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Supreme Court Cases (2000-2009) - Patent Law

From lawbrain.com

The Supreme Court has granted cert in a handful of cases in the last decade to help clarify unsettled questions in patent law or to provide guidance to the Federal Circuit (Court of Appeals for the Federal Circuit or CAFC) which is the sole appellate court with jurisdiction to hear appeals from patent law cases.

The list of cases below represents the most significant patent-related decisions and appears with short summaries and links to the full Supreme Court opinions. For more US Supreme Court cases, you may wish to visit the FindLaw US Supreme Court Center


Contents

Bilski v. Doll (argued 2009)

(patent-eligible subject matter)

The statutory framework for all discussions relating to subject matter that can be patented is based in 35 U.S.C. Sec. 101 which states:

"Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title."  The statute has been further teased out with caselaw, so that it is currently understood that ideas, abstractions, formulae and living matter cannot be patented. Some kinds of business methods (which come under the umbrella of process patents) have been deemed to be patentable. The Federal Circuit in State Street Bank[1], made a bright-line rule that would make a business method patent patent eligible if it "produces a useful, concrete and tangible result." In its en banc review of the Bilski case in 2008, the Federal Circuit retreated from this position and attempted to reconcile with an earlier position from the Supreme Court's trilogy of patent-eligibility cases[2], that a business method patent must involve a "machine or transformation."

The Supreme Court granted cert and has heard arguments from both sides but has not yet ruled on the merits.  

Quanta Computer, Inc. v. LG Electronics, Inc. (2008)

(first sale/patent exhaustion)

The Supreme Court unanimously (opinion by Justice Clarence Thomas) ruled that the patent exhaustion doctrine extends to method patents. Additionally, the Court ruled that patent exhaustion can also occur with the sale of components of a system rather than the entire system, as long as the components substantially embody the patented methods.


First sale/patent exhaustion, is a longstanding doctrine that can be pled as an affirmative defense to patent infringement. It provides that the initial authorized sale of a patented item terminates all the patent rights to that item. LG Electronics acquired and licensed its method patents to Intel without restricting the sale (an unconditional sale) of Intel products using the patented technology. Intel, in turn, sold its chip-set to Quanta Computers, which used these in conjunction with non-Intel chips in their computers. LG Electronics sued Quanta Computers alleging that the combination of the Intel and non-Intel chips infringed its patents. The Court found that the Intel chip set sold to Quanta was (a) authorized under the Intel-LG license, and (b) substantially embodied the patented technology. Thus, LGE could not control the post-sale use of its patented technology.


By ruling that the patent exhaustion defense could be asserted in the case, the Court's decision barred LGE's patent infringement suit from going forward.

KSR Int'l Co., v Teleflex, Inc. (2007)

(Obviousness)

35 U.S.C. Section 103 lays out one of the fundamental requirements for patentability of an invention. The section states, in part, that a patent for an invention may not be obtained, "...if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains..."


The CAFC through its jurisprudence had laid out a "teaching-suggestion-motivation (TSM)" framework that a patent examiner needed to analyze obviousness within. The analysis would need to include if there was any teaching, suggestion or motivation to combine prior art that stemmed from the prior art, the nature of the problem being solved or the knowledge of a person with ordinary skill in the art. The Supreme Court, in another unanimous decision (opinion by Justice Anthony Kennedy), ruled that the TSM framework was too restrictive and obviousness questions should not be constrained to such a narrow enquiry. The Court pointed back to the expansive and flexible analysis it had laid out in Graham[3]. The Court pointed out the application of the obviousness analysis that it had conducted in Adams[4], Anderson's Black Rock[5] and Sakraida[6], three cases that followed Graham

Post-KSR the obviousness analysis is generally a two-step enquiry.

  1. Would the prior art have motivated those of ordinary skill in the art to make the claimed invention? and
  2. Would a person of ordinary skill in the art making the claimed invention, based on the prior art, have a reasonable expectation of success ?

MedImmune, Inc., v. Genentech, Inc. (2007)

(patent licensee's right to sue to invalidate patent); 

MedImmune, Inc. and Genentech, Inc. entered into a patent license agreement that covered Genetech's then-pending patent application which matured into the "Cabilly II" patent, in addition to other patents. After it was granted the Cabilly II patent, Genentech sent MedImmune a letter stating that the latter's drug, Synagis, was covered by the Cabilly II patent, and MedImmune owed royalties for manufacturing Synagis under the license agreement. Although MedImmune believed no royalties were due because the patent was invalid and unenforceable and because Synagis did not infringe the patent's claims, MedImmune considered the letter a clear threat to enforce the patent, terminate the license agreement, and bring a patent infringement action if it did not pay. Because such an action could have resulted in MedImmune's being ordered to pay treble damages and attorney's fees and enjoined from selling Synagis, which accounts for more than 80 percent of its sales revenue, MedImmune paid the royalties under protest and filed this action for declaratory and other relief. The District Court dismissed the declaratory-judgment claims for lack of subject-matter jurisdiction because, under Federal Circuit precedent, a patent licensee in good standing cannot establish a constitutional Article III "case or controversy" with regard to the patent's validity, enforceability, or scope. The Federal Circuit affirmed.

The Supreme Court in an 8-1 decision (Opinion by Justice Antonin Scalia, Dissent by Justice Clarence Thomas), reversed the Federal Circuit's decision ruling that MedImmune was not required, insofar as Article III is concerned, to break or terminate its 1997 license agreement before seeking a declaratory judgment in federal court that the underlying patent was invalid, unenforceable, or not infringed.

Microsoft Corp., v. AT&T Corp.  (2007)

(transnational patent law)


In a patent infringement suit brought by AT&T charging Microsoft with liability for foreign installations of Windows under 35 U.S.C. section 271(f), rulings holding Microsoft liable are reversed as, because Microsoft does not export from the U.S. copies of Windows installed on the foreign-made computers in question, it does not "suppl[y]...from the United States" "components" of those computers, and it is therefore not liable under section 271(f).

eBay, Inc. v. MercExchange, LLC (2005)

(permanent injunctions)

The traditional four-factor test applied by courts of equity when considering whether to award permanent injunctive relief to a prevailing plaintiff applies to disputes arising under the Patent Act. A judgment reversing the denial of a motion for permanent injunctive relief in a patent infringement case against eBay is vacated where neither court below correctly applied the traditional four-factor framework that governs an award of injunctive relief.

Festo Corp., v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd. (2002)

(doctrine of equivalents)

Prosecution history estoppel may apply to any claim amendment made to satisfy the Patent Act's requirements, not just to amendments made to avoid the prior art, but estoppel need not bar suit against every equivalent to the amended claim element.


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 Prosecution history estoppel is a limit on the doctrine of equivalents. Under Festo, the Court makes it clear that a narrowing amendment made in proceedings in the PTO during the application process to satisfy any requirement of the Patent Act may give rise to an estoppel. The patentee is presumed to have given up the right to argue the doctrine of equivalents for anything that falls between the original and the amended claim.

  1. State Street Bank & Trust Co. v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998)
  2. Gottschalk v. Benson, 409 U.S. 63 (1972), Parker v. Flook, 437 U.S. 584 (1978), and Diamond v. Diehr, 450 U.S. 175 (1981).
  3. Graham v. John Deere Co., 383 U.S. 1 (1966)
  4. United States v. Adams, 383 U.S. 39 (1966).
  5. Anderson's Black Rock, Inc. v. Pavement Co., 396 U.S. 57 (1969).
  6. Sakraida v. Ag Pro, Inc., 425 U.S. 273 (1976).

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