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CAFC Weekly: September 3, 2010

by Orlando Lopez

It must be the back-to-school effect, since this week had four precedential opinions ranging from an en banc opinion of patent misuse, to an opinion on the standing to bring a false marking suit.

The CAFC considered patent misuse in an en banc opinion in Princo v. ITC. The controversy stems from the patent pool license by Philips and Sony for the CD-CD/RW standard. Philips and Sony collaborated in the development of the CD technology and decided which of their patents should go in the patent pool for the CD standard (known as the Orange Book).  Princo alleged that Phillips had committed patent misuse, because in choosing one patent (Raamaker) owned by Philips, for the method of encoding location information and suppressing another patent (Lagadec), owned by Sony, Philips had induced Princo not to license a competitive technology. The CAFC did not find patent misuse.  The end result of this opinion is that patent misuse has been narrowed as an infringement defense.  The CAFC found that patent misuse only applies to those practices by which the patentee is trying to extend the patent grant beyond its limits.  Consequently, the misuse must be a misuse of the patent being infringed.

The fact that any person has standing to sue under the false marking statute, was clarified in the CAFC decision in Stauffer v. Brooks Brothers.  The CAFC reversed a dismissal by the District Court for lack of standing of this false marking qui tam action, and also reversed a denial of the US government motion.

In Funai Electric Co., Ltd. v. Daewoo Electronics Co., Ltd., the CAFC considered claim construction, infringement, damages and successor liability.  While this opinion has received attention mostly due to the reversal of no successor liability, the treatment by the CAFC of prosecution history estoppel, where infringement by equivalents is precluded by amendments to the claims during patent prosecution, is also worthy of mention.  In Funai, the CAFC found that there is no prosecution history estoppel when a claim was amended to overcome an objection.  The claim was amended to rewrite it in independent form because it was dependent on a rejected claim.  In prior opinions, the CAFC had held that prosecution history estoppel was triggered by an amendment that rewrote a claiming independent form because it was dependent on a rejected claim.  In Funai, the CAFC found that the amendment was only tangential to the equivalent.  This is another decision that softens the effect of Festo.

In Eli Lilly and Co. v. Teva Pharmaceuticals USA, Inc., the CAFC considered obviousness, enablement and written description.  The discussion on obviousness is noteworthy since non-obviousness was established due to data that would have dissuaded researchers from pursuing the invention.  Some of the data was obtained by the employer of the inventors and assignee, Lilly.  The CAFC affirmed the District Court’s finding of non-obviousness and enablement, but did not satisfy the written description requirement for the claims in some of the patents in the suit.


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