More on Eolas v. Microsoft

from EOLAS TECHNOLOGIES INCORPORATED and THE REGENTS OF THE UNIVERSITY OF CALIFORNIA, Plaintiffs-Appellees, v. MICROSOFT CORPORATION, Defendant-Appellant, 2005 U.S. App. LEXIS 3476:

on public use issues: Similarly, in the case at
bar, Wei demonstrated DX34 to two Sun engineers who were under no
confidentiality obligation. Indeed, the Sun engineers informed Wei that they intended to share information gleaned from Wei with other people at Sun. Eolas attempts to distinguish Netscape on the basis that Konrad was the patentee in that case, whereas here, Wei is a third party. However, a third party may, and often does,
initiate a public use. See, e. g., Baxter, 88 F.3d at 1058-59.
Therefore, Wei's third-party disclosure may erect a public use bar.

Eolas further points to W.L. Gore & Associates, Inc. v. Garlock,
Inc., 721 F.2d 1540, 1550 (Fed. Cir. 1983), to advance its position that section 102(b) does not apply in this case. In Gore, a third party used the patented invention more than one year prior to the patentee's application date and the court found no public use. Id. at 1549. Gore represents a different factual situation. The third party in Gore deliberately chose to keep the invention as a
trade secret and avoid disclosure through a patent application.
Accordingly, the Gore third party had a confidentiality agreement in place with its employees to prevent public disclosure of the method whose subject matter could not otherwise be publicly discerned. Id.

on anticipation: In addition, this court vacates the district court's JMOL that DX37 did not anticipate the '906 patent. To anticipate, a single reference must teach each and every limitation of the claimed invention. See EMI Group N. Am., Inc. v.
Cypress Semiconductor Corp., 268 F.3d 1342, 1350 (Fed. Cir. 2001). When viewed in "a light most favorable" to Microsoft, the testimony by Microsoft's expert, Dr. Kelly, presents a question of fact as to whether DX37 anticipates the '906 patent. See Mahurkar v. C.R. Bard, Inc., 79 F.3d 1572, 1576 (Fed. Cir. 1996).

on obviousness: Although Microsoft's direct examination
of Dr. Kelly focused on anticipation, the information solicited from
Dr. Kelly might also support an argument of obviousness in the alternative. In light of this court's determination that DX34 was not abandoned or concealed, Microsoft should also have the opportunity to present DX34 as part of its obviousness
defense. See Panduit Corp. v. Dennison Mfg. Co., 810 F.2d 1561, 1568
(Fed. Cir. 1987) (indicating that a key preliminary legal inquiry in obviousness analysis is: "what is the prior art?").


Summation of the errors by the district court:

In sum, with respect to the district court's prior art rulings, this
court finds: the district court erred in finding as a matter of law that DX34 was abandoned, suppressed or concealed within the meaning of section 102(g); Wei's May 7, 1993 demonstration to two Sun Microsystems employees without confidentiality agreements was a public use under section 102(b); and the district court erred in its JMOL that DX37 did not as a matter of law anticipate
or render the '906 patent obvious. As a result, this court remands for additional proceedings on these issues.

****
In this particular case, a district court judge (in the Northern District, Illinois) made several errors, and the Eolas/Berkeley patent was insulated from prior art that should have been considered.

Recently, a law review writer (Michael H. Davis, Patent Politics, 56 S.C. L. Rev. 337 (winter, 2004) suggested a somewhat different scenario:

One author asks,


Does the invalidation of patents coming into the courts indicate a flaw in the patent system? Or does it suggest that the two tribunals are effectively serving different functions - the Patent and Trademark Office to grant patents
on the basis of prior art appraisals, and courts to weed out subject
matter that more highly-focussed factfindings - and subsequently-occurring events - prove to have been obvious?


Goldstein, Copyright, Patent, Trademark and Related State Doctrines
384 (rev. 3d ed. 1993). Indeed, just as it has been asserted that almost any prosecutor could get an indictment against a ham sandwich, see Do We Need Grand Juries?, N.Y. Times, Feb. 18, 1985, at A16 (reporting that Chief Justice Wachtler favored
abolishing New York's grand juries from most felony cases, because
grand juries "would "indict a ham sandwich' if the district attorney asked nicely"), Patent Office statics themselves establish themselves that almost any patent lawyer can
probably get one patented. Those numbers reveal that just about every patent application is eventually approved by the PTO and a patent ultimately issues. "Virtually all patent applications are successful in the end... ."
Mickey Davis, Summary of "Continuing Patent Applications and Performance of the U.S. Patent and Trademark Office," by Cecil D. Quillen, Jr. (Cornerstone Research) and Ogden
H. Webster, 11 Fed. Cir. B.J. (2001-2002), in TIIP Newsletter, Issue 2 003.1 (2003), available at
http://www.researchoninnovation.org/tiip/archive/2003.

Michael, get a grip. The "97% granted" number in 11 Fed. Cir. Bar Journal is long gone, and you should not be referencing that paper as accurate in "winter 2004." See for example 4 CHI.-KENT J. INTELL. PROP. 186.
And, the district court in Eolas did not weed out subject
matter that more highly-focussed factfindings - and subsequently-occurring events - prove to have been obvious.

UPDATE. March 8, 2005.

Professor Michael ("Mickey") Davis emailed me and observed:

In any event, it is my understanding from data made available by the
PTO that the data used in the PTO Clark [sic: Clarke] article has since been revised, rendering the conclusions there unreliable.

Professor Davis did not identify the source of the "revised" PTO data nor how the "revised" data made Clarke's conclusions "unreliable." If anyone has any insight on this matter, please email me or post.