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U.S. Supreme Court Patent

Cases

 Harold C. Wegner*

Costa Rican Bar AssociationAuditorio Pablo Casafont

San Jose, Costa RicaJune 8, 2010

* Biographical information at the end of this presentation.

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Supreme Court DecisionsThe two major Supreme Court battleground areas for obtaining valid patents deal with patent-eligible subject matter (35 USC § 101) and nonobviousness as a condition for patentability(35 USC § 103)(a)).

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Supreme Court DecisionsMost tangible objects as well as processes

are patent-eligible(§ 101), whether or not they are patentableas being nonobvious (§ 103).

E.g., a laboratory-crafted microorganism may be “eligible” (§ 101), and it is also patentable if new and nonobvious (§ 103).

But, a second microrgansim may be unpatentableif it is “obvious” versus previously known microorganisms.

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Supreme Court DecisionsLeading Cases on Patent-Eligibility (35

USC § 101)

Bilski v. Kappos: Supreme Court decision expected June 7 or 14 or 21 or 28.

Diamond v. Chakrabarty, 447 U.S. 303 (1980)(Rehnquist, C.J.)(patent-eligibility under 35 USC § 101 for “living” inventions).

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Supreme Court DecisionsLeading Cases on Patentability (35 USC

§ 103)(a)

Is the invention which is patent-eligible under 35 USC 101 also patentable under the nonobviousness test of the leading cases:

Graham v. John Deere Co. 383 U.S. 1 (1966)KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398,

426 (2007).

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Supreme Court DecisionsThe “Obviousness” Inquiry of Graham and KSR

 “The underlying  factual inquiries [for an

obviousness determination] are: (1) the scope and content of the prior art, (2) the differences between the prior art and the claims at issue, (3) the level of ordinary skill in the pertinent art, and (4) secondary considerations of nonobviousness.”

Perfect Web Techs., Inc. v. InfoUSA, Inc., 587 F.3d 1324, 1327 (Fed. Cir. 2009)(Linn, J.) (citing KSR Int'l Co. v. Teleflex Inc., 550 U.S. 398, 406 (2007),

citing Graham v. John Deere Co., 383 U.S. 1, 17-18 (1966)).

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Supreme Court Decisions

“[T]he Supreme Court observed that common sense can be a source of reasons to combine or modify prior art references to achieve the patented invention.”

Perfect Web, 587 F.3d at 1328.

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Supreme Court DecisionsWhen there is a design need or market pressure to

solve a problem and there are a finite number of identified, predictable solutions, a person of ordinary skill has good reason to pursue the known options within his or her technical  grasp. If this leads to the anticipated success, it is likely the product not of innovation but of ordinary skill and common sense. In that instance the fact that a combination was obvious to try might show that it was obvious under § 103.”

Perfect Web, 587 F.3d at 1328 (quoting KSR, 550 U.S. at 421(emphasis added).

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Supreme Court Decisions“Common sense teaches . . . that familiar items may have obvious uses beyond their primary purposes, and in many cases a person of ordinary skill will be able to fit the teachings of multiple patents together like pieces of a puzzle.”

Perfect Web, 587 F.3d at 1328 (quoting KSR, 550 U.S. at 420-21.

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Supreme Court DecisionsMayo v. Prometheus:

Diagnostic Method Patent-Eligibility

InMayo Collaborative Services v. Prometheus Laboratories, Inc., Supreme Court No. 09-490, opinion below, Prometheus Laboratories, Inc. v. Mayo Collaborative Services, 581 F.3d 1336 (Fed. Cir. 2009)(Lourie, J.), the Supreme Court is given the opportunity to grant certiorari concerning the patent-eligibility under 35 USC § 101 of a medical diagnostic method.

 

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Supreme Court DecisionsClaim: A method of optimizing therapeutic efficacy for treatment of an

immune-mediated gastrointestinal disorder, comprising:

“(a) administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointestinal disorder; and

“(b) determining the level of 6-thioguanine in said subject having said immune-mediated gastrointestinal disorder

“wherein the level of 6-thioguanine less than about 230 pmol per 8x108 red blood cells indicates a need to increase the amount of said drug subsequently administered to said subject and

“wherein the level of 6-thioguanine greater than about 400 pmol per 8x108 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject.”

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Supreme Court DecisionsQuestion Presented in Mayo v. Prometheus

at the Supreme Court:

“Whether 35 U.S.C. § 101 is satisfied by a patent claim that covers observed correlations between patient test results and patient health, so that the claim effectively preempts all uses of these naturally occurring correlations.”

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Supreme Court DecisionsInternational Patent ExhaustionA patent right is “exhausted” when the patentee sells his patented product to a purchaser. Then, the purchaser is free to resell (or otherwise transfer) the thus-purchased product.

 

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Supreme Court: ExhaustionDoes the patentee’s sale have to be in the

same country to create “exhaustion”? Thus, if a patentee has parallel patents in the

United States and another country, is the United States patent right “exhausted” when the patentee sells in the other country?

If “yes”, this would be “international patent exhaustion”.

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Supreme Court: Exhaustion“International patent exhaustion” was

strongly opposed by the Executive Branch of the United States in negotiations leading up to the TRIPS, while developing countries were equally adamant that there is (or should be) international patent exhaustion.

 

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Supreme Court: ExhaustionThe TRIPS treaty failed to reach any agreement

on whether there is or should be international exhaustion. Instead, the TRIPS expressly states:

“[S]ubject to the provisions of [TRIPS] Articles 3 [providing for national treatment] and 4 [providing most-favored-nation treatment,] nothing in this Agreement shall be used to address the issue of the exhaustion of intellectual property rights.”

TRIPS, Article 6.

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Supreme Court: ExhaustionThe Supreme Court in has never yet

considered the case of international patent exhaustion.

Boesch v. Graff, 133 U.S. 697 (1890), is incorrectly cited as denying international patent exhaustion.

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Supreme Court: ExhaustionBoesch v. Graff has nothing to do with the

patentee’s first sale of a product in a foreign country:

The patentee owned parallel patents for his stove component in both the United States and Germany.

The patentee’s competitor sold the same stove component in Germany without a license because the competitor was making the stove component independent of the patent right (due to a “prior user right”).

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Supreme Court: ExhaustionIn Boesch v. Graff the sale of the stove

component purchased from the patentee’s competitor was found to be an infringement of the United States patent.

But, this was not “international patent exhaustion” because the patentee never sold the patented stove component that was imported into the United States and sold.

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Supreme Court: ExhaustionJazz Photo Corp. v. Int'l Trade Comm'n, 264

F.3d 1094 (Fed.Cir.2001)(Newman, J.), is the first and therefore precedential Federal Circuit case on “international patent exhaustion”.

Without any reasoning, the Court simply that “[t]o invoke the protection of the first sale doctrine [of exhaustion], the authorized first sale must have occurred under the United States patent.” Jazz Photo, 264 F.3d at 1105.

 

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Supreme Court: ExhaustionThe only support given by the Federal Circuit

is a citation to Boesch v. Graff, 133 U.S. at 701-703,with a parenthetical statement of what it viewed as the holding:

“[A] lawful foreign purchase does not obviate the need for license from the United States patentee before importation into and sale in the United States.”

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Supreme Court: ExhaustionBut, of course, Boesch v. Graff had

nothing to do with “international patent exhaustion.

 FujiFilm Corp. v. Benum, __ F.3d __ (Fed.

Cir. 2010)(per curiam)(Michel, C.J., Mayer, Linn, JJ.), is the most recent Federal Circuit case following the Jazz Photo denial of international patent exhaustion because that case is binding precedent (unless overturned en banc).

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Supreme Court: ExhaustionThe Supreme Court has never considered

international patent exhaustion but has considered other IPR international exhaustion.

The October 2010 Term of the Court will consider international copyright exhaustion in Costco Wholesale Corp. v. Omega, S.A., Supreme Court No. 08-1423, opinion below, Omega S.A. v. Costco Wholesale Corp., 541 F.3d 982 (9th Cir. 2008)(Smith, Jr., J.),

 

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Supreme Court: ExhaustionThe Supreme Court in Costco may well

provide clues as to its views on international exhaustion generally, i.e., including patents, when it decides the Costco case.

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Supreme Court: ExhaustionIn Transcore, the Federal Circuit broadly

interpreted the scope of exhaustion: “[T]he Supreme Court [in Quanta] reiterated unequivocally that ‘[t]he longstanding doctrine of patent exhaustion provides that the initial authorized sale of a patented item terminates all patent rights to that item[.]’” TransCore, LP v. Electronic Transaction Consultants Corp., 563 F.3d 1271, 1274 (2009)(Gajarsa, J.) (quoting QuantaComputer, Inc. v. LG Electronics,

Inc., 128 S.Ct. 2109, 2115, 2121 (2008))(emphasis added).

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Supreme Court: ExhaustionA second appeal in the same Quanta case is

expected which will deal with international patent exhaustion. “Quanta II” is the second part of the Quanta case. The District Court in Quanta II said that “yes”, there is international patent exhaustion. LG Electronics, Inc. v. Hitachi, Ltd., 2009 WL 667232 (N.D.Cal. 2009)(Wilken, J.)

 

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Supreme Court: ExhaustionThe Federal Circuit – and then possibly the Supreme Court as well – will consider international patent exhaustion in a “Quanta II” appeal.

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Supreme Court DecisionsThank you very much for your

attention!

If you have any questions you may feel free to contact me at hwegner@foley.com.

Thank you, again!

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HAROLD C. WEGNER retains his affiliation with the George Washington University Law School where he had been Director of the Intellectual Property Law Program and Professor of Law. His involvement with other academic institutions has included service as a Visiting Professor at Tokyo University. Hecontinues his patent practice as a partner at Foley & Lardner LLP. Prof. Wegner’s patent career commenced with service at the U.S. Department of Commerce as a Patent Examiner. He spent three years at the Max-Planck-InstitutfürGeistigesEigentum in Munich where he was a WissenschaftlicheMitarbeiter. He then became a Kenshuinat the Kyoto University Law Faculty under Dr. Kitagawa. Prof. Wegner is a graduate of Northwestern University (B.A.) and the Georgetown University Law Center (J.D.), where he launched his teaching career as an Adjunct Professor of Law teaching International Licensing.

contact: hwegner@foley.com