Saturday, April 18, 2009

Prior art subtraction/essential features

Rooklidge and Shah wrote in the March 2009 IPT:

[Leahy] suggested that the "Supreme Court’s Quanta decision may offer a useful way of describing the truly inventive feature of a patent," referring to the Supreme Court’s recent Quanta Computer, Inc. v. LG Electronics, Inc., 128 S. Ct. 2109 (2008). Senator Leahy was referring to "essential features of the invention," a phrase that has been championed as of late by IBM as a solution to the patent damage reform deadlock. See IBM, Towards an Efficient Market for Innovation (2009) (...) Rather than a solution, however, "essential features" is but another form of the prior art subtraction that has plagued patent damages reform legislation since 2005, and as such represents a dead end.

Jeff Bounds wrote in the Houston Business Journal in April 2009: One beef the coalition [Coalition for 21st Century Patent Reform ] has with the bills is with the notion of “prior art subtraction,” essentially taking out the value of previous inventions in order to help calculate damages for patent infringement. “Provisions intentionally designed to reduce damages, such as ‘prior art subtraction,’ should not be part of any patent reform enacted by Congress,’” the coalition announced in a recent news release.

On May 23, 2006, Philip Johnson testified before the Senate:

Unfortunately, the damages proposal in the Coalition Text has yet to gain widespread acceptance in the so-called "tech" community. These stakeholders instead suggest parsing the claimed invention into its elements to look for the so-called "inventive contribution" and to award damages on that feature alone. Under this theory, elements found in the prior art, and contributions made by the infringer to the product, would be subtracted out of the invention for purposes of the damages analysis.

"Prior art subtraction" has met widespread opposition in the IP community, as unfairly diminishing the value of patent damages. At some level, all inventions are combinations of old elements. As Chief Judge Howard Markey of the Court of Appeals of the Federal Circuit once observed, "virtually all inventions are 'combinations,' and . . . every invention is formed of 'old' elements'?Only God works from nothing. Man must work with old elements." Howard T. Markey, "Why Not the Statute?," 65 P.Pat.Off.Soc'y 331, 333-34 (1983). Accordingly, in almost every instance, rigorous application of a prior art subtraction will leave little or nothing on which to award damages. Moreover, some inventions result from the elimination of prior art elements or steps in a process. Once again, using the prior art subtraction approach, no damages would be awarded to these inventions, no matter how economically valuable they may have been shown to be.


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