Agenda for 6th Class

1
Agenda for 6th Class

• Voice Recorder on
• Infringement
• Doctrine of Equivalents
• Prosecution History Estoppel
• Defenses
• Invalidity
• Inequitable Conduct
• Implied License and First Sale
• Laches
• Patent Misuse
• Trade Secrets
• Basic Doctrine
• Theory

2
Administrative Stuff

• Sign-in sheet
• Name cards
• Extra paper and pen at podium
• Handouts
• Slide handouts
• Kewanee assignment
• Papers
• Grades to web soon
• Corrected papers available soon

3
Review

• Infringement
• Literal accused device or process has elements
  which correspond exactly to elements of at least
  one patent claim
• Doctrine of Equivalents (DOE)- accused device or
  process has elements which are equivalent to
  elements of at least one patent claim.
• Differences are insubstantial
• Equivalent element may reflect after arising
  technology whose equivalence is obvious at the
  time of infringement
• DOE prevents easy evasion of patents and thus
  preserves incentives to invent
• Prosecution History Estoppel Patentee can not
  use DOE to get rights which the patent examiner
  required the patentee to surrender through a
  narrowing amendment

4
Homework Questions I

• 1) Landes invented a process for making ethanol.
  His original application specified that the
  process could use as its raw material any plant
  matter. The patent examiner disallowed the
  claim, because a very similar process had already
  been invented for sugar cane. In response,
  Landes amended his application so that it applied
  only to grains, such as corn or wheat. The
  patent examiner allowed the amended claim and the
  patent issued.
• a) Lemley, an inventor new to the production of
  ethanol, read the patent and thought, if it
  works for grains, it might work for sugar cane,
  and if it works for sugar cane, I wont need a
  license from Landes. Lemley experimented and
  found out that the process indeed worked for
  sugar cane. He then started producing and
  selling commercial quantities of ethanol from
  sugar cane using Landess process. Landes sued
  Lemley for infringement. Who will win? Would the
  result be different under the complete bar or
  flexible bar?

5
Homework Questions II

• b) After Landes received his patent, Merges
  invented an enzyme which converts grass into
  carbohydrates very similar to grains. Merges
  received a patent on his enzyme. Kitsch read the
  Landes and Merges patents and realized that he
  can make ethanol more cheaply than anyone else,
  by converting grass to a grain-like substance and
  then using Landess process to convert the
  grain-like substance into ethanol. He started
  commercial production without licenses from
  Landes or Merges. Landes and Merges sue Kitsch
  for patent infringement. Who will win? Would
  the result be different under the complete bar or
  flexible bar?
• c) Lunney read Landess patent and thought, if
  it works for grains, it might work for wood
  chips, and if it works for wood chips, I wont
  need a license from Landes. Lunney experimented
  and found out that the process indeed worked for
  wood chips. He then started producing and
  selling commercial quantities of ethanol from
  wood chips using Landess process. Landes sued
  Lunney for infringement. Who will win? Would the
  result be different under the complete bar or
  flexible bar?
• d) Some commentators call the flexible bar
  endorsed by the Supreme Court in Festo a
  foreseeability bar. Can you see why? Were the
  alternatives in (a), (b), and (c) foreseeable at
  the time of Landess patent application?

6
Homework Questions III

• 2) If the Warner-Jenkinson case, discussed in
  class, were decided after Festo, who would win?

7
Homework Questions IV

• 3) Urban invented a new chair. The initial
  application said the chair was made out of metal.
  During prosecution, Urban realized that the
  chair could also be made out of plastic and
  amended the claim so that it said the chair could
  be made out of metal or plastic. The amended
  claim was allowed and the patent issued. Barnett
  read the patent and decided to make a chair
  identical to that described in Urbans patent,
  except that it was made out of Kevlar? Kevlar
  is, a super strong composite, which is neither a
  metal nor a plastic.
• a) If Urban sued Barnett for patent
  infringement, who would win? In answering this
  question, make sure to discuss the doctrine of
  equivalents and prosecution history estoppel. In
  answering this question, would it matter whether
  Kevlar were invented before or after Urban
  received her patent? Would it matter whether
  Kevlar was patented, and whether Barnett had
  procured a license for Kevlar?
• b) Suppose Chang made a chair that matched
  Urbans chair exactly, but made only one such
  chair, which he used only in his private study?
  If Urban sued Chang for patent infringement, who
  would win?
• c) Suppose Recliner Corp wants to produce a
  chair similar to Urbans. In order to design
  around the patent, Recliner Corp. made one chair
  that matched Urbans chair exactly. It then
  designed and sold a different chair, which
  although similar to Urbans, does not infringe
  her patent. Urban sued Recliner Corp for patent
  infringement. Who will win?

8
Warner-Jenkinson III

• Opinion did not clearly resolve case
• Left issues relating to prosecution history
  estoppel to be resolved later in Festo
• But did clarify many issues relating to doctrine
  of equivalents
• Intent irrelevant
• Since main point of DOE is to unscrupulous
  copiers
• Might have thought that intent was requirement
• Or at least a factor
• BUT Supreme Court says intent irrelevant
• keeps bright line rule
• Like rest of patent law, intent/knowledge is
  unnecessary for infringement
• simplifies litigation
• strengthens patent owner's rights

9
Warner-Jenkinson IV

• Time for determining equivalents is time of
  infringement
• 2 possible times for determining equivalents
• Equivalents disclosed or known at time of patent
• Equivalents known to person skilled in art at
  time of infringement
• Supreme Court chooses latter interpretation
• After arising technologies can be equivalents
• See hypothetical about tape drive / hard disk
  drive
• 2 different tests for doctrine of equivalents
• 3-part test -- function, way, result
• doctrine of equivalents applies when accused
  device or process performs same function, in same
  way, to achieve same result as patented invention
• Insubstantial differences test
• doctrine of equivalents if there are
  insubstantial differences between patent and
  accused device or process
• Supreme Court refuses to choose
• Both approaches correct, useful in different
  circumstances

10
Warner-Jenkinson V

• Element by element approach
• 2 possible ways of applying 3-part test
• look to function, way, and result of whole
  invention
• DOE applies if accused device or process performs
  same function in same way to achieve same result
  as patented invention
• Look to function, way and result of each element
• DOE applies if aspect of accused device or
  process performs same function in same way to
  achieve same result as each element of patented
  invention
• Similarly, 2 possible ways of applying
  insubstantial differences test
• Ct endorses element-by-element approach to both
  tests

11
Defenses I

• Invalidity
• When someone is sued for patent infringement,
  defendant always has option of arguing that a
  patent is invalid
• Invention not proper subject matter, obvious,
  fails statutory bars, etc
• Patent is accorded presumption of validity
• A defendant can rebut the presumption by clear
  and convincing evidence

12
Defenses II

• Inequitable Conduct
• Patent may be unenforceable if applicant
  submitted false information, made
  misrepresentations or failed to disclose
  important information during prosecution of
  patent.
• Implied license and first sale
• Sale of patented device implies license to use,
  repair, and sell device
• But not make copies of it or otherwise use
  patented invention
• Subsequent buyers also may use, repair and sell
  article
• These rights may be altered by contract

13
Defenses III

• Laches
• If patentee unreasonably delays bringing
  infringement action, patentee may lose rights
• Especially relevant where defendant has made
  investments which would be made worthless by
  successful infringement suit
• Patent misuse
• Use of patent to violate antitrust laws or
  otherwise stifle competition may bar enforcement
• Some forms of tying may be misuse
• Requiring purchasers of patented product to
  purchase unpatented products from patentee

14
Trade Secrets Introduction

• Subject Matter
• Economically valuable secret information
• May or may not be patentable
• Most common trade secrets Chemical processes,
  customer lists
• Infringement (misappropriation)
• Wrongful means torts, crimes, industrial
  espionage
• Violation of confidential relationships
• Confidentiality agreements
• Employment and other confidential relationships
• NOT independent invention or reverse engineering
• Duration -- as long as information is a secret
• Source of Law
• State law
• Nearly all states have adopted Uniform Trade
  Secrets Law
• Restatements also influential

15
Trade Secrets Theory

• Two theories
• Incentives
• Fencing costs
• Incentives
• Like patent, trade secret law provides incentives
  to innovation
• Because it helps innovators prevent others from
  using innovation
• Costs similar to patent, but somewhat different
• Deadweight loss of monopoly
• Somewhat reduced by independent invention and
  reverse engineering
• Transactions costs
• Reduced by absence of application process
• More danger of duplicative invention costs

16
Fencing Costs I

• Cost of protecting secrets sometimes called
  fencing costs
• Protecting/guarding secrets is expensive
• Fences, locks on doors, security guards, dark
  windows
• Security consultants
• Restricted access
• Only some employees may have access to
  information
• Reduces creativity, collaboration, understanding
  of tasks
• Cumbersome procedures
• Formulae may be kept in locked safe
• Wastes time
• These costs are socially wasteful
• Dont contribute to overall welfare
• Except to extent that, by guarding secrets,
  companies have incentive to discover/compile info
• Society would like to reduce these costs, if
  possible

17
Fencing Costs II

• If no trade secret law existed
• Companies would have to be very careful
• Very elaborate fences, etc.
• Screen employees for reliability
• Perhaps only hire family members
• Trade Secret law means that companies dont need
  to be so careful
• Fence can be low,
• because if someone hops over fence to get secret,
  they have to pay damages, can be enjoined from
  using the secret
• And others to whom she gave the info may have to
  pay damages and can be enjoined
• Screening of employees can be more lax
• Because if employee is disloyal, she can be
  liable for damage, can be enjoined
• And others to whom she gave the info may have to
  pay damages and can be enjoined

18
Fencing Costs III

• Similar to rationale for tort and criminal law
• W/o tort criminal law, people would spend a lot
  on private security
• Socially wasteful
• So tort criminal law are good, because they
  reduce defense expenditures
• Like disarmament treaty