Yesterday, the Federal Circuit handed down its anticipated en banc decision in Therasense, Inc. v. Becton, Dickinson & Co., increasing the standards for inequitable conduct. The 6-5 majority held that:
an omitted reference is material only if the claim or patent would not have issued, but for omission of the reference;
specific intent to deceive must be shown by clear and convincing evidence;
courts can no longer employ a “sliding scale” of intent and materiality, both must be showng by clear and convincing evidence; and
courts should apply equity to ensure that the remedy is not based upon conduct “immaterial to the issuance of the patent.”
Patent Docs has an excellent explanation of the opinion and the case background. And there is plenty of commentary about the opinion (see links below). My initial reaction was that the heightened standards will not actually reduce the number of inequitable conduct claims that are filed, although it may reduce the number of inequitable conduct findings.
So, while the overall outcomes may change, the general cost and complexity of patent litigation will likely remain the same. But when I said as much on Twitter (@rdd), I got an interesting reaction from what appears to be an anonymous patent lawyer. This anonymous person suggested that the heightened standard would actually embolden inventors and patent prosecutors to omit references and hide information from the Patent Office because they are now less likely to be charged with inequitable conduct. My inclination is to dismiss this theory based upon my operating presumption that most patent prosecutors, and most inventors, are, or at least intend to, zealously advocate for their clients, or themselves, within the Patent Office’s rules and the relevant ethics standards. Of course, I have seen exceptions, and they can be severe. But my experience is that those are the exceptions, not the rule. I am curious to hear what others think about this. Am I wrong?
Here is a round up of some of the blog posts about the decision:
Peter Zura’s 271 Patent Blog “rejoices” that the heightened standards give prosecutors added protection;
Life Sciences Law;
Orange Book Blog;
Patently-O ;
PharmaPatents; and
PLI Blog.

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This post comes more than a week after the Supreme Court decided Bilski. Last Monday when the decision came down I was struggling with what value I could add to the many reports that would fill the intellectual property blogosphere, and was leaning towards waiting a few days (which also allowed me to deal with various client commitments and new opportunities). Then a good friend praised me for being the lone IP blog who had not said a word about Bilski on the day of the decision, after receiving an email of the blog’s content for the day. That comment cemented it for me. I decided to give myself some time to think about the decision before posting here. Of course, that means that much of what can be said already has been. So, links to many excellent commentaries are below.
At its heart, the Bilski decision continues the Supreme Court’s patent law trend moving away from bright line rules and allowing the flexibility to adapt the law to future situations. The business method in Bilski was struck down, but the Court did not strike down all business methods. And the justices made clear that the machine-or-transformation test was not the only option for determining patentability, increasing the law’s flexibility even more. Having preserved at least some business methods, the Court obviously left software patents intact as well. So, Bilski was not the death of business methods or software. And just as after KSR (obviousness) and eBay (injunction standard), the decision injects uncertainty into the law that will take 18 – 24 months to sort out, first in the district courts and then more slowly in the Federal Circuit. The one thing you can be sure of is that you will see lots of Bilski-based motions over the next year. And I am sure I will be writing about Northern District Bilski decisions during that time.
Here is some of the commentary from across the blogosphere:
* 271 Patent Blog;
* Chisum’s Notes on Bilski;
* Filewrapper (noting that the Supreme Court issued grant, vacate and remand orders in two business method cases assuring we will get some realtively quick Federal Circuit guidance on the outlines of Bilski);
* IPWatchdog (arguing, among other things, that even in the post-Bilski world one could write claims that would capture Bilski innovation);
* New York Times Bits Blog (looking at the uncertainty the decision injects into litigation);
* Patent Docs (looking at Bilski’s impact upon biotech patents);
* Patently-O (and here, here, here and here); and
* WSJ Law Blog.

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A few weeks ago, I discussed how the Northern District of Illinois had become the false patent marking capitol of the world (okay, the United States) and how the Local Patent Rules may be playing into it. But Congress may be stepping in to limit false patent marking suits – click here for a Patent Docs post showing that similar amendments have been introduced in both the House and the Senate patent reform bills. The current versions of the amendments would require that false patent making plaintiffs have suffered competitive injury. And most significantly, the amendments would apply the standing requirement to both pending and future false patent marking cases. If passed and signed into law, these amendments would effectively end the vast majority of the 100+ false patent marking cases filed this year, including more than 50 filed in the Northern District of Illinois.
The Public Patent Foundation – a false patent marking plaintiff itself – has come out in opposition to the amendments. Presumably, most industry segments support the competitive injury requirement which still gives the false patent marking statute plenty of teeth.

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The Supreme Court heard oral argument in the Bilski case Monday afternoon. Click here for a transcript of the arguments. Here are a few of the highlights from Bilski’s argument:
JUSTICE GINSBURG: But you say you would say tax avoidance methods are covered, just as the process here is covered. So an estate plan, tax avoidance, how to resist a corporate takeover, how to choose a jury, all of those are patentable?
MR. JAKES: They are eligible for patenting as processes, assuming they meet the other statutory requirements.
JUSTICE BREYER: So that would mean that every — every businessman — perhaps not every, but every successful businessman typically has something. His firm wouldn’t be successful if he didn’t have anything that others didn’t have. He thinks of a new way to organize. He thinks of a new thing to say on the telephone. He thinks of something. That’s how he made his money.
And your view would be — and it’s new, too, and it’s useful, made him a fortune — anything that helps any businessman succeed is patentable because we reduce it to a number of steps, explain it in general terms, file our application, granted?
MR. JAKES: It is potentially patentable, yes.
* * *
JUSTICE BREYER: So you are going to answer this question yes. You know, I have a great, wonderful, really original method of teaching antitrust law, and it kept 80 percent of the students awake. They learned things – (Laughter.)
JUSTICE BREYER: It was fabulous. And I could probably have reduced it to a set of steps and other teachers could have followed it. That you are going to say is patentable, too?
MR. JAKES: Potentially.
And here are some of the highlights from the government’s argument:
JUSTICE SOTOMAYOR: No ruling in this case is going to change State Street. It wasn’t looking at process or the meaning of “process.” It was looking at something else.
* * *
CHIEF JUSTICE ROBERTS: Mr. Stewart, I thought I understood your argument up until the very last footnote in your brief. And you say this is not –simply the method isn’t patentable because it doesn’t involve a machine. But then you say but it might be if you use a computer to identify the parties that you are setting a price between and if you used a microprocessor to calculate the price. That’s like saying if you use a typewriter to type out the — the process then it is patentable. I — I — it — that takes away everything that you spent 53 pages establishing.
* * *
CHIEF JUSTICE ROBERTS: But if you look at your footnote, that involves the most tangential and insignificant use of a machine. And yet you say that might be enough to take something from patentability to not patentable.
MR. STEWART: And all we’ve said is that it might be enough; that is, hard questions will arise down the road as to where do you draw the line, to what extent must the machine or the transformation be central —
CHIEF JUSTICE ROBERTS: So you think it’s a hard question. If you develop a process that says look to the historical averages of oil consumption over a certain period and divide it by 2, that process would not be patentable. But if you say use a calculator, then it — then it is?
MR. STEWART: I think if it’s simply using a calculator for its preexisting functionality to crunch numbers, very likely that would not be enough. But what we see in some analogous areas is that the computer will be programmed with new software, it will be given functionality it didn’t have before in order to allow it to perform a series of calculations, and that gets closer to the line. And again —
CHIEF JUSTICE ROBERTS: Well, your footnote — I don’t mean to dwell on it — it says to identify counterparties to the transactions. So that if what you’re trying to get is the — the baker who sells bread, because you are going to hook him up with the grocer who sells, you know, in the grocery store, if you punched in in your search station, you know, give me all the bakers in Washington, that would make it patentable?
MR. STEWART: Again, we are — we are not saying it would be patent eligible. We would have to review those facts, and the PTO would have to review those facts in the context of an actual application.
I guess the point I’m trying to make is simply that we don’t want the Court, for instance, in the area of software innovations or medical diagnostic techniques to be trying to use this case as the vehicle for identifying the circumstances in which innovations of that sort would and would not be patent eligible, because the case really doesn’t present any — any question regarding those technologies. And therefore, we —
If those highlights, left you wanting more, check out the following posts that give some additional context to the cold transcript or read the tea leaves, as we all wait for a decision, likely this spring:
271 Patent Blog
IPWatchdog (and here)
Patent Docs
Patently-O (and here)
The Prior Art
WSJ Law Blog

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The Supreme Court hears oral argument today in Bilski v. Kappos. The Court will decide the proper test for Section 101 patentability and will either decide or at least significantly impact the patentability of software and business method patents. Here are the questions presented:
1. Whether the Federal Circuit erred by holding that a “process” must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing (“machine-or-transformation” test), to be eligible for patenting under 35 U.S.C. § 101, despite this Court’s precedent declining to limit the broad statutory grant of patent eligibility for “any” new and useful process beyond excluding patents for “laws of nature, physical phenomena, and abstract ideas.”
2. Whether the Federal Circuit’s “machine-or-transformation” test for patent eligibility, which effectively forecloses meaningful patent protection to many business methods, contradicts the clear Congressional intent that patents protect “method[s] of doing or conducting business.” 35 U.S.C. § 273.
For more on the history of both the Bilski case, check out my recent article with my colleague Mike Grill in the Northwestern Journal of Technology and Intellectual Property. Patently-O has compiled the amicus briefs — click here for the briefs supporting Bilski or neither party, and here for the briefs supporting the government. The briefs supporting the government include a brief by a group of Internet Retailers that, I am proud to say, cites my law review article arguing for an even application of the Twombly pleading standard as to both patent plaintiffs and patent defendants — click here for the amicus brief and here for my article from the John Marshall Review of Intellectual Property Law.
Click here for the SCOTUSBlog’s preview of the argument. For post-argument CLE options, click here for a list of courses compiled by Patent Docs and here for information on a CLE from IPWatchdog’s Gene Quinn, who plans to attend oral arguments.

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Gene Quinn has done some great work in developing a list of the top 50 patent blogs at IPWatchdog, based on a combination of objective and subjective criteria — click here to read the post. With all of the usual caveats about the value of top blog lists and competitions, I am proud that the Chicago IP Litigation blog came in at number 28 and the top regional US patent blog. I am honored to be among the top regional patent blogs, including Washington State Patent Blog, California Biotech Blog,* and Georgia Patent Law. I am also proud to be among the numerous Chicago patent blogs that made the list, including Patent Docs, Orange Book Blog and the 271 Patent Blog.
Here is the top 50:
1. Patently-O
2. IPWatchdog.com
3. IP Kat
4. Spicy IP
5. Patent Baristas
6. Intellectual Property Watch
7. Patent Docs
8. 271 Patent Blog
9. BlawgIT
10. Patent Prospector
11. The Invent Blog
12. IP Think Tank and The Prior Art
13. –
14. Orange Book Blog
15. IPJUR and European Patent Caselaw
16. –
17. Promote the Progress
18. IP NewsFlash
19. Anticipate This!
20. Patentably Defined
21. India Patent
22. Intellectual Asset Management
23. Against Monopoly
24. Patent Circle
25. I/P Updates
26. PHOSITA
27. IP Spotlight
28. Chicago IP Litigation
29. The IP Factor
30. Patent Arcade and File Wrapper
31. –
32. Securing Innovation
33. Patents 101 and IP Estonia
34. –
35. PatLit
36. Just An Examiner
37. The Business of Patents
38. Patentability
39. Inventive Step
40. Holman’s Biotech IP
41. Washington State Patent Law
42. California Biotech Law
43. Patent Infringement Updates and Patent Assassins
44. –
45. Russian Patents
46. Georgia Patent Law
47. Patentnapsis
48. Honoring the Inventor
49. OC Patent Lawyer
50. Nanomedicine & IP
* Another blog by LexBlog.

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The patent blogosphere loves a cert grant in a patent case. A patent case pending before the Supreme Court gives months of blog material and lots to debate, not to mention months of law review articles like the one I have slated for publication later this summer. So, it is no surprise to see some strong commentary lighting up the patent blogs. Here are two of the most thorough and interesting:
Patent Docs (predicting that the Supreme Court moves away from the Federal Circuit’s “bright line” machine-or-transformation test and questioning whether the Court will address the patentability of diagnostic method claims as raised in Justice Breyer’s dissent from the Court’s dismissal of Cert in Labcorp v. Metabolite); and
The Prior Art (handicapping the Supreme Court’s eventual decision, including a brief look at appointee Judge Sotomayor’s potential impact on the decision).

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The legal blogosphere is full of analysis and commentary regarding the Patent Reform Act, here is more of the best:
FileWrapper;
Patent Baristas (surveying industry responses to the Act);
Patent Docs (discussing the witness list for Patent Reform Act hearings);
Patently-O (damages provisions analysis), and here and here;
Washington State Patent Law Blog.
And the Bilski amicus briefs began coming into the Supreme Court today. Click here for Dennis Crouch’s post with links to many of the amicus briefs. And here for Crouch’s post discussing the PTO’s Bilski guidance to Examiners.

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As promised, the new Patent Reform Acts were introduced in Congress this week — click here for the Senate bill and here for the House bill. While I have not yet done a comprehensive review, I understand that the bills are largely similar. Here are some highlights of the bills:
They move from the current first to invent system to the international norm, first to file.
Expanded reexamination and a new period of post-grant review.
Damages provisions require that the specific contribution over the prior art be considered and allow consideration of licensing terms for similar noninfringing substitutes. As Dennis Crouch points out, for alternatives in the public domain the comparable license could be free.
Specifically allows for Federal Circuit jurisdiction of interlocutory claim construction appeals where the district court approves the appeal.
Federal Circuit judges would no longer be required to live within fifty miles of the District of Columbia.
The venue provisions are changed to narrow possible venues.
There is plenty of commentary in the blogosphere. Here are some of the best:
271 Patent Blog (giving highlights, noting changes from the last version and do not miss Peter Zura’s blog makeover);
Patent Docs (discussing the Senate press conference announcing the Senate bill and noting BIO’s response to the bills); and
Patently-O (giving highlights and noting changes from the most recent attempted reforms) and here (reposting comments from Google’s Head of Patents and Patent Strategy, Michelle Lee).

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Here are several important, national patent and trademark stories:
Via Patent Docs (which has a new web address — http://www.patentdocs.org) a new patent reform bill (perhaps the first of three) may be issued as early as Monday, March 2 — click here to read the Patent Docs post.
President Obama has nominated Gary Locke to be the next Secretary of Commerce, which would put Locke in charge of the PTO. Locke, formerly the Governor of the state of Washington, is currently a partner in Davis Wright Tremaine’s Seattle office. For more on the appointment from the Chicago Tribune’s Swamp blog, click here. In his speech announcing the nomination, President Obama pointed out that among Locke’s many impressive credentials and accomplishments, he is an Eagle Scout. As an Eagle myself, I am always glad to see another succeed.

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