Recent IP decisions reinforce the view that outside the US, IP decisions more often favor patent and trademark holders.
China: One on the patent side, one on the trademark
Before 1985, China had no patent system, and many people have been skeptical of what system there is since then. But China recognizes the importance of protecting IP rights, and has even created an IP court in Beijing.
A patent holder, Iwncomm, is the owner of a standards essential patent (SEP), which means that it holds a patent for a technology that is required by any mobile operator that uses one of the essential standards (like 3G, 4G LTE for example). In a recent holding, an IP court ordered Sony to pay Iwncomm $1.3 million in damages and stop selling certain mobile devices that infringe Iwncomm’s patent.
Iwncomm’s injunction applies not just to products sold in China but also to exports of goods made in that country. Erick Robinson, the director of patent litigation at Beijing East IP Ltd., summed up the holding’s broader implications. “Enforcement of standard-essential patents is an important issue throughout the world, specifically whether injunctions should be available in such cases…In China, the answer to this question is a definitive ‘yes.’”
A trademark ruling in favor of Under Armour ordered a knock off clothing maker called Uncle Martian (!) to pay $300,000 in damages, destroy its products, and cease infringing manufacture. The interesting thing to note here is that this result issued from the People’s Higher Court of Fujian Province, which a local provincial court. This gives rise to a growing belief that IP owners may find support to enforce their IP rights in Chinese courts, even outside the specialty ones.
UK: Easier to find equivalence infringement
To find infringement, an accused product must fall within the scope of the patent claims. The infringement can be literal, meaning the claims literally read on the accused product, or equivalent, meaning the claims don’t literally read on an accused product but the difference between the accused product and claims is insubstantial (this last word being the US test). In the UK, proof of equivalents, until recently, required that a patent owner overcome the Improver inquiry.
The variant will not infringe if any of the following are true:
- The variant has a material effect on the way the invention works.
- The fact that the variant has no material effect on the way the invention works would not have been obvious to an expert in the field.
- That an expert in the field would have taken from the language used in the patent that strict compliance with the primary meaning was an essential requirement of the invention.
The UK Supreme Court struck down this decision in Activis UK Ltd. v. Eli Lilly and Company. In an interesting decision that explores how other countries approach equivalents, the UK Supreme Court fount that “The second Improver question is more problematic. In my view, it imposes too high a burden on the patentee to ask whether it would have been obvious to the notional addressee that the variant would have no material effect on the way in which the invention works, given that it requires the addressee to figure out for himself whether the variant would work.” In taking this position, the Court strengthened the perception that the EU in general and UK in particular, is a patent-holder friendly venue.
The question of what software is patent-eligible subject matter is still evolving. The Federal Circuit in Visual Memory v. NVIDIA, recently weighed in with another guidepost on the way to patent eligibility.
Claim 1 reads:
A computer memory system connectable to a processor and having one or more programmable operational characteristics, said characteristics being defined through configuration by said computer based on the type of said processor, wherein said system is connectable to said processor by a bus, said system comprising:
a main memory connected to said bus; an
a cache connected to said bus;
wherein a programmable operational characteristic of said system determines a type of data stored by said cache.
In the lower court decision, the district court concluded that the “abstract idea of categorical data storage” was something that humans had been doing for many years. For this reason, the claim ran afoul of the Supreme Court’s Alice rationale that claims cannot “tend to impede innovation more than it would tend to promote it.” This captures the challenges that courts and USPTO examiners currently face from the limited guidance given in the Supreme Court’s Alice decision.
The Federal Circuit rejected the district court’s reasoning in a split decision. The reasoning was mostly limited to the facts of the case, “Our review of the ’740 patent claims demonstrates that they are directed to an improved computer memory system, not to the abstract idea of categorical data storage.” The court expanded on this to conclude, with reference to its earlier Enfish and Thales cases, “As with Enfish’s self-referential table and the motion tracking system in Thales, the claims here are directed to a technological improvement: an enhanced computer memory system.”
The split decision, unfortunately, adds limited clarity for future cases, since the dissenting opinion expresses what others on the Federal Circuit still believe, “Because the ’740 patent does not describe how to implement the “programmable operational characteristic” and requires someone else to supply the innovative programming effort, it is not properly described as directed to an improvement in computer systems.”
You sell something but keep the details of the sale a secret. Is this still a sale that bars issuance of a patent under 35 USC 102: “A person shall be entitled to a patent unless the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention?” The Federal Circuit Helsinn Healthcare SA v Teva Pharmaceuticals, Inc. case answers yes: Secret sales bar issuance of a patent.
Before the American Invents Act (AIA) passed in 2011, the law regarding secret sales was well-settled:
- In re Caveney rejected the argument that a sale or offer for sale did not trigger the on-sale bar when it had been “kept secret from the trade,” concluding that “sales or offers by one person of a claimed invention . . . bar another party from obtaining a patent if the sale or offer to sell is made over a year before the latter’s filing date.”
- Woodland Trust v. Flowertree Nursery, Inc. stated that “an inventor’s own prior commercial use, albeit kept secret, may constitute a public use or sale under § 102(b), barring him from obtaining a patent.”
- J.A. LaPorte, Inc. v. Norfolk Dredging Co. stated that the on-sale bar “is not limited to sales by the inventor or one under his control, but may result from activities of a third party” and rejecting the argument that “secret commercialization by a third party” is not invalidating since “the invention . . . was discoverable from the device which was sold” and the “device . . . embodie[d] the invention.”
These cases relied on pre-AIA 35 USC 102, which read: “A person shall be entitled to a patent unless (a) the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent….” The difference between pre- and post AIA 35 USC 102, for secret sales, turns on one clause emphasized as follows: “A person shall be entitled to a patent unless the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.”
Following passage of the AIA, some commentators and organizations (a few gathered in this excellent Patently-O article), argued that “non-public offers for sale (and non-public uses) would not qualify as prior art under the AIA,” quoting the American Bar Association IP Law Section.
The ABA’s and others’ interpretation may have been bolstered by remarks made by Senator Kyl (R-Utah): “And the current on-sale bar imposes penalties not demanded by any legitimate public interest. There is no reason to fear ‘‘commercialization’’ that merely consists of a secret sale or offer for sale but that does not operate to disclose the invention to the public.” Congressional Record at S1371.
The Federal Circuit Helsinn panel considered this and found that Senator Kyl’s remarks addressed the “public use” exception and not the “on-sale” bar. Helsinn instead chose to follow older Supreme Court precedent in Penneck v. Dialogue, which held that a public sale that did not publicly disclose an invention “would materially retard the progress of science and the useful arts, and give a premium to those who should be least prompt to communicate their discoveries.” The Supreme Court justified its decision by relying on the public service that a patent serves:
If an inventor should be permitted to hold back from the knowledge of the public the secrets of his invention; if he should for a long period of years retain the monopoly, and make, and sell his invention publicly, and thus gather the whole profits of it, relying upon his superior skill and knowledge of the structure; and then, and then only, when the danger of competition should force him to secure the exclusive right, he should be allowed to take out a patent, and thus exclude the public from any farther use than what should be derived under it during his fourteen years; it would materially retard the progress of science and the useful arts, and give a premium to those who should be least prompt to communicate their discoveries.
The Federal Circuit agreed, stating, “A primary rationale of the on-sale bar is that publicly offering a product for sale that embodies the claimed invention places it in the public domain, regardless of when or whether actual delivery occurs…Thus, our prior cases have applied the on-sale bar even when there is no delivery, when delivery is set after the critical date, or, even when, upon delivery, members of the public could not ascertain the claimed invention. There is no indication in the floor statements that these members intended to overrule these cases.”
Helsinn is likely on its way to appeal to the Supreme Court because of the potential conflict between its holding and the statute, but for now, secret sales still trigger the on-sale bar.