An A-to-Z discussion of the United States Patent Law.

1. INTRODUCTION TO
PATENTS & TRADE SECRETS
Laws, Cases, Essays, Discussions
Includes Intellectual Property Disputes in Reproductive Health CareIncludes Intellectual Property Disputes in Reproductive Health Care
Naira R. Matevosyan, MD, PhD, JSMNaira R. Matevosyan, MD, PhD, JSM
Medical Doctor, Jurist, Scientist, Author, Musician, MotherMedical Doctor, Jurist, Scientist, Author, Musician, Mother
August 08, 2016August 08, 2016

2. CONTENTSCONTENTSSlides 3-6 Claiming an invention
Slide 7 Disparity amid the patent, copyright, and trademark laws
Slides 8-12 Overview of the U.S. Patent Law
Slides 13-14 Patentability: Utility, Novelty, Non-obviousness, Specification
Slides 15-17 Patentability of a business process
Slides 18-19 Statutory subject matter: Judiciary extensions, exceptions
Slide 20 Establishing a Prima Facie case on the record
Slides 21-27 From Checkers to Chakrabarty: Abstract v. Nature's wisdom
Slides 28-31 Enablement v. Utility; Novelty v. Nonobviousness
Slides 33-46 Third-party prior art; P-H-O-S-I-T-A; Statutory bars
Slides 47-55 Utility patent protection; Doctrine of Equivalents; Reversed D.
Slides 57-61 Design & plant patent protection: Gorham & Imazio standards
Slides 62-76 Five defense strategies; Estoppel types; Measuring a damage
Slides 77-85 The law of undeveloped ideas; Trade secrets; Antitrust law
Slide 86 Biotechnology patents: Bayh-Dole & Stevenson-Wydler Acts
Slides 87-98 Essay on a patent dispute in reproductive health

3. Claiming an Invention
3
What did Archimedes
claim while screaming
“Eureka!” upon his
mighty discovery in the
16th
century?
Was it about a:
- patent ?
- copyright ?
- trade secret ?
- theory ?
- trophy ?
- or... something else?

4. Invention Type v. Commercial Vigor
With a prompt glimpse on the two patents below, which one you would find
more “useful”? Mind, that the market price of a product under the patent -1
ranges between USD $ 60-100, and under the patent-2 USD $ 1,200 – 5,800.
1) Animal Ear Protectors
US 4233942
Developed in the late 70-s,this
device avails protection of the ears
of long eared animals, especially
dogs, from coming into contact
with food or drink while they eat.
2) Fireplace Waterfall
US 6901925
An upgrade from the conventional fireplace,
this 2002's patent calls for a trough to be
installed in front of a firebox for a pool of
water. The water circulates through special
plumbing and funnels out of the fireplace front
to create a fountain-like effect. Just add fire! 4

5. Moral v. Commercial Impact of an Invention
5
In 1895, the German physicist Wilhelm C. Röntgen
invented the X-ray (also known as Röntgen Ray), the
worldwide use of which improves diagnostic accuracy and
saves innumerable lives since ever.
Röntgen deliberately did not claim a patent for this cogent
invention. However, for the discovery of electromagnetic
radiation in a wavelength range of X-ray, he earned the
first Nobel Prize in Physics in 1901. (Note, the 1901's fiscal
fund for all five Nobel Prize laureates was 32,00 SEK, i.e.
today's 1.7 million USD). Many streets were named after
him. In 2004 the radioactive element-111, Röentgenium,
was named after him.
Ask yourselves. Had Röntgen patented his invention:
(1) Would X-ray be adopted worldwide at an extraordinary
pace? (2) Would scientists freely create X-rays using
cathode-ray? (3) Would today's prices for an X-ray exam
jump to record highs? (4) When would Röntgen's
ownership expire?

6. To the Nature's Credit
What if a patentable subject matter carries the
Nature's wisdom as being a seed, phenomenon,
process, association, product or law of Nature?
Is there a precise line between the Nature's and
human ingenuity?
Is there a far-term guarantee that human
interventions or modification would improve a
natural subject (matter, process, phenomenon,
association), as such the latter's impact on
human lives and the environment (biotic,
abiotic, celestial)?
What does “improvement” mean? Is it time - or
consumer - sensitive?
Are hybrids patentable? If so, which (sexual,
asexual) reproduction deems fit?
All these questions are
discussed and addressed in
the next slides.
6

7. Very Briefly: Overlaps & Differences [1 -32]
LAWS INCLUSIONS EXCLUSIONS
Patent
- 35 USC
 A patentable subject matter (process,
machine, manufacture, composition of
matter) must show function or
functionality (utility), be novel, non-
obvious, and specific.
 Is a federal law.
 Abstract ideas or algorithms
 Products of nature
 A human per se
 A datum per se
 A computer program per se
 Transitory forms of signal transmission
 Legal contractual agreement
 A company
 A mere arrangement of printed matter.
Copyright
- 17 USC
 Is a federal law
 May refer to expressive works (literary,
musical, dramatic, pantomime and
choreographic, pictorial, graphic,
sculptural, audio, visual, derivative,
compilational, architectural)
 Protects creation of inventiveness.
 Facts
 Works created by the U.S. Government
 Works not fixed in a tangible form of
expression
 Ideas, concepts, principles, or discoveries
 Words, phrases, or familiar symbols
 Works in the public domain.
Trademark
- 15 USC
 Is both federal and state law
 TM is registered at the state level
 TM refers to the commerce only
 TM identifies goods or services and
sources of those good or services
 TM may refer to expressive works
 Can be acquired with non innovative input
from the owner whatsoever.
 TM does not show a function or
functionality of a business, good, or
service
 TM does not protect creation or
inventiveness.
 Trade-name (not TM) registration is
non-mandatory.

8. A Brief History of the U.S. Patent Law
History of the U.S. patent jurisprudence has been moving at a steady pace.
The importance of granting monopolies for new inventions has been
recognized since the adoption of the U.S. Constitution (1787). Article I,
Section 8 vests, “Congress shall have power . . . to promote the progress of
science and useful arts, by securing for limited times to authors and inventors
the exclusive right to their respective writings and discoveries.”
Then followed the first federal statute, the Patent Act of 1790, titled as “An
Act to promote the Progress of Useful Arts.” In 1793, it was repealed by the
Patent Act of 1793, the subject-matter definition of which remains
unchanged until now: “... any new and useful art, machine, manufacture or
composition of matter and any new and useful improvement on any art,
machine, manufacture or composition of matter.”
The Patent Act of 1836 improved the former act, created a Patent Office
freeing the Secretary of State from the patent-oversight, made all granted
patents publicly accessible at libraries throughout the country for the
efficient detection and prevention of fraud, allowed a possible extension of
7 years of ownership in addition to the original 14-year term, and removed
the US nationality and residency requirements, making it possible for
foreigners to file for U.S. patents.
8

9. History (continued)
In 1849, the Patent Office was transferred to the Department of the Interior.
Resultant from depression from the unfavorable review of patents based
on the Sherman Antitrust Act provisions, in 1925 the Patent Office was
transferred to the Department of Commerce where it stays today.
The basic structure of the current patent law is stemmed of the Patent Act
of 1952, which amended the review criteria so the inventor had to
describe not only the invention but also the basis for its infringement;
plus, the invention needed to be new, useful, and “non- obvious” - to
keep individuals from taking ownership or taking away from the base
pool of knowledge in a peculiar field.
After the regained enthusiasm for the intellectual monopoly, in 1982 the
Court of Customs & Patent Appeals was abolished and patent cases were
heard in the newly established Court of Appeals for the Federal Circuit
that provided more protection to patent owners.
In 2011, the Leahy-Smith America Invents Act (AIA) significantly changed
the patent system from 1952. Choosing between the "first-to-invent"
and "first-to-file" systems, the AIA adopted the "first inventor to file"
requirement. Such provisions went into effect in 2013.
9

10. Current Jurisprudence
Patents are governed by the U.S. Patent Act, 35 U.S.C. §§ 1 et seq., 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” (35 U.S.C. §101).
This language remains essentially unchanged from the Patent Act of 1793,
except for replacing the word art with the term process - as in a “process,
art or method, including a new use of a known process, machine,
manufacture, composition of matter, or material” (35 U.S.C. §100(b)).
“Whoever invents” means that patents are granted to inventors, not to the
companies that employ them. In the contrary to the Copyright Act, there is
no automatic “work for hire” provision in the Patent Act, although under
common-law the employer may have a “shop right” to use an invention
that was developed using its resources. In cases where a person was
employed specifically to invent, a court may find that there is an implied
contract to assign the inventor's rights to the employer.
“Invents or discovers” sees the patentee as the actual creator and not just the
discoverer of something that already existed, including the laws of nature
or natural phenomena. 10

11. How Does It Work ?
The word PATENT is referred in two different ways:
(1) Branch of federal law;
(2) Official document in which an invention is described.
Patents are classified in the United States Patent & Trademark Office (USPTO), and
published 18 years after the patent application.
Patent protection is afforded to inventions, industrial designs, and plants. A patent
grants the inventor a legal right to keep others from making, using, selling,
offering to sell, and importing the claimed invention for a period of up to twenty
years. Different patents have different terms:
• Utility patents (including plant patents) have a 20-year term.
• Design patents have a 14-year term.
Each patent claim must be of one sentence and must have five parts:
(1) preamble - general terms what the invention is
(2) elements of the claim
(3) specifics (35 U.S.C. §112a)
(4) a drawing (35 U.S.C. §113)
(5) an oath or declaration (35 U.S.C. §115).
11
A
t
the
heart
of
a
patent
is
specification.

12. Patent Oversight in the United States
USC: 35 US Code
CFR: Code of Federal Regulations
12
USPTO: United States Patent and Trademark Office
MPEP: Manual of Patent Examining Procedure

13. Patentability
“A patent is not a hunting license. It's not a reward for research, but rather a
compensation for its successful conclusion.” [1]
Patentability has five parts:
(1) Patentable subject matter (35 U.S.C. §101)
(2) Utility (35 U.S.C. §102)
(3) Novelty (ibid)
(4) Nonobviousness (35 U.S.C. §103)
(5) Enablement (PTO 2164.01).
Some countries disallow patents on certain businesses, like software or
pharmaceuticals. There are also regional limits: the 35 U.S.C. §104 (invention
made abroad) was repealed as of July 2015.
Under the U.S. Patent Act (35USC), the statutory subject must be:
- Process
- Machine
- Manufacture
- Composition of matter.
(1) Brennerv.Manson, 383 US 519 - 1966
13

14. Patentability (continued)
Patent (process, machine, manufacture, or composition of matter) is pretty
much everything objective under the Sun. Ideas, theories, canons, products
of human imagination, expressions or perceptions (songs, paintings,
sculptures, embroidery, culinary art) are not patentable but can be
copyrighted.
The PTO grants three types of patents:
(1) Utility patents - inventions or discoveries of any new and useful process,
machine, article of manufacture, or composition of matter, or any new and
useful improvement thereof;
(2) Design patents - inventions of a new, original, and ornamental design for
an article of manufacture;
(3) Plant patents -inventions , discoveries, or asexually reproducing of any
distinct and new variety of plant.
The patentable invention must be “useful.” Under “utility” (35 U.S.C. §102),
usefulness is not a hard test; it simply means that the invention does benefit
something. The PTO invariably rejects applications for inventions that
appear to be perpetual motion machines and requires an operative model for
the examiner to review. Presumably, if the model does in fact run forever
without additional energy, a patent would be granted.
14

15. Patentability of a Business Process
Bilski v. Kappos [2]
A patent claimed on a method (mathematical algorithm) of hedging against
price changes.
The issues were, whether a process:
- is tied to a particular machine or apparatus;
- transforms a particular article into a different state or thing.
Four justices held that business methods are never patentable.
Justice Kennedy distinguished the "threshold" §101 analysis from the other
"conditions and requirements" for patentability found in §102 (novelty), §103
(nonobviousness), and §112 (particular description). Focusing on the “ordinary,
contemporary, common meaning" of the term “process” as defined in 35 U.S.C.
§ 100(b), he concluded that neither the text of the Patent Act nor Supreme
Court precedents supported the "machine-or-transformation" test as the sole
prong for deciding a processes-patentability. (continued)
(2) Bilski v. Kappos, 130 S. Ct. 3218 - 2010
15

16. In re Bilski (continued)
Justice Kennedy next explained that there is no "ordinary, contemporary, [or]
common meaning" of the term 'method' that excludes business methods as
patentable processes;” he cited 35 U.S.C. §273 which provides a prior user
defense to infringement claims for "method[s] of doing or conducting
business," and reasoned that "federal law explicitly contemplates the
existence of at least some business method patents.” [2]
As such, Justice Kennedy reasoned that the Court should not interpret the
Patent Act so as to "render another provision superfluous," and concluded
that business methods cannot be categorically excluded from patent
eligibility.
Despite upholding the patentability of business methods, the majority
nonetheless rejected petitioners' application for "falling outside” of §101
because it claimed an abstract idea.
With that, the Bilski court [2] was opportunistic to Chakrabarty's [13] (see
further).

17. Post-Bilski
Following Bilski [2], the Supreme Court:
denied certiorari in Ferguson v. USPTO [3], where the Federal
Circuit had rejected claims for a "marketing paradigm,"
rejected Digital Image Technologies V. Electronics, [4]
rejected In re Nuijten, [5]
granted certiorari, then vacated and remanded -
Classen Immunotherapies, Inc. v. Biogen IDEC,[6] and
Mayo Collaborative Svcs. v. Prometheus Labs. [7]
(3) In re Ferguson (ex patre), 558 F.3d 1359, 90 U.S.P.Q.2d 1035
(4) Digitech Image Technologies, LLC v. Electronics for Imaging, Inc et al al., 758 F.
3d 1344, 111 U.S.P.Q.2d 1717 (Fed. Cir. 2014)
(5) In re Nuijten, 500 F.3d 1346, 84 U.S.P.Q.2d 1495 (Fed. Cir. 2007)
(6) Classen Immunotherapies, Inc. v. Biogen IDEC, 130 S.Ct. 3541 (2010)
(7) Mayo v. Prometheus, 566 U.S. (2012)
17

18. Four Categories of Statutory Subject Matter
As of July 2015, the PTO recognizes two criteria in determining subject matter
eligibility under 35 USC § 101. Both must be satisfied. The claim must:
1) be directed to one of the four statutory categories, and
2) not be wholly directed to subject matter encompassing a judicially recognized
exception (see in the next slide).
The first step in claiming an invention should be directed to one of the four
eligible subject matter categories: process, machine, manufacture, or
composition of matter. If it's not, the claim is rejected under § 101.
Claims that are not directed to one of the statutory categories include: transitory
forms of signal transmission (for example, a propagating electrical or
electromagnetic signal, In re Nuijten [5]), a human per se (Leahy-Smith
America Invents Act (AIA), Public Law 112-29, sec. 33); a legal contractual
agreement (In re Ferguson, [3]); a computer program per se, Gottschalk v.
Benson [8]); a company [3], a mere arrangement of printed matter (In re Miller
[9]); and data per se (Digitech Image v. Electronics, [10]).
(8) Gottschalk v. Benson, 409 U.S. at 72, 175 USPQ at 676-77
(9) In re Miller, 418 F.2d 1392, 1396, 164 USPQ 46, 49, CCPA 1969
(10) Digitech Image Tech., LLC v. Electronics for Imaging, Inc., 758 F.3d 1344, Fed. Cir. 2014

19. Judiciary Extensions & Exceptions
Next step is to determine whether the claim wholly embraces a judicially
recognized exceptions or extension.
(11) Alice Corp. Pty. Ltd. v. CLS Bank Int'l, 573 U.S. (2014)
(12) Association for Molecular Pathology v. Myriad Genetics, Inc. 569 U.S. (2013)
(13) Diamond v. Chakrabarty, 447 U.S. (1980)
(14) Mayo Collaborative Serv. v. Prometheus Labs., Inc., 566 U.S. (2012)
(15) Parker v. Flook, 437 US 584 - Supreme Court (1978)
(16) Le Roy et al v. Tathem et al., 55 US 156 - Supreme Court (1852)
(17) Ultramercial v. Hulu, 657 F.3d (Fed. Cir. 2011)
What is not patentable? What is patentable?
Laws of nature [16] Methods and products employing
abstract ideas [17]
Natural phenomena [12] Methods and products employing
natural phenomena [13]
Abstract ideas [2, 3, 11, 15]
Diagnostic tests [14]
Laws of nature to perform a real-
world function [17]
19

20. A Prima Facie Showing on the Record
Under the principles of compact prosecution, regardless of whether a rejection
under 35 USC §101 is made based on lack of subject matter eligibility, a
complete examination should be made for every claim under each of the
other patentability requirements: utility (35 USC §102), novelty (35 USC
§102), non-obviousness (35 USC §103), specification (35 USC §112),and non-
statutory double patenting (35 USC §121). [18]
If two or more independent and distinct inventions are claimed in one
application, the examiner may require the application to be restricted to
one of the inventions. If the other invention is made the subject of a
divisional application which complies with the requirements of §120 (benefit
of earlier filing date in the USA), it shall be entitled to the benefit.
“The examiner bears the initial burden … of presenting a prima facie case of
unpatentability.” [18] If the record as a whole suggests that it's more likely
that the claimed invention would be considered significantly more than an
abstract idea, natural phenomenon, or law of nature, then USPTO personnel
should not reject the claim.
(18) USPTO: Patent Subject Matter Eligibility [R-07.2015]
(19) In re Oetiker, 977 F.2d (Fed. Cir. 1992)
20

21. From Checkers to Chakrabarty
While the US3767201 A is a game-patent of a multi-level board structure for
three-dimensional chess and checker, a question raises whether the
similar human creativity, that may change or improve a natural process or
product, is patentable?
In the former slides (15-19) we discussed that the laws of nature, natural
phenomena, diagnostic methods, and abstract ideas are NOT patentable
under the federal statute.
The commonlaw however, is instructive with respects to which arguments
have not been advanced. The patent law is anything but simple. It's like a
piecemeal doctrinal construction, each part more readily explained by the
circumstances of its addition than by its relation to a coherent whole. The
success mostly depends on how thorough is the patent application with
compelling specification and enablement .
Diamond v. Chakrabarty [13] was a landmark, mind-changing decision.
Ananda Chakrabarty, a microbiologist, had invented a man-made,
genetically engineered bacterium capable of breaking down crude oil - a
property which is possessed by no naturally occurring bacteria
(continued).
21

22. Sidney Diamond v. Ananda Chakrabarty
22
Chakrabarty had filed three types of patent claims:
(1) process claim for the method (process) of producing the bacteria;
(2) claim for an inoculum (media) comprised of a carrier material floating
on water (like straw) and the new bacteria; and
(3) claim to bacteria (matter) themselves. [13]
The claims were tried under 35 USC §101 (Utility), §112 (Specification), and
7USC 2402(a).
Pursuant to the 35 USC §101, the patent examiner allowed the claim
falling into the first and second categories, but rejected the third claim
for bacteria on two grounds: (1) micro-organisms are "products of
nature" and (2) as living things they are not qualified as a subject matter
under §101.
(13) Sidney A. Diamond v. Ananda M. Chakrabarty, 447 U.S. (1980)

23. Chakrabarty (continued)
The Court of Customs & Patent Appeals reversed, reasoning that “the fact that
micro-organisms are alive is without legal significance for purposes of the law.”
[13]
By the majority of votes, the Supreme Court held that the “bacterium was a non-
naturally occurring manufacture or composition of matter, a product of human
ingenuity having distinctive name, character and use and thus, Chakrabarty had
produced a new bacterium with markedly different characteristics from any found
in nature and one having for significant utility.” [13]
Under the specification doctrine (§ 112), the Court reasoned that although the
bacteria are classified under the Plant Patent category which is barred under
the 35 USC § 112 and 28 USC 2181, it was not necessary to leave the resolution
of the claim to Congress to modify the patent specificity clause.
Relying on on TVA v. Hill, [20] and Parker v. Flook [21], the Court held: “Congress
is free to amend §101 so as to exclude from patent protection organisms produced
by genetic engineering, exempting from patent protection inventions useful solely
in the utilization of special nuclear material or atomic energy in an atomic
weapon.”
(20) TVA v. Hill, 437 U.S., at 194, 98 S.Ct., at 2302
(21) Parker v. Flook, 437 U.S. 584, 98 S.Ct. 2522, 57 L.Ed.2d 451 (1978) 23

24. Post-Chakrabarty
24
Docket Year Issue(s) Holding
Diamond v.
Diehr 1981
Do patentable claims become
invalid because they include
mathematical formulas?
No. Patentable claims do not
become invalid because they
include mathematical formulas.[22]
Bilski v. Kappos 2010
Whether the process
(mathematical algorithm) is tied
to a particular machine or
apparatus, or whether it
transforms a particular article
into a different state or thing.
The process is related to an abstract
idea with no relationship to a
specific apparatus, and therefore it
is not patentable.[2]
Mayo v.
Prometheus
2012
Whethera method of treating
Crohn's disease, where dosage of
drug was adjusted based on
results of metabolic tests, is
patentable as a subject matter.
The subject matter is not
inpatentable. A correlation
between metabolites and dosage
levels is not patentable because it is
a "law of nature.” [14]
Association for
Molecular
Pathology v.
Myriad
2012
Whether a method of diagnosing
propensity to cancer by looking
for mutated DNA sequences, and
methods to identify drugs using
isolated DNA sequences qualify
as subject matter .
cDNA claims are patent eligible
under section 101, because the
cDNA is "distinct" from the original
DNA from which it is derived.[12]
(With that Myriad's court overruled
Chakrabaty's decision).
(22) 450 US 175- Supreme Court, 1981

25. Patentability of a Process or a Software
MENTAL PROCESS: Some cases (In re Abrams,[23]) raise a question of whether the
mental process is a statutory subject matter under §101. The term “process” is vague
in itself. In Cochrane v. Deener [24] the Supreme Court held: “A process is a mode of
treatment of certain materials to produce a given result. It's an act, or series of acts,
performed upon the subject matter to be transformed or reduced to a different state or
thing.”
Which definition of “process” did the Cochrane's court provide: exclusive or inclusive ?
Exclusive commonly is, “ only acts that transform something are processes” and
inclusive is, “there may be other types of processes in addition to those that transform
something.” While definitions remain unsettled, in AT&T v. Excel Communications
[25] the Court used the inclusive definition: “When a claimed invention is performing
a function which the patent laws were designed to protect (transforming or reducing
an article to a different state or thing), then the claim satisfies the requirements of
§101.” Thus, a signal denotes a non- exclusive process.
Lessons learned: The mental flow is a process that involves steps that require a
subjective or aesthetic judgment on the part of the person; therefore it is not
patentable. This is not because the process is too subjective for §101, but because
the disclosure requirement ( §112) has not been met (see Disclosure in further
slides).
(23) In re Abrams, 188 F.2d 165 (1951); (24) Cochrane v. Deener, 94 U.S. 780 (1876)
(25) AT&T v. Excel Communications, 172 F.3d 1352, (Fed. Cir. 1999)
25

26. 26
PRINTED MATERIAL: Courts have held that printed matter is not patentable because
it's not a proper manufacture [26, 27].
In simpler terms, something that includes stored information, such as printed matter,
is a manufacture. This approach gets complicated under §103 which requires that
claims be considered “as a whole” when determining the obviousness of an
invention. Consider J.K Rowling's “invention” of Harry Potter. While the book is a
manufacture, that manufacture differs from prior art books only in the writing in the
book. The book would be statutory subject matter (§101) but would not be novel
(§102) or nonobvious in light of other books. Therefore, it is governed by the
copyright law.
COMPUTER SOFTWARE: In Alice Corp. v. CLS Bank Intern.[11] the Court held,that
“implementing abstract ideas on a computer is not enough to transform that idea into
patentable subject matter.” In WMS Gaming, Inc. v. International Game
Technology [28] the Federal Circuit held, "for a means-plus-function limitation to read
on a device, the device must employ means identical to or the equivalent of the
structures, material, or acts described in the patent specification -§112.”
Lessons learned: A computer program per se is not deemed as patentable. Yet,
virtually any technique that can be embodied in a computer program that produces
a useful result is patentable if properly disclosed to the examiner.
(26) In re Miller, 418 F.2d 1392, (CCPA 1969)
(27) In re Gulack, 15: 703 F.2d 1381, (Fed. Cir. 1983)
(28) WMS Gaming, Inc. v. Int. Game Technology; 184 F. 3d 1339 , Fed. Circuit, 1999

27. METHODS OF DOING BUSINESS: A number of cases have held that methods of
doing business are not patentable. Yet, what constitutes a method of doing business
is a fuzzy concept.
Justice Newman, dissenting In re Schrader [29], described method-of-doing-business
exception as “an unwarranted encumbrance to the definition of statutory subject
matter” that should be “discarded as error-prone, redundant, and obsolete. It merits
retirement from the glossary of § 101.” Yet, the Federal Circuit’s decision in State
Street Bank v. Signature Financial [30] cites her remarks with strong approval:
“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.
Business method patents are generally just a particular type of software patent, since the
business method often relies on involved calculations that require the use of a computer
in any practical application of the method, or involves doing something that enhances
electronic commerce on the Internet.” [30]
(29) In re Schrader; 22 F.3d 290, 30 USPQ2d 1455 (Fed. Cir. 1994)
(30) State Street Bank v. Signature Financial; 149 F.3d 1368, 47 USPQ2d 1596 (Fed.Cir.1998)
27

28. Enablement v. Utility
How the utility requirement differs from the enablement requirement?
Pursuant to the Patent Act § 102 (Utility), the invention in question must be
capable of doing something. It must not be theoretical and should entail an
identifiable application of scientific concepts of laws.
In Brenner v. Manson [31], for example, the applicant identified a new
chemical compound but could not explain what it did. The PTO rejected the
application, but the Federal Circuit disagreed, holding that “utility
requirement was satisfied as long as invention was not alleged to be
detrimental to the public interest." Supreme Court reversed, holding that
“invention must show a use that is both (1) substantial and (2) specific.”[31]
Lessons learned: Put simply, enablement is about the invention's potential to
be replicated, and utility is its potential to be used.
(31) Brenner v. Manson, 383 US 519 - 1966
28

29. Novelty v. Nonobviousness
At the Crux: § 102 goes on to define novelty, and § 103 imposes a third required
element, nonobviousness. §102(e) bars patents on inventions for which a patent
application had been filed under §122(b), or for which a patent had been
granted prior to the invention at issue. §102(g) bars patents on inventions by
previous inventors when the prior invention was not abandoned, suppressed,
or concealed.
NOVELTY: §102(a) bars patents on inventions “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.”
Novelty is defined by the date of patent application and the absence of prior art.
There are three types of third-party prior art:
- Invention is known or used in the United States.
- Invention was disclosed in patent anywhere in the world.
- Invention disclosed was in a publication anywhere in the world (inclusive for a
printed article, chapter, magazine, power point presentation, conference abstract,
poster, even a record of sell ofan invention for the commercial inquiry).
If there are overlaps in applications, the examiner looks for two requirements:

Conception - the inventor had elements of invention worked out in her mind;

Reduction to practice - the purported inventor had worked out the application
is some way. 29

30. Novelty v. Nonobviousness (continued)
30
NONOBVIOUSNESS:
Under §103(a), no patent will issue if “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.” In other words, if the invention would be
obvious to anyone involved in the same area as the inventor, there can
be no statutory monopoly granted in the form of a patent.
The § 103 test for nonobviousness requires a four-part factual analysis:
(1) the scope and content of the prior art;
(2) the differences between the claimed invention and the prior art;
(3) the level of ordinary skill in the art; and
(4) objective evidence of non-obviousness, such as commercial success,
long-felt but unsolved need, failure of others, copying, and unexpected
results.

31. Nonobviousness: Graham v. John Deere
FACTS: The patented invention was a new shock-absorber doo-dad, additive to the
tractors. It was later improved and repatented. Defendant was
using similarly improved device on his tractor. At the
infringement trial, defendant contended that the patent on
improvement was invalid because it failed the test for non-
obviousness. The Trial Court found for defendant and the
Appellate Court reversed. The Supreme Court reviewed the case.
ISSUE: Whether the improved invention was nonobvious enough to be patentable.
HOLDING: The invention was obvious as it served the same purpose as that in the
prior art.
JUDGMENT: The patent was invalidated.
REASONING: Pursuant to the Intellectual Property Clause (Art. I, § 8, Cl. 8) of the U.S.
Constitution, patents are only intended for inventions that are new, useful, and
which further human knowledge rather than for small details and obvious
improvements. The Court also used the 35 USC §103 factors for determining
nonobiousness, also known as Graham Factors: (1) The scope and content of the
prior art; (2) The differences between the claimed invention and the prior art; (3) The
level of ordinary skill in the prior art; and (4) Secondary considerations (commercial
success, long felt but unsolved needs, and failure of others). Thus, Graham's own
patent was used as prior art against his new patent.
(32) Graham v. John Deere Co. of Kansas City, 383 US 1 - Supreme Court 1966 3131

32. Undue Experimentation
What is “undue experimentation” and how does it relate to enablement?
The test of enablement “is not whether any experimentation is necessary, but whether,
if experimentation is necessary, it is undue.” [33]
The following factors determine whether there is sufficient evidence that a disclosure
does not satisfy the enablement requirement and whether any necessary
experimentation is undue :
(1) The breadth of the claim; (2) The nature of the invention; (3) The state of the prior art;
(4) The level of one of ordinary skill; (5) The level of predictability in the art; (6) The
amount of direction provided by the inventor; (7) The existence of working examples;
and (8) The quantity of experimentation needed to make or use the invention based
on the content of the disclosure. [34]
The determination of the need of “undue experimentation” must be reached by
weighing all the above factual considerations. [35] A conclusion of lack of
enablement means that, based on the evidence regarding each of the above
factors, the specification, at the time the application is filed, “will not have taught
one skilled in the art how to make or use the full scope of claimed invention without
undue experimentation.”[36]
(33) In re Angstadt, 537 F.2d 498, 504, 190 USPQ 214, 219 (CCPA 1976)
(34) MPEP 2164.01(a) Undue Experimentation Factor
(35) In re Wands, 858 F.2d at 737, 8 USPQ2d at 1404
(36) In re Wright, 999 F.2d 1557,1562, 27 USPQ2d 1510, 1513 (Fed. Cir. 1993) 32

33. Third-Party Prior Art
In order to understand prior art, one must first define invention. Patent Law
identifies an invention for showing both components below:

Conception – inventor had innovative elements worked out in his mind.

Reduction to practice - the purported inventor had worked out the
application is some way.
Prior art (background art) constitutes all information that has been made
available to the public in any form before a given date that might be relevant
to a patent's claims of originality. If an invention has been described in the
prior art, a patent on that invention is invalid.
A trade secret, for example, is not a prior art as the employees and others with
access to the information are under a non-disclosure obligation. With such
an obligation, the information is typically not regarded as prior art. In order
to succeed on the prior art , the applicant must show that the invention
was:
- reduced to the practice (inventor had exercised due diligence in reducing to
practice and had not abandon the invention)
- public exposure (invention was in public demand either altruistically [the
corsage case] or commercially).
33

34. Prior Art (continued)
Examples:
In Jungersen v. Baden [37], the work of Benvenuto Cellini (an Italian artist
of the 16th
century) was cited in the judicial opinion as part of prior art,
invalidating a patent for the lost-wax casting of jewelry.
In KSR Intern. Co. v. Teleflex Inc.[38], the Engelgau patent (car engines
without computer-controlled throttles) was approved based on this
concept.
In Schering Corp. v. Geneva Pharmaceuticals [39], an anti-histamine
drug, loratadine, was found inherent to the prior art, and the patent
application was denied.
(37) Jungersen v. Baden, 69 F. Supp. 922 (S.D.N.Y. 1947)
(38) KSR Intern. Co. v. Teleflex Inc., 127 S. Ct. 1727 - Supreme Court (2007)
(39) Schering Corp. v. Geneva Pharmaceuticals, 339 F. 3d 1373 - Court of Appeals,
Federal Circuit (2003)
34

35. Types of Prior-Art
There are three types of the 3-rd party prior art:
- Invention known or used in the U.S.;
- Invention disclosed in patent anywhere in the world;
- Invention disclosed in a publication anywhere in the world.
The last type (prior publication) concerns to the geographical restriction.
There are three reason for this restriction:
1) Discovery failure: It was impossible or troublesome to discover for was
invented outside the United States. Rosaire v. Baroid Sales Division [40]
falls under this type , where patent was challenged based on use of identical
process before the date of invention.
2) Timing: Earlier use sufficient to serve as prior art, even though it was not
known by the publication.
3) Secrecy: A “ secret prior art” was locked for discovery.
(40) Rosaire v. Baroid Sales Division; 218 F.2d 72 (5th
Circ., 1955)
35

36. Reason 2: Timing
The date of invention must be earlier of the date of conception and the date of
reduction to practice. The date of application serves as reduction of base. There are
two scenarios between two or more inventors.
Scenario 1: One who conceived and reduced to practice (Ficher-Kalla case) [41].
Inventor-2 gets the patent unless Inventor- 1 can show that she exercised due
diligence in reducing to practice and did not abandon the invention. It shows that
the inventor conceived the idea but could not reduce to practice due to bad luck or
test failure. Per statutory bar, it must be one year before the application.
Scenario 2: Public use, which permits the use of invention that takes it outside the
control of the inventor ('corsage case'). In City of Elizabeth v. American Nicholson
Pavement [42], the Court held that experimental public use will not bar patenting
(testing the viability of the invention). In this case, evidence of experimentation
was found not in commercial use. Prior art based on invention being on “sale” must
be one year before the sale. The Supreme Court identified two requirements for an
“invention to be on sale”:

Invention must be subject of commercial offer for sale;

Invention must be sufficiently developed to be described in a patent application.
(41) Leapfrog Enterprises, Inc. v. Fisher-Price, Inc., 485 F. 3d 1157 - Court of Appeals,
Federal Circuit 2007
(42) City of Elizabeth v. American Nicholson Pavement Co., 97 U.S. 126 (1878)
36

37. Timing: Under the AIA Update
In 2014, the America Invents Act (AIA) updated the definition of prior art. The
new definition is broader in some respects, and narrower in others. Since
then, practitioners are operating under multiple versions of 35 USC § 102 at
least until March 15, 2034.
The pre-AIA patent law included seven separate conditions for patentability
under §§ 102(a)-(g). Under AIA §§ 102(a)(1) and (2), these seven conditions
have been replaced by two conditions - along with exceptions to each - that
dramatically increase the scope of what constitutes prior art.
Under AIA § 102(a)(1), the prior art includes not only prior publications, but
any public disclosure, something in public use, on sale, or otherwise
available to public anywhere in the world in any language prior to the
effective filing date of the claimed invention. The phrase “otherwise
available to the public” is a broad “catch-all” provision that expands the
definition of prior art beyond the prior use, sale, and publication of the
claimed invention.
Under AIA § 102(a)(2), the prior art is limited to the U.S. patents, published
U.S. patent applications, and published Patent Cooperation Treaty (PCT)
applications designating the United States, which become available as prior
art as of the date that they were “effectively filed.” 37

38. AIA - Definition (continued)
Additionally, according to AIA § 102(d), the U.S. patents, published patent
applications, and published PCT applications are “effectively filed” as of a
foreign priority date, even if the foreign priority application was in a foreign
language. Thus, AIA § 102(d) abolishes the well-established “Hilmer doctrine”
[43] (which referred to the situations where the foreign priority date of a U.S.
patent could not be used as a prior art date), and expands the scope of prior art
that can be applied to applications.
The AIA distinguishes between the terms “Effective Filing Date” (Entitled to
Priority) and “Effectively Filed Date” (Entitled to Claim Priority) as they appear
in AIA §§ 102(a)(1) and (2).
“Effective filing date” is the actual filing date of the patent or the application for
the patent containing a claim to the invention or “the filing date of the earliest
application” for which the patent or application is entitled, as to such invention,
to a right of [foreign] priority under section 119, 365 (a), or 365 (b) or to the
[domestic] benefit of an earlier filing date under section 120, 121, or 365 (c).
“Effectively filed” applies when a U.S. patent, a patent application publication, or
a published PCT application designating the United States, whether or not that
PCT application ever enters into the U.S. national stage, is being considered as
prior art against a claimed invention.
(43) In re Hilmer, 359 F.2d 859, 879 (C.C.P.A. 1966)
38

39. Summary of AIA's New Provision

Date of invention no longer matters, as patent goes to the first
inventor to file.

Prior art no longer is restricted by geography (knowledge, public
use or sale outside the U.S. do count as prior arts).

One year grace-period for public disclosures prior to filling
applies to disclosures by the inventor OR disclosure by third
parties made after disclosure by the invention.

Prior art includes printed publication or sale. [44]
(44) AIA §§ 102(a)(1), 102(a)(2), 102(d), 119-121
39

40. Reason 3: Secrecy
Are the secret use and sales activities considered as prior art?
The AIA goes a long way towards eliminating “secret prior art,” by requiring that
certain disclosures be publically available to qualify as prior art. A prior public use
or sale activity may occur anywhere in the world and qualify as prior art under AIA
§102(a)(1).
If such public use or sale activity were by the inventor (directly, indirectly), and no
more than one year before the effective filing date of the invention, then the
public use/sale activity would fall into a prior art exception under AIA §102(b)(1)(a).
Secret use of a process not coupled to public use of a product resulting from the
process would not constitute prior art under the AIA because of the public
accessibility requirement. Before AIA (2014), in Metalizing Engineering Co. v.
Kenyon Bearing & AutoParts Co. [45] the 2n Circuit found that a patent on a
process was invalid because, “although the process was kept secret by the inventor,
the product of the process had been in commercial use for more than a year before
the patent application was filed.” Under AIA law, this scenario could constitute
public use for public policy reasons. Yet, the Federal Circuit later held in W.L. Gore
& Associates, Inc. v. Garlock, Inc.[46] that “a process kept secret by one inventor
will not constitute prior art as to another inventor who subsequently and
independently makes the inventive process.” Whether Gore remains applicable
under AIA law remains obscure.
(45) 153 F.2d 516 (2d. Cir. 1946); (46) 721 F.2d 1540 (Fed. Cir. 1983) 40

41. P-H-O-S-I-T-A
In Slide-32 we mentioned about PHOSITA requirement in determination of the
undue experimentation.
“PHOSITA” stands for a “person having ordinary skill in the art.”
Pursuant to the MPEP 2141.03, the PHOSITA is:
(1) a hypothetical person who is presumed to have known the relevant art at the
time of the invention. Factors that may be considered in determining the level
of ordinary skill in the art may include:
(A) type of problems encountered in the art;
(B) prior art solutions to those problems;
(C) rapidity with which innovations are made;
(D) sophistication of the technology; and
(E) educational level of active workers in the field.
(2) a person of ordinary creativity, not an automaton;
(3) a person who is capable to understand scientific and engineering principles.
[38, 46].
(46) Ex parte Hiyamizu, 10 USPQ2d 1393, 1394 (1988)
41

42. PHOSITA's Central Role
The importance of resolving the level of ordinary skill in
the arts lies in the necessity of maintaining objectivity
in the obviousness inquiry. [47]
Nonobviousness complements to novelty, because nonobviousness
looks for differences and novelty looks for similarities.
While it's relatively easier for a lay or non-technical person to establish
novelty, it is uneasy, however, for such a person to establish
nonobviousness.
In order to count on differences, the person must be at least a PHOSITA
to understand parametric properties of the patent application for
running a comparative analysis for singularities and undue
experimentation.
(47) Ryko Mfg. Co. v. Nu-Star, Inc.,950 F.2d 714, 718, 21 USPQ2d 1053, 1057
(Fed. Cir. 1991)
42

43. PHOSITA => Enablement
Enablement requirement is coded in 35USC §112 (Specification).
Specification (sufficient disclosure) is essential to enablement, because
too broad claim causes problems for enablement, and too narrow claim
causes problems for the patentee [33].
Enablement may be insufficient when the applicant claims an invention
broadly with a dearth of supporting data or examples. This is
problematic in unpredictable fields, like chemistry, cosmetics and drugs,
because a PHOSITA often needs a specific and detailed teaching in order
to practice the full scope of the claimed invention. PHOSITA, who is
familiar with the specific field of the patent - would know what
dimensions are being referred to, what is taught or motivated, therefore
could compare with the prior art to establish non-obviousness.
In Graham v. Deere [33, p. 31] the Supreme Court adopted a three-step
approach for the non-obviousness analysis, providing that “the
differences between the prior art and the claimed invention have to be
gauged from the perspective of a PHOSITA.”
43

44. PHOSITA => “Teaching Away”
The patent is a teaching document. There are situations, like the patent bargain,
requiring to teach the world an invention in exchange for an exclusive right to
practice it. Also, a patentee has several arguments s/he can make to counter a
finding or allegation of obviousness, or simply to bolster the likelihood a court or
examiner will find the claimed invention non-obvious.
In KSR Int'l Co. v. Teleflex, [48] the Supreme Court identified a number of rationales
to support a conclusion of obviousness which are consistent with the proper
“functional approach” (teaching, suggestion, motivation) to the determination of
obviousness as laid down in Graham. [33] The Court noted that the analysis
supporting a rejection under 35 U.S.C.§ 103 should be made explicit.
In Ball Aerosol v. Ltd. Brands [49], the Federal Circuit offered additional instruction
as to the need for explicit analysis, explaining that the Supreme Court's
requirement for an explicit analysis does not require record evidence of an
explicit teaching of a motivation to combine in the prior art.
“The analysis that should be made explicit refers not to the teachings in the prior art of
a motivation to combine, but to the court's analysis.” [49]
(48) KSR Int'l Co. v. Teleflex Inc.,550 U.S. 398, 415-421, 82 USPQ2d 1385, 1395-97 (2007)
(49) Ball Aerosol v. Ltd. Brands, 555 F.3d 984, 89 USPQ2d 1870 (Fed. Cir. 2009)
44

45. Statutory Bars
Under §102 (b), an inventor would be barred from obtaining a patent if,
more than one year before filling date of his patent application, he or a
third party sells, offers for sale, or publicly uses the claimed invention
(or an obvious variation thereof) in the U.S., or patents or describes in a
printed publication the claimed invention anywhere in the world.
The one-year time-frame for statutory bars is known as the critical date.
The one-year period between the triggering event (public use) and the
filing date is referred as the grace period.
Statutory bars operate independently of the novelty, and may imply even if
an inventor satisfies the novelty requirement. Statutory bars and
novelty differ in two important ways:
(1) statutory bars focus on activity of both the inventor and third parties;
the critical date for statutory bars is one year before the application was
filed;
(2) novelty focuses on activity before the date of invention.
(50) Nard CA (2010). The Law of Patents.Wolters Kluwer.
45

46. On-Sale Bar
Under §102 (b), an inventor will be barred from obtaining patent rights if he or a third party
sold or offered for sale the claimed invention more than one year before the patent
application is filled. This is known as the “on-sale” bar, limitation on patentability under
the Utility doctrine [51, 52].
In Merck & CIE v. Watson Laboratories, Inc. [53], the Federal Circuit found that
communications between Merck and a potential joint venture amounted to a commercial
offer to sell, and thus invalidated the folate patent at issue.
The patent was on a crystalline calcium salt of 5-methyl-(6S)-tetrahydrofolic acid , a folate
component (MTHF) of the combination birth control products sold by Bayer under the
trademarks Safyral® and Beyaz®. The patent had a priority date of April 17, 2000, making
April 17, 1999 its “critical date” under the pre-AIA version of §102(b). It was as early as 1997
when Merck began “exploring a strategic partnership with Weider Nutrition International, to
introduce dietary supplements with Merck ingredients into the United States.”
The Court determined that Merck’s detailed faxmail from Sept. 9, 1998 —providing essential
price, delivery, payment terms—contained all the required elements to qualify as a
commercial offer for sale.” It reasoned: “Regardless of whether the communications
between Merck and Weider in the fall of 1998 were sufficient to establish a binding contract
for the sale of MTHF, they confirm that, at a minimum, both parties understood that
Martin’s September 9, 1998, fax was an offer to sell the product.” [53]
(51) 35 U.S.C. 102 Conditions for patentability; novelty and loss of right to patent.
(52) MPEP 2133.03(b) "On Sale" [R-2- 2100 Patentability]
(53) Merck & Cie v. Watson Labs., Inc., Nos. 15-2063, -2064 (Fed. Cir. May 13, 2016)
46

47. Showing Patent Infringement
We can't use, make, sell, offer to sell, or import a patent without a permission of the
patent owner. Exclusively, the patent owner may decide to make, use, sell, offer
to sell, or import the invention himself and thereby have exclusive ability to
commercialize the invention. Through the license, the patent owner can obtain
compensation from the third party.
The Prima facie showing of a patent infringement consists of two broad elements:
- Ownership of a valid patent;
- Infringement of the patented invention.
Proving the ownership of a valid patent requires grant of the valid patent by
the USPTO. Without grant, there can be no patent infringement lawsuit.
Grant gives the patent owner a presumption of validity. The alleged infringer
can challenge this presumption by showing that the patent is not valid for
not meeting the five validity requirements.
In order to show infringement of the patented invention the patent owner has
to show that the alleged infringer made, used, sold, offered to sell, or
imported the patented invention as described in the patent claims. [54]
(54) Ghosh et al., Intellectual Property: Private Rights, The Public Interest, and the
Regulation of Creative Activity (Thomson West 2nd Ed. 2010) 47

48. Suits of Utility Patent Infringements
Suits to enforce a patent or to challenge its validity may be brought in any
U.S. District Court with a proper venue. Appeals from the District Courts
must be brought to the U.S. Courts of Appeals for the Federal Circuit (since
1982). From there, review may be sought in the U.S. Supreme Court.
Claims that infringing goods are being imported into the United States may be
taken to the International Trade Commission (ITC). Appeals from the ITC are
also taken to the Federal Circuit, and from there to the Supreme Court.
What constitutes infringement?
Persons may be liable for: (1) directly infringing a patent; (2) inducing another
to infringe a patent; (3) contributory infringement; (4) importing, selling,
offering to sell, or using a product made through a process protected by a U.S.
process patent; or (5) manufacturing or selling certain components of a
patented invention to be assembled abroad. [55]
(55) Barret M, Louden RB (2004). Intellectual Property. Emanuel Law
Outlines (Aspen)
48

49. Types of Infringement
(1) Direct or literal infringement (§102 [a]) - where the alleged infringer has made,
used, sold, offered to sell, or imported the material component of the patented
invention as claimed. The infringement of combination patents constitutes in:
- entering into a contract to sell the patented invention;
- manufacturing all the components;
- subassembling the components;
- testing the operation of various parts in subassembled form;
- delivering the subassembled components to its customer in the U.S. during
the patent term.
(2) Contributory infringement (§271 [c]) - where the alleged infringer has
facilitated direct infringement by:
- ordering the act of infringement or selling the material to a known infringer;
- providing the tools and resources that enabled infringement;
- materially changing the patented invention through subsequent processes.
(3) Indirect or nonliteral infringement (§271 [b], [f], [g]) - where the alleged
infringer has made, used, sold, offered to sell, or imported an invention that is
similar to the claimed invention, but not within the literal language of the
claim(s). 49

50. Doctrine of Equivalents
Doctrine of equivalents (DOE) allows the patent owner to claim liability if the alleged
infringer practices an invention that performs "substantially the same function in
substantially the same way to obtain substantially the same result.” [56] Put differently,
the DOE prevents from avoiding liability through unsubstantial changes that take the
device (or process or design) outside the literal language of the patent claims.
In determining equivalence, the DOE [56] analyzes the role played by each element in the
context of specific patent claim, to address the inquiry as to whether a substitute element
matches the function, way, and result of the claimed element, or whether the substitute
plays a role substantially different from the claimed element.
In order to find infringement under this doctrine, it must be determined that the defendant's
device (or process or design) contains an element that corresponds (either identically or
equivalently) to each elements described in the patent claim(s).
Equivalency is an objective determination made on an element-by-element basis from the
perspective of a PHOSITA as of the time of infringement. The inquiry must be framed as:
(1) whether defendant's differing element performs substantially the same function in
substantially the same way to obtain the same results as claimed; and
(2) whether the difference amid defendant's and claimed element is “insubstantial.”
Judgment must consider: (a) whether persons reasonably skilled in the art would have known
that the differing elements were interchangeable at the time of infringement; (b) whether
finding defendant's invention equivalent, and thus infringing, would give the patentee rights
that s/he would not have been able to obtain initially through the broader claim language;
and (c) how great is the departure of the patentee's invention from the prior art.
(56) USPTO 2186: Relationship to the Doctrine of Equivalents [R-11.2013] 50

51. Warner-Jenkinson, Inc. v. Hilton Davis Chemical Co. [57]
FACTS: Plaintiff Hilton Davis Chemical, was a dye-making business that had
developed an "ultrafiltration" process to purify dyes. An amendment to its
patent specified that a solution used in the dye-making process might confer to
the pH of 6.0 - 9.0. The amendment was filed in order to clarify that this patent
did not overlap with a previously patented process that used a solution with a
pH level > 9.0. Defendant had developed a process using a solution with pH of
5.0, which was outside the range of plaintiff's patent.
PROSEDURAL HISTORY: Plaintiff filed for infringement, conceding that
defendant's process did not literally infringe, but breached the doctrine of
equivalents (DOE). Defendant contended that the DOE was no longer judicially
applicable as Congress had made some changes to the patent statute after the
Supreme Court's 1950 decision establishing the propriety of using the DOE.
ISSUE: Whether the Patent Act of 1952 overruled the doctrine of equivalents.
HOLDING:The DOE had not been eliminated by changes to the patent statute.
Instead, the Court determined that Congress would have explicitly stated that
they were eliminating the doctrine if that was their intent. The Supreme Court
enunciated a test for amendments, finding that if plaintiff could prove a reason
that the amendment was not to limit the patent, then infringement theory
would prevail.
(57) Warner-Jenkinson Company, Inc. v. Hilton Davis Chemical Co., 520 U.S. 17 (1997)

52. Warner-Jenkinson, Inc. (continued)
Lessons learned: The troubling aspect of this case was that the patent owner
did not initially have a limitation on the pH level of the claims:
Limitations were added during the patent prosecution.
Defendant (Warner -Jenkinson) argued that since the patent owner imposed
limitations, it could not avoid the consequences by relying on the DOE.
This argument is known as "prosecution history estoppel." (see the next slides)
The court also recognized that a patent owner cannot recover based on the
estoppel on elements that were limited during the patent prosecution;
However, these limitations were only lost if they were imposed because of
patentability.
It did not seem herein, that the lower pH level of 6.0 was imposed because of
the prior art.
Therefore, the prosecution history estoppel would not apply in this case.
Patent owner could use the doctrine of equivalents.
OUTCOME: The case was remanded to the Trial Court to determine if plaintiff
could explain his lower pH limit.
52

53. Doctrine of Prosecution History Estoppel
Also known as the “file wrapper estoppel,” the doctrine of prosecution history estoppel
(DOPHE) requires that the scope of the patent claims be interpreted in light of what
happened in the application process at the PTO. If the applicant took a position with
regard to the scope of coverage of the claim, s/he will not be allowed in a later
infringement action to take an inconsistent position.
For example, plaintiff may not use the DOE to bring an element relinquished in the
course of prosecution back within the scope of the patent's protection.
The U.S. Supreme Court has held, that “any narrowing amendment that the applicant
made to satisfy any statutory requirement of the 35 USC §102 will give rise to
prosecution history estoppel. When the purpose of the amendment is unclear, it shall be
presumed to have been made to satisfy a statutory requirement unless the applicant
can bear the burden of proving otherwise.” [58]
Grounds for the DOPHE limitations:
The patentee may rebut the presumption by showing that:
(1) the equivalent at issue was unforeseeable at the time the narrowing amendment
was made;
(2) the rationale underlying the amendment bears no more than a tangential relation
to the equivalent in question;
(3) there is some other reason suggesting that the patentee could not reasonably be
expected to have described the insubstantial substitute in question in the amended
claim language.
(58) Festo Corp. v Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722 (2002)
53

54. DOPHE - continued
The ultimate question is whether, at the time of the amendment, one
skilled in the art (PHOSITA) could reasonably be expected to have
drafted a claim that would have literally encompassed the alleged
equivalent. If so, then the equivalent would be barred.
Additional grounds for limiting the DOE:
The Court of Appeals for a Federal Circuit has held that, “when a patent
applicant discloses subject matter in the patent specification (§112), but
does not include it in his claim(s), then he dedicates it to the public; as
such, he may not rely on the DOE to hold the defendant liable for
incorporating that subject matter in the place of the claimed elements.”
[59]
(59) Jane DOE, et al., Plaintiffs–Appellants, v. Drummond Company, Inc., et al;
United States Court of Appeals, 11th
Circuit (2015)
54

55. Reverse Doctrine of Equivalents
- Defense is raised by the alleged patent infringer.
- An alleged infringer has engaged in literal infringement but has found an
improvement in how to practice the patent literally.
- Because of this improvement, the alleged infringer is found not liable for patent
infringement.
- If someone can practice the patent in a better and imrpoving way, there is not
infringement.
Scripps Clinic and Research Found. v. Genentech Inc. [60]
Defendant (Genentech) was accused of infringing Scripp's patent on purifying blood
clotting factor. Defendant argued that it had improved on Scripp's invention.
The Court granted plaintiff's motion for partial summary judgment for both,
infringement of claims and inducement to infringe those claims. Plaintiff's motion
for preliminary injunction was denied. Defendant's motions under 35 USC § 271(e)
as well for summary judgment of unenforceability were denied. Plaintiff's motion
for partial summary judgment on the defense of inequitable conduct was granted.
Lessons learned:The reverse doctrine of equivalents is consistent with the goal of
patent law to promote progress in technology and applied science. Some-once, the
defense strategy is that some infringement is even allowed for the counter-
balancing policy reasons.
(60) Scripps Clinic and Research Found. v. Genentech Inc., 927 F.2d 1565 (Fed . Cir. 1991)
55

56. How is the Reverse Doctrine of Equivalents different from the
Doctrine of Equivalents?
The reverse doctrine of equivalents is a way for courts to find that an
invention does not actually infringe on a patent, even if it
technically does. While the doctrine of equivalents expands the
scope of the patent claims, the reverse doctrine of equivalents
narrows it so that a new invention does not infringe even if it is
substantially similar.
The reverse doctrine of equivalents is used only in cases where the new
invention has significantly changed in principle, but still falls under
the literal claims of the patented invention.
The courts use the reverse doctrine of equivalents to avoid finding
infringement only if it would be very unfair or very detrimental to
bar the new inventor from making his invention.
56

57. Design Patent Protection
Standard: To qualify for a patent, the design of an article of manufacture must
be novel, non-obvious, and ornamental (35 USC §171).
The legal term “article of manufacture” is construed broadly and includes most
tangible, man-made objects.
The design patent protects the article's appearance, not its function.
Duration: Design patent protection commences when the patent is issued and
lasts 14 years.
Novelty and Statutory Bars: All provisions of Patent Act §102 apply to design
patents.
The Non-obviousness: A PHOSITA makes this determination based on the:
Scope and content of the prior art;
Differences between the prior art and the design at issue;
Level of skill in pertinent art.
The question is whether the applicable prior art suggests making the variation. If
so, then the claimed design is obvious [61].
(61) Hupp v. Siroflex of America, Inc., 122 F.3d 1456 (fed. Circ. 1997)
57

58. Design Patents (continued)
The Ornamentality Standard: A design must be
primarily ornamental. For example, the upper portion
of an athletic shoe can be designed in a vast variation:
in different colors, with different styles of stitches, and yet perform the shoe's
basic function effectively. Such design choices are primarily ornamental – not
dedicated by function – and thus are protectable under design patents.
Such determination is made with the help of several factors set-forth in Berry
Sterling [62]:
(1) existence of alternative designs;
(2) whether the protected design represents the best design;
(3) whether alternative designs would adversely affect the utility of the special
article;
(4) whether there are any concomitant utility patents;
(5) whether the advertising touts particular features of the design as having specific
utility; and
(6) whether there are any elements in the design or overall appearance clearly not
dictated by function.
(62) Berry Sterling Corp. v. Pescor Plastics, Inc., 122 F.3d 1452 (Fed. Circ. 1997) 58

59. Infringement of Design Patents
35 USC § 271 provisions for utility patents also apply to design patents. The
Supreme Court has held in Gorham [63], “If, in the eye of an ordinary observer,
giving such attention as a purchaser usually gives, two designs are substantially
the same, if the resemblance is such as to deceive an observer, inducing him to
purchase one supposing it to be the other, the first one patented is infringed by the
other.” [63]
Federal Circuit's Additional Requirements: In addition to the Gorham standard,
the allegedly infringing design must appropriate the novelty in the patented
design (“points of novelty requirement”). Also, where the design is comprised of
both functional and ornamental features, the ordinary observed may be
deceived by reason of the ornamental (opposed to functional) features
(“common ornamental feature requirement”).
The Gorham standard does not apply to the utility patents.
Double Patenting: One article may contain two separate inventions (one conferring
to the utility patent standards). It is possible to obtain both utility and design patent
in the same article.
Defense and Remedies: Same as for the utility patents. In addition § 289 provides
a remedy for design patent infringement that utility patents do not convey. The
monetary compensation is the total profit, and not less than $250.
(63) Gorham Manufacturing Co. v. White, 81 U.S. (14 Wall.) 511 (1872) 59

60. Plant Patent Protection
Standard: Plant patents are available to persons who discover or invent a distinct
and new variety of plant and asexually reproduce it.
Duration: The plant monopoly lasts for the same term as that for utility patents
(up to 20 years).
Novelty and Statutory Bars: 35 USC §102 applies to the plant patents, though a
printed publication describing a new variety of plant is fairly unlikely to defeat
patentability under §102 (a) or (b). The clue: the description in a printed
publication is unlikely to enable others reproduce the plant.
Prior “Art” (existence): To be novel, the new variety of plant must not have
existed before in nature. If a “mutation” per se is being patented, it will be seen
as novel, if the earlier mutation would have been passed down naturally to
subsequent generations. My personal prediction is that decades after, the
Global Seed Vault of Svalbard, Norway, will become a role player in this
provision.
Distinctiveness standard: The ability of the plant in question to grow in a
different type of soil, the different color -shape-size -flavor of the plant.
Infringement: A plant patent gives the owner the right to exclude others from
asexually reproducing the patented plant, selling, using, importing a plant (or any
of its parts) so reproduced. 60

61. Plant Patent Infringement
Independent Discovery: Plant patents differ from utility and design patents which
prohibit not just the copies, but independently conceived designs and
inventions as well – when they are essentially the same as the patented
invention.[64]
Taking Seeds: Growing a plant from seeds taken from the patented plant will not
infringe the plant patent. This is sexual, rather than asexual reproduction, which
is not prohibited by Patent Act.
Plant Parts: In 1998, Congress amended 35 USC §163 to include the protection of
the plant parts (cut flowers, fruit, harvested timber, illegally exported from the
USA).
Utility Patents for Plants: Chakrabarty's decision [13] made it apparent that the
new varieties of plants are eligible for utility patents – either as articles of
manufacture or compositions of matter.
Plant Variety Protection Act: Coded as 7 USC §2321, the Act gives patent-like
protection to persons who breed new varieties of plants through use of seeds
(sexual reproduction). There is no non-obviousness requirement, though there
are statutory bar provisions similar to 35USC §102(b).
(64) Imazio Nursery, Inc. v. Dania Greenhouses, 69 F.3d 1560 (Fed. Circ. 1995).
61

62. Defense Strategies
Defense is designed to protect either party from disposition of liability. It is
raised by the alleged person to state why the other party is liable or to
prove a contribution or an inequitable conduct.
Patent Infringement Case + No Defenses = Remedy
If defendant can show that the patent owner engaged in inequitable conduct in
obtaining or enforcing the patent, the court will find the patent
unenforceable until the inequitable conduct is cured.
There are five common defense strategies in patent infringment cause of
actions:
62
1) Invaildity
2) Patent misuse
3) Laches
4) Equitable estoppel
5) Term limit.

63. Strategy 1: Invalidity Defense
A patent is presumed valid. However, to prevail on this strategy, the alleged
infringer must show that:
(I) the patent in question did not fully hold one or more out the five requirements
for the subject matter (35 USC §§ 101-103),
- Novelty
- Nonobviousness
- Subject matter
- Utility
- Enablement,
(II) or the invention was not fully disclosed under 35 USC § 112.
Estoppel: Under Lear, Inc. v. Adkins [65], patent licenses are not estopped from
challenging the validity of the patent, notwithstanding the fact that their
license agreement implicitly acknowledges the patent's validity. The Federal
Circuit, however,has held that in such cases the license may be liable for
royalties under the licensing agreement up until the time that it asserts its
claim that the patent is invalid. Further, the patent owner who subsequently
assigns the patent to another, will be estopped from later challenging of the
patent's validity.[66]
(65) Lear, Inc. v. Adkins, 395 U.S. 653 (1969)
(66) 35 USC § 154 63

64. Strategy 2: Patent Misuse
Some courts [67, 68] have found that enforcing patent rights can constitute misuse.
The patentee may be deemed to have misused his patent if he used it as leverage
to obtain more market power than Congress intended to convey through the
grant of a patent. This doctrine works somewhat like the DOE of unclean hands.
It requires from the licensee to purchase additional items as a condition of
licensing the patented technology. Defendant escapes liability for infringement,
regardless of whether s/he actually infringed the patent, and regardless of
whether s/he himself was injured by plaintiff's or his misuse.
The following activities are examples of patent misuse:
(I) Relationship to Antitrust Law: Use of a patent in a manner that violates the
antitrust laws. Yet, the patent misuse doctrine has not been expressly limited to
antitrust violations.
(II) Tying Arrangements: Arises when the patentee conditions a license to make,
use, sell, or import the patented invention on the licensee's agreement to
purchase goods or another license from the patentee. As such, the patentee
may have using the market power conveyed by the patent to gain an advantage
in a market of goods falling outside the scope of the patent monopoly.
(67) Illinois Tool Works Inc. v. Independent Ink, Inc., 547 U.S. 28 (2006)
(68) Morton Salt Co. v. GS Suppiger Co., 314 US 488 - Supreme Court (1942)
64

65. Misuse (continued)
Patent Act § 271 expressly authorizes some tying arrangements.
Example: The owner has a process patent for killing fungi from the
growing crops. The chemical (used for that process) itself is not
patented. The patent owner may condition a license to use the
patented process or purchase of the chemical from it, refusing to
grant a license to persons who buy the chemical from someone
else. This tying arrangement will not constitute as patent misuse.
Under 35 USC § 271 (d), however, if the patent owner has a market
power, than the tying arrangement will have an anti-competitive
effect and should be found as misuse. For example, Tom has a
patent for a new type of cigarette lighter. He grants a license to Bob
only if the latter buys lighter fluid wholesale from him. Tom will be
posed a misuse defense only if he has market power as to his
patented lighter.
65

66. Misuse (continued)
Tie-in to another license (or “package licensing”): When the owner conditions
license for a second patented invention, it is deemed patent misuse if: (1) the
first invention cannot be practiced without infringing the patent on the second
invention; (2) the patentee lacks market power for the first patented invention
(35 USC § 271 (d)).
Example: Tom has a patent on a new type of electric cigarette. He also owns a
patent on a new type of keychain-camera. The “Dupont, Inc.” (a fictitious
name) seeks a license to manufacture and sell the electric cigarette, but Tom
grants it to the express condition that the “Dupont, Inc.” has also to purchase a
license to manufacture and sell the keychain-camera. Tom will be found liable
of misuse if he has market power in the electric cigarette market.
Actions that do not constitute patent misuse under § 271 (d):

Derive revenue from acts that constitute contributory infringement if performed
by another without the consent of the patentee.

License or authorize others to perform acts that, if performed without the
patentee's consent, would constitute contributory infringement.

Seek to enforce his rights against infringement or contributory infringement.

Refuse to license or use any rights in the patent. (This last exception for misuse
defense may have allowing the patentee to “corner the market” in a non-
patented item [69] ).
(69) Dawson Chemical Co. v. Rohm & Haas Co., 448 U.S. 176 (1980) 66

67. Strategy 3: Laches
Laches means an equitable defense, or defense to a claim for an equitable remedy.
Elements of the laches include:
- unreasonable delay in filing suit, and
- material prejudice to the defendant.
(I) Delay of more than 6 years gives rise to rebuttable presumption of laches. It bars
recovery for conduct engaged in prior suit, but it does not bar injunctive relief or
recovery for activities conducted subsequent to filing suit.
(II) Prejudice may be evidentiary or economic.
1. Evidentiary prejudice – defendant's inability to present adequate defense due to
loss of records, death of witnesses, unreliability of memories of long past events;
2. Economic prejudice - loss of monetary investments or financial damage which
likely would have been prevented by earlier suit [70].
In 2015, the Court of Appeals for the Federal Circuit ruled -en banc - in SCA Hygiene
Products [71] that laches remains a viable defense in patent or intellectual property
infringement suits, even after the Supreme Court's “Raging Bull” decision ( in
Petrella v. Metro-Goldwyn-Mayer, Inc.) which held that “laches does not apply to
copyright cases.” [72]
(70) Wanlass v. General Electric Co., 46 U.S.P.Q.2d 1915 (Fed. Cir. 1998)
(71) SCA Hygiene Products AB et al. v. First Quality Baby Products LLC (Fed. Circ. 2015)
(72) Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 67

68. Strategy 4: Equitable Estoppel
Equitable estoppel, in general, is a bar to a party from asserting a legal claim or
defense that is contrary or inconsistent with his/ her prior action of conduct. In
context of the patent law, equitable estoppel belongs to the Doctrine of
Equivalents. Its elements include: misleading statements or conduct, action in
reliance, and resulting prejudice. Unlike laches (slide 63), equitable estoppel
does not involve a six-year presumption.
The inequitable conduct defense, often called as “Fraud on the Patent Office,”
is related to the patent misuse. It renders the patent unenforceable when
defendant proves, with preponderance of the convincing evidence, that the
patentee intentionally made a misrepresentation of withheld material
information about the patentability of the invention during patent
prosecution.
The Court of Appeals for the Federal Circuit has held in 1st Media v. Electronic
Arts [73], that a defendant claiming that a patentee failed to disclose
material information must show with clear and convincing evidence a:
(1) prior art or information that is material to patentability;
(2) knowledge chargeable to the applicant of that art or information and of its
patentability;
(3) failure of the applicant to disclose the art or information resulting from an
intent to mislead the PTO.
(73) 1st Media v. Electronic Arts (Fed. Cir. 2012) 68

69. Strategy 5: Term Limit
In the United States, the limited-time term of patent is 20 years from the earliest
patent application filing date. After the patent term expires, the new
technology enters the public domain and is free for anyone to use. This can be
used in infringement defense.
This strategy also may include the Exhaustion of the Rights on the Method Patent
doctrine.
The Patent Act provides: when a person entitled to the 35 USC §273 defense, sells a
product of a patented business method, the sale exhausts the patentee's rights in
the product. Thus, the prior user's purchasers have the same rights to resell or
repair the product that they would had if they had purchased it from the
patentee.
The Drug Price Competition and Patent Term Restoration Act of 1984 [74],
informally known as the Hatch-Waxman Act, enables a generic
pharmaceutical manufacturer to develop copy of a patented innovator drug
without duplicating the clinical and non-clinical studies or risking liability for
patent infringement damages. The generic manufacturer must only
demonstrate bioequivalence to the innovator. Sec. 505(j)(2)(A)(vii)(IV), known
as Paragraph IV, gives the first company to file an Abbreviated New Drug
Application (ANDA) for a particular drug 180 days of exclusive rights to market
the drug as the generic alternative to the branded drug.
(74) Public Law 98-417 69

70. Remedies
There are two types of remedies for patent infringement:
- Damage repay
- Injunction.
The patent owner can obtain both.
Injunctions are preventive, whereas damage-compensation is retrospective.
Is an injunction relief mandatory or discretionary?
The courts have seen the patent injunctions as discretionary, depending on the
policies or effects.
In eBay case [75], the concern was whether the injunction can drive products
out of the market and have a negative effect on companies and consumers.
It was established by the majority that in determining whether to grant an
injunction, judges have to consider four factors:
1) whether the patent owner has suffered irreparable injury;
2) whether damages are inadequate to remedy the patent owner;
3) whether a balancing of the hardships weigh in favor of the patent owner;
4) whether the public interest would be damaged by the injunction.
(75) eBay Inc. v. MercExchange,L.L.C., 547 U.S. 388 (2006)
70

71. Remedies (continued)
Infringement of Method Claims:
The law distinguishes between method claims, and product or apparatus
claims. [76]
For infringement of a method claim, the patentee (plaintiff) must prove that
the accused party performs each day and every step of the claimed method.
[77].The “sale of equipment to perform a process is not a sale of the process
within the meaning of §271 (a).” [77, 78]
The courts find no direct infringement by the manufacturer who performed
the first step of a process claim even where its customer performer the other
step of the claim. In Cross Med. Products [79], the court rejected patentee's
efforts to combine the acts of surgeons with those of a medical device
manufacturer to find direct infringement of an apparatus claim.
Nevertheless, a party who performs fewer than the claimed steps may be
liable for direct infringement if the party exercises “control and discretion.”
[80]
(76) NTP Inc. v. Research in Motion Ltd., 418 F.3d 1281, 1317 (Fed. Circ. 2005)
(77) Joy Technologies, Inc. v. Flakt, Inc., 6 F.3d 770, 773 (Fed. Circ. 1993)
(78) Fromson v. Advance Offset Plate, Inc., 720 F.2d 1565, 1568 (Fed. Circ. 1983)
(79) Cross Med. Prods. v. Medtronic Sofamor Danek, 424 F.3d 1311 (Fed. Circ. 2007)
(80) BMC Resources, Inc. v. Paymentech L.P., 498 F.3d, 1381 (Fed. Circ. 2007)

72. Remedies (Injunction)
Remedies for infringement through performance of “medical activities”:
In 1996, Congress amended Patent Act §287 to prohibit infringement remedies
against medical practitioners and related healthcare entities (HMOs and hospitals)
who directly infringe or induce infringement of a patent through performance of a
“medical activity.” Remedies are not precluded if the medical practitioner:
(1) makes unauthorized use of a patented machine, manufacture, or composition of
matter;
(2) practices a patented use of a composition of matter without authorization;
(3) practices a patented biotechnology process without authorization.
Therefore, the defense under the §287's exception refers only to the performance of
patented medical or surgical procedures without involving drugs or patented
devices, such as the internal cephalic version, manual detachment of placenta, CPR,
or Heimlich maneuver. However, this general rule is subject to a caveat.
The caveat: §287 will preclude infringement remedies even though a composition of
matter (a drug, commonly) is cited in the patent if the use of it does not directly
contribute to the achievement of the objective of the claimed procedure. For
example, if administering anesthesia entails a novel anesthetic or dosing schedule,
the use of composition of matter (the drug) should be deemed directly to
contribute to achievement of the goal (anesthesia), and remedies for infringement
should be available against a medical practitioner and related healthcare entities.
72

73. Remedies (Damage repay)
For the defendant, a judicial finding of inequitable conduct is the legal
equivalent of a jackpot at the nickel slot machine in a grand casino.
Damages are the alternatives, sought after the court finds that injunction is
not appropriate [81].
In Kingstown [82], the Court held that in order to establish inequitable conduct:
- The infringer must show intent to deceive (high standard);
- Mere negligence is not sufficient;
- Reckless or grossly negligent behavior is not enough;
- There must be a conscious purpose to deceive;
- The material misrepresentation must be shown.
(81) Rite-Hite Corp. v. Kelley Co., 56 F. 3d 1538 (Fed. Cir. 1995) (en banc)
(82) Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 876 (Fed.
1988)
73

74. Measuring Damages
Patent Act §284 directs courts to award prevailing patentees damages “adequate
to compensate for the infringement.” Infringement-damages are calculated on
the patentee's lost profits attributable to the infringement or by calculating a
reasonable royalty for the defendant's use of the patented invention, but in any
event, the patenteee should receive no less than a reasonable royalty, together
with interest and costs.
1) The reasonable royalty measure is the default measure of damages, and is
appropriate when the lost profits are too speculative to estimate, or the patent
owner does not himself sell the invention. The fact of infringement itself is a
compensable injury because the infringement violates the patent owner's
rights of exclusivity. Considerations of the reasonable royalty amount include:
The amount that other licenses have agreed to pay for comparable licenses;
The royalties paid or methods used to calculate royalties used by other parties in
comparable situations;
The patentee's own manufacturing and marketing capacity, and his general
willingness to grant licenses in regard to the invention;
The amount of profit or cost saving that the license may obtain from making,
selling, using, or importing the patented invention.
74

75. Measuring Damages (continued)
2) The lost-profits measure is preferred only when it can be determined,
because it may more fully compensate the plaintiff. It needs demonstration
of a reasonably probability that but for the defendant's infringement, the
plaintiff would have made the sales that the defendant made. The following
factors require a demonstration:
Sufficient demand for the patented product;
An absence of acceptable non-infringing substitutes;
Manufacturing and marketing capacity to fill the demand;
The amount of profit the patentee would have made.
Lost profits on units that do not embody the patented invention: In an en-banc
decision upon Rite-Hite v. Kelley [83], the Supreme Court held that in
addition to recovering lost profits from an infringer on sales of the patented
device, the patent owner may recover lost profits on sales of devices that do
not incorporate the patented invention if s/he demonstrates: (1) that s/he
would have sold the patented device but for the infringement; (2) the lost sales
were reasonably foreseeable by the infringing competitor; and (3) the
unpatented device directly competes with defendant's infringing product.
(83) Rite-Hite Corp. v. Kelley Co., Inc., 516 U.S. 867 (1995) 75

76. Measuring Damages (continued)
Entire market value rule: Under Patent Act § 284, the patentee may be entitled
to recover lost profits on unpatented components sold with a patented
apparatus. This rule applies when patented and unpatented components are
together considered as parts of a single assembly, or a functional unit,
operating together to achieve one result (for example, a weaving apparatus
which consists of a frame, an arm, and a weaving device, and where only the
last components is patented).
3) Attorney fees: This falls under § 285, which authorizes the courts to award
reasonable attorney fees to the prevailing party in exceptional cases. Courts
interpret “exceptional cases” as cases of willful or deliberate infringement by
the defendant when the plaintiff is the prevailing party, and bad faith conduct
by the patentee in obtaining his patent or in suing for infringement when the
alleged infringer is the prevailing party.
4) Double or treble damages: § 284 authorizes the courts to increase the
damages awarded to a patentee up to three times the actual damages found
or assessed. These enhanced damages may only be awarded upon a showing of
willful infringement or bad faith on the part of the defendant.
5) Prejudgment interest: Under § 284, the Supreme Court directs the lower
courts to award prevailing plaintiffs prejudgment interest - calculated as of the
date of infringement - as a routine matter.
76

77. The Law of Undeveloped Ideas
Protection of the undeveloped ideas is based on the following theories:
(A) Miscellaneous accumulation
(B) The express contract theory
(C) The contract-implied-in-fact theory
(D) The contract-implied-in-law theory
(E) The confidential relationship theory
(F) The property theory.
(A) The law of undeveloped ideas is a miscellaneous accumulation of state
common law decisions addressing a claimed right to compensation for a
defendant's unauthorized use of the plaintiff's idea. Examples:
An employee discloses an idea for a cost-saving measure to his employer, who
implements the idea but refuses to pay the employee for it.
An independent person submits an idea for an advertising slogan to a
department store, expecting compensation upon use and popularity, but gets
none.
77

78. The Law of Undeveloped Ideas (continued)
(B) Express contracts to pay for an idea are enforceable. But the idea in question
must be “concrete,” and the promise must be supported by a consideration [84].
Two problems with this theory: (1) people may be willing to pay for not novel, not
concrete ideas because such are useful to them; and (2) enforcing contracts to
pay for ideas does not really remove the ideas from the marketplace, since the
only parties affected by enforcement are the immediate parties to the contract.
(C) Court found and enforce contracts based on implied-in-fact theory to pay for
the ideas based on the parties' actions and surrounding circumstances showing
bilateral intent. To determine whether parties have entered into an implied
contractual obligation, the following factors or inter alia are considered:
Specific words or actions of the parties;
Whether the defendant has paid for similar ideas in the past;
Whether the plaintiff customarily has been paid for his ideas;
Whether there is an industry custom of paying for such ideas.
(D) A contract-implied-in-law or a “quasi-contract” is not based on the intentions of
the parties, but on court's finding of unjust enrichment - that the defendant
received a benefit for which equity and justice require him to pay.
(E) When the parties are in a confidential relationship during the flow of the idea
based on trust and good faith, some courts can find a right for recovery.
(F) Some courts see the novel, concrete idea as a form of personal property.
(84) Masline v. New York, New Haven and Hartford Railroad Co., 95 Conn. 702, 112 A.
639 (1920)

79. Trade Secrets
Patent protection is expensive: it requires time and investment. It takes 3-4 years
from the patent application to a successful grant. Meantime, the applicant
remains concerned that her invention may be appropriated by others before
the patient would be approved. Therefore, there are laws to protect Trade
Secrets.
Before 1974, in the United States, Trade Secrets law was mainly common-law. In
1974, the U.S. Supreme Court issued a landmark decision in Kewanee Oil Co. v.
Bicron Corp., allowing the states to develop their own trade secret laws.[85]
In 1979 several U.S. states adopted the Uniform Trade Secrets Act (UTSA) -
amended in 1985, with approximately 47 states having adopted it. Also, the
Economic Espionage Act (EEA) of 1996 (18 U.S.C. §§ 1831–1839), made the
theft or misappropriation of a trade secret a federal crime. The EEA was
extended in 2016 to allow companies to file civil suits in federal court.
Misappropriation doctrine: Companies often try to disclose each other's trade
secrets through lawful methods (reverse engineering) or unlawful methods,
such as breaching of the non-compete covenant by the ex employee in the new
job setting (except in state California where the covenants not-to-compete are
illegal), or through industrial espionage. If a trade secret is acquired by improper
means, then the secret is deemed to have been misappropriated.
(85) Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 94 S.Ct. 1879, 40 L.Ed.2d 315
(1974) 79

80. Trade Secrets v. Patents
Briefly, the differences between Patent Law and Trade Secret Law
80
TRADE SECRET LAW PATENT LAW
Protects patentable inventions AND
data not covered by patents such as
customer lists, pricing information,
undeveloped ideas, and more.
Protects only patentable subject matter
(process, machine, manufacture,
composition of matter) that shows
function or functionality (utility), is
novel, non-obvious, and specific.
Invention is kept secret. Invention is disclosed to public once the
patent is issued
Protection lasts until patent is issued or
while invention is kept secret.
Protection is for limited time only.
Protection only from unauthorized
disclosure or use of secret by third
parties.
Protection is for limited time only (14-
20 years).
Risk for reverse engineering. Has strong legal foundation to exclude
others from use of invention.
Is a state law. Is a federal law.

81. Trade Secrets v. Patents (continued)
Imagine, if Coca-Cola company would patent its invention in 1886 under the
name of John Pemberton. The patient would last for 20 years, and today it
would be nullified. By contrast, trade secrets are timeless; they however,
carry the risk of reverse engineering.
In some cases, an invention may qualify for both patent and trade secret
protection – giving the proprietor of choice. Yet, it's impossible to have both
forms of protection simultaneously for the same invention, because most
patent applications (including disclosure) are published 18 months after they
are filed. Even if not published yet, the invention will be fully disclosed to the
public when the patent is granted. Further, secret commercial use of an
invention for a certain time prior to filing for a patent may foreclose patent
protection under 35 USC §§ 102 (a) or (c).
When such a dilemma exists, which form of protection (patent v. trade secret)
is most advantageous?
Several factors are considered: (1) duration of protection; (2) breadth of
protection; (3) cost; (4) risk of losing protection, and (5) licensing. The weight
of these factors may differ depending on the circumstances and the very
goals or needs of the proprietor.
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82. Antitrust Law
Antitrust Law governs anti-competitive conduct by a business or a group of
businesses. Market power is essential to Antitrust Law. A question: since
Patent Law allows a company to exclude a competitor from making, selling or
offering to sell a product that incorporates an invention, then is the Patent Law
consistent with the Antitrust Law?
Antitrust Law makes illegal two types of conducts:
(1) Collusive agreements among competitors; and
(2) Unilateral conduct by a single dominant player that reduces competition in the
marketplace.
Collusive agreements are illegal, because the firms suppose to compete with each
other. However, in some situations, cooperation among competitors becomes
necessary (example, setting industry standards). As a result, some collusive
agreements are treated as illegal per se, and other agreements are illegal only if
they are unreasonable (pro-competitive benefits).
Unilateral conduct (monopolistic) is illegal, if the firm has market power and acts
in a way that predates on consumers, excludes new competitors, or leverages
the market power into related markets.
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83. Antitrust Law (continued)
Can patent rights give rise to violations of Antitrust Law, and how?
A patent license might give rise to collusive conduct if the competing owners
agree on how to split-up the market.
A patent law can give rise to monopolistic conduct, if the patent owner forces a
licensee to buy a non-patented product as a condition of licensing the
patented one.
Overlapping: Antitrust law enforces polices that are consistent with patent law.
Antitrust law is about competition in the market to provide goods to
consumers at a competitive price and with desirable quality. Patent law too, is
about competition through creation of a new technology (function) that
provides better quality to consumers. These two can cross- conflict; still, there
is nothing inherently inconsistent between the patent law and antitrust law.
Complementing: Patent law gives the inventor an exclusive right, but this right
cannot be exercised in an anti-competitive way. The latter means: (1) unilateral
refusal to license a technology; (2) standard setting (where patents on critical
technologies are owned by different companies and the firms enter into a cross-
license or a patent pool so that the disparate components can be used together to
practice the new product; this collusive behavior is not anti-competitive if
reasonable); (3) compulsory licensing (antitrust law favors the opposite, i.e.
voluntary negotiation); (4) patent litigation (injunctive relief can reduce the
anticompetitive effects of patent enforcement); (5) market power (the patent
owner's conduct is monopolistic).
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84. Can a patent owner license his invention on whatever terms he may choose?
The notion of tying arrangement is at the heart of Motion Picture case [86].When
the patent owner, Motion Picture Patents Company (MPPC), granted the right
and license to manufacture and sell machines embodying a mechanism for
feeding film through a projector, it attached a notice to each machine limiting
their use by the purchaser or by the sub-lessee to terms not stated in the
notice but which were to be fixed after sale at MPPC's discretion. Universal
Film Manufacturing Company (defendant) claimed that the owner’s rights to
control the materials to be used in operating the machine could not be used
and the notice was invalid.
The issue was whether the exclusive right granted in every patent must be limited
to the filed invention and it is not competent for the owner to extend the scope
of its patent monopoly by restricting the use of it to materials necessary in its
operation that are not part of the patented invention.
The Court held that this condition expanded the scope of the patent owner's
rights beyond the patent at issue. Therefore, it was impermissible and
rendered the patent unenforceable under the doctrine of patent misuse. From
the antitrust perspective, a tying arrangement is anti-competitive if there is
market power in the tying product (the movie projector) and the arrangement
has a tendency to have anticompetitive effects in the market for the tied
product (the film).
(86) Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502 (1917) 84

85. International Patent Treaties to which the United
States Adheres
A) The Paris Convention: Signed into law in 1883, and having over 125 adherents
(including the USA), Paris Convention is administered by the World Intellectual
Property Organization (WIPO). The members are free to determine the nature and
extent of substantive patent protection they will provide for inventions, as long as
they provide uniformly to domestic and foreign applicants.
B) The Patent Cooperation Treaty (PCT): Since 1978, the PCT has 100 members ,
including the USA. It is too, administered by the WIPO.
C) The Agreement on Trade-related Aspects of Intellectual Property Rights
(TRIPs) is administered by the World Trade Organization (WTO), and incorporates
the principles of Paris Convention.
D) The Patent Law Treaty (PLT) is administered by the WIPO, and eliminates
some unduly complex and expensive formalities imposed on the patent applicants.
E) Budapest Treaty on the International Recognition of the Deposit of
Microorganisms for the Purposes of Patent Procedure: Entered entered
into force in 1980, and administered by the WIPO, it allows deposits of
microorganisms at an international depository authority to be recognized for the
purposes of patent procedure.
85