Wednesday, March 02, 2005

Win for Microsoft in Eolas case; remand to consider Microsoft's defenses

In a decision by Judge Rader, the Federal Circuit vacated the district court's decisions on Microsoft's defenses of anticipation, obviousness, and inequitable conduct and remanded for a new trial on these issues. Thus, Microsoft will get another chance to show that the Eolas/Berkeley patent (US 5,838,906) is invalid and/or unenforceable.

A serious error of law by the district court was the idea that a "public use" anticipation under 35 USC 102(b) could be undone if later abandoned. Once there is a public use, it is not undone by any subsequent action. In this case, a disclosure by Wei to employees of Sun Microsystems who were under no obligation of secrecy to Wei was found by the CAFC to be a public use, citing to Netscape v. Konrad, 295 F3d 1315, 1320 (CAFC 2002). Of the abandonment confusion, the CAFC cited to Woodland v. Flowertree, 148 F3d 1368, 1370 (CAFC 1998).

Similarly, there was confusion by the district court about a 102(g) defense. A delay to refine or improve is not an abandonment, citing to Lutzker v. Plet, 843 F2d 1364, 1367 (CAFC 1988). Wei's DX-37 was deemed an improvement of DX-34, not an entirely new invention. Thus, DX-34 was deemed prior art, and the district court instructed to consider it.

Separately, the CAFC vacated the district court's JMOL that DX-37 did not anticipate the claims of the '906 patent. Although the district court dismissed testimony by a Dr. Kelly on this point as conclusory, the CAFC noted that anticipation is a question of fact, for the jury.

Further, the CAFC found that, with the proper identification of prior art, there was an obviousness defense to be considered.

Also, having misidentified the Viola browser as not prior art, the district court did not properly consider the inequitable conduct defense. One of the inventors of the '906 (Michael D. Doyle) knew of the Viola browser of Wei but did not disclose it to the PTO. Interestingly, following a press release by Doyle on Aug. 31, 1994, Wei immediately emailed Doyle and informed Doyle of Wei's demonstration of the Viola browser (DX-34) to Sun engineers in May 1993. Wei also directed Doyle to a paper by Wei. The University of California filed the patent application leading to the '906 patent on Oct. 17, 1994, AFTER the communication between Wei and Doyle.

One notes that whether or not the DX-34 anticipates the claims of the '906, there is a very serious issue for Eolas/Berkeley on the inequitable conduct defense, which would render all claims unenforceable. Given that Wei considered his work to have already accomplished what was set out in the press release (which may be arguable), it is hard to understand why Wei's work would not have been disclosed to the PTO when Doyle knew of Wei's work prior to filing the application. The standard is not what the inventor (Doyle) thought, but what an examiner would have thought of the relevance. [Although 37 CFR 1.56 was amended in 1992, note the case GFI, Inc. v. Franklin Corp., 265 F.3d 1268, 1274, 60 U.S.P.Q.2d
1141, 1143-44 (Fed. Cir. 2001)]


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