Last The FederalCircuit - Finnegan...Monsanto, seeking to rescind the 1994 Agreement on the ground that DeKalb had procured its sub-license by fraud. RPA also alleged that DeKalb and

EDITED BY VINCE KOVALICK

This publication brings you a synopsis of patent cases decided last month by the United StatesCourt of Appeals for the Federal Circuit based on slip opinions received from the court. You canreview and download the full text of each opinion by visiting our Web site (www.finnegan.com).

Washington, DC202-408-4000

Palo Alto650-849-6600

Atlanta404-653-6400

Cambridge617-452-1600

Tokyo011-813-3431-6943

Brussels011-322-646-0353

FEDERAL CIRCUIT CLARIFIES PRECEDENTS ON DOCTRINE OF EQUIVALENTSA patentee cannot apply the DOE to cover unclaimed subject matter disclosed in the specification. Johnson & Johnston Assocs., Inc. v. R.E. Serv. Co., Inc., No. 99-1076 (Fed. Cir. Mar. 28, 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1

BONA FIDE PURCHASER DEFENSE DOES NOT APPLY TO NONEXCLUSIVE LICENSEESSince a nonexclusive license transfers less than all of the available patent rights, underfederal law, the bona fide purchaser defense does not apply to nonexclusive licensees.Rhône-Poulenc Agro, S.A. v. DeKalb Genetics Corp., No. 00-1266 (Fed. Cir. Mar. 26, 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

DEFENDANTS LOSE ON COSTS FOR VIDEO EXHIBITVideo exhibit is not an “exemplification” under 28 U.S.C. § 1920. Kohus v. Cosco, Inc.,No. 01-1358 (Fed. Cir. Mar. 13, 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

INFRINGEMENT OF DESIGN PATENT MUST CONSIDER CLAIMED ORNAMENTAL FEATURES OF ALL FIGURES“Ordinary observer” test for design patent is not limited to the ornamental features of asubset of the drawings, but must encompass the claimed features of all figures of adesign patent. Contessa Food Prods., Inc. v. Conagra, Inc., No. 01-1157 (Fed. Cir. Mar. 13, 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3

PTO “STRETCHED” OBVIOUSNESS REJECTION FOR ELASTIC-WAIST TRAINING PANTS INVENTIONAn inventor’s explanation of how the invention works does not render obvious thatwhich is otherwise unobvious. In re Glaug, No. 00-1571 (Fed. Cir. Mar. 15, 2002) . . .4

JUNIOR PARTY LOSES ON CONCEPTIONAlthough reduction to practice is not an element of conception, a junior party claimingprior conception cannot meet its burden of proof merely by showing that the subjectmatter of the count was desired or spoken of by its inventors. Rexam Indus. Corp. v.Eastman Kodak Co., No. 01-1308 (Fed. Cir. Mar. 4, 2002) (nonprecedential decision) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

CLAIM CONSTRUCTION LEAVES MOST CLAIMS NONINFRINGED AND INVALIDDisplay Techs., Inc. v. Paul Flum Ideas, Inc., No. 01-1069 (Fed. Cir. Mar. 4, 2002) (nonprecedential decision) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

LIMITED DISCLOSURE SUPPORTS MEANS-PLUS-FUNCTION LIMITATIONBaker Hughes, Inc. v. Davis-Lynch, Inc., No. 01-1377 (Fed. Cir. Mar. 15, 2002) (nonprecedential decision) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

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Federal Circuit Clarifies Precedentson Doctrine of Equivalents

Vince Kovalick

[Judges: En banc, PER CURIAM, with severalconcurring opinions; dissenting opinion by JudgeNewman]

In Johnson & Johnston Associates, Inc. v. R.E.Service Co., Inc., No. 99-1076 (Fed. Cir. Mar. 28,2002), the Federal Circuit ruled that a patenteecannot apply the DOE to cover unclaimed subjectmatter disclosed in the specification. To the extentthat this decision conflicts with that of YBMMagnex, Inc. v. International Trade Commission, 145F.3d 1317 (Fed. Cir. 1998), the en banc courtexpressly overruled that case.

Johnson & Johnston Associates, Inc.(“Johnston”) asserted U.S. Patent No. 5,153,050(“the ‘050 patent”) against R.E. Service Companyand Mark Frater (collectively “RES”). A jury foundthat RES had willfully infringed claims 1 and 2 ofthe ‘050 patent under the DOE and awardedJohnston over a million dollars in damages. Thedistrict court awarded enhanced damages, and thecase was appealed. After a hearing before a three-judge panel, the Federal Circuit ordered an en bancrehearing of the DOE issue, which occurred in late2001.

The ‘050 patent relates to a method of manu-facturing printed circuit boards that stacks sheets ofcopper foil and prepreg in a press and heats themto melt the resin in the prepreg and bond the lay-ers. Manual handling of the thin sheets of copperfoil can damage or contaminate them. The ‘050patent claims an assembly that prevents much ofthis damage by adhering the fragile copper foil to astiffer substrate sheet of aluminum. The aluminumsubstrate protects the copper foil during handlingand the heating steps and can be removed andrecycled.

After RES began making laminates for the man-ufacture of printed circuit boards that joined copperfoil to a sheet of steel, Johnston sued for infringe-ment. The district court granted RES’s motion forSJ of no literal infringement but denied as to theDOE. With respect to the DOE, RES argued, citingMaxwell v. Baker, Inc., 86 F.3d 1098 (Fed. Cir.1996), that the patent specification, which dis-closed a steel substrate but did not claim it, consti-tuted a dedication of the steel substrate to the pub-lic. Johnston countered that the steel substrate hadnot been dedicated to the public, citing YBMMagnex. The district court ruled that the ‘050patent did not dedicate the steel substrate to thepublic and gave the DOE issue to a jury, whichfound RES liable for willful infringement under theDOE.

This appeal, therefore, was essentially a disputeover whether Maxwell or YBM Magnex applied in

this case. In Maxwell, the Court observed, it hadessentially concluded that there existed a well-established rule that subject matter disclosed butnot claimed in a patent application is dedicated tothe public. In YBM Magnex, however, the Courtconcluded that Maxwell had not created a new ruleof law that the DOE could never encompass subjectmatter disclosed in the specification but notclaimed. Rather, the Court characterized YBMMagnex as purporting to limit Maxwell to situationswhere a patent discloses an unclaimed alternativedistinct from the claimed invention.

In addressing the issue, the Court reviewedextensive precedents proclaiming the virtues of thenotice function of claims and the continued exis-tence of the DOE. It emphasized its decisions thathad concluded that application of the DOE torecapture subject matter deliberately left unclaimedwould conflict with the primacy of the claims indefining the scope of the patentee’s exclusive right.In the end, the Court concluded that by enforcingthe Maxwell rule, courts would avoid the problemof extending the coverage of an exclusive right toencompass more than that properly examined bythe PTO.

Applying its conclusion to the facts of this case,the Court observed that the specification expresslydiscloses that while aluminum is the preferredmaterial for the substrate, other metals, such asstainless steel or nickel alloys, could be used.Having disclosed without claiming the steel sub-strates, the Federal Circuit concluded, Johnston can-not now invoke the DOE to extend its aluminumlimitation to encompass steel. Accordingly, theFederal Circuit reversed the district court’s judg-ment of infringement under the DOE.

The Federal Circuit emphasized that a patenteewho inadvertently fails to claim disclosed subjectmatter is not left without a remedy, given his abilityto file a reissue or continuation application.

The judges filed various concurring opinions toamplify the decision, to offer alternative reasoning,or to address the dissent. Judge Rader, for exam-ple, reasoned that the Court’s ruling reconciled thenotice function of the claims with the protectivefunction of the DOE by preventing applicants fromrecapturing subject matter that the patent drafterreasonably could have foreseen during the applica-tion process and included in the claims. JudgeLourie addressed this point in his concurrence, not-ing that, having been a patent lawyer, he was notconvinced that introducing the concept of foresee-ability was the answer to the equivalence dilemma.

Judge Newman, author of YBM Magnex, sawthe majority opinion as an assault on the DOE thatestablishes a new absolute bar to equivalency whenthere is no prosecution history estoppel, no priorart, no disclaimer, and no abandonment.

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Bona Fide Purchaser Defense DoesNot Apply to Nonexclusive Licensees

Donald D. Min

[Judges: Dyk (author), Clevenger, and Schall]

In Rhône-Poulenc Agro, S.A. v. DeKalb GeneticsCorp., No. 00-1266 (Fed. Cir. Mar. 26, 2002), inresponse to an en banc order vacating its earlierdecision, the Federal Circuit held that the bona fidepurchaser defense is governed by federal law and isnot available to nonexclusive licensees.

From 1991 through 1994, Rhône-PoulencAgro, S.A. (“RPA”) and DeKalb GeneticsCorporation (“DeKalb”) collaborated on the devel-opment of biotechnology related to an optimizedtransit peptide (“OTP”), which proved useful ingrowing herbicide-resistant corn plants. OTP iscovered by the claims of U.S. Patent No.5,510,471, reissued on December 14, 1999, as RE36,449 (“the ’471 patent”). In 1994, RPA, DeKalb,and nonparty Calgene, Inc. (“Calgene”) enteredinto an agreement (the “1994 Agreement”) thatgranted DeKalb the world-wide, paid-up right touse OTP for corn. DeKalb was also allowed togrant sublicenses without further payment. In1996, DeKalb sublicensed its rights to MonsantoCompany (“Monsanto”). In exchange for the subli-cense, Monsanto granted DeKalb licenses to certainintellectual property related to genetically engi-neered corn and acquired interests in DeKalb.

In 1997, RPA filed suit against DeKalb andMonsanto, seeking to rescind the 1994 Agreementon the ground that DeKalb had procured its sub-license by fraud. RPA also alleged that DeKalb andMonsanto were infringing the ’471 patent and hadmisappropriated RPA’s trade secrets. Monsantoargued that it had a valid license to practice theinvention of the ‘471 patent and use the tradesecrets, based on the 1994 Agreement and havingpaid value to DeKalb for its sublicense.

At trial, a jury found that DeKalb had fraudu-lently induced RPA to enter into the 1994Agreement. However, the district court, relying onHeidelberg Harris, Inc. v. Loebach, 145 F.3d 1454(Fed. Cir. 1998), found that Monsanto was a bonafide purchaser of the ‘471 patent and the right touse the technology and, as a matter of law, couldnot be liable for patent infringement or misappro-priation of trade secrets.

On appeal, a panel of the Federal Circuitaffirmed the grant of SJ by the district court inRhône-Poulenc Agro, S.A. v. DeKalb Genetics Corp.,272 F.3d 1335 (Fed. Cir. 2001). The panel, citingHeidelberg Harris, agreed that the bona fide pur-chaser defense was available to nonexclusivelicensees and affirmed. Monsanto then moved fora rehearing en banc. The Federal Circuit granted

the petition for the limited purpose of decidingwhether Heidelberg Harris was binding authority onthe question of whether the bona fide purchaserdoctrine applies to patent licensees.

Unconstrained by Heidelberg Harris, the panelreconsidered its decision and, this time, held thatthe bona fide purchaser defense to patent infringe-ment is governed by federal law and, therefore, isnot available to nonexclusive licensees. The Courtreviewed a plethora of precedent on both issues inreaching its conclusions and found that the bonafide purchaser defense required an assignment,grant, or conveyance of all substantial rights of apatent, not just some of those rights. Therefore,since a nonexclusive license transfers less than allsubstantial rights of a patent, the bona fide pur-chaser defense was not available to Monsanto.

The en banc Court concluded that because ofunique circumstances in that case, and because theparties did not contest the issue, Heidelberg Harriswas not binding authority on the issue.Accordingly, the Court vacated its previous decisionto the contrary.

Defendants Lose on Costs for VideoExhibit

Steven P. O’Connor

[Judges: Prost (author), Mayer, and Dyk (dis-senting)]

In Kohus v. Cosco, Inc., No. 01-1358 (Fed. Cir.Mar. 13, 2002), the Federal Circuit reversed anaward to Defendants, Cosco, Inc. and others(“Cosco”), of costs in the amount of $12,950 relat-ing to a video exhibit.

Louis Kohus sued Cosco on his U.S. Patent No.4,688,280 directed to a portable playpen with afoldable frame, alleging that Cosco’s manufactureand sale of a line of “Zip ‘N Go” playyards infringedthe patent. Cosco filed a motion for SJ of nonin-fringement, which relied on an expert’s report thatreferred to and included a video exhibit that dis-closed the structure and operation of the accusedplayyards and the patented playpen. After constru-ing the claims, the district court granted Cosco’smotion for SJ, which the Federal Circuit affirmed inKohus v. Cosco, Inc., 250 F.3d 758 (Fed. Cir. 2000)(per curiam).

Having prevailed on appeal, Cosco filed a billof costs. The district court awarded Cosco costs,including the cost of the video exhibit. Althoughthe district court decided the case based on itsclaim construction, it noted that it would have con-sidered the exhibit, which Cosco relied upon inmaking its motion for SJ. Finding that the videoexhibit was a necessity for Cosco in making its

motion, the court held that an award of costs wasappropriate under 28 U.S.C. § 1920 (1994), whichdefines the costs that may be awarded under Fed.R. Civ. P. 54(d).

Applying the law of the Sixth Circuit, theFederal Circuit reversed the award of costs as anabuse of discretion. The Federal Circuit noted thatsection 1920 does not explicitly authorize an awardof costs for a video exhibit, but subsection (4) doesauthorize costs for exemplification and copies ofpapers necessarily obtained for use in the case. TheSixth Circuit has not previously addressed whethersubsection (4) encompassed a video exhibit. TheFederal Circuit held that it does not.

Noting that a video is obviously not a copy ofpaper, the Federal Circuit considered whether thevideo exhibit was an “exemplification” under sec-tion 1920. Citing the legal definition of an exem-plification as “[a]n official transcript of a publicrecord, authenticated as a true copy for use as evi-dence,” the Federal Circuit ruled that a video exhib-it is not an exemplification. The Federal Circuitrejected Cosco’s argument that “exemplification”should be construed broadly to include demonstra-tive evidence such as its video animation. Relyingon Sixth Circuit precedent denying an award ofcosts for preparing demonstrative models becausethese costs are not authorized by section 1920, theFederal Circuit reasoned that a video exhibit was nodifferent than a physical model and, therefore, anaward of costs for video exhibits is also outside thescope of the district court’s authority. The FederalCircuit also noted that its conclusion was consistentwith Eleventh Circuit precedent holding that a com-puter animation is not an exemplification.

Since the video exhibit prepared by Cosco wasnot an exemplification under section 1920, the dis-trict court had no authority to award costs for it.Accordingly, the district court had erred by taxingthe cost of the video to Kohus.

Judge Dyk dissented because he believed thatSixth Circuit precedent would allow the cost ofpreparing an original video, as opposed to the costof copying or authenticating a video. This cost, heconcluded, does not fall within, and thus is not pre-cluded by, section 1920.

Infringement of Design Patent MustConsider Claimed OrnamentalFeatures of All Figures

Bart W. Wise

[Judges: Linn (author), Clevenger, and Schall]

In Contessa Food Products, Inc. v. Conagra, Inc.,No. 01-1157 (Fed. Cir. Mar. 13, 2002), the FederalCircuit vacated and remanded a district court’s

grant of Contessa Food Products, Inc.’s(“Contessa”) motion for partial SJ of infringementof Contessa’s design patent for a serving tray withshrimp.

Contessa is the assignee of U.S. Design PatentNo. 404,612 (“the ‘612 patent”) entitled “ServingTray with Shrimp.” The ‘612 patent contains fivefigures that depict the tray with an arrangement ofshrimp, although no shrimp are visible in Figure 4,which shows a bottom view of the tray. The tray iscircular with a circular receptacle in the center forcocktail sauce. Two layers of shrimp are arrangedsuch that the head of each shrimp is nearer thecenter of the tray and the tail of each shrimp isnearer the outer edge. The tails of the shrimp inthe layer of shrimp nearer the center of the tray lieupon the heads of the shrimp in the outer layer ofshrimp.

Contessa sued Conagra, Inc. (“Conagra”) forinfringement of the ‘612 patent and moved for SJ.The district court construed the single claim of the‘612 patent to include “a tray of a certain design,as shown in Figures 4-5, containing shrimparranged in a particular fashion, as shown in Figures1-3.” Applying the two-part test for infringementof a design patent, the district court found that anordinary purchaser would find the accused products“substantially similar” to the claimed design in the‘612 patent and that the accused products appro-priated the “point of novelty” of the ‘612 patentdesign.

The Federal Circuit observed that this appealinvolved two distinct questions relevant to the“ordinary observer” analysis: (1) whether the dis-trict court was required to consider the ornamentalfeatures illustrated in all of the drawings of thedesign patent, and (2) whether the district courtproperly limited its analysis to those features visibleat the point of sale, rather than those features visi-ble at any time in the “normal use” lifetime of theaccused product.

First, the Federal Circuit determined that thedistrict court was required to consider the orna-mental features illustrated in all of the drawings ofthe design patent. The Court held that all of theornamental features illustrated in the figures mustbe considered in evaluating design-patent infringe-ment because a patented design is defined by thedrawings in the patent, not just by one feature ofthe claimed design. Here, the Federal Circuit foundthat the district court did not consider the featuresillustrated in Figure 4, which shows a bottom viewof the tray. The omission of any consideration ofthe features illustrated in Figure 4 was held to beerroneous.

Second, the Federal Circuit determined thatthe district court had improperly limited its analysisto those features visible at the point of sale. TheFederal Circuit emphasized that a design-patentinfringement inquiry extends over a period in the

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article’s life, beginning after completion of manu-facture or assembly and ending with the ultimatedestruction, loss, or disappearance of the article.The Federal Circuit determined that the districtcourt had failed to consider ornamental features ofthe bottom of the tray, which are not normally visi-ble at the point of purchase but which are fullyrevealed when the packaging is removed and arethereafter visible to the consumer during use of theaccused product.

Thus, the district court’s failure to properly con-sider the ornamental features shown in all of thefigures, and the ornamental features of the accusedproduct visible during normal use of the product,provided the basis for the Federal Circuit to vacatethe district court’s SJ of infringement.

PTO “Stretched” ObviousnessRejection for Elastic-Waist TrainingPants Invention

Malcolm T. Meeks

[Judges: Newman (author), Mayer, and Michel]

In In re Glaug, No. 00-1571 (Fed. Cir. Mar. 15,2002), the Federal Circuit vacated the Board’s obvi-ousness rejection of claims for a method of makingdisposable training pants having elastic waistbands,concluding that the Board had not met its burdenof showing a prima facie case of obviousness.

Frank S. Glaug and Margaret A. Kato (collec-tively “Glaug”) are the owners of the invention,which produces training pants having a more com-fortable fit with a waistband maintaining its elastici-ty over a longer period of time. The inventionachieves this, in part, by the way adhesive is placedon the fabric to form the elastic waistband.Specifically, in creating the waistband, Glaug’smethod describes applying adhesive intermittently,i.e., in patterns spaced apart from one another tocreate areas where the elastic and fabric are notadhered to one another at all.

The Board deemed Glaug’s inventionunpatentable because a prior patent (“Nomura”)rendered it obvious in light of a second patent.The Board found Glaug’s evidence of superiorresults, illustrated by numerical measurements,inadequate to rebut their finding. Also, the Boardfound that Glaug’s technical explanation of theinvention further served as evidence of obviousnessbecause the advantages Glaug describes in theapplication would be inherent in any system thatintermittently spaced adhesive.

On appeal, the Federal Circuit reversed theBoard’s decision, holding that the Board had not

satisfied its burden to establish a prima facie case ofobviousness in rejecting Glaug’s application. TheCourt held that although Nomura uses the word“intermittent” in a catchall statement at the end ofits description, Nomura’s use differs from Glaug’s inthat Nomura did not contemplate adhesive place-ment zones that are entirely separate from oneanother. By the Court’s reading of the Nomura ref-erence, the specification states that its processrequires broad areas of adhesive contact betweenthe elastic and the fabric, and the figures depictcontinuous zones of adhesive. The Court statedthat the word “intermittent” may have differentinterpretations, but in situations where words aresusceptible to various meanings, the inventor’s lexi-cography must prevail. Therefore, becauseNomura’s meaning does not suggest or contem-plate adhesive-free zones, and Glaug’s meaningdoes, the Nomura reference does not renderGlaug’s invention obvious.

As to Glaug’s numerical measurements, Glaugintroduced this evidence to illustrate the advan-tages of the invention over the prior art. The Courtstated that although measurements of a physicalproperty usually do not make patentable otherwiseunpatentable claims, a measured property is rele-vant to patentability when it calls out distinctions oradvantages over the prior art.

The Federal Circuit also rejected the Board’sargument that Glaug’s explanation of the inventionsupported its obviousness finding. The Court rea-soned that an inventor’s explanation of an inven-tion and its advantages does not render it obviouswhen it otherwise is not. To that end, the FederalCircuit held that the prior art did not teach or sug-gest the features of Glaug’s method, so Glaug’sexplanation of his invention and its advantagesactually served as evidence supporting a finding ofnonobviousness.

Junior Party Loses on Conception

Mark J. Feldstein

[Judges: Clevenger (author), Mayer, andGajarsa]

In Rexam Industries Corp. v. Eastman Kodak Co.,No. 01-1308 (Fed. Cir. Mar. 4, 2002) (nonprece-dential decision), the Federal Circuit affirmed a dis-trict court’s award of priority in an interference pro-ceeding to Eastman Kodak Company and AveryDennison Corporation (collectively “Kodak”), hold-ing that Rexam Industries Corporation (“Rexam”),the junior party, failed to prove prior conception bya preponderance of the evidence.

Rexam and Kodak had been engaged in aninterference proceeding to establish priority over acount directed to “[a] flexible decorative sheetmaterial suitable for use in surface panels, such asautomotive body panels, . . . comprising a flexibleouter layer having a smooth, glossy outer surfacewith a distinctiveness of image [DOI] value of 65percent or greater . . . .” The count was identicalto claim 1 of Rexam’s U.S. Patent No. 4,931,324(“the ‘324 patent”).

To establish priority for the count, Kodak, thesenior party, relied on the constructive reduction topractice of its filing date of November 3, 1987.Rexam, the junior party, had a filing date ofSeptember 8, 1988, for the ‘324 patent, but soughtto establish October 28, 1986, the filing date ofU.S. Patent No. 4,810,540 (“the ‘540 patent”) as itspriority date since the ‘324 patent was a continua-tion-in-part of the ‘540 patent. The DOI limitationcontained in the ‘324 patent, which is achieved byusing a film having a surface roughness of less than0.018 µm, was the key difference between the ‘324and ‘540 patents, and was the focus of the decisiondenying Rexam priority to the count.

As understood by the Court, the recited DOIvalue can only be achieved by casting the outerlayer of the decorative sheet material on a smoothcarrier surface. In order to show conception,Rexam had to provide evidence of an appreciationor recognition of this relationship. Although notrequired to recognize the DOI in the exact words ofthe count, Rexam must at least show prior recogni-tion of a genus of films with the required DOI,though not necessarily recognition of a specific DOIvalue. However, according to the Court, the evi-dence supported a finding that Rexam’s inventorsdid not understand the requisite properties of thecarrier surface and, hence, did not conceive of theinvention until after Kodak’s constructive reductionto practice.

Rexam had introduced evidence to show itsprior conception, none of which was sufficient tomeet its evidentiary burden. In the original interfer-ence proceeding before the Board, Rexam relied onstatements from a third-party manufacturer, who,in 1986, had apparently judged certain Rexam sam-ples to be a “good match” to their paint specifica-tions. However, since there was no evidence thatthe manufacturer’s specifications included a DOI ofgreater than 65%, and that, even if the specifica-tions did, that Rexam’s product was more than acommercially acceptable match and necessarily metthis limitation, the Board found that Rexam couldnot establish priority.

In the district court proceeding, the court heldthat, prior to Kodak’s filing, Rexam’s inventors hadnot recognized or appreciated that they hadobtained a DOI of more than 65%. Thus, Rexam

did not have prior conception. Further, the courtheld that, even if the DOI had been recognized,Rexam had not shown that it exercised diligence inreducing the invention to practice from just beforeKodak’s filing date up to Rexam’s reduction to prac-tice.

On appeal, the Federal Circuit likewise heldthat for at least the reason that Rexam’s inventorshad failed to recognize or appreciate the roughnessproperties of the casting surface necessary toachieve the DOI limitation, Rexam had not shownprior conception and was not entitled to priority inthe interference. The Court attached no weight tothe submission in an Information DisclosureStatement for the earlier ‘540 patent of a referenceallegedly showing the relationship betweensmoothness and DOI. According to the Court, thepatent attorney’s submission said little about whatthe inventors appreciated. Moreover, the Courtfound that the reference did not, in fact, disclose aconnection between any specific casting smooth-ness and a DOI value.

The Court also discounted evidence thatshowed, at most, a desire on the part of Rexam toachieve a DOI of 80 percent in order to meet amanufacturer’s product specifications. As stated bythe Court, a desire is not an enabling conception.The Federal Circuit also accepted the district court’sfinding that a “hair test” performed on Rexam’sproducts, alleged by Rexam to be evidence of aDOI of over 90 percent, was not a reliable test anddid not show prior conception. Further, the Courtconcluded, even if Rexam had made some samplesmeeting the DOI limitation, conception is not com-plete without understanding how the claimed sub-ject matter may be made.

Thus, due at least to Rexam’s inability to showprior recognition of the DOI limitation, Rexam hadnot met its burden of demonstrating earlier concep-tion by a preponderance of the evidence and theFederal Circuit affirmed the award of priority toKodak.

Claim Construction Leaves MostClaims Noninfringed and Invalid

William L. Strauss

[Judges: Schall (author), Mayer, and Lourie]

In Display Technologies, Inc. v. Paul Flum Ideas,Inc., No. 01-1069 (Fed. Cir. Mar. 4, 2002) (non-precedential decision), the Federal Circuit affirmedthe district court’s SJ that certain claims of U.S.Patent No. 5,645,176 (“the ’176 patent”) assignedto Display Technologies, Inc. (“Display”) were

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invalid as either anticipated by or obvious over theprior art and that certain claims of the ’176 patentwere not infringed by Paul Flum Ideas, Inc.’s(“Flum”) beverage dispenser. However, the FederalCircuit vacated the district court’s holding thatclaims 2 and 3 of the ’176 patent were obvious andremanded for further proceedings on that issue.

The ’176 patent is directed to a gravity-fed dis-penser for beverage bottles or cans in a refrigerateddisplay case. As embodied by claim 1, the dis-penser allows a customer to view part of the bottleor can through an aperture, which is defined by thefronts of the two sidewalls of the dispenser, the topof the front of the track on which the containersrest, and the bottom of a front member spacedabove the track. In one embodiment, exemplifiedby claims 2 and 3, the front member is disposedforward of the front of the track. In a secondembodiment, exemplified by claims 14-16 and 21-26, the sidewalls of the dispenser extend below thetrack and provide notches for the “telescopicreceipt” of the front and back members of a sup-port shelf in the display case. These notches permitthe dispenser to be attached to different-sizeshelves.

Display alleged that a dispenser manufacturedby Flum infringed claims 1-4, 7-11, 14-17, and 21-26 of the ’176 patent. After construing the term“aperture” to refer to a two-dimensional rectangu-lar opening, in a first decision, the district courtheld that claim 1 of the patent was anticipated andfound that the Flum device differed from the tele-scoping mechanism of the ’176 patent and, there-fore, did not infringe claims 21-26 of that patent.

In a second decision, the district court heldthat claims 4 and 10 of the ’176 patent were alsoinvalid as anticipated and that claims 2-4, 7-11, and17 were invalid as obvious. The district court alsofound that the Flum dispenser did not infringeclaims 14-16 of the ’176 patent.

On appeal, Display challenged the districtcourt’s construction of the claim term “aperture.”Referring to the specification, Display asserted thatan “aperture” must be a three-dimensional open-ing, not the two-dimensional opening of the districtcourt’s definition.

The Federal Circuit disagreed, observing thatthe specification refers to the aperture as generallyrectangular in outline and states that the full quad-rant displayed has “typically an area of about 10square inches.” The Federal Circuit agreed with thedistrict court that this language was consistent witha two-dimensional, but not with a three-dimension-al “aperture.” The Court also affirmed the holdingthat claims 4, 7-11, and 17 were invalid, since theonly argument regarding these claims that Displaymade on appeal was that the district court had mis-construed the term “aperture.”

As to claims 2 and 3, however, the Federal

Circuit found fault with the district court’s failure toconsider whether the commercial success ofDisplay’s rack could be attributed to the increasedvisibility of the lead item resulting from the positionof the forward member, which created a genuineissue of material fact that precluded SJ that claims 2and 3 were obvious.

Finally, Display challenged the district court’s SJthat the Flum rack did not infringe claims 14-16and 21-26 of the ’176 patent, which require meansfor “telescopic receipt” of the supporting rack. Onappeal, Display argued that the bottom of the Flumdispenser had four recesses that could engage frontor back support rods on the underlying supportrack. According to Display, these recesses couldfunction to telescopically receive the underlyingsupport rack and, therefore, the Flum dispenser lit-erally infringed. Flum countered that the purposeof the recesses was to allow the user to break offportions and, thereby, adjust the size of the dis-penser. Moreover, it was unclear whether therecesses would engage a rod or simply slip off it.

The Federal Circuit rejected Display’s argumentas merely a conclusory assertion unsupported byany evidence to suggest that the recesses serve anyfunctions other than those advanced by Flum andaffirmed the SJ of noninfringement.

Limited Disclosure Supports Means-Plus-Function Limitation

Anthony C. Tridico

[Judges: Clevenger (author), Rader, and Bryson]

In Baker Hughes, Inc. v. Davis-Lynch, Inc., No.01-1377 (Fed. Cir. Mar. 15, 2002) (nonprecedentialdecision), the Federal Circuit affirmed a districtcourt’s grant of SJ for Baker Hughes, Inc. (“Baker”)that the claims of U.S. Patent No. 4,311,314 (“the‘314 patent”) were not indefinite. The Court vacat-ed, however, the district court’s order granting SJ asto the obviousness and on-sale bar defenses ofDavis-Lynch, Inc. (“Davis”), remanding these issuesfor trial.

The ‘314 patent discloses and claims an inflat-able packer for use in the drilling of oil and gaswells. The inflatable packer seals off the surround-ing borehole from a pipe, known as a “mandrel,”and thus isolates the pipe from the surroundingearth. Conventional inflatable packers had a ten-dency to catch on the walls of the borehole, tearingthem away and destroying their utility. The ‘314patent claims an inflatable packer with a grit-likesubstance bonded to the outer surface of the man-drel, making it more likely that the packer will bepulled down with the mandrel rather than catchingon a wall, thus reducing the risk of tearing.

The ‘314 patent was filed on November 20,1980, and was initially assigned to Completion ToolCompany (“CTC”). CTC was acquired by Baker in1995 and Baker subsequently sued Davis for infringe-ment of the ‘314 patent. Davis moved for SJ of inva-lidity based on obviousness, indefiniteness, and theon-sale bar. Baker cross-moved for SJ on the indefi-niteness and on-sale bar issues, but not on obvious-ness, and also moved for partial SJ of infringement.The lower court granted Baker’s motions as to indefi-niteness, the on-sale bar, and infringement, anddenied Davis’s motions on invalidity. The lowercourt’s order was unclear, and the parties disputedwhether SJ was granted for Baker as to obviousness.

The Federal Circuit agreed with the districtcourt’s ruling that claim 1 of the ‘314 patent was notindefinite. At issue was the means-plus-function limi-tation that recites “a means to inflate.” According tothe Federal Circuit, the district court correctly notedthat the port described in the specification is not suf-ficient structure in and of itself to accomplish thefunction of inflating the sleeve, as required by theclaim. However, repeated references in the specifica-tion and claims to an inflatable packer inform one ofordinary skill in the art of the necessary accompany-ing structure to carry out the inflation means.

As to obviousness, the Court concluded thatboth documentary evidence and expert testimonyexisted for the proposition that the use of “grit-like”material was known in the inflatable packer field, andwhile the evidence may not conclusively establish theobviousness of the ‘314 claims, it does suffice to raisea triable issue of material fact. Thus, the FederalCircuit vacated the lower court’s grant of SJ ofnonobviousness and remanded for trial.

The Federal Circuit also vacated and remanded

for trial the lower court’s grant of SJ as to the on-salebar. The district court had found that the evidencedid not tend to show that the complete inventionwas on-sale prior to the critical date since the docu-mentary evidence did not indicate whether the prod-ucts sold were packers and the affidavits were insuffi-ciently corroborated. The Federal Circuit disagreed,explaining that, contrary to the district court’s opin-ion, the case law does not limit the application of theon-sale bar to the use, sale, or offer for sale of a com-plete invention. According to the Federal Circuit, theon-sale bar is triggered by the use, sale, or offer forsale of subject matter which fully anticipated theclaimed invention or would have rendered theclaimed invention obvious by its addition to the priorart. Further, in regard to the district court’s rationalefor limiting the weight assigned to the affidavits, oralcorroboration is evaluated for a number of factors,including the extent, details, and contradiction orimpeachment of the witnesses’ testimony. Thus, theFederal Circuit concluded that when all the pertinentevidence is considered, Davis had offered sufficient,corroborated evidence to create a triable issue ofmaterial fact as to whether the ‘314 patent is invaliddue to an on-sale bar.

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In Last month at The Federal Circuit, certain terms, titles, and names of fed-eral agencies that are frequently referred to in text, appear in abbreviatedforms or as acronyms. These abbreviated forms and acronyms are listed below.

ALJ Administrative Law Judge APJ Administrative Patent Judge Board Board of Patent Appeals and InterferencesCommissioner Commissioner of Patents and Trademarks CIP Continuation-in-PartDJ Declaratory Judgment DOE Doctrine of EquivalentsIP Intellectual PropertyITC International Trade CommissionJMOL Judgment as a Matter of Law MPEP Manual of Patent Examining ProcedurePCT Patent Cooperation TreatyPTO United States Patent and Trademark Office SEC Securities and Exchange CommissionSM Special Master SJ Summary Judgment

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