In today’s tough economic times, large international companies holding patent rights in several countries are having to make tough decisions about which countries to actually enforce their patent rights. In order to maximize a company’s capital, it pays for in-house counsel to know which countries offer the biggest returns on its IP enforcement investment.
For example, corporations may choose to enforce its patent rights in Canada instead of (or at least prior to) enforcing its patents in the United States for several reasons. For one, IP litigation in Canada averages around $500,000 - $1 million, while IP litigation in America typically runs between $2-3 million. Why the big difference in costs? There are several reasons.
Unlike American law, Canada has no doctrine of patent abuse or inequitable conduct, so there is simply less issues to argue in Canadian courts. Also, there are no jury trials or Markman hearings in Canada, which tend to be a huge monetary drain for U.S. patent litigants. Instead, Canadian patent cases are tried by judges, which tend to award remarkably higher damages than United States patent juries.
Another major cost-saving factor of a Canadian patent trial is that under Canadian law, parties are typically allowed to depose only one witness each. These depositions are generally much longer than American depositions (2 weeks as opposed to 1-3 days) because the deponent may not have enough personal knowledge to answer a question. In American depositions, a deponent not designated as a 30(b)(6) witness for the corporation is not obligated to answer questions for which they have no personal knowledge. Often, this means that large amounts of time used to prepare questions and documents for a deposition are all but wasted when the deponent simply states they have no personal knowledge of subject matter essential to the case. This leaves the deposing party scrambling to serve subpoena’s to other individuals within the defendant’s corporation who may (or may not) have the vital information needed. In Canada, however, the deponent is obligated to find the person with the necessary information and report this information to the deposing party before the deposition is over, saving everyone time and money.
Similar to American patent litigation, each party is allowed to submit expert reports in order to support their arguments. But unlike in American patent litigation, Canadian experts are not deposed regarding their expert reports, saving even more time and money for both sides.
Of course, there are several aspects of Canadian patent litigation that could lead to disparate results than the American system. For example, the USPTO allows for a plethora of petitions to correct various mistakes during the prosecution of the patent, whether the mistake was the USPTO’s or the patent applicant’s. However, mistakes made in the prosecution of a Canadian patent are often unfixable if they are not rectified during the prosecution of the patent, leaving many patents invalid and unenforceable. Because of this difference, patent litigation in Canada often focuses on the prosecution of the patent in the Canadian patent office. In American patent litigation, the prosecution of an application is focused on either to establish what subject matter is not covered in the patent, or to establish inequitable conduct (a topic that is non-existent in Canadian patent law).
Many companies that have both a Canadian patent and an American patent covering the same subject matter choose to litigate the Canadian patent first in Canada. This often gives the patent holder an inexpensive route to uncovering a potential infringer’s best argument(s) before litigating in American courts. However, as discussed before, a Canadian patent trial will give a patent holder no clue regarding the patent’s unenforceability as to inequitable conduct; any patent holder’s worst nightmare. Great care must be taken before choosing Canada as a proving ground for subsequent patent litigation in America.
Monday, January 26, 2009
Saturday, January 17, 2009
Boston Scientific Stent Patent Obvious in Light of KSR
The new obviousness standard set forth in KSR v. Teleflex, 550 U.S. 398 (U.S. 2007), has put to rest yet another patent into the invalidity graveyard. After a district court found a Boston Scientific stent patent valid and infringed, the Federal Circuit applied the KSR standard and reversed the district court ruling, finding the patent invalid.
The reason for this is simple: after Boston Scientific won the jury trial, a new standard was put in place as to what renders a patent obvious. Before KSR, a patent was non-obvious if one reference contained some of the elements of a patent claim, and a second reference contained the remaining elements, but there was no explicit statement suggesting that the two references should be combined to result in the resulting patent claim. In other words, there must have been some motivation to combine the two references in order to render a patent claim obvious. Typically, rendering a patent obvious requires two references. After KSR, there is no longer a requirement of an explicit motivation to combine references. Now, two references may be combined if common sense would lead one skilled in the field of science in question to combine the references. The Federal Circuit has taken this rule one step further, and has found that a patent can be rendered invalid for obviousness with only one reference.
In Boston Scientific v. Cordis Corp. (Fed. Cir. 2009), the Federal Circuit applied the KSR standard to Boston Scientific’s patent, U.S. Patent 6,120,536 (“the ’536 patent”), using only one reference, namely U.S. Pat. No. 5,545,208 (“Wolff”). Wolff described every element of the ’536 patent, but they were described in separate embodiments within the patent. Figure 3B (along with its corresponding description in the specification in Wolff), described some of the elements, and Figure 4 (along with its corresponding description in the specification) described the remaining elements. It is common practice to insert a catch-all statement at the end of a specification stating that “each embodiment, or any combination of the embodiments, are contemplated in the invention.” This allows the patentee to later change the patent claims to include a mixture of the embodiments because there is an explicit reference that a combination of the embodiments were contemplated by the inventor.
Wolff, however, had no such catch-all statement. Thus, the district court rejected Cordis’ argument that the two embodiments described in Wolff render the ’536 patent obvious because there was no explicit motivation to combine them. Unfortunately for Boston Scientific, KSR was issued after the district court’s ruling, loosening the strict requirements for rendering a patent obvious.
The Federal Circuit explained that “all the limitations of claim 8 were found in two separate embodiments in Wolff pictured side by side… Combining two embodiments disclosed adjacent to each other in a prior art patent does not require a leap of inventiveness.” In so stating, the Federal Circuit has opened the door to holding patents invalid for obviousness using only one reference.
What about Anticipation?
It is unclear as to how this ruling with affect how a reference anticipates a patent. A reference anticipates a patent, and thus renders it invalid, when all of the elements of a patent are found in one reference. But even though all the elements of the patent claim were found in Wolff, the Federal Circuit found the patent obvious, not anticipated. Case law regarding this issue should be closely watched in order to further clarify the difference between anticipation and obviousness with regards to one prior art reference.
The reason for this is simple: after Boston Scientific won the jury trial, a new standard was put in place as to what renders a patent obvious. Before KSR, a patent was non-obvious if one reference contained some of the elements of a patent claim, and a second reference contained the remaining elements, but there was no explicit statement suggesting that the two references should be combined to result in the resulting patent claim. In other words, there must have been some motivation to combine the two references in order to render a patent claim obvious. Typically, rendering a patent obvious requires two references. After KSR, there is no longer a requirement of an explicit motivation to combine references. Now, two references may be combined if common sense would lead one skilled in the field of science in question to combine the references. The Federal Circuit has taken this rule one step further, and has found that a patent can be rendered invalid for obviousness with only one reference.
In Boston Scientific v. Cordis Corp. (Fed. Cir. 2009), the Federal Circuit applied the KSR standard to Boston Scientific’s patent, U.S. Patent 6,120,536 (“the ’536 patent”), using only one reference, namely U.S. Pat. No. 5,545,208 (“Wolff”). Wolff described every element of the ’536 patent, but they were described in separate embodiments within the patent. Figure 3B (along with its corresponding description in the specification in Wolff), described some of the elements, and Figure 4 (along with its corresponding description in the specification) described the remaining elements. It is common practice to insert a catch-all statement at the end of a specification stating that “each embodiment, or any combination of the embodiments, are contemplated in the invention.” This allows the patentee to later change the patent claims to include a mixture of the embodiments because there is an explicit reference that a combination of the embodiments were contemplated by the inventor.
Wolff, however, had no such catch-all statement. Thus, the district court rejected Cordis’ argument that the two embodiments described in Wolff render the ’536 patent obvious because there was no explicit motivation to combine them. Unfortunately for Boston Scientific, KSR was issued after the district court’s ruling, loosening the strict requirements for rendering a patent obvious.
The Federal Circuit explained that “all the limitations of claim 8 were found in two separate embodiments in Wolff pictured side by side… Combining two embodiments disclosed adjacent to each other in a prior art patent does not require a leap of inventiveness.” In so stating, the Federal Circuit has opened the door to holding patents invalid for obviousness using only one reference.
What about Anticipation?
It is unclear as to how this ruling with affect how a reference anticipates a patent. A reference anticipates a patent, and thus renders it invalid, when all of the elements of a patent are found in one reference. But even though all the elements of the patent claim were found in Wolff, the Federal Circuit found the patent obvious, not anticipated. Case law regarding this issue should be closely watched in order to further clarify the difference between anticipation and obviousness with regards to one prior art reference.
Wednesday, January 14, 2009
The JPO to Study Patentability of Software and Business Patents
Japanese newspapers are reporting that the Japanese Patent Office (JPO) will begin a study in January of 2009 in an attempt to dramatically change the current patent laws there. Some of the possible areas of change include:
1. Changing the definition of “invention” to include business methods and software
2. Revising employee’s patent rights when working for an employer
3. Disallowing injunctions in order to promote innovation
4. Decrease the amount of time it takes to issue a patent
Currently, applicants must wait an average of 5-6 years after filing before the patent is issued in Japan. The costs associated with the maintenance fees in Japan, as well as the cost of patent prosecution, is the highest of any other country in the world. Also, the Japanese definition of what is obvious is much narrower than most other countries. For example, a patent may be deemed as non-obvious in the USPTO, but could still be rejected as obvious in the JPO.
1. Changing the definition of “invention” to include business methods and software
2. Revising employee’s patent rights when working for an employer
3. Disallowing injunctions in order to promote innovation
4. Decrease the amount of time it takes to issue a patent
Currently, applicants must wait an average of 5-6 years after filing before the patent is issued in Japan. The costs associated with the maintenance fees in Japan, as well as the cost of patent prosecution, is the highest of any other country in the world. Also, the Japanese definition of what is obvious is much narrower than most other countries. For example, a patent may be deemed as non-obvious in the USPTO, but could still be rejected as obvious in the JPO.
Sunday, January 11, 2009
EPO Rejects Patent for Manipulating Embryonic Stem Cells
The European Patent Office (EPO) has refused to grant a patent claim covering the manipulation of embryonic stem cells.
Claim 1, the claim under examination, reads:
A cell culture comprising primate embryonic stem cells which
(i) are capable of proliferation in vitro culture for over one year,
(ii) maintain a karyotype in which all chromosomes normally characteristic of the primate species are present and are not noticeably altered through culture for over one year,
(iii) maintain the potential to differentiate to derivatives of endoderm, mesoderm, and ectoderm tissues throughout the culture, and
(iv) are prevented from differentiating when cultured on a fibroblast feeder layer.
Rule 28 of the European Patent Convention (EPC) prohibits the granting of a patent relating to: (a) processes for cloning human beings; (b) processes for modifying the germ line genetic identity of human beings; (c) uses of human embryos for industrial or commercial purposes; and (d) processes for modifying the genetic identity of animals which are likely to cause them suffering without any substantial medical benefit to man or animal, and also animals resulting from such processes.
Here, the patent claim requires the destruction of human embryos. The EPC held that the use of human embryos for industrial or commercial purposes are excluded from patentability, while inventions for therapeutic or diagnostic purposes applied to the human embryo and useful to it is patentable.
Although the claim was not allowed, the EPC stated that this ruling does not relate to the patentability in general of inventions relating to human stem cells or human stem cells cultures. Instead this decisions holds unpatentable inventions concerning products (here: human stem cell cultures) which can only be obtained by destroying human embryos.
This decision is in direct contrast to American patent law which would likely allow such patent claims.
Claim 1, the claim under examination, reads:
A cell culture comprising primate embryonic stem cells which
(i) are capable of proliferation in vitro culture for over one year,
(ii) maintain a karyotype in which all chromosomes normally characteristic of the primate species are present and are not noticeably altered through culture for over one year,
(iii) maintain the potential to differentiate to derivatives of endoderm, mesoderm, and ectoderm tissues throughout the culture, and
(iv) are prevented from differentiating when cultured on a fibroblast feeder layer.
Rule 28 of the European Patent Convention (EPC) prohibits the granting of a patent relating to: (a) processes for cloning human beings; (b) processes for modifying the germ line genetic identity of human beings; (c) uses of human embryos for industrial or commercial purposes; and (d) processes for modifying the genetic identity of animals which are likely to cause them suffering without any substantial medical benefit to man or animal, and also animals resulting from such processes.
Here, the patent claim requires the destruction of human embryos. The EPC held that the use of human embryos for industrial or commercial purposes are excluded from patentability, while inventions for therapeutic or diagnostic purposes applied to the human embryo and useful to it is patentable.
Although the claim was not allowed, the EPC stated that this ruling does not relate to the patentability in general of inventions relating to human stem cells or human stem cells cultures. Instead this decisions holds unpatentable inventions concerning products (here: human stem cell cultures) which can only be obtained by destroying human embryos.
This decision is in direct contrast to American patent law which would likely allow such patent claims.
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