Chicago Maroon on drug patents

from Laura Hamilton in the (University of) Chicago Maroon, October 31, 2004:

This embarrassing failure [note: flu vaccine, 2004], however, highlights the fact that our health-care system is broken. American commercial medicine was founded on capitalist principles: Reward innovation with patents and allow private companies to behave as they please [note: perhaps subject to the FDA], and the market will do the rest. The system worked brilliantly for decades, and America enjoyed health care second to none.

What went wrong?

Like any good conservative, I would at once suggest: Blame Canada. Less enlightened countries with varying degrees of socialism, most notably Canada, have scoffed at the free-market theory. They place price controls on patented American drugs. The Canadians still believe you can “eat your cake and have it too,” as they like to phrase it. Americans pay more for American-made drugs than Canadians do—because Americans trust the market to work. Seventeen [sic] years of high drug prices are the incentive for pharmaceutical research and innovation, and the dollars consumers pay are directly reflected in medical strides forward. Essentially, Americans are subsidizing innovations from which the Canadians benefit disproportionately.

Which leads us to these hare-brained “import drugs from Canada” schemes. If politicians want to adopt price controls, they should at least admit it. So we don’t have to ask Canada for drugs. America should really have more pride than that.

Big-pharmaceuticals, whom we can thank for ampicillin, acetaminophen, and fluoxetine, among others, are understandably disconcerted by this bizarrely engineered flouting of American patent traditions. The obvious conclusion—here I want to make it clear that this is not my conclusion, personally, but rather a conclusion that is obvious in a general sort of way from the situation as I have presented it above—would be for big-pharmaceuticals to stop selling drugs to Canada. The only problem would be that Canada might get a little upset, in the sense that it would be a diplomatic disaster, just below the magnitude of the assassination of Archduke Ferdinand.

--> Of Hamilton's reference to fluoxetine, perhaps Hamilton should check out the Winston & Strawn webstite, especially the words "nearly 27 years":

In one of the most significant patent decisions in many years, the Federal Circuit recently invalidated the key patent for Prozac®, the world's leading antidepressant with annual U.S. sales exceeding a billion dollars. See Eli Lilly & Co. v. Barr Laboratories, Inc., 2000 WL 1114915 (Fed. Cir. 2000).

The dispute focused on several patents for fluoxetine hydrochloride, which is Prozac’s active ingredient. Barr Laboratories, represented by Winston & Strawn, contended that Lilly’s main patent was invalid for double patenting. This patent was not scheduled to expire until December 2003. Barr argued that Lilly had improperly extended its patent protection by obtaining multiple patents on slight variations of the same basic invention. By obtaining multiple patents, Lilly extended its patent monopoly on Prozac to nearly 27 years, almost a decade beyond the term Congress authorized.

Ranbaxy files with FDA over zidovudine (ZDV)

Another patent issue is illustrated by Ranbaxy's application to the FDA for approval for its version of zidovudine [zdv; RETROVIR]. Ranbaxy's application is related to its proposed use of zidovudine OUTSIDE OF the United States, although to be distributed by US-backed agencies. The presence of US patents forecloses this distribution in the United States.

Reuters:

India's Ranbaxy Laboratories Ltd. said on October 29, 2004 it had filed an application with the U.S. Food and Drug Administration for approval of its anti-retroviral drug zidovudine tablets used to treat AIDS. [Zidovudine is the generic name for Retrovir, manufactured by GlaxoSmithKline, which was the first drug approved for the treatment of HIV, in 1987. It is in a category of HIV medications called nucleoside reverse transcriptase inhibitors (NRTIs). Retrovir prevents HIV from altering the genetic material of healthy T-cells. This prevents the cells from producing new virus and decreases the amount of virus in the body.]

The U.S. government has so far refused to buy generic AIDS drugs under its $15 billion emergency AIDS plan, saying that the FDA and not the World Health Organisation (WHO) should assess the quality of medicines.

If it gets approval, Ranbaxy's drugs could be distributed by U.S.-backed agencies in Africa and other poor countries. But they would not be sold in the United States, due to patent protection.

The WHO had removed three Ranbaxy-made generic AIDS drugs from its approved list in August, amid concerns over their safety after finding that the independent laboratory used by Ranbaxy to prove they were equivalent to brand-name drugs did not meet international standards.

Cohn article: increased competitiveness adversely affecting inventors

An article by Meredith Cohn in the Baltimore Sun on October 29, 2004 argues that it is getting harder for individual inventors to sell their ideas. The article observes that the number of patent applications in the United States is at an all time high.

This viewpoint is a different take on things from that of Quillen and Webster. Cohn looks at the number of patent applications and sees increased competitiveness. Quillen/Webster look at the increased patent grants and see lowered quality at the PTO.

Excerpt from Cohn:

-->Inventors then can pitch their products directly to manufacturers, distributors or companies that would license the product. Recently, some big corporations have begun accepting pitches from inventors.

Dial Corp., maker of the household products Dial, Purex and Renuzit, set up a Web site this month through which inventors can submit their patented or patent-pending ideas to complement the soap, laundry detergent and air fresheners already in the company's lineup. Dial is looking for new products and creative packaging and dispensing systems.

But DiForte, 60, knows having a new and appealing product doesn't guarantee success. After a career as an inventor, with some products actually making it to market, he believes his latest life belt invention, called The Survivor, is his best work.

He said he has spent years and much of his savings on the belt, with his first patent won on it in 1992. But never has he encountered such resistance from buyers and investors. They tell him they already offer a full line of personal flotation devices. But he can't let it go.

Lamellar buckyballs?

US Patent 6,809,046 (issued October 26, 2004) states: Inorganic solid particles having a lamellar fullerene (buckyball) structure are also useful in the present invention.

Gee, isn't carbon of a lamellar structure called "graphite"? Pure buckyballs have a cubic structure. Materials having a lamellar structure can be composed of sheets or plates of atoms in hexagonal array, with strong bonding within the sheet and weak van der Waals bonding between sheets, providing low shear strength between sheets. A nonlimiting example of a lamellar structure is a hexagonal crystal structure, such as P63/mmc of graphite.

The '046 is directed to non-heat cleaned glass fiber fabrics comprising resin compatible coatings that offer higher tensile strengths than corresponding fabrics that have been heat cleaned and silane finished. These fabrics can be used in a wide variety of applications, such as reinforcements for composites such as printed circuit boards.

Haven for plagiarism?

A recent article in computerweekly.com expresses concern that Europe might become a haven for plagiarism.

One might have thought Harvard Law School was in the running for that moniker.

-->EICTA, the European IT and communications industry association, a group of some of the world's leading IT and telecommunications companies have warned that Europe could become a "haven for plagiarism" if the European Parliament fails to agree to allow patent protection for inventions implemented by computer.<--

The article also notes

-->The group warns that if members of Parliament (MEPs) insist on some of the amendments they requested when they were first asked their views on the directive, it would "seriously threaten research and development in Europe" and put thousands of highly skilled jobs at risk.<--

Gee, thousands of highly skilled jobs are already at risk to offshoring.

Labcyte's US 6,802,593 on acoustic ejection

from businesswire
-->
SUNNYVALE, Calif.--(BUSINESS WIRE)--Oct. 27, 2004--Labcyte Inc. announced today that it has been granted US patent 6,802,593 for rapidly transferring fluids from a multi-well plate with acoustic energy. This patent describes the use of focused acoustics for the transfer of liquids at speeds greater than one second per well.


Dr. Elaine J. Heron, Chief Executive Officer of Labcyte Inc., said, "This patent covers our enablement of a process that simultaneously meets the speed, accuracy and low volume needs of life science researchers. It describes liquid transfers at rates that keep pace with the other steps in high throughput screening and other industrialized assay processes in all well-plate formats including 96-, 384-, 1536-well micro-plates and other high-density formats. Four major pharmaceutical companies are now using this process in our award-winning Echo 550 compound reformatter to precisely transfer nanoliter volumes." <--

The priority chain for US '593 is as follows:

This is a continuation of U.S. patent application Ser. No. 09/964,212, filed Sep. 25, 2001, which issued on Dec. 23, 2003 as U.S. Pat. No. 6,666,541, which is a continuation-in-part of U.S. patent application Ser. No. 09/727,392, filed Nov. 29, 2000, now abandoned, which is a continuation-in-part of U.S. patent application Ser. No. 09/669,996, filed Sep. 25, 2000, also abandoned. The disclosures of the aforementioned applications are incorporated by reference herein.

The first claim for US '593 recites:

A device for acoustically ejecting a droplet of fluid from each of a plurality of fluid reservoirs, comprising:

a plurality of reservoirs each adapted to contain a fluid, wherein the distance between the centers of any two adjacent reservoirs is less than about 1 centimeter;

an acoustic ejector comprising an acoustic radiation generator for generating acoustic radiation and a focusing means for focusing the acoustic radiation generated; and

a means for positioning the acoustic ejector in acoustic coupling relationship to each of the reservoirs.

** The final element of the claim, including the words
--a means for-- is an example of a means plus function claim (35 USC 112, paragraph 6).

US 6,805,663: beyond the swing and peanut butter and jelly to shared erotic experience

US Patent No. 6,805,663, Method of shared erotic experience and facilities for same. The inventors are Vince and Liz Bugliosi of Grand Terrace, CA. The involved law firm is Cislo & Thomas, LLP.


The patent is self-identified as a "business method" patent:

This invention relates generally to a business method for providing a shared erotic experience and to facilities to accomplish that purpose.

The patent solves a problem associated with adult children still living at home with their parents:

-->In big cities in Japan such as Tokyo, young people well into their twenties often still live at home with their parents, but need a private place to go for watching adult entertainment and having sex. Many Japanese Love Hotels have sprung up having small rooms available for a reasonable price including such entertainment, some with interesting decor including following certain themes. While not entirely different in principle than a conventional small hotel, these establishments serve their purposes in Japan.<--

The summary of the invention of the '663 states:

-->A method of sharing erotic experiences includes providing a building with a number of compartments and entertainment viewable from inside the compartments. Participants enter the building and the compartments and the entertainment starts at a prescribed time. Preferably shortly thereafter, a stimulation device for sexual pleasure starts in each of the compartments. Then the facilities are such that sounds from the participants are transmitted between the compartments, such that couples or individuals in one compartment can hear couples or individuals in other compartments.<--






Abstract

A method of sharing erotic experiences includes
providing a building with a number of compartments,
entertainment viewable from inside the compartments
and surround sound music audible throughout the
building, participants entering the building and go to
the compartments, starting the entertainment at a
proscribed time, and turning on the power from a
central control booth at a proscribed time to a
stimulation device for sexual pleasure found in each
of the compartments. The facilities are such that
sounds from the participants are transferred between
the compartments, such that couples or individuals in
one compartment can hear others in the building also
experiencing intense sexual pleasure. The individual
compartments may further contain a whirlpool tub with
jets starting at a proscribed time. Importantly,
security is provided to maintain order in the
building, and regular cleaning and sanitizing of the
compartments and stimulation device is provided.

There are three indepedent claims (1, 7, 11).

The first claim of the '663 is a method claim and recites:

A method of sharing erotic experiences comprising the steps of:

providing a building with a plurality of compartments and entertainment viewable from inside the compartments;

admitting participants to the building and the compartments;

starting the entertainment viewable from inside the compartments at a prescribed time;

starting a stimulation device for sexual pleasure in each of the compartments at a prescribed time; and,

transferring sounds from the participants between the compartments.

The seventh claim recites:

Facilities for a shared erotic experience comprising:

a building with a high ceiling and having a plurality of walled compartments each without a ceiling; and,

a hot water tub for each compartment,

the compartments containing furniture for reclining thereon and a stimulation device for sexual pleasure,

whereby sounds may be easily transferred between the compartments for entertainment of participants.

a building with a high ceiling and having a plurality of walled compartments each without a ceiling; and,

the compartments containing furniture for reclining thereon and a stimulation device for sexual pleasure,

whereby sounds may be easily transferred between the compartments for entertainment of participants, and

wherein the stimulation devices are coupled to a central control booth.

The 11th claim recites:

Facilities for a shared erotic experience comprising:

a building with a high ceiling and having a plurality of walled compartments each without a ceiling; and,

the compartments containing furniture for reclining thereon and a stimulation device for sexual pleasure,

whereby sounds may be easily transferred between the compartments for entertainment of participants, and

wherein the stimulation devices are coupled to a central control booth.

Injunction against Static Controls lifted in Lexmark copyright/DMCA case

The Sixth Circuit lifted the injunction against Static Controls, but the ultimate merits of the case remain to be decided. Although each of the three judges wrote individual opinions, the court as a whole noted that its opinion concerns only the preliminary injunction that had been issued against Static Controls, and leaves a decision on a permanent injunction in the hands of the district court, to which the case is now remanded.


ZDNet news reported:

-->The court said that "lock-out" codes in software that's designed to control or limit interoperability is not covered by the original-expression intentions of copyright law. Furthermore, said the court, SCC's reverse engineering was not a circumvention of Lexmark's Toner Loader Program but a replacement of it, so even if the code had been covered by copyright, SCC's implementation would have been allowed under the fair-use doctrine. <--

ZDNet also noted:

-->When printer ink costs more than perfume, something smells wrong. So when Gartner recently did a few simple sums and worked out that, at £1,200 a litre, printer ink costs more than Chanel No.5, it's hardly surprising that a few eyebrows were raised. <--

[http://comment.zdnet.co.uk/other/0,39020682,39171564,00.htm]


The decision of the three judge panel of the Court of Appeals for the Sixth Circuit was split.

Judge Jeffrey Sutton wrote that "because Lexmark failed to establish a likelihood of success on any of its claims, whether under the general copyright statute or under the DMCA, we vacate the district court's preliminary injunction and remand the case for further proceedings."

Judge Gilbert Merritt wrote a separate concurrence ("We should make clear that in the future companies like Lexmark cannot use the DMCA in conjunction with copyright law to create monopolies of manufactured goods for themselves."), and the panel's third member, U.S. District Judge John Feikens, issued his own opinion, which dissented in part from the ruling.

The economic significance is great. In the past, there were great patent wars, involving among others Hewlett-Packard, concerning the repair/reconstruction issue over the act of re-filling cartridges. Sales of cartridges and other printer supplies are a major part of Lexmark's business, especially because the prices of printers and other computer hardware have fallen in recent years. The average business spends 1 percent to 3 percent of its annual revenue on ink and paper, Lexmark has said. The goal is to capture as much of that market as possible.

Another case wherein an injunction in an IP case was lifted, was that against Barnes & Noble (BN) in the amazon.com case over the double-click patent. That case settled and the question of the validity of the amazon patent was not decided. In the Lexmark case, it is more likely that the merits of the DMCA claim will be addressed by the district court (in the present remand) and possibly by the Sixth Circuit, on any later appeal. PCWorld reported Merrill Lynch analyst Steven Milunovich says in a research note that he is "somewhat surprised" at the appeals court ruling but does not expect it to significantly affect Lexmark's business.

In the near term, the analysis by Milunovich may be correct, but if the rejection of the concept of using the DMCA to foreclose interoperability remains, Lexmark (and others) may have a problem. The margins on replacement printer cartridges will shrink and this will resemble the generic drug business.

Profits drop at Dr. Reddy's

Not having had a major generic drug release since 2002, Dr. Reddy's reports net profits down 44% in the last quarter.

Dr. Reddy's is India's only New York Stock Exchange-listed drug maker, is India's biggest spender on drug R&D as a percentage of sales (12%), and earns a majority of its revenue -- 60 percent in the quarter ended Sept. 30 -- from outside India.

NanoInk licences patent from University of Illinois

The licensing of US 6,642,129 from the University of Illinois to NanoInk represents another Bayh-Dole case. The first page of US 6,642,129 states: This invention was made with United States Government assistance through Defense Advanced Research Projects Agency (DARPA), Contract No. NW 0650 300 F 245. The Government has certain rights in this invention.

The abstract states:

A microfabricated probe array for nanolithography and process for designing and fabricating the probe array. The probe array consists of individual probes that can be moved independently using thermal bimetallic actuation or electrostatic actuation methods. The probe array can be used to produce traces of diffusively transferred chemicals on the substrate with sub-1 micrometer resolution, and can function as an arrayed scanning probe microscope for subsequent reading and variation of transferred patterns.

The first claim recites:

An apparatus for applying a pattern to a substrate for nanolithography, the apparatus comprising:

at least one patterning compound;

an array of actuated probes, said array of actuated probes being arranged in parallel, wherein each of said actuated probes comprises:

a cantilever;

a tip at an end of said cantilever for applying one of said at least one patterning compound to said substrate; and

an actuator operatively coupled to said cantilever, said actuator being responsive to an applied current or voltage to move said cantilever so as to move said tip relative to said substrate.




from businesswire:

NanoInk, Inc. announces its worldwide, exclusive license of a family of patents from the University of Illinois. The family is entitled "Nanoscale Chemical Surface Patterning Dip Pens" and
includes United States Patent No. 6,642,129 and numerous foreign filings. This license adds to NanoInk's sizable patent portfolio, which already includes over 100 filings.

The technology licensed involves arrays of "active pens" for performing nanoscale lithography, and it resulted from the work of Dr. Chang Liu, NanoInk Scientific Advisory Board member and Associate Professor in the Department of Electrical and Computer Engineering at the University of Illinois - Urbana-Champaign. The arrays are important for improving the flexibility and
speed of the Dip Pen Nanolithography(TM) (DPN(TM)) process for
nanofabrication, and as a result, for its possible industrial applications.

Article by John Carey in Business Week

An article by John Carey, Flying High?; Long the innovation leader, the U.S. now has serious competition from abroad. Is America's research lead in danger?, in Business Week (October 11, 2004) is worth a look.

It perhaps does not fully come to grips with the consequences of establishment of research labs by US companies in foreign countries (eg, GE in Bangalore, DuPont in Shanghai, Cummins in Pune). Further, it perhaps does not fully come to grips with the visa issue; there are many U.S.-born scientists who are not being optimally used (remember the comments of Dr. Hale of Hale-Bopp fame?) It is true that US companies need to look globally, but it is also true that the US, as a country, needs to preserve its scientific infrastructure.

Additionally, the comment about leading the world in patents is a close call.

Excerpt:

-->With more than 10 million people with degrees in science or engineering, America still leads the world in scientific papers and patents. But other nations are catching up fast. Within a few years, China plans to graduate 350,000 new engineers annually. In contrast, U.S. universities produce less than 100,000 per year. And as many other nations invest heavily in science and technology, the number of papers and patents from researchers in Taiwan, South Korea, Hong Kong, and Singapore is soaring. The world is increasingly populated with innovators. ``We are at a watershed in the global economy,'' says Denis Fred Simon of Rensselaer Polytechnic University.
Overall, this global innovation explosion ``is a good thing. We want a productive world,'' says C. Paul Robinson, president of Sandia National Laboratories. But it presents new challenges for the U.S. Companies increasingly need to scour the world for ideas. In the future, ``the U.S. can only count on making at most one in five inventions,'' predicts Greg E. Blonder, a former Bell Laboratories scientist who is now a venture capitalist. The good news is that U.S. researchers appear to be rising to this challenge by tapping into overseas talent. The Georgia Institute of Technology, for instance, is working with Bangladesh scientists on monsoon forecasting and is also collaborating with universities and companies across Asia and Europe in fields such as microelectronics and advanced sensors. Says provost Jean-Lou Chameau: ``Nowadays it would be very arrogant to think that we have all of the research expertise concentrated in one area or country.''
Collaboration becomes ever more important as the flow of talent to the U.S. slows. Greater opportunities in countries outside the U.S. mean that fewer foreign-born researchers will be studying, working, and staying in the U.S. The number of visas granted to foreign scientists and engineers has been declining since 2001, aggravated by restrictions imposed to fight terrorism. Because of foreign students' visa troubles, ``there has been a precipitous drop in graduate school applications,'' says James S. Langer, vice-president of the National Academy of Sciences. ``It is having a major effect on science and technology in the U.S.
QUICKER CLEARANCE
Bush administration officials stress that the visa problem is not easy to solve. ``Imagine the outcry if we let a terrorist in to study biological methods or physics,'' says C. Stewart Verdery Jr., Assistant Secretary for Border and Transportation Security Policy and Planning at the Homeland Security Dept. Still, he says: ``We agree that if we make it unduly difficult for people to come and work in high tech, we will have done serious damage.''
That's why the Administration is taking action. And there may be reason for optimism on the visa front. A Sept. 7 letter to the scientific community from the State Dept. claims that ``98% of all Visa Mantis cases [which involve a security check designed to protect against sensitive technology transfers] are being cleared in less than 30 days.'' While skeptical scientists are waiting for firm proof, ``we have seen a really big improvement in the rate at which cases are being cleared,'' says Wendy D. White, director of the Board on International Scientific Organizations at the National Academy of Sciences.
No such improvement has come in another area of contention -- stem cell research. Scientists charge that the Administration is stifling work that holds the promise of treating a host of diseases. The White House has prohibited federally funded scientists from freely experimenting with all but a small selection of embryonic stem cells because of opposition from anti-abortion advocates. ``In the U.S., you have this absolutely ridiculous position on federal funding. Most of the best researchers [in publicly funded labs] can't touch these cells while private companies can do anything,'' says Austin Smith, director of Edinburgh University's Institute for Stem Cell Research. But that could change. California voters will soon decide whether to sell billions of dollars in bonds to support research in stem cells.
The fears about inadequate research support and slowing immigration are real. But do they strike at the heart of America's technological might, or are they just niggling worries, overshadowed by an innovation engine that still holds awesome power? The complete answer won't be known for years -- and, of course, will depend on everything from future R&D funding to visa policies. But if past history is any guide, it's unlikely that the U.S. is facing any serious threats to its ability to compete in the world.

Nanotech patent wars?

A recent article by Charles Choi detailed a fear that the threat of patent infringement litigation might be deterring innovation in the area of nanotechnology. This theme is not dissimilar from arguments that the threat of patent infringement litigation is deterring innovation in the software field. Furthermore, it is not dissimilar from even earlier claims that the uncertainty in ownership of patent rights over buckyballs was deterring research in C60.

I strongly questioned the claims about patent uncertainty over buckminsterfullerene in an article in Intellectual Property Today. Further, the comments in the Choi article about "lack of diligence" and "flood of patents" don't fit the basic buckyball patent fact pattern, because the basic buckyball patent did NOT ISSUE in the United States. Additionally, the comments about "flood of patents" do bring up the Quillen/Webster/Harvard Law Review "97% grant rate" saga, which hopefully should be put to bed by now.

It is absolutely correct that people should investigate all the fullerene (or quantum dot, etc.) patents out there and formulate business strategy accordingly. If you have a patent lawyer who understands what's going on, you will probably do well. If not, hope you like rolling dice.

from UPI article by Charles Choi:

In talks over the past three months with more than 100 companies, Matthew Nordan, vice president of research for nanotechnology analyst firm Lux Research in New York said he has found a massive dogfight brewing over patents. "The lawsuits could fly like arrows," he said. "In the nightmare scenario, that could stall development for a very long time."

At the root of the problem is patent infringement.

"I'm hearing from (chief executive officers), 'I know of four or five companies infringing on my patents,'" Nordan said. "A number of nanotechnology companies have acquired every patent they can find around a specific nanomaterial, like a quantum dot or carbon nanotube. They growl a lot about their intellectual property position."

"Personally, I think the U.S. Patent and Trademark Office is completely overwhelmed, and a lot of patents make it through without the diligence they used to get," Clint Ballinger, CEO of Evident Technologies in Troy, N.Y., told UPI. "They got a flood of patents in the mid '90s to now, so it's interesting to everybody how many of these patents are really enforceable."

Howard Barnett, CEO of Southwest Nanotechnology, a carbon nanotube company in Norman, Okla., agreed with Nordan, saying it was "absolutely, unequivocally" likely these patent battles were going to happen.

"Nobody's making any money right now, so there's no particular reason to fight the battles yet," Barnett explained. "But a lot of people are coming out with patents, and a lot of claims are certainly overlapping, if not certainly conflicting. The fights are going to be brutal."

"Companies are waiting until somebody hits the $3 million or $4 million sales mark to sue the hell out of them and try to shut them down," Nordan added.

The most likely battles will take place over carbon nanotubes or quantum dots, he said.


***

The following was of interest.

-->"Let's say you have Lancome or L'Oreal interested in using fullerenes as anti-oxidants -- a huge application for them, as they are far more anti-oxidant than vitamins at smaller volumes. But they will not want to touch fullerenes if they're afraid they'll be at the receiving end of a lawsuit," Nordan said.<--

Recall that recent research has shown buckminsterfullerene (C60) is cytotoxic at 20 parts per billion. It will be a while before you will find it in your cosmetic, and longer still before you find it in a vitamin.

For example, from Health Insurance Week (October 24, 2004):

-->The researchers postulate that cell death in the tests occurred via physical disruption of the cell membrane by oxygen radical species generated by the buckyballs.
Colvin and her colleagues emphasized that the study only fills in part of the puzzle regarding fullerene toxicity. For example, because cytotoxic studies look only at cells in culture, they don't tell scientists what happens inside the body, where cellular repair mechanisms, whole-organ and whole-body processes come into play.
"Cytotoxicity should not be confused with a full-fledged toxicological risk assessment," said Kevin Ausman, CBEN executive director and a coauthor of the paper. "Risk assessments take into account exposure rates, uptake mechanisms, transport within the body and much more. Most often, cytotoxicity studies are used as indicators of whether more extensive toxicological study is needed. Based on our results we think buckyballs should be studied in more detail, and we're already working to arrange additional studies."<--

Polycom drops counterclaims in Avistar case

As noted in previous posts, there are examples of cases wherein a patentee brings an infringement suit, but ends up losing not only the infringement suit but also loses on counterclaims.

In Avistar v. Polycom, the counterclaims were dropped but the original suit remains.

from businesswire:

REDWOOD SHORES, Calif.--(BUSINESS WIRE)--Oct. 26, 2004--Avistar Communications Corporation, a provider of business video collaboration solutions, and Collaboration Properties, Inc. (CPI), its wholly owned subsidiary, today announced that they have reached agreement with Polycom, Inc. wherein Polycom agrees to drop its counterclaim lawsuit against Avistar regarding infringement of U.S. Patent No. 5,767,897. CPI's original infringement lawsuit against Polycom on four Collaboration Properties patents continues. A trial date is currently set for January 24, 2005.


In the original patent lawsuit, CPI alleged that several Polycom videoconferencing products infringe four of its patents: U.S. Patent No. 5,867,654; No. 5,896,500; No. 6,212,547; and No. 6,343,314. The suit was filed in the U.S. District Court for the Northern District of California by the law firm of Simpson Thacher & Bartlett LLP on September 23, 2002. In a response to this lawsuit, Polycom brought countersuit against Avistar on four patents, three of which were previously dropped. This agreement drops the last of the four.

CAFC case on declaratory judgments: Capo v. Dioptics

The factual background of the case depicts a frequent theme in patent law. A patent holder (here, Dioptics) becomes aware that an entity (here, Capo) may be infringing claims of its patents. The patent holder brings up the issue to the possibly infringing entity ("competitor"). The intensity of the dialog escalates. The patent holder talks about patent litigation. At some point, the competitor, fearing that the threats of patent litigation are real and business-threatening, files a declaratory judgment action in federal district court to resolve the issue once and for all. That is, the competitor (here, Capo) files suit in court to obtain a determination that its commercial products do not infringe the claims of the patentee (here, Dioptics). In this particular case, the district court dismissed the declaratory judgment action, but the Court of Appeals for the Federal Circuit determined that the district court was wrong, and that the competitor (Capo) did have a right to obtain a determination of whether or not its products infringed the claims of the patent of Dioptics. Successful declaratory judgment filings give the competitor some advantages, as the competitor gets to make the initial choice of where the action will be (venue) and when it will commence.

In Capo v. Dioptics, the Federal Circuit reviewed (under the abuse of discretion standard, Wilton v. Seven Falls, 515 US 277 (1995)) a district court's decision dismissing a declaratory judgment [DJ] action, and vacated the dismissal. Text within the case gives guidance to patent holders on "what not to do" when seeking to license patents to competitors.


The Federal Circuit cited several cases on DJ actions, including Webb v. Southern, 742 F.2d 1388 (CAFC 1984), Indium v. Semi-Alloys, 781 F.2d 879 (CAFC 1985), and Arrowhead v. Ecolochem, 846 F.2d 741 (CAFC 1988). The Federal Circuit noted that there must be well-founded reasons for declining to entertain a DJ action. Public Affairs v. Rickover, 369 US 111 (1962). On the facts presented in the Capo case, the Federal Circuit did find an abuse of discretion in dismissing the DJ action. [Minnesota Mining v. Norton, 929 F2d 670 (CAFC 1991).]

The Federal Circuit found significant that the patent holder's threats were aimed not a negotiation, but at impeding a competitor's commercial activity. The Federal Circuit also observed that the competitor is not required to verify the extent to which the patent holder has studied the competitor's accused product before the competitor starts a DJ action. That the patent holder declined to file an infringement action (here, based on lack of knowledge of the competitor's product) does not mean that the competitor does not have a reasonable apprehension of suit. To determine whether a DJ action is appropriate, one takes an objective measure of the patentee's words and actions. [citing to BP Chemicals, 4 F.3d at 939; Arrowhead, 846 F.2d at 736.]

Within the decision, the Federal Circuit cited Learned Hand's remark about certain patents functioning as "scarecrows." Bresnick v. U.S. Vitamin, 139 F.2d 239 (CA2 1943). [At some other time, I believe Judge Hand referred to bad patents as derelict ships.]

As a minor point, I note that the disagreement between the two companies started in September 2002 when the presidents of both companies met at a Wal-Mart suppliers meeting. Dioptics is a maker of sunglasses and Capo was buying from Dioptics but decided to become a maker. Of relevance to Knorr-Bremse, the competitor Capo engaged patent counsel to design around the Dioptics product and to furnish a noninfringement opinion. [Note that this behavior is contrary to that discussed by Mark Lemley in "rational ignorance."] The president of the patentee Dioptics cautioned the competitor Capo about "charging down a path here that's going to end up into a multi-million dollar law suit." The president also mentioned not having any choice but to defend the patents against infringement.

Background on Phillips v. AWH, 376 F.3d 1382 (CAFC 2004)

The Phillips case, currently pending before the Federal Circuit, is recognized as a significant case for the future of patent litigation. The Phillips case, once decided, will give some guidance on how the meaing of terms in patent claims will be determined. For example, the first question to be decided is:

Is the public notice function of patent claims better served by referencing primarily to technical and general purpose dictionaries and similar sources to interpret a claim term or by looking primarily to the patentee's use of the term in the specification? If both sources are to be consulted, in what order?

HOWEVER, one judge is skeptical that the Phillips case will yield a final resolution. In dissent, Chief Judge Mayer wrote:

Until the court is willing to reconsider its holdings in Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed. Cir. 1995) (en banc), aff'd on other grounds, 517 U.S. 370, 134 L. Ed. 2d 577, 116 S. Ct. 1384 (1996), and Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448 (Fed. Cir. 1998) (en banc), that claim construction is a pure question of law subject to de novo review in this court, any attempt to refine the process is futile. Nearly a decade of confusion has resulted from the fiction that claim construction is [**7] a matter of law, when it is obvious that it depends on underlying factual determinations which, like all factual questions if disputed, are the province of the trial court, reviewable on appeal for clear error. To pretend otherwise inspires cynicism. Therefore, and because I am convinced that shuffling our current precedent merely continues a charade, I dissent from the en banc order.
[376 F3d at 1384]

With the legal significance in mind, it is useful to contemplate some of the underlying details of what this case is about.

from Daily Camera, October 24, 2004, on the case Phillips v. AWH, 376 F.3d 1382 (CAFC 2004), 2004 US App LEXIS 15065, now pending before an en banc Federal Circuit:

-->The squabble in question dates back to the 1990s.

Phillips, who lives near Estes Park, says AWH infringed on a patent he holds for steel-plate panels used in prison cells after his contract work expired with the company.

The sheet metal products maker sold its own panels to seven prison projects in a six-year span after the contract with Phillips. It then exited that business, citing economic concerns.

Phillips' patent details the use of steel baffles inside his panels. The panels are sturdy, diminish noise, resist fire and deflect projectiles, such as bullets, the patent says.

Phillips says the baffles allow all of those things to happen.

AWH says the patent only suggests the baffles, by connecting to form an intermediate barrier inside the panels, help deflect projectiles. AWH says it only used steel studs inside its panels as a strengthening mechanism, not for deflection.

Phillips hired Boulder attorney Carl Manthei and filed a lawsuit in district court in 1997 seeking damages. AWH hired Mark Fischer, a lawyer with Boulder-based Chrisman, Bynum & Johnson, which has since merged with Faegre & Benson.

Both the trial court and the appeals court favored AWH, although each used slightly different reasons. But the crux of the decisions centered on how terms are defined in the patent.

Manthei says his client's patent uses the word baffle to generally describe all of the features performed by the panel, and a dictionary definition suggests as much.

The Webster's New World Dictionary explains a baffle "as to interfere with; hinder; impede .... an obstructing device, as a wall or screen to hold back or turn aside the flow of liquids, gases."

"Our position is that baffle means what the dictionary says it means," he says.

The trial court, though, said Phillips' panels, as described in his patent, use the baffles specifically for deflection.

The three-judge appeals court favored AWH in a 2-1 decision, the one dissenter saying a dictionary should be used.

****20 to 50%?

Appeals courts often disagree with the way trial courts define terms in patents, an expensive source of frustration for plaintiffs and defendants.

The ABA's Dunner says the problem is significant, adding various observers estimate the issue arises anywhere from 20 percent to 50 percent of the time. <--

*****

Edward H. Phillips has several patents in the area of baffles.

-->US 4,928,468, Filed: December 5, 1988

first claim:
1. A generally rectangular building panel module for defining at least a portion of a building wall, floor, or ceiling when a plurality of modules are assembled, the module comprising:

(a) at least three rectangular metallic plates arranged in parallel to define a hollow, generally rectangular panel module having a pair of spaced, substantially parallel outer faces, at least one of the plates including inwardly extending legs and being symmetrical relative to a longitudinal centerline, at least two of the plates including at least one inwardly extending leg that is joined to an inwardly extending leg of an adjacent plate on the same face of the module to define a longitudinally extending I-beam element having a central web member and a pair of spaced, substantially parallel transverse end members extending outwardly from longitudinally extending edges of the central web member, the end members including an outer end member defining a part of a panel module outer face and an inner end member spaced inwardly from each of the panel module faces, the inner end members each defining first baffle members positioned within the interior of the panel module, the I-beam element providing longitudinal stiffness to the panel module to withstand longitudinally applied compression loads and to provide transverse strength to the panel module to withstand tranversely applied bending loads;

(b) a discontinuous intermediate inner wall positioned between the outer faces, the inner wall defined by respective ones of the first baffle members and by transversely offset second baffle members carried by at least one end leg of each of the plates plates, the first and second baffle members being substantially planar and positioned relative to each other in overlapping relationship and spaced from each other in a transverse direction of the module to prevent direct transmission therebetween of heat and sound and to prevent unimpeded passage through the module of ballistic projectiles that penetrate one face of the module, and thereby provide resistance to passage through the module of ballistic projectiles heat, and sound; and

(c) end cap means extending across respective longitudinally spaced ends of the panel module for interconnecting respective ones of the plates to provide a unitary panel module that can be handled and transported as a unit for assembly with correspondingly-shaped panel modules for defining a portion of a structural, load bearing building surface.

[no claim of priority to other applications. Subsequently cited by four US patents, including 5,228,257]

-->US 4,731,964 This is a continuation-in-part of copending application Ser. No. 852,021, filed Apr. 14, 1986 now U.S. Pat. No. 4,677,798.

first claim:
. A building panel element for forming a part of a building wall surface, said element comprising;

(a) a generally rectangular metallic wall member having an inner wall surface and an outer wall surface, said wall member having a predetermined height and width and including longitudinally extending edges and laterally extending edges;

(b) a pair of laterally spaced baffle members each extending inwardly from respective ones of said longitudinal edges, at least one of said baffle members defining an acute angle with said inner wall surface; and

(c) end flanges carried along longitudinally extending innermost edges of each of said baffle members and extending inwardly toward the inner wall surface of the panel element.



--> US 4,677,798 Filed: April 14, 1986

first claim:

1. Building modules adapted to fit together for construction of fire, sound and impact resistant security barriers and rooms for use in securing records and persons, comprising in combination, an outer shell of substantially parallelepiped shaped with two outer steel plate panel sections of greater surface area serving as inner and outer walls for a structure when a plurality of the modules are fitted together, sealant means spacing the two panel sections from steel to steel contact with each other by a thermal-acoustical barrier material, and further means disposed inside the shell for increasing its load bearing capacity comprising internal steel baffles extending inwardly from the steel shell walls.

[no claim of priority to earlier applications. Subsequently cited by four US patents, including US 5,228,257.]

Spyware epidemic?

Do computer users have a reasonable expectation of privacy against programs implanted on their own computer which transmit data from their computer?

-->

80% of infected PC users unaware – study

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A study of home PCs released October 25 found that about 80% had been infected with spyware unbeknown to their users, News.com reports.

The study of 329 home PCs was funded by America Online (AOL) and the US National Cyber Security Alliance. According to AOL chief trust officer Tatiana Gau, users were mostly unprotected from online threats and largely ignorant to the dangers.

"No consumer would walk down the street waving a stack of cash or leave their wallet sitting in a public place, but far too many are doing the exact same thing online. Without basic protections like anti-virus (AV) and firewall software, consumers are leaving their personal and financial information at risk."

Among the other alarming discoveries, nearly three in five users do not know the difference between a firewall and AV software, and two-thirds of users do not have a firewall installed on their computer.

While 85% of PC owners had installed AV software, two-thirds had not updated the software in the last week, and only 20% of users had an active anti-virus on their machines.

Inherent anticipation. Patent Law day at Michigan State.

A blog (duecourse.blogspot.com) carries a discussion of "Patent Law Day" at Michigan State University. I don't see too much other discussion of this event (held on Sept. 13, 2004) but do see a notice about that the inaugural issue of the Michigan State Intellectual Property Review contains selected presentations from this conference.

One item of the blog that caught my eye concerned inherent anticipation:

-->
Benjamin Hsing, of Kaye Scholer, discussed inherent anticipation. It is very hard to invalidate a patent by anticipation. Previously, there was a split in case law regarding the standard for anticipation. Both lines of cases said the limitation must be “necessarily present” in the prior art. However, one line of case also required that the limitation be “recognized by a person skilled in the art.” The Shilling case resolved the split, and recognition is not part of the test.
Suppose that a patent covers a drug that produces result Y. Say, drug causes reaction X before producing effect Y. Nobody recognized reaction X. Can you patent a drug that causes reaction X? Or, is it anticipated? The court says: recognition is not part of the test. However, recognition is proof of inherent anticipation. Intent is also important. If you use the patented drug to produce result Z, it does not infringe on the patent.
<--

The case in question is not the "Schilling" case but is Schering v. Geneva concerning Claritin (loratadine) and an attempt in US Patent 4,659,716 to obtain protection to a metabolite of loratidine, desloratadine (DCL) (marketed as Clarinex). The Federal Circuit recited the general rule on inherent anticipation that a prior art reference may anticipate without disclosing a feature of the claimed invention if that missing characteristic is necessarily present, or inherent, in that reference.

It is not clear that there was a split of authority on the point that the limitation be “recognized by a person skilled in the art.” The real issue may have been WHEN the limitation had to be recognized, and Schering makes clear that the limitation did not have to be recognized at the time of filing of the application (here, for the '716 patent). The patent opponent still needs to show that the limitation was inherent at the time of the filing and that this limitation is known to one of ordinary skill at the time of the litigation. [someone had to show that desloratine IS an inevitable product of the metabolism of loratadine]

I had written in Endnote 12 of "There's Always Something There to Remind You," Intellectual Property Today, May 2003:

Note In re Seaborg, 328 F.2d 996 (CCPA 1964). Applicant argued that a small amount of an unknown, unconcentrated isotope would have been undetectable, and the CCPA concurred. However, what result if a new analytical method were subsequently developed which made that small amount detectable? Contemplate text from L. B. Ebert, “Inherent difficulties,” Int. Prop. Today, Nov. 1999: To illustrate one issue in the interpretation of Continental Can, consider the discovery of buckyballs. In 1984, workers at Exxon disclosed the existence of C60, with the formula as determined by mass spectrometric measurement n6 and a way to make said C60. (J. Chem. Phys., 1984, 81, 3322). They did not disclose the correct structure of C60; Professors Smalley and Kroto proposed the structure of C60 to be that of a truncated icosahedron in 1985. This was not known to be correct until after the work of Huffman and Kratschmer in 1990. Now, assuming that the synthesis of Exxon always led to C60 with the icosahedral structure, would a patent claim to C60 in 1990 (with the truncated icosahedral structure) be inherently anticipated by the Exxon work in 1984, even though no one knew the structure in 1984, and in fact could not have proved the structure until 1990? Assuming that one of ordinary skill would recognize the inherent property, albeit at a later date, one might think there would be inherent anticipation. (Of course, a 1990 claim to merely C60 would be explicitly anticipated by the written description and enablement of the 1984 reference.)


From a commercial standpoint, the "big deal" about the Schering case concerned whether or not metabolites could be patented. The Federal Circuit noted generally that this conclusion regarding inherent anticipation does not preclude all patent protection for metabolites of known drugs. However, such metabolites [prodrugs] must be claimed in a way that is both new and non-obvious. Bare compound claims that include within their scope the recited compounds as chemical species in any surroundings, including within the human body, may not be novel under 35 USC 102, even if they have not been recognized. As Schering holds, these broad compound claims are inherently anticipated by a prior art disclosure of a process that causes a drug to metabolize into the claimed compound.

***Also of note

-->Sharon Barner, of Foley & Lardner, considered recent decisions related to the patent disclosure requirements. The Festo decision has created an increase of litigation over the description requirement of section 112.<--

I wasn't sure that the Festo decision, as opposed to perhaps Eli Lilly or Enzo or University of Rochester, was responsible for most 112 "written description" issues.

****

-->
The Hon. Cohn, Senior District Judge, United States District Court, for the Eastern District of Michigan, began by listing some challenges in American patent litigation. The complexity of patent suits tests the patience and capacity of a District Court judge (this was a joke, but it makes a point). In patent cases, there is a 33% reversal rate on appeal, and very complicated decisions are often committed to unsophisticated jury (or judge). There is a very high degree of uncertainty about outcome of patent suit. However, most action in patent cases is in the pre-trial, because most cases settle. Trials are becoming uncommon in the American legal system, especially for patent cases. <--

COMMENT: At one point, it seemed that legal academics pegged the reversal rate above 33%. A number of 33% has been mentioned for reversal SPECIFICALLY on claim construction issues.

In the April 2002 issue of Intellectual Property Today , Endnote 11 of "Deciding Cases the Old Fashioned Way", recites

--IP Worldwide, p. 30 (March 2002), citing to Kimberly Moore for a true rate of reversal of about 50% (Harvard's Journal of Law and Technology) and to Christian Chu for a rate of 47.3% (Berkeley Technology Law Journal). Also, Cybor Corp. v. FAS Technologies, Inc., 138 F.3d 1441, 1473 (Rader concurring)--

In the November 2002 Bulletin of the IP section of the ABA, Mark Banner reported of Moore's 2001 article: The article reviewed in exhaustive detail the holdings of the Federal Circuit on claim construction issues. It concluded that there was a 33% reversal rate on claim construction issues, and that where district courts were reversed on claim construction, the Federal Circuit either reversed or remanded the decision 81% of the time. Implicit in the analysis was the conclusion that such a reversal rate was too high for the legal and business community to have confidence in the predictability of outcome in patent infringement cases. [“Are District Court Judges Equipped to Resolve Patent Cases?”, 15 Harv. J. L. & Tech. 1 (2001), republished in 12 Fed. Cir. Bar. Journal 1 (2002).]


from footnote 194 of Glynn S. Lunney, Jr, Patent Law, the Federal Circuit, and the Supreme Court: A Quiet Revolution, 11 S. Ct. Econ. Rev. 1 (2004):

Both Christian Chu and Kimberly Moore have documented the high reversal rates involving claim construction. See Christian A. Chu, Empirical Analysis of the Federal Circuit's Claim Construction Trends, 16 Berkeley Tech LJ 1075, 1097-1100 (2001) (noting that despite the changes to the infringement inquiry, "the promises of pre-trial predictability and expedient patent litigation seem to remain a tantalizing dream"); Moore, 15 Harv J L & Tech at 14 (cited in note 192) ("This means that more than one in four appealed patent cases involving claim construction result in overturning the judgment reached by the district court solely for claim construction reasons.").

from footnote 26 of article by Rai, 17 Berkeley Tech. L.J. 877 (2002):

See Christian Chu, Empirical Analysis of the Federal Circuit's Claim Construction Trends, 16 Berkeley Tech. L.J. 1075, 1104 (2001) (giving figure of 44%); Kimberly A. Moore, Are District Court Judges Equipped to Resolve Patent Cases?, 15 Harv. J.L. Tech. 1, 11 (2001) (giving figure of 33%). The discrepancy between the Moore and Chu findings likely emerges from two factors. First, while Moore's study encompasses cases decided between April 1996 and December 2000, Chu's study encompasses cases decided between January 1998 and April 2000. In addition, while Moore's includes within her population of cases Rule 36 summary affirmances, Chu excludes these affirmances. Chu's study also draws interesting conclusions regarding the Federal Circuit's review of patent cases more generally. He determines that, excluding summary affirmances, the overall reversal rate was 47.3%. Id. at 1098. Including summary affirmances, the overall reversal rate was 36.6%. Id. at 1100.

Also, from article by Judge Holderman, 2002 U. Ill. J.L. Tech. & Pol'y 425:

Nationwide, there are about 2,500 patent infringement cases filed in the U.S. District Courts each year. In fact, in the year 2000, there were exactly 2,484 filed, n25 and in 2001, there were 2,520 filed. n26 However, there are over 300,000 other types of cases, both civil and criminal, filed each year. In fact, the nationwide number of total district court filings in 2000 was 322,262 n27 and in 2001 was 313,615. n28 Patent cases are less than 1% of the nationwide caseload of our district judges.



****Also

-->Also, Judge Cohn pointed out that two books were recently published about reforming our patent system (Patents in the knowledge based economy & Patent system for the 21’st century). It is suggested that we also look at other studies commissioned by the FTC in 1936, 1943, 1966, 1992. Looking at these 5 reports might suggest the progress we have made in the past century.

Finally, Judge Cohn looked at four of the recommendations made in the books.

1. Post grant review procedure of opposition – suggests this could run into problems due to the 7th amendment right to jury trial.
2. Validity should have a Preponderance of Evidence Standard – This will probably be accomplished by an upcoming Federal Circuit decision.
3. The legal standards for obviousness should be tightened. – This will probably be accomplished by upcoming Federal Circuit decisions.
4. Redefine willfulness to be just actual written notice, or obvious copying. – This probably requires legislation, but will shorten the length of patent trials.

A final practice point: Judge Cohn does not like attorneys trying to hustle the judiciary with fancy PowerPoint presentations.
<--
Of 1., I don't believe I've heard that objection before. If the opposition is part of the PTO administrative process, what jury right attaches?
Of 2., what upcoming Federal Circuit decision will change the evidence standard? Same query for 3.
Of 4., Knorr-Bremse has altered presumptions about willfulness.

***Also
-->
Maria C.H. Lin, spoke about China’s patent system. To put China into context, one must remember that China is a socialist state, China had no patent laws just 25 years ago, and China only joined the WTO in 2001. China is different from US patent law in some major ways. For example, there is a 2 year statute of limitations for patent damages. Also, there is a defense of innocent infringement in China. Finally, the feared compulsory licensing provision exists, but has never been used.
The Chinese translation of English patents is controlling, which can cause problems. Chinese patents use Jepson claim format. U.S. practitioners must remember to deposit microorganisms on the filing date to receive a patent in China. China also provides “utility model” patents which are filed without examination and a source of possible danger. The legal profession is still being privatized, and the Chinese culture has some conflicts with patent ownership. Finally, China is influenced by the U.S. Federal Court of Appeals (which can be seen as good or bad).<--

Pharma article by Malcolm Gladwell

In discussing Angell's book “The Truth About the Drug Companies: How They Deceive Us and What to Do About It” (Random House; $24.95), Gladwell gives a brief history of Prilosec/Nexium (including a discussion of the enantiomer/racemate relationship) and points out certain issues with the application of COX-2 inhibitors (see also "Increasingly Aggressive Efforts at Patent Enforcement," Intellectual Property Today, (June 2000)). He brings up the possibility that PBMs might alleviate some of the inefficient utilizations of drugs (eg, use of higher cost drugs where the incremental cost is not commensurate with the incremental benefit).

-->
This is why increasing numbers of employers have in recent years made use of what are known as Pharmacy Benefit Managers, or P.B.M.s. The P.B.M.s draw up drug formularies—lists of preferred medications. They analyze clinical-trials data to find out which drugs are the most cost-effective. In a category in which there are many equivalent options, they bargain with drug firms, offering to deliver all their business to one company in exchange for a discount. They build incentives into prescription-drug plans to encourage intelligent patient behavior. If someone wants to take a brand-name oral contraceptive and there is a generic equivalent available, for example, a P.B.M. might require her to pay the price difference. In the case of something like heartburn, the P.B.M. might require patients to follow what’s called step therapy—to try the cheaper H2 antagonists first, and only if that fails to move to a proton-pump inhibitor like omeprazole. Employers who used two or more of these strategies last year saw a decrease of almost five per cent in their pharmacy spending.

There is no mention of these successes in “The Truth About the Drug Companies.” Though much of the book is concerned with the problem of such costs, P.B.M.s, the principal tool that private health-care plans use to control rising drug costs, are dismissed in a few paragraphs. Angell’s focus, instead, is on the behavior of the pharmaceutical industry. An entire chapter, for instance, centers on the fact that the majority of drugs produced by the pharmaceutical industry are either minor variations or duplicates of drugs already on the market. Merck pioneered the statin category with Mevacor. Now we have Pfizer’s Lipitor, Bristol-Myers Squibb’s Pravachol, Novartis’s Lescol, AstraZeneca’s Crestor, and Merck’s second entrant, Zocor—all of which do pretty much the same thing. Angell thinks that these “me-too” drugs are a waste of time and money, and that the industry should devote its resources to the development of truly innovative drugs instead. In one sense, she’s right: we need a cure for Alzheimer’s much more than we need a fourth or fifth statin. Yet me-too drugs are what drive prices down. The presence of more than one drug in a given category gives P.B.M.s their leverage when it comes time to bargain with pharmaceutical companies.<--

Another topic covered by Gladwell relates to misinformation:

-->Here is a classic case of the kind of thing that bedevils the American health system—dubious findings that, without careful evaluation, have the potential to drive up costs. But whose fault is it? It’s hard to blame Pravachol’s manufacturer, Bristol-Myers Squibb. The study’s principal objective was to look at Pravachol’s effectiveness in fighting heart attacks; the company was simply using that patient population to make a secondary observation about strokes. In any case, Bristol-Myers didn’t write up the results. A group of cardiologists from New Zealand and Australia did, and they hardly tried to hide Pravachol’s shortcomings in women and older people. All those data are presented in a large chart on the study’s third page. What’s wrong is the context in which the study’s findings are presented. The abstract at the beginning ought to have been rewritten. The conclusion needs a much clearer explanation of how the findings add to our understanding of stroke prevention. There is no accompanying commentary that points out the extreme cost-ineffectiveness of Pravachol as a stroke medication—and all those are faults of the medical journal’s editorial staff. In the end, the fight to keep drug spending under control is principally a matter of information, of proper communication among everyone who prescribes and pays for and ultimately uses drugs about what works and what doesn’t, and what makes economic sense and what doesn’t—and medical journals play a critical role in this process.

<--

A more significant critique of medical journals is the writing of drug reviews by authors with some conflict of interest in the drug being reviewed. Angell, in her previous role as editor at NEJM, was involved in a problem of this kind.

As to Gladwell's issue of "clearer explanation," one might also take a look at the way law reviews are being handled. For example, as noted elsewhere on this blog, the Harvard Law Review published an article asserting a 97% patent grant rate at the USPTO, even though there is no such thing, and never corrected the error. At a minimum, that article needed a "clearer explanation."

**UPDATE. 2 Sept 2005**

Several pieces of legislation, enacted from the Reagan era onwards, have played into the hands of Big Pharma - the collective name for the top 10 drug companies that between them netted $US36 billion in profits in 2002 - more than all the other 490 Fortune 500 companies together.

It sounds like high farce but it is fact: the US Patent and Trademark Office is paid a piece rate according to how many applications it processes, which, naturally, predisposes it to grant patents rather than having to justify rejecting them. Bingo: patents on new dosages, combinations of old drugs, and even on the coatings and colours of pills.

Pity the drug regulator as it wades through the resulting patent mountain to figure out which of these supposed innovations should earn the companies an extension on their lucrative exclusive marketing rights.

Of course, the pharmaceutical industry and free-market pundits decried Angell and her work when the book was published in the US last year.

She was lampooned as a woolly leftie by James Pinkerton, a fellow of the think tank New America Foundation.

"She argues that the same government that has given us the Interstate Commerce Commission, the Federal Communications Commission, the Federal Energy Regulation Commission, the Federal Elections Commission, and a hundred other acronymic agencies, will do a wonderful job of overseeing the pharmaceutical industry," he sniggered. "So if you are sick and tired of capitalism, your ship may be coming in."

Henry Miller, a fellow at the conservative Hoover Institution at Stanford University, got more personal, accusing Angell of a crusade to deny people life-saving innovations. "Dr Angell's analysis of companies' profitability downplays their huge investments in research and development," he wrote. This investment, as a proportion of sales, was about four times as much as the electronics, telecommunications or aerospace sectors.

Nanotech applications

In a basic application, NanoTex Co. has created nanoparticles that attach to cotton fibers and create a barrier that causes liquids and other substances to bead up rather than be absorbed by the cotton. The process is used by many clothing manufacturers, including Gap and Old Navy. The company has developed a coating that will help clothes absorb and neutralize body odors, giving clothes a fresh smell through repeat wearings.

Other products utilizing nanotechnology include:

Sunscreen: The use of microscopic metal oxide particles produces a clear sun-blocking lotion without the “white smear” caused by older technologies.
Cosmetics: L'Oreal, Esteé Lauder and other companies are making skin creams and other products with nanoparticles that penetrate deep into the skin, allowing more effective and longer-lasting delivery of vitamins and other agents.
Paints and coatings: Nanoparticles better protect surfaces from decay, scratches and corrosion, and window coatings reduce glare or provide greater insulation. Inframat, a firm in Farmington, Conn., says its nanotech ceramic coating prevents barnacles from adhering to ship hulls.
Silver antibacterials. [Nano-sized metals, such as gold, behave quite differently than larger sized particles. for example, “Responsible Development of Nanotechnology,” April 2, 2004, available at www.nano.gov/ html/about/TeagueRegNNIConf04.html.]


Quantum dots are used in bio applications because they are small enough to pass through the leaky blood vessels found near cancerous cells and lodge near them. Shuming Nie has further boosted their detection skills by attaching cancer-finding antibodies to them. “Nanoprobes Are Destined for Major New Roles in Medicine,” Drug Week, March 19, 2004, p. 173.

Also: “2003 Nanotech Product Guide,” Nanotech Report, July 2003, p. 1. For a list of early patents in the fullerene area, see LB Ebert, Carbon, 1995, 33, 1010.

**The article by Barnaby J. Feder on nanotech is repeated at
http://news.zdnet.com/2100-9596_22-5425075.html.

As one point on the patent issue, note that buckyballs were probably synthesized in the 1960's by a group in the United States. Using a technique which we now know would make buckys, they reported an x-ray diffraction pattern distinct from graphite. Under the law set out in the Schering case, we know that for buckyballs to be anticipated by this work, it is not relevant that the workers in the 1960's did not understand that they had made a new form of carbon; it only matters that they did make a new form, which can be proved by experiments done at a later time, like 2004.

Ampex files patent suit against Kodak over digital cameras

To illustrate that patent law is not always the "big guy" suing the "little guy," note that Ampex has filed suit, both at the ITC and in the District of Delaware, against Kodak over digital cameras. Kodak recently was the plaintiff against Sun in a patent suit involving Java issues, and much earlier was the defendant in a suit brought by Polaroid.

-->Ampex Corp. (Redwood City, Calif.) filed a complaint with the International Trade Commission seeking to exclude Eastman Kodak Co. from selling digital cameras in the U.S., alleging the imaging products supplier infringed on its IP.

In addition, Ampex filed suit in the United States District Court for the District of Delaware seeking unspecified damages from Kodak for patent infringement. <--

Magma answers, counterclaims in Synopsys patent suit

from Businesswire: Magma Design Automation Inc., a provider of chip design solutions, announced on Oct. 21, 2004 it has filed an answer and counterclaims in United States District Court for the Northern District of California in response to a lawsuit filed by Synopsys Inc. against Magma for allegedly infringing three patents related to electronic design automation ("EDA") technology. In the filing of October 21, 2004, Magma refutes all allegations that it is infringing a Synopsys patent. Magma also affirms its full ownership of two other patents granted to it by the U.S. Patent & Trademark Office, patents to which Synopsys now claims rights.


Key points in the "Preliminary Statement" of Magma's answer to the Synopsys lawsuit (pages 1-4 of the court filing) include:

-- Synopsys' claim that Magma infringes U.S. Patent No. 6,378,114 ('114) is without merit because Magma's technology is fundamentally different from the invention disclosed in that patent. [Note: this is an assertion of noninfringement.]

-- Magma has full ownership of the two other patents at issue, U.S. Patent No. 6,453,446 ('446) and U.S. Patent No. 6,725,438 ('438), because the inventions disclosed in those patents were developed at Magma. Thus, Synopsys has no right to assert these patents.

-- Synopsys has no standing to bring any infringement action under the '114 Patent because IBM is a joint owner of that patent pursuant to a joint development project with Synopsys. Magma, moreover, holds a license to this patent under a license agreement with IBM. [Note: each assignee of a patent does have a right to license complete patent rights in the absence of an agreement to the contrary.]

-- Even if Synopsys could show that the '446 and '438 patents are not owned entirely by Magma, those patents would also be jointly owned with IBM, and thus Synopsys has no standing to sue Magma for infringement. If owned by Synopsys and IBM, these patents would also be licensed to Magma pursuant to Magma's license agreement with IBM.

-- Synopsys is engaging in efforts to spread false and misleading statements about Magma and its products.

In its filing today, Magma seeks, among other things, dismissal with prejudice of Synopsys' complaint, reaffirmation of Magma's ownership interest in the '446 and '438 Patents and an order enjoining Synopsys' unfair business practices.

The filing is available to the public from the U.S. District Court, Northern District of California, San Francisco, Case No. C04-03923.

Jury verdict against Genetech upheld in City of Hope case

On October 21, 2004, the California Court of Appeal in Los Angeles upheld a jury verdict ordering Genentech Inc. to pay $500 million to the City of Hope National Medical Center (Duarte, CA) to settle a dispute over a 1976 drug royalties contract. The litigation involved commercial rights to Genentech-funded City of Hope research conducted in the late 1970s that yielded a patented method for using bacteria to produce human proteins invented by City of Hope researchers Arthur Riggs and Keiichi Itakura. Overall, there were 100 patents, and the research led to the creation, among other things, of synthetic insulin, or Humulin®, the world's first biotechnology drug. This litigation is not directed to the license that City of Hope has granted to Genentech for use of its monoclonal antibody technology. This technology is used in the manufacture of the medications Herceptin® and Rituxan® two promising anti-cancer drugs.

The history of this case is complex. City of Hope filed the original contract dispute suit against Genentech in 1999. The first trial resulted in a hung jury, 7-5 in Genentech’s favor, in October 2001. In the retrial, the jury deliberated for 17 days before announcing the verdict on June 10, 2002, which directed Genentech to pay approximately $300 million in additional royalties, including royalties on products for which Genentech itself did not receive royalties. The trial continued three days and the jury deliberated an additional three days before announcing the punitive damages award granted to City of Hope.

Of the decision on appeal, the three-member appellate court said there was "substantial evidence of fraud and malice" by Genentech. It also refused to grant the company a new trial. City of Hope had asserted Genentech concealed licensed sales of protein products, such as hepatitis vaccines, over a 15-year period that were worth about $16.7 billion and that it thereby was owed $457 million in royalties and interest.

Fewer than 25,000 genes in the human genome

As the number of human genes drops downward, it becomes apparent that the key technical, and patent, frontier is at the proteome, not the genome.

from The Scientist:

Still, it is the paucity of genes in the human genome—a figure revised downward to fewer than 25,000—that continues to "blow our socks off," according to Francis Collins. It seems like an awfully short list to account for the biological properties of a human being, he said.

Hal Varian in the New York Times on patents

A problem with economists viewing the patent system is their lack of familiarity with the patent system.

--> Superficial anecdotes are used to substitute for thorough analysis. Thus, one might get the idea that the patents on a method of swinging on a swing or on the sealed crustless sandwich are the rule, rather than the exception, at the Patent Office. Amazon's one-click patent is frequently brought up, but the fact that it sustained a validity attack in district court is rarely mentioned. Fictional anecdotes, such as the idea that the inventors of the transistor foresaw applications only for hearing aids, are presented as if they were fact.

--> Concepts such as "regulatory capture" are imported from other fields, where they might make sense, to the patent system, where there is no evidence that they have any relevance. Although some of the judges come from industry, it's hard to detect a pro-industry bias among the judges. Further, in looking at the scattered positions taken by corporations in the two recent cases on the doctrine of equivalents (Hilton Davis; Festo), it's hard to tell "what is" the corporate position on patent issues.

--> Discrete concepts, such as novelty (35 USC 102) and obviousness (35 USC 103), can be garbled. For example, in the much discussed re-examination involving the Eolas patent, the only issue has been one of obviousness, with no contention that the claims of the Eolas patent are anticipated over the prior art.

--> Broad-brush assertions, such as the presence of "a steady reduction in patent quality," are presented without proper documentation. In the Quillen/Webster studies, there is an assertion that "higher grant rates" directly imply a reduction in patent quality, although this has not been documented. Furthermore, the assumptions underlying the Quillen/Webster studies, which are the primary evidence for "higher grant rates," have been questioned.

from the New York Times, October 21:

by HAL R. VARIAN

Published: October 21, 2004


FEELING hungry? How about a peanut butter and jelly sandwich? But be careful how you make it - you don't want to infringe on United States Patent No. 6,004,596, for a "sealed crustless sandwich."

Well, maybe it is safer just to have some toast. But watch out for Patent No. 6,080,436 on a "bread refreshing method."

Not hungry anymore? Well, maybe you could just play with the cat. But even that's not safe. Patent No. 5,443,036, "Method of Exercising a Cat," protects using a laser pointer to amuse a cat "and any other animals with the chase instinct."

These patents, which might strike some as frivolous, are symptoms of the deeper problems with the nation's patent system discussed in "Innovation and Its Discontents," a recent book by two economics professors, Adam B. Jaffe of Brandeis and Josh Lerner of Harvard.

Most economists, including the authors of this work, accept the need for intellectual property protection. Patents provide necessary incentives for innovation by adding "the fuel of interest to the fire of genius," in the words of Abraham Lincoln, the only American president to hold a patent - for a device to lift boats over shoals.

However, any system of intellectual property protection requires balance. The law must offer enough rights to the inventor to stimulate innovation, while at the same time ensuring that the resulting temporary monopoly on the invention does not impose too onerous a burden on society.

A patent has a length, a width and a height: how long it is valid, how broadly it applies and how novel it is. Mr. Jaffe and Mr. Lerner are most concerned with the last issue.

A patentable invention must be "not obvious to one skilled in the art." This guideline is subject to interpretation, and in recent years it has seemed as if almost anything could be patented.

According to the authors, the deterioration in patent quality started in 1982, when Congress made two seemingly innocuous changes to the system.

First, it created a specialized Court of Appeals for the Federal Circuit. The motivation for this change was well intentioned: the district courts that heard patent appeals before 1982 applied widely varying standards, and the new Court of Appeals was supposed to offer a consistent policy.

Second, Congress tried to make the processing of patents self-sustaining: it was to be supported entirely from fees paid by patent applicants.

These reforms resulted in a tilt toward patent holders. Mr. Jaffe and Mr. Lerner assert that since these changes, a patent applicant is "much more likely to have the patent granted; the patent is much more likely to be held valid if challenged in court; and the party accused of violating the patent is more likely to be found to be an infringer and forced to pay a large monetary award."

The economists explain these changes as an example of what economists call regulatory capture. Regulators - in this case, judges who hear patent cases - are often drawn from the industry they regulate. Even in cases where they come in as outsiders, over time they tend to identify with the concerns of the industry they regulate rather than with the public at large.

The Patent and Trademark Office now views its constituency as patent holders - not surprising, given that they make up the group that provides its financing. As one patent examiner put it: "When I first started here, I was told, 'When in doubt, reject' and to try to reject. Now I am told, 'When in doubt, allow' and try to find a reason to allow."

Patent examiners are underpaid and overworked. Novelty is supposed to be judged relative to "prior art," but it is almost impossible for a single human being to root out all relevant prior art. One result has been a steady reduction in patent quality, with patents of dubious novelty being granted routinely.

The reduction in standards for granting patents has started an arms race among patent holders. The best defense against being sued for patent infringement is to hold a portfolio of patents that can be used to countersue. So every company has to build a "patent thicket": an arsenal of patents that can be used offensively or defensively, as necessary

DSS loses dualsand trademark case at CAFC

DSS appealed to the Federal Circuit a decision of the TTAB denying registration of the trademark "dualsand" on the ground it was descriptive. DSS argued that "dualsand" was suggestive.

Background

In the final office action of the examination, the examining attorney cited 13 articles from the internet to conclude that "dual sand" was a term of art. DSS submitted third party registrations to substantiate the suggestiveness argument, but these were not considered because DSS did not provide copies of the registrations to make them of record.

Appeal to the TTAB

On appeal, the TTAB sustained the examining attorney. Of the suggestive/descriptive boundary, the TTAB cited In re Quick Copy Shops, 616 F2d 523 (CCPA 1980).

Appeal to the Federal Circuit (CAFC)

In turn, the CAFC affirmed the TTAB decision, finding substantial evidence sustained its decision. The CAFC quickly disposed of the argument of DSS that the internet citations were not credible. A due process argument about the failure to consider the registrations failed, especially because the TTAB had stated it would have reached the same decision even if the registrations had been considered. [HOWEVER, on this particular point, recall the dissent of Judge Newman in a different due process case [Nelson v. Adams], and recall that the dissent of Judge Newman was largely embraced by the US Supreme Court, which obliquely characterized the CAFC majority view of due process as being like Alice in Wonderland. Thus, the better reasoning is that there was due process, not that its absence did not matter. And remember the infringement defendant in Nelson v. Adams, although winning at the Supreme Court, ended up losing when he got his due process, courtesy of collateral estoppel.]

Vocel markets cell phone application to Verizon

from zdnet:

Verizon Wireless is now selling a $5.75-a-month SAT-tutoring service that automatically e-mails questions to cell phones. The subscriber chooses when he or she wants to receive questions, then the service sends flash card type exercises, queries from previous Scholastic Assessment Test exams and other material.

A devilish feature lets a parent check up on how well a teenager is doing with the service, said Carl Washburn, chief executive of Vocel, the San Diego-based wireless software maker that's supplying the application for Verizon Wireless to sell.

(...)
Premium games, ring tones and other cell phone software has developed into a billion-dollar-a-year business in the United States, and it's helping carriers adjust to the steadily declining price of phone calls.

Tutoring represents a new generation of more sophisticated applications, and a patent is pending on some of the technology in use, according to Vocel. Other next-generation cell services include downloadable videos and TV.

******

VOCEL uses QUALCOMM's BREW solution to incorporate its cutting edge SMS "push" technology into this innovative application. The unique part of this technology is that students can choose their test prep schedule. "My 15 year old son is not yet disciplined enough to study for the SAT on his own," said Carl Washburn, CEO of VOCEL. "This technology is a godsend-SAT practice questions are automatically being sent to his phone throughout the day. The
practice questions are impossible to ignore. Now he is answering SAT practice questions each day without my having to nag him to study," said Carl Washburn, CEO of VOCEL.

USPTO creates nanotechnology reference guide

from smalltimes:

The U.S. Patent Office has created a cross-reference digest designed to improve the ability to search and examine nanotech-related patents.

The office said in a written release that the digest seeks to guide the search for prior art, serve as a collection of issued U.S. patents and published pre-grant patent applications, and help develop an expanded cross-reference art collection classification schedule. That schedule, ultimately designed to replace the new digest, will include definitions, sub-classes and search notes.

**There's certainly no shortage of published papers on buckminsterfullerene (aka buckyball), fullerenes, and nanotubes. Further, although there have been allegations that uncertainty over patent ownership of fullerene technology has impeded development, it may be more likely that undertainty over viable applications has been the obstacle.

***The patent office's definition for nanotechnology requires that a least one dimension of the item of an invention be less than 100 nanometers, but small size alone is not enough. The nanoscale element of the product or process must be essential to whatever properties make it novel.

"People looking for venture capital money will call anything small 'nanotechnology,' " said Bruce Kisliuk, director of the section of the patent office that handles biotechnology and pharmaceutical applications, who is coordinating the work on nanotechnology issues. [i.e., the call of "nano, nano."]

The decision to set up Class 977, as the new patent class category will be officially designated, is a recognition that a swarm of nanoscale inventions is headed the patent office's way. Some are already on the market, including fibers for clothing and mattresses that are highly stain resistant and water resistant; particles of titanium dioxide that make sunscreen transparent; and nanocrystals of silver for antimicrobial bandages [see earlier post on Hatch-Waxman work out of Penn State].

The Shelby Amendment: the boogey man never came

Back in 1999, the Shelby amendment was controversial. Many scientists and scientific societies predicted doom and gloom. Five years later in 2004, we see that these predictions were way off the mark and probably represented interest-group mindset rather than objective reasoning.

In 1999, Dick Kirschten reported on Rush Holt's position opposing the amendment:

-->Rep. Rush Holt, D-N.J., a physicist, describes the Shelby amendment as an attempt at "back door regulatory reform." He attributes it to a mind-set holding that "if those regulators are doing things to me that I don't like, then it must be bad science." Holt says all research findings should be open to scrutiny not only by the public but by other scientists who can try to replicate or refute them. But, he adds, "that doesn't mean the scientist should be harassed while doing the research." <--

In "Risk-Aversion and Iatrogenic Events: Not All Patent Claims (or Lawyers) Are Created Equal," (Intellectual Property Today, March 2000), I took issue with Holt's view of the Shelby amendment.

--> C&E NEWS, THE SHELBY AMENDMENT, AND CREATIVE EDITING

On January 10, 2000, Chemical & Engineering News (CEN) published a guest editorial by Congressman Rush Holt (D-NJ), who has a Ph.D. in physics and was formerly assistant director of Princeton University's Plasma Physics Laboratory. Entitled "Repealing a Bad Law," it was directed to the Shelby amendment of the
Freedom of Information Act (FOIA), although it did not refer to the "Shelby amendment" or Senator Richard Shelby by name. There was an aspect of the editorial pertinent to possible effects of the Shelby amendment on intellectual property (IP) rights created under the Bayh-Dole Act, although the Bayh-Dole Act was not named. This IP-relevant text follows.

As a direct result of this law, university-industry partnerships will be adversely affected because FOIA does not adequately protect scientists from proprietary breaches. Data from privately funded research may be conmingled with data from publicly funded research in ways that may be difficult to separate. This will dampen industry's enthusiasm for academic collaboration and significantly hinder scientific progress, particularly in fast-paced high-tech
industries. According to PhRMA [Pharmaceutical Research & Manufacturers of America], this amendment "could result in the release of commercially sensitive data and thereby undermine the incentives for joint public-private cooperative research." It is vital that this productive environment for research not be
hampered by the issues that will result from these new regulations. n12

n12 R. Holt, Chemical & Engineering News, p. 3 (Jan. 10, 2000). Holt presumably considers the Shelby amendment iatrogenic. Also, L. B. Ebert, C&E News, p. 4 (Jan. 31, 2000). Of the possible issue that disclosure under FOIA to third parties might lead to patents to third parties, one wonders if the public is poorly served if data derived from public grant funds create (additional)
inventions not contemplated by the grantee. The buckyball saga illustrates a related point, wherein it was the SECOND group of researchers to knowingly make C60 (the academic Professors Smalley, Kroto and Curl, who corrected the imperfect FIRST results of the industrial workers) who received the Nobel Prize.

On January 12, 2000, I emailed the following letter to CEN.

Of the guest editorial "Repealing A Bad Law" (C&EN, 10-Jan-00),
Congressman/scientist Holt is somewhat lawyer-like in omitting certain details surrounding the Shelby amendment of Public Law 105-277, which gives the public access to data generated by federally-funded grants under procedures established under the Freedom of Information Act ("FOIA"). Cong. Holt says that the "legislation was introduced hastily in backroom discussions without any public
debate" and that "it was concocted in the dark of night," but fails to mention the factors which caused Senator Shelby to act. These omitted aspects include the following. The National Institutes of Health funded the Harvard School of Public Health to research certain clean air/particulate matter issues. The Environmental Protection Agency used these research findings in justifying
regulations pertaining to sources of small particle emissions ("soot"). The regulated community wanted to see the data. The request was denied. The data resided with Harvard and not the EPA, and were thus immune from a FOIA request. Senator Shelby acted to rectify the problem. In doing so, Senator/ lawyer Shelby was in harmony with a 1985 statement of the National Research Council:
"Scientists have a special responsibility to share data as quickly and as widely as possible where the data are or will become relevant to public policy." Cong. Holt identifies four major problems with the Shelby amendment: confidentiality breach, "infringement of intellectual property", opportunity for harassment and administrative burden. Of the intellectual property issue, 35 USC sections 200 -212 (relevant portions of the Bayh-Dole Act) and 37 CFR 401-414 (implementing rules thereof) impose confidentiality restrictions on the agencies as to release under FOIA. Of the non-profit organization itself, the fact that it is the first entity to generate and to possess the data suggests that it is in the best
position to file for patent protection, with or without the Shelby amendment, with or without conmingled data. The availability of provisional applications (35 USC section 111(b)) allows rapid and inexpensive filing to establish protection. Of harassment, would one prefer partisan lobbyists to make ad hominem attacks (the no-FOIA Holt world) or at least to address issues in the
underlying data (the FOIA Shelby world)? In the context of the Dorn controversy (Science, 29-Oct-99, pp. 883, 885), a lawyer was quoted: "Scientific disputes normally get worked out by a riproaring debate in the literature." The debates most useful to society are those with all available facts on the table. The concerns raised by Cong. Holt must be addressed, but omitting the issues of
Sen. Shelby is not a good way to reach dialog and resolution.

On January 20, CEN said my letter would be published. En route to
publication, the key sentence on the intellectual property issue underwent transmogrification. Thus, "Of the non-profit organization itself, the fact that it is the first entity to generate and to possess the data suggests that it is in the best position to file for patent protection, with or without the Shelby amendment, with or without conmingled data" was changed by CEN to become "Of the nonprofit organization itself, (as considered in the Bayh-Dole Act), since it is the first entity to generate and to possess the data, it is in the best position to file for patent protection, with or without the Shelby amendment or commingled data." I requested substitution of "as considered in the Bayh-Dole Act" by -- e.g., a university -- but CEN, without authorization, published the
key sentence as: "Since Harvard is the first entity to generate and possess the data, it is in the best position to file for patent protection -- with or without the Shelby amendment or conmingled data."

Instead of dealing with the nub of the general issue of the Shelby amendment (opening up grantees (e.g., universities) to FOIA) and the general sub-issue (the interplay of the Shelby amendment with the Bayh-Dole Act), CEN made it appear that the specific Harvard/ NIH/EPA episode concerned patent rights, which it did not.

In the debate about the Shelby amendment, there has been some discussion of the amendment effectively (or essentially) overturning a 1980 Supreme Court decision, Forsham v. Harris, 445 U.S. 169 (1980). This is incorrect. In Forsham, the court noted FOIA (5 USC 552) empowers federal courts to order an "agency" to produce "agency records improperly withheld." (Section 552(a) (4)(B)) but that the data at issue were not "agency records." Forsham, 445 US at
177. Post-Shelby, the data in Forsham still are not agency records. FOIA was amended to allow access to grantee's data. n13 However, comparisons of Forsham to Shelby are interesting. In Forsham, the technical data at issue pertained to the correct treatment regimen for diabetes, and the petitioners (whose ideas were adversely affected by a federal regulation) wanted to see the data and statistical methods. Because the data were not agency records, they didn't get to see the data. Justice Rehnquist (a "conservative") wrote the opinion effectively blocking data access and Justices Brennan and Marshall ("liberals") dissented. About twenty years later, Senator Shelby (a "conservative" and a lawyer) is blocked in his efforts to secure data on behalf of people adversely
affected by a federal regulation. n14 He presents his amendment, effectively opening data access, and Congressman Holt (a "liberal" and a scientist) tries to repeal the amendment and to cut back data access.


n13 For a discussion of the contractee/grantee dichotomy, see letter of Gary D. Bass of OMB Watch in the Washington Post, April 20, 1999.

n14 The regulation tightened standards on particulate emission. The author discloses that he worked as a scientist on soot. L. B. Ebert, J. C. Scanlon and C. A. Clausen "Combustion Tube Soot from a Diesel Fuel/Air Mixture: Issues in Structure and Reactivity," Energy & Fuels, 2, 438 (1988). The impact of the Shelby amendment on the collaboration between Exxon (analyzer of soot) and a
university grantee/ contractee (creator of soot) might be interesting to contemplate. Separately, the work showed that soot consists primarily of polynuclear aromatics (a class including potent carcinogens) rather than benevolent buckyballs, theoretically avoiding an iatrogenic outcome. [Note added in 2004: As is known in 2004, but not known in 2000 when the IPT article was written, buckyballs are toxic at 20 parts per billion, and are thus not benevolent. However, soot, in 2004, in 2000, and at all previous relevant times, has far, far more polynuclear aromatics than buckyballs specifically or fullerenes generally.]

[IPT available LEXIS: March 13, 2000; see also article in National Law Journal on Shelby amendment in 2000.]


**** Later study of the impact of the Shelby amendment did not confirm Holt's fears.

-->In the Spring 2001, the Science, Technology and Law Program of the National Research Council (NRC) held a workshop on the effect of the "Shelby" Amendment on public access to research data. Agencies representatives at that meeting indicated that they had received relatively few FOIA requests under the Shelby Amendment for scientific information (14 from NIH and 7 from EPA). <--

Similar findings were also reported by the Government Accounting Office (GAO) at http://www.gao.gov/atext/d0431.txt . The GAO additionally noted:

-->Each of the eight federal agencies we examined relies on university scientists who receive federally funded research grants to make the results available to the public; five of these agencies also disseminate results by posting them on their Web sites. Although university scientists customarily seek to publish their research results in peer-reviewed journals, agencies cannot require such publication as a condition for funding because it is impossible to ensure in advance that the results will be deemed by peer review to be acceptable for publication. Agencies do, however, explicitly encourage funding recipients to make results available to the public, and they consider scientists' publication records in reviewing grant applications. Agriculture, Defense, Energy, EPA, and NASA also disseminate the results of the research they fund by posting researchers' final reports on their Web sites because, according to officials at these agencies, Web sites offer an effective way to share information among scientists, as well as with the public. In contrast, NIH officials told us that they do not post researchers' final reports because, in the biomedical field, the risks associated with posting results that have not been scrutinized and validated by peer review are too great. Similarly, NSF officials said that NSF does not post results, partly because some scientific journals reject manuscripts if the results have already been posted on the Web. Education currently is considering how best to respond to the directive in the Education Sciences Reform Act of 2002 to widely disseminate the findings and results of scientifically valid research in education. We are recommending that Education post the results of the research it has funded on its Web site to facilitate access to and maximize the benefits of its research investment. Education agreed with our recommendation.<--

GPCI/Scieran sue Bausch & Lomb unit

from PRNewswire:

A complaint filed in the District of Delaware alleges that Bausch & Lomb Surgical Inc, a unit of Bausch & Lomb, Inc., manufactured, used, sold and/or offered for sale a disposable high-speed vitrectomy cutter, without the rights or license from Scieran, acts of infringement of Scieran's US Patent Nos. 6,629,98 ("Apparatus and method for performing opthalmic procedures") and 6,258,111. Scieran seeks unspecified compensatory damages and a permanent injunction against Bausch & Lomb.

UPDATE. from Rochester Business Journal:


Scieran alleges that the inner cannula used in Bausch & Lomb’s vitrectomy cutters infringes two Scieran patents, Bausch & Lomb officials said. But the local company uses the inner cannula supplied by Promex Technologies LLC in Franklin, Ind.
“Promex has indemnified Bausch & Lomb against patent liability relating to this inner cannula. Bausch & Lomb believes this lawsuit is without merit and will conduct a vigorous defense in this case,” said Margaret Graham, spokeswoman for Bausch & Lomb.

AFL-CIO sues Astrazeneca over misleading information about NEXIUM

from Reuters:

--> The AFL-CIO and two California consumer groups on Monday sued AstraZeneca, alleging the company misled patients into switching to its expensive new ulcer drug as the patent on its nearly identical older Prilosec pill was set to expire.

The suit was filed in U.S. Superior Court in Los Angeles by the labor union, the Congress of California Seniors and the California Alliance for Retired Americans on behalf of consumers nationwide who purchased the newer pill, called Nexium.

The plaintiffs are members of the Prescription Access Litigation Project, a national coalition of 100 consumer organizations that are using class-action lawsuits to challenge prices of prescription drugs.

The coalition in a release said London-based AstraZeneca initiated "a massive and misleading advertising and promotional campaign to deceive consumers into purchasing Nexium, a nearly identical new drug" to Prilosec.

The coalition said the suit contends AtraZeneca used "misleading information to convince consumers that Nexium was a significantly better drug than Prilosec." <--

***
The Reuters article did not go into detail on what "nearly identical" meant. In an earlier article, the Wall Street Journal screwed up the relationship of Nexium and Prilosec.

To go into detail, from a chemical formula point of view, Nexium and Prilosec are identical; they have the same chemical formula. They are not identical from a stereochemical point of view, because the molecule has a center of optical activity.

From "It's a Strange, Strange World," Intellectual Property Today, October 2002:

-->
The discussion of optical isomers contained in the article on AstraZeneca ["For AstraZeneca, Ruling on Patents Will Be Critical," WSJ, C1, C3 (10 Sept. 02)], which is critical to the understanding of the disputes over PRILOSEC/NEXIUM and PLAVIX, is in error. An optical isomer is not "one-half of a mirror image of the original molecule." Certain molecules are related to one another in the same way as a right hand is to a left hand: they are mirror images which are nevertheless distinguishable. The molecules in NEXIUM and PLAVIX are analogous to collections of "right hands," while the corresponding racemates are analogous to collections of equal amounts of "right hands" and "left hands." Patent law has a relatively straightforward approach to analyze patentability distinctions between optical isomers and the corresponding racemate. A larger error appears concerning the drug fexofenadine at page 469 of the article FDA POLICY AND REGULATION OF STEREOISOMERS by M. Strong. 54 Food & Drug L.J. 463 (1999). Fexofenadine is not an enantiomer of the racemate terfenadine.

Patent law: a blight on innovation?

John Leyden in The Register reports that Hewlett-Packard's Jeremy Allison, head of the Samba team, described patent law as a "blight on innovation". Also: "Patents become a legal game for large companies to crush small. It's too late in the US, but there's a chance to fight [proposed patent laws] in Europe."

Gee, Jeremy, as to large companies, ever hear about the Eolas case? eBay? Lemelson? As to innovation, contemplate the transistor patents to Bell Labs and how they spawned all kinds of industries.

The Leyden article also got into Linux:

-->Jeremy Allison - who heads up HP's Samba team - pointed that it would be difficult for vendors to make a profit from pushing Linux into the classroom. He said if people wanted to effect change they needed to do it at a local level. This might not be straightforward, however, with members of the audience pointing out some schools would be reluctant to accept Linux boxes even if they were given away free.

Steve Hnizdur, technical director at consultancy Netproject, said only be when Linux comes pre-loaded on boxes in PC World will it reach the mainstream.<--

***

One particular intellectual property dispute involves the free content management system (CMS) called Mambo and the company Furthermore.

According to LinuxWorld (http://www.linuxworld.com/story/46386.htm):


-->The Furthermore CMS was described recently in a LinuxWorld Magazine article as follows:

"It's 42 distinct modules of Mambo OS (and therefore PHP, MySQL, and Apache), smoothed with necessary snippets of code, obsessively tweaked and configured to behave as the next iteration of 'The Newspaper.'"

The problem, according to Brian Connolly, is that one of the lead developers he hired to help create Furthermore’s CMS, a Mambo community notable called Emir Sakic from the Royal Academy in Sweden, subsequently “implemented” - to official Mambo - Furthermore code designed to make a leading story present itself in such a way as to make the Furthermore CMS resemble a newspaper portal. Sakic has apparently admitted this in an e-mail to Connolly dated 10/3/03; but too late for Furthermore to anything about it.<--

Relevant to the big guy/little guy assertion by Allison:

-->Furthermore’s dilemma is that it doesn’t, as Connolly admits, have millions of dollars “to go out and sue everyone.” Hence its choice to seek mediation from the Open Source Software Institute. “SCO and IBM are the big guys, but down here in the trenches is where it's happening…we don't have a forum to resolve this kind of problem,” Connolly said in a recent interview.<--


***
As a footnote, according to David Berlind (http://blogs.zdnet.com/index.php?p=618):

SAMBA is an open source technology that's found in just about every *ix-based operating system that makes those operating systems look, feel, and smell like Windows to other systems on the network.

[While this is useful, how innovative is technology to make one thing look like something else?]

UPDATE:

[from http://www.cbronline.com/article_news.asp?guid=D3FB4667-8647-45A9-94BA-0DBDBFD2F04C]

Raleigh, North Carolina-based Linux vendor Red Hat and Uppsala, Sweden-based open source database vendor MySQL have joined the NoSoftwarePatents campaign as partners, alongside web hosting firm 1&1 Internet Inc and campaign manager Florian Mueller, a software industry veteran and advisor to MySQL.

Mueller plans to use the campaign to discuss the issue of software patents with politicians and the media, arguing that "software patents are used for anti-competitive purposes, stifle innovation, and would cost the entire economy and society dearly," according to a statement.

The issue of software patents has risen up the agenda in Europe in recent months as proposed changes to the EU Software Directive have been the subject of fierce debate between the European Parliament and the Council of Ministers.

Putnam and Tepperman revisit rational ignorance

Jonathan D. Putnam and Andrew B. Tepperman revisit Mark Lemley's rational ignorance at pages 17-19 of the October 2004 issue of Intellectual Property Today.

Quite distinct from Lemley, who advocated the status quo in his 2001 article in the Northwestern University Law Review, the authors state:

-->The only real solution to these problems is to make sure that the PTO has the resources to keep most bad patents from reaching the market. The issuance of poor quality patents causes an externality to transacting parties which largely cannot be otherwise internalized.<--

All right, tell me what externality scientifically invalid patents cause to transacting parties. For example, one should know whether or not there are hydrinos independently of whether there is a U.S. patent on them. There are bad patents that cause externalities and bad patents which don't cause externalities.

The authors also write
-->we view the optimal solution as one which increases resource expenditures until the marginal social benefit of reducing bad-quality patents is equal to the marginal social cause of increased resource expenditures.<--

This is a nice exposition of high school calculus, but doesn't give anyone any answers of "how much" more money to give to the USPTO. Also, the authors neglected to cite the Ghosh/Kesan paper on optimal ignorance at 40 Hous. L. Rev. 1219, otherwise cited in a different paper in the Oct. 2004 issue of Int. Prop. Today (at page 41).

In endnote 5, the authors repeat the false canard about firms telling R&D staff not to read competitor's patents, an observation Lemley made in rational ignorance. This wasn't even true before Knorr-Bremse, but it is impossible to swallow after.

Of Knorr-Bremse:

As stated in the Knorr-Bremse opinion, the touchstone of willfulness is whether the infringer acted as a reasonably prudent business person to avoid infringing another’s valid patent rights. Knorr-Bremse, 2004 U.S. App. LEXIS 19185 at *26-27. A policy of telling employees not to read patents of competitors would not seem a reasonable way to avoid infringing another's valid patent rights.

The Knorr-Bremse court reaffirmed that “there continues to be ‘an affirmative duty of due care to avoid infringement of the known patent rights of others....’” Id. at *22 (citation omitted); The court thus arguably reaffirmed the principle that infringers may not simply ignore patents of which they are aware, hoping they will not be sued.

On plagiarism, ghost writing, and falsities

Dean Lawrence Velvel had a post from Judge Richard Posner most directly related to the --law as different culture-- remark of Allan Dershowitz in the context of the plagiarism by Laurence Tribe.

-->
From: Richard_Posner
To: Dean Lawrence R. Velvel
Sent: Wednesday, September 29, 2004 2:56 PM

Larry, you make some good points. But it's a losing battle. The problem is that we no longer have a culture of writing. Writing is now a specialty. So judges, politicians, businessmen, lawyers--and now it seems law professors--increasingly hire ghostwriters (whether they're called ghostwriters, law clerks, or research assistants) as specialists in writing. I am one of the dinosaurs who still does all my own opinion writing (and of course book and article writing as well). You probably are too. But let's face it: we're on the road to extinction.

All the best. Dick
------

September 30, 2004

Dear Dick:

Thanks much for the response. You make a very worrisome point. I would therefore like to post your response and this reply, and since your email does not object to posting your comments, I presume it is okay to post them and the reply. But if it is not okay, please tell me.

To turn to your comments, let me say, first, it is surely not surprising that you do your own work. I would have been stunned if it were otherwise. For paradoxical as it may seem to many, nobody turns out the quantity of first rate work that you do if he has others doing his work for him. This would seem to many counterintuitive, since they would think more could be done if others are bearing part of the burden. But though it is counterintuitive to many, it is nonetheless true. There is an old saying that, if you want something done, give the job to a busy person. That is something that I think a lot of people understand. Yet the idea underlying it is the exact same idea as underlies my view that nobody will be as prolific as you have long been if others are writing his stuff.

You are, incidentally, correct in apparently thinking that I too do my own writing. This shows that one can do one’s own writing but not have your prolificness.

You make the worrisome point that the battle against having others do one’s writing is a losing one because "we no longer have a culture of writing." Thus, people turn over their writing to "specialists in writing," "whether they’re called ghost writers, law clerks, or research assistants." One simply cannot argue with your view of the present culture, i.e., that it is not a culture of writing. But such a culture is a disaster, is accompanied by the unhappy corollary that we no longer have a culture of reading, and in significant measure is attributable to our schools, from grammar schools to post graduate schools. Every effort should be made to change the culture, in my judgment, and the change should be promoted at every level of the school system.

The non-culture of writing, I may add, is also pretty strange in a way. For computers have made it easier and faster than ever to write and rewrite. It is far easier today than it was in, say, the first 60 or 70 years of the 20th century. There are precious few people left who, like me, don’t use a computer and write out everything in longhand.

There are some interrelated reasons why I feel strongly that we should get back to a culture of writing. One is the very question of honesty discussed in the prior posting. Much has been said there about that. But let me add one thing: if people insist on continuing to have others do their writing for them, then, heretical as this may sound to CEOs, politicians and judges, due credit should be given to the others. Perhaps, for example, a judge should say in a footnote in his or her opinion that so and so, a law clerk, assisted in the writing of the opinion. Or perhaps politicians or CEOs should explicitly thank -- i.e., give credit to -- those who helped them.

This may sound bizarre to judges and politicians and businessmen. But others have faced and resolved similar problems by giving credit where it is due. Newspapers, for instance, have faced the problem and have solved it by putting the names of two or more reporters on articles, instead of just one. Or sometimes they say at the bottom of a piece that X and Y and Z contributed to the article.

Thanking others for their help would be the honest thing to do. It would also let readers know who contributed to resolutions of problems or to other work -- or is this precisely the problem because the putative writers don’t want people to know that others contributed to the work. I would say that, if it is the problem, if CEOs, politicians and judges don’t want people to know that they have relied on the work of others, then they damn well ought to do the work themselves, as you do.

But there are other problems, too. One is encapsulated by the old saw that clear writing makes clear thinking. This, as you know, is a way of saying that writing things out stimulates one’s thought process wonderfully. Problems, illogicalities, possible solutions, etc. that one would never have thought of otherwise impress themselves on one if he or she has to write out the matter. (Judges have long had an expression that reflects this: "The opinion wouldn’t write.") When people don’t write, their thinking can be far less competent. This is very dangerous to our society, because it bespeaks a much lower quality of thinking on the part of leaders.

The corollary that a society which does not write will not read is, I think, equally true and, if anything, even more dangerous. What can one say? A society where people do not read is doomed to progressively greater ignorance and mistakes, is it not? Although you might strongly disagree, it seems to me that non-reading and the ignorance it breeds are in no little measure responsible for some terrible messes we find ourselves in today. Harry Truman once said there is nothing new under the sun except the history you don’t know, and apparently he also said, or least thought, that not all readers can be leaders, but all leaders must be readers. To me Truman seems exactly right.

There is one final point. Even if we do now have a general culture of non-writing, the people who recently have found themselves in trouble -- Ogletree and Tribe -- and the ones who previously got in difficulty because of a charge of plagiarism -- Ambrose, Kearns-Goodwin, to some extent Dershowitz -- have made their lives in a specific sub-culture of writing. So they in particular should not have had books, for which they claimed credit, written in part or whole by others, and should not have plagiarized. You know, it is sad to say, but may be inevitable, that what has been coming to public notice will lead to questioning of the bona fides of what is done generally at the Harvard Law School, in other parts of Harvard University, and at other top ranked and lesser institutions. Suspicion may run deep for awhile, and God forbid that it should prove widely warranted. This society really should get back to people doing their own work. I seem to remember that Holmes did it. I believe Brandeis did it. You do it. Even turkeys like me do it. At rock bottom there is not much in the way of sustainable reason why most people shouldn’t do it, and there are lots of good reasons why they should.

And yet . . . . and yet . . . . one dreads the possibility that your pessimism may be all too well placed.

In any event, thanks again for your response. I would like to post it and this reply. Also, any further comments you wish to make would be avidly received and, if you have no objection, would be posted.

All the best.
Sincerely yours,
Larry Velvel <--

***The issue of incorrect attribution for "good" ideas is not new in law or anything else. Law & Order SVU had a plot line wherein a judge stole credit for law review articles (on intellectual property in the 21st century) from his law clerk, who was subsequently murdered. Earlier, Law & Order had a plot line wherein a Ph.D. advisor stole an idea within a grant proposal by his former grad student (the advisor's wife was (inadvertently) murdered in that episode). If viewers of a one hour tv show buy into the concept that idea stealing occurs in academic circles, then we shouldn't think the ghost writing phenomenon is in any way revolutionary.

What we ought to worry about a lot more is the presentation, and rooting, of FALSE ideas in the academic literature. The incident with Jan-Hendrik Schon of Lucent illustrated just how easy it is for completely fabricated, false work to enter into the scientific literature through prestigious journals such as Science and Nature. People who recognized the bad work for what it was were not given a voice until the house of cards had collapsed through identification of the multiply-published graphs. Similarly, law reviews publish completely false work and it is virtually impossible to remove it. If, perhaps, only other law professors read this stuff, it would not matter a whole lot, but, in fact, other people read and rely on law reviews to formulate policy, as in the case of the reliance of the FTC and the National Academy of Science on law reviews to create proposals for reform of the patent law system.

In the intellectual property area, a paper in the Harvard Law Review in 2003 asserted that the US Patent Office grants patents on 97% of submitted applications and thereby asserted there was madness at the PTO that needed to be stopped. The problem is that the 97% number is simply false, and the Harvard Law Review won't correct the mistake. A paper in the University of Chicago Law Review asserted that the inventors of the transistor (Bardeen, Brattain, Shockley) thought its only use was for hearing aids. The underlying reference (misidentified as to its page number) didn't even say that. But the University of Chicago Law Review wouldn't correct the mistake. As to the substantive truth of the assertion about hearing aids, the first graduate student of John Bardeen referred to the text in the law review as "a naive, ridiculous view." [see L.B. Ebert, Foreseeability and the Transistor, Intellectual Property Today, p. 41 (October 2004)]

Although the issues of improper attribution are a cause for concern, the publication, and rooting, of ideas which are demonstrably false poses a far greater threat to intellectual advancement, whether in scientific or legal disciplines.

**As a minor footnote

Related to another piece of problematic science, which was published in the journal Nature, Bob Park writes

-->2. HOMEOPATHIC E-MAIL: LOOKS LIKE THE TEST WILL BE DELAYED AGAIN.
Jacques Benveniste, 69, died last week after a heart operation. The French biologist claimed in 1988 that biological effects of a dissolved substance persist, even after the dilution limit is exceeded. A decade later he discovered that infinitely dilute solutions emit an electronic signature that can be captured by a coil, digitized, and transmitted over the internet to transfer homeopathic properties to flasks of water anywhere in the world. I challenged him to a simple international double-blind test in which he would be asked to identify which of several flasks had been activated. The challenge was carried in a Time magazine article by Leon Jaroff (Time, 17 May ‘99). I met with Benveniste that June. A pleasant man, he agreed to everything, but said he needed time to get ready (WN 14 May 99). Weeks became months. Years passed, trees fell, but to the end Jacques Benveniste needed more time. We all do.

<--

The way Nature handled Benveniste's publication verged on the comical. Years later, Schon's work would be handled in a different way.

UPDATE:

Noah Peters wrote on the Harvard business:
http://www.cavalierdaily.com/CVArticle.asp?ID=20756&pid=1192

Amgen wins Epogen case over Transkaryotic and Aventis

Amgen reported on October 15, 2004 that federal district court judge William G. Young (D. Mass.) ruled in its favor in a remand from the Federal Circuit in a patent infringement suit against Transkaryotic Therapies Inc. (TKT) and Aventis Pharmaceuticals Inc. over claims of two of Amgen's product patents on erythropoietin (EPOGEN) and claims of two patents on the production of erythropoietin. The accused product in question was Dynepo (epoetin delta), the Gene-Activated(R) erythropoietin product of Transkaryotic for the treatment of anemia. Transkaryotic intends to appeal to the Federal Circuit.

From a press release by Transkaryotic:

"Courts should not create thirty-five year monopolies by allowing
companies to radically expand their patent claims more than a decade after filing an application. I believe today's decision misreads the law, discourages innovation, exports biotechnology manufacturing jobs overseas, and denies patients in the United States an important alternative product," said Michael J. Astrue, President and Chief Executive Officer of TKT. "We will appeal."
In January 2003, the Federal Circuit issued a decision affirming in part and reversing in part the District Court's initial January 2001 decision and remanding the case for further proceedings. The Federal Circuit instructed the District Court to reconsider infringement and validity of certain of Amgen's patents.

The District Court on remand found with respect to:
* U.S. Patent No. 5,955,422, that the patent is valid. The Federal Circuit had affirmed the District Court's finding of infringement of one claim, but remanded to reconsider validity of the patent.
* U.S. Patent No. 5,756,349, that the patent is valid and is literally infringed. The Federal Circuit had affirmed the District Court's finding of infringement of certain claims, and remanded to reconsider validity of the patent and infringement of certain other claims.
* U.S. Patent No. 5,618,698, that Aventis' and TKT's process infringes certain claims. The Federal Circuit had remanded to reconsider infringement.
* U.S. Patent No. 5,621,080, that the claims of the patent are valid.
The District Court issued an opinion in October 2003 that Aventis and TKT infringed under the doctrine of equivalents. The Federal Circuit had remanded to reconsider validity and infringement under the doctrine of equivalents.

**Earlier Federal Circuit decision

In Amgen v. Hoechst Marion Roussel, 2003 US App LEXIS 118, the Federal Circuit addressed written description issues related to Lilly, 119 F.3d 1559 and Enzo-II, 296 F.3d 1316 and determined a presumption of enablement for for both claimed and unclaimed disclosures in prior art patents. A technical issue in the case was that the Amgen work disclosed production of human EPO by introducing exogenous DNA into a number of different mammalian and vertebrate host cells but TKT produced its EPO product, Gene-Activated EPO, utilizing endogenous, as opposed to exogenous, DNA.

One issue on remand was the question of enablement of the Sugimoto patent. Because the initial district court decision did not recognize the presumption of enablement and instead placed the burden of proving enablement on TKT, the Federal Circuit had remanded and instructed the lower court to reconsider invalidity under section 102 in view of Sugimoto, with Amgen bearing the burden of proof on nonenablement, rather than the patent challenger TKT having to prove enablement.

**UPDATE on Oct. 22, 2004

The patentlyobvious blog of Dennis Crouch reports that Amgen lost its parallel British case at the House of Lords (Kirin-Amgen v. Hoechst Marion). Further, it is reported that the House of Lords has rejected the "doctrine of equivalents."

Advantages of PCT filing at Swiss receiving office

An article by Joe Berghammer in IP Law & Business points to certain advantages in filing a PCT application with the Swiss receiving office. Remember that a PCT application is a US application.

-->This is where the Patent Cooperation Treaty comes in. Patent applications published under the treaty through any international receiving office (including the office in Geneva) benefit from U.S. laws regarding publication. Many receiving offices are more efficient at publication of applications than the U.S. Patent and Trademark Office, and the fastest is in Switzerland. Companies knowledgeable of this difference can use it to their competitive advantage.

By following the seemingly odd route of filing an international patent application in Geneva, our cereal company, and hundreds of other companies facing similar dilemmas, can get things turned around in 30 days.

(...)
The standard publication time frame for international receiving offices is 18 months. However, knowing the internal procedures of the particular international office, and diligently following up, can reduce that time frame. Understanding what parts of the procedure can slow the application is vital. For example, filing a Petition to Make Special, a practice that can generally speed prosecution of the application, can actually delay its publication. Moreover, applicants should be willing to ask questions, such as how publication procedures are followed internally by particular receiving office officials, and whether additional information would speed publication. And they should be open to cultural differences and expectations: The Swiss Receiving Office, for example, has a predilection for electronic communications.

In one instance, a client of ours, a consumer display company, became aware that a competitor had copied its new displays and was preparing a large shipment of the knock-off goods in six to eight weeks. We filed a patent application for the displays in Switzerland, and secured publication of the application in 29 days. We then notified the competitor of the applicationÕs publication. This put them on the hook for damages for the entirety of their imminent shipment. <--

Another district court's claim construction vacated: On-line v. Perkin-Elmer

Case: ON-LINE TECHNOLOGIES, INC., Plaintiff-Appellant,
BODENSEEWERK PERKIN-ELMER GMBH,
PERKIN-ELMER CORP., PERKIN-ELMER INC.,
SICK UPA GMBH, and SICK, A.G. (decided October 13, 2004)

We find the all-too-familiar words:

Accordingly, because the summary judgment of noninfringement was based on an erroneous claim construction, we vacate the judgment of noninfringement and remand the case for further proceedings on the remaining issues pertinent to On-Line’s claim of infringement.

Here, extrinsic evidence was rejected:

The district court relied on extrinsic evidence that the court interpreted as supporting its claim construction. Extrinsic evidence, however, cannot be used to alter a claim construction dictated by a proper analysis of the intrinsic evidence. See Intel Corp. v. VIA Techs., Inc., 319 F.3d 1357, 1367 (Fed. Cir. 2003) (“When an analysis of intrinsic evidence resolves any ambiguity in a disputed claim term, it is improper to rely on extrinsic evidence to contradict the meaning so ascertained.”); Frank’s Casing Crew & Rental Tools, Inc. v. PMR Techs., Ltd., 292 F.3d 1363, 1374 (Fed. Cir. 2002); Bell & Howell Document Mgmt. Prods. Co. v. Altek Sys., 132 F.3d 701, 706 (Fed. Cir. 1997). In any event, we do not agree with the district court’s analysis of the extrinsic evidence.

Report on interface biopharmaceuticals/biogenerics

Research and Markets has developed the report: The Future Battle Between Biopharmaceuticals and Biogenerics.

-->
This report analyses the opinions and arguments held by producers of biopharmaceuticals or generic-drug makers as well as regulatory authorities, in order to gain insight on how the near future guidelines will develop. We have reviewed the positions of the FDA and the Emea, the views on regulatory precedent cases from the biologics industry, the possible route of a comparability study approval, the scope of clinical trial necessary, and the scientific and regulatory issues that must be addressed before future guidelines can be initiated.

This report has listed more than 50 approved recombinant products and their global sales figures. Furthermore, we have looked at expiring patents and the biogeneric products that are likely to get a head start in Europe and the US. The most active generic companies and their selected recombinant biologics project portfolio have been evaluated. This report also evaluates the key challenges faced by the generic companies, the expected prize of the second entry biologics, as well as the competitive strategies available to each respective party as they compete for market shares. To gain background and updated information, as well as standpoints from current leaders in this field, a number of key management officers in the industry, key personnel of regulatory authorities, interest organizations, investors and members of the academic research community have been interviewed.<--

Pure buckyballs toxic at 20 parts per billion

On May 4, 1998, the Wall Street Journal (WSJ) ran a story, “Whatever Happened to the Buckyball?” In April 2003, we read about this “dream material easing into the limelight” for applications in medicine, battery technology, fuel cells, semiconductors, and medicine [The Japan Times, “Carbon molecule inspires hope in medicine, energy sectors,” (April 2, 2003)]. In October 2004, twenty years after Exxon researchers first reported C60 ((J. Chem. Phys., 1984, 81, 3322), we learn that buckminsterfullerene (aka buckyball, C60) is a bit toxic, and that we might be careful about having a lot of this nanotechnology material around.

-->from http://www.sciencedaily.com/releases/2004/10/041006083717.htm

In the study, the researchers exposed two types of human cells to various solutions containing different concentrations of buckyballs. Four types of solutions were tested. One contained tiny clusters of smooth-surfaced buckyballs [ie, pure C60]. In the other three, researcher s modified the buckyballs by attaching other molecules to their sides. Researchers measured how many cells died within 48 hours of exposure to each solution, and they repeated the tests until they found the exposure level for each that resulted in a 50 percent mortality rate.

In general, the greater the degree of surface modification, the lower the toxicity. For example, the undecorated buckyballs [ie, C60] showed the highest toxicity — about 20 parts per billion— while the least toxic proved to be buckyballs decorated with the largest number of hydroxyl side-groups . To achieve the equivalent level of toxicity as that of bare buckyballs, the researchers had to increase the concentration of these modified buckyballs by 10 million times to more than 5 million parts per billion.

Jury orders Medtronic to pay $400 million in punitives

Further to an earlier compensatory award of $159 million, a federal jury in Memphis, Tennessee awarded Dr. Gary K. Michelson $400 million in punitive damages against Medtronic Inc., the world's biggest maker of spinal implants, for violating contracts.

There had been a determination on September 28, 2004 that Medtronic's violations of its contracts with Los Angeles spinal surgeon Dr. Gary K. Michelson were ``reckless, intentional, fraudulent and malicious.'' The punitive award totaled $400 million, said Michelson spokesman Jonathan Gasthalter.

In September, 2004, the jury awarded Michelson $109 million in damages for breach of contract and at least $50 million for patent infringement [refer to earlier post on IPBiz.] Jurors also told Medtronic to pay him 10 percent royalties on spinal-implant products that infringe patents, including Infuse Bone Graft System and LT Cage.

UPDATE: On October 15, 2004, Medtronic stated that a newly designed screw with improved color-coding features is on the market and will be fully phased in before the effective date of the injunction, Medtronic said. Medtronic expects to continue to serve customers and their patients without interruption.

The Medtronic vs. Michelson/Karlin case is an example of a case where the "little guy" prevailed against the "big guy." Furthermore, it is an example of a countersuit case, wherein the initial action was a lawsuit by Medtronic against Michelson/Karlin.
(The legal dispute was initiated by Medtronic in 2001. The Minneapolis company charged Michelson was interfering with its business by trying to sell some of the inventions to competitors. http://www.reuters.com/newsArticle.jhtml;jsessionid=WIRVFWNIMAMX4CRBAEZSFFA?type=topNews&storyID=6518332).

Thus, the Medtronic suit illustrates the need to contemplate the intellectual property implications of a lawsuit BEFORE bringing the suit.

** from the Kirkland & Ellis website-->

Co-lead counsel for Dr. Michelson and Karlin were Marc Marmaro of Jeffer, Mangels, Butler & Marmaro LLP and Robert Krupka of Kirkland & Ellis, LLP, all based in Los Angeles where Dr. Michelson practiced. Stan Gibson, a Jeffer Mangels Butler & Marmaro partner, also played a major role at the trial.



"This verdict represents vindication for Dr. Michelson and Karlin Technology, Inc. in their dispute with Medtronic Sofamor Danek. The jury is to be complimented for sorting through the complex issues involved in this case and coming to a fair resolution. The decision that punitive damages are warranted confirms that Medtronic Sofamor Danek's conduct in breaching its agreements with Dr. Michelson and Karlin Technology, Inc. was reprehensible," said Mr. Marmaro.



"We are pleased with this verdict, which is a tremendous victory for Dr. Michelson, a man who has devoted his entire life to helping others and advancing medical technology, against a $60 billion global company," said Mr. Krupka. "This outcome compensates Dr. Michelson for some of Medtronic's egregious conduct."



According to Mr. Gibson, "the jury verdict demonstrates that a major corporation cannot breach its agreements with impunity."

Technology for directly faxing pdf files

-->from http://www.pdfzone.com/news/1768-PDFzone_news.html

Many industry pundits say the fax is a dying technology, thanks to PDF. Yet paper pervades offices in record volumes, and the typical office dweller could use an easier way to turn paper into PDF than find the closest scanner, save the scanned file as a PDF and whatever else has to happen (open an e-mail program, attach the scanned file, etc.)



E-mate has announced two U.S. patents (one of them is US 6,693,729) for a new “adapter device” that turns fax scans into PDFs and directly e-mails them to whatever address the person faxing the document specifies--without a computer.

Drug test at Stanford under "Best Pharmaceuticals for Children Act"

The Hatch-Waxman Act, as amended, provides for a patent extension for pediatric testing. In the case of drugs no longer under patent protection, the federal government can provide contracts for testing of unpatented drugs through the National Institute of Child Health and Human Development of the National Institutes of Health (NIH).

--> from the Stanford University Medical Center

In 2002, Congress passed the Best Pharmaceuticals for Children Act. For drugs still under patent, the law offered companies a patent extension if they would conduct specified studies in kids.

But for drugs with expired patents (so called "off-patent" drugs), another solution was needed. "Drugs that are off-patent have no value for big pharmaceutical companies," said Drover. "The profit margins are extremely low. And that means someone else now has to pay for the investigations that the companies never did in the pediatric population."

Under the 2002 law, that "someone else" is the federal government. Thus far, the FDA has created a list of 25 off-patent drugs needing clinical testing and has issued nine written requests asking pharmaceutical companies if they will do the work. When the companies decline, as they are almost certain to do, the NIH's National Institute of Child Health and Human Development steps in to fund the work. So far research contracts have been granted for just two drugs.

Under the contract awarded to Stanford, Greg Hammer and David Drover will spend three years conducting clinical and laboratory tests to determine the safety and effectiveness of sodium nitroprusside. This drug works to control blood pressure during anesthesia and in the intensive-care unit. The FDA listed it for testing because it is known to produce cyanide - the toxin people associate with suicide pills.

Wall St. Journal on Madey v. Duke University

In Madey v. Duke University (Oct. 3, 2002), the Federal Circuit found only a very narrow scope for the experimental use exception. Stating that REGARDLESS of whether an institution is engaged in an endeavor for commercial gain, as long as it furthers the alleged infringer's legitimate business and is not solely for amusement, to satisfy curiosity or philosophical inquiry, the experimental use exception will not apply. Universities have been in trouble with this decision. Semitool v. Ebara, 2002 U.S. Dist. LEXIS 21939 quoted the Madey case, 307 F.3d 1351, ["Similarly, our precedent does not immunize any conduct that is in keeping with the alleged infringer's legitimate business, regardless of commercial implications."].

The Madey case arose from intra-academic competition and disagreement, but the legal decision may impact industrial/academic interaction. See also, Rebecca Eisenberg, "Patent Swords and Shields," Science, 2003, 299, 1018 ["As universities have become increasingly aggressive as patent owners, they have compromised their claim to disinterested stewardship of knowledge in the public interest." [from L.B. Ebert, "Say Good-Night, Gracie," Intellectual Property Today, June 2003]. As a Bayh-Dole case, the Madey case is somewhat unusual in that Madey himself took ownership in the patents, after the funded university (Stanford) declined.

An article by Bernard Wysocki in October 2004 discusses both the academic competition aspect and the legal implications of Madey.

-->by BERNARD WYSOCKI JR. : The Wall Street Journal-->

(...)
The battle pits the university against John M.J. Madey, a 61-year-old former Duke physics professor and the inventor of the device. In the late 1990s, Duke demoted Madey and removed him as director of the free-electron laser lab. Madey quit Duke, decamped to the University of Hawaii, and sued the university in federal court in Greensboro, alleging breach of contract, fraud and other civil claims.

Duke denied the charges, and this might have been just another academic spat except that Madey held the patent rights on two critical elements of the laser he left behind. So, in his suit, he also alleged patent infringement.

Duke figured it had a solid defense. It was following a time-honored "experimental use" exception whereby academics, in the name of research, could infringe on patents so long as they didn't sell the results in commercial markets.

But Madey didn't say Duke was selling anything in the normal sense. Instead, he contended Duke used the laser to further its business interests as a research university. "The Duke free-electron laboratory is a significant enterprise," he argued, that brings in millions of dollars worth of government grants every year. He said the lab was part of Duke's larger purpose of competing with other institutions for faculty, students, recognition, scientific distinction and grant money. "This is Duke's business," his suit said, and therefore Duke had to honor his patents.

(...)
Part of the case has been sent back to the lower court, where Duke is claiming a patent exemption for another reason: because it uses the laser to carry out federal contracts. On that issue and others, the lower court has told the sides to get ready for a trial.

(...)
Whether Duke ultimately prevails or not, Madey v. Duke is raising a central question: At a time when universities increasingly act like corporations, should they also be subject to the intellectual-property laws that bind businesses and consumers?

These days, big research universities use their formidable powers for far more than teaching and scholarly inquiry. They invest in top scientists, create big labs, team up with companies and spawn commercial spinoffs. They and their scientists lure grants from foundations and federal agencies. The National Institutes of Health alone funded $20 billion of research at U.S. campuses last year.

(...)
Duke's fight against Madey isn't universally applauded within the academic world. Although more than 20 universities backed Duke by filing a friend-of-the-court brief with the Supreme Court, some universities with active patent programs declined to join. Among them was the University of Wisconsin, whose efforts to promote inventions and patents go back eight decades. The Wisconsin Alumni Research Foundation manages 800 issued patents and 600 pending ones. It holds stakes in 30 university spinoff companies.

"We believe it's a mistake to say [to industry] you need to pay us for intellectual property but we aren't going to pay you, because we're a university," says Carl Gulbrandsen, managing director of the Wisconsin foundation.

***Background on Madey case**
-->In 1988 he moved to Duke, where he became director of the free-electron laboratory and a tenured professor. The U.S. government paid to ship the laser to Durham, where Duke constructed facilities to house the laser-research program. Madey won about $40 million in government research money from various U.S. defense agencies, including the Office of Naval Research.

Then troubles arose. In his suit, Madey asserted that his Duke superiors wanted to divert research into areas outside the government grants. Duke officials said Madey's superiors repeatedly warned him about mismanagement of the lab. Finally, Duke said in court documents, his "managerial incompetence forced Duke to take remedial measures." Madey says there was nothing wrong with his management.

The university removed Madey as principal investigator on a large Navy grant, according to its court filings. It let him retain top status on other grants and remain tenured.

Madey was infuriated at the demotion. In an interview, he says younger scientists at the lab were shocked. "There's a chilling effect on these youngsters to see a researcher's work taken out of the researcher's hands," he says.

He sued Duke, asking for unspecified damages for using the laser patents without his permission. He also resigned from Duke and took a tenured physics position at the University of Hawaii.

(...)
Madey has launched a parallel legal effort to get the Mark III free-electron laser shipped to Hawaii. The big machine is something of a technological golden goose, because whoever has it can use it to bid for and carry out federal grants and contracts. Madey wants it in Hawaii to fulfill an Army contract to develop prototypes of a device to detect clandestine nuclear tests. He says he is midway through the five-year, $49.9 million contract but can't complete it without the laser.

But even the laser's ownership is a matter of dispute. Duke says it owns it. Madey says the primary owner is the U.S. Department of Energy, because it financed key phases of construction, and he has some ownership interest himself because he donated some funds used to build it. The fight has become so bitter that Duke lawyers won't allow Madey anywhere near the device he built, or let him enter the building the university built specifically for him in 1988.

Early last year, the Energy Department, which agrees it is the laser's primary owner, asked Duke for permission to inspect the lab and conduct an "inventory." Duke lawyers shot down the request and warned that neither Madey nor anyone who might be an expert witness in his case against Duke could visit. <--

Trademarks in smells?

With the Nobel Prize in Medicine for 2004 awarded in the area of smells, there has been some discussion of patenting or trademarking smells.

There was a 2003 case in Europe, Sieckmann, that may have made trademarking smells difficult.

From

http://www.ipr-helpdesk.org/newsletter/cuerpo.jsp?len=en&id=IPRTDarticleN10AD4&issue=15&seccion=newsletter&len=en
-->
The Sieckmann case makes reference to various European trademark registries beginning to see difficulties with registering smells. The UK Registry rejected an application to register the 'smell, aroma or essence of cinnamon' for furniture products. And in the Sieckmann case itself, the European Court of Justice gave a ruling on the registration of smell marks. The court confirmed the principle that non-visual signs could be 'trademarks' and thus registered, providing the sign was distinctive. However, the case turned upon how smells might be represented graphically. By rejecting all of the main possible modes of representation - by a chemical formula, by a description in written words, by the deposit of an odour sample or by a combination of those elements - the ECJ has made it well-nigh impossible to register smell marks for Europe in the future.

Citing Theofrastus on the intoxicating and all-powerful scent of the rose, Maniatis observed

'perhaps it is better for people to avoid trademarking scents, and, instead, let the scent of the rose fulfil its superb function, irrespective of its name, even when it can indicate origin.'

By Sieckmann, the European Court has effectively removed scents from the trademark system.


[Ralf Sieckmann v. Deutsches Patent- und Markenamt (C273/00) [2002] E.C.R. I-11737 (ECJ); [2003] Ch. 487; [2003] R.P.C. 38 ECJ; [2003] E.T.M.R. 37 ECJ]

Information Week featuring software patents on Oct. 18

-->
But despite Sun's legal woes and anyone standing in the path of SCO's Darl McBride right now, patenting software is changing the landscape of innovation. As it becomes increasingly more difficult for any one company to control all the pieces it needs to bring innovative products to the market, technology vendors are seeking new ways to license their IP to other companies and integrate open standards into their software. Ultimately, faster technology transfers will mean that products and services will get to the market faster. And there are big bucks to be made in the development phase: IBM made about $1 billion in profit last year from licensing its IP.


On Oct. 18, we'll bring you more on the future of R&D, IP licensing, and other issues through discussions with some of the nation's top computer scientists and perspectives from industry visionaries. Stay tuned.


Stephanie Stahl

<--

Damage award in Integra v. Merck

In addition to the suggestion of cert

-->Last week, the U.S. Supreme Court took a step toward accepting Merck's petition of writ of certiorari by inviting the Solicitor General to file a brief expressing the views of the U.S. Government.<--

one notes that the district court was active on September 28, 2004:

District Court Awards Integra LifeSciences $6.37 Million in Damages
PLAINSBORO, N.J., Sept. 28, 2004 (PRIMEZONE) -- Integra LifeSciences Holdings Corporation (Nasdaq:IART) today announced that the United States District Court for the Southern District of California, ruling in the case Integra LifeSciences (et. al.) vs. Merck KGaA, et. al., has ordered Merck KgaA to pay Integra LifeSciences $6.37 million in damages. Integra has filed a motion requesting pre- and post-judgment interest.

The district court ruling follows a June 2003 order of the United States Court of Appeals for the Federal Circuit affirming the trial court's earlier finding that Merck KGaA had infringed four of Integra's licensed patents, vacating the trial court's award of $15 million in damages and remanding the case back to the trial court for further factual development and recalculation of damages.

The lawsuit, which was filed in 1996, alleged that Merck KGaA and a non-profit research institution under contract from Merck KGaA had infringed various United States patents held by The Burnham Institute of San Diego that have been licensed to Integra. The patents at issue relate in various ways to technology involving peptides containing an arginine-glycine-aspartic acid (RGD) sequence or related cell surface receptors. Compounds containing the RGD sequence promote or inhibit cell adhesion by binding receptors called integrins found on the surface of almost every cell in the body. The patents include United States Patent Numbers 4,792,525, 4,879,237, 5,695,997, and 4,789,734.

"We are pleased that the District Court has, once again, awarded substantial damages for Merck's infringement of our patents," said John B. Henneman, III, Executive Vice President and Chief Administrative Officer.

The order of the District Court remains subject to appeal. Accordingly, Integra has not recorded any gain as a result of this order or the earlier jury verdict.

Possible cert grant in Integra v. Merck [?]

The "patently obvious" blog of Dennis Crouch noted:

-->Last week, the U.S. Supreme Court took a step toward accepting Merck's petition of writ of certiorari by inviting the Solicitor General to file a brief expressing the views of the U.S. Government.<--

The June 2003 case of Integra v. Merck related to the interpretation of text in 271(e)(1) concerning --reasonably related to the development and submission of information to the FDA--. In part, the case reflected divergences in world view between Judge Rader and Judge Newman.

Footnote 2 of the Rader opinion brings up discussion of the Madey v. Duke University case (307 F.3d 1351 (CAFC 2002)) and of de minimis infringement matters.

An important issue in the Integra case was the interpretation of 271(e)(1) in light of, among other things, Intermedics v. Ventritex.[991 F2d 808]

Footnote 4 of the case discusses research tools.

Silence in prosecution can be held against the applicant

In Fuji v. ITC, the Federal Circuit observed:

That exchange indicates not only that the applicant’s attention was called to the examiner’s interpretation of “said means” as not including the “taking lens,” but also that the applicant was invited to correct the examiner’s interpretation—an invitation the applicant did not accept. Although caution must be used in attaching weight to an applicant’s silence in response to an examiner’s statement about claim scope, see 3M Innovative Props., Inc. v. Avery Dennison Corp., 350 F.3d 1365, 1373-74 (Fed. Cir. 2004); Inverness Med. Switz. GmbH v. Warner Lambert Co., 309 F.3d 1373, 1380 (Fed. Cir. 2002), the applicant’s failure to correct the examiner’s characterization of the “said means” as referring to only two means rather than three supports the inference that the omission of the word “means” after “taking lens” was not inadvertent.

If the omission of the word “means” after “taking lens” was an oversight, it should have been corrected with an amendment or by some other timely measure to correct the error. Since no amendment or other corrective measure was proposed, we have no way of knowing whether it would have been granted, i.e., whether the broader claim scope that Fuji now seeks would have been available to it. As we have previously observed, “as between the patentee who had a clear opportunity to negotiate broader claims but did not do so, and the public at large, it is the patentee who must bear the cost of its failure to seek protection” for particular subject matter. Sage Prods., Inc. v. Devon Indus., Inc., 126 F.3d 1420, 1425 (Fed. Cir. 1997); see also Lemelson v. Gen. Mills, Inc., 968 F.2d 1202, 1208 (Fed. Cir. 1992) (“Other players in the marketplace are entitled to rely on the record made in the Patent Office in determining the meaning and scope of the patent.”).

[See also the article "Just the Facts, Ma'am," Intellectual Property Today, January 2003-->

The television show Dragnet n2 popularized the concept that anything you say can and will be used against you. There was a never a suggestion that your silence could be used against you. Recent court cases have suggested that silence in patent prosecution can and will be used against you.

On October 31, 2002, in Inverness v. Warner-Lambert, n3 the Federal Circuit referred to Elkay Mfg. Co. v. Ebco Mfg. Co., 192 F.3d 973, 979, 52 USPQ2d 1109, 1113-14 (Fed. Cir. 1999) for the proposition that failure to respond to an examiner's reason for allowance functioned as a disavowal of a different interpretation of the claim. Although this is an overstatement of the text in Elkay, n4 it is not necessarily an incorrect statement of current law. Of recent case law using silence against a patentee, on November 25, someone posted on an internet chat board a quote from a district court case n5:

The Examiner's reasons for allowance are absolutely binding on the patentee, absent an objection by the patentee thereto. See, e.g., Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 41 U.S.P.Q.2D (BNA) 1865, 137 L. Ed. 2d 146, 117 S. Ct. 1040 (1997); Markman v. Westview Instruments, 52 F.3d 967, 34 U.S.P.Q.2D (BNA) 1321 (Fed. Cir. 1995), aff'd 517 U.S. 370, 38 U.S.P.Q.2D (BNA) 1461, 134 L. Ed. 2d 577, 116 S. Ct. 1384 (1996); Vitronics Corp., 90 F.3d at 1578; Zenith Labs., Inc. v. Bristol-Myers Squibb Co., 19 F.3d 1418, 30 U.S.P.Q.2D (BNA) 1285 (Fed. Cir. 1996); see also 65 F.R. 54604 (2000) (changing the written text of the Manual of Patent Examining Procedures to reflect the cited case law); Southwest Software, Inc. v. Harlequin Inc., 226 F.3d 1280, 1296, 56 U.S.P.Q.2D 1161, 1173 (Fed. Cir. 2000) (stating that "it does not seem to us to be asking too much to expect a patentee to check a patent when it is issued in order to determine whether it contains any errors that require the issuance of a certificate of correction"). [end case quote]

The internet poster commented about the case quote: I find this part of the opinion quite "disappointing." I tried to follow the cites provided for elaboration, and I found none. The court points to Warner-Jenkinson and to Markman, but it does not say on which page(s) of the huge opinions support its statement regarding reasons for allowance. The court does provide a page cite for Vitronics, but the page says nothing about reasons for allowance. (It seems that judges are not held to the same standards as the parties' lawyer or law students are held.)[UPDATE: Please refer to Alan Dershowitz's comments (in regard to the accusation that Lawrence Tribe plagiarized work) to the effect that the legal area in general has different standards for sourcing, and separately note issues with certain footnotes of Mark Lemley.]

The poster is correct about the absence of justification in the cases for the proposition that "reasons for allowance are absolutely binding on the patentee, absent an objection by the patentee thereto." n6 Surprisingly, the situation is a bit worse than the poster envisioned. Those same cases were used prior to Apex v. Raritan to justify the change to rule 104(e) which eliminated the "safe harbor" which made explicit that a non-response to "reasons for allowance" would not be held against applicant. n7 Not only were there no cases eliminating the safe harbor, but there could not have been such cases. As pointed out by the BPAI in Ex parte Yamaguchi, 61 USPQ2d 1043 (BPAI 2001): "However, it is well settled that the rules of the PTO have the force and effect of law unless they are inconsistent with statutory provisions, In re Rubinfield, 270 F.2d 391, 395, 123 USPQ 210, 214 (CCPA 1959), cert. denied, 362 U.S. 903 (1960), and neither any of the cases cited in footnote 2, supra, nor any other decision of which we are aware, has specifically held this provision of 37 CFR § 1.109/1.104(e) to be inconsistent with the statute or otherwise invalid."

To illustrate the point in a somewhat whimsical way, contemplate a hypothetical analysis of 37 CFR 1.63(b)(2) n8 by some reviewing body: "In view of the supplementary guidelines adopted by the American Physical Society (APS) on November 10, 2002 n9 that co-authors who make specific, limited contributions are responsible only for the limited contributions but may have only limited responsibility for other results, we find it unreasonable to require all inventors to sign the oath required by 37 CFR 1.63(b)(2). The mandate that patent law promote the progress of science directs us to recognize that multi-person multidisciplinary scientific collaborations, frequently involving multiple institutions, which are necessary to advance scientific understanding, create an environment wherein not all inventors will understand all aspects of the invention. The requirement of the declaration of 1.63(b)(2) signed by all inventors deters collaboration and thus does not promote the progress of science." Later, there is an observation that 1.63(b)(2) is inconsistent with case law, and 1.63(b)(2) is subsequently eliminated.




<--]

As a side point, the issue of "substantial evidence" came up in the Fuji case:

We review the administrative law judge’s findings on the issue of infringement for substantial evidence. Oak Tech., Inc. v. U.S. Int’l Trade Comm’n, 248 F.3d 1316, 1324-25 (Fed. Cir. 2001). Because we conclude that substantial evidence supports the administrative law judge’s noninfringement findings with respect to both models even under the administrative law judge’s claim construction, we find it unnecessary to consider Achiever’s argument that the administrative law judge’s claim construction was too broad.

"Ordinary meaning" also came up:
See Teleflex, Inc. v. Ficosa N. Am. Corp., 299 F.3d 1313, 1325 (Fed. Cir. 2002) (an accused infringer cannot overcome the heavy presumption that claims should be given their ordinary meaning “simply by pointing to the preferred embodiment or other structures or steps disclosed in the specification”); Liebel-Flarsheim Co. v. Medrad, Inc., 358 F.3d 898, 906 (Fed. Cir. 2004) (“the claims of the patent will not be read restrictively unless the patentee has demonstrated a clear intention to limit the claim scope”).


It is a familiar axiom of patent law, however, that the scope of the claims is not limited to the preferred embodiments described in the specification. Cordis Corp. v. Medtronic AVE, Inc., 339 F.3d 1352, 1365 (Fed. Cir. 2003).

Intel wins dispute with AMD over document release

To support a charge before the European Commission of anticompetitive behavior by Intel, AMD had requested access to documents from the lawsuit by Intergraph against Intel. A decision issued on Oct. 4, 2004 by U.S. District Judge James Ware in San Jose, Calif. denied the motion by AMD, and Intel publicly released this on Friday, October 8.

from http://news.zdnet.com/2100-9584_22-5403692.html
-->Sunnyvale, Calif.-based AMD has requested access to hundreds of thousands of pages of Intel documents that it believes will help prove Intel threatens to retaliate against customers that do business with AMD.

The documents were produced during a prior U.S. lawsuit against Intel by Intergraph. Intergraph's accusations against Intel included patent infringement and antitrust claims, which were rejected by a U.S. court in 2001.

The European Commission opened an investigation into Intel's business practices after AMD filed a complaint in October 2000 accusing Intel of engaging in anticompetitive behavior in violation of European laws. The commission has taken no enforcement actions.

Santa Clara, Calif.-based Intel, which has denied AMD's charges, was pleased with Ware's ruling.

Intel "We've said all along that AMD's request for discovery was unjustified. The European Commission told AMD that (the commission) didn't want the information AMD was trying to get ahold of," said Intel spokesman Chuck Mulloy.

Patrick Lynch, a lawyer for AMD, said the company was disappointed with the judge's ruling and would determine whether it would appeal.<--

Kodak and Sun settle patent dispute over Java

Sun will pay Kodak $92 million to settle a high profile lawsuit over Java, and Sun will receive a license to use technologies falling within the scope of claims of the Kodak/Wang patents. This settlement agreement avoids a trial on financial damages wherein Kodak intended to ask for $1.06 billion in royaltiesand Sun was planning to argue that a reasonable award should not exceed $25 million.

In the patent litigation, the relevance of the "ask for help" feature of the Kodak/Wang patents to Java had been at issue.

From the Rochester Democrat and Chronicle:

-->Researchers at Wang developed the technology in the early 1980s. Programmers were looking for ways to add functions to software without turning out programs that were impractically large and unwieldy.

The team's approach: Develop general communication tools that allow the software to identify and call for help from programs that reside on the computing system.

That, Kodak argued, is similar in a general way to Java's operating procedure. Java is language that allows programmers to write one set of code, but have their software run on any system, PC, Macintosh or others.<--

-->Software patents cover more than just formulas — they cover formulas that accomplish practical results, said Theodore Hagelin, a law professor at Syracuse University.

"What is surprising to many people is that they (programmers) got this wrong for so long. They confused these extremely complex, valuable formulas with abstract math," Hagelin said.<--

**The Wang patents involve continuations. US 5,226,161 (filed Aug 31, 1992) is a continuation of US 5,206,951 (filed April 3, 1991) and has but one claim, but the later filed US 5,421,012 (filed May 20, 1993), a continuation of US 5,226,161, has 51 claims.

Analysis of continuation patents has played a significant role in the patent grant rate controversy involving published work of Quillen/Webster on the one hand and Clarke on the other. This controversy has been discussed with proposals for patent reform, such as that of the National Academy of Sciences (NAS).

How continuation applications are "counted" is critical to this debate. Not all continuation applications arise from an antecedent abandonment, as is true of these particular Wang patents. Thus, subtracting continuing applications generally (and continuation applications specifically) as done by Quillen and Webster is not correct and leads to an artificially enhanced grant rate.

There have been some missteps in this debate. Mark Lemley and Kimberly Moore in footnote 22 of an article in the Boston University Law Review asserted that Clarke was guilty of "erroneously assuming that every continuation resulted in a patent and concluding that the grant rate was 75%." Because of this assertion, Lemley and Moore themselves concluded "The 85% number provided in the revised Quillen et al. study is based on actual data about the applications that issue based on continuations, and reflects the best estimate we have of how often applications mature into patents."

As we pointed out earlier (Patent Grant Rates at the United States Patent and Trademark Office, 4 CHI-K. J. INTELL. PROP. 108 (2004); available http://jip.kentlaw.edu/art/volume%204/4-1-4.htm)), Clarke made no assumption anywhere in his paper that "every continuation resulted in a patent" and, as such, the footnote is incorrect and not properly cite-checked.

Subsequently, it has been suggested that the footnote intended to state "erroneously assuming every allowed continuation resulted in a patent." This suggestion may be criticized on several grounds.

First, Clarke did not "assume" every allowed continuation resulted in a patent. To eliminate the effects of continuing application practice on the patent grant rate, he identified issued patents claiming priority to an earlier issued patent and he removed them from consideration. This removal included all continuing applications (continuations, divisionals, continuations-in-part).

Second, Clarke did not remove from consideration allowed continuations that did not claim priority to an issued patent and Clarke did not remove from consideration allowed continuations which did not give rise to a patent.

Third, in working with data on issued patents to identify the number of patents based on continuing applications, Clarke merely did a more thorough job of what was attempted in the QWII. As stated in footnote 29 of Lemley and Clarke: "The 85% number provided in the revised Quillen et al. study is based on actual data about the applications that ISSUE based on continuations," [emphasis added], QWII made their correction based on data on ISSUED applications, not on ALLOWED applications. If the use of data on ISSUED applications means an assumption that every allowed continuation resulted in a patent, then it is an assumption made by both Quillen/Webster and Clarke. Because it is assumed by both, this assumption is not a basis to select the results of Quillen/Webster over those of Clarke.

**Returning to the Kodak/Sun dispute-->
from Maureen O'Gara (http://www.linuxworld.com/story/46702.htm)

-->The anti-patent folks had hoped to use Corba and OLE to trump the Kodak patents, but Wang's work pre-dates either and Microsoft's license would have undercut the ploy.

Ironically, Sun has just announced the general availability of Java 2 Standard Edition 5.0, spun as the most significant Java upgrade in nearly a decade. J2SE is the foundation platform for delivering Java on the desktop, where it has not been brilliant.

The new rev is supposed to make development easier and the JVM and Java apps more manageable. There's a new GUI for Java apps and there are performance improvements.

Sun claims a half-million downloads of the betas of the J2SE 5.0 Java Runtime Environment (JRE) and SDK. It claims 150 million J2SE downloads since 1998. Acer, Apple, Dell, Gateway, HP, Fujitsu-Siemens, Samsung, Tsinghua Tongfang and Toshiba factory install the stuff.<--

UPDATE. from zdnetnews

http://news.zdnet.co.uk/business/0,39020645,39170222,00.htm

-->
Hartmut Pilch, of FFII & Eurolinux Alliance, leapt to our defence in a long, careful statement: "Sun Corporate Communications" called the ZDNet article irresponsible on several accounts. Unfortunately the portrait is very accurate, at least as far as Sun's "stance on intellectual property" is concerned, as "Sun Corporate Communication" shows by its own words a few lines later: "Sun believes firmly in the need to provide strong intellectual property protections, such as software patents, in order to assure that both individuals and companies will be rewarded for creativity and invention.

Sun's statements make no sense at all. Copyright and other mechanisms already assure a sufficient reward for creativity, and patents contribute very little to economic growth in most technical fields, as anybody will know who cares to read up on the economic literature.

All software patents that I have seen are "junk patents". [TO Hartmut: where were you and all the experts when Amazon's double-click patent survived a validity challenge in court? Barnes & Noble's expert said double-click wasn't obvious to him.] The patent system tends to turn honorable non-trivial work into disgracefully broad patent claims, and the only practical solution to this that I know of is to change the caselaw that imposed these patents on the software industry (against its will, as the hearings of 1994 showed, where Sun was one of very few companies who, yes, betrayed the industry). [TO Hartmut: "software" patents existed long before the State Street case. It's the statute, not the caselaw.]

We do not need to abolish the entire patent system. We are just talking of pushing it out of the software field. If a system doesn't work, you don't release it. Fix the bugs first, then release the code. That's the sense of responsibility that I'd expect of a company like Sun. It's the basic ethics of this field. Unfortunately, Sun betrayed this basic ethic because they have a large hardware business and, based on that, a strong tradition of patenting."

Others felt we were way too harsh on Sun, and that Kodak should bear more responsibility.

One anonymous UK techie wrote: "Enough with the Sun Bashing please...Why don't you bash Kodak? They're the legal-process-abusing extortionists. Why don't you support Sun? They're the good guys and I can empathize with their situation. They were ruled against by a screwed-up jury that's clueless to technical facts and most probably biased towards, Kodak, the largest employer in their area, Rochester." [Merely fyi: the University of Rochester COX-2 patent was litigated in Rochester and the University of Rochester lost on summary judgment.]


Mike Schwager, a systems administrator in Chicago, also thinks Kodak - and American patent law - is the real villain, and writes: "Put the blame where it belongs: On bogus patents, on a bogus system. Given the rules of the game, a company must play or die. It's the game itself that's broken, not the player. Europe, you've been warned! Do not follow in the footsteps of your hapless friends across the Atlantic! Reject software patents!"

And so does Rob from Yorkshire: "KODAK has betrayed us all, not Sun. I'll never buy Kodak again, and I encourage everyone else to do the same - and email Kodak to tell them this!"

For Dave Hall, a UK IT consultant, Sun and Kodak are not alone. He writes: "Unfortunately, Sun's actions are indicative of the industry as a whole, and is not a single perpetrator in this matter.

What is clearly being lost in the translation here is fair use - it's about corporations lifting their leg and marking out their turf. It's not about a set of ideals; nor is it about anything other than greed.

I suppose those who bash Sun will say Kodak was correct to accept the settlement, just as those who blast Kodak will tell us Sun can do what they like with their money.

Licensing is becoming more expensive, but short-sightedness has contributed towards this. Sun's Java-PC is a prime example: pay for the hardware, then 'rent' the software out. All this is, pure and simple, is criminal."

Vaino Vaher, a consultant in Sweden, takes an even more jaundiced view. "Yet another competitive advantage for the rest of the world. We will surely work hard to keep your lawyers out of our courts. We will not allow our IT industry to be ruined by phoney patents. Oh. And I just came up with something that I will patent in the US: A gas mixture of approx 79% nitrogen and 21% oxygene. Purpose: vitalizing and enhancing performance in mammals. I think I will call it "Air". Pay up or die." <--

UPDATE from zdnet:

-->
Sun Microsystems has called for reform of the US patent system, with its president and chief operating officer saying authorities are too free to issue patents, some of which were "spurious" and being used to stifle innovation.
Jonathan Schwartz told ZDNet Australia in an interview during a brief visit to Australia this week that while intellectual property constituted "the foundation of global economies", there was also a limit.

"My view on the patent system in the United States is that we are too free to issue patents, so someone can patent one-click shopping, which to me is ridiculous," he said. "That's like patenting scroll-bars".

Schwartz said companies' garnering of "spurious patents" and subsequent wielding of them against innovators threatened the future of smaller companies' abilities to invest in intellectual property. He stressed, however, that such assaults did not really impact on larger players like Sun. "There's nothing in the Kodak suit that is going to threaten our long-run R&D roadmap," he said.

Sun would, he said, continue to build a "good defensive software patent portfolio" to mitigate the threat posed by those with malicious intent. "We'll stop issuing software patents on the day that spurious litigators cease suing us," Schwartz said.

Sun has been in the news lately over patent applications, with Schwartz having filed applications for the company's per-employee software pricing plan and two in relation to the company's three-dimensional Looking Glass user interface. However, Schwartz this week stressed that Sun itself had never issued "offensive patent litigation".

"That's not what we do for a living," he said.

"We choose to use innovation as a competitive weapon, not litigation. And when will we use litigation? When the breach is so severe and so fundamental and so in all likelihood echoed by a government that we choose to step into the fray. So when a contract is breached, you bet we'll get involved in litigation. Thus, what happened with Java. When anticompetitive actions take place in the marketplace, you bet we will be a part of that discussion".

Schwartz said he did not believe that SCO's litigation against had had an impact on the evolution of the open source community: "To me, that's not the path we're going to use to grow a brighter future".
<--

Caterpillar's US 6,688,280 to be re-examined(?); derivation issue?

James Weber and Scott Leman are named inventors on two patents (each entitled Air and fuel supply system for combustion engine): US 6,651,618 (app. 370,852 filed February 20, 2003 and issued November 25, 2003) and US 6,688,280 (app. 143,908 filed May 14, 2002 and issued Feb. 10, 2004). The '618 and '280 patents explicitly cite US 6,279,550 to Clyde Bryant.

Weber and Leman are the only named inventors on the '280. There are other named inventors on the '618, including the first named inventor Gerald Coleman.

Although the '618 issued BEFORE the '280, the '618 is a continuation-in-part of application Ser. No. 10/143,908 filed on May 14, 2002. Thus, the '280 is the PARENT.

The first claim of the '618 recites:


1. A method of operating an internal combustion engine including at least one cylinder and a piston slidable in the cylinder, the method comprising:

supplying a mixture of pressurized air and recirculated exhaust gas from an intake manifold to an air intake port of a combustion chamber in the cylinder;

selectively operating an air intake valve to open the air intake port to allow the pressurized air and exhaust gas mixture to flow between the combustion chamber and the intake manifold substantially during a majority portion of a compression stroke of the piston; and

operably controlling a fuel supply system to inject fuel into the combustion chamber after the intake valve is closed.



The first claim of the '280 recites:

A method of operating an internal combustion engine including at least one cylinder and a piston slidable in the cylinder, the method comprising:

supplying pressurized air from an intake manifold to an air intake port of a combustion chamber in the cylinder;

selectively operating an air intake valve to open the air intake port to allow pressurized air to flow between the combustion chamber and the intake manifold substantially during a majority portion of a compression stroke of the piston; and

operably controlling a fuel supply system to inject fuel into the combustion chamber after the intake valve is closed.

--> Discussion from an Atlanta newspaper (below) suggests that the first filed patent, US 6,688,280, is the subject of a re-examination. Although NOT mentioned in the newspaper article, note that the '280 patent cites to the Bryant patent, US 6,279,550 (filed May 23, 1997 issued August 28, 2001). The '550 describes the following priority: This application claims the priority of U.S. Provisional Application 60/022,102, filed Jul. 17, 1996; 60/023,460, filed Aug. 6, 1996; 60/029,260, filed Oct. 25, 1996; and 60/040,630, filed Mar. 7, 1997. Furthermore, this application is a continuation-in-part of U.S. application Ser. No. 08/841,488, filed Apr. 23, 1997, abandoned. [Perhaps the re-examination request will be denied.]

The first claim of the '550 patent recites:

An internal combustion engine, comprising:

an engine block defining at least one cylinder therein, two cylinder inlet ports communicating between said cylinder and a source of air, and an exhaust port through which exhausted gases are expelled from said cylinder;

a piston movably mounted within said cylinder;

an intake valve selectively occluding each inlet port;

an exhaust valve selectively occluding said exhaust port;

at least one compressor in fluid communication via a conduit between said source of air and at least one cylinder inlet port;

at least one air cooler interconnected between said compressor and said inlet port; and

means for directing low pressure air to one of said inlet ports during an intake stroke of the piston and for directing air highly compressed by said compressor to the other of said inlet ports during a compression stroke of said piston, wherein one of said intake valves occupies an open position only while the other of said intake valves occupies a closed position.

****from the Atlanta Journal-Constitution:

-->A 77-year-old retired chemist from Alpharetta has challenged a patent for a prize-winning Caterpillar Inc. engine, claiming it was based on his invention.

Clyde Bryant has filed a formal request that the U.S. Patent and Trademark Office re-examine a 2004 patent for technologies that are central to the performance of the Caterpillar engine.


Clyde Bryant has filed a formal request with the U.S. Patent and Trademark Office.

The goal of such requests is to have the patents revoked.

Caterpillar says it spent hundreds of millions of dollars developing the new engine around a fuel control system it calls ACERT, which stands for Advanced Combustion Emissions Reduction Technology.

The system increases power while cutting air pollution, the Illinois-based supplier of heavy industrial equipment says.

Three months ago, two Caterpillar engineers, Jim Weber and Scott Leman, shared a national Inventor of the Year award for the patent being challenged by Bryant.

Both Bryant's patent, issued Aug. 28, 2001, and the patent issued last February to Weber and Leman and assigned to Caterpillar describe ways to control the introduction of fuel and a charge of cooled, compressed air into the cylinder of an engine.

Precisely timed, the cooled air introduction increases combustion efficiency and causes engine exhaust to contain less air pollution, both patents claim.

Language cited

Bryant's request for a re-examination repeatedly cites similar phrases in his patent and the later Weber-Leman patent.

For example, Bryant says that in his engine, a "variable valve timing system can control the times of opening and closing intake valves." The Caterpillar patent offers "a variable intake valve closing mechanism to keep the intake valve open."

Bryant says his engine would run "so that the initial injection of fuel would be a pilot injection." The Caterpillar patent describes a "pilot injection of fuel at a predetermined crank angle before a main injection."

Bryant refers to a valve remaining open "for at least 90 degrees crank angle past bottom dead center," and Caterpillar says the same process would occur when conditions were "at least 90 degrees crank angle after bottom dead center."

Altogether, Bryant's challenge lists 40 separate innovations that he says appear in his 2001 patent, then reappear in the 2004 invention by Leman and Weber.

Records of the U.S. Patent and Trademark Office indicate Leman and Weber filed for their patent on May 14, 2002.

In a prepared statement from its general patent counsel, William B. Heming, Caterpillar said:

"Caterpillar's ACERT Technology is a great advancement in engine technology and has received many accolades from industry. Given this media attention, it is not unexpected to receive challenges such as this, and Caterpillar will defend against these challenges vigorously."

A spokeswoman for the company declined to say anything beyond that.

Licenses offered

Bryant, the founder and chairman of Entec Engine Corp. of Alpharetta, referred questions to a lawyer, Louis T. Isaf of Atlanta.

Isaf would not respond to questions about whether the Bryant patent had been shown to Caterpillar officials prior to the approval of the Leman-Weber patent. [Note: clearly the '550 patent of Bryant was known by Caterpillar prior to the February 2004 issuance because it is cited within the '280 patent.]

"Entec has contacted many of the major engine manufacturers, seeking assistance with the manufacture of Entec engines and also offering licenses," Isaf said in a prepared statement.

He would not say which engine manufacturers the company had contacted or specifically whether they included Caterpillar.<--

Honeywell sues over LCD patent, US 5,280,371

Honeywell announced on October 6, 2004 that it had filed a patent infringement suit in the federal district court of Delaware over US 5,280,371 against a number of companies, including Apple, Argus a.k.a. Hartford Computer Group Inc., Audiovox Corp., Casio Computer Co. Ltd., Casio Inc., Concord Cameras, Dell Inc., Eastman Kodak Co., Fuji Photo Film Co. Ltd., Fuji Photo Film U.S.A. Inc., Fujitsu Ltd., Fujitsu America Inc., Fujitsu Computer Products of America Inc., Kyocera Wireless Corp., Matsushita Electrical Industrial Co., Matsushita Electrical Corp. of America, Navman NZ Ltd., Navman U.S.A. Inc., Nikon Corp., Nikon Inc., Nokia Corp., Nokia Americas, Olympus Corp., Olympus America Inc., Pentax Corp., Pentax U.S.A. Inc., Sanyo Electric Co. Ltd., Sanyo North America, Sony Corp., Sony Corp. of America, Sony Ericsson Mobile Communications AB, Sony Ericsson Mobile Communications (USA) Inc., Toshiba Corp. and Toshiba America Inc.

Honeywell described its technology as enabling "a display to produce a brighter image (making the screen easier to see) without requiring additional power while helping to reduce the appearance of an undesirable interference pattern called the 'Moire effect' on the screen." Honeywell originally developed the technology for the aerospace industry, for use with LCD-based displays in airplane cockpits.

The need to read: study your competitor's patents

Contrary to the idea that one shouldn't read competitor's patents, the wise businessman will gain an understanding of the IP terrain before investing money in any project. It is frequently the case that the company on the wrong end of an adverse patent decision didn't do its homework. The whole idea of the patent system is to advance technology by giving incentives for everybody to write down and publish their inventions so that everybody, including competitors, knows what's going on and can utilize the information, and, if appropriate, make a rational decision to license or design around. When someone ignores what's going on, that person can be hurt. Too bad, so sad, but quite avoidable.

The following is from an article by A. José Cortina:

The extent of due diligence is likely to be guided by the amount of investment and the stage of development/growth of the company seeking the investment. In the case of a very early-stage company, it may only be necessary to ensure that patent applications have been filed in an attempt to secure an exclusive position and create an asset with value. If software is involved, there may not yet have been any development conducted so that the only issue is whether appropriate agreements are in place with the developers. If no product or service is being provided, trademarks or service marks would not be an issue.

On the other hand, in the case of a larger investment or a more mature company, investors may wish to conduct comprehensive IP due diligence. On the patent front this may require a comprehensive infringement search, followed by culling of patents identified by counsel or company technical staff to preliminarily identify possible problem patents. Thereafter, a formal opinion of counsel may be required to allow the investor to properly assess the risk of infringement of a third-party patent. The issue of whether procurement of patents is important and still possible may need to be addressed. If software is involved, investors may need to pay more serious attention to the copyright issues discussed above, including ensuring that rights are owned by the company and that infringing work product is not built into the product. As in the case with patents, if trademarks or service marks are important to the success of the company, it may be necessary to know that they are protected and owned by the company, and that they do not infringe the marks of others.

The Balance

Ultimately, the investor needs to understand the impact of not sufficiently investing in IP due diligence as balanced against applying the funds involved towards productive growth of the company. The dilemma faced is that if IP issues are not addressed in a timely manner, the investment may be for naught as the company could find itself blocked from going forward, or in a competitive nightmare due to its lack of an exclusive position in the marketplace.

Ultimately, the investor should be knowledgeable about the potential pitfalls, and should go forward with a sufficient understanding of the risks involved depending on the amount of IP due diligence conducted prior to making the investment decision.

Patent confusion at eWeek?

Steven Vaughan-Nichols in eWeek propounds some patent confusion.



Of
-->Microsoft's Sender ID-related patent proposals helped crush a once-promising way to stop spam; and Microsoft's own FAT (file allocation table) patent has, for now anyway, been denied.<--
Gee, all four patents of Microsoft's licensing stable are in force. A rejection of claims in the first Office Action of a re-exam does not constitute a "denial of a patent."

Of
-->As a developer, closed or open source, you don't have the time or skills to look for software patents. For that matter, some experts say you shouldn't look anyway!

"Current U.S. patent law creates an environment in which vendors and developers are generally advised by their lawyers not to examine other people's software patents, because doing so creates the risk of triple damages for 'willful' infringement," Daniel Egger, chairman and founder of OSRM (Open Source Risk Management), said a few weeks back.<--

Totally dumb. If you read the patent and act accordingly, you avoid infringment altogether, so triple damages never come up. This stupid advice probably is a vestigial remnant of copyright confusion, but whatever its source, it really is bad. Further, the Knorr-Bremse case has modified the lay of the land. [Merely as a sidelight, Mark Lemley talked about not reading other people's patents in the rational ignorance paper in the Northwestern Law Review; refer to earlier post on IPBiz.blogspot.]



Of
-->Can you say that's a little broad? I knew you could. Kodak is using it against Java, but Kodak also could use it against Microsoft and its .NET platform.<--
Microsoft took a license.

Of
-->It all seemed so funny back in 1999, when Amazon.com started this whole mess by patenting the one-click idea. But now, no one is laughing.<--
Barnes & Noble, with Pennie & Edmonds LLP as attorneys, could not invalidate the patent.

Of
-->How did we ever end up in such a mess? Well, I'm no lawyer, but Glenn Peterson, who is an IP attorney and shareholder in the Sacramento-based law firm McDonough Holland & Allen PC, said, "Many traditionalists harken back to Thomas Jefferson to remind us that ideas are not patentable. One may patent the tangible fruits of an idea, but not the abstraction, i.e., the idea itself." <--
Say what?

Of
-->Eolas is still fighting Microsoft over basic browser technology found in IE.

Think that doesn't matter to open-source developers? Think again. If upheld, the Eolas patent also can be used against Mozilla or Firefox. No one is safe from patent abuse.<--

Gee, by your logic on Microsoft's FAT patent, the Eolas patent has been "denied," since the claims were rejected (twice) in a re-exam. At least be consistent.

[Steven J. Vaughan-Nichols is a Senior Editor at eWeek.com.]

***
In an accompanying article, there was more confusion.

-->Beyond the Kodak/Sun case, Glenn Peterson of McDonough Holland expects "software patentability issues to be the subject of intense litigation over the next few years, both in the trial courts and in the federal courts of appeal."

"I would not be surprised at all to see the issue reviewed in the U.S. Supreme Court," he said. "It is hard to overstate the commercial impact of a patent office that continues to proliferate software patents, especially with such minimal scrutiny as would explain issuance of the 'one-click' patent and some of its just as ridiculous siblings."<--

Comment: Recall that the one-click patent of Amazon was litigated in district court in the context of the injunction. With all the resources of Barnes & Noble and of Pennie & Edmonds, a significant case for invalidity could not be made. Although the district court decision was later reversed, it is simply wrong to say that there was "minimal scrutiny" of this patent. And the patent remains valid. Similarly, as to the Eolas browser patent, the 501 filing by W3C (written by Pennie & Edmonds) argued for anticipation of the claims. In the re-exam, the examiner initially accepted this argument only for obviousness (not anticipation), and, after receipt of the Eolas reply, withdrew his rejection entirely as to the arguments in the Pennie paper. A different rejection on different art was applied. It is simply wrong to say that these matters have received minimal scrutiny. If these patents are so ridiculous, where is the prior art that says so? It's one thing to give a sound byte about ridiculous patents, but where's the beef? eWeek needs to present substance rather than puffery.

Predictions by Nobel Bourse for Chemistry Prize for Oct. 6

The Nobel Bourse was "in the race" for the physics prize but was clueless on the medicine prize. Let's see how they do Oct. 6, 2004 when the chemistry prize is announced.

From The Scientist:

The Nobel Prize Bourse Web site went online September 1 in the German language, Skiera said. Due to requests from outside of Germany, English language pages were added 9 days later.

Skiera said the German Research Foundation has contributed to the project by funding two half-time, 2-year positions for the project team, including the position held by Web site technical manager Kepper. The daily Frankfurter Allgemeine Zeitung newspaper has provided written profiles of candidates being traded. IBM Germany has donated a notebook computer. In addition, E-Finance Lab, which helped develop the Web site, donated five Apple iPod digital music players to be awarded to winning Nobel Prize Bourse participants.

Both Skiera and Kepper said this year's Nobel Prize Bourse had been a learning process and that a new, improved version would be launched next year for 2005 prizes.

Skiera quipped: "We were running behind schedule this year, but unfortunately could not ask the [Nobel Prize] committee to postpone the selection process a few weeks."

As of Tuesday morning, the top performers in the Chemistry Prize—due to be announced Wednesday [Oct. 6, 2004]—were Kyriakos Nicolaou, George Whitesides, and Albert Eschenmoser.

[Note: at least these projections are more up-to-date than the selection of a 1970's patent for the Ig Nobel Prize. Further, one of the patent's inventors is deceased, a clear Nobel violation. Remember Rosalind Franklin...]

UPDATE:
Well, back to the drawing board for the Nobel bourse as none of the top performers got the prize:

On October 6, Aaron Ciechanover, Avram Hershko and Irwin Rose jointly won the Nobel prize for chemistry for discovering how proteins are broken down.

The work was directed to ``the cell functions as a highly efficient checking station where proteins are built up and broken down at a furious rate,'' according to the Stockholm- based Nobel Foundation said in a statement on its Web site.

Ciechanover, 57, and Hershko, 67, (the Technion - Israel Institute of Technology in Haifa), and Rose, 78, (the University of California at Irvine), focussed on understanding at a molecular level of how the cell controls a number of central processes by breaking down certain proteins and not others. The scientists will share an award of $1.36 million.

There is a patent angle.

Dr. Hershko is a named inventor on U.S. Patent 6,528,633 (issued March 4, 2003 and assigned to President and Fellows of Havard College (Cambridge, MA); Rappaport Family Institute for Research in the Medical Sciences (Haifa, IL)), entitled "Cyclin-selective ubiquitin carrier polypeptides."

The patent carries the text: This invention was made in part with Government support under Grant no. NIH HD-23696 (JVR), awarded by the National Institutes of Health, and as such the Government has certain rights in the invention, and thus would appear to be done through the Bayh-Dole Act.

Further, the patent is a continuing application, and carries the text: This application is a divisional of U.S. patent application Ser. No. 08/828,533, filed on Mar. 31, 1997, now U.S. Pat. No. 6,180,379 which is a continuation-in-part of U.S. patent application Ser. No. 08/820,693, filed on Mar. 18, 1997, now abandoned, which claims priority from U.S. provisional patent application Ser. No. 60/014,492, filed on Apr. 1, 1996, all of which applications are hereby incorporated by reference.

Claim 1 of the '633 patent recites:
An isolated nucleic acid encoding a non-xenopal, ubiquitin carrier polypeptide (Ubc) having an amino acid sequence with about 94 to about 100% sequence identity to the amino acid sequence set forth in SEQ ID NO:1, wherein said Ubc is involved in the ubiquitination of cyclin A and/or B.

US Patent No. 6,287,858 cites to Hershko, Avram, and Ciechanover, Aaron, "The Ubiquitin System for Protein Degradation," Annu. Rev. Biochem., 61:761-807 (1992).

Dr. Ciechanover is a named inventor on U.S. Patent 6,656,713 (issued December 2, 2003 and assigned to Signal Pharmaceuticals of San Diego, CA), entitled "Compounds and methods for modulating activation of NF-.kappa.B."

The abstract states:

Compositions and methods for modulating the activation of nuclear factor .kappa.B (NF-.kappa.B) are provided. The compositions comprise one or more agents that modulate ubiquitination of phosphorylated I.kappa.B.alpha. and/or I.kappa.B.beta.. Such compositions may be used for treating diseases associated with NF-.kappa.B activation. Modulating agents include human E3 ubiquitin ligases, antibodies thereto and variants thereof, as well as related proteins.

The first claim recites:

An isolated polypeptide comprising SEQ ID NO:16 or a truncated portion thereof of at least 50 amino acid residues wherein said portion retains the ability to enhance ubiquitination of phosphorylated I.kappa.B.

The '713 is a continuation application: "This is a Continuation of Ser. No. 09/210,060 filed Dec. 10, 1998 now abandoned which is hereby incorporated in its entirety by reference."


A technical paper by Ciechanover is cited: "The Ubiquitin-Proteasome Proteolytic Pathway," Cell 79:13-21, 1994. US Patent 6,613,541 (assigned to Millennium Pharmaceuticals; issued September 2, 2003), US Patent 6,365,358 (assigned to Incyte Genomics; issued April 2, 2002) and US Patent 6,287,858 (assigned to Dana Farber Cancer Institute, issued September 11, 2001)cite to the same paper.


Ciechanover is the first inventor on US Patent 5,384,255 (assigned to Rappaport Family Institute for Research in the Medical Sciences (Haifa, IL); issued January 24, 1995), entitled "Ubiquitin carrier enzyme E2-F1, purification, production, and use." To date, this patent has been cited by 15 other US patents. The '255 patent carries the statement: "Part of the work performed during development of this invention utilized U.S. Government funds. Therefore, the U.S. Government has certain rights in this invention."

US 5,264,365 cites to an earlier paper: Herschko, Avram and Ciechanover, Aaron, "Mechanisms of Intracellular Protein Breakdown", Ann. Rev. Biochem., 51:335-364 (1982).

UPDATE:

from The Scientist:

A lot of their work was done during sabbatical breaks that Hershko and Ciechanover spent with Rose at the Fox Chase Cancer Center in Philadelphia. Beginning with a paper in 1978, the three laureates published a series of biochemical studies that revealed and characterized the ubiquitin system. Two papers published in PNAS in 1980, which started to explain the role of ubiquitin in adenosine triphosphate–dependent proteolysis, are considered pivotal.

A. Ciechanover et al., "ATP-dependent conjugation of reticulocyte proteins with the polypeptide required for protein degradation," PNAS, 77:1365-8, March 1980.


A. Hershko et al., "Proposed role of ATP in protein breakdown: Conjugation of proteins with multiple chains of the polypeptide of ATP-dependent proteolysis" PNAS, 77:1783-6, April 1980.

BusinessWeek on innovation

from an article by Michael J. Mandel:

GET THE MAXIMUM BENEFIT FROM GLOBAL INNOVATION For the first time ever, innovation is spreading from a few large industrial countries to a broader stage. That's good news: The rise of higher education and R&D spending around the world can create a global division of labor where the U.S. specializes in areas such as biotech and advanced software while South Korea and Taiwan focus on areas such as flat-panel displays and chips.

Countries have to take two steps to fully participate in the new global innovation economy. First, they need to be willing to engage in collaborative research across national boundaries, and allow the free movement of ideas and people. Building up walls around intellectual property is simply a bad idea.

Second, to make the best use of innovations elsewhere, a country, including the U.S., has to spend enough on R&D and education to maintain a substantial presence in critical fields of research, including the ones where it is not the leader. That's the ante to get into the global game.

SUPPORT THE PATENT OFFICE A well-functioning patent office is key in an Innovation Economy. In the U.S., however, it's not working very well. Since 1997, the number of patent applications has risen by 50%, but the backlog of patents waiting for action by a patent examiner has quadrupled. Moreover, Congress, desperate for funds to reduce the budget deficit, has not allowed the Patent & Trademark Office to spend all the money brought in by application fees. "The patent office has been transformed into a profit center," says Josh Lerner, a professor at Harvard Business School.

Faced with a mountain of applications, patent examiners are compounding the problem by approving patents too quickly, and giving protection to far too many broad or mundane ideas. The result, says Lerner, is a "litigation tax" on innovation, which forces new companies to spend time and money wending their way through a forest of existing patents before they can launch a new product.

The right level of protection for intellectual property is a divisive subject. Perhaps the simplest fix is to give the patent office more funding, including allowing it to tap its own funds. More examiners, and more time to look into what has been done before -- "prior art" -- may improve the quality of patent grants.

BETTER NUMBERS ON INNOVATION An Innovation Economy requires political support to prosper. Politicians have to speak in favor of investments in new technologies that may not pay off for years.

It's easier to muster support for innovation with concrete evidence of its positive effects. Unfortunately, the government's statistical system typically does a much better job measuring old technologies and industries than it does measuring new ones, so it can take years before an innovation is fully reflected in the data.

For example, the first single-chip microprocessor was introduced by Intel Corp. (INTC ) in 1971, triggering a period of rapid decreases in the price of computing power. But that wasn't measured by the government until 1985.

Today, the statistical system needs to be retooled again to better quantify the impact of such health-care innovation as new drugs and surgical techniques. The cost of the health-care sector today is well counted, but there's no good measure of its true output, which is years of good health. That makes it much harder to assess the payoff from the billions of dollars spent on medical research.

MAINTAIN FREE MARKETS The rapid innovation of the past 75 years has been accompanied by the spread of the market-based economic system around the globe. In terms of innovation, this is no coincidence. "The historical record shows that this is the one system that has worked," says Northwestern University economic historian Joel Mokyr.

It is far easier to protect the status quo than it is to adopt the policies that promote change and innovation. Yet in the end, it is competition and free markets that spur innovation -- and that is what will make the next 75 years as fruitful as the past 75.

******

More on book by Jaffe and Lerner
from http://www.kentucky.com/mld/kentucky/business/9830180.htm:

From his home outside Boston, Lerner last week described the patent system after the reforms as mired in "the land of unintended consequences."

The patent agency has often struggled to keep up with the times. In recent years, the agency has confronted entirely new areas like biotechnology, software-related inventions, financial and business methods, Internet-based inventions and other information-technology innovations.

Some of the changes intended to deal with these occurred amid extensive public debate. Others got little attention because they seemed like innocuous administrative reforms -- like the ones that made patents easier to get, Lerner said. But many of those patents caused a secondary reaction, he added.

"The ability to litigate and expect to get substantial award from litigation increased," Lerner said. "So as a result we've got somewhat of a vicious cycle. Once you get one firm in an industry beginning a strategy of aggressive patent enforcement, it creates an almost inevitable response -- an almost arms-race dynamic -- where everyone else in the industry says, 'We better be doing the same thing.'"

He suggested that these changes for the worse occurred because "there's a relatively small group of people in the D.C. patent bar, and they have a very powerful influence on how patent policy gets decided. There is a powerful incentive for them to keep a patent system that is complicated, and one that involves protracted, costly litigation."

Also, Lerner said, businesses often fail to understand the importance of subtle changes in patent law.

"It is perhaps because of the complexity of patent issues, and because there is no long tradition of work by economists in this area, because a lot of corporations see it as second order relative to tax policy changes, for example, which directly affect their bottom line," he said. "Patent policy has an indirect effect."

The book lays out a strategy. "Our idea is that three things will potentially make a big difference," Lerner said. "First of all, this idea which may well have made sense in 19th century of a patent examiner being able to sit and in few hours figure out what a relevant technology is, and then go out and make a decision as to whether a patent should be granted or not, that really doesn't make sense in an era like today.

"Second, to see the patent review process as 'one size fits all' is again a mistake. There has to be way to figure out how to devote more resources to those patent applications which are really the important ones, and less to the unimportant ones."

The authors' third remedy is to reverse the trend toward jury trials for patent lawsuits.

Insituform again, Tangential Festo.

Under the "absolute bar" of the 2000 CAFC Festo case, the patentee lost. Now, the patentee wins under the tangential prong of the 2002 Supreme Court Festo.

From the 2004 Insituform case:

For their part, defendants note that claim 1, as originally filed, covered a process using single or multiple cups at any location downstream of the resin front. See Insituform I, 99 F.3d at 1108. They also note that we construed claim 1, as amended, to cover a single vacuum cup, which inherently creates a discontinuous vacuum. Id. at 1106. Defendants thus argue that accused Process 1 falls squarely within the territory surrendered by the narrowing amendment.

For the reasons which follow, we hold that plaintiffs have rebutted the Festo presumption that a narrowing amendment made for a reason of patentability surrenders the entire territory between the original claim limitation and the amended claim limitation. See Festo II, 535 U.S. at 740-41. We reach this conclusion because we conclude that the prosecution history establishes that “the rationale underlying” the amendment narrowing the scope of literal claim coverage from multiple cups to a single cup bears “no more than a tangential relation to the equivalent in question,” accused Process 1. Id. Therefore, application of the doctrine of equivalents in this case was not barred. Accordingly, we again affirm the judgment of the district court that Process 1 infringed claim 1 of the ‘012 patent under the doctrine of equivalents.
In Insituform I, we construed claim 1 of the ‘012 patent as limited to “a process using only one vacuum cup which inherently creates a discontinuous vacuum.” Id. at 1106. Based upon that construction, we affirmed the district court’s JNOV that Firstliner’s Process 1, employing multiple cups beyond the resin, did not literally infringe claim 1. Id. As noted, we also held, however, that Insituform was not barred by prosecution history estoppel from asserting that Process 1 infringed claim 1 under the doctrine of equivalents. Id. at 1109. In so holding, we first looked at the original claims in Insituform’s application. Of those, only the first four are relevant to this appeal.

(...)
In our view, Insituform has rebutted the Festo presumption. The prosecution history and our discussion of that history in Insituform I and II compel the conclusion that the amendment limiting the literal scope of claim 1 to a single cup process bears “only a tangential relation,” if that, “to the equivalent in question,” a process using multiple cups. The question we must address is “whether the reason for the narrowing amendment was peripheral, or not directly relevant, to the alleged equivalent.” Festo III, 344 F.3d at 1365. As the discussion above indicates, the narrowing amendment in this case was for the purpose of distinguishing the invention over Everson. Insituform made it clear that the difference between its process and Everson was that its process did not have the disadvantage of the Everson process of a large compressor at the end of the liner. There is no indication in the prosecution history of any relationship between the narrowing amendment and a multiple cup process, which is the alleged equivalent in this case. Thus, we hold that plaintiffs have successfully rebutted the Festo presumption by establishing that the amendment narrowing the claimed invention from multiple cups to a single cup was tangential to accused Process 1, which used multiple cups attached at different points along the liner tube. We therefore affirm the judgment of infringement under the doctrine of equivalents.

[Hmmm, after showing rebuttal of the presumption, doesn't the CAFC have to perform another step, showing that the accused element IS an equivalent of the claimed element? See also my earlier article: Insituform: Festo for the Festophile? in Intellectual Property Today.]

Kodak wins patent suit against Sun over Java

Kodak won a jury verdict against Sun on Friday, October 1, 2004, and will be seeking approximately one billion dollars in damages.

Kodak's litigation involved three patents that it purchased from Wang Laboratories in 1997, several years after Java was created. These patents -- numbers 5,206,951; 5,421,012; and 5,226,161 -- were directed to the integration of data between object managers, and between data managers, and to the integration of different programs that were manipulating data of different types.

Kodak took the position in court that these patents covered the method where an application "asked for help" from another application -- such as in Java's object-oriented programming.

Pamela Jones of Groklaw was quoted by zdnet
(http://news.zdnet.co.uk/software/0,39020381,39168864,00.htm):

"The rest of the world will out-innovate US companies, because they won't be running with the patent ball-and-chain attached to their ankles, holding them back. Protect your software with copyright and trade secrets, but using patents for software inevitably blocks progress. If you must have it, rope it off severely so it doesn't hurt anyone like this. At a minimum, patents that aren't actively being used by the patent holder in any way in any product shouldn't be available as a weapon against a company actively bringing an idea to fruition and use."

Of damages, the Rochester Democrat and Chronicle reported:
(http://www.democratandchronicle.com/apps/pbcs.dll/article?AID=/20041002/BUSINESS/410020333/1001)

-->Kodak in pre-trial documents indicated it would ask for $1.06 billion in lump-sum royalties – a figure that represents half of Sun's operating profit from the sales of computer servers and storage equipment between January 1998 and June 2001. The argument: Java provides the engine for such computer equipment. Sun executives have publicly estimated that Java is a "key factor in 90 percent of Sun's sales," Kodak said.

The damages phase will likely be sharply litigated, according to a local patent lawyer. "Kodak will (probably) be urging for a broad royalty base and a reasonable royalty, and I'm sure Sun will argue that the use was small and the royalty base should be lower," said Thomas Fitzgerald, a patent lawyer for the past three decades.<--

**Hoisting on one's own petard?

In the past, Kodak has been the loser in some notable patent suits. Further, as to Sun, from the net (Mike Gunderloy):

--> "there's the new from an SEC filing that Sun has reportedly applied for a patent on a "method for licensing software to an entity, including determining a per-employee cost for the software, determining a number of employees of the entity, and determining a total licensing cost using the number of employees and the per-employee cost, wherein the total licensing cost comprises a software license for all employees of the entity and all customers of the entity."

One would think that with this sort of insanity going on, Sun would notice that the system was broken - but instead Sun President Jonathan Schwartz chose to use weblog for a stirring defense of intellectual property rights just a day after a jury in Rochester nailed his company's hide to the wall. He does say he's not in favor of spurious patents or those acquired only for litigation, but given the attempt to patent a licensing plan, it's hard for me to see where he would draw the line.

And in the grander scheme of things, I thoroughly disagree with those who, with Schwartz, hold that software patents encourage innovators to innovate. We are now dangerously close to the point where no innovation in software will be possible, because any new software is an invitation to lawsuit. I assume Sun thought Java was innovative - are they prepared to admit otherwise now that the Wang patents have been applied against them? And what are smaller companies, without a billion dollars in the bank, supposed to do?<--


UPDATE:
There was some discussion of potential liability of HP, IBM, and Microsoft to the Kodak patents in question. It appears that they have licenses to the patents.

from computerworld

http://computerworld.co.nz/news.nsf/0/3B77C98B76DC46E3CC256F240016D587?OpenDocument&pub=Computerworld:

-->Kodak's patents, developed by Wang Laboratories' imaging software unit before it was purchased by Kodak in 1997, essentially cover a technique for allowing two pieces of software to agree how to interoperate — a key concept in object-oriented programming that dates back before the patents were filed to the Simula computer language, created in the 1960s, Eunice says.

"This is one of the things when you hit your head and say how can this possibly be valid," he says. "If Java does these things and infringes, then what doesn't?"

Java developer Adam Baker agrees with Eunice that the techniques covered in Kodak's patents were developed years before the patents themselves were issued.

"I'd be surprised if either via the appeals process or a separate application to the patent office the [patents don't] get rejected, although these things are never certain," says Baker, a senior consultant engineer in the UK who asked that his employer's name not be published.

"I think some serious overhaul of the patents system is required to avoid patents on trivial intentions, which would probably stop most, if not all, software patents," Baker said in an interview via instant messaging.

Though industry analysts like Eunice initially speculated that Microsoft could be vulnerable to a similar lawsuit over the techniques used by its .Net platform, that scenario now does not appear to be likely. Microsoft, IBM and HP are all licensees of the patents involved in the Sun litigation, says Jim Blamphin, a spokesman for Kodak.

The patents in question are US Patent & Trademark Office patents numbered 5226161, 5206951, and 5421012, Blamphin says.

Blamphin declined to comment on any plans for future litigation, or whether Kodak was actually using the patented technologies in question. "We're just not talking about it now because it is still a matter under litigation," he says.

Kodak did release a short statement about the case, which said the company was pleased that the court had validated Kodak's intellectual property rights.

Sun issued a statement saying it was "disappointed with the federal jury's decision" and that it was examining options as the jury begins the liability phase of the trial, where it will consider Kodak's billion-dollar damage request.

One likely outcome would be for Sun to join HP, IBM and Microsoft and simply license the technology, says Jeffrey Neuberger, a partner with Brown Raysman Millstein Felder & Steiner. "Once the jury's verdict is in, more often than not the case is ultimately settled with the jury's verdict being a factor in the settlement," he says.

A second option would be an appeal of the ruling, which would stand a good chance of being overturned, according to Dan Ravicher, executive director of The Public Patent Foundation in New York. Software patent case decisions are reversed about half the time in appellate court, he says. "In the patent world, the chance of reversals are so high that having a trial verdict doesn't leave you with the ability to predict the outcome of a case."

Coincidentally, Jonathan Schwartz, Sun's president and chief operating officer, had commented on the role of intellectual property in his company's business a day before the Kodak verdict. In a weblog posting entitled I Believe in IP, Schwartz wrote that intellectual property is "the foundation of world economies, and certainly the foundation upon which Sun Microsystems was built. Copyright, trademark, patent — I believe in them all."

Following Friday's verdict, Sun executives may now be more aware of the flaws in the US patent system, Ravicher says. "Sun is seeing firsthand ... how the patent system can have negative impact on technology," he says.<--


UPDATE:

News of a settlement for $92 million was released on October 8, 2004.

Prior to the settlement, BusinessWeek had criticized business method patents (below). In that discussion, note the incorrect reference to the Eolas patent ("USPTO rejected it"); as of this time, the final decision on the re-examination of the Eolas patent is still pending; there is a non-final Office Action rejecting the claims of the Eolas patent, and Eolas has an opportunity to respond to that Office Action.

-->The Java case is merely the latest in a string of patent suits hitting the industry. A year ago, a jury ruled that Microsoft's (MSFT ) Internet Explorer browser violated a patent of Chicago-based Eolas Technologies covering so-called plug-ins and decided that the software giant should pay Eolas $521 million. In March, though, the U.S. Patent & Trademark Office reviewed the patent and rejected it.

"SPURIOUS LAWSUITS." Five years ago, giant e-tailer Amazon (AMZN ) sparked outrage when it patented a one-click online ordering system and then sued rival BarnesandNoble.com (BKS ), alleging infringement. The outfits eventually settled the dispute.

As nettlesome as the issue of software patents can be, even those stung by suits aren't always opposed to the concept. Sun President and Chief Operating Officer Jonathan Schwartz argues in his Sept. 30 Web log that patents are an important tool to protect intellectual property. "From drug discovery to academic work, the protection of IP is part and parcel of what incents inventors to invent, and investors to invest," Schwartz writes.

Nonetheless, although he doesn't mention the Kodak case, Schwartz is critical of "the cynicism of spurious lawsuits." Officially, Sun's comment about the Kodak case is that it is "disappointed" and "examining our options."

Critics worry that the ruling could encourage businesses to exploit their patent portfolios to squeeze revenue from innovators who pioneer technology. Kodak is angling for more than $1 billion from Sun in the penalty phase of the trial, which comes next. The ruling could still be subject to appeals. But if it's upheld and Sun is hit with such a large judgment, the real penalty may be to software innovation. <--

Recent complaint about patent examination quality involving old news

I noticed the following text on the internet complaining about faulty US examination in the case of technology for geometric remapping of photographic images. Although the text is recent, the controversy with Professor Dersch goes back to 1999, and there was a Federal Circuit decision in 2001.

Recent text-->
Most of the mathematical problems involved in handling panoramic images were largely solved some time ago, and in particular were incorporated into the freely available 'Panorama Tools' software first written for DOS by Professor Helmut Dersch. More recently there have been controversial US Patents that have claimed his prior work for a commercial company, followed by legal threats that forced him to take his software off of his own web site, but it remains widely available on the web. 'Prior art' should always rule out patent applications, but there is an unfortunately long history of the US Patent Office failing to recognise a lack of originality in some 'American' inventions. Occasionally such mistakes are eventually recognised and the patents declared invalid.
<--

Separately, from the internet
http://www.virtualproperties.com/noipix/patents.html:

-->
I believe that their prior lawsuits and threats against others were
centered around their patents. IPIX US patents include: 5,313,306,
5,185,667, and at least two others. Some of their claims are quite
broad, suggesting that any geometric remapping of a fisheye image is
their invention. There is considerable prior art that would seem to
invalidate these broad IPIX claims. Variations of fisheye image
geometric remapping type systems have been used in aerospace, aerial
photography, submarine periscopes, flight simulation, planetarium
projection, etc. As an example, one system from the early 1970,s used a
6 mm Nikon fisheye lens in a F-111 aircraft to view wing extension
simultaneously on both sides of the aircraft while also providing star
image data. Two particularly relevant prior art references that would
appear to completely invalidate the broad IPIX patent claims include:

Ripley, D., DVI - A Digital Multimedia Technology, Communications of the
ACM, Volume 32 Number 7 (July 1989)

This paper describes an interactive computer based system that
dynamically extracts perspective corrected views from images filmed with
a Nikon 220° fisheye lens.

Lippman, A., Movie Maps: An Application of the Optical Video Disc to
Computer Graphics, Siggraph Conference Proceedings (1980)

This second paper describes an early VR system that used either a set of
4 cameras or a single donut image camera that captured the complete road
system in a small town. The viewer could travel down any of the roads in
several different seasons and see perspective corrected views. The
single camera system could use either the Nikon 6 mm f2.8 fisheye lens
or the Kern Peri Apollar lens to record a full 360 degree horizontal
view.

***
from

http://www.wired.com/news/print/0,1294,20824,00.html
-->
IPIX was granted the controversial patent back in 1993, when it was going by the name TeleRobotics International. Essentially, the patent covers spherical images created using fisheye camera lenses. Using a fisheye lens, a photographer can shoot a 180-degree image, or all of the scenery in a half-sphere in front of him. IPIX's software lets photographers weave two complementary 180-degree photos into a 360-degree panorama.

The problem with the patent, say experts, is that the techniques it covers were well known and well publicized years before the patent was granted.

"Cartographers and photogramatists have been familiar with the principles of image projection onto three-dimensional surfaces for years," said Andrew Davidhazy, chairman of the department of imaging and photographic technology at the Rochester Institute of Technology.

In particular, a widely read 1986 academic paper published in an Institute of Electrical and Electronics Engineers journal covered all the basic techniques later patented by IPIX, experts say.

Because there was substantial "prior art," IPIX competitors contend that the patent does not stand the test of law.

That's what David Ripley, CEO of IPIX competitor Infinite Pictures thought, anyway. When IPIX sued Infinite Pictures in 1996 for patent infringement, Ripley confidently headed to court in IPIX's home state of Tennessee.

"We went to trial against a Tennessee company before a jury of Tennessee folks," he said. "We had a biased jury, but frankly, in their defense, patent law should never go before a jury. Those people's eyes were glazed over, and they didn't have a chance of understanding what was going on."

Infinite Pictures plans to appeal to the Federal Circuit Court this fall, and Ripley is confident his company will prevail.

He may have cause for optimism, patent lawyers say.

"The federal appeals court often overturns jury cases," said Robert Sachs, a partner in the intellectual property division at Fenwick & West, a Palo Alto, California, firm that specializes in law for high-tech companies.

Nevertheless, Sachs said, the court tends to be deferential to the jury decision, because the jurors heard and evaluated all the experts and witnesses.

The IPIX patent, he said, is written in broad language that is subject to interpretation. The drafter of the IPIX patent didn't specify precisely how the components of the patented IPIX system interconnect, instead using general language such as "means for receiving digitized signals."

The appeals courts have tended to find that such patents apply only to the relatively narrow range of techniques the patent holder actually employs, Sachs said. Because IPIX accused Infinite Pictures not of literally infringing on its techniques, but of making equivalent technology, IPIX may have a hard time in the appellate court. It will come down to a battle of experts, Sachs said, noting again that the appeals court has tended to defer to the jury ruling because the jury saw and weighed all the expert testimony.

Still, he said, "I would not want to bet a company on this patent."

But IPIX has bet its future on the patent. If it loses, it could be in big trouble.
Unlike most software companies, which simply sell their products for a one-time fee, IPIX has built its business around a per-use model. Every time a photographer uses IPIX software to save an image, he has to pay IPIX up to $25, depending on whether the image is of high or low resolution. The fees have previously ranged as high as $100.

At the moment, many photographers are willing to pay the fees, if grudgingly, because IPIX is the fastest, easiest way to make a spherical image.

"Their advantage is ease of use," said Scott Highton, a pioneering VR photographer who helped both IPIX and Apple Computer develop VR software. If there were any viable alternative, however, even if were more cumbersome, photographers would gladly take it, he said.

Viable alternatives may be on the way -- whether or not IPIX prevails in its patent suit. Several companies, including Infinite Pictures and Panoscan, have introduced new technology that lets users create spherical images without using fisheye lenses.

"There are other kinds of technology that can provide better virtual environments," said Ken Turkowski, a senior research scientist at Apple Computer and a virtual reality pioneer. "IPIX can't touch those whatsoever."

**Federal Circuit
from http://realtytimes.com/rtapages/20011227_bitipix.htm

IPIX Wins Copyright[sic: patent] Infringement Suit
by Realty Times Staff


Internet Pictures Corporation (Nasdaq: IPIX - news), the global leader in mission-critical imaging solutions, today announced that the U.S. Court of Appeals for the Federal Circuit has upheld a patent infringement jury verdict of $1 million against Infinite Pictures, Inc (DBA iMove, Inc.). The court confirmed iPIX's patent rights covering the transformation of fisheye, equirectangular or equivalent photographic images into perspective corrected immersive images.

iPIX sued Infinite Pictures, Inc. in September 2000 for infringement of its patent (U.S. Patent 5,185,667) covering a technique for converting photographic ``fish eye'' images into a distortion corrected view, allowing a user to ``step inside'' and navigate within an image. The jury held the iPIX patent valid and infringed and awarded iPIX $1 million in damages. Infinite Pictures appealed the decision to the US Court of Appeals for the Federal Circuit. The appeals court affirmed in all respects the jury's verdict and held that Infinite Pictures' SmoothMove Panorama Web Builder, which aligned and seamed three images into a 360-degree panorama image in an equirectangular format, infringed the iPIX patent.

``What is particularly important about the holding of the court is that it agreed with iPIX's theory of infringement based on the doctrine of equivalents,'' said Robert F. Altherr, Jr., attorney for Banner & Witcoff who represented iPIX. ``The court agreed that SmoothMove's equirectangular panorama file, though not an image obtained directly from a fisheye lens camera, was substantially similar to it, and that decision was upheld on appeal.''

In addition to the award of $1 million in damages, Infinite Pictures is prevented from marketing products based on the infringing technology.

Published: December 27, 2001

**from a 10-Q report for IPIX in July 2004:

Over the past few years, we have restructured the Company around our higher gross margin businesses. We are now organized into three market focused business units: IPIX Security, IPIX AdMission and IPIX InfoMedia.

IPIX Security: Supplies Full-360 video surveillance technology for critical government and commercial security applications. Patent protected technology used in digital video systems that provide complete and continuous situational awareness.

IPIX AdMission: Enables local advertisers with the means to create rich, visual ads showcasing their businesses, products and services. The AdMission platform is implemented on a large scale for managing media across the Internet. It allows advertisers and consumers to successfully conclude commercial transactions by communicating the value of advertised goods and services through accompanying media.

IPIX InfoMedia: Provides for creation of Full-360 degree panoramic photography and movies content. Markets are professional photographers, ad and creative media agencies, Web developers and visual documentation.

Another claim construction case: AstraZeneca v. Mutual

Appellant Mutual won on a claim construction issue (thus, this is another case in which the district court interpretation was NOT UPHELD) and thereby won on the noninfringement issue but not on the invalidity issue.

The Federal Circuit cited Texas Digital again and referred to upcoming resolution in Phillips:

-->
Language in some of our recent cases suggests that the intrinsic record, except for the claims, should be consulted only after the ordinary and customary meaning of claim terms to persons skilled in the pertinent art is determined. See, e.g., Tex. Digital Sys., Inc. v. Telegenix, Inc., 308 F.3d 1193, 1204 (Fed. Cir. 2002) (“[T]he presumption in favor of a dictionary definition [of a claim term] will be overcome where the patentee, acting as his or her own lexicographer, has clearly set forth an explicit definition of the term different from its ordinary meaning. Further, the presumption also will be rebutted if the inventor has disavowed or disclaimed scope of coverage, by using words or expressions of manifest exclusion or restriction, representing a clear disavowal of claim scope.”) (citations omitted). The language in these cases emphasizes the use of technical and general-usage dictionaries in determining the ordinary meaning. Id. Under this approach, where the ordinary meaning of a claim is evident, the inventor’s written description of the invention, for example, is relevant only insofar as it provides clear lexicography or disavowal of the ordinary meaning. See, e.g., id.


Footnote 2: I.e., the invention vel non taught by the specification, as distinct from particular, idiosyncratic embodiments disclosed in the specification. See, e.g., Alloc, Inc. v. Int’l Trade Comm’n, 342 F.3d 1361, 1370 (Fed. Cir. 2003) (“[T]his court recognizes that it must interpret the claims in light of the specification, yet avoid impermissibly importing limitations from the specification. That balance turns on how the specification characterizes the claimed invention. In this respect, this court looks to whether the specification refers to a limitation only as a part of less than all possible embodiments or whether the specification read as a whole suggests that the very character of the invention requires the limitation to be a part of every embodiment.” (citations omitted)).

Footnote 3: Resolution of this question may be approaching. See Phillips v. AWH Corp., __ F.3d __, Nos. 03-1269, 03-1286, 2004 WL 1627271 (Fed. Cir. July 21, 2004) (granting petition for en banc rehearing, to address broadly the law of claim construction).

**
The particular technical term at issue in the AstraZeneca case is
--solubilizer--.

-->
Against this backdrop, the question becomes whether the intrinsic evidence takes priority in our construction of the claim term “solubilizer,” or if instead the ordinary meaning of the term, as determined from sources such as treatises and dictionaries, controls our construction in the absence of intrinsic evidence of clear lexicography or disavowal. Given that the parties agree that the extrinsic meaning of solubilizer is broad, Astrazeneca unsurprisingly urges the latter approach to claim construction.

We need not decide which approach is proper as a matter of law, as even under Astrazeneca’s preferred methodology, the district court’s claim construction must be reversed. The intrinsic evidence, we hold, clearly binds Astrazeneca to a narrower definition of “solubilizer” than the extrinsic evidence would support.

(...)
Mutual contends that the specification limits the scope of the claim term “solubilizer” to surfactants, and we agree. First, we hold that the inventors deliberately acted as their own lexicographers. The “Description of the Invention” states that “[t]he solubilizers suitable according to the invention are defined below” (emphasis added), and two paragraphs later, states that “[t]he solubilizers suitable for the preparations according to the invention are semi-solid or liquid non-ionic surface active agents” (emphasis added). Astrazeneca maintains that these statements simply refer to preferred embodiments of “suitable” solubilizers. We might agree if the specification stated, for example, “a solubilizer suitable for the preparations according to the invention,” but in fact, the specification definitively states “the solubilizers suitable for the preparations according to the invention” (emphasis added). Astrazeneca seems to suggest that lexicography requires a statement in the form “I define ____ to mean ____,” but such rigid formalism is not required. See, e.g., Bell Atl. Network Servs., Inc., 262 F.3d at 1268 (“[A] claim term may be clearly redefined without an explicit statement of redefinition. . . . [T]he specification may define claim terms ‘by implication’ such that the meaning may be ‘found in or ascertained by a reading of the patent documents.’” (citation omitted)). Certainly the ’081 specification’s statement that “[t]he solubilizers suitable according to the invention are defined below” provides a strong signal of lexicography.
Second, we hold the specification clearly disavows nonsurfactant solubilizers. The inventors’ lexicography alone works an implicit disavowal of nonsurfactant solubilizers, but the rest of the specification goes further.
(...)
Again, Astrazeneca contends that these statements in the specification simply address the features of preferred embodiments. Astrazeneca seems to suggest that clear disavowal requires an “expression of manifest exclusion or restriction” in the form of “my invention does not include ____.” But again, such rigid formalism is not required: Where the general summary or description of the invention describes a feature of the invention (here, micelles formed by the solubilizer) and criticizes other products (here, other solubilizers, including co-solvents) that lack that same feature, this operates as a clear disavowal of these other products (and processes using these products).

(...)
For the foregoing reasons, we conclude that the district court erred in its claim construction, and that properly construed, the claim term “solubilizer” must be limited to surfactants. Because all asserted claims include the term “solubilizer,” and because Mutual’s extended-release felodipine tablets use a co-solvent, not a surfactant, as a solubilizer, Mutual’s tablets could not literally infringe the ’081 patent.

[no doctrine of equivalents]
Astrazeneca contends that even under this construction, the case should be remanded for further proceedings to address the doctrine of equivalents. We disagree. The specification’s clear disavowal of nonsurfactant solubilizers precludes the application of the doctrine of equivalents to recapture the disavowed solubilizers. See, e.g., Gaus v. Conair Corp., 363 F.3d 1284, 1291 (Fed. Cir. 2004) (“Having disavowed coverage of [particular] devices . . . the patentee cannot reclaim that surrendered claim coverage by invoking the doctrine of equivalents.”)<--

In a separate case decided on Sept. 30, 2004, the Federal Circuit addressed a procedural issue in Lab Corp v. Chiron. The Delaware district court had enjoined Chiron from prosecuting a parallel litigation co-pending in the United States District Court for the Northern District of California. Lab Corp won at the Federal Circuit (the injunction remained) BUT NOT for the reasons argued by its lawyers (the argument by Lab Corp's lawyers that Third Circuit law, not Federal Circuit law, applied was REJECTED by the Federal Circuit but Lab Corp won under Federal Circuit law).

From the decision:

-->In this case, the decision whether to follow Federal Circuit or Third Circuit law is critical: as we have previously observed, the Third Circuit has held that injunctions against litigation in other forums are not appealable, while under Federal Circuit law such injunctions are appealable under 28 U.S.C. § 1292(a)(1). Thus, we must decide which law applies. In deciding the applicable law, we held in the first case to address the issue that “the Federal Circuit shall review procedural matters, that are not unique to patent issues, under the law of the particular regional circuit court where appeals from the district court would normally lie.” Panduit Corp. v. All States Plastic Mfg. Co., 744 F.2d 1564, 1574-75 (Fed. Cir. 1984), overruled on other grounds by, Richardson-Merrell Inc. v. Koller, 472 U.S. 424 (1985). More recently, this court articulated the rule in the following way:

We have held that a procedural issue that is not itself a substantive patent law issue is nonetheless governed by Federal Circuit law if the issue pertains to patent law, if it bears an essential relationship to matters committed to our exclusive control by statute, or if it clearly implicates the jurisprudential responsibilities of this court in a field within its exclusive jurisdiction.

Midwest Indus., Inc. v. Karavan Trailers, Inc., 175 F.3d 1356, 1359 (Fed. Cir. 1999) (en banc in relevant part) (internal citations and quotation marks omitted); see also Flex-Foot, Inc. v. CRP, Inc., 238 F.3d 1362, 1365 (Fed. Cir. 2001) (“We answer this question on an issue by issue basis, and will apply the law of the regional circuit to which the district court appeal normally lies unless ‘the issue pertains to or is unique to patent law,’ in which case we will apply our own law to both substantive and procedural issue ‘intimately involved in the substance of enforcement of the patent right.’”) (quoting Amana Refrigeration, Inc. v. Quadlux, Inc., 172 F.3d 852, 855-56 (Fed. Cir. 1999)).
(...)
Accordingly, and because of the importance of national uniformity in patent cases, we hold that injunctions arbitrating between co-pending patent declaratory judgment and infringement cases in different district courts are reviewed under the law of the Federal Circuit.

(...)
After fully considering Chiron’s arguments, we find no reason to conclude that the district court abused its discretion in enjoining the parallel California action.

Ig Nobel Prizes on Sept. 30 include patent

The Ig Nobel Prizes awarded on September 30, 2004 included one for a patent. A discussion included the following:

-->Balding men beware--the comb-over is the intellectual property of Frank and Donald Smith of Orlando, Fla. The two received U.S. Patent 4,022,227 for "a method of styling hair to cover partial baldness using only the hair on a person's head. The hair styling requires dividing a person's hair into three sections and carefully folding one section over another." <--

There are five claims:

1. A method for styling hair to cover bald areas using only the individual's own hair, comprising separating the hair on the head into several substantially equal sections, taking the hair on one section and placing it over the bald area, then taking the hair on another section and placing it over the first section, and finally taking the hair on the remaining sections and placing it over the other sections whereby the bald area will be completely covered.

2. A method as in claim 1 wherein the hair on a person's head is folded over the bald area beginning with the hair from the back of the head, and then from first one side and then the other.

3. A method as in claim 2 wherein after the hair from the back of the head is folded over the bald area, an object is placed over the hair and hair from a first of the sides is brushed over the object, and after the hair from said first side is folded into place the object is placed over the hair and the hair from the second side is folded over the object.

4. A method as in claim 3, wherein said object is a person's hand the hair spray is applied after the hair from said first side is folded into place and again after said second side being folded into place.

5. A method as in claim 3 wherein the hair from said first side and said second side is given a final styling.

As to the comment about this being "intellectual property," don't worry, the patent issued May 10, 1977. This wonderful method devised by two Orlando, Florida residents is in the public domain. And, to date, no U.S. Patent ever cited the '227 patent! Those folks in Cambridge need to update their material.

Merck recalls VIOXX on Sept. 30, 2004

Linda A. Johnson of AP reported that Merck pulled VIOXX from the market on September 30, 2004 after a study found it doubled the risk of heart attacks and strokes. "News of the drug's dangers came from a three-year study aimed at showing that Vioxx could prevent the recurrence of polyps..." (for example, Trenton Times, A1 (Oct. 1, 2004))

Endnote 9 of an article in the June 2000 issue of Intellectual Property Today (Increasingly Aggressive Efforts at Patent Enforcement, available LEXIS) had stated:

(...)According to a report from the group of Dr. Ganet A. FitzGerald in the Proceedings of the National Academy of Science, 1999, 96:272-277, the drug may increase the risk of heart attack, stroke and blood clotting disorders. Many older people who may want to take COX-2 inhibitors for conditions like arthritis could be at risk for developing heart and blood vessel problems from the drug. Dr. Saul Bloomfield said that taking COX-2 inhibitors might be a matter of exchanging a gastrointestinal risk from one painkiller to a cardiovascular risk for another. See also Wall St. Jour., April 20, 1999. On April 27, 2000, there was a Reuters release "Merck's Vioxx seen facing FDA scrutiny on heart attacks." [Vioxx (rofecoxib) is a different COX-2 inhibitor.] On April 28, 2000, PR Newswire reported results of a study in which Pharmacia found even at very high doses, Celebrex showed no increases in stroke or heart attack with or without aspirin. [See Hoover's Online]

UPDATE
from http://www.law.com/jsp/article.jsp?id=1097510715611

-->
One day after Merck & Co. announced the recall of its anti-inflammatory drug Vioxx, a prominent Long Island plaintiffs lawyer filed two product liability lawsuits against the drug company in the Nassau County Supreme Court.

Robert G. Sullivan, senior partner in the Mineola, N.Y., office of Sullivan Papain Block McGrath & Cannavo, said the suits are the first in New York to his knowledge.

More suits are already in the works, he said. By late last week, Sullivan's firm had already signed up more than 200 Vioxx clients, he said.

Six Sullivan Papain attorneys have been assigned to handle case intake, five in the firm's Long Island office, the sixth in Manhattan. The firm has a third office in Hackensack, N.J. They are "receiving calls all day long," he added.

Helped, at least in part, by a full page ad in the Oct. 6 edition of New York Newsday, Sullivan said, his firm is getting 50 to 60 new cases daily.

Sullivan predicts that given the number of people taking the drug, within the next four years national Vioxx litigation could come to dwarf every other product liability mass tort except for asbestos and tobacco. Sullivan is intent on having his firm lead the way.

Merck & Co. spokespeople declined to talk about how the company will handle the rising tide of litigation. Theodore V.H. Mayer of Hughes Hubbard & Reed, one of the pharmaceutical company's outside counsel, said that Merck's lawyers are reliant upon the defenses of full disclosure and lack of causation.

Veteran products liability defense attorney William M. Savino, who is not connected with the case or either side, cautioned, "It's one thing to try your case on the six o'clock news. It's another thing to put your proofs to the jury." Savino is managing partner at Rivkin Radler.

A POPULAR PRESCRIPTION

Approved by the federal Food and Drug Administration in 1999, and brought to the market that year, Vioxx was one of a class of non-steroidal anti-inflammatory drugs called "Cox-2 inhibitors," named after the enzyme they block. Other name-brand drugs in the same class are Celebrex and Bextra, both made by Pfizer.

All three became popular as arthritis pain relievers. It is that popularity that Sullivan is banking on. "There were 80 million people on this drug," he said.

That figure is contested by Merck. Spokesman Antonius Plohoros said that while 100 million prescriptions have been written for the drug, it had only 20 million users in the United States.

Merck announced its voluntary recall of the drug on Sept. 21, four days after receiving a warning letter from the FDA. That letter chastised the company for engaging in a promotional campaign for Vioxx "that minimizes the potentially serious cardiovascular findings" revealed during the company's study of the drug's gastrointestinal effects.

Sullivan asserted that a Vioxx user was 50 percent more likely to suffer a heart attack than users of the other Cox-2 drugs.

According to the pleadings, each of the plaintiffs in the suits filed by Sullivan suffered heart attacks. Echoing the FDA letter, each of those filed complaints accuses the company of minimizing the risk of cardiovascular injury. Both allege a breach of duty to disclose that risk; that the pills weren't safe for their intended use; and that the company's advertising was misleading.

In accordance with New York State law, neither complaint makes an express demand for a particular sum of money. Both, however, request a sum "in excess of the jurisdictional limits" of the court.

The results of the gastrointestinal study were reported to the FDA and published in the New England Journal of Medicine. The information available from placebo-controlled clinical trials at the time supported the cardiovascular safety of the drug and the doctors made the ultimate decision to prescribe the medication based upon available clinical trials and their knowledge of their own patients, Mayer said.

"The primary decision-maker is the physician," he said. "The physician makes the determination" as to which anti-inflammatory drug to prescribe, Mayer said.

From that perspective, said Mayer, it is likely that a component of Merck's defense would be the learned intermediary doctrine. It holds that a physician's having adequate notice of a drug's harmful side effects who nevertheless prescribes that drug to the detriment of his patient may vitiate a drug manufacturer's liability for side effect-related injuries.

In cases filed thus far, however, the physicians have not been named as defendants.

Sullivan said they may well be in the future, particularly cardiologists who arguably should have read published reports and those who failed to tell their patients that Celebrex might have been a safer alternative.

Sullivan's firm was one of three appointed by Attorney General Eliot Spitzer to represent the state in the mass tobacco lawsuit aimed at recouping the public money spent treating smoking-related illnesses.

New York State is receiving $25 billion from the national settlement of those claims. The three New York law firms, which included Schneider Kleinick Weitz & Damashek and Albany's Thuillez Ford Gold & Johnson, reaped $281 million in attorney fees.

Sullivan's firm is receiving $98.4 million of that. Part of that money is being paid to departed name partner Pamela Liapakis, but the lion's share is helping to fuel the Vioxx lawsuits, he said.

"Cash flow hasn't been a problem," he said. "Tobacco funds it."

The tobacco money will now be used to advance filing fees and the costs of discovery items such as deposition transcripts and expert witnesses.

At least preliminarily, Sullivan puts great stock and faith in the attorneys he has doing his intake screening: "You have to have a toxic tort department to do this, and we do."

Sullivan Papain's Vioxx project is led by partners Frank V. Floriani and Andrew J. Carboy. Attorneys do the case intake and paralegals obtain the plaintiffs' medical histories and retrieve the medical records.

Once screened and accepted, cases are then graded according to their severity. At one end of the scale are the fatalities -- Sullivan said that his firm already has five of them. Below the fatalities are the serious heart attack and disability patients.

Sullivan said that he expects none of the cases to go to trial. "They'll all settle," he predicted. "The liability is too strong." He said the only purpose in going to trial would be to establish damages.

Mayer, however, said, "An important component of the defense in these cases is disclosure of the results of clinical trials. Individual causation in these cases will be a high hurdle for plaintiffs."

Speaking as an observer, Savino said, "Pharmaceuticals that are alleged to have caused bodily injuries are among the most challenging [cases] to win," he said. "They are very very difficult to prove, because you have to prove causation."

By causation, Savino said he meant isolating the deleterious effect of one drug from any other possible causes of an ill plaintiff's condition.

For more than 20 years, Savino's firm has represented Dow Chemical in its defense of what he called "the grandfather of mass torts litigation, Agent Orange." His Uniondale-based firm, Long Island's largest, has also defended asbestos, ephedra and lead paint cases.

As for Sullivan, on Friday he was already on to the next thing, filing his first case against Pfizer over its Cox-2 drug Celebrex.

<--

UPDATE. from NJ Law Journal (Tim O'Brien, October 19, 2004):

-->One key to Merck's defense would seem to be its position on a key study begun in 1999 that compared Vioxx with a generic painkiller called naproxen to determine the effects on colon polyps. In March 2000, the results of that study showed that patients with polyps who took Vioxx over a long term had four times the risk of heart attack as naproxen users.

Merck, which gave the results to the Food and Drug Administration, argues that the result was due in large measure to naproxen's heart-protecting ingredients. The most recent study showed Vioxx was putting patients at risk for heart attacks or strokes, say Merck scientists. "Any claim that Merck didn't react responsibly is in direct conflict with the facts," said Merck Research Laboratories president Dr. Peter Kim at last Wednesday's press conference.

But the complaints filed thus far say the makers of naproxen never marketed the drug for cardiac problems, and they and other critics maintain that Merck never did a big clinical trial to specifically prove that Vioxx was safe for the heart.

Plaintiffs will rely heavily on an August 2001 paper, published in the Journal of the American Medical Association, by two Cleveland Clinic cardiologists who called for such a study.

Also not helping Merck is a pair of warnings by the FDA to the company to change its labeling and promotion of the drug. A 2002 letter chastised the company for putting out a "false and misleading" press release, saying its claims that Vioxx has a "favorable cardiovascular safety profile" is "simply incomprehensible" given the heart problems found in the comparison study with naproxen.

(...)
Gregory Nespole, a lawyer in the Arnoff v. Merck & Co. class action filed in New Jersey on behalf of shareholders disagrees, saying, "I believe the litigation belongs in New Jersey. The company is there. The acts were committed there. The science was there, their labs, their management and their clinicians. And the press releases and correspondence back and forth to the FDA were all in New Jersey."

(...)
The ERISA cases have been assigned to District Judge Mary Cooper, while the shareholders' action has been assigned to District Judge Stanley Chesler, who has handled class actions against Merck in the recent past. Both sit in Trenton. <--


UPDATE. from the Wall Street Journal on October 20:

"Merck is the ghost of Pfizer's future. . .Investors are slowly realizing that pharmaceutical companies should stay as small as they can, avoid distracting megamergers, invest large amounts in R&D, partner aggressively across the biotech spectrum and strive for novel, breakthrough medicines that add value."

UPDATE. from cover story of Fortune on November 1:

The event precipitating the crisis, of course, was Merck's announcement on Sept. 30 that it was recalling Vioxx, its $2.5-billion-a-year arthritis medicine, because the drug has been shown to double the risk of heart attacks and strokes in long-term users. On the day of the announcement, Merck suffered its own heart attack as investors fled the stock, and $27 billion in market cap—27% of the total—evaporated. (The company has subsequently lost an additional $6 billion in market cap.) Merck has taken a devastating public relations hit too; the recall has raised serious ethical questions about whether Merck inappropriately downplayed Vioxx safety issues over the past several years. And then there's the litigation problem: Although the company won't disclose how many lawsuits have been filed so far, roughly 20 million Americans had taken Vioxx by the time of the recall. According to an estimate in the Oct. 21 issue of the New England Journal of Medicine, tens of thousands of them may have had "major adverse events" attributable to the drug. Tort lawyers around the country have already set up toll-free numbers to solicit potential clients among Vioxx patients. The cost of settling the lawsuits will almost surely be in the billions of dollars, quite possibly in the tens of billions (see How Bad Will the Lawsuits Get?).