim. According to Alappat, the claimed rasterizer performs the same overall function as prior art rasterizers, but does so in a different way, which is represented by the combination of four elements claimed in means-plus-function terminology. Because claim 15 is directed to a "machine," which is one of the four categories of patentable subject matter enumerated in § 101, claim 15 appears on its face to be directed to § 101 subject matter. This does not quite end the analysis, however, because the Board majority argues that the claimed subject matter falls within a judicially created exception to § 101 which the majority refers to as the "mathematical algorithm" exception. . . . (a) The plain and unambiguous meaning of § 101 is that any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may be patented if it meets the requirements for patentability set forth in Title 35, such as those found in §§ 102, 103, and 112. The use of the expansive term "any" in § 101 represents Congress's intent not to place any restrictions on the subject matter for which a patent may be obtained beyond those specifically recited in § 101 and the other parts of Title 35. Indeed, the Supreme Court has acknowledged that Congress intended § 101 to extend to "anything under the sun that is made by man." Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980), quoting S.Rep. No. 1979, 82nd Cong., 2nd Sess., 5 (1952); H.R.Rep. No. 1923, 82nd Cong., 2nd Sess., 6 (1952). Thus, it is improper to read into § 101 limitations as to the subject matter that may be patented where the legislative history does not indicate that Congress clearly intended such limitations. See Chakrabarty, 447 U.S. at 308, ("We have also cautioned that courts 'should not read into the patent laws limitations and conditions which the legislature has not expressed.' "), quoting United States v. Dubilier Condenser Corp., 289 U.S. 178, 199, (1933). Despite the apparent sweep of § 101, the Supreme Court has held that certain categories of subject matter are not entitled to patent protection. In Diamond v. Diehr, 450 U.S. 175 (1981), its most recent case addressing § 101, the Supreme Court explained that there are three categories of subject matter for which one may not obtain patent protection, namely "laws of nature, natural phenomena, and abstract ideas." Diehr, 450 U.S. at 185. Of relevance to this case, the Supreme Court also has held that certain mathematical subject matter is not, standing alone, entitled to patent protection. See Diehr, 450 U.S. 175; Parker v. Flook, 437 U.S. 584; Gottschalk v. Benson, 409 U.S. 63. A close analysis of Diehr, Flook, and Benson reveals that the Supreme Court never intended to create an overly broad, fourth category of subject matter excluded from § 101. Rather, at the core of the Court's analysis in each of these cases lies an attempt by the Court to explain a rather straightforward concept, namely, that certain types of mathematical subject matter, standing alone, represent nothing more than abstract ideas until reduced to some type of practical application, and thus that subject matter is not, in and of itself, entitled to patent protection. Diehr also demands that the focus in any statutory subject matter analysis be on the claim as a whole. Indeed, the Supreme Court stated in Diehr: [W]hen a claim containing a mathematical formula [, mathematical equation, mathematical algorithm, or the like,] implements or applies that formula [, equation, algorithm, or the like,] in a structure or process which, when considered as a whole, is performing a function which the patent laws were designed to protect (e.g., transforming or reducing an article to a different state or thing), then the claim satisfies the requirements of § 101.

Diehr, 450 U.S. at 192 (emphasis added). In re Iwahashi, 888 F.2d at 1375, 12 USPQ2d at 1911; In re Taner, 681 F.2d 787, 789, 214 USPQ 678, 680 (CCPA 1982). It is thus not necessary to determine Chapter 12 – The Subject Matter of Patents

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whether a claim contains, as merely a part of the whole, any mathematical subject matter which standing alone would not be entitled to patent protection. Indeed, because the dispositive inquiry is whether the claim as a whole is directed to statutory subject matter, it is irrelevant that a claim may contain, as part of the whole, subject matter which would not be patentable by itself. "A claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula, [mathematical equation, mathematical algorithm,] computer program or digital computer." Diehr, 450 U.S. at 187. (b) Given the foregoing, the proper inquiry in dealing with the so called mathematical subject matter exception to § 101 alleged herein is to see whether the claimed subject matter as a whole is a disembodied mathematical concept, whether categorized as a mathematical formula, mathematical equation, mathematical algorithm, or the like, which in essence represents nothing more than a "law of nature," "natural phenomenon," or "abstract idea." If so, Diehr precludes the patenting of that subject matter. That is not the case here. Although many, or arguably even all, of the means elements recited in claim 15 represent circuitry elements that perform mathematical calculations, which is essentially true of all digital electrical circuits, the claimed invention as a whole is directed to a combination of interrelated elements which combine to form a machine for converting discrete waveform data samples into anti-aliased pixel illumination intensity data to be displayed on a display means. This is not a disembodied mathematical concept which may be characterized as an "abstract idea," but rather a specific machine to produce a useful, concrete, and tangible result. The fact that the four claimed means elements function to transform one set of data to another through what may be viewed as a series of mathematical calculations does not alone justify a holding that the claim as a whole is directed to nonstatutory subject matter. See In re Iwahashi, 888 F.2d at 1375, 12 USPQ2d at 1911. Indeed, claim 15 as written is not "so abstract and sweeping" that it would "wholly pre-empt" the use of any apparatus employing the combination of mathematical calculations recited therein. See Benson, 409 U.S. at 68-72 (1972). Rather, claim 15 is limited to the use of a particularly claimed combination of elements performing the particularly claimed combination of calculations to transform, i.e., rasterize, digitized waveforms (data) into anti-aliased, pixel illumination data to produce a smooth waveform. Furthermore, the claim preamble's recitation that the subject matter for which Alappat seeks patent protection is a rasterizer for creating a smooth waveform is not a mere field-of-use label having no significance. Indeed, the preamble specifically recites that the claimed rasterizer converts waveform data into output illumination data for a display, and the means elements recited in the body of the claim make reference not only to the inputted waveform data recited in the preamble but also to the output illumination data also recited in the preamble. Claim 15 thus defines a combination of elements constituting a machine for producing an anti-aliased waveform. **** CONCLUSION For the foregoing reasons, the appealed decision of the Board affirming the examiner's rejection is REVERSED. **** PAULINE NEWMAN, Circuit Judge, concurring. Phenomena of nature and abstract scientific and mathematical principles have always been excluded from the patent system. Some have justified this exclusion simply on the ground of lack of "utility"; some on the ground of lack of "novelty"; and some on the ground that laws of nature, albeit newly discovered, are the heritage of humankind. On whatever theory, the unpatentability of the principle Chapter 12 – The Subject Matter of Patents

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does not defeat patentability of its practical applications. See, e.g., O'Reilly v. Morse, 56 U.S. (15 How.) 62 (1854). Most technologic inventions involve the application of scientific principles and phenomena of nature to specific purposes. It is these purposes that are the subject matter of 35 U.S.C. § 101, and we need not decide such interesting epistemological questions as whether mathematical formulae exist in nature, or are created by mathematicians in the way that chemical compounds are created by chemists. However, the distinction between principle and practice was not observed in the Board's decision on Mr. Alappat's invention. The theme underlying the Board's rejection of the Alappat claims was that since mathematical steps were involved, and were performable by computer, Alappat was claiming a mathematical algorithm such as was held unpatentable in Gottschalk v. Benson, 409 U.S. 63, 175 USPQ 673 (1972). However, as is explained by Judge Rich, Alappat is claiming a rasterizer of an oscilloscope and similar devices of applied technology. The flaw contained in the Board's premise as applied to Alappat was recognized in Diamond v. Diehr, 450 U.S. 175, 209 USPQ 1 (1981), the Court explaining that "A claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula, computer program or digital computer." Id. at 187, 209 USPQ at 8. It is conspicuous that the Board in its opinion cited only Benson, suggesting a failure of appreciation of the evolution in Supreme Court and this court's jurisprudence. Devices that work by way of digital electronics are not excluded from the patent system simply because their mechanism of operation can be represented by mathematical formulae. The output of an electronic device or circuit may be approximated to any required degree as a mathematical function of its current state and its inputs; some devices, such as the transistor, embody remarkably elementary mathematical functions. Principles of mathematics, like principles of chemistry, are "basic tools of scientific and technological work". Benson, 409 U.S. at 67. Such principles are indeed the subject matter of pure science. But they are also the subject matter of applied technology.

RADER, Circuit Judge, concurring. I join Judge Rich's opinion holding that this court has subject matter jurisdiction over this appeal and reversing the reconstituted Board of Patent Appeals and Interferences' decision on the merits. While I fully agree with Judge Rich that Alappat's claimed invention falls squarely within the scope of 35 U.S.C. § 101 (1988), I write to clarify that this conclusion does not hinge on whether Alappat's invention is classified as machine or process under section 101.

State Street Bank & Trust Co. v. Signature Financial Group, Inc. 149 F.3d 1368 (Fed. Cir. 1998), cert. denied, 119 S. Ct. 851, 47 USPQ2d 1596 (1999) Before RICH, PLAGER, and BRYSON, Circuit Judges. RICH, Circuit Judge. Signature Financial Group, Inc. (Signature) appeals from the decision of the United States District Court for the District of Massachusetts granting a motion for summary judgment in favor of State Street Bank & Trust Co. (State Street), finding U.S. Patent No. 5,193,056 (the '056 patent) invalid on the ground that the claimed subject matter is not encompassed by 35 U.S.C. § 101 (1994). See State Street Bank & Trust Co. v. Signature Financial Group, Inc., 927 F. Supp. 502, 38 USPQ2d 1530 (D. Mass. 1996). We reverse and remand because we conclude that the patent claims are directed to statutory subject matter.

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BACKGROUND Signature is the assignee of the '056 patent which is entitled "Data Processing System for Hub and Spoke Financial Services Configuration." The '056 patent issued to Signature on 9 March 1993, naming R. Todd Boes as the inventor. The '056 patent is generally directed to a data processing system (the system) for implementing an investment structure which was developed for use in Signature's business as an administrator and accounting agent for mutual funds. In essence, the system, identified by the proprietary name Hub and Spoke®, facilitates a structure whereby mutual funds (Spokes) pool their assets in an investment portfolio (Hub) organized as a partnership. This investment configuration provides the administrator of a mutual fund with the advantageous combination of economies of scale in administering investments coupled with the tax advantages of a partnership. State Street and Signature are both in the business of acting as custodians and accounting agents for multi-tiered partnership fund financial services. State Street negotiated with Signature for a license to use its patented data processing system described and claimed in the '056 patent. When negotiations broke down, State Street brought a declaratory judgment action asserting invalidity, unenforceability, and noninfringement in Massachusetts district court, and then filed a motion for partial summary judgment of patent invalidity for failure to claim statutory subject matter under § 101. The motion was granted and this appeal followed. DISCUSSION . . . . We hold that declaratory judgment plaintiff State Street was not entitled to the grant of summary judgment of invalidity of the '056 patent under § 101 as a matter of law, because the patent claims are directed to statutory subject matter. **** The district court began its analysis by construing the claims to be directed to a process, with each "means" clause merely representing a step in that process. However, "machine" claims having "means" clauses may only be reasonably viewed as process claims if there is no supporting structure in the written description that corresponds to the claimed "means" elements. See In re Alappat, 33 F.3d 1526, 1540-41, 31 USPQ2d 1545, 1554 (Fed. Cir. 1994) (in banc). This is not the case now before us. When independent claim 1 is properly construed in accordance with § 112, ¶ 6, it is directed to a machine, as demonstrated below, where representative claim 1 is set forth, the subject matter in brackets stating the structure the written description discloses as corresponding to the respective "means" recited in the claims. 1. A data processing system for managing a financial services configuration of a portfolio established as a partnership, each partner being one of a plurality of funds, comprising: a. computer processor means [a personal computer including a CPU] for processing data; b. storage means [a data disk] for storing data on a storage medium; c. first means [an arithmetic logic circuit configured to prepare the data disk to magnetically store selected data] for initializing the storage medium; d. second means [an arithmetic logic circuit configured to retrieve information from a specific file, calculate incremental increases or decreases based on specific input, allocate the results on a percentage basis, and store the output in a separate file] for processing data regarding assets in the portfolio and each of the funds from a previous day and data regarding increases or decreases in each of the funds, [sic, funds'] assets and for allocating the percentage share that each fund holds in the portfolio; e. third means [an arithmetic logic circuit configured to retrieve information from a specific file, calculate incremental increases and decreases based on specific input, allocate the results on a percentage basis and store the output in a separate file] for processing data regarding daily incremental income, expenses, and net realized gain or loss for the portfolio and for allocating such data among each fund;

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f. fourth means [an arithmetic logic circuit configured to retrieve information from a specific file, calculate incremental increases and decreases based on specific input, allocate the results on a percentage basis and store the output in a separate file] for processing data regarding daily net unrealized gain or loss for the portfolio and for allocating such data among each fund; and g. fifth means [an arithmetic logic circuit configured to retrieve information from specific files, calculate that information on an aggregate basis and store the output in a separate file] for processing data regarding aggregate year-end income, expenses, and capital gain or loss for the portfolio and each of the funds.

Each claim component, recited as a "means" plus its function, is to be read, of course, pursuant to §112, ¶ 6, as inclusive of the "equivalents" of the structures disclosed in the written description portion of the specification. Thus, claim 1, properly construed, claims a machine, namely, a data processing system for managing a financial services configuration of a portfolio established as a partnership, which machine is made up of, at the very least, the specific structures disclosed in the written description and corresponding to the means-plus-function elements (a)-(g) recited in the claim. A "machine" is proper statutory subject matter under § 101. We note that, for the purposes of a § 101 analysis, it is of little relevance whether claim 1 is directed to a "machine" or a "process," as long as it falls within at least one of the four enumerated categories of patentable subject matter, "machine" and "process" being such categories. This does not end our analysis, however, because the court concluded that the claimed subject matter fell into one of two alternative judicially-created exceptions to statutory subject matter. The court refers to the first exception as the "mathematical algorithm" exception and the second exception as the "business method" exception. Section 101 reads: 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.

The plain and unambiguous meaning of § 101 is that any invention falling within one of the four stated categories of statutory subject matter may be patented, provided it meets the other requirements for patentability set forth in Title 35, i.e., those found in §§ 102, 103, and 112, ¶2. The repetitive use of the expansive term "any" in § 101 shows Congress's intent not to place any restrictions on the subject matter for which a patent may be obtained beyond those specifically recited in § 101. Indeed, the Supreme Court has acknowledged that Congress intended § 101 to extend to "anything under the sun that is made by man." Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980); see also Diamond v. Diehr, 450 U.S. 175, 182 (1981). Thus, it is improper to read limitations into § 101 on the subject matter that may be patented where the legislative history indicates that Congress clearly did not intend such limitations. See Chakrabarty, 447 U.S. at 308 ("We have also cautioned that courts 'should not read into the patent laws limitations and conditions which the legislature has not expressed.'" (citations omitted)). The "Mathematical Algorithm" Exception The Supreme Court has identified three categories of subject matter that are unpatentable, namely "laws of nature, natural phenomena, and abstract ideas." Diehr, 450 U.S. at 185. Of particular relevance to this case, the Court has held that mathematical algorithms are not patentable subject matter to the extent that they are merely abstract ideas. See Diehr, 450 U.S. 175, passim; Parker v. Flook, 437 U.S. 584 (1978); Gottschalk v. Benson, 409 U.S. 63 (1972). In Diehr, the Court explained that certain types of mathematical subject matter, standing alone, represent nothing more than abstract ideas until reduced to some type of practical application, i.e., "a useful, concrete and tangible result." Alappat, 33 F.3d at 1544, 31 USPQ2d at 1557. Unpatentable mathematical algorithms are identifiable by showing they are merely abstract ideas constituting disembodied concepts or truths that are not "useful." From a practical standpoint, this Chapter 12 – The Subject Matter of Patents

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means that to be patentable an algorithm must be applied in a "useful" way. In Alappat, we held that data, transformed by a machine through a series of mathematical calculations to produce a smooth waveform display on a rasterizer monitor, constituted a practical application of an abstract idea (a mathematical algorithm, formula, or calculation), because it produced "a useful, concrete and tangible result"--the smooth waveform. Similarly, in Arrythmia Research, we held that the transformation of electrocardiograph signals from a patient's heartbeat by a machine through a series of mathematical calculations constituted a practical application of an abstract idea (a mathematical algorithm, formula, or calculation), because it corresponded to a useful, concrete or tangible thing--the condition of a patient's heart. Today, we hold that the transformation of data, representing discrete dollar amounts, by a machine through a series of mathematical calculations into a final share price, constitutes a practical application of a mathematical algorithm, formula, or calculation, because it produces "a useful, concrete and tangible result"—a final share price momentarily fixed for recording and reporting purposes and even accepted and relied upon by regulatory authorities and in subsequent trades. The district court erred by applying the Freeman-Walter-Abele test to determine whether the claimed subject matter was an unpatentable abstract idea. The Freeman-Walter-Abele test was designed by the Court of Customs and Patent Appeals, and subsequently adopted by this court, to extract and identify unpatentable mathematical algorithms in the aftermath of Benson and Flook. See In re Freeman, 573 F.2d 1237, 197 USPQ 464 (CCPA 1978) as modified by In re Walter, 618 F.2d 758, 205 USPQ 397 (CCPA 1980). The test has been thus articulated: First, the claim is analyzed to determine whether a mathematical algorithm is directly or indirectly recited. Next, if a mathematical algorithm is found, the claim as a whole is further analyzed to determine whether the algorithm is "applied in any manner to physical elements or process steps," and, if it is, it "passes muster under § 101."

In re Pardo, 684 F.2d 912, 915, 214 USPQ 673, 675-76 (CCPA 1982) (citing In re Abele, 684 F.2d 902, 214 USPQ 682 (CCPA 1982)). After Diehr and Chakrabarty, the Freeman-Walter-Abele test has little, if any, applicability to determining the presence of statutory subject matter. As we pointed out in Alappat, 33 F.3d at 1543, 31 USPQ2d at 1557, application of the test could be misleading, because a process, machine, manufacture, or composition of matter employing a law of nature, natural phenomenon, or abstract idea is patentable subject matter even though a law of nature, natural phenomenon, or abstract idea would not, by itself, be entitled to such protection. The test determines the presence of, for example, an algorithm. Under Benson, this may have been a sufficient indicium of nonstatutory subject matter. However, after Diehr and Alappat, the mere fact that a claimed invention involves inputting numbers, calculating numbers, outputting numbers, and storing numbers, in and of itself, would not render it nonstatutory subject matter, unless, of course, its operation does not produce a "useful, concrete and tangible result." Alappat, 33 F.3d at 1544, 31 USPQ2d at 1557. After all, as we have repeatedly stated, every step-by-step process, be it electronic or chemical or mechanical, involves an algorithm in the broad sense of the term. Since § 101 expressly includes processes as a category of inventions which may be patented and § 100(b) further defines the word "process" as meaning "process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material," it follows that it is no ground for holding a claim is directed to nonstatutory subject matter to say it includes or is directed to an algorithm. This is why the proscription against patenting has been limited to mathematical algorithms . . . .

In re Iwahashi, 888 F.2d 1370, 1374, 12 USPQ2d 1908, 1911 (Fed. Cir. 1989) (emphasis in the original). The question of whether a claim encompasses statutory subject matter should not focus on which of the four categories of subject matter a claim is directed to—process, machine, manufacture, or composition of matter--but rather on the essential characteristics of the subject matter, in particular, its Chapter 12 – The Subject Matter of Patents

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practical utility. Section 101 specifies that statutory subject matter must also satisfy the other "conditions and requirements" of Title 35, including novelty, nonobviousness, and adequacy of disclosure and notice. See In re Warmerdam, 33 F.3d 1354, 1359, 31 USPQ2d 1754, 1757-58 (Fed. Cir. 1994). For purpose of our analysis, as noted above, claim 1 is directed to a machine programmed with the Hub and Spoke software and admittedly produces a "useful, concrete, and tangible result." Alappat, 33 F.3d at 1544, 31 USPQ2d at 1557. This renders it statutory subject matter, even if the useful result is expressed in numbers, such as price, profit, percentage, cost, or loss. The Business Method Exception As an alternative ground for invalidating the '056 patent under § 101, the court relied on the judiciallycreated, so-called "business method" exception to statutory subject matter. We take this opportunity to lay this ill-conceived exception to rest. Since its inception, the "business method" exception has merely represented the application of some general, but no longer applicable legal principle, perhaps arising out of the "requirement for invention"--which was eliminated by § 103. Since the 1952 Patent Act, business methods have been, and should have been, subject to the same legal requirements for patentability as applied to any other process or method.10 The business method exception has never been invoked by this court, or the CCPA, to deem an invention unpatentable. Application of this particular exception has always been preceded by a ruling based on some clearer concept of Title 35 or, more commonly, application of the abstract idea exception based on finding a mathematical algorithm. Illustrative is the CCPA's analysis in In re Howard, 394 F.2d 869, 157 USPQ 615 (CCPA 1968), wherein the court affirmed the Board of Appeals' rejection of the claims for lack of novelty and found it unnecessary to reach the Board's section 101 ground that a method of doing business is "inherently unpatentable." Id. at 872, 157 USPQ at 617. Similarly, In re Schrader, 22 F.3d 290, 30 USPQ2d 1455 (Fed. Cir. 1994), while making reference to the business method exception, turned on the fact that the claims implicitly recited an abstract idea in the form of a mathematical algorithm and there was no "transformation or conversion of subject matter representative of or constituting physical activity or objects." 22 F.3d at 294, 30 USPQ2d at 1459 (emphasis omitted). State Street argues that we acknowledged the validity of the business method exception in Alappat when we discussed Maucorps and Meyer: Maucorps dealt with a business methodology for deciding how salesmen should best handle respective customers and Meyer involved a 'system' for aiding a neurologist in diagnosing patients. Clearly, neither of the alleged 'inventions' in those cases falls within any § 101 category. However, closer scrutiny of these cases reveals that the claimed inventions in both Maucorps and Meyer were rejected as abstract ideas under the mathematical algorithm exception, not the business method exception. Even the case frequently cited as establishing the business method exception to statutory subject matter, Hotel Security Checking Co. v. Lorraine Co., 160 F. 467 (2d Cir. 1908), did not rely on the exception to strike the patent. In that case, the patent was found invalid for lack of novelty and "invention," not because it was improper subject matter for a patent. The court stated "the fundamental 10

As Judge Newman has previously stated, [The business method exception] is . . . an unwarranted encumbrance to the definition of statutory subject matter in section 101, that [should] be discarded as error-prone, redundant, and obsolete. It merits retirement from the glossary of section 101. . . . All of the "doing business" cases could have been decided using the clearer concepts of Title 35. Patentability does not turn on whether the claimed method does "business" instead of something else, but on whether the method, viewed as a whole, meets the requirements of patentability as set forth in Sections 102, 103, and 112 of the Patent Act. In re Schrader, 22 F.3d 290, 298, 30 USPQ2d 1455, 1462 (Fed. Cir. 1994) (Newman, J., dissenting).

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principle of the system is as old as the art of bookkeeping, i.e., charging the goods of the employer to the agent who takes them." Id. at 469. "If at the time of [the patent] application, there had been no system of bookkeeping of any kind in restaurants, we would be confronted with the question whether a new and useful system of cash registering and account checking is such an art as is patentable under the statute." Id. at 472. This case is no exception. The district court announced the precepts of the business method exception as set forth in several treatises, but noted as its primary reason for finding the patent invalid under the business method exception as follows: If Signature's invention were patentable, any financial institution desirous of implementing a multi-tiered funding complex modeled (sic) on a Hub and Spoke configuration would be required to seek Signature's permission before embarking on such a project. This is so because the '056 Patent is claimed [sic] sufficiently broadly to foreclose virtually any computer-implemented accounting method necessary to manage this type of financial structure.

927 F. Supp. 502, 516, 38 USPQ2d 1530, 1542 (emphasis added). Whether the patent's claims are too broad to be patentable is not to be judged under § 101, but rather under §§ 102, 103 and 112. Assuming the above statement to be correct, it has nothing to do with whether what is claimed is statutory subject matter. In view of this background, it comes as no surprise that in the most recent edition of the Manual of Patent Examining Procedures (MPEP) (1996), a paragraph of § 706.03(a) was deleted. In past editions it read: Though seemingly within the category of process or method, a method of doing business can be rejected as not being within the statutory classes. See Hotel Security Checking Co. v. Lorraine Co., 160 F. 467 (2nd Cir. 1908) and In re Wait, 24 USPQ 88, 22 CCPA 822 (1934).

MPEP § 706.03(a) (1994). This acknowledgment is buttressed by the U.S. Patent and Trademark 1996 Examination Guidelines for Computer Related Inventions which now read: Office personnel have had difficulty in properly treating claims directed to methods of doing business. Claims should not be categorized as methods of doing business. Instead such claims should be treated like any other process claims.

Examination Guidelines, 61 Fed. Reg. 7478, 7479 (1996). We agree that this is precisely the manner in which this type of claim should be treated. Whether the claims are directed to subject matter within § 101 should not turn on whether the claimed subject matter does "business" instead of something else. CONCLUSION The appealed decision is reversed and the case is remanded to the district court for further proceedings consistent with this opinion. REVERSED and REMANDED.

AT&T Corp., v. Excel Communications, Inc. 172 F.3d 1352 (Fed. Cir. 1999) Before PLAGER, CLEVENGER, and RADER, Circuit Judges. PLAGER, Circuit Judge. The '184 patent, entitled "Call Message Recording for Telephone Systems," issued on July 26, 1994. It describes a message record for long-distance telephone calls that is enhanced by adding a primary Chapter 12 – The Subject Matter of Patents

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interexchange carrier ("PIC") indicator. The addition of the indicator aids long-distance carriers in providing differential billing treatment for subscribers, depending upon whether a subscriber calls someone with the same or a different long-distance carrier. The invention claimed in the '184 patent is designed to operate in a telecommunications system with multiple long-distance service providers. The system contains local exchange carriers ("LECs") and long-distance service (interexchange) carriers ("IXCs"). The LECs provide local telephone service and access to IXCs. Each customer has an LEC for local service and selects an IXC, such as AT&T or Excel, to be its primary long-distance service (interexchange) carrier or PIC. IXCs may own their own facilities, as does AT&T. Others, like Excel, called "resellers" or "resale carriers," contract with facilityowners to route their subscribers' calls through the facility-owners' switches and transmission lines. Some IXCs, including MCI and U.S. Sprint, have a mix of their own lines and leased lines. The system thus involves a three-step process when a caller makes a direct-dialed (1+) long-distance telephone call: (1) after the call is transmitted over the LEC's network to a switch, and the LEC identifies the caller's PIC, the LEC automatically routes the call to the facilities used by the caller's PIC; (2) the PIC's facilities carry the call to the LEC serving the call recipient; and (3) the call recipient's LEC delivers the call over its local network to the recipient's telephone. When a caller makes a direct-dialed long-distance telephone call, a switch (which may be a switch in the interexchange network) monitors and records data related to the call, generating an "automatic message account" ("AMA") message record. This contemporaneous message record contains fields of information such as the originating and terminating telephone numbers, and the length of time of the call. These message records are then transmitted from the switch to a message accumulation system for processing and billing. Because the message records are stored in electronic format, they can be transmitted from one computer system to another and reformatted to ease processing of the information. Thus the carrier's AMA message subsequently is translated into the industry-standard "exchange message interface," forwarded to a rating system, and ultimately forwarded to a billing system in which the data resides until processed to generate, typically, "hard copy" bills which are mailed to subscribers. The invention of the '184 patent calls for the addition of a data field into a standard message record to indicate whether a call involves a particular PIC (the "PIC indicator"). This PIC indicator can exist in several forms, such as a code which identifies the call recipient's PIC, a flag which shows that the recipient's PIC is or is not a particular IXC, or a flag that identifies the recipient's and the caller's PICs as the same IXC. The PIC indicator therefore enables IXCs to provide differential billing for calls on the basis of the identified PIC. The application that issued as the '184 patent was filed in 1992. The U.S. Patent and Trademark Office ("PTO") initially rejected, for reasons unrelated to § 101, all forty-one of the originally filed claims. Following amendment, the claims were issued in 1994 in their present form. The '184 patent contains six independent claims, five method claims and one apparatus claim, and additional dependent claims. The PTO granted the '184 patent without questioning whether the claims were directed to statutory subject matter under § 101. AT&T in 1996 asserted ten of the method claims against Excel in this infringement suit. The independent claims at issue (claims 1, 12, 18, and 40) include the step of "generating a message record for an interexchange call between an originating subscriber and a terminating subscriber," and the step of adding a PIC indicator to the message record. Independent claim 1, for example, adds a PIC indicator whose [**6] value depends upon the call recipient's PIC:

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A method for use in a telecommunications system in which interexchange calls initiated by each subscriber are automatically routed over the facilities of a particular one of a plurality of interexchange carriers associated with that subscriber, said method comprising the steps of: generating a message record for an interexchange call between an originating subscriber and a terminating subscriber, and including, in said message record, a primary interexchange carrier (PIC) indicator having a value which is a function of whether or not the interexchange carrier associated with said terminating subscriber is a predetermined one of said interexchange carriers.

. . . Our analysis of whether a claim is directed to statutory subject matter begins with the language of 35 U.S.C. § 101, which reads: 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. The Supreme Court has construed § 101 broadly, noting that Congress intended statutory subject matter to "include anything under the sun that is made by man." See Chakrabarty, see also Diehr. Despite this seemingly limitless expanse, the Court has specifically identified three categories of unpatentable subject matter: "laws of nature, natural phenomena, and abstract ideas." In this case, the method claims at issue fall within the "process" category of the four enumerated categories of patentable subject matter in § 101. The district court held that the claims at issue, though otherwise within the terms of § 101, implicitly recite a mathematical algorithm, and thus fall within the judicially created "mathematical algorithm" exception to statutory subject matter. A mathematical formula alone, sometimes referred to as a mathematical algorithm, viewed in the abstract, is considered unpatentable subject matter. Courts have used the terms "mathematical algorithm," "mathematical formula," and "mathematical equation," to describe types of nonstatutory mathematical subject matter without explaining whether the terms are interchangeable or different. Even assuming the words connote the same concept, there is considerable question as to exactly what the concept encompasses. This court recently pointed out that any step-by-step process, be it electronic, chemical, or mechanical, involves an "algorithm" in the broad sense of the term. See State Street. Because § 101 includes processes as a category of patentable subject matter, the judicially-defined proscription against patenting of a "mathematical algorithm," to the extent such a proscription still exists, is narrowly limited to mathematical algorithms in the abstract. Since the process of manipulation of numbers is a fundamental part of computer technology, we have had to reexamine the rules that govern the patentability of such technology. The sea-changes in both law and technology stand as a testament to the ability of law to adapt to new and innovative concepts, while remaining true to basic principles. In an earlier era, the PTO published guidelines essentially rejecting the notion that computer programs were patentable. As the technology progressed, our predecessor court disagreed, and, overturning some of the earlier limiting principles regarding § 101, announced more expansive principles formulated with computer technology in mind. In our recent decision in State Street, this court discarded the so-called "business method" exception and reassessed the "mathematical algorithm" exception, both judicially-created "exceptions" to the statutory categories of § 101. As this brief review suggests, this court (and its predecessor) has struggled to make our understanding of the scope of § 101 responsive to the needs of the modern world.

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The Supreme Court has supported and enhanced this effort. In Diehr, the Court expressly limited its two earlier decisions in Flook and Benson by emphasizing that these cases did no more than confirm the "long-established principle" that laws of nature, natural phenomena, and abstract ideas are excluded from patent protection. The Diehr Court explicitly distinguished Diehr's process by pointing out that "the respondents here do not seek to patent a mathematical formula. Instead, they seek patent protection for a process of curing synthetic rubber." The Court then explained that although the process used a well-known mathematical equation, the applicants did not "pre-empt the use of that equation." Thus, even though a mathematical algorithm is not patentable in isolation, a process that applies an equation to a new and useful end "is at the very least not barred at the threshold by § 101." In this regard, it is particularly worthy of note that the argument for the opposite result, that "the term 'algorithm' ... is synonymous with the term 'computer program,'" and thus computer-based programs as a general proposition should not be patentable, was made forcefully in dissent by Justice Stevens; his view, however, was rejected by the Diehr majority. The State Street formulation, that a mathematical algorithm may be an integral part of patentable subject matter such as a machine or process if the claimed invention as a whole is applied in a "useful" manner, follows the approach taken by this court en banc in In re Alappat. In Alappat, we set out our understanding of the Supreme Court's limitations on the patentability of mathematical subject matter and concluded that: [The Court] never intended to create an overly broad, fourth category of [mathematical] subject matter excluded from § 101. Rather, at the core of the Court's analysis ... lies an attempt by the Court to explain a rather straightforward concept, namely, that certain types of mathematical subject matter, standing alone, represent nothing more than abstract ideas until reduced to some type of practical application, and thus that subject matter is not, in and of itself, entitled to patent protection. Thus, the Alappat inquiry simply requires an examination of the contested claims to see if the claimed subject matter as a whole is a disembodied mathematical concept representing nothing more than a "law of nature" or an "abstract idea," or if the mathematical concept has been reduced to some practical application rendering it "useful." In Alappat, we held that more than an abstract idea was claimed because the claimed invention as a whole was directed toward forming a specific machine that produced the useful, concrete, and tangible result of a smooth waveform display. In both Alappat and State Street, the claim was for a machine that achieved certain results. In the case before us, because Excel does not own or operate the facilities over which its calls are placed, AT&T did not charge Excel with infringement of its apparatus claims, but limited its infringement charge to the specified method or process claims. Whether stated implicitly or explicitly, we consider the scope of § 101 to be the same regardless of the form - machine or process - in which a particular claim is drafted. Furthermore, the Supreme Court's decisions in Diehr, Benson, and Flook, all of which involved method (i.e., process) claims, have provided and supported the principles which we apply to both machine- and process-type claims. Thus, we are comfortable in applying our reasoning in Alappat and State Street to the method claims at issue in this case. In this case, Excel argues, correctly, that the PIC indicator value is derived using a simple mathematical principle. But that is not determinative because AT&T does not claim the Boolean principle as such or attempt to forestall its use in any other application. It is clear from the written description of the '184 patent that AT&T is only claiming a process that uses the Boolean principle in order to determine the value of the PIC indicator. The PIC indicator represents information about the call recipient's PIC, a useful, non-abstract result that facilitates differential billing of long-distance calls made by an IXC's subscriber. Because the claimed process applies the Boolean principle to produce a useful, concrete, tangible result without pre-empting other uses of the mathematical principle, on its face the claimed process comfortably falls within the scope of § 101.

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Excel argues that method claims containing mathematical algorithms are patentable subject matter only if there is a "physical transformation" or conversion of subject matter from one state into another. The physical transformation language appears in Diehr, see 450 U.S. at 184 ("That respondents' claims involve the transformation of an article, in this case raw, uncured synthetic rubber, into a different state or thing cannot be disputed."), and has been echoed by this court in Schrader, 22 F.3d at 294, 30 U.S.P.Q.2D (BNA) at 1458 ("Therefore, we do not find in the claim any kind of data transformation."). The notion of "physical transformation" can be misunderstood. In the first place, it is not an invariable requirement, but merely one example of how a mathematical algorithm may bring about a useful application. As the Supreme Court itself noted, "when [a claimed invention] is performing a function which the patent laws were designed to protect (e.g., transforming or reducing an article to a different state or thing), then the claim satisfies the requirements of § 101." Diehr. The "e.g." signal denotes an example, not an exclusive requirement. Excel also contends that because the process claims at issue lack physical limitations set forth in the patent, the claims are not patentable subject matter. This argument reflects a misunderstanding of our case law. The cases cited by Excel for this proposition involved machine claims written in means-plusfunction language. See, e.g., State Street, 149 F.3d at 1371, 47 U.S.P.Q.2D (BNA) at 1599; Alappat, 33 F.3d at 1541, 31 U.S.P.Q.2D (BNA) at 1554-55. Apparatus claims written in this manner require supporting structure in the written description that corresponds to the claimed "means" elements. See 35 U.S.C. § 112, para. 6 (1994). Since the claims at issue in this case are directed to a process in the first instance, a structural inquiry is unnecessary. The argument that physical limitations are necessary may also stem from the second part of the Freeman-Walter-Abele test, an earlier test which has been used to identify claims thought to involve unpatentable mathematical algorithms. That second part was said to inquire "whether the claim is directed to a mathematical algorithm that is not applied to or limited by physical elements." Although our en banc Alappat decision called this test "not an improper analysis," we then pointed out that "the ultimate issue always has been whether the claim as a whole is drawn to statutory subject matter." Furthermore, our recent State Street decision questioned the continuing viability of the FreemanWalter-Abele test, noting that, "after Diehr and Chakrabarty, the Freeman-Walter-Abele test has little, if any, applicability to determining the presence of statutory subject matter." Whatever may be left of the earlier test, if anything, this type of physical limitations analysis seems of little value because "after Diehr and Alappat, the mere fact that a claimed invention involves inputting numbers, calculating numbers, outputting numbers, and storing numbers, in and of itself, would not render it nonstatutory subject matter, unless, of course, its operation does not produce a 'useful, concrete and tangible result.'" In his dissent in Diehr, Justice Stevens noted two concerns regarding the § 101 issue, and to which, in his view, federal judges have a duty to respond: First, the cases considering the patentability of program-related inventions do not establish rules that enable a conscientious patent lawyer to determine with a fair degree of accuracy which, if any, program-related inventions will be patentable. Second, the inclusion of the ambiguous concept of an "algorithm" within the "law of nature" category of unpatentable subject matter has given rise to the concern that almost any process might be so described and therefore held unpatentable.

Diehr, 450 U.S. at 219 (Stevens, J., dissenting). Despite the almost twenty years since Justice Stevens wrote, these concerns remain important. His solution was to declare all computer-based programming unpatentable. That has not been the course the law has taken. Rather, it is now clear that

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computer-based programming constitutes patentable subject matter so long as the basic requirements of § 101 are met. Justice Stevens's concerns can be addressed within that framework. His first concern, that the rules are not sufficiently clear to enable reasonable prediction of outcomes, should be less of a concern today in light of the refocusing of the § 101 issue that Alappat and State Street have provided. His second concern, that the ambiguous concept of "algorithm" could be used to make any process unpatentable, can be laid to rest once the focus is understood to be not on whether there is a mathematical algorithm at work, but on whether the algorithm-containing invention, as a whole, produces a tangible, useful, result. In light of the above, and consistent with the clearer understanding that our more recent cases have provided, we conclude that . . . all the claims asserted fall comfortably within the broad scope of patentable subject matter under § 101.

Questions, Comments, Problems 1. In State Street, the court threw off the antiquated exceptions that had grown up around the statute, and instead focused on the admittedly broad language of section 101. In light of the “safety net” provided by section 102 when an applicant claims her invention too broadly, and in light of the difficulties in making fine distinctions between what falls within a particular exception to section 101 and what falls without, is State Street the best way to handle the “statutory subject matter” issue? Is State Street’s almost-literal reading of section 101 at odds with the Supreme Court’s approach in Flook, where the Court rejected a “purely literal reading of 101” because the Benson Court had determined that an algorithm was unpatentable even though the algorithm was literally a process? Do the cases you have read use section 101 as an excuse to reject inventions on emerging technologies because the courts are uncomfortable with the technologies and because they are afraid to convey a broad monopoly in a quickly growing field lacking in prior art? Do the later cases, such as Chakrabarty on living organisms, Allapat on software, and State Street on business processes, reflect development in the technologies more than development in the law, in that the courts are confident their decisions will not wreak havoc? Obviously, when the issues first came up in the early cases, there would not have been much prior art (at least not much easy-to-find documentary prior art) in any of the emerging fields. Therefore, an applicant could potentially receive a patent having very broad claims, and could thereby preempt the development of a nascent industry for almost two decades. However, aren’t pioneering inventions and developments of entirely new fields precisely the types of contributions to society that we most want to reward? Would it be repugnant to the concepts of our patent system to give a patent to Sir Isaac Newton and Gottfried Wilhelm Leibniz if they developed calculus today? Calculus certainly has returned more to society in the last 300 years than it would have cost to let Newton and Leibniz maintain protection of it for 17 years. On the other hand, perhaps it is best to use section 101 as an excuse to deny patents during early development of an industry because many inventors simply pick the low-hanging fruit from a newly opened field. For example, is an application of an age-old method of commerce to the Internet deserving of patent protection? Are the judicially-created exceptions to patentability simply an attempt to prevent the patent monster from encroaching on areas that clearly should not be subject to patent protection? For example, much that is covered under copyright law would create an unworkable mess under patent law. How would a person write a claim to cover the plot line in a Stephen King novel? The opinion in State Street practically begs the reader to wonder what is not patentable. For instance, could Kevin Garnett of the Minnesota Timberwolves patent a new method of dunking a basketball that gives him an edge over the competition? See U.S. Patent No. 5,616,089, “Method of Putting,” which was issued to a Wausau, Wisconsin attorney, for a method in which the trailing hand grips a golf putter in a normal manner while the leading hand grips the wrist of the trailing hand. See also Robert G. Kramer, F. Scott Kieff, and Robert M. Kunstadt, A New Hook for IP Practice—Intellectual Property Protection for Sports Moves, Nat’l L.J., C1-C5 (May 20, 1996); Christopher Simon, Man With a Patented Putt Hopes Someone Shows Him the Green, Wall St. J., B1 (Aug. 18, 1997). Could a tax attorney patent a new method of structuring a business transaction that would avoid certain tax liabilities? 2. Printed Matter – The business method exception is not the only categorical exception to patentability. Things that are merely written or printed are not, by themselves, patentable. However, the printed matter can be part of a patentable claim if the physical structure on which the printed matter is placed has a new and useful feature, or if the physical structure relates in a new and useful way with the printed matter. The distinction is a fine

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one, and was examined closely in a group of cases near the turn of the century. The initial rule of unpatentability is stated in United States Credit System Co. v. American Credit Indemnity Co., 59 F. 139 (2d Cir. 1893), in which the patent was directed toward providing sheets of paper with appropriate headings, adapted to be used as historical records of certain business transactions, so as to insure merchants against bad-debt losses. The court stated: “There is nothing peculiar or novel in preparing a sheet of paper with headings generally appropriate to classes of facts to be recorded, and whatever peculiarity there may be about the headings in this case is a peculiarity resulting from the transactions theselves. . . . Given a series of transactions, there is no patentable novelty in recording them, where, as in this case, such record consists simply in setting down some of their details in an order or sequence common to each record.” Id. at 143. The exception, which imparts patentability when there is something new and useful about the physical structure, can be seen in three cases involving printed tickets, Benjamin Menu Card v. Rand, McNally & Co., 210 F. 285 (N.D. Ill. 1894), Rand, McNally & Co. v. Exchange Scrip-Book Co., 187 F. 984 (7th Cir. 1911), and Cincinnati Traction Co. v. Pope, 210 F. 443 (6th Cir. 1913). In Benjamin, the invention was a “combined menu and meal check” that prevented fraud by employees of railroad dining cards by ruining the menu when the checks were detached. Earlier systems used three attached checks that had to be turned in by the waiter, the cook, and the conductor. The earlier systems could be bypassed by collusion of the three employees, while the patented ticket required collusion by the passenger also. Because detachment of the checks rendered the menu useless for other passengers, the court held the ticket patentable: “The fact the structure may be of cardboard with printed matter upon it does not exclude the device from patentability.” The invention in Rand, McNally related to a book of detachable transportation coupons whose values were expressed in money instead of the prior art’s miles, so that the coupons could more easily be used by carriers with different mileage rates. The discussion of the court highlights the relationship between the printed matter exception and early development of the business methods exception: Nor do we think that this patented concept is nothing more than a business method. Its use is a part of a business method. The ticket patented is not a method at all, but a physical tangible facility, without which the method would have been impracticable, and with which it is practicable. 187 F. at 986. Cincinnati Traction is described as the “leading ‘exception’ case.” 1 Donald S. Chisum, Chisum on Patents § 1.02[4], at 1-19 (1998). There, the patent covered a transfer ticket for street railcars that had an attached coupon. A “morning” transfer was issued with the coupon detached, so that a conductor could not collude with morning passenger by issuing the passenger an “afternoon” transfer (presumably the conductor would have to account for the coupons at the end of the morning shift). In holding the invention patentable, the court stated: [W]hile the case is perhaps near the border line, we think the device should be classed an article to be used in the method of doing business, and thus a “manufacture.” . . . The device of the patent clearly involves physical structure. The claims themselves are, in a proper sense, limited to such structure. . . . [T]he alleged patentable novelty does not reside in the arrangement of the printed text, nor does such text constitute merely a printed agreement. . . . The specifications do not confine the construction to either the style or printed arrangement or language of the legends. The essential thing is that the required information be conveyed on the face of the ticket. 210 F. at 446-47. 3. Processes – Process claims have been a particular source of trouble for the courts, both before and after the term “process” was added to the patent laws in 1952. Process claims are common, however, because even a patent on a physical object, such as a machine, can include claims that cover a method or process for using the object. The Supreme Court defined the term before it even entered the statute, in Cochrane v. Deener, 94 U.S. 780, 788 (1877): “A process is a mode of treatment of certain materials to produce a given result. It is an act, or a series of acts, performed upon the subject-matter to be transformed and reduced to a different state or thing.” In In re Schrader, 22 F.3d 290, 30 USPQ2d 1455 (Fed. Cir. 1994), Circuit Judge Plager discussed some of the history behind the requirements for patentability of a process: When Congress approved the addition of the term “process” to the categories of patentable subject matter in 1952, it incorporated the definition of “process” that had evolved in the courts.11 As of 1952,

11

This conclusion is drawn from three sources. The first is 35 U.S.C. § 100(b), which defines “process” circularly as “process.” The second is the legislative history, which shows Congress approved the substitution of the term “process” for the term “art” used in all previous patent statutes because it had a more “readily grasped” meaning that had evolved in the courts. . . . The third is the presumption that

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that term included a requirement that there be a transformation or reduction of subject matter. We first see the requirement reflected in an early case, Cochrane v. Deener . . . . We then see it reflected, albeit imperfectly12, in Professor Robinson’s classic treatisde, written when the statute said art: An art or operation is an act or a series of acts performed by some physical agent upon some physical object, and producing in such object some change either of character or of condition. It is also called a “process.” . . . (Emphasis added) .... We also see it reflected, again imperfectly, in Benson, in which the Court stated: Transformation and reduction of an article “to a different state or thing” is the clue to the patentability of a process claim . . . . 409 U.S. at 70. [¶] Finally, we see it cited with approval in Diehr, 450 U.S. at 183-84. This basic requirement preceded and remains a part of the requirements incorporated in the 1952 Act. . . . 12. Professor Robinson cites to Cochrane for the above definition but inexplicably speaks in terms of changes to a physical “object” while Cochrane speaks in terms of changes to “subject matter.” The distinction is significant. In the Telephone Cases, 126 U.S. 1 (1887), the Court upheld the validity of a claim directed to a method for transmitting speech by impressing acoustic vibrations representative of speech onto electrical signals. If there was a requirement that a physical object be transformed or reduced, the claim would not have been patentable. The point was recognized by our predecessor court in In re Prater, 415 F.2d 1393, 162 USPQ 541, 549 (CCPA 1969): “[The Cochrane passage] has sometimes been misconstrued as a ‘rule’ or ‘definition’ requiring that all processes, to be patentable, must operate physically upon substances. Such a result misapprehends the nature of the passage.” Id. at 1403, 162 USPQ at 549. . . . Thus, it is apparent that changes to intangible subject matter representative of or constituting physical activity or objects are included in the definition. 22 F.3d at 295. It is also clear that processes can be based on the discovery of natural phenomena. The Court in Funk even acknowledged as much: If there is to be invention from such discovery [of a hitherto unknown phenomenon of nature], it must come from the application of the law of nature to a new and useful end. See Telephone Cases, 126 U.S. 1. . . . Dictum in the case of Le Roy v. Tatham, 55 U.S. (14 How.) 156 (1852), was to the same effect. There the inventors had discovered a property of lead that enabled them to make the first commercially practical wrought lead pipe, displacing cast lead pipe from the market. Unfortunately, they claimed their invention not as a process, but rather as the apparatus for achieving the result. The majority held that they had claimed the invention wrongly, but in dictum made clear that process claims using natural principles are patentable subject matter: The word principle is used by elementary writers on patent subjects, and sometimes in adjudications of courts, with such a want of precision in its application, as to mislead. It is admitted, that a principle is not patentable. A principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right. Nor can an exclusive right exist to a new power, should one be discovered in addition to those already known. Through the agency of when a statute uses a term of art, such as “process,” Congress intended it to have its established meaning. . . . 12

Professor Robinson cites to Cochrane for the above definition but inexplicably speaks in terms of changes to a physical “object” while Cochrane speaks in terms of changes to “subject matter.” The distinction is significant. In the Telephone Cases, 126 U.S. 1 (1887), the Court upheld the validity of a claim directed to a method for transmitting speech by impressing acoustic vibrations representative of speech onto electrical signals. If there was a requirement that a physical object be transformed or reduced, the claim would not have been patentable. The point was recognized by our predecessor court in In re Prater, 415 F.2d 1393, 162 USPQ 541, 549 (CCPA 1969): “[The Cochrane passage] has sometimes been misconstrued as a ‘rule’ or ‘definition’ requiring that all processes, to be patentable, must operate physically upon substances. Such a result misapprehends the nature of the passage.” Id. at 1403, 162 USPQ at 549. . . . Thus, it is apparent that changes to intangible subject matter representative of or constituting physical activity or objects are included in the definition. 22 F.3d at 295.

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machinery a new steam power may be said to have been generated. But no one can appropriate this power exclusively to himself, under the patent laws. The same may be said of electricity, and of any other power in nature, which is alike open to all, and may be applied to useful purposes by the use of machinery. In such cases, the processes used to extract, modify, and concentrate natural agencies, constitute the invention. The elements of the power exist; the invention is not in discovering them, but in applying them to useful objects. Whether the machinery used be novel, or consist of a new combination of parts known, the right of the inventor is secured against all who use the same mechanical power, or one that shall be substantially the same. Id. at 174-75. 4. Mental Steps – The mental steps doctrine is another exception to patentability that applies to claims for processes and often appears in computer software cases. The doctrine holds that mere steps that can be performed inside the human head are not statutory subject matter. There are at least three ideas lurking behind this doctrine. The first, discussed above, is that a process, to be patentable, must transform or operate physically upon substances. The second is that patentable processes are restricted to specific means that can be described with reasonable definiteness. Methods that require human judgment and choice do not meet this standard of definiteness. The third idea is that mental steps fall within the social sciences of the field of “liberal arts” rather than the industrial technologies of the patentable field of “useful arts.” See Chisum § 1.03[6], at 1-78.1. 5. The Freeman-Walter-Abele 2-Step – In the computer area, the courts have struggled with the relationship of algorithms to mental steps. In a series of decisions attempting to resolve questions raised by the Supreme Court’s decisions in Benson, Flook, and Diehr, the Court of Customs and Patent Appeals set up a two-step test for patentability of computer-related inventions. First, the court asked whether the patent claim recited, directly or indirectly, a mathematical algorithm, formula, or mental step. If the claim did not, it covered statutory subject matter and satisfied section 101. If the claim recited a mathematical algorithm, the court then asked whether the claim involved application of the algorithm, method, or mental step to specific physical elements or processes. If so, the invention was directed toward statutory subject matter, and, if not, it was not directed toward statutory subject matter. This test came to be known as the Freeman-Walter-Abele test, in honor of the three cases that spawned it. See In re Freeman, 573 F.2d 1237, 197 USPQ 464 (CCPA 1978); In re Walter, 618 F.2d 758, 205 USPQ 397 (CCPA 1980); In re Abele, 684 F.2d 902, 214 USPQ 682 (CCPA1982). The Federal Circuit applied the Freeman-Walter-Abele test in Arrhythmia Research Technology, Inc. v. Corazonix Corp., 958 F.2d 1053 , 22 USPQ2d 1033 (Fed. Cir. 1992), a case involving a patent on human heart electrocardiographic signal analysis methods and apparatuses. In finding the claims patentable, the court assumed the claimed process involved a mathematical algorithm, and then found that claim steps that involved “converting,” “applying,” “determining,” and “comparing” in relation to certain electrical signals “are physical process steps that transform one physical, electrical signal into another.” The court rejected the argument that there is nothing physical about signals. The court further concluded that the process steps transformed one physical, electrical signal into another and provided an output that was not an abstract number, but was instead a signal related to the patient’s heart activity. 958 at 1059, 22 USPQ2d at 1038. How viable is the Freeman-Walter-Abele test after Allapat and State Street? What is the current procedure for analyzing the patentability of a method carried out by a computer or a method of doing business? How is this analysis affected by the holding in Benson? 6. Software Guidelines – The PTO published guidelines that became final in 1996, to be used by its examining corps to evaluate the patentability of computer-related inventions. The guidelines provide a detailed flow chart to follow in determining whether an invention falls inside or outside section 101. See http://www1.uspto.gov/web/offices/com/hearings/software/analysis/computer.html. 7. Medical Procedures – In the past decade, the medical community has raised concerns over the patenting of medical and surgical procedures. In particular, groups were concerned that patents on medical procedures could increase the cost of healthcare, restrict access to important life-saving procedures, interfere with peer review of new procedures, and intrude on patient privacy during efforts to enforce patents. Congress therefore passed legislation in 1996 to amend section 287(c) of the patent act, on infringement, to prevent patentees from receiving remedies against medical practitioners who perform “medical activities” covered by a patent. Although the term “medical activity” includes “the performance of a medical or surgical procedure on a body,” it does not include: (i) the use of a patented machine, manufacture, or composition of matter in violation of such patent, (ii) The practice of a patented use of a composition of matter in violation of such patent, or (iii) The practice of a process in violation of a biotechnology patent.

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See 35 U.S.C. § 287(c)(2). Thus, instead of using a dull jackknife to make medical procedures entirely unpatentable, Congress used a scalpel to make patents effectively unenforceable against a narrow range of activities. What are the practical differences between excluding medical procedures from section 101 and limiting remedies as Congress did? The concerns that led Congress to pass this legislation in 1996 may have been the motivation for the result in the famous “ether” case in 1862, Morton v. New York Eye Infirmary, 5 Blatchf. 116 (C.C.S.D.N.Y. 1862). The court there held the ether anesthesia process of Morton and Jackson to be unpatentable subject matter. The discovery that excess doses of ether caused total insensibility to pain was not, in the court’s view, an “art” or “improvement” on an art. While the court granted that an invention was, in the broad sense, an improvement in the art of surgery, the court did not believe that the statute was intended to cover what it believed was essentially a new principle. Interestingly, the court lauded the discovery, while invalidating the patent covering it: Its discoverer is entitled to be classed among the greatest benefactors of mankind. But the beneficent and imposing character of the discovery cannot change the legal principles upon which the law of patents is founded. . . . Do you see the Funk v. Kalo approach here? Do you agree with the result? 8. Overbreadth of Claims vs. Scientific Principles – The famous case of Samuel F.B. Morse’s invention of the telegraph, O’Reilly v. Morse, 56 U.S. (15 How.) 62 (1853), has been cited by the court frequently as a statutory subject matter case. See. e.g., Gottschalk v. Benson, Parker v. Flook, and Diamond v. Diehr. But is it? The Court sustained Morse’s first seven claims to a telegraph in his reissue patent, but struck down the broader claim 8, which read: . . . the use of the motive power of the electric or galvanic current, which I call electro-magnetism, however developed, for making or printing intelligible characters, letters, or signs, at any distance. . . . It is true that in dictum, the Court said “the discovery of a principle in natural philosophy or physical science, is not patentable.” Id. at 116. But the decision invalidating claim 8 appears to have been grounded on claim overbreadth, based on the predecessor to 35 U.S.C. § 112 (to be covered in Chapter 6) rather than nonstatutory subject matter. Chief Justice Taney wrote: But Professor Morse has not discovered, that the electric or galvanic current will always print at a distance, no matter what may be the form of the machinery or mechanical contrivances through which it passes. You may use electro-magnetism as a motive power, and yet not produce the described effect, that is, print at a distance intelligible marks or signs. To produce that effect, it must be combined with, and passed through, and operated upon, certain complicated and delicate machinery, adjusted and arranged upon philosophical principles, and prepared by the highest mechanical skill. And it is the high praise of Professor Morse, that he has been able, by a new combination of known powers, of which electro-magnetism is one, to discover a method by which intelligible marks or signs may be printed at a distance. And for the method or process thus discovered, he is entitled to a patent. But he has not discovered that the electro-magnetic current, used as motive power, in any other method, and with any other combination, will do as well. **** This court has decided, that the specification required by this law is part of the patent; and that the patent issues for the invention described in the specification. [¶] Now, whether the Telegraph is regarded as an art or machine, the manner or process of making or using it must be set forth in exact terms. The act of congress makes no difference in this respect between an art and a machine. An improvement in the art of making bar iron or spinning cotton must be so described; and so must the act of printing by the motive power of steam. And in all of these cases it has always been held that the patent embraces nothing more than the improvement described and claimed as new, and that any one who afterwards discovered a method of accomplishing the same object, substantially and essentially differing from the one described, had a right to use it. Can there be any good reason why the art of printing at a distance, by means of the motive power of electric or galvanic current, should stand on different principles? **** Indeed, if the eighth claim of the patentee can be maintained, there was no necessity for any specification, further than to say that he had discovered that, by using the motive power of electromagnetism, he could print intelligible characters at a distance. We presume it will be admitted on all hands, that no patent could have issued on such a specification. Yet this claim can derive no aid from the specification filed. It is outside of it, and the patentee claims beyond it. And if it stands, it must stand

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simply on the ground that the broad terms above mentioned were a sufficient description, and entitled him to a patent in terms equally broad. In our judgment the act of congress cannot be so construed. Id. at 422-425. Clearly, telegraphy was not a “scientific principle,” existing apart from the handiwork of man. Electro-magnetism may be part of nature, but telegraphy is not. The issue addressed by the Court was what was Morse’s contribution compared to his claim. Do we foster or hinder analysis under section 101 by using shorthand phrases such as “laws of nature”? The later Telephone Cases, 126 U.S. 1 (1888), illustrate the claim overbreadth/scientific principle distinction. The report of the litigation over Alexander Graham Bell’s telephone patent takes up the entire volume of 126 U.S. Reports. As in O’Reilly v. Morse, the Court upheld Bell’s narrower claims but wrestled with the validity of broader claim 5, which read: The method of, and apparatus for, transmitting vocal or other sounds telegraphically, as herein described, by causing electrical undulations, similar in form to the vibrations of the air accompanying the said vocal or other sounds, substantially as set forth. In distinguishing O’Reilly and upholding claim 5, Chief Justice Waite wrote for the Court: The effect of [the O’Reilly] decision was, therefore, that the use of magnetism as a motive power, without regard to the particular process with which it was connected in the patent, could not be claimed, but that its use in that connection could. [¶] In the present case the claim is not for the use of a current of electricity in its natural state as it comes from the battery, but for putting a continuous current in a closed circuit into a certain specified condition suited to the transmission of vocal and other sounds, and using it in that condition for that purpose. So far as at present known, without this peculiar change in its condition it will not serve as a medium for the transmission of speech, but with the change it will. Bell was the first to discover this fact, and how to put such a current in such a condition, and what he claims is its use in that condition for that purpose, just as Morse claimed his current in his condition for his purpose. We see nothing in Morse’s case to defeat Bell’s claim; on the contrary, it is in all respects sustained by that authority. It may be that electricity may not be used at all for the transmission of speech except in the way Bell has discovered, and that therefore, practically, his patent gives him its exclusive use for that purpose, but that does not make his claim for the use of electricity distinct from the particular process with which it is connected in his patent. It will, if true, show more clearly the great importance of his discovery, but it will not invalidate his patent. Id. at 534-35. Implicit in the Court’s decision is that claim 5 was proper statutory subject matter. 9. Is it Section 101 or Section 102? (revisited) – Again, in the non-biotech cases you see judges sparring about whether they are improperly mixing up the statutory subject matter issue of section 101 with the issue of novelty under section 102. See, e.g., Diamond v. Diehr, majority and dissent. Are the majority in Flook and the dissent in Diehr the ones who are doing the mixing? Does the approach in Flook of dissecting out the algorithm and treating it as “well known” really make the issue one of novelty rather than statutory subject matter? Is this the same approach taken in Funk? Interestingly, in Flook, the Court cites O’Reilly v. Morse for this dissection approach, but it quotes only the words of a English judge in a case cited in O’Reilly, Neilson v. Harford, which the O’Reilly court distinguished. As discussed above, there is a serious question as to whether O’Reilly is a subject matter case at all. 10. Mere Function of a Machine – The CCPA until 1968 applied a bizarre doctrine it had gleaned from 19th century Supreme Court opinions, namely, the “function of a machine” doctrine. This doctrine held process claims invalid if they were only the inherent “function of a machine” described in the patent. In 1968, the CCPA abolished the doctrine in In re Tarczy-Hornoch, 397 F.2d 856, 158 USPQ 141 (CCPA 1968). In an in-depth treatment of the precedent, Judge Rich, writing for the court, concluded that the doctrine made no sense. He summed it up this way: We feel that the basic rationale of the patent system demands the upholding of properly drawn claims for new, useful, and unobvious processes, regardless of whether the inventor has invented one, two, or more machines to carry them out. Cf. Waxman v. Smith[, 294 U.S. 20 (1934)]. Id. at 867. Interestingly, the dissent in Diehr seemed unhappy with the CCPA’s abolition of the doctrine. 450 U.S. at 198.

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Software and Business Models| Modern Problems: Controversy The movement of the Federal Circuit to accept software and business models as eligible subject for patenting has sparked a great deal of controversy. As you read the following, consider whather you have objections to the patenting of software or business models, and what, if anything, is the appropriate action to take to resolve your concerns.

United States Patent 5,887,273 Method and System for Interactive Contributions: Solicitation and Donation

Inventor: Appl. No.: Filed: Issued:

Ziarno; Witold A. (4517 S. St. Louis Ave., Chicago, IL 60632) 575915 April 18, 1996 March 23, 1999 Abstract

An offering plate that permits an attender at a religious service to make a donation that consists of a cash donation acceptor, an envelope donation acceptor, a credit card donation processor, and/or a debit card donation processor. The offering plate associates a donation with an account of a member, tallies information regarding a number of donations, and stores information regarding a donation, and a plurality of donations. The offering plate is part of an offering plate network which consists of an offering plate, a clergy member's terminal, and a communication link between the offering plate and the clergy member's terminal. The offering plate network collects, analyzes, and displays statistical information. Claims I claim: 1.

A computer implemented method of interactive fund-raising across a data packet transferring computer network, comprising communicating a request for a contribution data packet to a plurality of remote contribution accepting devices communicatively linked to a contributions managing device and remote from each other and geographically remote from said contributions management device, accepting said request for a contribution data packet at said remote contribution accepting devices by way of a routine, said remote contributions accepting devices utilizing a routine for accepting at least one contribution, and said request being at least visually presented on said contribution accepting device;

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inputting contributions at said remote contribution accepting devices in response to said request; receiving and recording at said contributions managing device from a plurality of said remote contribution accepting devices said contributions inputted on said plurality of said remote contribution accepting devices, and said contributions managing device having a routine for receiving and recording contributions from at least one contribution accepting device.

Inventor Claims Red Cross Violates His Patent Rights THE WALL STREET JOURNAL, March 30, 2001 By Richard B. Schmitt Staff Reporter of THE WALL STREET JOURNAL CHICAGO -- Witold Ziarno says some big charities are stealing his technology and it's time to make them pay. The lawyer and sometime inventor has a patent for a computerized way for nonprofit groups to raise money. The patent specifically covers "a computer-implemented method of interactive fund raising across a data-packet-transferring computer network." In other words, he's claiming just about any means of raising money over the Internet. Mr. Ziarno says he was inspired to develop the approach while sitting in church during the offering. Nowadays, charities and politicians raise millions of dollars online, and Mr. Ziarno says he's determined to get his share. When the American Red Cross refused to pay him a royalty, he filed suit in federal court, alleging that two Web sites the group operates to solicit disaster relief violate his patent rights. In the past, patents primarily covered gadgets, like the proverbial better mousetrap. But recently they have been extended to include Internet "business methods," even though critics say the ideas covered are frequently obvious or unoriginal. A court is still considering the best-known example -- a patent granted to Amazon.com for online shopping using a single mouse click. Online giving, while still small, is considered a major growth area for charities, allowing them to tap into the young, wired and rich. "It is a damn shame what that guy is doing," says Adam Corson-Finnerty, a University of Pennsylvania development official and the co-author of a book called "Fundraising and Friend-Raising on the Web." A Red Cross spokesman calls Mr. Ziarno's suit "preposterous and distressing" and says his patent claims are "at best, a gross exaggeration." Mr. Ziarno, 35 years old, responds that big charities are big businesses and should be held accountable as such. So far, the judge overseeing the case has issued a number of pretrial rulings favoring the inventor, including declining to dismiss the suit.

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Besides the Red Cross, more than a dozen fund-raising groups with successful Internet operations have declined to take Mr. Ziarno seriously. He has threatened to sue Second Harvest, a hunger-relief charity. He also claims that boosters of Arizona Sen. John McCain, who took in more than $6 million in Web-based contributions for his presidential bid last year, used his technology without authorization. He says he offered to license the technology to the campaign for a fee, but "they basically blew me off." A spokesman declines comment. In taking on the Red Cross, Mr. Ziarno has picked a juicy target. The charity has annual revenue of about $2 billion, partly because it has been quick to take advantage of new technology. Its Web sites offer gripping accounts of disasters around the world. Over the years, it has sponsored such programs as virtual auctions of Super Bowl tickets. "This year you can put your money where your mouse is," says an ad for the Red Cross chapter in Chicago. In 1996, the Red Cross launched a new site, called www.DisasterRelief.org. The site linked to the main Red Cross Web site, which accepted credit-card contributions, and it was an instant hit. The Internet "is tailor-made for disaster relief operations," Douglas Rekenthaler, a former editor of the Web site, declared in an interview cited by Mr. Ziarno in court papers. Enter Mr. Ziarno, who had been fooling around with inventions since he was a kid, designing imaginary robots and other labor-saving gizmos to help his mother. As a lawyer, he has helped an unusual array of innovators protect their works, including a doctor who developed nonsurgical treatments to clean out arteries and an importer who designed a trumpetshaped vodka bottle. His clients say he is unusually skilled at helping to describe their inventions for federal patent examiners in ways that distinguish them from prior works. Beginning in 1993, Mr. Ziarno started applying for patents on his own account. Over the years, he has received patents for an electronic version of the Salvation Army bucket and a gift-registering device to be passed around at weddings, funerals and christenings. Eventually, he would like to set up his own online company to service nonprofit and charitable organizations. The genesis of the patent in dispute in the Red Cross case was an idea he called an electronic offering plate. It was supposed to enable parishioners to punch in their offerings at church via computer. He says he got positive feedback from ministers, but the lay clergy felt the idea was overly commercial and crass. In 1999, after six years of negotiating with federal examiners over the breadth of the proposed invention, he was issued a patent, which is called "Method and System for Interactive Contributions Solicitation and Donation." Though the invention initially targeted church giving, he says the patent's language covers all forms of electronic fund raising, citing a tenet of patent law that gives inventors the right to all "embodiments" of their inventions. In court papers, the Red Cross calls the patent "invalid, unenforceable and void." It asserts that Mr. Ziarno added the Internet claims to his patent application only after the potential utility of the Internet had become obvious to the world, and it cites correspondence indicating that even federal patent examiners had trouble with the idea of extending his rights to all online fund raising. In addition, the group says others were raising funds via computer long before he came along, "prior art" that would by law eviscerate Mr. Ziarno's patent. It cites the Electronic Mall operated by the CompuServe network in the late 1980s and early 1990s that allowed people to purchase items to benefit the U.S. Olympic Committee and UNICEF. Mr. Ziarno's expects his suit to go to trial later this year.

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United States Patent 4,873,662 Information handling system and terminal apparatus therefor Desmond Sargeant, October 10, 1989 (filed August 15, 1980) Abstract

Informaton for display at a terminal apparatus of a computer is stored in blocks the first part of which contains the information which is actually displayed at the terminal and the second part of which contains information relating to the display and which may be used to influence the display at the time or in response to a keyboard entry signal. For example, the second part of the block could include information for providing the complete address of an another block which would be selected by the operation of a selected key of the keyboard. The second part of the block could alternatively influence the format and/or color of the display at the terminal. When a block is read from the store of the computer the second part is retained in another store which may be located in the terminal or in the computer itself or perhaps both. The invention is particularly useful in reducing the complexity of the operating protocol of the computer.

Description This invention relates to an information handling system in which information is derived from a computer at a remote point and transmitted via the public telephone network to terminal apparatus. The invention also includes the terminal apparatus itself. It has been proposed to provide for domestic and/or business consumers a simplified form of computer terminal by means of which information stored in a computer can be obtained from it via the public telephone network. The form of the terminal is different from a conventional computer terminal, both in the simplicity of its operation and in the form of its display. The display is of the form of a page of data and is reproduced on a cathode-ray tube screen which may be part of a domestic television receiver or may be a special purpose apparatus for this function. Instead of a cathode-ray tube screen, a special purpose alphanumeric display may be used. Initially the data is displayed on the screen in the form of a sequence of progressively more detailed indices by means of which an operator is enabled to key-in to a key pad provided for the terminal numbers identifying a particular page of information which he requires. Since the system is to be operated by unskilled operators it is important that the key required be of self-evident nature and inevitably this will restrict the nature of facilities which the computer can provide. One such system is known by the name VIEWDATA, and in which the information provided by the computer is identified by a page number and when this page is keyed the whole of the data contained in that page is transmitted in coded form to the terminal where it is stored and displayed continnously, until the next page is received or the terminal switched off. Difficulties arise in such a system, however, because of the need to ensure the simplicity of operation of the terminal, bearing in mind the likelihood that the significance of particular keying inputs may need to be varied in dependence on the data being displayed. It is an object of the present invention to alleviate the above difficulty.

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According to one aspect of the present invention there is provided an information handling system in which information is transmitted to a terminal apparatus from a computer via a telephone line, the information being transmitted to the terminal apparatus in packets, each of which is displayed by the terminal apparatus as a page consisting of a plurality of parallel lines of alphanumeric characters and/or graphical data, the terminal apparatus including means for transmitting signals to the computer via the telephone line indicating which packet or packets of information are to be transmitted by the computer, wherein information is stored by the computer in blocks each of which contains a first part consisting of the packet of information in the form of coded groups of digits representing the characters or graphical data forming the page to be displayed and a second part containing in coded form details relating to the page of information which are not displayed, means being provided for storing the second part of a block when the first part is transmitted to the terminal apparatus. The details relating to the page of information may be retained in the computer, for example, in a special register provided for the purpose, so that inputs from the terminal apparatus can be used to select items from among the details as information or instruction data for the computer. If the system forms part of a public telephone network, it is necessary to provide a way of charging a subscriber's account for the block or blocks of information transmitted to his terminal equipment. It is envisaged that certain information may be provided at very low cost or possibly free, whereas other information such as, for example, latest stock market prices may be relatively expensive. In such a system the second part of a block may include an indication of the charging rate for information supplied in the first part, so that the computer and/or the terminal can be arranged to record the cost of the information extracted to be charged against the subscriber's account. The second part of a block may include software, that is programming information, for simplifying entries to be made by an operator on the basis of the information displayed to him by the terminal apparatus. For example, the page of information displayed may be an index or part of an index, and to simplify keying each item of the index displayed may be indicated by a single digit. When the digit against a desired item is keyed it may be used to select full addressing information from the second part of the block, which full information is transmitted to the computer to enable the selection of the desired item. The second parts of the blocks of information may alternatively be transmitted to the terminal apparatus and stored in a special register there. According to a second aspect of the invention there is provided a terminal apparatus for an information handling system in which information is transmitted from a computer to the terminal apparatus via a telephone line, the information being transmitted to the terminal apparatus in blocks each of which is displayable by the terminal apparatus as a page consisting of a plurality of lines of alphanumeric characters and/or graphical data, the apparatus including means for receiving blocks of information signals from a telephone line, storage means for storing a block of information signals, means for repeatedly reading at least part of the storage means, means for converting signals repeatedly read from the storage means into video signals, means for producing a prolonged visible display in response to the video signals, and means for transmitting signals to a telephone line indicating to a computer which block or blocks of information are to be transmitted, wherein the storage means has a first part for storing coded groups of digits representing alphanumeric characters or graphical data forming the page of information to be displayed, and a second part for storing the remainder of the block of information representing details relating to the page of information to be displayed. The terminal apparatus may include data entry means, such as a manual keyboard, and means responsive to information stored in the second part of the storage means for modifying signals from the data entry means before they are applied to the transmitting means. Alternatively or additionally signals read from the second part of the storage means may be selectively, in response to the data entry means, transmitted to the telephone line for addressing other blocks of information stored in the computer.

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Claims What is claimed is: 1. A digital information storage, retrieval and display system comprising: a central computer means in which plural blocks of information are stored at respectively corresponding locations, each of which locations is designated by a predetermined address therein by means of which a block can be selected, each of said blocks comprising a first portion containing information for display and a second portion containing information not for display but including the complete address for each of plural other blocks of information; plural remote terminal means, each including (a) modem means for effecting input/output digital data communication with said central computer means via the telephone lines of a telephone network, (b) local memory for locally storing digital data representing at least the first portion of the selected block of information received via said modem means from the central computer, (c) display means for visually displaying such a locally stored first portion of a block of information and (d) key pad means connected to communicate data to at least said modem means for manual entry of keyed digital data; and further memory means being provided as a part of said central computer means for receiving and storing said second portion of the block of information selected by a particular terminal means in response to the selection of the block and when its respective first portion is transmitted to that terminal means for display, said central computer means utilizing keyed digital data from that particular terminal means of less extent than any one of said complete addresses for another block of information but nevertheless uniquely indicative of one of the complete addresses contained in said portion of the block of information which contains the first portion then being displayed by that particular terminal means for selectively accessing the part of said further memory means associated with that particular terminal means and for supplying the complete address of the next block of information which is to be retrieved for that particular terminal means and utilized for display purposes at that terminal means. 2. A system as in claim 1 wherein the second part of a block of information includes a representation of the monetary charge to be made in respect of supplying such information for display from the central computer means which also includes means for accumulating charges derived from the second parts of such supplied blocks and for associating the charges with the terminal apparatus to which the first parts of such blocks were transmitted. 3. A digital information storage, retrieval and display system comprising: a central computer means in which plural blocks of information are stored at respectively corresponding locations each of which locations is designated by a predetermined address therein by means of which a block can be selected, each of said blocks comprising a first portion containing information for display and a second portion containing information not for display but including the complete address for each of plural other blocks of information; plural remote terminal means, each including (a) modem means for effecting input/output digital data communication with said central computer means via the telephone lines of a telephone network, (b) local memory means for locally storing digital data representing at least the first portion of the selected block of information received via said modem means from the central computer and for processing digital data, (c) display means for visually displaying such a locally stored first portion of a block of information and (d) keypad means connected to communicate data to at least said local memory means for manual entry of keyed digital data; and further memory means being provided as a part of said local memory means at each of said remote terminal means for receiving and storing said second portion of the selected block of information in response to the selection of the block and when its respective first portion is transmitted thereto, said local memory means utilizing keyed digital data of less extent than any one of said complete addresses for another block of information but nevertheless uniquely indicative of one of the complete addresses contained in said second portion of the block of information which contains the first portion then being displayed for selectively accessing said further memory means and for supplying data to be transmitted by said modem means and indicative of the complete address of the next block of information which is to be retrieved and utilized for display purposes.

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4. A system as in claim 3 wherein the second part of a block of information includes a representation of the monetary charge to be made in respect of supplying such information for display from the central computer means which also includes means for accumulating charges derived from the second parts of such supplied blocks and for associating the charges with the terminal apparatus to which the first parts of such blocks were transmitted. 5. A terminal apparatus for use in a digital information storage, retrieval and display system having a central computer and a plurality of remote terminal apparatuses providing access via telephone lines to information stored in the central computer as plural blocks of information, each said block of information being stored at a respectively corresponding location designated by a predetermined unique address by means of which single address that complete block of information can be selected, each of said blocks comprising a first portion containing information for display at a remote terminal apparatus and a second portion containing information not for display but including the complete address for each of plural other stored blocks of information, said terminal apparatus comprising: (a) modem means for effecting input/output digital data communications with said central computer via the telephone lines of a telephone network, (b) local memory means linked to said modem means for locally storing digital data representing at least the first portion of the selected block of information received via said modem means from the central computer, (c) display means coupled to said local memory means for visually displaying such a locally stored first portion of a block of information, (d) keypad means coupled to at least one of said modem means and said local memory means for manual entry of keyed digital data, (e) further memory means for receiving and storing said second portion of a selected block of information when its respective first portion is transmitted for display to the terminal means, and (f) means coupled to said further memory means and to said keypad means for addressing such second portion stored in said further memory means using keypad digital data of less extent than any one of said complete addresses for another block of information to address a portion of the further memory means and cause a read-out portion of the further memory means to supply the complete address of the next block of information which is to be retrieved and utilized for display purposes, the thus obtained complete address being transmissible via the modem means to said central computer. 6. A terminal apparatus as in claim 5 including means responsive to information stored in the further memory means for modifying signals derived from the keypad means to produce the signals to be transmitted by the modem to a telephone line. 7. A terminal apparatus as in claim 5 including logic means responsive to data entered through the keypad means and the second portion then stored in the further memory means, the logic means having an output connected to the local memory means which logic and local memory means jointly cause the generation of a display dependent (a) on the data entered through the keypad means and (b) on the second portion then stored in the further memory means.

Patent Problems THE INDUSTRY STANDARD (http://www.thestandard.com/article/display/0,1151,8999,00.html) January 21, 2000 By Lawrence Lessig Jeff Bezos of Amazon.com is Time magazine's 1999 Person of the Year. "Unquestionably, the king of cybercommerce," and among the youngest to join that exclusive club (only Charles Lindbergh, Queen Elizabeth II and Martin Luther King Jr. were younger), Bezos has become a kind of hero of the Net. His

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success is a measure of the reward the Net returns to innovation. And his company is a symbol of that innovation. But for a growing number of people, "Amazon.com" has a second meaning. When it filed suit against Barnes & Noble to defend its patent over the "one-click" technology, it stood for a different trend in cyberspace. This is the trend to patent cyberspace – the explosion of patents claiming rights to technologies, and hence to ways of doing business, on the Net. One of this growing number is Richard Stallman . Winner of a MacArthur Foundation "genius grant," founder of the Free Software Movement, author of GNU – which made Linux possible – Stallman is not quite as rich as Bezos. Nor is he as young. But among founders of the Net, he has earned a certain respect as a man who speaks from principle. In Stallman's view, we should boycott Amazon.com. The one-click technology, Stallman writes, is an "important and obvious idea for e-commerce." It should not be the subject of a patent. "Foolish government policies gave Amazon the opportunity [to get this patent] – but an opportunity is not an excuse. Amazon made the choice to obtain this patent, and the choice to use it in court for aggression." You don't have to be against all patents to believe that there is a reason to be concerned here. For contrary to the it's-all-OK-sayers, there is something new about patents in cyberspace. While the old problems with patents remain – for example, can the patent office keep up with the pace of change – there is a new kind of patent that is sweeping technologists in the Valley. Yet we know nothing about the effect this patent will have. This is the "business method patent," discovered by a federal court in 1998. It gives the holder a monopoly over a way of doing business that gets instantiated in technology. That's troubling enough in real space, where not all ways of doing business can be expressed in technology. But in cyberspace, there is no limit to the potential of this sort of patent. Every method of doing business in cyberspace by definition is instantiated in technology – code. So every method in principle becomes subject to a patent. This a problem, because patents impose costs on the creative process, even if they also create benefits. They will move cyberspace from Nike-land ("Just do it") to lawyer-land ("Have you passed that by the lawyers"). And while these costs on balance might be worth it, there is no guarantee. It all depends. Thus, the question that any rational patent system must ask before it launches a new swarm of patents: whether the costs outweigh the benefits. Congress has not asked this question. Instead, this new monster was called forth from an old statute, reinterpreted by the Federal Circuit. So before any policy analysis has been made, lawyers have been scurrying about the Valley signing up technologists for this dole of government-granted monopolies. And long before anyone in Washington gets around to thinking about the matter, cyberspace will have changed. Lawyers will be regulating the coders; innovation will proceed only as quickly as the licenses can be sold. If they are sold. There is no more important issue about cyberspace for Congress to address than this, and now rather than later. It is the Issue of the Year for 2000. The Net was not built on proprietary technologies; there is a good argument that this weed will choke innovation. But whether one believes that or not, Congress should address the matter – with full hearings, and possibly new legislation (on this Stallman agrees). This central issue about the future of innovation should not be left to the innovation of lawyers, the mandarins of our culture, pushing courts to see how "this" is just like "that." And it should not be left to boycotts. For th0ugh I can understand how Stallman might call a company immoral for taking from the government's monopoly dole, the real responsibility here belongs to Congress. Amazon has shareholders; its management will act to maximize its return, given the legal Chapter 12 – The Subject Matter of Patents

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opportunities available. And while its founder may have joined the ranks of "a pioneer, royalty and a revolutionary," Bezos is still a businessman. We don't leave public policy to business. – Lawrence Lessig is Berkman Professor of Law at Harvard Law School.

My Conversation with Jeff Bezos Tim O'Reilly, March 2, 2000 (www.oreilly.com/ask_tim/bezos_0300.html) My February 29 column about Amazon's patents on oreilly.com, and the overwhelming support from all of you, certainly got Amazon's attention. I got a polite but short reply when I sent my first, private letter back in January. Yesterday, I got a call from Jeff. We talked for over an hour and a half. This is my report on that call, and what progress we made. I want to start out by saying that one of my first goals in the conversation was not to lambaste Jeff or his company, but to listen to him. I'd given him a public eyeful of my opinions, and I felt I owed him a chance to respond. So the first thing I'm going to report on is what he says about why Amazon did what they did, and what kind of sense those arguments made to me. Then I'm going to talk about what I suggested in response, and where we ended up. Note that comments I ascribe to Jeff or myself are not literal quotes for the most part, and simply represent my attempt to capture the gist of our argument. Note also that I've taken some liberties with the order of the conversation, to make the overall narrative clearer. We had many sallies back and forth that I've smoothed into a single thread. To cut the suspense short, while I don't think that we're all the way to a happy ending, we had an extremely productive conversation. We each made some important points that resonated with the other, and while our central disagreement remains unresolved, I think that we've laid out the issues in a way that will lead to fruitful further discussion. I'm hopeful that you will also regard this conversation as progress, and stay with us as we try to take it all the way through to a conclusion. First off, Jeff wanted to explain why he thought 1-click was original enough to patent. It has nothing to do with the implementation, which he admits is fairly trivial to duplicate, but with the reframing of the problem. At the time he came up with 1-click shopping, everyone was locked in to the shopping cart metaphor, because that's what you do in the real world. You pick up an item and take it to the counter to buy it. On the Web, he realized, something very different was possible: all you had to do was point to an article, and it was yours. Phrased that way, rather than in the convoluted language of the patent, I could see that Amazon was not just cynically abusing the patent system. Jeff could in fact be claiming in good faith that he had made a seemingly small but nonetheless significant innovation. I don't know if Jeff is right that Amazon was the absolute first to do such a thing--and I'd love to hear from any of our readers who believe that they implemented such a system before Amazon--but I could see that he was sincere. Jeff argued further that you can't just attribute this patent, as many do, to patent office incompetence. He pointed out that Barnes & Noble had a chance to present prior art in court, and that after a review of all the evidence B&N was able to dig up, the judge granted a preliminary injunction. Jeff feels that this is Chapter 12 – The Subject Matter of Patents

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fairly strong evidence (coupled with the press coverage when the 1-Click feature was introduced) that the feature was an Amazon innovation. What's more, Jeff went on, small inventions can often seem extremely obvious in retrospect. The patent literature is full of this kind of thing. The significance of an invention isn't how hard it is to copy, but how it reframes the problem in a new way. This may be true, I replied. But it is hard to believe that if Amazon hadn't introduced 1-click ordering (if they were indeed first to do it), that someone else wouldn't have done this. It beggars the imagination that this is so significant and unexpected an innovation that others should be prevented from using it. Patents are meant to promote the common welfare, the idea being that certain ideas won't be developed without government providing a degree of protection. Is this an idea that required that kind of protection to be developed? Jeff countered that Amazon has made countless other innovations in Web commerce that it didn't patent, and that have been widely copied. For one example, he pointed to the way that they publish sales rankings. He actually wishes they had patented a few more of these things. Why? Amazon started patenting because they realized that they would be under attack by players who might well one day be able to put them out of business. Jeff tried to reframe the problem from Amazon's point of view, and the analogy he used was arresting: "We don't want to be another Netscape." Jeff: While we may be large for an internet company, we're small in the retailing world. WalMart is 70 times the size of amazon.com, and there is no reason to believe they are hesitant to use their market power. B&N isn't doing any innovation at all on the Web--all they do is copy Amazon feature for feature, sometimes down to the exact wording. Is that right? he asked. How would you feel if Amazon ended up being acquired by WalMart as Netscape was acquired by AOL? Don't you wonder what might have happened if Netscape had filed a few patents? Amazon isn't the bully here. In fact, we are standing up to a bully. These are companies that have been extremely aggressive in stamping out competition in the bricks and mortar world, and they are bringing their entire arsenal to bear on Amazon. Point to Jeff. Amazon's failure would be a bad outcome. Regardless of what we may feel about the patentability of its ideas, or about software patents in general, or about B&N, Amazon has been an innovator and a leader, as Netscape was once an innovator and a leader. Our industry is impoverished by Netscape's fall from leadership, as it would be impoverished if Amazon were to fail and be acquired by a less visionary company. Is Amazon really in danger of that failure? The growing impatience of stock market analysts with Amazon's lack of profitability makes that less unthinkable than it once was, and Jeff may be right to be paranoid. But if Amazon's success really hangs on such a slender thread, then they deserve to lose their place in the sun. Jeff replied that there are ten thousand slender threads, and to win against entrenched competitors, you need as many threads as you can get. Patents are only one small part of the competitive arsenal.

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However, we didn't really go deeply into the extent of Amazon's danger. Here's where we did go: Collateral Damage We both agreed that the roadblocks placed in the way of B&N by Amazon's patents are small. After all, what did it take B&N to work around the 1-click patent? They had to add a second click for the user to confirm the order. To Jeff, this suggests that this is not a fundamental patent that is going to freeze up e-commerce. To Tim, this suggests all the more that pursuing suchpatents is a bad idea. They don't do Amazon that much good, and they do the software industry a lot of harm. Tim: With the Web we've had this incredibly fertile period marked by a great deal of sharing and consequent innovation, most of it by independent developers who've learned by looking at what others were doing, imitating it and then playing leapfrog. And it is these developers whose efforts are most harmed by the fear that they may be sued by a player like Amazon. Jeff: We aren't going after those developers. There are lots of people using 1-click purchasing on their sites whom we aren't suing. We're just going after the big guys who are going after us, the guys who are not innovating themselves but just copying us and working to crush us. Tim: Would you be willing to make some kind of public promise that you won't be going after other people about this? Jeff: I'll think about it and talk with my lawyers to see if there's any way we could do that without harming our suit against B&N. Hmmm. Would that be good enough? On the one hand, better half a loaf than none at all. I urge Jeff to do this, but I am worried that it won't be enough. Jeff suspects that there is likely to be some genuine disagreement at the end. If it's at Amazon's discretion to decide who is a no-account imitator threatening Amazon, and so subject to any defensive tactics, and who is an independent player, aren't we still in the same zone of fear and uncertainty? My biggest worry, I say, is that of bad example. When a good guy like Amazon, who has been an innovator, starts suing over software patents, that gives cover to someone like Jay Walker of Priceline, who runs a patent mill whose explicit business model is to make money from patent fees. Not to mention companies like IBM, who by some reports are the biggest thugs around in the patent space. Yes, Jeff, you're right that you aren't the biggest offender, and that it seems unfair to single you out when there are so many others who are doing so much more damage. You are being made an example of precisely because you are a good guy and Amazon a great company, which does care about both customers and innovation, as you said to me in your original email response. That's why it's so important that you set a good example. I'm mindful of a wonderful article called "The Tipping Point," by Malcolm Gladwell, that appeared several years ago in The New Yorker, which applied theories of epidemiology to social phenomena. (Gladwell has apparently just published a book of the same name, which I haven't read yet, but is presumably an expansion of the article.) Gladwell's basic concept is that an infection turns into an epidemic when the rate of infection is higher than the rate at which people die or recover. There is therefore a point (the tipping point) at which a relatively small intervention can have disproportionately large effects. This is why, for example, cleaning up graffiti or petty crime can turn a neighborhood around and reduce the incidence of more serious crimes.

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I didn't actually mention the tipping point in my conversation with Jeff, but it certainly shaped my argument. The Web has been developed under a certain set of informal groundrules, where imitation was the sincerest form of flattery. Those rules are under attack, as companies decide the Web is "good enough" and now they are going to change the rules under which it developed, and stop others from copying them. We have to strike now, before exclusionary and proprietary approaches become accepted practice. At the end of the day, a culture is ruled not just by its laws but by its social norms. The social norms of the Internet and of the Open Source community, which have proven so productive in the development of the Web, need to be recognized, honored, and upheld. The public relations cost of violating those norms needs to be high. I cited sustainable agriculture as a guiding metaphor. If you take from the soil and don't give anything back, crop yields eventually decline. If you look at the computer industry (and in fact most industries that rely on proprietary roadblocks to innovation), they resemble slash-and-burn agriculture. You strip the soil of its nutrients and move on. A fertile new field is developed, usually by people on the fringes of commercial activity, who are building for the love of it. There is a rich soil of ideas, the shared heritage of all practitioners in the field. Innovation comes naturally, since anyone can build on what has gone before. Talent is naturally rewarded. As commercial activity moves in, the field is fenced off. Innovations are no longer contributed back but are hoarded within corporations. Imitation is still possible, but requires re-implementation from scratch, which raises the barrier to entry. Companies start to see ideas as scarce resources that need to be protected (and yes, they are getting scarcer, though no one seems to ask why), and eventually they start suing each other to keep others from copying what they've done. We saw this in the early days of the PC industry. The open hardware platform allowed small developers to enter the market, and there was a fury of innovation until some of the players got big enough to forget the rules of the game as they'd played it when they were young. Instead, they started playing by the rules of older, stagnant industries. Apple sued Microsoft over ideas that they themselves had copied from Xerox PARC; Lotus sued Borland; Microsoft didn't sue, but they developed an awesome array of tools to keep others from copying what they were doing. It became a winner-takesall game where financial and legal engineering took precedence over technical innovation. The desktop software world had become a wasteland by the early 90's. If the Internet hadn't come along (a new fallow field, with rich soil laid down by twenty years of open exchange of ideas), Microsoft's victory would have turned hollow. Instead, they got a new wave of ideas, from an environment where ideas are grown, not just consumed. In short, hoarding of ideas may lead to short term advantage for your company, but long term, it's bad for the environment...an environment that you yourself depend on. So, yes, maybe it's far fetched that something as small as the Amazon 1-click patent could be the beginning of the end. But it's a sign that the rules are changing. And the long term consequences will be bad for all of us. Somewhere in the course of this line of discussion, Jeff's comments turned from a defense of the right to patent to increasing signs of agreement. He still holds to his need to use any weapon he has-including patents--to give Amazon the competitive advantage he believes it will need to survive. Still, the sustainable agriculture metaphor makes a lot of sense to him. Yes, it's true, he noted, that when companies like Apple and Lotus turned to lawsuits rather than engineering to beat their competition, they were losing their edge, and it was the start of a long downward slide.

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At this point, it started to feel like Jeff and I were brainstorming together about other ways than patents to solve his competitive problem. So, we started to ask, isn't the right way for Amazon to proceed to just keep out-innovating those big, hostile companies? How can Amazon develop strategic advantages by what they give away rather than what they try to keep others from using? How could they become more active in giving back to the innovative developers who will keep giving back to them? Amazon has already become the reference site of record for the publishing industry, the site that everyone uses to search for information about books. How about ways to make Amazon even more useful for research as well as commerce, with a public API for cooperating applications? Wouldn't that be the Internet way, to keep yourself at the center of the expanding universe of new possibilities, rather than trying to close the gate behind you? I won't go into details of all of the possibilities we talked about. The conversation was exhilarating, and I really felt that Jeff is sincere about wanting to think about the problems I raised with his approach, but in the end it is actions that will speak. Right now, the immediate actions that we agreed on were three: 1. For Amazon.com to think hard about what kind of assurances they could give to independent developers about their safety from patent lawsuits. 2.

To continue our conversation about patents, openness, and software innovation.

3. For me to write up our conversation so far and share it with the public, even in its inconclusive state. After all, one of the rules of the Internet, as articulated so brilliantly in The Cluetrain Manifesto, is that a market is a conversation. We don't have an answer yet, but we're talking. I'd like to invite you into this conversation. What do you think about Jeff's assertion that Amazon is under attack from ruthless competitors who might have the strength to bring them down? Even if this is true, is a patent lawsuit a legitimate way to defend against them? What kind of public stand would you like to see Amazon take on patent issues? How could Amazon best support further innovation on the Internet? How would you like to see them give back to the developer community? Thanks for all your support, --Tim O'Reilly

Questions, Comments, Problems 1. What do you think of the Ziarno patent? What do you think it covers? If you were advising the the Red Cross, would you take a license? 2. British Telecom, the assignee of the Sargeant patent, claims that it covers the “hyperlink” that is the core of the world-wide-web. Accordingly, the company has begun suing large Internet Service Providers with infringement. Evaluate this claim. How would you attack the patent? Is this patent representative of a larger problem, or simply an aberration?

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3. What do you think of the claims made by Lessig and O’Reilly? What are their principal objections to software and internet-related patents? Are these objection unique to software and the internet, or are that, more broadly, a condemnation of the patent system? How your you begin to address their concerns?

Software and Business Models| Modern Problems: Solutions?

The following materials illustrate some solutions that have been suggested to resolve the “problem” of software and internet patents. Consider whether you think these approaches will have their desired effect.

Amazon.Com, Inc., v. Barnesandnoble.Com, Inc 239 F.3d 1343 (Fed. Cir. 2001). Before CLEVENGER, GAJARSA and LINN, Circuit Judges. CLEVENGER, Circuit Judge. [Amazon.com sued Barnesandnoble.com (BN) for patent infringement, alleging that BN’s web-based ordering system violated the ‘411 patent. The district court entered a preliminary injunction, which BN appealed.] Amazon's patent is directed to a method and system for "single action" ordering of items in a client/server environment such as the Internet. In the context of the '411 patent, a client/server environment describes the relationship between two computer systems in which a program executing on a client computer system makes a service request from another program executing on a server computer system, which fulfills the request. Typically, the client computer system and the server computer system are located remotely from each other and communicate via a data communication network. The '411 patent describes a method and system in which a consumer can complete a purchase order for an item via an electronic network using only a "single action," such as the click of a computer mouse button on the client computer system. Amazon developed the patent to cope with what it considered to be frustrations presented by what is known as the "shopping cart model" purchase system for electronic commerce purchasing events. In previous incarnations of the shopping cart model, a purchaser using a client computer system (such as a personal computer executing a web browser program) could select an item from an electronic catalog, typically by clicking on an "Add to Shopping Cart" icon, thereby placing the item in the "virtual" shopping cart. Other items from the catalog could be added to the shopping cart in the same manner. When the shopper completed the selecting process, the electronic commercial event would move to the check-out counter, so to speak. Then, information regarding the purchaser's identity, billing and shipping addresses, and credit payment method would be inserted into the transactional information base by the soon-to-be purchaser. Finally, the purchaser would "click" on a button displayed on the screen or somehow issue a command to execute the completed order, and the server computer system would verify and store the information concerning the transaction. Chapter 12 – The Subject Matter of Patents

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As is evident from the foregoing, an electronic commerce purchaser using the shopping cart model is required to perform several actions before achieving the ultimate goal of the placed order. The '411 patent sought to reduce the number of actions required from a consumer to effect a placed order. In the words of the written description of the '411 patent: The present invention provides a method and system for single-action ordering of items in a client/server environment. The single-action ordering system of the present invention reduces the number of purchaser interactions needed to place an order and reduces the amount of sensitive information that is transmitted between a client system and a server system. How, one may ask, is the number of purchaser interactions reduced? The answer is that the number of purchaser interactions is reduced because the purchaser has previously visited the seller's web site and has previously entered into the database of the seller all of the required billing and shipping information that is needed to effect a sales transaction. Thereafter, when the purchaser visits the seller's web site and wishes to purchase a product from that site, the patent specifies that only a single action is necessary to place the order for the item. In the words of the written description, "once the description of an item is displayed, the purchaser need only take a single action to place the order to purchase that item." II [The relevant claims were written in both apparatus and method format; each contains the disputed “single action” limitation.] We set forth below the text of the [relevant claims] with emphasis added to highlight the disputed claim terms: 1. A method of placing an order for an item comprising: under control of a client system, displaying information identifying the item; and in response to only a single action being performed, sending a request to order the item along with an identifier of a purchaser of the item to a server system; under control of a single-action ordering component of the server system, receiving the request; retrieving additional information previously stored for the purchaser identified by the identifier in the received request; and generating an order to purchase the requested item for the purchaser identified by the identifier in the received request using the retrieved additional information; and fulfilling the generated order to complete purchase of the item whereby the item is ordered without using a shopping cart ordering model. 2. The method of claim 1 wherein the displaying of information includes displaying information indicating the single action. 6. A client system for ordering an item comprising: an identifier that identifies a customer; a display component for displaying information identifying the item; a single-action ordering component that in response to performance of only a single action, sends a request to a server system to order the identified item, the request including the identifier so that the server system can locate additional information needed to complete the order and so that the server system can fulfill the generated order to complete purchase of the item; and a shopping cart ordering component that in response to performance of an add-toshopping-cart action, sends a request to the server system to add the item to a shopping cart.

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9. A server system for generating an order comprising: a shopping cart ordering component; and a single-action ordering component including: a data storage medium storing information for a plurality of users; a receiving component for receiving requests to order an item, a request including an indication of one of the plurality of users, the request being sent in response to only a single action being performed; and an order placement component that retrieves from the data storage medium information for the indicated user and that uses the retrieved information to place an order for the indicated user for the item; and an order fulfillment component that completes a purchase of the item in accordance with the order placed by the singleaction ordering component. 11. A method for ordering an item using a client system, the method comprising: displaying information identifying the item and displaying an indication of a single action that is to be performed to order the identified item; and in response to only the indicated single action being performed, sending to a server system a request to order the identified item whereby the item is ordered independently of a shopping cart model and the order is fulfilled to complete a purchase of the item.

The district court interpreted the key "single action" claim limitation, which appears in each of the pertinent claims, to mean: The term "single action" is not defined by the patent specification. . . . As a result, the term "single action" as used in the '411 patent appears to refer to one action (such as clicking a mouse button) that a user takes to purchase an item once the following information is displayed to the user: (1) a description of the item; and (2) a description of the single action the user must take to complete a purchase order for that item. III As the moving party, Amazon is entitled to a preliminary injunction if it can succeed in showing: (1) a reasonable likelihood of success on the merits; (2) irreparable harm if an injunction is not granted; (3) a balance of hardships tipping in its favor; and (4) the injunction's favorable impact on the public interest. These factors, taken individually, are not dispositive; rather, the district court must weigh and measure each factor against the other factors and against the form and magnitude of the relief requested. Irreparable harm is presumed when a clear showing of patent validity and infringement has been made. This presumption derives in part from the finite term of the patent grant, for patent expiration is not suspended during litigation, and the passage of time can work irremediable harm. Our case law and logic both require that a movant cannot be granted a preliminary injunction unless it establishes both of the first two factors, i.e., likelihood of success on the merits and irreparable harm. In order to demonstrate a likelihood of success on the merits, Amazon must show that, in light of the presumptions and burdens that will inhere at trial on the merits, (1) Amazon will likely prove that BN infringes the '411 patent, and (2) Amazon's infringement claim will likely withstand BN's challenges to the validity and enforceability of the '411 patent. If BN raises a substantial question concerning either infringement or validity, i.e., asserts an infringement or invalidity defense that the patentee cannot prove "lacks substantial merit," the preliminary injunction should not issue.

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[ . . . .] [The court then analyzed the claim construction, ultimately agreeing with the district court’s construction of the “single action” limitation of the relevant claims.] After full review of the record before us, we conclude that under a proper claim interpretation, Amazon has made the showing that it is likely to succeed at trial on its infringement case. Given that we conclude that Amazon has demonstrated likely literal infringement of at least the four independent claims in the '411 patent, we need not consider infringement under the doctrine of equivalents. The question remaining, however, is whether the district court correctly determined that BN failed to mount a substantial challenge to the validity of the claims in the '411 patent. VII Validity challenges during preliminary injunction proceedings can be successful, that is, they may raise substantial questions of invalidity, on evidence that would not suffice to support a judgment of invalidity at trial. The test for invalidity at trial is by evidence that is clear and convincing. To succeed with a summary judgment motion of invalidity, for example, the movant must demonstrate a lack of genuine dispute about material facts and show that the facts not in dispute are clear and convincing in demonstrating invalidity. In resisting a preliminary injunction, however, one need not make out a case of actual invalidity. Vulnerability is the issue at the preliminary injunction stage, while validity is the issue at trial. The showing of a substantial question as to invalidity thus requires less proof than the clear and convincing showing necessary to establish invalidity itself. Here, we have several references that were urged upon the court as invalidating the asserted claims. [E]ach of the asserted references clearly teaches key limitations of the claims of the patent in suit. BN argued to the district court that one of ordinary skill in the art could fill in the gaps in the asserted references, given the opportunity to do so at trial. A One of the references cited by BN was the "CompuServe Trend System." The undisputed evidence indicates that in the mid-1990s, CompuServe offered a service called "Trend" whereby CompuServe subscribers could obtain stock charts for a surcharge of 50 cents per chart. Before the district court, BN argued that this system anticipated claim 11 of the '411 patent. The district court failed to recognize the substantial question of invalidity raised by BN in citing the CompuServe Trend reference, in that this system appears to have used "single action ordering technology" within the scope of the claims in the '411 patent. First, the district court dismissed the significance of this system partly on the basis that "[t]he CompuServe system was not a world wide web application." This distinction is irrelevant, since none of the claims mention either the Internet or the World Wide Web (with the possible exception of dependent claim 15, which mentions HTML, a program commonly associated with both the Internet and the World Wide Web). Moreover, the '411 patent specification explicitly notes that "[o]ne skilled in the art would appreciate that the single-action ordering techniques can be used in various environments other than the Internet." More importantly, one of the screen shots in the record (reproduced below) indicates that with the CompuServe Trend system, once the "item" to be purchased (i.e., a stock chart) has been displayed (by typing in a valid stock symbol), only a single action (i.e., a single mouse click on the button labeled "Chart ($.50)") is required to obtain immediate electronic delivery (i.e., "fulfillment") of the item. Once the button labeled "Chart ($.50)" was activated by a purchaser, an electronic version of the requested stock chart would be transmitted to the purchaser and displayed on the purchaser's computer screen, and an automatic process to charge the purchaser's account 50 cents for the transaction would be initiated. In Chapter 12 – The Subject Matter of Patents

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terms of the language of claims 2 and 11 in the CompuServe Trend system, the item to be ordered is "displayed" when the screen echoes back the characters of the stock symbol typed in by the purchaser before clicking on the ordering button.

The evidence before us indicates that the billing process for the electronic stock chart would not actually commence until the client system sent a message to the server system indicating that the electronic stock chart had been received at the client system. In its brief, Amazon argues that this feature of the CompuServe Trend system amounts to an additional "confirmation step necessary to complete the ordering process," and that the CompuServe Trend system therefore does not use "single action" technology within the scope of the claims in the '411 patent. However, all of the claims only require sending a request to order an item in response to performance of only a single action. In the CompuServe Trend system, this requirement is satisfied when a purchaser performs the single action of "clicking" on the button labeled "Chart ($.50)." The claims do not require that the billing process for the item must also be initiated in response to performance of the single action. Furthermore, in the CompuServe Trend system, the "action" of sending a message from the client system to the server system confirming successful reception of the electronic stock chart is performed automatically, without user intervention.

At oral argument, Amazon's counsel articulated three differences between the CompuServe Trend system and the claimed invention. First, Amazon's counsel repeated the district court's reasoning, and asserted that the CompuServe Trend system is not on the Internet or the World Wide Web. As mentioned above, the '411 patent specification indicates that this distinction is irrelevant. Second, Amazon's counsel claimed that the CompuServe Trend system was different from the claims of the '411 patent because it required a user to "log in" at the beginning of each session, and therefore Chapter 12 – The Subject Matter of Patents

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would not send the claimed "identifier" along with a request to purchase each item. However, claim 11 does not require transmission of an identifier along with a request to order an item. This requirement is found only in claims 1, 6, and 9, and their respective dependent claims. On its face, the CompuServe Trend reference does not mention transmission of the claimed identifier along with a request to purchase each item. Nor does the evidence in the record at this stage indicate that the CompuServe Trend system transmitted such an identifier. BN has therefore not demonstrated that the CompuServe Trend reference anticipates the asserted claims of the '411 patent requiring transmission of such an identifier with the degree of precision necessary to obtain summary judgment on this point. However, as noted above, validity challenges during preliminary injunction proceedings can be successful on evidence that would not suffice to support a judgment of invalidity at trial. The record in this case is simply not yet developed to the point where a determination can be made whether the CompuServe Trend system transmits the claimed identifier along with a request to order an item, or whether this limitation is obvious in view of the prior art. For example, United States Patent No. 5,708,780 ("the '780 patent") (a reference cited by BN which is discussed more fully below), describes "forwarding a service request from the client to the server and appending a session identification (SID) to the request and to subsequent service requests from the client to the server within a session of requests." See '780 patent, col. 3, ll. 12-16. Moreover, the '411 patent specification itself dismisses the distinction between ordering systems in which an identifier is transmitted along with each request to order an item, and systems in which a user logs in once at the beginning of each session. See '411 patent at col. 10, ll. 6-10 ("[T]he purchaser can be alternatively identified by a unique customer identifier that is provided by the customer when the customer initiates access to the server system and sent to the server system with each message."). The final distinction drawn by Amazon's counsel between the claimed invention and the CompuServe Trend system was that—according to Amazon—the only reason that a purchaser would "call up" the screen would be to actually order an electronic stock chart, and that therefore an earlier action taken by a purchaser to invoke the screen should count as an extra purchaser action. According to this argument, the CompuServe Trend system would not meet the "single action" limitation because at least two actions would need to be taken to order an item: one action to invoke the ordering screen, and a second action to click on the ordering button. However, as the screen shot plainly indicates, a purchaser could use the display screen for purposes other than to order an electronic stock chart (e.g., to "Lookup" a stock symbol). Furthermore, to the extent that Amazon argues that the CompuServe Trend fails to meet the "single action" limitation due to the "click" necessary to activate the stock chart ordering screen in the first place, Amazon also admits that BN's Express Lane feature fails to meet the same limitation because of the "click" required to proceed from a menu page to a product page when using the Express Lane feature. As the CompuServe Trend stock chart ordering screen indicates, we note that once a purchaser types in a valid stock symbol, the screen displays both "information identifying the item" (i.e., the stock symbol identifying the desired electronic stock chart) and an indication of the "single action" to be performed to order the identified item (i.e., clicking on the button labeled "Chart ($.50)"). Therefore, the substantial question of invalidity raised by the CompuServe Trend reference is the same regardless of whether one considers claims explicitly requiring that both of these pieces of information be displayed (i.e., claims 2 and 11) or claims requiring that only the "information identifying the item" be displayed (i.e., claims 1, 6, and 9). In view of the above, we conclude that the district court erred in failing to recognize that the CompuServe Trend reference raises a substantial question of invalidity. Whether the CompuServe Trend reference either anticipates and/or renders obvious the claimed invention in view of the knowledge of one of ordinary skill in the relevant art is a matter for decision at trial. B Chapter 12 – The Subject Matter of Patents

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In addition to the CompuServe Trend system, other prior art references were cited by BN, but ultimately rejected by the district court. For example, BN's expert, Dr. Lockwood, testified that he developed an on-line ordering system called "Web-Basket" in or around August 1996. The Web-Basket system appears to be an embodiment of a "shopping cart ordering component": it requires users to accumulate items into a virtual shopping basket and to check these items out when they are finished shopping. Because it is an implementation of a shopping cart model, Web Basket requires several confirmation steps for even pre-registered users to complete their purchases. However, despite the fact that Web-Basket is an embodiment of a shopping cart model, it is undisputed that Web-Basket implemented the Internet Engineering Task Force ("IETF") draft "cookie" specification, and stored a customer identifier in a cookie for use by a web server to retrieve information from a database. In other words, when a user first visited the Web-Basket site, a cookie (i.e., a file stored by the server system on the client system for subsequent use) was used to store an identifier on the user's computer. The first time that a user purchased an item on the Web-Basket site, the information entered by the user necessary to complete the purchase (e.g., name, address) would be stored in a database on the server system indexed by an identifier stored in the cookie on the client system. On subsequent visits, the cookie could be used to retrieve the user identifier, which would serve as the key to retrieve the user's information from the database on the server system. At the preliminary injunction stage, based on Dr. Lockwood's declaration and testimony during the hearing, BN argued that the Web-Basket reference—combined with the knowledge of one of ordinary skill in the art at the relevant time—renders obvious the claimed invention. The district court concluded that the Web-Basket system was "inconsistent with the single-action requirements of the '411 patent" because "it requires a multiple-step ordering process from the time that an item to be purchased is displayed." However, as discussed earlier, the undisputed evidence demonstrates that the accused BN Express Lane feature also requires a multiple-step ordering process (i.e., at least two "clicks") from the time that an item to be purchased is first displayed on the menu page, yet the district court concluded that BN's Express Lane feature infringed all of the asserted claims of the '411 patent. The district court's failure to recognize the inconsistency in these two conclusions was erroneous. Moreover, the district court did not address the "cookie" aspects of the Web-Basket reference, and failed to recognize that a reasonable jury could find that the step of storing purchaser data on the server system for subsequent retrieval indexed by an identifier transmitted from the client system was anticipated and/or rendered obvious by the Web-Basket reference. The district court dismissed BN's obviousness defense, apparently based on an alleged "admission" by BN's expert. In a section of its opinion entitled "Summary of Prior Art," the district court stated: On the question of obviousness, the Court finds that the differences between the prior art references submitted by Defendants and the '411 patent claims are significant. Moreover, there is insufficient evidence in the record regarding a teaching, suggestion, or motivation in the prior art that would lead one of ordinary skill in the art of e-commerce to combine the references. The Court finds particularly telling Dr. Lockwood's admission that it never occurred to him to modify his Web Basket program to enable singleaction ordering, despite his testimony that such a modification would be easy to implement. This admission serves to negate Dr. Lockwood's conclusory statements that prior art references teach to one of ordinary skill in the art the invention of the '411 patent.

Thus, the district court apparently based its conclusion of nonobviousness on Dr. Lockwood's "admission" that he personally never thought of combining or modifying the prior art to come up with the claimed "single action" invention. This approach was erroneous as a matter of law. Whatever Dr. Lockwood did or did not personally realize at the time based on his actual knowledge is irrelevant. The

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relevant inquiry is what a hypothetical ordinarily skilled artisan would have gleaned from the cited references at the time that the patent application leading to the '411 patent was filed. C BN also presented as a prior art reference an excerpt from a book written by Magdalena Yesil entitled Creating the Virtual Store that was copyrighted in 1996. Before the district court, BN argued that this reference anticipated every limitation of claim 11. Before this court, BN also alleges that many other claim limitations are disclosed in the reference, but that there was insufficient time to prepare testimony concerning these limitations, given the district court's accelerated briefing and hearing schedule at the preliminary injunction stage. In general terms, the reference apparently discusses software to implement a shopping cart ordering model. However, BN focuses on the following passage from Appendix F of the book: Instant Buy Option Merchants also can provide shoppers with an Instant Buy button for some or all items, enabling them to skip check out review. This provides added appeal for customers who already know the single item they want to purchase during their shopping excursion.

The district court dismissed the significance of this passage, stating that "[r]ead in context, the few lines relied on by Defendants appear to describe only the elimination of the checkout review step, leaving at least two other required steps to complete a purchase." However, the district court failed to recognize that a reasonable jury could find that this passage provides a motivation to modify shopping cart ordering software to skip unnecessary steps. Thus, we find that this passage, viewed in light of the rest of the reference and the other prior art references cited by BN, raises a substantial question of validity with respect to the asserted claims of the '411 patent. D Another reference cited by BN, a print-out from a web page describing the "Oliver's Market" ordering system, generally describes a prior art multi-step shopping cart model. BN argued that this reference anticipates at least claim 9. The reference begins with an intriguing sentence: A single click on its picture is all it takes to order an item.

Read in context, the quote emphasizes how easy it is to order things on-line. The district court failed to recognize that a reasonable jury could find that this sentence provides a motivation to modify a shopping cart model to implement "single-click" ordering as claimed in the '411 patent. In addition, the district court failed to recognize that other passages from this reference could be construed by a reasonable jury as anticipating and/or rendering obvious the allegedly novel "single action ordering technology" of the '411 patent. For example, the reference states that "[o]ur solution allows one-click ordering anywhere you see a product picture or a price." The reference also describes a system in which a user's identifying information (e.g., username and password) and purchasing information (e.g., name, phone number, payment method, delivery address) is captured and stored in a database "the very first time a user clicks on an item to order," and in which a corresponding cookie is stored on the client system. In this system, the stored information may be retrieved automatically during subsequent visits by reading the cookie. All of these passages further support BN's argument that a substantial question of validity is raised by this prior art reference, either alone or in combination with the other cited references. E

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The final reference considered by the district court is the '780 patent, entitled "Internet server access control and monitoring systems." Based on a patent application filed in the United States before the application that matured into Amazon's '411 patent, the '780 patent qualifies as prior art pursuant to 35 U.S.C. § 102(e) (1994). Before the district court, BN argued that this reference anticipated at least claim 1 of the '411 patent. In the preferred embodiment described in the '780 patent, a user browses the web conventionally, and a content server provides web documents to the user and determines when the user seeks access to "controlled" content, i.e., web pages for which the user needs authorization to browse. '780 patent, col. 7, ll. 35-38. The '780 patent describes a system in which controlled pages are returned to the user's browser when an authorized request is received by the content server. We note that the '780 patent describes "forwarding a service request from the client to the server and appending a session identification (SID) to the request and to subsequent service requests from the client to the server within a session of requests." We conclude that the district court failed to recognize that a reasonable jury could find that such "items" (i.e., controlled pages) fall within the scope of the claimed invention, and that delivery of these controlled pages based on receiving an authorized request from a user's browser may constitute a "single action ordering component" within the meaning of the claims in the '411 patent. Therefore, the '780 patent is yet another prior art reference cited by BN which tends to raise a substantial question of validity, either alone or in combination with the other cited references. The district court also cited certain "secondary considerations" to support its conclusion of nonobviousness. Specifically, the district court cited (1) "copying of the invention" by BN and other ecommerce retailers following Amazon's introduction of its "1-Click®" feature, and (2) "the need to solve the problem of abandoned shopping carts." First, we note that evidence of copying Amazon's "1Click®" feature is legally irrelevant unless the "1-Click®" feature is shown to be an embodiment of the claims. To the extent Amazon can demonstrate that its "1-Click®" feature embodies any asserted claims of the '411 patent under the correct claim interpretation, evidence of copying by BN and others is not sufficient to demonstrate nonobviousness of the claimed invention, in view of the substantial question of validity raised by the prior art references cited by BN and discussed herein. With respect to the abandoned shopping carts, this problem is not even mentioned in the '411 patent. Moreover, Amazon did not submit any evidence to show either that its commercial success was related to the "1-Click®" ordering feature, or that single-action ordering caused a reduction in the number of abandoned shopping carts. Therefore, we fail to see how this "consideration" supports Amazon's nonobviousness argument. While it appears on the record before us that Amazon has carried its burden with respect to demonstrating the likelihood of success on infringement, it is also true that BN has raised substantial questions as to the validity of the '411 patent. For that reason, we must conclude that the necessary prerequisites for entry of a preliminary injunction are presently lacking. We therefore vacate the preliminary injunction and remand the case for further proceedings.

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35 U.S.C. 273 Defense to infringement based on earlier inventor. (a) DEFINITIONS.— For purposes of this section— (1) the terms “commercially used” and “commercial use” mean use of a method in the United States, so long as such use is in connection with an internal commercial use or an actual arm’s-length sale or other arm’s-length commercial transfer of a useful end result, whether or not the subject matter at issue is accessible to or otherwise known to the public, except that the subject matter for which commercial marketing or use is subject to a premarketing regulatory review period during which the safety or efficacy of the subject matter is established, including any period specified in section 156(g), shall be deemed “commercially used” and in “commercial use” during such regulatory review period;

(2) in the case of activities performed by a nonprofit research laboratory, or nonprofit entity such as a university, research center, or hospital, a use for which the public is the intended beneficiary shall be considered to be a use described in paragraph (1), except that the use— (A) may be asserted as a defense under this section only for continued use by and in the laboratory or nonprofit entity; and (B) may not be asserted as a defense with respect to any subsequent commercialization or use outside such laboratory or nonprofit entity; (3) the term “method” means a method of doing or conducting business; and (4) the “effective filing date” of a patent is the earlier of the actual filing date of the application for the patent or the filing date of any earlier United States, foreign, or international application to which the subject matter at issue is entitled under section 119, 120, or 365 of this title. (b) DEFENSE TO INFRINGEMENT.— (1) IN GENERAL.— It shall be a defense to an action for infringement under section 271 of this title with respect to any subject matter that would otherwise infringe one or more claims for a method in the patent being asserted against a person, if such person had, acting in good faith, actually reduced the subject matter to practice at least 1 year before the effective filing date of such patent, and commercially used the subject matter before the effective filing date of such patent. (2) EXHAUSTION OF RIGHT.— The sale or other disposition of a useful end product produced by a patented method, by a person entitled to assert a defense under this section with respect to that useful end result shall exhaust the patent owner’s rights under the patent to the extent such rights would have been exhausted had such sale or other disposition been made by the patent owner.

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Federal Agency Rethinks Internet Patents New York Times, March 30, 2001 By SABRA CHARTRAND WASHINGTON, March 29 -- Facing charges that it has been too ready to issue patents for Internet business methods, the Patent and Trademark Office said today that it was changing its evaluation procedures to ensure that such patents cover true innovations. The patent office's director, Q. Todd Dickinson, said his agency will be "fine-tuning our examinations in a lot of areas" regarding the handling of business-method patents. "These changes have been in the works for a while." The actions announced today are the first substantial move to address a growing debate over whether ownership of business methods can be awarded to someone exclusively because they are applied online. The debate centers on this question: Do recent patents for practices like single-click purchases or name-your-price sales, to name just two, protect legitimate innovations? Or do they stifle electronic commerce and competition when issued to inventors exploiting a patent system designed in a nondigital age? It is not the first time the agency has made changes after being criticized for lagging behind technology; a similar controversy arose several years ago over its processing of software-related inventions. Both then and now, critics said the agency lacked the trained staff and resource materials to make informed judgments -- in the present case, to know enough about software, the Internet and electronic commerce to understand what business methods are widely used or already in the public domain. The agency said today that it would tackle those challenges by increasing review of its examiners' work, and by inviting representatives of the software industry to help educate the agency's staff. The plans were first reported today in The Wall Street Journal. Mr. Dickinson said the examiners who analyze and approve patents will be required to search databases to look for "prior art," or existing evidence of a business method. Each patent application will now undergo an initial examination and two reviews, instead of one review. The agency also will double the number of business-method patents it chooses at random each year to scrutinize for a fourth time. Mr. Dickinson said he also hoped "to get more examiners into the field," where they could visit laboratories and offices, in the software and computer industry, for example. He said he would like industry representatives to offer their expertise to the agency, and planned to invite them to a round-table discussion this summer, to share information, and to bolster the agency's research resources and the expertise of its examiners, managers and policy makers. Software makers and others would find themselves dealing with Group 705, a department created in 1997 to process patents for business-method software. At that time, it employed 12 examiners; now it has 40. The department was set up not long after a furor arose over software-related inventions. For years software was covered by copyright law, and was believed, like mathematical algorithms, to be ineligible for patents. But that changed as the software industry grew, and as ownership of lines of code became increasingly valuable.

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The dispute culminated with a patent awarded in 1993 to Compton's New Media for a search-andretrieval method. Critics immediately pointed out that the technology was already in the public domain. The Patent and Trademark Office was forced to reveal that it had few software engineers on its staff to evaluate such applications, and an inadequate supply of software manuals in its research library. The agency made a rare re-evaluation of an issued patent, and an even rarer rescinding of that patent. In 1994, the agency issued new guidelines, hired software engineers to train as patent examiners, opened a new computer database of existing software technologies, and set out to collect reference material for its software library. But the lesson was not easily transferred to the explosive growth in electronic commerce and the sudden glut of Internet-related business-method patents. In recent months, the agency has found itself criticized for issuing patents for what appear to be common ways of conducting electronic business, like the 1-Click purchasing patented by Amazon.com or the name-your-price method patented by Priceline.com. The chief executive of Amazon, Jeffrey Bezos, proposed this month that the controversy might be resolved by publishing applications while they are pending, and by shortening the lifespan of businessmethod patents. But Mr. Dickinson rejected the idea that the 210-year-old patent system was not well suited for a rapidly evolving computer-based economy. "We've adapted to every technology that has come along," Mr. Dickinson said. "People made the same argument when the telephone came along. They said the same thing with Henry Ford and the motorcar. The automobile industry was the main part of the economy in the first half of the century. This will sort itself out in the same way."

BountyQuest: Our Vision and Our History [www.bountyquest.com] Why we are here

Welcome to BountyQuest, the Internet destination where your knowledge can earn you large rewards. We are on a mission to connect two large communities: knowledge-loving people on one side, whether they be graduate students, scientists, engineers, librarians, or hobbyists, and companies in need of information on the other side. The companies need your information; our job is to get them to reward you for it. One type of information that companies need most is information that helps them defend against an overly broad patent. Patents now affect companies and their customers in almost every industry. In the old days patent monopolies were relevant mostly in "big-company" industries like the auto industry or the pharmaceutical industry. Now, patents threaten the operations of small businesses and entrepreneurs in a wide range of fields, including Internet and biotechnology startups, retailers, financial service providers, and many others. By affecting businesses, patents also affect consumers, raising prices of a wide range of product and services. You literally pay every day for patents on a host of the things you buy.

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You have probably seen coverage of patent issues in the press. Patents like Amazon.com's single-click patent and Priceline's reverse auction patent are the subjects of high-profile lawsuits. Most commentators and industry insiders seem to agree that some of the patents issued by the patent office in recent years are surprisingly broad. Some commentary has been even stronger, for example accusing patent attorneys of "stealing the future." Until now, individuals like you have not had a lot of ability to do anything about these patents that are costing you money or denying you access to a range of options in the marketplace. Now, with BountyQuest, we invite you to make a difference. You or someone you know may be able to knock out one of the patents listed on our site. That will not only win you a reward, but also help other consumers as well as companies affected by the patent. We invite you to join the hunt. It is good for everyone, except companies who are trying to enforce bad patents. How we got here

This is the story of a group of people who share a vision of a market-based patent reform, including the Time Man of the Year, one of the world's leading computer book publishers, and your author (BountyQuest's CEO). In other words, it is the story of how the BountyQuest founders formed a company, engaged the support of Jeff Bezos and Tim O'Reilly, and launched a product that we believe will revolutionize the way people search for high value information, such as prior art relevant to the validity of a patent. In the past year patents have taken a place in the press and in American commercial life that would have shocked people in the patent field even a decade ago. Patents are front-page news in major publications like the Wall Street Journal and the New York Times. At BountyQuest we think this makes sense, because patents affect almost every market, ranging from traditional areas like automobiles or drugs to new areas of patent coverage like software, business methods, and genomics. In every case, patents extract a price on consumers. The stakes are huge. Patent royalties are estimated at over $100 billion per year, and that cost is passed on to you, the consumer.

But patents have cost people money since their inception, so why are they so much more prominent now, as opposed to before? The answer starts with the State Street Bank v. Signature Financial case, where the Court of Appeals for the Federal Circuit, which hears federal patent appeals, decided that business methods are patentable. That case led to an enormous increase in the number of business method and Internet applications to the patent office and a corresponding increase in the number of these types of patents. Three paths meet at BountyQuest

Some of the Internet and business method patents have been extremely controversial. One prominent example is the Amazon.com One-Click patent, covering single-click purchasing transactions using the Internet. Amazon.com sued Barnes & Noble during last year's Christmas season and obtained an injunction that shut down Barnes & Noble's one-click function. Many commentators were outraged. One prominent industry figure, Tim O'Reilly, the leading publisher of software books and an active supporter of open source and peer-topeer software movements, published a letter on the Internet criticizing the inventor of the oneclick patent, Amazon.com CEO and Time Magazine Man of the Year, Jeff Bezos. Among Chapter 12 – The Subject Matter of Patents

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other things, Mr. O'Reilly called on Mr. Bezos to relinquish rights to the one-click patent. Interestingly, Mr. Bezos responded, not by relinquishing the patents, but by agreeing to help with patent reform, including working toward a database of prior art, talking to the patent office and lobbying congress for legislative reform. (For more on O'Reilly's take on patents, visit his Patents Devcenter). That is where BountyQuest entered the picture. For several years BountyQuest’s founders had been developing a plan for a company that would broadcast rewards for information and had decided to begin with prior-art searches. BountyQuest even filed a patent on own their business method, calling it the "Broadcast Reward System." ™ We had seen this need for a reform of the patent system years ago, and we were certain our method would provide a much better way to find prior art. The author of this article, CEO Charles Cella, and Board member Ted Mathas, traveled to Seattle to meet with Jeff Bezos. We shared our vision of a market-based patent reform founded on a new business model. Mr. Bezos was excited and agreed to invest in BountyQuest. At around the same time, one of the other founders, Ed Kelly, who had coauthored an open source article with me, contacted Mr. O'Reilly. He was excited about market-based reform, but skeptical about our having filed our own patent application. Once he got to know us and to understand that we were as committed as he is to patent reform, he came on board as an investor and advisor. Mr. Bezos has been active in filing business method patents on behalf of Amazon.com, while Mr. O'Reilly has been critical of many business method patents. What both agree on is that there is a need for better prior art, and that BountyQuest, a market-based reform, can be a powerful new vehicle for finding that prior art. We are very excited to have Mr. Bezos and Mr. O'Reilly as active investors in BountyQuest, and we are looking forward to writing the next chapter of United States patent reform.

1-Click Patent: No Exact Match But Runners Up Will Split $10,000 Cash Prize [www.bountyquest.com/infocenter/1click.htm] Three Bounty Hunters, one an interactive radio pioneer and the other two patent attorneys, will split a $10,000 unofficial award on the 1-Click patent posting. Although none exactly matched all the elements necessary to outright win the Bounty, the three runners up came very close. Their submissions should go a long way toward making the 1-Click patent virtually unenforceable, according to Bounty Poster Tim O'Reilly, a noted software book publisher and early investor in BountyQuest. "I had already earmarked this money for the prize, and I want to use it to honor the three runners up for their insight and efforts," says O'Reilly. "This was a tough one to win because the Amazon 1-Click patent is so specific to the Web. But these three people submitted terrific prior art that narrows the scope of what Amazon can now claim. In my opinion, it will be much more difficult for them to enforce their patent from here on out," he says.

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BountyQuest was extremely pleased with the breadth and quality of the prior art submitted on the 1Click Shopping posting. Once again, our Hunters turned up relevant and hard-to-find information, including marketing materials, patents that were overlooked in the original application, a CD-ROM from a foreign bank, as well as cartoons and TV episodes that were all surprisingly on target. Check it out here... There was no outright Bounty winner, mainly because the 1-Click patent is specific to the Web and describes not just a single-mouse-click system of ordering, but also claims many technical details, including the presentation of a user name and partial shipping and billing information. If you don't match all those elements, you can't invalidate such a patent in its entirety. However, because our Hunters identified a number of previously described systems for single-action ordering in other shopping environments, and these documents have been rendered readily accessible, it should make it far more difficult for Amazon to enforce its exclusive right to 1-Click ordering. In particular, it's highly unlikely that Amazon will be able to assert single-action claims in interactive TV, for example, even though the current patent covers that area. Even on the Web it's doubtful that Amazon can continue to enforce the 1-Click patent, except where alleged infringers utilize the precise sequence of software steps detailed in the patent. History of the 1-Click Patent Conflict This story began back in September of 1999, when Amazon.com received a patent on a simplified method of e-commerce they dubbed 1-Click shopping. With a single mouse click, an item can be placed in a shopping basket, with partial billing and shipping information displayed. The development of 1-Click addressed a pervasive problem in e-commerce, that the majority of shopping carts are abandoned before an order is completed. By simplifying the process to a single mouse click, the intent was to increase the percentage of completed sales. Barnes & Noble, seeing the advantage of this approach, created a similar simplified shopping system for their website. Amazon sued Barnes & Noble during the 1999 Christmas season and obtained an injunction forcing them to eliminate their single-click ordering function. Many commentators were outraged, including Tim O'Reilly, the leading publisher of software books. In an open letter in February 2000, he criticized Bezos, saying that "such broad patents serve only to hold back further innovation," and urging him to relinquish rights to the 1-Click patent. Interestingly, Mr. Bezos responded, not by relinquishing the patent, but by agreeing to help with patent reform, including working toward a database of prior art, talking to the patent office and lobbying congress for legislative reform. They also embraced BountyQuest's vision of market-based patent reform and both became early investors. One of the first Bounties posted was on the 1-Click patent. Today's announcement should make it far more difficult for Amazon to enforce the central provision of its patent, i.e., single-action ordering.

Questions, Comments, Problems 1.

Invalidation via Litigation. The Amazon.com case from the Federal Circuit illustrates the hurdles that a patentee must still clear in order to enforce a granted patent. What are the advantages and disadvantages of this method of recsolving the issues addressed by critics of software and business model patents?

2.

The Prior User Defense. Section 273 of Title 35 establishes a new “defense” to patent infringement. What is the scope of the defense? What do you think the problems are (were?) that § 273 purports

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to address? Do you this it is likely to succeed? Can you think of any unintended consequesnces flowing from that new defense? 3.

PTO Resources. How effective do you think that the additional resources in the division of the PTO examining these new patents will be?

4.

Patent Bounties. How successful will patent bounties be? Are there any downsides to the system? Should the government pay bounties for finding useful prior art?

5.

Bottom line: should software and internet patents be curtailed? If so, how?

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