IP News

Eastern District of TX: Attorney Need Not Do Examiner's Job

In Tyco Healthcare Group LP v. Applied Medical Resources Group, No. 9:06-CV-151 (E.D. Tex., June 26, 2009 Order), the District Court for the Eastern District of Texas denied Tyco's motion for summary judgment with respect to defendant Applied's inequitable conduct defense, but expressed speculation as to whether the intent-to-deceive prong of the inequitable conduct test can ever be predicated upon an applicant's failure to notify the patent examiner of oversights in his or her review of the prior art of record.

Tyco sued Applied alleging that Applied infringed five of Tyco's patents related to valve assemblies for introduction of an elongated object (such as a surgical instrument) into a patient's body. Applied alleged that three of the asserted patents were unenforceable for inequitable conduct. Specifically, Applied alleged that a prior art patent to Yoon was withheld from the PTO during prosecution of three of the asserted patents, that this patent was material to patentability, and that Tyco's prosecution counsel intended to deceive the PTO by withholding it.

One of Tyco's asserted patents had previously been the subject of an interference proceeding, where Tyco argued that the competing patent was invalid over the Yoon patent. The Board of Patent Appeals and Interferences (“BPAI”) ultimately ruled that there was no interference-in-fact, but directed the examiner to consider the Yoon patent as prior art in connection with Tyco's application. The examiner, however, failed to consider the Yoon patent, and counsel for Tyco failed to submit the patent independently. With the exception of the interference proceeding, the Yoon patent was not mentioned anywhere in the file history of the Tyco patent that was the subject of the interference, and was not disclosed at all during prosecution of the other two patents that Applied alleged to be unenforceable.

Tyco moved for summary judgment on Applied's inequitable conduct defense, arguing that Applied could not demonstrate the materiality of the Yoon reference and that Tyco's counsel did not have the requisite intent to deceive the PTO. The court denied Tyco's motion, finding too many factual issues with respect to the materiality prong of the inequitable conduct test, but hinted that there may not be the requisite intent to deceive to support an inequitable conduct finding.

Relying on earlier cases, Applied argued that the examiner and the BPAI are different units within the PTO, and that identifying the Yoon reference to the BPAI was not the equivalent of identifying it to the examiner. The district court distinguished those cases, explaining that here the BPAI specifically directed the examiner to consider a number of references in the parties' motion papers, including the Yoon patent.

Applied further argued that Tyco's counsel should have realized something was wrong when the examiner failed to cite the Yoon reference, must have assumed the Yoon reference was material, and had a duty to notify the examiner. The court disagreed, explaining, “Applied is entitled to second-guess the Examiner's allowance ' under an invalidity theory, but the court is unaware of any authority that requires [counsel] to either analyze the examination process for flaws and inform the Examiner of his mistakes, or be charged with inequitable conduct.”

The court reiterated that counsel has a duty of good faith and candor to the PTO, but has no duty to point out to the examiner the ways in which he or she thinks the examiner might be wrong.

Federal Circuit to Rehear Tafas v. Doll En Banc

On July 6, 2009, the Federal Circuit granted a petition to rehear en banc Tafas v. Doll (formerly captioned Tafas v. Dudas), concerning the PTO's rule-making authority. The case was originally brought by GlaxoSmithKline and inventor Triantaffylos Tafas, seeking to enjoin the PTO from implementing new rules that placed restrictions on the prosecution process. In a March 20 opinion by Judge Sharon Prost, a split three-judge panel overturned a district court's summary judgment ruling that would have blocked implementation of four of the PTO's proposed Final Rules of August 2007.

The PTO's proposed Final Rules 75 and 265 would, if implemented, impose extra requirements, in the form of examination support documents (“ESDs”), for any application including more than five independent claims or 25 total claims. An ESD would consist of a pre-examination prior art search, a list of relevant references and limitations disclosed by each reference, an explanation of each claim's patentability in light of the submitted references, and an analysis of how each limitation of the claims is disclosed and enabled by the specification.

Proposed Final Rule 78 would, if implemented, govern the availability of continuation and continuation-in-part applications. Under the rule, an applicant, as a matter of right, would be entitled to file two continuation applications. An applicant desiring to file more than two continuation applications would be required to file a petition showing that “the amendment, argument, or evidence sought to be entered could not have been submitted prior to the close of prosecution in the application.”

Proposed Final Rule 114 would treat requests for continued examination (“RCEs”) similarly, allowing an applicant one RCE as a matter of right, but requiring the filing of a petition with each further RCE, demonstrating that the new amendment or evidence to be entered could not have been entered prior to the close of prosecution.

On March 20, 2009, the U.S. District Court for the Eastern District of Virginia held that the PTO does not have substantive rule-making authority, but does have procedural rule-making authority. The district court then held that the PTO's proposed rules were “substantive rules that change existing law and alter the rights of applicants under the Patent Act.” The CAFC agreed that the PTO has only procedural authority, but went on to say that the proposed rules were procedural, vacating the district court's ruling in part. The CAFC opinion held that the PTO could limit the number of claims in a patent application, the number of requests for examination, and require examination support documents (“ESDs”), but could not limit the number of continuation applications filed. Specifically, the CAFC held that Proposed Final Rule 78 was invalid because it conflicted with the Patent Act, in particular ' 120 of Title 35, which states that an application that meets four
requirements “shall have the same effect, as to such invention, as though filed on the date of the prior application.”

Defendant John J. Doll is the acting Director of the PTO, and his brief for the en banc rehearing was due within 30 days after July 6, while the briefs for Tafas and GlaxoSmithKline are due 20 days after Doll's.

Salinger Gets Preliminary Injunction

In J.D. Salinger v. Fredrik Colting et al, No. 09 Civ. 5095 (S.D.N.Y. July 1, 2009 Order), the U.S. District Court for the Southern District of New York granted Salinger a preliminary injunction preventing Colting from publishing, advertising, or otherwise distributing his novel, 60 Years Later: Coming Through the Rye (“60 Years“) in the United States, while Salinger's suit alleging copyright infringement and common law unfair competition is pending.

Colting alleged that 60 Years constitutes fair use of Salinger's Catcher in the Rye (“Catcher“) and is an example of parody. The court considered the four factors set forth in the fair use test, and while it found some transformative character in 60 Years, it determined that the alleged parodic content is not reasonably perceivable, and that the limited transformative content is unlikely to overcome the work's obvious commercial nature, the injury to the potential market for derivative works of Catcher, and the substantial and pervasive extent to which 60 Years borrows from Catcher.

Finding it significant that Colting had not called 60 Years a parody before Salinger brought suit, the court found the contention that 60 Years poked fun at Catcher or Salinger's Holden Caulfield character, as opposed to Salinger himself, a post-hoc rationalization “employed through vague [generalization] about the alleged naivety of the original, rather than reasonably perceivable parody.” Further, the court noted that Colting took far more than necessary from Catcher to achieve the alleged critical purpose, and that 60 Years could harm the potential market for sequels or other derivative works based on Catcher, due to confusion and reduced novelty.

The court determined that Salinger had established a prima facie case of copyright infringement, that irreparable harm from the infringement should be presumed, and thus ordered the preliminary injunction.

Colting has filed a notice of appeal.

Howard Shire is a partner, Matthew Berkowitz is an associate, and
Edward Platt is a summer associate in the New York office of Kenyon & Kenyon LLP. Shire is editor-in-chief of this newsletter.

Eastern District of TX: Attorney Need Not Do Examiner's Job

In Tyco Healthcare Group LP v. Applied Medical Resources Group, No. 9:06-CV-151 (E.D. Tex., June 26, 2009 Order), the District Court for the Eastern District of Texas denied Tyco's motion for summary judgment with respect to defendant Applied's inequitable conduct defense, but expressed speculation as to whether the intent-to-deceive prong of the inequitable conduct test can ever be predicated upon an applicant's failure to notify the patent examiner of oversights in his or her review of the prior art of record.

Tyco sued Applied alleging that Applied infringed five of Tyco's patents related to valve assemblies for introduction of an elongated object (such as a surgical instrument) into a patient's body. Applied alleged that three of the asserted patents were unenforceable for inequitable conduct. Specifically, Applied alleged that a prior art patent to Yoon was withheld from the PTO during prosecution of three of the asserted patents, that this patent was material to patentability, and that Tyco's prosecution counsel intended to deceive the PTO by withholding it.

One of Tyco's asserted patents had previously been the subject of an interference proceeding, where Tyco argued that the competing patent was invalid over the Yoon patent. The Board of Patent Appeals and Interferences (“BPAI”) ultimately ruled that there was no interference-in-fact, but directed the examiner to consider the Yoon patent as prior art in connection with Tyco's application. The examiner, however, failed to consider the Yoon patent, and counsel for Tyco failed to submit the patent independently. With the exception of the interference proceeding, the Yoon patent was not mentioned anywhere in the file history of the Tyco patent that was the subject of the interference, and was not disclosed at all during prosecution of the other two patents that Applied alleged to be unenforceable.

Tyco moved for summary judgment on Applied's inequitable conduct defense, arguing that Applied could not demonstrate the materiality of the Yoon reference and that Tyco's counsel did not have the requisite intent to deceive the PTO. The court denied Tyco's motion, finding too many factual issues with respect to the materiality prong of the inequitable conduct test, but hinted that there may not be the requisite intent to deceive to support an inequitable conduct finding.

Relying on earlier cases, Applied argued that the examiner and the BPAI are different units within the PTO, and that identifying the Yoon reference to the BPAI was not the equivalent of identifying it to the examiner. The district court distinguished those cases, explaining that here the BPAI specifically directed the examiner to consider a number of references in the parties' motion papers, including the Yoon patent.

Applied further argued that Tyco's counsel should have realized something was wrong when the examiner failed to cite the Yoon reference, must have assumed the Yoon reference was material, and had a duty to notify the examiner. The court disagreed, explaining, “Applied is entitled to second-guess the Examiner's allowance ' under an invalidity theory, but the court is unaware of any authority that requires [counsel] to either analyze the examination process for flaws and inform the Examiner of his mistakes, or be charged with inequitable conduct.”

The court reiterated that counsel has a duty of good faith and candor to the PTO, but has no duty to point out to the examiner the ways in which he or she thinks the examiner might be wrong.

Federal Circuit to Rehear Tafas v. Doll En Banc

On July 6, 2009, the Federal Circuit granted a petition to rehear en banc Tafas v. Doll (formerly captioned Tafas v. Dudas), concerning the PTO's rule-making authority. The case was originally brought by GlaxoSmithKline and inventor Triantaffylos Tafas, seeking to enjoin the PTO from implementing new rules that placed restrictions on the prosecution process. In a March 20 opinion by Judge Sharon Prost, a split three-judge panel overturned a district court's summary judgment ruling that would have blocked implementation of four of the PTO's proposed Final Rules of August 2007.

The PTO's proposed Final Rules 75 and 265 would, if implemented, impose extra requirements, in the form of examination support documents (“ESDs”), for any application including more than five independent claims or 25 total claims. An ESD would consist of a pre-examination prior art search, a list of relevant references and limitations disclosed by each reference, an explanation of each claim's patentability in light of the submitted references, and an analysis of how each limitation of the claims is disclosed and enabled by the specification.

Proposed Final Rule 78 would, if implemented, govern the availability of continuation and continuation-in-part applications. Under the rule, an applicant, as a matter of right, would be entitled to file two continuation applications. An applicant desiring to file more than two continuation applications would be required to file a petition showing that “the amendment, argument, or evidence sought to be entered could not have been submitted prior to the close of prosecution in the application.”

Proposed Final Rule 114 would treat requests for continued examination (“RCEs”) similarly, allowing an applicant one RCE as a matter of right, but requiring the filing of a petition with each further RCE, demonstrating that the new amendment or evidence to be entered could not have been entered prior to the close of prosecution.

On March 20, 2009, the U.S. District Court for the Eastern District of Virginia held that the PTO does not have substantive rule-making authority, but does have procedural rule-making authority. The district court then held that the PTO's proposed rules were “substantive rules that change existing law and alter the rights of applicants under the Patent Act.” The CAFC agreed that the PTO has only procedural authority, but went on to say that the proposed rules were procedural, vacating the district court's ruling in part. The CAFC opinion held that the PTO could limit the number of claims in a patent application, the number of requests for examination, and require examination support documents (“ESDs”), but could not limit the number of continuation applications filed. Specifically, the CAFC held that Proposed Final Rule 78 was invalid because it conflicted with the Patent Act, in particular ' 120 of Title 35, which states that an application that meets four
requirements “shall have the same effect, as to such invention, as though filed on the date of the prior application.”

Defendant John J. Doll is the acting Director of the PTO, and his brief for the en banc rehearing was due within 30 days after July 6, while the briefs for Tafas and GlaxoSmithKline are due 20 days after Doll's.

Salinger Gets Preliminary Injunction

In J.D. Salinger v. Fredrik Colting et al, No. 09 Civ. 5095 (S.D.N.Y. July 1, 2009 Order), the U.S. District Court for the Southern District of New York granted Salinger a preliminary injunction preventing Colting from publishing, advertising, or otherwise distributing his novel, 60 Years Later: Coming Through the Rye (“60 Years“) in the United States, while Salinger's suit alleging copyright infringement and common law unfair competition is pending.

Colting alleged that 60 Years constitutes fair use of Salinger's Catcher in the Rye (“Catcher“) and is an example of parody. The court considered the four factors set forth in the fair use test, and while it found some transformative character in 60 Years, it determined that the alleged parodic content is not reasonably perceivable, and that the limited transformative content is unlikely to overcome the work's obvious commercial nature, the injury to the potential market for derivative works of Catcher, and the substantial and pervasive extent to which 60 Years borrows from Catcher.

Finding it significant that Colting had not called 60 Years a parody before Salinger brought suit, the court found the contention that 60 Years poked fun at Catcher or Salinger's Holden Caulfield character, as opposed to Salinger himself, a post-hoc rationalization “employed through vague [generalization] about the alleged naivety of the original, rather than reasonably perceivable parody.” Further, the court noted that Colting took far more than necessary from Catcher to achieve the alleged critical purpose, and that 60 Years could harm the potential market for sequels or other derivative works based on Catcher, due to confusion and reduced novelty.

The court determined that Salinger had established a prima facie case of copyright infringement, that irreparable harm from the infringement should be presumed, and thus ordered the preliminary injunction.

Colting has filed a notice of appeal.

Howard Shire is a partner, Matthew Berkowitz is an associate, and
Edward Platt is a summer associate in the New York office of Kenyon & Kenyon LLP. Shire is editor-in-chief of this newsletter.