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Willful Patent Infringement: Lingering Questions

A version of this article previously appeared in Landslide magazine (Vol. 14, Issue 4, June/July 2022), published by the ABA Intellectual Property Law Section.

Introduction

What are the minimum requirements to establish enhanced damages for patent infringement after the passage of the America Invents Act (AIA) and the U.S. Supreme Court’s decision in Halo, and what evidence can be presented on this point? Post-Halo cases reveal areas of ambiguity and dispute. Some dispute involves willfulness theories falling close to the line between reckless conduct sufficient to establish willfulness and merely negligent conduct that is not willful. But a lingering ambiguity is how 35 U.S.C. § 298 may exclude from willful patent infringement certain conduct that might be considered reckless—and thus willful—in other areas of tort law. For whatever reason, § 298 has received little attention or treatment, which has even led to decisions contrary to that statutory provision.

A Brief History of Willfulness

Let us begin with some context for how willfulness has evolved in patent law.[i] Damages enhancement is governed by 35 U.S.C. § 284, even though the term “willful” does not explicitly appear there. In the early 1980s, the Federal Circuit established an affirmative duty of due care and an adverse inference of willfulness if the accused infringer did not both obtain advice of counsel and waive privilege to present an advice of counsel defense.[ii] Decades later, the Federal Circuit abolished the adverse inference in Knorr-Bremse.[iii] Then it abolished the affirmative duty of due care in Seagate, substituting a two-prong willfulness analysis requiring “objective recklessness” as a prerequisite.[iv] In the aftermath of those cases, the AIA introduced § 298, which prohibits use of the failure to obtain advice of counsel or make an advice of counsel defense to establish willfulness (or inducement).[v]

In 2016, the Supreme Court in Halo threw out the “objective recklessness” prerequisite, finding its “inelastic constraints” insufficient to allow courts to punish “the full range of culpable behavior.”[vi] The Court held that “culpability is generally measured against the knowledge of the actor at the time of the challenged conduct.”[vii] Therefore, “[t]he subjective willfulness of a patent infringer, intentional or knowing, may warrant enhanced damages, without regard to whether his infringement was objectively reckless.”[viii] The Court discussed how reckless conduct supports punitive damages where willful intent is required while merely negligent conduct does not, clarifying that “a person is reckless if he acts ‘knowing or having reason to know of facts which would lead a reasonable man to realize’ his actions are unreasonably risky.”[ix] The abrogated “objective recklessness” threshold had allowed classically reckless conduct to be exonerated by after-the-fact rationalizations, which meant that some reckless conduct was inappropriately shielded from punitive enhanced damages.[x]

Later Federal Circuit cases have interpreted Halo as abrogating the “objective recklessness” requirement in a relatively narrow way but leaving intact much other pre-Halo case law,[xi] which presents challenges for anyone trying to parse out the way older cases may have been abrogated only in part but are potentially still controlling as to other aspects. The Federal Circuit has maintained that “willfulness” is a question of intent involving the accused infringer’s state of mind that is for the finder of fact (jury) to decide,[xii] and knowledge of the asserted patent is a prerequisite to a finding of willfulness.[xiii] After willfulness is established, the question of enhancement of damages is then a question for the court (rather than jury) to decide[xiv]—though a willfulness verdict does not automatically entitle the patentee to enhanced damages.[xv] But a court’s discretionary moral judgment regarding enhancement does not depend on any preceding factual finding of a particular state of mind or level of intent of the infringer.[xvi]

District court decisions post-Halo have begun to explore the minimum requirements to plead and then introduce evidence of willfulness, though the Federal Circuit has not yet reached some of the new theories definitively. These various new theories address what it means to subjectively “have reason to know” that accused conduct presents an unreasonable risk of patent infringement in the absence of direct evidence that the accused party actually knew about the patent and that there was a high probability its conduct infringed, as well as the effect of the accused taking affirmative steps to avoid learning of such facts.[xvii]

New Theories of Willful Infringement

First, a number of district courts have found “willful blindness” to be an acceptable theory of willful patent infringement. Motiva from the Eastern District of Texas is perhaps the most widely known of these cases, holding that “[s]ince the Supreme Court has explained that willful blindness is a substitute for actual knowledge in the context of infringement, it follows that willful blindness is also a substitute for actual knowledge with respect to willful infringement.”[xviii] Willful blindness has two basic requirements: (1) the accused must subjectively believe that there is a high probability that a fact exists, and (2) the accused must take deliberate actions to avoid learning of that fact; these two requirements mean willful blindness has a limited scope that surpasses recklessness and negligence.[xix] To avoid dismissal, patentees must make “plausible” willfulness allegations regarding both requirements for willful blindness.[xx]

What has generated much discussion about willfulness theories relying on willful blindness is the role of “no patent review” corporate policies that (at least on paper) bar employees from reviewing competitor patents.[xxi] Yet the mere existence of such a “no patent review” policy is not per se sufficient to plead willful blindness for willful infringement unless there is also a plausible allegation that the accused party subjectively believed a high probability of patent infringement existed.[xxii] In practical terms, this means there must be something more than simply a blanket corporate policy that applies to any and all (competitor) patents and that “something more” must plausibly suggest a culpable state of mind with regard to infringement of the asserted patent.

Second, some courts have addressed other theories—distinct from “willful blindness”—that an accused infringer should have reasonably known about the asserted patent. For example, district courts are divided about whether actual knowledge of an unasserted family-related patent coupled with an allegation that the accused should have investigated that patent family to discover the asserted patent—such as a broader continuation or broadening reissue—is sufficient to support willfulness.[xxiii] At times, these other theories appear uncomfortably close to the old, abrogated affirmative duty of due care.[xxiv] These other theories seem less stringent and more expansive than willful blindness, partly because they fall close to the boundary between negligence and recklessness but also because decisions on these theories often contain little or no discussion of why the accused had reason to know that there was infringement of a later-issued patent and not merely reason to know that the later-asserted patent existed.[xxv]

Statutory Limits on Evidence of Willfulness under § 298

But what about § 298? A curious feature of many post-Halo willfulness cases is how little that section introduced by the AIA is discussed or even cited by courts when dealing with issues to which it directly relates, namely the relevance of evidence under the second Read factor: “whether the infringer . . . investigated the scope of the patent and formed a good-faith belief that it was invalid or that it was not infringed.”[xxvi] This is most troubling when courts proffer reasoning based on case law that was abrogated by § 298 (if not also by Seagate). Section 298 states:

“The failure of an infringer to obtain the advice of counsel with respect to any allegedly infringed patent, or the failure of the infringer to present such advice to the court or jury, may not be used to prove that the accused infringer willfully infringed the patent or that the infringer intended to induce infringement of the patent.”[xxvii]

There can be no question that § 298 excludes certain evidence from use to prove willfulness, including (1) the failure to consult an attorney and (2) the decision to maintain privilege over advice received from counsel. Yet an asymmetrical framework remains: the accused infringer is still free to obtain a legal opinion and later voluntarily present an advice of counsel defense based on that legal advice,[xxviii] but a “decision not to seek an advice-of-counsel defense is legally irrelevant under 35 U.S.C. § 298.”[xxix]

The key effect of § 298’s framework has to be that “having reason to know” for a (recklessness) willfulness theory must be limited to what the accused infringer reasonably should have known at the time without the assistance of counsel. The scope of the accused party’s (subjective) knowledge of the intricacies of patent law will vary considerably, though. For instance, lay parties might reasonably believe that broader later-issuing patents or reissues are not likely or that something like prosecution laches would apply to them.[xxx] This subjective knowledge may be difficult to even infer from circumstantial evidence in situations in which the accused did obtain advice of counsel but chooses not to waive privilege and not to make an advice of counsel defense based on that advice. And mere speculation on this point is generally inadequate. Moreover, as one district court held, attempts to suggest what the accused knew based on privileged communications not in evidence may be improper as a “disguised” attempt to circumvent the limits set forth in § 298.[xxxi] In a somewhat counterintuitive way, § 298 provides two distinct incentives to obtain advice of counsel because an accused party can either waive privilege in such advice and present an advice of counsel defense or maintain privilege and later potentially shield certain state of mind inquiries or inferences implicating that (maintained) privilege.[xxxii]

Does a Duty of Due Care Still Exist? And Does It Matter?

Seagate abrogated the affirmative duty of due care; but when Halo later abrogated the “objective recklessness” standard, a question arose as to the impact of Halo’s abrogation of the abrogation of the duty of due care.[xxxiii] The Federal Circuit has not explicitly weighed in on this point, and no Federal Circuit case since Halo mentions the term “duty of due care” at all. On the one hand, § 298 makes the existence or nonexistence of a judicially created duty of due care less important. But a real question remains about how patentee use of the second Read factor against an accused infringer may now be abrogated in whole or part. Can an accused party’s failure to conduct a nonlegal investigation of some sort regarding an asserted patent be used to establish willfulness today?

Worth mentioning at the outset is the Federal Circuit’s Broadcom case regarding induced infringement. There, despite the abolishment of the duty of due care, “[b]ecause opinion-of-counsel evidence, along with other factors, may reflect whether the accused infringer ‘knew or should have known’ that its actions would cause another to directly infringe, . . . such evidence remains relevant.”[xxxiv] This is not at all straightforward. At first blush, failure to meet an abolished/nonexistent duty of due care hardly seems relevant, logically if not legally. But in any event, the passage of § 298 abrogated precedent like Broadcom with regard to failure to obtain advice of counsel (or to present such a defense).[xxxv] But if the duty of due care only ever pertained to advice of counsel, then its abrogation (by statute or case law) might have left intact some separate due inquiry obligation under the second Read factor.[xxxvi]

Tending to complicate matters here are cases reaching conclusions plainly contrary to § 298, or reaching conclusions as to the boundaries and implications of that section without meaningful explanation. For instance, one district court ruled that “failure to produce . . . an opinion for trial can be considered as a factor in the jury’s determination of willfulness.”[xxxvii] Astoundingly, that court discussed old cases without any reference to their abrogation, and its ruling ended up permitting use of statutorily barred evidence for willfulness.[xxxviii] Moreover, a nonprecedential Federal Circuit decision discussed the second Read factor and found that a lack of investigation of asserted patents provided some evidence of willfulness, reaching that conclusion without discussing legal relevance limits under § 298.[xxxix]

Justice Breyer’s concurrence in Halo suggested that a nonlawyer analysis of an asserted patent might be enough to show a lack of willfulness,[xl] though the majority opinion was silent about that scenario. But that very issue came up in a district court case that held a willfulness verdict to be supported by evidence that “years of lucrative infringing sales [occurred] after failing to respond to the . . . licensing letter with a minimally adequate analysis of whether a license would be necessary,” which the court said was not prohibited by § 298 because the jury was instructed to disregard such matters, although the accused did try to present evidence of a nonlawyer invalidity analysis that the court excluded at trial.[xli] This illustrates the problem of courts too often suggesting what is in effect an adverse inference in jury instructions and then trying to immediately unring the bell by stating that no adverse inference of willfulness is permitted.

Yet a contradiction often remains. A more defensible formulation is that a jury’s inferences of knowledge of the asserted patent and of infringement can support a willfulness finding in the absence of countervailing evidence. That is, an accused infringer simply runs a greater risk of a willfulness finding if no advice of counsel defense or the like is pursued to rebut willfulness allegations because a jury can properly infer minimally sufficient knowledge and intent even in the absence of direct evidence on those points, and this does not require going so far as to assign any probative value to a failure to act. There is an important difference between willfulness being inferred from unrebutted circumstantial evidence and the failure to act (e.g., to investigate or seek legal advice) itself being treated as positive evidence of willfulness.

It is fair to distinguish the possibility of the accused making a nonlawyer analysis or inquiry defense to a charge of willfulness from an affirmative duty to do so. On its face, § 298 bars patentees from arguing about failures to obtain or present “advice of counsel” evidence.[xlii] But nothing in the literal text of § 298 bars evidence of a failure to conduct a lay investigation of an affirmative claim of infringement. Yet excluding evidence of nonlawyer investigations or analyses by the accused runs against Justice Breyer’s Halo concurrence, if not also the implicit framework of § 298.

In these senses, the question of what evidence is relevant and what, if any, quasi “duty of due care” investigation/analysis requirement remains under the second Read factor becomes significant. While cases have relied on investigative failures to support willfulness, the reasoning and justifications for such conclusions are often shaky at best or simply stated in a confusing manner. Courts will need to sort this out more definitively. But, for their part, patent litigation counsel need to be more consciously aware of these issues so they can be raised and argued when appropriate.

Key Takeaways

  • Post-Halo, the Federal Circuit applies a two-step process to claims for enhanced patent infringement damages under § 284: willfulness is initially a question for the finder of fact, and then subsequent enhancement, if any, is at the court’s discretion.
  • Failure to obtain or present an opinion of counsel cannot be used to prove willfulness, though obtaining an opinion can still be valuable to rebut charges of willful infringement; however, the value or necessity of nonattorney patent infringement and validity investigations is not yet clear.
  • “Willful blindness” has been accepted by many district courts as a willfulness theory, but at the outset it requires plausible pleadings about the accused’s subjective belief that there was a high probability that the asserted patent both existed and was infringed and that the accused took deliberate actions to avoid learning of those facts; “no patent review” policies may or may not meet all of those requirements.
  • District courts are divided over whether willfulness can be plausibly supported by a failure to monitor or investigate a patent family after learning about an unasserted patent in that family (in the absence of affirmative avoidance of facts akin to willful blindness).
  • Relevance limits under § 298 have often been overlooked by courts but should be considered for evidentiary objections and motion practice.
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Austen Zuege is an attorney at law and registered U.S. patent attorney in Minneapolis whose practice encompasses patents, trademarks, copyrights, domain name cybersquatting, IP agreements and licensing, freedom-to-operate studies, client counseling, and IP litigation. If you have patent, trademark, or other IP issues, he can help.


[i]. See, e.g., Brandon M. Reed, “Who Determines What Is Egregious? Judge or Jury: Enhanced Damages after Halo v. Pulse,” 34 Ga. St. U. L. Rev. 389, 393–96 (2018).

[ii]. Underwater Devices Inc. v. Morrison-Knudsen Co., 717 F.2d 1380, 1389–90 (Fed. Cir. 1983) (“Where . . . a potential infringer has actual notice of another’s patent rights, he has an affirmative duty to exercise due care to determine whether or not he is infringing,” including “the duty to seek and obtain competent legal advice from counsel before the initiation of any possible infringing activity.”).

[iii]. Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337, 1345–46 (Fed. Cir. 2004) (en banc) (“Although there continues to be ‘an affirmative duty of due care to avoid infringement of the known patent rights of others,’ the failure to obtain an exculpatory opinion of counsel shall no longer provide an adverse inference or evidentiary presumption that such an opinion would have been unfavorable.” (citation omitted)).

[iv]. In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007) (en banc).

[v]. 35 U.S.C. § 298; see also Carson Optical Inc. v. eBay Inc., 202 F. Supp. 3d 247, 260–61 (E.D.N.Y. 2016) (§ 298 applies if the action is commenced on or after January 14, 2013); Halo Elecs., Inc. v. Pulse Elecs., Inc., 579 U.S. ___, ___, 136 S. Ct. 1923, 1936–37 (2016) (Breyer, J., concurring).

[vi]. Halo, 136 S. Ct. at 1933–34.

[vii]. Id. at 1933.

[viii]. Id. (citing Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1757 (2014)).

[ix]. Id.

[x]. Id. at 1932–35.

[xi]. E.g., WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1341 (Fed. Cir. 2016); WesternGeco L.L.C. v. ION Geophysical Corp., 837 F.3d 1358, 1362 (Fed. Cir. 2016), reinstated, 913 F.3d 1067, 1075 (Fed. Cir. 2019); see also Halo, 136 S. Ct. at 1934–35.

[xii]. WBIP, 829 F.3d at 1341; Exmark Mfg. Co. v. Briggs & Stratton Power Prods. Grp., LLC, 879 F.3d 1332, 1353 (Fed. Cir. 2018) (“[T]he entire willfulness determination is to be decided by the jury.”); Eko Brands, LLC v. Adrian Rivera Maynez Enters., Inc., 946 F.3d 1367, 1377–79 (Fed. Cir. 2020).

[xiii]. WBIP, 829 F.3d at 1341; see also SRI Int’l, Inc. v. Cisco Sys., Inc., 930 F.3d 1295, 1310 n.6 (Fed. Cir. 2019) (when willfulness began is a factual issue).

[xiv]. Seventh Amendment questions remain regarding holdings that a jury cannot determine egregiousness of conduct. Compare WBIP, 829 F.3d at 1341 n.13, and Eko, 946 F.3d at 1378, with Halo, 136 S. Ct. at 1933 and n.*. See also United States v. Murdock, 290 U.S. 389, 394 (1933) (“willfulness” is a set of states of mind), overruled in part on other grounds by Murphy v. Waterfront Comm’n of N.Y. Harbor, 378 U.S. 52 (1964); Howard Wisnia & Thomas Jackman, “Reconsidering the Standard for Enhanced Damages in Patent Cases in View of Recent Guidance from the Supreme Court,” 31 Santa Clara High Tech. L.J. 461, 473–76 (2015). Yet punitive enhancement is a discretionary moral judgment, not a factual question. See Smith v. Wade, 461 U.S. 30, 52 (1983).

[xv]. Halo, 136 S. Ct. at 1933; Presidio Components, Inc. v. Am. Tech. Ceramics Corp., 875 F.3d 1369, 1382 (Fed. Cir. 2017).

[xvi]. But questions arise where the Federal Circuit appears to suggest that certain levels of intent can support willfulness but not enhanced damages, which seems contrary to Halo. See SRI Int’l, Inc. v. Cisco Sys., Inc., 14 F.4th 1323, 1329–30 (Fed. Cir. 2021); see also Austen Zuege, “The Federal Circuit’s Standard for Enhanced Damages,” blue over gray (Oct. 12, 2021). This apparent discrepancy might allow courts to moot a jury’s willfulness finding. See Schwendimann v. Arkwright Advanced Coating, Inc., No. 11-cv-820, slip. op. at 50 (D. Minn. July 30, 2018).

[xvii]. See, e.g., Bos. Sci. Corp. v. Nevro Corp., 415 F. Supp. 3d 482, 495 (D. Del. 2019).

[xviii]. Motiva Pats., LLC v. Sony Corp., 408 F. Supp. 3d 819, 837 (E.D. Tex. 2019) (citing Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754, 769 (2011)).

[xix]. Global-Tech, 563 U.S. at 769–70; Motiva, 408 F. Supp. 3d at 837 (“By definition, willful avoidance requires more than mere recklessness—and Halo holds that recklessness alone is enough to show willful infringement.”).

[xx]. Bos. Sci., 415 F. Supp. 3d at 494–95; Nonend Inventions, N.V. v. Apple, Inc., No. 2:15-cv-466, 2016 WL 1253740, at *3 (E.D. Tex. Mar. 11, 2016), adopted, No. 2:15-cv-466, 2016 WL 1244973 (E.D. Tex. Mar. 30, 2016).

[xxi]. E.g., Charlotte Jacobsen et al., “Does Willful Blindness Beget Enhanced Patent Damages?,” Law360 (Feb. 28, 2020).

[xxii]. Nonend, 2016 WL 1253740, at *3; VLSI Tech. LLC v. Intel Corp., No. 18-cv-966, 2019 WL 1349468, at *2 (D. Del. Mar. 26, 2019); Ansell Healthcare Prods. LLC v. Reckitt Benckiser LLC, No. 15-cv-915, 2018 WL 620968, at *7 (D. Del. Jan. 30, 2018).

[xxiii]. Compare Vasudevan Software, Inc. v. TIBCO Software Inc., No. C 11-06638, 2012 WL 1831543, at *3 (N.D. Cal. May 18, 2012) (“requisite knowledge of the patent allegedly infringed simply cannot be inferred from mere knowledge of other patents,” such as “the [parent] patent, or, more generally, [the plaintiff’s] ‘patent portfolio’”), and Maxell, Ltd. v. Apple Inc., No. 5:19-cv-00036, slip op. at 9-10 (E.D. Tex. Oct. 23, 2019) (dismissing willfulness allegation based only on knowledge of application and not ultimately issued patent or knowledge of allowance of application), with SIMO Holdings Inc. v. Hong Kong uCloudlink Network Tech. Ltd., No. 1:18-cv-05427, slip op. at 7–9 (S.D.N.Y. Aug. 29, 2019) (rejecting Vasudevan), and Oxygenator Water Techs., Inc. v. Tennant Co., No. 20-cv-358, slip op. at 8–13 (D. Minn. Aug. 7, 2020), and SiOnyx, LLC v. Hamamatsu Photonics K.K., 330 F. Supp. 3d 574, 609 (D. Mass. 2018).

[xxiv]. E.g., Schwendimann, No. 11-cv-820, slip. op. at 42 (duty of due care remains abrogated); Biedermann Techs. GmbH & Co. KG v. K2M, Inc., 528 F. Supp. 3d 407, 429 n.17 (E.D. Va. 2021) (noting abrogation issues and not intending to impose duty of due care; allegations were similar to willful blindness).

[xxv]. E.g., Oxygenator Water Techs., No. 20-cv-358, slip op. at 8–13 (passing over willful blindness to find failure to monitor/investigate willfulness theory plausible); Meridian Mfg., Inc. v. C & B Mfg., Inc., 340 F. Supp. 3d 808, 844 (N.D. Iowa 2018). But see Halo, 136 S. Ct. at 1936 (Breyer, J., concurring) (“‘[W]illful misconduct’ do[es] not mean that a court may award enhanced damages simply because the evidence shows that the infringer knew about the patent and nothing more.”).

[xxvi]. Read Corp. v. Portec, Inc., 970 F.2d 816, 827 (Fed. Cir. 1992), abrogated in part on other grounds by Markman v. Westview Instruments, Inc., 517 U.S. 370, 116 (1996).

[xxvii]. 35 U.S.C. § 298.

[xxviii]. Omega Pats., LLC v. CalAmp Corp., 920 F.3d 1337, 1353 (Fed. Cir. 2019); Ultratec, Inc. v. Sorenson Commc’ns, Inc., No. 13-cv-346, 2014 WL 4976596, at *2 (W.D. Wis. Oct. 3, 2014).

[xxix]. SRI Int’l, Inc. v. Cisco Sys., Inc., 930 F.3d 1295, 1309 (Fed. Cir. 2019); see also Halo, 136 S. Ct. at 1936–37.

[xxx]. See Cancer Rsch. Tech. Ltd. v. Barr Labs., Inc., 625 F.3d 724, 728–32 (Fed. Cir. 2010).

[xxxi]. Oil-Dri Corp. of Am. v. Nestle Purina Petcare Co., No. 15-C-1067, slip. op. at 5–6 (N.D. Ill. Mar. 8, 2019).

[xxxii]. See id. In contrast, enhanced damages were affirmed where the infringer delayed obtaining advice of counsel for years. Arctic Cat Inc. v. Bombardier Recreational Prods. Inc., 876 F.3d 1350, 1371 (Fed. Cir. 2017). There, legal advice was (eventually) obtained and privilege waived, but the delay was held against the infringer.

[xxxiii]. See supra note xxiv.

[xxxiv]. Broadcom Corp. v. Qualcomm Inc., 543 F.3d 683, 699 (Fed. Cir. 2008) (holding that “failure to procure . . . an opinion [of counsel] may be probative of [subjective] intent”).

[xxxv]. 35 U.S.C. § 298.

[xxxvi]. See SRI Int’l, Inc. v. Advanced Tech. Labs., Inc., 127 F.3d 1462, 1464–65 (Fed. Cir. 1997) (“[T]he primary consideration is whether the infringer, acting in good faith and upon due inquiry, had sound reason to believe that it had the right to act in the manner that was found to be infringing.” (emphasis added)). Broadcom is still cited without mentioning its statutory abrogation. Omega Pats., 920 F.3d at 1352–53. Compare Broadcom, 543 F.3d at 699, with 35 U.S.C. § 298.

[xxxvii]. Visteon Glob. Techs., Inc. v. Garmin Int’l, Inc., No. 10-cv-10578, slip op. at 13–17, 2016 U.S. Dist. LEXIS 109564 (E.D. Mich. Aug. 18, 2016).

[xxxviii]. Compare id., with 35 U.S.C. § 298.

[xxxix]. WCM Inds., Inc. v. IPS Corp., 721 F. App’x 959, 970, 970 n.4 (Fed. Cir. 2018) (nonprecedential) (questioning cases suggesting no duty to predict what claims will issue from a pending patent applicable because prosecution histories are now normally publicly available); see also SIMO Holdings, No. 1:18-cv-05427, slip. op. at 5–7; 35 U.S.C. §§ 154(d), 284.

[xl]. Halo, 136 S. Ct. at 1936 (Breyer, J., concurring); see also Schwendimann, No. 11-cv-820, slip. op. at 42–43; Idenix Pharms. LLC v. Gilead Scis., Inc., 271 F. Supp. 3d 694, 699 (D. Del. 2017). But see SSL Servs., LLC v. Citrix Sys., Inc., 769 F.3d 1073, 1092 (Fed. Cir. 2014) (excluding lay testimony of belief in invalidity and noninfringement to rebut willfulness).

[xli]. Milwaukee Elec. Tool Corp. v. Snap-On Inc., 288 F. Supp. 3d 872, 886–88, 890–91 (E.D. Wis. 2017) (citing SSL, 769 F.3d at 1092).

[xlii]. Section 298 might only bar this evidence to initially prove willfulness but not its use in a subsequent enhancement determination.

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Conceptualizing Negative Limitations in Design Patents

Is it possible for a U.S. design patent claim to include a negative limitation? It does not appear that courts have explicitly addressed this question. That is partly due to emphasis on design patent claims and infringement analyses revolving around the design as a whole, which can lead to rather conclusory decisions. But the question posed here is whether a claimed ornamental design as a whole can contain within it one or more “negative limitations” that effectively indicate the absence of some ornamental aspect, as opposed to indicating the positive (or affirmative) presence of an ornamental aspect. Certain past cases have touched on similar issues without specific reference to “negative limitations” in the sense that term is used with regard to utility patent claims.

Consider a design patent claim that shows as part of the overall ornamental design a flat surface, that is, a solid planar surface that is plain and uninterrupted. Does such a depiction include a negative limitation of sorts that excludes the presence of ornamentation on the surface? That is, does it give rise to a potentially significant overall difference when comparing a perforated surface or a surface that has substantial non-planar texturizing surface ornamentation? The same questions might arise, for instance, when a claimed design depicts only a single element (such as a single rounded corner, single support bar, single hole, etc.) but the accused product includes more than one of those elements.

In general, design patent infringement analysis involves two steps: (1) claim construction and (2) comparison of the properly construed claim to the accused product. Elmer v. ICC Fabricating, Inc., 67 F.3d 1571, 1577 (Fed. Cir. 1995). Theoretically, at least, questions about “negative limitations” in design patents could potentially arise in either of those two steps.

While, certainly, a jury can always reach an ultimate infringing/non-infringing conclusion, in the binary sense, based on the particular and specific facts at hand in any given case. But the topics at hand here are how courts should treat the legal issues surrounding how a finder of fact might be presented with design patent infringement questions where negative limitation issues are present, and also how courts making dismissal (Rule 12(b)(6)), summary judgment, judgment on the pleadings, judgment as a matter of law (JMOL), or appeal decisions can explain their reasoning under the ordinary observer test when negative limitations may be present.

Negative Limitations in Design Claim Construction

Design patent infringement analysis begins with claim construction. Although claim construction is also the first step in utility patent infringement analysis, design patent claim construction differs from that for utility patents in some important ways.

A patentable design “gives a peculiar or distinctive appearance to the manufacture, or article to which it may be applied, or to which it gives form.” Gorham Co. v. White, 81 U.S. (14 Wall.) 511, 525 (1871); see also Samsung Elecs. Co., Ltd. v. Apple Inc., 580 U.S. ___, 137 S. Ct. 429, 432-33 (2016).  This means design patent claim construction must be adapted to the pictorial setting. Crocs, Inc. v. Int’l Trade Comm’n, 598 F.3d 1294, 1302 (Fed. Cir. 2010). In that sense, the Federal Circuit has said that “[d]epictions of the claimed design in words can easily distract from the proper infringement analysis of the ornamental patterns and drawings.” Id.; see also Dobson v. Dornan, 118 U.S. 10, 14 (1886) (a claimed design “is better represented by the photographic illustration than it could be by any description, and a description would probably not be intelligible without the illustration.”). 

The Federal Circuit has cautioned that detailed verbal claim constructions increase “the risk of placing undue emphasis on particular features of the design and the risk that a finder of fact will focus on each individual described feature in the verbal description rather than on the design as a whole.”  Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 680 (Fed. Cir. 2008) (en banc).  For such reasons, the level of detail to be used in describing the claimed design is a matter within a court’s discretion, and a court is not obligated to issue a detailed verbal description of the design if it would not be helpful. Id. at 679-80.  Yet a court may use claim construction to help guide the fact finder through issues that bear on claim scope. Id. at 680. 

Although not always at issue in every case, design patent claim construction can address prosecution history estoppel and prosecution history disclaimer.  See Egyptian Goddess, 543 F.3d at 680.  In general, the doctrine of prosecution history estoppel prevents a patentee from “recaptur[ing] in an infringement action the very subject matter surrendered as a condition of receiving the patent.” Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd., 535 U.S. 722, 734 (2002).  It requires that “the claims of a patent be interpreted in light of the proceedings in the [US]PTO during the application process.” Id. at 733. The Federal Circuit has specifically held that prosecution history estoppel applies to design patents too.  Pac. Coast Marine Windshields Ltd. v. Malibu Boats, LLC, 739 F.3d 694, 702 (Fed. Cir. 2014). 

However, for design patents, unlike with utility patents, “the concepts of literal infringement and equivalents infringement are intertwined.”  Id. at 700-01.  Because it is the drawings of the design patent that provide the description of the invention, courts “look at the requisite drawings in design patents to determine whether a surrender has occurred.” Id. at 702.  Estoppel arises when a narrowing amendment is made to satisfy any requirement to secure the grant of the patent, including amendments to avoid prior art or resulting from a restriction requirement.  Id. at 703-04; see also Advantek Marketing Inc. v. Shanghai Walk-Long Tools Co., 898 F.3d 1210, 1216-17 (Fed. Cir. 2018).

In the Pacific Coast Marine Windshields case, a design application (for U.S. Des. Pat. No. D555,070) originally included drawings depicting—and claiming—multiple embodiments of a boat windshield. As reproduced below, the various originally-claimed embodiments showed the claimed windshield design with different vent hole configurations and also showed claimed designs that included and excluded a hatch on the front of the windshield. The examiner issued a five-way restriction requirement, identifying five distinct groups of designs as windshields with:

  1. four circular holes and a hatch (FIG. 1);
  2. four circular or square holes and no hatch (FIGS. 7 and 12);
  3. no holes and a hatch (FIG. 8);
  4. no holes and no hatch (FIG. 9); and
  5. two oval or rectangular holes and a hatch (FIGS. 10 and 11).
Grid of selected original figures from the application for Des. Pat. No. D555,070

In that sense, the examiner indicated that many of the different embodiments (but not all of them) represented different design inventions. In response, the patentee removed alternate embodiments, thus deleting those alternate embodiments from the scope of the claim. That prosecution history had significant implications to the scope of the claim in the granted design patent before the court (D555,070). Incidentally, the patentee chose to file only one subsequent divisional application to the “no holes and a hatch” embodiment (that became U.S. Des. Pat. No. D569,782), apparently without pursuing any other of the original alternate embodiments—though a continuation application (that became U.S. Des. Pat. No. D593,024) based off the divisional was also later filed for a partial design to only the vertical corner posts with no vent holes (with the windscreen portions unclaimed, thus potentially avoiding hatch vs. no hatch questions).

Noting that treatises and prior district court decisions had said similar things in the past, the Federal Circuit ruled that surrender of claims to the alternate designs was for reasons of patentability that caused prosecution history estoppel to attach. Pac. Coast Marine Windshields, 739 F.3d at 702-04. However, because the accused windshield product’s design had three vent holes (see above) but the patented design had four vent holes (see FIG. 1 above) and the surrendered embodiments/designs had only two vent holes (see original FIGS. 10 and 11 above), summary judgment of non-infringement was reversed and the case was remanded to the district court for further proceedings. Id. at 704-05. In other words, without reaching a definitive infringement/non-infringement decision, the patentee was barred from arguing that the design patent’s claim covered a two-hole design (or any other surrendered embodiments) but was still able to argue that a three-hole design might be covered because there was no surrendered three-hole embodiment in the original drawings. (The Federal Circuit decision did not address potential differences in the horizontal/angled frame or trim aspects of the accused design as part of the overall appearance analysis). After remand, and denial of subsequent summary judgment cross motions (which included inventorship disputes, and non-patent issues), the parties eventually settled.

Generally similar negative limitation issues have arisen in utility patent cases. For example, the Spine Solutions case involved questions of claim construction and prosecution history estoppel for a utility patent. Claim 1 of the patent in question recited “a single anchor on each of the upper surface of the upper part and the lower surface of the lower part . . . .” The relevant claim construction implicitly regarded the “single anchor” recitation as including a negative limitation, that is, requiring one anchor having the recited characteristics but excluding the presence of more than one anchor. There was no infringement by the accused device, which had two anchors rather than a “single” anchor as claimed. The Federal Circuit reasoned as follows:

“We agree with [the accused infringer] Medtronic that the court erred in determining that [the accused] O-Maverick [device] literally infringes claims 1 and 2. The [district] court construed ‘single anchor’ to mean, in relevant part, that ‘[t]he upper and lower surfaces of the implant each have one anchor having the characteristics recited in the last paragraph of [claim 1].’ Claim Construction Order, 2008 WL 4831770, at *14, 2008 U.S. Dist. LEXIS 116648, at *43 (emphasis added). A simple observation of [the accused] O-Maverick [device] confirms that the implant has two anchors on each of the upper and lower pieces, not one. The anchors are separated by a one-millimeter gap that extends all the way to the base of the implant; at no point are the two anchors joined or connected in any way. O-Maverick clearly has two anchors on each piece, not a ‘single anchor’ as recited by claims 1 and 2. Therefore, we hold as a matter of law that [the accused] O-Maverick [device] does not literally infringe claims 1 and 2.

“During prosecution, applicants expressly distinguished the claimed invention over the ‘477 patent by asserting that ‘a reference disclosing two anchors does not disclose a device affirmatively claiming a single anchor… reciting a negative limitation in the form of a single element is not disclosed by prior art which teaches more than one element.’ J.A. 17524. This is a clear disclaimer of claim scope, and prosecution history estoppel therefore bars [the patentee] SSI from arguing that a two-anchor device is equivalent to the claimed implant. Because we hold that [the accused] O-Maverick [device] is a two-anchor device, SSI cannot argue that O-Maverick infringes claims 1 and 2 under the doctrine of equivalents.”

Spine Solutions, Inc. v. Medtronic Sofamor Danek USA, Inc., 620 F.3d 1305, 1316-17 (Fed. Cir. 2010).

What all these cases emphasize is that negative limitations can be at issue for design patent claim constructions, just as in utility patent cases. Prosecution disclaimer or prosecution estoppel issues resulting from arguments or amendments to a design application are especially relevant here. The Pacific Coast Marine Windshields case illustrates how those issues should be assessed as part of a design claim construction, if and when they arise. Other cases also indicated how this can be significant with respect to words in the design patent claim — such as words in the title that restrict the scope of the claim to a particular article of manufacture. Curver Luxembourg, SARL v. Home Expressions Inc., 938 F.3d 1334, 1340 (Fed. Cir. 2019); In re SurgiSil, L.L.P., No. 2020-1940 (Fed. Cir. Oct. 4, 2021). It is possible a design patent might include words like “individual” in the title that could include a negative limitation.

What is less certain for design patent claim construction is what role, if any, negative limitations have when the feature in question is something that appears in a drawing but there was no prosecution history disclaimer or estoppel. Because detailed design claim constructions that translate visual depictions into words are disfavored, it would not be appropriate in most situations to single out a particular visual element and explicitly construe it as containing a negative limitation (in the absence of a disclaimer or estoppel). That would depart from the context of the ordinary observer analysis and the requisite visual analysis of the overall appearance of the ornamental design.

Yet there may be instances where a negative limitation appears in relation to functional features, for example. The Federal Circuit has held that a claim construction may help the fact finder “distinguish[] between those features of the claimed design that are ornamental and those that are purely functional.” Egyptian Goddess, 543 F.3d at 680 (citing OddzOn Prods., 122 F.3d at 1405).  A design may contain both functional and ornamental elements, even though the scope of a design patent claim “must be limited to the ornamental aspects of the design.” Ethicon Endo-Surgery, Inc. v. Covidien, Inc., 796 F.3d 1312, 1333 (Fed. Cir. 2015). “Where a design contains both functional and non-functional elements, the scope of the claim must be construed in order to identify the non-functional aspects of the design as shown in the patent.” OddzOn Prods., 122 F.3d at 1405; accord Ethicon Endo-Surgery, Inc., 796 F.3d at 1333.  This ensures that the claim is limited to the ornamental aspects of the design, and does not extend to “the broader general design concept.” OddzOn Prods., Inc., 122 F.3d at 1405; see also Read Corp. v. Portec, Inc., 970 F.2d 816, 825 (Fed. Cir. 1992) (“[w]here . . . a design is composed of functional as well as ornamental features, to prove infringement a patent owner must establish that an ordinary person would be deceived by reason of the common features in the claimed and accused designs which are ornamental.”).  But a construction of design features that are only partly functional, with some at least minimal ornamentation, must not entirely eliminate whole aspects from the scope of the claim, even as the functional elements limit and narrow the claim scope.  See Sport Dimension, Inc. v. Coleman Co., Inc., 820 F.3d 1316, 1322-23 (Fed. Cir. 2016); Apple Inc. v. Samsung Elecs. Co., Ltd., 786 F.3d 983, 998-99 (Fed. Cir. 2015).

Negative Limitations in Comparisons Between Claimed Design and Accused Product

Following claim construction, if any, the design patent’s claim as construed is compared to the allegedly infringing products. Elmer, 67 F.3d at 1577.  When considering infringement of a design patent, the “ordinary observer” test is the sole test for determining if infringement has occurred. Egyptian Goddess, 543 F.3d at 678 (rejecting the use of a separate “point of novelty” test); Crocs, 598 F.3d at 1303.  Under the ordinary observer test, infringement occurs:

“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 such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other.”

Gorham, 81 U.S. at 528; Egyptian Goddess, 543 F.3d at 670-71.

This test has been codified in the patent laws, which provide as follows:

“Whoever during the term of a patent for a design, without license of the owner, (1) applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale, or (2) sells or exposes for sale any article of manufacture to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his total profit, but not less than $250, recoverable in any United States district court having jurisdiction of the parties.”

35 U.S.C. § 289

Thus, as the ordinary observer test is sometimes described, infringement is not found unless the accused article embodies the patented design or any colorable imitation of it. Egyptian Goddess, 543 F.3d at 678 (citations omitted). Though recall that for design patents “the concepts of literal infringement and equivalents infringement are intertwined.”  Pac. Coast Marine Windshields, 739 F.3d at 700-01. 

Against that backdrop, the question of potential negative limitations can arise in the context of whether logos (or the like) present on the accused product can or should be considered when comparing it to the design patent claim to determine if there is infringement.

It is necessary to compare the claimed design (as construed) as a whole to accused product. Ethicon Endo‐Surgery, 796 F.3d at 1335; Crocs, 598 F.3d at 1302-06. This is to say that in the “ordinary observer” analysis, the patented design is viewed in its entirety, as it is claimed.  L.A. Gear, Inc. v. Thom McAn Shoe Co., 988 F.2d 1117, 1125 (Fed. Cir. 1993). “[A]ll of the ornamental features illustrated in the figures must be considered in evaluating design patent infringement.”  Contessa Food Prods., 282 F.3d at 1378.  “A patented design is defined by the drawings in the patent, not just by one feature of the claimed design.” KeyStone Retaining Wall Sys., 997 F.2d at 1450. This means the comparison of the claimed design (as construed) to the accused product must generally include all of the patent figures in comparison, and it cannot merely compare separate elements in isolation or involve serial element-by-element comparison.

Yet an infringement analysis that recites significant differences between the ornamental features of the claimed and accused designs is still acceptable if, in determining infringement, that analysis still mainly focuses on whether an ordinary observer would be deceived into thinking that the accused product’s design was the same as the patented design. Richardson v. Stanley Works, Inc., 597 F.3d 1288, 1295-96 (Fed. Cir. 2010). It is in that sense that negative limitations can be used to help articulate significant differences from the standpoint of an ordinary observer.

Along those lines, the Federal Circuit has held that the finder of fact can consider “an ornamental logo, its placement, and its appearance as one among other potential differences between a patented design and an accused one.” Columbia Sportswear N. Am., Inc. v. Seirus Innovative Accessories, Inc., 942 F.3d 1119, 1131 (Fed. Cir. 2019). In a subsequent August 2021 trial under that guidance, a jury found no infringement. Columbia Sportswear N. Am., Inc. v. Seirus Innovative Accessories, Inc., No. 3:17-cv-01781 (S.D. Cal. Aug. 6, 2021) (jury verdict of non-infringement). The parties subsequently cross appealed.

In Columbia, the patent owner sometimes made a comparison of only a selected portion of the claimed design to the accused product in briefing. This had the effect of broadening the asserted claim. For instance, in the first comparative example below for district court summary judgment briefing, note how the claimed design uses broken lines in FIG. 1 to show that a boundary exists but is unclaimed (see MPEP § 1503.02(III) (9th Ed., Rev. 10.2019, June 2020)). But the claimed design of FIG. 1 includes a generally sinusoidal wave pattern with four full crests and five full troughs that appear uninterrupted between the broken line boundaries; whereas in a comparison table used in briefing only part of the claim with merely three full (and uninterrupted) crests and troughs was reproduced as allegedly being the “Patented Design”. And in the second example below, from appellate briefing, note how FIG. 2 is used by the patentee for comparison despite the asserted design patent stating that “FIG. 2 is an enlarged elevational view thereof, taken from any area in the design” (that is, FIG. 2 merely shows an enlargement of a portion [with]in the claimed design but does not show the entire claimed design). If we analogize this to the utility patent context, it is like comparing a selected claim limitation to the accused product in isolation without addressing one or more additional limitations present in the claim. The significance of the accused product’s interruption (with repeating logos) in comparison to the claimed uninterrupted design was a key issue in the case including its appeals. So the question of what constitutes the full scope of the claimed design is foundational to what is or is not interrupted in the accused product.

The district court declined to construe the design patent claim with a detailed verbal description in its Markman order, or to provide any other construction or guidance about design patent conventions, but instead later provided jury instructions that stated:

“A design patent’s claim defines what is covered by the patent. The claim is typically represented by illustrations. It is permissible to illustrate more than one embodiment of a design in a single design patent application. Each design patent contains multiple drawings to illustrate the claimed design.

The scope of the claim encompasses the design’s visual appearance as a whole. It does not cover a general design concept and is not limited to isolated features of the drawings. An inventor’s subjective intent is not relevant to the scope of the claimed design”

Quote from Jury Instruction No. 9 (as filed Aug. 6, 2021)

That jury instruction (No. 9) was largely generic. It could have been issued in any design patent case without changing a word. Neither the jury instruction nor the Markman order specifically addressed the proper interpretation of the language describing FIG. 2 quoted above, which is part of the claim. Most significantly, the jury was not instructed to disregard the presence of logos on the accused product (as Columbia had sought). But, additionally, the jury was not instructed about whether the asserted design patent actually included multiple embodiments or whether certain drawings showed the same design or merely incomplete portions of it. That meant that, in the Columbia case, there was no express “negative limitation” claim construction. Instead, everything came down to the comparison of the overall appearances.

“To determine infringement of a design patent, you must compare the overall appearances of the accused design to the Design Patent. The accused design is Seirus’s HeatWave fabric. If you find by a preponderance of the evidence that the overall appearance of the accused design is substantially the same as the overall appearance of the Design Patent, you must find that the accused design infringed the Design Patent.

Two designs are substantially the same if, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, the resemblance between the two designs is such as to deceive an ordinary observer, inducing him to purchase one supposing it to be the other. You do not need, however, to find that any purchasers were actually deceived or confused by the appearance of the accused products. You should consider any perceived similarities or differences between the patented and accused designs. Minor differences should not prevent a finding of infringement.”

Quote from Jury Instruction No. 10 (as filed Aug. 6, 2021)

The jury instruction (No. 10) regarding the comparison step did mention the accused product by name. But otherwise that instruction is also fairly generic. Jury instructions nos. 11-13 also pertained to design-patent-specific issues, including comments about the proper use of prior art in instruction no. 11.

The district court could have provided further claim construction guidance. But it chose not to. As already noted, the jury held that the patented design was not infringed. On the next appeal, there will surely be a dispute over the ultimate verdict of non-infringement of the design patent, but also perhaps about the mostly generic jury instructions related to design patent claim construction and infringement analysis and how those impact any “negative limitations” in the design patent claim. Though, interestingly, at the district court neither party really argued this point regarding the proposed final jury instructions for the August 2021 trial (most of the arguments over those instructions instead centered around what could be ignored, proper consideration of marketing materials evidence, how functionality should be referenced if at all, and the relevance and proper role of alleged prior art).

Conclusion

The appropriate way to address “negative limitations” in design patent claims is: first, to address in claim construction any prosecution history disclaimer or prosecution history estoppel issues that might give rise to recapture issues around such “negative limitations”, as well as any relevant interpretations of the text of the claim (including the title and description) that might do the same; and, second, to articulate the way design features affirmatively present in the accused design represent significant differences from such “negative limitations” in the claimed design in an analysis that still mainly focuses on whether an ordinary observer would be deceived into thinking that the accused product’s design was the same as the patented design overall.

The first aspect might not be relevant in all cases. Those questions will be highly dependent on the content of the asserted design patent claim and the prosecution history. But the second aspect could potentially apply whenever the asserted design patent appears to recite, in part, a “negative limitation”. This second part might impact jury instructions, as well as the way a case is argued to the finder of fact. It could also impact a pre-suit opinion of counsel analysis. Both factors might come up as part of dismissal, summary judgment, judgment on the pleadings, and/or JMOL motions, as well as in appeals.

January 2022
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Austen Zuege is an attorney at law and registered U.S. patent attorney in Minneapolis whose practice encompasses patents, trademarks, copyrights, domain name cybersquatting, IP agreements and licensing, freedom-to-operate studies, client counseling, and IP litigation. If you have patent, trademark, or other IP issues, he can help.

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New and Upcoming Developments in U.S. Patent & Trademark Law for 2022

Important Developments to Note

At the beginning of 2022, some recent and upcoming changes in practice at the U.S. Patent & Trademark Office (USPTO) for patent and trademark matters merit attention.


Patents

“DOCX” filing format deadline extended

The deadline for the implementation of a surcharge for non-DOCX patent application filings has been extended until January 1, 2023.  In recent years, most U.S. patent applications have been filed electronically in PDF format.  DOCX-format filings are currently possible but non-DOCX PDF-format filings are still permitted without any surcharge.  The non-DOCX surcharge will eventually be $400/$200/$100 for large/small/micro entities.  Note that the non-DOCX surcharge will not apply to PCT national phase entries into the USA. The applicability of the non-DOCX surcharge to U.S. applications filed in a language other than English is still rather unclear (it is not clear if a DOCX copy of only the English translation, only the non-English original, or both the original and translation is required to avoid the surcharge). 

In general, the greatest concerns about DOCX format have to do with rendering of complex application content, such as embedded mathematical equations created with a word processing program’s equation editing functionality, which may not render as the applicant intended at the USPTO side.  The official reason given for the implementation delay is to “provide the public an opportunity to more fully comprehend the nature of, and prepare to comply with, the DOCX format[.]” But while the DOCX format is an administrative convenience for the USPTO, its mandated use is a more of a burden than a benefit for applicants.  The need for applicants and their counsel to review and correct potential USPTO-side DOCX rendering errors (which may occur more frequently than with certain PDF-format filings) may make PDF-format filing and payment of the non-DOCX surcharge preferable in some situations.  Though for applications containing only simple text, without complex or unusual formatting or embedded equations (other than equations inserted as images), DOCX-format filing should not pose any major problems. 

Digital-only patents

Starting sometime in 2022, the USPTO will cease issuing paper patents and will issue digital patents instead.  However, paper “presentation copies” (also called ribbon copies) of patents (on heavy paper with an embossed gold seal and the USPTO Director’s signature) will still be available upon request for a $25 (US) official fee per copy.  The USPTO says that digital patent issuance will speed up the process of issuance after payment of the issue fee, with a target of one week to issuance.  This will shorten the time available to file a divisional or continuation patent application, which must be filed no later than the day of issuance of the parent patent.  Though it has always been—and will remain—a recommended best practice to file any desired divisional/continuation application no later than the date of issue fee payment. 

Bilateral exchange of certified priority documents with EPO ending

The USPTO’s bilateral electronic priority document exchange (PDX) program with the European Patent Office (EPO) is ending.  For any U.S. applications filed on or after January 01, 2022 with a priority claim to an earlier EP application, a WIPO Digital Access Service (DAS) code will need to be provided in order to electronically retrieve a certified copy through PDX.  This will require registering the EP application with the WIPO DAS exchange.  This change will not affect PCT national phase entries into the USA where the EP priority document is made available under PCT Rule 17. 

More U.S. patent filing information

Please also see the “Guide to Foreign Priority Patent Filings in the USA” (available for download as a set of condensed presentation slides titled “Patent Filings in the USA: Important Considerations”) for in-depth discussion of requirements for foreign applicants to file U.S. counterpart patent applications with a foreign priority claim.


Trademarks

“Flexible” (shortened) response periods

Starting December 1, 2022, the time to respond to trademark office actions (under 37 C.F.R. § 2.62(a)) will be shortened to three (3) months.  A single three-month extension of time to respond can be requested, which will carry an official fee of $125 (US).  The extension must be affirmatively requested within the original three-month period.  However, the shortened response periods will not apply to Madrid extensions to the USA.  For refusals in Madrid extension cases (§66), the applicant will still have a full six-month response period available without paying any extension fees.   

Digital-only registration certificates

Starting in spring 2022 the USPTO will cease issuing paper trademark registration certificates and will issue digital certificates instead.  [UPDATE: the USPTO began issuing only electronic registration certificates on May 24, 2022.] However, paper “presentation copy” trademark registration certificates (on heavy paper with an embossed gold foil seal, the name(s) of the owner(s), the mark, bibliographic data, and the classes of goods and/or services) will still be available upon request for a $25 (US) official fee per copy.  Registrants who filed an initial trademark application before the implementation date (a date that is not yet fixed) will be able to order presentation copies with no official fee.  Additionally, certified copies of U.S. trademark registration certificates with current title and status information are also available with payment of an official fee, currently $30 (US).

Filer Identify Verification

[UPDATE: the USPTO has postponed the deadline for filer identity verification to August 6, 2022.] By April 9, 2022, persons filing trademark applications, responses, and the like must complete identity verification in order to electronically file with the USPTO.  These identity verification procedures will be available starting January 8, 2022.

New expungement and reexamination proceedings

Two new proceedings are available for an existing trademark registration to be challenged.  Both of these new proceedings are conducted on an ex parte basis.  That is, a challenger files a petition to request expungement or reexamination and, if granted, the rest of the proceeding is conducted only between the USPTO and the registrant in a manner similar to original examination.  Unlike traditional cancellation (or opposition) proceedings, after institution of an expungement or reexamination proceeding, the challenger cannot substantively participate.  Summaries of the two new proceedings follow, but more details about applicable procedures can be found in the USPTO Examination Guide 1-21.  In addition to the two new types of proceedings, expungement is also available as a new ground for a traditional cancellation proceeding after three years of registration (15 U.S.C. § 1064(6)). 

Expungement proceedings: Any party may request cancellation of some or all of the goods or services in a registration because the registrant never used the mark in commerce with those goods or services.  The official filing fee for an expungement proceeding is currently $400 (US) per class.  An expungement proceeding must be requested in a period from three to ten (3-10) years after the registration date. However, there is currently an extended expungement filing period.  Until December 27, 2023, expungement may be requested for any registration at least three (3) years old, regardless of the ten-year limit.  In other words, the ten-year time limit for expungement proceeding requests will only go into effect after December 27, 2023.  Expungement proceedings are available for all registrations but will be especially significant for foreign-originating registrations (Madrid [§66] or Paris Convention [§44] cases) where proof of use is not required to initially obtain a U.S. registration. 

Reexamination proceeding: Any party may request cancellation of some or all of the goods or services in a use-based registration on the basis that the trademark was not in use in commerce with those goods or services on or before either (1) the application filing date (when the underlying application was initially filed based on use of the trademark in commerce under §1(a)) or (2) the later of the date that an amendment to allege use was filed or the date that the deadline to file a statement of use expired (when the underlying application was filed with an intent-to-use basis under §1(b)).  Reexamination proceedings are available for registrations under 15 U.S.C. §1051 (§1) but are not available for marks registered under the Paris Convention (§44) or the Madrid protocol (§66).  The official filing fee for a reexamination proceeding is currently $400 (US) per class.  Reexamination must be requested within the first five (5) years after registration.

More U.S. trademark filing information

Please also see this “Filing Guide for Trademark Registration in the USA” for in-depth discussion of requirements for foreign applicants to file U.S. federal trademark applications.


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Austen Zuege is an attorney at law and registered U.S. patent attorney in Minneapolis whose practice encompasses patents, trademarks, copyrights, domain name cybersquatting, IP agreements and licensing, freedom-to-operate studies, client counseling, and IP litigation. If you have patent, trademark, or other IP issues, he can help.

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The Delicious Ironies of Food Product Configuration Protection

The Scope and Limits of Trade Dress and Patent Protection in Product Shapes: Food Product Case Studies

Intellectual property (IP) protection for product configurations of comestibles, confections, foodstuffs, and the like have been a matter of dispute in courts for well over a century. A variety of distinct IP rights may be invoked in this context, among them design patents and trade dress (either as a registered or unregistered trademark). Courts have grappled with the limits of such IP rights, seeking to prevent end-runs around the expiration of patent and copyright rights that the U.S. Constitution restricts to only limited times.[i] Such limits on IP rights embody long-standing Anglo-American legal principles in place since the Statute of Monopolies curbed the English Crown’s practice of granting “odious” monopolies over common commodities to raise funds or bestow favor.[ii] Cases up to the present highlight continued aggressive assertions of trade dress rights by foodstuff manufacturers—coupled with pushback by courts to deny trade dress rights in purely functional product configurations.

A number of important historical decisions observed the tendency for assertions of trade dress in (food) product configurations/shapes/forms/designs—these terms being used somewhat interchangeably—to inappropriately extend monopoly protections after a patent expired. Judge Learned Hand authored Shredded Wheat Co. v. Humphrey Cornell Co., which dealt with alleged trade dress infringement of the shape of shredded wheat biscuits after the expiration of a design patent to the same biscuit shape.[iii] He wrote that “the plaintiff’s formal dedication of the design [upon expiration of U.S. Des. Pat. No. 24,688] is conclusive reason against any injunction based upon the exclusive right to that form, however necessary the plaintiff may find it for its protection.”[iv]

Front page of U.S. Design Patent No. 24,688

Later, the Supreme Court weighed in on a dispute between Kellogg and Nabisco, finding the pillow shape of a shredded wheat biscuit to be functional because “the cost of the biscuit would be increased and its high quality lessened if some other form were substituted for the pillow-shape.”[v] The Court stated,

“The plaintiff has not the exclusive right to sell shredded wheat in the form of a pillow-shaped biscuit — the form in which the article became known to the public. That is the form in which shredded wheat was made under the basic [utility] patent [U.S. Pat. No. 548,086]. The patented machines used were designed to produce only the pillow-shaped biscuits. And a design patent [U.S. Des. Pat. No. 24,688] was taken out to cover the pillow-shaped form. Hence, upon expiration of the patents the form . . . was dedicated to the public.”[vi]

Kellogg has remained the touchstone for cases on the limits of trade dress protection, and not just for foodstuffs. Subsequent decisions have elaborated on the non-functionality doctrine without changing the basic framework.[vii]

In a more modern case, Sweet Street Desserts, a “Blossom Design” for a round, single-serving, fruit-filled pastry with six folds or petals of upturned dough was held to be functional and, accordingly, unprotectable as trade dress because the product’s size, shape, and six folds or petals of upturned dough were all essential to the product’s ability to function as a single-serving, fruit-filled dessert pastry.[viii] Only incidental, arbitrary, or ornamental product features that identify the product’s source are protectable as trade dress. Chudleigh’s trade dress Reg. No. 2,262,208 was cancelled.[ix]

Trade Dress Reg. No. 2,262,208

In Ezaki Glico v. Lotte, the non-functionality requirement was assessed in connection with Ezaki Glico’s POCKY® treats—thin, rod- or stick-shaped cookies partially coated in chocolate (with optional nuts)—and Lotte’s competing PEPERO® treats.[x]

The core dispute was how to define “functional” for product configuration trade dress. Ezaki Glico argued a narrow reading, equating “functional” with “essential.” The court disagreed, reading Supreme Court precedent to say that product configuration features need only be useful to be functional. That is, a product shape feature is “useful” and thus “functional” if the product works better in that shape, including shape features that make a product cheaper or easier to make or use. The 3rd Circuit held that a product feature being “essential to the use or purpose of the article or if it affects the cost or quality of the article”[xi] is merely one way to establish functionality.[xii] A product feature is also unprotectably functional if exclusivity would put competitors at a significant, non-reputation-related disadvantage.[xiii] The rejection of a narrow reading of the functionality doctrine echoes cases in other circuits characterizing the Supreme Court’s TrafFix case as setting forth two ways to establish functionality.[xiv] There are several ways to establish functionality that are not limited to merely “essential” product features.

Functionality in the trade dress context is commonly assessed through the following types of non-dispositive evidence, as summarized in Ezaki Glico:

“First, evidence can directly show that a feature or design makes a product work better…. Second, it is ‘strong evidence’ of functionality that a product’s marketer touts a feature’s usefulness. Third, ‘[a] utility patent is strong evidence that the features therein claimed are functional.’ Fourth, if there are only a few ways to design a product, the design is functional. But the converse is not necessarily true: the existence of other workable designs is relevant evidence but not independently enough to make a design non-functional.”[xv]

There was evidence of practical functions of holding, eating, sharing, or packing the POCKY treats. Ezaki Glico’s internal documents showed a desire to have a portion of the stick uncoated by chocolate to serve as a handle. The court also noted how the size of the sticks allowed people to eat them without having to open their mouths wide and made it possible to place many sticks in a package. Ads for POCKY treats also emphasized the same useful features. Ezaki Glico proffered nine examples of partially chocolate-coated treats that do not look like POCKY treats, but the court found that evidence insufficient to avoid the conclusion that every aspect of POCKY treats is useful.

Finally, the court concluded that Ezaki Glico’s utility patent U.S. Pat. No. 8,778,428 for a “Stick-Shaped Snack and Method for Producing the Same” was irrelevant. The court’s rationale for that conclusion, however, is rather unconvincing. The utility patent was applied for in 2007, with a 2006 Japanese priority claim, which was long after Ezaki Glico began selling POCKY treats in the U.S. in 1978, and also long after Lotte began selling the accused PEPERO treats in 1983 and the first explicit allegations of misconduct in 1993. That patent was also still in force (i.e., unexpired). The utility patent corresponded to an “ultra thin” version of POCKY treats and Ezaki Glico argued that its patent addressed only one of many embodiments covered by its trade dress.

The lower court discussed utility patent disclosures regarding stick warping formulated like a problem-solution statement[xvi]—somewhat akin to inventive step (obviousness) analyses in European patent practice. But unmentioned was how the patent’s disclosed stick holder necessarily produces a partial chocolate coating.[xvii] The 3rd Circuit’s reasoning about the irrelevance of the utility patent is superficial to the point of being mere tautology. The appellate opinion did not address Kellogg’s statement that the form in which a food article was made under an expired “basic” patent was relevant to trade dress eligibility or other circuits’ cases that deemed a prior manufacturing method patent to be relevant. Moreover, the court did not address the way mere descriptiveness of just one good bars registration of a trademark for an entire group of goods encompassing additional, different goods.[xviii] Whether a later-filed patent can ever provide grounds to cancel an earlier trade dress registration for functionality is a question the court essentially avoided deciding.

Something else not discussed in Ezaki Glico was the 3rd Circuit’s decision nearly a century ago in the Eskimo Pie case.[xix] There, the validity of U.S. Pat. No. 1,404,539 on the original ESKIMO PIE® chocolate-covered ice cream treat was at issue. The court held the utility patent invalid, reasoning with regard to claim 6 (in which the core and casing form a “substantially rectangular solid adapted to maintain its original form during handling”) that “[t]here is no invention in merely changing the shape or form of an article without changing its function except in a design patent.”[xx] The rectangular solid shape was found non-functional and therefore unable to distinguish the prior art in a utility patent claim. The lower court had already pithily reached these same conclusions:

“The gist of the invention, if there be one, is in sealing a block of ice cream in a sustaining and self-retaining casing of chocolate. A rectangular piece of ice cream is coated with chocolate…. All that the patentee does is to take a small brick of ice cream and coat it with chocolate, just as candies are coated. [In the prior art,] Val Miller took a round ball of ice cream and coated it, just as candies are coated. In one case the ice cream is round in form, and in the other case it is rectangular. In both cases there is a sustaining and self-retaining casing, sealing the core of ice cream…. There is no invention in form alone.”[xxi]

Front page of U.S. Patent No. 1,404,539
U.S. Pat. No. 1,404,539

In a fascinating Wired article from 2015, Charles Duan located correspondence with the inventor’s patent attorney and other pertinent historical information in museum archives.[xxii] Duan highlighted how the invention, if anything, was really about the particular formulation of chocolate that allowed it to work effectively as a coating on a frozen ice cream treat, while the patent contains no disclosure in that regard and its claims were intended to be preemptive.[xxiii] Invalidation of the ESKIMO PIE patent opened the door for the KLONDIKE® ice cream treat, introduced in 1928, which was later the subject of an 11th Circuit trade dress case about product packaging (as opposed to product configuration) for a wrapper with a pebbled texture, images of a polar bear and sunburst, bright coloring, and square size that, in combination, were held non-functional.[xxiv]

Courts have tended to be more lenient on (food) packaging trade dress when it comes to functionality.[xxv] This held true when the 11th Circuit later found the unregistered product design of DIPPIN’ DOTS® multi-colored flash-frozen ice cream spheres/beads to be functional and thus ineligible for trade dress protection.[xxvi] An unexpired utility patent (U.S. Pat. No. 5,126,156)—later held invalid and unenforceable[xxvii]—was specifically cited as evidence of functionality of the product design, along with judicial notice that certain colors connote ice cream flavor.[xxviii]

So, in 1929, the 3rd Circuit ruled that the configuration of an ESKIMO PIE treat was ornamental and non-functional, and therefore unpatentable in a utility patent; whereas, in 2021, the Third Circuit ruled that the configuration of a POCKY treat was functional, and therefore ineligible for trade dress protection. How can these decisions be reconciled?

The only way to square these cases is to say that “functionality” in the trade dress context means something legally different than in the patent context. So, an ice cream treat’s shape/configuration was insufficiently functional to support a utility patent claim though a cookie treat’s shape and configuration was too functional (useful) to support trade dress protection. But courts and other commentators often stop well short of explaining why “functionality” differs in these two contexts, or what specific evidence would differ—aside from the separate need to prove inherent or acquired distinctiveness to establish trade dress rights.[xxix]

The ultimate conclusions in the two cases, however, are very consistent in seeking to limit overreaching IP assertions. The functionality doctrine for trade dress has long been used to scrutinize attempts to secure a potentially perpetual trademark monopoly on product feature(s) that consumers desire in the product itself apart from any unique but optional source-identifying function(s) of product configuration—as well as manufacturers’ concerns about ease and cost of manufacturability. In the patent context, utility requirements at least implicitly revolve around the technological arts rather than aesthetic, saleability, and product source identification concerns—those might be called functions but they are not the type of inventive functions that are eligible for utility patent protection.

But the courts have yet to make explicit the precise role, if any, of the relevant consumer’s perspective in this analysis, which would seem to be a legitimate inquiry in the trade dress context in a way it would not be in the utility patent context, for instance. Admittedly, the “ordinary observer” test used for infringement of design patents blurs this distinction somewhat, especially given that one appeals court has held that conflation of the trademark likelihood-of-confusion test and the design patent ordinary-observer test is harmless error.[xxx] But evidence of non-reputational consumer desires, such as a consumer survey or similar expert testimony, would appear to be rather unique to product configuration trade dress considerations and in closer cases might not always be answered or rendered unnecessary by the admissions or conduct of the alleged trade dress owner.

Certainly, many trade dress product configuration cases do turn on admissions or statements (such as ads) by the owner that indicate functionality or the failure of the owner to meaningfully rebut the persuasive articulation of functionality readily observable in the product itself. Additionally, parties aggressively enforcing trade dress have often also pursued or obtained another form of protection, such as a patent, and statements made in (or during the prosecution of) a patent on the same or similar subject matter can be relevant to trade dress functionality.[xxxi] The Supreme Court has gone so far as to explicitly note that invoking trademark rights as patent rights expire is suspicious enough to create “a strong implication” the party is seeking to improperly extend a patent monopoly and that summary disposition of anticompetitive strike suits is desirable.[xxxii] This means consumer surveys or the like should not become routinely necessary. Yet cases may arise where consumer perceptions of functionality (or usefulness) are not immediately apparent from the product configuration itself, or the plaintiff has not made damaging statements, making survey evidence informative in the absence of more straightforward grounds for assessing functionality. This seems like a potential additional (fifth) category of functionality evidence not spelled out in cases like Ezaki Glico.

Conclusion

Foodstuff product configuration trade dress disputes provide an excellent case study of how courts have sought to preserve consumer access to functional product features, as well as producer access to easy and economical manufacturing techniques. After all, the purpose of trademark law in general is supposed to be about helping consumers identify whether something originates from company A or company B, for instance, but it is not meant to give anyone a monopoly on that something itself. Unless product configurations are relatively easily avoided by competitors making basically the same products, assertions of trade dress protection in pure product configurations have often been rejected. While courts remain sensitive to potential confusion over a product’s source, valid product configuration trade dress rights, as a matter of branding, should include a prominent, non-functional feature related to reputation that does not significantly diminish consumer enjoyment or ease of manufacturability.[*]

A version of this article previously appeared in Bench & Bar of Minnesota Magazine Digital Edition Vol. LXXVIII No. XI (December 2021).

Photo of Austen Zuege

Austen Zuege is an attorney at law and registered U.S. patent attorney in Minneapolis whose practice encompasses patents, trademarks, copyrights, domain name cybersquatting, IP agreements and licensing, freedom-to-operate studies, client counseling, and IP litigation. If you have patent, trademark, or other IP issues, he can help.


Endnotes:

[i] U.S. Const., Art. I, § 8, cl. 8.

[ii] See Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 5-6 (1966); Darcy v. Allein, 11 Co. Rep. 84, 77 Eng. Rep. 1260 (K. B. 1603).

[iii] Shredded Wheat Co. v. Humphrey Cornell Co., 250 F. 960 (2d Cir. 1918).

[iv] Id. at 964.

[v] Kellogg Co. v. National Biscuit Co., 305 U.S. 111, 122 (1938); see also Graeme B. Dinwoodie, “The Story of Kellogg Co. v. National Biscuit Co.: Breakfast with Brandeis,” Intellectual Property Stories (Dreyfuss and Ginsburg, eds., Foundation Press, 2005).

[vi] Kellogg, 305 U.S. at 120-21; see also “Henry Perky: Patents,” Wikipedia (last visited Jan. 7, 2021); U.S. Des. Pat. No. 48,001.

[vii] See TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 28-32 (2001); Wal-Mart Stores, Inc. v. Samara Brothers, Inc., 529 U.S. 205, 213-16 (2000); Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 164-65 (1995); Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 771,775 (1992); Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989); Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 850 n.10 (1982); Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 228-32 (1964); Compco Corp. v. Day-Brite Lighting, Inc., 376 U.S. 234, 238 (1964); see also Scott Paper Co. v. Marcalus Mfg. Co., Inc., 326 U.S. 249, 255-57 (1945).

[viii] Sweet Street Desserts, Inc. v. Chudleigh’s Ltd., 69 F. Supp. 3d 530, 532-33 and 546-50 (E.D. Pa. 2014) aff’d 655 F. App’x 103 (3d Cir. 2016); see also 15 U.S.C. § 1064(3).

[ix] Sweet Street Desserts, Inc. v. Chudleigh’s Ltd., No. 5:12-cv-03363 (E.D. Pa. Jan. 15, 2015) aff’d 655 F. App’x 103.

[x] Ezaki Glico Kabushiki Kaisha v. Lotte Int’l Am. Corp., 986 F.3d 250 (3d Cir. 2021) cert denied 595 U.S. ___ (Nov. 1, 2021).

[xi] Qualitex, 514 U.S. at 165 (quoting Inwood, 456 U.S. at 850, n.10).

[xii] Ezaki Glico, 986 F.3d at 257; cf. Sulzer Mixpac AG v. A&N Trading Co., 988 F.3d 174, 182-84 (color-coding to denote size of dental mixing tips improved the operation of the goods, which affects their quality, and therefore was functional and unprotectable as trade dress even though not essential).

[xiii] Ezaki Glico, 986 F.3d at 257 (quoting TrafFix, 532 U.S. at 32).

[xiv] Dippin’ Dots, Inc. v. Frosty Bites Dist., LLC, 369 F.3d 1197, 1203 (11th Cir. 2004); Groeneveld Transp. Efficiency, Inc. v. Lubecore Int’l, Inc., 730 F.3d 494, 506-09 (6th Cir. 2013); Schutte Bagclosures Inc. v. Kwik Lok Corp., 193 F. Supp. 3d 245, 261-62 (S.D.N.Y. 2016) aff’d 699 F. App’x 93, 94 (2d Cir. 2017).

[xv] Ezaki Glico, 986 F.3d at 258 (internal citations omitted); but see James J. Aquilina, “Non-Functional Requirement for Trade Dress: Does Your Circuit Allow Evidence of Alternative Designs?” AIPLA (May 5, 2020).

[xvi] Ezaki Glico Kabushiki Kaisha v. Lotte Int’l Am. Corp., No. 2:15-cv-05477, 2019 WL 8405592 at *6 (D.N.J., 7/31/2019).

[xvii] See holder (61). U.S. Pat. No. 8,778,428, FIG. 5 and col. 5, lines 15-18 & 45-50.

[xviii] See TMEP §1209.01(b) (Oct. 2018).

[xix] Eskimo Pie Corp. v. Levous, 35 F.2d 120 (3d Cir. 1929).

[xx] Id. at 122; see also, e.g., E.H. Tate Co. v. Jiffy Ents., Inc., 196 F. Supp. 286, 298 (E.D. Pa. 1961); James Heddon’s Sons v. Millsite Steel & Wire Works, 128 F.2d 6, 13 (6th Cir. 1942).

[xxi] Eskimo Pie Corp. v. Levous, 24 F.2d 599, 599-600 (D. N.J. 1928).

[xxii] Charles Duan, “Ice Cream Patent Headache,” Wired (Oct. 20, 2015).

[xxiii] Id.; cf., Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208, 223-24 (2014); Mayo Collab. Servs. v. Prometheus Labs, Inc., 566 U.S. 66, 72-73 (2012).

[xxiv] AmBrit, Inc. v. Kraft, Inc., 812 F.2d 1531, 1535-38 (11th Cir. 1986), cert. denied, 481 U.S. 1041 (1987), abrogated by Wal-Mart, 529 U.S. at 216, but see The Islay Co. v. Kraft, Inc., 619 F. Supp. 983, 990-92 (M.D. Fla. 1985).

[xxv] E.g., Spangler Candy Co. v. Tootsie Roll Inds., LLC, 372 F. Supp. 3d 588, 604 (N.D. Ohio 2019); Fiji Water Co., LLC v. Fiji Mineral Water USA, LLC, 741 F. Supp. 2d 1165, 1172-76 (C.D. Cal. 2010).

[xxvi] Dippin’ Dots, 369 F.3d at 1202-07; see also 15 U.S.C. §1125(a)(3). The court incorrectly stated unregistered product configuration trade dress can be inherently distinctive, a position abrogated by Wal-Mart.

[xxvii] Dippin’ Dots, Inc. v. Mosey., 476 F.3d 1337 (Fed. Cir. 2007).

[xxviii] Dippin’ Dots, 369 F.3d at 1205-06.

[xxix] See Keystone Mfg. Co., Inc. v. Jaccard Corp., No. 03-CV-648, 2007 WL 655758 (W.D.N.Y., Feb. 26, 2007).

[xxx] Unette Corp. v. Unit Pack Co., 785 F.2d 1026, 1029 (Fed. Cir. 1986); see also Converse, Inc. v. Int’l Trade Comm’n, 909 F.3d 1110, 1124 (Fed. Cir. 2018) (calling the standards “analogous”).

[xxxi] TrafFix, 532 U.S. at 29-32; Dippin’ Dots, 369 F.3d at 1205-06.

[xxxii] Singer Mfg. Co. v. June Mfg. Co., 163 U.S. 169, 181 (1896); Wal-Mart, 529 U.S. at 213-14; see also Morton Salt Co. v. G.S. Suppiger Co., 314 U.S. 488 (1942) (misuse of patent on machine to restrain unpatented salt tablet sales); Dastar Corp. v. Twentieth Century Fox Film Corp., 539 U.S. 23 (2003) (improper trademark assertion after copyright expiration); EMI Catalogue P’ship v. Hill, Holliday, Connors, Cosmopulos, Inc., 228 F.3d 56, 63-54 (2d Cir. 2000) (“musical composition cannot be protected as its own trademark” because “[t]he creation and expression of an original work is protected by copyright law, and once an original work has been produced trademark law is not the proper means of protecting the rights in this originality”; declining to rule “that a product itself—in this case, the song—can serve as its own trademark”); Korzybski v. Underwood & Underwood, Inc., 36 F.2d 727, 728-29 (2d Cir. 1929) (election of protection doctrine bars copyright after obtaining patent: “An inventor who has applied for and obtained a patent cannot extend his monopoly by taking out a copyright . . . on what he has already diagrammatically disclosed”) accord Vacheron & Constantin-Le Coultre Watches, Inc. v. Benrus Watch Co., 260 F.2d 637, 642 (2d Cir. 1958) (“grant of a patent presupposed a dedication to the public of the disclosure, except so far as the statute specifically reserved it to the patentee”).

[*] For European perspectives on functionality issues for trade dress, see Megan Rae Blakely, “KitKat Lost Its Trade Mark Case: What You Need to Know,” The Conversation (July 31, 2018); Kirsti Knolle and Silke Koltrowitz, “Lindt Chocolate Bunny Hops Towards Victory in Trademark Battle,” Reuters (July 29, 2021); César J. Ramírez-Montes, “The Elusive Distinctivenes of Trade Dress in EU Trademark Law,” 34 Emory Int’l L. Rev. 277 (2020); see also Michiel Rijsdijk, “The Netherlands’ Tripp Trapp Chair Saga,” INTA Bulletin, Vol. 76, Issue 30 (Aug. 4, 2021).

Categories
Articles

Considerations for Patent Assignments After Minerva Ruling

By Austen Zuege & Benjamin Edlavitch

A version of this article about patent assignments and assignor estoppel appeared in an online magazine on August 4, 2021 as intellectual property “expert analysis”.

Introduction

For many decades, the terms and content of patent assignments have been relatively uncontroversial.  However, the Supreme Court’s recent ruling in Minerva Surgical, Inc. v. Hologic, Inc. established that assignor estoppel will apply to some assignments but not others.[i]  Consequently, the execution of an assignment of patent rights is now potentially more contentious than before.  Parties to an assignment may now wish to scrutinize the terms of an assignment document as well as the factual context around the execution of an assignment that may give rise to implied terms.  What follows is an analysis of practical considerations for a patent assignment, including sample assignment clauses that might be negotiated, in light of Minerva

Minerva reaffirmed the doctrine of assignor estoppel but limited its scope to what an assignor represents in assigning patent rights.  The assignor is estopped from challenging the validity of the patent when the “assignor’s claim of invalidity contradicts explicit or implicit representations” the assignor made.[ii] A key aspect of the Court’s holding involved determining the scope of “implicit representations” that result in assignor estoppel. 

The Minerva Decision

Inventor Truckai had assigned patent applications to Novacept, Inc., which was later acquired by Hologic, Inc.[iii]  Afterwards, Truckai founded Minerva Surgical, Inc., and Hologic sued Minerva for patent infringement on resulting patents.[iv]  Hologic argued that assignor estoppel barred Minerva from arguing the patents were invalid and the district court and the Federal Circuit both found that assignor estoppel barred the defendant from pursuing invalidity defenses.[v]  The Court vacated and remanded the case in a 5-4 ruling and explained that “the limits of the assignor’s estoppel go only so far as, and not beyond, what he represented in assigning the patent application.”[vi]  Therefore, “if Hologic’s new claim is materially broader than the ones Truckai assigned, then Truckai could not have warranted its validity in making the assignment” and, thus, “there is no basis for estoppel.”[vii]

The Court outlined a total of three examples where assignor estoppel does not apply.  “One example . . . is when the assignment occurs before an inventor can possibly make a warranty of validity as to specific patent claims.  Consider a common employment arrangement.   An employee assigns to his employer patent rights in any future inventions he develops during his employment; the employer then decides which, if any, of those inventions to patent.  In that scenario, the assignment contains no representation that a patent is valid.  How could it?  The invention itself has not come into being.”[viii]    “A second example is when a later legal development renders irrelevant the warranty given at the time of assignment.”[ix]  Thirdly, a post-assignment change in patent claim scope in which the “new claims are materially broader than the old claims” does not trigger assignor estoppel.[x]  This last example was the situation alleged in Minerva: materially broader continuation claims filed after execution of the assignment were not subject to assignor estoppel because the Court held there was no implied warranty of validity.[xi]  While the majority opinion helpfully gave a few examples of circumstances that would or would not give rise to an implied warranty, they are hardly exhaustive and do not reach some fairly common assignment scenarios, leaving some ambiguity.[xii] 

Practical Considerations and Possible Assignment Clauses

Almost all of the factors that determine whether assignor estoppel will apply may be within the control of the parties to an assignment.  It may be possible to include explicit terms in the assignment document in order to avoid later dispute about what was or was not implied by circumstances of execution.  The question becomes, what are the sorts of terms that assignors and assignees may now wish to consider?  The following are simply examples; particular parties will have different interests and their relative bargaining power will of course vary from one situation to the next.  Though as discussed below the enforceability of certain terms should not be assumed in all scenarios. 

Assignees will now have motivations to try to add clauses to employment and services agreements establishing assignment obligations with some or all of the following additional terms: assignment timing requirements (i.e., after assignor estoppel attaches), requirements for non-quitclaim assignment or warranty of validity requirements, and express no-challenge clauses.  For example, if an assignee’s claims are materially broadened, then the assignor could not have warranted the claims’ validity at the time of the assignment and there is no basis for assignor estoppel, as the Court held in Minerva.[xiii]  Assignees seeking to acquire patent rights on a stand-alone basis will now have reasons to do one or more of the following: add an express warranty of validity or a no-challenge clause to an assignment, obtain a further post-grant warranty of validity (especially if any claim is materially broader), obtain a new assignment with each continuation or divisional application having materially different claims (especially any broader claims), and include a choice of law provision.  The following are sample clauses that might be used to pursue assignee objectives:

I hereby waive all my rights to challenge validity of said invention in the United States and its territorial possessions and in all foreign countries and of all Letters Patent or similar legal protection in the United States and its territorial possessions and in any and all foreign countries to be obtained for said invention by said application or any continuation, continuation-in-part, divisional, renewal, substitute, or reissue thereof or any legal equivalent thereof in a foreign country for the full term or terms for which the same may be granted.

[No-challenge clause for stand-alone assignment]

I hereby waive all my rights to challenge validity of any and all inventions which I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time I am in the employ of the Company in the United States and its territorial possessions and in all foreign countries (collectively, “the Invention(s)”) and of all Letters Patent or similar legal protection in the United States and its territorial possessions and in any and all foreign countries to be obtained for the Invention(s) by any application or any continuation, continuation-in-part, divisional, renewal, substitute, or reissue thereof or any legal equivalent thereof in a foreign country for the full term or terms for which the same may be granted.

[No-challenge clause for employment agreement]

Assignors (including employee-inventors[xiv]) will now have greater reasons to question and push back against terms present in—or missing from—assignee-supplied assignment forms.  As the Supreme Court put it, assignor estoppel “raises the price of patent assignments.”[xv]  For example, assignors will have reasons to demand one or more of the following: insist upon only a quitclaim assignment[xvi] or language expressly denying any warranty of validity, inserting a clause that assignor estoppel shall not apply, sign an assignment only with regard to a patent application lacking claims,[xvii] refuse to sign any “confirmatory” assignment that gives rise to a new warranty, and  negotiate additional consideration (e.g., larger payment, bonus(es), a raise in base compensation, promotion in job title, etc.) if an assignee expects any express or implied warranty.  The following are sample clauses that might be used to pursue some of those assignor objectives:

I hereby make this assignment without representation or warranty as to patentability or validity of said invention.

[No Warranty of Validity]

It is possible that an assignor could unilaterally write-in additional terms into an assignment form prepared by the assignee, given that only the assignor conventionally signs an assignment under U.S. law.[xviii]  Assignees might be faced with scenarios where further consideration is required to subsequently “undo” terms unilaterally written-in by the assignor if consideration was already paid—giving rise to assignees withholding payment until the executed assignment (free from unilateral modifications) is delivered.   

Given that assignors and assignees may have widely divergent interests, with each seeking to receive more in exchange for less, there may be a need to reach a compromise with regard to assignment terms.  For example, one or more of the following terms might be agreed to: explicitly spell out what due diligence has or has not been performed and expressly include a partial warranty of validity limited to actual knowledge and due diligence activities and/or include express language that assignor estoppel is limited only to validity challenges based on the law as it exists at the time and/or only to prior art of which the assignor was actually aware at the time (putting the obligation on the assignee to inform the assignor of all material prior art).[xix]  The following are sample clauses that might be used to pursue some of those compromise objectives:

After performing due diligence, I hereby warrant and represent my belief in the validity of the specific claims presented to me as of the Effective Date of this Assignment to define said invention only with regard to prior art actually known to me as of the Effective Date and only with regard to patent statues, regulations, case law, and any other controlling authorities in effect as of the Effective Date, but this warranty does not extend to any other patent claims that are materially broader than the specific claims presented to me as of the Effective Date, and I hereby accept no liability for any finding of unpatentability or invalidity by any competent authority; and

[Partial Warranty of Validity]

I agree, upon payment of a reasonable fee, to conduct further due diligence with respect to any materially broader claim and to make a similar warranty and representation of my belief in validity of that materially broader claim if, in my discretion, such a warranty and representation is justified by all of the facts and information available to me at that time.

[Promise to Make Future Warranties for a Reasonable Fee]

Enforceability Considerations

The enforceability and effectiveness of warranties of validity and related contractual clauses present a number of other issues.  Among those is the need for consideration in order for an assignment to constitute a valid contract.[xx]   This is where an inventor bonus program could be useful—a bonus could be provided as consideration for an assignment and an explicit warranty, or even just for the warranty alone. 

Obligations to assign, such as in employment agreements, are subject to state (or foreign) law.[xxi]  But obligations to assign do not necessarily also create an obligationto warrant as to validity.  A party under an obligation to assign might therefore refuse to provide a warranty of validity absent receipt of further consideration.  And the enforceability of an employment agreement or master services agreement that purports to impose a prospective obligation to warrant validity of an invention not yet conceived is a question distinct from the enforceability of prospective obligations to assign, and may need to be sorted out by courts.

To even further complicate things, it has been suggested that a confirmatory assignment could create a warranty of validity that did not attach to an earlier assignment.[xxii]  That position seems doubtful, though it turns on the particular language used.  A true “confirmatory” assignment merely acknowledges (confirms) a prior assignment, perhaps curing technical defects such as to fix a typo, add missing information needed to accommodate recordation requirements in particular jurisdictions, or to omit sensitive price information in a publicly recorded version.  If the prior assignment contained no warranty of validity, express or implied, then merely confirming that prior (warranty-less) assignment creates no new warranty.  That would be especially true for nunc pro tunc assignments that relate back to the effective date of an earlier warranty-less assignment.  Many assignments include boilerplate language about further writings to effectuate the transfer in the event of a technical defect or barrier to recordability.  But if a new warranty is expressly (or implicitly) added to a purportedly “confirmatory” assignment, then the assignment is not really (or not merely) a confirmatory assignment and there must be consideration for the new warranty term—continued employment alone would not be sufficient consideration in some states.[xxiii] 

Conclusion

The execution of an assignment of patent rights is now potentially more contentious than before.  However, it seems that amending an assignment in light of Minerva may reduce disputes subsequent to its execution.

Have an invention you would like to patent? Have a brand you would like to register as a trademark? Concerned about infringing someone else’s intellectual property? Is someone else infringing your IP? Need representation in an IP dispute? Austen is a patent attorney / trademark attorney who can help. These and other IP issues are his area of expertise. Contact Austen today to discuss.


Endnotes:

[i] U.S. No. 20–440 (June 29, 2021). 

[ii] Id. Slip Op. at 1.

[iii] Id. at 2-3.

[iv] Id. at 3.

[v] Id. at 3-4.

[vi] Id. at 16.

[vii] Id.

[viii] Id. at 15.

[ix] Id.

[x] Id. at 15-16.

[xi] Id. at 16-17.

[xii] There are also ambiguities in the Court’s decision that stem from shifting terminology.  For instance, are (granted) “patent claim(s)” = (pending) patent application claim(s) “presented” to the USPTO = (unfiled) claims prepared by assignee’s attorney = (unfiled) claims prepared by assignor or assignor’s attorney?  A “patent claim” is not necessarily synonymous with a “patent application claim”.  An assignment knowingly executed while a pending patent application claim stands rejected might arguably carry no warranty, though Minerva does not explicitly address such a scenario. 

[xiii] Id.

[xiv] See Bd. of Trs. of Leland Stanford Junior Univ. v. Roche Molecular Sys., Inc., 563 U.S. 776, 786 (2011) (“In most circumstances, an inventor must expressly grant his rights in an invention to his employer if the employer is to obtain those rights.”); Banks v. Unisys Corp., 228 F.3d 1357, 1359 (Fed. Cir. 2000) (“The general rule is that an individual owns the patent rights to the subject matter of which he is an inventor, even though he conceived it or reduced it to practice in the course of his employment.”).

[xv] Minerva, Slip Op. at 14,n.4.   

[xvi] See, e.g., Van Renesselaer v. Kearney, 52 U.S. 297, 322 (1851); Black’s Law Dictionary 503 (10th ed. 2014) (quitclaim deed is one that “conveys a grantor’s complete interest or claim in certain real property but that neither warrants nor professes that the title is valid.”).  Assignor estoppel for patents is derived from real property law.  Minerva, slip op. at 5-6.  A patent quitclaim assignment could include language such as “hereby conveys and quitclaims” or “hereby transfers by quitclaim”, and the document title could explicitly use the word “quitclaim” (or “quit-claim”). 

[xvii] A U.S. utility patent application (but not a design patent application) can receive a filing date even if lacking a claim.  37 C.F.R. § 1.53.

[xviii] However, handwritten changes to an assignment are normally initialed and dated by each of the assignor(s) to avoid disputes about post-execution changes not agreed to by the assignor(s).  See MPEP § 323

[xix] See Mast, Foos, & Co. v. Stover Mfg. Co., 177 U.S. 485, 493 (1900) (“we must presume the patentee was fully informed of everything which preceded him, whether such were the actual fact or not”); In re Wood, 599 F.2d 1032, 1036 (CCPA 1979) (“we presume full knowledge by the inventor of all the prior art in the field of his endeavor. However, with regard to prior art outside the field of his endeavor, we only presume knowledge from those arts reasonably pertinent to the particular problem with which the inventor was involved.”) accord Airbus SAS v. Firepass Corp., 941 F.3d 1374, 1380 (Fed. Cir. 2019).

[xx] See Mars, Inc. v. Coin Acceptors, Inc., 527 F.3d 1359, 1370 (Fed. Cir. 2008) (Construction of patent assignment agreements is a matter of state contract law.”) and Jim Arnold Corp. v. Hydrotech Sys., Inc., 109 F.3d 1567, 1572 (Fed. Cir. 1997) (“the question of who owns the patent rights and on what terms typically is a question exclusively for state courts”; collecting cases); but contrast, e.g., Hewett v. Samsonite Corp., 507 P.2d 1119, 1121 (Colo. App. 1973) (continued employment insufficient consideration for patent assignment, which was found invalid for lack of consideration) and Jostens, Inc. v. Nat’l Computer Sys., 318 N.W.2d 691, 703-04 (Minn. 1982) (mere continued employment provided insufficient consideration under Minnesota law for coercive intellectual property agreement) with, e.g., Preston v. Marathon Oil Co., 684 F.3d 1276, 1284-85 (Fed. Cir. 2012) (under Wyoming law, no additional consideration is required to support an employee’s post-employment execution of an agreement to assign intellectual property to his employer). A state-by-state or country-by-country survey is beyond the scope of this article.   

[xxi] See Allen v. Riley, 203 U.S. 347, 355-57 (1906); Akazawa v. Link New Tech., 520 F.3d 1354, 1356-58 (Fed. Cir. 2008); see also 35 U.S.C. § 261; but see DDB Techs., L.L.C. v. MLB Advanced Media, L.P., 517 F.3d 1284, 1290 (Fed. Cir. 2008) (whether patent assignment clause creates automatic assignment or mere obligation to assign treated under Federal Circuit law).

[xxii] Dennis Crouch, “Assignor Estoppel Persists — But Only for Claims Specifically Assigned,” Patently-O (June 29, 2021).

[xxiii] See, e.g., Jostens, 318 N.W.2d at 703-04.

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Copyright Pitfalls: Ways to Avoid Copyright Infringement and Ownership Disputes

A version of this article appeared in AIPLA’s Innovate Magazine in October 2021.


Mark Twain observed that “[o]nly one thing is impossible for God: to find any sense in any copyright law on the planet.”[i]  From the standpoint of individuals and small businesses, Twain’s observation might ring true.  Not only do some people have difficulty distinguishing between what they feel copyright law ought to entail and what it actually does entail, there are many genuinely ambiguous and confusing copyright issues that arise from everyday practices.  What follows is a collection of observations about a few common copyright infringement pitfalls, meant as a practical reference for those who wish to avoid finding themselves embroiled in an avoidable copyright dispute.

“Free” Materials

“Free” photo and clipart websites and similar archives are used at your own risk.  Unless provided with full indemnity, which usually is not provided, ordinary users are liable for infringement if the “free” image website did not actually have permission to use and distribute the image(s) in question.  Put another way, just because a web site claims to grant free use of images that appear on the site does not mean that the site operators actually have the authority to grant such permission for a given image—the site operator or whoever uploaded an image to the site might be an infringer.  In some instances, there may even be reason to suspect that the alleged owner is aware of the presence of materials in a “free” repository—or was even responsible for placing the materials there—and seeks settlements in bad faith or through outright fraud.[ii]  

Will an “innocent infringer” defense help in these situations?  Not against liability.   Though it potentially limits statutory damages.[iii]  How much it might limit statutory damages is discretionary, it may not limit actual damages,[iv] and it will not prevent an injunction.  In pragmatic terms, innocent infringement defenses do very little in the face of nuisance settlement demands from copyright owners engaged in troll-like enforcement activities. 

“Creative Commons” (CC) licenses are another area where materials turn out to be less usable than believed.  There are different types of CC licenses and a given work subject to one kind of CC license may not permit your intended use, especially if your use is “commercial” in nature.  And, as discussed below, removal of copyright management information (CMI) from CC works is still a potential source of liability.

Moreover, even where a copyright owner freely grants use of a particular image, if it is an image of a person or derivative of another work—like a photo of a sculpture, painting/mural, clothing design, etc.—then separate authorization or release of a right of publicity/privacy (a so-called model release) for the depicted person or copyright authorization for the depicted work may still be required.  Very likely any such additional authorization(s) must be sought from a different person or entity. 

Licensing Stock Images

Many stock image providers offer what seem like intentionally confusing licenses.  “Royalty free” images (and music) are not actually free but rather are usually subject to lump sum license payments—advertisements about the provider’s license terms may be confusing if not outright misleading.  Many stock image providers also offer different types of licenses that are difficult to differentiate.  For instance, the least expensive types of stock image licenses often do not cover use for “merchandising”, use on more than a specified number of hard copies, use with video production budgets over a certain threshold, etc.  Understanding which type of license addresses your particular intended use may not be simple.  Yet, if you purchase an incorrect license you may find yourself in the position of having made an unlicensed use. 

Lastly, stock image providers may not offer indemnity or, if they do, it might be provided at levels well below statutory damage maximums.[v]   Therefore, if you license an image only to later discover that the image provider was not authorized to license that image you could find yourself in a lawsuit with a monetary exposure that may exceed your apparent culpability.  

Outside Contractors and Ownership

You need a written assignment to own copyright in outside contractors’ work.  This holds even when an outside contractor was specifically hired to create copyrightable works, such as advertising copy, software code, photos, videos, etc.  While “works made for hire” are initially owned by the employer, absent a written agreement to the contrary,[vi] that ownership provision only applies when the work is created by an employee within the scope of his or her job duties or if there is a written work-made-for-hire agreement and the work falls within nine statutory categories of works (and, chances are, it probably does not fall in one of those categories).[vii]  In single-member LLCs and similar small businesses where the owner’s status as an “employee” may be in doubt under agency law, and there is no employment or other applicable agreement in place to clarify, then the ownership of copyrights created by such a person may be subject to dispute at some point. 

Outside vendors, like marketing companies, will sometimes have service agreements with their customers stating that the customer will own all of the work product, but such language may be phrased in the future tense, which is generally not sufficient to constitute an assignment of copyright—in such cases only a contractual obligation to assign has been established and an additional written assignment is required for the customer to actually obtain ownership of particular copyrights, though this may vary under state law.[viii] 

Failure to own a copyright prevents enforcement against infringers.  So, if a business hires an outside photographer to take photos for the business’ web site, if a competitor copies any of them the business may find that it does not own the copyrights in the photos and therefore cannot assert infringement until ownership is secured. 

DMCA Takedowns

The Digital Millennium Copyright Act (DMCA) includes a “safe harbor” notice-and-takedown provision in 17 U.S.C. § 512.[ix]  Takedowns can be powerful tools against online piracy but can also be abused or misused.  There are also known scams involving infringers of a copyright using takedown notices to seek nuisance settlements from third parties (who may be protected by fair use) and allegations of usage to silence critics

CMI, Circumvention, and Repair Issues

Liability for knowing removal or alteration of copyright management information (CMI) is set forth under 17 U.S.C. § 1202.  CMI includes the title, author or copyright owner names, and terms and conditions for use.  While the law requires removal to be knowing, rather than unwitting or unintentional, and further requires knowing or having reasonable grounds to know that doing so will induce, enable, facilitate, or conceal an infringement, copyright owners sometimes broadly assert CMI removal to seek additional damages or as a fallback position when substantive infringement claims are unavailable.[x] 

Section § 1201 limits “circumvention” of a technological measure that effectively controls access to a copyrighted work, unless the Library of Congress grants an exception.  Product/repair manuals, error code outputs generated by diagnostic tools, and/or diagnostic tools themselves may be subject to anti-circumvention restrictions stemming from copyright, which can impact the ability to repair a purchased item.  Aside from Section 1201 anti-circumvention exemptions, state right to repair law may provide some counterbalance.  

End user license agreements (EULAs) also bridge copyright law and contract law and attempt to circumvent the first sale doctrine (more generally, exhaustion of rights).  They may limit or prevent the use of unauthorized repair sources or transfer/resale, even if the enforceability of such EULA terms might be questioned in some jurisdictions. 

Predatory Contracts

Finally, buyers sometimes request products from vendors while specifying product requirements (e.g., a fabric pattern or decorative image, included text or video) for which the buyer may not have rights.  That is, the buyer may be requesting an infringing knock-off product without explicitly saying so—and possibly without realizing that copyright infringement is being requested.  All liability for copyright infringement may nonetheless be placed on the vendor by a purchase agreement, including a buyer indemnification that overrides the Uniform Commercial Code (UCC).[xi]  Such agreements might be called predatory contracts where they give the appearance of an opportunity for the vendor when, at bottom, they are really vendor liabilities and the buyer is shifting a greater risk to the vendor than the value of the contract. 

Photo of Austen Zuege

Austen Zuege is an attorney at law and registered U.S. patent attorney in Minneapolis whose practice encompasses patents, trademarks, copyrights, domain name cybersquatting, IP agreements and licensing, freedom-to-operate studies, client counseling, and IP litigation. If you have patent, trademark, or other IP issues, he can help.


Endnotes:

[i] Mark Twain, Mark Twain’s Notebook (A.B. Paine, ed., 1935) quote reprinted at <http://www.twainquotes.com/Copyright.html>.

[ii] See also U.S. v. Hansmeier, No. 19-2386 (8th Cir., Feb. 10, 2021); Jason Mazzone, “Copyfraud,” 81 N.Y.U.L.R. 1026 (2006).

[iii] 17 U.S.C. § 504(c)(2).

[iv] Actual damages may be low or difficult to establish.  See, e.g., On Davis v. The Gap, Inc., 246 F.3d 152, 165 (2d Cir. 2001); Gregerson v. Vilana Fin., Inc., No. 0:06-cv-01164, 2008 U.S. Dist. LEXIS 11727, *14-15 (D. Minn., Feb. 15, 2008).

[v] General business insurance polices may cover non-willful copyright infringement, such as under “advertising injury” provisions. See, generally, David A Gauntlett, IP Attorney’s Handbook for Insurance Coverage in Intellectual Property Disputes (2nd ed., ABA 2014).

[vi] 17 U.S.C. § 201(b).

[vii] 17 U.S.C. § 101; see also Z. Peter Sawicki et al., “Copyright Ownership: A Mere Handshake Isn’t Good Enough” AIPLA Innovate (Sept. 24, 2018).

[viii] E.g., TD Bank N.A. v. Hill, 928 F.3d 259, 274 (3d Cir. 2019); cf. IpVenture, Inc. v. Prostar Computer, Inc., 503 F.3d 1324, 1327 (Fed. Cir. 2007) (interpreting “agree to assign” as requiring subsequent written instrument to effectuate assignment of patent rights).

[ix] See also U.S. Copyright Office, “Section 512 of Title 17: A Report of the Register of Copyrights” (May 2020).

[x] See, e.g., Philpot v. WOS, Inc., No. 1:18-cv-00339, 2019 WL 1767208 (W.D. Tex. April 22, 2019); Mango v. BuzzFeed, Inc., 970 F. 3d 167, 171 (2d Cir. 2020) (A plaintiff must prove the following: (1) the existence of CMI in connection with a copyrighted work; and (2) that a defendant distributed works or copies of works; (3) while knowing that CMI has been removed or altered without authority of the copyright owner or the law; and (4) while knowing, or having reasonable grounds to know that such distribution will induce, enable, facilitate, or conceal an infringement.); Stevens v. Corelogic, Inc., 899 F.3d 666, 673-75 (9th Cir. 2018) (there are two scienter requirements and for the second the copyright owner “must provide evidence from which one can infer that future infringement is likely, albeit not certain, to occur as a result of the removal or alteration of CMI” “such as by demonstrating a past ‘pattern of conduct’ or ‘modus operandi’, that the defendant was aware or had reasonable grounds to be aware of the probable future impact of its actions.”). 

[xi] UCC § 2-312(3) (2002) (“a buyer who furnishes specifications to the seller must hold the seller harmless against any such [infringement] claim which arises out of compliance with the specifications”).

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The Federal Circuit’s Standard for Enhanced Damages

October 2021

Recent Federal Circuit cases highlight a confused standard applied to discretionary enhanced damages determinations in patent infringement cases. As will be shown, the Federal Circuit has elevated the statement of mind requirement for enhanced patent damages contrary to Supreme Court precedent.

In Halo, the Supreme Court discussed how conventionally reckless conduct at the time of the conduct in question supports punitive damages for patent infringement under 35 U.S.C. § 284. Halo Elecs., Inc. v. Pulse Elecs., Inc., 979 U.S. ___, ___, 136 S. Ct. 1923, 1932-35 (2016) (“The principal problem with Seagate[] . . . is that it requires a finding of objective recklessness in every case before district courts may award enhanced damages. Such a threshold requirement excludes from discretionary punishment many of the most culpable offenders”). After-the-fact rationalizations drummed up during litigation were at odds with the conventional understanding of recklessness, which requires analysis of the accused’s state of mind at the time of the actions in question. Id. at 1930,1933. The Court clarified that “a person is reckless if he acts ‘knowing or having reason to know of facts which would lead a reasonable man to realize’ his actions are unreasonably risky.” Id. at 1933 (emphasis in original); cf. Sherry F. Kolb, “Why Can’t Jurors Distinguish ‘Knowing’ From ‘Reckless’ Misconduct?” Verdict (Jan. 11, 2012) (discussing subjective states of mind in the criminal law context, with helpful illustrative examples). “Section 284 allows district courts to punish the full range of culpable behavior[] . . . in a manner free from the inelastic constraints of the Seagate test.” Halo, 136 S. Ct. at 1933-34. In a way, Halo‘s ruling about conventional recklessness standards fits with other Supreme Court cases (like eBay v. MercExchange) striking down special rules and holding that patent matters are generally subject to the same standards that apply in other types of civil tort cases.

Since Halo, the Federal Circuit has been eager to restrict the Supreme Court’s holding to only a first step in a multipart analysis under § 284 despite the Supreme Court’s expansive discussion about “punish[ing]” the “full range of culpable behavior.” The Federal Circuit has, to some extent, lost the forest for the trees by focusing rather myopically on one sentence in Halo: “The subjective willfulness of a patent infringer, intentional or knowing, may warrant enhanced damages, without regard to whether his infringement was objectively reckless.” Id. at 1933. In doing so, Halo‘s ultimate holding that enhanced damages are available for conventional recklessness is lost.

The Federal Circuit currently maintains a two-step process for analysis of enhanced damages under 284. “[Halo] leaves in place our prior precedent that there is a right to a jury trial on the willfulness question. *** Whether the conduct is sufficiently egregious as to warrant enhancement and the amount of the enhancement that is appropriate are committed to the sound discretion of the district court.” WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1341-42 (Fed. Cir. 2016). So, first, the finder-of-fact determines “willfulness” and, second, the court has discretion to impose enhanced damages, if any.

For the first step, the Federal Circuit has said that willfulness can be found if the accused infringer “acted despite a risk of infringement that was ‘ ‘either known or so obvious that it should have been known . . . .’ ‘ ” WesternGeco LLC v. ION Geophysical Corp., 837 F.3d 1358, 1362 (Fed. Cir. 2016) (emphasis added), reinstated 913 F.3d 1067, 1075 (Fed. Cir. 2019); accord Arctic Cat, Inc. v. Bombardier Recreational Prods. Inc., 876 F. 3d 1350, 1371 (Fed. Cir. 2017) (willfulness supported if accused infringer “actually knew or should have known that its actions constituted an unjustifiably high risk of infringement of a valid and enforceable patent.”). Halo used the phrase “having reason to know” while the Federal Circuit has, without explanation, instead used the phrase “should have known”.

The second step is a moral judgment that falls to the discretion of the district court. But enhanced damages do not automatically follow from a finding of willfulness. Halo, 136 S. Ct. at 1933 (“Yet none of this is to say that enhanced damages must follow a finding of egregious misconduct.”); see also Presidio Components, Inc. v. Am. Technical Ceramics Corp., 875 F.3d 1369, 1382 (Fed. Cir. 2017) (“an award of enhanced damages does not necessarily flow from a willfulness finding.”).

In Eko, the Federal Circuit ruled on jury instructions for willfulness. Eko Brands, LLC v. Adrian Rivera Maynez Enters., Inc., 946 F.3d 1367, 1377-79 (Fed. Cir. 2020). The most controversial passage in that opinion was the assertion that “[u]nder Halo, the concept of ‘willfulness’ requires a jury to find no more than deliberate or intentional infringement.” Id. at 1378 (emphasis added). Merely implicit in the court’s opinion is that the issue was a defendant challenging a jury instruction (based upon the Federal Circuit Bar Association’s (“FCBA’s”) National Patent Jury Instructions) upon which the jury found willful infringement. In other words, while the jury instruction may have omitted reckless conduct that Halo had found sufficient to support willfulness and enhanced damages, that point was moot and not at issue in the Eko appeal because the jury had found that even a heightened state of mind (beyond recklessness) was present. But the court’s reference to “no more than” deliberate or intentional conduct is the confusing part, because it is odd, to say the least, to describe a heightened intent standard with a phrase like “no more than” that normally connotes a low threshold.

Then the Federal Circuit offered a rationalization of Eko in SRI International. SRI Int’l, Inc. v. Cisco Sys., Inc., No. 20-1685, Slip. Op. at *9-10 (Fed. Cir., Sept. 28, 2021). There, a district court had noted that “the [Federal Circuit] is not entirely consistent in its use of adjectives to describe what is required for willfulness.” SRI Int’l, Inc. v. Cisco Sys., Inc. (SRI III), No. 13-1534, 2020 WL 1285915, at *1 n.1 (D. Del., Mar. 18, 2020). So the Federal Circuit responded: “To eliminate the confusion created by our reference to the language ‘wanton, malicious, and bad-faith’ in Halo, we clarify that it was not our intent to create a heightened requirement for willful infringement. Indeed, that sentence from Halo refers to ‘conduct warranting enhanced damages,’ not conduct warranting a finding of willfulness.” SRI Int’l, No. 20-1685, Slip. Op. at *9-10 (Fed. Cir., Sept. 28, 2021). This actually adds to rather than eliminates confusion, by emphasizing rather minor procedural points as a kind of shell game but doubling down on the aspect that runs contrary to recent Supreme Court precedent. The partial and selective quotation from Halo omits a number of grounds the Supreme Court held can support an award of enhanced damages. The relevant sentence in Halo reads in full: “The sort of conduct warranting enhanced damages has been variously described in our cases as willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or — indeed — characteristic of a pirate.” Halo, 136 S. Ct. at 1932. Notice how the Federal Circuit’s quote drops the word “willful” and others? And recall from above how Halo was primarily about enhanced damages awards encompassing conventional recklessness?

Willfulness and enhanced damages continuum graphic
The Disputed and Confusing Continuum of States of Mind for Willfulness and Enhanced Damages in Patent Cases, Before and After Halo

The visualization above is meant to show that there is a continuum of states of mind for “willfulness”, though there is a long line of cases from different areas of law that show that there is no definitive definition of how to describe “willful” intent in civil matters. Indeed, Justice Breyer’s concurrence in Halo noted that “‘[w]illfu[l]’ is a ‘word of many meanings whose construction is often dependent on the context in which it appears.'” Halo, 136 S. Ct. at 1936 (Breyer, J., concurring) (also contrasting behavior that is not “wanton” or “reckless”) (quoting Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 57 (2007), a case relied upon by the majority). Though it is indisputably clear that Halo found that conventional recklessness qualifies as willfulness for enhanced patent damages.

A typical description of recklessness is conscious and willful indifference to the risk imposed on the unlucky victim; not that the defendant intended to harm the victim, but that he knowingly imposed a risk on the victim, which could have been eliminated with minimum effort. See Anthony J. Sebok, “Purpose, Belief, and Recklessness: Pruning the ‘Restatement’ (Third)’s Definition of Intent,” 54 Vanderbilt Law Review 1165, 1177 (2001) (discussing punitive damages in product liability cases). Yet there is potential circularity in any continuum that would partly define one degree of “willfulness” in the patent context as “willful indifference”.

Despite argument over the proper descriptors of degrees of willful intent, the Supreme Court has said that these distinctions may be troublesome but are nonetheless necessary and that “the difference between one end of the spectrum—negligence—and the other—intent—is abundantly clear.” Daniels v. Williams, 474 U.S. 327, 334-35 (1986) (citing LeRoy Fibre Co. v. Chicago, M. & St. P. R. Co., 232 U.S. 340, 354 (1914) (Holmes, J., partially concurring) and O. Holmes, The Common Law 3 (1923)). But in Eko the Federal Circuit discusses only the opposite end of the spectrum from negligence and not the troublesome “middle” degrees of willful intent—namely the lowest degree of willful intent set forth in Halo: recklessness. In other areas of law, courts distinguish a “deliberate” state of mind as from a “reckless” one, with “deliberate” representing a higher degree of intent than “recklessness”. E.g., Express Scripts, Inc. v. Bracket Holdings Corp., 248 A.3d 824, 825 (Del. 2021) (“A deliberate state of mind is a different kettle of fish than a reckless one.”). It is problematic, to say the least, for the Federal Circuit to sidestep entirely these troublesome but necessary distinctions in degree by using terminology like “deliberate” and “intentional” that typically connotes a higher degree of intent than the recklessness standard set forth in Halo.

Further complicating matters is that the Federal Circuit has taken a contradictory position about what “should have known” means in patent and trademark cases. Sometimes the Federal Circuit says “should have known” means negligence while at other times appears to say it means recklessness. For instance, more than a decade ago it clarified the requirements to establish when fraud on the USPTO bars trademark registration. The Federal Circuit rejected the TTAB’s “should have known” fraud standard because it — supposedly — correlates to mere negligence. In re Bose Corp., 580 F.3d 1240, 1244 (Fed. Cir. 2009) (“[B]y equating ‘should have known’ with a subjective intent,” the TTAB “erroneously lowered the fraud standard to a simple negligence standard.”). The Federal Circuit has also interpreted “should have known” as equating to negligence in patent cases involving active inducement of infringement. And yet, in WesternGeco and Arctic Cat the Federal Circuit held that “should have known” is an appropriate standard for willfulness in patent cases under Halo. And Halo made clear that “a person is reckless if he acts ‘knowing or having reason to know of facts which would lead a reasonable man to realize’ his actions are unreasonably risky” and that such recklessness is sufficient to award enhanced damages. Halo, 136 S. Ct. at 1933; see also Motiva Patents, LLC v. Sony Corp., 408 F. Supp. 3d 819, 837 (E.D. Tex. 2019) (“Halo holds that recklessness alone is enough to show willful infringement.”).

Halo abrogated at least the “inelastic” part of Seagate that set the threshold for willfulness and enhanced damages too high because if failed to allow enhancement for conventional (subjective) reckless intent at the time of the conduct at issue. Now (since Eko and SRI), the Federal Circuit has seemingly done an end-run around Halo by requiring an elevated level of intent beyond recklessness in order to support discretionary “enhanced damages” following a finding of willfulness. An issue here is that Halo said, “Consistent with nearly two centuries of enhanced damages under patent law, however, such punishment should generally be reserved for egregious cases typified by willful misconduct.” Halo, 136 S. Ct. at 1933-34. But recent Federal Circuit cases make no reference to that nearly two century history and instead utilize rather tendentious, selective, and partial quotations from Halo suggesting that a heightened state of mind beyond conventional recklessness is required for enhancement following a willfulness determination (contrary to the holding in Halo).

In the past, the Federal Circuit said that willfulness and discretionary enhancement analyses were basically the same. E.g., SRI Int’l, Inc. v. Advanced Tech. Labs., Inc., 127 F.3d 1462, 1469 (Fed. Cir. 1997) (“The principal considerations in enhancement of damages are the same as those of the willfulness determination, but in greater nuance as may affect the degree of enhancement.”). The Read factors commonly used for these analyses were about the totality of the circumstances and did not draw any categorical distinctions between degrees of intent within the category of willfulness (e.g., between recklessness and knowing/deliberate states of mind). Now, the Federal Circuit seems to be heading in another direction with (purportedly) a different standard for discretionary enhancement than for willfulness determinations. See Ryan Davis, “Fed. Circ. Outlines Willfulness, Enhanced Damages Standards,” Law360 (Oct. 7, 2021).

So today patentees face a situation in which the Federal Circuit seems to have merely pushed the abrogated initially high (“objective recklessness”) threshold of Seagate to the back end of the discretionary enhanced damages analysis, with what looks unmistakably like a heightened subjective intent requirement—higher than, and contrary to, the conventional recklessness standard set forth in Halo. Though another way to look at this is to say that the Federal Circuit has actually heightened the threshold “willfulness” standard too, even though they deny doing so, because a “deliberate or intentional” requirement has long been considered a heightened level of intent compared to conventional recklessness. Either way, this seems to shield merely reckless conduct from punishment, contrary to Halo, and is an untenable position for the Federal Circuit that calls for either an en banc reversal or further action by the Supreme Court.

P.S. — I should have a magazine article forthcoming in mid-2022 dealing with willfulness/enhanced damages. It will discuss the way district courts have frequently overlooked (or even ruled contrary to) 35 U.S.C. § 298 when dealing with issues involving the minimum requirements for willfulness and the way some district court cases (not yet reached in any precedential Federal Circuit decision) seem to resurrect something that looks like the old, abrogated “duty of due care” standard that corresponded to mere negligence.

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Austen Zuege is an attorney at law and registered U.S. patent attorney in Minneapolis whose practice encompasses patents, trademarks, copyrights, domain name cybersquatting, IP agreements and licensing, freedom-to-operate studies, client counseling, and IP litigation. If you have patent, trademark, or other IP issues, he can help.

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Patent Searching: (Almost) Everything You Need to Know

Reproduced here are materials presented at the AIPLA CLE webinar Patent Searching: (Almost) Everything You Need to Know on September 14, 2021. The presentation slides, which include links to patent searching resources available online, are available for download below.


Introduction

Rather than a tutorial or “how-to” guide in the mechanics of searching, these program materials address important considerations that inform the planning, execution, and validation of all types of patent searches, including patentability, freedom-to-operate, invalidity, landscape, and due diligence searches. Readers will learn about timing considerations, budgeting and staffing models, export controls, privileges, evidentiary considerations for invalidity/patentability challenges, metrics for evaluating the effectiveness of a search, and more. This overview will be useful for those who perform searches themselves and those who outsource their searches to others.

I. Types of Patent Searches

The purpose of a patent “landscape” search is to ascertain the overall state of patents in a particular technology area.  While “state-of-the-art” is sometimes used synonymously with “landscape” here, a distinction can be drawn between a patent landscape search limited exclusively to patents and published patent applications and a state-of-the-art search that includes patent documents as well as non-patent publications and potentially also commercially-available products.  These searches are frequently used for competitive/business intelligence purposes.  Landscape searches may be limited to particular jurisdictions in some cases.  Reports and documentation for landscape searches are often focused on only high-level bibliographic information and the like and may omit detailed discussion of the content of specific patent claims.  Landscape search reports can be very basic but also can be highly elaborate with infographics and other more elaborate visual elements aimed at an audience of businesspeople—especially higher-level executives—rather than patent attorneys. 

Landscape searches are exploratory searches performed for business-related purposes and they are not legally required. 

A patentability search identifies potential prior art against a particular invention, and is performed in order to assess the likelihood that a patent would be granted on the invention and the potential scope of allowable/patentable subject matter.  They allow more informed judgments as to whether the costs and effort of a patent application will be worthwhile.  Results of a patentability search can also be utilized by the person(s) preparing a patent application on the invention to improve the quality of the application through better awareness of the closest prior art.[1]  The patentability search, as such, is the gathering of relevant prior art for purposes of a patentability analysis, which involves legal judgments beyond mere searching effort. 

The scope of a patentability search may be based on the contents of an invention disclosure document; changes or further developments to the invention that are not contained in such a document—or are simply not explicitly identified in a meaningful way—may not be captured by the search.  Patentability searches should capture disclosures contained anywhere in a given prior art document or product, including inherent disclosures and things visible only in the drawings.  Patentability searches ideally encompass both patent documents and non-patent publications, as well as commercially available products, available anywhere in the world.  However, as a practical matter, patentability searches are usually subject to significant constraints on their scope.  Most patentability searches are budget-constrained, whether in terms of a monetary budget or a time budget (e.g., needed by tomorrow).  Moreover, some patentability searches might be limited to only a search of patent documents, or in a database that covers only certain key jurisdictions or non-patent literature (NPL) publications.

Patentability searches are exploratory searches performed to enable a legal evaluation of patentability as well as to inform business decision-making but they are not legally required by the USPTO before filing a patent application.  Sometimes a patentability search is combined with a freedom-to-operate (FTO) search. 

Due diligence searches are performed in various contexts where it is desired to verify the current ownership/assignment of given patent(s) or application(s) and to identify potential clouds on title, to establish family and other bibliographic data, and to vet corporate mergers & acquisitions (M&A) that involve patent assets and other patent licensing or acquisition opportunities (e.g., to assess scope, validity, valuation).  In the due diligence context, searching may be focused on ascertaining ancillary data for a known or limited universe of patents.  Due diligence searches may shade into other types of searches.  For instance, a freedom-to-operate search may be performed to assess infringement risks associated with a product line or technology acquisition.  Also, sometimes invalidity searches are performed during acquisitions in order to assess the strength of acquisition targets or even to proactively attack the patents to create leverage to drive down acquisition cost.  Another situation where due diligence searches can be utilized is in preparation for enforcement. 

Due diligence searches can be considered exploratory searches.  There is generally no affirmative legal duty to perform a due diligence patent search.[2] 

An FTO search, also called a “clearance” or “right-to-use” search, is used to identify patents and pending patent applications that pose potential infringement risks associated with a particular product or process.[3]  “Contract clearance” searches are a subset of FTO searches for compliance with contract provisions.  The FTO search, as such, is the gathering of relevant patents and applications for purposes of an FTO analysis, which involves legal judgments beyond mere searching effort. 

The scope of an FTO search must generally first be ascertained by performing a “feature identification” or “product decomposition” analysis to identify discrete, potentially patentable features to be searched.  FTO searches focus on the claimed subject matter, and need not address non-patent materials.  Moreover, FTO searches may be limited to only jurisdictions where the product or process will be made, used, sold, or offered for sale—bearing in mind that contributory or induced infringement risks may expand the list of relevant jurisdictions in some situations. 

In order to have a reasonable basis to rule out potential infringement risks an FTO search must be reasonably comprehensive and reliable, meaning that FTO searches should ideally not be subject to arbitrary constraints.  Though in some situations an FTO search on particular feature(s) might be deferred or foregone if there is a reasonable basis to believe those feature(s) will present relatively low risk of infringement, such as where the particular feature of the product or process in question is confidently known to have been in commercial use (identically) for more than twenty years—making any recent patents directed to such a feature likely to be invalid. 

FTO searches are defensive searches performed to enable a legal evaluation of infringement risk.  Sometimes an FTO search is combined with a patentability or due diligence search.  A potential infringer is not subject to an adverse inference for failing to affirmatively conduct an FTO search and/or seek an opinion of counsel.[4]   Though the range of options to avoid liability is much greater if you find a potentially problematic patent before it finds you. 

An invalidity search is used to identify prior art that renders one or more claims of a given patent invalid.  Invalidity searches are often used to develop an invalidity defense to an allegation of infringement and/or to help establish a good faith belief in invalidity to avoid a charge of willful infringement through an advice of counsel defense.[5]  Depending on the context, such as for a challenge at the USPTO, the word “unpatentability” may apply instead of “invalidity”, in a strict sense.  In other countries, terms like “nullity” or “opposition” might be used instead of “invalidity” or “unpatentability”.  An invalidity/unpatentability search can further be used to identify prior art against one or more claims of a pending patent application, for potential use for a third-party pre-grant submission or third-party observations made to the relevant patent office. 

Invalidity searches should seek relevant disclosures contained anywhere in prior art documents or products, including inherent disclosures and things visible only in the drawings.  Invalidity searches ideally encompass both patent documents and non-patent publications, as well as commercially available products, available anywhere in the world.  Though the status of certain activities or documents as “prior art” may vary.  Research into commercially available products may take on the character of an investigation more than an exercise in database searching.  Because invalidity searches may be performed in high-stakes situations, they are often the most involved and comprehensive searches, because the extra effort and expense is justified.  For example, it may sometimes be worthwhile to commission multiple invalidity searches in different languages. 

Invalidity searches are defensive searches performed to enable a legal defense to be developed against an actual or potential allegation of infringement. Although invalidity searches are not legally mandated per se, they are generally necessary in a practical sense in order to develop and assert an invalidity defense or affirmatively challenge validity/patentability.[6] 

II. Timelines

Searches can be informally divided into two general categories: prospective and reactive

Prospective searches include landscape, patentability, and FTO searches.  The prospective category refers to a given search being performed in advance of some key decision point or action, such as before the launch of a product (FTO search), or the preparation and filing of a patent application (patentability).  Prospective searches inform such decisions and actions and, accordingly, should be timed so that completed search results are available to be analyzed prior to any deadlines for a decision or action. 

With respect to FTO searches, in particular, searching may be performed on an ongoing or periodic basis, such as to monitor patenting activity by particular competitor(s) and/or in particular technology area(s).  Additionally, there may be a need to watch the prosecution status of certain pending patent applications, to ascertain the scope of what, if anything, is later allowed or granted.  Some patent database tools include features to help facilitate various ongoing monitoring efforts.  Furthermore, FTO searches may need to be updated at a later point in time.  For instance, changes in product configuration may arise (e.g., manufacturability concerns arise close to a schedule product release that prompt a slightly different product configuration, or a new version of a product is developed years later) and require a new search—or at least a renewed analysis of existing search results.  Additionally, because patent applications are typically published 18 months from filing, though potentially only upon grant, at the time of any given FTO search there may be relevant but unpublished patent applications pending that can only be captured by a subsequent search. 

Invalidity and due diligence searches are reactive, in the sense that they are performed after some concrete or potential infringement risk comes to light or some need for confirmation arises.  There may still be deadlines for filing an answer to a complaint before a district court, filing a patent office challenge (e.g., PGR, IPR, opposition, observation), completing an M&A deal, or the like that constrains aspects of an invalidity search timeline.  One benefit of conducting FTO studies is that early identification of potentially problematic patents can help provide a longer time period for invalidity searching. 

III. Budgeting and Staffing

In the most general sense, patent searches are about solving information-retrieval problems.  While it is always (theoretically) desirable to conduct a “perfect” search, with hypothetical 100% recall and 100% precision, in the real world all searches are subject to constraints and a “perfect” search is not possible.  Those constraints may be in the form of deadlines or budget limits.  For instance, few if any patentability searches have an unlimited budget, and most operate on the premise of making reasonable efforts within some predetermined time and budget limits.  Any given search also usually includes express or implied limits on the databases, jurisdictions, and languages in which a search is conducted. 

The project management discipline has developed something called the “iron triangle”, which can be applied to the searching context.  In its most basic form, the “iron triangle” has three components: cost, speed, and quality.  Project management says you must pick only two of the three on any given project—you cannot have all three, even though those requesting searches often want all three.[7]  But the two factors selected will generally vary depending on the type of search, with patentability searches often sacrificing quality in order to achieve cost and speed objectives and with FTO and invalidity searches accepting slower timelines and/or greater costs in order to maintain high quality, for example.  Also note that if you do not pick two of the three, someone else will pick them for you.

For any given search, the amount of effort required varies depending on the density of patenting or publication in a given technology area.  Though at the beginning of a search that density may be unknown—usually this is only something that can be estimated well if numerous searches have previously been performed on related subject matter. 

graphic showing continuums of patent/publication density and search cost/effort
Continuums of Patent/Publication Density and Searching Cost/Effort

Searches can be performed by dedicated non-attorney searchers.  Though attorneys can perform searches themselves and it may be surprising to some that attorney-conducted searches may be more cost effective in some situations because legal analysis and searching per se can be done concurrently and features of search tools can help aid the legal analysis (e.g., by informing the attorney which particular keyword(s) returned a given reference and highlighting that term in a searchable document).  Prize/award-based “crowdsourcing” is another approach, usually best suited to invalidity searches. 

When retaining a person or firm to conduct a search, another common decision point is choosing between an experienced subject-matter expert (e.g., an in-house staff person) versus a “hired gun” (e.g., a professional searcher with little or no knowledge of the specific subject matter).  Because experience has a cost this is generally a cost vs. quality tradeoff. 

Export controls and similar provisions (e.g., ITAR, sanctions, DoD tranches) may prohibit (or limit) who can perform a given search, which may prohibit outsourcing a search abroad.[8]  For conventional export controls, the Commerce Control Lists (CCLs) establish what is subject to export restrictions.  The “EAR99” CCL designation generally applies to low-tech consumer goods that do not require export license in many situations.  However, “dual-use” export controls apply to things that have both military and non-military applications, and can be esoteric.  The Wassenaar Arrangement Control Lists also provide guidance on what is currently implicated by dual-use export controls.  Reexports and retransfers are also prohibited.[9]  As an example of reexport, consider that a person from a foreign country sends technical information to a searcher in the USA; the searcher may not be able to send (reexport) the same information back to that same person—here you can think of the USA like a “fly trap” for export-controlled information.  Lastly, even if you are operating entirely within the USA, a “deemed export” involves providing controlled information to a non-Green Card foreigner (or non-protected person) located in the USA.  That is, providing information to a foreigner physically located in the USA is “deemed” to be the same as exporting that information to the foreigner’s home country. 

IV. Resources for Conducting Searches

A. Introduction

It is often said that patent searching is more an art than a science.  There is no one-size-fits-all formula for conducting effective and reliable searches.  While searching does not become “easy” simply because you wish it was easy, and there is a learning curve, it is a skill that can be learned.  Fortunately, there are many resources available on the mechanics of how to conduct searches in the patent context.[10] 

There are many patent searching tools available, most of which are computer databases accessible via the Internet, though patent offices and affiliated libraries do offer some additional on-site-only resources for patent searching.[11]  Search engine functionality varies widely, with advanced features like proximity searching, bulk export of selected data, and highlighting of keywords within search results available only with certain tools.  In general, paywalled proprietary databases tend to have bells and whistles that can be helpful and save time.  Though user licenses can be significant and searchers who perform searches only occasionally will likely find yearly license fees cost-prohibitive. 

Whatever particular tool is used it is important to familiarize oneself with the scope of coverage (which jurisdictions are covered? what time periods are full-text searchable?) and the database’s search syntax, which refers to the particular operators used to command the search engine to run queries in particular ways.  While basic Boolean operators like “AND” and “OR” tend to be fairly universal, some tools require those operators to be in all caps.  More advanced operators like proximity commands or wildcard characters can be very different from one tool to the next.  Search syntax matters because a given search string or query inputted verbatim into different database tools may be parsed quite differently. 

B. Principal Database Searching Methods

While it is still possible to search for information by visiting a library and locating relevant physical publications, most patent-related searching today is performed using computer databases, most of which are now accessible via the Internet.  Computer databases useful for patent searches can be queried in a number of different ways that are ultimately a function of both the database’s search engine and metadata structure and content. 

Keyword searching, which is generally synonymous with Boolean searching, involves inputting keywords and Boolean operators (“AND”, “OR”, etc.) into a keyword string or query that the database’s search engine parses against its contents.  Database search engines have vastly different capabilities.  For instance, proximity operators are available with some databases that can be used to greatly increase the precision of keyword-based queries.  Moreover, some databases are only full-text searchable back to a particular historical date.  But be aware that not all databases or search engines are perfect, even the most full-featured tools.  A database populated by text obtained through optical character recognition (OCR) may contain errors that frustrate efforts to use the database’s search engine.  Databases that utilize machine translations of foreign patent documents for search queries may produce unreliable or unexpected machine translations in some instances.  Also, and perhaps less widely known, is that database providers may parse keyword strings in ways that deviate from what a searcher has inputted in given query.  For instance, in order to manage server computer hardware loads, to “enhance” searches, or for another reason, some search engines will include automatic thesaurus and/or pluralization functions or will parse defined phrases with spaces in between characters or as proximity searches (without the user inputting proximity operators).  Such features may increase recall but at the same time may decrease precision.  Conversely, some search engines may limit proximity searches to individual paragraphs, omitting from search results the presents of terms that are as proximate as specified but in two different paragraphs, which may reduce recall. Thesaurus functions can be helpful but cannot be relied upon exclusively.  Not only are the thesaurus lists generally hidden within a “black box” of the database software, but they often are inadequate to capture variations in technical terms used in the patent context.  For instance, an automatic thesaurus is unlikely to recognize that while “shopping cart” is a term used commonly in the USA, in Great Britain and Australia the term “shopping trolley” is used instead, or be able to ascertain whether “backhoe” and “excavator” are synonyms within the context of a given patent search.  Translations can also be a factor here.  For that matter, patentees can act as their own lexicographer.  So, a search for automatic license/number plate recognition (ALPR/ANPR) tools using conventional terminology may not locate a patent that describes such a tool as a “parkulator” (a completely invented word).[12] 

Classification searching involves reviewing patent documents according to subject-matter classifications made by patent offices.  Historically, before the advent of computerized databases, searching hard copies of patent documents by classification (stored in “shoes” at the USPTO) was the only way to search patents.  Today, there are a number of different classification systems currently in use, as well as ones that are no longer in use but can still be utilized in some situations.  The main classification systems currently in use are the International Patent Classification (IPC) system, the Cooperative Patent Classification (CPC) system, the Japanese File Index/Facet (FI) and File Forming Term (F-term) systems, and the Locarno system for design patents (and industrial designs).  The main discontinued classifications that may still have some value are the U.S. Patent Classification (USPC) system and the European Patent Classification (EPC) system, both of which were retired by the end of 2014.  While patent offices have made efforts to re-classify old patent documents under the current classification systems, the nature of differences between the old and new classification systems means that there is at most a statistical correspondence between the two that varies for different subject matter areas. 

In general, patent classification systems establish a taxonomy that includes multiple levels of detail, with highest-level classes and then multiple sub-classes within them (plus main groups/subgroups for the IPC).  Manuals or guides are available explaining these taxonomies, including descriptions of the subject matter that each class/subclass is intended to cover.  Classifications are assigned to individual patent documents by examiners, generally at an initial or pre-examination stage.  Because the process of classification necessarily involves certain judgments, classifications can be prone to human error.  Moreover, even in the best of circumstances, classifications are never perfect.  For instance, at any given point in time classification systems may not recognize certain emerging technology areas in the sense that there may not be specific sub-classes in which to categorize such emerging technologies.  Also, there may be subtle disclosures, such as things shown only in figures and/or left up to implication in the text, that may not be completely captured by a given patent office’s classifications.   And yet, classifications can be a useful tool for patent searching.  It is possible to combine classifications with particular keywords/terms as part of Boolean searches, which can be a powerful strategy to increase the precision of queries.

Forward and backward searching refers to searching references that are cited in the “references cited” section of a given relevant patent (backward searching) or searching for later patents in which the “references cited” section cites back to a given relevant patent (forward searching).  The essence of forward and backward searching is that you begin with one or more patent documents that you have already determined to contain relevant subject matter and then you piggyback on prior searches that others have performed in relation to other patents, leveraging the past efforts of others to compile groupings of technologically-related references.  In other words, forward and backward searching treats citations within and back to a given relevant patent as a kind of quasi-classification system. But forward and backward searching can never be the initial starting point for a search, because you must begin with at least one relevant patent—ideally the most relevant patent(s) you could find through other avenues.  Yet forward and backward searching can sometimes be the most effective method for increasing search recall. The same principles can be applied to citations and bibliographies in non-patent literature.

Other available patent searching tools utilize natural language searching, semantic searching, machine learning, artificial intelligence (AI), or the like.  Typically, such search tools utilize some type of proprietary algorithms to parse and execute search queries.  With natural language, semantic, or AI searching, the general idea is often that a searcher inputs words in a narrative format—unlike formal Boolean search syntax—and the tool applies its algorithms to convert those inputs into one or more queries that are run against the database to produce a result set.  Of note is that the use of proprietary algorithms mean that the search tool runs these searches through what can be called a “black box”—the searcher typically has no idea what happens inside that black box and thus no real sense of what might be omitted or excluded from the result set.  Some evidence from the legal research context suggests that experienced attorneys do not trust “black box” search algorithms.[13]  There are some tools, potentially most applicable to design patent searching (or trade dress searches), in which a searcher uploads an image file and the search tool utilizes image matching software to try to locate documents containing similar images.  As of today, there is generally a lack of independent and peer-reviewed studies to validate the effectiveness of AI (etc.) patent searching tools.  Vendors frequently make claims about studies they have done themselves, though it is difficult to place any trust in such studies used for marketing purposes when often there is no disclosure of the methodology employed and vendors have strong incentives to succumb to self-interest bias.  Much of the available literature on the subject can be characterized as marketing “advertorials”.  And for that matter, because AI-powered tools almost always rely on proprietary “black box” algorithms there is no way to know how a study involving one black box relates to another black box—or even if a study of a given search tool in the past still applies to that search tool, given that changes to that proprietary tool may occur within the black box without any way for a user or investigator to know.  These concerns echo the reasons experienced attorneys do not trust black box legal research tools or with concerns over law enforcement usage of AI-powered facial-recognition tools or the like[14]—control is being surrendered over aspects of search queries to algorithms premised on undisclosed assumptions that may be important to outcomes.  Perhaps as AI-powered patent searching tools become more sophisticated they will play a larger role.  But as of today, a good rule of thumb is to rely principally on human-guided searches and utilize AI-type search tools only in a secondary sense, such as for initial “quick-start” or “drunk walk” search orientation efforts before running substantive queries, last-step search validation or auditing, or supplemental, almost “hail Mary pass” efforts to perhaps get lucky and find additional art otherwise missed through other avenues. 

C. INID and Kind Codes

“INID” is an acronym for “Internationally agreed Numbers for the Identification of (bibliographic) Data” on patents.[15]  Also referred to informally as “field codes”, these codes embody a system for the international harmonization of bibliographic data (or metadata) appearing on published patent documents, such as for the title (54), assignee name(s) (73), filing date (22), issue/grant date (45), etc. 

INID CodeData Field Content
(10)Publication/Patent Number
(22)Filing Date
(43)Application Publication Date
(45)Grant/Issue Date
(54)Title
(71)Applicant(s)
(73)Assignee(s)
(86)PCT Filing Details
Table of Selected INID “Field” Codes

These INID/field codes can be tremendously useful when fetching individual patents in another language.  For example, either by referring to a table that identifies INID code numbers and the associate data content description, or simply referring to a sample patent in a known language, the location of similar data on a foreign-language patent document can be located.  While machine translations of patent documents are now frequently available, machine translations of very old patent documents are not always available.  And many machine translation tools may be unable to reliably parse PDFs of old patent documents, though it may be possible to perform limited machine translations of just particular text—such as within a given INID field—to ascertain some basic information about a given patent document.  

Comparison of INID “Field” Codes Between Patents in Different Languages
Camera-Based Partial Machine Translation of Selected Patent INID “Field” Contents

“Kind codes” identify type of patent and generally appear as a letter or letter and number (e.g., “A1” or “B2”) immediately after the patent or publication number.[16]  The USPTO only began printing kind codes on U.S. patent documents on January 2, 2001, so older U.S. patents lack a kind code.  Some countries have different types of patents—like utility models—that do not exist in the USA.  And systems for assigning numbers to patents has, historically, not been particularly harmonized internationally. 

Perhaps most confusing to U.S. practitioners is the Japanese patent numbering system, which in the past has assigned the same numbers to different patents differentiated only by the kind code. 

Another potentially confusing practice involves the treatment of old U.S. patents that were issued without any kind code on their face to which the “A” kind code (without a numerical digit) is retroactively applied.  This is potentially confusing because WIPO kind codes “A1”, “A2”, and “A9” are currently used by the USPTO to designate published patent applications.  In other words, the old granted patent “A” designation retroactively applied in searching databases can easily be confused with the new “A1”, “A2”, and “A9” designations that apply only to published applications and never to granted patents. 

V. Metrics for Evaluating Searches

The key metrics for evaluating information retrieval effectiveness in the patent context (or other library science contexts) are “precision” and “recall”.  Recall is the proportion (%) of all relevant documents retrieved in a given search query or overall search; recall is hypothetically expressed as:

Recall = relevant documents actually retrieved divided by universe of all relevant documents

Precision is the proportion (%) of relevant documents versus irrelevant documents retrieved in a given search query or overall search; precision is hypothetically expressed as:

Precision = relevant documents retrieved divided by total relevant & irrelevant documents retreived

Put yet another way, perhaps more informally, “recall” measures how completely relevant materials have been located while “precision” measures how much unwanted or useless material has been captured.  Library science has shown that recall and precision are tradeoffs with any given search query.[17]  That is, increasing recall generally decreases precision and vice-versa

In the patent searching context, 100% recall is always desired but 100% recall is only a theoretical objective.  There is no way to know, definitively, the universe of all relevant materials against which to compare a given query or overall search.  After all, if you knew at the outset what all the relevant materials were, why would you bother conducting a search merely to confirm what you already know?  And yet, if further searching returns additional relevant results than you can retroactively determine that a prior query or set of queries had less than 100% recall.  The rub is that this aspect of ascertaining 100% recall is like the impossibility of “proving a negative”: no matter how much you have searched, you can never know for certain whether or not there is at least one additional relevant reference that you simply have not yet located.  At best, certain protocols can be employed as proxies for 100% recall (e.g., searching X number of databases for Y number of hours, finding no more relevant results after a certain number of queries or period of time, etc.) but such proxies necessarily involve certain assumptions that can always be questioned. 

When is search complete? graphic, with learning curve-like graph

Practically speaking, precision is about efficiency and reliability.  Search results that include irrelevant materials can raise questions about the reliability of the search—did the searcher not understand the specific information being sought?—and can also waste time—both in terms of requiring more efforts by the searcher but also impeding later work by anyone else utilizing imprecise, cluttered search results for a legal analysis or to make business decisions. 

Some patent searching databases assign “relevancy” scores to individual results in a given query.  Such “relevancy” scores are generally determined by proprietary algorithms baked into the database’s software.  Whether the judgments embodied in those algorithms suit a searcher’s purpose is hard to know.  Most vendors do not make public the algorithms or weighting used to assign relevancy scores.  Searchers can anecdotally attest to performing searches where the “silver bullet” prior art was assigned a low relevancy score by the database tool.  Database “relevancy” scores are not meaningful as metrics for assessing search quality.  Though they might still be useful in (theoretically) presenting voluminous query results in an order that is more helpful for review. 

VI. Evidentiary Burdens, Privileges, and Disclosure Duties

A. Evidentiary Issues for NPL References and Public Use/On-Sale Evidence

District court proceedings where invalidity is alleged follow the Federal Rules of Evidence (FRE).[18]  PTAB trials at the USPTO (PGRs, IPRs, Derivations) also generally follow the FRE.[19]  Under the FRE, a document introduced as “prior art” must satisfy rules requiring authentication and prohibiting hearsay (unless an exception applies).[20]  These evidentiary burdens are not a concern for U.S. patents and published patent applications, which as “public records” are self-authenticating (FRE 902) and fall in a hearsay exception (FRE 803(8)) to qualify them as prior art.  In practical terms, authentication/hearsay objections to foreign patents and published patent applications are unlikely—and a party bringing such objections is just going to annoy the judge.  Evidentiary issues surrounding domestic and foreign patents should really only arise in rare if not unheard-of situations where forgeries are being proffered.  But evidentiary issues for NPL references, on-sale activities, and the like cannot be taken for granted.[21]  For instance, the Federal Circuit has held that “corroboration is required of any witness whose testimony alone is asserted to invalidate a patent.”[22] 

However, during ordinary examination and reexamination lower evidentiary standards apply to NPL references and compliance with the FRE (or similar PTAB trial procedures) is unnecessary.[23]

B. Qualifying a Non-Patent Literature (NPL) Reference as “Prior Art”

In order to qualify as “prior art”, an NPL reference must be established as a “printed publication” that was sufficiently generally “publicly accessible” before the critical date—and that must be done in accordance with the hearsay and authentication requirements discussed above for district court litigation and PTAB trials.  “‘[P]ublic accessibility’ has been called the touchstone in determining whether a reference constitutes a ‘printed publication[.]’”[24]  “A reference will be considered publicly accessible if it was disseminated or otherwise made available to the extent that persons interested and ordinarily skilled in the subject matter or art exercising reasonable diligence[] can locate it.”[25]  “Whether a reference is publicly accessible is determined on a case-by-case basis based on the ‘facts and circumstances surrounding the reference’s disclosure to members of the public.’”[26]  Limited distribution, even to those skilled in the art, may not amount to “publication” unless the material is otherwise so situated that “anyone who chooses may avail himself of the information it contains.”[27]  While evidence of “indexing” can establish public accessibility, it is merely one among many ways to establish “printed publication” status.[28]

In the invalidity context, it cannot be assumed that a copyright date, printing date, Internet server upload date, or the like appearing on the face of the NPL reference will necessarily satisfy public availability evidentiary requirement.  Courts and the PTAB have rejected such arguments in numerous cases.[29]  But clear indications on or within an NPL reference evincing publication by an established publisher with traditional hallmarks of publication (ISBN, etc.) might be sufficient.  Courts and the PTAB have occasionally found such evidence sufficient, particularly when dealing with very conventional publications like a (hard copy) book from a well-known publisher or an industry standard published by a well-known standards-setting organization.[30]  Commonly, the publication of NPL materials is substantiated by testimony from a librarian who cataloged or indexed a book or magazine as of a particular date.  In those situations, merely finding a particular disclosure is not enough to qualify the NPL reference as “prior art”—it may also be necessary to locate a witness to corroborate public accessibility. 

Materials from Internet web sites constitute an important category of NPL references where hearsay concerns can be significant.  Once again, the mere appearance of a date on the face of a web page (or in the URL, etc.) will not ordinarily be sufficient to establish the web page as a printed publication that qualifies as “prior art” before a critical date.  It is possible to offer witness testimony to establish web page publication, just as with books, magazines, and the like.  But one unique avenue for satisfying evidentiary burdens to qualify a web page as prior art is to utilize archival records from the Internet Archive’s “Wayback Machine” (archive.org) or its equivalent.[31] 

Other ephemeral or temporarily displayed materials, such as posters, videos, or presentation slides temporarily displayed at trade shows or conferences, raise other unique issues regarding their status as printed publications that qualify as “prior art”.[32]  But they may qualify as prior art under various circumstances.

Also remember that standards of proof differ depending on where a validity or unpatentability challenge is lodged.  A preponderance of the evidence standard is applied at the USPTO whereas a clear and convincing evidence standard is applied in district courts.  These different standards of proof can make a difference in whether or not available evidence establishes something as “prior art”.  Some reported decisions are less than explicit about the standard of proof being applied, which may help make sense of decisions that otherwise might seem inconsistent. 

C. Privileges and Their Limits

The attorney-client privilege and work-product protections may shield certain materials from discovery.  Yet materials generated in connection with searches are not always privileged. 

Attorney-client privilege only applies to communications actually sent, and only when seeking or providing legal advice.[33]  Such communications must involve an attorney or someone acting under the supervision and control of an attorney; and just because a communication involves an attorney does not automatically mean it is privileged.  Privilege law varies across district courts and circuits but some courts have held that the acts of counsel, the general topics of discussion, and the ultimate legal conclusions are not privileged.  Moreover, communications involving in-house counsel are often scrutinized more closely and may be subject to a rebuttable presumption that they contain business rather than legal advice.[34]  In general, anything that would have to be disclosed on a privilege log in litigation is not privileged.[35]  For instance, a privilege log may need to identify patents by number, and documents found during patent infringement/prior art searches or reviewed by an expert witness might need to be identified or disclosed.[36]

Work product protection can preclude discovery of documents and tangible things that are “prepared in anticipation of litigation or for trial” by or for another party or its representative (including the other party’s attorney, consultant, or agent).[37]  Work product protections can apply to the work product of non-attorneys but will not apply where business considerations predominate (regardless of the involvement of any attorney(s)).[38]  Also, work product protection is not absolute, and can be overcome if the materials are otherwise discoverable and the party seeking discovery shows that it has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means.[39] 

D. Duty of Disclosure

The duty of disclosure applicable to pending U.S. patent applications may necessitate some additional steps when relevant prior art is located in a search.  “Each individual associated with the filing and prosecution of a patent application has a duty of candor and good faith in dealing with the [USPTO], which includes a duty to disclose  . . . all information known to that individual to be material to patentability . . . .”[40]  Deliberately withholding prior art material to patentability can render any resulting patent unenforceable.[41]  Anyone substantively involved[42] with pending U.S. patent application(s) who receives search results on related subject matter should consider the need to submit search results on an information disclosure statement (IDS). 

VII. Considerations for USPTO Post Grant Proceedings

Strategic and legal considerations regarding the type of post-grant challenge that might be leveled against a given patent will vary depending upon the available prior art.  For that reason, it is usually desirable to locate prior art, or at least most of it, before deciding which type of post-grant proceeding will be sought.  For example, certain types of post-grant proceedings can only be based on patents and printed publications.  Moreover, the thresholds for institution of different types of proceedings vary;[43] though one constant is that all USPTO post-grant proceedings are based on a preponderance of the evidence standard for patentability while district court actions are based on the higher clear and convincing evidence standard for invalidity.  Lastly, IPR institutions are on an all-or-nothing basis.[44] 

PTAB trials involve estoppel that bars any further challenge based on any ground the petitioner “raised or reasonably could have raised” in a prior proceeding.[45]  This amounts to a “use it or lose it” (or “cite it or forgetaboutit”) opportunity to present prior art in a PTAB trial petition for institution, and requires that essentially all prior art searching be completed before the petition is filed—and therefore, practically speaking, before a petition can be prepared by legal counsel.  The PTAB and some district courts have interpreted and applied the “raised or reasonably could have raised” standard by asking whether a skilled searcher conducting a diligent search reasonably could have been expected to discover the prior art reference in question.[46]  The PTAB has applied this standard in a rather strict and formalistic way, showing no sympathy if locating a patent document would have required “brute force” manual review of tens or hundreds of thousands of patents not in any apparently relevant class/subclass.[47]  Courts have also considered whether particular prior art, such as a physical product that is not a “printed publication” but was potentialyl was on sale or in public use, reasonably could have been raised in a PTAB trial.[48] 

On the other hand, estoppel does not arise from ex parte reexamination.  Though collateral estoppel (issue preclusion) from prior litigation can still apply to reexams.[49]  Additionally, it is more difficult to sustain the unchanging clear and convincing evidence burden for subsequent invalidity challenges in district court when the USPTO already considered the same art.[50] 

VIII. Considerations for Design Patents

For design searching, “brute force” manual review of all designs in relevant classifications is recommended.  A major reason is that design patents have so little text that keyword searching is frequently unreliable.  There is so little text that explanatory statements that normally appear in utility patents to provide an enabling disclosure for functional features is absent in design patents focused on ornamentation.  And what little text there is in design patents might use words that are not especially helpful or reliable for purposes of a keyword search.  Though initial keyword searching can still be helpful when seeking to identify relevant Locarno classifications.  Another tip is to be sure to check for alternate embodiments that are not depicted in a representative figure on the front page of the design patent (or shown in representative thumbnail views by search tool databases).  Another point to consider for design patents is that some subject matter areas may have relatively few prior art design patents, even in areas where commercial products have been sold and publicly used for decades.  In such situations it may be necessary to investigate non-patent prior art in the form of evidence of on-sale activities, etc.  Such investigations may call for a substantially different approach and timeline.  Actually, such investigations may require considerable effort to locate and authenticate suitable evidence including witnesses/declarants

Another challenge with design patent searching is that the Federal Circuit looks to the perspective of the ordinary designer (rather than the ordinary observer) for obviousness analyses and applies a two-part Durling test for obviousness.[51] 

Somewhat unique to design patents is the opportunity to present prior art for a three-way comparison between images of the asserted patent, the prior art, and the accused product in “close” cases.[52]  The burden is on the accused infringer to bring forward evidence of the closest prior art for a three-way comparison.[53] 


Photo of Austen Zuege

Austen Zuege is an attorney at law and registered U.S. patent attorney in Minneapolis whose practice encompasses patents, trademarks, copyrights, domain name cybersquatting, IP agreements and licensing, freedom-to-operate studies, client counseling, and IP litigation. If you have patent, trademark, or other IP issues, he can help.


Book available from the ABA. Includes extended treatment of patent searching techniques.


Endnotes:

[1] See Paul C. Haughey, “Patentability Searches – Bust or Save In-house Counsel Budgets?” Lexology (April 9, 2020).

[2] E.g., Digeo, Inc. v. Audible, Inc., 505 F.3d 1362, 1369-70 (Fed. Cir. 2007) (case not exceptional [frivolous] because defendant did not establish plaintiff knew or should have known it lacked legal title due to alleged forgeries); Q-Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 1295, 1303 (Fed. Cir. 2004) (reasonable belief in presumption of validity made suit nonfrivolous under Rule 11). 

[3] See, generally, Patent Freedom to Operate Searches, Opinions, Techniques, and Studies (Austen Zuege, ed., ABA 2017).

[4] 35 U.S.C. § 298; see also Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337, 1345-46 (Fed. Cir. 2004) (en banc) abrogated by In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007) (en banc); Seagate, 497 F.3d at 1371 abrogated on other grounds by Halo Elecs., Inc. v. Pulse Elecs., Inc., 979 U.S. ___, 136 S. Ct. 1923 (2016).

[5] See, e.g., The Sedona Conference, “Commentary on Patent Litigation Best Practices: Willful Infringement Chapter” (July 2020 Public Comment Version).

[6] There may be rare situations in which relevant prior art is already known without conducting an invalidity search, though even then a search to locate additional prior art may have value. 

[7] E.g., Mike Morrison, “The Project Management Triangle – Time, Quality, Cost – You Can Have Any Two,” (March 23, 2017).

[8] See 15 C.F.R. Part 730; 22 C.F.R. Part 120; 31 C.F.R. Part 501; Bureau of Industry and Security, “Export Administration Regulations (EAR)”; U.S. Department of State, “Understand the ITAR and Export Controls”; Krauland et al., “State Department Publishes Long-awaited ITAR Rule on Encryption and Other Excluded Activities” Lexology (Dec. 24, 2019); U.S. Dept. of the Treasury, “Sanctions Programs and Country Information”; U.S. Dept. of the Treasury, “Consolidated Sanctions List Data Files”; U.S. Dept. of Defense, “DOD Releases List of Additional Companies, In Accordance with Section 1237 of FY99 NDAA” (Jan. 14, 2021).

[9]  15 C.F.R. § 734.14; 22 C.F.R. §§ 120.19 and 120.51.

[10] E.g., Patent Freedom to Operate Searches, Opinions, Techniques, and Studies, supra; Stephen P. Harter, Online Information Retrieval: Concepts, Principles, and Techniques (1986); David Hunt et al., Patent Searching: Tools & Techniques (2007); WIPO, “Guidelines for Preparing Patent Landscape Reports” (2015).

[11] See WIPO, “INSPIRE” at <https://inspire.wipo.int>.

[12] U.S. Pat. No. 6,243,029 B1.

[13] Brian Sheppard, “Does Machine-Learning-Powered Software Make Good Research Decisions? Lawyers Can’t Know for Sure,” ABA Journal New Normal (Nov. 22, 2016).

[14] See, e.g., Grother et al., National Institute of Standards and Technology (NIST), “Face Recognition Vendor Test (FRVT) – Part 3: Demographic Effects,” NISTIR 8280 (Dec. 2019); “What is Math Washing?,” (last visited Jan. 29, 2021); Lyle Moran, “Pretrial Risk-Assessment Tools Should Only Be Used if They’re Transparent and Unbiased, Warns ABA House” (Feb. 14, 2022).  Note also Jacques Lacan’s concept of “university discourse.”  See, e.g., Jeffrey & Dolar, “The Sting of Knowledge,” The Point Magazine, Issue 16 (April 23, 2018); Bruce Fink, The Lacanian Subject (1995), pp. 132-33.

[15] WIPO, “Standard ST.9: Recommendation Concerning Bibliographic Data on and Relating to Patents and SPCS” (June 2013); WIPO, “Standard ST.80: Recommendation Concerning Bibliographic Data Relating to Industrial Designs” (February 2004); MPEP § 901.05(b)

[16] WIPO, “Standard ST.16: Recommended Standard Code for the Identification of Different Kinds of Patent Documents” (Oct. 2016); MPEP § 901.04(a); USPTO, “‘Kind Codes’ Included on the USPTO Patent Documents” (Sept. 18, 2013).

[17] David M.W. Powers, “Evaluation: From Precision, Recall and F-Measure to ROC, Informedness, Markedness & Correlation,” 2(1) J. Machine Learning Techs. 37, 37-63 (2011).

[18] See also, generally, Evidence in Patent Cases (Dorsney, ed., Bloomberg Law 2018).

[19] 37 CFR § 42.62; see also USPTO, “Hearsay and Authentication” (Dec. 6, 2018).

[20] Article VIII – FRE 801-807: Hearsay; Article IX – FRE 901-903: Authentication; but see, e.g., 37 CFR § 42.61 (admissibility in PTAB trials). 

[21] Cf. Wi-LAN Inc. v. Sharp Elecs. Corp., 992 F.3d 1366 (Fed. Cir. 2021) (proffered evidence of infringement inadmissible at summary judgment for lack of suitable authentication; 3d Circuit law applied).

[22] Texas Digital Sys., Inc. v. Telegenix, Inc., 308 F.3d 1193, 1217 (Fed. Cir. 2002); see also Juicy Whip, Inc. v. Orange Bang, Inc., 292 F.3d 728, 741-42 (Fed. Cir. 2002) (“rule of reason” and factors for assessing sufficiency of corroboration).

[23] E.g., MPEP § 2128 (date on a document can establish its publication for examination purposes unless applicant challenges it); Ex parte Grillo-López, Appeal No. 2018-006082 at *2-3 (PTAB, Jan. 31, 2020) (precedential) (lower examination standards vs. higher IPR standards to establish publication).

[24] In re Hall, 781 F.2d 897, 899 (Fed. Cir. 1986).

[25] Medtronic, Inc. v. Barry, 891 F.3d 1368, 1380 (Fed. Cir. 2018).

[26] In re Lister, 583 F.3d 1307, 1311 (Fed. Cir. 2009) (quoting In re Klopfenstein, 380 F.3d 1345, 1350 (Fed. Cir. 2004)); see also Blue Calypso, LLC v. Groupon, Inc., 815 F.3d 1331, 1348 (Fed. Cir. 2016) (“Whether a reference qualifies as a printed publication is a legal conclusion based on underlying factual determinations.”).

[27] In re Bayer, 568 F.2d 1357, 1360, 1362 (CCPA 1978).

[28] E.g., In re Lister, 583 F.3d at 1312 (“neither cataloging nor indexing is a necessary condition for a reference to be publicly accessible.”).

[29] E.g., Samsung Electronics Co., Ltd. v. InfoBridge Pte. Ltd., IPR2017-00099,-00100, Paper 43 (PTAB, Nov. 13, 2020) (remanded from Samsung Elecs. Co., Ltd. v. InfoBridge Pte. Ltd., 929 F.3d 1363, 1372 (Fed. Cir. 2019)); Acceleration Bay, LLC v. Activision Blizzard Inc., 908 F.3d 765, 773 (Fed. Cir. 2018); Blue Calypso, LLC v. Groupon, Inc., 815 F.3d 1331, 1348-49 (Fed. Cir. 2016); Open Text SA v. Box, Inc., No. 3:13-cv-04910, 2015 WL 4940798 at *7 (N.D. Cal. Aug. 19, 2015); CNET Networks, Inc. v. Etilize, Inc., 584 F. Supp. 2d 1260, 1274 (N.D. Cal. 2008).

[30] E.g., VidStream LLC v. Twitter, Inc., 981 F.3d 1060, 1066-67 (Fed. Cir. 2020); Hulu, LLC v. Sound View Innovations, LLC, Case IPR2018-01039, Paper 29 at *17-21 (PTAB, Dec. 20, 2019) (precedential); Ericsson Inc. v. Intellectual Ventures I LLC, IPR2014-00527, Paper 41 (PTAB, May 18, 2015); Kyocera Wireless Corp. v. Int’l Trade Comm’n, 545 F.3d 1340, 1351 (Fed. Cir. 2008).

[31] Valve Corp. v. Ironburg Inventions Ltd., Nos. 2020-1315, 2020-1316, and 2020-1379, Slip Op. at *16  (Fed. Cir., Aug. 17, 2021); James L. Quarles III and Richard A. Crudo, “[Way]Back to the Future: Using the Wayback Machine in Patent Litigation,” ABA Landslide, Vol. 6, No. 3 (Jan./Feb. 2014); see also Internet Archive, “Frequently Asked Questions”; Archive.Today at <https://archive.is>.

[32] See, e.g., Medtronic, 891 F.3d at 1379-83; Initiative for Medics., Access & Knowledge (I-MAK), Inc. v. Gilead Pharmasset LLC, IPR2018-00123, Paper 7 at *8-11 (PTAB, June 13, 2018); In re Klopfenstein, 380 F.3d at 1347-50; Ecolochem, Inc. v. S. Cal. Edison Co., 227 F.3d 1361, 1369-70 (Fed. Cir. 2000).

[33] See, generally, Jackie Unger, “Maintaining the Privilege: A Refresher on Important Aspects of the Attorney-Client Privilege,” Business Law Today (Oct. 2013).

[34] E.g., Lindley v. Life Inv’rs Ins. Co. of Am., 267 F.R.D. 382, 389 (N.D. Okla. 2010), aff’d in part as modified, No. 08-CV-0379-CVE-PJC, 2010 WL 1741407 (N.D. Okla., Apr. 28, 2010).

[35] See F.R. Civ. P. 26(b)(5); see also, e.g., Travis S. Hunter and Sara M. Metzler, “Is It Privileged? A Young Lawyer’s Guide to Preparing a Privilege Log in Commercial Litigation,” ABA Practice Points (June 29, 2018); Michael Downey and Paige Tungate, “Practical Advice on Privilege Logs,” Law Practice Today (Sept. 14, 2018). 

[36] E.g., Baxter Int’l, Inc. v. Becton, Dickinson and Co., No. 17-C-7576 (N.D. Ill, July 26, 2019); BASF Catalysts LLC v Aristo, Inc., No. 2:07-cv-222, 2009 WL 187808 (N.D. Ind., Jan. 23, 2009); Adobe Inc. v. RAH Color Techs. LLC, Nos. IPR2019-00627, -00628, -00629, -00646, Paper 59 (PTAB, Dec. 12, 2019).

[37] F.R. Civ. P. 26(b)(3)(A)

[38] E.g., Sioux Steel Co. v. Prairie Land Millwright Servs., Inc., No. 1:16-cv-02212 (N.D. Ill., May 19, 2021) (factual information in technical drawings related to attempts to design around patent discoverable, but counsel’s mental impressions and opinions about those efforts and legal advice sought or received not discoverable); In re Google Inc., 462 F. App’x 975, 976-79 (Fed. Cir. 2012) (nonprecedential) (email captioned “Attorney Work Product” expressing need for license was a technical/business investigation not protected work product, nor attorney-client privileged); Takeda Chem. Inds., Ltd. v. Alphapharm Pty., Ltd., No. 04-cv-1966, 2005 WL 1678001 (S.D.N.Y., July 19, 2005) (routine patent searches in ordinary course of business, irrespective of litigation, not protected work product).

[39] F.R. Civ. P. 26(b)(3)(A)

[40] 37 C.F.R. § 1.56; see also MPEP Chapter 2000.

[41] Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011 (en banc); see also, e.g., GS Cleantech Corp. v. Adkins Energy LLC, 951 F.3d 1310, 1328-32 (Fed. Cir. 2020).

[42] See Avid Identification Sys. Inc. v. Crystal Import Corp. SA, 603 F.3d 967, 974 (Fed. Cir. 2010).

[43] See USPTO, “Major Differences Between IPR, PGR, and CBM”.

[44] SAS Institute, Inc. v. Iancu, 584 U.S. ___, 138 S.Ct. 1348 (2018).

[45] 35 U.S.C. §§ 315(e) and 325(e); see also Wi-LAN Inc. v. LG Elecs. Inc., 421 F. Supp. 3d 911, 923-24 (S.D. Cal. 2019).

[46] Wasica Finance GmbH v. Schrader Int’l, 432 F. Supp. 3d 448, 453 (D. Del. 2020); IBM Corp. v. Intellectual Ventures II LLC, No. IPR2014-01465, Paper 32 at 5 (PTAB, Nov. 6, 2015).

[47] Valve Corp. v. Ironburg Inventions Ltd., IPR2017-00137, Paper 43 (PTAB, Jan. 25, 2018).

[48] E.g., The California Inst. of Tech. v. Broadcom Ltd., No. 2:16-cv-03714, Slip. Op. at *7-10 (C.D. Cal., Aug. 9, 2019); Wasica, 432 F. Supp. 3d at 452-55; Star Envirotech, Inc. v. Redline Detection, LLC, No. 8:12-cv-01861, 2015 WL 4744394, at *4 (C.D. Cal. Jan. 29, 2015).

[49] In re Freeman, 30 F.3d 1459 (Fed. Cir. 1994).

[50] Am. Hoist & Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1360 (Fed. Cir. 1984); accord Microsoft Corp. v. i4i Ltd. P’ship, 564 U.S. 91, 110 (2011); see also Ingersoll-Rand Co. v. Brunner & Lay, Inc., 474 F.2d 491, 496 (5th Cir. 1973).

[51] Campbell Soup Co. v. Gamon Plus, Inc., 939 F.3d 1335, 1340-41 (Fed. Cir. 2019); High Point Design LLC v. Buyers Direct, Inc., 730 F.3d 1301, 1313 (Fed. Cir. 2013); Durling v. Spectrum Furniture Co., 101 F.3d 100, 103 (Fed. Cir. 1996); contrast KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 415-18 (2007).

[52] Egyptian Goddess, Inc. v. Swisa, Inc., 543 F.3d 665, 678 (Fed. Cir. 2008) (en banc); see also, e.g., Wallace v. Ideavillage Prods. Corp., No. 2015-107, 2016 WL 850860 (Fed. Cir., March 3, 2016) (nonprecedential).

[53] Egyptian Goddess, 543 F.3d at 678.

Categories
Articles

Strategic Third-Party Submissions Against Patent Applications

Here is a copy of an old article about pre-grant submissions (observations) that third-parties can submit to challenge or weigh-in on someone else’s pending patent application:

“Strategic Third-Party Submissions Against Patent Applications,” Intellectual Property Today, Vol. 19, No. 12 (December 2012)

This information is still timely, though the fee for submitting 4-10 documents has since changed; under 37 C.F.R. § 1.17(p) the fee is $260/$130/$65 for a large/small/micro entity as of October 2021.

Photo of Austen Zuege

Austen Zuege is an attorney at law and registered U.S. patent attorney in Minneapolis whose practice encompasses patents, trademarks, copyrights, domain name cybersquatting, IP agreements and licensing, freedom-to-operate studies, client counseling, and IP litigation. If you have patent, trademark, or other IP issues, he can help.