Oregon State Bar Bulletin — FEBRUARY/MARCH 2009


Mention at a general bar function that you practice patent law and watch your colleagues’ eyes glaze over.

After all, many lawyers are lawyers precisely because they weren’t interested in, or good at, engineering, math or science.

But if patent law is so boring, why do patent lawyers do it?

“When I went to law school, I knew I didn’t want to do general law, so I called patent and environmental lawyers,” says Brenna Legaard of Portland, who last year helped to obtain a multimillion-dollar verdict for Oregon physician-inventor John Hayhurst and his licensee. “All the patent lawyers loved their jobs.”

“Patents have a big share in the American dream,” continues Legaard. “Dr. Hayhurst’s story: thinking of something new, patenting it, seeing it improve the lives of hundreds of thousands of people and getting rich. That part of the business is really interesting and positive. It’s a value-added area of law, like adoption. No one comes to you with great pride and says, ‘Here is my felony.’ ‘Here is my divorce.’”

That’s the upside of being a patent lawyer. The downside includes the process of applying for a patent, which even Legaard admits is “often dry (and) extremely mired in archaic procedure and administrative detail.” Not only that, but there are evolving court standards for what is patentable, and statutory reform that Congress has talked about — but not delivered on — for years.

What Are We Talking About Here?
For non-practitioners, the challenges of patent law begin immediately, with trying to understand what a patent is, what it does and doesn’t do, and why.

What a Patent Is

A patent is an intellectual property right granted to a person who:

invents or discovers a new and useful process, machine, article of manufacture or composition of matter or improves one of these in a new and useful way. ("Process" is defined as a process — primarily industrial or technical — act or method); or

invents a new, original and ornamental design for an article of manufacture; or

invents or discovers and asexually reproduces a new and distinct variety of plant.

A patent cannot be obtained based merely on an idea or suggestion for one of these things. As the United States Patent and Trademark Office’s website puts it, "The patent is granted upon the new machine, manufacture, etc…and not upon the idea or suggestion of the new machine. A complete description of the actual machine or other subject matter for which a patent is sought is required."

The term "useful" means that an invention must have not only a useful purpose — inventions related to atomic weapons cannot get patents — but that it must work. "…a machine which will not operate to perform the intended purpose would not be called useful," the office’s website explains.

What a Patent Does and Doesn’t Do and Why

A patent gives its holder the right to exclude others from making, selling, using or importing his invention within the United States for a statutorily set period of time from the date of application.

It doesn’t, however, give its holder the right to make, sell, use or import his invention himself if doing so would violate applicable laws and/or the rights of others. "For example," says the website, "a patent for an improvement of an original device
already patented would be subject to the patent on the [original] device."

Nor does a patent give its holder the right to help from the patent office if someone else infringes on his rights.

In other words, a patent is not a shield but a sword, one that almost certainly will be time-consuming and very expensive to wield.

"The purpose of patent law it not to protect the inventor but to protect the public: to get as many inventions out into the public as possible," says Karen Dana Oster, a Lake Oswego patent lawyer and co-author with Richard A. Wilhelm of the Computer & Internet Law Section’s e-Commerce Deskbook’s chapter on "Patents and E-Commerce." "Almost every rule can get traced back to that basic principle. They (the drafters of the United States’ first patent laws, enacted in 1790) had to give inventors some incentive, so they gave them the right to exclude others, but not a monopoly. It means the inventor has to go out and sue an infringer, not ‘You get the patent and you’re invincible.’ That was the bargain that was struck for the public good."

Thinking in Terms of the Big Picture
Oregon’s patent lawyers work in a number of settings, says the Intellectual Property Section’s chair-elect Anna McCoy, most of them in the greater Portland area. These include "boutique" firms that specialize in intellectual-property law; larger general-practice firms that have intellectual-property departments and companies like Intel and Nike that employ in-house counsel. There also are enough patent lawyers who, like Oster, are sole practitioners or contractors that they hold their own regular luncheon meetings in Lake Oswego.

Some of them, like Legaard, work with all four categories of intellectual property — patents, copyrights, trademarks and services — while some have more-narrow practices.

Patent lawyers whose work includes helping inventors submit patent applications must have a degree in engineering or physical science or its equivalent and have passed an exam to determine that they have what the patent office calls "…the legal and scientific and technical qualifications necessary to render applicants for patents a valuable service."

"The thing a patent lawyer brings to the table, ideally, is a broader scope," says Legaard, a partner with the intellectual property firm Chernoff Vilhauer McClung & Stenzel. "The inventor thinks his invention is ‘X.’ I try to think, ‘What’s broader than ‘X?’ to afford him the greatest possible (patent) coverage."

But the first thing a patent attorney in a non-corporate setting, like Legaard and Oster, needs to know is whether the client is the actual inventor. That’s because, with certain exceptions, only the inventor may apply for the patent. (Co-inventors must apply jointly.)

Then, says Legaard, "You have to have your inventor talk about his technology, how it works, why it’s better than what’s out there."

"My clients are better at anatomy and surgery than I am," says Legaard, who got a second college degree in biology to enable her to practice patent law and has prepared applications for surgical devices, among other inventions. "That’s not only obvious but inevitable. I had to get comfortable asking senior counsel stupid questions and then asking these people who are paying me stupid questions. Now I ask inventors for anatomical references: ‘When you talk about ‘X,’ where is it (on the body)?’ ‘How does that (device) work?’"

Once the patent attorney has some understanding of the invention, he or she does a search to determine whether it is likely to meet the law’s requirements.

"I can be really honest with (patent application) clients," says Oster. "I say, ‘You have a 50/50 chance of success.’ Some clients are more risk-tolerant than others."

In Oster’s view, applying for a patent is "just like going to school."

"You learn about the invention; write the application — which is like taking a test — and get the result," she says. "Most examiners are bureaucrats. If you give them a good reason to allow the patent, so they won’t get in trouble, your client will get his patent."

Although the patent lawyer Axel Horn’s blog ip:jur (www.ipjur.com/blog2) reported, in January, that the rate at which U.S. patent applications have been granted has dropped from over 65 percent in 1975 to 44 percent in 2008, the patent office’s website continues to say that approximately two of every three patent applications are granted.

That’s not necessarily a good thing, if the inventor later needs to sue someone for patent infringement.

"The U.S. patent office is notorious for doing a bad job on all patents," says Stephen Joncus, a patent litigator with Klarquist Sparkman in Portland and the immediate past president of the Oregon Patent Lawyers Association. "The view is it’s easier to get a patent in the U.S. than it is in Europe. But patent application examiners are generally not lawyers. And it’s not so easy, when you’re talking about a business method, to determine whether someone has done it before."

"Patent law is amazingly dense," he concludes. "I practiced general commercial litigation before patent law, and the facts in patent-law cases are incredibly hard."

Not "Only God" Can Make a Tree
To get a patent, all inventions must meet three distinct statutory criteria (although Legaard says that, as a practical matter, application of these requirements to new and distinct varieties of plants is "quite different" than it is for other inventions).

The first criteria is whether the invention actually constitutes a process; machine; article of manufacture or a design for one or a composition of matter. Or, as patent attorneys put it, is its subject matter patentable?

"That’s currently a huge issue of debate," says Oster, whose first job was proofreading patent applications for a friend’s lawyer-father at age 13 and who practiced patent law with Miller Nash before becoming a sole practitioner seven years ago.

Certain things, such as laws of nature, natural phenomena and mental processes, are not patentable subject matter.

"But if I’m a biologist and I create a tree," says Oster, "then I can get a patent on it, because it’s not found in nature. Mental processes are not patentable; at least that’s the current state of the law. But what happens if I can do bookkeeping in my head but develop a process whereby a computer can write it down? Is that process patentable or not patentable? Today, it’s more likely to not be patentable."

Oster bases that conclusion, which could have serious implications for "e-commerce," on the ruling by the U.S. Court of Appeals for the Federal Circuit (the Federal Circuit) in In re Bilski, which was announced in October. 545 F.3d 943 (Fed. Cir. 2008) (en banc).

In Bilski, the court — whose jurisdiction includes all appeals from any U.S. District Court where the original actions included complaints arising under patent law — held that a business method for hedging risk in commodity trading was not a patentable process.

"The general idea (of patent law) is that you can’t patent a law of nature," says Joncus about the court’s holding. "You can’t patent E=mc2. But you can patent practical applications. What Bilski tried to do is put into words the test of whether you have a practical application. Bilski’s claim (the part of his patent application in which he set out, in technical terms, the invention for which he was seeking the protection of a patent) had to do with a method for hedging risk. But you could do it all in your head, so the court said it was not patentable."

"The problem the court was wrestling with," Joncus continues, "is to what extent is a business method patentable? A business method is a lot different than what people think of as an invention, i.e., a widget, and it’s harder to draw a line between what is patentable subject matter and what is not. Bilski is probably a pretty extreme example (in terms of its facts), but the court used it as a vehicle to restate the test for what is patentable subject matter."

Oster says that "Significantly, the nine-member majority (in Bilski) made it clear that business methods are still considered patentable subject matter, noting that…business method claims (and indeed all process claims) are ‘subject to the same legal requirements for patentability as…any other process or method.’"

Nonetheless, patent lawyers believe that Bilski could have a major effect on the ability to get computer and software patents in the future.

"If upheld… it could mean a significant narrowing of what constitutes patentable subject matter as a business methods patent," John Palfrey, executive director of the Berkman Center for Internet & Society at Harvard Law School, concluded in online comments made shortly after the opinion issued. "The [Federal Circuit] didn’t seem to think much of the claim itself, making this a great set of facts for anyone wishing to shrink what is patentable and to take a crack at eliminating business methods
patents altogether."

Something New Under the Sun…
In addition to being "patentable subject matter," an invention must also be something that is "new," or, in the vernacular of patent lawyers, "not anticipated by the prior art."

According to Oster, "‘Prior art’ can generally be thought of as knowledge that is available to the public."

This includes information that can be found in written form, such as patent and non-patent-related books, magazines and websites, and non-written form, such as products and methods.

"If an invention was placed on sale or into public use in the U.S. or described in a printed publication anywhere in the world more than a year before the [‘new’ inventor’s] application filing date, the invention cannot be patented in the U.S.," Oster writes in "Patents and E-Commerce." (The main exception is if the public’s source of knowledge was the patent applicant himself, through his writing about, publicly using and/or offering to sell his invention, as long as he files his application within one year of his disclosure.)

"If something exists in its entirety in one reference (one prior source of knowledge), you can’t get a patent on it," says Oster.

But determining whether an invention is "new" was much easier when the first U.S. patent, for a cotton spinner, was granted in 1790.

That invention was followed by the steam-powered pumping station (1801); the spray gun (1803); the amphibious vehicle (1805); the coffee pot (1806); the steamboat (1807) and the armored warship (1813), all physical inventions that clearly represented something the public hadn’t seen before.

"It’s hard, with business methods, to see whether someone has done it before," says Joncus. "It’s not so easy when you’re talking about a method or a series of steps."

That’s So Obvious
If "newness" is simple to explain but hard to determine, the third test for patentability — whether the invention is too "obvious" to be patented — is hard even to explain. So Oster and Joncus use simple examples.

"Obviousness is a little bit different (than the "new" test) because it generally combines multiple references (or sources of prior knowledge)," says Oster.

"Think about your cell phone. How many features are in that phone? A phone, a camera, a scheduler, a GPS. Simply packaging them together is not going to be patentable. The question is, if all of the elements of your invention could be found someplace else, would your combination of the features be obvious?"

"Take the alarm clock," continues Oster. "You invent it. Theoretically you’ve made something new because you’ve combined an alarm and a clock and added some kind of mechanism that makes the alarm sound at a given time. But there are references, known to the public, that describe alarms and that describe clocks. Under previous obviousness tests, the combination would have been patentable unless it could be proven that there was some motivation or suggestion that caused the inventor to combine them. Under newer obviousness tests, an inventor might not be able to get a patent for an alarm clock."

Joncus uses another simple example.

"You drop a $20 bill on the ground," he says. "Someone picks it up. But anyone would pick it up. Just because he was the first person to pick it up doesn’t make it patentable."

"The key point with ‘obviousness,’" says Joncus, "is that not all innovation is patentable. You don’t want to create a monopoly for innovation that would occur naturally or that a lot of people would think of at the same time. But drawing a line between what would occur naturally and what is truly innovative is difficult."

In 2007, the U.S. Supreme Court ruled on the issue in a way that experts say will make it harder to get a patent on an arguably "obvious" invention, just as In re Bilski made it harder to show that an invention’s subject matter is patentable.

The ruling, in KSR v. Teleflex, 550 U.S. 398 (2007), arose from a gas pedal manufactured by KSR. The pedal had an electronic sensor that automatically adjusted its height to the height of whoever was driving the vehicle. Teleflex, which had a patent for a combined gas pedal and sensor, claimed infringement. KSR countered that the combined pedal-sensor — like Oster’s alarm clock — failed the obviousness test and shouldn’t have been granted a patent in the first place.

"Patent law appeared to be on KSR’s side," Eric Bangeman wrote in an article published the day the decision was issued on Ars Technica (http://arstecnica.com), a technology-related website owned by Condé Nast Publications.

Bangeman based his conclusion on general revisions to U.S. patent law, passed in 1952, which "…mandated that an invention could not be patented if a ‘person having ordinary skill in the art’ would consider it obvious."

But the Federal Circuit, in previous cases, had adopted a higher standard for "obviousness." It had held that challengers, like KSR, to existing patents like the one held by Teleflex had to prove that the patent holder had combined previous inventions as the result of some publicly available "teaching, suggestion or motivation." If so, the Federal Circuit had said, the combined invention was "obvious" and should not have received a patent.

In KSR, however, the Supreme Court found that this interpretation of "obviousness" was too narrow and that the Federal Circuit had been wrong in requiring KSR to prove that Teleflex’ sensor-pedal was invented as a result of a prior "teaching, suggestion or motivation."

"The results of ordinary innovation are not the subject of exclusive rights under the patent laws," the Supreme Court said in overruling the Federal Circuit and invalidating Teleflex’ patent. "Were it otherwise, patents might stifle rather than promote the progress of useful arts."

The court’s ruling pleased KSR’s supporters, which Bangeman said included Intel and Microsoft, companies whose software innovations are difficult to patent and who therefore benefit from a weaker patent system.

"It’s harder to get a patent now than it was before KSR," says Joncus. "More things should be rendered obvious."

"On the other hand," asks Joncus, who does patent litigation but not patent application, "is putting a restraint on business-method patents a bad thing? A good question to ask is whether they aid or hinder innovation. Business-method patents are an area where there are many questionable patents that can cause significant harm to innovation. As a matter of public policy, Europe finds it inappropriate to promote business-practices innovation through patent protection."

Looking to the Future
Bangeman called the Supreme Court’s invalidation of Teleflex’ patent and its direction to the Federal Circuit to "…pay closer attention to a patent’s obviousness" "…good news for a patent system that he says is "…in dire need of fixing."

But patent lawyers and their clients shouldn’t hold their breath waiting for that fix.

"Patent reform — including an item aimed at the perceived abuse of venue in Texas — has been pending before Congress for years because no one can agree," says Joncus.

The venue issue to which Joncus refers is the Eastern District of Texas.

"Portland is not a hotbed of patent litigation," says Joncus. "The Eastern District of Texas is number one for filing patent infringement cases because of its ‘rocket docket,’ the perception that juries there are plaintiff-friendly, and the court’s unwillingness to transfer cases for lack of venue. It’s retained cases, where nothing related to the case was in Texas, under general jurisdiction. (Last year, the Federal Circuit ordered a case transferred from the Eastern District of Texas to the Southern District of Ohio, noting that while both venues were "proper," Ohio was "far more convenient." In re TS Tech USA Corporation, Federal Circuit (December 2008).)

The lack of agreement over patent law reform to which Joncus refers is, he says, the result of the fact that companies that invent and sell products are divided into what he calls "two poles."

"One side is biotechnology," he explains. "Patents in biotech are extremely important. If there’s no patent on a drug, no company will pursue producing it because it’s so expensive to discover it and put it on the market. So, biotech is really interested in having strong patents."

"The other pole," says Joncus, "is technology companies. By the time they can get a patent, technology is already two miles downstream. Those two extremes can’t agree."

Legaard agrees with Joncus’ analysis.

"Patent law works really well for some industries but not others; i.e., software," she says. "Getting a patent — which can take from two to seven years — is a long, slow, expensive process. So unless an idea has that kind of staying power and profitability, it’s not worth it. Pharmaceutical companies and medical-device manufacturers tend to use patents a lot. They like provisions that strengthen it (patent law) and want more; software likes provisions that weaken the system and want more of those."

The Patent Reform Act of 2007 — which would have streamlined the process for appealing denials of patent applications; switched the U.S. patent system from a first-to-invent to the first-to-file system used by the rest of the world and capped the amount of damages that can be awarded for patent infringement — died in Congress.

"In some ways," says Joncus, "patent reform is needed less now because the law has changed through the action of the courts, e.g., KSR and Bilski."

Meanwhile, patent lawyers whose work, like Legaard’s and Oster’s, includes representing patent applicants are having to work with a system where it is more difficult to get a patent than it used to be.

"But there are still some tools left in our arsenal," says Oster. "Remember the alarm clock example? If you cannot combine the alarm and the clock without affecting them, you have a good argument that the combination is a patentable invention. For example, if in order to make an alarm clock work, changes would have to be made to the alarm or to the clock that rendered them unsuitable for their intended purposes, there might be an argument for patentability. I think all the patent attorneys out there are still trying to figure out what arguments will be successful."

 

ABOUT THE AUTHOR
Janine Robben has been a member of the Oregon State Bar since 1980. She is a frequent contributor to the Bulletin.

Blogs that discuss current issues in intellectual property law include http://law.lclark.edu/org/ipso/ipblogs.html, which is produced by students at Lewis & Clark Law School. A list of Oregon firms that practice intellectual property law can be found at http://law.lclark.edu/org/ipso/ipfirmlist.html#oregon.

© 2009 Janine Robben


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