The Battle for the Millenials.
No, this isn’t a new sci-fi video game or movie. The term “millenials” is a description used by USPTO Director Jon Dudas in his recent testimony before the Senate Appropriations Committee regarding the USPTO’s budget for the 2008 fiscal year. What he is referring to is often described as “Generation Y” individuals, and these are the persons that the USPTO is fighting to attract and retain as employees.
Although defining who falls under the category of “millenial” is subjective, the Challenger explosion on January 28, 1986 is one major event that is generally accepted as separating Generation X and Millenials. The widespread use of personal computers and the Internet is also an event shared by the majority of Millenials.
As with the other made-up generational labels, Millenials as a group have been molded by their shared experiences and have common values that distinguish them from other generations. Apparently, the USPTO believes that these Millenials not only care about money, but they also want to be valued as employees . . . go figure.
Below are some excerpts from the the testimony:
Some Finer Points Regarding Trade Secret Law (No. 3)
JW Note: This discussion is continued from earlier posts (see No. 1 and No. 2) on the relationship between patent law and trade secret law.
A TS holder’s options for restricting an ex-employee’s use of the TS is limited.
In most businesses, employees represent a large risk with regard to maintaining trade secrets (TS). To combat this risk, the use of explicit legal contracts that attempt to limit an ex-employee’s use of trade secrets are commonplace. However, the legal and practical effectiveness of such agreements are generally acknowledged to be limited. Although reasonable contracts may serve to clarify what information is trade secret, and provide an employer a basis for a remedy in case of misappropriation, excessive restrictions may impinge on an employee’s ability to find work or can create an oppressive work environment.
There are at least three types of contracts that are typically used to help businesses protect trade secrets: 1) confidentiality/non-disclosure agreements; 2) covenants not to compete; and 3) invention assignment contracts. Often, these agreements are included as clauses in a generic ”employment contract” that is signed when the employee begins employment.
1) Confidentiality or Non-disclosure Agreements:
A confidentiality or non-disclosure agreement (NDA) is a contract that can be used to protect trade secrets. An NDA requires that trade secret information disclosed to an employee during the course of business be kept a secret, for example, by requiring the employee to keep the information confidential. If a person has signed an NDA and uses the trade secret without authorization (TS misappropriation), the employer may sue for damages and stop the unauthorized use.
Practically speaking, however, it is often difficult to ascertain whether a former employee has kept trade secret information confidential in the course of new employment. This is particularly true when the trade secrets are not copies of information but are experiential in nature. Thus, the practical effectiveness of confidentiality contracts can be difficult to ensure.
2) Covenants Not To Compete:
Another method for preventing disclosure of trade secrets is the covenant not to compete (non-compete agreement). Such covenants protect trade secrets when an employee leaves the business. By requiring an employee to sign a non-compete agreement, the employee must agree not to work for a direct competitor for a certain amount of time after leaving your company. The theory behind this type of agreement is that the trade secret will become less valuable with time, and therefore the agreement limits a competitor’s access to the trade secret while its value is highest to the business.
A serious problem with non-compete agreements is that they run counter to a strong public policy, namely freedom to follow one’s profession. Courts generally use a “reasonableness” test in deciding whether a noncompete agreement is legal. For example, the terms of a non-compete agreement must be reasonable as to the duration, geography, and scope of the activity. Courts will also look at whether the restraint is unduly harsh and oppressive in curtailing the employee’s legitimate efforts at a livelihood. In many cases, a one-year restriction is generally acceptable. Acceptable agreements also often specify a list of competitors the employee may not join, as opposed to broadly preventing the employee from participating in a particular industry. Third, adverse consequences for third parties, even if the restraint is narrow in scope, are also considered by courts in determining whether to enforce such contracts.
3) Invention Assignment Contract:
Although most courts will deem trade secrets developed within the scope of employment to belong to the employer, having the relation memorialized by an Invention Assignment Contract clarifies trade secret rights and makes both the employee and the employer aware what information belongs to the employer. Such a contract also may recite explicit obligations to turn over all copies of trade secret information upon termination of employment.
Using explicit contractual measures to protect one’s trade secrets is undoubtably wise. These agreements are good evidence that reasonable security measures have been taken to protect trade secrets, and make the employee aware that confidentiality is expected and that there will be consequences if the trade secrets are improperly disclosed. For example, contracts make available breach of contract and trade secret liability actions to employers.
However, one should be aware that such agreements have limits, as described above, and the best way to protect TS from leaving a business may be to: 1) ensure that only limited persons have access to critical TS information, and 2) bolster loyalty with these employees by keeping them happy (preventing employee turn-over and subsequently limiting the transfer of TS to competitors).
Hakim v. Cannon Avent Group, PLC, et al.
Failure to retract arguments made during prosecution of the parent application resulted in a narrow construction of claim terms in the patent issued from the child application.
Hakim originally sued Avent in District Court (W.D. La.) asserting infringement of Hakim’s United States Patents No. 6,321,931 (the ‘931 patent) and No. 6,357,620 (the ‘620 patent) by Avent’s leak-resistant drinking cups. The district court granted Avent’s motions for summary judgment that the ‘931 patent is not infringed, based on the claim construction that limited the ‘931 claims to a sealing mechanism that includes a flexible valve material or diaphragm having a slit. On appeal, the CAFC affirmed.
The technology at issue relates to drinking cups that prevent the spilling of liquid if the cup is tipped over. Hakim’s patented cups have a valve through which fluid can pass when suction is applied by a person by way of a drinking spout, whereby the valve closes to seal the cup when a person is not drinking. Avent’s accused drinking cup has a valve with a flexible diaphragm having a central opening, but the opening is not a slit that opens and closes, but simply a hole in the diaphragm. The diaphragm rests against a plastic mount that has a conical head that seals the hole. Upon suction by a person seeking to drink, the diaphragm is lifted off the conical head, exposing the hole and permitting fluid to flow from the cup to the drinking spout.
During the initial prosecution of the ‘931 application, the presence of the slit in the flexible valve material was emphasized as distinguishing all of the claims from the cited references. The broader term “opening” was subsequently introduced to claims when Hakim filed a continuation application after receiving a notice of allowance for claims wherein the word “slit” appeared instead of “opening.” The continuation claims were allowed without any comment or rejection by the examiner.
In construing the claims of the continuation patent, the district court held Hakim to his arguments in the parent application that the invention included the presence of a slit in the flexible material. The district court stated: “Because Hakim did not retract any of his arguments distinguishing the prior art, he is held to the restrictive claim construction he argued during prosecution of the patent.” (Emphasis mine). Hakim argued, however, that he informed the Examiner that the new claims in the continuation were broader than those previously allowed, and that when the Examiner allowed the new claims without rejection, there is a presumption that the Examiner had assured himself of the patentability of the new claims. The CAFC disagreed.
Hakim had the right to refile the application and attempt to broaden the claims. However, an applicant cannot recapture claim scope that was surrendered or disclaimed. The district court did not err in holding that the examiner’s action in allowing the continuation claims without further prosecution was based on the prosecution argument in the parent. Although a disclaimer made during prosecution can be rescinded, permitting recapture of the disclaimed scope, the prosecution history must be sufficiently clear to inform the examiner that the previous disclaimer, and the prior art that it was made to avoid, may need to be re-visited.
Accordingly, the CAFC held that the district court correctly ruled that the word “opening” is properly construed to mean the sealing mechanism provided by the slitted diaphragm.
Invention Quotes. (No. 2)
“Discovery consists of seeing what everybody has seen and thinking what nobody else has thought.” – Jonathon Swift.
Sevenson Environmental Services, Inc. v. Shaw Environmental, Inc.
An accused infringer may have government contractor immunity if 1) the use is “for the Government”; and 2) the use is “with the authorization and consent of the Government.”
Sevenson appeals the summary judgement of District Court (W.D. N.Y.) that a patent suit against a hazardous waste remediation contractor was barred by government contractor immunity under 28 U.S.C. § 1498. The relevant statutory provision of 28 U.S.C. § 1498 reads as follows:
Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner’s remedy shall be by action against the United States in the United States Court of Federal Claims for the recovery of his reasonable and entire compensation for such use and manufacture . . . .
For the purposes of this section, the use or manufacture of an invention described in and covered by a patent of the United States by a contractor, a subcontractor, or any person, firm, or corporation for the Government and with the authorization or consent of the Government, shall be construed as use or manufacture for the United States.
Shaw is a hazardous waste remediation firm that in 2002 contracted with the Corps of Engineers to engage in cleanup and remediation work at a lead-contaminated parcel of land near Colonie, New York that is owned by the United States and managed by the U.S. Army Corps of Engineers. Sevenson is a corporation that holds several U.S. patents regarding hazardous waste remediation, including some that claim methods for treating hazardous waste by applying phosphoric acid. Sevenson alleged that Shaw’s work at the Colonie site infringed these patents.
In this case, Shaw’s immunity to suit hinged on the interpretation of its contracts with the government. Shaw’s relationship with the Government is defined by two separate contracts, the “Total Environmental Restoration Contract” (“TERC”) and the “Pre-placed Remedial Action Contract” (“PRAC”). Because Shaw is a contractor, its use of the patented method qualifies as “use . . . for the United States,” and it is thus immune from suit except “by action against the United States in the United States Court of Federal Claims,” if two criteria are met: (1) the use is “for the Government”; and (2) the use is “with the authorization and consent of the Government.”
The CAFC found that Shaw’s use of the accused method was in its capacity as a government contractor and pursuant to its contract for the benefit of the government. Also, the government contract contained an explicit authorization and consent clause that explicitly encompassed “specifications” that are a part of the contract, e.g. Shaw’s work plan. Shaw’s work plan required that Shaw use the accused method at the Colonie site. Accordingly, Shaw’s use of the contract was both “for the Government” and “with the authorization and consent of the Government,” and Shaw is entitled to immunity from suit under § 1498(a).
Affirmed.
Mukherjee v. Chu.
Recitation in the specification that a particular element was “critical” was used to invalidate claims under 35 U.S.C. § 112, ¶1.
(Fed. Cir. 2007, 06-1450), nonprecedential
Mukherjee appealed the decision of the BPAI holding Mukherjee’s claims in Interference No. 105,281 unpatentable for failure to comply with the written description requirement of 35 U.S.C. § 112, ¶1.
Section 112,¶1 recites that:
The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.
The technology at issue in Mukherjee’s U.S.Serial No. 09/795,915 relates to rechargeable lithium-sulfur batteries. The Mukherjee application disclosed that in addition to sulfur, the cathodes of the batteries contain an Electroactive Transition Metal Chalcogenide1 (“ETMC”) composition. As defined in the Mukherjee application, ETMC is “an electroactive material having a reversible lithium insertion ability, wherein the transition metal is at least one selected from the group consisting of Ti, V, Cr, Mn, Fe, Nb, Mo, Ta, W, Co, Ni, Cu, Y, Zr, Ru, Rh, Pd, Hf, Re, Os, and Ir, and the chalcogenide is at least one selected from the group consisting of O, S, and Se.”
Noticeably absent from the claims at issue in the interference was any requirement that the cathode contain an ETMC. That is, the claims at issue failed to recite ETMC as a limitation.
Written description is a question of fact, judged from the perspective of one of ordinary skill in the art as of the relevant filing date.The BPAI had conducted an extensive (64-page) analysis the Mukherjee application to determine whether it provided written description support for the claims at issue. In particular, the BPAI observed that the Detailed Description of the Invention Section continued with the notion that an ETMC cathode is a distinguishing feature of the invention. For example, the Detailed Description states:
The present invention also pertains to the design and configuration of composite cathodes of the present invention. The relative configuration of the electroactive sulfur-containing cathode material and the electroactive transition metal chalcogenide composition in the composite cathode is critical. In all cases, in order to retard out-diffusion of anionic reduction products from the cathode compartment in the cell, the sulfur-containing cathode material must be effectively separated from the electrolyte or other layers or parts of the cell by a layer of an electroactive transition metal chalcogenide composition. (Emphasis mine and CAFC).
Based on the review of the entire specification, the BPAI found that the application does not disclose non-ETMC cathodes as the invention or alternatives to the invention and does not characterize ETMC as an optional part of the cathode. Expert testimony was also provided to assert that it would have been clear to one of skill in the art that the Mukherjee invention was limited to ETMC cathodes because it was the presence of chalcogenide in the cathode that overcame the drawbacks of previous sulfur batteries.
In light of the above, the CAFC held that there is substantial evidence to support the Board’s determination that the Mukherjee application does not comply with the written description requirement of 35 U.S.C. § 112, ¶1. A reasonable person would find the testimonial and documentary evidence sufficient to support the Board’s finding.
Affirmed.
Cargill v. Cambra Foods.
A reasonable examiner would certainly want to consider test data that is directly related to an important issue of patentability, along with the applicant’s interpretation of that data.
Cargill appealed from a final judgment of the district court (D. Or.) concerning four patents owned by Cargill, namely U.S. Patents No. 5,969,169 (the “’169 patent”), No. 6,201,145 (the “’145 patent”), No. 6,270,828 (the “’828 patent”), and No. 6,680,396 (the “’396 patent”). The district court granted Cargill’s summary judgement that the ‘169 and ‘145 patents were infringed by Cambra et al., but entered judgment that the ’169 and ’145 patents were unenforceable due to inequitable conduct. In reaching these decisions, the district court relied on two documents that contained the applicant’s internal testing data but that were not disclosed to the examiner during prosecution. Upon appeal, the CAFC affirmed the judgement of invalidity.
The technology at issue relate to a non-hydrogenated canola oil that possesses superior oxidative stability and fry stability, and is useful for food applications. Ordinary canola oil is unstable and easily oxidized during cooking, which creates an off-flavor in the food. It also develops an undesirable odor when being stored. The oxidative stability of canola oil can be measured in at least two ways: in terms of AOM (Active Oxygen Method) hours, or in terms of peroxide and para-anisidine values. Generic commercial canola oil typically has an oxidative stability of about 22 AOM hours, whereas the claimed oil has an oxidative stability of about 35 to 40 AOM hours. During prosecution, Cargill argued successfully (based on data in the specifications of the applications) that two canola oils with similar fatty acid compositions have strikingly different oxidative stability values, and therefore a similar fatty acid composition as described by the prior art could not anticipate.
For the sake of simplicity, only the inequitable conduct issue is discussed herein. To hold a patent unenforceable due to inequitable conduct, there must be clear and convincing evidence that the applicant (1) made an affirmative misrepresentation of material fact, failed to disclose material information, or submitted false material information, and (2) intended to deceive the U.S. Patent and Trademark Office (“PTO”). If a misstatement or omission is material under the new Rule 56, it is material. Similarly, if a misstatement or omission is material under the ‘reasonable examiner’ standard, it is also material.
Upon reviewing the district court’s findings on the threshold issues of materiality and intent for clear error, the CAFC held that the district court findings that the applicant “unilaterally withheld information that unquestionably would have been viewed as worthy of serious consideration by the PTO, and might have resulted in the patents not being issued” was not clearly erroneous. Given that a crucial issue during prosecution was whether the claimed oil possessed strikingly superior oxidative stability, it is quite certain that a “reasonable examiner” would consider such test data to be important in deciding whether to allow the patents to issue. Materiality is determined from the viewpoint of a reasonable patent examiner, and not the subjective beliefs of the patentee.
The district court also found an intent to deceive based on several circumstantial factors: the repeated nature of the omission, the applicant’s motive to conceal, and the high materiality of the undisclosed information. The CAFC noted that the district court found that there were multiple occasions that called for disclosure of the omitted data. An applicant should know information is material when the examiner repeatedly raises an issue to which the information relates. Additionally, when an applicant knows or obviously should know that information would be material to the examiner, as was true here, but the applicant decides to withhold that information, “good faith” does not negate an intent to manipulate the evidence. Thus, there is no error in the district court’s finding of intent.
Affirmed.
Proposed Limits on Continuations No More?
Per this post by the Patent Prospector (via Hal Wegner), the rumor is continuing to propogate that the USPTO’s proposed limits on continuations are “dead.” However, there has been no official statement (yet) from the USPTO regarding this matter.
The proposed rules contained restrictions on continuation practice that would allow only one continuation or RCE as a matter of right (although further continuations could be filed with “a showing to the satisfaction of the Director as to why the amendment, argument, or evidence could not have been submitted prior to the close of prosecution after a single continuation, CIP or RCE”). The proposed rules would also require that multiple applications having the same effective filing date, overlapping disclosure, a common inventor, and a common assignee include either (i) an explanation to the satisfaction of the Director of how the claims are patentably distinct, or (ii) a terminal disclaimer and explanation to the satisfaction of the Director of why patentably indistinct claims have been filed in multiple applications.
The proposed rules can be found here. Numerous comments received in relation to the proposed rules can be found here.
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