Patent Law Insights : Software Patent Lawyer & Attorney : Perkins Coie Law Firm : Intellectual Property & Technology Law

During friendly mergers of corporate entities, legal departments and attorneys can sometimes let their guards down when conducting diligence or drafting language for agreements. For example, they may fail to precisely draft patent assignments. Doing so can have undesirable results many years later.

That may be what happened in Tyco Healthcare Group L.P. v. Ethicon Endo-Surgery, Inc. Four years into the patent infringement case, the defendant (Ethicon) filed a motion to dismiss the case because, according to Ethicon, the plaintiff (Tyco Healthcare) did not own the asserted patents.

Tyco Healthcare (now Covidian) had acquired various patents many years earlier. An agreement executed during the acquisition assigned all assets and patents except "patents and patent applications relating to any pending litigation" to Tyco Healthcare. The assignor also entered into a settlement with Ethicon on the same day to settle a patent dispute. Neither the assignment nor the settlement agreement identified the patents that each contemplated.

The court agreed with Ethicon and dismissed the case without prejudice because it could not tell from the documents whether the patents now asserted related to the settlement with Ethicon and so were unintentionally left off the assignment to Tyco Healthcare.

Even when transactions are friendly, attorneys should draft patent assignments with precision. One way to be precise is to specify by number which patents and patent applications are being assigned and/or which are not.  Moreover, the assignments should be recorded with the United States Patent and Trademark Office as quickly as possible so that the world can easily determine to whom a patent is assigned.

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I've always wanted one of these....

Happy Holidays!

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There are several ways to increase the value of a patent portfolio.  One is to ensure that patented claims cover  the evolutionary path of the relevant technology.  A second is to be sure to file patent applications (after receiving foreign filing licenses) in jurisdictions where the technology could have competitors or markets.

One market that is seen as being increasingly important is India.  A billion people live there and an increasing number of them are entering the middle class.  The inevitable off-shoring trend, though painful to many in the U.S. and Europe, has been a boon to people there.  They are demanding products and services they could not previously afford and, because of the popularity of American media, their demand for foreign brands is seemingly insatiable.

Although foreign companies have seen India as a source of cheap labor and a potential future market for several years, they have limited their direct investments because of India's rules that restricted royalty payments without prior government approval and lax enforcement of intellectual property rights.  The government of India on Wednesday announced a liberalization of the royalty payment rules. 

With this announcement along with improved enforceability of intellectual property, India is setting itself up for a bright future on the world stage.

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Citing a Federal Circuit decision in Intellectual Science and Technology v. Sony Electronics earlier this week, Dennis Crouch (Patently-O) first says that there is a "a long line of cases warning against the use of means-plus-function claim language," but then notes that "[t]here is nothing 'wrong' with writing means-plus-function claim language -- especially to accompany a well drafted specification." 

I think the second position is probably better than the first.  While means+function claims can be narrowly construed during litigation, they can nevertheless be valuable during licensing and assertion.

However, from a patent prosecution perspective, they can be difficult to appeal to the Board of Patent Appeals and Interferences because of the additional requirements the appeals rules impose on such claims.  As a result, some patent practitioners prefer to avoid such claims, while others add them to broaden out the claims in applications.

The case demonstrates, however, that asserting a means+function claim requires a clear explanation of infringement on the record.

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I've previously written about reducing risks when preparing patent applications abroad.  What happens when inventors are located abroad?  Such occurrences are happening increasingly frequently as research and development (R&D) transcends national boundaries.  Many multinational corporations (or even just U.S. corporations with overseas R&D facilities) have teams that span two or more countries.  When an invention was invented by inventors in multiple countries, employers need to be even more cautious about where and when to file patent applications.

In most cases, the law in each country needs to be considered.  For example, India can impose stiff penalties (including fines and jail time) if a patent application is first filed in any country other than India when even one of the inventors was an Indian resident when the invention was made.  It matters not if the other five inventors are American.  The Indian law specifically says "resident."  A U.S. citizen who is on temporary assignment to India and has lived and worked there for more than 6 months could be a resident.  Unlike similar laws in some other countries, the law does not specify the content of patent applications that is subject to this restriction.  However, my experience is that like other countries, India is concerned about the export of military and other sensitive technology.  An alternative to filing a patent application in India (and waiting six weeks before filing the application in other countries) would be to request a foreign filing license, which is typically granted in a month or less.

Many other countries have requirements that vary slightly, including China, France, Russia, the UK, and others.  It is generally best to seek the advice of patent attorneys in each of those countries (or an attorney experienced in both jurisdictions) before blindly filing an application in the U.S. or elsewhere when inventors are resident in different countries.

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Whenever a patent holder sends a communication to a potential defendant before filing an infringement action, the patent holder risks a declaratory judgment (DJ) action.  A common question is what language must be in the communication?  Must the communication threaten an infringement lawsuit?  The Federal Circuit's decision yesterday in Hewlett-Packard v. Acceleron says no and provides an example of a sequence of communications between the parties.

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To be patentable, an invention must meet various legal requirements.  One such requirement is that it must not be obvious.  The law relating to whether an invention is obvious can sometimes be confusing and difficult to apply -- especially in the wake of the KSR v. Teleflex U.S. Supreme Court case.

The Federal Circuit Court of Appeals delivered a precedential decision yesterday in Perfect Web Techs. v. InfoUSA explaining that an invention can be obvious as a matter of common sense.

Claim 1 of U.S. Patent No. 6,631,400 recited:

On appeal, the parties agreed that steps (A) through (C) were known in the prior art.  According to the Federal Circuit's decision, step (D) would have been common sense for one skilled in the art of "e-mail marketing" and so the claim is invalid as being obvious.

A district court can find by summary judgment that an invention is obvious as a matter of common sense, but "must articulate its reasoning with sufficient clarity for review. "

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In late October, the United States Patent and Trademark Office (USPTO) announced a pilot patent ombudsman program and requested comments.  According to the USPTO's notice, the ombudsman's role will be to assist "with application-specific issues including prosecution advancement concerns."

The American Bar Association (ABA) provided its comments last week.  In its comments, the ABA outlined the key requirements for an effective ombudsman.  These include:

1. independence from USPTO interference;
2. impartiality as between the applicant and the USPTO; and
3. ability to keep applicants' communications confidential.

An ombudsman is generally considered to be a trusted intermediary.  It will be interesting to see whether the USPTO's implementation of the program will lead applicants to trust USPTO ombudsmen.

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