Patent Law

Cases, Problems, and Materials

3rd Edition 2023

Jonathan S. Masur

John P. Wilson Professor of Law, David and Celia Hilliard Research Scholar,
Director of the Wachtell, Lipton, Rosen & Katz Program in Behavioral Law,
Finance and Economics

University of Chicago Law School

Lisa Larrimore Ouellette

Deane F. Johnson Professor of Law

Stanford Law School

 For generous comments on earlier versions of this casebook, we are grateful to
Michael Abramowicz, Bernard Chao, Thomas Cotter, Tabrez Ebrahim, Janet Freilich,
Dmitry Karshtedt, Amy Landers, Mark Lemley, Doug Melamed, Amy Motomura,
Jason Rantanen, Jason Reinecke, David Schwartz, Jacob Sherkow, Marketa Trimble,
Heidi Williams, Stephen Yelderman, Samantha Zyontz, and participants at the Notre
Dame Patent Colloquium. Special thanks to the Honorable Timothy B. Dyk for his
time and thoughtful suggestions. Thanks also to Gabrielle Dohmen, Hayk
Esaghoulyan, Mila Gauvin, Trip Henningson, Yiwei Jiang, Casey Lincoln, Yiming
Sun, and Elizabeth Trujillo for extraordinary research assistance.

We would like to thank Kavita, Kiran, and Alice for their inspiring and
unending curiosity. We hope that your love of science never fades and your love of law
never grows.

© 2023, Jonathan S. Masur & Lisa Larrimore Ouellette

This work is licensed under a Creative Commons

Attribution-NonCommercial-NoDerivatives 4.0 International License.

Excerpts from cases, statutes, the MPEP, and other government works are in
the public domain. Other excerpted materials are used with permission or under the
fair use provisions of 17 U.S.C. § 107. We have restricted the creation of derivative
works, but we are likely willing to authorize many derivative uses—please contact us
to discuss ([email protected], [email protected]).

When editing cases and the MPEP, our goal has been pedagogical clarity, not
Bluebook-compliant accuracy. We have frequently dropped citations and portions of
text without the usual ellipses and brackets where they seemed more cumbersome
than helpful. As James Grimmelmann explained in his own free IP casebook, “These
are pedagogical materials, not a legal brief. If it matters to you what the original said,
consult the original.”
4 MASUR & OUELLETTE ⋅ PATENT LAW

Contents

I. OVERVIEW ............................................................................................................. 10

1. The Patent System and Patent Claims ................................................. 10

A. U.S. Patent Institutions ..................................................................................................... 13
B. Patent Practice .................................................................................................................... 20
C. Locating Patent Documents: An Online Exercise ............................................................. 22
D. Patent Claims and Claim Construction ............................................................................ 25
Practice Problems: Patent Claims .............................................................................. 31
Claim Drafting Exercise: Spikeball ............................................................................ 32
E. Economics of Patent Law ................................................................................................... 33
F. Innovation and Inequality .................................................................................................. 39
1. Inequality Among Innovators .......................................................................................39
2. Inequality in Access to Innovation ................................................................................40

II. PATENTABILITY .................................................................................................. 43

2. Novelty .......................................................................................................... 47
A. The America Invents Act and Prior Art Timing ............................................................... 49
1. Pre- and Post-AIA § 102 Statutory Text .......................................................................52
2. The Structure of Pre- and Post-AIA § 102 ....................................................................55
Practice Problems: Pre- and Post-AIA § 102 Timing ................................................. 58
B1. Paper Prior Art: Printed Publications & Patents ........................................................... 60
1. Printed Publications ......................................................................................................61
Practice Problems: Printed Publications .................................................................... 64
2. Patents as Prior Art .......................................................................................................64
Practice Problems: Patents as Prior Art..................................................................... 66
3. “Known . . . by Others” and “Otherwise Available to the Public” ...............................66
4. The Enablement Standard for Paper Prior Art............................................................67
B2. Real-World Prior Art: In Public Use & On Sale .............................................................. 70
1. Public Use .......................................................................................................................71
Netscape Communications v. Konrad, 295 F.3d 1315 (Fed. Cir. 2002) ..................... 72
Motionless Keyboard v. Microsoft, 486 F.3d 1376 (Fed. Cir. 2007) ........................... 75
Practice Problems: Public Use .................................................................................... 79
2. The Enablement Standard for Real-World Prior Art...................................................80
3. On Sale ...........................................................................................................................82
Pfaff v. Wells Electronics, 525 U.S. 55 (1998) ............................................................. 83
4. Trade Secrets and Third-Party Rules ...........................................................................89
Secret Sales and Secret Commercial Use ................................................................... 89
Quest Integrity USA v. Cokebusters USA, 924 F.3d 1220 (Fed. Cir. 2019) ............... 91
Note on Secret Commercial Use ................................................................................. 93
Third-Party Rules ........................................................................................................ 94
W.L. Gore & Associates v. Garlock, 721 F.2d 1540 (Fed. Cir. 1983) ......................... 94
 TABLE OF CONTENTS 5

Nat’l Rsch. Development v. Varian Assocs., 30 U.S.P.Q.2d 1537 (Fed. Cir. 1994) ... 96
Note on Third-Party Rules .......................................................................................... 99
Practice Problem: Third-Party Rules........................................................................ 102
5. Public Disclosure and the AIA Third-Party Grace Period .........................................103
Practice Problems: Third-Party AIA Grace Period .................................................. 104
B3. Earlier Invention as Prior Art Under Pre-AIA § 102(g) ............................................... 105
1. Conception and Reduction to Practice ........................................................................107
Practice Problems: Conception and Reduction to Practice ...................................... 107
2. Reasonable Diligence ...................................................................................................108
Practice Problems: Reasonable Diligence ................................................................. 110
3. Abandonment, Suppression, Concealment .................................................................111
Practice Problems: § 102(g) ....................................................................................... 115
C. The Anticipation Analysis ................................................................................................ 116
1. Anticipation Claim Charts ..........................................................................................116
Everything Baseball v. Wilson Sporting Goods, 611 F. Supp. 2d 832 (N.D. Ill. 2009)
.................................................................................................................................... 119
Practice Problem: Creating an Anticipation Claim Chart ...................................... 122
2. Accidental and Inherent Anticipation ........................................................................124
In re Seaborg, 328 F.2d 996 (C.C.P.A. 1964) ............................................................ 125
Schering Corp. v. Geneva Pharmaceuticals, 339 F.3d 1373 (Fed. Cir. 2003) ......... 127
Practice Problems: Accidental and Inherent Anticipation ...................................... 131

3. Nonobviousness ........................................................................................ 133

A. Applying the Graham Test ............................................................................................... 134
KSR International v. Teleflex, 550 U.S. 398 (2007) ................................................. 136
KSR Claim Chart Exercise........................................................................................ 146
Practice Problems: § 102 Review and § 103 Warm Up ............................................ 149
Practice Problem: Creating an Obviousness Claim Chart ...................................... 150
B. Secondary Considerations ................................................................................................ 152
Apple v. Samsung Electronics, 839 F.3d 1034 (Fed. Cir. 2016) (en banc) .............. 153
Practice Problems: Post-KSR Federal Circuit Cases on Nonobviousness .............. 165

4. Utility and Disclosure ............................................................................. 168

A. Utility ................................................................................................................................ 170
In re ’318 Patent Infringement Litigation, 583 F.3d 1317 (Fed. Cir. 2009) ............ 172
B. Enablement ....................................................................................................................... 180
The Incandescent Lamp Patent, 159 U.S. 465 (1895) .............................................. 180
Amgen v. Sanofi, 143 S. Ct. 1243 (2023) .................................................................. 187
Idenix Pharmaceuticals v. Gilead Sciences, 941 F.3d 1149 (Fed. Cir. 2019) .......... 193
Applying the Undue Experimentation Standard: Excerpts from MPEP § 2164 .... 202
Practice Problems: Enablement ................................................................................ 204
C. Written Description .......................................................................................................... 205
Gentry Gallery v. Berkline, 134 F.3d 1473 (Fed. Cir. 1998) .................................... 206
Ariad Pharmaceuticals v. Eli Lilly, 598 F.3d 1336 (Fed. Cir. 2010) (en banc)....... 210
Idenix Pharmaceuticals v. Gilead Sciences, 941 F.3d 1149 (Fed. Cir. 2019) .......... 220
Applying the Possession Test: Excerpts from MPEP § 2163 ................................... 222
Practice Problems: Written Description ................................................................... 225
Note on Distinguishing Utility, Enablement, and Written Description ................. 226
6 MASUR & OUELLETTE ⋅ PATENT LAW

5. Definiteness and Functional Claiming ............................................... 231

A. The Standard for Definiteness ......................................................................................... 231
Nautilus v. Biosig Instruments, 572 U.S. 898 (2014) ............................................... 231
Practice Problems: Applying the Nautilus Indefiniteness Standard ...................... 239
B. Definiteness for Means-Plus-Function Claim Elements ................................................ 242
1. Does § 112(f) Apply to a Claim Limitation?................................................................243
Practice Problem: Does § 112(f) Apply? .................................................................... 246
2. Does a § 112(f) Limitation Have a Corresponding Structure? ..................................246
Practice Problem: Definiteness and Functional Claims .......................................... 249

6. Patentable Subject Matter ..................................................................... 252

A. Laws of Nature, Natural Phenomena, and Products of Nature ..................................... 254
Mayo Collaborative Services v. Prometheus Laboratories, 566 U.S. 66 (2012) ....... 254
Association for Molecular Pathology v. Myriad Genetics, 569 U.S. 576 (2013) ...... 267
Nat. Alternatives Int’l v. Creative Compounds, 918 F.3d 1338 (Fed. Cir. 2019) .... 274
Applying the Two-Step Test to “Nature” Claims: MPEP § 2106............................. 281
Practice Problems: Laws of Nature and Products of Nature .................................. 284
B. Abstract Ideas ................................................................................................................... 286
Alice Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014).................................................. 287
Enfish v. Microsoft, 822 F.3d 1327 (Fed. Cir. 2016)................................................. 294
ChargePoint v. SemaConnect, 920 F.3d 759 (Fed. Cir. 2019) .................................. 301
USPTO Guidance on Abstract Ideas: MPEP § 2106 ................................................ 308
American Axle and the State of Patent Eligibility at the Federal Circuit.............. 311
Practice Problems: Abstract Ideas ............................................................................ 312

7. Inventorship and Double Patenting .................................................... 315

A. Inventorship ...................................................................................................................... 315
Burroughs Wellcome v. Barr Laboratories, 40 F.3d 1223 (Fed. Cir. 1994) ............. 317
B. Double Patenting .............................................................................................................. 326
Practice Problem: Inventorship, Double Patenting, and § 102 Review .................. 331

III. INFRINGEMENT .............................................................................................. 332

8. Claim Construction ................................................................................. 334

Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc) ........................... 335

9. Direct Infringement ................................................................................ 350

A. Literal Infringement ......................................................................................................... 350
Exercise: Unique Concepts, Inc. v. Brown, 939 F.2d 1558 (Fed. Cir. 1991) ............ 350
Exercise: Brookhill-Wilk 1 v. Intuitive Surgical, 334 F.3d 1294 (Fed. Cir. 2003) .. 352
Exercise: K-2 Corp. v. Salomon S.A., 191 F.3d 1356 (Fed. Cir. 1999) .................... 354
B. Infringement by Equivalents ........................................................................................... 355
1. Determining Equivalency ............................................................................................356
2. Prosecution History Estoppel ......................................................................................359
Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722 (2002) ......... 359
Additional Limitations on Equivalents .................................................................... 370
 TABLE OF CONTENTS 7

An Infringement–Validity Flow Chart ..................................................................... 373

10. Indirect Infringement ........................................................................... 374

A. Contributory Infringement............................................................................................... 375
Aro Mfg. v. Convertible Top Replacement (“Aro II”), 377 U.S. 476 (1964) .............. 375
B. Inducement ....................................................................................................................... 381
Sanofi v. Watson Labs. Inc., 875 F.3d 636 (Fed. Cir. 2017)..................................... 381
Note on Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011) ................ 387

11. Other Infringement Issues ................................................................... 393

A. Divided Infringement ....................................................................................................... 393
Limelight Networks v. Akamai Techs., 572 U.S. 915 (2014).................................... 394
Akamai Techs. v. Limelight Networks, 797 F.3d 1020 (Fed. Cir. 2015) (en banc) . 398
Practice Problems: Divided Infringement ................................................................ 401
B. Cross-Border Infringement .............................................................................................. 402
C. Government Infringement................................................................................................ 407
1. Federal Government ....................................................................................................407
2. State Governments ......................................................................................................409
3. Native Nations .............................................................................................................410
D. Pharmaceutical Infringement and the FDA ................................................................... 412
Infringement Review Exercise .................................................................................. 419

12. Defenses ................................................................................................... 420

A. Invalidity and Noninfringement ...................................................................................... 420
B. Licenses and Exhaustion .................................................................................................. 422
Keurig v. Sturm Foods, 732 F.3d 1370 (Fed. Cir. 2013) .......................................... 423
Impression Products v. Lexmark International, 581 U.S. 360 (2017) ..................... 425
C. Inequitable Conduct ......................................................................................................... 433
D. Patent Misuse and Antitrust Violations ......................................................................... 436
E. Prior User Rights .............................................................................................................. 438
F. Experimental Use ............................................................................................................. 439
G. Laches................................................................................................................................ 441
Practice Problems: Defenses ..................................................................................... 442

IV. REMEDIES .......................................................................................................... 443

13. Injunctions............................................................................................... 444

eBay v. MercExchange, 547 U.S. 388 (2006) ............................................................. 444
Practice Problems: Injunctions ................................................................................. 454

14. Lost Profits Damages ............................................................................ 456

Rite-Hite v. Kelley Co., 56 F.3d 1538 (Fed.Cir.1995) (en banc) ............................... 460
Grain Processing v. American Maize-Products, 185 F.3d 1341 (Fed. Cir. 1999) .... 470
Practice Problems: Lost Profits Damages ................................................................ 480

15. Reasonable Royalties ............................................................................ 482

8 MASUR & OUELLETTE ⋅ PATENT LAW

LaserDynamics v. Quanta Computer, 694 F.3d 51 (Fed. Cir. 2012) ....................... 482

16. Enhanced Damages and Attorneys’ Fees ......................................... 500

A. Enhanced Damages .......................................................................................................... 500
Halo Electronics v. Pulse Electronics, 579 U.S. 93 (2016) ....................................... 500
Practice Problems: Enhanced Damages ................................................................... 511
B. Attorneys’ Fees.................................................................................................................. 512
Practice Problems: Attorneys’ Fees .......................................................................... 514

V. U.S. AND INTERNATIONAL PATENT SYSTEMS .................................. 515

17. U.S. Patent Litigation Procedure ....................................................... 515

A. Jurisdiction, Standing, and Venue .................................................................................. 515
B. Patent Local Rules ............................................................................................................ 520
C. Post-Issuance Review at the USPTO ............................................................................... 522
D. Litigation at the International Trade Commission ........................................................ 526
E. Alternative Dispute Resolution........................................................................................ 527
Practice Problems: Patent Litigation Procedure ...................................................... 529

18. Patent Licensing and Transactions ................................................... 530

A. Standards-Essential Patents, FRAND Licensing, Patent Pools, and Monopoly ........... 531
B. Kimble v. Marvel and the Structure of Licenses ............................................................. 533
C. Patents in Mergers, Acquisitions, and Other Deals ....................................................... 534
D. Assignor Estoppel ............................................................................................................. 536

19. Other U.S. Intellectual Property Rights ........................................... 538

A. Non-Patent IP ................................................................................................................... 539
1. Trade Secrets................................................................................................................539
2. Copyright ......................................................................................................................540
3. Trademark ....................................................................................................................542
B. Design Patents .................................................................................................................. 544
1. Claiming and Disclosing Design Patents ...................................................................545
2. Novelty and Nonobviousness.......................................................................................545
3. Ornamentality ..............................................................................................................546
4. Design Patent Infringement ........................................................................................547
5. Design Patent Damages ..............................................................................................547
Practice Problems: Designs ....................................................................................... 549
C. Plant Protection ................................................................................................................ 550
1. Plant Patents................................................................................................................550
2. Plant Variety Protection Certificates .........................................................................551

20. International and Comparative Patent Law ................................... 552

A. International Patent Institutions and Treaties .............................................................. 553
1. WIPO, WTO, and Other Fora ......................................................................................553
2. Paris Convention and TRIPS: Basic Principles..........................................................557
Practice Problems: Basic Principles of Paris and TRIPS ........................................ 558
 TABLE OF CONTENTS 9

3. Justifying International Patent Coordination ...........................................................559

B. Acquiring Multinational Patent Rights with the PCT ................................................... 563
C. Pre-Grant Flexibilities: Comparative Patent Validity ................................................... 567
Practice Problem: Patentable Subject Matter in the USPTO and EPO ................. 570
D. Post-Grant Flexibilities: Rights, Exceptions, and Remedies ......................................... 570
1. Rights............................................................................................................................570
2. Exceptions ....................................................................................................................571
3. Remedies ......................................................................................................................573
E. Coordinating Multinational Patent Litigation ................................................................ 575
1. Choosing Among Forums.............................................................................................576
Where Can You File? ................................................................................................. 576
Where Should You File? ............................................................................................ 576
Is Alternative Dispute Resolution a Better Option? ................................................ 578
2. Advising a Hypothetical Client ...................................................................................579
3. Case Study: Apple v. Samsung Smartphone Patent Wars ........................................580
10 MASUR & OUELLETTE ⋅ PATENT LAW

I. Overview

1. The Patent System and Patent Claims

A patent is a government-granted intellectual property right over a new
invention, which can range from a new pharmaceutical to a software algorithm.
Patents don’t cover new works of art, music, or literature, such as the new Taylor
Swift album (which is all three)—those are the subject of copyright. They don’t cover
brand names or symbols, like the Nike swoosh—those are the subject of trademark.
Instead, patent law covers only inventions: tangible objects that have practical
purposes, or methods of accomplishing some sort of useful purpose.1

As you may recall from 1L Property, “property” can be understood as a bundle

of different rights, often referred to with the “bundle of sticks” metaphor. Intellectual
property is no different. The most important right in the patent owner’s bundle is the
right to exclude others. A patent does not provide an affirmative right to make or use
the invention it describes, and many patent owners do not in fact produce their
inventions. Rather, the owner of a patent can prevent others from making, using, or
selling the invention during the life of the patent, which typically lasts twenty years
from when the patent application is filed.

This right applies not only to whatever the inventor actually made—it also
covers all other uses of the invention, including future uses not contemplated by the
inventor. For instance, suppose Xavier invents a new type of lawnmower that is
excellent at cutting grass and obtains a patent on it. Xavier’s patent only discusses
the use of this lawnmower for mowing lawns and its virtues as a grass-cutting device.
Ten years later, however, Jamilla figures out that Xavier’s lawnmower can be used to
transport humans to Mars. (Don’t ask.) Xavier’s patent covers the use of the
lawnmower in this fashion. If Jamilla starts a company that uses the lawnmower for
Mars transport, she must obtain a license from Xavier or face a lawsuit for
infringement.

The basic rationale for granting inventors these exclusionary rights is to

provide incentives to create new inventions in the first place. The problem for
innovators is that it is frequently much more expensive to create a new invention in
the first place than it is to copy one. Imagine a firm that spends a substantial amount

1 In addition to patents on inventions, sometimes called utility patents, there are also
design patents on new ornamental designs and plant patents on new plant varieties. In 2020,
the U.S. Patent and Trademark Office granted 352,049 utility patents, 34,877 design patents,
and 1,398 plant patents. This casebook focuses on utility patent law.
 OVERVIEW 11

of money researching and developing a new invention, such as a prescription drug,

and then begins selling it. Competitors could swoop in, copy the drug, and then sell it
at a lower price. These competitors would bear only the cost of producing the drug
itself. They would not have to recoup any initial expenditures in R&D. (Think about
how much cheaper it usually is to buy the generic version of a drug than the brand-
name version.) Accordingly, the competitors could undercut the firm that invented the
drug and force it out of business (or cause it to lose money). With the looming threat
of being undersold like this, what firm would want to invest in R&D in the first place,
knowing that it might never recoup its investment? The result could be a reduction in
innovation, to all of our detriment.

Patent law solves this problem by giving the inventor a right to exclude
competitors for a limited period. This prevents it from being undersold, allows it to
charge higher prices, and thereby enables it to recoup its R&D investments. Patents
thus make it more profitable for a firm to invest in innovation. This economic rationale
is explored in more detail later in this chapter.

Because patent law constantly must adapt to new technologies, it is one of the
most dynamic areas of legal practice, and it has grown in importance as the global
economy becomes increasingly reliant on technology-based industries. Patent law can
be used to both enforce and subvert structural inequalities, and it is hard to
understand the modern economy—including venture capital, corporate deals, and
international trade—without understanding patent law and its reach. It is also a field
in which any law student can excel: a technical background is not required for patent
litigation or transactional work.

We begin this casebook with an overview of the legal institutions that compose
the patent system, its underlying economic justifications, and its effects on global
inequality. This overview includes examples of the basic architecture of a patent and
an introduction to drafting patent claims, which define the boundaries of the legal
rights protected by a patent. For example, a simple patent claim for a pencil might
read as follows:

Chapters 2–7 then focus on the legal requirements for obtaining a patent. Most
importantly, a claimed invention must be novel and nonobvious when compared with
12 MASUR & OUELLETTE ⋅ PATENT LAW

everything available to the public that preceded it, including earlier publications,
patents, and other inventions that have been sold or used. The collection of
information available to the public before a patent application is filed is known as the
prior art. For example, our pencil claim might be rejected as an obvious combination
of prior art erasers and wooden cylinders with graphite cores. The patent document
also must disclose technical details about how to make and use the claimed invention
to prevent inventors from receiving legal rights broader than what they actually
contributed. The inventor of a wooden pencil thus cannot receive a patent claim
covering the future development of pens.

Chapters 8–12 cover patent infringement and defenses. We begin with a

module on claim construction, the critical process of determining what the technical
language of a patent claim actually covers. For example, does a pencil made from a
wood-plastic composite infringe a claim covering pencils with a “wooden holder”?
Again, the owner of a valid patent claim can prevent others from directly exploiting
the invention—including by making, using, or selling it—or from indirectly inducing
or contributing to infringement by others. And there are limited defenses to patent
infringement; it typically doesn’t matter if the infringer was unaware of the patent or
was using the invention for research, and there is no patent equivalent to copyright
fair use.

Chapters 13–16 examine the remedies patent owners can receive if their
patents are valid and infringed. In some cases, the patent owner can obtain an
injunction to block infringers from making, using, or selling the patented invention.
But injunctions to stop the infringing conduct are not guaranteed, especially if the
patent is on a small component of a complex product, so courts are often tasked with
calculating money damages for both past and future infringement. Damages are
intended to return patent holders to the position they would have been in but for the
infringement, which can include lost profits that a patentee would have made or a
reasonable royalty that a patentee and infringer would have agreed to. Patent owners
can also receive attorneys’ fees and enhanced damages in exceptional cases.

In Chapter 17, we explain additional details of U.S. patent litigation procedure.

Patent practitioners should be familiar with the patent procedural rules many federal
district courts have adopted, the options for challenging the validity of granted
patents at the U.S. Patent and Trademark Office (USPTO), the procedures for
litigating patents covering imported goods at the International Trade Commission,
and alternative dispute resolution.

Chapter 18 briefly reviews the law surrounding patent licensing and

transactions. Although this casebook focuses on patent litigation, most uses of
patented technology involve voluntary licenses rather than formal judicial
proceedings. For the most part, licenses are evaluated under standard contract
principles, but there are some specialized concerns that stem from patent
 OVERVIEW 13

transactions, including in the context of standards-essential patents (SEPs) and

agreements to license under fair, reasonable, and non-discriminatory (FRAND) terms.

Patents on useful inventions, the focus of this casebook, are sometimes called
utility patents. Chapter 19 provides a brief overview of the most prominent forms of
non-patent IP (trade secrets, copyright, trademark, and regulatory exclusivity), as
well as the two other kinds of U.S. patents: design patents on new ornamental designs
and plant patents on new plant varieties. Many of the rules of patent validity and
infringement are the same for all three types of patents, but we highlight some
important differences.

This casebook focuses on U.S. patent law, but in Chapter 20 we turn to the
increasingly global nature of the patent system. Under international treaties—
particularly the Agreement on Trade-Related Aspects of Intellectual Property Rights
(TRIPS) administered by the World Trade Organization—almost every country must
grant patents for new, nonobvious, and useful inventions in all fields of technology,
including to foreign inventors. Since 2008, foreign inventors have filed for more U.S.
patents each year than American inventors have. In turn, U.S. inventors file nearly
as many patents in other countries as they do in the United States. The five largest
patent offices—in China, the United States, Japan, Korea, and Europe—collectively
employ more than 27,000 patent examiners who are tasked with evaluating over 2.7
million patent applications filed each year. U.S. patent lawyers regularly need to
advise clients on acquiring, licensing, and litigating patents across the globe.

A. U.S. Patent Institutions

U.S. patent law is centered around two institutions: the U.S. Patent and
Trademark Office (USPTO), an agency within the Department of Commerce, and the
Court of Appeals for the Federal Circuit, which is unique among the thirteen federal
circuit courts in having a jurisdiction based entirely on subject matter—including
patent law—rather than geography.

The Life of a Patent

As illustrated below, the life of a patent begins when a patent application is

filed by an inventor with the USPTO. Inventors often file patent applications for
multiple aspects of a potential new product, with the number of patents per product
scaling with complexity. A simple chemical used as a pharmaceutical might be covered
by a handful of patents, while a smartphone may be covered by tens or hundreds of
thousands.
14 MASUR & OUELLETTE ⋅ PATENT LAW

Filing a patent involves a fee, typically a few thousand dollars, depending upon
the size of the party filing for the patent and the complexity of the application. The
inventor is often represented by a professional known as a “patent prosecutor,” who
can be an attorney (also referred to as a “patent attorney”) or a non-lawyer who has
been licensed to practice before the USPTO (also known as a “patent agent”).2 The
patent application is initially assigned to an examiner within the agency, who
possesses technical expertise in the appropriate field of technology and is tasked with
determining whether the application meets the necessary criteria for patentability.
The period when an application is pending at the USPTO is known as “patent
prosecution.”

The USPTO receives over 500,000 utility patent applications each year, and
examiners are often pressed for time when reviewing each one. The typical examiner
spends an average of 19 hours reviewing each patent application, including the time
to search for prior art and write rejections and responses to the applicant’s arguments.
Empirical evidence suggests that these time constraints cause examiners to
erroneously grant too many invalid patents. See Michael D. Frakes & Melissa F.
Wasserman, Is the Time Allocated to Review Patent Applications Inducing Examiners
to Grant Invalid Patents?: Evidence from Micro-Level Application Data, 99 Rev. Econ.
& Stat. 550 (2017).

2 To become a patent prosecutor, one must pass the registration examination,

colloquially known as the patent bar, a test administered by the USPTO that is analogous to
the bar exams administered by the states. An applicant must have scientific or technical
training to sit for the patent bar. But fear not, philosophy majors: this is the only job in patent
law that requires a technical degree. Many of the greatest patent litigators in the country—
the people who argue patent cases in federal court—have no technical background.
 OVERVIEW 15

Errors in patent grants also stem from examiners’ limited experience in the
technical fields they examine and difficulty searching for non-patent prior art. Patents
are not “peer reviewed,” the way that scientific publications are, and there have been
many suggestions for adding a peer review component to the patent system. A recent
study has shown, however, that doing so would create considerable expense and yield
relatively modest benefits. See Daniel E. Ho & Lisa Larrimore Ouellette, Improving
Scientific Experiments in Law and Government: A Field Study of Patent Peer Review,
17 J. Emp. Leg. Stud. 190 (2020).

Perhaps even more importantly, patent prosecution is ex parte: at this stage,

there is no party opposing the patent application and offering evidence and arguments
as to why the patent should not be granted. The only parties involved in examination
are the USPTO and the applicant.3 That means that it is very common for patent
examiners to miss key pieces of evidence when a patent is being examined, only for
those pieces of evidence to come to light years later when a motivated (and well-
funded) counter-party challenges a patent’s validity.

Patent applications usually remain secret for 18 months after they are filed, at
which point they typically are published and become part of the public record.4 In
many cases, a patent examiner does not even begin to look at the patent until the 18-
month mark has passed. However, patent applicants can pay an additional fee for
expedited examination,5 which moves them to the front of the line and spurs action
more quickly.

If the examiner determines that the application is legally flawed in some

manner, the application is sent back to the applicant with a description of the problem
(in what is known as an “office action”). The applicant can then respond to the
objection, such as by amending the claims or arguing that the examiner is mistaken.
The back and forth of patent examination generates a written record, which remains
associated with the patent in perpetuity.6 The written examination record is typically
referred to as the patent’s “prosecution history,” or sometimes the “file wrapper.” (The
latter name comes from the fact that the documents were attached to the outside of
the file that contained the patent document.) Prosecution history will be relevant to
several patent infringement doctrines.

3 Under a limited and little-used exception, within six months of an application’s

publication, a third party may submit relevant prior art along with a concise description of its
relevance for consideration by the patent examiner. See 35 U.S.C. § 122(e).
4 For the roughly 50% of applications without foreign counterparts, applicants can opt

out of publication at 18 months, but only about 10% of applicants do so. See 35 U.S.C. § 122(b).
5 Options for expediting examination include the “Accelerated Examination”
introduced in 2006, which has low fees but requires high effort, and the “Track One Prioritized
Examination” system introduced in 2011, which requires less effort but has high fees and an
annual cap.
6 These written records can be found here: https://patentcenter.uspto.gov/.
16 MASUR & OUELLETTE ⋅ PATENT LAW

Notably, even after multiple salvos back and forth with a patent applicant,
U.S. patent examiners—unlike most foreign counterparts—do not have the authority
to reject a patent application with finality. An examiner can issue a “final rejection,”
but applicants have numerous options to continue the examination process, often by
paying an additional fee. In theory, an applicant could continue amending an
application and re-filing it in perpetuity. The downside of this approach for applicants
is that it would involve substantial costs (in filing fees and attorney payments) and
delay, and the patent applicant might be forced to amend the patent in a manner she
does not wish. Accordingly, a patent applicant can appeal a patent examiner’s denial
to a tribunal within the USPTO: the Patent Trial and Appeal Board (PTAB). (This
tribunal was previously known as the Board of Patent Appeals and Interferences
(BPAI), and you will see that name crop up occasionally in older cases.) The PTAB is
staffed by administrative “patent judges,” and they have the power to reverse an
examiner’s decision and send the application back to the examiner for allowance.

If the PTAB affirms the examiner’s rejection, the applicant may appeal further
to the Court of Appeals for the Federal Circuit, the second institution around which
patent law orbits. The Federal Circuit is an Article III court of appeals that sits in
Washington, D.C. (not to be confused with the D.C. Circuit) and has exclusive
jurisdiction over all appeals in cases arising under the Patent Act (as well as over an
assortment of other cases). Every appeal from every patent case around the country
goes to the Federal Circuit, not to the regional courts of appeal (the 7th Circuit, 9th
Circuit, etc.). In addition, appeals from denials by the PTAB go directly to the Federal
Circuit, without passing through the lower federal courts.7 The Federal Circuit was
created in 1982; before then, appeals from the BPAI (the predecessor to the PTAB)
went to the Court of Customs and Patent Appeals, and appeals from other patent
cases were sent to the regional circuits. If the patent applicant loses before the Federal
Circuit, she may seek certiorari from the United States Supreme Court. The Supreme
Court has shown considerable interest in patent law in recent years, with an average
of over three patent cases per year since 2010.8

The animating principle behind the creation of the Federal Circuit was the idea
that patent law should be uniform throughout the country. Congress believed that it
would cause too many problems for inventors and innovative firms if patent law in
California differed from patent law in Illinois. As you proceed through this course, you
should consider three questions: (1) Was Congress right to view patent law as more in
need of national uniformity than other areas of federal law, such as employment law
or securities law? (2) Has the Federal Circuit succeeded in bringing national
uniformity to the law? (3) What are the costs of judicial specialization?

7 Applicants may first file in the U.S. District Court for the Eastern District of Virginia
if they wish to gather additional evidence before appealing to the Federal Circuit, but this is
relatively uncommon. See 35 U.S.C. § 145.
8 For a list, see https://writtendescription.blogspot.com/p/patents-scotus.html.
 OVERVIEW 17

Note that the ex parte nature of patent examination means that only the
applicant can appeal, and thus only patent denials are ever appealed. If the USPTO
incorrectly grants a patent, there is no party on the other side to appeal the grant.
This asymmetry has the potential to introduce distortions in the law, as it offers the
Federal Circuit more opportunities to grant patents that were initially denied and
fewer opportunities to invalidate patents that were initially granted. See Jonathan
Masur, Patent Inflation, 121 Yale L.J. 470 (2011). But see Lisa Larrimore Ouellette,
What Are the Sources of Patent Inflation?, 121 Yale L.J. Online 347 (2011).

The typical patent takes approximately two years to be granted by the USPTO.
For the patent to be granted, the patent applicant must pay an issuance fee. The now-
patent owner must also pay additional maintenance fees 3.5, 7.5, and 11.5 years after
the patent was issued to keep the patent in force. Failure to pay any of these fees
renders the patent unenforceable against infringers. These fees—which can be quite
substantial, in the thousands of dollars—do not really exist to cover the cost of
“maintaining” the patent (which involves trivial expense). Rather, they are used by
the USPTO to cover the costs of examination and of the office more generally. Because
they are administered later in a patent’s life, they serve a separate function as well:
they “weed the patent thicket”—that is, they help to screen out worthless patents that
have no real value but can make it more difficult for innovative firms to operate. See
Jonathan S. Masur, Costly Screens and Patent Examination, 2 J. Legal Analysis 687
(2010). Assuming that all the maintenance fees are paid, patents remain valid for 20
years from the date on which they are filed, not the date they are issued. This is part
of the reason why delays in the patent examination process can be so costly to
inventors: once the patent is filed, the 20-year clock is ticking, and any delay eats into
the patent’s useful life. Extensions to the patent term are available in some cases; in
particular, patent term adjustment (PTA) compensates for delays caused by the
USPTO, and patent term extension (PTE) partially compensates pharmaceutical
patent owners for delays in the drug commercialization process caused by clinical
trials.9 But in general, utility patents will expire 20 years from filing.10

As a practical matter, however, patent applicants often receive protection

lasting 21 years from their initial filing date because many applicants begin with a
patent application in another country (after which they have one year to file at the

9 On average, about half of patents receive additional term through PTA, with an
average adjustment of over four months. See 35 U.S.C. § 154(b). The USPTO processes about
100 PTE applications per year, which allow up to five years of extension for patents claiming
products that require approval by the Food and Drug Administration (FDA), Drug
Enforcement Agency (DEA), or Department of Agriculture (USDA). See 35 U.S.C. § 156.
10 For patents filed before June 8, 1995, the patent term was 17 years from issuance
rather than 20 years from filing. See Uruguay Round Agreements Act, Pub. L. No. 103-465,
§ 532(a)(1), 108 Stat. 4809, 4983 (1994) (amending 35 U.S.C. § 154, and stating that patents
filed before June 8, 1995 shall have a term of the greater of 17 years from issuance or 20 years
from filing).
18 MASUR & OUELLETTE ⋅ PATENT LAW

USPTO11) or with a U.S. provisional patent application filed under 35 U.S.C. § 111(b).
A provisional application must describe the invention, but it need not have claims and
the USPTO will not commence examination. The inventor then has one year to file a
nonprovisional application, which will be evaluated based on the provisional filing
date—known as “claiming priority” to that date. Provisional applications thus allow
inventors to establish an early priority date—which is important for demonstrating
the novelty of the invention—while delaying the expense of filing and prosecuting a
full nonprovisional application. After an applicant files a first nonprovisional
application, known as a “parent” application, she often files additional “child”
applications that claim priority to the same earliest provisional filing date. A
divisional application under 35 U.S.C. § 121 is a child with claims to an “independent
and distinct invention” that were originally filed in the parent, which often results
when an examiner issues a restriction requirement asking the original application to
be restricted to one related set of claims. A continuation application may have new
claims, and results when a new application is filed claiming priority to a pending
application. There is little legal difference between divisionals and continuations; both
have the same priority date as the parent and must be supported by the parent’s
disclosure. Applicants may also file a continuation-in-part, which may add new matter
to the disclosure, with the priority date of each claim based on whether it requires the
new matter for support. A patent owner may also obtain a reissue patent to correct
substantive errors in a granted patent under 35 U.S.C. § 251; a reissue broadening
claim scope must be applied for within two years of the original patent grant.

Even though third parties cannot insert themselves into the ex parte patent
examination process, there are administrative avenues available to them once a
patent has been granted. Three separate processes exist. Post-grant review (PGR)
allows any party who pays the necessary (substantial) filing fee to challenge a patent’s
validity within the first nine months after it is issued. The patent can be challenged
only on certain grounds, but the range of options available to the challenger is
relatively wide. Second, after the first nine months have passed, any party may
challenge a patent via the separate inter partes review (IPR) procedure, which allows
for challenges on a more limited set of grounds than PGR. Finally, anyone—including
anonymous parties—can petition for ex parte reexamination, which allows challenges
on the same limited grounds as IPR, but with less expense, less risk of estoppel, and
less opportunity for the third party to participate. All three of these processes exist in
order to facilitate challenges to patents that should not have been granted without
forcing the challenger to wait to be sued and then undergo the expense of litigation in
federal court. The most popular procedure, IPR, is often initiated by a party who has
been sued for infringement, which often results in a stay of the district court litigation.
We discuss these procedures in more detail in Chapter 17.

11 For more on the process of acquiring patent protection in multiple countries, see

Chapter 20.
 OVERVIEW 19

Once a patent has been granted, the patent’s owner can bring suit against any
party believed to be infringing the patent.12 The federal district courts have exclusive
jurisdiction over all lawsuits arising under the Patent Act; unlike for almost any other
claim under federal law, patent cases cannot be brought in state court. 28 U.S.C.
§ 1338(a). Importantly, a party sued for patent infringement may defend itself by
arguing not only that it does not infringe the patent, but also that the patent is invalid.
That is, the USPTO’s decision to grant a patent is not final, although the USPTO’s
decision to grant the patent does receive deference. See Jonathan S. Masur & Lisa
Larrimore Ouellette, Deference Mistakes, 82 U. Chi. L. Rev. 643 (2015). The losing
party in a patent litigation in district court may appeal that court’s decision to the
Federal Circuit, and from there again to the Supreme Court.

The Federal Circuit and Supreme Court thus consider patent validity in two
types of cases: appeals from the USPTO in which the agency does not think the claims
at issue are valid (with captions of the form “In re Inventor” at the Federal Circuit and
“Inventor v. USPTO Director” at the Supreme Court), and appeals from patent
infringement litigation in which the accused infringer challenges the patent’s validity
(with captions of the form “Patent Owner v. Accused Infringer,” or reversed if the
infringer filed the suit as a declaratory judgment action). The following figure
represents this institutional structure in graphic form:

Administrative Structure of the Patent System

12Pre-issuance damages are also available under 35 U.S.C. § 154(d) if the infringer
had knowledge of a published patent application.
20 MASUR & OUELLETTE ⋅ PATENT LAW

To decide patent cases, the primary source of legal authority is the Patent Act,
found at Title 35 of the U.S. Code, which Congress passed under the authority of the
Constitution’s IP Clause. As we will see, many provisions of the Patent Act are short
and provide little guidance on how they should be applied, so many core patent law
doctrines have been developed and elaborated by the courts through doctrinal
development. The USPTO does not have rulemaking authority over substantive
patent law, but it has issued regulations (at 37 C.F.R.) governing the procedural rules
of practice before the agency. The USPTO also publishes a Manual of Patent
Examining Procedure (MPEP), which provides guidance on patent law to patent
examiners and prosecutors.13 The federal courts have never treated the MPEP as
binding authority, but it exerts significant influence over the patents that the USPTO
chooses to grant, many of which are never challenged in court. The USPTO updates
the MPEP regularly in accord with changes in patent law. We will refer to this
document throughout the book, most prominently when discussing the law of
patentable subject matter.

B. Patent Practice
Most U.S. patent law work falls into three general categories: (1) being
involved in the patent examination process before the USPTO, either by helping
inventors obtain patents (which, as noted above, is known as “prosecution”) or by
working for the USPTO to decide which patent applications to grant; (2) helping
clients assert their patent rights in court or defend against patent lawsuits
(“litigation”); or (3) helping arrange transfers of patent rights (“licensing” or
“transactional work”). There are other options, including the growing field of patent
office litigation (a hybrid of litigation and practice before the USPTO) and advocacy
work at nonprofits like the Electronic Frontier Foundation that include patent policy
in their portfolios. Practice environments also vary, with many patent practitioners
starting at law firms and then moving “in house” to a private firm or a nonprofit such
as a university technology transfer office.

Patent prosecution involves interviewing inventors, writing patents, and

rebutting patent examiners’ arguments about why your applications shouldn’t be
granted. Patent prosecution does not require a legal degree; rather, prosecutors need
to have a bachelor’s degree in a technical field or its equivalent, and to pass the
registration examination (also known as the “patent bar exam”), a six-hour multiple-
choice exam that tests knowledge of USPTO rules.14 Passing the patent bar makes

13 The MPEP is available at: https://www.uspto.gov/web/offices/pac/mpep/index.html.

14 For information about the registration examination and its requirements, see

https://www.uspto.gov/learning-and-resources/patent-and-trademark-practitioners/becoming-
patent-practitioner/registration. For advice about the exam compiled by Eric E. Johnson, see
https://writtendescription.blogspot.com/2021/03/advice-about-patent-bar-for-current-
and.html.
 OVERVIEW 21

you a “patent agent.” If you are also admitted to a state bar, which typically requires
going to law school and passing a state bar exam, you may call yourself a “patent
attorney” and are allowed to provide legal advice.

Many patent prosecutors find the work gratifying because they enjoy learning
and writing about different successful technologies and communicating with people
from different backgrounds, and they often appreciate the relatively stable work hours
compared with other areas of law. Scientists who are interested in pursuing patent
prosecution careers sometimes begin by applying for a job as a patent examiner at the
USPTO, which is often a transition step to other careers. If you have an advanced
technical degree (usually an M.S. in engineering or a Ph.D. in science), you may also
be able to start with a higher-paying job at a law firm as a “technical advisor” or
“scientific advisor” who helps draft patent applications. The firm will typically pay for
your patent bar exam course so that you can become a patent agent, and will
sometimes also pay for you to attend law school.

Aspiring patent prosecutors might initially think they need only learn the
materials in Chapters 2–7 on the requirements for obtaining a patent, but writing
patents well also requires a thorough understanding of patent infringement and
remedies. Many patent claims can often be obtained on the same invention, but some
are more likely to be infringed—or to be infringed by more parties. And some claims
are more likely to allow the patent owner to receive an injunction or a larger damages
award. Your clients will be well served by a thorough knowledge of not only how claims
are likely to fare at the USPTO, but also what happens to them afterwards.

Patent litigation involves duking out patent rights in court. Contrary to most
court TV shows, your day-to-day life will not involve arguments in front of a jury.
Rather, as with other types of commercial litigation, you will be reviewing documents,
drafting questions and responses related to “discovery” (gathering information for
cases), doing legal research, and writing legal arguments in memos and briefs. Patent
litigators must be admitted to a state bar. A technical degree is not required, and
many terrific patent litigators spin their lack of technical background as an asset that
allows them to communicate more effectively with lay judges and juries. But many
firms also look for new patent litigation associates who do have some technical
training, so this is another common route for those transitioning from science to
patent law.

Patent litigators often enjoy the opportunity to strategize on behalf of their

clients, to translate technical ideas for lay audiences, and to work on high-stakes
cases. Patent litigators typically earn higher salaries than patent prosecutors,
although they also work longer hours. Some litigators start as prosecutors and then
broaden their practice to include litigation assignments, but it is more common to
begin litigation straight out of law school, and many patent litigators have not taken
the patent bar exam.
22 MASUR & OUELLETTE ⋅ PATENT LAW

In the nineteenth century, patent litigation was a staple of many large,

general-practice commercial law firms. Over the course of the twentieth century, most
patent litigation moved to smaller patent-centered firms, typically known as “patent
boutiques.” Over the past thirty years, however, patent litigation has again become a
centerpiece of many large general-practice firms. Many of these firms acquired
smaller patent boutiques as a means of creating patent litigation shops out of whole
cloth; others built them from the ground up. It is now quite common for the largest
and most profitable law firms to have substantial patent litigation departments. And
there are many patent litigation jobs available to budding associates, whether or not
they have technical degrees.

Patent licensing and transactional work involves arranging deals involving

patents. It involves the least engagement with the technical aspects of patents and
can be an attractive option for those with economics and business skills. Like
litigation, transactional practice does not require the patent bar but does require
admission to a state bar. Some patent-related transactional work involves individual
commercial transactions where patents are important, including patent licenses and
collaboration agreements, with day-to-day work focused on independently reading
large documents to spot potential concerns to discuss with your client. Patent-focused
transactional lawyers also help with patent issues for mergers and acquisitions
(“M&A work”), where the corporate team reaches out to specialists to discuss patent-
related portions of the deal. For example, deals often include representations (“reps”)
and warranties as to the title of patent rights, that those rights are sufficient to
continue the business, that the business isn’t infringing others’ patent rights, etc.
Salaries are similar to those for patent litigators. We discuss patent licensing in more
detail in Chapter 18, but transactional lawyers will also benefit from understanding
the rules of patent validity, infringement, and remedies.

Based on a recent survey by the American Intellectual Property Law

Association, the median legal charge for filing a new utility patent ranged from $7,000
for an invention of minimal complexity to $10,000 for more complex biotech or
electrical inventions, and the median charge for a patent license was $5,000. Of
course, arranging a more complex deal that involves patent licenses is far more
expensive. For litigation, the median legal costs for a full trial with less than $1
million at risk was $700,000; for a case with more than $25 million at risk, the median
cost was $4 million.

C. Locating Patent Documents: An Online Exercise

We think it is important for patent law students to feel comfortable finding and
interpreting patent documents. The best way to acquire this skill is through active
practice. This assignment will guide you through the process of locating a U.S. patent,
 OVERVIEW 23

understanding its contents, and finding additional information about the patent on
the USPTO website.

Consider the important problem of removing corks from wine bottles. The most
common approach is to use a corkscrew, such as the one shown below on the left, which
is screwed into the cork and then pulled out. Another cork remover, shown in the
center, is known as an ah-so, butler’s friend, or twin-prong cork puller. The prongs are
pushed between the cork and the neck of the bottle, and then the cork is twisted out
of the bottle. These two cork-removing mechanisms can also be combined, as shown
at right below. This combination corkscrew and ah-so is sold as “The Durand.”

1. The Durand website includes information on patents in six countries, including

U.S. Patent No. 7,237,455. Can you find a PDF of this patent? One option is to
use the USPTO website (www.uspto.gov); their “Search for patents” page has
a “Patent Public Search” where you can search by patent number. Another
option is to simply Google patent 7237455, click the first link, and then click
“Download PDF.” Who invented this bottle opener?

2. For utility patents filed on or after June 8, 1995, the patent term is 20 years
from the filing date of the earliest non-provisional application on which the
patent is based. Many patents are tied to earlier or later patents (referred to
as “parents” and “children,” and collectively as “families”), so in general you
should not assume that you can just add 20 years to the filing date. Some
patents also receive term adjustments or extensions for government-caused
delays, or the patent applicant may disclaim a portion of the term. But for this
patent, the “Related U.S. Application Data” field only contains a provisional
application, and there was no term adjustment or disclaimer. If all
maintenance fees are paid and it is not invalidated, what year will patent
7,237,455 expire?

3. After the cover information (including a list of prior art references cited by the
applicant or the examiner), you can see the patent drawings. Then, starting on
p. 13 of the PDF, is the background of the invention, which often reads like an
infomercial. (The text of patents is printed in 2 columns with line numbering
every 5 lines. The line numbers are rarely aligned with the text, but they are
nevertheless used for citation. E.g., U.S. Patent No. 7,237,455 col. 2 ll. 14–18.)
24 MASUR & OUELLETTE ⋅ PATENT LAW

According to this patent, what are the problems with the traditional spiral
corkscrew and with the ah-so?

4. Next comes the summary of the invention, a brief description of the drawings,
and a detailed description of the invention, including “preferred embodiments”
(i.e., what the inventor thinks are the best ways to make the invention).
Together with the drawings, this information is known as the “specification.”
The specification cannot be amended during prosecution because it represents
the definitive statement of what the inventor has actually invented as of the
date the application was filed. (This is relevant to a variety of patent law
doctrines.) A specification can be painful to read, particularly due to the
references to figure numbers, but it usually makes sense if you go slowly. Note
that patent applicants may be their own lexicographers, meaning that they
may use terms in idiosyncratic ways. What does this patent mean by
“stabilizer”?

5. At the very end of the patent are the “claims,” which are what the patent
legally covers. The claims are the fence posts that mark out the metes and
bounds of a patent owner’s intellectual property. The first claim begins on
column 6, line 65, and is an “independent” claim because it does not refer to
other claims. The second claim, beginning with “The bottle opener of claim 1,
wherein . . .” is a “dependent” claim. Technically speaking, the claims are
considered part of the specification. But it’s easier to think of the claims and
specification as separate parts of the patent. The specification describes what
the invention actually is; the claims describe its legal boundaries. How many
independent claims does this patent have?

6. As we explained above, the “prosecution history” or “file wrapper” of a patent

is everything that happened during patent examination. To find the file
wrapper for the Durand patent, search for “Patent Center” on the USPTO
website and search by patent number (7237455). The “Documents &
Transactions” page lists the events that occurred during prosecution. On
average, it takes over a year from when a patent is filed (the first date in the
transaction history) for a patent examiner to issue a “first office action” in
which the claims are either allowed (“Notice of Allowance”) or rejected
(typically, “Non-Final Rejection”). Approximately how many months did it take
in this case?

7. This application is unusual in that after the examiner allowed the claims, the
applicant submitted an Information Disclosure Statement (IDS) listing
additional prior art documents on Jan. 12, 2007, along with payment for the
issuance fee, which caused the examiner to issue a “Final Rejection” on Feb. 8,
2007. You can click “Preview” or “PDF” to read this file. What statutory
provision was used to reject some of the claims in light of this new prior art?
 OVERVIEW 25

8. The “Continuity” page lists any “parent” or “child” applications, including

applications filed under the Patent Cooperation Treaty (PCT) to facilitate
patenting in multiple countries. When a child application claims priority to a
parent, it is as if claims in that application were filed at the same time as the
parent. The child application relies on the same description of the invention
and has the same effective filing date. Can you find the U.S. patent number
(not application number) of a child of the 7,237,455 patent?

9. The “Assignee” field on the patent tells you who owned the patent when it was
issued. Typically, the assignee is the company or institution that employs the
inventors (unless they are independent inventors). The “Assignments” page in
Patent Center provides any information about transfers of interests in the
patent that have been recorded with the USPTO. Assignments are not always
recorded, and requiring greater transparency about patent ownership is
surprisingly controversial. Who was the assignee for the 7,237,455 patent at
the time of issuance, and what month was ownership transferred?

D. Patent Claims and Claim Construction

At the beginning of this chapter, we explained that claims define the legal
rights protected by a patent, and we gave an example of a simple patent claim for a
pencil. You have also seen patent claims for the Durand wine opener. Understanding
how to read patent claims like this is an essential preliminary for applying patent law
doctrines. Because they define the legal metes and bounds of a patent, the claims are
key to the patent’s value. The broader the claims, the broader the property right and
the more inventive territory the patent holder owns; the narrower the claims, the
narrower the property right. Patent applicants thus have an incentive to draft claims
that are as broad as possible. For example, the Durand inventors would have loved to
claim “all methods of removing corks from bottles.” But there are two significant
constraints on the breadth of claims an applicant can write:

1. An applicant cannot claim anything that has already been invented—that is,
she cannot claim anything that is in the prior art. The Durand inventors thus
could not have claimed a simple corkscrew or ah-so. This requirement is policed
primarily by the law of novelty (Chapter 2) and nonobviousness (Chapter 3).

2. Second, an applicant cannot claim what she has not invented! Her claim must
be limited to what she has actually invented and documented to the world. The
Durand inventors thus could not have claimed a cork remover powered by
nuclear fusion. This requirement is policed primarily by the law of enablement
and written description (Chapter 4).

Patent claim drafting thus representing a careful balancing act between the desire for
breadth and the limitations on breadth imposed by law.
26 MASUR & OUELLETTE ⋅ PATENT LAW

The process of interpreting what a patent claim covers—known as claim

construction—is a key step in analyzing the claim’s validity and whether a given
product or process infringes the claim. During patent examination, claims are
construed to have their “broadest reasonable interpretation.” Once claims are granted,
they are construed based on their “ordinary meaning” to a researcher of “ordinary
skill” in the relevant field. We save a more detailed discussion of claim construction
for Chapter 8; for now, it is enough to recognize that many claim terms have some
ambiguity. Consider the pencil claim at the start of this chapter. Does the claim cover
pencils with cores containing any percentage of graphite? Pencils with holders made
from a wood-plastic composite? Wooden mechanical pencils? Broader claims are both
more likely to be infringed and less likely to be valid, making claim construction a
critical part of patent infringement litigation.

For another example, consider a more recent invention: the Swiffer mop,
introduced by Procter & Gamble in 1997. As illustrated below on the left, the Swiffer
eliminates the need to clean the mop head or to use a separate bucket by using a
disposable cleaning pad and an integrated system for delivering the cleaning solution,
which can be sprayed by pressing a button on the handle.

Sales of Swiffer products quickly grew to over $1 billion per year, and Procter &
Gamble protected this market with numerous patents. A simplified version of claim 1
from one such patent, U.S. Patent No. 6,663,306, is shown above on the right. Can you
spot any ambiguities in any of the claim terms? We will return to this example later.

Patent claims follow stylized drafting rules:

1. Preamble. Claims begin with a preamble introducing the kind of invention

at issue—like “A cleaning implement”—which generally does not limit the legal scope
of the claim unless necessary, such as for more detailed preambles that describe
 OVERVIEW 27

features of the invention. (The Federal Circuit’s less-than-helpful test for whether a
preamble is limiting considers whether it “breathes life and meaning into the claim.”
See generally Mark A. Lemley, Without Preamble, 100 B.U. L. Rev. 357 (2020).) What
are the advantages to the patentee of writing a broad preamble?

2. Transition. After the preamble comes the transition, which for the vast
majority of claims is “comprising,” an “open” term signaling that the invention
includes but is not limited by the body elements that follow. In contrast, the “closed”
transition “consisting of” signals that the invention is limited to the following
elements, and not more. A claim to “A writing implement comprising graphite encased
by a wooden holder” covers pencils that include added elements such as an eraser,
whereas a claim to “A writing implement consisting of graphite encased by a wooden
holder” does not cover pencils with erasers. Claims can also use the middle ground of
“consisting essentially of,” which covers devices that include the following elements
and may include others that “do not materially affect the basic and novel properties
of the invention,” but this transition is even rarer than “consisting of.” Why do you
think patentees prefer the “comprising” transition? Why would a patentee ever use
“consisting of”?

3. Body Elements. After the transition come the claim elements, which define
the scope of the invention. The Swiffer claim covers mops with four elements—a
handle, a mop head, a liquid delivery system, and a disposable cleaning pad. A few
important points:

• As will be discussed in detail in later chapters, understanding the body

elements is essential for determining whether the claim is valid and
infringed. If any earlier mop (or a description of a mop) has all four of the
Swiffer claim elements, the claim would be invalid for lack of novelty. And
if the claim is valid, Procter & Gamble can prevent others from making,
using, or selling mops that include all four of these elements (even if the
infringing mops have additional elements).

• For understanding the scope of the Swiffer claim, Procter & Gamble’s
actual product is completely irrelevant. In fact, many patent owners do not
sell products covered by their patent claims. Rather, the legal right is
defined by the words in the claim text.

• Drafting rules require the claim to explain how each element interacts with
at least one other element that has already been introduced. For example,
the mop head is “attached to said handle” (i.e., to the handle already
introduced).

4. The Interaction between Novelty, Infringement, and Transitions. Imagine

that Jemele obtains a patent “comprising elements A, B, C, and D.” Fernando later
obtains a separate patent “comprising elements A, B, C, D, and E.” Suppose that
Rebecca then begins producing a product that includes elements A, B, C, D, and E.
28 MASUR & OUELLETTE ⋅ PATENT LAW

Whose patent does she infringe? The answer is both Jemele’s and Fernando’s. The
transition word “comprising” means that any product that has all four of the elements
of Jemele’s patent infringes her patent, even if it includes one or more additional
elements.

Now, consider the question of novelty. As we just noted above, if all the
elements of a claim are found in one piece of prior art, the claim is not novel. Thus, if
all the elements of Fernando’s patent were found in Jemele’s earlier patent, then
Fernando’s patent would be invalid. Jemele used the transition word “comprising,”
which means “includes A, B, C & D but is not limited to them.” Does this mean that
Fernando’s patent is invalid because Jemele’s patent could include E as well? The
answer is no. Jemele’s patent doesn’t actually include E. The word “comprising”
ensures that any product that includes element E (or element F, or G) will infringe,
so long as it includes A, B, C & D as well. But because Jemele does not mention E, her
patent will not destroy the novelty of any subsequent patent that includes E as an
element—which means the patent system still provides some incentive for Fernando.

Claim elements Jemele’s patent Fernando’s patent Rebecca’s product

A ✓ ✓ ✓

B ✓ ✓ ✓

C ✓ ✓ ✓

D ✓ ✓ ✓

E ✓ ✓

This means that sequential inventors can (and do) obtain patents that stack
on additional elements as technology progresses, known as blocking patents. After
Jemele obtains a patent claiming an invention comprising A, B, C & D and Fernando
obtains one comprising A, B, C, D & E, Rebecca could obtain a patent comprising A,
B, C, D, E & F. All three of these patents can be valid. Woe unto the manufacturer
who seeks to sell a product that includes A, B, C, D, E & F; this manufacturer infringes
all three patents and must negotiate licenses with all three inventors. That is, each of
Jemele, Fernando, and Rebecca can independently block the manufacturer if the
manufacturer does not license their patents.

5. Single-Sentence Rule. The USPTO requires each claim to be a single

sentence (typically beginning “I claim: 1. A cleaning implement comprising . . .” or
“The invention claimed is: 1. A cleaning implement comprising . . .”). Needless to say,
this rule does not enhance claim clarity.

6. Antecedent Basis. If the Swiffer claim read: “A cleaning implement

comprising a mop head pivotably attached to the handle,” it would be rejected because
it is unclear what handle is being referred to—i.e., “the handle” lacks “antecedent
 OVERVIEW 29

basis.” The first time a limitation is introduced, it must be introduced with “a” or “an”
(as in “a handle”); subsequently, that limitation can be referred to using either “said”
or “the” (as in “said handle”). In the following claims, each term has proper antecedent
basis:

7. Independent and Dependent Claims. Inventions can be described at many

different levels of abstraction, so inventors will often seek multiple claims in a patent.
As noted in the Durand exercise above, patent claims can be “independent,” meaning
that they stand on their own, or “dependent,” meaning that they refer to a claim
previously set forth and further limit that claim. For example, a dependent claim in
the Swiffer patent states: “6. The cleaning implement of claim 1, wherein said
absorbent layer has a t1200 absorbent capacity of at least about 5 grams/gram.” (The
patent defines “t1200 absorbent capacity” as the number of grams of water per gram of
cleaning pad absorbed at a pressure of 0.09 psi after 1200 seconds.) Each dependent
claim is a separate legal right that is legally equivalent to writing out the full
independent claim with the additional limitation. See 35 U.S.C. § 112(c)-(f). That is,
the elements of dependent claim 6 of the Swiffer patent are (a) the handle, (b) the mop
head, (c) the liquid delivery system, and (d) the disposable cleaning pad, where (e) the
absorbent layer has an absorbent capacity of at least 5 grams/gram.

Because they have additional limitations, dependent claims are necessarily

narrower than the claims from which they depend. This means that they are more
likely to be valid and less likely to be infringed. A product could include all of the
elements of the independent claim but not the additional element of the dependent
claim and thus not infringe the dependent claim. Or, if the product existed before the
patent application, it could invalidate the independent claim, but not invalidate the
dependent claim because it lacks that additional element.

Importantly, for this reason, invalidation of an independent claim does not

imply that any associated dependent claims are invalid. This is often
counterintuitive—the independent claim feels like the foundation on which the
dependent claims rest, and we naturally expect that when the foundation is destroyed,
the rest of the building will fall. But that is not the case. However, the converse is very
often true: if a dependent claim is invalid because it is not novel, any independent
claim to which it refers will be invalid as well, so long as the independent claim uses
the transition word “comprising.” Can you see why? Why do you think patent drafters
include more than one dependent claim?
30 MASUR & OUELLETTE ⋅ PATENT LAW

8. Product and Process Claims. The claims you have seen so far—for a pencil,
the Durand wine opener, and the Swiffer mop—are all examples of claims to a product,
or a tangible thing. But the majority of new patents also include at least one method
or process claim, which is written in the form of a series of steps. For example, Procter
& Gamble has received claims along these lines:

A method of cleaning a surface comprising the steps of:

(a) providing a cleaning implement comprising: [the four elements
above—a handle, a mop head, a liquid delivery system, and a
disposable cleaning pad];
(b) actuating said liquid delivery system; and
(c) mopping said surface with said cleaning pad.

This claim is infringed by someone who carries out these steps of using a Swiffer-like
mop to clean a surface, but not by someone who merely makes or sells a Swiffer-like
mop. Similarly, inventors of software algorithms often claim both the method of the
algorithm and a product—such as some electronic storage medium—containing
instructions for carrying out the algorithm. What are the advantages of writing claims
in both product and process formats?

Claims can also be written in product-by-process format, such as “A [product]

prepared by a process comprising the steps of . . . .” In a product-by-process claim, the
process is a claim limitation, so the product obtained by other processes would not be
infringing. Why might a claim drafter use this format?

9. Means-Plus-Function Claim Elements. An additional option for claim

drafting is provided in 35 U.S.C. § 112(f), under which a claim element may be
“expressed as a means or step for performing a specified function”—known as a
means-plus-function claim element—which is then interpreted “to cover the
corresponding structure . . . described in the specification.” For example, if one step of
your software algorithm method claim involves sorting data entries based on some
criterion, your claim does not need to explicitly list all the different sorting
algorithms—quick sort, merge sort, bubble sort, etc. Instead, you can include a step
with a “means for sorting” the data, and then this element will legally cover all the
means for sorting listed in the patent specification. (If the specification doesn’t list any
means for sorting, the claim is invalid.) If a claim element includes the phrase “means
for,” it is a strong signal that it is a means-plus-function claim element, but elements
written in similar functional terms will also trigger § 112(f). We will discuss these
rules in more detail in Chapter 5 on Definiteness and Functional Claiming.

10. Other Claim Formats. Patent claims may also be drafted in other formats.
For example, a claim with a Markush group (named after the case that approved this
format) contains an element such as “material selected from the group consisting of
A, B, and C,” which is frequently used for chemical structures. A Jepson claim explains
how the invention improves on some existing product or process, with a form such as:
“In an [existing product] having A, B, and C, the improvement comprising . . . .” A
 OVERVIEW 31

“kit” claim of the form “A kit for X comprising A, B, and C” is used to claim products
that involve separate parts that are used together. We will not discuss these formats
in more detail in this casebook, but you may encounter them in practice.

Practice Problems: Patent Claims

Consider the first three claims from U.S. Patent No. 6,635,133, titled “Method
for Making a Multilayered Golf Ball”:

1. A method of making a ball, comprising:

(a) forming an inner sphere by forming an outer shell with a fluid
mass center;
(b) forming a plurality of core parts from elastomeric material;
(c) arranging and adhesively joining the core parts around the inner
sphere with a flexible adhesive and then crosslinking the core
parts to each other by compressing them together at an elevated
temperature to form a substantially spherical core;
(d) molding a cover around the assembled core.

2. The method of claim 1, further comprising molding nonplanar mating

surfaces on the core parts.

3. The method of claim 1, wherein forming the inner sphere comprises

freezing a sphere of a fluid.

What is the preamble for all three claims? Are these claims open or closed? What are
the elements of dependent claim 2? If claim 1 is invalid because an earlier publication
already describes this method, what can you say about the validity of claims 2 and 3?
If instead it is claim 3 that is invalid because of an earlier publication, what can you
say about the validity of claims 1 and 2?
32 MASUR & OUELLETTE ⋅ PATENT LAW

Claim Drafting Exercise: Spikeball

Spikeball, also known as roundnet, is a backyard game played with a small

trampoline (typically with a three-foot diameter), called a “net,” and a small bouncing
ball (typically with a 3.8-inch diameter), as shown. In a standard game, two teams of
two people take turns bouncing the ball on the net. After an initial serve to the net,
each team has three hits to return the ball onto the net. There are no boundaries;
players may run anywhere around the net. Play continues until a team fails to return
the ball onto the net within three touches. For a video illustration, see
https://spikeball.com/pages/how-to-play-1. There are numerous variations of the basic
rules, including allowing the ball to bounce off the ground once per possession, playing
with tennis rackets, requiring one touch to be with a player’s foot, and two- or three-
player games. The Spikeball trampoline has foldable legs to allow for easy transport
and storage.

The inventor of Spikeball has asked you

to draft a patent claim (or set of claims) that
covers this invention and that will be as useful
as possible in preventing others from entering
the market with competing products that
might reduce Spikeball sales.

At the same time, you must be careful not to draft claims that would cover any
of the existing prior art. If some piece of prior art would infringe one of your claims,
the claim is invalid. After some research, you determine that trampolines and bouncy
balls of many different sizes and net strengths are well known in the prior art; there
are no important differences between prior art trampolines and the Spikeball net
besides the foldable legs to allow for easy transport and storage. You also determine
that the following games have sometimes been played on large trampolines:

• Volleyball. Two teams attempt to hit a ball back and forth over a net without
allowing the ball to touch the trampoline, and each team may touch the ball
three times before it must be returned over the net.

• Four Square. Four players each have their own quadrant of the trampoline,
and when a ball is bounced in a player’s quadrant, it must be bounced back
into another quadrant.

• Basketball. Players dribble a ball on the trampoline and attempt to shoot it

through hoops mounted high in the air.

• Hacky Sack. Players stand in a circle on the trampoline and attempt to keep a
ball in the air using only their feet. A player who allows the ball to hit the
trampoline loses.

For purposes of this exercise, assume that this is all the relevant prior art.
 OVERVIEW 33

E. Economics of Patent Law

The dominant framework for justifying and analyzing U.S. patent laws is
utilitarianism—the idea that the government grants patents because the benefits
they create for society are larger than their social costs. In other words, patents should
be granted only when they have a positive effect on social welfare. This purpose is
reflected in the “IP Clause” of the Constitution: Article 1, Section 8, Clause 8 grants
Congress the power to enact patent laws to “promote the Progress of Science and
useful Arts.” Similarly, the Supreme Court explained in Graham v. John Deere Co.,
383 U.S. 1 (1966): “The patent monopoly was not designed to secure to the inventor
his natural right in his discoveries. Rather, it was a reward, an inducement, to bring
forth new knowledge.”

Why should the government intervene in the market for new ideas? Consider
some ideas that might be protected by a patent: the design of a new mousetrap, a
cheaper method of making mousetraps, an algorithm for a faster computational
search method, the formula for a new pharmaceutical, or the fact that a certain
pharmaceutical is effective at treating cancer. Ideas like these—which we will refer to
as knowledge goods—are fundamentally different from most tangible property in that
they have the two characteristics of what economists call public goods:

1. Nonrivalry: One person’s use of some piece of information does not decrease
others’ ability to use it. The social benefit from producing a new knowledge
good is thus greater than the private benefit to its producer. Because an
additional user can benefit without imposing costs on others—or in economic
terms, the marginal cost of production is zero—the good should be as widely
and freely available as possible.

2. Nonexcludability: The producer of a knowledge good often cannot prevent

others from using the good. Persons other than the producer can thus free-ride
off the producer’s efforts. And because a self-interested firm will not consider
the benefits of these free-riders when deciding how much to invest in producing
knowledge goods, it will invest less than the socially optimal amount.

Can you think of other goods that are nonrivalrous and at least somewhat
nonexcludable? Common examples outside the innovation context include things like
national defense and clean air. Public goods such as knowledge goods will be
underproduced by the market, providing a justification for government intervention.

The fundamental problem for producers of knowledge goods is that it is often

far cheaper to copy the invention than it is to create the invention in the first place.
Consider a new cancer drug. Once one company has undertaken the tremendous
expense of developing the drug and testing whether it is safe and effective at treating
cancer, it is comparatively inexpensive for a generic manufacturer to copy the drug
34 MASUR & OUELLETTE ⋅ PATENT LAW

and enter the market. Estimates vary, but R&D costs have been estimated at around
$1 billion per approved drug, while generic entry costs are on the order of $10 million.

If patents did not exist, a generic manufacturer could wait until someone else
has developed the drug and then enter the market and sell generic versions of the
drug at a much lower price. (Many of you have probably had the experience of being
offered the generic alternative to a brand-name prescription drug at a much lower
price than the brand-name drug would cost.) By itself, this wouldn’t necessarily
constitute a social problem—it’s not clear that society should care whether the original
pharmaceutical developer (a large corporation) or the generic manufacturer (a large
corporation) makes more money. The problem is that pharmaceutical firms would
anticipate this problem. If they thought their drugs would be underpriced, such that
they couldn’t recover their R&D costs, they wouldn’t invest in R&D in the first place!
This would represent a major social problem because the public would lose the benefit
of new drugs. Put another way, the high cost of pharmaceutical development relative
to generic production means that even if a new drug has enormous social value
relative to existing treatments, the private value often will not be enough to induce
development absent government intervention.

To be sure, the economics of public goods do not mean that no innovation will
occur without government intervention. For one thing, knowledge goods are often
partially excludable, such as through secrecy or social norms. For another, in some
cases the private value will be enough to recover the costs of R&D. But in many cases
the gap between social and private value will cause society to miss out on valuable
innovations.

Policymakers have numerous policy tools to address the concern that inventors
will not have sufficient incentives to invest in R&D. See generally Daniel J. Hemel &
Lisa Larrimore Ouellette, Beyond the Patents–Prizes Debate, 92 Tex. L. Rev. 303
(2013). They can directly fund R&D, such as through grants to universities or firms
or through government-run laboratories like the National Institutes of Health. They
can offer prizes for successful innovations, such as the fixed prizes offered at
Challenge.gov or the market subsidies provided by government health insurance
programs. They can use R&D tax incentives to reduce firms’ R&D costs, such as those
at I.R.C. §§ 41, 174. And they can use patents.

If the government grants the drug developer an exclusive right to sell or license
the drug for a limited time, then the developer can prevent generic entrants and have
a limited monopoly over that drug. In this way, patents can address the
nonexcludability problem by making knowledge goods more excludable, such that
others cannot benefit from the goods without the patent owner’s permission. In
practice, few patents confer a true monopoly, but many patents do allow their owners
to charge prices above marginal cost—that is, the cost of producing one more unit of
that good. In a competitive market, firms will sell goods at marginal cost, which means
that they will not earn much profit for each unit of the good sold. But when a firm has
 OVERVIEW 35

market power (like in a monopoly), the firm can increase its profits by selling a smaller
quantity of the goods at a higher price. In this sense, the patent system is equivalent
to a sales tax on patented technologies, with revenues going to the knowledge-good
producers.

Patents have the virtue of rewarding inventors based on how much consumers
value the goods they are creating. If an inventor creates a very useful product, such
as a treatment for a debilitating disease, it can use the power of its patent to sell that
invention at a high price. This creates an incentive for inventive firms to pursue the
inventions that will be most highly valued by the public, which is of course the
objective. But using patents as an allocation mechanism has costs. Most importantly,
if the patent owner is unable to price discriminate by charging different prices to
different consumers, those who value the good above its competitive price—the price
the good would sell for absent a patent, equal to marginal cost—but below the patent
owner’s price will be denied access to the good. For example, if a month’s supply of a
patented new cancer drug would have a competitive price of $100 but is sold by the
patent owner for $10,000, then consumers who value the drug at $5,000 (more than
$100 but less than $10,000) will be priced out of the market by the patent. This lack
of access—and the resulting cost to human health and lives—is a real cost to society
known as deadweight loss. Under the conventional account, patents thus create a
fundamental tradeoff between incentives on the one hand and access on the other, or
what economists call a tradeoff between dynamic efficiency (incentives to create more
inventions) and allocative efficiency (access to existing inventions).

This incentives/access tradeoff is not inevitable, however. As one of us has

explored in work with Daniel Hemel, society can have both widespread access and
substantial rewards for innovation. First, the patent system itself may affect the
demand for a new technology: patents incentivize manufacturers to invest in creating
demand for their products, such as through marketing, which increases the number
of patients who access them. In the pharmaceutical context, this means that patent
expiration often leads to a decrease in price without a corresponding increase in use.15
This patent-driven increase in demand and access could be either beneficial or
harmful. In some cases, perhaps including mental health treatments, marketing by
developers prior to a patent’s expiration may have encouraged patients to seek
treatment for conditions that otherwise might have been unrecognized or stigmatized
in the absence of a patented treatment. In other cases, such as Purdue Pharma’s
misleading marketing in support of their patented and addictive opioid OxyContin,

15 Patent expiration does not always lead to a decrease in price; in many cases, other
features of the pharmaceutical industry such as high entry costs or natural monopolies provide
market power. For example, there are over 300 off-patent drugs with no approved generic, and
it typically takes multiple generic competitors to lead to a substantial price decrease. The
revolutionary cancer drug Gleevec (imatinib) had a list price of over $10,000 per month when
it first faced a generic competitor, but the price declined by only 10% in the first 20 months
after generic entry. Ashley L. Cole & Stacie B. Dusetzina, Generic Price Competition for
Specialty Drugs: Too Little, Too Late?, 37 Health Aff. 738 (2018).
36 MASUR & OUELLETTE ⋅ PATENT LAW

this expansion in pharmaceutical use has been disastrous. See Daniel J. Hemel & Lisa
Larrimore Ouellette, Innovation Institutions and the Opioid Crisis, 7 J.L. &
Biosciences (2020).

More importantly, the choice of patents as an incentive mechanism does not

mean that the patent system must be used to allocate access to the resulting
technologies: financial incentives for developers could be made distinct from out-of-
pocket costs for consumers. For example, if the government purchases products or
patent rights from the patent owner for fair market value and then distributes the
patented products at no cost, the innovator receives the same patent-based incentive
while consumers get access for free. And this kind of matching of patent incentives
with non-patent allocation is not merely hypothetical: other countries like the United
Kingdom already purchase medicines directly from patent holders and distribute
them at low or no cost to patients, and Medicare and Medicaid achieve much the same
thing for many patients in the United States. See Daniel J. Hemel & Lisa Larrimore
Ouellette, Innovation Policy Pluralism, 128 Yale L.J. 544 (2019). This is part of the
reason why price decreases for pharmaceutical drugs don’t always lead to increases
in use of the drug, as we noted above. Many people who might not be able to afford
the expensive, brand-name drug at retail are nonetheless able to access it through
Medicare, Medicaid, or private insurance. In short, patents can create deadweight loss
by limiting access, but this is not inevitable.

Patents can also create other social costs, although the extent of each cost is
contested. Perhaps most importantly, patents can over-incentivize innovation. To be
clear, by “over-incentivizing,” we do not mean providing rewards greater than
whatever is “just enough” to induce invention—such rewards are transfers from one
party to another, not true social costs.16 Rather, over-incentivizing occurs when
patents spur R&D costs that are greater than the expected social value of those
expenditures, where social value accounts for the risk of failure and is measured
compared with the next-best alternative. For example, if multiple firms compete to
solve a particular technological problem, their combined R&D expenditures might be
greater than the prize for the winning firm. This problem is variously known as the
“patent racing” or “common pool” problem, and numerous scholarly articles have
debated how significant it is in practice and whether alternative reward systems
might be preferable. See generally Michael Abramowicz, The Uneasy Case for Patent
Races over Auctions, 60 Stan. L. Rev. 803 (2007).

16 If the reward is in the form of monopoly power that leads to deadweight loss, then
there is a social loss, but as noted above, patent rewards need not be coupled to allocation
through proprietary pricing. Alternative allocation mechanisms do require taxpayer funding,
but tax scholars have explained why the deadweight loss of taxation is largely irrelevant to
choices about the magnitude of public spending. See Louis Kaplow, On the (Ir)Relevance of
Distribution and Labor Supply Distortion to Government Policy, 18 J. Econ. Persp. 4 (2004);
David A. Weisbach, Daniel J. Hemel & Jennifer Nou, The Marginal Revenue Rule in Cost-
Benefit Analysis, 160 Tax Notes 1507 (2018).
 OVERVIEW 37

Over-incentivizing innovation can also occur without patents. One such

mechanism is “business stealing,” whereby a firm expends a significant amount of
resources to produce an invention that is different from—but no better than—existing
inventions and then captures some of the existing market share. (Think about how
many roughly identical statins are on the market.) A firm might reap a great deal of
profit from this strategy without creating any social value, if its product is no better
than the ones that existed. But here too, patents can exacerbate the problems.

In addition to the costs from raising prices on patented products and from
patent racing, the patent system creates substantial administrative and transaction
costs.17 A rough estimate suggests the costs of obtaining and litigating patents are on
the order of $10 billion per year. Hemel & Ouellette, Beyond the Patents–Prizes
Debate, supra at 365. And this estimate does not include nonlitigation legal costs such
as the cost to an inventor of determining whether she is at risk of infringing her
competitors’ patents and negotiating patent licenses. For a complex product,
conducting a patent clearance search and negotiating with multiple holders of
overlapping patent rights can be costly, leading to concern about “patent thickets”
slowing commercialization. See Carl Shapiro, Navigating the Patent Thicket: Cross
Licenses, Patent Pools, and Standard Setting, 1 Innovation Pol’y & Econ. 119 (2000).
Litigation and licensing are complicated by the many patents that are erroneously
granted by the USPTO and invalidated only when subjected to greater scrutiny, or
that are intentionally written in vague terms that make it difficult to determine what
they cover. Concern about this “patent quality” problem has driven many of the recent
doctrinal changes we will discuss in subsequent chapters.

Complex patent landscapes have given rise to some firms that are solely in the
business of patent litigation and licensing. These firms are known variously as “non-
practicing entities,” “patent assertion entities,” or (least favorably) “patent trolls.” The
terms are not used exactly interchangeably. For instance, a major research university
such as Stanford University or the University of Chicago is a non-practicing entity, in
that it does not produce and sell products, but it would be odd to refer to it as a patent
assertion entity. Patent assertion entities are typically for-profit firms whose business
is asserting patents; any patent assertion entity is also (by definition) a non-practicing
entity. And “patent troll” is the unfavorable word used to describe any non-practicing
entity that is attempting to capture value from a patent in situations where it does
not deserve to do so, perhaps because the patent is invalid or vaguely worded. There
are ongoing policy debates about whether these types of firms increase the efficiency
of technology markets or merely serve as a drag on truly innovative companies.

17 The patent system can also reduce transaction costs for joint technology ventures by
solving what is known as Arrow’s information paradox. Without patents, transacting over a
knowledge good is difficult because no one will want to buy an idea without knowing what it
is, but once the idea is disclosed, what’s to stop the prospective purchaser from walking away
and pursuing the idea herself? See Jonathan M. Barnett, Property as Process: How Innovation
Markets Select Innovation Regimes, 119 Yale L.J. 284 (2009).
38 MASUR & OUELLETTE ⋅ PATENT LAW

Given the magnitude of the many social costs arising from the patent system,
society should ensure it is obtaining some offsetting benefit. Unfortunately, “we lack
sufficient evidence to inform this big picture question of whether strengthening the
patent system—through longer or stronger patents—would increase or decrease
research investments and innovation, much less whether this benefit is large enough
to outweigh patents’ costs.” Lisa Larrimore Ouellette & Heidi Williams, Reforming
the Patent System (Hamilton Project Policy Proposal 2020-12). We have chosen
examples from the pharmaceutical industry because this is the industry in which
patents appear to play the largest role. For example, pharmaceutical executives report
that they regularly drop drugs that lack strong patent protection from their
development pipelines. Benjamin N. Roin, Unpatentable Drugs and the Standards of
Patentability, 87 Tex. L. Rev. 503, 545 (2009). One of the best empirical efforts to study
the effect of patent protection on research investments documented less private R&D
investment in cancer drugs that require longer clinical trials and thus have shorter
effective patent terms. Eric Budish, Benjamin N. Roin & Heidi Williams, Do Firms
Underinvest in Long-Term Research? Evidence from Cancer Clinical Trials, 105 Am.
Econ. Rev. 2044 (2015). But even this study could not determine whether the
decreased investment incentive was caused by the shorter effective patent term or
from corporate short-termism.

All of this is to say that there are good justifications for having a large-scale
innovation incentive system such as patent law. The social returns to innovation, even
accounting for racing and business stealing, appear to be enormous. See Benjamin F.
Jones & Lawrence H. Summers, A Calculation of the Social Returns to Innovation, in
Innovation and Public Policy (2021). But the details of where and when patent law
provides too much, too little, or just the right amount of protection are very much up
for grabs.

Patents also serve other objectives. Part of the quid pro quo for obtaining
patent rights is disclosure: in exchange for the right to exclude, the inventor must
teach the public how to make and use the invention. This disclosure enables
subsequent inventors to improve upon the invention and further grow the store of
public knowledge. (Subsequent research efforts might infringe the patent, however,
which is a subject we take up later in the book.) Patents can also be privately valuable
to market participants—as a signal to potential investors that an invention is new
and nonobvious, or as a feather in the cap of an inventor. Here, we can think of patents
as providing information to the market, though it may be hard to know how much that
information is worth given the problem of patent quality. In any event, these
considerations are undoubtedly important, and for some patentees they may be the
principal reason for pursuing patents. On the whole, however, they are generally
viewed as second-order to the objective of creating incentives for innovation.

As you read through this book and learn patent law, you should consider which
legal changes might be warranted to enable the patent system to better achieve all of
its objectives.
 OVERVIEW 39

F. Innovation and Inequality

The focus on a utilitarian framework for patent law doesn’t mean that patent
law is just about money, or that patent lawyers and scholars shouldn’t or don’t care
about issues of inequality. Throughout history, innovation has been a leading driver
of economic growth and has helped lift communities out of poverty. The importance of
knowledge goods to the global economy has only increased with the rise of computing
and information technologies. But the benefits of innovation are not evenly
distributed. Patent law and other legal institutions that incentivize innovation and
allocate access to knowledge goods are used both to reinforce and subvert existing
power structures and inequalities, including issues related to gender, race, geography,
and income.

The connection between innovation and inequality has been the subject of
scholarly interest in fields ranging from economics to critical legal studies. Here, we
briefly highlight inequalities in two key aspects of innovation: Who becomes an
inventor, and who benefits from innovation?

1. Inequality Among Innovators

Inequality among innovators is a pervasive social problem. As one of us has
explained:

Disparities in innovation by gender, race, and class raise concerns for

both equity and economic growth. For example, Professor Raj Chetty’s
team of economists has estimated that if women, racial minorities, and
people from low-income backgrounds invented at the same rate as white
men from families in the top income quintile, these “lost Einsteins”—or
perhaps “lost Maryam Mirzakhanis”—would quadruple the rate of
innovation in America. But progress on increasing participation of
underrepresented groups in the innovation ecosystem has been glacial.
Unless something dramatic changes, gender inequality . . . will persist
among American innovators in science and engineering for well over a
century.

Amy C. Madl & Lisa Larrimore Ouellette, Policy Experiments to Address Gender
Inequality Among Innovators, 57 Hous. L. Rev. 813 (2020) (citing Alex Bell et al., Who
Becomes an Inventor in America? The Importance of Exposure to Innovation, 134 Q.J.
Econ. 647 (2019)). These gaps affect not only the rate of innovation, but also what
kinds of innovations are produced. For example, “patents with all-female inventor
teams are 35% more likely than all-male teams to focus on women’s health.”
Rembrand Koning, Sampsa Samila & John-Paul Ferguson, Who Do We Invent for?
Patents by Women Focus More on Women’s Health, but Few Women Get to Invent, 372
40 MASUR & OUELLETTE ⋅ PATENT LAW

Science 1345 (2021). Unfortunately, “the evidence base for most policy interventions
to reduce the innovation gender gap is depressingly shallow, and there is even less
evidence for disparities by race and ethnicity.” Madl & Ouellette, supra, at 816.

Does the choice of patent law as a key innovation policy ameliorate or

exacerbate these inequalities? Some scholars have argued that because patent law
places relatively little discretion in the hands of government decisionmakers—
requiring the USPTO to grant patents to any inventions that meet relatively objective
criteria, without regard to the race, class, or gender of the inventor—it has
democratized innovation. See, e.g., B. Zorina Khan, The Democratization of Invention:
Patents and Copyrights in American Economic Development, 1790–1920 (2005). Other
scholars have argued, however, that patent law is far from “neutral” to societal
identities in its design. See, e.g., Anjali Vats & Deidré A. Keller, Critical Race IP, 36
Cardozo Arts & Ent. L.J. 735 (2018) (arguing that “race is an exceedingly important
site for intellectual property analysis for which existing considerations of power,
inequality, or distributive justice simply do not fully account”); Keith Aoki,
Distributive and Syncretic Motives in Intellectual Property Law (with Special
Reference to Coercion, Agency, and Development), 40 U.C. Davis L. Rev. 717, 741
(2007) (arguing that the early U.S. patent system exacerbated race-based wealth
disparities between inventors).

Additionally, even if patent laws are objectively applied, receiving a patent

from the USPTO is worth little in isolation; financially benefiting from patents
depends on institutions such as corporate rent-sharing and venture capital, which
may have their own biases. See, e.g., Patrick Kline et al., Who Profits from Patents?
Rent-Sharing at Innovative Firms, 134 Q.J. Econ. 1343 (2019); Dana Kanze et al.,
Male and Female Entrepreneurs Get Asked Different Questions by VCs—and It Affects
How Much Funding They Get, Harv. Bus. Rev. (June 27, 2017).

Should these considerations affect the choice of patent law versus other
innovation institutions? Although direct funding of R&D through federal grants
involves far more discretion for government decisionmakers, race and gender gaps
among grant recipients are smaller than among patent inventors.

2. Inequality in Access to Innovation

The patent system is built around the notion that rewarding innovators based
on consumers’ willingness to pay is a good way to aggregate dispersed information
about the social value of new knowledge goods. Policymakers do not have to make
tough decisions in doling out R&D funding, such as whether Pfizer or Gilead will make
better drugs or whether Apple or Samsung will make better smartphones—they can
let the market decide. But this means that R&D investment decisions are often based
on consumers’ ability to pay, which affects both what innovations are produced and
who has access to them.
 OVERVIEW 41

Consider what innovations will emerge from a patent-based reward system.

Firms focused on market returns may choose to invest in lifestyle drugs like Viagra
rather than essential medicines, or in the next generation iPhone rather than more
accessible internet devices. Private firms will also overinvest in products with
negative externalities—ranging from addictive opioids to carbon-emitting power
plants—for which the social burden often falls disproportionately on marginalized
communities. A system based on disaggregated R&D decisions can also intensify
social problems like technological unemployment—job loss due to innovations like
automation. The net effect of private R&D investment decisions is product innovations
that disproportionately benefit high-income households. See Xavier Jaravel, The
Unequal Gains from Product Innovations: Evidence from the U.S. Retail Sector, 134
Q.J. Econ. 715 (2019); David Rotman, Technology and Inequality, MIT Tech. Rev. (Oct.
21, 2014).

One might look at these market failures and conclude that society should rely
less on patents and more on non-patent incentives such as direct public funding for
R&D. But failures of political markets can be devastating. Government actors are
subject to corruption and capture and are limited by the constraints of the next
election. And even absent explicit bias, government funding can still compound social
inequalities. For example, NIH grants targeted at the most common causes of U.S.
infant mortality were effective at reducing mortality, but they exacerbated racial
disparities in infant outcomes. See David M. Cutler et al., Induced Innovation and
Social Inequality: Evidence from Infant Medical Care, 47 J. Hum. Res. 456 (2012).
More targeted legislation may be needed to shift the distributive balance of what
innovations are produced. See, e.g., Christopher Buccafusco, Disability and Design, 95
N.Y.U. L. Rev. 952 (2020) (“[T]wo of the most important drivers of innovation for
accessible design have been social welfare laws and antidiscrimination laws.”).

In addition to distorting what innovations are produced, the patent system can
magnify inequalities in who has access to new innovations. Recall the example above
of a cancer drug with a competitive price of $100 but a profit-maximizing patent-
protected price of $10,000. Unless the government takes steps to increase access to
the drug—such as by instituting a national healthcare system—consumers who
cannot afford to pay $10,000 will be priced out of the market, resulting in a substantial
social loss. For health technologies, many government programs do exist to increase
access, alleviating the incentives/access tradeoff. But healthcare is an exception. For
other types of technology—including technology that is nearly essential in the modern
world, such as computers and smartphones—access is based on willingness to pay.

Again, these distributional concerns are not necessarily a sufficient reason to

abandon the patent system, especially if we think political institutions are even less
likely to make the right R&D investment decisions. First, as famously articulated in
Louis Kaplow & Steven Shavell, Why the Legal System is Less Efficient than the
Income Tax in Redistributing Income, 23 J. Legal Stud. 667 (1994), the first-best
approach to distributional problems would be to make innovation institutions as
42 MASUR & OUELLETTE ⋅ PATENT LAW

efficient as possible and then use the tax system to redistribute income so as to
promote greater equality. This would have the effect of promoting greater access to
patented goods as well. Of course, this argument that distribution should be left to
the tax-and-transfer system can be challenged on a number of grounds; for example,
see the discussion of political action costs in Lee Anne Fennell & Richard H.
McAdams, The Distributive Deficit in Law and Economics, 100 Minn. L. Rev. 1051
(2016). Second, and perhaps more compellingly, there is a distributive argument for
patent law’s user-pays allocation system in the case of nonessential goods, and
especially luxury goods. The patent system allocates the costs of developing those
goods to the consumers who actually use them. See Hemel & Ouellette, Beyond the
Patents–Prizes Debate, supra, at 349–52.

All of this is to say that the patent system will suffer from all of the same
pathologies as the markets on which it is based. Those pathologies are amplified by
the fact that patent law deliberately distorts markets, creating monopolies or quasi-
monopolies. This can exacerbate existing inequalities in access to patented goods. The
challenge for policymakers lies in determining how to harness the advantages of
patent law while simultaneously ensuring access to essential goods for everyone who
needs them.
 PATENTABILITY 43

II. Patentability
The following six chapters examine the requirements for patentability:

Requirements Overview

2. Novelty A claimed invention must be new compared with each piece

(§ 102) of prior art (e.g., an earlier publication, patent, use, or sale).
The governing statute changed dramatically from a “first to
invent” system for applications filed before March 16, 2013,
to a “first to disclose” system for more recent applications.

3. Nonobviousness A claim cannot be an obvious variation or combination of

(§ 103) the prior art. To avoid hindsight bias, a court may look to
“secondary considerations” such as near-simultaneous
invention and failure of others.

4. Utility and An invention must be useful at the time of filing: the

Disclosure specification must demonstrate that the invention is
(§ 112(a), § 101) operable and that it has a specific and substantial real-
world use. The disclosure also must show that the claim
satisfies enablement (teaching how to make and use the
invention without “undue experimentation”) and written
description (showing that the inventor “possessed” the
invention at the time of filing).

5. Definiteness A claim must describe the scope of the invention with

and Functional “reasonable certainty” or it is invalid as indefinite. If a
Claiming claim element is in “means-plus-function” form (like “a
(§ 112(b), (f)) means for fastening”), its scope is limited to the
corresponding structure in the specification, and the claim
is indefinite if there is no corresponding structure.

6. Patentable If the claim is directed to a patent-ineligible category (laws

Subject Matter of nature, natural phenomena, or abstract ideas), it must
(§ 101) add “significantly more” to be patentable. Adding
conventional steps—implementing an abstract idea on a
general-purpose computer or drawing blood for a
diagnostic—is not enough.

7. Inventorship Omitted inventors may seek correction of inventorship and

(§§ 116, 256) and then may independently license the patent. Double
Double Patenting patenting prevents an inventor from patenting the same
(nonstatutory) invention or obvious variants thereof unless a terminal
disclaimer is filed so that later patents expire at the same
time as the first one.
44 MASUR & OUELLETTE ⋅ PATENT LAW

Before turning to the first requirement of novelty, we emphasize several points

that apply across the patentability requirements:

Common Law Statutory Interpretation. Most of the patentability requirements

are codified in the Patent Act, but many of these statutory provisions are short and
vaguely worded. A substantial portion of the law of patentability has been developed
by the courts through a common-law process that is informed by the underlying social
welfare goals of the patent laws. The following chapters will frequently refer to the
policy considerations introduced in Chapter 1 and will include numerous problems to
help students develop a lawyer’s situation sense for how courts evaluate different
cases.

The PHOSITA. These requirements are generally evaluated from the

perspective of the Person Having Ordinary Skill in the Art (PHOSITA) as of the
effective filing date for the claim at issue.1 The PHOSITA is a hypothetical person like
the “reasonable person” in tort law—you can think of her as a “reasonable researcher”
in the field of the patent at issue, with a level of skill and general background
knowledge that increases as the field becomes more complex. For example, the
PHOSITA will have more skill for a bioinformatics invention than for a simple
mechanical invention.

Claim Construction. As noted in Chapter 1, interpreting what a claim covers

(i.e., “construing” the claim) is an important preliminary step for assessing its validity.
We save a detailed discussion of the law of claim construction for Chapter 8 because
it is difficult to understand what is at stake in claim construction without some
understanding of the patentability requirements, and because the Federal Circuit has
emphasized the importance of the context of a specific allegation of infringement when
ruling on claim construction. See, e.g., Jang v. Bos. Sci. Corp., 532 F.3d 1330, 1337
(Fed. Cir. 2008). For now, it is sufficient to know that claims in a patent application
are given their “broadest reasonable interpretation,” whereas claims in a granted
patent are given their “ordinary meaning” to a PHOSITA at the time of filing. As you
read the cases in the following chapters, look for places where the interpretation of a
claim term might affect the outcome.

Questions of Law or Fact? Most of the patentability requirements are questions

of law based on underlying questions of fact. The main exception is determining
whether a given prior art reference renders a claim invalid for lack of novelty under
§ 102 because this is simply a question of whether the reference discloses every claim
element, as we discuss in the following chapter. Additionally, the written description
requirement of § 112(a) is a question of fact for reasons that seem “inexplicable.”

1 One of the hottest debates in patent law is exactly how to abbreviate and pronounce
this hypothetical person. See Dennis Crouch, Person (Having) Ordinary Skill in the Art,
Patently-O (Nov. 30, 2018), https://patentlyo.com/patent/2018/11/person-having-
ordinary.html.
 PATENTABILITY 45

Anascape v. Nintendo of Am., 601 F.3d 1333, 1342 (Fed. Cir. 2010) (Gajarsa, J.,
concurring).

Evidentiary Standards. Patentability is relevant both before and after a patent

is granted: the USPTO evaluates whether a patent application satisfies these
requirements when deciding whether to grant the application, and the USPTO or the
courts may be asked to reevaluate these issues if an accused infringer argues that a
granted patent is invalid (in the context of infringement litigation in court or a post-
grant review such as IPR at the USPTO). In any of these contexts, the patentee does
not have to prove that her patent is valid—the burden is on the USPTO or on the
party challenging the patent to show that it is invalid. The substantive legal test is
generally the same in each context, but the evidentiary standard is different. During
examination or during post-grant review at the USPTO, a claim should be rejected if
the patent examiner or third-party challenger establishes unpatentability by a
preponderance of the evidence, meaning it is more likely than not that the claim is
unpatentable. But in district court, granted patents are entitled to a presumption of
validity, meaning that a challenger must establish invalidity by clear and convincing
evidence. See Microsoft Corp. v. i4i Ltd. P’ship, 564 U.S. 91 (2011).

Patent examination at Post-grant review at Infringement litigation

the USPTO the USPTO’s PTAB in district court
Claim in patent Granted patent claim
application Granted patent claim (presumption of validity)

↓ ↓ ↓
Examiner’s rejection Invalidity challenge by Invalidity challenge by
(establishing third party (establishing accused infringer
unpatentability by a invalidity by a (establishing invalidity by
preponderance of the preponderance of the clear and convincing
evidence) evidence) evidence)

↓ ↓ ↓
Applicant’s response Patent owner’s response Patent owner’s response
(amend the claim or try to (petition to amend the (rebut the argument, with
argue against the claim or rebut the appeal to the Federal
rejection, including by argument, with appeal to Circuit)
appeal to the PTAB and the Federal Circuit)
then to the Federal
Circuit)

It is thus important to pay attention to the context in which a case arises, as we have
written previously: “Just because there is not clear and convincing evidence that a
patent is invalid does not mean that it should not be held invalid under a lower
standard. It is often a mistake for the PTO to rely on precedent from infringement
46 MASUR & OUELLETTE ⋅ PATENT LAW

cases when deciding to grant patents.” Jonathan S. Masur & Lisa Larrimore
Ouellette, Deference Mistakes, 82 U. Chi. L. Rev. 643 (2015). That is, it is possible that
the same patent could be declared not invalid during litigation—where the “clear and
convincing evidence” standard applies—but invalid in a direct appeal from the
USPTO, where the “preponderance of the evidence” standard applies. Courts that
reason from validity precedents should take care to consider whether the precedent
arose in the context of litigation or a direct appeal from the USPTO.

Validity and Preclusion. Neither the USPTO nor the courts determine that a
patent claim is legally valid; rather, examiners determine that they have not been
able to establish a prima facie case of unpatentability, and the courts determine that
a patent challenger has not been able to establish invalidity by clear and convincing
evidence. We will thus often write that a claim was held “not invalid”—avoid the
temptation to rewrite the double negative! Because courts do not hold a claim to be
valid, the validity of a patent can be challenged repeatedly by different defendants. In
contrast, once a claim has been held invalid, issue preclusion (also known as collateral
estoppel) prevents a patentee from relitigating its validity. Blonder–Tongue
Laboratories v. University of Illinois Foundation, 402 U.S. 313 (1971).

Additional Resources. As noted in Chapter 1, courts do not grant deference to

the USPTO’s interpretation of substantive patent law, but the USPTO generally
updates training materials and guidance to examiners to be consistent with the most
recent caselaw. The MPEP has a free and useful summary of the law of patentability
in Chapter 2100.2 The leading patent treatise is Chisum on Patents (available on
Lexis), although it is so detailed that it can be difficult to read. Westlaw’s resources
include Matthews Annotated Patent Digest, Moy’s Walker on Patents, and the Patents
section of Business and Commercial Litigation in Federal Courts by the Honorable
Timothy B. Dyk & Samuel F. Ernst.

2 https://www.uspto.gov/web/offices/pac/mpep/mpep-2100.html.
 NOVELTY 47

2. Novelty
To be patentable, an invention must be new. This rule derives from the
fundamental patent tradeoff between the benefits of creating incentives for research
and development and the costs that arise from patents themselves. If an invention is
truly new, the public gains something in exchange for the cost of granting a patent:
the benefit of an invention it might otherwise not have enjoyed. If the invention
already exists, however, the public can benefit from it without bearing the costs that
a patent would create for consumers and subsequent innovators. The goal of patent
law is to provide incentives for people to create new and useful inventions, not to claim
patent rights on inventions that already exist. The novelty requirement is meant to
police these incentives.

This policy justification for patent law’s novelty requirement is longstanding

and generally compelling. Nonetheless, as we will see, the doctrine of novelty extends
well beyond these boundaries. In some cases, even inventions that enrich the store of
knowledge—and that were invented by the person who is filing for the patent—may
be barred from patenting. In these cases, the law rests upon different principles, which
we explore below.

A claimed invention is unpatentable for lack of novelty only if a single piece of

prior art—an earlier reference, such as a publication or item for sale—discloses every
element of the claim, which is also referred to as anticipating the claim. For example,
as illustrated in the chart below, the simplified Swiffer patent claim described in
Chapter 1, which combines a handle, a mop head, a liquid delivery system for cleaning
solution, and a disposable cleaning pad, is not anticipated by a sponge mop that has
long been in use, by an article describing a mop with a disposable pad, or by an earlier
patent on a broom with an integrated cleaning solution. Only a single prior art
reference teaching all four claim elements arranged together as they are in the claim
would destroy the claim’s novelty. See Net MoneyIN v. VeriSign, 545 F.3d 1359, 1371
(Fed. Cir. 2008). As we discuss later, however, the separate article and earlier patent
references might render the claim invalid as obvious. Claim charts like this are a
useful tool for organizing a novelty analysis, as we discuss in more detail below.
48 MASUR & OUELLETTE ⋅ PATENT LAW

Novelty Claim Chart

The Swiffer claim is not anticipated because no single prior art reference discloses every claim
element.

Prior art references

Claim elements Traditional Article describing Earlier patent on

of simplified sponge mop in mop with broom with
Swiffer patent public use disposable pad cleaning solution

handle ✓ ✓ ✓
mop head ✓ ✓
✓
liquid delivery
system

disposable
cleaning pad ✓
Novelty doctrine often operates as rules, not as standards, and occasionally
harsh rules at that. U.S. patent law takes an expansive approach to novelty: even
obscure references can prevent a later inventor from receiving a patent. This rule can
have substantial consequences. If an invention was described decades ago in an
obscure publication but never implemented in practice, the public has received little
benefit—and the resulting unpatentability might deter others from further developing
that invention. Unpatentable drugs are regularly dropped from pharmaceutical
development pipelines, for example, even if they have tremendous potential social
value. See Benjamin N. Roin, Unpatentable Drugs and the Standards of Patentability,
87 Tex. L. Rev. 503 (2009).

The rule that an invention must be new is simple to state but is the most
challenging doctrine to master for many students. When assessing the novelty of a
given patent claim in practice—or on an exam—you typically will have a list of
references that might invalidate the claim, like publications, other patents, or actions
taken by the inventor of the claim at issue or by an independent inventor.

As a preliminary step, you will need to determine which statute applies. The
law governing novelty, 35 U.S.C. § 102, was significantly changed by the 2011
America Invents Act (AIA). As discussed in more detail below, if the effective filing
date of the claim at issue is before March 16, 2013, it is governed by the “pre-AIA”
rules; later claims are governed by the current “post-AIA” statute.

We then recommend the following plan of attack:

 NOVELTY 49

A. For each reference that might invalidate the claim, does the timing of the
reference allow it to serve as prior art under the relevant statute? For example,
both the pre-AIA and post-AIA statutes give inventors a one-year grace period
between disclosing or using their invention and filing a patent.

B. If yes, does the reference fall under some statutory category of prior art: (1)
paper prior art (for a “printed publication” or “patent”), (2) real-world prior art
(for a reference that is “in public use” or “on sale”), or (3) earlier invention
(which is relevant only pre-AIA)?

C. If yes, does the information disclosed in the prior art reference anticipate the
patent claim, meaning that it explicitly or inherently discloses every element
of the invention? (If not, don’t ignore the reference—it may still be relevant for
assessing obviousness!)

Sometimes, the answer to each of these questions is straightforward. If you try

to claim a particular chemical compound, but that exact compound was disclosed in a
published scientific journal article ten years ago, then under either pre- or post-AIA
law the article is a printed publication that anticipates the claim. This is true whether
the article was published by someone else or by you. But each question can also
present more challenging issues. How does a claim’s effective filing date differ from its
actual filing date? What if the reference is a conference poster that is no longer
available, or a secret offer for sale that was declined and never made public? What if
the chemical compound was frequently made by a prior art process, but no one realized
it? What if someone else invented the compound first but did not disclose or use it for
many years? The following sections explore these subtleties.

We will tackle the three “plan of attack” questions in order. Section A presents
the two versions of § 102 and examines whether the timing of a reference allows it to
serve as prior art under the relevant statute. Sections B1, B2, and B3 then discuss
three categories of prior art: paper prior art (printed publications and earlier patents),
real-world prior art (references that are in public use or on sale), and prior inventions
(which are relevant pre-AIA). Finally, Section C explains how to determine whether a
given reference anticipates a claim.

A. The America Invents Act and Prior Art Timing

When the AIA was enacted in September 2011, it became the most significant
statutory revision to the Patent Act since 1952. A key change was shifting the United
States from a “first-to-invent” system to a “first-to-file” system for patent applications
with an effective filing date on or after March 16, 2013. Under the pre-AIA law,
whether a particular invention was novel was determined primarily by whether there
was some piece of prior art that predated the patent applicant’s invention. This
accorded with widespread intuition about what it meant for an invention to be “new”—
50 MASUR & OUELLETTE ⋅ PATENT LAW

that it is the first time that invention has come into existence—but created
administrative difficulties. To resolve a dispute between competing independent
inventors under the pre-AIA first-to-invent system, the USPTO had to conduct an
evidence-intensive inquiry into invention dates.1

Under the post-AIA first-to-file system, the USPTO now joins most other
patent offices around the world in simply looking to which inventor got to the patent
office first (or, as we will see, publicly disclosed and then got to the patent office within
one year). Under this system, invention dates are largely irrelevant. (As we will see,
invention dates are not entirely irrelevant; for example, the date an invention is “ready
for patenting” is relevant to when it may be placed “on sale.”) What matters for judging
novelty is which party made the invention public first, either by filing for a patent or
through some other means.

It is important for students of patent law to learn both systems because many
litigated patents will be governed by pre-AIA rules for the next decade. The last pre-
AIA patents will not expire until around 2033 (twenty years after filing in 2013), and
over one-third of patent assertions are not resolved until within three years of
expiration. Additionally, courts interpreting the post-AIA statutory language have
looked to pre-AIA caselaw.

Note that the key to determining whether pre- or post-AIA law applies is the
effective filing date of the patent. As described in Chapter 1, patent applications often
“claim priority” to earlier “parent” applications, which include (1) provisional U.S.
applications, (2) earlier U.S. applications, (3) applications filed under the Patent
Cooperation Treaty, and (4) applications directly filed in a foreign country and then
filed in the United States within one year.2 These are listed on the cover page under
“Related U.S. Application Data.” If a patent application properly claims priority to an
application filed before March 16, 2013, then it is governed by pre-AIA rules.3

Below is part of the cover page of a patent filed by the Broad Institute and MIT
on CRISPR gene-editing technology, which has been the subject of a high-profile
dispute with UC Berkeley. (Jennifer Doudna and Emmanuelle Charpentier won the

1 If two inventors file competing patent applications, this proceeding is known as an

interference. If one inventor wants to show that her invention predates a prior art reference,
she must file an affidavit swearing behind the reference with facts demonstrating earlier
invention.
2For relevant statutes, see 35 U.S.C. § 119 (provisionals and patents filed in other
countries); § 120 (claiming priority to an earlier U.S. application); § 121 (divisionals); § 365
(Patent Cooperation Treaty (PCT) applications); § 386 (Hague Agreement (international
design) applications).
3 If an applicant files a first application before March 16, 2013 and a second application
on or after March 16, 2013 that includes “new matter,” then claims that require the new matter
for support do not receive the earlier effective filing date, and the entire second application—
including claims with a pre-AIA effective filing date—is governed by post-AIA rules. This is
true even if claims based on the new matter are later amended or cancelled.
 NOVELTY 51

2020 Nobel Prize in Chemistry for developing CRISPR at Berkeley, which filed its own
patent applications, but Feng Zhang’s group at Broad was the first to use the gene-
editing technique in human cells.) Before you look at the answer in the footnote, try
to figure out: What is the effective filing date of this application? Which § 102 applies:
pre-AIA or post-AIA?4

4 The application was actually filed on Oct. 15, 2013, but the effective filing date is
generally the earliest date in the “Related U.S. Application Data” section—in this case,
December 12, 2012. Because there was not “new matter” added to the specification after March
16, 2013 (which one can confirm in Patent Center), the application was governed by the pre-
AIA first-to-invent rules. Note also that this patent issued extraordinarily fast—five months
after it was actually filed—because the applicant filed an Accelerated Examination Request.
See MPEP § 708.02(a).
52 MASUR & OUELLETTE ⋅ PATENT LAW

1. Pre- and Post-AIA § 102 Statutory Text

Both versions of § 102 are complicated, and we recommend reading them
multiple times and bookmarking this section for easy reference. What differences do
you see between the statutes, and what statutory terms seem particularly important?

Post-AIA § 102 (for patents filed on or after March 16, 2013)

(a) Novelty; Prior Art.—A person shall be entitled to a patent unless—

(1) [Prior Art Disclosures] the claimed invention was patented,

described in a printed publication, or in public use, on sale, or otherwise
available to the public before the effective filing date of the claimed
invention; or

(2) [Prior Patent Filing Disclosures] the claimed invention was

described in a patent issued under section 151, or in an application for
patent published or deemed published under section 122(b), in which
the patent or application, as the case may be, names another inventor
and was effectively filed before the effective filing date of the claimed
invention.

(b) Exceptions.—

(1) [Exceptions to (a)(1) Disclosures] Disclosures made 1 year or less

before the effective filing date of the claimed invention.—A disclosure
made 1 year or less before the effective filing date of a claimed invention
shall not be prior art to the claimed invention under subsection (a)(1)
if—

(A) [Inventor Disclosures] the disclosure was made by the

inventor or joint inventor or by another who obtained the subject
matter disclosed directly or indirectly from the inventor or a
joint inventor; or

(B) [Third-Party Disclosures that Follow Public Inventor

Disclosures] the subject matter disclosed had, before such
disclosure, been publicly disclosed by the inventor or a joint
inventor or another who obtained the subject matter disclosed
directly or indirectly from the inventor or a joint inventor.

(2) [Exceptions to (a)(2)] Disclosures appearing in applications and

patents.—A disclosure shall not be prior art to a claimed invention
under subsection (a)(2) if—
 NOVELTY 53

(A) [Inventor Patent Disclosures] the subject matter

disclosed was obtained directly or indirectly from the inventor or
a joint inventor;

(B) [Third-Party Patent Disclosures that Follow Public

Inventor Disclosures] the subject matter disclosed had, before
such subject matter was effectively filed under subsection (a)(2),
been publicly disclosed by the inventor or a joint inventor or
another who obtained the subject matter disclosed directly or
indirectly from the inventor or a joint inventor; or

(C) [Commonly Owned Patent Disclosures] the subject

matter disclosed and the claimed invention, not later than the
effective filing date of the claimed invention, were owned by the
same person or subject to an obligation of assignment to the
same person.

(c) Common Ownership Under Joint Research Agreements.—Subject matter

disclosed and a claimed invention shall be deemed to have been owned by the
same person or subject to an obligation of assignment to the same person in
applying the provisions of subsection (b)(2)(C) if—

(1) the subject matter disclosed was developed and the claimed
invention was made by, or on behalf of, 1 or more parties to a joint
research agreement that was in effect on or before the effective filing
date of the claimed invention;

(2) the claimed invention was made as a result of activities undertaken

within the scope of the joint research agreement; and

(3) the application for patent for the claimed invention discloses or is
amended to disclose the names of the parties to the joint research
agreement.

(d) Patents and Published Applications Effective as Prior Art.—For purposes

of determining whether a patent or application for patent is prior art to a
claimed invention under subsection (a)(2), such patent or application shall be
considered to have been effectively filed, with respect to any subject matter
described in the patent or application—

(1) if paragraph (2) does not apply, as of the actual filing date of the
patent or the application for patent; or

(2) if the patent or application for patent is entitled to claim a right of

priority under section 119, 365(a), 365(b), 386(a), or 386(b), or to claim
the benefit of an earlier filing date under section 120, 121, 365(c), or
386(c), based upon 1 or more prior filed applications for patent, as of the
54 MASUR & OUELLETTE ⋅ PATENT LAW

filing date of the earliest such application that describes the subject
matter.

Pre-AIA § 102 (for patents filed before March 16, 2013)

A person shall be entitled to a patent unless —

(a) [Novelty] the invention was known or used by others in this

country, or patented or described in a printed publication in this or a foreign
country, before the invention thereof by the applicant for patent, or

(b) [Statutory Bars] the invention was patented or described in a

printed publication in this or a foreign country or in public use or on sale in
this country, more than one year prior to the date of the application for patent
in the United States, or

(c) [Abandonment] he has abandoned the invention, or

(d) [Late Filing in the U.S.] the invention was first patented or caused
to be patented, or was the subject of an inventor’s certificate, by the applicant
or his legal representatives or assigns in a foreign country prior to the date of
the application for patent in this country on an application for patent or
inventor’s certificate filed more than twelve months before the filing of the
application in the United States, or

(e) [Earlier U.S. Patent Applications] the invention was described in

— (1) an application for patent, published under section 122(b), by another
filed in the United States before the invention by the applicant for patent or
(2) a patent granted on an application for patent by another filed in the United
States before the invention by the applicant for patent, except that an
international application filed under the treaty defined in section 351(a) [the
Patent Cooperation Treaty] shall have the effects for the purposes of this
subsection of an application filed in the United States only if the international
application designated the United States and was published under Article
21(2) of such treaty in the English language; or

(f) [Derivation] he did not himself invent the subject matter sought to
be patented, or

(g) [First-to-Invent] (1) during the course of an interference conducted

under section 135 [for USPTO proceedings] or section 291 [for federal district
court proceedings], another inventor involved therein establishes, to the extent
permitted in section 104, that before such person’s invention thereof the
invention was made by such other inventor and not abandoned, suppressed, or
concealed, or (2) before such person’s invention thereof, the invention was
made in this country by another inventor who had not abandoned, suppressed,
 NOVELTY 55

or concealed it. In determining priority of invention under this subsection,

there shall be considered not only the respective dates of conception and
reduction to practice of the invention, but also the reasonable diligence of one
who was first to conceive and last to reduce to practice, from a time prior to
conception by the other.

2. The Structure of Pre- and Post-AIA § 102

Below is a graphical illustration of each statute mapped onto an invention
timeline; can you match the statutory sections above onto these pictures?
56 MASUR & OUELLETTE ⋅ PATENT LAW

Let us look at post-AIA law first. Section 102(a) is best understood as the
baseline requirement of novelty: if the invention was available to the public before the
person seeking a patent filed their patent application, then it cannot be patented. That
is, if patent applicant is not enriching the state of knowledge available to the public
but instead merely duplicating knowledge that already exists, the applicant cannot
obtain a patent. This is the meaning of the word “disclosure” in § 102(a)(1): a
disclosure is a mechanism by which the invention becomes “available to the public” in
some form—although as we will see, “public” in § 102 is a term of art that encompasses
many things that might seem rather private!

Section 102(a)(1) lists the categories of prior art that will prohibit a subsequent
filer from obtaining a patent. Much of this chapter will be devoted to figuring out what
falls within those categories—what does it mean for an invention to be in public use
or described in a printed publication, for instance? For the moment, the only
important thing is to know that these are the statutory categories. In addition, note
that a prior art reference under post-AIA § 102(a) does not have to come from someone
other than the patent applicant. The patent applicant herself can create prior art that
will block her own patent. Section 102(a)(1) does not distinguish between prior art
created by the patent applicant and prior art created by someone else.

Section 102(a)(2) is why the post-AIA law is described as a “first to file” regime.
That section says that an inventor cannot obtain a patent if anyone has previously
filed a patent application on the same invention, even if that application has not yet
been published. That is, absent § 102(a) prior art, the first party to file a patent
application will be entitled to the patent. However, this section only applies if the
patent is eventually granted or if the application is eventually published. (Recall that
patent applications are kept secret for 18 months and then usually published.) If the
applicant abandons the application before the 18-month mark and the application is
never published, it does not block subsequent applications under § 102(a)(2).

Section 102(b) contains the exceptions to § 102(a): the situations in which

§ 102(a) prior art will not block an applicant from receiving a patent. Section 102(b)
parallels § 102(a): § 102(b)(1) applies to § 102(a)(1), and § 102(b)(2) applies to
§ 102(a)(2). Section 102(b)(1)(A) states that a § 102(a) piece of prior art will not block
a patent applicant from receiving a patent if the prior art was created by the applicant
herself, and if the applicant files within a year of the prior art being created. Section
102(b)(1)(A) thus creates a one-year “grace period” for prior art that was disclosed by
the patent applicant. This includes § 102(a) prior art that was disclosed by someone
who obtained the relevant information from the patent applicant herself. That is, if
Ava tells Boyd about an invention, and then Boyd discloses the information in a way
that creates § 102(a)(1) prior art, patent law treats that disclosure as if it came from
Ava. Ava can still obtain a patent if she files within a year.

Section 102(b)(1)(B) states that § 102(a)(1) prior art that comes from someone
else won’t bar an applicant so long as the applicant “publicly disclosed” the invention
 NOVELTY 57

before the creation of the § 102(a) prior art, and so long as the applicant files within a
year. (What it means to “publicly disclose,” and how that might differ from merely
“disclosing,” is a subject we take up later in the chapter.) Put together, §§ 102(b)(1)(A)
and 102(b)(1)(B) create both a safe harbor and a ticking clock for a prospective patent
applicant who discloses an invention publicly. Once that applicant discloses the
invention per § 102(a), (a) her clock starts ticking and she must file within a year, per
§ 102(b)(1)(A), and (b) if her disclosure was public, she is protected against disclosures
by any other parties that occur during that time period, per § 102(b)(1)(B).

Section 102(b)(2) operates the same way as § 102(b)(1), but with respect to
patent application filings. An earlier patent filing does not count as § 102(b)(1) prior
art against a later applicant if the filing was based on information derived from the
applicant (§ 102(b)(2)(A)) or if the applicant had previously publicly disclosed the
invention (§ 102(b)(2)(B)). Section 102(b)(2)(C) also exempts patent filings with the
same owner or assignee. These § 102(b)(2) exceptions do not have the same one-year
limit as the § 102(b)(1) exceptions, but as we discuss below, patent filings that fall
within these exceptions can still become § 102(a)(1) prior art after they are published.

Accordingly, post-AIA § 102 is best understood as a “first to publish” regime,

rather than a first to file regime. The first inventor to publicly disclose an invention
(by creating public § 102(a) prior art) blocks every other party from ever obtaining a
patent and locks in a one-year grace period within which she can file and obtain a
patent herself.

Now consider pre-AIA § 102. Pre-AIA law functions similarly in many respects,
but the timing rules and trigger dates are different. Pre-AIA § 102(a) lists essentially
the same categories of prior art as post-AIA § 102(a), but under pre-AIA law those
categories of prior art only bar an inventor when they come into existence before the
inventor’s date of invention, not her date of filing. It’s generally hard to disclose an
invention without first having invented it, so it’s nearly impossible for an inventor to
create pre-AIA § 102(a) prior art that blocks herself, unlike under post-AIA law. (It’s
not entirely impossible, and we describe one situation in which this can occur below.)
The principle behind pre-AIA § 102(a) is the same as the principle behind post-AIA
§ 102(a): if the public already knew about the invention, you haven’t added anything
to the store of public knowledge and don’t deserve a patent.

Pre-AIA § 102(b), sometimes known as the “statutory bar” provision, includes

very similar categories of prior art and operates even more similarly to post-AIA law.
Under § 102(b), by and large, if anyone creates prior art, then everyone has a one-year
grace period in which to file for a patent; after a year, everyone is barred. Unlike post-
AIA law, by and large, § 102(b) does not distinguish based on who created the prior
art. (The “by and large” is the subject of much debate within patent law and is covered
in detail in the chapter below.)

Pre-AIA § 102(e) operates similarly to post-AIA § 102(a)(2) by preventing an

inventor from obtaining a patent if anyone has previously filed a patent application
58 MASUR & OUELLETTE ⋅ PATENT LAW

on the same invention, as long as the patent is eventually granted or the application
is eventually published. But like for pre-AIA § 102(a), these other patent applications
become prior art only if they were filed before the inventor’s date of invention, not her
date of filing.

Finally, pre-AIA law couples these novelty provisions with § 102(g), which asks
whether the party seeking a patent actually invented first, or whether some other
party beat her to the invention. Section 102(g) is the provision that really makes pre-
AIA law a “first to invent” regime.

One important consequence of the way these statutes are written is that many
of the novelty cases that arise under both pre-AIA and post-AIA law involve prior art
that was created by the inventor herself and may now bar her patent. These “first-
party cases” are instances where the party seeking the patent has indeed created
something new and enriched the state of knowledge, and yet nonetheless she is barred
from patenting her creation. Accordingly, they require policy justifications separate
from the standard policy rationale that undergirds the requirement of novelty (which
is that the applicant has not enriched the store of public knowledge). We will discuss
these policy justifications below in the course of discussing the various forms of prior
art, as there are different justifications for various types of prior art.

Practice Problems: Pre- and Post-AIA § 102 Timing

Although some students find the bright-line rules of § 102 timing refreshing
after encountering the ambiguous standards of many legal doctrines, many others find
these statutes to be the most challenging aspect of a Patent Law course. To check your
own understanding, we highly recommend tackling the following practice problems.

Alyssa, an entrepreneur in Palo Alto, invents a novel diaper in April 2012 and
files a U.S. patent application in September 2013. Consider each of the following
additional sets of facts. In each scenario, is Alyssa entitled to receive a patent based
on the facts presented? In your explanation, please note the relevant statutory section
(e.g., “post-AIA § 102(a)(2)”).

1. In May 2013, Alyssa publishes an article describing the diaper in Parenting

magazine.

2. In June 2013, Luis independently invents the same diaper in Mexico and
immediately puts the diapers into public use in his publicly accessible childcare
facility in Mexico City.

3. In June 2013, Luis independently invents the same diaper, and in July 2013,
he publishes a Spanish-language article describing it in Mi Bebé.

4. In May 2013, Alyssa publishes an article describing the diaper in Parenting

magazine. In June 2013, Luis independently invents the same diaper. And
 NOVELTY 59

then in July 2013, Luis publishes a Spanish-language article describing it in

Mi Bebé.

5. In June 2013, Luis independently invents the same diaper, and in July 2013,
he files a U.S. patent application claiming the diaper. His patent application
is published 18 months after filing.

6. In May 2013, Alyssa publishes an article describing the diaper in Parenting

magazine. In June 2013, Luis independently invents the same diaper. In July
2013, Luis files a U.S. patent application claiming the diaper.

7. In August 2012, Alyssa places her diaper on sale by offering to sell it to

Strawberry Baby, a boutique in Menlo Park. The boutique declines.

8. Please re-answer questions 1–7 after shifting all dates in the scenarios above
back by one year. Alyssa now invents in April 2011 and files her patent
application in September 2012, her publication in question 1 is in May 2012,
etc.

Discussion Questions: Distinctions Between Pre- and Post-AIA Law

Post- and Pre-AIA law differ in a variety of important ways, many of which we
have already discussed or will explore further below. Here, we pause to highlight two
large-scale impacts wrought by the change in law.

1. International Prior Art. Pre-AIA law is in many respects quite American-

centric. Although printed publications count as prior art anywhere in the world,
sections 102(a), 102(b), and 102(g)(2) all classify other types of activities as prior art
only if they occurred in the United States. This means that inventors who, for
instance, placed their inventions into public use in a foreign country before the critical
date could nonetheless find themselves squeezed out of the American market if
someone obtained an American patent that their prior use did not bar. The existence
of this rule might have been due in part to a nationalistic desire to benefit American
inventors at the expense of foreign inventors; it might also have been due to concerns
regarding reliable evidence from overseas. (These provisions of the law are quite old.)

Regardless, the AIA eliminated these geographic limitations, as some of the

practice problems above indicate. This is an appropriate recognition of the fact that
innovation can easily cross borders, as well as the fact that the internet and related
technologies have made it easier to prove that various activities took place abroad.
There may well be other consequences from the change in law as well. For instance,
some scholars have argued that the AIA will lead to greater legal protection for long-
standing cultural knowledge. See Ryan Levy & Spencer Green, Pharmaceuticals and
Biopiracy: How the America Invents Act May Reduce the Misappropriation of
Traditional Medicine, 23 U. Miami Bus. L. Rev. 401 (2015). Do you think these are
60 MASUR & OUELLETTE ⋅ PATENT LAW

unequivocally positive changes, or will there be downsides for the American

innovation system?

2. First-to-File and Small Inventors. One concern that accompanied the

passage of the AIA was that it would disadvantage inventors with fewer resources—
small and medium-sized business, as well as solo inventors—to the advantage of
larger corporations. Larger corporations of course have many advantages in the race
to invent, including economies of scale and substantial resources that can be deployed
toward a particular line of R&D. But the AIA threatened to add another layer of
advantage: no longer would it be enough for a smaller inventor to beat a large
corporation to the invention; now the small inventor would have to beat the larger
player to the Patent Office. Larger corporations typically have greater access to patent
counsel—either in-house or external—to file patent applications, not to mention the
resources to devote to those operations. There was thus concern that the AIA would
exacerbate the trend toward large corporations dominating patent filings. See, e.g.,
David S. Abrams & R. Polk Wagner, Poisoning the Next Apple? How the America
Invents Act Harms Inventors, 65 Stan. L. Rev. 517 (2013).

The AIA offers a partial solution to this issue by creating what is effectively a
“first-to-publish” regime, rather than strictly a first-to-file regime. If an inventor is
the first to publish her invention, she will (1) bar anyone else from obtaining a patent
on the invention under § 102(a), (2) disqualify any subsequently published prior art
(such as prior art from a competing inventor) from serving as prior art against her,
via § 102(b)(2)(B), and (3) create a year-long grace period for herself during which time
she may file for a patent, under § 102(b)(1)(A). We will explore all of these provisions
and rules in greater detail below, but the bottom line is that a smaller inventor who
fears losing a race to the patent office has a better alternative: simply publish the
details of the invention, such as on a website. It is too early to say with certainty
whether these provisions of the AIA have helped level the playing field between large
and small innovators. But it is fair to say that the first-to-publish rule represents at
least a creative potential solution to the inequities created by a race to the patent
office. Can you think of other possible solutions that Congress might have enacted to
level the playing field between small and large inventors? Does this seem like the best
approach, or is there another option that would have been preferable? Why do you
think Congress chose this one?

B1. Paper Prior Art: Printed Publications & Patents

Both versions of § 102 describe various statutory categories of prior art. We’ll
begin with written disclosures in printed publications and patents—which we will
collectively refer to as “paper prior art”—before turning to real-world disclosures
through use or sale of the invention.
 NOVELTY 61

1. Printed Publications
A “printed publication” can be prior art under pre-AIA § 102(a) or (b), or under
post-AIA § 102(a)(1), and (so far as we know) the term has the same meaning under
either statute. The Federal Circuit has interpreted the “printed publication” category
broadly, encompassing a reference that is obscure or only temporarily available as
long as “persons interested and ordinarily skilled in the subject matter or art,
exercising reasonable diligence, can locate it.” Samsung Elecs. v. Infobridge Pte., 929
F.3d 1363, 1369 (Fed. Cir. 2019). A reference can be a printed publication even if no
member of the public actually accessed it. Electronic publications, including digital
videos, can be printed publications, although a purely oral presentation that is not
recorded cannot.

Whether a reference is sufficiently accessible to constitute a printed

publication is a legal conclusion based on a case-by-case balancing of underlying
factual determinations. Courts have interpreted this standard to include many
references that might not seem very accessible. If even a single copy of a reference is
in a public library indexed by subject matter, it is a printed publication. See In re Hall,
781 F.2d 897 (Fed. Cir. 1986). Other factors favoring accessibility include distribution
without confidentiality restrictions, a large number of people of ordinary skill in the
art having access, availability for longer periods of time (e.g., days rather than
minutes), relative ease of copying, and the absence of restrictions on copying the
material (or the lack of reasonable expectations that the material would not be copied).
See In re Klopfenstein, 380 F.3d 1345 (Fed. Cir. 2004). Where the underlying facts are
not in dispute, the Federal Circuit has often resolved the question of whether
something is a printed publication as a matter of law.

The date a publication is available as a reference is determined by when a

member of the relevant public could have accessed it. Journal articles are thus dated
by when they become available to the public, not when they are submitted to the
publisher or mailed. The date of accessibility can be established through routine
business practices. For online materials, the Wayback Machine at archive.org can be
used to establish the date of accessibility. Timestamped material from social media
websites can also be used as prior art.

Again, remember that invalidating prior art can be disclosed by either a third
party or the inventor herself, although both pre- and post-AIA rules generally provide
the inventor a one-year grace period between disclosing the invention and filing a U.S.
patent.

The following references have been held to be sufficiently accessible to

constitute printed publications:
62 MASUR & OUELLETTE ⋅ PATENT LAW

• A single cataloged doctoral thesis in a German university library that has a

routine business practice of cataloging, even without specific evidence of the
date the thesis was cataloged. In re Hall, 781 F.2d 897 (Fed. Cir. 1986).

• A poster displayed at two scientific conferences for a total of about three days,
with no restriction on copying, even though the poster was not indexed in any
database or distributed to the public. In re Klopfenstein, 380 F.3d 1345 (Fed.
Cir. 2004).

• A paper distributed orally to between 50 and 500 people in the relevant art,
after which copies were distributed on request, without restrictions, to as many
as six people. Massachusetts Inst. of Tech. v. AB Fortia, 774 F.2d 1104 (Fed.
Cir. 1985).

• An Australian patent application kept on microfilm at the Australian Patent

Office. In re Wyer, 655 F.2d 221 (C.C.P.A. 1981).

• An electronic post to a newsgroup populated by people in the relevant art, even

though the post was non-indexed and non-searchable. Suffolk Techs., LLC v.
AOL Inc., 752 F.3d 1358 (Fed. Cir. 2014).

• A sales catalog for which hundreds of copies were distributed at a trade show
without restriction, even though the trade show was open exclusively to dealers
and not the general public, and there was no evidence as to whether or not a
person of ordinary skill in the art attended the show. GoPro, Inc. v. Contour IP
Holding LLC, 908 F.3d 690 (Fed. Cir. 2018).

In contrast, these references were found to not be printed publications:

• Student theses that were not cataloged or indexed in a meaningful way. In re

Cronyn, 890 F.2d 1158 (Fed. Cir. 1989); In re Bayer, 568 F.2d 1357 (C.C.P.A.
1978).

• An article uploaded in 1999 to a university library website organized by author

and year but without a working keyword search option. Acceleration Bay v.
Activision Blizzard, 908 F.3d 765 (Fed. Cir. 2018).

• A presentation of lecture slides that was of limited duration. Univ. of

California v. Howmedica, Inc., 530 F. Supp. 846 (D.N.J. 1981) (discussed by
Klopfenstein, supra).

• An abstract that was brought to a technical conference to distribute upon

request to the authors, where there was no evidence that it had been requested
or disseminated. Norian Corp. v. Stryker Corp., 363 F.3d 1321 (Fed. Cir. 2004).

• Four technical reports distributed to fifty persons or organizations involved in

a military computing project that were of the class of documents typically
 NOVELTY 63

distributed with a “not for public release” notice. Telecom, Inc. v. Datapoint
Corp., 908 F.2d 931 (Fed. Cir. 1990).

• Monographs distributed by an inventor to (1) university and hospital

colleagues, where there was evidence in the record that academic norms gave
rise to an expectation that the disclosures would remain confidential, and (2)
two commercial entities, where there was an oral agreement on confidentiality.
Cordis Corp. v. Bos. Sci. Corp., 561 F.3d 1319 (Fed. Cir. 2009).

Discussion Questions: Printed Publications

1. First-Party Printed Publications. It is easy to see why a printed publication

created by someone other than the patent applicant should bar the applicant from
obtaining a patent. If the invention already existed, and the applicant did not enrich
the store of knowledge, then there is nothing to be gained from awarding a patent.
The question is, why should a printed publication created by the applicant bar the
applicant from obtaining a patent? (Note that many of the cases mentioned above
involve applicant-created prior art.) Suppose Alice invents something new and
publishes a paper about her invention. Thirteen months later, Alice files for a patent
on her invention. Under pre-AIA § 102(b) or post-AIA § 102(a), she cannot obtain a
patent. (Her safe-harbor period under post-AIA § 102(b)(1)(A) has expired.) What do
you think is the policy rationale behind this rule? From the perspective of the public,
or of society as a whole, what is gained from barring patents in these situations? What,
if anything, is lost?

2. Obscure Printed Publications. What are the advantages and disadvantages

of interpreting “printed publication” so broadly that a patent can be invalidated based
on an obscure or ephemeral piece of third-party prior art that most inventors are
unlikely to be aware of? If the invention has already been described, even in an
obscure reference, is that evidence that the patent incentive is less important for
spurring that invention? Would a requirement that the publication be more easily
accessible by the public be difficult to implement in practice? Would this policy change
have an affect on inequalities among innovators? How does the rise of search tools like
Google Scholar affect the inquiry into public accessibility of online references?

3. Patenting Academic Research. After the 2004 Klopfenstein decision held a

temporary conference poster to be a prior art printed publication, commentators
worried that the decision “could have a further chilling effect on conference
presentations by university researchers seeking to disseminate early results.” Margo
A. Bagley, Academic Discourse and Proprietary Rights: Putting Patents in Their
Proper Place, 47 B.C. L. Rev. 217, 244 (2006). The availability of state university
research files under open records laws may also limit the patentability of some
university research. See Jason Rantanen & Madison Murhammer Colon, Can Public
Universities Patent Their Research?: The Tension Between Open Records Laws and
64 MASUR & OUELLETTE ⋅ PATENT LAW

Patentability, 69 Drake L. Rev. (2021). Is this a policy concern, and if so, should it be
addressed through patent law or through open records rules? Should academic
research be treated differently from industry research?

Practice Problems: Printed Publications

Do you think the references described below are sufficiently publicly accessible
to count as prior art printed publications? (Assume they qualify under the relevant
timing provisions.) If you are unsure, what additional facts would you want to know
to determine whether or not they qualify?

1. A medical device manufacturer has been sued for infringement of a patent

claiming a method for correcting spinal column deviations such as scoliosis. In
arguing that the patent is invalid, the manufacturer points to a CD containing
a video demonstration and related slide presentation that it distributed to
spinal surgeons at three industry meetings before the patent’s effective filing
date. The meetings were attended by nearly 100 surgeons. See Medtronic v.
Barry, 891 F.3d 1368 (Fed. Cir. 2018).

2. The inventors of a cybersecurity patent on “event monitoring enabling

responses to anomalous live disturbances” (EMERALD) submitted a paper on
the invention for publication in conference proceedings more than one year
before filing a patent. When submitting the paper, one of the inventors also
placed a copy on his firm’s file transfer protocol (FTP) server at
ftp://ftp.csl.sri.com/pub/emerald/ndss98.ps for a week, making it publicly
accessible to anyone who visited that address without restrictions on copying.
In seven other instances, the inventor directed third parties to the papers in
the same “emerald” FTP subdirectory to find other papers related to the
EMERALD project. See SRI Int’l v. Internet Sec. Sys., 511 F.3d 1186 (Fed. Cir.
2008).

3. A scientist attends a conference of experts in her field, where she presents her
invention at a plenary session attended by 250 other leading scientists. During
the presentation she talks for 60 minutes and takes questions for another 30
minutes but does not show slides or make copies of her paper available. See In
re Klopfenstein, 380 F.3d 1345, 1349 n.4 (Fed. Cir. 2004).

2. Patents as Prior Art

Patents are an important category of paper prior art for subsequent inventions.
Despite efforts to improve search tools for “non-patent literature,” U.S. patent
examiners overwhelmingly focus on patent prior art when evaluating applications.
 NOVELTY 65

Patent prior art is also treated differently under both pre- and post-AIA § 102. Patents
can be prior art under three categories:

First, patents (including most foreign patents) are “patented” prior art under
the same sections as printed publications—pre-AIA § 102(a) or (b), and post-AIA
§ 102(a)(1)—as of when they are issued. But the nuances of the “patented” category
are generally irrelevant because almost all patents become prior art under other
provisions, and usually sooner.

Second, patents and patent applications—whether U.S. or foreign—are prior

art “printed publications” when published. At most patent offices, patent applications
are generally published when granted or 18 months after the earliest priority date,
whichever is sooner.5 When considering a patent as a “printed publication,” there is
no need to distinguish between the specification and the claims—the entire patent
document is prior art.

Third, under pre-AIA § 102(e) and post-AIA § 102(a)(2), any U.S. patent or
patent application that is eventually published is prior art as of its effective filing date.
This means that if Alice files a U.S. patent application that is published 18 months
later, Alice’s application is prior art against an application Becca files a month after
Alice, even though Becca has no way of knowing about Alice’s prior art for the first 17
months that her application is pending. This rule applies only to patents and patent
applications filed in the United States, including international applications filed under
the Patent Cooperation Treaty that designate the United States.6 A patent application
that is filed only in China is prior art as of when it is published, not when it is filed.

Note that Alice’s application does need to be published (including through

issuance) to trigger this pre-publication prior art rule. If Alice’s application is
abandoned before publication, it never becomes prior art. But if a patent application
is abandoned after publication, it is still prior art as of its filing date. One study found
that abandoned applications are actually more likely than issued patents to be used
by patent examiners as prior art. Christopher A. Cotropia & David L. Schwartz, The
Hidden Value of Abandoned Applications to the Patent System, 61 B.C. L. Rev. (2020).

Additionally, note that an inventor’s own patent applications are prior art
against her only as of the date they are published. Pre-AIA § 102(e) applies only to
patents filed “by another,” which means patents not filed by the same combination of
inventors (known as an “inventive entity”). Similarly, post-AIA § 102(a)(2) applies

535 U.S.C. § 122(b)(2) contains exceptions to this rule for U.S. patents, including that
an applicant who has not filed corresponding foreign patents at offices that require 18-month
publication may request that an application not be published until it is granted.
6If a U.S. application claims priority to an earlier-filed foreign patent application not
filed under the Patent Cooperation Treaty, the relevant prior art date is the U.S. filing date
pre-AIA and the foreign filing date post-AIA. For more on international patent institutions,
see Chapter 20.
66 MASUR & OUELLETTE ⋅ PATENT LAW

only to a patent that “names another inventor,” and post-AIA § 102(b)(2)(C) creates
an even broader exception for patents “owned by the same person or subject to an
obligation of assignment to the same person.” Thus, § 102 does not prevent an inventor
from filing a second patent application that is identical or very similar to an
application she filed a year earlier. Instead, the double patenting doctrine, discussed
in Chapter 7, prevents an inventor from obtaining multiple patents on the same
invention.

Practice Problems: Patents as Prior Art

1. Mila invents a novel roller skate in January 2012 and files a U.S. patent
application in July 2013. Hayk independently invents the same roller skate in
April 2013 and files a U.S. patent application in May 2013. Both patent
applications are published in due course, 18 months after filing. Who gets a
patent?

2. Same facts as question 1, but Hayk decides to abandon his patent application
in May 2014 because he does not think there is a large market for the roller
skate.

3. Same facts as question 2, but Hayk now abandons his patent application in
May 2015.

3. “Known . . . by Others” and “Otherwise Available to the

Public”
For the most part, knowledge that becomes publicly available—and thus will
invalidate a patent—will fall into one of the categories described here or in the next
section. Either the prior art will be written down, in which case it will be a printed
publication or a patent; or the prior art will relate to a real-world embodiment of the
invention, in which case it will be in public use or on sale. However, it is possible to
imagine cases in which knowledge of an invention becomes public without one of the
denominated categories of prior art being implicated. For instance, imagine the
following hypothetical scenario:

On January 1, Alice creates an invention, which she stores in her

laboratory. On January 2, she gives a public lecture about the invention
to a group of 1000 leading scientists in her field in which she describes
the invention in detail. Her lecture is purely audial; there are no slides
displayed and no papers distributed. Many of the scientists who attend
the lecture take careful notes, but their notes are never published. On
January 3, Brian independently creates the same invention, and on
January 4 he files for a patent.
 NOVELTY 67

Will Brian be able to obtain a patent in this scenario? Alice did not herself create a
printed publication. The notes of the conference attendees, while printed, were never
made public, so they cannot qualify. Alice also did not put the invention into public
use or offer to sell it, so those types of prior art are not implicated. (More on that
below.) Yet information about the invention is widely known by people in the field
before Brian invents or patents it, and thus it would be hard to say that Brian
meaningfully enriched the store of public knowledge. Granting him a patent in these
circumstances would seem to run counter to the principles that undergird the law of
novelty.

If these events took place before March 2013, it seems likely that Brian’s patent
would be barred by pre-AIA § 102(a) because the invention was “known . . . by others”
before Brian’s invention. Some litigants have gone so far as to argue that under pre-
AIA § 102(a), information “known . . . by others” before the date of invention could
anticipate a patent even if that information is not disclosed or used, but courts have
rejected these arguments. “[T]o invalidate a patent based on prior knowledge or use,
that knowledge or use must have been available to the public.” Woodland Tr. v.
Flowertree Nursery, Inc., 148 F.3d 1368 (Fed. Cir. 1998). Here, however, the fact that
the information was known to 1000 people in the field seems sufficiently public to
qualify. Nonetheless, we are unaware of a single case in which a patent was
invalidated by virtue of being “known . . . by others” without reference to any other
category of prior art. Situations in which knowledge of an invention reaches the public
without implicating any of the other categories of prior art appear to be very rare.

The “known . . . by others” language was removed by the AIA. Post-AIA law
contains its own catch-all category: “otherwise available to the public.” The Federal
Circuit has yet to decide a case that squarely implicates this provision, but an oral
presentation, unaccompanied by any printed matter, might well be an example of
something that is “otherwise available to the public.” Accordingly, it seems unlikely
that Brian would be able to obtain a patent if these events took place after March
2013, with post-AIA law in effect.

The upshot is that these provisions in pre- and post-AIA law likely exist to
capture situations, such as the hypothetical scenario above, in which information has
been made public but without implicating one of the other enumerated categories of
prior art. It is difficult to know for sure, however, precisely because such situations so
rarely arise.

4. The Enablement Standard for Paper Prior Art

As we will explore in more detail later, a patent is only valid if it satisfies the
enablement requirement of 35 U.S.C. § 112, meaning that it must teach a researcher
in that field how to make and use the invention without “undue experimentation.”
Similarly, printed publications and patents are only prior art for what they enable.
68 MASUR & OUELLETTE ⋅ PATENT LAW

After all, if a printed publication or patent does not teach a researcher in the field how
to make an invention, it can hardly be said to have added that invention to the store
of public knowledge. A subsequent inventor who actually figures out how to build this
invention and teaches the public should not be barred from obtaining a patent by a
publication that does not do the same.

For example, the fictional 1995 film Clueless, in which the lead character Cher
uses a computer program to determine whether certain clothing combinations match,
would not anticipate a real-world outfit-choosing algorithm. The program is fictitious
and contains no details to help a programmer implement it in real life. The film is
prior art, however, for what it does contain: the idea of using a computer to select
matching outfits, which may be relevant for determining whether an outfit-choosing
invention is obvious. See Symbol Techs., Inc. v. Opticon, Inc., 935 F.2d 1569 (Fed. Cir.
1991) (“While a reference must enable someone to practice the invention in order to
anticipate under § 102[], a non-enabling reference may qualify as prior art for the
purpose of determining obviousness under § 103.”).

Prior art is presumed to be enabling. The patentee thus has the burden of
showing that an otherwise anticipatory prior art reference is not enabling, both during
examination and in subsequent challenges to validity. See In re Antor Media Corp.,
689 F.3d 1282, 1289 (Fed. Cir. 2012); Amgen Inc. v. Hoechst Marion Roussel, Inc., 314
F.3d 1313, 1354 (Fed. Cir. 2003). For an argument that this burden of proving non-
enablement has a negative effect on innovation due to the large number of references
that disclose an invention (such as a chemical structure) without actually enabling it,
see Sean B. Seymore, Rethinking Novelty in Patent Law, 60 Duke L.J. 919 (2011).

The enablement standard for paper prior art is similar to the enablement
requirement of § 112, but there is an important difference. As we will discuss later,
§ 112—in conjunction with the utility requirement of § 101—requires a patentee to
disclose a known use for an invention in addition to disclosing how to make the
invention. The predecessor court to the Federal Circuit explained this distinction in
In re Hafner, 410 F.2d 1403 (C.C.P.A. 1969), in which a patent applicant’s own earlier
patent application—which had been rejected under § 112 for failing to disclose any
use for a new chemical compound—was used as prior art under § 102 against his later
patent application that included a use:

In essence, appellant is contending that a double standard

should not be applied in determining the adequacy of a disclosure to
anticipate under § 102, on the one hand, and to support the
patentability of a claim under § 112 on the other. He feels that a
disclosure adequate for the one purpose is necessarily adequate for the
other but, unhappily for him, this is not so. As we shall develop, a
disclosure lacking a teaching of how to use a fully disclosed compound
for a specific, substantial utility or of how to use for such purpose a
compound produced by a fully disclosed process is, under the present
 NOVELTY 69

state of the law, entirely adequate to anticipate a claim to either the

product or the process and, at the same time, entirely inadequate to
support the allowance of such a claim. This is so because of the
requirements of law engrafted on sections 101 and 112 by the decision
of the Supreme Court in Brenner v. Manson, 383 U.S. 519 (1966), with
respect to the meaning to be given to the words “useful” and “use” in
those sections. In construing them, we must of course, give them the
meaning demanded by the Supreme Court.

Standing alone, appellant’s argument against a double standard

is a plausible proposition. However, when considered in light of the
specific provisions of § 102, and § 112 as it has been interpreted, it is
seen to be untenable—§ 112 provides that the specification must enable
one skilled in the art to “use” the invention whereas § 102 makes no
such requirement as to an anticipatory disclosure. The disclosure of how
to use must relate to a use of the kind considered by the Supreme Court
in Brenner v. Manson to be a sufficient utility. Thus, the double
standard which appellant criticizes is now, implicitly if not explicitly,
required by law, at least in situations such as we have here, although
the “invention” per se claimed is fully disclosed and though the manner
of “making,” as distinguished from “using,” the invention is also fully
disclosed or is obvious.

Note that to satisfy the enablement standard for prior art, a reference need not
be a technical scientific publication. For example, in Iovate Health Sciences v. Bio-
Engineered Supplements & Nutrition, 586 F.3d 1376 (Fed. Cir. 2009), the Federal
Circuit affirmed the district court’s grant of summary judgment of invalidity based on
a prior art advertisement that listed the ingredients for a dietary supplement:

Here the parties do not dispute that the Professional Protein ad

was published in Flex and that the magazine was accessible to those
interested in the art of nutritional supplements prior to [the critical
date of] November 13, 1996. To be anticipatory, the ad must also
describe, either expressly or inherently, each and every claim limitation
and enable one of skill in the art to practice an embodiment of the
claimed invention without undue experimentation.

We agree with [defendant] that all one of ordinary skill in the

art would need to do to practice an embodiment of the invention is to
mix together the known ingredients listed in the ad and administer the
composition as taught by the ad. We have already rejected [plaintiff’s]
argument that the claims require administering an effective amount of
the claimed composition. But even if the claims did require an effective
amount, one of skill in the art would have been able to determine such
an amount based on the ad and the knowledge in the art at the time.
70 MASUR & OUELLETTE ⋅ PATENT LAW

Again, the ad teaches the amount of protein an active athlete needs per
day per kilogram of body weight and that Professional Protein should
be taken once before and once after exercise. In addition, the ′287 patent
specification lists numerous pre–1996 publications that teach
acceptable clinical dosages of the two claimed components. It also lists
pre–1996 publications that teach the effects of the components’
administration on humans . . . . Thus, contrary to [plaintiff’s]
assertions, the district court correctly concluded, as do we, that a person
of skill in the art, combining his or her knowledge of the art with the
advertisement’s suggestions, would have considered the advertisement
to be enabled.

As emphasized in Iovate, an anticipatory prior art publication must only enable the
claimed limitations, not the most effective embodiment of an invention, and
enablement may depend on knowledge the person of ordinary skill in the art obtains
from other sources. Whether a paper prior art reference is enabled is a question of law
based on underlying facts.

Discussion Questions: Enablement Standard for Paper Prior Art

1. Why should there be any enablement requirement for paper prior art? Why
is it not enough that the prior art disclose every element of the invention?

2. Can you justify the distinction drawn by the Hafner court between
enablement for § 102 and § 112, either as a matter of statutory interpretation or as a
matter of policy?

B2. Real-World Prior Art: In Public Use & On Sale

The previous section involved what might be thought of as “paper” categories
of prior art: patents and printed publications. In this section we consider categories
that cover real-world embodiments of the invention: “in public use” and “on sale.” We
will refer to these as “real-world” prior art.7 Many of the rules governing these types
of prior art, including the timing rules we described above, function similarly. But as
you will see, a number of doctrinal rules function very differently.

7 As we will see, the “on sale” category also includes sales that were never
consummated, and where the invention was never actually built, and thus in which the
invention technically never entered the real world.
 NOVELTY 71

1. Public Use
An invention is no longer patentable if it was “in public use” more than one
year before the patent was filed, under post-AIA § 102(a) and pre-AIA § 102(b), or if it
was “used by others” before the invention date under pre-AIA § 102(a). (Despite the
slight difference in language, these phrases are understood to mean the same thing.)
As with printed publications, it is easy to see why public use initiated by one party
should bar another party from obtaining a patent. That is, if Firm A develops an
invention and places that invention into public use, Firm B should not be permitted
to patent the invention because it has not enriched the store of public knowledge.

But, again in parallel with the printed publication rule, there are many
instances—including several of the cases below—in which it is the inventor herself
who has placed the invention into public use, thus barring herself from obtaining a
patent if she does not file quickly enough. This is possible under pre-AIA § 102(b) and
post-AIA § 102(a)(1) and (b)(1), which provide the inventor with a one-year grace
period by which time she must file or lose any right to the patent. These situations,
where the inventor does enrich the store of knowledge but is denied a patent
nonetheless, call for additional justification.

One important principle behind applying the public-use bar in these “first-
party” situations—where the party seeking the patent is the same party who created
the public use—is that inventions available to the public should not be removed from
the public domain via patenting. Doing so would upset the reliance interests that
members of the public might have formed regarding access to the invention. See
Continental Plastic Containers v. Owens Brockway Plastic Products, Inc., 141 F.3d
1073, 1079 (Fed. Cir. 1998). Another rationale is to speed up patenting: the public-use
bar gives parties incentives to file their patents more quickly lest they find themselves
barred if they—or someone else—puts the invention into public use.

Accordingly, the canonical “public use” case would involve widespread use of
an invention among members of the public for years before the inventor files for a
patent on it. This would squarely implicate the policies behind imposing the bar,
whether it is the inventor herself or a third party who made the invention available
to the public. Of course, courts have had to adjudicate a number of cases involving
much more borderline instances of public access.8 In particular, there can be a great
deal of uncertainty surrounding how “public” or widespread a use must be before it
qualifies as “public use.” The following two cases consider that question.

8 One study of district court litigation from 2011 to 2017 estimated that prior art based
on uses and sales were 52% of prior art in § 102 invalidations, of which only 14% were even
potentially secret uses or sales (such as when proof of sale relied on a contract or use was
performed by a limited group). Stephen Yelderman, Prior Art in the District Court, 95 Notre
Dame L. Rev. 837 (2019).
 72 MASUR & OUELLETTE ⋅ PATENT LAW

Netscape Communications v. Konrad, 295 F.3d 1315 (Fed. Cir. 2002)

Haldane R. Mayer, Chief Judge.

Background

1 Allan Konrad is the owner of the ’320, ’901, and ’444 patents, all directed to
systems that allow a computer user to access and search a database residing on a
remote computer. He began working as a staff scientist for the Lawrence Berkeley
Laboratory in 1977, where he studied how an individual computer workstation user
could obtain services from a remote computer. On September 26, 1990, while working
with Cynthia Hertzer, a Lawrence Berkeley Laboratory staff assistant, Konrad
successfully tested the remote database object system. The first prototype of this
system was configured to access Lawrence Berkeley Laboratory’s STAFF database
from a remote workstation. The Lawrence Berkeley Laboratory STAFF database
resided on an IBM mainframe computer on the Berkeley campus of the University of
California. In 1991, Konrad and Hertzer adapted the Lawrence Berkeley Laboratory
STAFF remote database object system prototype for the high energy physics database,
maintained at the Stanford Linear Accelerator Center, which is a national laboratory
operated by Stanford University. The high energy physics database was a compilation
of abstracts and technical papers used as a research tool for physicists worldwide.

2 The ’320 patent, Konrad’s first issued patent, is a continuation of an

application filed on January 8, 1993. The ’901 patent is a continuation of the ’444
patent application, which is a continuation of the ’320 patent application. Thus, the
earliest filing date that Konrad is entitled to is January 8, 1993, making the critical
date for the public use and on-sale inquiry January 8, 1992.

3 On February 8, 2000, Konrad filed a patent infringement suit in the District

Court for the Eastern District of Texas, alleging that thirty-nine commercial entities,
all customers of Netscape, had infringed the ’320, ’901, and ’444 patents. Citing
threatened customer relationships, Netscape filed a declaratory judgment action
against Konrad in the District Court for the Northern District of California, seeking
a judgment of invalidity, noninfringement, and unenforceability. Netscape moved for
partial summary judgment that prototypes of the invention were in public use or on-
sale under 35 U.S.C. § 102(b) based on Konrad’s activities prior to January 8, 1992.
The California district court entered partial summary judgment for Netscape
concluding that: (1) Konrad’s demonstration of the claimed invention to Shuli Roth
and Dick Peters, University of California computing personnel, without any obligation
of confidentiality was a public use; [and] (2) his demonstration of the high energy
physics remote database object to the Stanford Linear Accelerator Center in
conjunction with the use of the remote database object by University Research
Association Superconducting Super Collider Laboratory employees was a public use
....
 NOVELTY 73

Discussion

4 Public use includes “any use of [the claimed] invention by a person other than
the inventor who is under no limitation, restriction or obligation of secrecy to the
inventor.” Petrolite Corp. v. Baker Hughes Inc., 96 F.3d 1423, 1425 (Fed. Cir. 1996).
“The public use bar serves the policies of the patent system, for it encourages prompt
filing of patent applications after inventions have been completed and publicly used,
and sets an outer limit to the term of exclusivity.” Allied Colloids v. Am. Cyanamid
Co., 64 F.3d 1570, 1574 (Fed. Cir. 1995).

5 The law recognizes that an inventor may test his invention in public without
incurring the public use bar. “The use of an invention by the inventor himself, or of
any other person under his direction, by way of experiment, and in order to bring the
invention to perfection, has never been regarded as such a use.” City of Elizabeth v.
Am. Nicholson Pavement Co., 97 U.S. 126, 134 (1877).

6 We look to the totality of the circumstances when evaluating whether there

has been a public use within the meaning of section 102(b). The circumstances may
include: the nature of the activity that occurred in public; the public access to and
knowledge of the public use; whether there was any confidentiality obligation imposed
on persons who observed the use; whether persons other than the inventor performed
the testing; the number of tests; the length of the test period in relation to tests of
similar devices; and whether the inventor received payment for the testing. There may
be additional factors in a particular case relevant to the public nature of the use or
any asserted experimental aspect. On summary judgment, once Netscape presented
facts sufficient to establish a prima facie case of public use, it fell to Konrad to come
forward with some evidence raising a genuine issue of material fact to the contrary.

A.

7 Konrad argues that the district court erred in determining that his 1991
demonstration of the Lawrence Berkeley Laboratory STAFF remote database object
to University of California computing personnel was an invalidating public use. He
maintains that the invention disclosure he submitted to the Lawrence Berkeley
Laboratory patent department in October of 1990, established an expectation of
confidentiality from Roth and Peters.

8 [We do not agree with Konrad.] Konrad did not show that Roth or Peters were
ever made aware of any requirement of confidentiality or even apprised of the
invention disclosure forms that he submitted to the Lawrence Berkeley Laboratory
patent department. He also did not make any discernable effort to inform the 1991
demonstration attendees of the requirement of confidentiality, or otherwise indicate
to them that they would owe him a duty of confidentiality. Lack of a confidentiality
agreement is significant here because Roth and Peters were computer personnel who
could easily demonstrate the invention to others.
 74 MASUR & OUELLETTE ⋅ PATENT LAW

9 Konrad also argues that the 1991 demonstration was an experimental use for
the purpose of obtaining technical support to incorporate upgrades and make the
invention run more smoothly. To establish that an otherwise public use does not run
afoul of section 102(b), it must be shown that the activity was “substantially for
purposes of experiment.” Konrad presented no objective evidence to support
experimental use. Indeed, his testimony leads to the opposite conclusion. He said that
the purpose of the demonstration “was to convince the people in the Berkeley
computer center VM systems group that there was a viable project.” He added that he
hoped showing them the remote database object would make them supportive of it.
Konrad’s demonstration was geared more toward making the remote database object
more commercially attractive, with endorsements from outside technical people, than
for experimental use purposes. The experimental use negation is unavailable to a
patentee when the evidence presented does not establish that he was conducting a
bona fide experiment. Furthermore, Konrad presented no objective evidence that he
maintained any records of testing the remote database object. This failure weighs
against him.

10 Konrad also argues that at all relevant times he took affirmative steps to
maintain control of his invention and questions the substantiality of the evidence to
the contrary. He asserts that Moleculon Research Corp. v. CBS, Inc., 793 F.2d 1261
(Fed. Cir. 1986), applies here. That case said that the display of a device to friends
and colleagues of the inventor was subject to an implied restriction of confidentiality,
and thus did not constitute a public use. However, that inventor always retained
control over the use of the device as well as over the distribution of information
concerning it. Here, Konrad testified that during 1991 he did not monitor tests of the
remote database object, but that he would simply turn on the system and let people
try it out. He further testified that he was aware that a workstation was made
available to use the remote database object system, but was unaware of where it was
located. There was no indication that he ever monitored this workstation’s use or
imposed a confidentiality agreement on those persons exercising the database.

B.

11 Konrad argues that the district court erred in determining that the
demonstration of the high energy physics remote database object system to Stanford
Linear Accelerator Center and use by University Research Association
Superconducting Super Collider Laboratory employees were invalidating public uses
under section 102(b). He contends that the Department of Energy owned all of the
intellectual property rights to the invention, and that all Department of Energy
laboratory employees were under an obligation of confidentiality to the government
during all demonstrations and testing.

12 Konrad tries to cloak his failure to protect the confidentiality of his invention
and maintain control of others’ use by arguing that because the Department of Energy
was providing the funding for his project, it ultimately owned the invention; therefore,
 NOVELTY 75

anyone working on the remote database object server was subject to Department of
Energy confidentiality. This argument is without merit. Konrad is the inventor of the
patents; the limitation, restriction, or obligation of secrecy of others using the
invention is owed to him, not the persons or entities providing the funding. See Egbert
v. Lippmann, 104 U.S. 333, 336 (1881). The onus is on him, as the inventor, to protect
the confidentiality of his invention and its use by others before the critical date. The
contract between Lawrence Berkeley Laboratory and the Department of Energy
provides for the protection of government property, the University of California’s duty
to safeguard restricted data and provide written disclosures, and the government’s
right to duplicate and disclose the subject invention. Moreover, Konrad has not shown
that this contract applied to the University Research Association Superconducting
Super Collider Laboratory or Stanford Linear Accelerator Center employees.

Motionless Keyboard v. Microsoft, 486 F.3d 1376 (Fed. Cir. 2007)

Randall R. Rader, Circuit Judge.

1 [Independent inventor Thomas L. Gambaro developed a new ergonomic

keyboard for handheld devices while working part-time as a graphic artist and
dishwasher. On February 22, 1987, he developed a prototype known as the Cherry
Model 5. He entered a partnership with Keith Coulter to further develop and patent
the keyboard. In 1987, Mr. Gambaro demonstrated the keyboard to potential investors
who signed two-year non-disclosure agreements (NDAs), and to his friend Kathie
Roberts who did not sign a NDA. He also disclosed the keyboard to Sheila Lanier on
June 25, 1990 to conduct typing tests. On June 6, 1991, he filed an application that
became Patent No. 5,178,477, and on January 11, 1993, he filed an application that
became Patent No. 5,332,322. He then assigned both patents to Motionless Keyboard
Co. (MKC), which sued Microsoft and other parties for patent infringement. MKC
appeals the district court grant of summary judgment that both patents are invalid
for public use under 35 U.S.C. § 102(b).]

2 The classical standard for assessing the public nature of a use was established
in Egbert v. Lippman, 104 U.S. 333 (1881). In Egbert, the inventor of a corset spring
gave two samples of the invention to a lady friend, who used them for more than two
years before the inventor applied for a patent. Although the inventor in Egbert did not
obtain any commercial advantage, the Court determined that the invention had been
used for its intended purpose for over a decade without limitation or confidentiality
requirements. Thus, even though not in public view, the invention was in public use.
In Electric Storage Battery Co. v. Shimadzu, 307 U.S. 5 (1939), the Court found “the
ordinary use of a machine or the practice of a process in a factory in the usual course
of producing articles for commercial purposes is a public use.” On the other hand, in
TP Laboratories, Inc. v. Professional Positioners, Inc., 724 F.2d 965 (Fed. Cir. 1984),
this court found that premature installation of an inventive orthodontic appliance in
several patients without a written confidentiality agreement was not a public use due
 76 MASUR & OUELLETTE ⋅ PATENT LAW

to the expectation of confidentiality inherent in the dentist-patient relationship. This

case again presents the question of the meaning of public use under 35 U.S.C. § 102(b).

3 In this case, Mr. Gambaro disclosed his Cherry Model 5 to his business partner,
a friend, potential investors, and a typing tester (Ms. Lanier). In all these disclosures,
except in the case of Ms. Lanier, however, the Cherry Model 5 was not connected to a
computer or any other device. In the case of Ms. Lanier, the Cherry Model 5 was used
to conduct typing tests on July 25, 1990, and thereby connected to a computer for its
intended purpose. With respect to the ’477 patent, the typing test occurred after the
critical date of June 6, 1990. With respect to the ’322 patent, [the test was before the
January 11, 1992 critical date but under a NDA]. In this case, the one time typing test
coupled with a signed NDA and no record of continued use of the Cherry Model 5 by
Ms. Lanier after July 25, 1990 did not elevate to the level of public use. Thus, the
Cherry Model 5 was never in public use. All disclosures, except for the one-time typing
test, only provided a visual view of the new keyboard design without any disclosure of
the Cherry Model 5’s ability to translate finger movements into actuation of keys to
transmit data. In essence, these disclosures visually displayed the keyboard design
without putting it into use. In short, the Cherry Model 5 was not in public use as the
term is used in section 102(b) because the device, although visually disclosed and only
tested one time with a NDA signed by the typing tester, was never connected to be
used in the normal course of business to enter data into a system.

4 Unlike the situations in Egbert and Electric Storage Battery, where the
inventions were used for their intended purpose, neither the inventor nor anyone else
ever used the Cherry Model 5 to transmit data in the normal course of business. The
entry of data did not ever occur outside of testing and the tester signed an NDA. The
Cherry Model 5 was not used in public, for its intended purpose, nor was the Cherry
Model 5 ever given to anyone for such public use. Thus, the disclosures in this record
do not rise to the level of public use.

Discussion Questions: Public Use

1. The Expansive Understanding of “Public.” The court’s holding in Netscape v.

Konrad is based on the disclosure of the invention without any obligation of
confidentiality or secrecy. But it would be hard to describe it as “public” in the
conventional sense. The disclosures occurred in private offices, behind closed doors,
not out in the open. And the invention was shared with only a handful of people, not
broadcast widely to the masses.

Netscape v. Konrad indicates that it is not necessary for “the public” to make
widespread use of an invention for it to be in public use. Rather, even use by a handful
of people or even a single member of the public is sufficient. This should indicate the
breadth of the courts’ understanding of what is “public” for purposes of the public-use
 NOVELTY 77

bar. Note the similarity to courts’ broad interpretation of “printed publication,” as

discussed above.

What effect does the expansive understanding of “public” have on

unsophisticated or less resourced inventors? Remember that innovative
entrepreneurs interact with the patent system as producers, consumers, or both. In
some instances they may be concerned about inadvertently creating prior art against
themselves; in others they may need to determine the patentability of their
inventions; and in still others they may need to assess their freedom to operate based
on others’ patents. Do you think those tasks will be easy or difficult for less
sophisticated inventors to accomplish? Are there particular aspects of this doctrine
that will pose especially greater problems?

2. Public Use Without the Public Using? In both Konrad and Motionless
Keyboard, the potential public use at issue was thought to involve actual use of the
patented invention by a member of the public. This is often thought of as a bright-line
requirement in the law of public use: there can be no public use if the invention is not
actually being used by a member of the public.

However, a small but influential line of cases suggests that there is another
route to public use: if the invention is being used by its inventor, but under non-secret
conditions such that members of the public could learn how the invention works, this
is a public use. Jonathan S. Masur & Lisa Larrimore Ouellette, Real-World Prior Art,
76 Stan. L. Rev. __ (forthcoming 2024). You might think of this as a constructive
knowledge standard: if information about how the invention operates could have
reached the public through use by the inventor, then the invention is in public use,
even if there is no evidence that information about the invention has actually seeped
out. This line of cases begins with Electric Storage Battery Co. v. Shimadzu, 307 U.S.
5 (1939). There, a third-party inventor had “continuously employed the alleged
infringing machine and process”—a process for producing lead oxide for use in
batteries—in its own factory without protecting the process through confidentiality
agreements and other measures. The court found that no “efforts were made to conceal
[the inventions] from anyone who had a legitimate interest in understanding them”
and held that this constituted a public use.

The Fifth Circuit reached a similar result in Rosaire v. Nat’l Lead Co., 218 F.2d
72, 75 (5th Cir. 1955), where it held that any type of work “done openly and in the
ordinary course of the activities of the employer” was sufficiently public. The activity
in Rosaire—an underground oil-drilling method on private property—was not “public”
in any usual sense of the word, but because it was done “without any deliberate
attempt at concealment or effort to exclude the public” it was held to be a public use
that anticipated a third party’s patent. Here, too, the court’s holding appears to rely
on the idea of constructive public knowledge: someone from the public could have
learned how the invention operated from observing its operation, and that was enough
to constitute public use.
78 MASUR & OUELLETTE ⋅ PATENT LAW

The Federal Circuit appears to have confirmed this understanding of the law
as recently as 2020. In BASF Corp. v. SNF Holding Co., 955 F.3d 958 (Fed. Cir. 2020),
a third party had operated the claimed invention in its factory before the critical date
and had given tours of its factory to the general public. Citing Shimadzu, the court
stated that “the public-use bar applies to uses of the invention not purposely hidden
and that the use of a process in the ordinary course of business—where the process
was well known to the employees and no efforts were made to conceal it from anyone
else—is a public use.” On the factual record presented to the Federal Circuit, it was
unclear whether the tours revealed enough information about the invention to enable
a person of ordinary skill in the art to construct it. But the court made clear that if a
person of ordinary skill in the art would have been able to glean sufficient information
about the invention from these tours, the invention would have been in public use—
without any member of the public ever having laid a finger on the invention, and
irrespective of whether any person of ordinary skill in the art had actually ever taken
a tour. Again, the court appears to be using a constructive knowledge standard.

Indeed, it would probably be better if the Federal Circuit treated these types
of cases as arising under the “otherwise available to the public” language of post-AIA
§ 102(a), rather than the public-use bar. That would make clear that the use could be
prior art even if the public never uses the invention but only if the use is enabling,
which differentiates it from standard public use cases. But the courts have never
taken this step.

Despite the potential reach of this doctrine, we suspect that it has been largely
limited by how rarely inventors are willing to show their work to the public before it
is ready for actual public use. The vast majority of inventive activity in private firms
takes place behind closed and locked doors, both literally and metaphorically, and
those firms closely guard their secrets. If a curious member of the public knocked on
Apple’s headquarters and asked what new inventions the firm was working on, that
person would be laughed (and escorted) off the premises. Accordingly, while it is
undoubtedly important to understand this separate track to finding public use, we
suspect that cases invoking this line of doctrine will arise much less frequently than
“standard” public use cases.

What are the policy considerations that justify the courts’ holding that an
invention can be in public use without any member of the public actually using the
invention? Can this line of doctrine be justified by the same considerations described
in Konrad and Motionless Keyboard, or are additional policy justifications necessary?

3. Experimental Use. In some cases, courts have held that uses that would
otherwise constitute public use are exempted if they are for experimental purposes.
The seminal case is City of Elizabeth v. Am. Nicholson Pavement Co., 97 U.S. 126
(1877). In that case, an inventor installed a new type of wooden paving on a heavily
trafficked street. Under normal circumstances, this would have obviously put the
invention into public use. During the time that it was installed, hundreds or
 NOVELTY 79

thousands of members of the public used that stretch of road. Nonetheless, the
Supreme Court carved out an exception to the general public-use bar for uses that
take place for “experimental” purposes. The Court held that the inventor’s use had
been experimental, and thus he was not barred from obtaining a patent. Three factors
were critical to the Court’s decision:

First, while the invention was physically complete, the inventor did not yet
know that it would work properly for its intended purpose. (In patent parlance, the
invention had not yet been “reduced to practice,” a concept we will discuss at length
in the section below on § 102(g).) Here, that purpose was durability: the point of the
invention was to create a type of paving that could remain intact for a period of years
under heavy use. Second, the best way to test the paving was through use by the
public. There was no good substitute for actually installing the paving on a segment
of road and allowing people to walk and drive (their horses) over it, exposing it to use
and to the elements. Third, the inventor kept the invention “under his own control.”
Here, that meant that he kept it under observation on a regular basis and did not
distribute it more widely. It is at least plausible that members of the public did not
think that they would have unfettered access to the invention.

Again, once an invention has been built and proven to work for its intended
purpose—that is, once it has been reduced to practice—experimental use does not
apply. See Continental Plastic Containers v. Owens Brockway Plastic Prods., 141 F.3d
1073, 1079 (Fed. Cir. 1998). For instance, market testing to gauge consumer demand
is not experimental use. In re Smith, 714 F.2d 1127, 1135 (Fed. Cir. 1983). The
experimental use exception is thus narrow, but some cases still arise in which it
applies. The Federal Circuit upheld jury findings that the exception applied to
otherwise valid § 102(b) public use prior art in Barry v. Medtronic, 914 F.3d 1310 (Fed.
Cir. 2019) (spinal correction device), and Polara Engineering Inc. v. Campbell Co., 894
F.3d 1339 (Fed. Cir. 2018) (crosswalk control system), although it was not applied for
at least a decade before Polara. What do you think are the policy rationales behind
the experimental use exception? How effectively do you think it is serving these goals?
Do you think the narrow role of the experimental use exception is salutary?

Practice Problems: Public Use

Do you think the following uses constitute “public use”? What additional facts
would you want to know?

1. An inventor develops a new small, wooden toy. He brings it to his office

workplace and allows his boss to play with the toy and examine how it works.
Both the inventor and his boss tell their friends and acquaintances about the
toy, but no one else has a chance to play with it. See Moleculon Research v.
CBS, 793 F.2d 1261 (Fed. Cir. 1986).
80 MASUR & OUELLETTE ⋅ PATENT LAW

2. An inventor develops a new type of toy. She holds a party, to which she invites
approximately 20–30 friends, to solicit feedback about the toy. At the party,
her friends play with the toy and then offer suggestions regarding how it might
be improved or changed. The inventor did not impose any confidentiality
obligation, and one of the guests testified that she did not think the information
was confidential. None of the inventor’s friends are allowed to take copies of
the toy home. See Beachcombers v. WildeWood Creative Products, Inc., 31 F.3d
1154 (Fed. Cir. 1994).

If your answer to this question is different from your answer to the prior
question, what do you think differentiates the situations?

3. An inventor developed a new strain of table grape. Unbeknownst to the

inventor, an employee of the inventing company gave samples of the grape to
another grape grower. The grape grower was instructed “not to let the material
‘get away from [him]’ and not to ‘put them in a box,’ which [he] understood to
mean that he should not sell the resulting grapes until the varieties were
commercially released.” The grape vines “bore no usable fruit, and the [grower]
sold no grapes from those plantings prior to the critical date. Although the
various plantings were visible from publicly accessible roads, none of the vines
were marked or labeled in any way, and the evidence showed that the
particular variety of the grapes could not be readily ascertained from simply
viewing the vines.” See Delano Farms v. California Table Grape Comm’n, 778
F.3d 1243 (Fed. Cir. 2015).

2. The Enablement Standard for Real-World Prior Art

Unlike printed publications and patents, real-world prior art—including the
public uses discussed above and putting the invention “on sale,” discussed in the next
section—generally need not be enabling. As summarized by the Federal Circuit:
“Beyond [an] ‘in public use or on sale’ finding, there is no requirement for an
enablement-type inquiry. . . . [T]he question is not whether the sale, even a third party
sale, ‘discloses’ the invention at the time of the sale, but whether the sale relates to a
device that embodies the invention.” In re Epstein, 32 F.3d 1559, 1568 (Fed. Cir. 1994).
That is, it only matters whether some members of the public have the opportunity to
buy or use the invention, not whether a member of the public could learn how the
invention functions.

The only exception is the type of public use described in Discussion Question 2
above, where the public acquires constructive knowledge of how an invention works
without ever actually using it. There, enablement appears to be necessary, although
the Federal Circuit has not explicitly described this as an enablement requirement.
See BASF Corp. v. SNF Holding Co., 955 F.3d 958, 966–67 (Fed. Cir. 2020). When an
invention is placed on public display without a possibility of public use, an enablement
 NOVELTY 81

requirement makes sense because the disclosure is more similar to a conference poster
or an oral presentation—it only enriches the public to the extent that the public can
learn how to make and use the invention from the display.

The rule that real-world prior art typically need not be enabled stems from the
principles underlying the public-use and on-sale bars. Again, the public-use bar
operates to prevent an inventor from depriving the public of an invention to which it
has had (unpatented) access, thus upsetting the public’s reliance interests. Those
reliance interests can form irrespective of whether members of the public are able to
learn how the invention actually functions, so long as they believe they will have
access to it and be able to use it. For its part, the on-sale bar exists to prevent an
inventor from improperly extending her monopoly, which could occur even if a sale
was not enabling.

Lockwood v. American Airlines, 107 F.3d 1565 (Fed. Cir. 1997), is a

prototypical example of this rule. The invention at issue was the SABRE system,
which is used for searching and booking airline tickets across airlines. (If you’ve
booked a ticket through Kayak, Expedia, or similar platforms, you’ve used SABRE.)
SABRE was widely in use among members of the public—particularly travel agents—
before the filing of a patent on the technology. But nobody who used SABRE would
have been able to determine precisely how it worked, just as an individual user of
Kayak today cannot see the inner workings of the program. The Federal Circuit held
that this was immaterial to the question of public use:

American submitted an affidavit averring that the SABRE

system was introduced to the public in 1962, had over one thousand
connected sales desks by 1965, and was connected to the reservation
systems for most of the other airlines by 1970. Lockwood does not
dispute these facts, but argues that because “critical aspects” of the
SABRE system were not accessible to the public, it could not have been
prior art. American’s expert conceded that the essential algorithms of
the SABRE software were proprietary and confidential and that those
aspects of the system that were readily apparent to the public would
not have been sufficient to enable one skilled in the art to duplicate the
system. However, American responds that the public need not have
access to the “inner workings” of a device for it to be considered “in
public use” or “used by others” within the meaning of the statute.

We agree with American that those aspects of the original

SABRE system relied on by the district court are prior art to the ’359
patent. The district court held that SABRE, which made and confirmed
reservations with multiple institutions (e.g., airlines, hotels, and car
rental agencies), combined with the terminal of the ’631 patent
rendered the asserted claims of the ’359 patent obvious. The terminal
of the ’631 patent admittedly lacked this “multiple institution” feature.
82 MASUR & OUELLETTE ⋅ PATENT LAW

It is undisputed, however, that the public was aware that SABRE

possessed this capability and that the public had been using SABRE to
make travel reservations from independent travel agencies prior to
Lockwood’s date of invention.

If a device was “known or used by others” in this country before the date of invention
or if it was “in public use” in this country more than one year before the date of
application, it qualifies as prior art. See 35 U.S.C. § 102(a) and (b). Lockwood attempts
to preclude summary judgment by pointing to record testimony that one skilled in the
art would not be able to build and practice the claimed invention without access to the
secret aspects of SABRE. However, it is the claims that define a patented invention.
As we have concluded earlier in this opinion, American’s public use of the high-level
aspects of the SABRE system was enough to place the claimed features of the ’359
patent in the public’s possession. See In re Epstein, 32 F.3d 1559, 1567–68 (Fed. Cir.
1994) (“Beyond this ‘in public use or on sale’ finding, there is no requirement for an
enablement-type inquiry.”). Lockwood cannot negate this by evidence showing that
other, unclaimed aspects of the SABRE system were not publicly available. Moreover,
the ’359 patent itself does not disclose the level of detail that Lockwood would have us
require of the prior art. For these reasons, Lockwood fails to show a genuine issue of
material fact.

3. On Sale
Post-AIA § 102(a) and pre-AIA § 102(b) similarly bar an inventor from
patenting an invention that was placed “on sale” more than one year before filing.9 As
with “printed publication” and “public use” prior art, whether an invention has been
placed “on sale” is a question of law based on underlying facts.

Though it is often considered in conjunction with the “public use” bar, the
principle underlying the on-sale bar is actually quite different. As explained in the
following case, the on-sale bar is designed to prevent an inventor from using the
patent system to enable exclusive commercial exploitation of an invention for longer
than the twenty-year statutory patent term. Without the on-sale bar, an inventor
could conceivably hold an invention as a trade secret for a period of years, and then
patent the invention for an additional twenty years—effectively controlling exclusive
rights over an invention for much longer than the statutory twenty-year period. The
on-sale bar forces an inventor to choose between trade secret protection and patent

9 Technically speaking, post-AIA 35 U.S.C. § 102(a) bars a patent if the invention was
placed on sale before the date of filing. However, if it was the patent applicant who placed the
invention on sale, post-AIA 35 U.S.C. § 102(b)(1)(A) provides the applicant with a one-year
grace period. This aligns pre- and post-AIA law and means that under both versions of the law,
inventors must file within a year of placing an invention on sale or risk losing the ability to
obtain a patent.
 NOVELTY 83

protection, rather than availing herself of both. Thus, whereas the public-use bar is
focused on the public and the reliance interests formed around available inventions,
the on-sale bar is focused on the inventor and the possibility that she will attempt to
exploit the invention for longer than allowed. This difference in underlying policy has
ramifications for the on-sale bar doctrine, as the sections below will make clear.

The on-sale bar is triggered whenever “the invention” is “on sale.” This raises
the question of what it means for “the invention” to be on sale—for instance, must the
invention physically exist? It also raises the question of what it means for the
invention to be “on sale”—must the invention actually have been sold? How many
units of the invention? What if the invention is available for purchase but has not been
sold? And so forth. In 1998, the Supreme Court granted certiorari in the case below to
answer these questions.

Pfaff v. Wells Electronics, 525 U.S. 55 (1998)

Justice John Paul Stevens delivered the opinion of the Court.

1 Section 102(b) of the Patent Act of 1952 provides that no person is entitled to
patent an “invention” that has been “on sale” more than one year before filing a patent
application. We granted certiorari to determine whether the commercial marketing of
a newly invented product may mark the beginning of the 1–year period even though
the invention has not yet been reduced to practice.

2 On April 19, 1982, petitioner, Wayne Pfaff, filed an application for a patent on
a computer chip socket. Therefore, April 19, 1981, constitutes the critical date for
purposes of the on-sale bar of 35 U.S.C. § 102(b); if the 1–year period began to run
before that date, Pfaff lost his right to patent his invention.

3 Pfaff commenced work on the socket in November 1980, when representatives

of Texas Instruments asked him to develop a new device for mounting and removing
semiconductor chip carriers. In response to this request, he prepared detailed
engineering drawings that described the design, the dimensions, and the materials to
be used in making the socket. Pfaff sent those drawings to a manufacturer in February
or March 1981.

4 Prior to March 17, 1981, Pfaff showed a sketch of his concept to representatives
of Texas Instruments. On April 8, 1981, they provided Pfaff with a written
confirmation of a previously placed oral purchase order for 30,100 of his new sockets
 84 MASUR & OUELLETTE ⋅ PATENT LAW

for a total price of $91,155. In accord with his normal practice, Pfaff did not make and
test a prototype of the new device before offering to sell it in commercial quantities.10

5 The manufacturer took several months to develop the customized tooling

necessary to produce the device, and Pfaff did not fill the order until July 1981. The
evidence therefore indicates that Pfaff first reduced his invention to practice in the
summer of 1981.

6 The Court of Appeals [found] all six claims invalid. Four of the claims (1, 6, 7,
and 10) described the socket that Pfaff had sold to Texas Instruments prior to April 8,
1981. Because that device had been offered for sale on a commercial basis more than
one year before the patent application was filed on April 19, 1982, the court concluded
that those claims were invalid under § 102(b). That conclusion rested on the court’s
view that as long as the invention was “substantially complete at the time of sale,” the
1–year period began to run, even though the invention had not yet been reduced to
practice. The other two claims (11 and 19) described a feature that had not been
included in Pfaff’s initial design, but the Court of Appeals concluded as a matter of
law that the additional feature was not itself patentable because it was an obvious
addition to the prior art. Given the court’s § 102(b) holding, the prior art included
Pfaff’s first four claims.

II

7 The primary meaning of the word “invention” in the Patent Act unquestionably
refers to the inventor’s conception rather than to a physical embodiment of that idea.
The statute does not contain any express requirement that an invention must be
reduced to practice before it can be patented. Neither the statutory definition of the
term in § 100 nor the basic conditions for obtaining a patent set forth in § 101 make
any mention of “reduction to practice.” The statute’s only specific reference to that
term is found in § 102(g), which sets forth the standard for resolving priority contests
between two competing claimants to a patent. That subsection provides:

In determining priority of invention there shall be considered not only

the respective dates of conception and reduction to practice of the

10 [n.3 in opinion] At his deposition, respondent’s counsel engaged in the following

colloquy with Pfaff:
“Q. Now, at this time [late 1980 or early 1981] did we [sic] have any prototypes
developed or anything of that nature, working embodiment?
“A. No.
“Q. It was in a drawing. Is that correct?
“A. Strictly in a drawing. Went from the drawing to the hard tooling. That’s the way I
do my business.
“Q. ‘Boom-boom’?
“A. You got it.
“Q. You are satisfied, obviously, when you come up with some drawings that it is going
to go—‘it works’?
“A. I know what I’m doing, yes, most of the time.”
 NOVELTY 85

invention, but also the reasonable diligence of one who was first to
conceive and last to reduce to practice, from a time prior to conception
by the other.

8 Thus, assuming diligence on the part of the applicant, it is normally the first
inventor to conceive, rather than the first to reduce to practice, who establishes the
right to the patent.

9 It is well settled that an invention may be patented before it is reduced to

practice. In 1888, this Court upheld a patent issued to Alexander Graham Bell even
though he had filed his application before constructing a working telephone. When we
apply the reasoning of [the cases concerning Bell’s invention] to the facts of the case
before us today, it is evident that Pfaff could have obtained a patent on his novel socket
when he accepted the purchase order from Texas Instruments for 30,100 units. At
that time he provided the manufacturer with a description and drawings that had
“sufficient clearness and precision to enable those skilled in the matter” to produce
the device. The parties agree that the sockets manufactured to fill that order embody
Pfaff’s conception as set forth in claims 1, 6, 7, and 10 of the ’377 patent. We can find
no basis in the text of § 102(b) or in the facts of this case for concluding that Pfaff’s
invention was not “on sale” within the meaning of the statute until after it had been
reduced to practice.

III

10 Pfaff nevertheless argues that longstanding precedent, buttressed by the

strong interest in providing inventors with a clear standard identifying the onset of
the 1–year period, justifies a special interpretation of the word “invention” as used in
§ 102(b). We are persuaded that this nontextual argument should be rejected.

11 As we have often explained, most recently in Bonito Boats, Inc. v. Thunder

Craft Boats, Inc., 489 U.S. 141 (1989), the patent system represents a carefully crafted
bargain that encourages both the creation and the public disclosure of new and useful
advances in technology, in return for an exclusive monopoly for a limited period of
time. The balance between the interest in motivating innovation and enlightenment
by rewarding invention with patent protection on the one hand, and the interest in
avoiding monopolies that unnecessarily stifle competition on the other, has been a
feature of the federal patent laws since their inception.

12 Consistent with these ends, § 102 of the Patent Act serves as a limiting
provision, both excluding ideas that are in the public domain from patent protection
and confining the duration of the monopoly to the statutory term.

13 We originally held that an inventor loses his right to a patent if he puts his
invention into public use before filing a patent application. “His voluntary act or
acquiescence in the public sale and use is an abandonment of his right.” Pennock v.
 86 MASUR & OUELLETTE ⋅ PATENT LAW

Dialogue, 27 U.S. (2 Pet.) 1, 24 (1829) (Story, J.). A similar reluctance to allow an

inventor to remove existing knowledge from public use undergirds the on-sale bar.

14 Nevertheless, an inventor who seeks to perfect his discovery may conduct

extensive testing without losing his right to obtain a patent for his invention—even if
such testing occurs in the public eye. The law has long recognized the distinction
between inventions put to experimental use and products sold commercially. In 1878,
we explained why patentability may turn on an inventor’s use of his product.

It is sometimes said that an inventor acquires an undue advantage over

the public by delaying to take out a patent, inasmuch as he thereby
preserves the monopoly to himself for a longer period than is allowed
by the policy of the law; but this cannot be said with justice when the
delay is occasioned by a bona fide effort to bring his invention to
perfection, or to ascertain whether it will answer the purpose intended.
His monopoly only continues for the allotted period, in any event; and
it is the interest of the public, as well as himself, that the invention
should be perfect and properly tested, before a patent is granted for it.
Any attempt to use it for a profit, and not by way of experiment, for a
longer period than two years before the application, would deprive the
inventor of his right to a patent.

Elizabeth v. Am. Nicholson Pavement Co., 97 U.S. 126, 137 (1877) (emphasis added).

15 The patent laws therefore seek both to protect the public’s right to retain
knowledge already in the public domain and the inventor’s right to control whether
and when he may patent his invention.

16 The word “invention” must refer to a concept that is complete, rather than
merely one that is “substantially complete.” It is true that reduction to practice
ordinarily provides the best evidence that an invention is complete. But just because
reduction to practice is sufficient evidence of completion, it does not follow that proof
of reduction to practice is necessary in every case. Indeed, both the facts of [the
Alexander Graham Bell cases] and the facts of this case demonstrate that one can
prove that an invention is complete and ready for patenting before it has actually been
reduced to practice.

17 We conclude, therefore, that the on-sale bar applies when two conditions are
satisfied before the critical date. First, the product must be the subject of a commercial
offer for sale. An inventor can both understand and control the timing of the first
commercial marketing of his invention. The experimental use doctrine, for example,
has not generated concerns about indefiniteness, and we perceive no reason why
unmanageable uncertainty should attend a rule that measures the application of the
on-sale bar of § 102(b) against the date when an invention that is ready for patenting
is first marketed commercially. In this case the acceptance of the purchase order prior
 NOVELTY 87

to April 8, 1981, makes it clear that such an offer had been made, and there is no
question that the sale was commercial rather than experimental in character.

18 Second, the invention must be ready for patenting. That condition may be
satisfied in at least two ways: by proof of reduction to practice before the critical date;
or by proof that prior to the critical date the inventor had prepared drawings or other
descriptions of the invention that were sufficiently specific to enable a person skilled
in the art to practice the invention. In this case the second condition of the on-sale bar
is satisfied because the drawings Pfaff sent to the manufacturer before the critical
date fully disclosed the invention.

19 The evidence in this case thus fulfills the two essential conditions of the on-
sale bar. As succinctly stated by Learned Hand:

[I]t is a condition upon an inventor’s right to a patent that he shall not

exploit his discovery competitively after it is ready for patenting; he
must content himself with either secrecy, or legal monopoly.

Metallizing Engineering v. Kenyon Bearing & Auto Parts, 153 F.2d 516, 520 (2d Cir.
1946).

20 The judgment of the Court of Appeals finds support not only in the text of the
statute but also in the basic policies underlying the statutory scheme, including
§ 102(b). When Pfaff accepted the purchase order for his new sockets prior to April 8,
1981, his invention was ready for patenting. The fact that the manufacturer was able
to produce the socket using his detailed drawings and specifications demonstrates this
fact. Furthermore, those sockets contained all the elements of the invention claimed
in the ’377 patent. Therefore, Pfaff’s ’377 patent is invalid because the invention had
been on sale for more than one year in this country before he filed his patent
application.

Discussion Questions: On Sale

1. Commercial Offer for Sale. The first prong of the Pfaff test is that the product
must be the subject of a “commercial offer for sale.” Note that this means that the offer
need not be accepted, no money need change hands, the product need not be delivered,
and so forth. All that is required is that the product be offered for sale. But this is
different from a mere advertisement. An advertisement that says “Coming soon: a
brand new widget!” is not an offer for sale (though it may be a printed publication if
it enables the widget).

Whether there is an offer for sale is a standard question of contract law and is
treated as such by the Federal Circuit. However, the Federal Circuit does not look to
the law of the relevant state to determine whether there has been an offer for sale.
88 MASUR & OUELLETTE ⋅ PATENT LAW

Instead, the Federal Circuit has created its own version of federal/patent contract law,
which it uses to determine whether a product has been offered for sale.

What work do you think the word “commercial” is doing in the phrase
“commercial offer for sale?” What would be an example of a non-commercial offer for
sale? Why do you think the Supreme Court chose to trigger the on-sale bar merely
with an offer for sale, rather than holding that the bar is triggered when the product
is actually sold?

As you consider these questions, keep in mind that the purpose of the on-sale
bar is to prevent the patentee from exploiting the patented invention beyond the
twenty-year exclusivity period. That means that the on-sale bar is typically only
triggered when the patentee offers a sale to an outside party in a manner that is
intended to earn profit. For instance, in Medicines Co. v. Hospira, Inc. (Medicines I),
827 F.3d 1363 (Fed. Cir. 2016) (en banc), the patentee contracted with a
manufacturing company to produce the patented invention, with the intention of later
selling the invention to the public. The Federal Circuit, sitting en banc, held that this
did not place the invention on sale for purposes of the on-sale bar. In contrast, in
Medicines Co. v. Hospira, Inc. (Medicines II), 881 F.3d 1347 (Fed. Cir. 2018), an
exclusive distribution agreement that required the distributor to make commercially
reasonable efforts to fill purchase orders established an offer for sale. Does this seem
like the right result, and if so, why?

2. Ready for Patenting. The second prong of the Pfaff test is that the invention
must be ready for patenting. What, exactly, does it mean for an invention to be ready
for patenting? Does it mean that the invention has to exist in finished form (such that
it could be put into public use)?

Later in this chapter, you will learn about two important moments in an
invention’s lifespan: the moment of conception, and the moment of reduction to
practice. When you do, consider whether “ready for patenting” is equivalent to either
of those moments. Why do you think the Supreme Court chose to trigger the on-sale
bar at this point in the invention’s lifespan, as opposed to earlier or later?

3. Alternatives to Barring the Patent. As we have explained, the purpose of the

on-sale bar is to prevent the patentee from exploiting the patented invention for longer
than the designated twenty-year term. But barring the patentee from obtaining a
patent if the invention was placed on sale is not the only way of doing this. Can you
think of alternatives?

One option would be to simply run the twenty-year patent term from the date
of the first offer for sale. So, for instance, if a putative patentee placed the invention
on sale in 2021, and then filed for a patent in 2026, the patent would expire in 2041
(20 years from the first sale), not in 2046. What do you think would be the advantages
and disadvantages of this approach? Try to think about this question from the
perspectives of the patentee, the public, and potential competitors to the patentee.
 NOVELTY 89

4. Timing Problems. The timing of events in Pfaff was relatively conventional:

the invention was ready for patenting, and the inventor then placed it on sale. The on-
sale bar was triggered when the offer for sale occurred. But what if these events
happened in a different order, or in a more scattered fashion? For each of the following
situations, can you identify the date on which the on-sale bar is triggered (if it is
triggered at all)?

(a) The prospective invention is placed on sale on March 1, before it is ready

for patenting. It becomes ready for patenting on April 1.

(b) The prospective invention is placed on sale on March 1. The offer for
sale is then withdrawn on April 1, with no sales having been made. The
invention becomes ready for patenting on May 1.

(c) The same situation as (b), except now the offer for sale was accepted by
one purchaser on March 15, before the offer was withdrawn (with regard to
others) on April 1.

4. Trade Secrets and Third-Party Rules

The simplest types of public use and on-sale bar situations involve an inventor
who has put the invention on sale or in public use in a “public” fashion, observable to
outsiders—say, listing an invention for sale on Amazon. But these prior art provisions
can give rise to much more complicated situations as well. In some cases, the
complexity is generated by secrecy: the inventor is attempting to hold the invention
as a trade secret and either sell it or use it in secret. In other cases, complexity stems
from the fact that someone other than the patent applicant has put the invention on
sale or into public use. The question that arises is whether the activities of this third
party should affect the applicant’s patent rights. Though they arise from different
sources, these additional complexities raise related questions.

Secret Sales and Secret Commercial Use

Pfaff implies that even entirely “secret” sales—sales in which no enabling

information is made public, and the very fact of the sale itself is not made public—will
nonetheless trigger the on-sale bar. After all, in that case Pfaff’s patent was
invalidated due to a sale without the product changing hands and without enabling
information about the device reaching the public. Nonetheless, the Supreme Court did
not explicitly hold that secret sales would trigger the on-sale bar.

This question garnered renewed attention after the passage of the AIA. Recall
that § 102(a)(1) of the post-AIA law states that an inventor is entitled to a patent
unless “the claimed invention was patented, described in a printed publication, or in
90 MASUR & OUELLETTE ⋅ PATENT LAW

public use, on sale, or otherwise available to the public” (emphasis added). The
inclusion of the word “otherwise” led some commentators to argue that the phrase
“available to the public” should be seen as modifying each of the other categories of
prior art listed in the statute. This would not affect our understanding of “patented,”
“in public use,” or “printed publication,” all of which by their nature are publicly
available. Rather, it was suggested that the on-sale bar could now only be triggered
by “public” sales, and a purely private or secret sale (such as the one in Pfaff) would
not implicate the on-sale bar.

The Supreme Court rejected that argument in Helsinn Healthcare S.A. v. Teva
Pharmaceuticals USA, Inc., 139 S. Ct. 628 (2019):

Although this Court has never addressed the precise question

presented in this case, our precedents suggest that a sale or offer of sale
need not make an invention available to the public. For instance, we
held in Pfaff that an offer for sale could cause an inventor to lose the
right to patent, without regard to whether the offer discloses each detail
of the invention. E.g., 525 U.S. at 67. Other cases focus on whether the
invention had been sold, not whether the details of the invention had
been made available to the public or whether the sale itself had been
publicly disclosed. E.g., Consolidated Fruit–Jar Co. v. Wright, 94 U.S.
92, 94 (1877) (“[A] single instance of sale or of use by the patentee may,
under the circumstances, be fatal to the patent . . . .”).

The Federal Circuit—which has “exclusive jurisdiction” over

patent appeals, 28 U.S.C. § 1295(a)—has made explicit what was
implicit in our precedents. It has long held that “secret sales” can
invalidate a patent. E.g., Special Devices, Inc. v. OEA, Inc., 270 F.3d
1353, 1357 (Fed. Cir. 2001) (invalidating patent claims based on “sales
for the purpose of the commercial stockpiling of an invention” that “took
place in secret”); Woodland Trust v. Flowertree Nursery, Inc., 148 F.3d
1368, 1370 (Fed. Cir. 1998) (“Thus an inventor’s own prior commercial
use, albeit kept secret, may constitute a public use or sale under
§ 102(b), barring him from obtaining a patent”).

In light of this settled pre-AIA precedent on the meaning of “on

sale,” we presume that when Congress reenacted the same language in
the AIA, it adopted the earlier judicial construction of that phrase. The
new § 102 retained the exact language used in its predecessor statute
(“on sale”) and, as relevant here, added only a new catchall clause (“or
otherwise available to the public”). As amicus United States noted at
oral argument, if “on sale” had a settled meaning before the AIA was
adopted, then adding the phrase “or otherwise available to the public”
to the statute “would be a fairly oblique way of attempting to overturn”
that “settled body of law.” The addition of “or otherwise available to the
 NOVELTY 91

public” is simply not enough of a change for us to conclude that Congress

intended to alter the meaning of the reenacted term “on sale.”

Helsinn thus confirms what was implicit in Pfaff: even secret sales in which no
enabling information reaches the public—and even when the fact of the offer for sale
is not public—will still trigger the on-sale bar under both pre- and post-AIA law. This
holding also reinforces the policy justification for the on-sale bar by preventing an
inventor from having exclusive rights over her invention for longer than the statutory
patent term.

In some cases, an inventor can earn money from an invention not by selling
the invention itself, but by selling some product or service that is produced using the
invention. This is particularly true when the invention is a process or method, rather
than a physical product, but it can be true as well for certain types of machines that
are used to produce other physical products, rather than being sold themselves. When
an inventor makes commercial use of an invention in this fashion, it is not
immediately obvious which provisions in pre-AIA § 102(b) or post-AIA § 102(a) are
implicated by the inventor’s actions. See Jonathan S. Masur & Lisa Larrimore
Ouellette, 76 Stan. L. Rev. __ (forthcoming 2024). It is not obvious that this activity
implicates the on-sale bar because “the invention” is not exactly being placed on sale.
Instead, the inventor is selling a “fruit” of the invention (a related product or service).
It is also not obvious that this implicates the public-use bar because “the invention” is
not exactly in public use. Instead, in many cases the invention itself is being used in
secret, behind closed doors, and what is made public is only the product or fruit of the
invention.

These are commonly referred to as cases involving “secret commercial use.”

The following case illustrates the Federal Circuit’s approach to these situations.

Quest Integrity USA v. Cokebusters USA, 924 F.3d 1220 (Fed. Cir. 2019)

Timothy B. Dyk, Circuit Judge.

1 On December 15, 2014, Quest filed suit against Cokebusters in the District of
Delaware, alleging infringement of the ’874 patent. Cokebusters defended on the
ground that the claims were invalid under 35 U.S.C. § 102(b) because there was a
commercial sale of services that used the claimed methods, computer-readable media,
and system more than one year before June 1, 2004, the date the application that led
to the ’874 patent was filed in the United States.

2 The basis for the on-sale bar defense was an offer by Quest itself to provide
furnace tube inspection services to a client in the petrochemical industry. In February
and March 2003, Quest performed furnace tube inspection services for Orion Norco
Refinery in Norco, Louisiana in exchange for $72,060 (“the Norco Sale”). Cokebusters
alleged that these commercial activities rendered the claims invalid because of the on-
 92 MASUR & OUELLETTE ⋅ PATENT LAW

sale bar. Cokebusters argued that during those inspections, Quest used its commercial
furnace tube inspection method, computer-readable medium, and system and
generated two inspection reports (“the Norco Reports”), which Quest provided to the
customer. The Norco Reports contained two-dimensional, color-coded strip charts
displaying the collected furnace inspection data (“the Norco Strip Charts”).
Cokebusters alleged that the method, computer-readable medium, and system used
to prepare the Norco Strip Charts satisfied the limitations of the asserted claims.
Quest did not sell any hardware or software to the customer.

Discussion

3 Section 102(b) prevents a person from receiving a patent if, “more than one
year prior to the date of the application for patent in the United States,” “the invention
was . . . on sale” in the United States. This is known as the “on-sale bar.” The date
exactly one year prior to the date of the patent application is known as the critical
date. As noted above, since the application for the ’874 patent was filed on June 1,
2004, the critical date here is June 1, 2003.

4 The on-sale bar seeks to prevent “[a]ny attempt to use [the claimed invention]
for a profit, and not by way of experiment,” for more than one year before filing for a
patent application. Pfaff v. Wells Elecs., Inc., 525 U.S. 55, 65 (1998). And “[i]t is a
condition upon an inventor’s right to a patent that he shall not exploit his discovery
competitively after it is ready for patenting; he must content himself with either
secrecy, or legal monopoly.” Pfaff, 525 U.S. at 68 (quoting Metallizing Eng’g Co. v.
Kenyon Bearing & Auto Parts Co., 153 F.2d 516, 520 (2d Cir. 1946)).

5 In Pfaff, the Supreme Court outlined a two-part test for determining whether
an invention is “on sale” within the meaning of § 102(b). The patented invention must
have been (1) “the subject of a commercial offer for sale” and (2) “ready for patenting.”
There is no dispute here that the method, system, and computer-readable medium
used by Quest during the Norco Sale were ready for patenting at the time of the Norco
Sale. The question is whether the invention was the subject of a commercial offer for
sale before the critical date. This inquiry requires there have been a “commercial
offer,” and “the invention that [wa]s the subject matter of the offer for sale must satisfy
each claim limitation of the patent, though it may do so inherently.” Scaltech, Inc. v.
Retec/Tetra, LLC, 269 F.3d 1321, 1328–29 (Fed. Cir. 2001). Further, “a sale or offer
of sale need not make an invention available to the public,” and “‘secret sales’ can
invalidate a patent.” Helsinn Healthcare v. Teva Pharm. USA, Inc., 139 S. Ct. 628,
633 (2019).

6 The parties agree on appeal that the Norco Sale, which includes the Norco
Strip Charts, was “a commercial offer for sale” under § 102(b). The fact that Quest did
not sell its furnace inspection hardware or software (i.e., its method, computer-
readable medium, or system) does not take Quest’s commercial activities outside the
on-sale bar rule. Rather, Quest used its method, computer-readable medium, and
 NOVELTY 93

system commercially to perform furnace inspection services and produce the Norco
Reports for its customer.

7 Sale of a product (here, sale of the Norco Reports) produced by performing a

claimed process implicates the on-sale bar. Cf. Quanta Comput., Inc. v. LG Elecs., Inc.,
553 U.S. 617, 629 (2008) (“[T]his Court has repeatedly held that method patents were
exhausted by the sale of an item that embodied the method.”). Performance of a
claimed method for compensation, or a commercial offer to perform the method, can
also trigger the on-sale bar, even where no product is sold or offered for sale. As we
held in Scaltech, “[t]he on sale bar rule applies to the sale of an ‘invention,’ and in this
case, the invention was a process.” 269 F.3d at 1328.

8 The same approach necessarily applies where a service (here, furnace tube
inspection) is performed for compensation using a claimed computer-readable medium
or system that generates a “product” (here, the Norco Reports). The method, system,
and software used during the Norco Sale to perform furnace inspection services for
compensation for a customer were thus “on sale.”

Note on Secret Commercial Use

In some instances, the courts have treated secret commercial use cases as
implicating the public-use bar, rather than the on-sale bar. One important early
example is Metallizing Engineering Co. v. Kenyon Bearing & Auto Parts Co., 153 F.2d
516 (2d Cir. 1946). There, an inventor was using a metal reconditioning process in
secret (behind the closed doors of his workshop) and selling the fruits of the process—
the reconditioned metal—to the public. Judge Learned Hand held that the inventor
was barred from obtaining a patent by the public-use bar. Some scholars have
similarly treated these types of cases as implicating the public-use bar. See, e.g., Mark
A. Lemley, Does “Public Use” Mean the Same Thing It Did Last Year?, 93 Tex. L. Rev.
1119 (2015).

Notwithstanding the courts’ waffling on the question, secret commercial use

cases are better understood as implicating the on-sale bar, not the public-use bar.
Jonathan S. Masur & Lisa Larrimore Ouellette, Real-World Prior Art, 76 Stan. L. Rev.
__ (forthcoming 2024). The most important reason is that secret commercial use more
strongly implicates the central principle animating the on-sale bar: concern that the
inventor will exploit the invention commercially for longer than the prescribed patent
term. As Judge Hand says in Metallizing (again, a case in which he relied upon the
public-use bar), “it is a condition upon an inventor’s right to a patent that he shall not
exploit his discovery competitively after it is ready for patenting; he must content
himself with either secrecy, or legal monopoly.” In addition, “public” use is an odd fit
for cases of secret commercial use, which are (by definition) not public. And finally,
this doctrine operates like the on-sale bar and not like the public-use bar in that it
applies only to the inventor, as the next section will explain. Regardless, the outcome
 94 MASUR & OUELLETTE ⋅ PATENT LAW

of the cases is consistent: irrespective of which particular doctrinal category is

triggered, instances of secret commercial use by an inventor before the critical date
will bar that inventor from later patenting the invention.

Third-Party Rules

In all the public use and on sale cases above, it is the patent applicant who has
created the prior art that makes the invention unpatentable. Indeed, this is one of the
salient features of those categories of prior art: a careless inventor who does not file
in time can bar herself from ever obtaining a patent.11 Nonetheless, these cases beg
the question as to when public use or sale by Party A will bar Party B from obtaining
a patent, even if Party B meets all of the other requirements of patentability. That is,
what are the third-party effects of placing an invention in public use or on sale? The
following cases address that question, first for on sale, and then for public use.

W.L. Gore & Associates v. Garlock, 721 F.2d 1540 (Fed. Cir. 1983)

Howard T. Markey, Chief Judge.

Background

1 In late October, 1969, Dr. Gore discovered that stretching [rods of

polytetrafluorethylene (PTFE), also known by du Pont’s trademark TEFLON] as fast
as possible enabled him to stretch them to more than ten times their original length
with no breakage. The rapid stretching also transformed the hard, shiny rods into
rods of a soft, flexible material. On May 21, 1970, Gore filed the patent application
that resulted in the patents in suit. The ’566 patent has 24 claims directed to processes
for stretching highly crystalline, unsintered, PTFE.

2 The district court declared all claims of the patent invalid under 102(b) because
the invention had been in public use and on sale more than one year before Gore’s
patent application, as evidenced by Budd [Company]’s use of the Cropper machine.

Opinion

§ 102(b) and the Cropper Machine

3 In 1966 John W. Cropper of New Zealand developed and constructed a machine

for producing stretched and unstretched PTFE thread seal tape. In 1967, Cropper sent
a letter to a company in Massachusetts, offering to sell his machine, describing its

11This is unlike the “known or used by others . . . before the invention thereof” provision
from pre-AIA § 102(a), under which it is nearly impossible for an inventor to bar herself from
obtaining a patent. After all, an inventor cannot inform “others” of an invention before she has
invented it herself.
 NOVELTY 95

operation, and enclosing a photo. Nothing came of that letter. There is no evidence
and no finding that the present inventions thereby became known or used in this
country.

4 In 1968, Cropper sold his machine to Budd, which at some point thereafter
used it to produce and sell PTFE thread seal tape. The sales agreement between
Cropper and Budd provided:

ARTICLE “E”—PROTECTION OF TRADE SECRETS Etc.

1. BUDD agrees that while this agreement is in force it will not

reproduce any copies of the said apparatus without the express written
permission of Cropper nor will it divulge to any person or persons other
than its own employees or employees of its affiliated corporations any
of the said known-how or any details whatsoever relating to the
apparatus.

2. BUDD agrees to take all proper steps to ensure that its

employees observe the terms of Article “E” 1 and further agrees that
whenever it is proper to do so it will take legal action in a Court of
competent jurisdiction to enforce any one or more of the legal or
equitable remedies available to a trade secret plaintiff.

5 Budd told its employees the Cropper machine was confidential and required
them to sign confidentiality agreements. Budd otherwise treated the Cropper machine
like its other manufacturing equipment.

6 A former Budd employee said Budd made no effort to keep the secret. That
Budd did not keep the machine hidden from employees legally bound to keep their
knowledge confidential does not evidence a failure to maintain the secret. Similarly,
that du Pont employees were shown the machine to see if they could help increase its
speed does not itself establish a breach of the secrecy agreement. There is no evidence
of when that viewing occurred. There is no evidence that a viewer of the machine could
thereby learn anything of which process, among all possible processes, the machine is
being used to practice. As Cropper testified, looking at the machine in operation does
not reveal whether it is stretching, and if so, at what speed. Nor does looking disclose
whether the crystallinity and temperature elements of the invention set forth in the
claims are involved. There is no evidence that Budd’s secret use of the Cropper
machine made knowledge of the claimed process accessible to the public.

7 The district court held all claims of the ’566 patent invalid under 102(b)
because “the invention” was “in public use [and] on sale” by Budd more than one year
before Gore’s application for patent. [I]t was error to hold that Budd’s activity with
the Cropper machine, as above indicated, was a “public” use of the processes claimed
in the ’566 patent, that activity having been secret, not public.
 96 MASUR & OUELLETTE ⋅ PATENT LAW

8 Assuming, arguendo, that Budd sold tape produced on the Cropper machine
before October 1969, and that that tape was made by a process set forth in a claim of
the ’566 patent, the issue under § 102(b) is whether that sale would defeat Dr. Gore’s
right to a patent on the process inventions set forth in the claims.

9 If Budd offered and sold anything, it was only tape, not whatever process was
used in producing it. Neither party contends, and there was no evidence, that the
public could learn the claimed process by examining the tape. If Budd and Cropper
commercialized the tape, that could result in a forfeiture of a patent granted them for
their process on an application filed by them more than a year later. D.L. Auld Co. v.
Chroma Graphics Corp., 714 F.2d 1144, 1147–48 (Fed. Cir. 1983); see Metallizing
Engineering Co. v. Kenyon Bearing & Auto Parts Co., 153 F.2d 516 (2d Cir. 1946).
There is no reason or statutory basis, however, on which Budd’s and Cropper’s secret
commercialization of a process, if established, could be held a bar to the grant of a
patent to Gore on that process.

10 Early public disclosure is a linchpin of the patent system. As between a prior

inventor who benefits from a process by selling its product but suppresses, conceals,
or otherwise keeps the process from the public, and a later inventor who promptly
files a patent application from which the public will gain a disclosure of the process,
the law favors the latter. See Horwath v. Lee, 564 F.2d 948 (C.C.P.A. 1977). The
district court therefore erred as a matter of law in applying the statute and in its
determination that Budd’s secret use of the Cropper machine and sale of tape
rendered all process claims of the ’566 patent invalid under § 102(b).

Nat’l Rsch. Development v. Varian Assocs., 30 U.S.P.Q.2d 1537 (Fed. Cir. 1994)

Raymond C. Clevenger III, Circuit Judge.

1 U.S. Patent No. 3,999,118 (’118 patent), entitled “Spectrographic Analysis of

Materials,” issued on December 21, 1976, to Hoult, who assigned his rights thereunder
to NRDC. The subject matter of the ’118 patent’s four claims concerns a method and
apparatus for eliminating systemic noise produced in a Nuclear Magnetic Resonance
(NMR) spectrometer during sample analysis.

2 The invention resulted from the endeavors of Dr. David Hoult, a graduate
student at Oxford University, England, while under the supervision of his advisor, Dr.
(Sir) Rex Richards. A patent application to Dr. Hoult’s invention was filed in the
United Kingdom on April 8, 1974. The patent application from which the ’118 patent
issued was filed on February 27, 1975, in the United States.

3 During the period of Dr. Hoult’s development work, Dr. Richards attended an
Experimental NMR Conference in the United States in April 1973. While travelling
to the conference one morning, Dr. Richards had an informal, one-on-one conversation
on a bus with Dr. Stejskal, a Monsanto Company research scientist. During that
 NOVELTY 97

conversation, Dr. Richards disclosed the essence of Dr. Hoult’s invention to Dr.
Stejskal. It is undisputed, and the district court expressly found, that Dr. Richards at
that time did not ask Dr. Stejskal to keep the information confidential, and did not
inform him that either he or Dr. Hoult intended to file for a patent thereon.

4 Upon his return to Monsanto, Dr. Stejskal and his colleague, Dr. Schaefer (the
Monsanto scientists), collaborated in incorporating Dr. Hoult’s invention as disclosed
by Dr. Richards into one of the NMR spectrometers in their Monsanto research
laboratory. As the district court found, “by the summer of 1973, more than one year
before the application for Hoult patent [sic] was filed in the United States,” the
Monsanto NMR spectrometer modified by the Monsanto scientists was using the
subject matter of the ’118 patent. The Monsanto scientists then used this modified
spectrometer as an analytical tool to determine, inter alia, whether the then-
experimental herbicide “Roundup” was safe for release into the environment.

5 In 1989, NRDC filed suit against Varian Associates, Inc. in the U.S. District
Court for the District of New Jersey alleging infringement of its ’118 patent. [The
district court held a bench trial.] The court held “the patent” invalid under the public-
use bar of 35 U.S.C. § 102(b) because the Monsanto scientists were using the
spectrometer in the usual course of Monsanto’s business, without restriction, more
than one year before the filing date of Dr. Hoult’s patent application in the United
States.

[Discussion]

6 This court in In re Smith, 714 F.2d 1127 (Fed. Cir. 1983), defined the public
use of a claimed invention under section 102(b) as including “any use of that invention
by a person other than the inventor who is under no limitation, restriction or
obligation of secrecy to the inventor.” Id. at 1134 (citing Egbert v. Lippmann, 104 U.S.
(14 Otto) 333, 336 (1881)).

7 On appeal, NRDC argues that the district court erred in concluding that the
facts of this case evidence a prior public use, as defined by In re Smith, because the
totality of the circumstances indicates that there was an “understanding” between
Drs. Richards and Stejskal that the information was not to be disclosed to the public,
and therefore that the information was provided under enough of a restriction to
preclude a public-use bar. Relying on W.L. Gore & Assocs., Inc. v. Garlock, Inc., 721
F.2d 1540 (Fed. Cir. 1983), NRDC reasons that the district court therefore erred as a
matter of law in placing undue emphasis on the absence of a restrictive or
confidentiality agreement. We disagree.

8 There is ample evidence in the record to support the district court’s factual
finding that the information was disclosed to Dr. Stejskal without any restriction on
use or dissemination. The “totality of the circumstances,” even including describing
the conversation on the bus as “private,” simply does not support NRDC’s position.
Moreover, the mere fact that Drs. Richards and Stejskal had known each other for
 98 MASUR & OUELLETTE ⋅ PATENT LAW

many years cannot of itself create the “understanding” of confidentiality that NRDC
struggles to establish, especially since the NMR Conference was specifically designed
to encourage intellectual discourse through the free disclosure of information. Thus,
the unrestricted disclosure of the invention, coupled with use of that information in
the ordinary course of business, renders that use public.

9 Moreover, use by only one member of the public, without that use informing
other members of the public as to the true nature of the invention, is sufficient under
Supreme Court jurisprudence to invalidate a patent under section 102(b) for prior
public use. See, e.g., Egbert v. Lippmann, 104 U.S. (14 Otto) at 336 (“If an inventor . . .
gives or sells [the invention] to another, to be used by the donee or vendee, without
limitation or restriction, or injunction of secrecy and it is so used, such use is public,
even though the use and knowledge of the use may be confined to one person.”). Thus,
even assuming that only the Monsanto scientists had access to the modified
spectrometer, and that others visiting the laboratory had no idea as to the true nature
thereof, the Monsanto scientists’ knowledge and use alone provide sufficient basis on
which to invoke the statutory bar of section 102(b). Monsanto’s internal policies
concerning dissemination of information are to that extent irrelevant.

10 W.L. Gore is not contrary to this result. In that case, this court concluded that
the facts did not support a public-use bar because an entity entirely separate from the
inventor, Cropper, had independently developed the subject matter of the
subsequently issued patent and had kept it entirely secret from the public, even
though it had been used in a commercial process. We reasoned:

As between a prior inventor who benefits from a process by selling its

product but suppresses, conceals, or otherwise keeps the process from
the public, and a later inventor who promptly files a patent application
from which the public will gain a disclosure of the process, the law
favors the latter.

721 F.2d at 1550. The present case, however, does not involve a secret development of
the patent’s subject matter wholly separate from the patentee. Rather, the source of
the information about the invention which led to the public use was indirectly the
patentee himself. Under United States patent law, an inventor has the obligation to
avoid public use of his invention more than one year before filing, in order to preserve
his right to receive a patent thereon. See Moleculon Research, 793 F.2d at 1265. This
applies as much to the inventor’s confidants as it does to the inventor himself. Thus,
in order to avoid application of the public use bar of section 102(b), Dr. Richards,
having free access to Dr. Hoult’s invention, had to refrain from freely disclosing
information concerning that invention. Since Dr. Richards failed to do so, Dr. Hoult
failed to meet his obligation and the resulting public use of the invention invalidates
NRDC’s patent on the subject matter publicly used. This result furthers the important
public policy of discouraging the removal of inventions from the public domain which
members of the public justifiably have come to believe are freely available.
 NOVELTY 99

Note on Third-Party Rules

Gore v. Garlock is really a case of third-party secret commercial use: Budd was
using the process in secret and selling the (non-informing) fruits of that process
publicly. The Federal Circuit held that Budd’s secret commercial use did not bar Gore
from later obtaining a patent. This echoed a result from 43 years earlier, when the
Second Circuit (in the person of Judge Learned Hand) held in Gillman v. Stern, 114
F.2d 28 (2d Cir. 1940), that a third party’s secret commercial use of a pneumatic
machine used in quilting did not invalidate another inventor’s later effort to obtain a
patent. The Federal Circuit again affirmed this understanding in BASF Corp. v. SNF
Holding Co., 955 F.3d 958, 967 (Fed. Cir. 2020).

One would imagine that other types of secret sales similarly should not bar
third parties if they do not lead to public use. For instance, suppose Aleida creates an
invention and offers it for sale (without disclosing any information about it), but the
sale is never accepted. Aleida has triggered the on-sale bar, and under Pfaff she will
be barred from obtaining a patent if she does not file within a year. But should her
offer for sale bar Bruno, another inventor who is unconnected with Aleida? Everything
we know about the on-sale bar indicates that the answer should be “no.” Per Pfaff, the
on-sale bar exists to prevent inventors from commercially exploiting their inventions
for longer than the twenty-year statutory period. Bruno is not doing that; only Aleida
is. And from the perspective of patent law, there is no meaningful difference between
secret commercial use that does not disclose the invention and a secret sale that does
not disclose the invention. Both involve commercial exploitation, neither involves any
sort of public use, and neither creates enabling prior art. It would seem that they
should be treated identically.

However, this is not what the Federal Circuit has generally said. That court
has stated explicitly, on multiple occasions, that third-party sales will bar anyone from
obtaining a patent. See, e.g., Zacharin v. United States, 213 F.3d 1366, 1371 (Fed. Cir.
2000) (“Finally, under this court’s precedents, it is of no consequence that the sale was
made by a third party, not by the inventor.”); Abbott Laboratories v. Geneva
Pharmaceuticals, Inc., 182 F.3d 1315, 1318 (Fed. Cir. 1999) (“Furthermore, the
statutory on-sale bar is not subject to exceptions for sales made by third parties either
innocently or fraudulently.”). On the other hand, there is one case in which the Federal
Circuit has held the opposite. In Poly-America, L.P. v. GSE Lining Technology, Inc.,
383 F.3d 1303 (Fed. Cir. 2004), a third party sold a machine that may have been
capable of performing the claimed method well before the critical date. But the court
held that this third-party sale could not invalidate the patent:

[T]his case involves a purported sale by a third party of a device

asserted after the critical date to be usable in a claimed method. This
case thus does not involve the policy prohibition against an inventor
commercializing his invention while deferring the filing of a patent
application.
100 MASUR & OUELLETTE ⋅ PATENT LAW

Id. at 1309.

Now consider what the Federal Circuit has actually done in these cases. In
every case (save one) in which the Federal Circuit has held that a third-party sale
bars another inventor has involved a sale that was not secret. In all of those cases, the
sale either put the invention into public use—by making embodiments of the invention
publicly available—or disclosed the invention to the public in an enabling way.

Zacharin offers a good example. In that case, the inventor, an engineer working
for the Army, disclosed the invention to the Army. The Army in turn disclosed it to a
third-party private company (Breed), which manufactured 6000 units and sold them
back to the Army. The court held that this third-party sale (Breed to the Army) barred
the inventor. There is no mention of Breed being bound by any duty of secrecy. At
minimum, then, the invention appears to have been in public use by Breed itself. The
argument for public use here is even stronger than it would be in a typical case
because Breed was actively induced by the inventor to use the invention, without any
mention of a patent. The public-use bar exists to protect reliance interests on the part
of members of the public who believe that they have access to an unpatented
invention. Those reliance interests loom especially large in a case such as this one.
And as National Research Development Corp. v. Varian teaches, the public-use bar is
not party-specific, precisely because the concern is for the public’s reliance interests,
which can be triggered regardless of which party puts the invention into public use.

The one counter-example is Evans Cooling System v. General Motors, 125 F.3d
1448 (Fed. Cir. 1997), which involved a claim by an inventor that General Motors had
misappropriated his invention and incorporated it into the 1992 Corvette. At least one
customer had purchased the ’92 Corvette before the critical date, but it does not
appear that the car was delivered by that date, making this a pure case of a sale
without public use.

Lower courts have gone back and forth on this question. Some lower courts
have held that the on-sale bar is party-specific: a sale by one party does not preclude
another party from obtaining a patent, so long as the sale does not also trigger the
public-use bar. See, e.g., Schlumberger Tech. Corp. v. BICO Drilling Tools, 2019 WL
2450948 (S.D. Tex. June 12, 2019); MDS Associates v. United States, 37 Fed. Cl. 611
(1997). MDS is illustrative. That case involved a patent on technology used to prevent
ship-to-ship collisions. More than a year before the patent application was filed, a
third party—the United States Navy—sold the invention to the nation of West
Germany. As befitting a sale from one country’s military to another’s, the sale was
confidential and the technology was protected by various secrecy and classification
rules. The court held that the secret third-party sale did not bar the patent. In other
cases, however, courts have held that truly secret sales nonetheless trigger the on-
sale bar against third parties. See, e.g., Piet v. United States, 176 F. Supp. 576 (S.D.
Cal. 1959).
 NOVELTY 101

Accordingly, there are two ways of understanding this area of law. The first
accords with the language of Federal Circuit opinions: the on-sale bar is not party-
specific. A sale by one party will bar a patent by another party who was unconnected
to the sale. However, there are two problems with this approach. The first is that it
requires incorporating at least one exception for secret commercial use (as in Gore v.
Garlock). There is of course nothing wrong with exceptions to a doctrine when the
exceptions are motivated by some compelling reason. But here, there is no reason
whatsoever that secret commercial use should be treated differently than secret sales
when they implicate precisely the same policy concerns. This relates to the second—
and more significant—problem, which is that the policy underlying the on-sale bar
dictates that it should be party-specific. Again, as the Supreme Court explains in
Pfaff, the primary focus of the on-sale bar is the threat that a party will attempt to
exploit a patent beyond the prescribed twenty-year term. Actions by one party simply
do not implicate this concern with respect to another party; the second party has done
nothing wrong.

The second way of understanding this area of law is to view the on-sale bar as
purely party-specific: sales by Aleida can only bar Aleida, not Bruno. However, sales
by Aleida will often give rise to other types of statutory bars. If Aleida sells 1000 units
of her invention to the public, the invention is now in public use. The public-use bar
is not party-specific, so those uses will bar Bruno from obtaining a patent on the same
invention. But if Aleida’s sale had been non-public, or if her offer for sale had never
been accepted, the offer itself would bar only Aleida and not Bruno.

There are several important virtues to this approach. First, and most
importantly, it would align the on sale and public use doctrines with their underlying
policies. The on-sale bar would be party-specific because it exists to vindicate a party-
specific policy objective; the public-use bar would not be party-specific because it exists
to vindicate a policy objective that concerns the public at large, rather than any
specific patent applicant. Second, it would eliminate the need for a special,
unprincipled exception for secret commercial use. The downside of this approach is
that it would conflict with how the Federal Circuit generally describes this area of
doctrine—except in Poly-America, where it stated that the on-sale bar is party-
specific. It would also conflict with the result in Evans Cooling System. On the other
hand, it would not actually conflict with any other of the Federal Circuit’s results. As
we explained above, every other case in which the Federal Circuit has stated that the
on-sale bar applies to third parties has also involved some element of public use. Those
cases are better understood as instances in which a sale led to public use, which in
turn barred all parties from patenting. Indeed, the Federal Circuit has at least once
described the two bars as operating in this manner. In a footnote to In re Caveney, 761
F.2d 671 (Fed. Cir. 1985), the court wrote:

The “on sale” provision of 35 U.S.C. § 102(b) is directed at precluding

an inventor from commercializing his invention for over a year before
he files his application. Sales or offers made by others and disclosing
102 MASUR & OUELLETTE ⋅ PATENT LAW

the claimed invention implicate the “public use” provision of 35 U.S.C.

§ 102(b).

For these reasons, we think this second route is the best way to understand
the on-sale and public-use bars. Jonathan S. Masur & Lisa Larrimore Ouellette, Real-
World Prior Art, 76 Stan. L. Rev. __ (forthcoming 2024). It better aligns doctrine with
policy and principle, and it rationalizes the doctrine without epicycles of caveats and
exceptions.12 From the perspective of students looking to learn and understand the
law, we believe this is the cleanest and most rational approach. We hope that the
Federal Circuit will soon come to see it our way and alter how it discusses these cases.
But please exercise caution! If you are writing a brief to a court or a memo to a senior
partner, you are well-advised not to blithely state that the on-sale bar is party-specific.
Less enlightened lawyers who have not learned from this book may not understand
what you mean. Rather, you should explain that the Federal Circuit typically claims
that sales bar everyone from patenting, but that in fact the bar is better understood
as party-specific (as the court said in Poly-America) and the vast majority of third-
party sales cases actually involve public use as well. Lower courts tend to treat the
on-sale bar as party-specific for this reason. At bottom, the law is in flux, and good
arguments to the Federal Circuit will be necessary to clarify it.

Practice Problem: Third-Party Rules

In 1998, S invented a new type of motor to be used in drilling for oil and gas.
Separately, K invented the same type of motor the same year. In 1999, K exhibited
the motor itself, as well as drawings of the motor, at a trade show. The motor was
available for viewing but could not be touched or examined. The drawings outlined
the basic features of the motor but did not contain all of the technical detail that would
have been necessary to build the motor. In 2000, K reached a confidential agreement
to sell 1000 motors to B. B planned to resell the motors on the retail market. Those
motors were eventually delivered in 2003, and B resold them on the retail market in
2004. In 2002, S filed for a patent on the invention. Is S’s patent valid? Why or why
not?

(a) Would your answer have been different if K had delivered the motors to B in
2000, and B had immediately resold them to retail purchasers who began using
them?

12 There is one other potential option, which is that the court could maintain that the
on-sale bar is not party-specific but carve out an exception for “secret” sales, which would bar
only the party making the sale, where “secret” means “does not create a public use.” This would
harmonize the rules for secret sales and secret commercial use, but only by creating yet
another exception to the general rule. If this is how the court believes these cases should be
decided (as it should), better to simplify matters by treating the on-sale bar as party-specific
and the public-use bar as not.
 NOVELTY 103

(b) Would your answer be different in either scenario above if the events were
shifted forward in time so they were governed by the AIA?

See Schlumberger Tech. Corp. v. BICO Drilling Tools, 2019 WL 2450948 (S.D. Tex.
June 12, 2019).

5. Public Disclosure and the AIA Third-Party Grace Period

Post-AIA § 102(b)(1)(A) provides a one-year grace period for prior art disclosed
by the patent filer herself. For instance, if an inventor discloses an invention via a
printed publication, under § 102(b)(1)(A) that inventor has one year to file for a patent
before she will have barred herself. In this respect, the post-AIA and pre-AIA law are
identical. And this one-year grace period distinguishes the U.S. patent system from
that in many other jurisdictions, in which any public disclosure bars a later patent.

Now consider post-AIA § 102(b)(1)(B). That section provides a one-year grace

period with regard to prior art disclosed by a third party, but only if the invention had
previously been “publicly disclosed” by the applicant herself or someone associated
with her. So, for instance, if Alice creates a printed publication disclosing an invention
on March 1, before Kavita has disclosed anything, Kavita is forever barred from filing
a patent on that invention. However, if Kavita discloses the invention via a printed
publication on February 1, and then Alice discloses on March 1, Kavita’s earlier
disclosure creates a one-year grace period with respect to her own disclosure and
Alice’s disclosure. So long as she files before February 1 of the following year, she will
not be barred by these pieces of prior art. Because of this feature, the AIA is sometimes
referred to as a “first-to-publish” system, rather than a first-to-file system.

Importantly, however, post-AIA § 102(b)(1)(B) states that the grace period only
applies if the patent applicant publicly disclosed before the other party’s prior art
came into existence. This is in contrast to §§ 102(b)(1) and 102(b)(1)(A), which refer to
the various categories of prior art merely as “disclosures,” without the “public”
modifier. What does it mean to publicly disclose, as opposed to merely disclosing? This
statutory provision has never been adjudicated, so it is difficult to say for certain. But
we can guess. Paper prior art—which must necessarily be both public and enabling—
are almost surely public disclosures of the invention. Public use, by its very nature, is
presumably a public disclosure as well. (After all, public use is defined by its
publicness.) However, we suspect that secret commercial uses and secret sales—sales
that do not create public uses—would not be considered public disclosures. These
types of disclosures create no enabling information and do not make the invention
available to the public. If the requirement that a disclosure be “public” is to have any
meaning, it must disqualify disclosures that do neither of those things. Jonathan S.
Masur & Lisa Larrimore Ouellette, Real-World Prior Art, 76 Stan. L. Rev. __
(forthcoming 2024).
104 MASUR & OUELLETTE ⋅ PATENT LAW

This understanding of the § 102(b)(1)(B) third-party grace period has the

virtue of unifying that provision of law with the general third-party prior art rules
described above. Paper prior art and public uses, which bar third parties from
patenting, would similarly insulate the disclosing party against subsequent third-
party disclosures. Secret commercial uses and secret sales, which do not bar third
parties from patenting, would not insulate the “disclosing” party against subsequent
third-party disclosures. Public disclosures are public for all purposes; secret
“disclosures” are secret for all purposes.

Practice Problems: Third-Party AIA Grace Period

1. On January 1, 2015, A writes a blog post describing and enabling a new

invention. Four days later, completely independently, B writes a blog post
describing the same invention. B files for a patent on October 15, 2015, and A
files for a patent on November 1, 2015. What result?

2. Same facts as question 1, but now A filed on February 1, 2016, and B filed on
February 10, 2016. What result then?

3. A invents a widget on Jan. 1, 2015. On June 1, 2015, A reaches an agreement

to sell the widget to B. This agreement is never made public. C invents the
same widget on July 1, 2015 and files for a patent on October 1, 2015. A files
for a patent on October 2, 2015. What result?

4. A invents a widget on Jan. 1, 2015. On April 1, 2015, A gives an enabling oral

presentation about the widget to an audience of 50 widget purchasers. The next
day, one of them writes an enabling blog post about the widget. Without
reading the blog post, B files for a patent on the widget on April 3, 2015. A files
for a patent on April 5, 2015. What result?

5. A invents a widget on Jan. 1, 2015. On May 1, 2015, A offers the widget for sale
to some widget users. Word leaks out that a new widget is for sale, but no
details about it are revealed. On June 1, 2015, A tells three friends, B, C, and
D, all about the widget. On June 1, 2015, B writes a blog post about the widget
but does not explain how to manufacture it. On June 2, 2015, E independently
figures out how to make the widget and files for a patent on it. A files for a
patent on July 1, 2015. What result?

6. A invents a widget on Jan. 1, 2015. On Feb. 1, 2015, B steals technical

information that enables the widget from A and publishes it on her blog. On
Jan. 15, 2015, C invents the same widget. On Jan. 16, 2015, C offers to sell 50
widgets to D. The offer is secret, and no information regarding it reaches the
public. On April 2, 2015, C puts up a website describing the widget in enabling
fashion. On October 1, 2015, C files for a patent on the widget. On November
1, 2015, A files for a patent on the widget. Result?
 NOVELTY 105

7. Same facts as question 6, but now A files Mar. 1, 2016. Result?

B3. Earlier Invention as Prior Art Under Pre-AIA

§ 102(g)
In some cases, the pre-AIA question of who invented first can be settled with
reference to the types of § 102(a) prior art discussed above. Before the second inventor
can invent, the first inventor will have already produced a printed publication, a
patent application, or put the invention into public use. But in other instances, two
(or more) parties might invent before either of them can publicize the invention.
Section 102(g) exists to govern invention races in these sorts of cases.

Section 102(g) is complex; you should take a moment to reread that statutory
section and then probably read it a third time. Importantly, § 102(g) is phrased in the
negative. It states that a party cannot obtain a patent if there is another party who
(a) invented first and (b) did not abandon, suppress, or conceal the invention. Thus, it
is possible to obtain a patent even if one did not invent first, or if one abandoned,
suppressed, or concealed the invention. So long as there is not another party with a
stronger claim to having invented, § 102(g) will not bar an applicant from receiving a
patent.

Also pay attention to the two key differences between § 102(g)(1) and
§ 102(g)(2). First, they differ in whether both independent inventors are seeking U.S.
patent rights. When both are, the USPTO declares an “interference” between the
parties under § 102(g)(1) and conducts a trial-like hearing to determine which party
will receive the patent. When only one inventor seeks patent rights, a second
inventor’s earlier invention can serve as prior art under § 102(g)(2) as long as she did
not abandon, suppress, or conceal the invention. That is, you can win an invention
race and bar others from patenting without ever filing yourself. The second difference
between § 102(g)(1) and § 102(g)(2) is that they differ in territorial scope. For
interferences under § 102(g)(1), the invention locations can be almost anywhere (since
1995, any country that is a member of the World Trade Organization). For § 102(g)(2),
the prior art invention must have been in the United States.

The following subsections will decompose the various component parts of

§ 102(g) in depth. In brief, as illustrated in the following figure, the process of
invention starts with conception—having a definite and permanent idea of the
complete and operative invention—and ends with reduction to practice.
106 MASUR & OUELLETTE ⋅ PATENT LAW

The Process of Invention

Reducing an invention to practice can be done either by constructing a product or

performing a process within the scope of the claim (known as actual reduction to
practice) or by filing an enabling patent application (constructive reduction to
practice). If the inventor demonstrates reasonable diligence throughout the entire
period between conception and reduction to practice, then the priority date for
invention is the date of conception; otherwise, it is the date of reduction to practice. If
the first inventor has engaged in actual reduction to practice, patent rights could still
go to a second inventor under § 102(g) if the first inventor has abandoned, suppressed,
or concealed the invention rather than bringing the invention to the public by either
filing a patent application or commercializing it. As we will explain more below,
“abandoned, suppressed or concealed” is a unified idea, not three separate concepts,
and it does not require active suppression—delay due to neglect can fall under this
category, although the standard is not as exacting as the diligence inquiry.
 NOVELTY 107

1. Conception and Reduction to Practice

Invention begins with conception. The term “conception” might bring to mind
the first moment an inventor has an idea for an invention—the “aha” moment that
sparks the process of inventing. In fact, however, conception is much more than a
spark of an idea. Rather, conception is the “formation in the mind of the inventor, of
a definite and permanent idea of the complete and operative invention, as it is
thereafter to be applied in practice.” Coleman v. Dines, 754 F.2d 353, 359 (Fed. Cir.
1985). Thus, to have conceived of an invention, an inventor must have a sense of how
the full invention will be constructed and how it will function. This doesn’t necessarily
mean that the inventor needs to have built the invention or even produced detailed
blueprints and schematics. But it does require much more than just an initial idea.

Invention concludes with reduction to practice, which can be established in

either of two ways. First, the party can simply file a patent application. This is known
as “constructive reduction to practice.” Second, the party can (a) make the actual
invention and (b) ascertain that it works for its intended purpose. This is known as
“actual reduction to practice.” These two routes to reduction to practice are treated as
equivalent because either way, the inventor has concluded the inventive process:
either the invention has been completed and the inventor knows it will work, or the
inventor has filed a patent, which requires legal affirmation that the inventor has
enabled the invention.

The text of § 102(g) does not explain the relationship between conception and
reduction to practice or the conditions under which an inventor who is first to one
stage or another will be declared the first inventor. However, the courts have clarified
this issue. The first inventor is the party who reduced to practice first, unless another
party can prove that it (a) conceived first and (b) was diligent during the relevant
period. We will discuss the requirement of diligence at greater length in the next
subsection.

Finally, note that if a party cannot prove when it conceived of an invention or

when it reduced to practice, the party can always rely on its filing date. Filing the
patent counts as constructive reduction to practice, and so a party that cannot prove
conception or reduction to practice prior to the date of its filing will be treated as if it
conceived and reduced to practice on its filing date.

Practice Problems: Conception and Reduction to Practice

1. Suppose I’m working on inventing a cancer drug. I know what the chemical
compound is, but I don’t know whether it should be administered in pill or
liquid form. Have I conceived?
108 MASUR & OUELLETTE ⋅ PATENT LAW

2. Suppose I want to make a new type of electric car. It needs a special battery,
and I don’t know yet if there’s a battery that will work for it. Have I conceived?

3. Once I have conceived of my electric car, how can I reduce the invention to
practice? Are there advantages to the inventor of pursuing one route over the
other?

4. Recall that in Pfaff, the Supreme Court held that “the invention” exists once it
is “ready for patenting,” meaning that the inventor would be capable of
constructively reducing the invention to practice at that point by filing for a
patent. How does “ready for patenting” map onto the conception → reduction-
to-practice timeline of an invention? Is it the same thing as reduction to
practice? Is it the same thing as conception?

2. Reasonable Diligence
If an inventor is first to conceive but second to reduce to practice, she may
stretch her invention date back past her reduction-to-practice date if she shows
reasonable diligence; any periods of inactivity must be legally excused. The Federal
Circuit has stated that the purpose of this inquiry is to ensure the invention was not
“unreasonably delayed by the first inventor during the period after the second
inventor entered the field.” Brown v. Barbacid, 436 F.3d 1376, 1379 (Fed. Cir. 2006).

To establish reasonable diligence, the first party to conceive must demonstrate

“reasonably continuing activity” directed toward actual or constructive reduction to
practice during the critical period between the second party’s conception and the first
party’s reduction to practice. Id. at 1380. Diligence is a strict standard. Reasonable
diligence must be shown “throughout the entire critical period.” Monsanto v. Mycogen
Plant Science, 261 F.3d 1356, 1369 (Fed. Cir. 2001). Although “there need not
necessarily be evidence of activity on every single day if a satisfactory explanation is
evidenced,” all gaps must be accounted for with either activity related to reduction to
practice or a reasonable excuse. Id. Diligence and its corroboration may be shown by
a variety of activities, including time obtaining necessary supplies, testing, and
preparing a patent application. Reasonable diligence is a question of fact that is
assessed on a case-by-case basis, and an inventor’s testimony must be corroborated.

Efforts directed to “ongoing laboratory experimentation” are the clearest

evidence of diligence, whereas “pure money-raising activity that is entirely unrelated
to practice of the process” does not demonstrate diligence. Scott v. Koyama, 281 F.3d
1243 (Fed. Cir. 2002). Delay will be excused for “reasonable everyday problems and
limitations” such as illness, short vacations, the demands of an everyday job, or delays
in receiving necessary materials, but not for “efforts to refine an invention to the most
marketable and profitable form.” Griffith v. Kanamaru, 816 F.2d 624 (Fed. Cir. 1987).
 NOVELTY 109

To provide some sense of how courts evaluate diligence, inventors were found to be
reasonably diligent in the following cases:

• The inventor’s laboratory notebook showed evidence of activity on all but six
days of the 31-day critical period, and each of those six days was a single-day
gap. Brown v. Barbacid, 436 F.3d 1376 (Fed. Cir. 2006).

• During an eleven-month critical period, laboratory notebooks demonstrated

activity during every month, from which a jury could reasonably infer the work
was ongoing without interruption, despite the lack of daily entries. Monsanto
Co. v. Mycogen Plant Science, 261 F.3d 1356 (Fed. Cir. 2001).

• The inventor’s patent attorney was working on the patent application during
the three-month critical period. There was no specific evidence of activity
during three portions of this period (lasting nineteen, three, and eighteen
days), but there was evidence from which the court could infer what activities
occurred during those gaps (such as time the inventor spent responding to the
attorney’s questions). Perfect Surgical Techniques v. Olympus America, 841
F.3d 1004 (Fed. Cir. 2016).

• Over a seventeen-day critical period, the inventor showed daily activity

directed toward building a facility for large-scale commercial practice of a
chemical process. Although these activities “were not of themselves an actual
reduction to practice,” they were “directly aimed at achieving actual practice”
and are not disqualified by their commercial scale. Scott v. Koyama, 281 F.3d
1243 (Fed. Cir. 2002).

In contrast, the activities in these cases were found to not constitute reasonable
diligence:

• A “bald assertion” of diligence during an eighteen-month critical period fails to

raise a genuine issue of material fact because a party must “account for the
entire period during which diligence is required.” Creative Compounds, LLC v.
Starmark Labs., 651 F.3d 1303 (Fed. Cir. 2011).

• The inventor, a professor at Cornell University, had a three-month period of

inactivity to wait for a graduate student to arrive and for grant funding to come
through. Cornell’s standard academic policy of waiting for outside research
funding reflects a choice “to assume the risk that priority in the invention
might be lost to an outside inventor.” Griffith v. Kanamaru, 816 F.2d 624 (Fed.
Cir. 1987).

• Over a five-month critical period, the inventor’s patent attorney “had a few
conversations with [the inventor], conducted a prior art search, billed for under
30 hours of work, and drafted the patent application.” There were few records
showing the exact days when activity specific to the application occurred,
allowing the Federal Circuit to find that substantial evidence supported the
110 MASUR & OUELLETTE ⋅ PATENT LAW

PTAB’s finding that the inventor had failed to demonstrate sufficient attorney
diligence. In re Enhanced Sec. Rsch., LLC, 739 F.3d 1347 (Fed. Cir. 2014).

Discussion Questions: Reasonable Diligence

1. Why Require Diligence? Why do you think patent law has a diligence
requirement at all, and what’s the best justification for such a strict standard?

2. Why Not Require Everyone’s Diligence? Diligence is only relevant in one

situation: when the party who was first to reduce to practice was not first to conceive.
That is, if a given party is both first to conceive and first to reduce to practice, it is
irrelevant how diligent that party was during the period between conception and
reduction to practice. The inventor could have taken 10 year-long vacations to Tahiti
in the intervening time, and she still would win the § 102(g) priority race. Why should
this be? What policy rationale explains this rule? And what policies would be furthered
by adopting a contrary rule that required diligence irrespective of who was first to
conceive and reduce to practice?

Practice Problems: Reasonable Diligence

1. Suppose I conceive of an idea, but I have a full-time job teaching patent law.
So I work on my new idea one or two evenings/week, though I’m mostly
spending time on my full-time job. Have I been diligent?

2. Suppose I conceive of an idea, and then I take a five-year vacation. Toward the
end of my vacation, I hear that you’re about to start doing research on the same
technologies. I rush home and get back to work on my invention immediately,
two days before you begin work. Have I been diligent?

3. Consider the following timeline:

If both parties are diligent, who will win the § 102(g) priority race? Whose
diligence is relevant in this scenario? During what period must that party
establish diligence? Why not require that each party be diligent from the
moment of her conception until the moment of her reduction to practice?
 NOVELTY 111

3. Abandonment, Suppression, Concealment

An earlier inventor will not win an interference under § 102(g)(1) or have her
invention count as prior art under § 102(g)(2) if she “abandoned, suppressed, or
concealed” the invention between actual reduction to practice and bringing the
invention to the public by filing a patent application or commercializing the invention.
Like the reasonable diligence inquiry, whether a first inventor abandoned,
suppressed, or concealed an invention is a fact-specific equitable inquiry, but the
standard is less exacting than it is for diligence—delays are typically measured in
years rather than days or weeks.

Abandonment, suppression, or concealment can be shown not only through

deliberate concealment but also through inactivity and neglect. For example, in Peeler
v. Miller, 535 F.2d 647 (C.C.P.A. 1976), Miller invented in 1966, Peeler filed in 1968
(and could not establish an earlier invention), and then Miller filed in 1970. During
the four years between invention and filing, Miller’s invention was sitting in a backlog
of invention disclosures in the legal office of his employer, Monsanto. The court held
that “a four-year delay from the time an inventor is satisfied with his invention and
completes his work on it and the time his assignee-employer files a patent application
is, prima facie, unreasonably long” and constituted abandonment, suppression, or
concealment. Id. at 654.

The abandonment, suppression, concealment inquiry is an equitable one.

Accordingly, not all delays are treated equally. It matters what the first inventor was
doing between reduction to practice and filing. The Federal Circuit has indicated that
if the inventor was working to “improve or perfect the invention,” a multi-year delay
is excusable. Lutzker v. Plet, 843 F.2d 1364, 1367 (Fed. Cir. 1988). However, these
improvements (or perfections) must be reflected in the final patent application: they
must involve claimed elements, and they must be described in the specification. If the
delay is due to efforts to commercialize the invention—prepare it for market, but not
in a way that changes the actual patented invention—a court will not excuse a longer
delay (although the standard is still less strict than for diligence). Lutzker’s patent
was on a machine for making canapes (!), but his post-reduction to practice activity
involved creating different canape molds and publishing a recipe book, none of which
appeared in the patent application. Accordingly, the court held that Lutzker had
abandoned his invention for purposes of § 102(g) by waiting over 4 years to file.

On the other hand, as we noted at the beginning of this section, not every
§ 102(g) priority contest involves two parties who both filed for patents. Sometimes
one party will bring the invention directly to market without attempting to patent it
or disseminate it to the public through a printed publication or some other means.
That party can still bar others from patenting under § 102(g)(2) if it was the first party
to invent and did not abandon, suppress, or conceal. In such cases, the relevant time
period for measuring abandonment, suppression, concealment is from reduction to
practice to when the invention hits the market or appears in a printed publication (at
112 MASUR & OUELLETTE ⋅ PATENT LAW

which point it is no longer concealed from the public and can serve as § 102(a) prior
art). Palmer v. Dudzik, 481 F.2d 1377 (C.C.P.A. 1973). When the inventor takes the
product to market without patenting it, the Federal Circuit has been more permissive
regarding the types of activities the inventor may engage in between reduction to
practice and commercialization without the court finding that the inventor has
abandoned, suppressed, or concealed. In particular, the court is more inclined to
excuse time spent commercializing the invention and preparing it to be marketed and
sold. See Checkpoint Sys., Inc. v. U.S. Intern. Trade Commn., 54 F.3d 756, 762 (Fed.
Cir. 1995). It is not necessary that the inventor have spent the intervening time
improving or perfecting the invention for the equities to tilt in her favor.

As some additional examples of how courts have adjudicated these cases, the
following cases found that inventors had not abandoned, suppressed, or concealed
their inventions:

• The inventor corresponded nearly monthly with his employer’s patent

department in the seven months before publicly disclosing the invention, and
then filed a patent application one month later, satisfying “the public policy
requirement of early public disclosure.” Seven months has never “been seen as
raising a presumption” of abandonment. Correge v. Murphy, 705 F.2d 1326
(Fed. Cir. 1983).

• During a three-year period from reduction to practice to filing a patent, the

inventor worked on improving the invention until his firm went into
bankruptcy, and after finding work at another firm he continued to
communicate with the new owner of the invention rights and was eventually
hired back, at which point he continued to work on the invention until he filed
a patent. “The delay of active work in these circumstances was not
unreasonable and was consistent with a continuing commitment to pursuing
the project to the full extent conditions allowed.” Fleming v. Escort, 774 F.3d
1371 (Fed. Cir. 2014).

• An earlier invention as reflected in a web browser that was demonstrated to

industry colleagues without a confidentiality agreement could be § 102(g)(2)
prior art even though the browser was then replaced with an improved version
that was posted on a public website. If improvements to an invention removed
it from the prior art, “the public would lose the benefit of diligent efforts to
produce a more useful product.” Eolas Techs. v. Microsoft, 399 F.3d 1325 (Fed.
Cir. 2005).

• A firm that spent two and one-half years after reduction to practice engaged in
“reasonable efforts towards commercialization” and never filed a patent did not
abandon, suppress, or conceal, and the firm’s earlier invention constituted
§ 102(g)(2) prior art. Dow Chemical v. Astro-Valcour, 267 F.3d 1334 (Fed. Cir.
2001).
 NOVELTY 113

In contrast, the activities in these cases were found to constitute abandonment,

suppression, or concealment:

• After reducing to practice, the inventor forwarded an invention disclosure to

his firm’s patent department. The matter was treated under standard
docketing practice, and an application was filed twenty-nine months later. The
delay raised an inference of suppression that the inventor had not rebutted.
Shindelar v. Holdeman, 628 F.3d 1337 (C.C.P.A. 1980).

• The two-year delay in patenting after reduction to practice constituted

suppression because it was due to the inventor’s pursuit of a cheaper
manufacturing process as opposed to perfecting the invention itself. Young v.
Dworkin, 489 F.2d 1277 (C.C.P.A. 1974).

• During the nineteen months between reduction to practice and commercial

release of a software invention, the earlier inventors failed to take “affirmative
steps to make the invention publicly known” and instead entered “a web of
nondisclosure agreements, confidentiality agreements, and noncompete
agreements.” These facts supported a jury verdict of suppression. TQP Dev. v.
1-800-Flowers.com, 120 F. Supp. 3d 600 (E.D. Tex. 2015), aff’d, 677 F. App’x
683 (Fed. Cir. 2017).

Discussion Questions: Abandonment, Suppression, Concealment

1. Charting Time for Abandonment, Suppression, and Concealment. The

relevant time period for determining whether an inventor abandoned, suppressed, or
concealed, is not entirely clear. In Peeler, the court counted four years of delay from
Monsanto’s reduction to practice until its filing date, despite the fact that Peeler only
took action halfway through that four-year period. On the other hand, in Paulik v.
Rizkalla, 760 F.2d 1270 (Fed. Cir. 1985) (en banc), Paulik invented in 1970, but his
employer (again Monsanto!) did not begin work on the patent application until
January or February of 1975. The second inventor, Rizkalla, filed in March 1975 (and
could not establish an earlier invention), and then Paulik filed in June 1975. The en
banc Federal Circuit held that Paulik did not abandon, suppress, or conceal because
“the first inventor will not be barred from relying on later, resumed activity
antedating an opponent’s entry into the field.” Id. at 1276. The court noted the
similarities with the four-year period in Peeler v. Miller but distinguished the cases:
“Peeler had entered the field and filed his patent application while Miller remained
dormant; Rizkalla entered the field, according to the record before us, after Paulik had
renewed activity on the invention.” Based on this discussion, what is the relevant time
period for determining whether a first inventor A has abandoned, suppressed, or
concealed if A files a patent after a second inventor B, as illustrated by the following
timeline?
114 MASUR & OUELLETTE ⋅ PATENT LAW

Even though Paulik says A can rely on resumed activity before B’s entry,
suggesting that the relevant period should be between Time 2 and Time 4 (as with the
diligence inquiry above), Peeler focuses on a four-year delay, and Paulik claims to be
consistent with Peeler. We think the best way to understand this is that we measure
abandonment using the entire period of inactivity (Time 1 to Time 4), but that a party
that abandoned can still win the priority race if it resumed activity before the other
party invented (Time 2) and then did not again abandon between the resumption and
filing (at Time 4). The best way to understand the law is that A “loses” the initial
invention date (Time 1) upon abandonment, but can establish a new invention date
upon resumption of activity.

Now consider the following timeline:

A is first to invent and first to file, so is A necessarily entitled to a patent? We

think not. If A abandons immediately after invention (Time 1) and does not resume
activity until A files (Time 3), then A’s invention date is now Time 3, and B is the first
to invent at Time 2. B will thus win the § 102(g) priority contest—unless B abandons
the invention before filing. In this sense, the abandonment inquiry is not symmetric
with the diligence inquiry: although we only ever care about the diligence of the first
party to conceive, there may be cases in which both parties’ abandonment becomes
relevant. Do you think the Federal Circuit’s approach to charting time for
abandonment purposes makes sense?

2. When Does the Second Inventor Enter the Field? In Paulik, the first inventor
is saved by his resumption of activity prior to the moment when the second inventor
“enters the field.” However, the Paulik court does not specify what it means to “enter
the field”—is it conception, reduction to practice, or something else? As best as one
can tell, the Federal Circuit dates a party’s entrance into the field to its earliest
invention date. So, for instance, the court will view a party as having entered the field
on the date of its conception if it was diligent between conception and reduction to
practice. If the party was not diligent, or if it cannot establish an earlier conception
date (like Rizkalla), it will have entered the field on the date of its reduction to
 NOVELTY 115

practice. Fleming v. Escort, 774 F.3d 1371, 1378–79 (Fed. Cir. 2014). What are the
pros and cons of this approach?

3. What Time Period Should Be Relevant? Consider again the timeline above,
in which A invents first but files a patent after a second inventor B. What are the
policy arguments in favor of treating the entire period of time from A’s invention to
A’s filing as relevant to the abandonment inquiry? What are the policy arguments in
favor of only considering the period from B’s invention until A’s filing?

4. Why Treat Abandonment Differently from Diligence? Recall that when

evaluating diligence in a comparable situation where A is first to conceive and last to
reduce to practice, the only relevant time period is between B’s conception and A’s
reduction to practice, not the full span of time between A’s conception and A’s
reduction to practice. Is there an argument for treating abandonment differently?

5. Why Treat Patenting Differently from Commercialization? What is the policy

rationale for permitting different activities depending on whether the endpoint is a
patent or a commercialized product?

Practice Problems: § 102(g)

Consider the following hypotheticals. What do the answers to these various

hypotheticals tell you about the advantages and disadvantages of the various
strategies an inventor can pursue with a new invention?

1. Suppose I reduce to practice, then let my invention sit around for 6 months,
then file my patent. Have I abandoned, suppressed, or concealed?

2. Suppose I conceive, then let the invention sit around for 6 months before
reducing to practice. Was I diligent? If your answer is different from question
1, why do you think that is? Why is diligence a stricter standard than
abandonment, suppression, or concealment. Should it be that much stricter?

3. Suppose I reduce to practice, and then (since I’m an academic) go off and give
talks for five years about how great I am and how exciting my invention is.
Then I file. Have I abandoned, suppressed, or concealed?

4. Suppose in 2000 I reduce to practice, then I put the invention down to work on
other things. In 2010, I pick it back up and then file. Two days later, a
competitor conceives of the same invention, reduces to practice, and then files.
Have I abandoned, suppressed, or concealed in the intervening decade?

5. Same question as 4, but here the other party conceives of the invention two
days before I picked it back up? Who is going to get the patent? If your answer
is different from question 4, can you explain why they should be different? Why
116 MASUR & OUELLETTE ⋅ PATENT LAW

should a few days here or there make such a difference, as against a decade of
inactivity?

6. Suppose I invent something and reduce it to practice. I then spend one year
working to create a product and bring it to market. Halfway through this year-
long period, you invent the same thing, reduce it to practice, and quickly bring
it to market. We each file for a patent at the end of the year. Who gets the
patent?

7. In January 2000, I invent a new invention. I then do nothing for five years. In
January 2001, you invent the same thing. You spend a year and a half working
to commercialize the invention, and in July 2002 you file for a patent on it and
confidentially offer it for sale. Nobody buys the invention. In January 2005, I
file for a patent on the same invention. Who is entitled to the patent? What if
you file in 2006 instead of 2002?

C. The Anticipation Analysis

The rule for whether a piece of prior art anticipates a given patent claim is
easy enough to state: Does the prior art reference disclose every element of the claim?
(This rule is sometimes called the “identity requirement.”) Recall the Swiffer patent
example from the beginning of this chapter: none of the three prior art references had
all four elements of the Swiffer patent claim, so it was not anticipated. But applying
this rule in practice is not always straightforward. What is an “element” of a claim?
Is what the reference discloses the same thing as that element?

1. Anticipation Claim Charts

As an example of how courts grapple with these kinds of questions, consider
U.S. Patent No. 6,161,226, which was filed in 1999 and disclosed a baseball chest
protector. Here are three of the figures from the ’226 patent:
 NOVELTY 117

The ’226 patent issued in 2000 with a single claim, to which we have added numbers
corresponding to the figures above:

1. A baseball chest protector comprising:

a flexible main pad [11] having a left shoulder portion [14], a

right shoulder portion [15], a chest portion [16], and an abdomen
portion [17];

a flexible shoulder guard [12] extending from the left shoulder

portion of the main pad over the shoulder of a wearer and having
a front portion [20] adjacent the main pad, a top portion [21],
and a back portion [22];

and adjustable straps [13], each adjustable strap attached at one

end to the abdomen portion of the main pad and at the other end
to the back portion of the shoulder guard.

The assignee of the ’226 patent, Everything Baseball, sued manufactures of

baseball chest protectors including Wilson Sporting Goods, Rawlings Sporting Goods,
and Adidas America. The defendants moved for summary judgment of invalidity,
arguing that the claim was anticipated by each of three prior art references related to
a chest protector invented by Major League Baseball umpire Joe West, illustrated
below: (1) a chest protector manufactured and sold by Douglas Athletic Equipment
beginning in 1993; (2) the paper “hang tag” for a protector sold by Wilson Sporting
Goods; and (3) U.S. Patent No. 5,530,966, filed by West in 1992.
118 MASUR & OUELLETTE ⋅ PATENT LAW

In their motion for summary judgment, defendants argued:

As each West embodiment shows, the West designed chest protector

features both a flexible inner layer and outer shell portions. It is the
flexible inner layer that is significant to Defendants’ motion. The West
chest protector has a flexible main pad (the inner layer) that protects
the user’s shoulders, chest, and abdomen; right and left shoulder guards
that bend over the shoulder to protect the front, top and rear of the
shoulder, and adjustable straps that attach and connect to the back of
the shoulder guards and the abdomen region of the main pad.

Before you keep reading to see how the district court ruled on this motion, look
back at the claim language above and compare it with the West references. At trial,
this is typically done through what is known as a “claim chart.” In a claim chart, a
party separates the claim into its component elements and attempts to identify some
feature in the prior art that matches each element—or, for the plaintiff, attempts to
show that there is no match for at least one of the claim elements.13 We have created
a sample claim chart below. Try to identify the part of each of the three West
references that meets each claim limitation. Do you agree with the defendants that
each reference clearly anticipates the claim?

Claim charts are also used in infringement analysis to match claim elements with
13

components of the product or process that is accused of infringing the patent.

 NOVELTY 119

Claim 1 elements Location of element in prior art?

(1) a flexible main pad [11] having

(a) a left shoulder portion [14],

(b) a right shoulder portion [15],

(c) a chest portion [16],

(d) an abdomen portion [17];

(2) a flexible shoulder guard [12]

(a) extending from the left shoulder

portion of the main pad over the
shoulder of a wearer and having

(b) a front portion [20] adjacent the

main pad,

(c) a top portion [21], and

(d) a back portion [22]; and

(3) adjustable straps [13],

(a) each adjustable strap attached at

one end to the abdomen portion
of the main pad

(b) and at the other end to the back

portion of the shoulder guard.

Everything Baseball v. Wilson Sporting Goods, 611 F. Supp. 2d 832 (N.D. Ill. 2009)

Elaine E. Bucklo, District Judge.

1 Although patent claims are presumed valid, that presumption can be

overcome—and the claims invalidated as “anticipated”—where clear and convincing
evidence shows that the claimed subject matter was previously described in a single
prior art reference. To anticipate, a single reference must teach every limitation of the
claimed invention. Anticipation is a question of fact.

2 The parties agree that to anticipate the ’226 patent, at least one of the West
references must demonstrate all of the following limitations: “a flexible main pad
having . . . an abdomen portion”; “a flexible shoulder guard” that extends “over the
shoulder of a wearer”; and “adjustable straps attached at one end to the abdomen
 120 MASUR & OUELLETTE ⋅ PATENT LAW

portion of the main pad.” The parties also generally agree on the structure of the West
references. Nevertheless, the parties’ positions on whether these references disclose
the aforementioned limitations are diametrically opposed: defendants assert that each
West reference demonstrates all of the limitations, while plaintiff argues that none of
the references contains any of them. I need not examine all of these disputes, however,
because even a single material dispute relating to each of the references is sufficient
to deny summary judgment.

1. The Douglas chest protector

3 After viewing, handling, and observing the Douglas embodiment as worn by a

law clerk, I am not persuaded that this reference indisputably contains “an abdomen
portion” as required by the ’226 patent. When worn in what appears to be the proper
position (as I assume was the case in the photographs defendants submitted in
support of their motion), the Douglas chest protector comes down to just below the
sternum, i.e., several inches above the navel, leaving a large portion of the abdomen
exposed. I am thus baffled by defendants’ contention that it is “self-evident from just
looking at” this reference that it has an abdomen portion. At the very least, whether
the Douglas chest protector contains an abdomen portion is a question of fact for the
jury. Accordingly, the Douglas chest protector does not anticipate the patent-in-suit
as a matter of law.

2. The ’966 Patent

4 I am also not persuaded that the ’966 patent indisputably contains “a flexible
main pad.” Defendants concede that the ’966 patent discloses a protective garment
with an outer shell layer of plastic plates (which both the specification and the claims
of that patent describe as “stiff”), but they argue that the invention is nevertheless
“flexible” because 1) the inner portion of the garment is flexible, which satisfies the
requirement that the reference contain a “flexible main pad,” and 2) the assembly
taken together is flexible because the plastic plates of the outer shell are themselves
flexible and, in any event, are hingedly linked so as to be capable of folding when
disassembled from the inner portion.

5 To set the stage for their first argument, defendants characterize the plates as
“separate components added to the flexible inner pad,” then argue that the presence
of “additional” features (i.e., the external plastic plates) in the ’966 patent do not
diminish the reference’s satisfaction of the “flexible” limitation in the asserted claim.
But it is not the “inner pad” that must be flexible according to the claim; it is the “main
pad.” I share plaintiff’s skepticism that the term “main pad” can be construed as
referring to the “inner pad” (rather than to the assembly of the inner and outer
portions), which is how the phrase would have to be interpreted for defendants’
argument to win the day. Defendants are correct that the transition “comprising”
(which precedes the limitation “a flexible main pad”) typically suggests an open-ended
claim, and that provided all limitations of the patent-in-suit are present in a prior art
reference, the presence of “additional” features in the prior art reference does not
 NOVELTY 121

undermine its satisfaction of the criteria for anticipation. If the claim language read,
for example, “a main pad comprising a flexible inner pad,” defendants might have a
point, since a “main pad” having both a flexible inner pad and inflexible outer plates
would presumably satisfy the limitation as written. The asserted claim, however,
recites “a flexible main pad,” and a reasonable interpretation of this language is that
the main pad must be “flexible” when all of its components are considered together.

6 This brings me to defendants’ second argument, which is that even if the inner
and outer layers of the chest protector disclosed in the ’966 patent are considered
collectively to be the “main pad,” the assembly still meets the requirement of the ’226
patent that the chest protector be “flexible.” I cannot decide this question as a matter
of law, despite the parties’ agreed-upon construction of the term “flexible” as meaning
“capable of being bent or flexed.” As to the first prong of defendants’ argument (that
the plastic plates are themselves flexible), most any material is capable of being bent
or flexed if sufficient pressure is exerted (indeed, even steel structures such as
buildings and bridges are engineered to be flexible enough to withstand the pressures
of wind and earthquakes, for example). That some amount of pressure will cause the
plastic plates to bend or flex thus does not compel the conclusion that the plates are
“flexible” as that term is used in the patent-in-suit. Moreover, the ’966 patent
repeatedly describes the plastic plates used in the invention as “stiff.” Defendants
point out that the ’226 patent itself also contemplates the use of plastic for the “outer
casing” of the main pad. Unlike the ’966 patent, however, which specifically describes
the plastic plates used for the outer portion of the garment as “stiff,” there is nothing
in the patent-in-suit to suggest that the invention contemplates the use of “stiff” outer
material in the “flexible main pad.” The disclosure states only that the outer layer
“may be made of any suitable material, such as fabric or plastic.” In light of the overall
requirement that the main pad be flexible, a reasonable interpretation of this
language is that it contemplates the use of malleable, rather than “stiff” plastic for
the outer casing. In sum, defendants have not demonstrated, as a matter of law, that
the plastic plates of the ’966 patent are “flexible” as that term is used in the patent-
in-suit.

7 This leaves the second prong of defendants’ second argument: that the
assembly of the inner and outer portions of the invention embodied in the ’966 patent
is “flexible” because the “stiff” outer plates are “hingedly connected by flexible straps.”
This issue also cannot be resolved as a matter of law. Plaintiff and defendants point
to the same portion of the ’966 disclosure in support of their respective positions: a
passage that discusses the relationship among the various plastic plates. The relevant
text describes an embodiment of the ’966 patent in which the plastic plates are
connected by “flexible straps” that “afford hinge-like displacement of the associated
plate elements about a hinge axis.” In addition, the description specifies that “the
straps are of a width and stiffness so as to resist flexing of the straps except along the
hinge axis.” Unsurprisingly, plaintiff focuses on the “of a width and stiffness so as to
resist flexing” portion of this excerpt, while defendants emphasize the “except along
 122 MASUR & OUELLETTE ⋅ PATENT LAW

the hinge axis” portion, which they say “directly contradicts” plaintiff’s argument that
the invention in the ’966 patent is “rigid.”

8 Defendants’ argument fails because even assuming the presence of flexible

hinges means the exterior shell cannot accurately be characterized as “rigid,”
reasonable minds can differ as to whether the ability of the stiff plastic plates to be
“displaced” about their axes—but not in any other direction—satisfies the
requirement that the main pad be “flexible” as that term is used in the patent-in-suit.
A reasonable interpretation of “flexible” as used in the ’226 patent is that the main
pad must be flexible in various directions, not merely among a particular axis or axes.
Indeed, such an interpretation would support the patent-in-suit’s stated object of
protecting a catcher “without restricting the catcher’s mobility,” which presumably is
not limited to movement along the axes formed by the interconnected plates. In other
words, the hinged movement among the stiff plastic plates disclosed in the ’966 patent
may render the invention non-rigid without rendering it “flexible” as that term is used
in the ’226 patent.

9 For at least these reasons, the ’966 patent does not anticipate the patent-in-
suit as a matter of law.

3. The Wilson West Vest “Hang Tag”

10 First of all, other than identifying what appears to be the inner layer of the
garment as the “soft underpad,” there is no evidence that any or all of the portion of
the West Vest corresponding to the “main pad” of the ’226 patent is “flexible.” The
front view drawing depicts and identifies the following parts: collar plates; collar roll;
shoulder cup; bicep pad; side chest plates; breast plate; sternum plate; soft underpad;
“T” hooks; and “T” hook slots. (I note in passing that no “abdomen plate” is identified,
and the extent to which the “sternum plate” descends below the sternum when worn
is not ascertainable from the drawing.) It is not clear from the picture whether certain
of these parts are overlapping or adjacent. I cannot discern, for example, whether the
portion identified as the “breast plate” overlaps with the parts identified as “side chest
plates,” or whether one of these plate ends where the other begins. Moreover, nothing
tells me the extent to which the “plate” components are themselves flexible or stiff, or
how they are connected to one another, if at all. For at least these reasons, I cannot
conclude as a matter of law that the Wilson “hang tag” anticipates the patent-in-suit.

11 For the foregoing reasons, defendants’ motion for summary judgment is

denied. [After the summary judgment motion was denied, the parties agreed to a
stipulated dismissal, indicating a likely settlement.]

Practice Problem: Creating an Anticipation Claim Chart

As explained above, patent practitioners create claim charts to demonstrate

which elements of a patent claim are present in another work. Invalidity claim charts
 NOVELTY 123

show how each element is present (or not) in the prior art; infringement claim charts
show how each element is present (or not) in the defendant’s accused product. In this
exercise,14 you will assemble an invalidity claim chart for claim 1 of U.S. Patent No.
5,026,109 (the ’109 patent), which claims a tarp system for covering a truck trailer.
You represent the accused infringer, who wants to argue that the claim is anticipated
by prior art U.S. Patent No. 4,189,178 (Cramaro). (Conventionally, the patent-in-suit
is referred to by its last three digits, and prior art patents are referred to by the first
inventor’s last name.) Please download PDFs of these patents. If you forget how to do
this, look back at the “Locating Patent Documents” exercise in Chapter 1.

For each limitation of claim 1 of the ’109 patent, provide one or more quotes,
cites, or figures from the reference demonstrating how the limitation is disclosed by
that reference. If you do not believe that the reference includes one or more of the
limitations, indicate that as well. We have filled in two of the rows already as models.
Do you think Cramaro anticipates the ’109 patent?

U.S. Patent No. 5,026,109 U.S. Patent No. 4,189,178 (Cramaro prior art)

1. A retractable segmented “A tarpaulin cover system for use in trucks

cover system used with a eliminates the need for usual side tracks for guiding
truck trailer comprising the tarpaulin supporting rods.” Abstract.

“This invention relates to a new tarpaulin cover

system for use in a truck box. More particularly, the
present invention relates to a tarpauline cover
system suitable for vehicles such as dump trucks or
the like, frequently used in hauling sand, gravel,
rocks etc.” Col. 1, ll. 6–10.

(a) a plurality of flexible

cover sections with

(b) a plurality of
substantially parallel
supporting bows spaced
therebetween and

“Turning now to the embodiment of FIGS. 6 and 7, it

will be seen that the rods 5′ 6′ of this embodiment
are of the type of upwardly arched bows.” Col. 3, ll.
45–47.

14 We thank Roger Ford for creating the original version of this exercise.
124 MASUR & OUELLETTE ⋅ PATENT LAW

(c) a drive assembly,

(d) wherein each cover

section is detachably
connected between
substantially parallel
supporting bows,

(e) the bows are slideably

supported on the truck
trailer and

(f) at least one bow is

fixedly connected to the
drive assembly such that
the cover system can be
extended or retracted by
the drive assembly and

(g) wherein a cover section

can be removed from the
cover system independent
of the other cover sections.

2. Accidental and Inherent Anticipation

As we explained at the very beginning of this section on novelty, a claimed
invention is unpatentable for lack of novelty only if a single piece of prior art discloses
every element of the claim. Much of the time, this analysis is straightforward: a
printed publication or a prior patent either does or does not describe all of the
elements of the claim; an invention that is in public use or on sale either does or does
not include every claim element. But in some cases, the elements of a patent claim
will necessarily be present in a prior art reference without explicitly being mentioned
or described in that reference. Or a reference will disclose the elements of a claim
without the party who created the reference having any idea (or intention) that it does
so.

These situations involve what is known as “accidental” or “inherent”

anticipation, and they raise a number of related questions. Can prior art anticipate if
the elements of a claim are necessarily present in the prior art reference, even if they
are never explicitly mentioned? If so, under what circumstances? And must the
 NOVELTY 125

creator of a piece of prior art realize that the claimed elements are present in the prior
art in order for that prior art to anticipate a claim? If not, why not? The following two
cases attempt to answer these questions.

In re Seaborg, 328 F.2d 996 (C.C.P.A. 1964)

Arthur M. Smith, Judge.

1 The application and the claims in issue relate to a new transuranic element
having atomic number 95, now known as Americium (Am). Two isotopes of Americium
are disclosed, Americium 241 and 242. Two general methods of synthesizing element
95 are set forth, namely (1) bombardment of plutonium with deuterons or neutrons;
and (2) in a neutronic reactor operated at a relatively high power level for an extended
period of time (approximately 100 days). A suitable reactor is said to be that described
in Fermi et al. application Serial No. 568,904, filed December 19, 1944, which is now
U.S. Patent No. 2,708,656.

The claims in issue read simply:

1. Element 95.

2. The isotope of element 95 having the mass number 241.

2 There is but a single ground of rejection involving the above claims, i.e.,
unpatentability over the Fermi et al. patent, for the reason that element 95 must be
inherently produced in the operation of the reactor disclosed therein.

3 The Fermi et al. patent discloses several nuclear reactors. The patent does not
mention elements 95 and 96. The claims in issue were first rejected on the Fermi
patent in the examiner’s letter of May 25, 1955.

4 Appellant, however, asserts in his brief:

The statements are exemplary only. [T]he maximum amount of

americium 241 that could have been produced in the reactor operated
for 100 days at 500 kilowatts power can be calculated to be 6.15 × 10-9
gram. Thus the reactor could have produced no more than one billionth
[sic]15 of a gram of americium-241, and this one billionth of a gram
would have been distributed throughout forty tons of intensely
radioactive uranium reactor fuel. This amount of an unknown,
unconcentrated isotope, if present, would have been undetectable.

15 [n.3 in opinion] It would appear that appellant meant ‘one one-hundred millionth’
rather than ‘one billionth,’ since 6.15 × 10-9 gram amounts to more than six billionths of a
gram.
 126 MASUR & OUELLETTE ⋅ PATENT LAW

5 The solicitor has taken no issue with appellant’s assertion. In fact, the solicitor
states in his brief:

The facts are relatively simple and not actually in dispute. The rejection
is not based upon a finding that the patent expressly discloses the
formation of the claimed element, but rather upon the conclusion
reached that that product is inherently produced in the operation of the
Fermi reactor.

6 The issue here arises by application of what both the appellant and the solicitor
term the “inherency doctrine,” which, as we understand it, is a Patent Office doctrine
which infers a lack of novelty in a product if a comparable process for making the
product is found to exist in the art. When so stated and applied to the facts here this
doctrine establishes a broader basis for refusing a patent than is required by the
courts in finding anticipation of an issued patent. It goes beyond the rule as stated by
Judge Learned Hand in Dewey & Almy Chemical Co. v. Mimex Co., 124 F.2d 986, 989
(2d Cir. 1942):

No doctrine of the patent law is better established than that a prior

patent or other publication to be an anticipation must bear within its
four corners adequate directions for the practice of the patent
invalidated. If the earlier disclosure offers no more than a starting point
for further experiments, if its teaching will sometimes succeed and
sometimes fail, if it does not inform the art without more how to practice
the new invention, it has not correspondingly enriched the store of
common knowledge, and it is not an anticipation.

7 The record before us . . . is replete with showings that the claimed product, if
it was produced in the Fermi process, was produced in such minuscule amounts and
under such conditions that its presence was undetectable.

8 In the companion appeal [involving a patent application for element 96,

Curium], the board stated what we consider to be the fact here, that:

The exhibits submitted do not show that appellant could predict with
any degree of definiteness the properties or characteristics of the new
elements or specify with any certainty the exact procedures which could
be followed, without the exercise of more than the ordinary skill of the
art, to prepare these elements. Indeed, in view of the unpredictability
both as to the character of the product elements and of the processes by
which they might be achieved, it is particularly reasonable to hold that
conception and reduction to practice are necessarily concurrent for an
invention of this kind.

9 We also agree with the summary statement in appellant’s brief that:

 NOVELTY 127

There is no positive evidence that americium was produced inherently

in the natural uranium fuel by the operation of the reactor for the times
and at the intensity mentioned in the exemplary statement relied upon
by the Patent Office. The calculations show that the element, if
produced, was produced in the most minute quantities. If the one
billionth of a gram were produced, it would have been completely
undetectable, since it would have been diluted with the 40 tons of
intensely radioactive uranium fuel which made up the reactor.

10 Since we reject the position of the board in affirming the rejection on the Fermi
patent, there is no reason to here consider the sufficiency of the Rule 131 affidavits as
establishing for appellant a date of invention prior to the date of the Fermi reference.

11 For the foregoing reasons, the decision of the board is reversed.

Schering Corp. v. Geneva Pharmaceuticals, 339 F.3d 1373 (Fed. Cir. 2003)

Randall R. Rader, Circuit Judge.

1 On summary judgment, the United States District Court for the District of
New Jersey determined that claims 1 and 3 of U.S. Patent No. 4,659,716 (the ’716
patent) are invalid. Because the district court correctly found that U.S. Patent No.
4,282,233 (the ’233 patent) inherently anticipates claims 1 and 3 of the ’716 patent,
this court affirms.

I.

2 Schering Corporation owns the ’233 and ’716 patents on antihistamines.

Antihistamines inhibit the histamines that cause allergic symptoms. The prior art
’233 patent covers the antihistamine loratadine, the active component of a
pharmaceutical that Schering markets as CLARITIN™. Unlike conventional
antihistamines when CLARITIN™ was launched, loratadine does not cause
drowsiness.

3 The more recent ’716 patent at issue in this case covers a metabolite of
loratadine called descarboethoxyloratadine (DCL). A metabolite is the compound
formed in the patient’s body upon ingestion of a pharmaceutical. The ingested
pharmaceutical undergoes a chemical conversion in the digestion process to form a
new metabolite compound. The metabolite DCL is also a non-drowsy antihistamine.
The ’716 patent issued in April 1987 and will expire in April 2004 (the ’233 patent
issued in 1981 and has since expired).

4 The numerous defendants-appellees sought to market generic versions of

loratadine once the ’233 patent expired. [Under the Hatch–Waxman framework that
this casebook describes in Chapter 11, defendants submitted Abbreviated New Drug
Applications to the FDA along with “paragraph IV” certifications that the ’716 patent
 128 MASUR & OUELLETTE ⋅ PATENT LAW

was invalid. Schering then filed this suit for infringement under 35 U.S.C.
§ 271(e)(2)(A).]

5 The district court construed claims 1 and 3 of the ’716 patent to cover DCL in
all its forms, including “metabolized within the human body” and “synthetically
produced in a purified and isolated form.” The parties agreed to that construction.
Applying that claim construction, the district court found that the ’233 patent did not
expressly disclose DCL. Nonetheless, the district court also found that DCL was
necessarily formed as a metabolite by carrying out the process disclosed in the ’233
patent. The district court concluded that the ’233 patent anticipated claims 1 and 3 of
the ’716 patent under 35 U.S.C. § 102(b). The district court therefore granted the
appellees’ motions for summary judgment of invalidity. Schering timely appealed . . . .

II.

A.

6 At the outset, this court rejects the contention that inherent anticipation
requires recognition in the prior art. Precedents of this court have held that inherent
anticipation does not require that a person of ordinary skill in the art at the time
would have recognized the inherent disclosure. The district court therefore did not err
in allowing for later recognition of the inherent characteristics of the prior art ’233
patent.

7 Cases dealing with “accidental, unwitting, and unappreciated” anticipation

also do not show that inherency requires recognition. See Eibel Process Co. v. Minn.
& Ontario Paper Co., 261 U.S. 45 (1923); Tilghman v. Proctor, 102 U.S. 707 (1880).
The patent at issue in Tilghman claimed a method of forming free fatty acids and
glycerine by heating fats with water at high pressure. In Tilghman, the record did not
show conclusively that the claimed process occurred in the prior art. In reviewing the
prior art, the Court referred hypothetically to possible disclosure of the claimed
process. For example, the Court stated “[w]e do not regard the accidental formation of
fat acid in Perkins’s steam cylinder . . . (if the scum which rose on the water issuing
from the ejection pipe was fat acid) as of any consequence in this inquiry.” 102 U.S. at
711.

8 Applying an inherency principle in the context of an on-sale bar under 35

U.S.C. § 102(b), this court has distinguished Eibel and Tilghman. See Abbott Labs. v.
Geneva Pharms., Inc., 182 F.3d 1315, 1319 (Fed. Cir. 1999) (“If a product that is
offered for sale inherently possesses each of the limitations of the claims, then the
invention is on sale, whether or not the parties to the transaction recognize that the
product possesses the claimed characteristics.”); Scaltech, Inc. v. Retec/Tetra, LLC,
269 F.3d 1321, 1330 (Fed. Cir. 2001) (“[A]ppreciation of the invention is not a
requirement to trigger the statutory [on sale] bar.”).
 NOVELTY 129

9 In the context of accidental anticipation, DCL is not formed accidentally or

under unusual conditions when loratadine is ingested. The record shows that DCL
necessarily and inevitably forms from loratadine under normal conditions. DCL is a
necessary consequence of administering loratadine to patients. The record also shows
that DCL provides a useful result, because it serves as an active non-drowsy
antihistamine.

B.

10 This court recognizes that this may be a case of first impression, because the
prior art supplies no express description of any part of the claimed subject matter.
The prior art ’233 patent does not disclose any compound that is identifiable as DCL.
In this court’s prior inherency cases, a single prior art reference generally contained
an incomplete description of the anticipatory subject matter, i.e., a partial description
missing certain aspects. Inherency supplied the missing aspect of the description.
Upon proof that the missing description is inherent in the prior art, that single prior
art reference placed the claimed subject matter in the public domain. This case does
not present the issue of a missing feature of the claimed invention. Rather, the new
structure in this case, DCL, is not described by the prior ’233 patent.

11 Because inherency places subject matter in the public domain as well as an

express disclosure, the inherent disclosure of the entire claimed subject matter
anticipates as well as inherent disclosure of a single feature of the claimed subject
matter. The extent of the inherent disclosure does not limit its anticipatory effect. In
general, a limitation or the entire invention is inherent and in the public domain if it
is the “natural result flowing from” the explicit disclosure of the prior art.

12 In reaching this conclusion, this court is aware of In re Seaborg, 328 F.2d 996
(C.C.P.A. 1964). In that case, this court’s predecessor considered claims drawn to an
isotope of americium made by nuclear reaction in light of a prior art patent disclosing
a similar nuclear reaction process but with no disclosure of the claimed isotope. This
court’s predecessor found that the prior art process did not anticipate the claims
because the process would have produced at most one billionth of a gram of the isotope
in forty tons of radioactive material, i.e., the isotope would have been undetectable. In
this case, DCL forms in readily detectable amounts as shown by the extensive record
evidence of testing done on humans to verify the formation of DCL upon ingestion of
loratadine.

13 This court sees no reason to modify the general rule for inherent anticipation
in a case where inherency supplies the entire anticipatory subject matter. The patent
law principle “that which would literally infringe if later in time anticipates if earlier,”
Bristol–Myers Squibb Co. v. Ben Venue Labs., Inc., 246 F.3d 1368, 1378 (Fed. Cir.
2001), bolsters this conclusion. Similarly, “if granting patent protection on the
disputed claim would allow the patentee to exclude the public from practicing the prior
art, then that claim is anticipated.” Atlas Powder v. Ireco, 190 F.3d 1342, 1346 (Fed.
Cir. 1999). “The public remains free to make, use, or sell prior art compositions or
 130 MASUR & OUELLETTE ⋅ PATENT LAW

processes, regardless of whether or not they understand their complete makeup or the
underlying scientific principles which allow them to operate. The doctrine of
anticipation by inherency, among other doctrines, enforces that basic principle.” Id. at
1348. Thus, inherency operates to anticipate entire inventions as well as single
limitations within an invention.

14 Turning to this case, the use of loratadine would infringe claims 1 and 3 of the
’716 patent covering the metabolite DCL. This court has recognized that a person may
infringe a claim to a metabolite if the person ingests a compound that metabolizes to
form the metabolite. An identical metabolite must then anticipate if earlier in time
than the claimed compound.

C.

15 This court next examines whether Schering’s secret tests of loratadine before
the critical date placed DCL in the public domain. Before the critical date, Schering
only tested loratadine in secret. Thus, according to Schering, “DCL was not publicly
used, or described in any printed publication, until after February 15, 1983, the
critical date for the ‘716 patent.”

16 Anticipation does not require the actual creation or reduction to practice of the
prior art subject matter; anticipation requires only an enabling disclosure. Thus,
actual administration of loratadine to patients before the critical date of the ’716
patent is irrelevant. The ’233 patent suffices as an anticipatory prior art reference if
it discloses in an enabling manner the administration of loratadine to patients.

17 To qualify as an enabled reference, the ’233 patent need not describe how to
make DCL in its isolated form. The ’233 patent need only describe how to make DCL
in any form encompassed by a compound claim covering DCL, e.g., DCL as a
metabolite in a patient’s body. The ’233 patent discloses administering loratadine to
a patient. A person of ordinary skill in the art could practice the ’233 patent without
undue experimentation. The inherent result of administering loratadine to a patient
is the formation of DCL. The ’233 patent thus provides an enabling disclosure for
making DCL.

D.

18 Finally, this court’s conclusion on inherent anticipation in this case does not
preclude patent protection for metabolites of known drugs. With proper claiming,
patent protection is available for metabolites of known drugs.

19 For example, the metabolite may be claimed in its pure and isolated form, or
as a pharmaceutical composition (e.g., with a pharmaceutically acceptable carrier).
The patent drafter could also claim a method of administering the metabolite or the
corresponding pharmaceutical composition. The ’233 patent would not provide an
enabling disclosure to anticipate such claims because, for instance, the ’233 patent
does not disclose isolation of DCL.
 NOVELTY 131

20 The ’716 patent contains claims 5–13 covering pharmaceutical compositions

and claims 14–16 covering methods of treating allergic reactions by administering
compounds that include DCL. These claims were not found anticipated by the ’233
patent.

21 The district court did not err in finding that the ’233 patent discloses
administering loratadine to a patient, and that DCL forms as a natural result of that
administration. The district court correctly concluded that DCL is inherent in the
prior art. Without any genuine issues of material fact, the district court correctly
granted summary judgment that claims 1 and 3 are invalid as anticipated by the ’233
patent.

Discussion Questions: Schering and Seaborg

1. Distinguishing Seaborg. The court in Schering offers an argument for

distinguishing the result in that case from the result in Seaborg. Is the distinction the
Schering court draws persuasive? Is it compelling from a policy standpoint? Why or
why not?

2. Infringement–Anticipation Symmetry. One of the bedrock principles of

patent law is the symmetry between infringement and anticipation. Any product that
would infringe a patent if it postdates the patent should anticipate the patent if it
predates the patent. And vice versa. Does Schering preserve this symmetry? That is,
the Schering court holds that loratadine use bars Schering from patenting DCL. If
individuals had only started taking loratadine after Schering successfully patented
DCL, would they infringe the DCL patent? Does Seaborg preserve this symmetry?
That is, would use of Fermi’s reactor infringe Seaborg’s patent?

3. Why Patent an Element? When Fermi’s prior art reactor patent was filed,
Fermi and Seaborg were working together in Chicago on the Manhattan Project, and
Seaborg’s group had already synthesized americium; it was just being kept secret.
Both patents were filed by the Atomic Energy Commission. Why do you think the
United States patented these inventions? A front-page New York Times story after the
C.C.P.A. decision stated: “As Dr. Seaborg explained, he was ‘just a name’ that the
Atomic Energy Commission was using on the patents. In effect, he said, they are
Government patents, taken out to protect the public against the possibility that some
individual would lay a patent claim to the elements and their production methods and
then attempt to force payment of royalties.” Is this “defensive patenting” justification
convincing?

Practice Problems: Accidental and Inherent Anticipation

1. The claims at issue involve “preparing a food product rich in glucosinolates,

comprising germinated cruciferous seeds” such as broccoli and cauliflower, and
132 MASUR & OUELLETTE ⋅ PATENT LAW

harvesting the resulting sprouts. The inventors did not create a new kind of sprout
but were the first to recognize that certain kinds of sprouts are rich in glucosinolates
(compounds that purportedly detoxify carcinogens). Are the claims anticipated by
prior art describing preparing, harvesting, and eating sprouts including broccoli and
cauliflower? See In re Cruciferous Sprout Litig., 301 F.3d 1343 (Fed. Cir. 2002).

2. The claims at issue cover methods for treating hair loss by applying the
chemical bimatoprost topically to the scalp. An earlier patent discloses using the same
chemical to treat glaucoma by applying eyedrops to the eye. That patent’s disclosure
taught that the application of bimatoprost would, among other things, lead to the
growth of eyelashes. However, it did not disclose any other location on the body where
bimatoprost might be applied, other than the eye. Are the claims anticipated? See
Allergan v. Apotex, 754 F.3d 952 (Fed. Cir. 2014).

3. The only claim at issue reads in its entirety: “Crystalline paroxetine

hydrochloride [PHC] hemihydrate.” PHC hemihydrate is a more stable version of the
compound PHC, and is the active ingredient in the antidepressant drug Paxil. A prior
art patent discloses a method for making PHC, and it is now recognized that practicing
this method inevitably produces trace amounts of PHC hemihydrate, although the
technology to detect these trace levels did not exist at the time. Is the claim
anticipated by this prior art patent? See SmithKline Beecham v. Apotex, 403 F.3d 1331
(Fed. Cir. 2005).

4. The patent claimed methods for removing body hair using a laser. They
required aligning the laser vertically over the hair follicle opening. The prior art is an
instruction manual that describes how to remove tattoos using a laser. The manual
did not discuss hair follicles, and it did not specify that the laser must always be
aligned vertically with the skin. In some situations, however, a user who follows the
manual might align the laser vertically over a hair follicle opening. Are the claims
anticipated? See MEHL/Biophile v. Milgraum, 192 F.3d 1362 (Fed. Cir. 1999).

5. The claims recite “administering, to a patient diagnosed as in need of

[stroke] treatment or prevention, an inhibitor of the renin-angiotensin system.” One
inhibitor of the renin-angiotensin system is the compound ramipril. Are the claims
anticipated by a paper describing a protocol for a randomized trial in which ramipril
would be administered to over 9000 patients at high risk for cardiovascular events
such as myocardial infarction and stroke”? The study had begun before the critical
date, but it was only completed (and the results were only published) after the critical
date. The study ultimately found that patients who received ramipril had a
statistically significant reduction in the risk of stroke, but again these results were
not published until after the patent was filed and are thus irrelevant to the
anticipation analysis. Are the claims anticipated? See In re Montgomery, 677 F.3d
1375 (Fed. Cir. 2012) (including a dissent on the inherency analysis).
 NONOBVIOUSNESS 133

3. Nonobviousness
As we’ve discussed, the requirement that patents be granted only on new
inventions is the bedrock rule of the patent system. But the novelty doctrine is also
quite limited: an invention is anticipated only if a single prior art reference discloses
all elements of the claimed invention. As you might imagine, many inventions differ
only slightly from the prior art. And many inventions are predictable combinations of
two or more pieces of prior art.

These types of inventions would not seem to warrant patent protection for
many of the same reasons that inventions that fail the test of novelty do not warrant
patent protection. If an invention is so obvious that no true innovation is required to
create it, then it is unlikely that a patent is necessary to incentivize its development.
See Tun-Jen Chiang, A Cost-Benefit Approach to Patent Obviousness, 82 St. John’s L.
Rev. 39 (2008); Glynn S. Lunney, Jr., E-Obviousness, 7 Mich. Telecomm. & Tech. L.
Rev. 363 (2001); Michael Abramowicz & John F. Duffy, The Inducement Standard of
Patentability, 120 Yale L.J. 1590 (2011). If an invention would have been obvious to
an ordinary researcher—that is, easily discovered by someone who is not relying on a
patent—then awarding a patent would generate social costs (the deadweight loss from
the patent) without any corresponding social benefit. In addition, the proliferation of
patents on obvious inventions would create other types of costs. It is expensive and
difficult for firms to comb through the stock of existing patents to determine what has
and has not been patented (and thus what freedom they have to operate). And if firms
were able to obtain obvious patents, they might also invest energy in acquiring those
valuable property rights rather than researching new innovations.

Nonobviousness is the patent doctrine for achieving these policy goals. As the
Supreme Court stated in Graham v. John Deere, 383 U.S. 1 (1966), the doctrine is
intended to be a “means of weeding out those inventions which would not be disclosed
or devised but for the inducement of a patent.” But it does not do so directly. In an
ideal world, judges and patent examiners evaluating obviousness would seek direct
evidence regarding whether the patent was necessary to the development of the
invention. They would examine the costs required to develop the invention in
comparison to what the market for the invention would look like with or without a
patent. If the cost of development were sufficiently low and the market sufficiently
robust that the inventor could have turned a profit without a patent, the court would
rule the patent obvious. If, however, the invention was expensive to develop and bring
to market, and the market was such that the inventor would never have recouped
these costs without a patent, then the court would consider the patent to be
nonobvious.

As a doctrinal matter, however, this type of evidence is difficult to obtain and

difficult for courts to work with. The costs of invention might be hard to measure, and
134 MASUR & OUELLETTE ⋅ PATENT LAW

reconstructing what a market for a given product would look like without a patent
requires substantial guesswork. Whether for this reason or others, Congress and the
courts have not attempted to pursue this type of inquiry directly. Instead, they have
settled on a doctrine that looks primarily at one half of the equation: how costly was
it to create the invention in the first place. And rather than examine costs themselves,
Congress and the courts have focused on a proxy: how much technical skill was
required to create the invention in the first place. (We call this a proxy because
technical skill is of course one input into the overall cost, but not the only input.) As
this chapter will explain, the doctrine of nonobviousness is focused on this technical
question. That is, obviousness is typically framed as a cognitive inquiry, not an
economic one. But see Abramowicz & Duffy, supra (arguing that courts can and should
shift toward a more economic approach).

A. Applying the Graham Test

The relevant statutory section is § 103 of the Patent Act:

35 U.S.C. § 103

A patent for a claimed invention may not be obtained, notwithstanding

that the claimed invention is not identically disclosed as set forth in
section 102, if the differences between the claimed invention and the
prior art are such that the claimed invention as a whole would have
been obvious before the effective filing date of the claimed invention to
a person having ordinary skill in the art to which the claimed invention
pertains. Patentability shall not be negated by the manner in which the
invention was made.

Unlike for § 102, the relevant text of § 103 was only slightly amended by the
2011 America Invents Act; the main difference is that for pre-AIA patents,
obviousness is assessed “at the time the invention was made” rather than on “the
effective filing date.” Pre-AIA § 103(c) also excluded prior art owned by the same
person from the obviousness analysis, which has been replaced to the same effect with
post-AIA § 102(b)(2)(C) and § 102(c).

As you can see, the nonobviousness statute is not particularly informative; it

merely states that obvious inventions cannot be patented. In Graham v. John Deere,
383 U.S. 1 (1966), the Supreme Court set out what remains the official four-part test
for obviousness. A court attempting to determine whether an invention would have
been obvious should:

1. Determine the scope and content of the prior art;

2. Determine the differences between the prior art and the claimed invention;
 NONOBVIOUSNESS 135

3. Determine the level of skill of someone skilled in the art (the PHOSITA); and
then
4. Determine whether the PHOSITA would have found the invention obvious in
light of the prior art.

Graham does not explain how to determine the content of the prior art, but the
Federal Circuit has concluded that all § 102 prior art qualifies, including under pre-
AIA § 102(e), (f), (g). See, e.g., OddzOn Products v. Just Toys, 122 F.3d 1396, 1403
(Fed. Cir. 1997); 2 Chisum on Patents § 5.03[3]. In the colorful “Winslow Tableau,”
obviousness is evaluated by “pictur[ing] the inventor as working in his shop with the
prior art references—which he is presumed to know—hanging on the walls around
him.” In re Winslow, 365 F.2d 1017, 1020 (C.C.P.A. 1966). That means that just like
for anticipation, a patent could be judged obvious based on prior art that was not
public at the time the inventor created the invention. Imagine that Kathryn invents
a widget in 2014 (that may or may not be obvious), just a week after Jamal files for a
patent on a component piece of technology. Jamal’s patent application remains secret
for 18 months until it is published. But for obviousness purposes, Jamal’s patent
would be prior art to Kathryn’s invention (under the AIA), even though the patent is
not yet published and Kathryn has no way of knowing about it.

The one caveat to this rule on prior art is that unlike for anticipation, the scope
of the prior art for an obviousness analysis is limited to “analogous” art. This means
that the art must either be “from the same field of endeavor” or “reasonably pertinent
to the problem with which the inventor is involved.” In re Bigio, 381 F.3d 1320, 1325
(Fed. Cir. 2004). The “field of endeavor” is determined from the patent specification;
for example, a toothbrush and a hairbrush can be in the same field of endeavor
because of their structural similarities. Id. Similarly, an inventor considering a hinge
mechanism for laptops would consider hinges from other fields—such as in “a desktop
telephone directory, a piano lid, a kitchen cabinet, a washing machine cabinet, a
wooden furniture cabinet, or a two-part housing for storing audio cassettes”—to be
“reasonably pertinent” to the problem to be solved. In re Paulsen, 30 F.3d 1475, 1481
(Fed. Cir. 1994).

Graham also does not explain how to determine the level of skill of someone
skilled in the art. The Federal Circuit has stated that nonexhaustive factors for
determining the level of skill include “(1) the educational level of the inventor; (2) type
of problems encountered in the art; (3) prior art solutions to those problems;
(4) rapidity with which innovations are made; (5) sophistication of the technology; and
(6) educational level of active workers in the field.” Daiichi Sankyo v. Apotex, 501 F.3d
1254, 1256 (Fed. Cir. 2007). For example, in evaluating the obviousness of a method
of treating an ear infection, the district court erred in concluding that the level of skill
was that of a general practitioner who might prescribe the invention, rather than that
of an ordinary researcher in the field the invention was trying to solve; i.e., a person
with expertise in both ear treatments and pharmaceutical development. Id. But this
factor is rarely dispositive; one empirical study concludes that “despite its ostensible
 136 MASUR & OUELLETTE ⋅ PATENT LAW

claim to ground these doctrinal decisions in an objective reference point, the PHOSITA
plays a surprisingly minor role in judicial decisions.” Laura Pedraza-Fariña & Ryan
Whalen, The Ghost in the Patent System: An Empirical Study of Patent Law’s Elusive
“Ordinary Artisan,” 108 Iowa L. Rev. 247 (2022).

Once one has determined the scope and content of the prior art and the level
of skill in the art, the Graham test is no more helpful than the statute. Essentially all
of the action occurs at step four, and Graham provided no guidance as to how that
analysis is meant to occur. This left lower courts at sea for decades as they attempted
to find ways to bring structure to the obviousness inquiry.

Perhaps the most important legal innovation in response to this uncertainty

was the Federal Circuit’s development of the “teaching, suggestion, or motivation”
(TSM) test. The Federal Circuit understood quite correctly that many important
innovations consist of combinations of prior inventions. In the world of science and
technology, progress is typically incremental, and nearly everyone stands on the
shoulders of giants. The Federal Circuit was concerned that in hindsight even true
innovations would appear to be merely obvious combinations of multiple pre-existing
inventions, a problem known as hindsight bias.

Accordingly, before two or more pieces of prior art could be combined to show
that an invention was obvious, the Federal Circuit required that there be an explicit
teaching, suggestion, or motivation to combine those references. This teaching,
suggestion, or motivation had to be something specific—either another piece of prior
art that specifically suggested the combination, or something particular in the
PHOSITA’s training that would lead the PHOSITA to combine the elements. A party
could not merely wave its hands at the problem and claim that it would have been
obvious for a PHOSITA to try combining the existing prior art.

Over the years, the TSM test played a larger and larger role in nonobviousness
cases. In many instances, finding multiple pieces of prior art that together contained
all the elements of the claimed invention was relatively easy; finding an explicit
teaching, suggestion, or motivation to combine those elements was frequently much
harder. A large number of cases thus turned on the presence or absence of a TSM.
Although this made § 103 decisions more predictable, it also drew criticism as making
weak patents too difficult to invalidate, including in academic articles and in reports
from the Federal Trade Commission and the National Academies. It is against that
background that the Supreme Court granted certiorari in KSR v. Teleflex.

KSR International v. Teleflex, 550 U.S. 398 (2007)

Justice Anthony Kennedy delivered the opinion for a unanimous Court.

1 Teleflex Incorporated sued KSR International Company for patent

infringement. The patent at issue, United States Patent No. 6,237,565, is entitled
 NONOBVIOUSNESS 137

“Adjustable Pedal Assembly With Electronic Throttle Control,” referred to as “the

Engelgau patent.”

2 Claim 4 of the Engelgau patent describes a mechanism for combining an

electronic sensor with an adjustable automobile pedal so the pedal’s position can be
transmitted to a computer that controls the throttle in the vehicle’s engine. When
Teleflex accused KSR of infringing the Engelgau patent by adding an electronic sensor
to one of KSR’s previously designed pedals, KSR countered that claim 4 was invalid
under the Patent Act, 35 U.S.C. § 103, because its subject matter was obvious.

3 In Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 17–18 (1966), the
Court set out a framework for applying the statutory language of § 103:

Under § 103, the scope and content of the prior art are to be determined;
differences between the prior art and the claims at issue are to be
ascertained; and the level of ordinary skill in the pertinent art resolved.
Against this background, the obviousness or nonobviousness of the
subject matter is determined. Such secondary considerations as
commercial success, long felt but unsolved needs, failure of others, etc.,
might be utilized to give light to the circumstances surrounding the
origin of the subject matter sought to be patented.

4 Seeking to resolve the question of obviousness with more uniformity and

consistency, the Court of Appeals for the Federal Circuit has employed an approach
referred to by the parties as the “teaching, suggestion, or motivation” test (TSM test),
under which a patent claim is only proved obvious if “some motivation or suggestion
to combine the prior art teachings” can be found in the prior art, the nature of the
problem, or the knowledge of a person having ordinary skill in the art. KSR challenges
that test, or at least its application in this case. Because the Court of Appeals
addressed the question of obviousness in a manner contrary to § 103 and our
precedents, we granted certiorari. We now reverse.

5 In car engines without computer-controlled throttles, the accelerator pedal

interacts with the throttle via cable or other mechanical link. The pedal arm acts as a
lever rotating around a pivot point. In a cable-actuated throttle control the rotation
caused by pushing down the pedal pulls a cable, which in turn pulls open valves in
the carburetor or fuel injection unit. The wider the valves open, the more fuel and air
are released, causing combustion to increase and the car to accelerate. When the
driver takes his foot off the pedal, the opposite occurs as the cable is released and the
valves slide closed.

6 In the 1990’s it became more common to install computers in cars to control

engine operation. Computer-controlled throttles open and close valves in response to
 138 MASUR & OUELLETTE ⋅ PATENT LAW

electronic signals, not through force transferred from the pedal by a mechanical link.
Constant, delicate adjustments of air and fuel mixture are possible. The computer’s
rapid processing of factors beyond the pedal’s position improves fuel efficiency and
engine performance.

7 For a computer-controlled throttle to respond to a driver’s operation of the car,

the computer must know what is happening with the pedal. A cable or mechanical
link does not suffice for this purpose; at some point, an electronic sensor is necessary
to translate the mechanical operation into digital data the computer can understand.

8 Before discussing sensors further we turn to the mechanical design of the pedal
itself. In the traditional design a pedal can be pushed down or released but cannot
have its position in the footwell adjusted by sliding the pedal forward or back. As a
result, a driver who wishes to be closer or farther from the pedal must either reposition
himself in the driver’s seat or move the seat in some way. In cars with deep footwells
these are imperfect solutions for drivers of smaller stature. To solve the problem,
inventors, beginning in the 1970’s, designed pedals that could be adjusted to change
their location in the footwell. Important for this case are two adjustable pedals
disclosed in U.S. Patent Nos. 5,010,782 (filed July 28, 1989) (Asano) and 5,460,061
(filed Sept. 17, 1993) (Redding). The Asano patent reveals a support structure that
houses the pedal so that even when the pedal location is adjusted relative to the
driver, one of the pedal’s pivot points stays fixed. The pedal is also designed so that
the force necessary to push the pedal down is the same regardless of adjustments to
its location. The Redding patent reveals a different, sliding mechanism where both
the pedal and the pivot point are adjusted.

9 We return to sensors. Well before Engelgau applied for his challenged patent,
some inventors had obtained patents involving electronic pedal sensors for computer-
controlled throttles. These inventions, such as the device disclosed in U.S. Patent No.
5,241,936 (filed Sept. 9, 1991) (’936), taught that it was preferable to detect the pedal’s
position in the pedal assembly, not in the engine. The ’936 patent disclosed a pedal
with an electronic sensor on a pivot point in the pedal assembly. U.S. Patent No.
5,063,811 (filed July 9, 1990) (Smith) taught that to prevent the wires connecting the
sensor to the computer from chafing and wearing out, and to avoid grime and damage
from the driver’s foot, the sensor should be put on a fixed part of the pedal assembly
rather than in or on the pedal’s footpad. [Eds: As noted in Chapter 2, the convention
is to refer to a patent-in-suit by its last three digits and a prior art patent by the last
name of the first inventor, but the Supreme Court often ignores patent conventions.]

10 In addition to patents for pedals with integrated sensors inventors obtained

patents for self-contained modular sensors. A modular sensor is designed
independently of a given pedal so that it can be taken off the shelf and attached to
mechanical pedals of various sorts, enabling the pedals to be used in automobiles with
computer-controlled throttles. One such sensor was disclosed in U.S. Patent No.
5,385,068 (filed Dec. 18, 1992) (’068). In 1994, Chevrolet manufactured a line of trucks
 NONOBVIOUSNESS 139

using modular sensors attached to the pedal assembly support bracket, adjacent to
the pedal and engaged with the pivot shaft about which the pedal rotates in operation.

11 The prior art contained patents involving the placement of sensors on

adjustable pedals as well. For example, U.S. Patent No. 5,819,593 (filed Aug. 17, 1995)
(Rixon) discloses an adjustable pedal assembly with an electronic sensor for detecting
the pedal’s position. In the Rixon pedal the sensor is located in the pedal footpad. The
Rixon pedal was known to suffer from wire chafing when the pedal was depressed and
released.

12 Ford Motor Company hired KSR in 1998 to supply an adjustable pedal system
for automobiles with cable-actuated throttle controls. KSR developed an adjustable
mechanical pedal for Ford and obtained U.S. Patent No. 6,151,986 (filed July 16, 1999)
(’986) for the design. In 2000, KSR was chosen by General Motors Corporation to
supply adjustable pedal systems for Chevrolet and GMC light trucks that used
engines with computer-controlled throttles. To make the ’986 pedal compatible with
the trucks, KSR merely took that design and added a modular sensor.

13 Teleflex is a rival to KSR in the design and manufacture of adjustable pedals.

It is the exclusive licensee of the Engelgau patent. Engelgau filed the patent
application on August 22, 2000, as a continuation of a previous application for U.S.
Patent No. 6,109,241, which was filed on January 26, 1999. The Engelgau patent
discloses an adjustable electronic pedal described in the specification as a “simplified
vehicle control pedal assembly that is less expensive, and which uses fewer parts and
is easier to package within the vehicle.” Claim 4 of the patent, at issue here, describes:

A vehicle control pedal apparatus comprising:

a support adapted to be mounted to a vehicle structure;

an adjustable pedal assembly having a pedal arm moveable in for[e] and

aft directions with respect to said support;

a pivot for pivotally supporting said adjustable pedal assembly with

respect to said support and defining a pivot axis; and

an electronic control attached to said support for controlling a vehicle

system;

said apparatus characterized by said electronic control being responsive

to said pivot for providing a signal that corresponds to pedal arm
position as said pedal arm pivots about said pivot axis between rest and
applied positions wherein the position of said pivot remains constant
while said pedal arm moves in fore and aft directions with respect to
said pivot.
 140 MASUR & OUELLETTE ⋅ PATENT LAW

14 Before issuing the Engelgau patent the U.S. Patent and Trademark Office
(PTO) rejected one of the patent claims that was similar to, but broader than, the
present claim 4. The claim did not include the requirement that the sensor be placed
on a fixed pivot point. The PTO concluded the claim was an obvious combination of
the prior art disclosed in Redding and Smith. Redding provided an example of an
adjustable pedal, and Smith explained how to mount a sensor on a pedal’s support
structure, and the rejected patent claim merely put these two teachings together.

15 Although the broader claim was rejected, claim 4 was later allowed because it
included the limitation of a fixed pivot point, which distinguished the design from
Redding’s. Engelgau had not included Asano among the prior art references, and
Asano was not mentioned in the patent’s prosecution. Thus, the PTO did not have
before it an adjustable pedal with a fixed pivot point.

16 KSR refused to enter a royalty arrangement with Teleflex; so Teleflex sued for
infringement.

17 The District Court granted summary judgment in KSR’s favor. By direction of

35 U.S.C. § 282, an issued patent is presumed valid. The District Court applied
Graham’s framework to determine whether under summary-judgment standards
KSR had overcome the presumption and demonstrated that claim 4 was obvious in
light of the prior art in existence when the claimed subject matter was invented. The
District Court determined, in light of the expert testimony and the parties’
stipulations, that the level of ordinary skill in pedal design was “an undergraduate
degree in mechanical engineering (or an equivalent amount of industry experience)
[and] familiarity with pedal control systems for vehicles.” The court then set forth the
relevant prior art, including the patents and pedal designs described above.

18 Following Graham’s direction, the court compared the teachings of the prior
art to the claims of Engelgau. It found “little difference.” Asano taught everything
contained in claim 4 except the use of a sensor to detect the pedal’s position and
transmit it to the computer controlling the throttle. That additional aspect was
revealed in sources such as the ’068 patent and the sensors used by Chevrolet.

19 The Court of Appeals reversed. It ruled the District Court had not been strict
enough in applying the [TSM] test, having failed to make “finding[s] as to the specific
understanding or principle within the knowledge of a skilled artisan that would have
motivated one with no knowledge of [the] invention . . . to attach an electronic control
to the support bracket of the Asano assembly.” The Court of Appeals held that the
District Court was incorrect that the nature of the problem to be solved satisfied this
requirement because unless the “prior art references address[ed] the precise problem
that the patentee was trying to solve,” the problem would not motivate an inventor to
look at those references.
 NONOBVIOUSNESS 141

20 Here, the Court of Appeals found, the Asano pedal was designed to solve the
“constant ratio problem”—that is, to ensure that the force required to depress the
pedal is the same no matter how the pedal is adjusted—whereas Engelgau sought to
provide a simpler, smaller, cheaper adjustable electronic pedal. As for Rixon, the court
explained, that pedal suffered from the problem of wire chafing but was not designed
to solve it. When the patents were interpreted in this way, the Court of Appeals held,
they would not have led a person of ordinary skill to put a sensor on the sort of pedal
described in Asano.

II

21 We begin by rejecting the rigid approach of the Court of Appeals. Throughout

this Court’s engagement with the question of obviousness, our cases have set forth an
expansive and flexible approach inconsistent with the way the Court of Appeals
applied its TSM test here. For over a half century, the Court has held that . . . [t]he
combination of familiar elements according to known methods is likely to be obvious
when it does no more than yield predictable results.

22 The principles underlying [prior] cases are instructive when the question is
whether a patent claiming the combination of elements of prior art is obvious. When
a work is available in one field of endeavor, design incentives and other market forces
can prompt variations of it, either in the same field or a different one. If a person of
ordinary skill can implement a predictable variation, § 103 likely bars its
patentability. For the same reason, if a technique has been used to improve one device,
and a person of ordinary skill in the art would recognize that it would improve similar
devices in the same way, using the technique is obvious unless its actual application
is beyond his or her skill.

23 Following these principles may be more difficult in other cases than it is here
because the claimed subject matter may involve more than the simple substitution of
one known element for another or the mere application of a known technique to a
piece of prior art ready for the improvement. Often, it will be necessary for a court to
look to interrelated teachings of multiple patents; the effects of demands known to the
design community or present in the marketplace; and the background knowledge
possessed by a person having ordinary skill in the art, all in order to determine
whether there was an apparent reason to combine the known elements in the fashion
claimed by the patent at issue. To facilitate review, this analysis should be made
explicit. As our precedents make clear, however, the analysis need not seek out precise
teachings directed to the specific subject matter of the challenged claim, for a court
can take account of the inferences and creative steps that a person of ordinary skill in
the art would employ.
 142 MASUR & OUELLETTE ⋅ PATENT LAW

24 When it first established the requirement of demonstrating a teaching,

suggestion, or motivation to combine known elements in order to show that the
combination is obvious, the Court of Customs and Patent Appeals captured a helpful
insight. A patent composed of several elements is not proved obvious merely by
demonstrating that each of its elements was, independently, known in the prior art.
Although common sense directs one to look with care at a patent application that
claims as innovation the combination of two known devices according to their
established functions, it can be important to identify a reason that would have
prompted a person of ordinary skill in the relevant field to combine the elements in
the way the claimed new invention does. This is so because inventions in most, if not
all, instances rely upon building blocks long since uncovered, and claimed discoveries
almost of necessity will be combinations of what, in some sense, is already known.

25 Helpful insights, however, need not become rigid and mandatory formulas; and
when it is so applied, the TSM test is incompatible with our precedents. The
obviousness analysis cannot be confined by a formalistic conception of the words
teaching, suggestion, and motivation, or by overemphasis on the importance of
published articles and the explicit content of issued patents. The diversity of inventive
pursuits and of modern technology counsels against limiting the analysis in this way.
In many fields it may be that there is little discussion of obvious techniques or
combinations, and it often may be the case that market demand, rather than scientific
literature, will drive design trends. Granting patent protection to advances that would
occur in the ordinary course without real innovation retards progress and may, in the
case of patents combining previously known elements, deprive prior inventions of
their value or utility.

26 There is no necessary inconsistency between the idea underlying the TSM test
and the Graham analysis. But when a court transforms the general principle into a
rigid rule that limits the obviousness inquiry, as the Court of Appeals did here, it errs.

27 The flaws in the analysis of the Court of Appeals relate for the most part to the
court’s narrow conception of the obviousness inquiry reflected in its application of the
TSM test. In determining whether the subject matter of a patent claim is obvious,
neither the particular motivation nor the avowed purpose of the patentee controls.
The Court of Appeals failed to recognize that the problem motivating the patentee
may be only one of many addressed by the patent’s subject matter. The question is not
whether the combination was obvious to the patentee but whether the combination
was obvious to a person with ordinary skill in the art. Under the correct analysis, any
need or problem known in the field of endeavor at the time of invention and addressed
by the patent can provide a reason for combining the elements in the manner claimed.
 NONOBVIOUSNESS 143

28 The second error of the Court of Appeals lay in its assumption that a person of
ordinary skill attempting to solve a problem will be led only to those elements of prior
art designed to solve the same problem. Common sense teaches, however, 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. Regardless of Asano’s primary purpose, the design
provided an obvious example of an adjustable pedal with a fixed pivot point; and the
prior art was replete with patents indicating that a fixed pivot point was an ideal
mount for a sensor. The idea that a designer hoping to make an adjustable electronic
pedal would ignore Asano because Asano was designed to solve the constant ratio
problem makes little sense. A person of ordinary skill is also a person of ordinary
creativity, not an automaton.

29 The same constricted analysis led the Court of Appeals to conclude, in error,
that a patent claim cannot be proved obvious merely by showing that the combination
of elements was “[o]bvious to try.” When 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.

30 The Court of Appeals, finally, drew the wrong conclusion from the risk of courts
and patent examiners falling prey to hindsight bias. A factfinder should be aware, of
course, of the distortion caused by hindsight bias and must be cautious of arguments
reliant upon ex post reasoning. Rigid preventative rules that deny factfinders recourse
to common sense, however, are neither necessary under our case law nor consistent
with it.

III

31 When we apply the standards we have explained to the instant facts, claim 4
must be found obvious. We agree with and adopt the District Court’s recitation of the
relevant prior art and its determination of the level of ordinary skill in the field. As
did the District Court, we see little difference between the teachings of Asano and
Smith and the adjustable electronic pedal disclosed in claim 4 of the Engelgau patent.
A person having ordinary skill in the art could have combined Asano with a pedal
position sensor in a fashion encompassed by claim 4, and would have seen the benefits
of doing so.

32 The District Court was correct to conclude that, as of the time Engelgau
designed the subject matter in claim 4, it was obvious to a person of ordinary skill to
combine Asano with a pivot-mounted pedal position sensor. There then existed a
marketplace that created a strong incentive to convert mechanical pedals to electronic
pedals, and the prior art taught a number of methods for achieving this advance. The
proper question to have asked was whether a pedal designer of ordinary skill, facing
 144 MASUR & OUELLETTE ⋅ PATENT LAW

the wide range of needs created by developments in the field of endeavor, would have
seen a benefit to upgrading Asano with a sensor.

33 In automotive design, as in many other fields, the interaction of multiple

components means that changing one component often requires the others to be
modified as well. Technological developments made it clear that engines using
computer-controlled throttles would become standard. As a result, designers might
have decided to design new pedals from scratch; but they also would have had reason
to make pre-existing pedals work with the new engines. Indeed, upgrading its own
pre-existing model led KSR to design the pedal now accused of infringing the Engelgau
patent.

34 For a designer starting with Asano, the question was where to attach the
sensor. The consequent legal question, then, is whether a pedal designer of ordinary
skill starting with Asano would have found it obvious to put the sensor on a fixed pivot
point. The prior art discussed above leads us to the conclusion that attaching the
sensor where both KSR and Engelgau put it would have been obvious to a person of
ordinary skill.

35 The ’936 patent taught the utility of putting the sensor on the pedal device, not
in the engine. Smith, in turn, explained to put the sensor not on the pedal’s footpad
but instead on its support structure. And from the known wire-chafing problems of
Rixon, and Smith’s teaching that “the pedal assemblies must not precipitate any
motion in the connecting wires,” the designer would know to place the sensor on a
nonmoving part of the pedal structure. The most obvious nonmoving point on the
structure from which a sensor can easily detect the pedal’s position is a pivot point.
The designer, accordingly, would follow Smith in mounting the sensor on a pivot,
thereby designing an adjustable electronic pedal covered by claim 4.

36 Just as it was possible to begin with the objective to upgrade Asano to work
with a computer-controlled throttle, so too was it possible to take an adjustable
electronic pedal like Rixon and seek an improvement that would avoid the wire-
chafing problem. Following similar steps to those just explained, a designer would
learn from Smith to avoid sensor movement and would come, thereby, to Asano
because Asano disclosed an adjustable pedal with a fixed pivot.

37 Teleflex indirectly argues that the prior art taught away from attaching a
sensor to Asano because Asano in its view is bulky, complex, and expensive. The only
evidence Teleflex marshals in support of this argument, however, is the Radcliffe
declaration, which merely indicates that Asano would not have solved Engelgau’s goal
of making a small, simple, and inexpensive pedal. What the declaration does not
indicate is that Asano was somehow so flawed that there was no reason to upgrade it,
or pedals like it, to be compatible with modern engines. To judge Asano against
Engelgau would be to engage in the very hindsight bias Teleflex rightly urges must
be avoided.
 NONOBVIOUSNESS 145

38 Like the District Court, finally, we conclude Teleflex has shown no secondary
factors to dislodge the determination that claim 4 is obvious. Proper application of
Graham and our other precedents to these facts therefore leads to the conclusion that
claim 4 encompassed obvious subject matter. As a result, the claim fails to meet the
requirement of § 103.

39 We need not reach the question whether the failure to disclose Asano during
the prosecution of Engelgau voids the presumption of validity given to issued patents,
for claim 4 is obvious despite the presumption. We nevertheless think it appropriate
to note that the rationale underlying the presumption—that the PTO, in its expertise,
has approved the claim—seems much diminished here.

IV

40 A separate ground the Court of Appeals gave for reversing the order for
summary judgment was the existence of a dispute over an issue of material fact. We
disagree with the Court of Appeals on this point as well. The ultimate judgment of
obviousness is a legal determination. Where, as here, the content of the prior art, the
scope of the patent claim, and the level of ordinary skill in the art are not in material
dispute, and the obviousness of the claim is apparent in light of these factors,
summary judgment is appropriate.

41 We build and create by bringing to the tangible and palpable reality around us
new works based on instinct, simple logic, ordinary inferences, extraordinary ideas,
and sometimes even genius. These advances, once part of our shared knowledge,
define a new threshold from which innovation starts once more. And as progress
beginning from higher levels of achievement is expected in the normal course, the
results of ordinary innovation are not the subject of exclusive rights under the patent
laws. Were it otherwise patents might stifle, rather than promote, the progress of
useful arts. See U.S. Const. art. I, § 8, cl. 8. These premises led to the bar on patents
claiming obvious subject matter established in Hotchkiss v. Greenwood, 52 U.S. 248
(1850), and codified in § 103. Application of the bar must not be confined within a test
or formulation too constrained to serve its purpose.

42 KSR provided convincing evidence that mounting a modular sensor on a fixed

pivot point of the Asano pedal was a design step well within the grasp of a person of
ordinary skill in the relevant art. Its arguments, and the record, demonstrate that
claim 4 of the Engelgau patent is obvious. In rejecting the District Court’s rulings, the
Court of Appeals analyzed the issue in a narrow, rigid manner inconsistent with § 103
and our precedents. The judgment of the Court of Appeals is reversed, and the case is
remanded for further proceedings consistent with this opinion.
146 MASUR & OUELLETTE ⋅ PATENT LAW

KSR Claim Chart Exercise

Try putting check marks in this chart to indicate which claim elements are
present in each prior art reference, as well as which elements were in Teleflex’s earlier
rejected claim.

Prior art references

Teleflex Asano Redding Smith ’068 & Rixon Rejected

Claim 4 Chevy Teleflex
(Engelgau) sensors Claim

adjustable
pedal

fixed pivot
point

electronic
pedal sensor

sensor on
pedal support

Is claim 4 of Teleflex’s patent invalid for lack of novelty? Why? What references
did the USPTO use to reject Teleflex’s earlier patent claim? Why didn’t the USPTO
reject claim 4 as an obvious combination of the references relied on by the Supreme
Court?

Discussion Questions: KSR and Nonobviousness

1. Combining the Prior Art. Although the Supreme Court lowered the bar for
finding a combination of prior art to be obvious, in general it must still be shown that
two or more references together disclose all the limitations of the claim at issue. If a
claim limitation is missing from the prior art, it may sometimes be filled in with the
PHOSITA’s general knowledge or common sense, but the Federal Circuit has “invoked
common sense to fill in a missing limitation only when the limitation in question was
unusually simple and the technology particularly straightforward.” DSS Tech. Mgmt.
v. Apple, 885 F.3d 1367, 1375 (Fed. Cir. 2018). Do you think the Supreme Court would
view this stringent test for when common sense may be invoked to supply a missing
limitation as consistent with KSR?

2. Predictability. The Supreme Court repeatedly references the question of

whether a combination is “predictable”—as the Court says, predictable combinations
and variations are obvious and not patentable. What do you think the Court means
 NONOBVIOUSNESS 147

by “predictable”? Is predictability a useful measure for the purpose of the

nonobviousness requirement as described by the Supreme Court in Graham: a “means
of weeding out those inventions which would not be disclosed or devised but for the
inducement of a patent”? 383 U.S. at 11. For example, should patents be available for
inventions that are scientifically predictable but that have a high ratio of development
costs to imitation costs, such that they won’t be developed without patent protection?
Can “predictability” include the kind of market uncertainty that sometimes makes
patents necessary to induce development?

3. The Teaching, Suggestion, or Motivation Test. What is the applicability of

the TSM test after KSR? The Supreme Court stated that the TSM test is a “helpful
insight” and that the underlying idea is consistent with Graham but criticized the
Federal Circuit’s transformation of the test into a “rigid rule.” In subsequent cases,
the Federal Circuit has required that a PHOSITA have both a “reasonable expectation
of success” in combining pre-existing elements and also “a motivation to combine” the
references before an invention can be judged as obvious. Intelligent Bio-Sys., Inc. v.
Illumina Cambridge Ltd., 821 F.3d 1359, 1367–68 (Fed. Cir. 2016). Consider the two
elements of the test separately: is requiring a “reasonable expectation of success”
consistent with the Supreme Court’s approach in KSR? Is requiring a “motivation to
combine” consistent? Note that some version of the TSM test was applied in nearly
half of all obviousness decisions in the five years after KSR. See Ryan T. Holte & Ted
Sichelman, Cycles of Obviousness, 105 Iowa L. Rev. 107, 158 (2019).

At the same time, a careful read of these cases suggests that the new
“motivation to combine” test “is hardly a reincarnation of the TSM requirement, both
in terms of vigor and analytical structure.” Jason Rantanen, The Federal Circuit’s
New Obviousness Jurisprudence: An Empirical Study, 16 Stan. Tech. L. Rev. 709
(2013). Rather, post-KSR caselaw is less focused on explicit statements in published
materials; more focused on predictability, market forces, and the fact that a PHOSITA
has some degree of creativity and common sense; and more cognizant that PHOSITAs
understand that the prior art can have uses beyond any explicitly stated purposes.
See, e.g., Arctic Cat v. Bombardier Recreational Products, 876 F.3d 1350, 1359 (Fed.
Cir. 2017) (“[A] motivation to combine can be found explicitly or implicitly in the prior
art references themselves, in market forces, in design incentives, or in any need or
problem known in the field of endeavor at the time of invention and addressed by the
patent.”). Does this change your assessment of the test’s consistency with KSR?

4. Other Factors for Assessing Obviousness. In addition to emphasizing

“predictability” and noting that the TSM test may be “helpful,” what other guidance
does KSR offer on performing an obviousness analysis?

• The Court resurrected the “obvious to try” test: When there are a finite number
of predictable solutions to a known problem, “the fact that a combination was
obvious to try might show that it was obvious under § 103.” What if it is obvious
148 MASUR & OUELLETTE ⋅ PATENT LAW

to try something, but the result is unpredictable and unexpected? See Mark A.
Lemley, Expecting the Unexpected, 92 Notre Dame L. Rev. 1369 (2017).

• Decisionmakers can consider “common sense” (a phrase KSR uses five times).

• The Court quotes Graham’s statement that “[s]uch secondary considerations

as commercial success, long felt but unsolved needs, failure of others, etc.,
might be utilized.” We discuss these factors in detail in the following section.
One secondary factor that seemed important here was advances in collateral
technology: KSR notes the relevance of “design incentives and other market
forces” such as the technological developments in computing that “created a
strong incentive to convert mechanical pedals to electronic pedals.”

5. Presumption of Validity. As we noted at the beginning of the section on

patentability, a granted patent carries a presumption of validity. This requirement is
statutory: the first sentence of 35 U.S.C. § 282 reads, “A patent shall be presumed
valid.” This presumption is operationalized via the rule that a party seeking to prove
that a granted patent is invalid must do so by “clear and convincing evidence.”
Microsoft v. i4i, 564 U.S. 91 (2011). The most compelling argument for this rule is that
a granted patent has already undergone review by an expert patent examiner. The
presumption of validity, and the clear and convincing evidence rule, represent
deference to the USPTO’s judgment. If we assume that is the rationale, can you think
of a reason why the presumption of validity should not have attached to Teleflex’s
patent when evaluating its obviousness over the prior art discussed by the Court?

6. The PHOSITA. In KSR, the Supreme Court takes a more expansive view of
the PHOSITA than had the Federal Circuit in prior cases. Whereas the Federal
Circuit treats the PHOSITA almost as an automaton who will not try combining two
prior inventions without explicitly being told to do so, the Supreme Court describes
the PHOSITA as flexible and creative—someone who will use “common sense” and try
any combination that is “obvious to try.” One way to understand this disagreement is
as simple divergence over the level of skill of someone in the art and what that person
is capable of. Is there another way to understand what the Supreme Court is doing,
and why it rejects the Federal Circuit’s construction of the PHOSITA? Take a look at
the Supreme Court’s statement beginning with “These advances, once part of our
shared knowledge . . . .” What is the Court saying there?

7. An Identity-Conscious PHOSITA? Should the nonobviousness standard be

applied differently for innovators who face structural barriers to successful
innovation, such as by using a “woman of ordinary skill in the art” standard for
inventions by women? See Dan L. Burk, Diversity Levers, 23 Duke J. Gender L. & Pol’y
25 (2015). Are there better ways to address these concerns?

8. Is Racial Application Nonobvious? Should patents restricting an invention

to a particular race be considered nonobvious? In 2005, the FDA approved the drug
BiDil to treat heart failure in “self-identified black patients.” The FDA had previously
 NONOBVIOUSNESS 149

denied approval of the drug for all patients due to inadequate statistical support, but
when the sponsors re-examined the data along racial lines and then ran a new trial
on patients who identified as African-American, they found a statistically significant
effect. The FDA’s decision was controversial for applying questionable statistical
standards (i.e., re-examining data for a subgroup raises concerns about “p-hacking” or
“data fishing”) in ways that could reinforce the idea that race is biological rather than
a social and political construct. See Dorothy E. Roberts, What’s Wrong with Race-
Based Medicine?: Genes, Drugs, and Health Disparities, 12 Minn. J.L. Sci. & Tech. 1
(2011). A patent on using BiDil to treat heart failure in all patients expired in 2007,
but the USPTO also granted a later patent claiming the use of BiDil to treat heart
failure “in a black patient,” without defining “black.” The race-based patent did not
expire until 2020, providing thirteen additional years of protection. What does the
USPTO’s conclusion that this claim is nonobvious over the general claim imply about
the baseline from which obviousness is judged? Does the decision seem wrong as a
matter of standard patent law? See Jonathan Kahn, Race-ing Patents/Patenting Race:
An Emerging Political Geography of Intellectual Property in Biotechnology, 92 Iowa L.
Rev. 353 (2007).

Practice Problems: § 102 Review and § 103 Warm Up

In July 2013, Serena secretly invented a device for harvesting maple syrup.1
Syrup producers have realized that if you stop harvesting sap from a maple tree once
it gets below a certain concentration of sugar, you can sell the resulting syrup for a
premium. Old-timers can taste the sap to know the concentration of sugar, but that’s
expensive. Serena’s device automates this process using a refractometer, which
measures the concentration of sugar in a liquid. Serena keeps her invention secret
and files a patent on December 1, 2013, claiming:

1. A device for harvesting maple syrup comprising:

(a) an electronically closable tap for insertion into a maple tree;
(b) a refractometer connected to said electronically closable tap;
(c) fastening means for attaching a container to said tap; and
(d) a container suitable for collecting maple sap attached to said tap
by said fastening means.

The first step of a § 103 analysis is determining the content of the prior art. You have
determined that the prior art definitely includes these two references:

A. A refractometer, patented in 1986 and widely available.

B. A manual tap for maple trees with a hook for hanging a bucket, marketed in
1941.

1 We thank Nicholson Price for creating the original version of this problem.
150 MASUR & OUELLETTE ⋅ PATENT LAW

Do the following facts create any additional prior art under the relevant § 102?

C. A sap-harvesting device invented by Trip in Vermont in June 2009. The sap-

harvesting device includes an electronically closable tap with a bucket hanging
on it by a hook; the device is operated by having a knowledgeable maple farmer
taste the sap and close the tap for a group of nearby trees all at once if the
sugar concentration is below the relevant threshold. Trip kept his invention
secret and didn’t pursue the idea further until he filed for a patent on
September 1, 2013, which was published in due course.

D. An automatic milking system for cows, designed for making all-natural sweet
cream cheese: it involves an automatic milking machine with an attached
bucket, and uses a refractometer to measure the sugar content of the milk,
then shuts off the milking machine when the sugar concentration gets too low.
Natalia invented the system in Germany at her dairy and cheese farm outside
of Frankfurt, where she has proudly demonstrated it to cheese-buyers and
allowed them to use it since 2011. No one has published about or patented this
invention.

Is a court likely to find Serena’s invention obvious under § 103? What if you subtract
three years from all dates, so that Serena’s patent is filed on December 1, 2010, Trip’s
device is invented in 2006, and so forth?

Practice Problem: Creating an Obviousness Claim Chart

In Chapter 2, you created an anticipation claim chart to show where (if at all)
each limitation of a truck-covering system (claim 1 of the ’109 patent) could be found
in a prior art reference (the Cramaro patent). Please add an additional column to your
claim chart now for another prior art reference, U.S. Patent No. 3,415,260 (Hall). Do
you think claim 1 of the ’109 patent would have been obvious in light of Cramaro and
Hall?

U.S. Patent No. 5,026,109 U.S. Patent No. 3,415,260 (Hall prior art)

1. A retractable segmented
cover system used with a
truck trailer comprising

(a) a plurality of flexible

cover sections with

(b) a plurality of “A plurality of frames or arch members are

substantially parallel independently movable between two fixed posts or
 NONOBVIOUSNESS 151

supporting bows spaced support members and each is maintained in aligned

therebetween and parallelism by four cables, each cable being disposed
in a Z-pulley arrangement.” Col. 1, ll. 10–14.

“Referring now to FIG. 1, it is to be noted that the

structure embodies a plurality of frames, as for
example, a first or forward frame and a first
rightwardly adjacent frame 61. Other adjacent
frames 62, 63, 64 and 65 are spaced rearwardly
toward a rear frame 66, which frame may be
attached to a wall indicated in phantom outline.”
Col. 4, ll. 8–14.

(c) a drive assembly,

(d) wherein each cover

section is detachably
connected between
substantially parallel
supporting bows,

(e) the bows are slideably

supported on the truck
trailer and

(f) at least one bow is

fixedly connected to the
drive assembly such that
the cover system can be
extended or retracted by
the drive assembly and

(g) wherein a cover section

can be removed from the
cover system independent
of the other cover sections.
152 MASUR & OUELLETTE ⋅ PATENT LAW

B. Secondary Considerations
In addition to scrutinizing the technical details of an invention, in both
Graham and KSR the Supreme Court referred to “secondary considerations” that
“might be utilized” to assess obviousness. The secondary considerations are external
indicators that are thought to shed light on the obviousness inquiry and help guard
against hindsight bias. The Federal Circuit has offered a laundry list of potential
secondary considerations, see, e.g., Ecolochem, Inc. v. S. California Edison Co., 227
F.3d 1361, 1379 (Fed. Cir. 2000); Allergan, Inc. v. Sandoz Inc., 796 F.3d 1293, 1305
(Fed. Cir. 2015), which can be broken down into what we might call technical and
economic factors. Technical factors include:

• Teaching away. Whether the prior art discouraged the invention, such as by
suggesting that the patented combination would not work well.

• Unexpected results. Whether there is evidence that experts would not have
expected the results of the experiment producing the invention.

• Failure of others. Whether other people with skill in the art have tried and
failed to construct the invention or to solve the problem addressed by the
invention.

• Skepticism. Whether experts initially expressed skepticism or surprise when

they learned of the invention.

• Professional approval. Whether the invention received awards or praise from

experts or professional organizations.

• Near-simultaneous invention. Whether the invention was independently

created by other parties (suggesting that it may not have required great
innovation), particularly if other inventors disclosed the invention without
seeking a patent (suggesting obviousness).

These six considerations all relate to the technology of the invention. The first
two—teaching away and unexpected results—are directly relevant to determining
technologically whether the invention would have been obvious. What the prior art
teaches (and whether it “teaches away” from the invention) is simply part of the
inquiry as to the scope and content of the prior art. And whether the invention yielded
“unexpected results” is another way of restating the question as to whether the
combination yielded a “predictable” outcome, which the Supreme Court describes as
a key to the obviousness inquiry in KSR. Accordingly, these two considerations should
be thought of as part of the primary obviousness inquiry, not as secondary.

The latter four considerations are all proxies for whether the invention was
obvious, rather than direct evidence of the invention’s obviousness or nonobviousness.
Accordingly, they are properly understood as true “secondary” considerations.
 NONOBVIOUSNESS 153

The list of “secondary considerations” also includes a set of economic factors.

We describe these as economic in the sense that they offer economic proxy evidence as
to whether the invention was technically challenging to create. (They are not
necessarily any more probative with respect to the overarching economic question of
whether the invention would have been created absent patent rights.) Those factors
are:

• Long-felt need. Whether there is long-standing demand for the invention or one
like it.

• Copying by others. Whether others have deliberately copied the invention from
the patent holder.

• Commercial success. Whether the invention was commercially successful once

produced (on the controversial theory that such success indicates a long-felt
need for the invention, and that if it were obvious how to satisfy that need,
someone would have done so earlier).

• Licensing activity. Whether competitors in the market have acquiesced to the

validity of a patent through acceptance of a license.

• Advances in collateral technology. Whether there is evidence that the invention

was made possible by a recent change in the cost of invention, the tools
available for invention, or market demand, rather than by nonobvious
innovation. This consideration can be thought of as an explanation for—or
rebuttal to—some of the preceding factors.

The Federal Circuit has emphasized that secondary considerations “may often
be the most probative and cogent evidence in the record” and that courts must consider
any evidence of secondary considerations before reaching an obviousness conclusion.
See, e.g., In re Cyclobenzaprine Hydrochloride Extended-Release Capsule Patent Litig.,
676 F.3d 1063, 1075 (Fed. Cir. 2012). However, these are only considerations, and
secondary ones at that. Even strong evidence of secondary considerations can
sometimes be overborne by a more straightforward technical analysis of the claimed
invention and the prior art. The following case provides an example of how the Federal
Circuit has dealt with secondary factors.

Apple v. Samsung Electronics, 839 F.3d 1034 (Fed. Cir. 2016) (en banc)

Kimberly A. Moore, Circuit Judge.

1 [As part of a multinational patent war, Apple sued Samsung for infringement
of numerous patent claims, including claim 8 of U.S. Patent No. 8,046,721, which
covered the “slide-to-unlock” iPhone feature that Samsung allegedly copied. A jury
found the claim infringed and not invalid, and the district court denied Samsung’s
 154 MASUR & OUELLETTE ⋅ PATENT LAW

request for judgement as a matter of law (JMOL) that the claim was obvious. On
appeal, a Federal Circuit panel reversed the denial of JMOL, and the court took the
case en banc without further briefing.]

2 The ’721 patent discloses a portable device with a touch-sensitive display that
can be “unlocked via gestures” performed on the screen. The patent teaches that a
“problem associated with using touch screens on portable devices is the unintentional
activation or deactivation of functions due to unintentional contact with the touch
screen,” commonly referred to as “pocket dialing.” The ’721 patent also describes the
importance of making phone activation as “user-friendly” and “efficient” as possible.
Apple’s expert, Dr. Cockburn, explained that there was a tension between preventing
pocket dialing and ease of use: “[I]t has to work. It has to succeed in preventing
accidental activation by mistake. But yet it needs to be something that’s easy to do,
but not so easy that it can occur by accident, and it succeeds in that.”

3 Apple asserted claim 8, which depends from claim 7, against several Samsung
devices. These claims recite:

7. A portable electronic device, comprising:

a touch-sensitive display;

memory;

one or more processors; and

one or more modules stored in the memory and configured for execution
by the one or more processors, the one or more modules including
instructions:

to detect a contact with the touch-sensitive display at a first

predefined location corresponding to an unlock image;

to continuously move the unlock image on the touch-sensitive

display in accordance with the movement of the detected contact
while continuous contact with the touch-sensitive display is
maintained, wherein the unlock image is a graphical, interactive
user-interface object with which a user interacts in order to
unlock the device; and

to unlock the hand-held electronic device if the unlock image is

moved from the first predefined location on the touch screen to
a predefined unlock region on the touch-sensitive display.

8. The device of claim 7, further comprising instructions to display

visual cues to communicate a direction of movement of the unlock image
required to unlock the device.
 NONOBVIOUSNESS 155

4 Samsung argues claim 8 would have been obvious in light of the combination
of Neonode and Plaisant. “Neonode” refers to the Neonode N1 Quickstart Guide.
Neonode discloses a mobile device with a touch-sensitive screen. It explains that a
user may unlock the device by pressing the power button. After the user presses the
power button, text appears instructing the user to “Right sweep to unlock.” Sweeping
right then unlocks the unit.

5 “Plaisant” refers to a video and corresponding two-page paper published in

1992 titled “Touchscreen Toggle Design” by Catherine Plaisant and Daniel Wallace.
The authors of the paper conducted an experiment to determine which controls
(“toggles”) users prefer on wall-mounted controllers for “entertainment, security, and
climate control systems.” These controllers were intended to be installed
“flushmounted into the wall or the cabinetry.” The authors presented six alternative
unlocking mechanisms to a group of fifteen undergraduate students, including a
“slider toggle” where a user could activate the controller by “grab[bing] the pointer
and slid[ing] it to the other side.” The students preferred “toggles that are pushed”
over “toggles that slide,” and generally ranked the slider fifth of the six alternatives.

6 On appeal, Apple does not contest that, together, Neonode and Plaisant
disclose all the elements of claim 8. Rather, the parties dispute whether a person of
ordinary skill in the art would have been motivated to combine one of the unlocking
mechanisms disclosed in Plaisant with Neonode. Samsung argues “there was no
evidence of any kind suggesting that Plaisant’s application to a wall-mounted device
would lead inventors not to combine Plaisant with Neonode.” Its expert, Dr.
Greenberg, testified that “a person looking at this would just think it natural to
combine these two, as well taking the ideas in Plaisant, the slider, and putting them
on the Neonode is, is just a very routine thing to think about in terms of interaction
design.” Samsung points to the Plaisant reference which states that sliding movement
“is less likely to be done inadvertently.”

7 Apple counters that a skilled artisan designing a mobile phone would not have
been motivated to turn to a wall-mounted air conditioning controller to solve the
pocket dialing problem. Its expert, Dr. Cockburn, testified that a person of ordinary
skill would not have been naturally motivated to combine Neonode and Plaisant. He
also explained to the jury that Plaisant itself discloses that sliding toggles were less
preferred than the other switches disclosed. Apple points to Plaisant’s teachings that
“sliders were not preferred,” “sliding is a more complex task,” and “sliders are more
difficult to implement.” Apple argues there was substantial evidence for the jury to
conclude that there would not have been a motivation to combine Plaisant and
Neonode to arrive at the claimed invention.

8 Because the jury found the issue of validity in favor of Apple, we presume it
resolved the conflicting expert testimony and found that a skilled artisan would not
have been motivated to combine the slider toggle in Plaisant with the cell phone
disclosed in Neonode. The question for our review is whether substantial evidence
 156 MASUR & OUELLETTE ⋅ PATENT LAW

supports this implied fact finding. We conclude that it does. Neonode discloses a
mobile phone. Plaisant discloses a wall-mounted air conditioning controller. The jury
had both references before it. Although Samsung presents arguments for combining
the two references, these arguments were before the jury. Our job is not to review
whether Samsung’s losing position was also supported by substantial evidence or to
weigh the relative strength of Samsung’s evidence against Apple’s evidence. We are
limited to determining whether there was substantial evidence for the jury’s findings,
on the entirety of the record.

1. The Objective Indicia of Non–Obviousness

9 The Supreme Court explained that various factors “may also serve to guard
against slipping into use of hindsight, and to resist the temptation to read into the
prior art the teachings of the invention in issue.” Graham, 383 U.S. at 36. These
factors are commonly known as secondary considerations or objective indicia of non-
obviousness. Apple introduced evidence of industry praise, copying, commercial
success, and long-felt need. We presume the jury found that the evidence was
sufficient to establish each by a preponderance of the evidence. We find substantial
evidence in the record to support each of those findings.

a. Industry Praise

10 Evidence that the industry praised a claimed invention or a product that

embodies the patent claims weighs against an assertion that the same claimed
invention would have been obvious. Industry participants, especially competitors, are
not likely to praise an obvious advance over the known art. Thus, if there is evidence
of industry praise of the claimed invention in the record, it weighs in favor of the non-
obviousness of the claimed invention.

11 The district court cited numerous internal Samsung documents that both
praised Apple’s slide to unlock feature and indicated that Samsung should modify its
own phones to incorporate Apple’s slide to unlock feature [such as presentations
calling Apple’s slide to unlock invention a “creative way of solving UI complexity” and
recommending a “direction of improvement” to make Samsung’s phone the “same as
iPhone” with “unlocking standard by sliding”]. Such internal documents from the
patentee’s top competitor represent important admissions, acknowledging the merits
of the patented advance over the then state of the art and can be used to establish
industry praise. The court also explained that Apple presented a video at trial showing
Steve Jobs unveiling the slide to unlock feature at an Apple event. When Mr. Jobs
swiped to unlock the phone, “the audience burst into cheers.”2

12 In light of this evidence, we find [Samsung’s] argument that the district court
cited only generic praise of the iPhone, and not praise tied to the claimed slide to
unlock feature, is without merit. The jury was presented with substantial evidence of

2 [You can see this video here: https://www.youtube.com/watch?v=kx2XpSgeAiY]

 NONOBVIOUSNESS 157

praise in the industry that specifically related to features of the claimed invention,
thereby linking that industry praise with the patented invention.

b. Copying

13 Samsung does not dispute in its briefing that the jury heard substantial
evidence that it copied Apple’s slide to unlock feature, nor does it challenge on appeal
that this evidence of copying supports a conclusion that claim 8 would not have been
obvious. Apple cites the same Samsung internal documents for both industry praise
and copying, as they show evidence of both. This is substantial evidence of copying by
Samsung, and it supports the jury’s verdict that the claimed invention would not have
been obvious.

c. Commercial Success

14 In its opening appellate brief, Samsung also glosses over commercial success,
giving it one sentence: “Apple made no effort to establish a nexus between commercial
success and the subject matter of claim 8.” Commercial success requires a nexus to
the claimed invention. We look to the record to ascertain whether there is substantial
evidence for the jury’s fact finding that Apple established a nexus between commercial
success and the invention in claim 8.

15 At trial, Apple’s expert, Dr. Cockburn, testified that the iPhone practiced the
asserted claim of the ’721 patent, and “clearly there’s been commercial success of the
iPhones that use this invention.” Critically, Apple presented survey evidence that
customers would be less likely to purchase a portable device without the slide to
unlock feature and would pay less for products without it, thus permitting the jury to
conclude that this feature was a key driver in the ultimate commercial success of the
products. Apple’s Senior Vice President of Worldwide Marketing testified that slide to
unlock was the very first feature shown in Apple’s original iPhone TV commercial,
and the jury saw that commercial during the trial. A reasonable jury could have found
evidence that Apple’s marketing experts elected to emphasize the claimed feature as
evidence of its importance. It is likewise reasonable to conclude that advertising that
highlights or focuses on a feature of the invention could influence customer purchasing
decisions. And an inventor of the ’721 patent—an Apple Vice President—confirmed
that slide to unlock was important because it “would possibly be [a customer’s] first
experience even in a retail environment” when the customer was “deciding whether
they want to buy it.” Finally, the video of the crowd “burst[ing] into cheers” when
Steve Jobs demonstrated the slide to unlock feature supports a conclusion that
consumers valued this particular feature.

16 This record overall contains substantial evidence of a nexus between the slide
to unlock feature and the iPhone’s commercial success, and we are required to give
this jury fact finding deference. It is not our role to reweigh the evidence or consider
what the record might have supported. This commercial success evidence supports the
jury’s verdict that the claimed invention would not have been obvious.
 158 MASUR & OUELLETTE ⋅ PATENT LAW

d. Long–Felt Need

17 Evidence of a long-felt but unresolved need can weigh in favor of the non-
obviousness of an invention because it is reasonable to infer the need would not have
persisted had the solution been obvious. There is substantial evidence for the jury to
have found that there was a long-felt but unresolved need for a solution to the pocket
dialing problem until Apple’s claimed invention, with its slide to unlock feature, solved
that problem. Denying JMOL on this issue, the district court cited testimony from
Apple’s expert: “Dr. Cockburn’s testimony that phone designers had been trying to
solve the problem of accidental activation and the ‘pocket dial problem’ before the
iPhone existed, but had only come up with ‘frustrat[ing]’ solutions.” While the expert
discusses particular examples in the first person: “I have been very frustrated with
[the prior art options],” the jury could still reasonably find that this testimony was
probative of a long-felt need.

18 The record [also] contained a document in which Samsung listed all the
alternatives to the iPhone slide to unlock. Apple’s expert went through several of the
alternatives . . . and explained how each of these failed to solve the accidental
activation problem. The jury could have reasonably found that this testimony
established long-felt unresolved need.

19 In addition, the jury could have found that the same internal Samsung
documents Apple relied upon for industry praise and copying demonstrate that
Samsung compared four of its own rejected alternative unlock mechanisms to the
iPhone slide to unlock mechanism, and that Samsung concluded the iPhone slide to
unlock was better. The jury could have found that these Samsung documents show
that Samsung, Apple’s fiercest competitor, was unsuccessfully trying to solve the same
problem. This evidence constitutes substantial evidence for the jury fact finding that
there was a long-felt but unresolved need, which Apple’s ’721 patented invention
solved.

2. Conclusion on Obviousness of the ’721 Patent

20 With [KSR’s] principles in mind, we review de novo the ultimate legal

determination and conclude that it would not have been obvious to a skilled artisan
to combine the prior art to arrive at the claimed invention.

21 Common sense and real world indicators indicate that to conclude otherwise
would be to give in to hindsight, to allow the exact ex post reasoning against which
the Supreme Court cautioned in Graham and KSR. Though the prior art references
each relate to touchscreens, the totality of the evidence supports the conclusion that
it would not have been obvious for a skilled artisan, seeking an unlock mechanism
that would be both intuitive to use and solve the pocket dialing problem for cell
phones, to look to a wall-mounted controller for an air conditioner. The two-page
Plaisant paper published in 1992 reported the results of a user-preference survey of
fifteen undergraduates on six different computer-based switches. That a skilled
 NONOBVIOUSNESS 159

artisan would look to the Plaisant paper directed to a wall-mounted interface screen
for appliances and then choose the slider toggle, which the study found rated fifth out
of six options in usability, to fulfill a need for an intuitive unlock mechanism that
solves the pocket dialing problem for cell phones seems far from obvious.

22 We have considered the jury’s implicit fact findings about the teachings of
Plaisant and Neonode. We have also considered the objective indicia found by the jury
which are particularly strong in this case and powerfully weigh in favor of validity.
These real world indicators of whether the combination would have been obvious to
the skilled artisan in this case “tip the scales of patentability,” Graham, 383 U.S. at
36, or “dislodge the determination that claim [8 would have been] obvious,” KSR, 550
U.S. at 426. Weighing all of the Graham factors, we agree with the district court on
the ultimate legal determination that Samsung failed to establish by clear and
convincing evidence that claim 8 of the ’721 patent would have been obvious. We
affirm the district court’s denial of JMOL.

Timothy B. Dyk, Circuit Judge, dissenting.

23 [Judge Dyk criticized the procedural irregularity of taking a case en banc

without further briefing before turning to “the profound changes in the law of
obviousness that the majority creates.”]

24 First, the majority turns the legal question of obviousness into a factual issue
for a jury to resolve, both as to the sufficiency of the motivation to combine and the
significance to be given to secondary considerations. KSR explicitly rejected the
contention that obviousness is always a matter of fact requiring jury resolution. In
KSR, the patentee argued that the question of motivation to combine was for the jury.
The Supreme Court rejected this contention. Here too, “the content of the prior art,
the scope of the patent claim, and the level of ordinary skill in the art are not in
material dispute,” KSR, 550 U.S. at 427, and there is no indication that the
combination of the relevant prior art does more than yield a predictable result. Yet
the majority holds that the question of the sufficiency of the motivation here was a
jury question.

25 Second, the majority lowers the bar for nonobviousness by refusing to take
account of the trivial nature of the two claimed inventions. The slide to unlock feature
was known in the prior art (Neonode) and the only innovation is an image associated
with the sliding gesture from fixed starting to ending points.3 Treating such minimal
advances over the prior art as nonobvious is contrary to KSR, where the Supreme
Court confirmed that the obviousness doctrine is designed to ensure that “the results
of ordinary innovation are not the subject of exclusive rights under the patent laws.”

[n.3 in opinion] Courts in other countries [including the UK, the Netherlands, and
3

Germany] have uniformly found the ’721 patent invalid.

 160 MASUR & OUELLETTE ⋅ PATENT LAW

550 U.S. at 427. On the face of these patents, only ordinary, indeed trivial, innovation
is involved.

26 Third, the majority concludes that combinations of prior art used to solve a
known problem are insufficient to render an invention obvious as a matter of law.
According to the majority, there must be evidence of a specific motivation to combine.
Both aspects of these conclusions are contrary to KSR. Under KSR, the existence of
each patented feature in the prior art is alone not sufficient to establish obviousness.
There must be a reason to make a combination. But KSR holds that the reason may
be found as a matter of law in the solution to a known problem. KSR was quite clear
that the existence of a known problem suffices: “[o]ne of the ways in which a patent’s
subject matter can be proved obvious is by noting that there existed at the time of
invention a known problem for which there was an obvious solution.” 550 U.S. at 419–
20. “[W]hen a patent simply arranges old elements with each performing the same
function it had been known to perform and yields no more than one would expect from
such an arrangement, the combination is obvious.” Id. at 417. KSR also held, contrary
to the majority, that evidence of a specific motivation to combine is not required. The
Court rejected our court’s approach in requiring a “specific understanding or
principle” that creates a specific motivation to combine. In KSR itself, the combination
was held obvious despite no “precise teachings” to combine the previous references.

27 Here, the inventions combine features known in the prior art. Apple does not
dispute that the combination of the prior art Neonode and Plaisant references
produces the claimed invention. There is no claim that the combination yielded
unpredictable results. The patent also addresses a known problem: ease-of-use and
avoidance of inadvertent activation. Contrary to KSR, the majority now holds that a
known problem is not sufficient and that there must be evidence of a specific
motivation.

28 Fourth, the majority errs in cabining the relevant technology in the field of
prior art. The majority invites the factfinder to dismiss prior art evidence on the
theory that it concerns a different device than the patented invention, even if the
references are directed to solving the same problem and pertain to a related device.
For example, the majority holds that the jury could dismiss the Plaisant reference
because it was directed to wall-mounted rather than portable devices. The Supreme
Court in KSR rejected the theory that prior art addressing the same problem can be
dismissed because it concerns a different device. “[I]f a technique has been used to
improve one device, and a person of ordinary skill in the art would recognize that it
would improve similar devices in the same way, using the technique is obvious unless
its actual application is beyond his or her skill.” KSR, 550 U.S. at 417.

29 The ’721 patent concerns unlocking touchscreen devices. Here, the prior art
dismissed by the majority concerns the general field of touchscreen devices. The
majority errs in two respects. First, the ’721 patent is not limited to cell phones or to
the cell phone pocket-dialing problem, and indeed makes no reference to a pocket-
 NONOBVIOUSNESS 161

dialing problem. The ’721 patent is directed to portable devices generally, and to ease
of use and inadvertent activation with respect to all such devices. Second, the Plaisant
prior art was concerned with the same problems as the ’721 patent in the field of touch
screen devices. Plaisant indicated that the study’s “focus is on providing . . . systems
that are easy for the home owner to use.” Plaisant also indicated that an “advantage
of the sliding movement is that it is less likely to be done inadvertently.” Plaisant was
thus directed to solving the same problem in the same area as the patented invention.

30 This change is evident from comparing the majority’s holding here to our past
jurisprudence. We have previously held that “[a] reference is reasonably pertinent if,
even though it may be in a different field from that of the inventor’s endeavor, [it]
logically would have commended itself to an inventor’s attention in considering his
problem.” In re Clay, 966 F.2d 656, 659 (Fed. Cir. 1992). “We therefore have concluded,
for example, that an inventor considering a hinge and latch mechanism for portable
computers would naturally look to references employing other housings, hinges,
latches, springs, etc., which in that case came from areas such as a desktop telephone
directory, a piano lid, a kitchen cabinet, a washing machine cabinet, a wooden
furniture cabinet, or a two-part housing for storing audio cassettes.” In re ICON
Health & Fitness, Inc., 496 F.3d 1374, 1380 (Fed. Cir. 2007). Not only does the majority
alter our jurisprudence with respect to district court proceedings, its approach would
affect patent examiners who are currently instructed that analogous prior art “does
not require that the reference be from the same field of endeavor as the claimed
invention.” Manual of Patent Examining Procedure § 2141.01(a).

31 Fifth, the majority errs in elevating secondary considerations of

nonobviousness beyond their role as articulated by the Supreme Court. Secondary
considerations “without invention[ ] will not make patentability.” Sakraida, 425 U.S.
at 278. Thus, when, as here, a patent is plainly not inventive, that is, when the prima
facie case of obviousness is strong, secondary considerations carry little weight. The
majority holds that secondary considerations must “always” be considered and that
even a strong case of obviousness involving small advances in the prior art can be
outweighed by secondary considerations. But under Supreme Court authority,
secondary considerations are insufficient to outweigh a strong case of obviousness
involving small advances over the prior art.

32 KSR and Graham assigned a limited role to secondary considerations. KSR

required inquiry into secondary considerations only “where appropriate.” 550 U.S. at
415. In Graham, secondary considerations are referred to as factors that “might be
utilized to give light to the circumstances.” 383 U.S. at 17. For example, the Graham
Court weighed (in evaluating the Scoggin insecticide sprayer patent) that despite the
presence of “long-felt need in the industry” and “wide commercial success” of the
patentee, “these factors do not, in the circumstances of this case, tip the scales of
patentability.” 383 U.S. at 35–36. This was so because in that case the invention
“rest[ed] upon exceedingly small and quite non-technical mechanical differences in a
device which was old in the art.” Id. at 36. Similarly, even though the patentee in KSR
 162 MASUR & OUELLETTE ⋅ PATENT LAW

introduced evidence of commercial success, the Court dismissed it because it

“conclude[d] Teleflex has shown no secondary factors to dislodge the determination
that claim 4 is obvious.” 550 U.S. at 426.

33 This case also is not a close one. The combination of references, the known
problem, the predictable results, and the exceedingly small differences from the prior
art make the combination evident and secondary considerations insufficient as a
matter of law.

34 Finally, even if secondary considerations in this case were legally relevant, the
majority fails to compare to the closest prior art to properly assess the innovation over
the prior art. Secondary considerations must be directed to what is claimed to be
inventive. In other words, there must be a demonstrated nexus to the claimed
invention—a nexus to what is new in comparison to the prior art. Furthermore, the
proponent of such evidence of secondary considerations, in this case Apple, “bears the
burden of showing that a nexus exists between the claimed features of the invention
and the objective evidence offered to show nonobviousness.” WMS Gaming v. Int’l
Game Tech., 184 F.3d 1339, 1359 (Fed. Cir. 1999).

35 [Under prior Federal Circuit caselaw,] ascertaining the significance of the

innovative leap over the prior art using secondary considerations requires a
comparison to the closest prior art. The majority’s secondary considerations analysis
repeatedly compares to inferior or non-existent prior art, rather than to the relevant,
closest prior art. For example, for commercial success, Apple and the majority rely on
survey evidence developed for Apple’s damages case that consumers are more likely
to purchase (and pay more for) a phone with a slide to unlock feature. However, this
is an irrelevant comparison because Neonode provides a slide-to-unlock feature. There
was no showing of nexus between the inventive steps (over the closest prior art) and
the surveyed consumer demand. For long-felt but unresolved need, the majority
compares to an older Nokia device with a very different non-touchscreen, button-based
unlocking feature, as well as to Samsung touchscreen unlocking mechanisms that do
not have the slide-to-unlock feature of Neonode. The majority also cites Steve Job’s
unveiling of the slide to unlock feature at an Apple event and the audience’s cheers as
evidence of industry praise for the ’721 patent. Again, however, Apple provides no
evidence that this praise was specifically for the ’721 patent’s innovative step beyond
Neonode or even that the audience was comprised of industry experts. The majority
thus errs in elevating such irrelevant comparisons as providing “particularly strong”
and “powerful[ ]” evidence of nonobviousness.

36 In summary, the majority decision here materially raises the bar for
obviousness by disregarding Supreme Court precedent.

37 [Separate dissents by Chief Judge Prost and Judge Reyna are omitted. In 2017,
the Supreme Court denied Samsung’s cert petition after calling for the views of the
Solicitor General, who recommended against review. In 2018, Apple and Samsung
 NONOBVIOUSNESS 163

settled all lawsuits—including a suit involving design patents that did make it to the
Supreme Court.]

Discussion Questions: Secondary Considerations

1. Advantages? What are the advantages to courts of looking to the secondary

considerations as opposed to focusing solely on the technical characteristics of the
inventions? What does a court have to gain from scrutinizing, for instance, the success
or failures of other inventors or the commercial success of a product instead of looking
directly at the technical aspects of the invention?

2. The Inferences and Assumptions Underlying Secondary Considerations. The

weakness of secondary considerations is that they are only proxies for nonobviousness,
not the real thing. This means that each secondary consideration relies on background
assumptions or requires additional information to be made useful. Consider the most
frequently used secondary consideration: commercial success. This factor has been
criticized as “a poor indicator of patentability because it is indirect; it depends for its
effectiveness on a long chain of inferences, and the links in the chain are often subject
to doubt.” Robert P. Merges, Commercial Success and Patent Standards: Economic
Perspectives on Innovation, 76 Calif. L. Rev. 803, 838 (1988). The Federal Circuit has
repeatedly emphasized that evidence of secondary considerations must have a “nexus”
to the claimed invention. A nexus is presumed to exist “when the patentee shows that
the asserted objective evidence is tied to a specific product and that product embodies
the claimed features, and is coextensive with them.” Fox Factory v. SRAM, 944 F.3d
1366, 1373 (Fed. Cir. 2019). To have relevance for the obviousness inquiry, the
commercial success of a product also must be due to the claimed invention, and that
future success must have been apparent to numerous firms before the invention’s
development. What else is required before a court can infer nonobviousness from
commercial success?

Are all secondary considerations subject to this critique to the same degree?
For each of the following, what are those potential confounding variables, and what
additional information is necessary to interpret the secondary consideration?

A. Failure of others, skepticism, professional approval, and near-

simultaneous invention? See Merges, supra, at 862 (“Unlike commercial
success, the failure of others to make an invention proves directly that
parallel research efforts were under way at a number of firms, and that
one firm (the patentee) won the race to a common goal.”). Do you agree
with this quote from the Merges article that the failure of others
provides direct evidence of nonobviousness?

B. Long-felt need?

C. Copying by others and licensing activity?

164 MASUR & OUELLETTE ⋅ PATENT LAW

3. Secondary Considerations as Secondary. One case that starkly poses the

question of how much to weigh the primary and secondary considerations is Ritchie v.
Vast Resources, Inc., 563 F.3d 1334 (Fed. Cir. 2009). This case, decided by Judge
Richard Posner sitting by designation, involved a highly commercially successful
invention that seemed technically trivial, but which nobody until the plaintiffs had
thought to invent despite the raw materials existing for nearly a century:

Both [plaintiff and defendant] firms produce what the parties

call “sex aids” but are colloquially referred to as “sex toys.” The devices
are generally in the shape of rods of various curvatures and are made
out of rubber, plastic, glass, or some combination of these materials.
Until the plaintiffs began manufacturing their patented sexual devices,
glass sexual devices were made out of soda-lime glass, the most common
form of glass. The plaintiffs’ patent claims [devices made from]
“borosilicate glass,” [which is] “resistant to heat, chemicals, electricity
and bacterial absorptions.” Borosilicate glass is the glass out of which
Pyrex glassware was originally made, and is sometimes still made.

Given that it has commercial value, as heavily emphasized by

the plaintiffs, and given that Pyrex has been sold for almost a century,
to call its use in a sexual device “obvious” may seem the triumph of
hindsight over insight. Commercial value is indeed one of the indicia of
nonobviousness, because an invention that has commercial value is
likely to come on the market very shortly after the idea constituting the
invention (in this case the use of borosilicate glass in a sexual device)
became obvious; if the invention did not appear so soon despite its value
in the market, this is some evidence that it wasn’t obvious after all. But
for a variety of reasons commercial success is deemed a “secondary”
indicator of nonobviousness. The commercial success of a product can
have many causes unrelated to patentable inventiveness; for example,
the commercial success of an “invention” might be due not to the
invention itself but to skillful marketing of the product embodying the
invention.

Among the inventions that the law deems obvious are efforts at
routine experimentation with different standard grades of a material
used in a product—standard in the sense that their properties,
composition, and method of creation are well known, making successful
results of the experimentation predictable. This is such a case.

This case thus exemplifies the Supreme Court’s analysis in KSR.

“If a person of ordinary skill can implement a predictable variation,
§ 103 likely bars its patentability. For the same reason, if a technique
has been used to improve one device, and a person of ordinary skill in
the art would recognize that it would improve similar devices in the
 NONOBVIOUSNESS 165

same way, using the technique is obvious unless its actual application
is beyond his or her skill.” (The last sentence describes our case to a
tee.)

In Ritchie, Judge Posner makes clear that when the secondary considerations
cut strongly in one direction and the technical approach to nonobviousness cuts
strongly in the other, the courts will side with the technical approach. This was
particularly remarkable given the identity of the opinion’s author, perhaps the most
famous law and economics scholar and judge in history. Do you think this is
appropriate? Should the court in Ritchie have given greater credence to the secondary
considerations, given how strongly they favored a finding of nonobviousness?

4. Other Evidence of Obviousness? Can you think of any evidence not captured
by the Federal Circuit’s list of potential secondary considerations that might be
probative of obviousness or nonobviousness?

Judge Dyk’s dissent notes in a footnote that other countries had uniformly
found the slide-to-unlock patent invalid; should this be relevant to the assessment by
a U.S. court?

Should courts consider evidence of how “distant” the invention is from the prior
art as determined by algorithmic measures of technological networks? If so, should
this be considered a secondary consideration or direct evidence? See Laura G. Pedraza-
Fariña & Ryan Whalen, A Network Theory of Patentability, 87 U. Chi. L. Rev. 63
(2020).

Practice Problems: Post-KSR Federal Circuit Cases on Nonobviousness

The following problems are based on real Federal Circuit cases decided after
KSR. Do you think the claims at issue are obvious or nonobvious?

1. Tai Hoon and Eric applied for a patent on a paper shredder with two sensors:
a “presence” sensor, which will turn on the shredder when it senses the presence of
one or more sheets of paper; and a “thickness” sensor, which will prevent the shredder
from operating if the stack of paper inserted is too thick and risks jamming the
shredder. The key claim is as follows:

A shredding machine for shredding sheet material comprising:

(a) a feed-aperture;
(b) an electric cutting mechanism, the feed-aperture being configured
to receive multiple sheets and direct said sheets in a feeding
direction towards the cutting mechanism for shredding;
(c) a controller coupled to the cutting mechanism;
(d) a thickness detector coupled to the controller; and
166 MASUR & OUELLETTE ⋅ PATENT LAW

(e) a presence sensor along the feed-aperture for detecting a presence

of the sheet material inserted into the feed-aperture, coupled to the
controller,
(f) wherein the controller will turn the shredder on only when the
presence sensor detects the presence of at least one sheet of paper
inserted into the feed-aperture, and when the thickness detector
detects that the paper is not too thick for the shredder.

Prior art shredders have features including (1) presence sensors that automatically
turn on the shredder when paper is present; (2) the ability to sense when a paper jam
has occurred (by measuring a spike in voltage from the electric motor) and switch off
the shredder’s motor with a controller; and (3) thickness sensors that can determine
the thickness of a stack of paper. A competitor independently invented a shredder
with presence and thickness sensors shortly after Tai Hoon and Eric applied for their
patent. See ACCO Brands Corp. v. Fellowes, Inc., 813 F.3d 1361 (Fed. Cir. 2016).

2. LeapFrog Enterprises, a manufacturer of technology-based learning

products for children, sued Fisher-Price and Mattel for infringement of this patent
claim on a device to help young children read phonetically:

An interactive learning device, comprising:

(a) a sound production device in communication with a plurality of
switches and including a processor and a memory;
(b) at least one depiction of a sequence of letters, each letter being
associable with a switch; and
(c) wherein selection of a depicted letter activates an associated switch
to communicate with the processor, causing the sound production
device to generate a signal corresponding to a sound associated with
the selected letter, the sound being determined by a position of the
letter in the sequence of letters.

The prior art includes (1) a patent describing a learning toy for which pressing any
letter from a word produces the sound of that letter using a phonograph record
controlled with an electric motor and (2) a Texas Instruments toy that allows a child
to press the first letter of a word or the remaining letters (e.g., “c” or “at” for “cat”) and
hear those sounds played using a processor, memory, and a speaker. At trial,
LeapFrog presented substantial evidence of commercial success, praise, and long-felt
need. See LeapFrog Enterprises v. Fisher-Price, Inc., 485 F.3d 1157 (Fed. Cir. 2007).

3. University scientists sought a patent on a method of disinfecting surfaces

for methicillin-resistant Staphylococcus aureus (MRSA) and other “Gram-positive”
bacteria that have developed resistance to antibiotics. It was well known that these
bacteria could be inactivated with exposure to light of certain wavelengths, but most
prior art methods involved the time-consuming step of applying a “photosensitizer” to
the surface before the light exposure. The university scientists developed a method
that did not require a photosensitizer. The key claim is as follows:
 NONOBVIOUSNESS 167

A method for disinfecting comprising:

(a) exposing one or more Gram-positive bacteria to visible light without
using a photosensitizer,
(b) wherein the one or more Gram-positive bacteria are selected from
the group consisting of Methicillin-resistant Staphylococcus aureus
(MRSA), Coagulase-Negative Staphylococcus (CONS),
Streptococcus, Enterococcus, and Clostridium species, and
(c) wherein a portion of the visible light consists of wavelengths in the
range 400–420 nm.

One prior art article by Dr. Helena Ashkenazi noted that porphyrin—a compound that
naturally occurs in Gram-positive bacteria including MRSA—damages bacteria when
exposed to blue light. The article described inactivation of Gram-positive bacteria
using a photosensitizer that enhances porphyrin production inside cells, followed by
exposure to light with 407–420 nm wavelengths. A second prior art article by Dr.
Yeshayahu Nitzan described exposure of MRSA and other Gram-positive bacteria to
407–420 nm light without a photosensitizer, which did not successfully achieve
inactivation. See Univ. of Strathclyde v. Clear-Vu Lighting, 17 F.4th 155 (Fed. Cir.
2021).

4. The Wrigley chewing gum company sued Cadbury (the candy company) for
infringing its patent on “cool flavored” gum:

A chewing gum composition comprising:

(a) about 5% to about 95% gum base;
(b) about 5% to about 95% bulking and sweetening agent; and
(c) about 0.1% to about 10% flavoring agent wherein the flavoring
agent comprises WS-23 and menthol.

WS-23 is a flavoring agent that, like menthol, produces a “cool” sensation. The prior
art includes (1) gum with a gum base of 45%; (2) gum with 53% bulking and
sweetening agent; (3) gum using combinations of menthol and WS-3 (another
flavoring agent that produces a “cooling” effect); and (4) printed publications
disclosing that WS-3 and WS-23 are similar substitutes for menthol. Wigley’s gum,
which fell within this claim scope and contained other ingredients, was a commercial
success, and Cadbury copied the Wrigley formula after conducting an internal study
showing that consumers greatly preferred Wrigley’s product. See Wm. Wrigley Jr. Co.
v. Cadbury Adams USA LLC, 683 F.3d 1356 (Fed. Cir. 2012).
168 MASUR & OUELLETTE ⋅ PATENT LAW

4. Utility and Disclosure

In the previous chapters, we addressed the question of when an inventor has
created a novel and nonobvious invention that is eligible for patenting. But these are
not the only requirements for patentability. An invention must also be useful at the
time of filing, and it must be adequately disclosed in the patent document. Four
doctrines have evolved to police these requirements: utility, enablement, written
description, and best mode.

All of these doctrines stem from 35 U.S.C. § 112(a), which was previously
known as § 112, ¶ 1 before the 2011 America Invents Act added letters to the
paragraphs. Pre-AIA claims are governed by the old § 112, ¶ 1, but the only difference
is the addition of “or joint inventor,” and we will refer throughout to § 112(a) for
simplicity.

35 U.S.C. § 112(a)

The specification shall contain a written description of the invention,

and of the manner and process of making and using it, in such full,
clear, concise, and exact terms as to enable any person skilled in the art
to which it pertains, or with which it is most nearly connected, to make
and use the same, and shall set forth the best mode contemplated by
the inventor or joint inventor of carrying out the invention.

In addition, utility depends on § 101’s requirement that inventions be “useful.” Some

references suggest that utility depends only on § 101, but the first case below explains
how the statutes are linked. As MPEP § 2107 states: “A deficiency under the utility
prong of 35 U.S.C. 101 also creates a deficiency under 35 U.S.C. 112(a).”

In short, utility requires that the invention be operable and that it have some
demonstrated real-world use at the time of filing. Enablement requires that the patent
teach the PHOSITA how to make and use the invention without “undue
experimentation.” Written description requires the patent demonstrate that the
inventor “possessed” the invention at the time of filing, meaning that the inventor
understood that she had invented the invention. And under the best mode
requirement, an inventor must disclose not just a way of practicing the invention, but
her preferred way. Best mode is relevant only during prosecution: under the 2011
America Invents Act, “failure to disclose the best mode shall not be a basis on which
any claim of a patent may be canceled or held invalid or otherwise unenforceable.”
Pub. L. No. 112-29, § 15, 125 Stat. 284 (2011). The other three doctrines—utility,
enablement, and written description—will be discussed in greater detail in the
following sections.
 UTILITY & DISCLOSURE 169

We discuss these doctrines together not only because they stem from the same
statutory provision but also because each of these doctrines serves—to varying
degrees—three distinct policy goals.

1. Promoting Knowledge Dissemination. First, these doctrines encourage

dissemination of scientific knowledge. The benefit of these disclosures is contested—
the Supreme Court has stated that “such additions to the general store of knowledge
are of such importance” that they are worth the “high price . . . of exclusive use.”
Kewanee Oil Co. v. Bicron Corp., 416 US. 470, 481 (1974), but numerous legal scholars
have worried that scientists do not read patents, both because they are obfuscated
with legal jargon and because reading patents might lead to increased liability for
willful patent infringement. What percentage of scientists do you think read patents
and find useful information in them? To compare your priors with a recent survey, see
Lisa Larrimore Ouellette, Who Reads Patents?, 35 Nature Biotechnology 421 (2017).

2. Limiting Premature Patenting. Second, utility, enablement, and written

description limit premature patenting based on predictions and speculation. We have
already seen how the novelty and nonobviousness requirements encourage inventors
to get to the patent office early; these are the doctrines that prevent them from going
too early. The fundamental problem of when someone has done enough to merit a new
property right “has bedeviled property theorists for centuries, as demonstrated by the
enduring resonance of the 1805 property case Pierson v. Post. Should the fox belong
to the hunter who begins the chase or the one who makes the kill? Should an invention
belong to the researcher who begins work on it or the one who brings it to fruition?”
Lisa Larrimore Ouellette, Pierson, Peer Review, and Patent Law, 69 Vand. L. Rev.
1825 (2016). What’s the harm of granting patents before inventors have figured out
all the details of their invention or what it is good for? When should patent law require
inventors to demonstrate that their ideas work in practice?

3. Limiting Overbroad Claims. Third, and most importantly, these doctrines

prevent overbroad patents, or patents with claims that are broader in scope than what
the inventor contributed to the art. Patent claims have never been limited to exactly
what the inventor has done or to the examples listed in the patent specification, but
how far beyond the inventor’s actual work should patent rights stretch? Consider the
following hypothetical:

[S]uppose an inventor produced a method of curing AIDS using

radiation therapy, specifically using X-radiation, and then built a
radiation machine that implemented the method. This would be a
working embodiment. The ideas that underlie this cure can be broken
into many different levels of abstraction, each progressively more
specific and narrower in the resulting patent’s scope:

1. The idea of curing AIDS, covering all cures that might ever be
devised.
170 MASUR & OUELLETTE ⋅ PATENT LAW

2. The idea of curing AIDS by using radiation therapy, covering all

cures using any type of radiation but not other methods.
3. The idea of curing AIDS by using radiation therapy specifically
by using X-radiation, thereby excluding methods not using X-
radiation.
4. The idea of curing AIDS using radiation therapy specifically by
using X-radiation and more specifically by using the exact make
and model of the patentee’s radiation machine.
As can be seen from this example, each idea at a different level of
abstraction can be accurately described as the “invention.” . . . How this
choice is exercised, however, has tremendous consequences for both the
incentives of inventors and the rights of subsequent improvers and
users.

Tun-Jen Chiang, The Levels of Abstraction Problem in Patent Law, 105 Nw. U. L. Rev.
1097 (2011). We will see that choosing the right level of abstraction is both a critical
policy question and one that eludes easy answers.

As you read the cases that follow, consider how effectively each of the three
doctrines serve the goals of promoting knowledge dissemination and limiting
premature and overbroad patenting. It is also worth noting that these last two
considerations are policed by the law of patentable subject matter, which we discuss
in Chapter 6. As you study the doctrines described here and in Chapter 6, you should
consider the extent to which they are mutually reinforcing or redundant, and whether
one of these doctrines accomplishes the desired policy goals better than the other.

A. Utility
The utility requirement stems from § 101’s requirement that inventions be
“useful” and § 112(a)’s requirement of disclosure of “the manner and process of making
and using” the invention. A claim that is unpatentable for lack of utility is thus
deficient under both § 101 and § 112(a). See MPEP § 2107. Utility is a low bar that is
usually easily satisfied. If an invention were not useful, who would bother patenting
or infringing it?

There are three strands of utility cases, of which we will focus only on the third:

1. Beneficial utility is a now-defunct doctrine that previously imposed limits on

illegal, immoral, or socially harmful inventions. For example, in Lowell v. Lewis, 15
F. Cas. 1018 (C.C.D. Mass. 1817), Justice Story said inventions “to poison people, or
to promote debauchery, or to facilitate private assassination” would lack utility, and
subsequent cases frequently concerned gambling devices. But in a case involving a
deceptive juice dispenser—which created an illusion it was dispensing fresh juice
 UTILITY & DISCLOSURE 171

when the actual beverage was from concentrate,

as shown at right—the Federal Circuit rejected
this view: “Congress never intended that the
patent laws should displace the police powers of
the States, meaning by that term those powers by
which the health, good order, peace and general
welfare of the community are promoted.” Juicy
Whip, Inc. v. Orange Bang, Inc., 185 F.3d 1364,
1368 (Fed. Cir. 1999) (quoting Webber v. Virginia,
103 U.S. 344, 347–48 (1880)). Courts no longer
use utility to assess whether an invention is
socially beneficial, although some moral concerns
have motivated the growth of a separate doctrine,
patentable subject matter, which we will consider
later. And some other countries do have public
policy exceptions to patentability—known as
“ordre public” exceptions—as we discuss in Chapter 20. Do you think beneficial utility
doctrine should be revived in the United States?

2. Credible utility requires an invention to be operable—one cannot patent a

perpetual motion machine or an invention that simply does not work for its intended
purpose. But this does not mean that patentees must demonstrate that their
inventions work. A patent application’s assertion of utility is presumed credible, so
examiners have the burden of establishing the incredibility of the asserted utility. The
USPTO notes that credible utility rejections are “rare” and limited to cases in which
the asserted utility is “inconsistent with known scientific principles,” “the logic
underlying the assertion is seriously flawed,” or “the facts upon which the assertion
is based are inconsistent with the logic underlying the assertion.” MPEP § 2107. Aside
from these rare cases, patent law leaves the task of policing operability to the
market—if an invention does not work, it should have limited commercial success. Do
you think the USPTO should do more to limit these patents?

3. Practical utility, also known as specific and substantial utility, requires a

disclosed use at the time of filing that is specific to the subject matter claimed and
that has a substantial real-world use, meaning it is useful to the public in its current
form, and not merely after further research. For example, the following inventions
lack practical utility:

• A method of diagnosing or treating an unspecified disease or condition.

• A method of identifying or making a material that itself has no practical

utility, such as a material that is merely an input to further research.

• A claim to a polynucleotide whose use is disclosed simply as a “gene probe”

or “chromosome marker” to gain further information about underlying
genes. See In re Fisher, 421 F.3d 1365 (Fed. Cir. 2005).
 172 MASUR & OUELLETTE ⋅ PATENT LAW

• A research intermediate that will be used to make some final product that
itself has no known utility.

Note that unpatentable research intermediates should be distinguished from

patentable research tools. “Many research tools such as gas chromatographs,
screening assays, and nucleotide sequencing techniques have a clear, specific and
unquestionable utility (e.g., they are useful in analyzing compounds). An assessment
that focuses on whether an invention is useful only in a research setting thus does not
address whether the invention is in fact ‘useful’ in a patent sense. Instead, [examiners]
must distinguish between inventions that have a specifically identified substantial
utility and inventions whose asserted utility requires further research to identify or
reasonably confirm.” MPEP § 2107. The requirement of “specific utility” also means
that the invention has to have utility that is particular to itself and not the sort of use
to which any object could be put. For instance, an inventor can’t establish utility by
pointing out that her new machine can be used as a paperweight.

What is the harm of allowing patents on inventions that do not yet have a
specific or substantial use?

The following case shows how practical utility doctrine can be applied to limit
premature patenting in the pharmaceutical context.

In re ’318 Patent Infringement Litigation, 583 F.3d 1317 (Fed. Cir. 2009)1

Timothy B. Dyk, Circuit Judge.

1 Janssen Pharmaceutica N.V., Janssen L.P., and Synaptech, Inc. (“Janssen”),

appeal from a final judgment of the United States District Court for the District of
Delaware. After a bench trial, the district court determined that the claims of U.S.
Patent No. 4,663,318 were invalid for lack of enablement. We affirm.

BACKGROUND

2 Janssen’s ’318 patent claims a method for treating Alzheimer’s disease with
galantamine. Claim 1 is representative. It claims “[a] method of treating Alzheimer’s
disease and related dementias which comprises administering to a patient suffering
from such a disease a therapeutically effective amount of galantamine or a

1[Eds: This opinion’s unusual caption indicates that multiple cases were consolidated
for multi-district litigation (MDL) under 28 U.S.C. § 1407. MDLs are intended to reduce the
burden on federal district courts by consolidating cases involving common questions of fact.
MDLs are initiated after parties file a motion to transfer to the Judicial Panel on Multidistrict
Litigation, which decides whether to transfer and which judge should oversee the consolidated
proceedings. After pretrial proceedings, cases that have not been resolved, dismissed, or settled
are transferred back to their original districts for trial.]
 UTILITY & DISCLOSURE 173

pharmaceutically-acceptable acid addition salt thereof.” The application for the ’318
patent was filed on January 15, 1986, by Dr. Bonnie Davis, the claimed inventor.

3 At the time of the ’318 patent’s application in early 1986, researchers had
observed a correlation between Alzheimer’s disease symptoms and a reduced level of
the neurotransmitter acetylcholine in the brain. During neurotransmission,
acetylcholine is released by a transmitting neuron and binds to receptors on a
receiving neuron. At that time, galantamine, a small molecule compound, was known
to inhibit acetylcholinesterase, an enzyme that breaks down acetylcholine.
Acetylcholinesterase inhibitors like galantamine increase the amount of acetylcholine
available for binding to receptors.

4 The specification for the ’318 patent was only just over one page in length, and
it provided almost no basis for its stated conclusion that it was possible to administer
“an effective Alzheimer’s disease cognitively-enhancing amount of galantamine.” The
specification provided short summaries of six scientific papers in which galantamine
had been administered to humans or animals. The specification summarized the first
paper as showing that administering galantamine with the drug atropine to humans
under anesthesia raised blood levels of the hormone cortisol, and the second paper as
showing that administering galantamine and atropine together during anesthesia
also raised levels of adrenocorticotropic hormone (“ACTH”) in humans. There was no
explanation of the significance of increasing cortisol or ACTH levels, but it was known
to those skilled in the art in early 1986 that the production of cortisol and ACTH was
controlled by the central nervous system rather than the peripheral nervous system,
and that the studies thus suggested that galantamine was able to cross the blood-
brain barrier and have effects within the brain.

5 The specification then provided brief summaries of four scientific papers

reporting brain effects and positive effects on memory from administering
galantamine to animals. The first paper concluded that galantamine intravenously
administered to rabbits affected brain wave activity. The second paper concluded that
galantamine increased short-term memory in dogs. The third and fourth papers
concluded that galantamine reversed amnesia in rats that had been induced by
administering the drug scopolamine. The specification did not suggest that such
scopolamine-induced amnesia was similar to Alzheimer’s disease. The specification
did not provide analysis or insight connecting the results of any of these six studies to
galantamine’s potential to treat Alzheimer’s disease in humans.

6 The specification noted that another prior art scientific paper described an
animal testing model for replicating in animals the acetylcholine deficit and other
effects of Alzheimer’s disease. The specification agreed that acetylcholine deficiency
in animals is a “good animal model for Alzheimer’s disease in humans” because the
deficiency produces “[n]umerous behavioral deficits, including the inability to learn
and retain new information.” The specification cited the prior art for the conclusion
that “[d]rugs that can normalize these abnormalities would have a reasonable
 174 MASUR & OUELLETTE ⋅ PATENT LAW

expectation of efficacy in Alzheimer’s disease.” However, the specification did not refer
to any then-existing animal test results involving the administration of galantamine
in connection with this animal model of Alzheimer’s disease.

7 In April 1986 an examiner at the United States Patent and Trademark Office
rejected the claims in the ’318 patent’s application for obviousness in light of the
animal studies cited in the specification describing the use of galantamine to treat
scopolamine-induced amnesia and in improving short-term memory.

8 In September 1986 the applicant, Dr. Davis, responded to the obviousness

rejection by explaining that, because the brains of the animals in the studies cited in
the specification were “normal” (rather than having “physiological changes” similar to
Alzheimer’s disease), the studies were conducted under “circumstances having no
relevance to Alzheimer’s disease.”

9 In addition, Dr. Davis responded by stating that “experiments [are] underway

using animal models which are expected to show that treatment with galantamine
does result in an improvement in the condition of those suffering from Alzheimer’s
disease,” and that it was “expected that data from this experimental work will be
available in two to three months and will be submitted to the Examiner promptly
thereafter.” The ’318 patent issued on May 5, 1987. Dr. Davis did not learn the results
of the animal testing experiments—which suggested that galantamine could be a
promising Alzheimer’s disease treatment—until July 1987. These studies required
several months and considerable effort by researchers at the Johns Hopkins
University under the supervision of Dr. Joseph T. Coyle. No such testing results were
ever submitted to the PTO.

10 After the ’318 patent issued in May 1987, Dr. Davis licensed the patent in
November 1995 to Janssen. In February 2001 Janssen received approval from the
Food and Drug Administration (“FDA”) for using galantamine to treat mild to
moderate Alzheimer’s disease.

11 In February 2005 several generic drug manufacturers filed abbreviated new

drug applications (“ANDAs”) and so-called “Paragraph IV” certifications with the FDA
[a procedure discussed in more detail in Chapter 11], and Janssen sued each
manufacturer for infringing the ’318 patent. The actions were consolidated, the
defendants conceded infringement of claims 1 and 4 of the ’318 patent, and a bench
trial was held in May 2007 on the invalidity issues of anticipation, obviousness, and
enablement.

12 The district court concluded that the ’318 patent was invalid for lack of
enablement on two distinct grounds. The district court found that the specification did
not demonstrate utility because relevant animal testing experiments were “not
finished . . . by the time the ’318 patent was allowed” and the specification provided
only “minimal disclosure” of utility. ’The district court alternatively found that the
specification and claims did not “teach one of skill in the art how to use the claimed
 UTILITY & DISCLOSURE 175

method” because the application “only surmise[d] how the claimed method could be
used” without providing sufficient galantamine dosage information. The district court
entered judgment in favor of the defendants that the ’318 patent was invalid for lack
of enablement.

DISCUSSION

13 Enablement is closely related to the requirement for utility. As we noted in

Process Control Corp. v. HydReclaim Corp., 190 F.3d 1350, 1358 (Fed. Cir. 1999),

The enablement requirement of 35 U.S.C. § 112, ¶ 1 requires that the

specification adequately discloses to one skilled in the relevant art how
to make, or in the case of a process, how to carry out, the claimed
invention without undue experimentation. The utility requirement of
35 U.S.C. § 101 mandates that any patentable invention be useful and,
accordingly, the subject matter of the claim must be operable. If a patent
claim fails to meet the utility requirement because it is not useful or
operative, then it also fails to meet the how-to-use aspect of the
enablement requirement.

The Supreme Court in Brenner v. Manson, 383 U.S. 519, 534–35 (1966), discussing
the utility requirement, stated that inventions must have “substantial utility” and
“specific benefit exist[ing] in currently available form.”

14 The utility requirement prevents mere ideas from being patented. As we noted
in Genentech, Inc. v. Novo Nordisk A/S, 108 F.3d 1361, 1366 (Fed. Cir. 1997), “[p]atent
protection is granted in return for an enabling disclosure of an invention, not for vague
intimations of general ideas that may or may not be workable. Tossing out the mere
germ of an idea does not constitute enabling disclosure.” See also In re Fisher, 421
F.3d 1365, 1373 (Fed. Cir. 2005) (inventions fail to meet the utility requirement if
their “asserted uses represent merely hypothetical possibilities, objectives which the
claimed [inventions] could possibly achieve, but none for which they have been used
in the real world”).

15 The utility requirement also prevents the patenting of a mere research

proposal or an invention that is simply an object of research. Again as the Supreme
Court stated in Brenner, “a patent is not a hunting license. It is not a reward for the
search, but compensation for its successful conclusion.” 383 U.S. at 536. A process or
product “which either has no known use or is useful only in the sense that it may be
an object of scientific research” is not patentable. Id. at 535. As we observed in Fisher,
inventions do not meet the utility requirement if they are “objects upon which
scientific research could be performed with no assurance that anything useful will be
discovered in the end.” 421 F.3d at 1373. Allowing ideas, research proposals, or objects
only of research to be patented has the potential to give priority to the wrong party
and to “confer power to block off whole areas of scientific development, without
compensating benefit to the public.” Brenner, 383 U.S. at 534.
 176 MASUR & OUELLETTE ⋅ PATENT LAW

16 Typically, patent applications claiming new methods of treatment are

supported by test results. But it is clear that testing need not be conducted by the
inventor. In addition, human trials are not required for a therapeutic invention to be
patentable. As we observed in In re Brana, “[w]ere we to require Phase II testing
[human trials] in order to prove utility, the associated costs would prevent many
companies from obtaining patent protection on promising new inventions, thereby
eliminating an incentive to pursue . . . potential cures.” 51 F.3d 1560, 1568 (Fed. Cir.
1995).

17 We have held that results from animal tests or in vitro experiments2 may be
sufficient to satisfy the utility requirement. We noted in Cross v. Iizuka that “[w]e
perceive no insurmountable difficulty, under appropriate circumstances, in finding
that the first link in the screening chain, in vitro testing, may establish a practical
utility for the [pharmaceutical] compound in question” in order for a patent to issue.
753 F.2d 1040, 1051 (Fed. Cir. 1985). We concluded that in vitro test results for a
claimed pharmaceutical compound, combined with animal test results for a
structurally similar compound, showed “a reasonable correlation between the
disclosed in vitro utility and an in vivo activity, and therefore a rigorous correlation is
not necessary where the disclosure of pharmacological activity is reasonable based
upon the probative evidence.” Id. at 1050.

18 In this case, however, neither in vitro test results nor animal test results
involving the use of galantamine to treat Alzheimer’s-like conditions were provided.
The results from the ’318 patent’s proposed animal tests of galantamine for treating
symptoms of Alzheimer’s disease were not available at the time of the application, and
the district court properly held that they could not be used to establish enablement.

19 Nor does Janssen contend that the prior art animal testing summarized in the
’318 patent application’s specification established utility. Indeed, both in responding
to the examiner’s obviousness rejection and in responding to the obviousness defense
at trial, the inventor (Dr. Davis) and Janssen’s witnesses explicitly stated that the
utility of the invention could not be inferred from the prior art testing described in the
application. The response of the inventor, Dr. Davis, to the examiner’s obviousness
rejection stated, with regard to studies cited in the specification showing
galantamine’s ability to reverse scopolamine-induced amnesia in normal rats, that
“[n]othing in this teaching leads to an expectation of utility against Alzheimer’s
disease.” The response of Dr. Davis also stated that “predict[ing] that galantamine
would be useful in treating Alzheimer’s disease just because it has been reported [in
the prior art studies cited in the specification] to have an effect on memory in
circumstances having no relevance to Alzheimer’s disease” would be “as baseless as a
prediction that impaired eyesight due to diabetes would respond to devices

2 [n.7 in opinion] “In vitro” experiments are performed in artificial environments

outside living organisms (such as in a test tube or culture media), while “in vivo” experiments
are performed within living organisms.
 UTILITY & DISCLOSURE 177

(eyeglasses) or treatments (eye exercises) known to improve the vision of normal

persons.”

20 However, Janssen argues that in some circumstances utility may be

established without testing the proposed treatment in the claimed environment or a
sufficiently similar or predictive environment; that is, Janssen argues that utility may
be established by analytic reasoning. Although no case has been called to our attention
where utility was established simply by analytic reasoning, the PTO’s Manual of
Patent Examining Procedure (“MPEP”) has recognized that “arguments or reasoning”
may be used to establish an invention’s therapeutic utility.3

21 Janssen goes on to argue that the specification here establishes utility by

analytic reasoning. Relying on trial testimony, Janssen reasons that the selection and
description of the prior art tests, while not directly pertinent, “set[ ] forth the evidence
from existing studies demonstrating galantamine’s effects on central nicotinic as well
as muscarinic receptors and connect[ed] it to a model for Alzheimer’s therapy
rendering those effects therapeutically relevant.” These insights, however, are
nowhere described in the specification. Nor was there evidence that someone skilled
in the art would infer galantamine’s utility from the specification, even if such
inferences could substitute for an explicit description of utility.

22 Janssen relies on the testimony of its expert Dr. Coyle, the scientist who later
supervised the performance of the animal studies suggested in the specification. He
testified that the specification “connected the dots” for galantamine as a potential
Alzheimer’s disease treatment. This testimony of Dr. Coyle on which Janssen relies,
however, characterized the use of galantamine to treat Alzheimer’s disease as “a
proposal that connected the dots that raised very interesting questions and worth the
effort to check it out in a model in which both nicotinic and muscarinic receptors would
come into play.” Id. (emphases added). Similarly, agreement by another of Janssen’s
expert witnesses, Dr. Raskind, that a person of ordinary skill in the art in early 1986
would have viewed the “invention as set forth in the patent as scientifically grounded”
falls far short of demonstrating that a person of ordinary skill in the art would have
recognized that the specification conveyed the required assertion of a credible utility.
In fact, the inventor’s own testimony reveals that an ordinarily skilled artisan would
not have viewed the patent’s disclosure as describing the utility of galantamine as a
treatment for Alzheimer’s disease: “[W]hen I submitted this patent, I certainly wasn’t

3 [n.10 in opinion] As stated in the MPEP, establishing “a reasonable correlation

between” a compound’s activity and its asserted therapeutic use may involve “statistically
relevant data documenting the activity of a compound or composition, arguments or reasoning,
documentary evidence (e.g., articles in scientific journals), or any combination thereof.” MPEP
§ 2107.03. See also Fisher, 421 F.3d at 1372 (“The MPEP and [PTO Utility] Guidelines are not
binding on this court, but may be given judicial notice to the extent they do not conflict with
the statute.”).
 178 MASUR & OUELLETTE ⋅ PATENT LAW

sure, and a lot of other people weren’t sure that cholinesterase inhibitors [a category
of agents that includes galantamine] would ever work.”

23 Thus, at the end of the day, the specification, even read in the light of the
knowledge of those skilled in the art, does no more than state a hypothesis and propose
testing to determine the accuracy of that hypothesis. That is not sufficient. See
Rasmusson v. SmithKline Beecham Corp., 413 F.3d 1318, 1325 (Fed. Cir. 2005) (“If
mere plausibility were the test for enablement under section 112, applicants could
obtain patent rights to ‘inventions’ consisting of little more than respectable guesses
as to the likelihood of their success. When one of the guesses later proved true, the
‘inventor’ would be rewarded the spoils instead of the party who demonstrated that
the method actually worked. That scenario is not consistent with the statutory
requirement that the inventor enable an invention rather than merely proposing an
unproved hypothesis.”).

24 The ’318 patent’s description of using galantamine to treat Alzheimer’s disease

thus does not satisfy the enablement requirement because the ’318 patent’s
application did not establish utility.

25 [Judge Gajarsa dissented, arguing that the case should be remanded for
additional factual findings.]

Discussion Questions: Utility and Patent Timing

1. Demonstrating Utility at the Time of Filing. The invention claimed in the

’318 patent—using galantamine to treat Alzheimer’s—did turn out to have a specific
and substantial utility; as the opinion notes, the patent owner received FDA approval
for this pharmaceutical method. And the inventor described how to administer
galantamine to Alzheimer’s patients so that a PHOSITA could practice the invention.
What did she do wrong?

2. Only One Disclosed Utility Is Required. Suppose Dr. Bonnie Davis were the
first researcher to discover the compound galantamine, and the first to show that
galantamine improves short-term memory in dogs. Could she patent the compound,
with a disclosed utility of treating short-term memory in dogs? Would such a claim
cover use in humans? Should pharmaceutical compound claims be treated differently
from method-of-use claims? See generally Rebecca S. Eisenberg, The Problem of New
Uses, 5 Yale J. Health Pol’y L. & Ethics (2005).

3. Effect on Pharmaceutical R&D. Based on In re ’318 Patent Infringement

Litigation, what kind of evidence is needed to patent the use of a drug to treat some
disease in humans? The court holds that a research hypothesis is not sufficient, but
what would be sufficient? Does a patent applicant have to complete full-scale clinical
trials showing that the drug is safe and effective? Or is something between a research
hypothesis and full-scale clinical trials required?
 UTILITY & DISCLOSURE 179

Keep in mind that full-scale clinical trials can be immensely costly (in the tens
or hundreds of millions of dollars) and take years to complete. If the applicant has
filed for a patent before the clinical trial begins, the patent term will run during the
clinical trial. On the other hand, there can be risk in embarking on a multimillion-
dollar clinical trial without knowing whether one will obtain a patent in the end. How
does the rule in this case affect the effective patent term for pharmaceutical
companies? From the perspective of a pharmaceutical firm, what is the optimal rule
about what sorts of tests and evidence are required before the firm can obtain a
patent?

4. Constructive Reduction to Practice. As we previously discussed in the context

of pre-AIA § 102(g), one can receive a patent without actually reducing it to practice;
that is, without actually demonstrating that it works in the real world. It is enough to
constructively reduce the invention to practice by filing a patent application that
satisfies the disclosure requirements. As ’318 Patent Infringement Litigation
illustrates, an inventor needs to have more than a plausible hypothesis for a successful
constructive reduction to practice; she must demonstrate utility at the time of filing.
But she can patent the use of a drug in humans without ever having administered
that drug to a human patient. What are the costs and benefits of permitting
constructive reduction to practice?

5. Prophetic Examples. To assist with constructive reduction to practice, patent

applicants sometimes include predicted and hypothetical experimental methods and
results, known as prophetic or paper examples. MPEP § 608.01(p) specifies that
prophetic examples are permitted but “should not be described using the past tense.”
Using this tense rule, one study estimated that 17% of examples in U.S. chemistry
and biology patents are prophetic, and that almost one-quarter of these patents have
at least one prophetic example. Janet Freilich, Prophetic Patents, 53 U.C. Davis L.
Rev. 663 (2019). For example, the present tense used in the following patents for a
chemical synthesis, a medical procedure, and a medical device suggests that the
procedures had not been conducted at the time of filing:

• U.S. Patent No. 3,931,205: 2.5 g of 2-(5H-[1]benzopyrano[2,3-b]pyridin-7-

yl)acrylic acid is dissolved in 20 ml of 0.5 N aqueous sodium hydroxide solution,
and 1 g of Raney nickel is added. The solution is stirred in a hydrogen stream
at ordinary pressure and temperature until absorption of 230 ml of hydrogen
is attained. The Raney nickel is removed by filtration, and the filtrate is
neutralized with hydrochloric acid. The resulting crystalline precipitate is
filtered off, washed with water, and recrystallized from aqueous dioxane to give
1.8 g of 2-(5H-[1]benzopyrano[2,3-b]pyridin-7-yl) propionic acid melting at
183°–184°C.

• U.S. Patent No. 6,869,610: A 46-year-old woman presents with pain localized
at the deltoid region due to an arthritic condition. The muscle is not in spasm,
nor does it exhibit a hypertonic condition. The patient is treated by a bolus
 180 MASUR & OUELLETTE ⋅ PATENT LAW

injection of between about 50 units and 200 units of intramuscular botulinum

toxin type A. Within 1 to 7 days after neurotoxin administration the patient’s
pain is substantially alleviated. The duration of significant pain alleviation is
from about 2 to about 6 months.

• U.S. Patent No. 7,291,497: Each patch [for drawing and sampling 0.1 ml of
blood for vancomycin] consists of two parts. Micro-needles automatically draw
small quantities of blood painlessly. A mechanical actuator inserts and
withdraws the needle mak[ing] several measurements after the patch is
applied. Needles are produced photolithographically in molds at [the Stanford
Nanofabrication Facility]. Blood flows through the micro-needles into the blood
reservoir.

The third example is drawn from one of many patents granted to the failed Silicon
Valley biotech startup Theranos. Given the possibility of confusing patent readers
such as scientists, investors, and foreign patent examiners, is there any good
justification for not requiring prophetic examples to at least be labeled more clearly?
See Janet Freilich & Lisa Larrimore Ouellette, Science Fiction: Fictitious Experiments
in Patents, 364 Science 1036 (2019) (citing the above examples and arguing for clearer
labeling). Do you think prophetic examples should be allowed at all, especially as
constructive reduction to practice does not require specific, numerical examples that
read like actual experiments?

B. Enablement
35 U.S.C. § 112(a) requires inventors to describe their inventions “in such full,
clear, concise, and exact terms as to enable any person skilled in the art to which it
pertains, or with which it is most nearly connected, to make and use the same.” To
illustrate this doctrine, we provide two cases: Incandescent Lamp, the canonical
treatment (of the predecessor to this requirement) from 1895, and Idenix v. Gilead, a
2019 Federal Circuit decision that wiped out a record-breaking damages award by
holding the patent invalid.

The Incandescent Lamp Patent, 159 U.S. 465 (1895)

1 This was a bill in equity, filed by the Consolidated Electric Light Company
against the McKeesport Light Company, to recover damages for the infringement of
letters patent No. 317,676, issued May 12, 1885, to the Electro-Dynamic Light
Company, assignee of Sawyer and Man, for an electric light. The defendants justified
[their actions] under certain patents to Thomas A. Edison, particularly No. 223,898,
issued January 27, 1880; denied the novelty and utility of the complainant’s patent;
and averred that the same had been fraudulently and illegally procured. The real
defendant was the Edison Electric Light Company, and the case involved a contest
 UTILITY & DISCLOSURE 181

between what are known as the Sawyer and Man and the Edison systems of electric
lighting.

2 In their application, Sawyer and Man stated that their invention related to
“that class of electric lamps employing an incandescent conductor inclosed in a
transparent, hermetically sealed vessel or chamber, from which oxygen is excluded,
and more especially to the incandescing conductor, its substance, its form, and its
combination with the other elements composing the lamp. Its object is to secure a
cheap and effective apparatus; and our improvement consists, first, of the
combination, in a lamp chamber, composed wholly of glass, of an incandescing
conductor of carbon made from a vegetable fibrous material, in contradistinction to a
similar conductor made from mineral or gas carbon, and also in the form of such
conductor so made from such vegetable carbon, and combined in the lighting circuit
with the exhausted chamber of the lamp.”

3 The following drawings exhibit the substance of the invention:

4 The specification further stated that:

In the practice of our invention, we have made use of carbonized

paper, and also wood carbon. We have also used such conductors or
burners of various shapes, such as pieces with their lower ends secured
to their respective supports, and having their upper ends united so as
to form an inverted V-shaped burner. We have also used conductors of
varying contours—that is, with rectangular bends instead of curvilinear
ones—but we prefer the arch shape.

No especial description of making the illuminating carbon

conductors, described in this specification, and making the subject-
matter of this improvement, is thought necessary, as any of the
ordinary methods of forming the material to be carbonized to the
desired shape and size, and carbonizing it according to the methods in
 182 MASUR & OUELLETTE ⋅ PATENT LAW

practice before the date of this improvement, may be adopted in the

practice thereof by any one skilled in the arts appertaining to the
making of carbons for electric lighting or for other use in the arts.

The advantages resulting from the manufacture of the carbon

from vegetable fibrous or textile material instead of mineral or gas
carbon are many. Among them may be mentioned the convenience
afforded for cutting and making the conductor in the desired form and
size, the purity and equality of the carbon obtained, its susceptibility to
tempering, both as to hardness and resistance, and its toughness and
durability.

5 The claims were as follows:

(1) An incandescing conductor for an electric lamp, of carbonized fibrous

or textile material, and of an arch or horseshoe shape, substantially as
hereinbefore set forth.

(2) The combination, substantially as hereinbefore set forth, of an

electric circuit and an incandescing conductor of carbonized fibrous
material, included in and forming part of said circuit, and a
transparent, hermetically sealed chamber, in which the conductor is
inclosed.

(3) The incandescing conductor for an electric lamp, formed of

carbonized paper, substantially as described.

6 The commercial Edison lamp used by the appellee is

composed of a burner, A, made of carbonized bamboo of a peculiar
quality, discovered by Mr. Edison to be highly useful for the
purpose. This filament of carbon is bent into the form of a loop,
and its ends are secured by good electrical and mechanical
connections to two fine platinum wires, B, B. These wires pass
through a glass stem, C, the glass being melted and fused upon
the platinum wires. A glass globe, D, is fused to the glass stem,
C. This glass globe has originally attached to it, at the point d, a
glass tube, by means of which a connection is made with highly
organized and refined exhausting apparatus, which produces in
the globe a high vacuum, whereupon the glass tube is melted off
by a flame, and the globe is closed by the fusion of the glass at
the point d.

7 Upon a hearing in the circuit court, the court held the patent to be invalid, and
dismissed the bill. Thereupon complainant appealed to this court.

8 Mr. Justice Brown, after stating the facts in the foregoing language, delivered
the opinion of the court.
 UTILITY & DISCLOSURE 183

9 In order to obtain a complete understanding of the scope of the Sawyer and

Man patent, it is desirable to consider briefly the state of the art at the time the
application was originally made, which was in January, 1880.

10 Two general forms of electric illumination had for many years been the subject
of experiments more or less successful, one of which was known as the ‘arc light,’
produced by the passage of a current of electricity between the points of two carbon
pencils placed end to end, and slightly separated from each other. This form of light
had come into general use as a means of lighting streets, halls, and other large spaces;
but by reason of its intensity, the uncertain and flickering character of the light, and
the rapid consumption of the carbon pencils, it was wholly unfitted for domestic use.
The second form of illumination is what is known as the ‘incandescent system,’ and
consists generally in the passage of a current of electricity through a continuous strip
or piece of refractory material, which is a conductor of electricity, but a poor conductor;
in other words, a conductor offering a considerable resistance to the flow of the current
through it. It was discovered early in this century that various substances might be
heated to a white heat by passing a sufficiently strong current of electricity through
them. The production of a light in this way does not in any manner depend upon the
consumption or wearing away of the conductor, as it does in the arc light.

11 For many years prior to 1880, experiments had been made by a large number
of persons, in various countries, with a view to the production of an incandescent light
which could be made available for domestic purposes, and could compete with gas in
the matter of expense. Owing party to a failure to find a proper material, which should
burn but not consume, partly to the difficulty of obtaining a perfect vacuum in the
globe in which the light was suspended, and partly to a misapprehension of the true
principle of incandescent lighting, these experiments had not been attended with
success. The chief difficulty was that the carbon burners were subject to a rapid
disintegration or evaporation, which electricians assumed was due to the disrupting
action of the electric current, and hence the conclusion was reached that carbon
contained in itself the elements of its own destruction, and was not a suitable material
for the burner of an incandescent lamp.

12 It is admitted that the lamp described in the Sawyer and Man patent is no
longer in use, and was never a commercial success; that it does not embody the
principle of high resistance with a small illuminating surface; that it does not have
the filament burner of the modern incandescent lamp; and that the lamp
manufactured by the complainant, and put upon the market, is substantially the
Edison lamp; but it is said that, in the conductor used by Edison (a particular part of
the stem of the bamboo, the peculiar fitness for which purpose was undoubtedly
discovered by him), he made use of a fibrous or textile material covered by the patent
to Sawyer and Man, and is therefore an infringer. It was admitted, however, that the
third claim—for a conductor of carbonized paper—was not infringed.
 184 MASUR & OUELLETTE ⋅ PATENT LAW

13 The two main defenses to this patent are (1) that it is defective upon its face,
in attempting to monopolize the use of all fibrous and textile materials for the purpose
of electric illuminations; and (2) that Sawyer and Man were not in fact the first to
discover that these were better adapted than mineral carbons to such purposes.

14 Is the complainant entitled to a monopoly of all fibrous and textile materials

for incandescent conductors? If the patentees had discovered in fibrous and textile
substances a quality common to them all, or to them generally, as distinguishing them
from other materials, such as minerals, etc., and such quality or characteristic
adapted them peculiarly to incandescent conductors, such claim might not be too
broad. If, for instance, minerals or porcelains had always been used for a particular
purpose, and a person should take out a patent for a similar article of wood, and woods
generally were adapted to that purpose, the claim might not be too broad, though
defendant used wood of a different kind from that of the patentee. But if woods
generally were not adapted to the purpose, and yet the patentee had discovered a wood
possessing certain qualities, which gave it a peculiar fitness for such purpose, it would
not constitute an infringement for another to discover and use a different kind of wood,
which was found to contain similar or superior qualities. The present case is an apt
illustration of this principle. Sawyer and Man supposed they had discovered in
carbonized paper the best material for an incandescent conductor. Instead of confining
themselves to carbonized paper, as they might properly have done, and in fact did in
their third claim, they made a broad claim for every fibrous or textile material, when
in fact an examination of over 6,000 vegetable growths showed that none of them
possessed the peculiar qualities that fitted them for that purpose. Was everybody,
then, precluded by this broad claim from making further investigation? We think not.

15 The injustice of so holding is manifest in view of the experiments made, and

continued for several months, by Mr. Edison and his assistants, among the different
species of vegetable growth, for the purpose of ascertaining the one best adapted to an
incandescent conductor. Of these he found suitable for his purpose only about three
species of bamboo, one species of cane from the valley of the Amazon (impossible to be
procured in quantities on account of the climate), and one or two species of fibers from
the agave family. Of the special bamboo, the walls of which have a thickness of about
3/8 of an inch, he used only about 20/1000 of an inch in thickness. In this portion of
the bamboo the fibers are more nearly parallel, the cell walls are apparently smallest,
and the pithy matter between the fibers is at its minimum. It seems that carbon
filaments cannot be made of wood—that is, exogenous vegetable growth—because the
fibers are not parallel, and the longitudinal fibers are intercepted by radial fibers. The
cells composing the fibers are all so large that the resulting carbon is very porous and
friable. Lamps made of this material proved of no commercial value. After trying as
many as 30 or 40 different woods of exogenous growth, he gave them up as hopeless.
But finally, while experimenting with a bamboo strip which formed the edge of a palm-
leaf fan, cut into filaments, he obtained surprising results. After microscopic
examination of the material, he dispatched a man to Japan to make arrangements for
securing the bamboo in quantities.
 UTILITY & DISCLOSURE 185

16 It seems that the characteristic of the bamboo which makes it particularly

suitable is that the fibers run more nearly parallel than in other species of wood. There
is no generic quality, however, in vegetable fibers, because they are fibrous, which
adapts them to the purpose. Indeed, the fibers are rather a disadvantage. If the
bamboo grew solid, without fibers, but had its peculiar cellular formation, it would be
a perfect material, and incandescent lamps would last at least six times as long as at
present. All vegetable fibrous growths do not have a suitable cellular structure. In
some the cells are so large that they are valueless for that purpose. No exogenous, and
very few endogenous, growths are suitable. The messenger whom he dispatched to
different parts of Japan and China sent him about 40 different kinds of bamboo, in
such quantities as to enable him to make a number of lamps, and from a test of these
different species he ascertained which was best for the purpose. From this it appears
very clearly that there is no such quality common to fibrous and textile substances
generally as makes them suitable for an incandescent conductor, and that the bamboo
which was finally pitched upon, and is now generally used, was not selected because
it was of vegetable growth, but because it contained certain peculiarities in its fibrous
structure which distinguished it from every other fibrous substance. The question
really is whether the imperfectly successful experiments of Sawyer and Man, with
carbonized paper and wood carbon, conceding all that is claimed for them, authorize
them to put under tribute the results of the brilliant discoveries made by others.

17 It is required by Rev. St. § 4888 [the precursor to today’s 35 U.S.C. § 112], that
the application shall contain “a written description of the device, and of the manner
and process of making constructing, compounding, and using it in such full, clear,
concise, and exact terms as to enable any person, skilled in the art or science to which
it appertains or with which it is most nearly connected, to make, construct, compound,
and use the same.” The object of this is to apprise the public of what the patentee
claims as his own, the courts of what they are called upon to construe, and competing
manufacturers and dealers of exactly what they are bound to avoid. If the description
be so vague and uncertain that no one can tell, except by independent experiments,
how to construct the patented device, the patent is void.

18 It was said by Mr. Chief Justice Taney in Wood v. Underhill, 46 U.S. (5 How.)
1, 5 (1857), with respect to a patented compound for the purpose of making brick or
tile, which did not give the relative proportions of the different ingredients:

But when the specification of a new composition of matter gives only

the names of the substances which are to be mixed together, without
stating any relative proportion, undoubtedly it would be the duty of the
court to declare the patent void. And the same rule would prevail where
it was apparent that the proportions were stated ambiguously and
vaguely; for in such cases it would be evident, on the face of the
specification, that no one could use the invention without first
ascertaining, by experiment, the exact proportion of the different
ingredients required to produce the result intended to be
 186 MASUR & OUELLETTE ⋅ PATENT LAW

obtained. . . . And if, from the nature and character of the ingredients
to be used, they are not susceptible of such exact description, the
inventor is not entitled to a patent.

19 So in Tyler v. Boston, 74 U.S. (7 Wall.) 327 (1868), wherein the plaintiff

professed to have discovered a combination of fusel oil with the mineral and earthy
oils, constituting a burning fluid, the patentee stated that the exact quantity of fusel
oil which is necessary to produce the most desirable compound must be determined
by experiment. And the Court observed: “Where a patent is claimed for such a
discovery, it should state the component parts of the new manufacture claimed with
clearness and precision, and not leave a person attempting to use the discovery to find
it out by experiment.”

20 Applying this principle to the patent under consideration, how would it be

possible for a person to know what fibrous or textile material was adapted to the
purpose of an incandescent conductor, except by the most careful and painstaking
experimentation? If, as before observed, there were some general quality, running
through the whole fibrous and textile kingdom, which distinguished it from every
other, and gave it a peculiar fitness for the particular purpose, the man who discovered
such quality might justly be entitled to a patent; but that is not the case here. An
examination of materials of this class carried on for months revealed nothing that
seemed to be adapted to the purpose; and even the carbonized paper and wood carbons
specified in the patent, experiments with which first suggested their incorporation
therein, were found to be so inferior to the bamboo, afterwards discovered by Edison,
that the complainant was forced to abandon its patent in that particular, and take up
with the material discovered by its rival. Under these circumstances, to hold that one
who had discovered that a certain fibrous or textile material answered the required
purpose should obtain the right to exclude everybody from the whole domain of fibrous
and textile materials, and thereby shut out any further efforts to discover a better
specimen of that class than the patentee had employed, would be an unwarranted
extension of his monopoly, and operate rather to discourage than to promote
invention. If Sawyer and Man had discovered that a certain carbonized paper would
answer the purpose, their claim to all carbonized paper would, perhaps, not be
extravagant; but the fact that paper happens to belong to the fibrous kingdom did not
invest them with sovereignty over this entire kingdom, and thereby practically limit
other experimenters to the domain of minerals.

21 [W]e are all agreed that the claims of this patent, with the exception of the
third, are too indefinite to be the subject of a valid monopoly.

22 For the reasons above stated, the decree of the circuit court is affirmed.
 UTILITY & DISCLOSURE 187

Amgen v. Sanofi, 143 S. Ct. 1243 (2023)

Justice Neil Gorsuch delivered the opinion of the Court.

1 The development of antibody drugs has yielded life-changing therapies.

Individuals across the world now rely on antibody drugs to treat conditions ranging
from Crohn’s disease to cancer. This case concerns patents covering antibodies that
help reduce levels of low-density lipoprotein cholesterol, sometimes called LDL
cholesterol (for the obvious reason) or bad cholesterol (because it can lead to
cardiovascular disease, heart attacks, and strokes).

2 The immune system produces antibodies as a defense to foreign agents called

antigens. When a particular antigen—a virus, for example—enters the body, the
immune system generates antibodies to attack it. [An antibody is made of a chain of
amino acids that folds into a complex three-dimensional shape, and the “structure” of
an antibody is typically defined by its amino acid sequence. The “function” of the
antibody is what it does—whether it binds to a particular antigen, and whether it can
block other molecules from doing so. The connection between an antibody’s structure
and function remains very unpredictable.]

3 [In the mid-2000s, a number of pharmaceutical companies began researching

antibodies known as “PCSK9 inhibitors” to treat patients with high LDL cholesterol.
PCSK9 is a naturally occurring protein that degrades beneficial LDL receptors that
would otherwise extract LDL cholesterol from the bloodstream. An antibody drug that
bound to PCSK9 at a particular place known as the “sweet spot” would block it from
binding to and degrading LDL receptors. The LDL receptors could then continue their
work of reducing the level of LDL in the blood.]

4 Eventually, Amgen developed a PCSK9-inhibiting drug that it marketed under

the name Repatha, and Sanofi produced one it labeled Praluent. Each drug employs
a distinct antibody with its own unique amino acid sequence. In 2011, Amgen obtained
a patent for the antibody employed in Repatha, and Sanofi received one covering the
antibody used in Praluent. Each patent describes the relevant antibody by its amino
acid sequence. Neither of these patents is at issue in this case.

5 Instead, our dispute focuses on two additional patents Amgen obtained in 2014
that relate back to the company’s 2011 patent. See U.S. Patent Nos. 8,829,165,
8,859,741. In particular, this case revolves around claims 19 and 29 of the ’165 patent
and claim 7 of the ’741 patent. In these claims, Amgen did not seek protection for any
particular antibody described by amino acid sequence. Instead, Amgen purported to
claim for itself the entire genus of antibodies that (1) bind to specific amino acid
residues on PCSK9, and (2) block PCSK9 from binding to LDL receptors.
 188 MASUR & OUELLETTE ⋅ PATENT LAW

6 As part of its submission to the patent office, Amgen identified the amino acid
sequences of 26 antibodies that perform these two functions, and it depicted the three-
dimensional structures of two of these 26 antibodies. But beyond that, Amgen only
offered scientists two methods to make other antibodies that perform the binding and
blocking functions it described. The first method is what Amgen calls the “roadmap.”
At a high level, the roadmap directs scientists to: (1) generate a range of antibodies in
the lab; (2) test those antibodies to determine whether any bind to PCSK9; (3) test
those antibodies that bind to PCSK9 to determine whether any bind to the sweet spot
as described in the claims; and (4) test those antibodies that bind to the sweet spot as
described in the claims to determine whether any block PCSK9 from binding to LDL
receptors. The second method is what Amgen calls “conservative substitution.” This
technique requires scientists to: (1) start with an antibody known to perform the
described functions; (2) replace select amino acids in the antibody with other amino
acids known to have similar properties; and (3) test the resulting antibody to see if it
also performs the described functions.

7 Soon after receiving the ’165 and ’741 patents, Amgen sued Sanofi for
infringing them. After lengthy proceedings, the district court granted Sanofi judgment
as a matter of law, concluding that the claims at issue are not enabled. The Federal
Circuit affirmed. It determined that “no reasonable factfinder could conclude” that
Amgen had provided “adequate guidance” to make and use the claimed antibodies
“beyond the narrow scope of the 26 working examples” it had identified by their amino
acid sequences.

II

8 [Every U.S. patent law since the first Patent Act of 1790 has had an
enablement requirement similar to the one currently codified at 35 U.S.C. § 112(a).]
This Court has addressed the enablement requirement on many prior occasions. Begin
with O’Reilly v. Morse, 56 U.S. 62 (1853). [Samuel Morse patented an electric
telegraph and sued a telegraph manufacturer, who argued that the patent was
invalid.] Morse’s patent included eight claims, and this Court had no trouble
upholding seven of them—those limited to the telegraphic structures and systems he
had designed. But the Court paused on the eighth. That claim covered “the essence”
of the invention, which Morse described as “the use of the motive power of the electric
current . . . however developed for marking or printing intelligible characters, signs,
or letters, at any distances.” Leaving no doubt about this claim’s scope, Morse stated
plainly: “I do not propose to limit myself to the specific machinery or parts of
machinery described in the foregoing specification and claims.” The Court held the
eighth claim “too broad, and not warranted by law.” The problem was that it covered
all means of achieving telegraphic communication, yet Morse had not described how
to make and use them all.

9 Consider, too, The Incandescent Lamp Patent, 159 U.S. 465 (1895). [19th
century lighting had many problems.] From his laboratory in Menlo Park, Thomas
 UTILITY & DISCLOSURE 189

Edison and a team toiled to improve upon the prevailing method of incandescent
lighting, which tended to employ carbon filaments that disintegrated rapidly. Seeking
an alternative, Edison tinkered for a time with platinum, but it was expensive and
difficult to bring to the point of incandescence without melting. Eventually, Edison
dispatched men across the globe to collect specimens of bamboo. One sample from
Japan worked brilliantly because its “fibres ran more nearly parallel than in other
species of wood.”

10 But there was a catch. William Sawyer and Albon Man had obtained a patent
for an “electric lamp” with an “incandescing conductor” made of “carbonized fibrous or
textile material,” which they claimed was an improvement over conductors made of
“mineral or gas carbon.” Sawyer and Man’s patent had not won them commercial
success. They had designed a lamp with a conductor made of carbonized paper, but
the lamp proved defective and quickly fell out of use. [But they] alleged that Edison’s
lamp infringed their patent because it “made use of a fibrous or textile material,
covered by the patent.” What was that offending material? Bamboo.

11 This Court sided with Edison. It held that Sawyer and Man’s patent claimed
much but enabled little. “Instead of confining themselves to carbonized paper, as they
might properly have done, and in fact did in their third claim, Sawyer and Man made
a broad claim for every fibrous and textile material.” Even that broad claim “might”
have been permissible, the Court allowed, if Sawyer and Man had disclosed “a quality
common” to fibrous and textile substances that made them “peculiarly” adapted to
incandescent lighting. Had they done so, others would have known how to select
among such materials to make an operable lamp. But the record showed that most
fibrous and textile materials failed to work. Only through “painstaking
experimentation” did Edison discover that bamboo “answered the required purpose.”
The Court summed up things this way: “The fact that paper happens to belong to the
fibrous kingdom did not invest Sawyer and Man with sovereignty over this entire
kingdom.”

12 The Court returned to these principles in Holland Furniture v. Perkins Glue,

277 U.S. 245 (1928). There, the evidence indicated that animal glue has properties
that have long made it excellent for wood veneering. Seeking a substitute, Perkins
Glue Company had developed and patented a starch glue similar enough to animal
glue that craftsmen could also use it for wood veneering. Yet Perkins’s patent included
a claim that went beyond the specific starch glue it manufactured. This claim covered
all “starch glue which, [when] combined with about three parts or less by weight of
water, will have substantially the same properties as animal glue.”

13 The Court held this broad claim invalid for lack of enablement. The
specification described the key input—the “starch ingredient”—in terms of its “use or
function” rather than its “physical characteristics or chemical properties.” As the
Court put it: “One attempting to use or avoid the use of Perkins’ discovery as so
claimed and described functionally could do so only after elaborate experimentation”
 190 MASUR & OUELLETTE ⋅ PATENT LAW

with different starches. To be sure, the Court held, Perkins was entitled to its patent
on the specific starch glue it had invented. The specification described that glue’s
“characteristic ingredient” with “particularity.” But just as Morse could not claim all
means of telegraphic communication, and Sawyer and Man could not claim all fibrous
and textile materials for incandescence, Perkins could not claim all starch glues made
from whatever starch happened to perform as well as animal glue. To hold otherwise,
the Court said, “would extend the monopoly beyond the invention.”

14 Our decisions in Morse, Incandescent Lamp, and Holland Furniture reinforce

the simple statutory command. If a patent claims an entire class of processes,
machines, manufactures, or compositions of matter, the patent’s specification must
enable a person skilled in the art to make and use the entire class.

15 That is not to say a specification always must describe with particularity how
to make and use every single embodiment within a claimed class. For instance, it may
suffice to give an example (or a few examples) if the specification also discloses “some
general quality running through” the class that gives it “a peculiar fitness for the
particular purpose.” Incandescent Lamp, 159 U.S. at 475. In some cases, disclosing
that general quality may reliably enable a person skilled in the art to make and use
all of what is claimed, not merely a subset.

16 Nor is a specification necessarily inadequate just because it leaves the skilled

artist to engage in some measure of adaptation or testing. In Wood v. Underhill, 46
U.S. 1 (1847), a patent claimed a process for making bricks by mixing coal dust into
clay. The patent included “a general rule” about the proportion of dust and clay to use
and offered two alternative proportions “where the clay has some peculiarity.” The
Court upheld the claim, recognizing that “some small difference in the proportions
must occasionally be required” given the varieties of clay. Similarly, in Minerals
Separation v. Hyde, 242 U.S. 261 (1916), the Court dismissed a challenge to a claimed
process for separating metal from mineral ores. The record showed that “preliminary
tests” were required to adapt the process to any particular ore. Once more, the Court
explained that “the certainty which the law requires in patents is not greater than is
reasonable.” And because the “composition of ores varies infinitely,” it was “impossible
to specify in a patent the precise treatment which would be most successful and
economical in each case.”

17 Decisions such as Wood and Minerals Separation establish that a specification

may call for a reasonable amount of experimentation to make and use a patented
invention. What is reasonable in any case will depend on the nature of the invention
and the underlying art. But in allowing that much tolerance, courts cannot detract
from the basic statutory requirement that a patent’s specification describe the
invention “in such full, clear, concise, and exact terms as to enable any person skilled
in the art” to “make and use” the invention. § 112(a).
 UTILITY & DISCLOSURE 191

III

18 With these principles in mind, we return to claims 19 and 29 of the ’165 patent
and claim 7 of the ’741 patent. In doing so, we do not doubt that Amgen’s specification
enables the 26 exemplary antibodies it identifies by their amino acid sequences. But
the claims before us sweep much broader than those 26 antibodies. And we agree with
the lower courts that Amgen has failed to enable all that it has claimed, even allowing
for a reasonable degree of experimentation.

19 Amgen’s claims bear more than a passing resemblance to those this Court
faced long ago in Morse, Incandescent Lamp, and Holland Furniture. Amgen seeks to
monopolize an entire class of things defined by their function—every antibody that
both binds to particular areas of the sweet spot of PCSK9 and blocks PCSK9 from
binding to LDL receptors. The record reflects that this class of antibodies does not
include just the 26 that Amgen has described by their amino acid sequences, but a
“vast” number of additional antibodies that it has not. Much as Morse sought to claim
all telegraphic forms of communication, Sawyer and Man sought to claim all fibrous
and textile materials for incandescence, and Perkins sought to claim all starch glues
that work as well as animal glue for wood veneering, Amgen seeks to claim
“sovereignty over [an] entire kingdom” of antibodies. Incandescent Lamp.

20 That poses Amgen with a challenge. For if our cases teach anything, it is that
the more a party claims, the broader the monopoly it demands, the more it must
enable. That holds true whether the case involves telegraphs devised in the 19th
century, glues invented in the 20th, or antibody treatments developed in the 21st. To
be fair, Amgen does not dispute this much. It freely admits that it seeks to claim for
itself an entire universe of antibodies. Still, it says, its broad claims are enabled
because scientists can make and use every undisclosed but functional antibody if they
simply follow the company’s “roadmap” or its proposal for “conservative substitution.”

21 We cannot agree. These two approaches amount to little more than two
research assignments. The first merely describes step-by-step Amgen’s own trial-and-
error method for finding functional antibodies—calling on scientists to create a wide
range of candidate antibodies and then screen each to see which happen to bind to
PCSK9 in the right place and block it from binding to LDL receptors. The second isn’t
much different. It requires scientists to make substitutions to the amino acid
sequences of antibodies known to work and then test the resulting antibodies to see if
they do too—an uncertain prospect given the state of the art. Whether methods like a
“roadmap” or “conservative substitution” might suffice to enable other claims in other
patents—perhaps because, as this Court suggested in Incandescent Lamp, the
inventor identifies a quality common to every functional embodiment—they do not
here. They leave a scientist about where Sawyer and Man left Edison: forced to engage
in “painstaking experimentation” to see what works. That is not enablement. More
nearly, it is “a hunting license.” Brenner v. Manson, 383 U.S. 519, 536 (1966).
 192 MASUR & OUELLETTE ⋅ PATENT LAW

22 Think about it this way. “Imagine a combination lock with 100 tumblers, each
of which can be set to 20 different positions.” Brief for Intellectual Property Law
Professors and Scholars as Amici Curiae 20. “Through trial and error, imagine that
an inventor finds and discloses 26 different successful lock combinations.” But
imagine, too, “that the inventor tries to claim much more, namely all successful
combinations,” while instructing others “to randomly try a large set of combinations
and then record the successful ones.” Sure enough, that kind of “roadmap” would
produce functional combinations. But it would not enable others to make and use
functional combinations; it would instead leave them to “random trial-and-error
discovery.” Like many analogies, this one may oversimplify a bit, but it captures the
gist of the problem.

23 Failing in its primary argument that it has enabled all of the antibodies it
claims, Amgen tries a few alternative lines of attack. First, it suggests that the
Federal Circuit erred by applying an enablement test unmoored from the statutory
text. As Amgen sees it, that court conflated the question whether an invention is
enabled with the question how long may it take a person skilled in the art to make
every embodiment within a broad claim. We do not see it that way. While we agree
with Amgen that enablement is not measured against the cumulative time and effort
it takes to make every embodiment within a claim, we are not so sure the Federal
Circuit thought otherwise. That court went out of its way to say that it “does not hold
that the effort required to exhaust a genus is dispositive.” Instead, the court stressed,
the problem it saw is the same problem we see: Amgen offers persons skilled in the
art little more than advice to engage in “trial and error.”

24 Taking a similar tack, Amgen next argues that the Federal Circuit erroneously
“raised the bar” for enablement of claims that, like Amgen’s, encompass an entire
“genus” of embodiments defined by their function. This is impermissible, Amgen
argues, because the Patent Act “provides a single, universal enablement standard for
all inventions.” Here, too, we agree with Amgen in principle: There is one statutory
enablement standard. But, once more, we do not understand the Federal Circuit to
have thought differently. Instead, we understand that court to have recognized only
that the more a party claims for itself the more it must enable.

25 Finally, Amgen warns that an affirmance risks “destroying incentives for

breakthrough inventions.” But striking the proper balance between incentivizing
inventors and ensuring the public receives the full benefit of their innovations is a
policy judgment that belongs to Congress. Since 1790, Congress has included an
enablement mandate as one feature among many designed to achieve the balance it
wishes. Our only duty in this case lies in applying that mandate faithfully.
 UTILITY & DISCLOSURE 193

Idenix Pharmaceuticals v. Gilead Sciences, 941 F.3d 1149 (Fed. Cir. 2019)

Sharon Prost, Chief Judge.

1 This appeal stems from Idenix’s December 2013 patent infringement suit
against Gilead. At the time of the suit, both Idenix and Gilead were researching and
developing drugs for treatment of the hepatitis C virus (“HCV”). HCV is a leading
cause of chronic liver disease, infecting hundreds of millions of people worldwide, and
accounting for tens of thousands of deaths per year in the United States alone. Idenix
alleged that the imminent Food and Drug Administration approval, and launch, of
Gilead’s HCV treatment drug sofosbuvir [sold under the brand name Sovaldi] would
infringe Idenix’s U.S. Pat. No. 7,608,597.4

2 Following years of litigation, Chief Judge Stark held a two-week jury trial in
December 2016. Gilead stipulated to infringement under the district court’s claim
construction but argued that the ’597 patent was invalid for failure to meet the written
description and enablement requirements. The jury found for Idenix, upholding the
validity of the patent and awarding [a record-breaking $2.54 billion in] damages. After
trial, Gilead filed a renewed motion for JMOL with respect to written description and
enablement. The district court denied the motion with respect to written description
but granted JMOL on enablement, holding the ’597 patent invalid.

II

3 Enablement requires that “the specification teach those in the art to make and
use the invention without undue experimentation.” In re Wands, 858 F.2d 731, 737
(Fed. Cir. 1988). A claim is not enabled when, “at the effective filing date of the patent,
one of ordinary skill in the art could not practice their full scope without undue
experimentation.” Wyeth & Cordis Corp. v. Abbott Labs., 720 F.3d 1380, 1384 (Fed.
Cir. 2013).

III

4 The ’597 patent claims a method of treating HCV by administering nucleoside

compounds having a specific chemical structure. The nucleosides claimed in the ’597
patent contain a sugar ring having five carbon atoms, numbered 1' (one prime) to 5'
(five prime), as well as a base. At each carbon, substituent atoms or groups of atoms
can be added in either the “up” or “down” position. This structure is illustrated below,
with a hydroxyl group (OH) shown attached at the 2'-down and 3'-down positions:

4 [Eds: Idenix was purchased by Merck in 2014, which then dropped Idenix’s HCV

candidate uprifosbuvir in 2017 after poor clinical trial results.]

 194 MASUR & OUELLETTE ⋅ PATENT LAW

5 The parties’ arguments focus on the presence of various possible substituents

at the 2'-up and 2'-down positions.

6 Idenix argues that the key to its invention, and to treatment of HCV, is the use
of 2'-methyl-up nucleosides: nucleosides “having a methyl substitution (‘CH3’) at the
2' ‘up’ position of the molecule’s sugar ring,” illustrated below.

7 [It is not necessary to have a deep understanding of chemical structures to

understand the legal issue in this case. In the structures above, known as
“nucleosides,” the five places where lines intersect with labels 1' to 5' represent carbon
atoms, and they can have additional molecules attached to them (known as
“substituents”) pointing “up” or “down.” The 2' carbon has a methyl in the up position
(CH3, or one carbon and three hydrogens) and a hydroxyl in the down position (OH,
or one oxygen and one hydrogen). This case is about the many other molecules that
can be attached while keeping the methyl in the 2'-up position.]

8 Gilead argues that this characterization is overly broad, as the ’597 patent
provides no guidance in determining which of the billions of potential 2'-methyl-up
nucleosides are effective in treating HCV. According to Gilead, the ’597 patent
primarily describes 2'-methyl-up nucleosides that have a hydroxyl group (OH) at the
2'-down position. But Gilead’s accused product has fluorine (F), not OH, at the 2'-down
position. According to Gilead, the ’597 patent cannot enable the full scope of effective
2'-methyl-up nucleosides at least because its accused embodiment, 2'-methyl-up 2'-
fluoro-down, is not disclosed in or enabled by the specification.

9 The only independent claim of the ’597 patent recites:

 UTILITY & DISCLOSURE 195

1. A method for the treatment of a hepatitis C virus infection,

comprising administering an effective amount of a purine or
pyrimidine β-D-2'-methyl-ribofuranosyl nucleoside or a phosphate
thereof, or a pharmaceutically acceptable salt or ester thereof.

10 The district court construed the structural limitation “β-D-2'-methyl-

ribofuranosyl nucleoside” to require “a methyl group in the 2' up position and non-
hydrogen substituents at the 2' down and 3' down positions.” Thus, while the claim
requires methyl at the 2'-up position, it allows nearly any imaginable substituent at
the 2'-down position.

11 At Idenix’s urging, the district court also construed the preamble, “[a] method
for the treatment of a hepatitis C virus infection,” as a narrowing functional
limitation. In combination with the requirement to administer an “effective amount,”
this claim language “limit[s] the scope of the claims to the use of some set of
compounds that are effective for treatment of HCV.”

12 Neither party challenges the district court’s claim constructions in this appeal.
Claim 1, therefore, encompasses any nucleoside meeting both the structural
limitations (including a methyl group at 2'-up) and the functional limitations (efficacy
in treating HCV). It is undisputed, however, that there are billions of potential 2'-
methyl-up nucleosides. The key enablement question is whether a person of ordinary
skill in the art would know, without undue experimentation, which 2'-methyl-up
nucleosides would be effective for treating HCV. We conclude that they would not.
Taking into account the evidence presented at trial, a reasonable jury would not have
had a legally sufficient basis to find otherwise.

13 In analyzing undue experimentation, we consider the factors first enumerated

in In re Wands:

(1) the quantity of experimentation necessary;

(2) how routine any necessary experimentation is in the relevant field;

(3) whether the patent discloses specific working examples of the claimed
invention;

(4) the amount of guidance presented in the patent;

(5) the nature and predictability of the field;

(6) the level of ordinary skill; and

(7) the scope of the claimed invention.

See Wands, 858 F.2d at 737. The parties agree that the level of ordinary skill in the
art is high, but dispute the impact of the remaining factors. We discuss each in turn.
 196 MASUR & OUELLETTE ⋅ PATENT LAW

14 We agree with the district court that the quantity of experimentation required
to determine which 2'-methyl-up nucleosides meet claim 1 is very high, which favors
a finding of non-enablement. The evidence presented to the jury could not support any
other finding. At trial, Gilead presented expert testimony that because the claim
allows for nearly any substituent to be attached at any position (other than 2'-up), a
person of ordinary skill in the art would understand that “billions and billions” of
compounds literally meet the structural limitations of the claim.

15 Idenix did not dispute that math, but argued to the jury that this approach
was merely “theoretical,” because a person of ordinary skill in the art (“POSA”) would
not attach substituents at random. Instead, Idenix argued, a POSA would know to
“take into account the patent as a whole” to focus on a “significantly smaller” set of
candidate compounds. The district court accepted this argument, but concluded that
even taking into account the knowledge and approach of a POSA, the candidate
compounds number “likely[ ] millions or at least many, many thousands.”

16 On the evidence presented, a reasonable jury could only have concluded that
at least “many, many thousands” of candidate compounds exist. Idenix’s evidence,
which supports at best an unspecified number “significantly smaller” than “billions,”
could not lead a reasonable jury to any other conclusion. Idenix’s counsel conceded
that in its “best case,” considering the knowledge of a POSA, the structural limitations
still encompass “some number of thousands” of compounds.

17 This conclusion is supported by the ’597 patent itself, which discloses enormous
quantities of 2'-methyl-up nucleosides that would need to be tested for efficacy against
HCV. The specification contains 18 Formulas, each of which is represented by a
diagram with variables at multiple positions. For example, Formula XVII, described
as the “eleventh principal embodiment,” provides: [a complicated chemical structure
with a methyl group as one of two dozen possible substituents at 2'-up].

18 Even limiting this formula only to its 2'-methyl-up variations, however, the
formula provides more than a dozen options at the [5'] position, more than a dozen
independent options at the 2'-down position, more than a dozen independent options
at the 3'-down position, and multiple independent options for the base.

19 As the district court meticulously calculated, this formula alone discloses more
than 7,000 unique configurations of 2'-methyl-up nucleosides. Other formulas in the
specification provide equally large numbers of compounds. Idenix argues that a POSA
would have focused on only a narrow subset of billions of possible candidates, but the
jury was not free to adopt a number lower than the many, many thousands of
configurations identified as “principal embodiments” in the patent itself. Testing the
compounds in the specification alone for efficacy against HCV requires enough
experimentation for this factor to weigh in favor of non-enablement.
 UTILITY & DISCLOSURE 197

20 Idenix relatedly argues that a POSA would understand the “focus” of the claim
to be “the inhibition of the NS5B polymerase” to effectively cure HCV. Therefore,
Idenix argues, a POSA would know which candidates were likely to inhibit NS5B, and
would test only those, resulting in a “predictable and manageable” group of candidate
compounds. This argument improperly attempts to narrow the claim to only those
nucleosides that would inhibit the NS5B polymerase. But the district court’s claim
construction, not challenged in this appeal, made clear that “as a matter of law, NS5B
activity is not a claim limitation.”

21 Moreover, it would be improper to rely on a POSA’s knowledge of NS5B to fill

the gaps in the specification. “It is the specification, not the knowledge of one skilled
in the art, that must supply the novel aspects of an invention in order to constitute
adequate enablement.” Genentech, Inc. v. Novo Nordisk A/S, 108 F.3d 1361, 1366
(Fed. Cir. 1997). Idenix’s attempt to treat NS5B as a claim limitation, based on the
knowledge of a POSA, would be an impermissible end-run around the requirement to
enable the full scope of the claim.5

22 At oral argument here on appeal, Idenix presented an additional theory for

why little or no experimentation was required. According to Idenix, “the jury could
have concluded that all 2'-methyl-up ribonucleosides were active against the hepatitis
C virus, so that the numbers don’t matter. Screening [of each candidate for efficacy
against HCV] was irrelevant.” We do not agree that the evidence presented could have
supported this conclusion. Indeed, Idenix’s own evidence contradicts it.

23 At trial, Idenix’s expert agreed that the field of modifying nucleosides for anti-
HCV activity was “in its infancy” and “unpredictable.” Another of Idenix’s experts
testified that screening was performed to “actually cut down on the number of
compounds, by removing all in-active ones to a few interesting ones.” A third Idenix
expert testified that “you don’t know whether or not a nucleoside will have activity
against HCV until you make it and test it.” And at oral argument on the post-trial
motions, Idenix’s counsel agreed that “not all 2' methyl up ribonucleosides will be
effective to treat HCV,” and therefore screening was necessary. In light of this
evidence, and this concession, no reasonable jury could have concluded that all 2'-
methyl-up nucleosides were effective against HCV or that no screening was needed.

24 Because the claims of the ’597 patent encompass at least many, many
thousands of 2'-methyl-up nucleosides which need to be screened for HCV efficacy, the
quantity of experimentation needed is large and weighs in favor of non-enablement.

5[n.6 in opinion] Idenix does not argue that the full scope of the claim includes only
compounds that inhibit NS5B polymerase. Nor could it, as the ’597 patent describes treating
HCV in other ways.
 198 MASUR & OUELLETTE ⋅ PATENT LAW

25 The district court concluded that a reasonable jury could only find that many
candidate nucleosides would need to be synthesized before they could be screened, as
not all candidate nucleosides were available for purchase. We agree.

26 We do agree with Idenix, however, that a jury could have found that the
synthesis of an individual compound was largely routine. Gilead argued that
synthesis was difficult, presenting the jury with evidence of an Idenix scientist who
repeatedly tried and failed to synthesize 2'-methyl-up 2'-fluoro-down, which is the
nucleoside at issue in Gilead’s accused product. Idenix countered this with evidence
of a scientist at a Gilead subsidiary who produced a 2'-methyl-up 2'-fluoro-down
compound “in relatively short order.” As a reviewing court, we are mindful that we
may not weigh the evidence, determine the credibility of witnesses, or substitute our
version of facts for the jury’s version. In light of this conflicting testimony, a
reasonable jury was entitled to conclude that a POSA could synthesize this particular
compound in relatively short order.

27 Because a jury could only have found that synthesis of many 2'-methyl-up
nucleosides was necessary, but could have concluded that synthesis of an individual
nucleoside was largely routine, this factor weighs against a finding of non-
enablement.

28 We analyze the presence of working examples and the amount of guidance

presented in the specification together. Idenix argues that these factors weigh against
non-enablement because the specification “identifies the ‘key’ modification (2'-methyl-
up)” and contains “working examples of active 2'-methyl-up ribonucleosides that were
tested.” We disagree.

29 Idenix contends that the ’597 patent provides meaningful guidance as to which
nucleosides meet the functional limitations of the claim because it identifies the “key”
modification of 2'-methyl-up. That is insufficient. An enabling disclosure must “be
commensurate in scope with the claim.” In re Hyatt, 708 F.2d 712, 714 (Fed. Cir. 1983).
Claim 1 requires more than just an identification of 2'-methyl-up: it requires
identification of which 2'-methyl-up nucleosides will effectively treat HCV. Without
specific guidance on that point, the specification provides “only a starting point, a
direction for further research.” ALZA Corp. v. Andrx Pharm., LLC, 603 F.3d 935, 941
(Fed. Cir. 2010). That guidance is absent from the ’597 specification.

30 Idenix argues that the ’597 patent provides this guidance because a POSA
would understand NS5B to be the “target” enzyme or would understand that the
modified nucleoside must have “either the natural –OH (hydroxyl) or a mimicking
substitute at 2'-down.” But reliance on a POSA is insufficient to meet the enablement
requirement. A patent owner is “required to provide an enabling disclosure in the
 UTILITY & DISCLOSURE 199

specification; it cannot simply rely on the knowledge of a person of ordinary skill to

serve as a substitute for the missing information in the specification.” ALZA, 603 F.3d
at 941. Even if we credit Idenix’s position that a POSA would look for compounds that
would “target” NS5B, the specification fails to provide an enabling disclosure. It is not
enough to identify a “target” to be the subject of future testing. A specification that
requires a POSA to “engage in an iterative, trial-and-error process to practice the
claimed invention” does not provide an enabling disclosure. Id.

31 It is true that the specification contains some data showing working examples
of 2'-methyl-up nucleosides with efficacy against HCV. As discussed, however, the
specification alone encompasses tens if not hundreds of thousands of “preferred” 2'-
methyl-up nucleosides that would need to be tested for efficacy against HCV. In the
face of that broad disclosure, four examples on a single sugar are insufficient to
support enablement. Where, as here, working examples are present but are “very
narrow, despite the wide breadth of the claims at issue,” this factor weighs against
enablement. Enzo Biochem, Inc. v. Calgene, Inc., 188 F.3d 1362, 1374 (Fed. Cir. 1999).

32 Because the ’597 patent fails to provide meaningful guidance as to which 2'-
methyl-up nucleosides are or are not effective against HCV, and because the only
working examples provided are exceedingly narrow relative to the claim scope, these
two factors weigh in favor of non-enablement.

33 Based on the testimony presented at trial, a reasonable jury could only have
concluded that the use of modified nucleosides to treat HCV was an unpredictable art.
Gilead’s experts testified at trial that the art was “highly unpredictable” because “in
the nucleoside area . . . the smallest change can have a dramatic effect not only on the
activity of that compound but on the toxicity of the compound. So nothing is
predictable.”

34 Idenix’s experts also testified at trial that the field was new and unpredictable.
On cross-examination, Idenix’s expert admitted that at the time the ’597 patent was
invented, the field of “modified nucleosides activity for HCV” was “in its infancy.” He
also admitted that, even as late as 2012, it was “unpredictable to make a compound
and determine whether or not it is active” against HCV. Another of Idenix’s witnesses
confirmed that “you don’t know whether or not a nucleoside will have activity against
HCV until you make it and test it.”

35 In light of both parties’ testimony that the art was unpredictable, this factor
could only weigh in favor of non-enablement. See In re Fisher, 427 F.2d 833, 839
(C.C.P.A. 1970) (“In cases involving unpredictable factors, such as most chemical
reactions and physiological activity, the scope of enablement obviously varies
inversely with the degree of unpredictability of the factors involved.”).
 200 MASUR & OUELLETTE ⋅ PATENT LAW

36 For largely the same reasons discussed with respect to the quantity of
experimentation factor, we conclude that the scope of the claims could only support a
finding of non-enablement. On appeal, Idenix makes two arguments specifically
directed to this factor. Neither is persuasive.

37 First, Idenix argues that “[w]hen required to take all of the claim limitations
into account, Gilead’s witnesses described the claims as embracing only a ‘small’
number of compounds.” This analysis is backwards. Gilead’s expert testified that, in
order for the ’597 patent to teach which 2'-methyl-up nucleosides effectively treat
HCV, the patent would need to detail “how to get from a large number [of candidate
compounds] to a relatively speaking small number [of effective compounds].” In other
words, the ’597 patent leaves a POSA searching for a needle in a haystack to
determine which of the “large number” of 2'-methyl-up nucleosides falls into the
“small” group of candidates that effectively treats HCV. The size disparity between
those two groups requires significant experimentation, which weighs against
enablement, not for it.

38 Second, Idenix argues that the claim is not broad because “evidence showed
that the POSA, with common sense, the claims, and the specification as guidance,
would focus on a narrow set of candidates.” This factor, however, considers the scope
of the claim as written, not just the subset of the claim that a POSA might practice.
Idenix does not, and cannot, argue that the scope of the claim is actually limited to
this narrow set of candidates. “[A]s a matter of law, NS5B activity is not a claim
limitation.” We therefore conclude that the breadth of the claims weighs in favor of
non-enablement.

39 Weighing each of these factors, we conclude as a matter of law that the ’597
patent is invalid for lack of enablement. The immense breadth of screening required
to determine which 2'-methyl-up nucleosides are effective against HCV can only be
described as undue experimentation.

40 Our decision in Wyeth and Cordis Corp. v. Abbott Laboratories compels this
conclusion, and as the district court correctly acknowledged, the similarities between
that case and this one are striking. In Wyeth, as here, we considered a claim that
encompassed “millions of compounds made by varying the substituent groups,” while
only a “significantly smaller” subset of those compounds would have the claimed
“functional effects.” 720 F.3d at 1384. We then credited the patent owner’s argument
that, based on the knowledge of a POSA, the number of candidate compounds to be
tested could be as little as “tens of thousands.” Id. at 1384–85. In both cases, scientific
testimony confirmed that practicing the full scope of the claims would require
synthesizing and screening tens of thousands of candidate compounds for the claimed
efficacy.
 UTILITY & DISCLOSURE 201

41 Notwithstanding the fact that screening an individual compound for

effectiveness was considered “routine,” we concluded as a matter of law in Wyeth that
the claim was not enabled because there were “at least tens of thousands of candidate
compounds” and “it would be necessary to first synthesize and then screen each
candidate compound.” Id. at 1385–86. As we explicitly stated: “The remaining
question is whether having to synthesize and screen each of at least tens of thousands
of candidate compounds constitutes undue experimentation. We hold that it does.” Id.
at 1385. That principle controls here. A reasonable jury could only have concluded
that there were at least many, many thousands of candidate compounds, many of
which would require synthesis and each of which would require screening. That
constitutes undue experimentation.

42 [The Federal Circuit also held that the ’597 patent is invalid for lack of written
description; this section of the opinion is excerpted below. A dissent by Judge Pauline
Newman is omitted. She would have construed the claim more narrowly to require
hydroxyl groups at the 2'-down position, such that Gilead’s product (with fluorine
rather than hydroxyl at 2'-down) would not be within the scope of the claims.]

Discussion Questions: Enablement

1. Species and Genus Claims. The patentees in the above cases did make
inventions that worked—Sawyer and Mann made light bulbs with filaments of
carbonized paper and wood carbon, Amgen developed the successful PCSK9-inhibiting
drug Repatha, and Idenix provided working examples of specific chemicals with some
evidence of efficacy against HCV. The problem was that the patentees invented a
particular type of invention—a species—and then tried to patent a broader class of
inventions—a genus. What could these inventors have claimed, based on the work
they actually did? Can you write a claim or set of claims for them that would have
been valid?

What would the inventors have to have discovered—or, for that matter, what
would have to be true about the relevant technology—for them to patent the entire
genus (carbonized fibrous and textile materials in Incandescent Light Bulb, every
antibody that binds and blocks PCSK9 in Amgen, and the genus of thousands of
chemicals in Idenix)? After all of his experiments, would it have been possible for
Edison to patent all fibrous and textile materials? If Idenix’s claim covered only the
species made by Gilead, would the result be the same?

2. The Differential Treatment of Uses and Products. Recall from our discussion
in Chapter 1 that a patent on a product will cover all uses of that product, whether or
not they were known to the patentee. So, if Pfizer patents sildenafil citrate thinking
it will function as a hypertension medication, and it turns out to treat erectile
dysfunction instead (as was the case for Viagra), Pfizer’s patent will cover the use of
sildenafil citrate to treat erectile dysfunction just as much as it would any other use.
 202 MASUR & OUELLETTE ⋅ PATENT LAW

However, the same broad rule does not apply to products themselves. If Sawyer and
Mann patent the particular type of carbonized vegetable material that they have used,
that does not entitle them to a patent on all other types of carbonized vegetable
materials. What is the reason for this discrepancy? It is easy to understand why
Sawyer and Mann should only be allowed to patent the particular type of light bulb
they have invented. But why should Pfizer be allowed to patent sildenafil citrate in
such a way as to cover every conceivable use for the drug, as opposed to limiting their
patent to the uses they discovered?

3. Trade Secrets and Enablement. It is common for patentees to patent some

aspects of their inventions while keeping other aspects as trade secrets. Google
patented PageRank—the method of ranking search results based on the number and
quality of links each website receives—but has kept most of its search algorithm
details as a trade secret; pharmaceutical manufacturers often have numerous patents
on each drug but keep manufacturing details as trade secrets. Could the USPTO or
the courts require greater disclosure of some trade secrets under the enablement
doctrine? For an argument that many patents on complex biologic drugs fail
enablement because they do not provide enough details for reproduction, see Gregory
N. Mandel, Industry’s Unintended Admission that Biotech Patents Fail Enablement,
11 Va. J.L. & Tech. 8 (2006).

4. Deposit Requirements, Biological Materials, and Computer Code.

Sometimes, a written description alone is not enough to enable a PHOSITA to make
and use the invention without undue experimentation because specialized materials
are required. Since 1970, courts have found that disclosure of living materials such as
microorganisms or cultured cells can be satisfied by placing samples of these materials
in a public depository, and the Budapest Treaty of 1977 set out requirements for
internationally recognized depositories. There are three such depositories in the
United States—in Illinois, Maine, and Virginia—from which anyone may request
samples for fees ranging from $40 to $330. Biological depositories are not heavily used
by patentees; a GAO study found that only 0.6% of patents granted in the last three
months of 1999 were supported by deposits. Similarly, inventors may submit
computer code along with their applications—known as a “computer program listing
appendix”—but only about 0.1% of patents include such an appendix. Should the
USPTO require deposit more often? Do you think patent examiners are well equipped
to determine when a deposit is needed to legally enable an invention?

Applying the Undue Experimentation Standard: Excerpts from MPEP § 2164

1 [As explained in Chapter 1, the Manual of Patent Examining Procedure

(MPEP) provides guidance to USPTO examiners and is thus useful for understanding
how the agency applies patent validity doctrines to new patent applications. It does
not receive any formal deference from the courts, but footnote 10 from In re ’318 Patent
Infringement Litigation showed how it may still be influential.]
 UTILITY & DISCLOSURE 203

2 The fact that experimentation may be complex does not necessarily make it
undue, if the art typically engages in such experimentation. The determination that
“undue experimentation” would have been needed to make and use the claimed
invention is not a single, simple factual determination. Rather, it is a conclusion
reached by weighing all the above noted factual considerations [from In re Wands, as
quoted in Idenix].

3 An applicant need not have actually reduced the invention to practice prior to
filing. Lack of a working example, however, is a factor to be considered, especially in
a case involving an unpredictable and undeveloped art. For a claimed genus,
representative examples together with a statement applicable to the genus as a whole
will ordinarily be sufficient if one skilled in the art (in view of level of skill, state of
the art and the information in the specification) would expect the claimed genus could
be used in that manner without undue experimentation.

4 The scope of the required enablement varies inversely with the degree of
predictability involved, but even in unpredictable arts, a disclosure of every operable
species is not required. A single embodiment may provide broad enablement in cases
involving predictable factors, such as mechanical or electrical elements. In cases
involving unpredictable factors, such as most chemical reactions and physiological
activity, more may be required. This is because it is not reasonably predictable from
the disclosure of one species, what other species will work.

5 Example of Reasonable Experimentation: In United States v. Telectronics, Inc.,

857 F.2d 778 (Fed. Cir. 1988), the court reversed the findings of the district court for
lack of clear and convincing proof that undue experimentation was needed. The court
ruled that since one embodiment (stainless steel electrodes) and the method to
determine dose/response was set forth in the specification, the specification was
enabling. The question of time and expense of such studies, approximately $50,000
and 6-12 months standing alone, failed to show undue experimentation.

6 Example of Unreasonable Experimentation: In In re Ghiron, 442 F.2d 985

(C.C.P.A. 1971), functional “block diagrams” were insufficient to enable a person
skilled in the art to practice the claimed invention with only a reasonable degree of
experimentation because the claimed invention required a “modification to prior art
overlap computers,” and because “many of the components which appellants illustrate
as rectangles in their drawing necessarily are themselves complex assemblages. It is
common knowledge that many months or years elapse from the announcement of a
new computer by a manufacturer before the first prototype is available. This does not
bespeak of a routine operation but of extensive experimentation and development
work.”

7 The presence of inoperative embodiments within the scope of a claim does not
necessarily render a claim nonenabled. The standard is whether a skilled person could
determine which embodiments that were conceived, but not yet made, would be
inoperative or operative with expenditure of no more effort than is normally required
204 MASUR & OUELLETTE ⋅ PATENT LAW

in the art. Atlas Powder Co. v. E.I. du Pont de Nemours & Co., 750 F.2d 1569 (Fed.
Cir. 1984). A disclosure of a large number of operable embodiments and the
identification of a single inoperative embodiment did not render a claim broader than
the enabled scope because undue experimentation was not involved in determining
those embodiments that were operable. In re Angstadt, 537 F.2d 498 (C.C.P.A. 1976).
However, claims reading on significant numbers of inoperative embodiments would
render claims nonenabled when the specification does not clearly identify the
operative embodiments and undue experimentation is involved in determining those
that are operative.

Practice Problems: Enablement

1. The asserted claims cover methods of collecting and processing data from
“disparate databases” without an intermediate step of converting the data to
compatible formats and storing the converted data in a new database. The
specification lacks any working examples, and it took the inventor three years from
filing to build a commercial-grade embodiment of the invention, though there was
evidence that a functional prototype could have been produced in far less time. Are
the claims enabled? See Vasudevan Software v. MicroStrategy, 782 F.3d 671 (Fed. Cir.
2015).

2. The claim involves a single step: “adding a chemically-stabilizing amount of

polyethoxylated castor oil (PECO)” to a prostaglandin (a composition used as an eye
ointment). This step was construed as requiring an increase in the prostaglandin’s
ability to resist chemical change. PECO is generally understood to increase stability,
though the degree of increase can vary greatly. There are a range of PECOs and
prostaglandins encompassed by the claims, and expert testimony indicated that
“various parameters including pH, buffer, and preservatives may affect the chemical
stability of prostaglandins in ophthalmic formulations,” and that “when you have a
lot of variables on top of one another, the experimentation needed to optimize stability
gets out of control quickly.” Is the claim enabled? See Alcon Research v. Barr
Laboratories, 745 F.3d 1180 (Fed. Cir. 2014).

3. The patent discloses a “tri-layer tunnel junction,” which is an electronic

device used in computer memory storage systems. The asserted claims cover any tri-
layer tunnel junction wherein “applying a small magnitude of electromagnetic energy
to the junction . . . causes a change in the resistance by at least 10% at room
temperature.” The specification teaches that the inventors’ best efforts achieved a
change in resistance of 11.8% at room temperature. The specification also notes that
the fundamental science of the tunnel junction had been known for many years, and
a twenty-year-old publication predicted that an “ideal” tunnel junction could yield
around a 24% change in resistance, but past efforts had not produced effective use of
the phenomenon. During prosecution, the inventors achieved resistance changes of
18% and stated that there was not a clear theoretical upper limit. A tunnel junction
 UTILITY & DISCLOSURE 205

with a 120% resistive change was achieved over ten years later, and 604% junctions
were achieved a few years after that. Are the claims enabled? What if they were
amended during prosecution from “causes a change in the resistance by at least 10%
at room temperature” to “causes a change in the resistance by up to about 12% at room
temperature”? See MagSil Corp. v. Hitachi Glob. Storage Techs., Inc., 687 F.3d 1377
(Fed. Cir. 2012).

C. Written Description
As we explained in Chapter 1, the process of patent examination can involve
an extended back-and-forth between the inventor and the USPTO. During that time,
the inventor cannot add “new matter” to her specification (without losing her priority
date), but she can—and often must—amend her claims. While this is taking place,
many savvy patent applicants keep tabs on what their competitors are doing and what
new products they might be placing on the market. The applicant, whose patent is
still being examined by the USPTO, can then amend her claims to explicitly cover
competitors’ products. In addition, because patent applications remain secret for 18
months, the very fact of the patent’s existence can remain a surprise to competitors
until the patent is issued (or shortly beforehand). Imagine a competitor’s unpleasant
surprise when the patent is published and the competitor realizes that there exists a
patent that is specially designed to cover her new product.

We hope it goes without saying that this is not how the patent system is
supposed to work. Applicants should be required to claim what they have actually
invented, not whatever inventions of others they can retrofit into their own patents.
The Federal Circuit addressed this concern by turning to written description doctrine,
which had previously played only a small role in adjudicating patent validity. As we
noted at the start of this chapter, the written description requirement limits patent
claims to what the inventor actually invented at the time of filing, or in other words,
what inventions the inventor “possessed.” The Federal Circuit leveraged this
requirement as a check on patents that seemed to claim territory that the inventor
had not obviously invented, based on what was disclosed in the specification. In that
respect, written description is a close cousin of enablement. Both doctrines govern the
claim breadth that a given specification can be used to support.

As you read the following cases, one question to consider is what work the
written description doctrine is doing that the enablement doctrine could not perform.
 206 MASUR & OUELLETTE ⋅ PATENT LAW

Gentry Gallery v. Berkline, 134 F.3d 1473 (Fed. Cir. 1998)

Alan D. Lourie, Circuit Judge.

1 The Gentry Gallery appeals from the judgment of the United States District
Court for the District of Massachusetts holding that the Berkline Corporation does
not infringe U.S. Patent 5,064,244. Berkline cross-appeals from the decision that the
patent was not shown to be invalid. [B]ecause the court clearly erred in finding that
the written description portion of the specification supported certain of the broader
claims asserted by Gentry, we reverse the decision that those claims are not invalid
under 35 U.S.C. § 112, ¶ 1 (1994).

BACKGROUND

2 Gentry owns the ’244 patent, which is directed to a unit of a sectional sofa in
which two independent reclining seats (“recliners”) face in the same direction.
Sectional sofas are typically organized in an L-shape with “arms” at the exposed ends
of the linear sections. According to the patent specification, because recliners usually
have had adjustment controls on their arms, sectional sofas were able to contain two
recliners only if they were located at the exposed ends of the linear sections. Due to
the typical L-shaped configuration of sectional sofas, the recliners therefore faced in
different directions. Such an arrangement was “not usually comfortable when the
occupants are watching television because one or both occupants must turn their
heads to watch the same [television] set. Furthermore, the separation of the two
reclining seats at opposite ends of a sectional sofa is not comfortable or conducive to
intimate conversation.”

3 The invention of the patent solved this supposed dilemma by, inter alia, placing
a “console” between two recliners which face in the same direction. This console
“accommodates the controls for both reclining seats,” thus eliminating the need to
position each recliner at an exposed end of a linear section. Accordingly, both recliners
can then be located on the same linear section allowing two people to recline while
watching television and facing in the same direction. Claim 1, which is the broadest
claim of the patent, reads in relevant part:

A sectional sofa comprising:

a pair of reclining seats disposed in parallel relationship with one

another in a double reclining seat sectional sofa section being without
an arm at one end . . . ,

each of said reclining seats having a backrest and seat cushions and
movable between upright and reclined positions . . . ,

a fixed console disposed in the double reclining seat sofa section between
the pair of reclining seats and with the console and reclining seats
together comprising a unitary structure,
 UTILITY & DISCLOSURE 207

said console including an armrest portion for each of the reclining seats;
said arm rests remaining fixed when the reclining seats move from one
to another of their positions,

and a pair of control means, one for each reclining seat; mounted on the
double reclining seat sofa section . . . .

’244 patent; col. 4, l. 66 to col. 5, ll. 1-27 (emphasis added). Claims 9, 10, 12–15, and
19–21 are directed to a sectional sofa in which the control means are specifically
located on the console. [Eds: A figure from the patent is shown below.]

4 In 1991, Gentry filed suit alleging that Berkline infringed the patent by
manufacturing and selling sectional sofas having two recliners facing in the same
direction. In the allegedly infringing sofas, the recliners were separated by a seat
which has a back cushion that may be pivoted down onto the seat, so that the seat
back may serve as a tabletop between the recliners. The district court granted
Berkline’s motion for summary judgment of non-infringement, but denied its motions
for summary judgment of invalidity and unenforceability.

DISCUSSION

5 Berkline argues that claims 1–8, 11, and 16–18 are invalid because they are
directed to sectional sofas in which the location of the recliner controls is not limited
to the console. According to Berkline, because the patent only describes sofas having
controls on the console and an object of the invention is to provide a sectional sofa
“with a console . . . that accommodates the controls for both the reclining seats,” the
claimed sofas are not described within the meaning of § 112, ¶ 1. Berkline also relies
on [the inventor] Sproule’s testimony that “locating the controls on the console is
definitely the way we solved [the problem of building sectional sofa with parallel
recliners] on the original group [of sofas].” Gentry responds that the disclosure
represents only Sproule’s preferred embodiment, in which the controls are on the
console, and therefore supports claims directed to a sofa in which the controls may be
 208 MASUR & OUELLETTE ⋅ PATENT LAW

located elsewhere. Gentry relies on Ethicon Endo–Surgery, Inc. v. United States

Surgical Corp., 93 F.3d 1572, 1582 n.7 (Fed. Cir. 1996), and In re Rasmussen, 650 F.2d
1212, 1214 (C.C.P.A. 1981), for the proposition that an applicant need not describe
more than one embodiment of a broad claim to adequately support that claim.

6 We agree with Berkline that the patent’s disclosure does not support claims in
which the location of the recliner controls is other than on the console. Whether a
specification complies with the written description requirement of § 112, ¶ 1, is a
question of fact, which we review for clear error on appeal from a bench trial. To fulfill
the written description requirement, the patent specification “must clearly allow
persons of ordinary skill in the art to recognize that [the inventor] invented what is
claimed.” In re Gosteli, 872 F.2d 1008, 1012 (Fed. Cir. 1989). An applicant complies
with the written description requirement “by describing the invention, with all its
claimed limitations.” Lockwood v. American Airlines, Inc., 107 F.3d 1565, 1572 (1997).

7 It is a truism that a claim need not be limited to a preferred embodiment.

However, in a given case, the scope of the right to exclude may be limited by a narrow
disclosure. For example, as we have recently held, a disclosure of a television set with
a keypad, connected to a central computer with a video disk player did not support
claims directed to “an individual terminal containing a video disk player.” See id.
(stating that claims directed to a “distinct invention from that disclosed in the
specification” do not satisfy the written description requirement); see also Regents of
the Univ. of Cal. v. Eli Lilly & Co., 119 F.3d 1559, 1568 (Fed. Cir. 1997) (stating that
the case law does “not compel the conclusion that a description of a species always
constitutes a description of a genus of which it is a part”).

8 In this case, the original disclosure clearly identifies the console as the only
possible location for the controls. It provides for only the most minor variation in the
location of the controls, noting that the control “may be mounted on top or side
surfaces of the console rather than on the front wall . . . without departing from this
invention.” No similar variation beyond the console is even suggested. Additionally,
the only discernible purpose for the console is to house the controls. As the disclosure
states, identifying the only purpose relevant to the console, “[a]nother object of the
present invention is to provide . . . a console positioned between [the reclining seats]
that accommodates the controls for both of the reclining seats.” Thus, locating the
controls anywhere but on the console is outside the stated purpose of the invention.
Moreover, consistent with this disclosure, Sproule’s broadest original claim was
directed to a sofa comprising, inter alia, “control means located upon the center
console to enable each of the pair of reclining seats to move separately between the
reclined and upright positions.” Finally, although not dispositive, because one can add
claims to a pending application directed to adequately described subject matter,
Sproule admitted at trial that he did not consider placing the controls outside the
console until he became aware that some of Gentry’s competitors were so locating the
recliner controls. Accordingly, when viewed in its entirety, the disclosure is limited to
sofas in which the recliner control is located on the console.
 UTILITY & DISCLOSURE 209

9 Gentry’s reliance on Ethicon is misplaced. It is true, as Gentry observes, that

we noted that “an applicant is generally allowed claims, when the art permits, which
cover more than the specific embodiment shown.” Ethicon, 93 F.3d at 1582 n.7.
However, we were also careful to point out in that opinion that the applicant “was free
to draft claim[s] broadly (within the limits imposed by the prior art) to exclude the
lockout’s exact location as a limitation of the claimed invention” only because he “did
not consider the precise location of the lockout to be an element of his invention.” Id.
Here, as indicated above, it is clear that Sproule considered the location of the recliner
controls on the console to be an essential element of his invention. Accordingly, his
original disclosure serves to limit the permissible breadth of his later-drafted claims.

10 Similarly, In re Rasmussen does not support Gentry’s position. In that case,

our predecessor court restated the uncontroversial proposition that “a claim may be
broader than the specific embodiment disclosed in a specification.” 650 F.2d at 1215.
However, the court also made clear that “[a]n applicant is entitled to claims as broad
as the prior art and his disclosure will allow.” Id. at 1214 (emphasis added). The
claims at issue in Rasmussen, which were limited to the generic step of “adheringly
applying” one layer to an adjacent layer, satisfied the written description requirement
only because “one skilled in the art who read [the] specification would understand that
it is unimportant how the layers are adhered, so long as they are adhered.” Here, on
the contrary, one skilled in the art would clearly understand that it was not only
important, but essential to Sproule’s invention, for the controls to be on the console.

11 In sum, the cases on which Gentry relies do not stand for the proposition that
an applicant can broaden his claims to the extent that they are effectively bounded
only by the prior art. Rather, they make clear that claims may be no broader than the
supporting disclosure, and therefore that a narrow disclosure will limit claim breadth.
Here, Sproule’s disclosure unambiguously limited the location of the controls to the
console. Accordingly, the district court clearly erred in finding that he was entitled to
claims in which the recliner controls are not located on the console. We therefore
reverse the judgment that claims 1–8, 11, and 16–18, were not shown to be invalid.

Discussion Questions: Gentry Gallery

1. Why Not Enablement? Recall that enablement requires that the specification
teach the PHOSITA how to make and use the invention without “undue
experimentation.” Why didn’t the court simply invalidate Gentry’s claim as not
enabled? What additional information would you need to know in order to judge
whether the claim is enabled?

2. Gentry’s Best Argument. If you were Gentry’s attorney, what is the best
defense you could have offered to save the patent’s validity? How would you have tried
to describe the language in the specification describing the controls on the console?
 210 MASUR & OUELLETTE ⋅ PATENT LAW

3. Sproule’s Inspiration. At some point, Sproule (the inventor) considered

placing the controls somewhere other than the console. When was this? What gave
him the idea? What is the significance of this fact for the case? If Sproule had come to
the idea of placing the controls on the console after the patent was filed, but for
separate reasons, do you think the case would have come out the same way?

4. Claim Amendment. When Sproule decided to amend his claim to permit the
controls to be anywhere on the invention (not just on the console), why did he not
simply amend his specification as well to match the breadth of his claims? What would
have been the downside of taking that approach?

5. The Expansion of Written Description. As we noted at the beginning of this

section, written description originally evolved to police claim amendments introduced
during prosecution. Is there anything special about claim amendments that justifies
limiting the doctrine to that context? Is anything in the doctrine naturally self-
limiting? As the cases below indicate, over time the Federal Circuit has applied the
written description doctrine even where no claim amendment is at issue.

Ariad Pharmaceuticals v. Eli Lilly, 598 F.3d 1336 (Fed. Cir. 2010) (en banc)

Alan D. Lourie, Circuit Judge.

1 Ariad Pharmaceuticals, Inc., Massachusetts Institute of Technology, the

Whitehead Institute for Biomedical Research, and the President and Fellows of
Harvard College (collectively, “Ariad”) brought suit against Eli Lilly & Company
(“Lilly”) in the United States District Court for the District of Massachusetts, alleging
infringement of U.S. Patent 6,410,516 (“the ’516 patent”). After trial, at which a jury
found infringement, but found none of the asserted claims invalid, a panel of this court
reversed the district court’s denial of Lilly’s motion for judgment as a matter of law
(“JMOL”) and held the asserted claims invalid for lack of written description.

2 Ariad petitioned for rehearing en banc, challenging this court’s interpretation

of 35 U.S.C. § 112 as containing a separate written description requirement. Because
of the importance of the issue, we granted Ariad’s petition. We now reaffirm that § 112
contains a written description requirement separate from enablement, and we again
reverse the district court’s denial of JMOL and hold the asserted claims of the ’516
patent invalid for failure to meet the statutory written description requirement.

BACKGROUND

3 The ’516 patent relates to the regulation of gene expression by the

transcription factor NF-κB [nuclear factor kappa B]. The inventors discovered that
NF-κB normally exists in cells as an inactive complex with a protein inhibitor, named
“IκB” (“Inhibitor of kappa B”), and is activated by extracellular stimuli, such as
bacterial-produced lipopolysaccharides, through a series of biochemical reactions that
 UTILITY & DISCLOSURE 211

release it from IκB. Once free of its inhibitor, NF-κB travels into the cell nucleus where
it binds to and activates the transcription of genes containing a NF-κB recognition
site. The activated genes (e.g., certain cytokines), in turn help the body to counteract
the extracellular assault. The production of cytokines can, however, be harmful in
excess. Thus the inventors recognized that artificially interfering with NF-κB activity
could reduce the harmful symptoms of certain diseases, and they filed a patent
application on April 21, 1989, disclosing their discoveries and claiming methods for
regulating cellular responses to external stimuli by reducing NF-κB activity in a cell.

4 Ariad brought suit against Lilly on June 25, 2002, the day the ’516 patent
issued. Ariad alleged infringement of claims 80, 95, 144, and 145 by Lilly’s Evista and
Xigris pharmaceutical products. [Representative claim 80], rewritten to include the
claims from which [it] depend[s], [is] as follows:

80. [A method for modifying effects of external influences on a

eukaryotic cell, which external influences induce NF-κB-mediated
intracellular signaling, the method comprising altering NF-κB activity
in the cells such that NF-κB-mediated effects of external influences are
modified, wherein NF-κB activity in the cell is reduced] wherein
reducing NF-κB activity comprises reducing binding of NF-κB to NF-κB
recognition sites on genes which are transcriptionally regulated by NF-
κB.

The claims are thus genus claims, encompassing the use of all substances that achieve
the desired result of reducing the binding of NF-κB to NF-κB recognition sites.
Furthermore, the claims, although amended during prosecution, use language that
corresponds to language present in the priority application. The specification also
hypothesizes three types of molecules with the potential to reduce NF-κB activity in
cells: decoy, dominantly interfering, and specific inhibitor molecules.

DISCUSSION

I.

A.

5 As in any case involving statutory interpretation, we begin with the language

of the statute itself. Section 112, first paragraph, reads as follows:

The specification shall contain a written description of the

invention, and of the manner and process of making and using it, in
such full, clear, concise, and exact terms as to enable any person
skilled in the art to which it pertains, or with which it is most nearly
connected, to make and use the same, and shall set forth the best
mode contemplated by the inventor of carrying out his invention.
 212 MASUR & OUELLETTE ⋅ PATENT LAW

6 According to Ariad, a plain reading of the statute reveals two components: a

written description (i) of the invention, and (ii) of the manner and process of making
and using it. Yet those two components, goes Ariad’s argument, must be judged by the
final prepositional phrase; both written descriptions must be “in such full, clear,
concise, and exact terms as to enable any person skilled in the art . . . to make and use
the same.”

7 Ariad argues that its interpretation best follows the rule of English grammar
that prepositional phrases (here, “of the invention,” “of the manner and process of
making and using it,” and “in such full, clear, concise, and exact terms”) modify
another word in the sentence (here, “written description”), and that it does not
inexplicably ignore the comma after “making and using it” or sever the “description of
the invention” from the requirement that it be in “full, clear, concise, and exact terms,”
leaving the description without a legal standard.

8 Ariad also argues that earlier versions of the Patent Act support its
interpretation. Specifically, Ariad contends that the first Patent Act, adopted in 1790,
and its immediate successor, adopted in 1793, required a written description of the
invention that accomplished two purposes: (i) to distinguish the invention from the
prior art, and (ii) to enable a person skilled in the art to make and use the invention.6
Ariad then asserts that when Congress assigned the function of defining the invention
to the claims in 1836, Congress amended the written description requirement so that
it served a single purpose: enablement.7

9 Lilly disagrees, arguing that § 112, first paragraph, contains three separate
requirements. Specifically, Lilly parses the statute as follows:

(1) “The specification shall contain a written description of the

invention, and”

(2) “The specification shall contain a written description . . . of the

manner and process of making and using it, in such full, clear, concise,
and exact terms as to enable any person skilled in the art to which it

6 [n.1 in opinion] Section 3 of the 1793 Patent Act provided, in relevant part: “[E]very
inventor, before he can receive a patent shall . . . deliver a written description of his invention,
and of the manner of using, or process of compounding the same, in such full, clear and exact
terms, as to distinguish the same from all other things before known, and to enable any person
skilled in the art or science, of which it is a branch, or with which it is most nearly connected,
to make, compound, and use the same.”
7[n.2 in opinion] Section 6 of the 1836 Patent Act provided, in relevant part: “[B]efore
any inventor shall receive a patent for any such new invention or discovery, he shall deliver a
written description of his invention or discovery, and of the manner and process of making,
constructing, using, and compounding the same, in such full, clear, and exact terms, avoiding
unnecessary prolixity, as to enable any person skilled in the art or science to which it
appertains, or with which it is most nearly connected, to make, construct, compound, and use
the same.”
 UTILITY & DISCLOSURE 213

pertains, or with which it is most nearly connected, to make and use the
same, and”

(3) “The specification . . . shall set forth the best mode contemplated by
the inventor of carrying out the invention.”

10 Lilly argues that Ariad’s construction ignores a long line of judicial precedent
interpreting the statute’s predecessors to contain a separate written description
requirement, an interpretation Congress adopted by reenacting the current language
of § 112, first paragraph, without significant amendment.

11 We agree with Lilly and read the statute to give effect to its language that the
specification “shall contain a written description of the invention” and hold that § 112,
first paragraph, contains two separate description requirements: a “written
description [i] of the invention, and [ii] of the manner and process of making and using
[the invention].” 35 U.S.C. § 112, ¶ 1 (emphasis added).

12 [W]e see nothing in the statute’s language or grammar that unambiguously

dictates that the adequacy of the “written description of the invention” must be
determined solely by whether that description identifies the invention so as to enable
one of skill in the art to make and use it. The prepositional phrase “in such full, clear,
concise, and exact terms as to enable any person skilled in the art . . . to make and use
the same” modifies only “the written description . . . of the manner and process of
making and using [the invention],” as Lilly argues, without violating the rules of
grammar. That the adequacy of the description of the manner and process of making
and using the invention is judged by whether that description enables one skilled in
the art to make and use the same follows from the parallelism of the language.

13 While Ariad agrees there is a requirement to describe the invention, a few

amici appear to suggest that the only description requirement is a requirement to
describe enablement. If Congress had intended enablement to be the sole description
requirement of § 112, first paragraph, the statute would have been written differently.
Specifically, Congress could have written the statute to read, “The specification shall
contain a written description of the invention, in such full, clear, concise, and exact
terms as to enable any person skilled in the art . . . to make and use the same,” or
“The specification shall contain a written description of the manner and process of
making and using the invention, in such full, clear, concise, and exact terms as to
enable any person skilled in the art . . . to make and use the same.” Under the amicis’
construction a portion of the statute—either “and of the manner and process of making
and using it” or “[a written description] of the invention”—becomes surplusage,
violating the rule of statutory construction that Congress does not use unnecessary
words.

B.

14 [Discussion of Supreme Court precedent omitted.]

 214 MASUR & OUELLETTE ⋅ PATENT LAW

C.

15 In addition to the statutory language and Supreme Court precedent supporting

the existence of a written description requirement separate from enablement, stare
decisis impels us to uphold it now. Ariad acknowledges that this has been the law for
over forty years, and to change course now would disrupt the settled expectations of
the inventing community, which has relied on it in drafting and prosecuting patents,
concluding licensing agreements, and rendering validity and infringement opinions.
As the Supreme Court stated in admonishing this court, we “must be cautious before
adopting changes that disrupt the settled expectations of the inventing community.”
Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 772, 739 (2002). If the
law of written description is to be changed, contrary to sound policy and the uniform
holdings of this court, the settled expectations of the inventing and investing
communities, and PTO practice, such a decision would require good reason and would
rest with Congress.

D.

16 [Discussion of prior Court of Claims and Patent Appeals precedent omitted.]

E.

17 In contrast to amended claims, the parties have more divergent views on the
application of a written description requirement to original claims. Ariad argues that
Regents of the University of California v. Eli Lilly & Co., 119 F.3d 1559 (Fed. Cir.
1997), extended the requirement beyond its proper role of policing priority as part of
enablement and transformed it into a heightened and unpredictable general
disclosure requirement in place of enablement. Rather, Ariad argues, the requirement
to describe what the invention is does not apply to original claims because original
claims, as part of the original disclosure, constitute their own written description of
the invention. Thus, according to Ariad, as long as the claim language appears in ipsis
verbis in the specification as filed, the applicant has satisfied the requirement to
provide a written description of the invention.

18 Lilly responds that the written description requirement applies to all claims
and requires that the specification objectively demonstrate that the applicant actually
invented—was in possession of—the claimed subject matter. Lilly argues that § 112
contains no basis for applying a different standard to amended versus original claims
and that applying a separate written description requirement to original claims keeps
inventors from claiming beyond their inventions and thus encourages innovation in
new technological areas by preserving patent protection for actual inventions.

19 Again we agree with Lilly. If it is correct to read § 112, first paragraph, as

containing a requirement to provide a separate written description of the invention,
as we hold here, Ariad provides no principled basis for restricting that requirement to
establishing priority. Certainly nothing in the language of § 112 supports such a
 UTILITY & DISCLOSURE 215

restriction; the statute does not say “The specification shall contain a written
description of the invention for purposes of determining priority.” And although the
issue arises primarily in cases involving priority, Congress has not so limited the
statute, and neither will we.

20 Furthermore, while it is true that original claims are part of the original
specification, In re Gardner, 480 F.2d 879, 879 (C.C.P.A. 1973), that truism fails to
address the question whether original claim language necessarily discloses the subject
matter that it claims. Ariad believes so, arguing that original claims identify whatever
they state, e.g., a perpetual motion machine, leaving only the question whether the
applicant has enabled anyone to make and use such an invention. We disagree that
this is always the case. Although many original claims will satisfy the written
description requirement, certain claims may not. For example, a generic claim may
define the boundaries of a vast genus of chemical compounds, and yet the question
may still remain whether the specification, including original claim language,
demonstrates that the applicant has invented species sufficient to support a claim to
a genus. The problem is especially acute with genus claims that use functional
language to define the boundaries of a claimed genus. In such a case, the functional
claim may simply claim a desired result, and may do so without describing species
that achieve that result. But the specification must demonstrate that the applicant
has made a generic invention that achieves the claimed result and do so by showing
that the applicant has invented species sufficient to support a claim to the
functionally-defined genus.

21 Recognizing this, we held in Eli Lilly that an adequate written description of

a claimed genus requires more than a generic statement of an invention’s boundaries.
119 F.3d at 1568. The patent at issue in Eli Lilly claimed a broad genus of cDNAs
purporting to encode many different insulin molecules, and we held that its generic
claim language to “vertebrate insulin cDNA” or “mammalian insulin cDNA” failed to
describe the claimed genus because it did not distinguish the genus from other
materials in any way except by function, i.e., by what the genes do, and thus provided
“only a definition of a useful result rather than a definition of what achieves that
result.” Id.

22 We held that a sufficient description of a genus instead requires the disclosure

of either a representative number of species falling within the scope of the genus or
structural features common to the members of the genus so that one of skill in the art
can “visualize or recognize” the members of the genus. Id. at 1568–69. We explained
that an adequate written description requires a precise definition, such as by
structure, formula, chemical name, physical properties, or other properties, of species
falling within the genus sufficient to distinguish the genus from other materials. Id.
at 1568. We have also held that functional claim language can meet the written
description requirement when the art has established a correlation between structure
and function. See Enzo, 323 F.3d at 964 (quoting 66 Fed. Reg. 1099 (Jan. 5, 2001)).
But merely drawing a fence around the outer limits of a purported genus is not an
 216 MASUR & OUELLETTE ⋅ PATENT LAW

adequate substitute for describing a variety of materials constituting the genus and
showing that one has invented a genus and not just a species.

23 In fact, this case similarly illustrates the problem of generic claims. The claims
here recite methods encompassing a genus of materials achieving a stated useful
result, i.e., reducing NF-κB binding to NF-κB recognition sites in response to external
influences. But the specification does not disclose a variety of species that accomplish
the result. Thus, as indicated infra, that specification fails to meet the written
description requirement by describing only a generic invention that it purports to
claim.

F.

24 Since its inception, this court has consistently held that § 112, first paragraph,
contains a written description requirement separate from enablement, and we have
articulated a “fairly uniform standard,” which we now affirm. Specifically, the
description must “clearly allow persons of ordinary skill in the art to recognize that
[the inventor] invented what is claimed.” In other words, the test for sufficiency is
whether the disclosure of the application relied upon reasonably conveys to those
skilled in the art that the inventor had possession of the claimed subject matter as of
the filing date.

25 The term “possession,” however, has never been very enlightening. It implies
that as long as one can produce records documenting a written description of a claimed
invention, one can show possession. But the hallmark of written description is
disclosure. Thus, “possession as shown in the disclosure” is a more complete
formulation. Yet whatever the specific articulation, the test requires an objective
inquiry into the four corners of the specification from the perspective of a person of
ordinary skill in the art. Based on that inquiry, the specification must describe an
invention understandable to that skilled artisan and show that the inventor actually
invented the invention claimed.

26 This inquiry, as we have long held, is a question of fact. There are, however, a
few broad principles that hold true across all cases. We have made clear that the
written description requirement does not demand either examples or an actual
reduction to practice; a constructive reduction to practice that in a definite way
identifies the claimed invention can satisfy the written description requirement.
Conversely, we have repeatedly stated that actual “possession” or reduction to
practice outside of the specification is not enough. Rather, as stated above, it is the
specification itself that must demonstrate possession. And while the description
requirement does not demand any particular form of disclosure, a description that
merely renders the invention obvious does not satisfy the requirement.

27 We also reject the characterization, cited by Ariad, of the court’s written

description doctrine as a “super enablement” standard for chemical and biotechnology
inventions. The doctrine never created a heightened requirement to provide a
 UTILITY & DISCLOSURE 217

nucleotide-by-nucleotide recitation of the entire genus of claimed genetic material; it

has always expressly permitted the disclosure of structural features common to the
members of the genus.

28 Perhaps there is little difference in some fields between describing an

invention and enabling one to make and use it, but that is not always true of certain
inventions, including chemical and chemical-like inventions. Thus, although written
description and enablement often rise and fall together, requiring a written
description of the invention plays a vital role in curtailing claims that do not require
undue experimentation to make and use, and thus satisfy enablement, but that have
not been invented, and thus cannot be described. For example, a propyl or butyl
compound may be made by a process analogous to a disclosed methyl compound, but,
in the absence of a statement that the inventor invented propyl and butyl compounds,
such compounds have not been described and are not entitled to a patent. See In re
DiLeone, 58 C.C.P.A. 925 (1971) (“[C]onsider the case where the specification
discusses only compound A and contains no broadening language of any kind. This
might very well enable one skilled in the art to make and use compounds B and C; yet
the class consisting of A, B and C has not been described.”).

29 The written description requirement also ensures that when a patent claims a
genus by its function or result, the specification recites sufficient materials to
accomplish that function—a problem that is particularly acute in the biological arts.8
See Guidelines for Examination of Patent Applications Under the 35 U.S.C. 112, 1,
“Written Description” Requirement, 66 Fed. Reg. 1099, 1105–06 (Jan. 5, 2001). This
situation arose not only in Eli Lilly but again in University of Rochester v. G.D. Searle
& Co., Inc., 358 F.3d 916 (Fed. Cir. 2004). In Rochester, we held invalid claims directed
to a method of selectively inhibiting the COX–2 enzyme by administering a non-
steroidal compound that selectively inhibits the COX–2 enzyme. Id. at 918. We
reasoned that because the specification did not describe any specific compound
capable of performing the claimed method and the skilled artisan would not be able
to identify any such compound based on the specification’s function description, the
specification did not provide an adequate written description of the claimed invention.
Id. at 927–28. Such claims merely recite a description of the problem to be solved while
claiming all solutions to it and, as in Eli Lilly and Ariad’s claims, cover any compound
later actually invented and determined to fall within the claim’s functional
boundaries—leaving it to the pharmaceutical industry to complete an unfinished
invention.

8 [n.5 in opinion] The record does not reflect how often the PTO rejects claims as
enabled but not described, but the government believes the number to be high. At least one
example has made it to this court in recent years, In re Alonso, in which the PTO found claims
to a method of treating a tumor by administering an effective amount of an antibody that
recognizes the tumor enabled but, as we affirmed, not adequately described. 545 F.3d 1015,
1021–22, 1022 n.6. (Fed. Cir. 2008).
 218 MASUR & OUELLETTE ⋅ PATENT LAW

30 That research hypotheses do not qualify for patent protection possibly results
in some loss of incentive, although Ariad presents no evidence of any discernable
impact on the pace of innovation or the number of patents obtained by universities.
But claims to research plans also impose costs on downstream research, discouraging
later invention. The goal is to get the right balance, and the written description
doctrine does so by giving the incentive to actual invention and not “attempt[s] to
preempt the future before it has arrived.” Fiers v. Revel, 984 F.2d 1164, 1171 (Fed.
Cir. 1993). As this court has repeatedly stated, the purpose of the written description
requirement is to “ensure that the scope of the right to exclude, as set forth in the
claims, does not overreach the scope of the inventor’s contribution to the field of art
as described in the patent specification.” Rochester, 358 F.3d at 920. It is part of the
quid pro quo of the patent grant and ensures that the public receives a meaningful
disclosure in exchange for being excluded from practicing an invention for a period of
time.

II.

31 The ’516 patent must adequately describe the claimed methods for reducing
NF-κB activity, including adequate description of the molecules that Ariad admits are
necessary to perform the methods. The specification of the ’516 patent hypothesizes
three classes of molecules potentially capable of reducing NF-κB activity: specific
inhibitors, dominantly interfering molecules, and decoy molecules. We review the
specification’s disclosure of each in turn to determine whether there is substantial
evidence to support the jury’s verdict that the written description evidenced that the
inventor possessed the claimed invention.

32 Specific inhibitors are molecules that are “able to block (reduce or eliminate)
NF-κB binding” to DNA in the nucleus. ’516 patent col.37 ll.44–45. The only example
of a specific inhibitor given in the specification is I-κB, a naturally occurring molecule
whose function is to hold NF-κB in an inactive state until the cell receives certain
external influences. Nearly all of Ariad’s evidence regarding the disclosure of I-κB
relies upon figure 43. Ariad’s expert, Dr. Kadesch, testified that figure 43 discloses the
sequence of DNA that encodes I-κB and relied on this disclosure with regard to his
opinion that the written description requirement was satisfied by disclosure of specific
inhibitor molecules. But as Ariad admits, figure 43 was not disclosed until 1991.
Because figure 43 was not in the 1989 application, neither it nor Dr. Kadesch’s
testimony regarding it can offer substantial evidence for the jury determination. The
only other testimony of Dr. Kadesch with regard to I-κB was that it existed in 1989
and that one of ordinary skill could through experimentation isolate natural I-κB. In
the context of this invention, a vague functional description and an invitation for
further research does not constitute written disclosure of a specific inhibitor.

33 Dominantly interfering molecules are “a truncated form of the NF-κB

molecule.” ’516 patent col.38 l.11. The specification provides no example molecules of
this class. Moreover, the specification acknowledges that dominantly interfering
 UTILITY & DISCLOSURE 219

molecules can work only “if the DNA binding domain and the DNA polymerase domain
of NF-κB are spatially distinct in the molecule.” Id. at col.38 ll.9–10 (emphasis added).
The jury also heard Dr. Kadesch’s testimony that “it is a fair representation” that “the
’516 patent itself doesn’t disclose in its text that the DNA binding domain and the
RNA preliminary activating domain of NF-κB are, in fact, separable or spatially
distinct.” Considering that the inventors of the ’516 patent discovered NF-κB, if they
did not know whether the two domains are distinct, one of ordinary skill in the art
was at best equally ignorant. Perhaps one of ordinary skill could discover this
information, but this does not alter our conclusion that the description of the
dominantly interfering molecules “just represents a wish, or arguably a plan” for
future research. Nor is it sufficient, as Ariad argues, that “skilled workers actually
practiced this teaching soon after the 1989 application was filed.”

34 Decoy molecules are “designed to mimic a region of the gene whose expression
would normally be induced by NF-κB. In this case, NF-κB would bind the decoy, and
thus, not be available to bind its natural target.” ’516 patent col.37 ll.51–54. Like the
other two classes of molecules, decoy molecules are presented hypothetically, but
unlike the other two classes of molecules, the specification proposes example
structures for decoy molecules. As Dr. Kadesch explained, because the specification
discloses specific example sequences, there is little doubt that the specification
adequately described the actual molecules to one of ordinary skill in the art. Yet this
does not answer the question whether the specification adequately describes using
those molecules to reduce NF-κB activity. The full extent of the specification’s
disclosure of a method that reduces NF-κB activity using decoy molecules is that NF-
κB “would bind the decoy” and thereby, “negative regulation can be effected.” Id. at
col.37 ll.50–54. Prophetic examples are routinely used in the chemical arts, and they
certainly can be sufficient to satisfy the written description requirement. But this
disclosure is not so much an “example” as it is a mere mention of a desired outcome.
As Dr. Latchman pointed out, there is no descriptive link between the table of decoy
molecules and reducing NF–κB activity.

35 Whatever thin thread of support a jury might find in the decoy-molecule

hypothetical simply cannot bear the weight of the vast scope of these generic claims.
Here, the specification at best describes decoy molecule structures and hypothesizes
with no accompanying description that they could be used to reduce NF-κB activity.
Yet the asserted claims are far broader. We therefore conclude that the jury lacked
substantial evidence for its verdict that the asserted claims were supported by
adequate written description, and thus hold the asserted claims invalid.
 220 MASUR & OUELLETTE ⋅ PATENT LAW

Idenix Pharmaceuticals v. Gilead Sciences, 941 F.3d 1149 (Fed. Cir. 2019)

1 [The previous casebook section on enablement contained an edited portion of

this opinion in which the Federal Circuit affirmed the district court’s grant of
judgment as a matter of law (JMOL) that patent 7,608,597 is invalid for lack of
enablement. In this portion of the opinion, the Federal Circuit reverses the district
court’s denial of JMOL on written description and holds that the patent is also invalid
on this basis.]

2 We separately address the district court’s denial of JMOL on the issue of

written description. The Patent Act contains a written description requirement
distinct from the enablement requirement. 35 U.S.C. § 112; see Ariad Pharm., Inc. v.
Eli Lilly & Co., 598 F.3d 1336, 1340 (Fed. Cir. 2010) (en banc). To fulfill the written
description requirement, a patent owner “must convey with reasonable clarity to those
skilled in the art that, as of the filing date sought, he or she was in possession of the
invention, and demonstrate that by disclosure in the specification of the patent.”
Carnegie Mellon Univ. v. Hoffmann-La Roche Inc., 541 F.3d 1115, 1122 (Fed. Cir.
2008). That test “requires an objective inquiry into the four corners of the specification
from the perspective of a person of ordinary skill in the art.” Ariad, 598 F.3d at 1351.

3 The question in this case is whether the ’597 patent demonstrates that the
inventor was in possession of those 2'-methyl-up nucleosides that fall within the
boundaries of the claim (i.e., are effective against HCV), but are not encompassed by
the explicit formulas or examples provided in the specification. The parties focus in
particular on whether the specification demonstrates possession of the 2'-methyl-up
2'-fluoro-down nucleosides that are the basis for Gilead’s accused product.

4 There is no dispute that neither the ’597 patent nor any of its predecessor
applications discloses a 2'-methyl-up 2'-fluoro-down nucleoside, including in any
formulas or examples. Nor is there any dispute as to why. Idenix only came up with
the methyl up fluoro down embodiment a year or so after the application was filed.
Idenix argues instead that its claims are directed to the entire genus of 2'-methyl-up
compounds for treating HCV, and are enabled by the disclosure of a number of
examples, without needing to disclose each species of nucleoside.

5 Idenix is correct that generally a genus can be sufficiently disclosed by “either

a representative number of species falling within the scope of the genus or structural
features common to the members of the genus so that one of skill in the art can
visualize or recognize the members of the genus.” Ariad, 598 F.3d at 1350. We have
alternatively described this inquiry as “looking for blaze marks which single out
particular trees” in a forest, rather than simply “pointing to trees.” See Fujikawa v.
Wattanasin, 93 F.3d 1559, 1570 (Fed. Cir. 1996).

6 In this case, we hold that the ’597 patent is invalid for lack of written
description, as it fails to provide sufficient blaze marks to direct a POSA to the specific
subset of 2'-methyl-up nucleosides that are effective in treating HCV. The patent
 UTILITY & DISCLOSURE 221

provides eighteen position-by-position formulas describing “principal embodiments”

of compounds that may treat HCV. However, the specification provides no indication
that any nucleosides outside of those disclosed in its formulas could be effective to
treat HCV—much less any indication as to which of those undisclosed nucleosides
would be effective. “A written description of an invention involving a chemical genus,
like a description of a chemical species, ‘requires a precise definition, such as by
structure, formula, [or] chemical name’ of the claimed subject matter sufficient to
distinguish it from other materials.” Bos. Sci. Corp. v. Johnson & Johnson, 647 F.3d
1353, 1363 (Fed. Cir. 2011) (quoting Regents of the Univ. of Cal. v. Eli Lilly & Co., 119
F.3d 1559, 1568 (Fed. Cir. 1997)). The ’597 patent provides adequate written
description for the compounds within its formulas. The specification, however,
provides no method of distinguishing effective from ineffective compounds for the
compounds reaching beyond the formulas disclosed in the ’597 patent.

7 Idenix argues that it provides “abundant traditional blazemarks for the

claims—working examples, formulas, data, synthesis routes, and the target.” Each of
these suffer from the same flaw. They provide lists or examples of supposedly effective
nucleosides, but do not explain what makes them effective, or why. As a result, a
POSA is deprived of any meaningful guidance into what compounds beyond the
examples and formulas, if any, would provide the same result. In the absence of that
guidance, the listed examples and formulas cannot provide adequate written
description support for undisclosed nucleosides that also happens to treat HCV. The
written description requirement specifically defends against such attempts to “cover
any compound later actually invented and determined to fall within the claim’s
functional boundaries.” See Ariad, 598 F.3d at 1353.

8 We are mindful of Ariad’s caution that written description does not require “a
nucleotide-by-nucleotide recitation of the entire genus.” Id. at 1352. The purpose of
that rule is to allow relatively few representative examples or formulas to support a
claim on a structurally similar genus. It does not extend to this case, where the
specification lists tens or hundreds of thousands of possible nucleosides, substituent-
by-substituent, with dozens of distinct stereochemical structures, and yet the
compound in question is conspicuously absent.

9 The absence of 2'-fluoro-down is indeed conspicuous. Seven of the provided

formulas permit 2'-methyl-up. All seven formulas explicitly list fluorine as a
possibility at other positions, including 2'-up. Yet not one of them includes fluorine at
2'-down, despite each listing more than a dozen possible substituents at that position.
This is true even though the formulas include every other recited halogen at both
positions.

10 Further, to the extent Idenix argues that, although not disclosed, a POSA
would have known to include fluorine at 2'-down based on its similarities to other
halogens, that is insufficient for written description. “[A] description that merely
 222 MASUR & OUELLETTE ⋅ PATENT LAW

renders the invention obvious does not satisfy” the written description requirement.
Ariad, 598 F.3d at 1352.

11 We therefore disagree with Idenix’s characterization that “the specification

plainly embraces the use of the [2'-fluoro-down] embodiment.” In light of the
conspicuous absence of that compound, a POSA would not “visualize or recognize the
members of the genus” as including 2'-fluoro-down, and the specification could not
demonstrate to a POSA that the inventor had possession of that embodiment at the
time of filing. Ariad, 598 F.3d at 1350.

Applying the Possession Test: Excerpts from MPEP § 2163

1 [The following excerpts from MPEP § 2163 are from guidance for applying the
written description doctrine to original claims; the MPEP offers additional guidance
for evaluating new or amended claims. As MPEP § 2163 emphasizes, these guidelines
“do not constitute substantive rulemaking and hence do not have the force and effect
of law,” but they reflect the USPTO’s effort to summarize relevant caselaw.]

2 Whether the specification shows that the applicant was in possession of the
claimed invention is not a single, simple determination, but rather is a factual
determination reached by considering a number of factors. Factors to be considered in
determining whether there is sufficient evidence of possession include the level of skill
and knowledge in the art, partial structure, physical and/or chemical properties,
functional characteristics alone or coupled with a known or disclosed correlation
between structure and function, and the method of making the claimed invention.
Disclosure of any combination of such identifying characteristics that distinguish the
claimed invention from other materials and would lead one of skill in the art to the
conclusion that the applicant was in possession of the claimed species is sufficient.

3 In most technologies which are mature, and wherein the knowledge and level
of skill in the art is high, a written description question should not be raised for claims
present in the application when originally filed, even if the specification discloses only
a method of making the invention and the function of the invention. In contrast, for
inventions in emerging and unpredictable technologies, or for inventions
characterized by factors not reasonably predictable which are known to one of
ordinary skill in the art, more evidence is required to show possession.

4 The written description requirement for a claimed genus may be satisfied

through sufficient description of a representative number of species by actual
reduction to practice, reduction to drawings, or by disclosure of relevant, identifying
characteristics, i.e., structure or other physical and/or chemical properties, by
functional characteristics coupled with a known or disclosed correlation between
function and structure, or by a combination of such identifying characteristics,
sufficient to show the applicant was in possession of the claimed genus.
 UTILITY & DISCLOSURE 223

5 A “representative number of species” means that the species which are

adequately described are representative of the entire genus. Thus, when there is
substantial variation within the genus, one must describe a sufficient variety of
species to reflect the variation within the genus. The disclosure of only one species
encompassed within a genus adequately describes a claim directed to that genus only
if the disclosure indicates that the patentee has invented species sufficient to
constitute the genus. “A patentee will not be deemed to have invented species
sufficient to constitute the genus by virtue of having disclosed a single species when
. . . the evidence indicates ordinary artisans could not predict the operability in the
invention of any species other than the one disclosed.” In re Curtis, 354 F.3d 1347
(Fed. Cir. 2004).

6 The Federal Circuit has explained that a specification cannot always support
expansive claim language and satisfy the requirements of 35 U.S.C. § 112 “merely by
clearly describing one embodiment of the thing claimed.” LizardTech v. Earth
Resource Mapping, Inc., 424 F.3d 1336 (Fed. Cir. 2005). The issue is whether a person
skilled in the art would understand the applicant to have invented, and been in
possession of, the invention as broadly claimed. In LizardTech, claims to a generic
method of making a seamless discrete wavelet transformation (DWT) were held
invalid because the specification taught only one particular method for making a
seamless DWT and there was no evidence that the specification contemplated a more
generic method.

7 For inventions in an unpredictable art, adequate written description of a genus

which embraces widely variant species cannot be achieved by disclosing only one
species within the genus. Instead, the disclosure must adequately reflect the
structural diversity of the claimed genus, either through the disclosure of sufficient
species that are “representative of the full variety or scope of the genus,” or by the
establishment of “a reasonable structure-function correlation.” Such correlations may
be established “by the inventor as described in the specification,” or they may be
“known in the art at the time of the filing date.” AbbVie Deutschland GmbH v. Janssen
Biotech, Inc., 759 F.3d 1285 (Fed. Cir. 2014).

Discussion Questions: Written Description

1. More on the Expansion of Written Description. As we discussed above, the

written description doctrine originally evolved to focus on opportunistic claim
amendments, but it has expanded in cases like Ariad and Idenix to include situations
where applicants claimed too broadly in their original applications. Are you convinced
by the argument in Ariad that it is necessary to apply a robust written description
requirement that is distinct from enablement in cases where the claims were not
amended? In both Gentry-type cases and Ariad-type cases, the doctrinal test is the
same: Does the specification convey to the PHOSITA that the inventor possessed the
full scope of the claim as of the filing date? In cases like Gentry, lack of possession is
224 MASUR & OUELLETTE ⋅ PATENT LAW

demonstrated by amendment of the claim to cover inventions the inventor did not
seem to have in mind at the time of filing. How does the “possession” test work in
Ariad and Idenix? How would a challenger to the patent demonstrate that the
inventor lacked possession?

Note that the MPEP states that “a written description question should not be
raised for claims present in the application when originally filed” with respect to
“technologies which are mature,” whereas it is appropriate to apply the written
description requirement to claims present in the original application in the context of
new and emerging technologies. Why do you think that is? Does it shed light on the
more general question of whether the written description requirement should remain
applicable to claims present in the original application, and why the courts believe
that it does?

2. Early-Stage Biomedical Inventions. Many of the important Ariad-type

written description cases—including Ariad, Idenix, and Regents of the University of
California v. Eli Lilly & Co., 119 F.3d 1559 (Fed. Cir. 1997)—have involved early-
stage biomedical inventions. Is there something special about chemistry and
biotechnology that makes it more difficult for inventors in these fields to demonstrate
possession of broad claims at the time of filing? Is it relevant that the inventions at
issue in these cases often involve research conducted at universities? Unlike typical
pharmaceutical patent infringement cases, in which a brand-name manufacturer of a
biomedical product asserts patents to prevent generic competitors from entering the
market, these cases all involve patent assertion against brand-name manufacturers.
(Remember that brand-name manufacturers are firms that are typically in the
business of researching and developing new drugs and then patenting them; generic
firms do not conduct independent research and typically enter the market after the
patent on a brand-name drug has expired or is invalid.) Can you think of reasons why
so many of these cases involve the assertion of patents based on university research
against brand-name pharmaceutical manufacturers? Do you think that affects how
courts view these cases?

3. Enough Species to Support a Genus. The MPEP notes repeatedly that the
description of a single species is not enough to support a claim to a genus unless the
single species is representative of the full genus. Instead, the specification must
“adequately reflect the structural diversity of the claimed genus” through “the
disclosure of sufficient species that are ‘representative of the full variety or scope of
the genus.’” What does this mean with respect to a claim for a very large genus? Or
how about a genus in which not all of the species are operative?

For instance, imagine a claim that would cover any operable member of a genus
of thousands of structurally similar chemical compounds. Suppose that only
approximately 10% of the species of that genus are operable. Someone skilled in the
art could quickly and easily identify a handful of operable species, and any given
species could be tested to determine whether it is operable relatively quickly.
 UTILITY & DISCLOSURE 225

However, testing the entire genus to determine which of the many species are operable
and which are not would be tremendously time-consuming and expensive. Should this
claim be patentable? In other words, is it enough if someone skilled in the art could
determine a substantial number of operative species, more than enough to make the
invention work for its intended purpose? Or is it necessary for patentability that
someone skilled in the art be able to determine the precise boundaries of the genus,
including which species are included and not included? For an argument that claims
of this sort should be patentable, see Dmitry Karshtedt, Mark A. Lemley & Sean B.
Seymore, The Death of the Genus Claim, 35 Harv. J.L. & Tech. 1 (2021).

Practice Problems: Written Description

Do you think any of the claims below are invalid for lack of written description?
What about lack of enablement or utility? These are not simplified cases—the facts
and claims are drawn from recent Federal Circuit cases, some of which involve
complex technologies—but you now have the doctrinal tools to tackle them.

1. The claim at issue, which was added during reexamination, is directed to a

method for processing debit purchase transactions, with numerous steps that include
“entering a general authorization code,” “entering a customer authorization code,” and
“entering a clerk authorization code.” The specification provides numerous examples
of the invention that involve entering authorization codes, but no example includes
all three authorization codes. See Stored Value Solutions v. Card Activation Techs.,
499 F. App’x 5 (Fed. Cir. 2012).

2. The claims at issue recite a method of treating restenosis, the renarrowing

of an artery. For example:

A method of treating restenosis in a mammal . . . which comprises

administering an antirestenosis effective amount of rapamycin . . . .

“Rapamycin” is a genus that, in this case, includes tens of thousands of chemical

compounds, most of which have not been synthesized. Synthesizing a species and
testing it for efficacy against restenosis each require lengthy experiments. The
specification discloses a rapamycin species called sirolimus, which is naturally
produced by a bacterium, and it discloses in vitro and in vivo test data showing that
sirolimus has the desired antirestenosis effect. The defendants sell a different species
of rapamycin that also has an antirestenosis effect. See Wyeth & Cordis Corp. v. Abbott
Laboratories, 720 F.3d 1380 (Fed. Cir. 2013).

3. The claims are directed to the chemical compound dutasteride, which has
medical uses such as treating enlarged prostate glands. For example:

[Dutasteride] or a pharmaceutically acceptable solvate thereof.

226 MASUR & OUELLETTE ⋅ PATENT LAW

The specification defines a “solvate” by its structure—a complex of dutasteride

molecules and molecules from a liquid “solvent”—as well as by the process of creating
that structure—dissolving dutasteride in the solvent. The universe of solvents
thought to be pharmaceutically acceptable (i.e., suitable for administering to patients)
was well known and relatively small. The patent provides one example of forming a
solvate by dissolving dutasteride in liquid propylene glycol. See GlaxoSmithKline LLC
v. Banner Pharmacaps, Inc., 744 F.3d 725 (Fed. Cir. 2014).

4. The patented technology is a “handguard” system for attaching ancillary

devices like laser systems to a rifle barrel without damaging the barrel. The
specification discloses that the handguard system, surrounding the barrel, is
supported by two points: the “receiver sleeve” and the “barrel nut.” The specification
also discloses an invention where the receiver sleeve provides complete support for
the handguard. The patentee obtained a reissue patent claiming a handguard system
supported only at the barrel nut. See Atlantic Research Marketing Systems, Inc. v.
Troy, 659 F.3d 1345 (Fed. Cir. 2011).

Note on Distinguishing Utility, Enablement, and Written Description

By now, you may be wondering about how best to understand the distinction
between enablement, written description, and utility. If the relationship (and
distinctions) between these doctrines seem confusing or unclear, do not despair! You
are not alone. The Federal Circuit devoted a substantial portion of its Ariad opinion
to explaining the difference, and that is hardly the last word on the subject. Note the
MPEP’s discussion above, with respect to written description, of the relationship
between a claim to a genus and a specification that discloses one or more species. That
analysis is not much different than the analysis one would use for enablement. If you
had read those MPEP paragraphs without knowing whether the MPEP was
discussing enablement or written description, it may have been difficult or impossible
to guess which doctrine it was referring to.

Here is a very simple formulation for understanding the difference between

these doctrines: Written description requires that you describe the thing you are
trying to claim with specificity, such that you can prove that you actually knew what
you were inventing and are now patenting. Enablement requires that you teach
someone how to make and use the thing. Utility requires that you show that the thing
is useful. In this respect, the best way to understand Gentry is that the inventor never
described the thing he was trying to patent—namely, dual recliners with the controls
somewhere other than the console—in the specification. This is why that claim fails
for lack of written description. But it could very well be that a PHOSITA would know
how to construct dual recliners with controls somewhere other than the console—
maybe the art of recliner construction is well understood?—even if the specification
does not describe that embodiment. That is why the claim was not invalid for lack of
enablement.
 UTILITY & DISCLOSURE 227

Let’s explore this point further with some hypothetical claims. Suppose an
inventor claims “treating cancer with a compound selected from set X” where X is a
list of 10,000 compounds. The specification explicitly lists all 10,000 compounds, but
it is not necessarily the case that any given compound in the set will actually treat
cancer. This area of technology is unpredictable, and a PHOSITA cannot know
whether a particular compound from the list will treat cancer without first testing it
in a process that involves undue experimentation. It might be that a few thousand of
the compounds will treat cancer, or a few dozen of them, or none. Is this claim invalid,
and if so, under what doctrine?

For starters, the claim is invalid for lack of utility under the logic of In re ’318,
because the inventor has not demonstrated that the claim is useful the time it was
filed. Without knowing for certain whether even a single compound will treat cancer,
there is no demonstrated utility. If there were evidence that most of the compounds
would be effective at treating cancer due to some common structural feature, then the
patent would have demonstrated utility. But as described, it falls short on this
dimension.

The claim is also invalid for lack of enablement because (by hypothesis) it
would require undue experimentation on the part of a PHOSITA to determine which
embodiments work and don’t work. This is a canonical example of having invented a
species and trying to claim the genus, as in the Incandescent Lamp case. If, however,
a machine existed that could manufacture and screen all 10,000 compounds for
efficacy against cancer in a single day, then it would no longer require undue
experimentation to determine which do and do not work. Accordingly, the claim would
be enabled.

Finally, the claim would also be invalid for lack of written description. The
invention is claimed in functional terms: the claim is for treating cancer with any
compounds from set X that can be used to treat cancer. This leaves open the question
of which compounds actually treat cancer and which do not. Recall that written
description requires the inventor to describe the thing that she is attempting to claim.
In order to successfully describe the thing, you have to describe the boundary between
what is the thing and what is not the thing. The problem for this inventor is that the
claim might actually include only a few species in the 10,000-species genus (set X),
and if the inventor hasn’t explained which species are actually included in the claim
and which are not, then she has not successfully identified the thing she is trying to
claim. By way of even more extreme illustration, imagine claiming “treating cancer
with any chemical known to humans that effectively treats cancer,” and then listing
all chemicals known to humans in the specification. It would be implausible to argue
that the patent describes the thing it is claiming with specificity, as required by
written description doctrine.

With this in mind, consider the three types of molecules at issue in Ariad:
specific inhibitors, dominantly interfering molecules, and decoy molecules. Suppose
228 MASUR & OUELLETTE ⋅ PATENT LAW

that instead of claiming all methods for reducing NF-κB activity, the Ariad patent had
separately claimed the use of each of these types of molecules. Could written
description still be used to reject each of those hypothetical claims? What about
enablement and utility?

There is an argument that a claim using the decoy molecules would have
satisfied the written description requirement. As Ariad explains, the patent
specification did describe the decoy molecules by structure, formula, or physical
properties. By disclosing the decoy molecules, the specification necessarily disclosed
reducing NF-κB activity with the decoy molecules, because the means of that
reduction is simply to administer the decoy molecules to a person. Where the
specification failed is that it did not provide any evidence that administering decoy
molecules would actually reduce NF-κB activity. That constitutes a failure to satisfy
the utility requirement. It might also constitute a lack of enablement, depending on
whether the specification adequately disclosed how to produce the decoy molecules.

Now consider how enablement and written description interact with

“comprising” claims. Imagine a claim for a chair, as follows:

1. An object for supporting a human body, comprising a substantially

flat surface sized to accommodate a human posterior, and three legs
supporting said surface.

(This example is borrowed from Jeffrey A. Lefstin, The Formal Structure of Patent
Law and the Limits of Enablement, 23 Berkeley Tech. L.J. 1141, 1169 (2008).) Imagine
that the specification describes how to make a three-legged wooden stool, 1 foot in
diameter and 1 foot tall.

This claim is drafted broadly enough to cover stools with more than three legs,
chairs with backs, and non-wooden stools/chairs. For that matter, if someone
constructed a chair with three legs that had a seat-warmer powered by a cold fusion
reactor, it would still infringe this claim. Can a claim that is broad enough to cover a
chair with a cold fusion reactor possibly be enabled by a specification that only
mentions wooden stools?

The answer is yes, and the reason is that the law of enablement does not
require the inventor to enable “unclaimed elements”—namely, those elements that
are not mentioned in the claim (but could be part of an infringing device via the
“comprising” term). See Matthew’s Annotated Patent Digest § 20:48 (“While the
disclosure must enable the practice of the claimed invention, disclosure of unclaimed
aspects of the invention is generally not required.”); id. § 22:34 (“The written-
description requirement generally does not require a description of unclaimed aspects
of the invention, unless those aspects are critical to the claimed invention.”).

This may seem like an odd rule, but it is inherent to the idea of allowing the
“comprising” transition word to capture future inventions that have additional
 UTILITY & DISCLOSURE 229

elements. If an inventor had to enable every conceivable permutation of an invention

every time she used the word “comprising,” that word would simply no longer be
useable. Some challenger would always be able to imagine a variant on the patented
invention that includes an element the inventor did not enable (“It’s a Swiffer with a
nuclear reactor!”) and thereby invalidate the claim. Perhaps, then, the issue is that
the word “comprising” is too powerful. Maybe this claim for a three-legged stool
shouldn’t cover a much more advanced invention that uses cold fusion. That argument
has force, but it would represent a sea change from a doctrine that has always
permitted broad, pioneering patents that cover both early embodiments of an
invention and more advanced later ones that depend on the pioneering work. And
without the word “comprising,” a subsequent inventor could always add an irrelevant
additional feature and evade the patent.9 In any event, the law on this point is
relatively clear.

So now suppose these are the claims:

1. An object for supporting a human body, comprising a substantially

flat surface sized to accommodate a human posterior, and three legs
supporting said surface.

2. The object of claim 1, further comprising a seat warmer powered by

nuclear fusion.

Imagine that the specification still includes just the single embodiment, a
three-legged wooden stool.

Are there § 112 problems with any of these claims? Claim 2 is surely invalid
for lack of enablement, and it might also be invalid for lack of written description
unless the claim was part of the original application (in which case the claim language
itself might demonstrate possession at the time of filing).

How about claim 1? Claim 2 is necessarily narrower than claim 1, because it is

a dependent claim. If the patent does not enable claim 2, the narrower claim, then
how could it possibly enable claim 1? Or, put in reverse, if claim 1 (the broader claim)
is enabled, then must it not be the case that claim 2 (the narrower claim) is also
enabled? Indeed, the USPTO has taken exactly this position and treated as axiomatic
the idea that if a broader claim is enabled, the narrower claim must be as well. Ex
parte Forstova, No. 1998-0667, 2002 WL 32349992 3 (B.P.A.I. Apr. 11, 2002).

As you have probably realized, this rule of enablement runs headlong into the
rule (described above) that an inventor need not enable unclaimed elements.
See Matthew’s Annotated Patent Digest § 20:45.75 (“This proposition—if the
dependent claim is not enabled, the independent claim must also not be enabled—

9 Enterprising students who have read ahead may realize that the doctrine of

equivalents would be an alternative means of capturing subsequent inventions that differ only
trivially, but that doctrine would then raise the same sorts of enablement questions.
230 MASUR & OUELLETTE ⋅ PATENT LAW

may, in some instances, be in tension with another aspect of enablement law, namely,
that only one mode of an invention needs to be enabled in a manner that permits one
of skill in the art to practice the full scope of the claimed invention without undue
experimentation.”). One of these two rules has to give.

The rule that should give is the one that if the dependent claim is not enabled,
the independent claim is not enabled either. As we explained above, there is a strong
reason, grounded in patent policy, for the rule that unclaimed elements need not be
enabled: the alternative would be to eliminate the word “comprising” from the lexicon
and render patent claims much weaker. The enablement rule about dependent claims,
by contrast, is a pure formalism that makes logical sense given the structure of claims
but leads to absurd results. It is clear that claim 1 would be valid without claim 2;
why should the addition of claim 2 all of a sudden render claim 1 invalid? It’s not as
if claim 2 has changed either the meaning of claim 1 or the content of the specification.
For this reason, we believe that the USPTO should simply let go of the rule that
invalidating a dependent claim for lack of enablement necessarily means invalidating
its independent claim. Each claim should be judged on its own merit, and the patentee
need not enable unclaimed elements.
 DEFINITENESS & FUNCTIONAL CLAIMING 231

5. Definiteness and Functional Claiming

The previous chapter described the patentability requirements of § 112(a),
which ensure that the claims are commensurate in scope with the specification. In
this chapter, we turn to § 112(b), which requires patent claims to be sufficiently
definite that a PHOSITA can understand what they cover:

35 U.S.C. § 112(b)

The specification shall conclude with one or more claims particularly

pointing out and distinctly claiming the subject matter which the
inventor or a joint inventor regards as the invention.

Any claim that fails to satisfy this requirement is invalid as indefinite. As with
§ 112(a), pre-AIA claims are governed by the old § 112, ¶ 2 rather than § 112(b), but
there are no substantive differences, so we focus on § 112(b) for simplicity.

The policy tradeoff embedded in § 112(b) is straightforward: Clearer claims

provide better notice to others of what they cover, allowing competitors to more easily
determine whether they are infringing and preventing patent applicants from
engaging in creative reinterpretation of vague claim language in later litigation. But
language is inherently imprecise, and too strict a demand of clarity raises drafting
costs for patentees and risks invalidating claims for technicalities, lowering incentives
for innovation. Have any of the claims we have encountered so far seemed
insufficiently definite to you?

Although many claims could be written more clearly, claim definiteness has
been a relatively toothless requirement for much of its history. The first section of this
chapter examines the legal standard for definiteness, which was revised by the
Supreme Court in Nautilus v. Biosig Instruments, 572 U.S. 898 (2014). We then turn
to the area in which the claim definiteness requirement has had the most bite: claims
with means-plus-function claim elements under § 112(f) (or § 112, ¶ 6 for pre-AIA
claims).

A. The Standard for Definiteness

Nautilus v. Biosig Instruments, 572 U.S. 898 (2014)

Justice Ruth Bader Ginsburg delivered the opinion of the Court.

 232 MASUR & OUELLETTE ⋅ PATENT LAW

1 The Patent Act requires that a patent specification “conclude with one or more
claims particularly pointing out and distinctly claiming the subject matter which the
applicant regards as [the] invention.” 35 U.S.C. § 112, ¶ 2. This case, involving a
heart-rate monitor used with exercise equipment, concerns the proper reading of the
statute’s clarity and precision demand. According to the Federal Circuit, a patent
claim passes the § 112, ¶ 2 threshold so long as the claim is “amenable to
construction,” and the claim, as construed, is not “insolubly ambiguous.” We conclude
that the Federal Circuit’s formulation, which tolerates some ambiguous claims but
not others, does not satisfy the statute’s definiteness requirement. In place of the
“insolubly ambiguous” standard, we hold that a patent is invalid for indefiniteness if
its claims, read in light of the specification delineating the patent, and the prosecution
history, fail to inform, with reasonable certainty, those skilled in the art about the
scope of the invention. Expressing no opinion on the validity of the patent-in-suit, we
remand, instructing the Federal Circuit to decide the case employing the standard we
have prescribed.

2 Authorized by the Constitution “[t]o promote the Progress of Science and useful
Arts, by securing for limited Times to . . . Inventors the exclusive Right to their . . .
Discoveries,” Art. I, § 8, cl. 8, Congress has enacted patent laws rewarding inventors
with a limited monopoly. “Th[at] monopoly is a property right,” and “like any property
right, its boundaries should be clear.” Festo Corp. v. Shoketsu Kinzoku Kogyo
Kabushiki Co., 535 U.S. 722, 730 (2002). Thus, when Congress enacted the first Patent
Act in 1790, it directed that patent grantees file a written specification “containing a
description . . . of the thing or things . . . invented or discovered,” which “shall be so
particular” as to “distinguish the invention or discovery from other things before
known and used.” Act of Apr. 10, 1790, § 2, 1 Stat. 110.

3 The patent laws have retained this requirement of definiteness even as the
focus of patent construction has shifted. Under early patent practice in the United
States, we have recounted, it was the written specification that “represented the key
to the patent.” Markman v. Westview Instruments, 517 U.S. 370, 379 (1996).
Eventually, however, patent applicants began to set out the invention’s scope in a
separate section known as the “claim.” The Patent Act of 1870 expressly conditioned
the receipt of a patent on the inventor’s inclusion of one or more such claims, described
with particularity and distinctness. See Act of July 8, 1870, § 26, 16 Stat. 201 (to
obtain a patent, the inventor must “particularly point out and distinctly claim the
part, improvement, or combination which [the inventor] claims as his invention or
discovery”).

4 The 1870 Act’s definiteness requirement survives today, largely unaltered.

Section 112 of the Patent Act of 1952, applicable to this case, requires the patent
applicant to conclude the specification with “one or more claims particularly pointing
out and distinctly claiming the subject matter which the applicant regards as his
 DEFINITENESS & FUNCTIONAL CLAIMING 233

invention.” 35 U.S.C. § 112, ¶ 2. A lack of definiteness renders invalid “the patent or

any claim in suit.” § 282, ¶ 2(3).47

II

5 The patent in dispute, U.S. Patent No. 5,337,753, issued to Dr. Gregory
Lekhtman in 1994 and assigned to respondent Biosig Instruments, Inc., concerns a
heart-rate monitor for use during exercise. Previous heart-rate monitors, the patent
asserts, were often inaccurate in measuring the electrical signals accompanying each
heartbeat (electrocardiograph or ECG signals). The inaccuracy was caused by
electrical signals of a different sort, known as electromyogram or EMG signals,
generated by an exerciser’s skeletal muscles when, for example, she moves her arm,
or grips an exercise monitor with her hand. These EMG signals can “mask” ECG
signals and thereby impede their detection.

6 Dr. Lekhtman’s invention claims to improve on prior art by eliminating that

impediment. The invention focuses on a key difference between EMG and ECG
waveforms: while ECG signals detected from a user’s left hand have a polarity
opposite to that of the signals detected from her right hand, EMG signals from each
hand have the same polarity. The patented device works by measuring equalized EMG
signals detected at each hand and then using circuitry to subtract the identical EMG
signals from each other, thus filtering out the EMG interference.

7 As relevant here, the ’753 patent describes a heart-rate monitor contained in a

hollow cylindrical bar that a user grips with both hands, such that each hand comes
into contact with two electrodes, one “live” and one “common.” The device is illustrated
in figure 1 of the patent, reproduced [below].

47 [n.1 in opinion] In the Leahy–Smith America Invents Act, Pub. L. 112–29, 125 Stat.
284, enacted in 2011, Congress amended several parts of the Patent Act. Those amendments
modified §§ 112 and 282 in minor respects not pertinent here. In any event, the amended
versions of those provisions are inapplicable to patent applications filed before September 16,
2012.
 234 MASUR & OUELLETTE ⋅ PATENT LAW

8 Claim 1 of the ’753 patent, which contains the limitations critical to this
dispute, refers to a “heart rate monitor for use by a user in association with exercise
apparatus and/or exercise procedures.” The claim “comprise[s],” among other
elements, an “elongate member” (cylindrical bar) with a display device; “electronic
circuitry including a difference amplifier”; and, on each half of the cylindrical bar, a
live electrode [9 and 13 in fig. 1] and a common electrode [11 and 15] “mounted . . . in
spaced relationship with each other.” The claim sets forth additional elements,
including that the cylindrical bar is to be held in such a way that each of the user’s
hands “contact[s]” both electrodes on each side of the bar. Further, the EMG signals
detected by the two electrode pairs are to be “of substantially equal magnitude and
phase” so that the difference amplifier will “produce a substantially zero [EMG]
signal” upon subtracting the signals from one another.

9 The dispute between the parties arose in the 1990’s, when Biosig allegedly
disclosed the patented technology to StairMaster Sports Medical Products, Inc.
According to Biosig, StairMaster, without ever obtaining a license, sold exercise
machines that included Biosig’s patented technology, and petitioner Nautilus, Inc.,
continued to do so after acquiring the StairMaster brand. In 2004, based on these
allegations, Biosig brought a patent infringement suit against Nautilus in the U.S.
District Court for the Southern District of New York.

10 With Biosig’s lawsuit launched, Nautilus asked the U.S. Patent and
Trademark Office (PTO) to reexamine the ’753 patent. The reexamination proceedings
centered on whether the patent was anticipated or rendered obvious by prior art—
principally, a patent issued in 1984 to an inventor named Fujisaki, which similarly
disclosed a heart-rate monitor using two pairs of electrodes and a difference amplifier.
Endeavoring to distinguish the ’753 patent from prior art, Biosig submitted a
declaration from Dr. Lekhtman. The declaration attested, among other things, that
the ’753 patent sufficiently informed a person skilled in the art how to configure the
detecting electrodes so as “to produce equal EMG [signals] from the left and right
hands.” Although the electrodes’ design variables—including spacing, shape, size, and
material—cannot be standardized across all exercise machines, Dr. Lekhtman
explained, a skilled artisan could undertake a “trial and error” process of equalization.
This would entail experimentation with different electrode configurations in order to
optimize EMG signal cancellation. In 2010, the PTO issued a determination
confirming the patentability of the ’753 patent’s claims.

11 In 2011, the District Court conducted a hearing to determine the proper

construction of the patent’s claims, including the claim term “in spaced relationship
with each other.” According to Biosig, that “spaced relationship” referred to the
distance between the live electrode and the common electrode in each electrode pair.
Nautilus, seizing on Biosig’s submissions to the PTO during the reexamination,
maintained that the “spaced relationship” must be a distance “greater than the width
 DEFINITENESS & FUNCTIONAL CLAIMING 235

of each electrode.” The District Court ultimately construed the term to mean “there is
a defined relationship between the live electrode and the common electrode on one
side of the cylindrical bar and the same or a different defined relationship between
the live electrode and the common electrode on the other side of the cylindrical bar,”
without any reference to the electrodes’ width.

12 Nautilus moved for summary judgment, arguing that the term “spaced
relationship,” as construed, was indefinite under § 112, ¶ 2. The District Court
granted the motion. Those words, the District Court concluded, “did not tell [the court]
or anyone what precisely the space should be,” or even supply “any parameters” for
determining the appropriate spacing.

13 The Federal Circuit reversed and remanded. A claim is indefinite, the majority
opinion stated, “only when it is ‘not amenable to construction’ or ‘insolubly
ambiguous.’” Under that standard, the majority determined, the ’753 patent survived
indefiniteness review. Considering first the “intrinsic evidence”—i.e., the claim
language, the specification, and the prosecution history—the majority discerned [that]
these sources of meaning make plain that the distance separating the live and
common electrodes on each half of the bar “cannot be greater than the width of a user’s
hands”; that is so “because claim 1 requires the live and common electrodes to
independently detect electrical signals at two distinct points of a hand.” Furthermore,
the majority noted, the intrinsic evidence teaches that this distance cannot be
“infinitesimally small, effectively merging the live and common electrodes into a
single electrode with one detection point.”

14 We granted certiorari, and now vacate and remand.

III

15 Although the parties here disagree on the dispositive question—does the ’753
patent withstand definiteness scrutiny—they are in accord on several aspects of the
§ 112, ¶ 2 inquiry. First, definiteness is to be evaluated from the perspective of
someone skilled in the relevant art. Second, in assessing definiteness, claims are to be
read in light of the patent’s specification and prosecution history. Third, definiteness
is measured from the viewpoint of a person skilled in the art at the time the patent
was filed.

16 The parties differ, however, in their articulations of just how much imprecision
§ 112, ¶ 2 tolerates. In Nautilus’ view, a patent is invalid when a claim is “ambiguous,
such that readers could reasonably interpret the claim’s scope differently.” Biosig and
the Solicitor General would require only that the patent provide reasonable notice of
the scope of the claimed invention.

17 Section 112, we have said, entails a “delicate balance.” Festo, 535 U.S. at 731.
On the one hand, the definiteness requirement must take into account the inherent
 236 MASUR & OUELLETTE ⋅ PATENT LAW

limitations of language. Some modicum of uncertainty, the Court has recognized, is

the “price of ensuring the appropriate incentives for innovation.” Id., at 732. One must
bear in mind, moreover, that patents are “not addressed to lawyers, or even to the
public generally,” but rather to those skilled in the relevant art. Carnegie Steel Co. v.
Cambria Iron Co., 185 U.S. 403, 437 (1902).

18 At the same time, a patent must be precise enough to afford clear notice of
what is claimed, thereby “appris[ing] the public of what is still open to them.”
Markman, 517 U.S. at 373. Otherwise there would be “[a] zone of uncertainty which
enterprise and experimentation may enter only at the risk of infringement claims.”
United Carbon Co. v. Binney & Smith Co., 317 U.S. 228, 236 (1942). And absent a
meaningful definiteness check, we are told, patent applicants face powerful incentives
to inject ambiguity into their claims. See Federal Trade Commission, The Evolving IP
Marketplace: Aligning Patent Notice and Remedies with Competition 85 (2011)
(quoting testimony that [the] patent system fosters “an incentive to be as vague and
ambiguous as you can with your claims” and “defer clarity at all costs”). Eliminating
that temptation is in order, and “the patent drafter is in the best position to resolve
the ambiguity in . . . patent claims.” Halliburton Energy Servs., Inc. v. M–I LLC, 514
F.3d 1244, 1255 (Fed. Cir. 2008).

19 To determine the proper office of the definiteness command, therefore, we must

reconcile concerns that tug in opposite directions. Cognizant of the competing
concerns, we read § 112, ¶ 2 to require that a patent’s claims, viewed in light of the
specification and prosecution history, inform those skilled in the art about the scope
of the invention with reasonable certainty. The definiteness requirement, so
understood, mandates clarity, while recognizing that absolute precision is
unattainable. The standard we adopt accords with opinions of this Court stating that
“the certainty which the law requires in patents is not greater than is reasonable,
having regard to their subject-matter.” Minerals Separation, Ltd. v. Hyde, 242 U.S.
261, 270 (1916). See also United Carbon, 317 U.S. at 236 (“claims must be reasonably
clear-cut”); Markman, 517 U.S. at 389 (claim construction calls for “the necessarily
sophisticated analysis of the whole document,” and may turn on evaluations of expert
testimony).

20 In resolving Nautilus’ definiteness challenge, the Federal Circuit asked

whether the ’753 patent’s claims were “amenable to construction” or “insolubly
ambiguous.” Those formulations can breed lower court confusion, for they lack the
precision § 112, ¶ 2 demands. It cannot be sufficient that a court can ascribe some
meaning to a patent’s claims; the definiteness inquiry trains on the understanding of
a skilled artisan at the time of the patent application, not that of a court viewing
matters post hoc. To tolerate imprecision just short of that rendering a claim
“insolubly ambiguous” would diminish the definiteness requirement’s public-notice
 DEFINITENESS & FUNCTIONAL CLAIMING 237

function and foster the innovation-discouraging “zone of uncertainty,” United Carbon,

317 U.S. at 236, against which this Court has warned.

21 Appreciating that “terms like ‘insolubly ambiguous’ may not be felicitous,”

Biosig argues the phrase is a shorthand label for a more probing inquiry that the
Federal Circuit applies in practice. But although this Court does not “micromanag[e]
the Federal Circuit’s particular word choice” in applying patent-law doctrines, we
must ensure that the Federal Circuit’s test is at least “probative of the essential
inquiry.” Warner–Jenkinson Co. v. Hilton Davis Chemical Co., 520 U.S. 17, 40 (1997).
Falling short in that regard, the expressions “insolubly ambiguous” and “amenable to
construction” permeate the Federal Circuit’s recent decisions concerning § 112, ¶ 2’s
requirement. We agree with Nautilus and its amici that such terminology can leave
courts and the patent bar at sea without a reliable compass.48

IV

22 Both here and in the courts below, the parties have advanced conflicting
arguments as to the definiteness of the claims in the ’753 patent. Nautilus maintains
that the claim term “spaced relationship” is open to multiple interpretations reflecting
markedly different understandings of the patent’s scope, as exemplified by the
disagreement among the members of the Federal Circuit panel. Biosig responds that
“spaced relationship,” read in light of the specification and as illustrated in the
accompanying drawings, delineates the permissible spacing with sufficient precision.

23 “[M]indful that we are a court of review, not of first view,” Cutter v. Wilkinson,
544 U.S. 709, 718, n.7 (2005), we decline to apply the standard we have announced to
the controversy between Nautilus and Biosig. As we have explained, the Federal
Circuit invoked a standard more amorphous than the statutory definiteness
requirement allows. We therefore follow our ordinary practice of remanding so that
the Court of Appeals can reconsider, under the proper standard, whether the relevant
claims in the ’753 patent are sufficiently definite.

48 [n.10 in opinion] The Federal Circuit suggests that a permissive definiteness

standard “accord[s] respect to the statutory presumption of patent validity.” 715 F.3d 891, 902
(Fed. Cir. 2013). As the parties appear to agree, however, this presumption of validity does not
alter the degree of clarity that § 112, ¶ 2 demands from patent applicants; to the contrary, it
incorporates that definiteness requirement by reference. See § 282, ¶ 2(3) (defenses to
infringement actions include “[i]nvalidity of the patent or any claim in suit for failure to comply
with . . . any requirement of [§ 112]”).
The parties nonetheless dispute whether factual findings subsidiary to the ultimate
issue of definiteness trigger the clear-and-convincing-evidence standard and, relatedly,
whether deference is due to the PTO’s resolution of disputed issues of fact. We leave these
questions for another day. The court below treated definiteness as “a legal issue [the] court
reviews without deference,” 715 F.3d, at 897, and Biosig has not called our attention to any
contested factual matter—or PTO determination thereof—pertinent to its infringement
claims.
238 MASUR & OUELLETTE ⋅ PATENT LAW

Discussion Questions: Nautilus

1. Is “Spaced Relationship” Indefinite? On remand, the Federal Circuit stated

that “we may now steer by the bright star of ‘reasonable certainty,’ rather than the
unreliable compass of ‘insoluble ambiguity’” and concluded that the claim is not
indefinite because “a skilled artisan would understand the inherent parameters of the
invention as provided in the intrinsic evidence.” Biosig Instruments v. Nautilus, 783
F.3d 1374, 1379, 1384 (Fed. Cir. 2015). Do you agree? What would have been the
benefits and costs of requiring more precise language, such as stating that the
electrodes must be mounted “between 0.1 and 6.0 inches apart”?

2. Is “Reasonable Certainty” Indefinite? The new “reasonable certainty”

standard for indefiniteness can be criticized as indefinite itself, but can you think of a
better legal standard? Nautilus asked the Court to hold that claims are invalid if they
are “ambiguous, such that readers could reasonably interpret the claim’s scope
differently.” During oral argument, Justice Sotomayor asked:

Now, I have a really big problem, which is we as Justices disagree on

the meaning of things all the time, and one side will say, this is perfectly
clear from the text of the statute, from its history, from its context. And
we do all the statutory tools, and there will be one or more of us who
will come out and say, no, we think it’s a different interpretation. Would
we have any valid patents in the world if that’s the standard that we
adopt?

Nautilus’s lawyer didn’t have a good response; do you?

On the other hand, the Justices also gave patent owner Biosig a hard time for
its argument. Biosig supported the Federal Circuit’s old standard that claims are
indefinite only if “insolubly ambiguous” but supported a “reasonable certainty”
standard as long as it was clear that claims like theirs are reasonably certain. The
Justices worried that claims would never be indefinite under such a standard. As
Justice Scalia noted, “There’s never more than one correct construction. . . . I mean,
we always have to come up with an answer. . . . Have you ever heard of a court that
says, well, you know, it could mean either one of these? It’s a tie!” If you were Biosig’s
lawyer, how would you respond?

Although the Justices complained at oral argument that “reasonable certainty”

is “not much of a test,” this is the standard they settled on. Could you do better?

3. Indefiniteness Rejections During Examination. Nautilus was an appeal from

a patent litigation suit involving a granted patent rather than an appeal from the
USPTO’s rejection of a patent application during examination. If an examiner rejects
a claim for indefiniteness, the applicant can amend the claim to impose greater clarity.
Given this, do you think the indefiniteness standard should be the same during
prosecution and litigation? Before Nautilus was decided, Judge Dyk of the Federal
 DEFINITENESS & FUNCTIONAL CLAIMING 239

Circuit argued that “[c]onstruing ambiguous and poorly drafted claims continues to
be the principal task that our court faces in patent cases” and that the USPTO should
take a more active role in policing claim drafting by “reject[ing] applications when the
claims are not clear.” Timothy B. Dyk, Ten Prescriptions for What Ails Patent Law, 17
Stan. Tech. L. Rev. 345 (2014).

The USPTO previously used “a lower threshold of ambiguity” such that a claim
was indefinite when “amenable to two or more plausible constructions,” Ex parte
Miyazaki, 89 U.S.P.Q.2d 1207 (B.P.A.I. 2008), or “when it contains words or phrases
whose meaning is unclear,” In re Packard, 751 F.3d 1307 (Fed. Cir. 2014). Does
Nautilus specify the standard examiners should apply? See Lisa Larrimore Ouellette
& Jonathan Masur, How Will Nautilus Affect Indefiniteness at the PTO?, Patently-O
(June 5, 2014), https://patentlyo.com/patent/2014/06/nautilus-affect-
indefiniteness.html. In 2017, the PTAB decided in a precedential opinion that it would
follow the “meaning is unclear” standard in the examination context, Ex Parte
McAward, 2017 WL 3947829 (P.T.A.B. 2017), and a 2021 memo from the USPTO
Director later clarified that the PTAB “shall follow Nautilus in AIA post-grant
proceedings.” However, nonprecedential PTAB opinions in examination appeals still
cite a variety of standards (including the “insolubly ambiguous” standard!),
illustrating the difficulty of quality control.

If claims do not meet the legal standard for indefiniteness during examination,
should examiners ask applicants to clarify the meaning of any claim terms in the
prosecution record? Examiners may “require information that does not directly
support a rejection,” Star Fruits v. United States, 393 F.3d 1277 (Fed. Cir. 2005) (citing
37 C.F.R. § 1.105), although they do not generally use this authority to clarify claim
terms that were not found indefinite.

4. Inherently Ambiguous Claim Terms. In our experience, students new to

patent law tend to be quicker than examiners or the courts at identifying claims that
seem insufficiently definite. Claims are routinely granted and upheld even when they
contain approximations (like “about,” “essentially,” “substantially”), references to
objects of variable size (like “so dimensioned as to be insertable” into an automobile),
open-ended numerical ranges (like “less than X%”), and the very common phrase “an
effective amount” (meaning an amount effective for accomplishing some stated
purpose). See MPEP § 2173. Should the indefiniteness standard be further revised to
prevent applicants from using this kind of inherently ambiguous language?

Practice Problems: Applying the Nautilus Indefiniteness Standard

In general, one cannot assess indefiniteness just by looking at the claim—it is

also important to consider the specification, and expert testimony may be necessary
to determine whether a claim provides reasonable certainty to a PHOSITA. In this
sense, the definiteness determination provides a preview of the claim construction
240 MASUR & OUELLETTE ⋅ PATENT LAW

process we will consider in Chapter 8. (Indeed, definiteness is most often resolved as

part of the claim construction process.) The following examples provide simplified
claims and relevant context from recent Federal Circuit cases. Do you think the
underlined claim terms render the claims indefinite?

1. The asserted claims are directed to light emitting diodes (LEDs) with
improved heat dissipation. The claims require “a thermally conductive elongated core”
that draws heat from the LEDs and dissipates it into the air. The accused infringer
argues that “elongated” is indefinite because the specification does not use the term
“elongated” or describe the core’s dimensions. The patentee responds that “elongated”
refers to whether a core was long enough to pull heat away from the LEDs. During
prosecution, the patentee distinguished two prior art references with extended cores
as not containing an “elongated” element. GE Lighting Solutions v. Lights of America,
663 F. App’x 938 (Fed. Cir. 2016).

2. The patent-in-suit is directed to a lawn mower with improved flow control

baffles. A baffle is a metal structure under the mower deck that directs air flow and
grass clippings during operation. The asserted claim requires a “flow control baffle” to
have an “elongated and substantially straight baffle portion” between two “arcuate
baffle portions,” as illustrated in the side view below. The accused infringer argues
that “elongated and substantially straight” provides no objective standard for whether
a baffle portion is straight enough or long enough to be covered by the claim. The
patentee responds that a PHOSITA would understand the term to mean the baffle
portion is long enough to transition between the arcuate portions and straight relative
to the other components. Exmark Manufacturing v. Briggs & Stratton Power Products,
879 F.3d 1332 (Fed. Cir. 2018).

3. The asserted claims cover multilayer capacitors—electrical components that

store and release energy—with a “fringe-effect capacitance” between two contacts that
is “capable of being determined by measurement in terms of a standard unit.” The
 DEFINITENESS & FUNCTIONAL CLAIMING 241

specification discloses a method of measuring capacitance called insertion loss testing

that was well known in the art. The accused infringer argues that the claim is
indefinite because the insertion loss method had not previously been applied to
measure fringe-effect capacitance, and the specification provides no guidance on how
to do this. The patent owner’s expert testified that a PHOSITA would be able to
develop a test methodology for this purpose. Presidio Components v. American
Technical Ceramics, 875 F.3d 1369 (Fed. Cir. 2017).

4. The claims at issue are directed to a method of manufacturing a polymer

“having a molecular weight of about 5 to 9 kilodaltons.” A kilodalton is a widely used
unit of atomic mass. Both the patent owner and accused infringer agree that the claim
term “molecular weight” could refer to any of three measures of a polymer’s molecular
weight: peak average molecular weight (Mp), number average molecular weight (Mn),
and weight average molecular weight (Mw). Each measure is calculated in a different
manner, and the patent provides no guidance on which to use. During prosecution of
two continuation patents of the patent-in-suit, the patentee overcame indefiniteness
rejections from the USPTO—in one case by defining “molecular weight” as Mw, and in
the other by defining it as Mp. The response defining “molecular weight” as Mw
included a scientific error. Teva Pharmaceuticals v. Sandoz, 789 F.3d 1335 (Fed. Cir.
2015).

5. The claimed invention addresses the problem of website visitors being lured
away from a host website by clicking an advertisement. Under the system disclosed
in the patent, when a visitor clicks an advertising link, they are taken to a composite
website that displays the product information from the third-party advertiser, but
retains the host website’s “look and feel,” which “gives the viewer of the page the
impression that she is viewing pages served by the host” website. Here is a simplified
version of the claim:

A system serving web pages comprising:

(a) a computer store containing data, for each of a plurality of first web
pages, defining a plurality of look and feel elements corresponding
to the plurality of first web pages, wherein each of the first web
pages displays at least one active link associated with a commerce
object associated with a buying opportunity of a selected one of a
plurality of merchants; and
(b) a server coupled to the computer store and programmed to:
(i) receive from the web browser of a computer user a signal
indicating activation of one of the links displayed by one of
the first web pages; and
(ii) automatically generate and transmit to the web browser a
second web page that displays: information associated with
the commerce object associated with the link that has been
activated, and the plurality of look and feel elements
corresponding to the source page.
242 MASUR & OUELLETTE ⋅ PATENT LAW

The specification describes “look and feel elements” as “including logos, colors, page
layout, navigation systems, frames, ‘mouse-over’ effects, or other elements that are
consistent through some or all of a host’s website.” The patent owner’s expert testified
that a skilled artisan would interpret these “other elements” as elements such as
headers, footers, fonts, and images. Is “look and feel elements” indefinite? DDR
Holdings, LLC v. Hotels.com, L.P., 773 F.3d 1245, 1260 (Fed. Cir. 2014).

6. The patents-in-suit are directed to an “attention manager for occupying the

peripheral attention of a person in the vicinity of a display device.” The specification
has two primary embodiments: a “wallpaper” embodiment that displays images in
spatial portions of the screen not occupying the user’s primary attention, and a
“screensaver” embodiment that displays images after detecting an idle period. The
relevant claims include the following step:

. . . providing to the content display system a set of instructions for

enabling the content display system to selectively display, in an
unobtrusive manner that does not distract a user of the display device
or an apparatus associated with the display device from a primary
interaction with the display device or apparatus, an image or images
generated from a set of content data . . .

The accused infringer argues that the “unobtrusive manner” phrase is indefinite
because it is highly subjective. The patentee responds that it is sufficiently defined
through its relationship to the wallpaper embodiment. Interval Licensing LLC v. AOL,
Inc., 766 F.3d 1364 (Fed. Cir. 2014).

B. Definiteness for Means-Plus-Function Claim

Elements
As noted at the end of Chapter 1, § 112(f) (known as § 112 ¶ 6 for pre-AIA
claims) gives patent drafters the option to write claim elements in terms of the
function they perform rather than what they are, such as a “a means for fastening”
rather than “a button.”

35 U.S.C. § 112(f)

An element in a claim for a combination may be expressed as a means

or step for performing a specified function without the recital of
structure, material, or acts in support thereof, and such claim shall be
construed to cover the corresponding structure, material, or acts
described in the specification and equivalents thereof.
 DEFINITENESS & FUNCTIONAL CLAIMING 243

Claim limitations written in functional terms are known as means-plus-function

elements. Writing a claim element in functional terms can be beneficial for patentees
who do not want to list all the means for performing that function in their claim, but
under § 112(f), this benefit comes at the cost of narrowing claim scope: means-plus-
function elements cover only the corresponding structure in the specification (and
equivalents). “Structure” is a term of art for whatever performs the claimed function.
In some cases, like the button that is a means for fastening, the structure is something
tangible. But the structure for a means-plus-function claim element need not be a
physical structure; for example, the structure for a software function is the
corresponding algorithm. If there is no corresponding structure, the claim is invalid
for indefiniteness under § 112(b).

Importantly, it is not generally true that claim terms are limited to the specific
examples in the application. As we will discuss in more detail in Chapter 8 on claim
construction, the Federal Circuit has repeatedly emphasized that courts should “avoid
importing limitations from the specification into the claims.” Phillips v. AWH Corp.,
415 F.3d 1303, 1323 (Fed. Cir. 2005) (en banc). But means-plus-function claim
elements are an exception to this general rule: when § 112(f) is triggered, importing
limitations from the specification is required.

Consider a hypothetical claim directed to a novel sneaker. Rather than

expressing one of the claim elements as “shoelaces,” the patentee could express this
element as “a means for securing the shoe around a foot.” Under § 112(f), this “means
for securing” element would then be construed to cover the corresponding structure in
the specification. If the specification explains that “the shoe may be secured around a
foot using traditional closure mechanisms such as shoelaces or velcro,” then the
“means for securing” element is construed to cover shoelaces, velcro, and their
equivalents—and thus would not cover no-tie elastic systems or mechanical systems
that allow users to adjust shoe fit by turning a knob. If the specification does not
mention any means for securing the shoe, then the claim is invalid for indefiniteness.

Analyzing functional claims for indefiniteness thus involves two steps: (1) Is
there a means-plus-function element triggering § 112(f)? (2) If so, does that means-
plus-function element have corresponding structure in the specification? If not, the
claim is invalid for indefiniteness under § 112(b). We consider these steps in turn.

1. Does § 112(f) Apply to a Claim Limitation?

Before 2015, the inquiry into whether a claim limitation should be construed
under § 112(f) focused on whether the limitation employed the word “means.” Use of
“means” created a presumption that § 112(f) applied; failure to use “means” created a
“strong” presumption that § 112(f) did not apply. Claim drafters responded by
replacing “means” with generic terms like “module,” “mechanism,” “element,” or
“device” in an effort to achieve broader claims without the restrictions of § 112(f). In
244 MASUR & OUELLETTE ⋅ PATENT LAW

2015, the Federal Circuit decided en banc that a “strong” presumption for elements
not using “means” was unwarranted. Williamson v. Citrix Online, LLC, 792 F.3d 1339,
1349 (Fed. Cir. 2015). There is still a presumption that “means” triggers § 112(f) and
the absence of “means” does not, but it can be overcome. A claim limitation does not
trigger § 112(f) if “the words of the claim are understood by persons of ordinary skill
in the art to have a sufficiently definite meaning as the name for structure.” Id.

The invention at issue in Williamson v. Citrix was a system for a virtual

classroom purporting to provide “the benefits of classroom interaction without the
detrimental effects of complicated hardware or software, or the costs and
inconvenience of convening in a separate place.” (Little did the inventor know how
valuable this field would become in 2020!) One limitation of the claims was a
“distributed learning control module for receiving communications transmitted
between the presenter and the audience member computer systems and for relaying
the communications to an intended receiving computer system and for coordinating
the operation of the streaming data module.” The Federal Circuit held that
“distributed learning control module” should be construed under § 112, ¶ 6 because
“‘module’ is simply a generic description for software or hardware that performs a
specified function” and none of the surrounding claim language “impart[s] structure
into the term ‘module.’” Id. at 1350–51.

The result in Williamson would have been different if “distributed learning

control module” had a well understood meaning in the computer technology field. As
summarized by the USPTO in MPEP § 2181:

If persons of ordinary skill in the art reading the specification

understand the term to have a sufficiently definite meaning as the
name for the structure that performs the function, even when the term
covers a broad class of structures or identifies the structures by their
function (e.g., “filters,” “brakes,” “clamp,” “screwdriver,” and “locks”), 35
U.S.C. § 112(f) will not apply. The term is not required to denote a
specific structure or a precise physical structure to avoid the application
of 35 U.S.C. § 112(f). The following are examples of structural terms
that have been found not to invoke 35 U.S.C. § 112(f) or pre-AIA § 112,
¶ 6: “circuit,” “digital detector,” “detent mechanism,” “reciprocating
member,” “connector assembly,” “perforation,” “sealingly connected
joints,” and “eyeglass hanger member.” It is important to remember
that there are no absolutes in the determination of terms used as a
substitute for “means” that serve as generic placeholders. The examiner
must carefully consider the term in light of the specification and the
commonly accepted meaning in the technological art. Every application
will turn on its own facts.

A limitation will not invoke 35 U.S.C. § 112(f) if there is a

structural modifier that further describes the term “means” or the
 DEFINITENESS & FUNCTIONAL CLAIMING 245

generic placeholder. For example, although a generic placeholder like

“mechanism” standing alone may invoke § 112(f) when coupled with a
function, it will not invoke § 112(f) when it is preceded by a structural
modifier (e.g., “detent mechanism”). Greenberg v. Ethicon Endo-
Surgery, 91 F.3d 1580 (Fed. Cir. 1996) (holding that the term “detent
mechanism” did not invoke § 112, ¶ 6 because the structural modifier
“detent” denotes a type of structural device with a generally understood
meaning in the mechanical arts). By contrast, a generic placeholder
(e.g., “mechanism,” “element,” “member”) coupled with a function may
invoke § 112(f) when it is preceded by a non-structural modifier that
does not have any generally understood structural meaning in the art
(e.g., “colorant selection mechanism,” “lever moving element,” or
“movable link member”).

To determine whether a word, term, or phrase coupled with a

function denotes structure, examiners may check whether: (1) the
specification provides a description sufficient to inform one of ordinary
skill in the art that the term denotes structure; (2) general and subject
matter specific dictionaries provide evidence that the term has achieved
recognition as a noun denoting structure; and/or (3) the prior art
provides evidence that the term is an art-recognized structure to
perform the claimed function. It is necessary to decide on an element-
by-element basis whether 35 U.S.C. § 112(f) applies.

In short, what matters is whether the claim is written in such a way that a PHOSITA
can tell what the claim element is, or if the PHOSITA could only tell what the claim
element does. If a claim element could equally have been written in the form “a means
for [performing a function]” or “a [function] means,” such as “a means for fastening”
or “a fastening means,” this indicates that the claim element is only telling a
PHOSITA what the element does. In such a case, it is a means-plus function element.
And if it is a means-plus-function element, it is limited to the corresponding structure
in the specification (or is indefinite if there is no corresponding structure).

This means that if the claim term is “a fastening thing-a-ma-bob,” the relevant
question is whether the term “thing-a-ma-bob” itself conveys some kind of structure
to a PHOSITA, or whether it is simply a generic placeholder for “means.” If it conveys
some kind of structure, this is not a means-plus-function element. If it is simply a
generic placeholder, it is a means-plus-function element.
246 MASUR & OUELLETTE ⋅ PATENT LAW

Practice Problem: Does § 112(f) Apply?

Consider the cutlery apparatus at right, which combines a fork, spoon,

and knife so that a person may eat and cut his food using one hand. The fork
is on a retractable shaft, and the knife blade is on the bottom edge of the
spoon. When activated, the spoon/knife combination rotates about the fork to
cut the food item in which the fork is impaled. The first patent claim reads:

1. A cutlery apparatus comprising:

(a) a cutlery handle;
(b) a fork movably engaged with the cutlery handle; and
(c) a means for cutting disposed adjacent to the fork and rotatably
attached to the cutlery handle.

Does § 112(f) apply to “a means for cutting”? Would your analysis differ if “a
means for cutting” in element (c) were replaced with the following language?49

2. “a device configured for cutting”

3. “a knife blade”

4. “a knife blade means for cutting”

2. Does a § 112(f) Limitation Have a Corresponding Structure?

If a claim limitation triggers § 112(f), it must be supported by a corresponding
structure in the specification, or else it is indefinite under § 112(b). The structure
“must be disclosed in the written description in such a manner that one skilled in the
art will know and understand what structure corresponds to the means limitation.”
Atmel Corp. v. Info. Storage Devices, 198 F.3d 1374, 1382 (Fed. Cir. 1999). Claims with
means-plus-function elements are far more likely than claims drafted in other formats
to be held indefinite. See John R. Allison & Lisa Larrimore Ouellette, How Courts
Adjudicate Patent Definiteness and Disclosure, 65 Duke L.J. 609 (2016).

Whether a means-plus-function claim element has a disclosed structure is

closely related to the question of whether it is adequately described and enabled under
§ 112(a), but the issues are distinct: “The inquiry is whether one of skill in the art
would understand the specification itself to disclose a structure, not simply whether
that person would be capable of implementing a structure.” Biomedino v. Waters
Techs., 490 F.3d 946 (Fed. Cir. 2007). For example, a disclosure that an invention
“may be controlled by known differential pressure, valving and control equipment”
was not a disclosure of structure corresponding to the claimed “control means for

49 See https://www.uspto.gov/sites/default/files/documents/112f_cbt_slides.pdf (slide 21

et seq.).
 DEFINITENESS & FUNCTIONAL CLAIMING 247

automatically operating valves,” even though this may have been sufficient to enable
a PHOSITA to practice the invention. Id.

Interpreting claim elements as triggering § 112(f) and requiring a

corresponding structure has played a particularly important role in limiting broad
software patent claims that are written in functional terms. For computer-
implemented inventions, the Federal Circuit has held that the specification must
disclose an algorithm for performing the claimed function. A general-purpose
microprocessor “can serve as structure for a computer-implemented function only
where the claimed function is ‘coextensive’ with a microprocessor itself,” such as for
“receiving,” “storing,” and “processing” data. EON Corp. IP Holdings v. AT&T
Mobility, 785 F.3d 616, 622 (Fed. Cir. 2015). Otherwise, an algorithm is required,
which may be expressed “in any understandable terms including as a mathematical
formula, in prose, in a flow chart, or in any other manner that provides sufficient
structure.” MPEP § 2181.

In a prominent case, Aristocrat Technologies v. International Game

Technology, 521 F.3d 1328 (Fed. Cir. 2008), the Federal Circuit held a claim directed
to an electronic slot machine to be indefinite because the “game control means” lacked
corresponding structure:

Aristocrat contends that the language of claim 1 referring to “the

game control means being arranged to pay a prize when a
predetermined combination of symbols is displayed in a predetermined
arrangement of symbol positions selected by a player” implicitly
discloses an algorithm for the microprocessor. That is, when the
winning combination of symbols is displayed, the program should pay a
prize. But that language simply describes the function to be performed,
not the algorithm by which it is performed. Aristocrat’s real point is
that devising an algorithm to perform that function would be within the
capability of one of skill in the art, and therefore it was not necessary
for the patent to designate any particular algorithm to perform the
claimed function. As we have noted above, however, that argument is
contrary to this court’s law. . . .

Finally, Aristocrat contends that “the written description

delineates what constitutes ‘appropriate programming’ through the
disclosed embodiments of the invention.” Again, however, the
description of the embodiments is simply a description of the outcome
of the claimed functions, not a description of the structure, i.e., the
computer programmed to execute a particular algorithm. In making
this argument, Aristocrat relies on Figure 1 and Table 1 from the
patent, which provide examples of how player selections translate to
possible winning combinations. The corresponding portion of the
written description contains mathematical descriptions of how many
248 MASUR & OUELLETTE ⋅ PATENT LAW

winning combinations would be produced. Aristocrat refers to these

examples as “algorithms.” The figures, tables, and related discussion,
however, are not algorithms. They are simply examples of the results of
the operation of an unspecified algorithm. Like the mathematical
equation set forth in claim 1, these combinations of figures and tables
are, at best, a description of the claimed function of the means-plus-
function claim. Aristocrat has elected to claim using section 112
paragraph 6 and therefore must disclose corresponding structure. It has
disclosed, at most, pictorial and mathematical ways of describing the
claimed function of the game control means. That is not enough to
transform the disclosure of a general-purpose microprocessor into the
disclosure of sufficient structure.

Many software patents have been invalidated under the same logic as
Aristocrat, but some commentators have argued for more vigorous enforcement of
these requirements. Consider the argument from Mark A. Lemley, Software Patents
and the Return of Functional Claiming, 2013 Wis. L. Rev. 905 (2013):

It is broad functional claiming of software inventions that is

arguably responsible for most of the well-recognized problems with
software patents. Writing software can surely be an inventive act, and
not all new programs or programming techniques are obvious to outside
observers. So some software inventions surely qualify for patent
protection. Even if there are too many software patents, the patent
thicket and patent troll problems won’t go away if we simply reduce the
number of software patents somewhat. And while the lack of clear
boundaries is a very real problem, the most important problem a
product-making software company faces today is not suits over claims
with unclear boundaries but suits over claims that purport to cover any
possible way of achieving a goal. The fact that there are lots of patents
with broad claims purporting to cover those goals creates a patent
thicket. And while the breadth of those claims should (and does) make
them easier to invalidate, the legal deck is stacked against companies
who seek to invalidate overbroad patent claims.

This is a problem primarily in software. We wouldn’t permit in

any other area of technology the sorts of claims that appear in
thousands of different software patents. Pharmaceutical inventors
don’t claim “an arrangement of atoms that cures cancer,” asserting their
patent against any chemical, whatever its form, that achieves that
purpose. Indeed, the whole idea seems ludicrous. . . . But in software,
as we will see, claims of just that form are everywhere.

While there are some arguments in favor of broad functional

claims in software, they are insufficient to justify the costs they impose.
 DEFINITENESS & FUNCTIONAL CLAIMING 249

As it did seventy-five years ago, the law should rein in efforts to claim
to own a goal itself rather than a particular means of achieving that
goal. Doing so should not require legislative action; it is enough to
interpret existing Section 112(f) in light of the realities of software and
modern patent practice. And so, with one fell swoop—without changing
the patent statute and without invalidating existing patents—we may
be able to solve most of the software patent problem.

Do you agree with Professor Lemley that there is a software patent problem? If so, do
you agree that a stricter interpretation of § 112(f) would help address it? In the next
chapter, we will discuss patentable subject matter, a doctrine that has ballooned in
recent years in part to deal with a perceived problem with software patents of dubious
validity asserted by “patent trolls.” As you learn about patentable subject matter,
consider whether you think indefiniteness is a better tool to address these policy
concerns.

Practice Problem: Definiteness and Functional Claims

Your firm’s client, Life360, makes a smartphone application that allows users
to see where their friends and family are on a private map, stay in touch with group
and one-to-one messaging, and get help in an emergency. Life360 has been sued for
infringement of patent 7,031,728, which has an effective filing date in 2004. As
explained in the abstract, the invention allows “cellular phone users to monitor each
other’s location and status, to initiate cellular phone calls by touching a symbol on the
display screen with a stylus or finger which can also include conferencing calling.”
Here is the asserted claim:

3. A communication system to provide a cellular phone network for a

group of participants, each of the participants having an individual
portable cellular phone that includes a CPU and a GPS navigational
system that can accurately determine the location of each cellular
phone, each of the cellular phones in the communications net of
participants containing:

(a) said CPU and memory;

(b) a touch screen display;

(c) a symbol generator in said CPU that can generate symbols that
represent each of the participants’ cell phones in the communication
network on the touch screen display;

(d) a database that stores the individual telephone numbers related to

each of the symbols;
250 MASUR & OUELLETTE ⋅ PATENT LAW

(e) cellular phone call initiating software in said CPU connected to the
telephone number database and the symbols on the touch screen
display, whereby touching an individual symbol will automatically
initiate a cellular phone telephone call to the user represented by the
symbol; and

(f) said display including databases that display geographical

information that includes showing the geographical location of each of
the symbols representing participants in the communication network,
fixed locations, and entered items of interest.

A partner at your law firm has asked you to work with another junior associate
to see if there is a viable challenge to this claim’s validity using 35 U.S.C. § 112(b), (f).
How would you analyze this problem? Below are figure 1 from the ’728 patent and the
most relevant excerpts from the specification.

Referring now to the drawings and, in software. With the touch screen system,
particular, FIG. 1, the present invention is the screen symbols are entered through
shown generally at 10 that includes a small GPS inputs or by the operator using a
handheld cellular phone/ communications stylus or finger 14 by manipulatively
system in housing 12 that includes an directing the stylus or finger 14 to literally
on/off power switch 19, a microphone 38, touch display screen 16.

Cellular phone units such as these are

currently on sale and sold as a complete
unit (or with an external connected GPS)
that can be used for cellular telephone calls
and sending cellular SMS and TCP/IP or
other messages using the unit’s display and
computer.

The heart of the invention lies in the

software applications provided in the
system. Mounted inside housing 12 as part
of the unit is the display function screen
and the CPU. The CPU includes databases
that provide for a geographical map and
georeferenced entities that is shown as
display portion 16 b that includes as part of
the display various areas of interest in the
particular local map section.

When looking at FIG. 1, permanent

geographical locations and buildings are
shown. For example, the police station is
and an LCD display 16 that is also a touch shown and when the symbol is touched by
screen system. The small area 16 a is the the stylus or finger, the latitude and
Navigation Bar that depicts the telephone, longitude of the symbol’s location, as shown
GPS and other status data and the active in display section 16 c, is displayed at the
 DEFINITENESS & FUNCTIONAL CLAIMING 251

bottom left of the screen. The bottom right that relates the x and y coordinates to
side of display 16 c is a multifunction inset latitude and longitude and can access a
area that can contain a variety of communications net participant’s symbol
information including: a) a list of the or an entity’s symbol as being the one
communication link participants; b) a list closest to that point.
of received messages; c) a map, aerial
photograph or satellite image with an In order to initiate a telephone call to the
indication of the zoom and off set location cellular phone user represented by symbol
of the main map display, which is indicated (triangle) 30 at a specific GPS provided
by a square that depicts the area actually latitude and longitude which has been sent
displayed in the main geographical screen to the cellular phone shown in FIG. 1, the
16 b; d) applicable status information; and operator or initiator of what we call cellular
e) a list of the communication net phone one in FIG. 1 can take the stylus or
participants. finger 14, touch the triangle 30 with the
stylus or finger, and then touch a “call”
Also shown on the display screen 16, software switch from a matrix of displayed
specifically the geographical display 16 b, switches that will overlay the display area
is a pair of different looking symbols 30 and 16 c and immediately the cellular phone
34, a small triangle and a small square, one will initiate a cellular phone telephone
which are not labeled. These symbols 30 call to the cellular phone user at the
and 34 can represent communication net location shown that represents symbol 30.
cellular phone users in the displayed A second cellular phone user is represented
geographical area that are part of the by symbol 34 which is a small square but
overall cellular phone communications net could be any shape or icon to represent an
used in this invention wherein each of the individual cellular phone unit in the
users has a similar cellular phone to the display area. The ring 32 around symbol 30
one shown in FIG. 1. The latitude and indicates that the symbol has been touched
longitude of symbol 30 is associated within and that a telephone call can be initiated
a database along with a specific phone by touching the soft switch that says “call.”
number. The screen display 16 b, which is When this is done, the telephone call is
a touch screen, provides x and y placed. Another type of symbolic display
coordinates of the screen 16 b to the CPU’s can indicate that the call is in effect.
software. The software has an algorithm

See Advanced Ground Info. Sys., Inc. v. Life360, Inc., 830 F.3d 1341 (Fed. Cir. 2016).
252 MASUR & OUELLETTE ⋅ PATENT LAW

6. Patentable Subject Matter

Consider the patentability doctrines covered thus far. To be valid, a patent
must claim an invention that is new and nonobvious. The invention must be useful. It
must be described in the specification such that a person skilled in the art would know
how to make and use it. The claims must provide reasonable certainty as to what they
cover. One might imagine that would be it; so long as a patent satisfied those
requirements, it would be considered valid.

Yet this has never been the law. U.S. patent law has always required that an
invention also fall into one or more statutory categories. Even if an invention is new
and useful, if it does not fit within one of those categories, it cannot be patented. This
is called the doctrine of “patentable subject matter.” Section 101 of the Patent Act
provides the relevant statutory language:

35 U.S.C. § 101

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.

As a matter of the plain text, it is hard to imagine any invention that does not
fall into the broad categories of “process, machine, manufacture, or composition of
matter.” For starters, what physical substance is not a “composition of matter”? Even
atoms, the building blocks of matter, are themselves compositions of other matter—
protons, neutrons, and electrons. Protons and neutrons are themselves compositions
of quarks. And when it comes to intangible inventions, what type of invention could
not be described as a “process”? In addition, the statutory text indicates that patents
should be available for those who merely “discover[]” something new and useful.
Congress has enacted separate bars on patenting inventions “useful solely in the
utilization of special nuclear material or atomic energy in an atomic weapon,” 42
U.S.C. § 2181(a), and inventions “directed to or encompassing a human organism,”
America Invents Act, Pub. L. No. 112-29, § 33(a), 125 Stat. 284 (2011). But the Patent
Act itself imposes no apparent limits.

The broad text notwithstanding, the courts have long recognized several
implicit exceptions to the statutory categories of patentable subject matter. The
Supreme Court has held that “laws of nature,” “natural phenomena,” and “abstract
ideas” cannot be patented, even if they are new and useful. In recent years the
boundaries of these categories have expanded, and in some areas of technology the
limitations on patentable subject matter have become much more important. This
 PATENTABLE SUBJECT MATTER 253

shift has taken place across four recent Supreme Court cases over a five-year period:
Bilski v. Kappos, 561 U.S. 593 (2010); Mayo Collaborative Services v. Prometheus
Laboratories, 566 U.S. 66 (2012); Association for Molecular Pathology v. Myriad
Genetics, Inc., 569 U.S. 576 (2013); and Alice Corp. v. CLS Bank, 573 U.S. 208 (2014).
We will read the last three of those cases below. Those cases have had a dramatic
impact on the patentability of a range of inventions, particularly computer- and
internet-related methods.

What purpose is served by these exclusions from patentable subject matter?

The Supreme Court has framed the doctrine in utilitarian terms, asserting that laws
of nature, natural phenomena, and abstract ideas “are the basic tools of scientific and
technological work” and that patents on these tools “might tend to impede innovation
more than it would tend to promote it.” Alice, 573 U.S. at 216. There is little empirical
support for these empirical judgments, and many commentators have expressed
skepticism that the doctrine of patentable subject matter can accomplish patent law’s
utilitarian goals better than the other doctrines we have covered so far. Patentable
subject matter has enabled faster patent invalidations, as the legal issues can often
be resolved on a motion to dismiss without the need for expensive discovery, but
stakeholders are divided on whether this is a good thing.

To implement the patentable subject matter exclusions, the Supreme Court

has created a new two-step test, known as the “Alice/Mayo test” after the two cases in
which it was developed. That test operates as follows:

• Step 1: Determine whether the claim in question is “directed to” a natural law,
product of nature, or abstract idea. If the claim is not directed to one of these
exemptions, the claim is patentable subject matter under § 101.

• Step 2: If the claim is directed to one of the exempt categories, remove the
natural law, product of nature, or abstract idea from the claim and examine
what remains. If the rest of the claim includes an “inventive concept” such that
the claim as a whole “amounts to significantly more” than a patent on the
ineligible concept, the claim is patentable under § 101.1

Of course, this simple statement of the two-step test raises as many questions
as it answers, including what it means for a claim to be “directed to” a natural law,
product of nature, or abstract idea, and what it means for a claim to include an
“inventive concept.” This chapter explores the law of patentable subject matter and
attempts to answer those questions. It also examines the extent to which this doctrine

1In USPTO materials such as the MPEP, these two steps are referred to as “Step 2A”
and “Step 2B,” with “Step 1” being the initial question of whether the claim is to a process,
machine, manufacture, or composition of matter. We will instead use the terminology of the
courts.
 254 MASUR & OUELLETTE ⋅ PATENT LAW

constrains patenting in various technological fields. We will begin with patents on

laws of nature and products of nature, and then we consider abstract ideas.

As you read these cases and materials, consider the following questions: What
is the doctrine of patentable subject matter accomplishing that the doctrines of
novelty, nonobviousness, utility, and sufficient disclosure are not? What additional
purposes or policies is it serving, and what policies or purposes might it be hindering?
If answering these questions seems challenging, you are not alone. Patentable subject
matter is probably the most contentious patent law doctrine today, with many
advocating for judicial or legislative revision. But the Supreme Court has repeatedly
denied certiorari in other patentable subject matter cases, and a push for legislative
reform died in 2019 after a failure to reach stakeholder consensus. As you read this
chapter, consider whether you think patentable subject matter reform is warranted.

A. Laws of Nature, Natural Phenomena, and Products

of Nature
The modern story of patentable subject matter begins with Bilski v. Kappos,
561 U.S. 593 (2010), in which the Supreme Court reaffirmed that abstract ideas are
unpatentable. But Bilski did not provide a workable test for determining the limits of
patentable subject matter. The Court took up that problem two years later in Mayo
Collaborative Services v. Prometheus Laboratories, 566 U.S. 66 (2012).

Mayo concerned a patent on a medical diagnostic method, which implicates the

patentable subject matter exception for “laws of nature.” In this section, we take up
the law governing laws of nature, beginning with Mayo, followed by the subcategory
of “products of nature.” Cases involving these types of inventions make up a small but
important fraction of all of the patentable subject matter cases adjudicated by the
federal courts over the past five years. (The majority involve the exception for
“abstract ideas,” which we take up in the next section.) But more importantly, these
cases were the initial vehicle for the most important doctrinal development in patent
law of the past several decades. Mayo is the case in which that development first
picked up steam.

Mayo Collaborative Services v. Prometheus Laboratories, 566 U.S. 66 (2012)

Justice Stephen Breyer delivered the opinion of the Court.

1 The Court has long held that [§ 101] contains an important implicit exception.
“[L]aws of nature, natural phenomena, and abstract ideas” are not patentable.
Diamond v. Diehr, 450 U.S. 175 (1981); see also O’Reilly v. Morse, 15 How. 62 (1854).
Thus, the Court has written that “a new mineral discovered in the earth or a new
 PATENTABLE SUBJECT MATTER 255

plant found in the wild is not patentable subject matter. Likewise, Einstein could not
patent his celebrated law that E=mc2; nor could Newton have patented the law of
gravity. Such discoveries are ‘manifestations of . . . nature, free to all men and
reserved exclusively to none.’” Diamond v. Chakrabarty, 447 U.S. 303, 309 (1980).

2 “Phenomena of nature, though just discovered, mental processes, and abstract

intellectual concepts are not patentable, as they are the basic tools of scientific and
technological work.” Gottschalk v. Benson, 409 U.S. 63 (1972). And monopolization of
those tools through the grant of a patent might tend to impede innovation more than
it would tend to promote it.

3 The Court has recognized, however, that too broad an interpretation of this
exclusionary principle could eviscerate patent law. For all inventions at some level
embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or
abstract ideas. Thus, in Diehr the Court pointed out that “a process is not
unpatentable simply because it contains a law of nature or a mathematical algorithm.”
450 U.S. at 187. It added that “an application of a law of nature or mathematical
formula to a known structure or process may well be deserving of patent protection.”
Id. at 187.

4 Still, as the Court has also made clear, to transform an unpatentable law of
nature into a patent-eligible application of such a law, one must do more than simply
state the law of nature while adding the words “apply it.” See, e.g., Benson, supra, at
71–72.

5 The case before us lies at the intersection of these basic principles. It concerns
patent claims covering processes that help doctors who use thiopurine drugs to treat
patients with autoimmune diseases determine whether a given dosage level is too low
or too high. The claims purport to apply natural laws describing the relationships
between the concentration in the blood of certain thiopurine metabolites and the
likelihood that the drug dosage will be ineffective or induce harmful side effects. We
must determine whether the claimed processes have transformed these unpatentable
natural laws into patent-eligible applications of those laws. We conclude that they
have not done so and that therefore the processes are not patentable.

6 Our conclusion rests upon an examination of the particular claims before us in

light of the Court’s precedents. Those cases warn us against interpreting patent
statutes in ways that make patent eligibility “depend simply on the draftsman’s art”
without reference to the “principles underlying the prohibition against patents for
[natural laws].” Parker v. Flook, 437 U.S. 584, 593 (1978). They warn us against
upholding patents that claim processes that too broadly pre-empt the use of a natural
law. Morse, supra, at 112–120; Benson, supra, at 71–72. And they insist that a process
that focuses upon the use of a natural law also contain other elements or a
combination of elements, sometimes referred to as an “inventive concept,” sufficient
to ensure that the patent in practice amounts to significantly more than a patent upon
the natural law itself. Flook, supra, at 594; see also Bilski v. Kappos, 561 U.S. 593, at
 256 MASUR & OUELLETTE ⋅ PATENT LAW

610–11 (“[T]he prohibition against patenting abstract ideas cannot be circumvented

by attempting to limit the use of the formula to a particular technological environment
or adding insignificant postsolution activity.”).

7 We find that the process claims at issue here do not satisfy these conditions.
In particular, the steps in the claimed processes (apart from the natural laws
themselves) involve well-understood, routine, conventional activity previously
engaged in by researchers in the field. At the same time, upholding the patents would
risk disproportionately tying up the use of the underlying natural laws, inhibiting
their use in the making of further discoveries.

8 The patents before us concern the use of thiopurine drugs in the treatment of
autoimmune diseases, such as Crohn’s disease and ulcerative colitis. When a patient
ingests a thiopurine compound, his body metabolizes the drug, causing metabolites to
form in his bloodstream. Because the way in which people metabolize thiopurine
compounds varies, the same dose of a thiopurine drug affects different people
differently, and it has been difficult for doctors to determine whether for a particular
patient a given dose is too high, risking harmful side effects, or too low, and so likely
ineffective.

9 At the time the discoveries embodied in the patents were made, scientists
already understood that the levels in a patient’s blood of certain metabolites,
including, in particular, 6–thioguanine and its nucleotides (6–TG) and 6–methyl–
mercaptopurine (6–MMP), were correlated with the likelihood that a particular
dosage of a thiopurine drug could cause harm or prove ineffective. But those in the
field did not know the precise correlations between metabolite levels and likely harm
or ineffectiveness. The patent claims at issue here set forth processes embodying
researchers’ findings that identified these correlations with some precision.

10 More specifically, the patents—U.S. Patent No. 6,355,623 and U.S. Patent No.
6,680,302—embody findings that concentrations in a patient’s blood of 6–TG or of 6–
MMP metabolite beyond a certain level (400 and 7,000 picomoles (pmol) per 8×108 red
blood cells, respectively) indicate that the dosage is likely too high for the patient,
while concentrations in the blood of 6–TG metabolite lower than a certain level (about
230 pmol per 8×108 red blood cells) indicate that the dosage is likely too low to be
effective.

11 The patent claims seek to embody this research in a set of processes. Like the
Federal Circuit we take as typical claim 1 of the ’623 patent, which describes one of
the claimed processes as follows:

A method of optimizing therapeutic efficacy for treatment of an

immune-mediated gastrointestinal disorder, comprising:
 PATENTABLE SUBJECT MATTER 257

(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 8×108
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
8×108 red blood cells indicates a need to decrease the amount of said
drug subsequently administered to said subject.

For present purposes we may assume that the other claims in the patents do not differ
significantly from claim 1.

12 Respondent, Prometheus Laboratories, Inc., is the sole and exclusive licensee

of the ’623 and ’302 patents. It sells diagnostic tests that embody the processes the
patents describe. For some time petitioners, Mayo Clinic Rochester and Mayo
Collaborative Services (collectively Mayo), bought and used those tests. But in 2004
Mayo announced that it intended to begin using and selling its own test—a test using
somewhat higher metabolite levels to determine toxicity (450 pmol per 8×108 for 6–
TG and 5,700 pmol per 8×108 for 6–MMP). Prometheus then brought this action
claiming patent infringement.

13 [The district court found Mayo’s test infringing but granted summary
judgment for Mayo on the grounds that the claims were not patent eligible. The
Federal Circuit reversed, and the Supreme Court granted certiorari.]

II

14 Prometheus’ patents set forth laws of nature—namely, relationships between

concentrations of certain metabolites in the blood and the likelihood that a dosage of
a thiopurine drug will prove ineffective or cause harm. Claim 1, for example, states
that if the levels of 6–TG in the blood (of a patient who has taken a dose of a thiopurine
drug) exceed about 400 pmol per 8×108 red blood cells, then the administered dose is
likely to produce toxic side effects. While it takes a human action (the administration
of a thiopurine drug) to trigger a manifestation of this relation in a particular person,
the relation itself exists in principle apart from any human action. The relation is a
consequence of the ways in which thiopurine compounds are metabolized by the
body—entirely natural processes. And so a patent that simply describes that relation
sets forth a natural law.
 258 MASUR & OUELLETTE ⋅ PATENT LAW

15 The question before us is whether the claims do significantly more than simply
describe these natural relations. To put the matter more precisely, do the patent
claims add enough to their statements of the correlations to allow the processes they
describe to qualify as patent-eligible processes that apply natural laws? We believe
that the answer to this question is no.

16 If a law of nature is not patentable, then neither is a process reciting a law of

nature, unless that process has additional features that provide practical assurance
that the process is more than a drafting effort designed to monopolize the law of
nature itself. A patent, for example, could not simply recite a law of nature and then
add the instruction “apply the law.” Einstein, we assume, could not have patented his
famous law by claiming a process consisting of simply telling linear accelerator
operators to refer to the law to determine how much energy an amount of mass has
produced (or vice versa). Nor could Archimedes have secured a patent for his famous
principle of flotation by claiming a process consisting of simply telling boat builders
to refer to that principle in order to determine whether an object will float.

17 What else is there in the claims before us? The process that each claim recites
tells doctors interested in the subject about the correlations that the researchers
discovered. In doing so, it recites an “administering” step, a “determining” step, and a
“wherein” step. These additional steps are not themselves natural laws but neither
are they sufficient to transform the nature of the claim.

18 First, the “administering” step simply refers to the relevant audience, namely,
doctors who treat patients with certain diseases with thiopurine drugs. That audience
is a pre-existing audience; doctors used thiopurine drugs to treat patients suffering
from autoimmune disorders long before anyone asserted these claims. In any event,
the “prohibition against patenting abstract ideas cannot be circumvented by
attempting to limit the use of the formula to a particular technological environment.”
Bilski, supra, at 610–11.

19 Second, the “wherein” clauses simply tell a doctor about the relevant natural
laws, at most adding a suggestion that he should take those laws into account when
treating his patient. That is to say, these clauses tell the relevant audience about the
laws while trusting them to use those laws appropriately where they are relevant to
their decisionmaking (rather like Einstein telling linear accelerator operators about
his basic law and then trusting them to use it where relevant).

20 Third, the “determining” step tells the doctor to determine the level of the
relevant metabolites in the blood, through whatever process the doctor or the
laboratory wishes to use. As the patents state, methods for determining metabolite
levels were well known in the art. Indeed, scientists routinely measured metabolites
as part of their investigations into the relationships between metabolite levels and
efficacy and toxicity of thiopurine compounds. Thus, this step tells doctors to engage
 PATENTABLE SUBJECT MATTER 259

in well-understood, routine, conventional activity previously engaged in by scientists

who work in the field. Purely “conventional or obvious” “[pre]-solution activity” is
normally not sufficient to transform an unpatentable law of nature into a patent-
eligible application of such a law. Flook, 437 U.S. at 590.

21 Fourth, to consider the three steps as an ordered combination adds nothing to

the laws of nature that is not already present when the steps are considered
separately. Anyone who wants to make use of these laws must first administer a
thiopurine drug and measure the resulting metabolite concentrations, and so the
combination amounts to nothing significantly more than an instruction to doctors to
apply the applicable laws when treating their patients.

22 The upshot is that the three steps simply tell doctors to gather data from which
they may draw an inference in light of the correlations. To put the matter more
succinctly, the claims inform a relevant audience about certain laws of nature; any
additional steps consist of well-understood, routine, conventional activity already
engaged in by the scientific community; and those steps, when viewed as a whole, add
nothing significant beyond the sum of their parts taken separately. For these reasons
we believe that the steps are not sufficient to transform unpatentable natural
correlations into patentable applications of those regularities.

23 A more detailed consideration of the controlling precedents reinforces our

conclusion. The cases most directly on point are Diehr and Flook, two cases in which
the Court reached opposite conclusions about the patent eligibility of processes that
embodied the equivalent of natural laws. The Diehr process (held patent eligible) set
forth a method for molding raw, uncured rubber into various cured, molded products.
The process used a known mathematical equation, the Arrhenius equation, to
determine when (depending upon the temperature inside the mold, the time the
rubber had been in the mold, and the thickness of the rubber) to open the press. It
consisted in effect of the steps of: (1) continuously monitoring the temperature on the
inside of the mold, (2) feeding the resulting numbers into a computer, which would
use the Arrhenius equation to continuously recalculate the mold-opening time, and
(3) configuring the computer so that at the appropriate moment it would signal “a
device” to open the press. Diehr, 450 U.S. at 177–79.

24 The Court pointed out that the basic mathematical equation, like a law of
nature, was not patentable. But it found the overall process patent eligible because of
the way the additional steps of the process integrated the equation into the process as
a whole. Those steps included “installing rubber in a press, closing the mold,
constantly determining the temperature of the mold, constantly recalculating the
appropriate cure time through the use of the formula and a digital computer, and
automatically opening the press at the proper time.” Id. at 187. It nowhere suggested
 260 MASUR & OUELLETTE ⋅ PATENT LAW

that all these steps, or at least the combination of those steps, were in context obvious,
already in use, or purely conventional. And so the patentees did not “seek to pre-empt
the use of [the] equation,” but sought “only to foreclose from others the use of that
equation in conjunction with all of the other steps in their claimed process.” Ibid.
These other steps apparently added to the formula something that in terms of patent
law’s objectives had significance—they transformed the process into an inventive
application of the formula.

25 The process in Flook (held not patentable) provided a method for adjusting
“alarm limits” in the catalytic conversion of hydrocarbons. Certain operating
conditions (such as temperature, pressure, and flow rates), which are continuously
monitored during the conversion process, signal inefficiency or danger when they
exceed certain “alarm limits.” The claimed process amounted to an improved system
for updating those alarm limits through the steps of: (1) measuring the current level
of the variable, e.g., the temperature; (2) using an apparently novel mathematical
algorithm to calculate the current alarm limits; and (3) adjusting the system to reflect
the new alarm-limit values. 437 U.S. at 585–87.

26 The Court, as in Diehr, pointed out that the basic mathematical equation, like
a law of nature, was not patentable. But it characterized the claimed process as doing
nothing other than “provid[ing] a[n unpatentable] formula for computing an updated
alarm limit.” Id. at 586. Unlike the process in Diehr, it did not “explain how the
variables used in the formula were to be selected, nor did the [claim] contain any
disclosure relating to chemical processes at work or the means of setting off an alarm
or adjusting the alarm limit.” Diehr, supra, at 192, n.14. And so the other steps in the
process did not limit the claim to a particular application. Moreover, “[t]he chemical
processes involved in catalytic conversion of hydrocarbons[,] . . . the practice of
monitoring the chemical process variables, the use of alarm limits to trigger alarms,
the notion that alarm limit values must be recomputed and readjusted, and the use of
computers for ‘automatic monitoring-alarming’” were all “well known,” to the point
where, putting the formula to the side, there was no “inventive concept” in the claimed
application of the formula. Flook, supra, at 594. “[P]ost-solution activity” that is purely
“conventional or obvious,” the Court wrote, “can[not] transform an unpatentable
principle into a patentable process.” Id. at 589.

27 The claim before us presents a case for patentability that is weaker than the
(patent-eligible) claim in Diehr and no stronger than the (unpatentable) claim in
Flook. Beyond picking out the relevant audience, namely, those who administer doses
of thiopurine drugs, the claim simply tells doctors to: (1) measure (somehow) the
current level of the relevant metabolite, (2) use particular (unpatentable) laws of
nature (which the claim sets forth) to calculate the current toxicity/inefficacy limits,
and (3) reconsider the drug dosage in light of the law. These instructions add nothing
specific to the laws of nature other than what is well-understood, routine,
conventional activity, previously engaged in by those in the field. And since they are
steps that must be taken in order to apply the laws in question, the effect is simply to
 PATENTABLE SUBJECT MATTER 261

tell doctors to apply the law somehow when treating their patients. The process in
Diehr was not so characterized; that in Flook was characterized in roughly this way.

28 Other cases offer further support for the view that simply appending
conventional steps, specified at a high level of generality, to laws of nature, natural
phenomena, and abstract ideas cannot make those laws, phenomena, and ideas
patentable. This Court has previously discussed in detail an English case, Neilson,
which involved a patent claim that posed a legal problem very similar to the problem
now before us. The patent applicant there asserted a claim

for the improved application of air to produce heat in fires, forges, and
furnaces, where a blowing apparatus is required. [The invention] was
to be applied as follows: The blast or current of air produced by the
blowing apparatus was to be passed from it into an air-vessel or
receptacle made sufficiently strong to endure the blast; and through or
from that vessel or receptacle by means of a tube, pipe, or aperture into
the fire, the receptacle be kept artificially heated to a considerable
temperature by heat externally applied.

Morse, 15 How., at 114–115. The English court concluded that the claimed process did
more than simply instruct users to use the principle that hot air promotes ignition
better than cold air, since it explained how the principle could be implemented in an
inventive way. Baron Parke wrote (for the court):

It is very difficult to distinguish [Neilson’s claim] from the specification

of a patent for a principle, and this at first created in the minds of some
of the court much difficulty; but after full consideration, we think that
the plaintiff does not merely claim a principle, but a machine
embodying a principle, and a very valuable one. We think the case must
be considered as if the principle being well known, the plaintiff had first
invented a mode of applying it by a mechanical apparatus to furnaces;
and his invention then consists in this—by interposing a receptacle for
heated air between the blowing apparatus and the furnace. In this
receptacle he directs the air to be heated by the application of heat
externally to the receptacle, and thus he accomplishes the object of
applying the blast, which was before of cold air, in a heated state to the
furnace.

Neilson v. Harford, Webster’s Patent Cases, at 371. Thus, the claimed process
included not only a law of nature but also several unconventional steps (such as
inserting the receptacle, applying heat to the receptacle externally, and blowing the
air into the furnace) that confined the claims to a particular, useful application of the
principle.
 262 MASUR & OUELLETTE ⋅ PATENT LAW

29 In Bilski the Court considered claims covering a process for hedging risks of
price changes by, for example, contracting to purchase commodities from sellers at a
fixed price, reflecting the desire of sellers to hedge against a drop in prices, while
selling commodities to consumers at a fixed price, reflecting the desire of consumers
to hedge against a price increase. One claim described the process; another reduced
the process to a mathematical formula. 561 U.S. at 599. The Court held that the
described “concept of hedging” was “an unpatentable abstract idea.” Id. at 611. The
fact that some of the claims limited hedging to use in commodities and energy markets
and specified that “well-known random analysis techniques [could be used] to help
establish some of the inputs into the equation” did not undermine this conclusion, for
“Flook established that limiting an abstract idea to one field of use or adding token
postsolution components did not make the concept patentable.” Id. at 612.

30 Finally, in Benson the Court considered the patentability of a mathematical

process for converting binary-coded decimal numerals into pure binary numbers on a
general purpose digital computer. The claims “purported to cover any use of the
claimed method in a general-purpose digital computer of any type.” 409 U.S. at 64, 65.
The Court recognized that “a novel and useful structure created with the aid of
knowledge of scientific truth” might be patentable. Id. at 67. But it held that simply
implementing a mathematical principle on a physical machine, namely, a computer,
was not a patentable application of that principle. For the mathematical formula had
“no substantial practical application except in connection with a digital computer.”
Benson, supra, at 71. Hence the claim (like the claims before us) was overly broad; it
did not differ significantly from a claim that just said “apply the algorithm.”

31 The Court has repeatedly emphasized this last mentioned concern, a concern
that patent law not inhibit further discovery by improperly tying up the future use of
laws of nature. Thus, in Morse the Court set aside as unpatentable Samuel Morse’s
general claim for “the use of the motive power of the electric or galvanic current . . .
however developed, for making or printing intelligible characters, letters, or signs, at
any distances,” 15 How. at 86. The Court explained:

For aught that we now know some future inventor, in the onward march
of science, may discover a mode of writing or printing at a distance by
means of the electric or galvanic current, without using any part of the
process or combination set forth in the plaintiff’s specification. His
invention may be less complicated—less liable to get out of order—less
expensive in construction, and in its operation. But yet if it is covered
by this patent the inventor could not use it, nor the public have the
benefit of it without the permission of this patentee.

Id. at 113. Similarly, in Benson the Court said that the claims before it were “so
abstract and sweeping as to cover both known and unknown uses of the [mathematical
formula].” 409 U.S. at 67, 68. In Bilski the Court pointed out that to allow “petitioners
 PATENTABLE SUBJECT MATTER 263

to patent risk hedging would pre-empt use of this approach in all fields.” 561 U.S. at
612. And in Flook the Court expressed concern that the claimed process was simply
“a formula for computing an updated alarm limit,” which might “cover a broad range
of potential uses.” 437 U.S. at 586.

32 These statements reflect the fact that, even though rewarding with patents
those who discover new laws of nature and the like might well encourage their
discovery, those laws and principles, considered generally, are “the basic tools of
scientific and technological work.” Benson, supra, at 67. And so there is a danger that
the grant of patents that tie up their use will inhibit future innovation premised upon
them, a danger that becomes acute when a patented process amounts to no more than
an instruction to “apply the natural law,” or otherwise forecloses more future
invention than the underlying discovery could reasonably justify.

33 The laws of nature at issue here are narrow laws that may have limited
applications, but the patent claims that embody them nonetheless implicate this
concern. They tell a treating doctor to measure metabolite levels and to consider the
resulting measurements in light of the statistical relationships they describe. In doing
so, they tie up the doctor’s subsequent treatment decision whether that treatment
does, or does not, change in light of the inference he has drawn using the correlations.
And they threaten to inhibit the development of more refined treatment
recommendations (like that embodied in Mayo’s test) that combine Prometheus’
correlations with later discovered features of metabolites, human physiology or
individual patient characteristics. The “determining” step too is set forth in highly
general language covering all processes that make use of the correlations after
measuring metabolites, including later discovered processes that measure metabolite
levels in new ways.

34 We need not, and do not, now decide whether were the steps at issue here less
conventional, these features of the claims would prove sufficient to invalidate them.
For here, as we have said, the steps add nothing of significance to the natural laws
themselves. Unlike, say, a typical patent on a new drug or a new way of using an
existing drug, the patent claims do not confine their reach to particular applications
of those laws. The presence here of the basic underlying concern that these patents
tie up too much future use of laws of nature simply reinforces our conclusion that the
processes described in the patents are not patent eligible, while eliminating any
temptation to depart from case law precedent.

III

35 We have considered several further arguments in support of Prometheus’

position. But they do not lead us to adopt a different conclusion. First, the Federal
Circuit, in upholding the patent eligibility of the claims before us, relied on this
Court’s determination that “[t]ransformation and reduction of an article ‘to a different
state or thing’ is the clue to the patentability of a process claim that does not include
particular machines.” Benson, supra, at 70–71. It reasoned that the claimed processes
 264 MASUR & OUELLETTE ⋅ PATENT LAW

are therefore patent eligible, since they involve transforming the human body by
administering a thiopurine drug and transforming the blood by analyzing it to
determine metabolite levels.

36 The first of these transformations, however, is irrelevant. As we have pointed

out, the “administering” step simply helps to pick out the group of individuals who are
likely interested in applying the law of nature. And the second step could be satisfied
without transforming the blood, should science develop a totally different system for
determining metabolite levels that did not involve such a transformation. Regardless,
in stating that the “machine-or-transformation” test is an “important and useful clue”
to patentability, we have neither said nor implied that the test trumps the “law of
nature” exclusion. Bilski, 561 U.S. at 603. That being so, the test fails here.

37 Second, Prometheus argues that, because the particular laws of nature that its
patent claims embody are narrow and specific, the patents should be upheld. Thus, it
encourages us to draw distinctions among laws of nature based on whether or not they
will interfere significantly with innovation in other fields now or in the future.

38 But the underlying functional concern here is a relative one: how much future
innovation is foreclosed relative to the contribution of the inventor. A patent upon a
narrow law of nature may not inhibit future research as seriously as would a patent
upon Einstein’s law of relativity, but the creative value of the discovery is also
considerably smaller. And, as we have previously pointed out, even a narrow law of
nature (such as the one before us) can inhibit future research.

39 In any event, our cases have not distinguished among different laws of nature
according to whether or not the principles they embody are sufficiently narrow. And
this is understandable. Courts and judges are not institutionally well suited to making
the kinds of judgments needed to distinguish among different laws of nature. And so
the cases have endorsed a bright-line prohibition against patenting laws of nature,
mathematical formulas, and the like, which serves as a somewhat more easily
administered proxy for the underlying “building-block” concern.

40 Third, the Government argues that virtually any step beyond a statement of a
law of nature itself should transform an unpatentable law of nature into a potentially
patentable application sufficient to satisfy § 101’s demands. The Government does not
necessarily believe that claims that (like the claims before us) extend just minimally
beyond a law of nature should receive patents. But in its view, other statutory
provisions—those that insist that a claimed process be novel, 35 U.S.C. § 102, that it
not be obvious in light of prior art, § 103, and that it be “full[y], clear[ly], concise[ly],
and exact[ly]” described, § 112—can perform this screening function. In particular, it
argues that these claims likely fail for lack of novelty under § 102.

41 This approach, however, would make the “law of nature” exception to § 101
patentability a dead letter. The approach is therefore not consistent with prior law.
The relevant cases rest their holdings upon § 101, not later sections.
 PATENTABLE SUBJECT MATTER 265

42 We recognize that, in evaluating the significance of additional steps, the § 101

patent-eligibility inquiry and, say, the § 102 novelty inquiry might sometimes overlap.
But that need not always be so. And to shift the patent-eligibility inquiry entirely to
these later sections risks creating significantly greater legal uncertainty, while
assuming that those sections can do work that they are not equipped to do.

43 What role would laws of nature, including newly discovered (and “novel”) laws
of nature, play in the Government’s suggested “novelty” inquiry? Intuitively, one
would suppose that a newly discovered law of nature is novel. The Government,
however, suggests in effect that the novelty of a component law of nature may be
disregarded when evaluating the novelty of the whole. But §§ 102 and 103 say nothing
about treating laws of nature as if they were part of the prior art when applying those
sections. And studiously ignoring all laws of nature when evaluating a patent
application under §§ 102 and 103 would make all inventions unpatentable because all
inventions can be reduced to underlying principles of nature which, once known, make
their implementation obvious.

44 Section 112 requires only a “written description of the invention . . . in such

full, clear, concise, and exact terms as to enable any person skilled in the art . . . to
make and use the same.” It does not focus on the possibility that a law of nature (or
its equivalent) that meets these conditions will nonetheless create the kind of risk
that underlies the law of nature exception, namely the risk that a patent on the law
would significantly impede future innovation.

45 These considerations lead us to decline the Government’s invitation to

substitute §§ 102, 103, and 112 inquiries for the better established inquiry under
§ 101.

46 Fourth, Prometheus, supported by several amici, argues that a principle of law

denying patent coverage here will interfere significantly with the ability of medical
researchers to make valuable discoveries, particularly in the area of diagnostic
research. That research, which includes research leading to the discovery of laws of
nature, is expensive; it “ha[s] made the United States the world leader in this field”;
and it requires protection.

47 Other medical experts, however, argue strongly against a legal rule that would
make the present claims patent eligible, invoking policy considerations that point in
the opposite direction. The American Medical Association, the American College of
Medical Genetics, the American Hospital Association, the American Society of Human
Genetics, the Association of American Medical Colleges, the Association for Molecular
Pathology, and other medical organizations tell us that if “claims to exclusive rights
over the body’s natural responses to illness and medical treatment are permitted to
stand, the result will be a vast thicket of exclusive rights over the use of critical
scientific data that must remain widely available if physicians are to provide sound
medical care.”
 266 MASUR & OUELLETTE ⋅ PATENT LAW

48 We do not find this kind of difference of opinion surprising. Patent protection

is, after all, a two-edged sword. On the one hand, the promise of exclusive rights
provides monetary incentives that lead to creation, invention, and discovery. On the
other hand, that very exclusivity can impede the flow of information that might
permit, indeed spur, invention, by, for example, raising the price of using the patented
ideas once created, requiring potential users to conduct costly and time-consuming
searches of existing patents and pending patent applications, and requiring the
negotiation of complex licensing arrangements. At the same time, patent law’s general
rules must govern inventive activity in many different fields of human endeavor, with
the result that the practical effects of rules that reflect a general effort to balance
these considerations may differ from one field to another.

49 In consequence, we must hesitate before departing from established general

legal rules lest a new protective rule that seems to suit the needs of one field produce
unforeseen results in another. And we must recognize the role of Congress in crafting
more finely tailored rules where necessary. Cf. 35 U.S.C. §§ 161–164 (special rules for
plant patents). We need not determine here whether, from a policy perspective,
increased protection for discoveries of diagnostic laws of nature is desirable.

50 For these reasons, we conclude that the patent claims at issue here effectively
claim the underlying laws of nature themselves. The claims are consequently invalid.
And the Federal Circuit’s judgment is reversed.

Discussion Questions: Mayo

1. Two-Step Test. Patent law—and law in general—is full of multi-part tests in

which various factors are balanced against one another. For instance, the rules
governing whether a particular document constitutes a printed publication are
properly described as a multi-part test. It is worth noting, however, that Mayo sets
forth what is properly understood as a multi-step test. The answers to Step 1 and Step
2 of the Mayo test are not weighed against one another to arrive at a final result.
Rather, a court must proceed sequentially through the two steps of the Mayo test. If
the claim “passes” the test at either step—either because it is not directed to a law of
nature, product of nature, or abstract idea at Step 1, or because it contains an
inventive concept at Step 2—then the claim is valid under § 101. What kinds of factors
seem most relevant at each step?

2. Pre-Mayo Precedents. Prior to Bilski and Mayo, the leading precedents on

patenting abstract ideas and laws of nature were Benson, Flook, and Diehr, all of
which are discussed at some length in the Mayo opinion. If you hadn’t read Mayo and
were examining the law as it stood before 2012, what would you say was the
distinction between the cases that led the Supreme Court to hold the claims invalid
in Benson and Flook and valid in Diehr? What was it about the invention in Diehr that
rendered the claim patentable? Is the Mayo Court’s basis for differentiating these
 PATENTABLE SUBJECT MATTER 267

cases credible? Can you think of anything else that might distinguish Diehr from
Benson and Flook? (If you find them challenging to distinguish, you are not alone.)

3. Searching for an Inventive Concept. What do you think the Court means by
“inventive concept?” Is that meant to be synonymous with “novel and nonobvious,” or
does the Court intend something else? If the Court means “novel and nonobvious,”
why didn’t it use those words?

In many inventions such as the one in Mayo, the natural law or abstract idea
is itself the inventive concept. That is, the natural relationship at issue in Mayo was
completely unknown in the art until the inventors discovered it. Why should this not
be enough to make the claim patentable? Why require inventors to develop two
inventive concepts: the natural law itself, and something besides the natural law?

4. The Draftsman’s Art. Suppose you were given a chance to redraft the claims
in Mayo in light of what you now know of the doctrine. Is there a way to redraft the
claims to make them patentable? Or is the invention simply unpatentable no matter
how the claims are drawn?

5. Do We Need Patentable Subject Matter Limits? What is the doctrine of

patentable subject matter accomplishing that the doctrines of novelty,
nonobviousness, utility, etc. would not? What value is it adding? If your answer is that
we should not grant patents on basic building blocks of nature (including laws of
nature), why not? Is it improper to grant these types of patents, and if so, why? Would
it harm the progress of innovation to grant them, and if so, why?

For instance, suppose someone were able to obtain a patent on a basic scientific
law or principle. Would this inhibit the progress of science and technology? Obviously,
a patent has no value if it is not exploited commercially. Wouldn’t the patent owner
have an incentive to license the patented technology as broadly as possible? Under
what circumstances might we expect licensing efforts to fail or fall short?

Association for Molecular Pathology v. Myriad Genetics, 569 U.S. 576 (2013)

Justice Clarence Thomas delivered the opinion of the Court.

1 Respondent Myriad Genetics, Inc., discovered the precise location and

sequence of two human genes, mutations of which can substantially increase the risks
of breast and ovarian cancer. Myriad obtained a number of patents based upon its
discovery. This case involves claims from three of them and requires us to resolve
whether a naturally occurring segment of deoxyribonucleic acid (DNA) is patent
eligible under 35 U.S.C. § 101 by virtue of its isolation from the rest of the human
genome. We also address the patent eligibility of synthetically created DNA known as
complementary DNA (cDNA), which contains the same protein-coding information
found in a segment of natural DNA but omits portions within the DNA segment that
 268 MASUR & OUELLETTE ⋅ PATENT LAW

do not code for proteins. For the reasons that follow, we hold that a naturally occurring
DNA segment is a product of nature and not patent eligible merely because it has been
isolated, but that cDNA is patent eligible because it is not naturally occurring.

2 The human genome consists of approximately 22,000 genes packed into 23

pairs of chromosomes. Each “cross-bar” in the DNA helix consists of two chemically
joined nucleotides. The possible nucleotides are adenine (A), thymine (T), cytosine (C),
and guanine (G), each of which binds naturally with another nucleotide: A pairs with
T; C pairs with G. Sequences of DNA nucleotides contain the information necessary
to create strings of amino acids, which in turn are used in the body to build proteins.
Only some DNA nucleotides, however, code for amino acids; these nucleotides are
known as “exons.” Nucleotides that do not code for amino acids, in contrast, are known
as “introns.”

3 DNA’s informational sequences and the processes that create mRNA, amino
acids, and proteins occur naturally within cells. Scientists can, however, extract DNA
from cells using well known laboratory methods. These methods allow scientists to
isolate specific segments of DNA—for instance, a particular gene or part of a gene—
which can then be further studied, manipulated, or used. It is also possible to create
DNA synthetically through processes similarly well known in the field of genetics.
One such method begins with an mRNA molecule and uses the natural bonding
properties of nucleotides to create a new, synthetic DNA molecule. The result is the
inverse of the mRNA’s inverse image of the original DNA, with one important
distinction: Because the natural creation of mRNA involves splicing that removes
introns, the synthetic DNA created from mRNA also contains only the exon sequences.
This synthetic DNA created in the laboratory from mRNA is known as complementary
DNA (cDNA).

B
4 This case involves patents filed by Myriad after it made one such medical
breakthrough. Myriad discovered the precise location and sequence of what are now
known as the BRCA1 and BRCA2 genes. Mutations in these genes can dramatically
increase an individual’s risk of developing breast and ovarian cancer.

5 Once it found the location and sequence of the BRCA1 and BRCA2 genes,
Myriad sought and obtained a number of patents. [The following claims are
representative.] The first claim [of Patent No. 5,747,282] asserts a patent on “[a]n
isolated DNA coding for a BRCA1 polypeptide,” which has “the amino acid sequence
set forth in SEQ ID NO:2.” SEQ ID NO:2 sets forth a list of 1,863 amino acids that the
typical BRCA1 gene encodes. Put differently, claim 1 asserts a patent claim on the
DNA code that tells a cell to produce the string of BRCA1 amino acids listed in SEQ
ID NO:2.
 PATENTABLE SUBJECT MATTER 269

6 Claim 2 of the ’282 patent operates similarly. It claims “[t]he isolated DNA of
claim 1, wherein said DNA has the nucleotide sequence set forth in SEQ ID NO:1.”
Like SEQ ID NO:2, SEQ ID NO:1 sets forth a long list of data, in this instance the
sequence of cDNA that codes for the BRCA1 amino acids listed in claim 1.
Importantly, SEQ ID NO:1 lists only the cDNA exons in the BRCA1 gene, rather than
a full DNA sequence containing both exons and introns. As a result, the Federal
Circuit recognized that claim 2 asserts a patent on the cDNA nucleotide sequence
listed in SEQ ID NO:1, which codes for the typical BRCA1 gene.

7 Claim 5 of the ’282 patent claims a subset of the data in claim 1. In particular,
it claims “[a]n isolated DNA having at least 15 nucleotides of the DNA of claim 1.” The
practical effect of claim 5 is to assert a patent on any series of 15 nucleotides that exist
in the typical BRCA1 gene. Because the BRCA1 gene is thousands of nucleotides long,
even BRCA1 genes with substantial mutations are likely to contain at least one
segment of 15 nucleotides that correspond to the typical BRCA1 gene.

II

A
8 We have “long held that [§ 101] contains an important implicit exception: Laws
of nature, natural phenomena, and abstract ideas are not patentable.” Mayo v.
Prometheus, 566 U.S. 66, 70 (2012). As the Court has explained, without this
exception, there would be considerable danger that the grant of patents would “tie up”
the use of such tools and thereby “inhibit future innovation premised upon them.” Id.
at 86. The rule against patents on naturally occurring things is not without limits,
however, for “all inventions at some level embody, use, reflect, rest upon, or apply laws
of nature, natural phenomena, or abstract ideas,” and “too broad an interpretation of
this exclusionary principle could eviscerate patent law.” Id. at 71. As we have
recognized before, patent protection strikes a delicate balance between creating
“incentives that lead to creation, invention, and discovery” and “impeding the flow of
information that might permit, indeed spur, invention.” Id. at 92.

B
9 It is undisputed that Myriad did not create or alter any of the genetic
information encoded in the BRCA1 and BRCA2 genes. The location and order of the
nucleotides existed in nature before Myriad found them. Nor did Myriad create or
alter the genetic structure of DNA. Instead, Myriad’s principal contribution was
uncovering the precise location and genetic sequence of the BRCA1 and BRCA2 genes
within chromosomes 17 and 13. The question is whether this renders the genes
patentable.

10 Myriad recognizes that our decision in Diamond v. Chakrabarty is central to

this inquiry. In Chakrabarty, scientists added four plasmids to a bacterium, which
enabled it to break down various components of crude oil. 447 U.S. 303, 305 & n.1
(1980). The Court held that the modified bacterium was patentable. It explained that
 270 MASUR & OUELLETTE ⋅ PATENT LAW

the patent claim was “not to a hitherto unknown natural phenomenon, but to a
nonnaturally occurring manufacture or composition of matter—a product of human
ingenuity having a distinctive name, character [and] use.” Id. at 309–10. The
Chakrabarty bacterium was new “with markedly different characteristics from any
found in nature” due to the additional plasmids and resultant “capacity for degrading
oil.” Id. at 305 n.1, 310. In this case, by contrast, Myriad did not create anything. To
be sure, it found an important and useful gene, but separating that gene from its
surrounding genetic material is not an act of invention.

11 Groundbreaking, innovative, or even brilliant discovery does not by itself

satisfy the § 101 inquiry. In Funk Brothers Seed Co. v. Kalo Inoculant Co., 333 U.S.
127 (1948), this Court considered a composition patent that claimed a mixture of
naturally occurring strains of bacteria that helped leguminous plants take nitrogen
from the air and fix it in the soil. The Court held that the composition was not patent
eligible because the patent holder did not alter the bacteria in any way. His patent
claim thus fell squarely within the law of nature exception. So do Myriad’s. Myriad
found the location of the BRCA1 and BRCA2 genes, but that discovery, by itself, does
not render the BRCA genes “new . . . composition[s] of matter,” § 101, that are patent
eligible.

12 Indeed, Myriad’s patent descriptions highlight the problem with its claims. For
example, a section of the ’282 patent’s Detailed Description of the Invention indicates
that Myriad found the location of a gene associated with increased risk of breast
cancer and identified mutations of that gene that increase the risk. In subsequent
language Myriad explains that the location of the gene was unknown until Myriad
found it among the approximately eight million nucleotide pairs contained in a
subpart of chromosome 17. Myriad seeks to import these extensive research efforts
into the § 101 patent-eligibility inquiry. But extensive effort alone is insufficient to
satisfy the demands of § 101.

13 Nor are Myriad’s claims saved by the fact that isolating DNA from the human
genome severs chemical bonds and thereby creates a nonnaturally occurring molecule.
Myriad’s claims are simply not expressed in terms of chemical composition, nor do
they rely in any way on the chemical changes that result from the isolation of a
particular section of DNA. Instead, the claims understandably focus on the genetic
information encoded in the BRCA1 and BRCA2 genes. If the patents depended upon
the creation of a unique molecule, then a would-be infringer could arguably avoid at
least Myriad’s patent claims on entire genes (such as claims 1 and 2 of the ’282 patent)
by isolating a DNA sequence that included both the BRCA1 or BRCA2 gene and one
additional nucleotide pair. Such a molecule would not be chemically identical to the
molecule “invented” by Myriad. But Myriad obviously would resist that outcome
because its claim is concerned primarily with the information contained in the genetic
sequence, not with the specific chemical composition of a particular molecule.
 PATENTABLE SUBJECT MATTER 271

14 Finally, Myriad argues that the PTO’s past practice of awarding gene patents
is entitled to deference, citing J.E.M. Ag Supply, Inc. v. Pioneer Hi–Bred Int’l, Inc.,
534 U.S. 124 (2001). We disagree. Undercutting the PTO’s practice, the United States
argued in the Federal Circuit and in this Court that isolated DNA was not patent
eligible under § 101 and that the PTO’s practice was not “a sufficient reason to hold
that isolated DNA is patent-eligible.” These concessions weigh against deferring to
the PTO’s determination.2

C
15 cDNA does not present the same obstacles to patentability as naturally
occurring, isolated DNA segments. As already explained, creation of a cDNA sequence
from mRNA results in an exons-only molecule that is not naturally occurring.3
Petitioners concede that cDNA differs from natural DNA in that “the non-coding
regions have been removed.” They nevertheless argue that cDNA is not patent eligible
because “[t]he nucleotide sequence of cDNA is dictated by nature, not by the lab
technician.” That may be so, but the lab technician unquestionably creates something
new when cDNA is made. cDNA retains the naturally occurring exons of DNA, but it
is distinct from the DNA from which it was derived. As a result, cDNA is not a “product
of nature” and is patent eligible under § 101, except insofar as very short series of
DNA may have no intervening introns to remove when creating cDNA. In that
situation, a short strand of cDNA may be indistinguishable from natural DNA.

III
16 It is important to note what is not implicated by this decision. First, there are
no method claims before this Court. Had Myriad created an innovative method of
manipulating genes while searching for the BRCA1 and BRCA2 genes, it could
possibly have sought a method patent. But the processes used by Myriad to isolate
DNA were well understood by geneticists at the time of Myriad’s patents and are not
at issue in this case.

17 Similarly, this case does not involve patents on new applications of knowledge
about the BRCA1 and BRCA2 genes. Nor do we consider the patentability of DNA in

2 [n.7 in opinion] Myriad also argues that we should uphold its patents so as not to
disturb the reliance interests of patent holders like itself. Concerns about reliance interests
arising from PTO determinations, insofar as they are relevant, are better directed to Congress.
3 [n.8 in opinion] Some viruses rely on an enzyme called reverse transcriptase to
reproduce by copying RNA into cDNA. In rare instances, a side effect of a viral infection of a
cell can be the random incorporation of fragments of the resulting cDNA, known as a
pseudogene, into the genome. Such pseudogenes serve no purpose; they are not expressed in
protein creation because they lack genetic sequences to direct protein expression. Perhaps not
surprisingly, given pseudogenes’ apparently random origins, petitioners have failed to
demonstrate that the pseudogene consists of the same sequence as the BRCA1 cDNA. The
possibility that an unusual and rare phenomenon might randomly create a molecule similar
to one created synthetically through human ingenuity does not render a composition of matter
nonpatentable.
 272 MASUR & OUELLETTE ⋅ PATENT LAW

which the order of the naturally occurring nucleotides has been altered. Scientific
alteration of the genetic code presents a different inquiry, and we express no opinion
about the application of § 101 to such endeavors. We merely hold that genes and the
information they encode are not patent eligible under § 101 simply because they have
been isolated from the surrounding genetic material.

Justice Antonin Scalia, concurring in part and concurring in the judgment.

18 I join the judgment of the Court, and all of its opinion except Part I–A and some
portions of the rest of the opinion going into fine details of molecular biology. I am
unable to affirm those details on my own knowledge or even my own belief. It suffices
for me to affirm, having studied the opinions below and the expert briefs presented
here, that the portion of DNA isolated from its natural state sought to be patented is
identical to that portion of the DNA in its natural state; and that complementary DNA
(cDNA) is a synthetic creation not normally present in nature.

Discussion Questions: Myriad

1. What Distinguishes cDNA? Why does the Court hold that cDNA strands are
patentable and isolated DNA strands are not? In what way or ways are those two
products different? Do they perform different functions? Which of them, if either, is
different from what appears in nature? Are they different structurally from each
other, and if so, in what way?

What is the distinction between the mixture of bacteria found unpatentable in

Funk Brothers and the cDNA found patentable in Myriad? Why couldn’t the cDNA be
characterized as a mixture or rearrangement of existing natural substances (the base
pairs) and held unpatentable on those grounds?

Look back at footnote 8, which indicates that viruses can create cDNA strands
in nature. In that footnote, the Court notes that it is only a “possibility” that the
relevant cDNA strand was created in nature by a virus at some point. Suppose it could
be proven that a virus randomly created the BRCA cDNA strand once, in a small town
in Nevada, at 6:34 pm on a Friday in October. Should that affect the patentability of
the invention? What if it could be shown that a virus regularly created the BRCA
cDNA strand?

2. Should Generalist Judges Decide Technical Patent Cases? Justice Scalia’s

concurrence in Myriad involves the problems faced by generalist judges (and justices)
in adjudicating patent cases. What should we make of that concurrence? Do we think
the problem Justice Scalia describes will be more acute in patentable subject matter
cases than in other types of patent cases? Is this a reason to rethink our approach to
judging patent cases?
 PATENTABLE SUBJECT MATTER 273

3. Do Patentee Reliance Interests Matter? One argument that Myriad made in

defense of its patents was that it had relied upon the patentability of DNA molecules
when constructing its business. As we noted above, DNA had been patentable for
many years prior to the Myriad decision. Do these reliance interests constitute a good
argument in favor of leaving the law as it is? Under what circumstances should
reliance interests such as these play a role in judicial decision-making, if at all? See
Jonathan S. Masur & Adam K. Mortara, Patents, Property, and Prospectivity, 71 Stan.
L. Rev. 963 (2019).

4. Are Products of Nature Different from Laws of Nature? Are the doctrinal
rules that the Supreme Court laid down to govern products of nature (in Myriad) and
the rules that it laid down to govern laws of nature (in Mayo) the same or different?
If they appear to be different, can you devise a way to unify them? In Alice v. CLS
Bank, which we will read in the next section, the Supreme Court states that the two-
step Mayo/Alice test is now the test for evaluating all patentable subject matter issues.
Why do you think the Court didn’t apply this test in Myriad?

5. Myriad’s Impact on Innovation. There have been few evidence-based studies

before or after Myriad on the impact of patents on DNA-related research, largely
because researchers cannot observe the counterfactual world in which patent
eligibility rules were different. Even before Myriad, the number of gene patents
granted each year was declining since a peak in 1999, including because the 1990
Human Genome Project led to the sequencing of most genes by the early 2000s.
Although researchers have not been able to determine whether the prospect of gene
patents (or the absence of that incentive post-Myriad) caused any measurable change
in R&D, they have used pre-Myriad data to study the effect of existing gene patents
on follow-on innovation on those genes, including scientific publications and the use
of genes in pharmaceutical clinical trials and diagnostic tests. Using a clever empirical
design to identify the causal effect of patents, Bhaven Sampat and Heidi Williams
determined that “gene patents have had no quantitatively important effect on follow-
on innovation.” Bhaven Sampat & Heidi L. Williams, How Do Patents Affect Follow-
on Innovation? Evidence from the Human Genome, 109 Am. Econ. Rev. 203 (2019).
What does this result make you think of the Supreme Court’s view that Myriad’s
patents “would ‘tie up’ the use of [genes] and thereby inhibit future innovation”?

6. The Morality of Patenting Human Genes and Biological Samples. Are there
special concerns raised by the fact that Myriad was seeking to patent part of the
human genome? Was there a risk that Myriad might sue people who had the BRCA
gene in their own bodies? Is it problematic for Myriad to “own” the rights to the basic
building blocks of human genetics? Do you think these concerns figured into the
Supreme Court’s decision, or should they have? If your answer to either of these last
questions is “yes,” do you think the Court’s decision to allow only the cDNA patents
effectively solves the problem?
 274 MASUR & OUELLETTE ⋅ PATENT LAW

Are similar concerns raised with patents derived from biological samples? The
Immortal Life of Henrietta Lacks, a best-selling book with a film adaptation by Oprah
Winfrey, tells the history of Henrietta Lacks, a Black woman whose cancer cells were
cultured without her knowledge or consent in 1951, shortly before her death. The
resulting HeLa cell line is still used for medical research, and although the cells
themselves were not patented, there are thousands of U.S. patents involving HeLa
cells. Should an invention’s origins in biological samples affect its patentability?
Should people who provide valuable genetic resources receive any IP rights in those
resources or other forms of compensation?

Nat. Alternatives Int’l v. Creative Compounds, 918 F.3d 1338 (Fed. Cir. 2019)

Kimberly A. Moore, Circuit Judge.

BACKGROUND

1 Natural Alternatives owns a number of patents that relate to dietary

supplements containing beta-alanine and have substantially similar specifications.
Beta-alanine is an amino acid [i.e., one of 20 naturally occurring building blocks of
proteins encoded by DNA]. Together with histidine, another amino acid, it can form
dipeptides [two linked amino acids] that are found in muscles. The dipeptides are
involved in the regulation of intra-cellular pH during muscle contraction and
development of fatigue, and variations in dipeptide concentrations affect the
anaerobic work capacity of individual athletes [i.e., how much intense exercise
athletes can do without getting oxygen to their cells]. One of these dipeptides is
carnosine, which contributes to hydronium ion buffering. During certain sustained
exercise, hydronium ions and lactate can accumulate and severely reduce
intracellular pH. The reduced pH interferes with the creatine-phosphorylcreatine
system, a part of the process by which energy is generated in cells, particularly muscle
cells. The claimed patents generally relate to the use of beta-alanine in a dietary
supplement to increase the anaerobic working capacity of muscle and other tissue.
[Eds: It is not necessary to understand the details of biochemistry to understand this
case; the key point is simply that the inventors discovered that taking beta-alanine as
a dietary supplement improves athletic performance.]

I.

2 Several of the asserted patents claim methods of treatment using beta-alanine

(“the Method Claims”). Claim 1 of the ’596 patent and claim 1 of the ’865 patent have
been treated as representative of the claims in those patents. Claim 1 of the ’596
patent recites:

1. A method of regulating hydronium ion concentrations in a human

tissue comprising:
 PATENTABLE SUBJECT MATTER 275

providing an amount of beta-alanine to blood or blood plasma effective

to increase beta-alanylhistidine dipeptide synthesis in the human tissue;
and

exposing the tissue to the blood or blood plasma, whereby the

concentration of beta-alanylhistidine is increased in the human tissue.

3 Claim 1 of the ’865 patent recites:

1. A method of increasing anaerobic working capacity in a human

subject, the method comprising:

a) providing to the human subject an amount of an amino acid to blood

or blood plasma effective to increase beta-alanylhistidine dipeptide
synthesis in the tissue, wherein said amino acid is at least one of:

i) beta-alanine that is not part of a dipeptide, polypeptide or

oligopeptide;

ii) an ester of beta-alanine that is not part of a dipeptide,

polypeptide or oligopeptide; or

iii) an amide of beta-alanine that is not part of a dipeptide,

polypeptide or oligopeptide; and

b) exposing the tissue to the blood or blood plasma, whereby the

concentration of beta-alanylhistidine is increased in the tissue,

wherein the amino acid is provided through a dietary supplement.

4 Natural Alternatives’ proposed construction of the “effective” limitations is to

“elevates beta-alanine above natural levels to cause an increase in the synthesis of
beta-alanylhistidine dipeptide in the tissue.” It defines “dietary supplement” as “an
addition to the human diet, which is not a natural or conventional food, which
effectively increases athletic performance when administered to the human over a
period of time.” It also defines “increasing anaerobic working capacity” as “increasing
the amount of work performed by a muscle under lactate producing conditions.”

5 The district court held both claims are directed to natural laws. It held claim
1 of the ’865 patent is directed to the natural law that “ingesting certain levels of beta-
alanine, a natural substance, will increase the carnosine concentration in human
tissue and, thereby, increase the anaerobic working capacity in a human.” It held
claim 1 of the ’596 patent is directed to the natural law that “ingesting certain levels
of beta-alanine, a natural substance, will increase the carnosine concentration in
human tissue and, thereby, aid in regulating hydronium ion concentration in the
tissue.” We do not agree.
 276 MASUR & OUELLETTE ⋅ PATENT LAW

6 Administering certain quantities of beta-alanine to a human subject alters that

subject’s natural state. Specifically, homeostasis is overcome, and the subject’s body
will produce greater levels of creatine. This, in turn, results in specific physiological
benefits for athletes engaged in certain intensive exercise. The claims not only embody
this discovery, they require that an infringer actually administer the dosage form
claimed in the manner claimed, altering the athlete’s physiology to provide the
described benefits. These are treatment claims and as such they are patent eligible.

7 As we explained in Vanda Pharmaceuticals Inc. v. West-Ward Pharmaceuticals

International Ltd., 887 F.3d 1117 (Fed. Cir. 2018), claims that are directed to
particular methods of treatment are patent eligible. The claims in Vanda involved a
method of treating patients with schizophrenia that first required performing a
genetic test to determine if a patient was a CYPD2D6 performer. Based on the results
of that test, a particular dose of iloperidone was selected and internally administered.
As a result, the risk of QTc prolongation, a dangerous side effect, was decreased. We
held that the claims were not directed to a natural relationship between iloperidone,
CYP2D6 metabolism, and QTc prolongation. While we acknowledged that the
inventors had recognized the underlying relationships, we explained that those were
not what was claimed. Instead, the claims were directed to a patent-eligible method
of using iloperidone to treat schizophrenia, a specific method of treatment for specific
patients using a specific compound at specific doses to achieve a specific outcome.

8 Unlike the claims held ineligible in Mayo, which required only the observation
of a natural law, the Vanda claims required a doctor to affirmatively administer a
drug to alter a patient’s condition from their natural state. In Mayo, the discovery
underlying the claims was that when blood levels were above a certain level harmful
effects were more likely and when they were below another level the drug’s beneficial
effects were lost. Nothing in the claim required any application of that discovery
beyond the steps that must be taken in order to apply the laws in question. The claims
at issue in Mayo involved administering a prior art drug to a subject and determining
the level of drug metabolite in that subject. The claims further provided that
particular levels of measured metabolite indicated a need to increase or decrease the
amount of drug subsequently administered to the subject. The claims did not,
however, require any actual action be taken based on the measured level of
metabolite. The claim, therefore, “was not a treatment claim,” because “it was not
limited to instances in which the doctor actually decreases (or increases) the dosage
level.” Vanda, 887 F.3d at 1136. This was expressly recognized in Mayo, which
distinguished the Mayo claim from “a typical patent on a new drug or a new way of
using an existing drug,” because the Mayo claim did not “confine [its] reach to
particular applications” of the natural laws relied upon. 566 U.S. at 87 (emphasis
added). Such claims rely on the relationship between the administration of the drug
and the physiological effects in the patient. The fact that the human body responds to
the treatment through biochemical processes does not convert the claim into an
ineligible one.
 PATENTABLE SUBJECT MATTER 277

9 The Method Claims are directed to patent eligible new ways of using an
existing product, beta-alanine, [and] they are treatment claims. This falls clearly
within the scope of § 101, which allows for patents on “any new and useful process,”
including “a new use of a known . . . composition of matter, or material.” 35 U.S.C.
§§ 100(b), 101. As the Supreme Court explained in Mayo, such patents on a new use
of an existing drug are “typical.” 566 U.S. at 87.

10 While the Method Claims have similarities to the claims found ineligible in
Mayo, as they utilize an underlying natural law, this is not sufficient to establish that
they are directed to that law. In Mayo, the Court held the claims did not do
significantly more than simply describe the natural “relationships between
concentrations of certain metabolites in the blood and the likelihood that a dosage of
a thiopurine drug will prove ineffective or cause harm.” The Method Claims similarly
rely on the relationships between the administration of beta-alanine and beta-
alanylhistidine dipeptide synthesis, but under Natural Alternatives’ constructions,
the Method Claims require specific steps be taken in order to bring about a change in
a subject, altering the subject’s natural state. Unlike the claims in Mayo, the Method
Claims at issue are treatment claims.

11 Like the claims in Vanda, the Method Claims contain specific elements that
clearly establish they are doing more than simply reciting a natural law. Like the
Vanda claims, which specify a patient population to be treated, the Method Claims
specify particular results to be obtained by practicing the method. Claim 1 of the ’596
patent is directed to a “method of regulating hydronium ion concentrations in a human
tissue,” and claim 1 of the ’865 patent is directed to a “method of increasing anaerobic
working capacity in a human subject.” Similarly, both the Vanda claims and the
Method Claims specify a compound to be administered to achieve the claimed result.
Claim 1 of the ’596 patent achieves the result through the administration of the
specific compound beta-alanine, and claim 1 of the ’865 patent requires use of one of
the three specified forms of beta-alanine. The claims in Vanda further specified the
dosages of the compound to be administered. The Method Claims likewise contain a
dosage limitation by virtue of the “effective” limitation. As we looked to the
specification in Vanda to determine the significance of the dosing ranges, here, the
specification provides a method for calculating dosage based on a subject’s weight.
This goes far beyond merely stating a law of nature, and instead sets forth a particular
method of treatment.

12 Similarly, the fact that the active ingredient in the supplement is a molecule
that occurs in nature and is consumed as part of the human diet also does not alter
our analysis.4 Creative Compounds argues that, if it were discovered that beta-alanine

4 [n.2 in opinion] The U.S. Patent and Trademark Office has adopted guidance on how

examiners should determine whether a claim is eligible under § 101 and provided examples of
eligible and ineligible claims. Under these guidelines, a claim to a practical application of a
natural product to treat a particular disease is patent eligible. The parties dispute the
persuasiveness of this document and the weight we should afford it under Skidmore v. Swift
 278 MASUR & OUELLETTE ⋅ PATENT LAW

or another natural compound can be used to treat or cure Alzheimer’s or some other
disease, the method for doing so would not be patent eligible. That is not the case
before us. That flies in the face of the Patent Act, which expressly permits patenting
a new use of an existing product. The Supreme Court has also rejected the idea that
claims to methods making use of natural products are equivalent to claims to the
natural products themselves. See Ass’n for Molecular Pathology v. Myriad Genetics,
Inc., 569 U.S. 576, 595 (2013) (distinguishing between method claims for
manipulating genes and claims to the genes); Funk Brothers Seed Co. v. Kalo
Inoculant Co., 333 U.S. 127, 130 (1948) (“We do not have presented the question
whether the methods of selecting and testing the non-inhibitive strains are
patentable. We have here only product claims.”). Moreover, while beta-alanine may
exist in nature, Natural Alternatives has argued that the quantities being
administered do not, and that the claimed consumption greatly exceeds natural levels.

13 The Method Claims at issue are treatment claims. They cover using a natural
product in unnatural quantities to alter a patient’s natural state, to treat a patient
with specific dosages outlined in the patents. We hold, therefore, that the Method
Claims are not directed to ineligible subject matter.

II.

14 The district court also considered the patent eligibility of a number of claims
to dietary supplements (“the Product Claims”). The parties and the district court
treated claim 6 of the ’376 patent and claim 1 of the ’084 patent as representative of
the claims in those patents. Claim 6 of the ’376 patent depends on claims 1 and 5.

15 Turning to the Product Claims before us, claim 6 of the ’376 patent depends on
claims 1 and 5.

1. A composition, comprising:

glycine; and

a) an amino acid selected from the group consisting of a beta-

alanine, an ester of a beta-alanine, and an amide of a beta-alanine,
or

b) a di-peptide selected from the group consisting of a beta-alanine

di-peptide and a beta-alanylhistidine di-peptide.

5. The composition of claim 1, wherein the composition is a dietary

supplement or a sports drink.

& Co., 323 U.S. 134 (1944). The issue before us is a matter of law and the result is clear, thus
this is not a case in which Skidmore deference would affect the outcome.
 PATENTABLE SUBJECT MATTER 279

6. The composition of claim 5, wherein the dietary supplement or sports

drink is a supplement for humans.

16 Claim 1 of the ’084 patent recites:

1. A human dietary supplement, comprising a beta-alanine in a unit

dosage of between about 0.4 grams to 16 grams, wherein the
supplement provides a unit dosage of beta-alanine.

17 Although beta-alanine is a natural product, the Product Claims are not

directed to beta-alanine. A claim to a manufacture or composition of matter made from
a natural product is not directed to the natural product where it has different
characteristics and “the potential for significant utility.” See Diamond v. Chakrabarty,
447 U.S. 303, 310 (1980). Just as the Method Claims are directed to specific methods
of treatment that employ a natural law, the Product Claims are directed to specific
treatment formulations that incorporate natural products, but they have different
characteristics and can be used in a manner that beta-alanine as it appears in nature
cannot.

18 In the Product Claims, beta-alanine and glycine are incorporated into

particular dosage forms. Claim 6 of the ’376 patent is directed to a “dietary
supplement or sports drink” that uses a combination of glycine and one of the specified
forms of beta-alanine. Under Natural Alternatives’ claim constructions, the quantity
of beta-alanine must be sufficient to “effectively increase[] athletic performance,” and
the specification provides a method for determining such an amount. Similarly, the
“dietary supplement” in claim 1 of the ’084 patent uses the product beta-alanine at a
dosage of “between about 0.4 grams to 16 grams” to “effectively increase[] athletic
performance.” In each case, the natural products have been isolated and then
incorporated into a dosage form with particular characteristics. At this stage in the
litigation, it has been sufficiently alleged that these characteristics provide significant
utility, as the claimed dosage forms can be used to increase athletic performance in a
way that naturally occurring beta-alanine cannot. Accordingly, neither claim is
directed to ineligible subject matter.

19 Moreover, even though claim 6 contains a combination of glycine and beta-

alanine, both of which are natural products, that is not necessarily sufficient to
establish that the claimed combination is “directed to” ineligible subject matter. The
Court’s decision in Funk Brothers does not stand for the proposition that any
combination of ineligible subject matter is itself ineligible. In Funk Brothers, the Court
held that claims to a mixture of two naturally occurring bacteria were not patent
eligible where each bacteria species in the claimed combination “ha[d] the same effect
it always had,” and the “combination of species produce[d] . . . no enlargement of the
range of their utility.” 333 U.S. at 131. The combination of the bacteria into the same
package did “not improve in any way their natural function.” Here, as Creative
Compounds’ counsel acknowledged at oral argument, the record indicates that the
claimed combination of glycine and beta-alanine could have synergistic effects
 280 MASUR & OUELLETTE ⋅ PATENT LAW

allowing for outcomes that the individual components could not have. Given that this
is the pleading stage, we would have to accept this statement as true even if it were
just an allegation in the pleadings. Instead, what we have goes far beyond that,
including a statement in an article attached to an expert report explaining that “one
of insulin’s effects is to increase amino acid (such as beta-alanine) into our cells,” a
statement in the specification that “[i]t may be that glycine enhances insulin
sensitivity,” and an expert declaration explaining that direct supplementation of a
different amino acid had no effect unless “co-supplemented with glucose or other
compounds increasing the concentration of insulin in circulation.” All of these suggest
that when combined the beta-alanine and glycine have effects that are greater than
the sum of the parts. At a minimum, there are sufficient factual allegations to render
judgment on the pleadings inappropriate. Accordingly, given the factual allegations,
these claims would still survive a motion for judgment on the pleadings at the first
step of the Alice test.

20 Finally, even if the Product Claims were directed to ineligible subject matter,
judgment on the pleadings would still be inappropriate under step two. Like claim 1
of the ’865 patent, the Product Claims contain a dietary supplement limitation, with
the same proposed construction. As we explained with regard to the Method Claims,
the specification does not contain language supporting the idea that this limitation
was well-understood, routine, and conventional. The language in the specification
does not support this proposition, and patentee’s claim construction contradicts
Creative Compounds’ position, so such a determination may not be made on a motion
for judgment on the pleadings.

Discussion Questions: Natural Alternatives

1. Diagnostics Versus Treatments. The Federal Circuit’s holding on the method

claims in Natural Alternatives rests quite heavily on the distinction the court draws
between diagnostic methods (which are not patentable) and treatment methods
(which are patentable). The court first drew this distinction in Vanda
Pharmaceuticals, which is cited heavily in Natural Alternatives. Vanda is a highly
complex case about a pharmaceutical drug; Natural Alternatives, the case we chose to
include in this book, is about a sports drink. What can we say, except: you’re welcome.
Do you think this line between diagnostics and treatments is tenable? Is there
anything in the Mayo opinion that would support or undermine the Federal Circuit’s
rule that treatments are patentable and diagnostics are not? What if the claim is to a
new diagnostic followed by an old treatment, where the treatment dosage and other
details aren’t adjusted in light of the diagnostic?

Relatedly, do you think the Mayo patent was properly classified by the Federal
Circuit as a diagnostic patent? The dissent in Vanda criticized the characterization of
the Mayo invention as a diagnostic because the representative claim was to “[a]
method of optimizing therapeutic efficacy for treatment of an immune-mediated
 PATENTABLE SUBJECT MATTER 281

gastrointestinal disorder” that included “administering a drug” to a patient with this

disorder. The Vanda majority responded that the Mayo claim was not a treatment
claim because “a doctor . . . could violate the patent even if he did not actually alter
his treatment decision in the light of the test” such that the claim would “tie up the
doctor’s subsequent treatment decision whether that treatment does, or does not,
change in light of the inference he has drawn using the correlations.” The Mayo court
also noted that “unlike, say, a typical patent on a new drug or a new way of using an
existing drug, the patent claims do not confine their reach to particular applications
of those laws.” Which view do you find more convincing as a legal matter? As a policy
matter?

2. What About Myriad? In Natural Alternatives, the Federal Circuit cites the
earlier Supreme Court cases Chakrabarty and Funk Brothers but does not cite Myriad
in its discussion of the product claims. Why do you think that is? Is that approach
justified? Is the court’s result consistent with Myriad?

Applying the Two-Step Test to “Nature” Claims: MPEP § 2106

The Supreme Court first announced the two-step test for patentable subject
matter in 2012 in Mayo: (1) Is the claim directed to an ineligible concept? (2) If so,
what else is there? Is there an inventive concept that amounts to significantly more
than a patent on the ineligible concept? Needless to say, that left a great deal of prior
Supreme Court caselaw on patentable subject matter that had been decided using
other tests. The following table illustrates how the Supreme Court has attempted to
retrofit its earlier patentable subject matter (PSM) precedents (including abstract
ideas, laws of nature, and products of nature) into this new two-step test. (Please note
that we are only describing how the Supreme Court has characterized these old cases,
not endorsing it.)

Case 1. Ineligible concept? 2. What else? PSM?

Neilson hot air promotes ignition unconventional steps YES
(Eng. 1841) better than cold air implemented in inventive
way
Funk Bros. mixture of naturally nothing; combination did NO
(1948) occurring bacteria not improve natural
function
Benson binary-to-digital conversion implemented on a NO
(1972) computer, but that is only
practical use
Flook new formula for alarm well known chemical NO
(1978) limits in chemical reaction process & use of computers
282 MASUR & OUELLETTE ⋅ PATENT LAW

Chakrabarty NO (genetically modified N/A YES

(1980) bacterium is not natural)
Diehr Arrhenius equation (already novel rubber curing YES
(1981) known) apparatus
Bilski risk hedging limited to a few markets NO
(2010)
Mayo relationship between conventional NO
(2012) metabolite concentrations & “administering” and
thiopurine dose “determining” steps
Myriad isolated DNA is a product of nothing; claim is to natural NO
(2013) nature product itself
isolated DNA
Myriad NO (synthetic cDNA is not N/A YES
(2013) natural)
cDNA

As the Supreme Court noted in Mayo, “all inventions at some level embody,
use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.”
Even a claim to a standard spring-loaded mousetrap could be characterized as
directed to the abstract idea of catching mice, or the natural laws involving the physics
of springs and mechanical forces. But the Court recognized that “too broad an
interpretation of this exclusionary principle could eviscerate patent law.” Given the
malleability of the two-step test, we think patent lawyers should always at least
consider whether a claim is patentable subject matter. And figuring out whether a
claim is more analogous to those that have survived the Mayo test or those that have
failed requires some creativity and good lawyering.

The difficulties of applying this complicated framework led to widespread

complaints about inconsistency in USPTO examination decisions involving patentable
subject matter. To help patent examiners apply this doctrine, the USPTO has issued
extensive guidance to examiners. Although the Federal Circuit has not yet granted
any deference to the USPTO’s interpretation of substantive patent law, this guidance
is a useful resource for students looking for more examples of how the USPTO explains
Federal Circuit caselaw to non-lawyer patent examiners. As you read the following
MPEP excerpts, consider whether they are a faithful summary of current law.

The USPTO has divided Mayo Step 1 into two prongs: a claim is only “directed
to” an ineligible concept if it (1) “recites” an ineligible concept (as opposed to merely
“involving” an exception) and (2) fails to integrate that concept into a “practical
application.” MPEP § 2106.04 explains the recite vs. involve distinction as follows:
 PATENTABLE SUBJECT MATTER 283

An example of a claim that recites a judicial exception is “A machine

comprising elements that operate in accordance with F = ma.” This
claim sets forth the principle that force equals mass times acceleration
(F = ma) and therefore recites a law of nature exception. Because F =
ma represents a mathematical formula, the claim could alternatively
be considered as reciting an abstract idea. Because this claim recites a
judicial exception, it requires further analysis. An example of a claim
that merely involves, or is based on, an exception is a claim to “A teeter-
totter comprising an elongated member pivotably attached to a base
member, having seats and handles attached at opposing sides of the
elongated member.” This claim is based on the concept of a lever
pivoting on a fulcrum, which involves the natural principles of
mechanical advantage and the law of the lever. However, this claim
does not recite these natural principles and therefore is not directed to
a judicial exception. Thus, the claim is eligible without further analysis.

The USPTO then explains the application of this Mayo Step 1 test to “nature” claims:

[N]ot every claim describing a natural ability or quality of a product, or

describing a natural process, necessarily recites a law of nature or
natural phenomenon. Thus, in a claimed method of treating cancer with
chemotherapy, the cancer cells’ inability to survive chemotherapy is not
considered to be a law of nature. Similarly, in a claimed method of
treating headaches with aspirin, the human body’s natural response to
aspirin is not considered to be a law of nature. These claims are
accordingly eligible unless they recite another exception. Similarly, a
method of producing a new compound is not directed to the individual
components’ ability to combine to form the new compound.

Even if a claim does recite a law of nature or natural

phenomenon, it may still be eligible. For example, claims reciting a
naturally occurring relationship between a patient’s genotype and the
risk of QTc prolongation (a law of nature) were held eligible as not
“directed to” that relationship because they also recited a step of
treating the patient with an amount of a particular medication that was
tailored to the patient’s genotype. Vanda Pharms., 887 F.3d at 1134-36.
This particular treatment step applied the natural relationship in a
manner that integrated it into a practical application.

The MPEP further emphasizes that for products of nature, the key question at Mayo
Step 1 is whether the nature-based product limitations in the claim have “markedly
different characteristics” from naturally occurring products.

If a claim is directed to an ineligible concept at Step 1, it is necessary to move

to Step 2: determining whether the rest of the claim includes an “inventive concept”
that adds “significantly more” to the ineligible concept. Mayo emphasized that it is not
284 MASUR & OUELLETTE ⋅ PATENT LAW

enough to add “well-understood, routine, conventional activity” or to merely tell

someone “to apply the law.” Merely applying the concept in a particular field of use is
also insufficient. Although the USPTO emphasizes that “the search for an inventive
concept should not be confused with a novelty or non-obviousness determination,”
there are overlaps: if what remains after removing the ineligible concept from the
claim is nonobvious, then it likely passes Step 2.

Practice Problems: Laws of Nature and Products of Nature

Consider the following claims. Do you think these claims involve patentable
subject matter? If you will need more technical information to answer the question,
explain what information you will need.

1. The patented invention is a method for detecting genetic abnormalities in a

fetus. Prior to the invention of this method, the only known way of obtaining a genetic
sample from a fetus was to draw amniotic fluid directly from the pregnant person’s
uterus, in a method known as amniocentesis. This method was considered dangerous
because it involved poking a long needle into the pregnant person’s uterus, near the
fetus. The key to this invention was the groundbreaking discovery that some of the
fetus’s nucleic acid circulates in the bloodstream of the pregnant person (known as
cell-free fetal DNA). A doctor could thus draw blood from the pregnant person,
separate out and amplify the fetus’s DNA using conventional methods, and run
genetic tests on the fetus’s DNA. The claim reads:

A method for detecting a paternally inherited nucleic acid of fetal origin

performed on a maternal serum or plasma sample from a pregnant
female, which method comprises amplifying a paternally inherited
nucleic acid from the serum or plasma sample and detecting the
presence of a paternally inherited nucleic acid of fetal origin in the
sample.

Ariosa Diagnostics v. Sequenom, 788 F.3d 1371 (Fed Cir 2015).

2. The invention is a method of repeatedly freezing liver cells (hepatocytes) in

such a manner that they can be unfrozen and then used for transplant or other
medical purposes. The individual steps of freezing and thawing were known, but prior
to this invention, scientists had believed that liver cells could not survive multiple
freeze-thaw cycles. The claim reads:

A method of producing a desired preparation of multi-cryopreserved

hepatocytes, said hepatocytes being capable of being frozen and thawed
at least two times, and in which greater than 70% of the hepatocytes of
said preparation are viable after the final thaw, said method
comprising:
 PATENTABLE SUBJECT MATTER 285

(a) Subjecting hepatocytes that have been frozen and thawed to density
gradient fractionation to separate viable hepatocytes from
nonviable hepatocytes,
(b) recovering the separated viable hepatocytes, and
(c) cryopreserving the recovered viable hepatocytes . . . .

Rapid Litigation Management v. CellzDirect, 827 F.3d 1042 (Fed. Cir. 2016).

3. When an artery is damaged or inflamed, the body releases the enzyme

myeloperoxidase (MPO). Methods of detecting MPO were known, but the inventors
discovered that MPO is an indicator of a patient’s risk of cardiovascular disease. The
claim reads:

A method of assessing the risk of requiring medical intervention in a

patient who is presenting with chest pain, comprising:
(a) characterizing the levels of myeloperoxidase (MPO) activity, MPO
mass, or both, respectively in the bodily sample from the human
patient, wherein said bodily sample is blood or a blood derivative,
(b) wherein a patient whose levels of MPO activity, MPO mass, or both
is characterized as being elevated in comparison to levels of MPO
activity, MPO mass or both in a comparable bodily samples obtained
from individuals in a control population is at risk of requiring
medical intervention to prevent the occurrence of an adverse cardiac
event within the next six months.

Cleveland Clinic v. True Health Diagnostics, 859 F.3d 1352 (Fed Cir. 2017).

4. Some of you may remember the creation of Dolly, the famous cloned sheep.
That was the invention: a perfect genetic clone of a living animal. The claim reads as
follows:

A live-born clone of a pre-existing, non-embryonic, donor mammal,

wherein the mammal is selected from cattle, sheep, pigs, and goats.

In re Roslin Institute (Edinburgh), 750 F.3d 1333 (Fed. Cir. 2014).

5. The invention is a method for taking a person’s temperature by scanning

across their skin (typically the forehead). The technology for reading temperature
from the skin was well known, but prior to this invention, scientists thought skin
temperature could not be systematically correlated with body temperature. The
inventors discovered the relationship between skin temperature and internal body
temperature. The patent described the newly calculated coefficient for translating
skin measurements into body temperature readings. If you’ve had your temperature
taken by scanning your forehead (perhaps during the COVID-19 pandemic), you’ve
used the technology described in this patent. The claim reads:
286 MASUR & OUELLETTE ⋅ PATENT LAW

A method of detecting human body temperature comprising making at

least three radiation readings per second while moving a radiation
detector to scan across a region of skin over an artery to electronically
determine a body temperature approximation, distinct from skin
surface temperature.

Exergen v. Kaz, 725 F. App’x 959 (Fed. Cir. 2018).

6. This invention relates to the cell-free fetal DNA invention from problem 1.
One of the technical hurdles in examining fetal DNA was separating it from the DNA
of the pregnant individual, with which it was mixed. The inventors discovered that
the fragments of fetal DNA present in the pregnant person’s bloodstream were
typically very small, generally less than 500 base pairs. The invention is a method of
separating fetal blood from the pregnant individual’s blood by discriminating among
DNA fragments based on size. The claim reads:

A method for preparing a deoxyribonucleic acid (DNA) fraction from a

pregnant human female useful for analyzing a genetic locus involved in
a fetal chromosomal aberration, comprising:
(a) extracting DNA from a substantially cell-free sample of blood
plasma or blood serum of a pregnant human female to obtain
extracellular circulatory fetal and maternal DNA fragments;
(b) producing a fraction of the DNA extracted in (a) by: (i) size
discrimination of extracellular circulatory DNA fragments, and (ii)
selectively removing the DNA fragments greater than
approximately 500 base pairs, wherein the DNA fraction after (b)
comprises a plurality of genetic loci of the extracellular circulatory
fetal and maternal DNA; and
(c) analyzing a genetic locus in the fraction of DNA produced in (b).

Illumina, Inc. v. Ariosa Diagnostics, Inc., 967 F.3d 1319 (Fed. Cir. 2020).

B. Abstract Ideas
In the wake of Mayo and Myriad, questions remained (at least in the minds of
Federal Circuit judges) over the scope and application of the Mayo test. In particular,
patents involving abstract ideas quickly emerged as the most important set of § 101
cases and occupied the majority of the courts’ attention. This trend has continued; a
study of all patentable subject matter cases decided by the federal courts in 2015–19
found that 90% were in the software and information technology industries, which
largely involve abstract ideas rather than laws of nature. Mark A. Lemley &
Samantha Zyontz, Does Alice Target Patent Trolls?, 18 J. Empirical Legal Stud. 47
(2021). After Mayo, the Federal Circuit was torn about how (or whether) to apply that
case in the context of abstract ideas, and the Supreme Court’s 2010 abstract ideas
 PATENTABLE SUBJECT MATTER 287

decision in Bilski v. Kappos was not entirely helpful. This culminated in the en banc
Federal Circuit deadlocking six-to-six (and producing five separate opinions) in a case
concerning computerized methods for managing financial settlement risk. That case
was Alice v. CLS Bank. And when a circuit court of appeals sitting en banc deadlocks
and cannot issue a controlling opinion, the Supreme Court has little choice but to take
the case.

Alice Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014)

Justice Thomas delivered the opinion of the Court.

1 The patents at issue in this case disclose a computer-implemented scheme for

mitigating “settlement risk” (i.e., the risk that only one party to a financial transaction
will pay what it owes) by using a third-party intermediary. The question presented is
whether these claims are patent eligible under 35 U.S.C. § 101, or are instead drawn
to a patent-ineligible abstract idea. We hold that the claims at issue are drawn to the
abstract idea of intermediated settlement, and that merely requiring generic
computer implementation fails to transform that abstract idea into a patent-eligible
invention. We therefore affirm the judgment of the United States Court of Appeals for
the Federal Circuit.

2 Petitioner Alice Corporation is the assignee of several patents that disclose

schemes to manage certain forms of financial risk. The claims at issue relate to a
computerized scheme for mitigating “settlement risk”—i.e., the risk that only one
party to an agreed-upon financial exchange will satisfy its obligation. In particular,
the claims are designed to facilitate the exchange of financial obligations between two
parties by using a computer system as a third-party intermediary. The intermediary
creates “shadow” credit and debit records (i.e., account ledgers) that mirror the
balances in the parties’ real-world accounts at “exchange institutions” (e.g., banks).
The intermediary updates the shadow records in real time as transactions are entered,
allowing “only those transactions for which the parties’ updated shadow records
indicate sufficient resources to satisfy their mutual obligations.” At the end of the day,
the intermediary instructs the relevant financial institutions to carry out the
“permitted” transactions in accordance with the updated shadow records, thus
mitigating the risk that only one party will perform the agreed-upon exchange.

3 In sum, the patents in suit claim (1) the foregoing method for exchanging
obligations (the method claims), (2) a computer system configured to carry out the
method for exchanging obligations (the system claims), and (3) a computer-readable
medium containing program code for performing the method of exchanging obligations
(the media claims). All of the claims are implemented using a computer; the system
 288 MASUR & OUELLETTE ⋅ PATENT LAW

and media claims expressly recite a computer, and the parties have stipulated that
the method claims require a computer as well.

II

4 “We have long held that [§ 101] contains an important implicit exception: Laws
of nature, natural phenomena, and abstract ideas are not patentable.” Ass’n for
Molecular Pathology v. Myriad Genetics, Inc., 569 U.S. 576, 589 (2013) (internal
quotation marks and brackets omitted). We have interpreted § 101 and its
predecessors in light of this exception for more than 150 years. Bilski v. Kappos, 561
U.S. 593; see also O’Reilly v. Morse, 15 How. 62 (1854); Le Roy v. Tatham, 14 How. 156
(1853).

5 We have described the concern that drives this exclusionary principle as one of
pre-emption. See, e.g., Bilski, at 611–12 (upholding the patent “would pre-empt use of
this approach in all fields, and would effectively grant a monopoly over an abstract
idea”). Laws of nature, natural phenomena, and abstract ideas are “the basic tools of
scientific and technological work.” Myriad, 569 U.S. at 589. “[M]onopolization of those
tools through the grant of a patent might tend to impede innovation more than it
would tend to promote it,” thereby thwarting the primary object of the patent laws.
Mayo v. Prometheus, 566 U.S. 66, 71 (2012); see U.S. Const. art. I, § 8, cl. 8 (Congress
“shall have Power . . . To promote the Progress of Science and useful Arts”). We have
“repeatedly emphasized this . . . concern that patent law not inhibit further discovery
by improperly tying up the future use of” these building blocks of human ingenuity.
Mayo, 566 U.S. at 85 (citing Morse, 15 How. at 113).

6 At the same time, we tread carefully in construing this exclusionary principle

lest it swallow all of patent law. At some level, “all inventions . . . embody, use, reflect,
rest upon, or apply laws of nature, natural phenomena, or abstract ideas.” Id. at 71.
Thus, an invention is not rendered ineligible for patent simply because it involves an
abstract concept. “[A]pplication[s]” of such concepts “to a new and useful end,” we have
said, remain eligible for patent protection. Gottschalk v. Benson, 409 U.S. 63, 67
(1972).

7 Accordingly, in applying the § 101 exception, we must distinguish between

patents that claim the “buildin[g] block[s]” of human ingenuity and those that
integrate the building blocks into something more, Mayo, 566 U.S. at 89, thereby
“transform[ing]” them into a patent-eligible invention, id. at 72. The former “would
risk disproportionately tying up the use of the underlying” ideas, id. at 73, and are
therefore ineligible for patent protection. The latter pose no comparable risk of pre-
emption, and therefore remain eligible for the monopoly granted under our patent
laws.
 PATENTABLE SUBJECT MATTER 289

III

8 In Mayo Collaborative Services v. Prometheus Laboratories, Inc., 566 U.S. 66

(2012), we set forth a framework for distinguishing patents that claim laws of nature,
natural phenomena, and abstract ideas from those that claim patent-eligible
applications of those concepts. First, we determine whether the claims at issue are
directed to one of those patent-ineligible concepts. If so, we then ask, “[w]hat else is
there in the claims before us?” To answer that question, we consider the elements of
each claim both individually and “as an ordered combination” to determine whether
the additional elements “transform the nature of the claim” into a patent-eligible
application. We have described step two of this analysis as a search for an “inventive
concept”—i.e., an element or combination of elements that is “sufficient to ensure that
the patent in practice amounts to significantly more than a patent upon the [ineligible
concept] itself.”

9 We must first determine whether the claims at issue are directed to a patent-
ineligible concept. We conclude that they are: These claims are drawn to the abstract
idea of intermediated settlement.

10 The “abstract ideas” category embodies “the longstanding rule that ‘[a]n idea
of itself is not patentable.’” Benson, 409 U.S. at 67. In Benson, for example, this Court
rejected as ineligible patent claims involving an algorithm for converting binary-coded
decimal numerals into pure binary form, holding that the claimed patent was “in
practical effect . . . a patent on the algorithm itself.” 409 U.S. at 71–72. And in Parker
v. Flook, 437 U.S. 584, 594–95 (1978), we held that a mathematical formula for
computing “alarm limits” in a catalytic conversion process was also a patent-ineligible
abstract idea.

11 We most recently addressed the category of abstract ideas in Bilski v. Kappos,

561 U.S. 593 (2010). The claims at issue in Bilski described a method for hedging
against the financial risk of price fluctuations. Claim 1 recited a series of steps for
hedging risk, including: (1) initiating a series of financial transactions between
providers and consumers of a commodity; (2) identifying market participants that
have a counterrisk for the same commodity; and (3) initiating a series of transactions
between those market participants and the commodity provider to balance the risk
position of the first series of consumer transactions. Claim 4 “pu[t] the concept
articulated in claim 1 into a simple mathematical formula.” The remaining claims
were drawn to examples of hedging in commodities and energy markets.

12 “[A]ll members of the Court agree[d]” that the patent at issue in Bilski claimed
an “abstract idea.” Id. at 609; see also id. at 619 (Stevens, J., concurring in judgment).
Specifically, the claims described “the basic concept of hedging, or protecting against
risk.” The Court explained that “[h]edging is a fundamental economic practice long
prevalent in our system of commerce and taught in any introductory finance class.”
 290 MASUR & OUELLETTE ⋅ PATENT LAW

The concept of hedging as recited by the claims in suit was therefore a patent-
ineligible “abstract idea, just like the algorithms at issue in Benson and Flook.” Id. at
611.

13 It follows from our prior cases, and Bilski in particular, that the claims at issue
here are directed to an abstract idea. Petitioner’s claims involve a method of
exchanging financial obligations between two parties using a third-party
intermediary to mitigate settlement risk. The intermediary creates and updates
“shadow” records to reflect the value of each party’s actual accounts held at “exchange
institutions,” thereby permitting only those transactions for which the parties have
sufficient resources. At the end of each day, the intermediary issues irrevocable
instructions to the exchange institutions to carry out the permitted transactions.

14 On their face, the claims before us are drawn to the concept of intermediated
settlement, i.e., the use of a third party to mitigate settlement risk. Like the risk
hedging in Bilski, the concept of intermediated settlement is “a fundamental economic
practice long prevalent in our system of commerce.” The use of a third-party
intermediary (or “clearing house”) is also a building block of the modern economy.
Thus, intermediated settlement, like hedging, is an “abstract idea” beyond the scope
of § 101.

15 In any event, we need not labor to delimit the precise contours of the “abstract
ideas” category in this case. It is enough to recognize that there is no meaningful
distinction between the concept of risk hedging in Bilski and the concept of
intermediated settlement at issue here. Both are squarely within the realm of
“abstract ideas” as we have used that term.

16 Because the claims at issue are directed to the abstract idea of intermediated
settlement, we turn to the second step in Mayo’s framework. We conclude that the
method claims, which merely require generic computer implementation, fail to
transform that abstract idea into a patent-eligible invention.

17 At Mayo step two, we must examine the elements of the claim to determine
whether it contains an “inventive concept” sufficient to “transform” the claimed
abstract idea into a patent-eligible application. A claim that recites an abstract idea
must include “additional features” to ensure “that the [claim] is more than a drafting
effort designed to monopolize the [abstract idea].” Mayo made clear that
transformation into a patent-eligible application requires “more than simply stat[ing]
the [abstract idea] while adding the words ‘apply it.’”

18 The introduction of a computer into the claims does not alter the analysis at
Mayo step two. In Benson, for example, we considered a patent that claimed an
algorithm implemented on “a general-purpose digital computer.” 409 U.S. at 64.
 PATENTABLE SUBJECT MATTER 291

Because the algorithm was an abstract idea, the claim had to supply a “new and
useful” application of the idea in order to be patent eligible. But the computer
implementation did not supply the necessary inventive concept; the process could be
“carried out in existing computers long in use.” Id. We accordingly “held that simply
implementing a mathematical principle on a physical machine, namely a computer,
[i]s not a patentable application of that principle.” Mayo, 566 U.S. at 84 (citing Benson,
409 U.S. at 64).

19 Flook is to the same effect. There, we examined a computerized method for

using a mathematical formula to adjust alarm limits for certain operating conditions
(e.g., temperature and pressure) that could signal inefficiency or danger in a catalytic
conversion process. 437 U.S. at 585–86. Once again, the formula itself was an abstract
idea, and the computer implementation was purely conventional. 437 U.S. at 594
(noting that the “use of computers for ‘automatic monitoring-alarming’” was “well
known”). In holding that the process was patent ineligible, we rejected the argument
that “implement[ing] a principle in some specific fashion” will “automatically fal[l]
within the patentable subject matter of § 101.” Id. at 593. Thus, “Flook stands for the
proposition that the prohibition against patenting abstract ideas cannot be
circumvented by attempting to limit the use of [the idea] to a particular technological
environment.” Bilski, 561 U.S. at 610–11.

20 In Diamond v. Diehr, 450 U.S. 175 (1981), by contrast, we held that a

computer-implemented process for curing rubber was patent eligible, but not because
it involved a computer. The claim employed a “well-known” mathematical equation,
but it used that equation in a process designed to solve a technological problem in
“conventional industry practice.” The invention in Diehr used a “thermocouple” to
record constant temperature measurements inside the rubber mold—something “the
industry ha[d] not been able to obtain.” The temperature measurements were then
fed into a computer, which repeatedly recalculated the remaining cure time by using
the mathematical equation. These additional steps, we recently explained,
“transformed the process into an inventive application of the formula.” Mayo, 566 U.S.
at 81. In other words, the claims in Diehr were patent eligible because they improved
an existing technological process, not because they were implemented on a computer.

21 These cases demonstrate that the mere recitation of a generic computer cannot
transform a patent-ineligible abstract idea into a patent-eligible invention. Stating an
abstract idea “while adding the words ‘apply it’” is not enough for patent eligibility.
Mayo, 566 U.S. at 72. Nor is limiting the use of an abstract idea “to a particular
technological environment.” Bilski, 561 U.S. at 610–11. Stating an abstract idea while
adding the words “apply it with a computer” simply combines those two steps, with
the same deficient result. Thus, if a patent’s recitation of a computer amounts to a
mere instruction to “implemen[t]” an abstract idea “on . . . a computer,” Mayo, 566
U.S. at 84, that addition cannot impart patent eligibility. This conclusion accords with
the pre-emption concern that undergirds our § 101 jurisprudence. Given the ubiquity
of computers, wholly generic computer implementation is not generally the sort of
 292 MASUR & OUELLETTE ⋅ PATENT LAW

“additional featur[e]” that provides any “practical assurance that the process is more
than a drafting effort designed to monopolize the [abstract idea] itself.”

22 The fact that a computer “necessarily exist[s] in the physical, rather than
purely conceptual, realm,” is beside the point. There is no dispute that a computer is
a tangible system (in § 101 terms, a “machine”), or that many computer-implemented
claims are formally addressed to patent-eligible subject matter. But if that were the
end of the § 101 inquiry, an applicant could claim any principle of the physical or social
sciences by reciting a computer system configured to implement the relevant concept.
Such a result would make the determination of patent eligibility “depend simply on
the draftsman’s art,” Flook, 437 U.S. at 593, thereby eviscerating the rule that “[l]aws
of nature, natural phenomena, and abstract ideas are not patentable.”

23 The representative method claim in this case recites the following steps:
(1) “creating” shadow records for each counterparty to a transaction; (2) “obtaining”
start-of-day balances based on the parties’ real-world accounts at exchange
institutions; (3) “adjusting” the shadow records as transactions are entered, allowing
only those transactions for which the parties have sufficient resources; and (4) issuing
irrevocable end-of-day instructions to the exchange institutions to carry out the
permitted transactions. Petitioner principally contends that the claims are patent
eligible because these steps “require a substantial and meaningful role for the
computer.” As stipulated, the claimed method requires the use of a computer to create
electronic records, track multiple transactions, and issue simultaneous instructions;
in other words, “[t]he computer is itself the intermediary.”

24 In light of the foregoing, the relevant question is whether the claims here do
more than simply instruct the practitioner to implement the abstract idea of
intermediated settlement on a generic computer. They do not.

25 Taking the claim elements separately, the function performed by the computer
at each step of the process is “[p]urely conventional.” Using a computer to create and
maintain “shadow” accounts amounts to electronic recordkeeping—one of the most
basic functions of a computer. See, e.g., Benson, 409 U.S. at 65 (noting that a computer
“operates . . . upon both new and previously stored data”). The same is true with
respect to the use of a computer to obtain data, adjust account balances, and issue
automated instructions; all of these computer functions are “well-understood, routine,
conventional activit[ies]” previously known to the industry. In short, each step does
no more than require a generic computer to perform generic computer functions.

26 Considered “as an ordered combination,” the computer components of

petitioner’s method “ad[d] nothing . . . that is not already present when the steps are
considered separately.” Viewed as a whole, petitioner’s method claims simply recite
the concept of intermediated settlement as performed by a generic computer. The
method claims do not, for example, purport to improve the functioning of the computer
 PATENTABLE SUBJECT MATTER 293

itself. Nor do they effect an improvement in any other technology or technical field.
Instead, the claims at issue amount to “nothing significantly more” than an
instruction to apply the abstract idea of intermediated settlement using some
unspecified, generic computer. Under our precedents, that is not “enough” to
transform an abstract idea into a patent-eligible invention.

27 Petitioner’s claims to a computer system and a computer-readable medium fail

for substantially the same reasons. Petitioner conceded below that its media claims
rise or fall with its method claims. As to its system claims, petitioner emphasizes that
those claims recite “specific hardware” configured to perform “specific computerized
functions.” But what petitioner characterizes as specific hardware—a “data
processing system” with a “communications controller” and “data storage unit,” for
example—is purely functional and generic. Nearly every computer will include a
“communications controller” and “data storage unit” capable of performing the basic
calculation, storage, and transmission functions required by the method claims. As a
result, none of the hardware recited by the system claims “offers a meaningful
limitation beyond generally linking ‘the use of the [method] to a particular
technological environment,’ that is, implementation via computers.”

28 Put another way, the system claims are no different from the method claims in
substance. The method claims recite the abstract idea implemented on a generic
computer; the system claims recite a handful of generic computer components
configured to implement the same idea. This Court has long warned against
interpreting § 101 in ways that make patent eligibility depend simply on the
draftsman’s art. Holding that the system claims are patent eligible would have exactly
that result.

Justice Sotomayor, with whom Justice Ginsburg and Justice Breyer join, concurring.

29 I adhere to the view that any “claim that merely describes a method of doing
business does not qualify as a ‘process’ under § 101.” Bilski v. Kappos, 561 U.S. 593,
614 (2010) (Stevens, J., concurring in judgment); see also In re Bilski, 545 F.3d 943,
972 (Fed. Cir. 2008) (Dyk, J., concurring) (“There is no suggestion in any of the early
[English] consideration of process patents that processes for organizing human
activity were or ever had been patentable”). As in Bilski, however, I further believe
that the method claims at issue are drawn to an abstract idea. I therefore join the
opinion of the Court.

Discussion Questions: Alice

1. The Alice/Mayo Test. Do you think the test that the Supreme Court uses in
Alice is different from or the same as the test used in Mayo? If it is the same, why do
 294 MASUR & OUELLETTE ⋅ PATENT LAW

you think the Supreme Court felt the need to grant certiorari in Alice? Was it merely
the fact the Federal Circuit was deadlocked, or was there something more?

2. Justifying Patentable Subject Matter Exceptions. The Supreme Court

reiterates that the concern underlying its implicit exceptions to the statutory
categories of patent eligibility is “preemption”: the idea that tying up “the basic tools
of scientific and technological work . . . might tend to impede innovation more than it
would tend to promote it.” As we noted at the beginning of this chapter, this reads as
an empirical, utilitarian judgment that such patents should be denied because they
do not provide a net benefit to society. In making judgments such as these, should
courts also consider the wide array of non-patent innovation incentives when setting
patent policy? Or should they confine themselves to scrutinizing the effects of patent
law in isolation? See Lisa Larrimore Ouellette, Patentable Subject Matter and
Nonpatent Innovation Incentives, 5 U.C. Irvine L. Rev. 1115 (2015).

In addition, many of the parties arguing for robust exceptions to patent

eligibility have been motivated more by noneconomic moral concerns than by
utilitarian ones. For instance, the challengers to the gene patent claims in Myriad
argued that claims on human genes commodified human life and impinged on rights
of privacy. Some of the parties challenging software claims in cases like Bilski and
Alice argued that the claims should be invalidated because of the expressive value of
freedom in computer programming. Many aspects of software are considered
“expressive” and thus protectable under copyright law. Cf. Google v. Oracle, 141 S. Ct.
1183 (2021) (holding that Google’s copying of Oracle’s Java Application Programming
Interface is copyright fair use). What role should these different values play in patent
law?

3. The Draftsman’s Art. Suppose you were given a chance to redraft the claims
in Alice in light of what you now know of the doctrine. Is there a way to redraft the
claims to make them patentable? Or is the invention simply unpatentable no matter
how the claims are drawn?

Enfish v. Microsoft, 822 F.3d 1327 (Fed. Cir. 2016)

Todd M. Hughes, Circuit Judge.

1 Enfish sued Microsoft for infringement of several patents related to a “self-

referential” database. On summary judgment, the district court found all claims
invalid as ineligible under § 101. Enfish appeals. We find that the claims are not
directed to an abstract idea, so we reverse the summary judgment based on § 101.
 PATENTABLE SUBJECT MATTER 295

2 Microsoft develops and sells a variety of software products, including the

product ADO.NET. At least through the late 1990s and early 2000s, Enfish developed
and sold software products, including a new type of database program.

3 Enfish received U.S. Patent 6,151,604 and U.S. Patent 6,163,775 in late 2000.
The ’604 and ’775 patents are directed to an innovative logical model for a computer
database. A logical model is a model of data for a computer database explaining how
the various elements of information are related to one another. Contrary to
conventional logical models, the patented logical model includes all data entities in a
single table, with column definitions provided by rows in that same table.

4 This “self-referential” property can be best understood in contrast with the

more standard “relational” model. With the relational model, each entity (i.e., each
type of thing) that is modeled is provided in a separate table. For instance, a relational
model for a corporate file repository might include the following tables:

document table,

person table,

company table.

The document table might contain information about documents stored on the file
repository, the person table might contain information about authors of the
documents, and the company table might contain information about the companies
that employ the persons. Using this relational model, if a database were to store
information about a document called proj.doc, a person called Scott Wlaschin, and a
company called DEXIS, then the result might be:

5 To indicate that Scott Wlaschin is the author of proj.doc and that he is

employed by DEXIS, the relational model uses relationships as follows:
 296 MASUR & OUELLETTE ⋅ PATENT LAW

6 Here, the top-most relationship explains that the value for “Author” in the
Document table refers to the “ID” column of the Person table. Because the row for
proj.doc has AUTHOR = 1, the row in the Person table that has ID = 1 is the author
of proj.doc. By this technique, the relational model captures information about each
type of entity in a separate table, with relationships between those tables informing
the relationships between rows in different tables.

7 The patented self-referential model has two features that are not found in the
relational model: first the self-referential model can store all entity types in a single
table, and second the self-referential model can define the table’s columns by rows in
that same table. For example, a self-referential model corresponding to the example
relational model discussed above might look like the following:

8 This self-referential table stores the same information that is stored by the
example relational model shown above. However, all of the information about
documents, persons, and companies are stored in a single table.

9 Further, an additional row is included in the self-referential table: the row

beginning with ID = # 4. Such a row with TYPE = “field” is a special row, because it
defines characteristics of a column in that same table. In this case, the row with ID =
# 4 corresponds to the penultimate column, which is denoted by also marking that
column with the ID of # 4. The row with ID = # 4 defines a single characteristic of the
corresponding column, viz., its label. Because the row with ID = # 4 has LABEL =
 PATENTABLE SUBJECT MATTER 297

“Employed By,” we know that the corresponding column is labeled “Employed By,” as
seen in the penultimate column. In other situations, the row might define other
characteristics of the column, such as the type of data that the column can hold, e.g.,
text, integer numbers, or decimal numbers. Because the patent describes a model
where the table’s columns are defined by rows in that same table, it is “self-
referential.”

10 The patents teach that multiple benefits flow from this design. First, the
patents disclose an indexing technique that allows for faster searching of data than
would be possible with the relational model. Second, the patents teach that the self-
referential model allows for more effective storage of data other than structured text,
such as images and unstructured text.

11 Finally, the patents teach that the self-referential model allows more flexibility
in configuring the database. For instance, the database could be launched with no or
only minimal column definitions. Then, as a new attribute of information is
encountered, such as an email address, an “Email” column could be added simply by
inserting a new row of TYPE = “field” and LABEL = “email.”

12 In 2012, Enfish filed suit against Microsoft in district court in California,

alleging that Microsoft’s ADO.NET product infringes the ’604 and ’775 patents.
ADO.NET provides an interface by which software applications can store, retrieve,
and otherwise manipulate data stored in a database. [The district court found five
claims, including representative claim 17 of the ’604 patent, invalid under § 101.]

13 This court, as well as the Supreme Court, has long grappled with the exception
[to § 101] that “[l]aws of nature, natural phenomena, and abstract ideas are not
patentable.” Ass’n for Molecular Pathology v. Myriad Genetics, 569 U.S. 576 (2013)
(quoting Mayo Collaborative Servs. v. Prometheus Labs., 566 U.S. 66 (2012)). Supreme
Court precedent instructs us to “first determine whether the claims at issue are
directed to a patent-ineligible concept.” Alice Corp. v. CLS Bank Int’l, 573 U.S. 208
(2014). If this threshold determination is met, we move to the second step of the
inquiry and “consider the elements of each claim both individually and ‘as an ordered
combination’ to determine whether the additional elements ‘transform the nature of
the claim’ into a patent-eligible application.” Id.

14 The Supreme Court has not established a definitive rule to determine what
constitutes an “abstract idea” sufficient to satisfy the first step of the Mayo/Alice
inquiry. Rather, both this court and the Supreme Court have found it sufficient to
compare claims at issue to those claims already found to be directed to an abstract
idea in previous cases. For instance, fundamental economic and conventional business
practices are often found to be abstract ideas, even if performed on a computer.

15 In setting up the two-stage Mayo/Alice inquiry, the Supreme Court has

declared: “We must first determine whether the claims at issue are directed to a
patent-ineligible concept.” Alice, 573 U.S. at 218. That formulation plainly
 298 MASUR & OUELLETTE ⋅ PATENT LAW

contemplates that the first step of the inquiry is a meaningful one, i.e., that a
substantial class of claims are not directed to a patent-ineligible concept. The “directed
to” inquiry, therefore, cannot simply ask whether the claims involve a patent-
ineligible concept, because essentially every routinely patent-eligible claim involving
physical products and actions involves a law of nature and/or natural phenomenon—
after all, they take place in the physical world. Rather, the “directed to” inquiry
applies a stage-one filter to claims, considered in light of the specification, based on
whether their character as a whole is directed to excluded subject matter.

16 The Supreme Court has suggested that claims “purport[ing] to improve the
functioning of the computer itself,” or “improv[ing] an existing technological process”
might not succumb to the abstract idea exception. See Alice, 573 U.S. at 223–225.
While it is true that the Court discussed improvements to computer-related
technology in the second step of its analysis in Alice, that was because the Court did
not need to discuss the first step of its analysis at any considerable length.

17 We do not read Alice to broadly hold that all improvements in computer-related

technology are inherently abstract and, therefore, must be considered at step two.
Indeed, some improvements in computer-related technology when appropriately
claimed are undoubtedly not abstract, such as a chip architecture, an LED display,
and the like. Nor do we think that claims directed to software, as opposed to hardware,
are inherently abstract. Therefore, we find it relevant to ask whether the claims are
directed to an improvement to computer functionality versus being directed to an
abstract idea, even at the first step of the Alice analysis.

18 For that reason, the first step in the Alice inquiry in this case asks whether the
focus of the claims is on the specific asserted improvement in computer capabilities
(i.e., the self-referential table for a computer database) or, instead, on a process that
qualifies as an “abstract idea” for which computers are invoked merely as a tool. In
Bilski and Alice and virtually all of the computer-related § 101 cases we have issued
in light of those Supreme Court decisions, it was clear that the claims were of the
latter type—requiring that the analysis proceed to the second step of the Alice inquiry,
which asks if nevertheless there is some inventive concept in the application of the
abstract idea. In this case, however, the plain focus of the claims is on an improvement
to computer functionality itself, not on economic or other tasks for which a computer
is used in its ordinary capacity.

19 Accordingly, we find that the claims at issue in this appeal are not directed to
an abstract idea within the meaning of Alice. Rather, they are directed to a specific
improvement to the way computers operate, embodied in the self-referential table.
Specifically, claim 17 of the ’604 patent recites:

A data storage and retrieval system for a computer memory,

comprising:
 PATENTABLE SUBJECT MATTER 299

means for configuring said memory according to a logical table,

said logical table including:

a plurality of logical rows, each said logical row including an

object identification number (OID) to identify each said logical
row, each said logical row corresponding to a record of
information;

a plurality of logical columns intersecting said plurality of logical

rows to define a plurality of logical cells, each said logical column
including an OID to identify each said logical column; and

means for indexing data stored in said table.

20 The district court construed the “means for configuring” language as requiring
a four-step algorithm:5

1. Create, in a computer memory, a logical table that need not be stored

contiguously in the computer memory, the logical table being comprised
of rows and columns, the rows corresponding to records, the columns
corresponding to fields or attributes, the logical table being capable of
storing different kinds of records.

2. Assign each row and column an object identification number (OID)

that, when stored as data, can act as a pointer to the associated row or
column and that can be of variable length between databases.

3. For each column, store information about that column in one or more
rows, rendering the table self-referential, the appending, to the logical
table, of new columns that are available for immediate use being
possible through the creation of new column definition records.

4. In one or more cells defined by the intersection of the rows and

columns, store and access data, which can include structured data,
unstructured data, or a pointer to another row.

21 The district court concluded that the claims were directed to the abstract idea
of “storing, organizing, and retrieving memory in a logical table” or, more simply, “the
concept of organizing information using tabular formats.” Likewise, Microsoft urges
the court to view the claims as being directed to “the concepts of organizing data into
a logical table with identified columns and rows where one or more rows are used to

5 [n.3 in opinion] Construction of a means-plus-function limitation includes two steps.

First, the court must determine the claimed function. Second, the court must identify the
corresponding structure in the written description of the patent that performs the function.
And the corresponding structure for a function performed by a software algorithm is the
algorithm itself.
 300 MASUR & OUELLETTE ⋅ PATENT LAW

store an index or information defining columns.” However, describing the claims at

such a high level of abstraction and untethered from the language of the claims all
but ensures that the exceptions to § 101 swallow the rule. See Alice, 573 U.S. at 217
(noting that “we tread carefully in construing this exclusionary principle [of laws of
nature, natural phenomena, and abstract ideas] lest it swallow all of patent law”).

22 Here, the claims are not simply directed to any form of storing tabular data,
but instead are specifically directed to a self-referential table for a computer database.
For claim 17, this is reflected in step three of the “means for configuring” algorithm
described above. The necessity of describing the claims in such a way is underscored
by the specification’s emphasis that “the present invention comprises a flexible, self-
referential table that stores data.” Moreover, our conclusion that the claims are
directed to an improvement of an existing technology is bolstered by the specification’s
teachings that the claimed invention achieves other benefits over conventional
databases, such as increased flexibility, faster search times, and smaller memory
requirements.

23 In finding that the claims were directed simply to “the concept of organizing
information using tabular formats,” the district court oversimplified the self-
referential component of the claims and downplayed the invention’s benefits. The
court determined that the patents’ self-referential concept could be satisfied by
creating a table with a simple header row. But that is simply not the case. For
example, step three of the algorithm described above explains that the table stores
information related to each column in rows of that very same table, such that new
columns can be added by creating new rows in the table.

24 Moreover, we are not persuaded that the invention’s ability to run on a general-
purpose computer dooms the claims. Unlike the claims at issue in Alice or, more
recently in Versata Development Group v. SAP America, Inc., 793 F.3d 1306 (Fed. Cir.
2015), which Microsoft alleges to be especially similar to the present case, the claims
here are directed to an improvement in the functioning of a computer. In contrast, the
claims at issue in Alice and Versata can readily be understood as simply adding
conventional computer components to well-known business practices. See Alice, 573
U.S. at 222–226; Versata Dev. Grp., 793 F.3d at 1333–34 (computer performed “purely
conventional” steps to carry out claims directed to the “abstract idea of determining a
price using organization and product group hierarchies”); see also Mortgage Grader,
Inc. v. First Choice Loan Servs. Inc., 811 F.3d 1314, 1324–25 (Fed. Cir. 2016) (claims
attaching generic computer components to perform “anonymous loan shopping” not
patent eligible); Ultramercial, Inc. v. Hulu, LLC, 772 F.3d 709, 714–17 (Fed. Cir. 2014)
(claims applying an exchange of advertising for copyrighted content to the Internet);
buySAFE, Inc. v. Google, Inc., 765 F.3d 1350, 1354–55 (Fed. Cir. 2014) (claims adding
generic computer functionality to the formation of guaranteed contractual
relationships). And unlike the claims here that are directed to a specific improvement
to computer functionality, the patent-ineligible claims at issue in other cases recited
use of an abstract mathematical formula on any general purpose computer, see
 PATENTABLE SUBJECT MATTER 301

Gottschalk v. Benson, 409 U.S. 63 (1972), or recited a purely conventional computer

implementation of a mathematical formula, see Parker v. Flook, 437 U.S. 584, 594
(1978), or recited generalized steps to be performed on a computer using conventional
computer activity, see Internet Patents, 790 F.3d at 1348–49 (claims directed to
abstract idea of maintaining computer state without recitation of specific activity used
to generate that result).

25 Similarly, that the improvement is not defined by reference to “physical”

components does not doom the claims. To hold otherwise risks resurrecting a bright-
line machine-or-transformation test, cf. Bilski v. Kappos, 561 U.S. 593, 604 (2010)
(“The machine-or-transformation test is not the sole test for deciding whether an
invention is a patent-eligible ‘process.’”), or creating a categorical ban on software
patents, cf. id. at 603 (“This Court has not indicated that the existence of these well-
established exceptions gives the Judiciary carte blanche to impose other limitations
that are inconsistent with the text and the statute’s purpose and design.”). Much of
the advancement made in computer technology consists of improvements to software
that, by their very nature, may not be defined by particular physical features but
rather by logical structures and processes. We do not see in Bilski or Alice, or our
cases, an exclusion to patenting this large field of technological progress.

26 Because the claims are not directed to an abstract idea under step one of the
Alice analysis, we do not need to proceed to step two of that analysis. We recognize
that, in other cases involving computer-related claims, there may be close calls about
how to characterize what the claims are directed to. In such cases, an analysis of
whether there are arguably concrete improvements in the recited computer
technology could take place under step two. Here, though, we think it is clear for the
reasons stated that the claims are not directed to an abstract idea, and so we stop at
step one. We conclude that the claims are patent-eligible.

ChargePoint v. SemaConnect, 920 F.3d 759 (Fed. Cir. 2019)

Sharon Prost, Chief Judge.

1 The technology at issue in this patent infringement case pertains to charging

stations for electric vehicles. The battery in an electric vehicle is recharged by
connecting the vehicle to an electrical outlet. At the time the patent application was
filed, this process “typically require[d] hours and [was] often done overnight or while
the electric vehicle [was] parked for a significant time.” U.S. Patent No. 8,138,715 col.
1 ll. 24–26.

2 Generally, the supply of electricity available from a power grid may vary, and
in some cases the grid may lack sufficient electricity to meet demand. During such
periods, supply to certain customers or services may be reduced based on a preplanned
 302 MASUR & OUELLETTE ⋅ PATENT LAW

load prioritization scheme. The idea of reducing electricity consumption during

periods of high demand is one form of what is referred to as “demand response.”
Demand response may also involve increasing demand during periods when demand
is low compared to supply, by reducing the cost of electricity.

3 ChargePoint contends that its inventors created improved charging stations

that address the various needs inherent in electric vehicle charging. This was
accomplished by creating networked charging stations. According to ChargePoint, this
network connectivity allows the stations to be managed from a central location, allows
drivers to locate charging stations in advance, and allows all users to interact
intelligently with the electricity grid.

4 ChargePoint sued SemaConnect for infringement [of four patents] in December

2017. The district court granted SemaConnect’s motion to dismiss under Rule 12(b)(6)
with prejudice, holding each asserted claim ineligible for patenting under § 101.

II

5 Subject matter eligibility under § 101 may be determined at the Rule 12(b)(6)
stage of a case. Aatrix Software, 882 F.3d at 1125. Dismissal at this early stage,
however, is appropriate “only when there are no factual allegations that, taken as
true, prevent resolving the eligibility question as a matter of law.” Id.

6 In analyzing whether the claims are patent eligible, we employ the two-step
analysis articulated in Mayo Collaborative Services v. Prometheus Laboratories, Inc.,
566 U.S. 66 (2012), and further delineated in Alice Corp. v. CLS Bank Int’l, 573 U.S.
208 (2014). “First, we determine whether the claims at issue are directed to one of
those patent-ineligible concepts.” Alice, 573 U.S. at 217. If the claims are directed to
a patent ineligible concept, we begin the “search for an ‘inventive concept’—i.e., an
element or combination of elements that is ‘sufficient to ensure that the patent in
practice amounts to significantly more than a patent upon the [ineligible concept]
itself.’” Id. at 217–18.

7 Claims 1 and 2 of the ’715 patent are both apparatus claims. They recite:

1. An apparatus, comprising:

a control device to turn electric supply on and off to enable and

disable charge transfer for electric vehicles;

a transceiver to communicate requests for charge transfer with

a remote server and receive communications from the remote
server via a data control unit that is connected to the remote
server through a wide area network; and
 PATENTABLE SUBJECT MATTER 303

a controller, coupled with the control device and the transceiver,

to cause the control device to turn the electric supply on based
on communication from the remote server.

2. The apparatus of claim 1, further comprising an electrical coupler to

make a connection with an electric vehicle, wherein the control device
is to turn electric supply on and off by switching the electric coupler on
and off.

8 It is clear from the language of claim 1 that the claim involves an abstract
idea—namely, the abstract idea of communicating requests to a remote server and
receiving communications from that server, i.e., communication over a network. But
at step one, “it is not enough to merely identify a patent-ineligible concept underlying
the claim; we must determine whether that patent-ineligible concept is what the claim
is ‘directed to.’” Thales Visionix v. United States, 850 F.3d 1343, 1349 (Fed. Cir. 2017).
We therefore continue our analysis to determine whether the focus of claim 1, as a
whole, is the abstract idea. As explained below, we conclude that it is.

9 While the § 101 inquiry must focus on the language of the asserted claims
themselves, the specification may nonetheless be useful in illuminating whether the
claims are “directed to” the identified abstract idea. For example, in some cases the
“directed to” inquiry may require claim construction, which will often involve
consideration of the specification.

10 The “directed to” inquiry may also involve looking to the specification to
understand “the problem facing the inventor” and, ultimately, what the patent
describes as the invention. For example, in In re TLI Communications we held
ineligible a claim to a method for recording and administering digital images using a
phone. 823 F.3d 607, 610 (Fed. Cir. 2016). In our step one analysis, we explained that
“the problem facing the inventor was not how to combine a camera with a cellular
telephone, how to transmit images via a cellular network, or even how to append
classification information to that data.” Id. at 612. Instead, quoting the specification,
we explained that “the inventor sought to ‘provid[e] for recording, administration and
archiving of digital images simply, fast and in such way that the information therefore
may be easily tracked.’” Id. We also pointed to the specification to explain why the
tangible components recited in the method claim were merely “conduit[s] for the
abstract idea.” Id. at 612. We reached that conclusion in part because the specification
“fail[ed] to provide any technical details for the tangible components, but instead
predominately describe[d] the system and methods in purely functional terms.” Id.

11 In this case, ChargePoint has not expressed a need for claim construction, so
we need not look to the specification for that purpose. We do, however, view the
specification as useful in understanding “the problem facing the inventor” as well as
what the patent describes as the invention. Here, the specification suggests that claim
1 is directed to the abstract idea of communication over a network to interact with a
device connected to the network. The problem identified by the patentee, as stated in
 304 MASUR & OUELLETTE ⋅ PATENT LAW

the specification, was the lack of a communication network that would allow drivers,
businesses, and utility companies to interact efficiently with the charging stations.
For example, the specification states that “[t]here is a need for a communication
network which facilitates finding the recharging facility, controlling the facility, and
paying for the electricity consumed.” Looking to future needs, the specification
anticipates that “there will be a need for a system for collection of taxes and
consumption information.” From these statements, it is clear that the problem
perceived by the patentee was a lack of a communication network for these charging
stations, which limited the ability to efficiently operate them from a business
perspective.

12 The specification also makes clear—by what it states and what it does not—
that the invention of the ’715 patent is the idea of network-controlled charging
stations. Notably, the specification never suggests that the charging station itself is
improved from a technical perspective, or that it would operate differently than it
otherwise could. Nor does the specification suggest that the invention involved
overcoming some sort of technical difficulty in adding networking capability to the
charging stations.

13 In short, looking at the problem identified in the patent, as well as the way the
patent describes the invention, the specification suggests that the invention of the
patent is nothing more than the abstract idea of communication over a network for
interacting with a device, applied to the context of electric vehicle charging stations.
Although this is not necessarily dispositive of the “directed to” inquiry, it strongly
suggests that the abstract idea identified in claim 1 may indeed be the focus of that
claim.

14 With these indications from the specification in mind, we return to the claim
language itself to consider the extent to which the claim would preempt building
blocks of science and technology. See Intellectual Ventures I LLC v. Capital One Bank
(USA), 792 F.3d 1363, 1369 (Fed. Cir. 2015) (“At step one of the Alice framework, it is
often useful to determine the breadth of the claims in order to determine whether the
claims extend to cover a ‘fundamental . . . practice long prevalent in our system.’”
(quoting Alice, 573 U.S. at 219)). We agree with SemaConnect that, based on the claim
language, claim 1 would preempt the use of any networked charging stations.

15 The breadth of the claim language here illustrates why any reliance on the
specification in the § 101 analysis must always yield to the claim language. Even a
specification full of technical details about a physical invention may nonetheless
conclude with claims that claim nothing more than the broad law or abstract idea
underlying the claims, thus preempting all use of that law or idea. This was the case
in O’Reilly v. Morse, 56 U.S. 62 (1853). In Morse, the Court upheld claims related to
the details of Samuel Morse’s invention of the electromagnetic telegraph, but
invalidated a claim for the use of “electromagnetism, however developed for marking
or printing intelligible characters, signs, or letters, at any distances.” Id. at 112. The
 PATENTABLE SUBJECT MATTER 305

Court expressed concern that such a broad claim would cover any application of
printing at a distance via electromagnetism regardless of whether those applications
used the invention in the patent.

16 A similar scenario arose in Wyeth v. Stone, 30 F. Cas. 723 (C.C.D. Mass. 1840).
There, the patent described the inventor’s machine for cutting ice in great detail. But
Justice Story, riding circuit, held that one claim effectively “claim[ed] an exclusive
title to the art of cutting ice by means of any power, other than human power.” Id. at
727. He reasoned that “[s]uch a claim is utterly unmaintainable” because “[i]t is a
claim for an art or principle in the abstract, and not for any particular method or
machinery, by which ice is to be cut.” Id.

17 As we explained in Interval Licensing LLC v. AOL, Inc., in Morse and Wyeth,

each inventor “lost a claim that encompassed all solutions for achieving a desired
result” because those claims “were drafted in such a result-oriented way that they
amounted to encompassing the ‘principle in the abstract’ no matter how
implemented.” 896 F.3d 1335, 1343 (Fed. Cir. 2018). In our view, this is effectively
what ChargePoint has done in this case. Even if ChargePoint’s specification had
provided, for example, a technical explanation of how to enable communication over a
network for device interaction (which, as discussed above, it did not), the claim
language here would not require those details. Instead, the broad claim language
would cover any mechanism for implementing network communication on a charging
station, thus preempting the entire industry’s ability to use networked charging
stations. This confirms that claim 1 is indeed “directed to” the abstract idea of
communication over a network to interact with network-attached devices.

18 We conclude our “directed to” analysis by addressing ChargePoint’s argument

that the claims asserted are patent eligible because the claimed invention “build[s] a
better machine.” We are not persuaded. Claim 1 indicates that the abstract idea is
associated with a physical machine that is quite tangible—an electric vehicle charging
station. Claim 2 goes further, explaining that a vehicle may be connected to the
apparatus via an electrical coupler. But as the Supreme Court indicated in Alice,
whether a device is “a tangible system (in § 101 terms, a ‘machine’)” is not dispositive.
See 573 U.S. at 224. Resolving the § 101 inquiry based on such an argument “would
make the determination of patent eligibility ‘depend simply on the draftsman’s art.’”
Id. at 224.

19 In short, the inventors here had the good idea to add networking capabilities
to existing charging stations to facilitate various business interactions. But that is
where they stopped, and that is all they patented. We therefore hold that claim 1 is
“directed to” an abstract idea.

20 As to dependent claim 2, the additional limitation of an “electrical coupler to

make a connection with an electric vehicle” does not alter our step one analysis. The
character of claim 2, as a whole, remains directed to the abstract idea of
 306 MASUR & OUELLETTE ⋅ PATENT LAW

communication over a network to interact with a device, applied in the context of

charging stations.

21 [Two other asserted apparatus claims, claims 1 and 8 of Patent No. 8,432,131,
are similar to the ’715 claims.]

22 ChargePoint contends that claims 1 and 8 of the ’131 patent teach “a charging
station with improved technical features that enable it to adjust the amount of
electricity delivered to cars based on demand-response communications with
utilities.” To the extent ChargePoint is arguing that modification itself is an
improvement, nothing in the specification explains from a technical perspective how
that modification occurs. And the fact that the electricity flow is modified based on
demand response principles does nothing to make this claim directed to something
other than the abstract idea. Demand response is itself an abstract concept—a
familiar business choice to alter terms of dealing to help match supply and demand.
As we have said before, “[a]dding one abstract idea . . . to another abstract idea . . .
does not render the claim non-abstract.” RecogniCorp, LLC v. Nintendo Co., 855 F.3d
1322, 1327 (Fed. Cir. 2017). We therefore conclude that claims 1 and 8 are also
directed to the abstract idea of communicating over a network.

23 At step two of the Alice inquiry—the search for an inventive concept—we

“consider the elements of each claim both individually and ‘as an ordered combination’
to determine whether the additional elements ‘transform the nature of the claim’ into
a patent-eligible application.” Id. at 217. “[P]atentees who adequately allege their
claims contain inventive concepts survive a § 101 eligibility analysis under Rule
12(b)(6).” Aatrix Software, 882 F.3d at 1126–27.

24 Where a claim is directed to an abstract idea, the claim must include

“additional features to ensure that the [claim] is more than a drafting effort designed
to monopolize the [abstract idea].” Alice, 573 U.S. at 221. These additional features
cannot simply be “well-understood, routine, conventional activit[ies] previously
known to the industry.” Id. Indeed, adding novel or non-routine components is not
necessarily enough to survive a § 101 challenge. Instead, the inventive concept must
be “sufficient to ensure that the patent in practice amounts to significantly more” than
a patent on the abstract idea. See Mayo, 566 U.S. at 72–73.

25 Whether a claim “supplies an inventive concept that renders a claim

‘significantly more’ than an abstract idea to which it is directed is a question of law”
that may include underlying factual determinations. BSG Tech LLC v. Buyseasons,
Inc., 899 F.3d 1281, 1290 (Fed. Cir. 2018). For example, within the overall step two
analysis, “whether a claim element or combination of elements is well-understood,
routine and conventional to a skilled artisan in the relevant field is a question of fact”
that “must be proven by clear and convincing evidence.” Berkheimer v. HP Inc., 881
F.3d 1360, 1368 (Fed. Cir. 2018).
 PATENTABLE SUBJECT MATTER 307

26 Here, ChargePoint argues that it presented sufficient factual allegations to

preclude dismissal at the Rule 12(b)(6) stage. Specifically, ChargePoint argues that
its patents represent an unconventional solution to technological problems in the field,
and thus contain an inventive concept.

27 The problems in the art identified by ChargePoint are, generally: the sparse
availability of charging stations and the need for more widespread stations; the need
for a communication network that facilitates finding an available charging station,
controlling the station, and paying for electricity; and the need for real time
communication to effectively implement demand response and vehicle-to-grid
transfer.

28 ChargePoint contends that it solved these problems in an unconventional way

through: (a) the ability to turn electric supply on based on communications from a
remote server; (b) a “network-controlled” charging system; and (c) a charging station
that receives communication from a remote server, including communications made
to implement a demand response policy.

29 In essence, the alleged “inventive concept” that solves problems identified in

the field is that the charging stations are network-controlled. But network control is
the abstract idea itself, and “a claimed invention’s use of the ineligible concept to
which it is directed cannot supply the inventive concept that renders the invention
‘significantly more’ than that ineligible concept.” BSG Tech, 899 F.3d at 1290.

30 Turning to claims 1 and 8 of the ’131 patent, ChargePoint contends that these
claims capture technical improvements related to demand response. ChargePoint
disputes the district court’s conclusion that “the combination of connecting generic
networking equipment to a charging device to carry out a demand response plan
already existed and was well-understood, routine, and conventional.” But, as the
district court pointed out, the “Background of the Invention” section of the
specification demonstrates that demand response has been in use in other consumer
services, such as with air conditioning and lighting, which may be reduced during
periods of high demand. Indeed, demand response is simply a familiar business choice
of terms of dealing to help match supply and demand. This cannot supply an inventive
concept in this case.

31 Despite ChargePoint’s reliance on BASCOM Glob. Internet Servs., Inc. v.

AT&T Mobility LLC, 827 F.3d 1341 (Fed. Cir. 2016), the claims in this case do not
improve the technology the way the claims in BASCOM did. There, the patent
improved prior art content filtering solutions by making them more dynamic, thus
using software to improve the performance of the computer system itself. Id. at 1351.
Here, the claims do nothing to improve how charging stations function; instead, the
claims merely add generic networking capabilities to those charging stations and say
“apply it.” See Alice, 573 U.S. at 223. This is simply an “abstract-idea-based solution
implemented with generic technical components in a conventional way.” BASCOM,
827 F.3d at 1351.
 308 MASUR & OUELLETTE ⋅ PATENT LAW

32 In short, we agree with SemaConnect that the only possible inventive concept
in the asserted claims is the abstract idea itself. ChargePoint, of course, disagrees
with this characterization, arguing that its patents claim “charging stations enabled
to use networks, not the network connectivity itself.” But the specification gives no
indication that the patented invention involved how to add network connectivity to
these charging stations in an unconventional way. From the claims and the
specification, it is clear that network communication is the only possible inventive
concept. Because this is the abstract idea itself, this cannot supply the inventive
concept at step two. The claims are therefore ineligible.

33 For the foregoing reasons, we affirm the district court’s determination that
claims 1 and 2 of the ’715 patent, claims 1 and 8 of the ’131 patent [and the other
asserted claims omitted from the discussion above] are ineligible under § 101.

USPTO Guidance on Abstract Ideas: MPEP § 2106

As noted above, the USPTO has issued extensive guidance to help patent
examiners evaluate patentable subject matter, collected in MPEP § 2106. The Federal
Circuit has not granted deference to this guidance, and the USPTO generally reads
the caselaw as more favorable to patent eligibility than a neutral observer of the
Federal Circuit might find it to be. Nonetheless, it is a helpful conceptual framework
for approaching this complicated doctrine.

The USPTO notes that “the courts have declined to define abstract ideas,”
though it is clear that “software and business methods are not excluded categories.”
The agency has organized abstract ideas identified in the caselaw into three groups:

1. Mathematical concepts: e.g., the binary conversion procedure in Benson, the

mathematical formula for calculating an alarm limit in Flook, the Arrhenius
equation in Diehr, the mathematical formula for hedging in Bilski

2. Certain methods of organizing human activity:

○ fundamental economic principles or practices (e.g., hedging, insurance,

mitigating risk, a method of price optimization, rules for a wagering
game)

○ commercial or legal interactions (e.g., agreements in the form of

contracts, legal obligations, marketing or sales activities or behaviors,
business relations)

○ managing personal behavior or relationships or interactions between

people (e.g., social activities, teaching, and following rules or
instructions)
 PATENTABLE SUBJECT MATTER 309

3. Mental processes: concepts that can practically be performed in the human

mind (including an observation, evaluation, judgment, opinion)

As with laws of nature, a claim is not “directed to” an abstract idea if it merely
involves rather than recites that idea. See, e.g., Thales Visionix, Inc. v. United States,
850 F.3d 1343 (Fed. Cir. 2017) (determining that the claims to a method of using data
from inertial sensors to more accurately calculate the position of an object on a moving
platform did not merely recite “the abstract idea of using mathematical equations for
determining the relative position of a moving object to a moving reference frame”).

Again, as with laws of nature, even if a claim recites an abstract idea, the
USPTO cautions that it is not “directed to” the idea at Alice/Mayo Step 1 if it integrates
the idea into a practical application. It is not enough, however, to merely recite the
words “apply it” (or an equivalent), to add insignificant extra-solution activity, or to
merely link the use of the exception to a particular technological environment.
Limitations that may have integrated an idea into a practical application include
improving the functioning of a computer, implementing the idea with a particular
machine or manufacture that is integral to the claim, or effecting a transformation or
reduction of a particular article to a different state or thing. Note that tangible
implementation does not guarantee eligibility, nor does intangibility doom the claims.
With the caveat that this “integrates into a practical application” gloss has not been
endorsed by the Federal Circuit, MPEP § 2106.04(d) offers these examples of whether
a claim integrates an idea into a practical application:

In Solutran, Inc. v. Elavon, Inc., 931 F.3d 1161 (Fed. Cir. 2019),
the claims were to methods for electronically processing paper checks,
all of which contained limitations setting forth receiving merchant
transaction data from a merchant, crediting a merchant’s account, and
receiving and scanning paper checks after the merchant’s account is
credited.

In part one of the Alice/Mayo test, the Federal Circuit

determined that the claims were directed to the abstract idea of
crediting the merchant’s account before the paper check is scanned. The
court first determined that the recited limitations of “crediting a
merchant’s account as early as possible while electronically processing
a check” is a “long-standing commercial practice.” The Federal Circuit
then continued with its analysis under part one of the Alice/Mayo test
finding that the claims are not directed to an improvement in the
functioning of a computer or an improvement to another technology. In
particular, the court determined that the claims “did not improve the
technical capture of information from a check to create a digital file or
the technical step of electronically crediting a bank account” nor did the
claims “improve how a check is scanned.” This analysis is equivalent to
the Office’s analysis of determining that the exception is not integrated
310 MASUR & OUELLETTE ⋅ PATENT LAW

into a practical application [such that they are directed to an abstract

idea at Alice/Mayo Step 1 and must be evaluated at Alice/Mayo Step 2
to determine if they are valid].

In Finjan Inc. v. Blue Coat Systems, Inc., 879 F.3d 1299 (Fed.
Cir. 2018), the claimed invention was a method of virus scanning that
scans an application program, generates a security profile identifying
any potentially suspicious code in the program, and links the security
profile to the application program.

The Federal Circuit noted that the recited virus screening was
an abstract idea, and that merely performing virus screening on a
computer does not render the claim eligible. The court then continued
with its analysis under part one of the Alice/Mayo test by reviewing the
patent’s specification, which described the claimed security profile as
identifying both hostile and potentially hostile operations. The court
noted that the security profile thus enables the invention to protect the
user against both previously unknown viruses and “obfuscated code,”
as compared to traditional virus scanning, which only recognized the
presence of previously-identified viruses. The security profile also
enables more flexible virus filtering and greater user customization.
The court identified these benefits as improving computer functionality,
and verified that the claims recite additional elements (e.g., specific
steps of using the security profile in a particular way) that reflect this
improvement. Accordingly, the court held the claims eligible as not
being directed to the recited abstract idea. This analysis is equivalent
to the Office’s analysis of determining that the additional elements
integrate the judicial exception into a practical application [and that
the claims are thus patent eligible].

If a claim isn’t directed to an ineligible concept at Step 1, then it is patent

eligible. But if it is directed to an ineligible concept, we move to Step 2: the search for
an “inventive concept” that adds “significantly more” to the ineligible concept.
Limitations courts have found to not add “significantly more” include adding the
words “apply it,” adding insignificant extra-solution activity, or linking the exception
to a particular technological environment. Limitations that have qualified as
“significantly more” include improving the functioning of a computer, implementing
the idea with a particular machine, or transforming a particular article to a different
state or thing.

But wait—aren’t these Step 2 considerations the same ones the USPTO
suggested considering for the “practical application” prong of Step 1? Indeed they are!
Nonetheless, the USPTO is correct that the Federal Circuit uses similar
considerations at both steps of the Alice/Mayo test, and the choice of whether to resolve
a given case at Step 1 or Step 2 is often befuddling to even careful students of Federal
 PATENTABLE SUBJECT MATTER 311

Circuit caselaw. All we can suggest is to strongly consider making arguments in the
alternative in patentable subject matter briefs (or exam answers).

American Axle and the State of Patent Eligibility at the Federal Circuit

As the foregoing should make clear, determining whether a claim is “directed

to” an ineligible concept, and separating the ineligible concept from the rest of the
claim, is not a trivial exercise. All of science and technology relies at some level on
abstract ideas and laws of nature. Distinguishing between claims that effectively
claim those abstract ideas (and are thus unpatentable), and claims that merely draw
upon them at some higher level of abstraction (and are thus patentable), is a task that
frequently divides even the expert judges of the Federal Circuit.

A recent controversial instance of this is American Axle v. Neapco Holdings,

967 F.3d 1285, 1290 (Fed. Cir. 2020). The case involves a process for manufacturing
driveline shafts, which are a part used in automobiles (and other motorized vehicles)
to transfer power from the engine to the wheels. Driveline shafts spin very quickly
and, as a result, can begin to vibrate rapidly. This may cause damage to the
automobile and its drivetrain, and so one of the goals within the industry is to produce
driveline shafts that will dampen any potential vibration. The patentee claimed to
have invented a means of manufacturing a hollow driveline shaft with a liner inside
the shaft that could be “tuned” (that is, adjusted) to dampen vibrations more
effectively. Here is one claim from the patent:

22. A method for manufacturing a shaft assembly of a driveline system,

the driveline system further including a first driveline component and
a second driveline component, the shaft assembly being adapted to
transmit torque between the first driveline component and the second
driveline component, the method comprising:

providing a hollow shaft member;

tuning a mass and a stiffness of at least one liner, and

inserting the at least one liner into the shaft member;

wherein the at least one liner is a tuned resistive absorber for

attenuating shell mode vibrations and wherein the at least one liner is
a tuned reactive absorber for attenuating bending mode vibrations.

The challenging aspect of this claim is that it relies quite explicitly on a natural
law: a driveline shaft with a liner that has been tuned in the proper manner will not
vibrate as much when rotated. This fact derives from the physical laws of motion
governing different types of materials. In practice, tuning might be more complicated
than just applying these laws of physics, but the claim broadly covers any method of
“tuning,” by whatever steps happen to work. Indeed, the breadth of the claim is
312 MASUR & OUELLETTE ⋅ PATENT LAW

illustrated by testimony of the patentee’s expert that one would infringe the claim by
any method resulting in a tuned driveline shaft, even if unintentional. On the other
hand, the claim is directed toward a highly tangible type of technology that has existed
for decades: the manufacturing of automobile driveline shafts. It is not a software or
business method patent, the types of inventions to which the Courts have most
aggressively applied § 101 law. In addition, the patent does not seem to be trying to
claim the law of nature writ large, but instead is only claiming its application in a
particular engineering context.

The Federal Circuit panel held claim 22 invalid under Mayo as directed at a
natural law. Id. at 1299. The full Federal Circuit, by a tie vote of 6-6, then elected not
to rehear the case en banc, leaving the panel opinion undisturbed. 966 F.3d 1347 (Fed.
Cir. 2020). This denial of rehearing en banc generated no fewer than five separate
opinions from the twelve Federal Circuit judges. The Supreme Court requested the
views of the Solicitor General, who filed a brief recommending review, but the
Supreme Court then denied the certiorari petition without comment in June 2022.

Practice Problems: Abstract Ideas

Consider the following claims. Do you think these claims involve patentable
subject matter under Alice? If you will need more technical information to answer the
question, explain what information you will need.

1. The invention is a method for sorting emails between various users and
various mailboxes. The user could design a system of rules that would direct certain
emails to certain mailboxes or folders based on the identity of the sender, the subject
of the email, or other characteristics. The patent claims priority to 1997 and notes
that the invention can operate on existing communications networks and that
mailboxes can be connected to the network using conventional e-mail protocols. The
claim reads:

A post office for receiving and redistributing email messages on a

computer network, the post office comprising:
(a) a receipt mechanism that receives an e-mail message from a sender,
the e-mail message having at least one specified recipient;
(b) a database of business rules, each business rule specifying an action
for controlling the delivery of an e-mail message as a function of an
attribute of the e-mail message;
(c) a rule engine coupled to receive an e-mail message from the receipt
mechanism and coupled to the database to selectively apply the
business rules to the e-mail message to determine from selected
ones of the business rules a set of actions to be applied to the e-mail
message . . . .

Intellectual Ventures v. Symantec, 838 F.3d 1307 (Fed. Cir. 2016).

 PATENTABLE SUBJECT MATTER 313

2. The invention is an automated method of creating digitally animated

characters that can lip sync to music more convincingly. The invention involves a
database of “morph targets” showing how people’s lips move when they are making a
variety of different sounds, which are transitioned between by selecting appropriate
“morph weighs.” For instance, the face halfway between the neutral face and one
making an “oh” sound is expressed by setting the “oh” morph weight to 50%. When
the song called for a particular type of sound, the method would automatically load
the proper visual image from the database and display it for the digitally animated
character. The patent claims priority to 1997 and describes prior art processes that
required animators to manually select the appropriate morph weight for each frame
of the animation. The claim reads:

A method for automatically animating lip synchronization and facial

expression of three-dimensional characters comprising:
(a) obtaining a first set of rules that define output morph weight set
stream as a function of phoneme sequence and time of said phoneme
sequence;
(b) obtaining a timed data file of phonemes having a plurality of sub-
sequences;
(c) generating an intermediate stream of output morph weight sets and
a plurality of transition parameters between two adjacent morph
weight sets by evaluating said plurality of sub-sequences against
said first set of rules;
(d) generating a final stream of output morph weight sets at a desired
frame rate from said intermediate stream of output morph weight
sets and said plurality of transition parameters; and
(e) applying said final stream of output morph weight sets to a sequence
of animated characters to produce lip synchronization and facial
expression control of said animated characters.

McRO v. Bandai Namco Games Am., 837 F.3d 1299 (Fed. Cir. 2016).

3. The invention is technology used to stream video to online users. A user

would send a video to the streaming service, which would convert the video into a
streaming format and then associate it with a picture that represented the video, so
that the picture could be embedded in a website. The patent claims priority to 2000,
when sending files over the Internet and converting video files to streaming format
were in the prior art. The patent explains that the invention improves computer
functionality by overcoming the burden of manually posting a link associated with a
video to a web page. The claim reads:

A method of streaming a video to users over a network, the method

comprising the steps of:
(a) receiving, by a receiving computer via a web page, a video file sent
by a user on a second computer on a network;
314 MASUR & OUELLETTE ⋅ PATENT LAW

(b) executing, by the receiving computer, in response to receiving the

video file, an automated function automatically performing each of:
(i) converting the video file into a streaming video file
comprising a streaming video format, the video file being
converted independent from receiving a command to
perform such conversion from the user;
(ii) generating an identification tag comprising a video frame
image representing a subject matter of the streaming video
file and identifying the streaming video file; and
(iii) embedding the identification tag comprising the video
frame image into a web page for serving the streaming
video file to one or more users on one or more computers on
the network.

VideoShare v. Google, 2016 WL 4137524 (D. Del. Aug. 2, 2016), aff’d, 695 F. App’x 577
(Fed. Cir. 2016).

4. Prior art computer memory systems lacked versatility because they were
designed and optimized based on the specific type of processor selected for use in that
system. The invention purports to overcome these deficiencies by creating a memory
system with programmable operational characteristics that can be tailored for use
with multiple different processors without the accompanying reduction in
performance. The patent claims priority to 1990 and includes a microfiche appendix
with 263 frames of computer code, but it is unclear whether a PHOSITA would
understand how this code relates to the claimed programmable operational
characteristics. The claim reads:

A computer memory system connectable to a processor and having one

or more programmable operational characteristics, said characteristics
being defined through configuration by said computer based on the type
of said processor, wherein said system is connectable to said processor
by a bus, said system comprising:
(a) a main memory connected to said bus; and
(b) a cache connected to said bus;
(c) wherein a programmable operational characteristic of said system
determines a type of data stored by said cache.

Visual Memory v. NVIDIA, 867 F.3d 1253 (Fed. Cir. 2017).

 INVENTORSHIP & DOUBLE PATENTING 315

7. Inventorship and Double Patenting

In addition to satisfying the patentability requirements covered thus far, a
patent also must correctly name the inventor or joint inventors—the individual people
who contributed the ideas behind one or more of the claims. Inventorship is important
for at least three reasons.

First, failure to correctly name inventors renders a patent invalid, although

mistakes can be corrected if the error was made in good faith.

Second, by default, the inventors are joint owners of the patent, each of whom
may independently license the patent. In most cases, inventors contract around this
default by assigning patent rights to their employers; for example, an invention
created in a university lab by a professor and her grad students will be owned by the
university. But if a patent omits an inventor, a third party who wants to use the
invention can seek correction of inventorship plus a license from the omitted inventor.

Third, inventorship matters because under both pre- and post-AIA § 102, an
inventor’s own earlier patent application is not prior art against her before publication
the way it is against third parties. But courts have developed a separate doctrine—
double patenting—to prevent an inventor from improperly extending the effective
exclusivity period of the earlier application.

In this chapter, we first explain the law of inventorship and how finding
omitted inventors can be used as a litigation strategy, and then we turn to double
patenting.

A. Inventorship
The correct inventors for a patent are those individuals who contributed to the
conception of at least one claim in the patent. As we explained in Chapter 2, invention
begins with conception, or the formation of a definite and permanent idea of the
complete and operative invention. Invention then concludes with reduction to
practice, which is accomplished either by making the invention and ascertaining that
it works for its intended purpose (actual reduction to practice) or filing an enabling
patent application (constructive reduction to practice). For inventorship purposes,
reduction to practice is irrelevant—a person who contributes to reduction to practice
but not to conception is not an inventor.

The following statutory provisions govern inventors and joint inventors and
their default ownership rights:
316 MASUR & OUELLETTE ⋅ PATENT LAW

35 U.S.C. § 116 – Inventors

(a) Joint Inventions.— When an invention is made by two or more persons

jointly, they shall apply for patent jointly and each make the required
oath [unless they are deceased, incapacitated, unable to be found, or are
required to assign the invention but have refused to file an inventor’s
oath]. Inventors may apply for a patent jointly even though (1) they did
not physically work together or at the same time, (2) each did not make
the same type or amount of contribution, or (3) each did not make a
contribution to the subject matter of every claim of the patent.

(b) Omitted Inventor.— If a joint inventor refuses to join in an application

for patent or cannot be found or reached after diligent effort, the
application may be made by the other inventor on behalf of himself and
the omitted inventor. The Director, on proof of the pertinent facts and
after such notice to the omitted inventor as he prescribes, may grant a
patent to the inventor making the application, subject to the same
rights which the omitted inventor would have had if he had been joined.
The omitted inventor may subsequently join in the application.

(c) Correction of Errors in Application.— Whenever through error a person

is named in an application for patent as the inventor, or through error
an inventor is not named in an application, the Director may permit the
application to be amended accordingly, under such terms as he
prescribes.

35 U.S.C. § 256 – Correction of Named Inventor

(a) Correction.— Whenever through error a person is named in an issued

patent as the inventor, or through error an inventor is not named in an
issued patent, the Director may, on application of all the parties and
assignees, with proof of the facts and such other requirements as may
be imposed, issue a certificate correcting such error.

(b) Patent Valid if Error Corrected.— The error of omitting inventors or

naming persons who are not inventors shall not invalidate the patent
in which such error occurred if it can be corrected as provided in this
section. The court before which such matter is called in question may
order correction of the patent on notice and hearing of all parties
concerned and the Director shall issue a certificate accordingly.
 INVENTORSHIP & DOUBLE PATENTING 317

35 U.S.C. § 262 – Joint Owners

In the absence of any agreement to the contrary, each of the joint

owners of a patent may make, use, offer to sell, or sell the patented
invention within the United States, or import the patented invention
into the United States, without the consent of and without accounting
to the other owners.

Failure to correctly identify inventors has consequences, as. noted above. It can
result in the rejection of a patent application or invalidation of a granted patent if
inventorship is not corrected—and if the failure was deliberate, the patent may be
unenforceable for inequitable conduct (discussed in Chapter 12). More importantly, it
can change ownership of the patent. By default, each inventor is a co-owner with the
right to license the patent independently, so correcting a patent to add an omitted
inventor also adds a new owner to the patent. Consider how generic pharmaceutical
manufacturers that wanted to produce a patented HIV drug used inventorship rules
in the following case.

Burroughs Wellcome v. Barr Laboratories, 40 F.3d 1223 (Fed. Cir. 1994)

Haldane Mayer, Circuit Judge.

1 Burroughs Wellcome Co. is the owner of six United States patents that cover
various preparations of 3’–azidothymidine (AZT) and methods for using that drug in
the treatment of persons infected with the human immunodeficiency virus (HIV).
Each of these patents names the same five inventors—Janet Rideout, David Barry,
Sandra Lehrman, Martha St. Clair, and Phillip Furman (Burroughs Wellcome
inventors)—all of whom were employed by Burroughs Wellcome at the time the
inventions were alleged to have been conceived. The defendants-appellants concede
that all five are properly named as inventors on the patents.

2 In mid–1984, scientists discovered that AIDS was caused by a retrovirus

known [today] as HIV. After the identification of HIV, Burroughs Wellcome began to
search for a cure, screening compounds for antiretroviral activity using two murine
(or mouse) retroviruses.

3 At about this time, scientists at the National Institutes of Health (NIH), led by
Samuel Broder, were looking for effective AIDS therapies as well. Unlike Burroughs
Wellcome, Broder and his colleagues used live HIV, and were able to develop a test
that could demonstrate a compound’s effectiveness against HIV in humans using a
unique line of T-cell clones. The NIH scientists began to seek compounds from private
pharmaceutical companies for screening in their cell line. After Burroughs Wellcome
contacted Broder in the fall of 1984, he agreed to accept compounds from Burroughs
Wellcome under code for testing against live HIV.
 318 MASUR & OUELLETTE ⋅ PATENT LAW

4 Burroughs Wellcome’s Rideout selected AZT and a number of other compounds

for testing in the murine screens on October 29, 1984. The tests, performed at
Burroughs Wellcome facilities by St. Clair, showed that AZT had significant activity
against both murine retroviruses at low concentrations. In light of these positive
results, the Burroughs Wellcome inventors met on December 5, 1984, to discuss
patenting the use of AZT in the treatment of AIDS. Burroughs Wellcome’s patent
committee thereafter recommended that the company prepare a patent application
for future filing. By February 6, 1985, the company had prepared a draft application
for filing in the United Kingdom. The draft disclosed using AZT to treat patients
infected with HIV, and set out various pharmaceutical formulations of the compound
in an effective dosage range to treat HIV infection.

5 Two days earlier, on February 4, 1985, Burroughs Wellcome had sent a sample
of AZT, identified only as Compound S, to Broder at NIH. In an accompanying letter,
Lehrman told Broder of the results of the murine retrovirus tests and asked that he
screen the compound for activity against HIV in the [NIH’s unique] cell line. Another
NIH scientist, Hiroaka Mitsuya, performed the test in mid-February 1985, and found
that Compound S was active against HIV. Broder informed Lehrman of the results by
telephone on February 20, 1985. Burroughs Wellcome filed its patent application in
the United Kingdom on March 16, 1985 [and subsequently filed U.S. patent
applications claiming priority to this first application].

6 After Burroughs Wellcome learned that AZT was active against HIV, it began
the process of obtaining Food and Drug Administration (FDA) approval for AZT as an
AIDS therapy. As a part of the clinical trials leading to FDA approval, Broder and
another NIH scientist, Robert Yarchoan, conducted a Phase I human patient study
which showed that treatment with AZT could result in an increase in the patient’s T-
cell count. Broder reported this result to Lehrman on July 23, 1985. In 1987, the FDA
approved AZT for marketing by Burroughs Wellcome; Burroughs Wellcome markets
the drug for treatment of HIV infection under the trademark Retrovir.

7 On March 19, 1991, Barr Laboratories, Inc. (Barr) sought FDA approval to
manufacture and market a generic version of AZT. As part of the process, Barr
certified to the FDA that Burroughs Wellcome’s patents were invalid or were not
infringed by the product described in its ANDA. After Barr informed Burroughs
Wellcome of its action, Burroughs Wellcome commenced this case for patent
infringement against Barr on May 14, 1991, alleging technical infringement of its
patents under 35 U.S.C. § 271(e)(2)(A). [After Novopharm filed its own generic
application and was sued by Burroughs Wellcome, the suits were consolidated.]

8 Barr filed a counterclaim under 35 U.S.C. § 256 (1988) seeking correction of

the patents to list Broder and Mitsuya as coinventors. Barr admitted that its AZT
product would infringe the patents, but contended that it did not because Barr had
obtained a license to manufacture and sell AZT from the government, which should
 INVENTORSHIP & DOUBLE PATENTING 319

be deemed the owner of the interest of coinventors Broder and Mitsuya in the AZT
patents.

9 The district court granted Burroughs Wellcome’s motion for judgment as a

matter of law against all of the defendants, concluding that the Burroughs Wellcome
inventors had conceived of the subject matter of the inventions at some time before
February 6, 1985, without the assistance of Broder, Mitsuya, or Yarchoan. The court
rejected the arguments of Barr and Novopharm that they should be allowed to present
evidence that the Burroughs Wellcome inventors had no reasonable belief that the
inventions would actually work—that AZT was in fact active against HIV—until they
were told the results of the NIH testing.

Discussion

10 The arguments of both Barr and Novopharm are directed to when the inventors
conceived the invention. Burroughs Wellcome says it was before they learned the
results of the NIH tests; Barr and Novopharm say that confirmation of the inventions’
operability, which came from the NIH tests, was an essential part of the inventive
process. If Burroughs Wellcome is right, then the patents name the proper inventors,
they are not invalid, and the appellants are liable for infringement. If Barr and
Novopharm are correct, then Broder, Mitsuya, and Yarchoan should have been named
as joint inventors and the resolution of Burroughs Wellcome’s infringement suits is
premature.

11 A joint invention is the product of a collaboration between two or more persons

working together to solve the problem addressed. 35 U.S.C. § 116 (1988); Kimberly–
Clark Corp. v. Procter & Gamble Distrib. Co., 973 F.2d 911, 917 (Fed. Cir. 1992).
People may be joint inventors even though they do not physically work on the
invention together or at the same time, and even though each does not make the same
type or amount of contribution. 35 U.S.C. § 116. The statute does not set forth the
minimum quality or quantity of contribution required for joint inventorship.

12 Conception is the touchstone of inventorship, the completion of the mental part

of invention. It is “the formation in the mind of the inventor, of a definite and
permanent idea of the complete and operative invention, as it is hereafter to be applied
in practice.” Hybritech Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1376 (Fed.
Cir. 1986). Conception is complete only when the idea is so clearly defined in the
inventor’s mind that only ordinary skill would be necessary to reduce the invention to
practice, without extensive research or experimentation. Because it is a mental act,
courts require corroborating evidence of a contemporaneous disclosure that would
enable one skilled in the art to make the invention.

13 Thus, the test for conception is whether the inventor had an idea that was
definite and permanent enough that one skilled in the art could understand the
invention; the inventor must prove his conception by corroborating evidence,
preferably by showing a contemporaneous disclosure. An idea is definite and
 320 MASUR & OUELLETTE ⋅ PATENT LAW

permanent when the inventor has a specific, settled idea, a particular solution to the
problem at hand, not just a general goal or research plan he hopes to pursue. The
conception analysis necessarily turns on the inventor’s ability to describe his
invention with particularity. Until he can do so, he cannot prove possession of the
complete mental picture of the invention. These rules ensure that patent rights attach
only when an idea is so far developed that the inventor can point to a definite,
particular invention.

14 But an inventor need not know that his invention will work for conception to
be complete. He need only show that he had the idea; the discovery that an invention
actually works is part of its reduction to practice.

15 Barr and Novopharm suggest that the inventor’s definite and permanent idea
must include a reasonable expectation that the invention will work for its intended
purpose. They argue that this expectation is of paramount importance when the
invention deals with uncertain or experimental disciplines, where the inventor cannot
reasonably believe an idea will be operable until some result supports that conclusion.
Without some experimental confirmation, they suggest, the inventor has only a hope
or an expectation, and has not yet conceived the invention in sufficiently definite and
permanent form. But this is not the law. An inventor’s belief that his invention will
work or his reasons for choosing a particular approach are irrelevant to conception.

16 It is undoubtedly true that “[i]n some instances, an inventor is unable to

establish a conception until he has reduced the invention to practice through a
successful experiment.” Amgen v. Chugai Pharmaceutical, 927 F.2d 1200, 1206 (Fed.
Cir. 1991). But in such cases, it is not merely because the field is unpredictable; the
alleged conception fails because it is incomplete. Then the event of reduction to
practice in effect provides the only evidence to corroborate conception of the invention.

17 Under these circumstances, the reduction to practice can be the most definitive
corroboration of conception, for where the idea is in constant flux, it is not definite and
permanent. A conception is not complete if the subsequent course of experimentation,
especially experimental failures, reveals uncertainty that so undermines the
specificity of the inventor’s idea that it is not yet a definite and permanent reflection
of the complete invention as it will be used in practice. It is this factual uncertainty,
not the general uncertainty surrounding experimental sciences, that bears on the
problem of conception.

18 We emphasize that we do not hold that a person is precluded from being a joint
inventor simply because his contribution to a collaborative effort is experimental.
Instead, the qualitative contribution of each collaborator is the key—each inventor
must contribute to the joint arrival at a definite and permanent idea of the invention
as it will be used in practice.

19 Nor do we suggest that a bare idea is all that conception requires. The idea
must be definite and permanent in the sense that it involves a specific approach to
 INVENTORSHIP & DOUBLE PATENTING 321

the particular problem at hand. It must also be sufficiently precise that a skilled
artisan could carry out the invention without undue experimentation. And, of course,
the alleged conception must be supported by corroborating evidence.

20 [Five of the patents at issue] encompass compositions and methods of using

AZT to treat AIDS. The Burroughs Wellcome inventors claim conception of these
inventions prior to the NIH experiments, based on the draft British patent
application. That document is not itself a conception, for conception occurs in the
inventors’ minds, not on paper. The draft simply corroborates the claim that they had
formulated a definite and permanent idea of the inventions by the time it was
prepared.

21 The Burroughs Wellcome inventors set out with the general goal of finding a
method to treat AIDS, but by the time Broder confirmed that AZT was active against
HIV, they had more than a general hope or expectation. They had thought of the
particular antiviral agent with which they intended to address the problem, and had
formulated the idea of the inventions to the point that they could express it clearly in
the form of a draft patent application, which Barr and Novopharm concede would
teach one skilled in the art to practice the inventions. The draft expressly discloses
the intended use of AZT to treat AIDS. It sets out the compound’s structure, which,
along with at least one method of preparation, was already well known. The draft also
discloses in detail both how to prepare a pharmaceutical formulation of AZT and how
to use it to treat a patient infected with HIV. The listed dosages, dose forms, and
routes of administration conform to those eventually approved by the FDA. The draft
shows that the idea was clearly defined in the inventors’ minds; all that remained was
to reduce it to practice—to confirm its operability and bring it to market.

22 An examination of the events that followed the preparation of Burroughs

Wellcome’s draft confirms the soundness of the conception. Broder and Mitsuya
received from Burroughs Wellcome a group of compounds, known to Broder and
Mitsuya only by code names, selected for testing by the Burroughs Wellcome
inventors. They then tested those compounds for activity against HIV in their
patented cell line. The test results revealed for the first time that one of the
compounds, later revealed to be AZT, was exceptionally active against the virus.

23 Here, though, the testing was brief, simply confirming the operability of what
the draft application disclosed. True, the science surrounding HIV and AIDS was
unpredictable and highly experimental at the time the Burroughs Wellcome scientists
made the inventions. But what matters for conception is whether the inventors had a
definite and permanent idea of the operative inventions. In this case, no prolonged
period of extensive research, experiment, and modification followed the alleged
conception. By all accounts, what followed was simply the normal course of clinical
trials that mark the path of any drug to the marketplace.

24 That is not to say, however, that the NIH scientists merely acted as a “pair of
hands” for the Burroughs Wellcome inventors. Broder and Mitsuya exercised
 322 MASUR & OUELLETTE ⋅ PATENT LAW

considerable skill in conducting the tests, using their patented cell line to model the
responses of human cells infected with HIV. Lehrman did suggest initial
concentrations to Broder, but she hardly controlled the conduct of the testing, which
necessarily involved interpretation of results for which Broder and Mitsuya, and very
few others, were uniquely qualified. But because the testing confirmed the operability
of the inventions, it showed that the Burroughs Wellcome inventors had a definite and
permanent idea of the inventions. It was part of the reduction to practice and inured
to the benefit of Burroughs Wellcome.

25 Barr and Novopharm allege error in the district court’s refusal to hear their
evidence of the poor predictive value of the murine retrovirus screens for activity
against HIV. Regardless of the predictive value of the murine tests, however, the
record shows that soon after those tests, the inventors determined, for whatever
reason, to use AZT as a treatment for AIDS, and they prepared a draft patent
application that specifically set out the inventions, including an enabling disclosure.
Obviously, enablement and conception are distinct issues, and one need not
necessarily meet the enablement standard of 35 U.S.C. § 112 to prove conception. But
the enabling disclosure does suffice in this case to confirm that the inventors had
concluded the mental part of the inventive process—that they had arrived at the final,
definite idea of their inventions, leaving only the task of reduction to practice to bring
the inventions to fruition.

26 The question is not whether Burroughs Wellcome reasonably believed that the
inventions would work for their intended purpose, the focus of the evidence offered by
Barr and Novopharm, but whether the inventors had formed the idea of their use for
that purpose in sufficiently final form that only the exercise of ordinary skill remained
to reduce it to practice. Whether or not Burroughs Wellcome believed the inventions
would in fact work based on the mouse screens is irrelevant.

27 We do not know precisely when the inventors conceived their inventions, but
the record shows that they had done so by the time they prepared the draft patent
application that thoroughly and particularly set out the inventions as they would later
be used. The district court correctly ruled that on this record, the NIH scientists were
not joint inventors of these inventions.

28 [For the sixth patent, which claimed the use of AZT to increase a patient’s T-
cell count, the Federal Circuit vacated the district court’s judgment because the record
did not support resolution as a matter of law of whether the inventors had this definite
and permanent idea in mind. Judge Lourie dissented from this portion of the opinion,
concluding that increasing a patient’s T-cell count was an inherent result of practicing
the other patents.]
 INVENTORSHIP & DOUBLE PATENTING 323

Discussion Questions: Inventorship

1. AZT and the HIV/AIDS Crisis. The federal government was not a party to
this lawsuit, but they played an important role. What was their role, and why do you
think they were siding with the generic manufacturers Barr Laboratories and
Novopharm? Is it relevant that this litigation occurred at the height of the HIV/AIDS
epidemic and involved one of the first antiretroviral drugs that was effective at
treating the disease? What role do you think patents should play in the middle of a
public health crisis?

Does your answer differ for patents in other countries? As we will discuss in
Chapter 20, the 1994 Agreement on Trade-Related Aspects of Intellectual Property
Rights (TRIPS) requires all but the least-developed nations to protect the IP rights of
all 164 TRIPS members. Most pharmaceuticals are patented around the world. In the
2013 documentary Fire in the Blood, which depicts barriers to access to low-cost
HIV/AIDS drugs in Africa, activist Zackie Achmat noted that it took nearly 40 years
for the U.S. government to put apartheid South Africa on a sanctions watch list, but
it took less than three years to put democratic South Africa on a sanctions watch list
for importing generic AIDS drugs in violation of patent laws.

Is patent law a good tool for improving access to medicines, in the United
States or abroad? Should judges faced with a technical legal question about
inventorship—as in Burroughs Wellcome—consider the broader policy concerns at
stake? If so, how?

2. The Different Standards of Patent Inventorship and Scientific Authorship.

As Burroughs Wellcome explains, a researcher who contributes only to the reduction
to practice of an invention is not an inventor. But under the norms of scientific
authorship, such a researcher often would be included as an author on a corresponding
paper. Here is the first paper on the in vitro results using NIH’s patented cell line:

The first author, Hiroaki Mitsuya, is the NIH scientist who ran the tests, and the last
author, Samuel Broder, is the leader of the NIH group, in keeping with common
324 MASUR & OUELLETTE ⋅ PATENT LAW

authorship norms in many scientific fields. Why do you think the standards for
inventorship and authorship differ? Should they?

One study found that junior or female scientists who are named as authors on
a paper are more likely to be excluded as inventors on the corresponding patent than
their senior or male counterparts. Francesco Lissoni, Fabio Montobbio & Lorenzo
Zirulia, Misallocation of Scientific Credit: The Role of Hierarchy and Preferences, 6
Indus. & Corp. Change 1471 (2020). How would you explain this result?

3. Joint Inventorship Rules as a Penalty Default? As explained above, by

default, joint inventors are co-owners of any resulting patent. Each may
independently exploit and license the patent, with no duty to obtain consent from
other co-owners or to share patent-related income. In most cases, inventors contract
around this default by assigning their interest to their employers. And when separate
individuals or firms collaborate on a project, it is generally under a joint development
agreement that specifies ownership of any resulting intellectual property. If co-
inventors of a valuable patent do not contract around the default ownership rules,
what would you expect to happen if each inventor seeks to maximize profits? Do you
think they want to be in this default situation? If not, inventorship rules might be
referred to as a “penalty default rule”: a rule that most parties would find undesirable,
and that thus encourages them to contract around the rule. Can you think of why this
default rule might be justified from a social welfare perspective? What kind of
inventors might be disadvantaged by this rule?

4. The History of Black Inventorship in the United States. As discussed in

Chapter 1, some scholars have argued that patent law has democratized innovation
throughout U.S. history, although inventors from disadvantaged groups still face
barriers to successfully receiving rewards from the patent system. Shontavia Johnson
recounts the history of Black inventorship in the United States, shedding light on the
many legal and practical barriers Black inventors have faced, and highlighting how
they have been innovating nonetheless throughout the centuries.

One quintessential example of early American ingenuity is the

story of Benjamin Montgomery, who was born into slavery in Virginia
in 1819 and later sold in Mississippi to Joseph Davis, the brother of
Jefferson Davis. While enslaved in Mississippi, Montgomery invented a
certain type of boat propeller with significant utility for those who
depended on steamboats to deliver goods along the waterways.
Montgomery could not receive a patent for the invention as he was a
slave and not considered a citizen. Nonetheless, Montgomery found
success. He operated a general store on the plantation, built
relationships, and continued to innovate. He eventually earned enough
money to purchase his wife’s freedom. After the Civil War ended, he
also purchased the plantation he worked on as a slave and became one
of the wealthiest planters in Mississippi. . . .
 INVENTORSHIP & DOUBLE PATENTING 325

During these early American years, free black Americans were

also inventing and contributing to the country’s transition into a land
of innovation. Thomas Jennings, the first known black patentee, was
born free and successfully patented a dry cleaning method in 1821. This
proved to be lucrative for him, as the ability to exclude others from
making and selling his invention led Jennings to own one of New York
City’s largest clothing stores. [H]e used the profits from his patented
invention to free the rest of his family from slavery. . . .

Another black inventor, Norbert Rillieux, revolutionized

industry both domestically and abroad. Rillieux was born free in
Louisiana in 1806 and studied engineering in France. Because of his
intelligence, he became the youngest person ever—at age 24—to serve
as an applied mechanics instructor at L’École Centrale, a prestigious
French institution. Rillieux ultimately applied for and received four
U.S. patents related to sugar refining once he returned to America. His
inventions transformed the industry, and he became the most
celebrated engineer in Louisiana at the time.

Shontavia Jackson Johnson, The Colorblind Patent System and Black Inventors, 11
Landslide 16 (2019).

These entrepreneurs succeeded despite huge structural barriers. The racism

of the early U.S. patent system is perhaps most prominently illustrated by an odious
1858 opinion issued by Attorney General Jeremiah Black. As recently summarized by
Kara Swanson:

He needed only three sentences to explain that an invention by an

enslaved inventor could not be patented. The Attorney General relied
on the Supreme Court’s holding the previous year in Dred Scott v.
Sandford that African Americans were not citizens, whether free or
enslaved. Without the ability to swear an oath of citizenship, enslaved
persons could not apply for patents. This reasoning also placed free
African Americans outside the bounds of patent law.

Kara W. Swanson, Race and Selective Legal Memory: Reflections on Invention of a

Slave, 120 Colum. L. Rev. 1077 (2020). Swanson has also recounted how marginalized
inventors used false non-inventors as a form of “passing,” helping them “avoid bias
and stigma in the patent office and the marketplace” but also depriving them of “the
public status of inventor and also, often, the full value of their inventions.” Kara W.
Swanson, Centering Black Women Inventors: Passing and the Patent Archive, 25 Stan.
Tech. L. Rev. 305 (2022).

What should be done to account for the harms perpetrated by these rules?
Should the USPTO attempt to track down the Black inventors who were denied
patents prior to the Thirteenth Amendment and add them as named inventors to the
326 MASUR & OUELLETTE ⋅ PATENT LAW

patents that issued based on their work? Should there be other efforts to memorialize
the inventors who were denied patents? Should the U.S. government attempt to
calculate the value of these inventions and pay reparations to the descendants of their
true inventors? What about the broader social harms caused by underrepresentation
of women and racial minorities among named inventors? Are these types of harm best
addressed inside or outside of the patent system?

5. AI Inventors? Can a computer qualify as an inventor? In 2019, the Artificial

Inventor Project filed a patent application in several jurisdictions with the inventor
listed as a computer program known as DABUS (Device for the Autonomous
Bootstrapping of Unified Sentience). The academic spearheading this test case argued
that recognizing AI inventors will incentivize development of inventive AI systems.
See Ryan Abbott, The Reasonable Robot: Artificial Intelligence and the Law (2020).
The USPTO, European Patent Office, and UK Intellectual Property Office refused to
recognize DABUS as an inventor. If DABUS cannot be an inventor, is there a proper
inventor for this patent application? Or does the invention have no inventor, which
would make it unpatentable?

Do you think inventorship doctrine should be revised to account for inventions

where an entity other than a natural person contributes to conception? When the
USPTO requested comments on this issue in 2019, the “vast majority” responded “no,”
and many questioned the premise that state-of-the-art AI could conceive an invention.
See USPTO, Public Views on Artificial Intelligence and Intellectual Property Policy
(2020), https://www.uspto.gov/sites/default/files/documents/USPTO_AI-Report_2020-
10-07.pdf.

B. Double Patenting
Patent inventorship rules are also important for applying a final patentability
doctrine: a prohibition on “double patenting.” As explained in Chapter 2, patents and
patent applications are generally prior art as of the date they are filed, as long as they
are eventually published. For example, suppose Sofía is a researcher at IBM who
invents a new semiconductor design. If IBM files a patent application on January 1,
2020, which is published in due course on July 1, 2021, the application is prior art
against most applications filed after January 1, 2020 under post-AIA § 102(a)(2). But
§ 102(a)(2) applies only to a second patent application that “names another inventor,”
and there is also an exception under § 102(b)(2)(C) for a second application “owned by
the same person or subject to an obligation of assignment to the same person” (where
ownership includes invention under a “joint research agreement,” per § 102(c)). Thus,
what is to prevent Sofía and IBM from filing the exact same application on February
1, 2021?

The same problem arises pre-AIA. If IBM files the first patent application on
January 1, 2010, and it is published on July 1, 2011, it is generally prior art against
 INVENTORSHIP & DOUBLE PATENTING 327

applications filed after January 1, 2010 under pre-AIA § 102(e). But pre-AIA § 102(e)
applies only to patents and patent applications filed “by another,” meaning not filed
by the exact same inventors (known as the “inventive entity”). It thus would not apply
to a second application filed by IBM on February 1, 2011, with Sofía as the named
inventor. Again, nothing in § 102 prevents IBM from obtaining identical patents with
different expiration dates.

IBM could not use this tactic to extend the patent term indefinitely—once the
earlier application is published (typically at 18 months after filing), it is prior art as
of the publication date under post-AIA § 102(a)(1) or pre-AIA § 102(a) and (b). But it
could obtain an 18-month extension. And the problem was even more significant
before 1995, when the patent term was 17 years from issuance rather than 20 years
from filing, such that delaying prosecution of one of the patent applications would
result in a very long effective patent term.

To address this type of concern with improper extension of exclusive rights,

courts have developed the doctrine of double patenting, which comes in two flavors.
“Same-invention” double patenting prohibits an inventor from receiving two patents
on the same invention. “Obviousness-type” double patenting prohibits an inventor
from receiving a patent on an obvious variation of her earlier patent unless she files
a “terminal disclaimer” such that both patents expire at the same time. In both cases,
the later-expiring patent is the one that is invalid. These double patenting issues can
arise whenever two or more patents or patent applications have at least one common
inventor or common owner, or when the owners have entered a joint research
agreement. For the USPTO’s double patenting flowcharts, see MPEP § 804.

For an illustration of how terminal disclaimers work, consider the cover pages
of the following two patents, both from the inventorship case excerpted earlier in this
chapter, Burroughs Wellcome v. Barr Laboratories, 40 F.3d 1223 (Fed. Cir. 1994). The
’232 patent was filed before June 8, 1995, so it expired 17 years from issuance, on
February 9, 2005. For the ’750 patent, before you look at the answer in the footnote,
try to figure out: When was the effective filing date, and when did it expire?1

1 The ’750 patent was actually filed on October 20, 1987, but it is a continuation of the

’232 patent that was filed September 17, 1985, so that’s the effective filing date. It issued April
4, 1989, so would normally expire April 4, 2006, but it has disclaimed patent term after
February 9, 2005. Both patents expire on the same day.
328 MASUR & OUELLETTE ⋅ PATENT LAW
 INVENTORSHIP & DOUBLE PATENTING 329

Same-Invention Double Patenting

Same-invention double patenting is also known as statutory double patenting

because it is (weakly) grounded in the language of 35 U.S.C. § 101, which states that
an inventor “may obtain a patent” (emphasis added). See In re Longi, 759 F.2d 887,
892 (Fed. Cir. 1985). Determining whether two claims are directed to the same
invention parallels the element-by-element analysis we have performed when
assessing novelty. The Federal Circuit’s predecessor court has summarized the
doctrine:

35 U.S.C. § 101 prevents two patents from issuing on the same

invention. As we have said many times, “invention” here means what is
defined by the claims. A good test, and probably the only objective test,
for “same invention,” is whether one of the claims could be literally
infringed without literally infringing the other. If it could be, the claims
do not define identically the same invention. If it is determined that the
same invention is being claimed twice, 35 U.S.C. § 101 forbids the grant
of the second patent, regardless of the presence or absence of a terminal
disclaimer.

In re Vogel, 422 F.2d 438, 441 (C.C.P.A. 1970) (emphasis added).

Obviousness-Type Double Patenting

Obviousness-type double patenting is also known as non-statutory double

patenting because it “is a judicially created doctrine grounded in public policy (a policy
reflected in the patent statute) rather than based purely on the precise terms of the
statute.” Longi, 759 F.2d at 892. Obviousness-type double patenting prevents an
inventor from obtaining a second patent that is an obvious variation on an earlier one.
The test is similar to the § 103 analysis, except that it is only the claims of the earlier
patent that are prior art:

The doctrine of obviousness-type double patenting is intended to

prevent the extension of the term of a patent by prohibiting the issuance
of the claims in a second patent not patentably distinct from the claims
of the first patent. A later patent claim is not patentably distinct from
an earlier claim if the later claim is obvious over, or anticipated by, the
earlier claim.

As a general rule, obviousness-type double patenting

determinations turn on a comparison between a patentee’s earlier and
later claims, with the earlier patent’s written description considered
only to the extent necessary to construe its claims. This is so because
the nonclaim portion of the earlier patent ordinarily does not qualify as
prior art against the patentee and because obviousness-type double
330 MASUR & OUELLETTE ⋅ PATENT LAW

patenting is concerned with the improper extension of exclusive

rights—rights conferred and defined by the claims. The focus of the
obviousness-type double patenting doctrine thus rests on preventing a
patentee from claiming an obvious variant of what it has previously
claimed, not what it has previously disclosed.

Eli Lilly & Co. v. Teva Parenteral Medicines, 689 F.3d 1368, 1376, 1378–79 (Fed. Cir.
2012).

The Federal Circuit has emphasized two justifications for this doctrine. “The
first is to prevent unjustified timewise extension of the right to exclude granted by a
patent no matter how the extension is brought about. The second rationale is to
prevent multiple infringement suits by different assignees asserting essentially the
same patented invention.” In re Hubbell, 709 F.3d 1140, 1145 (Fed. Cir. 2013).

When the two patents involved in an obviousness-type double patenting

rejection or invalidation are commonly owned, the problem can be cured by filing a
terminal disclaimer on the later-expiring patent, which effectively causes it to expire
at the same time as the earlier patent. 35 U.S.C. § 253(b) states that “any patentee or
applicant may disclaim or dedicate to the public the entire term, or any terminal part
of the term, of the patent granted or to be granted.” A terminal disclaimer can be filed
to overcome the invalidation of a patent for obviousness-type double patenting during
litigation. Eli Lilly, 689 F.3d at 1375. (Why does the law not allow patent owners to
cure most other validity problems during litigation?)

However, the terminal disclaimer fixes the problem “only for and during such
period that said patent is commonly owned with the application or patent which
formed the basis for the judicially created double patenting” or, if created under a joint
research agreement, “only for and during such period that said patent and the patent,
or any patent granted on the application, which formed the basis for the double
patenting are not separately enforced.” 37 C.F.R. § 1.321(c)-(d). Terminal disclaimers
can thus complicate sales of patent portfolios because if the patents are sold
separately, the patent with the terminal disclaimer would become unenforceable.

Discussion Questions: Double Patenting

1. Why Treat an Inventor’s Own Earlier Patent Applications Differently? The

complicated doctrine of double patenting evolved because both pre- and post-AIA treat
earlier patent applications as prior art as of their filing date (rather than as of their
publication date) only if the applications were filed by other applicants. Why are prior
patent filings by the same inventor or owner (including companies working under a
joint research agreement) treated differently? Once an inventor has filed one patent,
she can file additional patents that claim obvious improvements on the first patent
until the first patent is published, but an unrelated inventor cannot. One justification
may be to encourage the inventor to file the first patent early, without worrying about
 INVENTORSHIP & DOUBLE PATENTING 331

whether it might prevent her from patenting later work. Do you find this convincing?
For additional justifications and effects of treating an applicant’s own earlier patent
applications differently and suggestions for reform, see Amy R. Motomura, Innovation
and Own Prior Art, 72 Hastings L.J. 565 (2021).

2. Obviousness in Light of the Claims? When judging whether an applicant is

engaged in obviousness-type double patenting, why do courts look only to the claims
of the prior patent and not the specification? Suppose an inventor filed for a second
patent with claims that were obvious in light of the specification of the first patent. If
that first patent belonged to any other party, the second patent would be invalid as
obvious. But under these rules, the same inventor can obtain a second patent on the
same material. Does that seem appropriate? Are there, or should there be, boundaries
on this doctrine that prevent such sequential patenting?

Practice Problem: Inventorship, Double Patenting, and § 102 Review

Given the facts below, does anyone receive a patent on the widget? Unless
otherwise specified, all patent applications are published in due course.
• Jan. 2005: Juting conceives of a new invention, the widget, but she isn’t sure
that it will work for its intended purpose or how to test it.
• Jan. 2006: Darryl conceives of the widget and reduces it to practice.
• Jan. 2007: Jamar conceives of the widget, reduces it to practice, and makes a
commercial offer for sale. The offer is declined.
• Mar. 2008: Daisuke conceives of the widget and submits a paper explaining
why it would work to Journal of Inventions. It is accepted and sent to the
printers in December 2008 and received by subscribers in February 2009.
• June 2008: Jamar files a patent application claiming the widget.
• Jan. 2009: Juting meets Elisa, who knows how to test the widget and confirms
that it works. Elisa also shows that they can make widgets out of vibranium,
which is a not insignificant but obvious improvement.
• Apr. 2009: At a party, Elisa demonstrates a widget to 30 friends, including
Alex, none of whom had ever seen a widget before.
• June 2009: Alex files a patent application claiming widgets.
• Sept. 2009: Juting and Elisa file a patent application claiming widgets.
• Nov. 2009: Jamar abandons his patent application.
• Dec. 2009: Juting and Elisa file a new patent application claiming vibranium
widgets.
• Mar. 2010: Darryl recalls his earlier idea and files a patent application
claiming widgets.
332 MASUR & OUELLETTE ⋅ PATENT LAW

III. Infringement
The principal right that accompanies a valid patent is the right to exclude
others from making, using, selling, or importing the patented invention. If a patent
owner believes that another is engaging in such activity, the owner may sue the other
party for patent infringement. At its heart, the infringement allegation is simple: the
alleged infringer is making, using, selling, or importing a good or process that meets
all of the limitations of the patent claim. The first step of any infringement analysis,
then, is to understand what the claims of the patent mean.

In fact, interpreting the patent claims is the first step to nearly all of the
patentability doctrines we described in the previous chapters as well. It is impossible
to determine whether a patent claim is novel, or nonobvious, or satisfies the written
description or enablement requirements without first interpreting the claim and
determining, as a legal matter, what it means. Even the doctrine of patentable subject
matter, which is often adjudicated before the patent claims are fully interpreted, relies
on understanding what the claims mean, at least in broad strokes. The process of
claim interpretation, or “claim construction,” is thus at the heart of nearly all of patent
law. Nonetheless, we have saved it for this point in the book. The reason is that it is
essential to understand what makes a patent claim valid in order to understand what
is at stake in claim construction. Additionally, the Federal Circuit has “emphasized
the importance of the context provided by an [infringement] analysis of the accused
device when ruling on claim construction and the problems presented by construing
claims in the absence of such context.” Jang v. Bos. Sci. Corp., 532 F.3d 1330, 1337
(Fed. Cir. 2008).

Accordingly, we discuss the law of claim construction in Chapter 8 before

turning directly to patent infringement in Chapters 9–11. Infringement comes in two
general flavors: “direct” and “indirect.” In a case involving direct infringement, the
claim is that the accused device includes all of the elements of the claim, either
“literally” (meaning the element is actually present) or as an “equivalent” (meaning
the accused device has a feature that is equivalent to the claim element). Indirect
infringement involves the claim that one party is facilitating the infringement of
another party. Thus, in a case of indirect infringement, the actual infringer may be
“off screen”—meaning not a party to the lawsuit. The following table provides an
overview of the statutes governing infringement that will be discussed in subsequent
chapters.

As we will see, the law of infringement employs many of the same concepts and
doctrinal rules as the law of validity. But there are a variety of new doctrines and
additional wrinkles, which we will explore in detail. First, a discussion of rules
surrounding claim construction.
 INFRINGEMENT 333

Type of Infringement Overview

9. Direct § 271(a) provides strict liability for any entity that

(§ 271(a)) “makes, uses, offers to sell, or sells any patented
invention, within the United States or imports into the
United States any patented invention.” Direct
infringement can be literal, requiring every claim
element to be met (mirroring the anticipation analysis)
or infringement under the doctrine of equivalents, if for
every claim element, the infringing device or method
has an element performing the same function in the
same way for the same result.

10. Indirect An entity can also be indirectly liable under § 271(b) for
(§ 271(b)-(c)) inducing another entity to directly infringe, or under
§ 271(c) for contributing to another entity’s direct
infringement by selling something especially adapted
for use in an infringement. Indirect liability requires
knowledge of (or willful blindness to) the patent.

11(A). Divided When multiple entities perform different steps of a

(§ 271(a), (e)-(g)) method patent, there is direct infringement only if a
single entity directs or controls the performance or
where the actors form a joint enterprise. There cannot
be indirect infringement without direct infringement.

11(B). Cross-Border Although there is generally a presumption against

(§ 271(f)-(g)) extraterritorial application of U.S. law, entities are
liable under § 271(f) for exporting “components of a
patented invention” so as to induce their combination
abroad, or where the components are especially
adapted for use in an infringement abroad. And
entities are liable under § 271(g) for importing, offering
to sell, selling, or using within the United States a
product made by a process patented in the United
States.

11(C). Government The federal government can be sued only for patent
(§ 271(h), 28 U.S.C. damages under § 1498(a), with damages calculated by
§ 1498(a)) the Court of Federal Claims, not for an injunction.
State governments can generally be sued only for an
injunction, not damages.

11(D). Pharmaceutical Under the 1984 Hatch-Waxman Act for small-molecule

(§ 271(e)) drugs and the 2011 Biologics Price Competition and
Innovation Act for biologic drugs, a generic firm’s FDA
application to market a patent-protected drug allows
the brand-name firm to commence patent litigation.
334 MASUR & OUELLETTE ⋅ PATENT LAW

8. Claim Construction
As we noted above, many critical patent doctrines turn on the meaning of the
patent claims. Claim language can be complex or ambiguous, which makes their
interpretation essential. In the 1996 case Markman v. Westview Instruments, 517 U.S.
370, the Supreme Court held that claim construction is a legal question to be decided
by the judge, not the jury. This followed from the fact that a patent is a legal document,
issued by the government, and thus analogous to a statute. In most patent trials, the
district judge will solicit briefing on contested claim construction issues relatively
early in the proceeding and will typically hold a hearing—sometimes referred to as a
“Markman” hearing—to decide those issues. For instance, the Northern District of
California, which includes Silicon Valley and is the site of many patent trials, has a
set of local rules governing patent cases.1 Those local rules provide that the parties to
a patent dispute must first notify one another of the patent claims that they believe
are infringed or invalid, and then within fourteen days must notify one another and
the court of any claim terms the parties believe need to be construed by the court. The
court will then construe the claims before deciding any motions for summary
judgment on invalidity or infringement. This means that the court’s single
construction of the claims will govern all parts of the case to come, including all issues
related to validity (anticipation, obviousness, enablement, written description, etc.)
and all issues related to infringement.

There are a variety of sources of meaning a court can draw upon when
construing a patent’s claims. First, of course, is the text and context of the claim
language itself. A court can also look to the patent specification and the patent’s
prosecution history—the record of communications with the USPTO during the
application process—as guides to meaning. Together, these three sources of meaning
are referred to as “intrinsic evidence,” because they are intrinsic to the patent itself.
Courts can also turn to “extrinsic” sources of information as to the patent’s meaning,
including dictionaries, scientific and technical papers and treatises, and even expert
testimony.2 The relationship between these different sources of meaning, and which
should take precedence when they conflict, is the subject of the case that follows. We
then provide opportunities to practice these claim construction rules in the very next
chapter, Chapter 9, which concerns direct patent infringement.

1 The rules are available at https://www.cand.uscourts.gov/rules/patent-local-rules.

2 Although claim interpretation is a question of law, the value and meaning of extrinsic
sources will sometimes raise underlying issues of fact, as when a court must evaluate the
testimony of a party’s expert who has testified about the meaning of the claims. These issues
of fact, like all issues of fact, are reviewed by the courts of appeal with deference to the district
court’s findings. Teva Pharms. USA, Inc. v. Sandoz, Inc., 574 U.S. 318 (2015).
 CLAIM CONSTRUCTION 335

Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc)

William C. Bryson, Circuit Judge.

1 Edward H. Phillips invented modular, steel-shell panels that can be welded

together to form vandalism-resistant walls. The panels are especially useful in
building prisons because they are load-bearing and impact-resistant, while also
insulating against fire and noise. Mr. Phillips obtained a patent on the invention, U.S.
Patent No. 4,677,798, [and sued AWH Corp. for infringement].

2 With regard to the patent infringement issue, the district court focused on the
language of claim 1, which recites “further means disposed inside the shell for
increasing its load bearing capacity comprising internal steel baffles extending
inwardly from the steel shell walls.” [The district court held that AWH’s walls did not
include “baffles” because the internal panels were at a 90-degree angle to the wall
face, and the ’798 patent shows baffles only at other angles. The court granted
summary judgment of noninfringement.]

3 [On appeal, a divided Federal Circuit panel affirmed. In the majority, Judge
Alan Lourie, joined by Judge Pauline Newman, sustained the judgment of
noninfringement. In dissent, Judge Timothy Dyk would have reversed on the basis
that nothing in the specification limited “baffles” to less than its “plain meaning,”
which included baffles at 90 degrees. The Federal Circuit agreed to hear the appeal
en banc.]

4 Claim 1 of the ’798 patent is representative of the asserted claims with respect
to the use of the term “baffles.” It recites:

Building modules adapted to fit together for construction of fire, sound

and impact resistant security barriers and rooms for use in securing
records and persons, comprising in combination, an outer shell . . . ,
sealant means . . . and further means disposed inside the shell for
increasing its load bearing capacity comprising internal steel baffles
extending inwardly from the steel shell walls.

5 As a preliminary matter, we agree with the panel that the term “baffles” is not
means-plus-function language that invokes 35 U.S.C. § 112, paragraph 6. To be sure,
the claim refers to “means disposed inside the shell for increasing its load bearing
capacity,” a formulation that would ordinarily be regarded as invoking the means-
plus-function claim format. However, the claim specifically identifies “internal steel
baffles” as structure that performs the recited function of increasing the shell’s load-
bearing capacity. In contrast to the “load bearing means” limitation, the reference to
“baffles” does not use the word “means,” and we have held that the absence of that
term creates a rebuttable presumption that section 112, paragraph 6, does not apply.
 336 MASUR & OUELLETTE ⋅ PATENT LAW

6 Means-plus-function claiming applies only to purely functional limitations that

do not provide the structure that performs the recited function. While the baffles in
the ’798 patent are clearly intended to perform several functions, the term “baffles” is
nonetheless structural; it is not a purely functional placeholder in which structure is
filled in by the specification. The claims and the specification unmistakably establish
that the “steel baffles” refer to particular physical apparatus. The claim characterizes
the baffles as “extend[ing] inwardly” from the steel shell walls, which plainly implies
that the baffles are structures. The specification likewise makes clear that the term
“steel baffles” refers to particular internal wall structures and is not simply a general
description of any structure that will perform a particular function. Because the term
“baffles” is not subject to section 112, paragraph 6, we agree with the panel that the
district court erred by limiting the term to corresponding structures disclosed in the
specification and their equivalents. Accordingly, we must determine the correct
construction of the structural term “baffles,” as used in the ’798 patent.

II

7 The first paragraph of section 112 of the Patent Act, 35 U.S.C. § 112, states
that the specification

shall contain a written description of the invention, and of the manner

and process of making and using it, in such full, clear, concise, and
exact terms as to enable any person skilled in the art to which it
pertains . . . to make and use the same . . .

The second paragraph of section 112 provides that the specification

shall conclude with one or more claims particularly pointing out and
distinctly claiming the subject matter which the applicant regards as
his invention.

8 Those two paragraphs of section 112 frame the issue of claim interpretation for
us. The second paragraph requires us to look to the language of the claims to
determine what “the applicant regards as his invention.” On the other hand, the first
paragraph requires that the specification describe the invention set forth in the
claims. The principal question that this case presents to us is the extent to which we
should resort to and rely on a patent’s specification in seeking to ascertain the proper
scope of its claims.

9 It is a “bedrock principle” of patent law that “the claims of a patent define the
invention to which the patentee is entitled the right to exclude.” Because the patentee
is required to “define precisely what his invention is,” the [Supreme] Court [has]
explained, it is “unjust to the public, as well as an evasion of the law, to construe it in
a manner different from the plain import of its terms.” White v. Dunbar, 119 U.S. 47,
52 (1886).
 CLAIM CONSTRUCTION 337

10 We have frequently stated that the words of a claim “are generally given their
ordinary and customary meaning.” Vitronics v. Conceptronic, 90 F.3d 1576, 1582 (Fed.
Cir. 1996). We have made clear, moreover, that the ordinary and customary meaning
of a claim term is the meaning that the term would have to a person of ordinary skill
in the art in question at the time of the invention, i.e., as of the effective filing date of
the patent application.

11 The inquiry into how a person of ordinary skill in the art understands a claim
term provides an objective baseline from which to begin claim interpretation. That
starting point is based on the well-settled understanding that inventors are typically
persons skilled in the field of the invention and that patents are addressed to and
intended to be read by others of skill in the pertinent art.

12 Importantly, the person of ordinary skill in the art is deemed to read the claim
term not only in the context of the particular claim in which the disputed term
appears, but in the context of the entire patent, including the specification.

13 In some cases, the ordinary meaning of claim language as understood by a

person of skill in the art may be readily apparent even to lay judges, and claim
construction in such cases involves little more than the application of the widely
accepted meaning of commonly understood words. In such circumstances, general
purpose dictionaries may be helpful. In many cases that give rise to litigation,
however, determining the ordinary and customary meaning of the claim requires
examination of terms that have a particular meaning in a field of art. Because the
meaning of a claim term as understood by persons of skill in the art is often not
immediately apparent, and because patentees frequently use terms idiosyncratically,
the court looks to “those sources available to the public that show what a person of
skill in the art would have understood disputed claim language to mean.” Innova, 381
F.3d at 1116. Those sources include “the words of the claims themselves, the
remainder of the specification, the prosecution history, and extrinsic evidence
concerning relevant scientific principles, the meaning of technical terms, and the state
of the art.” Id.

14 Quite apart from the written description and the prosecution history, the
claims themselves provide substantial guidance as to the meaning of particular claim
terms.

15 To begin with, the context in which a term is used in the asserted claim can be
highly instructive. To take a simple example, the claim in this case refers to “steel
baffles,” which strongly implies that the term “baffles” does not inherently mean
objects made of steel.
 338 MASUR & OUELLETTE ⋅ PATENT LAW

16 Other claims of the patent in question, both asserted and unasserted, can also
be valuable sources of enlightenment as to the meaning of a claim term. Because claim
terms are normally used consistently throughout the patent, the usage of a term in
one claim can often illuminate the meaning of the same term in other claims.
Differences among claims can also be a useful guide in understanding the meaning of
particular claim terms. For example, the presence of a dependent claim that adds a
particular limitation gives rise to a presumption that the limitation in question is not
present in the independent claim.

17 The claims, of course, do not stand alone. Rather, they are part of “a fully
integrated written instrument,” Markman, 52 F.3d at 978, consisting principally of a
specification that concludes with the claims. For that reason, claims “must be read in
view of the specification, of which they are a part.” Id. at 979. As we stated in Vitronics
v. Conceptronic, the specification “is always highly relevant to the claim construction
analysis. Usually, it is dispositive; it is the single best guide to the meaning of a
disputed term.” 90 F.3d 1576, 1582 (Fed. Cir. 1996).

18 The importance of the specification in claim construction derives from its

statutory role. The close kinship between the written description and the claims is
enforced by the statutory requirement that the specification describe the claimed
invention in “full, clear, concise, and exact terms.” 35 U.S.C. § 112.

19 Consistent with that general principle, our cases recognize that the
specification may reveal a special definition given to a claim term by the patentee that
differs from the meaning it would otherwise possess. In such cases, the inventor’s
lexicography governs. In other cases, the specification may reveal an intentional
disclaimer, or disavowal, of claim scope by the inventor. In that instance as well, the
inventor has dictated the correct claim scope, and the inventor’s intention, as
expressed in the specification, is regarded as dispositive.

20 In addition to consulting the specification, we have held that a court “should

also consider the patent’s prosecution history, if it is in evidence.” Markman, 52 F.3d
at 980. The prosecution history, which we have designated as part of the “intrinsic
evidence,” consists of the complete record of the proceedings before the PTO and
includes the prior art cited during the examination of the patent. Like the
specification, the prosecution history provides evidence of how the PTO and the
inventor understood the patent. Furthermore, like the specification, the prosecution
history was created by the patentee in attempting to explain and obtain the patent.
Yet because the prosecution history represents an ongoing negotiation between the
PTO and the applicant, rather than the final product of that negotiation, it often lacks
the clarity of the specification and thus is less useful for claim construction purposes.
Nonetheless, the prosecution history can often inform the meaning of the claim
 CLAIM CONSTRUCTION 339

language by demonstrating how the inventor understood the invention and whether
the inventor limited the invention in the course of prosecution, making the claim scope
narrower than it would otherwise be.

21 Although we have emphasized the importance of intrinsic evidence in claim

construction, we have also authorized district courts to rely on extrinsic evidence,
which “consists of all evidence external to the patent and prosecution history,
including expert and inventor testimony, dictionaries, and learned treatises.”
Markman, 52 F.3d at 980. However, while extrinsic evidence “can shed useful light on
the relevant art,” we have explained that it is “less significant than the intrinsic record
in determining ‘the legally operative meaning of claim language.’” C.R. Bard, Inc. v.
U.S. Surgical Corp., 388 F.3d 858, 862 (Fed. Cir. 2004).

22 Within the class of extrinsic evidence, the court has observed that dictionaries
and treatises can be useful in claim construction. We have especially noted the help
that technical dictionaries may provide to a court “to better understand the underlying
technology” and the way in which one of skill in the art might use the claim terms.
Vitronics, 90 F.3d at 1584 n.6. Because dictionaries, and especially technical
dictionaries, endeavor to collect the accepted meanings of terms used in various fields
of science and technology, those resources have been properly recognized as among
the many tools that can assist the court in determining the meaning of particular
terminology to those of skill in the art of the invention.

23 We have also held that extrinsic evidence in the form of expert testimony can
be useful to a court for a variety of purposes, such as to provide background on the
technology at issue, to explain how an invention works, to ensure that the court’s
understanding of the technical aspects of the patent is consistent with that of a person
of skill in the art, or to establish that a particular term in the patent or the prior art
has a particular meaning in the pertinent field. However, conclusory, unsupported
assertions by experts as to the definition of a claim term are not useful to a court.

24 We have viewed extrinsic evidence in general as less reliable than the patent
and its prosecution history in determining how to read claim terms, for several
reasons. First, extrinsic evidence by definition is not part of the patent and does not
have the specification’s virtue of being created at the time of patent prosecution for
the purpose of explaining the patent’s scope and meaning. Second, while claims are
construed as they would be understood by a hypothetical person of skill in the art,
extrinsic publications may not be written by or for skilled artisans and therefore may
not reflect the understanding of a skilled artisan in the field of the patent. Third,
extrinsic evidence consisting of expert reports and testimony is generated at the time
of and for the purpose of litigation and thus can suffer from bias that is not present in
intrinsic evidence. Fourth, there is a virtually unbounded universe of potential
extrinsic evidence of some marginal relevance that could be brought to bear on any
claim construction question. In the course of litigation, each party will naturally
 340 MASUR & OUELLETTE ⋅ PATENT LAW

choose the pieces of extrinsic evidence most favorable to its cause, leaving the court
with the considerable task of filtering the useful extrinsic evidence from the fluff.
Finally, undue reliance on extrinsic evidence poses the risk that it will be used to
change the meaning of claims in derogation of the “indisputable public records
consisting of the claims, the specification and the prosecution history, thereby
undermining the public notice function of patents.

III

25 Although the principles outlined above have been articulated on numerous

occasions, some of this court’s cases have suggested a somewhat different approach to
claim construction, in which the court has given greater emphasis to dictionary
definitions of claim terms and has assigned a less prominent role to the specification
and the prosecution history. The leading case in this line is Texas Digital Systems,
Inc. v. Telegenix, Inc., 308 F.3d 1193 (Fed. Cir. 2002).

26 In Texas Digital, the court noted that “dictionaries, encyclopedias and treatises
are particularly useful resources to assist the court in determining the ordinary and
customary meanings of claim terms.” 308 F.3d at 1202. Those texts, the court
explained, are “objective resources that serve as reliable sources of information on the
established meanings that would have been attributed to the terms of the claims by
those of skill in the art,” and they “deserve no less fealty in the context of claim
construction” than in any other area of law. Id. at 1203. The court added that because
words often have multiple dictionary meanings, the intrinsic record must be consulted
to determine which of the different possible dictionary meanings is most consistent
with the use of the term in question by the inventor. If more than one dictionary
definition is consistent with the use of the words in the intrinsic record, the court
stated, “the claim terms may be construed to encompass all such consistent
meanings.” Id.

27 The Texas Digital court further explained that the patent’s specification and
prosecution history must be consulted to determine if the patentee has used “the
words [of the claim] in a manner clearly inconsistent with the ordinary meaning
reflected, for example, in a dictionary definition.” 308 F.3d at 1204. The court
identified two circumstances in which such an inconsistency may be found. First, the
court stated, “the presumption in favor of a dictionary definition will be overcome
where the patentee, acting as his or her own lexicographer, has clearly set forth an
explicit definition of the term different from its ordinary meaning.” Id. Second, “the
presumption also will be rebutted if the inventor has disavowed or disclaimed scope
of coverage, by using words or expressions of manifest exclusion or restriction,
representing a clear disavowal of claim scope.” Id.

28 The Texas Digital court explained that it advanced the methodology set forth
in that opinion in an effort to combat what this court has termed “one of the cardinal
 CLAIM CONSTRUCTION 341

sins of patent law—reading a limitation from the written description into the claims,”
SciMed Life Sys., 242 F.3d at 1340. The court concluded that it is improper to consult
“the written description and prosecution history as a threshold step in the claim
construction process, before any effort is made to discern the ordinary and customary
meanings attributed to the words themselves.” Texas Digital, 308 F.3d at 1204.

29 Although the concern expressed by the court in Texas Digital was valid, the
methodology it adopted placed too much reliance on extrinsic sources such as
dictionaries, treatises, and encyclopedias and too little on intrinsic sources, in
particular the specification and prosecution history. While the court noted that the
specification must be consulted in every case, it suggested a methodology for claim
interpretation in which the specification should be consulted only after a
determination is made, whether based on a dictionary, treatise, or other source, as to
the ordinary meaning or meanings of the claim term in dispute. Even then, recourse
to the specification is limited to determining whether the specification excludes one of
the meanings derived from the dictionary, whether the presumption in favor of the
dictionary definition of the claim term has been overcome by “an explicit definition of
the term different from its ordinary meaning,” or whether the inventor “has disavowed
or disclaimed scope of coverage, by using words or expressions of manifest exclusion
or restriction, representing a clear disavowal of claim scope.” 308 F.3d at 1204. In
effect, the Texas Digital approach limits the role of the specification in claim
construction to serving as a check on the dictionary meaning of a claim term if the
specification requires the court to conclude that fewer than all the dictionary
definitions apply, or if the specification contains a sufficiently specific alternative
definition or disavowal. That approach, in our view, improperly restricts the role of
the specification in claim construction.

30 Assigning such a limited role to the specification, and in particular requiring

that any definition of claim language in the specification be express, is inconsistent
with our rulings that the specification is “the single best guide to the meaning of a
disputed term,” and that the specification “acts as a dictionary when it expressly
defines terms used in the claims or when it defines terms by implication.” Vitronics,
90 F.3d at 1582.

31 The main problem with elevating the dictionary to such prominence is that it
focuses the inquiry on the abstract meaning of words rather than on the meaning of
claim terms within the context of the patent. Properly viewed, the “ordinary meaning”
of a claim term is its meaning to the ordinary artisan after reading the entire patent.
Yet heavy reliance on the dictionary divorced from the intrinsic evidence risks
transforming the meaning of the claim term to the artisan into the meaning of the
term in the abstract, out of its particular context, which is the specification. Thus,
there may be a disconnect between the patentee’s responsibility to describe and claim
 342 MASUR & OUELLETTE ⋅ PATENT LAW

his invention, and the dictionary editors’ objective of aggregating all possible
definitions for particular words.

32 The problem is that if the district court starts with the broad dictionary
definition in every case and fails to fully appreciate how the specification implicitly
limits that definition, the error will systematically cause the construction of the claim
to be unduly expansive. The risk of systematic overbreadth is greatly reduced if the
court instead focuses at the outset on how the patentee used the claim term in the
claims, specification, and prosecution history, rather than starting with a broad
definition and whittling it down. Thus, the use of the dictionary may extend patent
protection beyond what should properly be afforded by the inventor’s patent.

33 Even technical dictionaries or treatises, under certain circumstances, may

suffer from some of these deficiencies. There is no guarantee that a term is used in
the same way in a treatise as it would be by the patentee. In fact, discrepancies
between the patent and treatises are apt to be common because the patent by its
nature describes something novel.

34 Moreover, different dictionaries may contain somewhat different sets of

definitions for the same words. A claim should not rise or fall based upon the
preferences of a particular dictionary editor, or the court’s independent decision,
uninformed by the specification, to rely on one dictionary rather than another.

35 As we have noted above, however, we do not intend to preclude the appropriate

use of dictionaries. Dictionaries or comparable sources are often useful to assist in
understanding the commonly understood meaning of words and have been used both
by our court and the Supreme Court in claim interpretation. A dictionary definition
has the value of being an unbiased source “accessible to the public in advance of
litigation.” Vitronics, 90 F.3d at 1585.

36 We also acknowledge that the purpose underlying the Texas Digital line of
cases—to avoid the danger of reading limitations from the specification into the
claim—is sound. Moreover, we recognize that the distinction between using the
specification to interpret the meaning of a claim and importing limitations from the
specification into the claim can be a difficult one to apply in practice. However, the
line between construing terms and importing limitations can be discerned with
reasonable certainty and predictability if the court’s focus remains on understanding
how a person of ordinary skill in the art would understand the claim terms. For
instance, although the specification often describes very specific embodiments of the
invention, we have repeatedly warned against confining the claims to those
embodiments. In particular, we have expressly rejected the contention that if a patent
describes only a single embodiment, the claims of the patent must be construed as
being limited to that embodiment. That is not just because section 112 of the Patent
Act requires that the claims themselves set forth the limits of the patent grant, but
also because persons of ordinary skill in the art rarely would confine their definitions
of terms to the exact representations depicted in the embodiments.
 CLAIM CONSTRUCTION 343

37 To avoid importing limitations from the specification into the claims, it is

important to keep in mind that the purposes of the specification are to teach and
enable those of skill in the art to make and use the invention and to provide a best
mode for doing so. One of the best ways to teach a person of ordinary skill in the art
how to make and use the invention is to provide an example of how to practice the
invention in a particular case. Much of the time, upon reading the specification in that
context, it will become clear whether the patentee is setting out specific examples of
the invention to accomplish those goals, or whether the patentee instead intends for
the claims and the embodiments in the specification to be strictly coextensive. The
manner in which the patentee uses a term within the specification and claims usually
will make the distinction apparent.

38 In the end, there will still remain some cases in which it will be hard to
determine whether a person of skill in the art would understand the embodiments to
define the outer limits of the claim term or merely to be exemplary in nature. While
that task may present difficulties in some cases, we nonetheless believe that
attempting to resolve that problem in the context of the particular patent is likely to
capture the scope of the actual invention more accurately than either strictly limiting
the scope of the claims to the embodiments disclosed in the specification or divorcing
the claim language from the specification.

IV

39 The critical language of claim 1 of the ’798 patent—“further means disposed

inside the shell for increasing its load bearing capacity comprising internal steel
baffles extending inwardly from the steel shell walls”—imposes three clear
requirements with respect to the baffles. First, the baffles must be made of steel.
Second, they must be part of the load-bearing means for the wall section. Third, they
must be pointed inward from the walls. Both parties, stipulating to a dictionary
definition, also conceded that the term “baffles” refers to objects that check, impede,
or obstruct the flow of something. The intrinsic evidence confirms that a person of
skill in the art would understand that the term “baffles,” as used in the ’798 patent,
would have that generic meaning.

40 The other claims of the ’798 patent specify particular functions to be served by
the baffles. For example, dependent claim 2 states that the baffles may be “oriented
with the panel sections disposed at angles for deflecting projectiles such as bullets
able to penetrate the steel plates.” The inclusion of such a specific limitation on the
term “baffles” in claim 2 makes it likely that the patentee did not contemplate that
the term “baffles” already contained that limitation. Independent claim 17 further
supports that proposition. It states that baffles are placed “projecting inwardly from
the outer shell at angles tending to deflect projectiles that penetrate the outer shell.”
That limitation would be unnecessary if persons of skill in the art understood that the
baffles inherently served such a function. Dependent claim 6 provides an additional
 344 MASUR & OUELLETTE ⋅ PATENT LAW

requirement for the baffles, stating that “the internal baffles of both outer panel
sections overlap and interlock at angles providing deflector panels extending from one
end of the module to the other.” If the baffles recited in claim 1 were inherently placed
at specific angles, or interlocked to form an intermediate barrier, claim 6 would be
redundant.

41 The specification further supports the conclusion that persons of ordinary skill
in the art would understand the baffles recited in the ’798 patent to be load-bearing
objects that serve to check, impede, or obstruct flow. At several points, the
specification discusses positioning the baffles so as to deflect projectiles. The patent
states that one advantage of the invention over the prior art is that “[t]here have not
been effective ways of dealing with these powerful impact weapons with inexpensive
housing.” While that statement makes clear the invention envisions baffles that serve
that function, it does not imply that in order to qualify as baffles within the meaning
of the claims, the internal support structures must serve the projectile-deflecting
function in all the embodiments of all the claims. The specification must teach and
enable all the claims, and the section of the written description discussing the use of
baffles to deflect projectiles serves that purpose for claims 2, 6, 17, and 23, which
specifically claim baffles that deflect projectiles.

42 The specification discusses several other purposes served by the baffles. For
example, the baffles are described as providing structural support. The patent states
that one way to increase load-bearing capacity is to use “at least in part inwardly
directed steel baffles 15, 16.” The baffle 16 is described as a “strengthening triangular
baffle.” Importantly, Figures 4 and 6 do not show the baffles as part of an
“intermediate interlocking, but not solid, internal barrier.” In those figures, the baffle
16 simply provides structural support for one of the walls, as depicted below:
 CLAIM CONSTRUCTION 345

43 Other uses for the baffles are listed in the specification as well. In Figure 7,
the overlapping flanges “provide for overlapping and interlocking the baffles to
produce substantially an intermediate barrier wall between the opposite [wall] faces”:

44 Those baffles thus create small compartments that can be filled with either
sound and thermal insulation or rock and gravel to stop projectiles. By separating the
interwall area into compartments (see, e.g., compartment 55 in Figure 7), the user of
the modules can choose different types of material for each compartment, so that the
module can be “easily custom tailored for the specific needs of each installation.” When
material is placed into the wall during installation, the baffles obstruct the flow of
material from one compartment to another so that this “custom tailoring” is possible.

45 The fact that the written description of the ’798 patent sets forth multiple
objectives to be served by the baffles recited in the claims confirms that the term
“baffles” should not be read restrictively to require that the baffles in each case serve
all of the recited functions. We have held that “[t]he fact that a patent asserts that an
invention achieves several objectives does not require that each of the claims be
construed as limited to structures that are capable of achieving all of the objectives.”
Liebel–Flarsheim v. Medrad, 358 F.3d 898, 908 (Fed. Cir. 2004). Although deflecting
projectiles is one of the advantages of the baffles of the ’798 patent, the patent does
not require that the inward extending structures always be capable of performing that
function. Accordingly, we conclude that a person of skill in the art would not interpret
the disclosure and claims of the ’798 patent to mean that a structure extending inward
from one of the wall faces is a “baffle” if it is at an acute or obtuse angle, but is not a
“baffle” if it is disposed at a right angle.

46 Invoking the principle that “claims should be so construed, if possible, as to

sustain their validity,” Rhine v. Casio, Inc., 183 F.3d 1342, 1345 (Fed. Cir. 1999), AWH
argues that the term “baffles” should be given a restrictive meaning because if the
term is not construed restrictively, the asserted claims would be invalid.

47 While we have acknowledged the maxim that claims should be construed to

preserve their validity, we have not applied that principle broadly, and we have
certainly not endorsed a regime in which validity analysis is a regular component of
claim construction. Instead, we have limited the maxim to cases in which “the court
concludes, after applying all the available tools of claim construction, that the claim
 346 MASUR & OUELLETTE ⋅ PATENT LAW

is still ambiguous.” Liebel–Flarsheim, 358 F.3d at 911. In such cases, we have looked
to whether it is reasonable to infer that the PTO would not have issued an invalid
patent, and that the ambiguity in the claim language should therefore be resolved in
a manner that would preserve the patent’s validity.

48 In this case, the claim term at issue is not ambiguous. Thus, it can be construed
without the need to consider whether one possible construction would render the claim
invalid while the other would not. The doctrine of construing claims to preserve their
validity, a doctrine of limited utility in any event, therefore has no applicability here.

49 In sum, we reject AWH’s arguments in favor of a restrictive definition of the

term “baffles.” Because we disagree with the district court’s claim construction, we
reverse the summary judgment of noninfringement. In light of our decision on claim
construction, it is necessary to remand the infringement claims to the district court
for further proceedings.

50 [Judge Lourie, joined by Judge Newman (the original panel majority), wrote
separately to “fully join the portion of the court’s opinion resolving the relative weights
of specification and dictionaries in interpreting patent claims” but dissenting from the
decision to reverse and remand for reconsideration of the infringement claims; he
would have affirmed the judgment of noninfringement. Judge Mayer dissented,
arguing that claim construction should not be treated as a matter of law and that the
Federal Circuit should defer to the district court’s construction.]

Discussion Questions: Phillips v. AWH

1. Competing Lines of Precedent. As Phillips explains, prior to that decision

there were two competing lines of precedent describing different approaches to claim
construction. One line, known as the “contextual,” “holistic,” or “specification-first”
approach and most closely associated with Vitronics v. Conceptronic, 90 F.3d 1576
(Fed. Cir. 1996), emphasized intrinsic evidence, particularly the specification. The
other, known as the “textual,” “procedural,” or “dictionary-first” approach and most
closely associated with Texas Digital Systems, Inc. v. Telegenix, Inc., 308 F.3d 1193
(Fed. Cir. 2002), emphasized the plain meaning of the text of the claims as interpreted
using dictionaries and other sources of extrinsic evidence. Phillips, which was decided
en banc, decided the matter in favor of the Vitronics approach. It is nonetheless
striking that it took the Federal Circuit 23 years—from its creation in 1982 until
2005—to attempt to settle what seems like a fundamental question. Can you think of
reasons why the court might have let this issue linger for so long? What, if anything,
does this episode tell us about the merits of having a single, specialized court of
appeals deciding all patent cases?

2. The Relationship Between the Specification and the Claims. The Phillips
court emphasized that “the specification is the single best guide to the meaning of a
disputed term.” But it also stated that courts must “avoid importing limitations from
 CLAIM CONSTRUCTION 347

the specification into the claims” or “limiting the scope of the claims to the
embodiments.” How is a court supposed to do both of these things? Suppose, for
instance, that a claim calls for making a particular element from “metal,” but the
specification discusses only zinc, iron, and cadmium as possible metals. How should a
court decide whether to read the claim’s reference to “metal” as encompassing only
those three metals, or whether it should be read to capture every type of metal? How
did the Phillips court go about making this decision?

Note in addition that there is a canon of patent claim construction that courts
should construe claims so as to render them valid. Construing a claim more broadly
than the specification, as in the example of a claim for “metal” above, could leave it
vulnerable to a written description or enablement challenge. Should this canon of
claim construction militate in favor of restricting the scope of a claim to the
embodiments described in the specification? Or would that run afoul of the Phillips
court’s admonition against importing limitations from the specification into the
claims?

3. The Road Not Taken. Suppose Phillips had been decided under the now-
discarded Texas Digital framework. Do you think it would have come out differently?
What sources would the court have looked to, and in what direction would they have
pointed?

4. Types of Extrinsic Evidence. The Phillips court largely paints the various
types of extrinsic evidence with a broad brush. But in reality, there are potentially
significant differences between technical materials (treatises, papers, and the like),
general dictionaries, expert testimony, and other types of extrinsic evidence that
might be offered in court. Which of these sorts of evidence do you think are most
reliable and should carry the greatest weight with a court? Does it depend on the type
of patent claim at issue?

5. Canons of Claim Construction. The Federal Circuit has developed a number

of guidelines for interpreting patent claims, which are analogous to the canons of
statutory interpretation courts use when evaluating statutes. A sampling of these
canons is provided below. What weight do you think each of these canons receives
after Phillips? What weight should each canon receive?

• Claims should be construed objectively from the perspective of a PHOSITA

at the time of filing.
• Claims should be construed consistently for assessing validity and
infringement.
• Intrinsic evidence should be considered first, starting with the claim
language, then looking at the specification, and concluding with the
prosecution history.
• Claim terms should be construed based on their ordinary meaning.
• The full scope of ordinary meaning applies unless intrinsic evidence
suggests a narrower definition.
348 MASUR & OUELLETTE ⋅ PATENT LAW

• Dictionaries, particularly technical dictionaries or treatises, may be useful

guides to ordinary meaning.
• When dictionaries conflict, the specification and prosecution history will be
needed to determine which definition should apply.
• A patentee may be her own lexicographer, using definitions different from
the ordinary meaning.
• Different claims are presumed to have different meanings.
• Different words in the same claim are presumed to have different
meanings.
• No claim limitation should be rendered meaningless.
• A given claim term is presumed to have the same meaning in different
claims.
• Claim terms must be construed in light of the specification.
• The specification in which the claim resides is preferred, but related
applications (including provisionals, parents, and foreign counterparts)
may be used.
• Material incorporated by reference may be considered as intrinsic evidence.
• The purpose of the invention may be considered when construing claims.
• Claims should not be redrafted by reading in limitations from the
specification or by expanding claim scope to cover embodiments in the
specification.
• If the specification lists a preferred embodiment, a claim should generally
be construed so that the preferred embodiment is within the claim scope.
• If the patentee has a commercial embodiment of the invention, it should
not be used when construing claims.
• A patentee may disclaim claim scope in the specification or prosecution
history, including by disparaging aspects of prior art devices or
distinguishing the claimed invention from prior art.
• Claims in an issued patent should be construed to preserve validity if
possible.

6. Did Phillips Change Anything? An empirical study of every Federal Circuit

claim construction decision from 1995 to 2007 concluded that Phillips had little effect
on whether Federal Circuit panels adopted a more contextual or textual methodology.
R. Polk Wagner & Lee Petherbridge, Did Phillips Change Anything? Empirical
Analysis of the Federal Circuit’s Claim Construction Jurisprudence, in Intellectual
Property and the Common Law (Shyamkrishna Balganesh, ed. 2013). Even though
Phillips nominally resolved the debate in favor of the contextualists, if you are
representing a client that benefits from a more textualist approach, what language
from Phillips would you quote in your brief?

In addition, why do you think Phillips had only a small effect on the
methodology used by Federal Circuit panels? Do you think it is caused by some feature
of the Federal Circuit, or is it inherent to patent cases in some fashion? Or do you
 CLAIM CONSTRUCTION 349

think this is just typical circuit behavior, and we should expect to see it in other
contexts across other courts as well?

7. The “Broadest Reasonable Interpretation.” The methodology outlined in

Phillips applies when a claim in a granted patent is being litigated in federal district
court or in the course of an IPR or other USPTO-based review. But when a patent
application that has not yet resulted in an issued patent is being examined by the
USPTO, the agency—including both the examiner and the PTAB, if the examiner’s
decision is appealed—does not use Phillips to interpret the claim. Instead, the agency
gives the claim what is known as its “broadest reasonable interpretation.” This is just
what it sounds like—the USPTO interprets the claim as broadly as reasonably
possible. This means that a claim might have one meaning during examination and
another during litigation. In addition, a broader claim is of course more likely to be
held invalid for anticipation, obviousness, or lack of enablement or written
description, and this will make the claim less likely to pass muster during
examination. Do you think it makes sense for the USPTO and the federal courts to
use different modes of claim interpretation? What are the advantages of doing so? The
downsides?
350 MASUR & OUELLETTE ⋅ PATENT LAW

9. Direct Infringement
With an understanding of claim construction in place, we now turn to direct
infringement. As noted above, direct infringement is governed by 35 U.S.C. § 271(a),
which states:

[W]hoever without authority makes, uses, offers to sell, or sells any

patented invention, within the United States or imports into the United
States any patented invention during the term of the patent therefor,
infringes the patent.

Direct infringement is in many respects the inverse of anticipation and obviousness.

Most importantly, just as with anticipation, the “all-elements rule” applies. Just as
invalidity requires an element-by-element comparison between a single piece of prior
art and the patent claim, direct infringement requires an element-by-element
comparison between the patent claim and the accused device. If you know how to
interpret a claim, and you know how to apply the all-elements rule, then you know
how to perform a direct infringement analysis.

A. Literal Infringement
The first subspecies of direct infringement is literal infringement. In a case of
literal infringement, every element of the patent claim is literally present in the
accused device. The symmetry between literal infringement and anticipation has
given rise to the patent maxim, “that which infringes if later, anticipates if earlier.”
Miller v. Eagle Mfg. Co., 151 U.S. 186 (1894). In other words, any literally infringing
device would anticipate the patent if it predated the patent; any real-world piece of
prior art that anticipates the patent would literally infringe if it postdated the patent.

Between the claim construction doctrine from the previous section and your
knowledge of the all-elements rule from the doctrine of anticipation, you have all of
the tools necessary to conduct a literal infringement analysis. The following exercises,
based on Federal Circuit cases, offer opportunities to apply those tools. For each of
them, consider the available facts. What claim construction arguments would you
make on behalf of the patentee? On behalf of the accused infringer?

Exercise: Unique Concepts, Inc. v. Brown, 939 F.2d 1558 (Fed. Cir. 1991)

Patented invention: Plaintiff Unique Concepts is the exclusive licensee of

the ’260 patent, which is directed to an “assembly of border pieces” used to attach a
 DIRECT INFRINGEMENT 351

fabric wall covering to a wall, as shown in Figure 2 from the patent. Claim 1 of the
patent reads:

An assembly of border pieces for creating a

framework attachable to a wall or other flat
surface for mounting a fabric sheet which is cut
to dimensions at least sufficient to cover the
surface, said assembly comprising linear
border pieces and right angle corner border
pieces which are arranged in end-to-end
relation to define a framework that follows the
perimeter of the area to be covered, each piece
including [a number of additional elements].

Accused devices: Unique has sued Kevin Brown, alleging that his products
infringe claim 1. Brown argues that his products do not infringe because they do not
have corner pieces which were preformed at a right
angle, instead employing two linear pieces which
are each mitered, i.e., cut at a 45-degree angle, and
then placed together to form a right angle (as
shown). Thus, he argues that his products do not
have the required “right angle corner border
pieces.”

Specification: The drawings show only preformed corner pieces and no

mitered pieces, and the specification repeatedly refers to the preformed pieces in the
drawings as “corner pieces” or “right angle border pieces.” The specification does once
refer to “improvised corner pieces” as an alternative:

Instead of using preformed right-angle corner pieces of the type

previously disclosed, one may improvise corner pieces by miter-cutting
the ends of a pair of short linear border pieces at right angles to each
other. The advantage of such corner pieces resides in the fact that linear
pieces may be mass-produced at low cost by continuous extrusion,
whereas preformed corner pieces must be molded or otherwise
fabricated by more expensive techniques. On the other hand, a
preformed corner piece is somewhat easier for a do-it-yourselfer to work
with.

Prosecution history: The examiner rejected the original claim 1, which also
referred to “right angle corner border pieces,” as unpatentable over references with
preformed corners. In response, the applicant amended the claim and argued against
the references, stating that the invention “greatly simplifies the mounting of a fabric
covering” such that an “amateur” can do it because “the fabric need not be cut so
precisely”—the fabric only has to be cut roughly to size, and the excess can be stuffed
352 MASUR & OUELLETTE ⋅ PATENT LAW

in the storage channel. The attorney and examiner then had an unrecorded telephone
interview, following which the examiner canceled certain claims, including claim 9:

9. An assembly as set forth in claim 1, wherein said right-angle corner

pieces are formed by a pair of short linear pieces whose ends are mitered
...

The reason for its cancelation is unclear; Brown’s expert said that it was
because “it was simply not something that a do-it-yourselfer could do.” The amended
claim 1 was allowed.

Exercise: Brookhill-Wilk 1 v. Intuitive Surgical, 334 F.3d 1294 (Fed. Cir. 2003)

Patented Invention: Plaintiff Brookhill is the owner of the ’003 patent, which
is directed to systems and methods for performing robotic surgery. The systems and
methods use robotic surgical tools and telecommunication links to permit a surgeon
to operate from a “remote location beyond a range of direct manual contact.” Claim 10
of the ’003 patent reads:

A surgical system, comprising: an endoscopic instrument; camera

means on said endoscopic instrument for obtaining video images of
internal body tissues inside a patient’s body via said endoscopic
instrument; transmission means operatively connected to said camera
means for transmitting, over an electromagnetic signaling link to a
remote location beyond a range of direct manual contact with said
patient’s body and said endoscopic instrument, a video signal encoding
said video image;

receiver means for receiving actuator control signals from said

remote location via said electromagnetic signaling link;

a surgical instrument insertable into the patient’s body and

movable relative to the patient’s body and said endoscopic
instrument; and

robot actuator means operatively connected to said surgical

instrument and said receiver means for actuating said surgical
instrument in response to the actuator control signals received
by said receiver means from said remote location.

Accused Device: Brookhill has sued Intuitive, claiming that Intuitive’s da

Vinci robotic surgical system infringes the ’003 patent. The surgeon in the da Vinci
system is located in the same operating room as the patient. The parties have agreed
that if Claim 10 is found to not cover instances where the surgeon is located in the
same operating room as the patient, the court would be required to find that the
patent is not infringed.
 DIRECT INFRINGEMENT 353

Specification: The written description in the ’003 patent explains that an

endoscopic instrument and a surgical instrument may each be placed within hollow
tubes, inserted through a small incision in the abdominal wall of a patient, and
thereby reach the surgical site. The endoscope remotely transmits to a computer that
generates an image of the internal body tissues of the patient on a monitor. The
specification sets forth no specific parameters as to the distance between the surgeon
and patient but teaches generally that a surgeon using the disclosed assembly may
operate without directly touching the patient, the surgical instruments, or the
endoscope.

The specification further states that the advantage of the invention is that it
allows a surgeon to operate at some distance, possibly across the world, from the
operating room in which the patient is located. The description of the preferred
embodiment is as follows:

It is to be understood, of course, that surgeons and other personnel are

present in the operating room at the time of surgery to oversee and
supervise the proper operation of the equipment. These personnel may
communicate with the remote surgeon via computers and
telecommunications links and/or through other telecommunications or
electromagnetic signaling linkages such as the telephone network.

The Objects of the Invention section of the specification describes the invention
as “reduc[ing] surgical costs” and “facilitat[ing] the performance of operations by
surgeons from all over the world.”

The Background section states that in traditional settings, “the surgeon is

always present in the operating room to manipulate the surgical instruments.”

Dictionary Terms: The word “remote” has the following possible meanings
in Webster’s Third New International Dictionary:

1. “separated by intervals greater than usual”

2. “far apart . . . far removed; not near; far; distant”

Prosecution History: Claim 10 originally used the phrase “remote location

beyond a range of direct visual contact.” The patent examiner rejected this phrase as
too indefinite because “the range of direct visual contact may be different for certain
operators of the system and this cannot be given weight in the claims.” To overcome
the indefiniteness rejection, Brookhill replaced the word “visual” with the word
“manual.” In support of this change, Brookhill stated that the amended text “means
that the remote location is beyond the arm’s reach of the patient. Inasmuch as an
arm’s length is a well understood difference, it is believed that the remote location is
sufficiently defined for purposes of the Patent Statute.” Brookhill further stated that
“[t]his amendment clarifies that a remote operator who is generating actuator control
signals . . . is so far from the patient and the endoscopic instrument as to be unable to
354 MASUR & OUELLETTE ⋅ PATENT LAW

manipulate the instrument at the patient’s side.” The examiner subsequently allowed
the claims and the patent issued.

Exercise: K-2 Corp. v. Salomon S.A., 191 F.3d 1356 (Fed. Cir. 1999)

Patented Invention: Plaintiff K-2 Corp. is the owner of the ’466 patent, which
is directed to an in-line roller skate that has a soft, pliable inner “bootie” surrounded
in certain areas by molded plastic or straps affixed to the base of the skate. This allows
the wearer’s foot to breathe and forms the skate, as shown in Figure 1 from the patent
below. Claim 1 of the patent reads:

In an in-line roller skate having an upper shoe

portion and a lower frame portion . . . a non-rigid
shoe portion adapted to receive and substantially
enclose the entire foot of the skater . . . support
means positioned adjacent selected areas of said
non-rigid shoe portion for providing support to aid
the skater in maintaining said in-line roller skate
in a substantially vertical position . . . and a base
portion, . . . said non-rigid shoe portion being
permanently affixed to said base portion at least
at said toe area and said heel area for
substantially preventing movement therebetween at least in a horizontal plane,
wherein at least a portion of said non-rigid shoe portion extends continuously
from said base portion to at least the top of said ankle support cuff.

Accused Devices: K-2 Corp. has sued Salomon S.A., alleging their products
infringe upon claim 1 of the ’466 patent. Salomon
makes an inline skate (called the TR skate) which
includes a soft inner bootie fastened to the lower,
rigid plastic frame of the skate by the use of rivets
and a screw in the toe area, and by a removable
hex-head screw in the heel area. Salomon argues
that the use of a removable screw in the heel area
of the TR skate does not meet the “permanently
affixed” limitation found in claim 1 of the ’466
patent.

Specification: In the specification, a rivet

is cited as a conventional fastening means to
accomplish a permanent connection.

Prosecution History: There is a prior art

reference, called the Johnson reference, which is a patent that discloses an in-line
skate with an easily removable upper shoe portion affixed at the toe and mid-foot with
 DIRECT INFRINGEMENT 355

a “detachable” connection. K-2 noted in its patent application that an advantage of

the “permanently affixed” connection was that it avoided the “sliding heel” problem of
the Johnson reference, where the shoe slid in the horizontal dimension. The examiner
rejected prior K-2 claims in light of the Johnson reference, and K-2 added the
“permanently affixed” language in response.

B. Infringement by Equivalents
The doctrine of literal infringement suffers from the same limitation as the
doctrine of novelty: if even a single element of a claim is not present in the accused
device, the device does not infringe. This raises the possibility that a potential
infringer could evade liability simply by making minor, immaterial changes to her
products. Consider, for instance, the baffles in Phillips, and suppose that the court
had held that the claim did not cover right-angled baffles. Is a right-angled baffle
really all that different from a baffle at 89 degrees, or 91 degrees? Does it make sense
to condition the patentee’s ability to win her lawsuit on whether the accused device
has such a miniscule difference?

The doctrine of equivalents exists to fill this gap. The doctrine of equivalents
is in many ways the analogue of the doctrine of obviousness; or, put another way, the
doctrine of equivalents is to literal infringement as obviousness is to anticipation.
With respect to validity, there are some inventions that are not anticipated, because
there is no single piece of prior art that contains all of the necessary elements, but
nonetheless add so little to the existing state of knowledge that it would do more harm
than good to allow them to be patented. The law of obviousness exists to block patents
in these circumstances. Similarly, there are some accused devices that do not literally
infringe, because they do not possess every element of the asserted claim, but are
nonetheless so similar to the asserted claim that it would seem contrary to the goals
of the patent system not to hold that they infringe. The doctrine of equivalents exists
to allow patentees to establish infringement in these circumstances.

The primary policy rationale behind the doctrine of equivalents is to prevent

would-be infringers from escaping liability by making trivial changes to their
inventions that evade the literal language of the claims. Without the doctrine of
equivalents, patents would be substantially weaker—and competitors might spend a
great deal of time and effort in the largely wasteful enterprise of making small
changes to evade them. At the same time, there is a tradeoff in clarity. By broadening
claims’ scope beyond their literal meaning to include equivalents, the doctrine of
equivalents introduces some additional uncertainty into the question of which devices
will infringe and which will not. On the other hand, imagine how patent applicants
would respond if the doctrine of equivalents did not exist. How might patent
applicants change the ways in which they draft claims if they were not able to claim
equivalents?
356 MASUR & OUELLETTE ⋅ PATENT LAW

1. Determining Equivalency
Importantly, the all-elements rule still applies in cases involving the doctrine
of equivalents. It is not enough for a court (or jury) just to eyeball the patent claim
and the accused device and conclude that they’re equivalent to one another. Rather,
the court must consider the elements of the patent claim one-by-one, as in a case of
literal infringement. For each element, the court must determine whether the element
is literally present in the accused device, whether an equivalent to the element is
present in the accused device, or neither. A court can “mix and match” literal
infringement and infringement by the equivalents—it could find that some elements
are literally present and others are present as equivalents—and this is sufficient for
a finding of infringement. But of course if any claim element is neither literally present
in the accused device nor present as an equivalent, then the device does not infringe
the claim.

To illustrate how infringement analysis operates when the doctrine of

equivalents and literal infringement are combined, consider Sage Products, Inc. v.
Devon Industries, Inc., 126 F.3d 1420 (Fed. Cir. 1997). The patent was on a container
for disposing of medical syringes and other hazardous waste without touching waste
already in the container, pictured below. Claim 1, the only independent claim in the
patent, read as follows:

1. A disposal container comprising:

(a) a hollow upstanding container body,

(b) an elongated slot at the top of the container body for permitting
access to the interior of the container body,

(c) barrier means disposed adjacent said slot for restricting access to the
interior of said container body, at least a
portion of said barrier means comprising

(i) a first constriction extending over

said slot, and

(ii) a complementary second constriction

extending beneath said slot, and

(d) a closure disposed adjacent said slot.

The district court held (and the Federal

Circuit agreed) that the accused device did not
literally include “an elongated slot at the top of the
container body” (element (b)) or “a first constriction
 DIRECT INFRINGEMENT 357

extending over said slot” (element (c)(i)), and thus the accused device did not literally
infringe.

On appeal, the patent owner argued that equivalents of those two elements
were present in the accused device and pointed to a variety of candidate parts that it
alleged were equivalent. The Federal Circuit rejected all of these arguments. It held
that all but one of the patent owner’s proposed equivalents to element (b) (the
elongated slot) were in the middle of the container body, rather than at the top. This
could not constitute an equivalent. The final candidate put forward by the patent
holder was located at the top of the container, but it was a hinged opening, which
could allow full access to the container. Accordingly, it was not the equivalent of a
“constriction.”

What is the legal standard for determining whether part of an accused device
is “equivalent” to a claim element? The primary legal standard is the “function-way-
result” test, sometimes known as the “triple identity” test. As the name would
indicate, this test involves considering whether the feature of the accused device in
question:

1. performs substantially the same function as the claim element;

2. in substantially the same way as the claim element;
3. yielding substantially the same result as the claim element.

See, e.g., Abbott Laboratories v. Sandoz, Inc., 566 F.3d 1282, 1296 (Fed. Cir. 2009).
The Federal Circuit also sometimes uses another test, called the “insubstantial
differences” test. As this name should indicate, for purposes of this test the question
is simply whether the differences between the claim element and the feature of the
accused device are “insubstantial” or not. Id.

The function-way-result test is widely accepted as the better test for

mechanical inventions. Warner-Jenkinson Co., Inc. v. Hilton Davis Chem. Co., 520
U.S. 17, 39 (1997). Nonetheless, the Federal Circuit will occasionally use the
insubstantial differences test when evaluating other types of inventions. Our view,
however, is that the insubstantial differences test is question-begging: what is the
standard for when a difference is substantial or insubstantial? The test adds nothing
to the requirement that the device and the claim element be “equivalent.” Accordingly,
we recommend that practitioners focus on the function-way-result test, though it is
worth being aware of the alternative.

Dawn Equip. Co. v. Kentucky Farms Inc., 140 F.3d 1009 (Fed. Cir. 1998),
provides a useful illustration of the function-way-result test. The patent at suit was
an improved mechanism for adjusting the height of a farming tool that might be towed
behind a tractor. The patented invention involved a system of pins and springs
connected to a rotatable shaft: to adjust the height of the tool, the operator would
remove the pin using the rotatable shaft, compress or decompress the spring to the
desired height, and then reinsert the pin. The accused device (pictured at right)
358 MASUR & OUELLETTE ⋅ PATENT LAW

instead used a system with two telescoping bars, one

inserted inside of the other, each with multiple
holds. The operator would extend or contract the
exterior bar until reaching the desired height, then
line up the holes and insert multiple pins to hold the
bars in place.

The court held that the accused device was

not an equivalent:

While the functions of the two mechanisms

are the same (i.e., locking and releasing a
connecting member), the way and result are
not substantially the same. The mechanisms
are structurally quite different, and operate
quite differently. In the patented device, the
pin is permanently fixed to the rotatable shaft
and is locked into and released from
engagement with the slot by rotating the
shaft. In sharp contrast, in the accused device, the pin is not attached
to anything and is inserted in and removed from the holes and by hand.

Id. at 1016. The court went on to note that the mere fact that both inventions used
pins was not enough for the “way” portion of the test. The rotatable shaft and slot
were important elements of the patented invention, but nothing akin to them was
present in the accused device. In addition, the court noted, the accused device did not
achieve the same result—reducing the time and accident risks involved in changing
the height of the farming tool—as did the patented invention:

The patent touts that the invention reduces adjustment time, prevents
misadjustment and eliminates the problem of easily lost pins. The
disclosed shaft, pin and slot mechanism plays a major role in achieving
these results. Because the mechanism is easy and quick to operate,
adjustment time is reduced, and because the mechanism only allows for
two positions (lowered and raised), misadjustment is
prevented. Furthermore, because the pin is fixed to the rotatable shaft,
the pin cannot be lost. In sharp contrast, the accused device’s loose pin
and holes combination accomplishes none of these touted results. As the
patent describes, a loose pin and holes mechanism is time consuming to
adjust, is prone to misadjustment because of the multiple holes, and the
loose pin is easily lost.

Id. at 1017. As this example illustrates, the function-way-result test will necessarily
involve a highly technical and fact-specific analysis of the claim and accused device at
issue. Accordingly, equivalence is a question of fact for the jury, Sage Products, Inc. v.
 DIRECT INFRINGEMENT 359

Devon Industries, Inc., 126 F.3d 1420, 1423 (Fed. Cir. 1997), which is often decided
through testimony by dueling experts.

2. Prosecution History Estoppel

As you know, patent applicants often amend their claims during patent
prosecution. These amendments change the scope of what the claims literally
encompass, of course. In addition, these claim amendments have long been understood
to restrict the scope of what a patentee can later claim as an equivalent to a claim
element as well. For instance, suppose that a patent applicant starts with a claim that
includes a “gear.” Imagine that the patent examiner rejects this claim on the grounds
that there is prior art that similarly includes a gear, made of wood. The patentee
amends her claim to specify that the invention must include a “metal gear,” in order
to avoid the prior art. Suppose then that someone else begins selling the same
invention, but with a gear made from stone. The patentee cannot later claim that a
“stone gear” is an equivalent to her “metal gear.” She is estopped from claiming this
equivalent because she amended the claim. This is known as the doctrine of
“prosecution history estoppel.” See Warner-Jenkinson Co., Inc. v. Hilton Davis Chem.
Co., 520 U.S. 17, 29-31 (1997).

This “metal gear” example presents an easy case in two respects. First, the
patentee amended the claim due to existing prior art. Amendments made because of
prior art have long been thought to trigger the doctrine of prosecution history estoppel.
But what about amendments made for other reasons, or for no discernable reason? Do
all amendments trigger prosecution history estoppel, or only some? Second, the
amendment directly implicated the equivalent that the patent owner later tried to
claim. That is, the patentee amended the element to specify a particular material
(metal), and then later tried to claim another type of material (stone). The amendment
thus could not be more relevant to the putative equivalent, and the case for applying
the doctrine of prosecution history estoppel could not be stronger. But what if the
amendment is not so closely connected with the equivalent the patent owner is trying
to recapture? Should amending a claim element bar a patent owner from recapturing
all potential equivalents to the element, or only some elements? Those are the
questions the Supreme Court took up in Festo.

Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722 (2002)

Justice Anthony Kennedy delivered the opinion of the Court.

1 This case requires us to address once again the relation between two patent
law concepts, the doctrine of equivalents and the rule of prosecution history estoppel.
The Court considered the same concepts in Warner–Jenkinson Co. v. Hilton Davis
Chemical Co., 520 U.S. 17 (1997), and reaffirmed that a patent protects its holder
 360 MASUR & OUELLETTE ⋅ PATENT LAW

against efforts of copyists to evade liability for infringement by making only

insubstantial changes to a patented invention. At the same time, we appreciated that
by extending protection beyond the literal terms in a patent the doctrine of
equivalents can create substantial uncertainty about where the patent monopoly
ends. If the range of equivalents is unclear, competitors may be unable to determine
what is a permitted alternative to a patented invention and what is an infringing
equivalent.

2 To reduce the uncertainty, Warner–Jenkinson acknowledged that competitors

may rely on the prosecution history, the public record of the patent proceedings. In
some cases the Patent and Trademark Office (PTO) may have rejected an earlier
version of the patent application on the ground that a claim does not meet a statutory
requirement for patentability. 35 U.S.C. § 132. When the patentee responds to the
rejection by narrowing his claims, this prosecution history estops him from later
arguing that the subject matter covered by the original, broader claim was nothing
more than an equivalent. Competitors may rely on the estoppel to ensure that their
own devices will not be found to infringe by equivalence.

3 In the decision now under review the Court of Appeals for the Federal Circuit
held that by narrowing a claim to obtain a patent, the patentee surrenders all
equivalents to the amended claim element. Petitioner asserts this holding departs
from past precedent in two respects. First, it applies estoppel to every amendment
made to satisfy the requirements of the Patent Act and not just to amendments made
to avoid pre-emption by an earlier invention, i.e., the prior art. Second, it holds that
when estoppel arises, it bars suit against every equivalent to the amended claim
element.

4 We granted certiorari to consider these questions.

5 Petitioner Festo Corporation owns two patents for an improved magnetic

rodless cylinder, a piston-driven device that relies on magnets to move objects in a
conveying system. The device has many industrial uses and has been employed in
machinery as diverse as sewing equipment and the Thunder Mountain ride at Disney
World. Although the precise details of the cylinder’s operation are not essential here,
the prosecution history must be considered.

6 Petitioner’s patent applications, as often occurs, were amended during the

prosecution proceedings. The application for the first patent, the Stoll Patent (U.S.
Patent No. 4,354,125), was amended after the patent examiner rejected the initial
application because the exact method of operation was unclear and some claims were
made in an impermissible way. (They were multiply dependent.) 35 U.S.C. § 112. The
inventor, Dr. Stoll, submitted a new application designed to meet the examiner’s
objections and also added certain references to prior art. The second patent, the
Carroll Patent (U.S. Patent No. 3,779,401), was also amended during a reexamination
 DIRECT INFRINGEMENT 361

proceeding. The prior art references were added to this amended application as well.
Both amended patents added a new limitation—that the inventions contain a pair of
sealing rings, each having a lip on one side, which would prevent impurities from
getting on the piston assembly. The amended Stoll Patent added the further limitation
that the outer shell of the device, the sleeve, be made of a magnetizable material.

7 After Festo began selling its rodless cylinder, respondents (SMC) entered the
market with a device similar, but not identical, to the ones disclosed by Festo’s
patents. SMC’s cylinder, rather than using two one-way sealing rings, employs a
single sealing ring with a two-way lip. Furthermore, SMC’s sleeve is made of a
nonmagnetizable alloy. SMC’s device does not fall within the literal claims of either
patent, but petitioner contends that it is so similar that it infringes under the doctrine
of equivalents.

8 SMC contends that Festo is estopped from making this argument because of
the prosecution history of its patents. The sealing rings and the magnetized alloy in
the Festo product were both [claimed] for the first time in the amended applications.
In SMC’s view, these amendments narrowed the earlier applications, surrendering
alternatives that are the very points of difference in the competing devices—the
sealing rings and the type of alloy used to make the sleeve. As Festo narrowed its
claims in these ways in order to obtain the patents, says SMC, Festo is now estopped
from saying that these features are immaterial and that SMC’s device is an equivalent
of its own.

9 The United States District Court for the District of Massachusetts disagreed.
It held that Festo’s amendments were not made to avoid prior art, and therefore the
amendments were not the kind that give rise to estoppel. A panel of the Court of
Appeals for the Federal Circuit affirmed. We granted certiorari, vacated, and
remanded in light of our intervening decision in Warner–Jenkinson. The Court of
Appeals ordered rehearing en banc to address questions that had divided its judges
since our decision in Warner–Jenkinson.

10 The en banc court reversed, holding that prosecution history estoppel barred
Festo from asserting that the accused device infringed its patents under the doctrine
of equivalents. The court held, with only one judge dissenting, that estoppel arises
from any amendment that narrows a claim to comply with the Patent Act, not only
from amendments made to avoid prior art. More controversial in the Court of Appeals
was its further holding [with four judges dissenting]: When estoppel applies, it stands
as a complete bar against any claim of equivalence for the element that was amended.
Previous decisions had held that prosecution history estoppel constituted a flexible
bar, foreclosing some, but not all, claims of equivalence, depending on the purpose of
the amendment and the alterations in the text. The court concluded, however, that
this case-by-case approach has proved unworkable. In the court’s view a complete-bar
rule, under which estoppel bars all claims of equivalence to the narrowed element,
would promote certainty in the determination of infringement cases.
 362 MASUR & OUELLETTE ⋅ PATENT LAW

II

11 The patent laws “promote the Progress of Science and useful Arts” by
rewarding innovation with a temporary monopoly. U.S. Const., Art. I, § 8, cl. 8. The
monopoly is a property right; and like any property right, its boundaries should be
clear. This clarity is essential to promote progress, because it enables efficient
investment in innovation. A patent holder should know what he owns, and the public
should know what he does not. For this reason, the patent laws require inventors to
describe their work in “full, clear, concise, and exact terms,” 35 U.S.C. § 112, as part
of the delicate balance the law attempts to maintain between inventors, who rely on
the promise of the law to bring the invention forth, and the public, which should be
encouraged to pursue innovations, creations, and new ideas beyond the inventor’s
exclusive rights.

12 Unfortunately, the nature of language makes it impossible to capture the

essence of a thing in a patent application. The inventor who chooses to patent an
invention and disclose it to the public, rather than exploit it in secret, bears the risk
that others will devote their efforts toward exploiting the limits of the patent’s
language. The language in the patent claims may not capture every nuance of the
invention or describe with complete precision the range of its novelty. If patents were
always interpreted by their literal terms, their value would be greatly diminished.
Unimportant and insubstantial substitutes for certain elements could defeat the
patent, and its value to inventors could be destroyed by simple acts of copying. For
this reason, the clearest rule of patent interpretation, literalism, may conserve judicial
resources but is not necessarily the most efficient rule. The scope of a patent is not
limited to its literal terms but instead embraces all equivalents to the claims
described.

13 It is true that the doctrine of equivalents renders the scope of patents less
certain. It may be difficult to determine what is, or is not, an equivalent to a particular
element of an invention. If competitors cannot be certain about a patent’s extent, they
may be deterred from engaging in legitimate manufactures outside its limits, or they
may invest by mistake in competing products that the patent secures. In addition the
uncertainty may lead to wasteful litigation between competitors, suits that a rule of
literalism might avoid. These concerns with the doctrine of equivalents, however, are
not new. Each time the Court has considered the doctrine, it has acknowledged this
uncertainty as the price of ensuring the appropriate incentives for innovation, and it
has affirmed the doctrine over dissents that urged a more certain rule. When the
Court in Winans v. Denmead first adopted what has become the doctrine of
equivalents, it stated that “[t]he exclusive right to the thing patented is not secured,
if the public are at liberty to make substantial copies of it, varying its form or
proportions.” 56 U.S. 330, 343 (1854). The dissent argued that the Court had sacrificed
the objective of “[f]ul[l]ness, clearness, exactness, preciseness, and particularity, in
the description of the invention.” Id. at 347 (opinion of Campbell, J.).
 DIRECT INFRINGEMENT 363

14 The debate continued in Graver Tank & Mfg. Co. v. Linde Air Products Co.,
339 U.S. 605 (1950), where the Court reaffirmed the doctrine. Graver Tank held that
patent claims must protect the inventor not only from those who produce devices
falling within the literal claims of the patent but also from copyists who “make
unimportant and insubstantial changes and substitutions in the patent which, though
adding nothing, would be enough to take the copied matter outside the claim, and
hence outside the reach of law.” Id. at 607. Justice Black, in dissent, objected that
under the doctrine of equivalents a competitor “cannot rely on what the language of a
patent claims. He must be able, at the peril of heavy infringement damages, to forecast
how far a court relatively unversed in a particular technological field will expand the
claim’s language . . . .” Id. at 617.

15 Most recently, in Warner–Jenkinson, the Court reaffirmed that equivalents

remain a firmly entrenched part of the settled rights protected by the patent. A
unanimous opinion concluded that if the doctrine is to be discarded, it is Congress and
not the Court that should do so:

[T]he lengthy history of the doctrine of equivalents strongly supports

adherence to our refusal in Graver Tank to find that the Patent Act
conflicts with that doctrine. Congress can legislate the doctrine of
equivalents out of existence any time it chooses. The various policy
arguments now made by both sides are thus best addressed to Congress,
not this Court. 520 U.S. at 28.

III

16 Prosecution history estoppel requires that the claims of a patent be interpreted

in light of the proceedings in the PTO during the application process. Estoppel is a
“rule of patent construction” that ensures that claims are interpreted by reference to
those “that have been cancelled or rejected.” Schriber–Schroth Co. v. Cleveland Trust
Co., 311 U.S. 211, 220–21 (1940). The doctrine of equivalents allows the patentee to
claim those insubstantial alterations that were not captured in drafting the original
patent claim but which could be created through trivial changes. When, however, the
patentee originally claimed the subject matter alleged to infringe but then narrowed
the claim in response to a rejection, he may not argue that the surrendered territory
comprised unforeseen subject matter that should be deemed equivalent to the literal
claims of the issued patent.

17 A rejection indicates that the patent examiner does not believe the original
claim could be patented. While the patentee has the right to appeal, his decision to
forgo an appeal and submit an amended claim is taken as a concession that the
invention as patented does not reach as far as the original claim. Were it otherwise,
the inventor might avoid the PTO’s gatekeeping role and seek to recapture in an
infringement action the very subject matter surrendered as a condition of receiving
the patent.
 364 MASUR & OUELLETTE ⋅ PATENT LAW

18 Prosecution history estoppel ensures that the doctrine of equivalents remains

tied to its underlying purpose. Where the original application once embraced the
purported equivalent but the patentee narrowed his claims to obtain the patent or to
protect its validity, the patentee cannot assert that he lacked the words to describe
the subject matter in question. The doctrine of equivalents is premised on language’s
inability to capture the essence of innovation, but a prior application describing the
precise element at issue undercuts that premise. In that instance the prosecution
history has established that the inventor turned his attention to the subject matter in
question, knew the words for both the broader and narrower claim, and affirmatively
chose the latter.

19 The first question in this case concerns the kinds of amendments that may give
rise to estoppel. Petitioner argues that estoppel should arise when amendments are
intended to narrow the subject matter of the patented invention, for instance,
amendments to avoid prior art, but not when the amendments are made to comply
with requirements concerning the form of the patent application. In Warner–
Jenkinson we recognized that prosecution history estoppel does not arise in every
instance when a patent application is amended. Our “prior cases have consistently
applied prosecution history estoppel only where claims have been amended for a
limited set of reasons,” such as “to avoid the prior art, or otherwise to address a specific
concern—such as obviousness—that arguably would have rendered the claimed
subject matter unpatentable.” 520 U.S. at 30–32. While we made clear that estoppel
applies to amendments made for a “substantial reason related to patentability,” id. at
33, we did not purport to define that term or to catalog every reason that might raise
an estoppel. Indeed, we stated that even if the amendment’s purpose were unrelated
to patentability, the court might consider whether it was the kind of reason that
nonetheless might require resort to the estoppel doctrine. Id. at 40–41.

20 Petitioner is correct that estoppel has been discussed most often in the context
of amendments made to avoid the prior art. It does not follow, however, that
amendments for other purposes will not give rise to estoppel. Prosecution history may
rebut the inference that a thing not described was indescribable. That rationale does
not cease simply because the narrowing amendment, submitted to secure a patent,
was for some purpose other than avoiding prior art.

21 We agree with the Court of Appeals that a narrowing amendment made to

satisfy any requirement of the Patent Act may give rise to an estoppel. As that court
explained, a number of statutory requirements must be satisfied before a patent can
issue. The claimed subject matter must be useful, novel, and not obvious. 35 U.S.C.
§§ 101–103. In addition, the patent application must describe, enable, and set forth
the best mode of carrying out the invention. § 112.

22 Petitioner contends that amendments made to comply with § 112 concern the
form of the application and not the subject matter of the invention. The PTO might
 DIRECT INFRINGEMENT 365

require the applicant to clarify an ambiguous term, to improve the translation of a

foreign word, or to rewrite a dependent claim as an independent one. In these cases,
petitioner argues, the applicant has no intention of surrendering subject matter and
should not be estopped from challenging equivalent devices. While this may be true
in some cases, petitioner’s argument conflates the patentee’s reason for making the
amendment with the impact the amendment has on the subject matter.

23 Estoppel arises when an amendment is made to secure the patent and the
amendment narrows the patent’s scope. If a § 112 amendment is truly cosmetic, then
it would not narrow the patent’s scope or raise an estoppel. On the other hand, if a
§ 112 amendment is necessary and narrows the patent’s scope—even if only for the
purpose of better description—estoppel may apply. A patentee who narrows a claim
as a condition for obtaining a patent disavows his claim to the broader subject matter,
whether the amendment was made to avoid the prior art or to comply with § 112. We
must regard the patentee as having conceded an inability to claim the broader subject
matter or at least as having abandoned his right to appeal a rejection. In either case
estoppel may apply.

24 Petitioner concedes that the limitations at issue—the sealing rings and the
composition of the sleeve—were made for reasons related to § 112, if not also to avoid
the prior art. Our conclusion that prosecution history estoppel arises when a claim is
narrowed to comply with § 112 gives rise to the second question presented: Does the
estoppel bar the inventor from asserting infringement against any equivalent to the
narrowed element or might some equivalents still infringe? The Court of Appeals held
that prosecution history estoppel is a complete bar, and so the narrowed element must
be limited to its strict literal terms. Based upon its experience the Court of Appeals
decided that the flexible-bar rule is unworkable because it leads to excessive
uncertainty and burdens legitimate innovation. For the reasons that follow, we
disagree with the decision to adopt the complete bar.

25 Though prosecution history estoppel can bar a patentee from challenging a

wide range of alleged equivalents made or distributed by competitors, its reach
requires an examination of the subject matter surrendered by the narrowing
amendment. The complete bar avoids this inquiry by establishing a per se rule; but
that approach is inconsistent with the purpose of applying the estoppel in the first
place—to hold the inventor to the representations made during the application
process and to the inferences that may reasonably be drawn from the amendment. By
amending the application, the inventor is deemed to concede that the patent does not
extend as far as the original claim. It does not follow, however, that the amended claim
becomes so perfect in its description that no one could devise an equivalent. After
amendment, as before, language remains an imperfect fit for invention. The
narrowing amendment may demonstrate what the claim is not; but it may still fail to
capture precisely what the claim is. There is no reason why a narrowing amendment
 366 MASUR & OUELLETTE ⋅ PATENT LAW

should be deemed to relinquish equivalents unforeseeable at the time of the

amendment and beyond a fair interpretation of what was surrendered. Nor is there
any call to foreclose claims of equivalence for aspects of the invention that have only
a peripheral relation to the reason the amendment was submitted. The amendment
does not show that the inventor suddenly had more foresight in the drafting of claims
than an inventor whose application was granted without amendments having been
submitted. It shows only that he was familiar with the broader text and with the
difference between the two. As a result, there is no more reason for holding the
patentee to the literal terms of an amended claim than there is for abolishing the
doctrine of equivalents altogether and holding every patentee to the literal terms of
the patent.

26 In Warner–Jenkinson we struck the appropriate balance by placing the burden

on the patentee to show that an amendment was not for purposes of patentability:

Where no explanation is established, however, the court should

presume that the patent application had a substantial reason related to
patentability for including the limiting element added by amendment.
In those circumstances, prosecution history estoppel would bar the
application of the doctrine of equivalents as to that element.

Id. at 33.

27 When the patentee is unable to explain the reason for amendment, estoppel
not only applies but also “bar[s] the application of the doctrine of equivalents as to
that element.” Id. These words do not mandate a complete bar; they are limited to the
circumstance where “no explanation is established.” They do provide, however, that
when the court is unable to determine the purpose underlying a narrowing
amendment—and hence a rationale for limiting the estoppel to the surrender of
particular equivalents—the court should presume that the patentee surrendered all
subject matter between the broader and the narrower language.

28 Just as Warner–Jenkinson held that the patentee bears the burden of proving
that an amendment was not made for a reason that would give rise to estoppel, we
hold here that the patentee should bear the burden of showing that the amendment
does not surrender the particular equivalent in question. This is the approach
advocated by the United States, and we regard it to be sound. The patentee, as the
author of the claim language, may be expected to draft claims encompassing readily
known equivalents. A patentee’s decision to narrow his claims through amendment
may be presumed to be a general disclaimer of the territory between the original claim
and the amended claim. There are some cases, however, where the amendment cannot
reasonably be viewed as surrendering a particular equivalent. The equivalent may
have been unforeseeable at the time of the application; the rationale underlying the
amendment may bear no more than a tangential relation to the equivalent in question;
or there may be some other reason suggesting that the patentee could not reasonably
be expected to have described the insubstantial substitute in question. In those cases
 DIRECT INFRINGEMENT 367

the patentee can overcome the presumption that prosecution history estoppel bars a
finding of equivalence.

29 This presumption is not, then, just the complete bar by another name. Rather,
it reflects the fact that the interpretation of the patent must begin with its literal
claims, and the prosecution history is relevant to construing those claims. When the
patentee has chosen to narrow a claim, courts may presume the amended text was
composed with awareness of this rule and that the territory surrendered is not an
equivalent of the territory claimed. In those instances, however, the patentee still
might rebut the presumption that estoppel bars a claim of equivalence. The patentee
must show that at the time of the amendment one skilled in the art could not
reasonably be expected to have drafted a claim that would have literally encompassed
the alleged equivalent.

IV

30 On the record before us, we cannot say petitioner has rebutted the
presumptions that estoppel applies and that the equivalents at issue have been
surrendered. Petitioner concedes that the limitations at issue—the sealing rings and
the composition of the sleeve—were made in response to a rejection for reasons under
§ 112, if not also because of the prior art references. As the amendments were made
for a reason relating to patentability, the question is not whether estoppel applies but
what territory the amendments surrendered. While estoppel does not effect a complete
bar, the question remains whether petitioner can demonstrate that the narrowing
amendments did not surrender the particular equivalents at issue. On these
questions, SMC may well prevail, for the sealing rings and the composition of the
sleeve both were noted expressly in the prosecution history. These matters, however,
should be determined in the first instance by further proceedings in the Court of
Appeals or the District Court.

31 The judgment of the Federal Circuit is vacated, and the case is remanded for
further proceedings consistent with this opinion.

Discussion Questions: Festo

1. The Policy Behind the Doctrine of Equivalents. What are the policy objectives
that the law seeks to achieve using the doctrine of equivalents? What are the tradeoffs
involved in this doctrine? That is, what values or policy objectives are being sacrificed
by having a doctrine of equivalents?

2. Substantial Reasons Related to Patentability. The Festo Court holds that all
amendments to address substantial reasons related to patentability give rise to the
presumption of prosecution history estoppel. What do you think the Court means by
a “substantial reason related to patentability?” What reason might a patentee have
for amending a claim, or what rule might force a patentee to amend a claim, that
368 MASUR & OUELLETTE ⋅ PATENT LAW

wouldn’t fall in this category? Not giving a reason is insufficient to avoid the
presumption: the Court notes that “[w]here no explanation is established [for an
amendment], the court should presume that the patent application had a substantial
reason related to patentability.”

3. The Flexible Bar. The Court opts for a “flexible” bar, rather than a complete
bar. This means that even if a presumption of prosecution history estoppel applies to
a claim amendment, the patentee can rebut that presumption. The Court says that
there are two categories of situations in which an amendment will not bar subsequent
equivalents to a claim element. The first category is if the equivalent was
unforeseeable—that is, the patent applicant could not have anticipated the equivalent
and thus could not have drafted a claim that would encompass it at the time the claim
was being amended. The second category is if the rationale underlying the amendment
was “tangential” to the equivalent that the patent owner seeks to capture. Consider
the following examples:

(a) Gabrielle applies for a patent on an invention that involves a “gear” with
“teeth.” During prosecution, the patent examiner rejects the patent on the
basis of prior art involving a gear that has five teeth. Gabrielle then revises
her claim element such that it reads “gear with six teeth.” Marco then begins
producing the same invention, but the gear in his invention has eight teeth.
Can Gabrielle argue that Marco’s gear is an equivalent to hers, or is she barred
by the doctrine of prosecution history estoppel?

(b) Imagine the same patent with the same prosecution history as (a) above.
This time, however, Marco’s invention uses a gear with six “links.” In a gear of
this type, a link is similar (though not identical) to a tooth. Can Gabrielle argue
that Marco’s gear is an equivalent to hers, or is she barred by the doctrine of
prosecution history estoppel?

(c) Imagine that Ellen invents a chemical reaction that operates at a “pH
between 6 and 10.” During prosecution, the patent examiner rejects the patent
on the basis of prior art that operates at a pH of 9.5. Ellen then amends her
claim element to specify that the invention must operate at a pH between “6
and 9.” Michael then begins producing the same invention, except that his
operates at a pH of 9.2. Can Ellen argue that Michael’s invention is equivalent
to hers, or is she barred by the doctrine of prosecution history estoppel?

(d) Imagine the same patent with the same prosecution history as (c) above.
This time, however, Michael’s invention operates at a pH of 5. Can Ellen argue
that Michael’s invention is equivalent to hers, or is she barred by the doctrine
of prosecution history estoppel? See Biagro W. Sales, Inc. v. Grow More, Inc.,
423 F.3d 1296 (Fed. Cir. 2005).

(e) Imagine that Alysia obtains a patent on a “microfluidic system,” which is a

device that uses microscopic channels—the width of a hair—to carry fluids.
 DIRECT INFRINGEMENT 369

During prosecution, Alysia amends her patent claim to specify that the
channels be “non-flourinated” (that is, that they contain no flourine) and thus
will not react with the fluid being carried through the channels, which is
flourinated. This amendment was made to distinguish the invention from prior
art that used a different method to avoid having the channel react chemically
with the fluid it is carrying. The accused device is a similar microfluidic system
that contains 0.02% Kynar, a non-reactive resin that contains de minimis
amounts of fluorine. Can Alysia argue that the accused device is equivalent to
hers, or is she barred by the doctrine of prosecution history estoppel? See Bio-
Rad Laboratories, Inc. v. 10X Genomics Inc., 967 F.3d 1353 (Fed. Cir. 2020).

4. The Boundaries of a Claim Element. Recall that the doctrine of prosecution

history estoppel only applies to the particular claim element that has been amended,
not to the entire claim. Accordingly, determining when a claim element begins and
ends can be critical to the prosecution history estoppel analysis. For instance, consider
the pH element described in example (d) above. If the pH range is actually two
elements—one element requiring a pH greater than 6 and one element requiring a pH
less than 9—then the first element (the lower end of the range) was never amended,
and prosecution history estoppel does not apply. How would a court decide in such a
case whether the pH range is one element or two elements?

For that matter, suppose the claim were written to require that “the chemical
reaction operate at a pH above 6, and also that the chemical reaction operate at a pH
below 9.” That formulation is, of course, functionally identical to requiring that it
operate at a “pH above 6 and below 9.” Should a court treat those two claims
differently? Would it be justified in construing the first version of the claim to involve
two separate pH elements and the second version of the claim to involve just one pH
element? If you think that the court should construe both versions of the claim to
involve just one pH element, what principles should guide a court in deciding how
many elements a claim contains and what each of those elements are?

5. The Policy Behind Prosecution History Estoppel. Festo’s patent claim calls
for two sealing rings with one lip each, while the accused device (which Festo argues
is equivalent) has one sealing ring with two lips. Maybe two rings with one lip are
equivalent to one ring with two lips, or maybe they aren’t; that is a question for the
function-way-result test. But Festo was never allowed to argue that they are
equivalent because (on remand) it was barred by prosecution history estoppel. Festo
Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd., 344 F.3d 1359 (Fed. Cir. 2003);
Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd., 493 F.3d 1368 (Fed. Cir.
2007). (It only required two more Federal Circuit opinions, two additional petitions
for certiorari, a few more district court opinions, and six additional years.)

Now, if there is prior art that includes a single ring with two lips, it would seem
improper to allow Festo to capture that claim scope. Either two rings are the same as
one ring, in which case Festo’s patent should probably be invalid as obvious, or they
370 MASUR & OUELLETTE ⋅ PATENT LAW

are not, in which case Festo’s patent is probably not infringed. (There is not perfect
symmetry between obviousness and the doctrine of equivalents, as there is with
anticipation and literal infringement, but it’s relatively close.) But a court could
determine the best way to interpret the patent, and whether the claim is infringed, on
its own, without referring to what occurred during examination or what claim scope
Festo might have surrendered. It might be that Festo surrendered claim scope (one
ring with two lips) entirely unnecessarily.

In fact, prosecution history estoppel is really only relevant when the equivalent
that a patentee wants to claim is not part of the prior art. After all, prosecution history
estoppel operates to prevent a patentee from claiming an equivalent precisely when
the patentee could have written a claim to literally cover that equivalent, and when
that claim would have been valid and infringed. If the claim would not have been
valid, there is no point to prosecution history estoppel.

In addition, keep in mind that prosecution history estoppel only operates when
there has been an amendment. If Festo had originally drafted its claim to include two
rings, each with one lip, the doctrine of prosecution history estoppel would not apply.
In other words, Festo could have had precisely the same patent issued, but without
implicating the doctrine of prosecution history estoppel, if it had written the claims to
include sealing rings in the first place. Why should it matter how Festo arrived at the
claim that was eventually issued? Why should otherwise identical claims be treated
differently, just because one was amended during prosecution and one was not?

6. The Doctrine of Equivalents and Claim Construction. The key policy

objective of the doctrine of equivalents—preventing infringers from evading the literal
claim language by insubstantial changes—can often also be addressed through claim
construction. That is, a court could simply construe claims slightly more capaciously
to include minor variants, rather than construing claims narrowly and forcing the
patent owner to rely on the doctrine of equivalents. Some scholars have suggested that
after Markman v. Westview, claim construction eclipsed the doctrine of equivalents in
importance. See John R. Allison & Mark A. Lemley, The (Unnoticed) Demise of the
Doctrine of Equivalents, 59 Stan. L. Rev. 955 (2007); David L. Schwartz, Explaining
the Demise of the Doctrine of Equivalents, 26 Berkeley Tech. L.J. 1157 (2011). What
are the advantages and disadvantages of addressing these policy concerns through
each doctrine?

Additional Limitations on Equivalents

1. The Disclosure-Dedication Rule. In Johnson & Johnston Associates v. R.E.

Service, 285 F.3d 1046 (Fed. Cir. 2002), the plaintiff’s claim included, as one element,
a “sheet of aluminum.” The specification disclosed that the invention could be made
with other metals as well, including steel and nickel. The defendant produced a
similar invention, except for the fact that it used a sheet of steel rather than
 DIRECT INFRINGEMENT 371

aluminum, and the plaintiff sued for infringement under the doctrine of equivalents.
The Federal Circuit held that the patentee could not capture steel as an equivalent
because, by disclosing the use of steel but not claiming it, it had placed the use of steel
into the public domain:

[W]hen a patent drafter discloses but declines to claim subject matter,

as in this case, this action dedicates that unclaimed subject matter to
the public. Application of the doctrine of equivalents to recapture
subject matter deliberately left unclaimed would conflict with the
primacy of the claims in defining the scope of the patentee’s exclusive
right.

Id. at 1054.

There is a certain logic to this decision, in that the claims do define the scope
of the patentee’s property right, and the specification does constitute a public
disclosure that can operate as prior art. But if this doctrine were applied with full
force, it would effectively eliminate the doctrine of equivalents. Anything disclosed in
the specification and not claimed would be part of the public domain, and the patentee
could not capture it as an equivalent; and if an equivalent were not disclosed in the
specification, claiming it would create enablement and written description problems.
The patentee’s claims would only encompass what was disclosed in the specification
and claimed—in other words, the patentee’s only option would be literal infringement.

However, the Federal Circuit has since moved to limit the force of this doctrine.
In subsequent cases, the court held that the rule

does not mean that any generic reference in a written specification

necessarily dedicates all members of that particular genus to the public.
Rather, the disclosure must be of such specificity that one of ordinary
skill in the art could identify the subject matter that had been disclosed
and not claimed. Additionally, this court [has] further clarified that
before unclaimed subject matter is deemed to have been dedicated to
the public, that unclaimed subject matter must have been identified by
the patentee as an alternative to a claim limitation.

SanDisk Corp. v. Kingston Tech. Co., Inc., 695 F.3d 1348, 1363–64 (Fed. Cir. 2012).
Accordingly, if the patentee in Johnson & Johnston had simply mentioned that “other
metals” could be made to work in the invention, it seems likely that the court would
have permitted it to argue that steel was an equivalent. It was naming steel,
specifically, that barred the patentee.

Think back to Unique Concepts. Could the patent owner have argued that
mitered corner pieces were equivalent to preformed corner pieces, and thus that the
accused device infringed under the doctrine of equivalents? Why or why not?
372 MASUR & OUELLETTE ⋅ PATENT LAW

2. The Ensnarement Doctrine. Another doctrine that exists to police the reach
of the doctrine of equivalents is called “ensnarement.” “Ensnarement bars a patentee
from asserting a scope of equivalency that would encompass, or ‘ensnare,’ the prior
art.” DePuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 567 F.3d 1314, 1322 (Fed.
Cir. 2009). That is, a patentee cannot claim that a claim has a particular scope via the
doctrine of equivalents if a claim that had the same scope via literal infringement
would be anticipated or obvious. This requirement makes a great deal of sense: if a
claim drafted to cover a certain scope literally would be invalid, the patentee should
not be allowed to capture the same scope through equivalents. One might even think
that this doctrine would be an axiomatic part of the doctrine of equivalents, but patent
law has bestowed upon it its own name.

For instance, DePuy Spine involved a claim for a medical device in which a
screw was connected to a “spherically-shaped” portion of the device. The accused
device connected the screw to a “conically-shaped” portion of the device instead. The
patentee claimed that a device with a conically-shaped portion was an equivalent to
its claim. To evaluate this argument, the Federal Circuit first formulated a
hypothetical claim that covered the accused device by substituting the word
“conically” for “spherically.” It then determined that this hypothetical claim would not
have been obvious in light of prior art. Id. at 1329. Accordingly, the doctrine of
ensnarement did not apply, and the patentee was permitted to argue that the accused
device infringed under the doctrine of equivalents.
 DIRECT INFRINGEMENT 373

An Infringement–Validity Flow Chart

With the addition of infringement by the equivalents, we have now introduced

a significant number of moving pieces into the infringement analysis. The doctrine of
prosecution history estoppel itself has two steps, and that does not include the
doctrine of equivalents analysis itself, much less any other step in the process of
determining validity and infringement. In order to help sort through the many steps
in adjudicating a patent, we offer the following highly simplified flow chart:
374 MASUR & OUELLETTE ⋅ PATENT LAW

10. Indirect Infringement

Thus far, we have been discussing what is known as “direct infringement”: the
party sued for infringement is a party that has made, used, or sold the patented
invention. But there are some cases in which the patent holder might want to sue a
party that has merely facilitated the infringement, rather than the party that has
directly infringed. For instance, recall the Swiffer patent from Chapter 1. Suppose a
company sells standard mops, along with instructions describing how to convert those
standard mops into Swiffers. The company knows full well—indeed, intends—that
individuals will purchase its mops and convert them into Swiffers. Can the owner of
the Swiffer patent sue this mop company, or may it only sue the individual customers
who build their own Swiffers? Or, for instance, imagine that a third firm sells specially
designed reservoirs of cleaning fluid that are meant to be combined with the mops
when they are made into Swiffers. Can the patent owner sue this company that is
making specialty parts?

This is similar to the concept of “aiding and abetting” liability from criminal
law: there are instances in which another party has performed a sufficiently critical
function in helping to further the infringement that there is a basis for holding that
party liable as well. This is known as “indirect infringement.”

Indirect infringement comes in two flavors: inducement, which is governed by

35 U.S.C. § 271(b), and contributory infringement, which is governed by 35 U.S.C.
§ 271(c). (Recall that ordinary direct infringement falls under 35 U.S.C. § 271(a).)
Here is the relevant statutory text:

35 U.S.C. § 271

(b) Whoever actively induces infringement of a patent shall be liable as

an infringer.

(c) Whoever offers to sell or sells within the United States or imports
into the United States a component of a patented machine,
manufacture, combination or composition, or a material or apparatus
for use in practicing a patented process, constituting a material part of
the invention, knowing the same to be especially made or especially
adapted for use in an infringement of such patent, and not a staple
article or commodity of commerce suitable for substantial noninfringing
use, shall be liable as a contributory infringer.

These statutory sections raise two principal questions that the cases below will
address. First, what types of actions will trigger liability? And second, what level of
 INDIRECT INFRINGEMENT 375

knowledge is required of the indirect infringer? In the hypothetical examples above,

does the company that manufactures reservoirs of cleaning solution have to know that
its customers will use its product to build make-shift Swiffers? Does it have to know
that they will be infringing the Swiffer patent? As you consider these doctrinal
questions, you should be thinking about what purpose the doctrines of inducement
and contributory infringement are meant to serve, and why direct infringement is not
sufficient by itself.

For ease of explication, we will take these statutory sections out of order. We
begin below with a case on § 271(c) contributory infringement (Aro II) before turning
to a case on § 271(b) inducement (Sanofi v. Watson). In addition to being the canonical
case on contributory infringement, Aro II introduces a key defense to patent
infringement that we will return to in Chapter 12: under the exhaustion doctrine, the
first authorized sale of a patented product “exhausts” the patent owner’s rights over
that product, and the patent owner can no longer sue the user of that product for
infringement. Because General Motors had a license to the convertible top patent at
issue, their customers could use the convertibles without an additional license.

The General Motors customers could also purchase and install replacement
fabric for their convertible tops from Aro Manufacturing because the Supreme Court
had held in the earlier Aro I case that fabric replacement was merely “repair” (covered
by the exhaustion defense) rather than “reconstruction” (which would require a new
patent license). Repair is permitted because it perpetuates the use of an existing item
(to which the GM customers already had licenses); reconstruction would not have been
permitted because it would entail construction of a new item (for which there would
be no license). But Ford did not have a license, and in Aro II, the Court considers
whether Aro Manufacturing is liable for selling convertible top replacement fabric to
Ford’s consumers.

A. Contributory Infringement

Aro Mfg. v. Convertible Top Replacement (“Aro II”), 377 U.S. 476 (1964)

Mr. Justice Brennan delivered the opinion of the Court.

1 Respondent Convertible Top Replacement Co., Inc., (CTR) acquired by

assignment from the Automobile Body Research Corporation (AB) all rights for the
territory of Massachusetts in United States Patent No. 2,569,724, known as the
Mackie-Duluk patent. This is a combination patent covering a top-structure for
automobile “convertibles.” Structures embodying the patented combination were
included in 1952–1954 models of convertibles manufactured by the General Motors
Corporation and the Ford Motor Company. They were included in the General Motors
 376 MASUR & OUELLETTE ⋅ PATENT LAW

cars by authority of a license granted to General Motors by AB; Ford, however, had
no license during the 1952–1954 period, and no authority whatever under the patent
until July 21, 1955, when it entered into an agreement with AB; Ford’s manufacture
and sale of the automobiles in question therefore infringed the patent. Petitioner Aro
Manufacturing Co., Inc. (Aro), which is not licensed under the patent, produces fabric
components designed as replacements for worn out fabric portions of convertible tops;
unlike the other elements of the top structure, which ordinarily are usable for the life
of the car, the fabric portion normally wears out and requires replacement after about
three years of use. Aro’s fabrics are specially tailored for installation in particular
models of convertibles, and these have included the 1952–1954 General Motors and
Ford models equipped with the Mackie-Duluk top-structures.

2 CTR brought this action against Aro in 1956 to enjoin the alleged infringement
and contributory infringement, and to obtain an accounting, with respect to
replacement fabrics made and sold by Aro for use in both the General Motors and the
Ford cars embodying the patented structures. The interlocutory judgment entered for
CTR by the District Court for the District of Massachusetts and affirmed by the Court
of Appeals for the First Circuit was reversed here. Aro Mfg. Co. v. Convertible Top
Replacement Co., 365 U.S. 336 (“Aro I”). Our decision dealt, however, only with the
General Motors and not with the Ford cars. Like the Court of Appeals, we treated
CTR’s right to relief as depending wholly upon the question whether replacement of
the fabric portions of the convertible tops constituted infringing “reconstruction” or
permissible “repair” of the patented combination. The lower courts had held it to
constitute “reconstruction,” making the car owner for whom it was performed a direct
infringer and Aro, which made and sold the replacement fabric, a contributory
infringer; we disagreed and held that it was merely “repair.” The reconstruction-
repair distinction is decisive, however, only when the replacement is made in a
structure whose original manufacture and sale have been licensed by the patentee, as
was true only of the General Motors cars; when the structure is unlicensed, as was
true of the Ford cars, the traditional rule is that even repair constitutes infringement.
Thus, the District Court had based its ruling for CTR with respect to the Ford cars on
the alternative ground that, even if replacement of the fabric portions constituted
merely repair, the car owners were still guilty of direct infringement, and Aro of
contributory infringement, as to these unlicensed and hence infringing structures.
This aspect of the case was not considered or decided by our opinion in Aro I.

3 On remand, however, another judge in the District Court read our opinion as
requiring the dismissal of CTR’s complaint as to the Ford as well as the General
Motors cars, and entered judgment accordingly. CTR appealed the dismissal insofar
as it applied to the Ford cars, and the Court of Appeals reinstated the judgment in
favor of CTR to the extent. In our view the Court of Appeals was correct in holding
that its “previous decision in this case was not reversed insofar as unlicensed Ford
cars are concerned.” However, we granted certiorari to consider the issue that had not
been decided in Aro I: whether Aro is liable for contributory infringement, under
 INDIRECT INFRINGEMENT 377

35 U.S.C. § 271(c), with respect to its manufacture and sale of replacement fabrics for
the Ford cars.

4 CTR contends, and the Court of Appeals held, that since Ford infringed the
patent by making and selling the top-structures without authority from the patentee,
persons who purchased the automobiles from Ford likewise infringed by using and
repairing the structures; and hence Aro, by supplying replacement fabrics specially
designed to be utilized in such infringing repair, was guilty of contributory
infringement under 35 U.S.C. § 271(c). In Aro I, 365 U.S. at 341-42, the Court said:

It is admitted that petitioners (Aro) know that the purchasers intend to

use the fabric for replacement purposes on automobile convertible tops
which are covered by the claims of respondent’s combination patent,
and such manufacture and sale with that knowledge might well
constitute contributory infringement under § 271(c), if, but only if, such
a replacement by the purchaser himself would in itself constitute a
direct infringement under § 271(a), for it is settled that if there is no
direct infringement of a patent there can be no contributory
infringement. . . . It is plain that § 271(c)—a part of the Patent Code
enacted in 1952—made no change in the fundamental precept that
there can be no contributory infringement in the absence of a direct
infringement. That section defines contributory infringement in terms
of direct infringement—namely the sale of a component of a patented
combination or machine for use “in an infringement of such patent.”
And § 271(a) of the new Patent Code, which defines “infringement,” left
intact the entire body of case law on direct infringement. The
determinative question, therefore, comes down to whether the car
owner would infringe the combination patent by replacing the worn-out
fabric element of the patented convertible top on his car . . . .

Similarly here, to determine whether Aro committed contributory infringement, we

must first determine whether the car owners, by replacing the worn-out fabric
element of the patented top-structures, committed direct infringement. We think it
clear, under § 271(a) of the Patent Code and the “entire body of case law on direct
infringement” which that section “left intact,” that they did.

5 Section 271(a) provides that “whoever without authority makes, uses or sells
any patented invention . . . infringes the patent.” It is not controverted—nor could it
be—that Ford infringed by making and selling cars embodying the patented top-
structures without any authority from the patentee. If Ford had had such authority,
its purchasers would not have infringed by using the automobiles, for it is
fundamental that sale of a patented article by the patentee or under his authority
carries with it an “implied license to use.” Adams v. Burke, 84 U.S. (17 Wall.) 453, 456
(1873). But with Ford lacking authority to make and sell, it could by its sale of the
cars confer on the purchasers no implied license to use, and their use of the patented
 378 MASUR & OUELLETTE ⋅ PATENT LAW

structures was thus “without authority” and infringing under § 271(a).1 Not only does
that provision explicitly regard an unauthorized user of a patented invention as an
infringer, but it has often and clearly been held that unauthorized use, without more,
constitutes infringement.

6 If the owner’s use infringed, so also did his repair of the top-structure, as by
replacing the worn-out fabric component. Where use infringes, repair does also, for it
perpetuates the infringing use. Consequently replacement of worn-out fabric
components with fabrics sold by Aro, held in Aro I to constitute “repair” rather than
“reconstruction” and thus to be permissible in the case of licensed General Motors
cars, was not permissible here in the case of unlicensed Ford cars. Here, as was not
the case in Aro I, the direct infringement by the car owners that is prerequisite to
contributory infringement by Aro was unquestionably established.

7 We turn next to the question whether Aro, as supplier of replacement fabrics

for use in the infringing repair by the Ford car owners, was a contributory infringer
under § 271(c) of the Patent Code. We think Aro was indeed liable under this
provision.

8 Such a result would plainly have obtained under the contributory-

infringement case law that § 271(c) was intended to codify. Indeed, most of the law
was established in cases where, as here, suit was brought to hold liable for
contributory infringement a supplier of replacement parts specially designed for use
in the repair of infringing articles. In Union Tool Co. v. Wilson, 259 U.S. 107, 113-14
(1922), the Court held that where use of the patented machines themselves was not
authorized, “There was, consequently, no implied license to use the spare parts in
these machines. As such use, unless licensed, clearly constituted an infringement, the
sale of the spare parts to be so used violated the injunction [enjoining infringement].”
As early as 1897, Circuit Judge Taft, as he then was, thought it “well settled” that
“where one makes and sells one element of a combination covered by a patent with
the intention and for the purpose of bringing about its use in such a combination he
is guilty of contributory infringement and is equally liable to the patentee with him
who in fact organizes the complete combination.” Thomson-Houston Elec. Co. v. Ohio
Brass Co., 80 F. 712, 721 (6th Cir. 1897).

9 In enacting § 271(c), Congress clearly succeeded in its objective of codifying

this case law. The language of the section fits perfectly Aro’s activity of selling “a
component of a patented . . . combination . . . , constituting a material part of the
invention, . . . especially made or especially adapted for use in an infringement of such
patent and not a staple article or commodity of commerce suitable for substantial
noninfringing use.” Indeed, this is the almost unique case in which the component was

1 [n.5 in opinion] We have no need to consider whether the car owners, if sued for
infringement by the patentee, would be entitled to indemnity from Ford on a breach of
warranty theory. In fact they were not sued, and were released from liability by the agreement
between Ford and AB.
 INDIRECT INFRINGEMENT 379

hardly suitable for any noninfringing use.2 On this basis both the District Court
originally and the Court of Appeals in the instant case held that Aro was a
contributory infringer within the precise letter of § 271(c).

10 However, the language of § 271(c) presents a question, apparently not noticed

by the parties or the courts below, concerning the element of knowledge that must be
brought home to Aro before liability can be imposed. It is only sale of a component of
a patented combination “knowing the same to be especially made or especially adapted
for use in an infringement of such patent” that is contributory infringement under the
statute. Was Aro “knowing” within the statutory meaning because—as it admits, and
as the lower courts found—it knew that its replacement fabrics were especially
designed for use in the 1952–1954 Ford convertible tops and were not suitable for
other use? Or does the statute require a further showing that Aro knew that the tops
were patented, and knew also that Ford was not licensed under the patent so that any
fabric replacement by a Ford car owner constituted infringement?

11 On this question a majority of the Court is of the view that § 271(c) does require
a showing that the alleged contributory infringer knew that the combination for which
his component was especially designed was both patented and infringing.3 With
respect to many of the replacement-fabric sales involved in this case, Aro clearly had
such knowledge. For by letter dated January 2, 1954, AB informed Aro that it held
the Mackie-Duluk patent; that it had granted a license under the patent to General
Motors but to no one else; and that “It is obvious, from the foregoing and from an
inspection of the convertible automobile sold by the Ford Motor Company, that anyone
selling ready-made replacement fabrics for these automobiles would be guilty of
contributory infringement of said patent.” Thus the Court’s interpretation of the
knowledge requirement affords Aro no defense with respect to replacement-fabric
sales made after January 2, 1954. It would appear that the overwhelming majority of
the sales were in fact made after that date, since the oldest of the cars were 1952
models and since the average life of a fabric top is said to be three years. With respect
to any sales that were made before that date, however, Aro cannot be held liable in
the absence of a showing that at that time it had already acquired the requisite

2 [n.7 in opinion] Aro’s factory manager admitted that the fabric replacements in
question not only were specially designed for the Ford convertibles but would not, to his
knowledge, fit the top-structures of any other cars.
3 [n.8 in opinion] This view is held by The Chief Justice and Justices Black, Douglas,
Clark, and White. [Eds: The only one of these five Justices to join Justice Brennan’s majority
opinion is Justice White; the others join Justice Black in a dissent, which argues that
consumers and repairmen should never be liable for direct infringement, and especially not
here, where the patent owner has already recovered for past infringements from Ford.]
Justices Harlan, Brennan, Stewart and Goldberg dissent from this interpretation of the
statute. They are of the view that the knowledge Congress meant to require was simply
knowledge that the component was especially designed for use in a combination and was not
a staple article suitable for substantial other use, and not knowledge that the combination was
either patented or infringing.
 380 MASUR & OUELLETTE ⋅ PATENT LAW

knowledge that the Ford car tops were patented and infringing. When the case is
remanded, a finding of fact must be made on this question by the District Court, and,
unless Aro is found to have had such prior knowledge, the judgment imposing liability
must be vacated as to any sales made before January 2, 1954. As to subsequent sales,
however, we hold, in agreement with the lower courts, that Aro is liable for
contributory infringement within the terms of § 271(c).

12 [In omitted portions of the majority opinion, the Court held that the July 21,
1955 settlement between Ford and AB resolving their past and future patent disputes
also prevented Aro from being liable for replacement fabric sales made after this
agreement. Aro is thus liable only for earlier sales, although a plurality of the Court
suggested that the 1955 agreement “does have the effect of limiting the amount that
CTR can recover for the pre-agreement infringement, and probably of precluding
recovery of anything more than nominal damages.” The plurality opined that “after a
patentee has collected from or on behalf of a direct infringer damages sufficient to put
him in the position he would have occupied had there been no infringement, he cannot
thereafter collect actual damages from a person liable only for contributing to the
same infringement.” A concurrence by Justice White and a dissent by Justice Black
are omitted.]

Discussion Questions: Aro II

1. Direct Infringement as a Prerequisite. Toward the beginning of the opinion,

the Court quotes a lengthy excerpt from its predecessor case (Aro I) in which it held
that “if there is no direct infringement of a patent there can be no contributory
infringement.” This is a critical axiom of patent law, and one that remains in the law
to the present day. But why should it be the case? Why not allow a patent owner to
sue a party that is attempting to contribute to another’s infringement, even if that
attempt is unsuccessful?

2. Repair vs. Reconstruction. Why is there a difference between “repair” and

“reconstruction,” and why does it mean the GM cars aren’t at issue? Why is it clear
that Ford and its customers are directly infringing?

3. The Lawsuit’s Targets. Given that Ford and its customers are directly
infringing, why isn’t CTR suing them, rather than suing Aro? Start with the
customers—why can’t CTR simply sue them (and only them) for their acts of
infringement? If suing the customers is not a good option, why can’t CTR simply sue
Ford? What does it have to gain from suing Aro instead of (or in addition to) Ford?

4. Noninfringing Uses? What work is the provision that excludes liability for
“substantial noninfringing uses” meant to do? What is the paradigm case of a
substantial noninfringing use? What about the sales to owners of GM cars? Those
were noninfringing uses. Could Aro have argued that it shouldn’t be liable because
the sales to GM owners are a “substantial noninfringing use?” Why or why not?
 INDIRECT INFRINGEMENT 381

5. What Knowledge? Why is the statute’s knowledge requirement ambiguous,

and how does the Court resolve the ambiguity? (Don’t skip footnote 8! Who is
authoring this opinion, and what does he think on this point?) What are the pros and
cons of the two views as a policy matter?

How do we know that Aro had the necessary knowledge, and when did it
acquire that knowledge? Can Aro be held liable for any acts of infringement that
occurred before it acquired the necessary knowledge?

The Aro II Court imposes a high knowledge requirement before a party can be
liable for contributory infringement. Direct infringement (under § 271(a)) is strict
liability. Even criminal law almost never requires that a party have knowledge of the
legal status of one’s actions, as opposed to the fact that one is taking the actions in the
first place. Why do you think the Court imposes such a high knowledge standard here?

6. Strategic Behavior in Light of the Knowledge Requirement. What incentives

does the requirement that contributory infringement be “knowing” create for parties
such as Aro that might be liable as contributory infringers? Does Aro have an
incentive to search for patents they might be infringing? What about the patent
holder—what obligations does this impose on it?

Suppose contributory infringement were strict liability, as direct infringement

is. What costs and benefits, and for which parties, would that rule create, compared
with the rule requiring knowledge? Suppose that you represented a firm, such as Aro,
that might be liable as a contributory infringer but is no longer protected by the
requirement of knowledge. What advice would you give to the firm’s managers? What
options does the firm have?

B. Inducement

Sanofi v. Watson Labs. Inc., 875 F.3d 636 (Fed. Cir. 2017)

Richard Taranto, Circuit Judge.

1 [As explained in detail in Chapter 11, patents related to approved drugs must
be listed in the FDA’s “Orange Book,” which allows generic manufacturers to
determine which (if any) patents they might infringe if they begin selling a generic
version of the drug. When a generic firm seeks to market a generic version of an FDA-
approved drug, it files a “paragraph IV” certification in which it certifies that any non-
expired patents listed in the Orange Book are either invalid or not infringed. Needless
to say, the original developer of the drug often disagrees with the generic firm’s
assessment of its patents, and 35 U.S.C. § 271(e)(2)(A) allows the patent owner to
 382 MASUR & OUELLETTE ⋅ PATENT LAW

initiate litigation against the generic firm to resolve these disputes before the generic
firm begins selling its products.]

2 [In 2009, the pharmaceutical firm Sanofi received FDA approval for the
cardiovascular drug dronedarone, which it began selling under the brand name
Multaq. The generic firms Watson Laboratories and Sandoz subsequently sought to
market generic dronedarone and filed paragraph IV challenges to the related patents,
including Patent No. 8,410,167, which claims methods of reducing hospitalization by
administering dronedarone to patients having specified characteristics. Notably, the
patent covering the compound dronedarone itself was set to expire in 2019, while the
’167 patent, which covered a method of treatment, was valid until 2029. Litigation
over this method of treatment was thus of great importance to all of the parties
involved. After a three-day bench trial, the district court ruled that Watson’s and
Sandoz’s sale of their proposed generic drugs would induce physicians to infringe all
but one of the asserted claims. Watson and Sandoz appealed this finding of
inducement.]

3 [Five clinical trials involving dronedarone are relevant to the inducement

issue. The first two trials, EURIDIS and ADONIS, primarily found that dronedarone
reduced the recurrence of a heart problem known as atrial fibrillation. They also
found, in a “post hoc analysis” of an issue the studies were not designed to address,
that the drug reduced hospitalization and death. Two additional studies,
ANDROMEDA and PALLAS, had to be terminated early due to adverse results.]

4 [The fifth study,] called ATHENA, was designed to address the potential for
clinical benefits of dronedarone that the EURIDIS/ADONIS researchers had
identified in their post-hoc analysis. ATHENA involved administration of
dronedarone to patients who had a recent history of atrial fibrillation and/or flutter
and at least one of several specified characteristics believed to be associated with
cardiovascular risk. The study assessed differences in cardiovascular hospitalization
or death (secondarily, in hospitalization or death regardless of cause) between
patients given dronedarone and patients given a placebo. The study produced positive
results for dronedarone. Those results led to the filings that resulted in the ’167 patent
and to the FDA’s approval of Multaq®.

5 The ’167 patent claims methods of reducing cardiovascular hospitalization by

administering dronedarone to patients meeting conditions mirroring those stated in
the ATHENA trial. Claim 1 is representative:

A method of decreasing a risk of cardiovascular hospitalization in a

patient, said method comprising administering to said patient an
effective amount of dronedarone or a pharmaceutically acceptable salt
thereof, twice a day with a morning and an evening meal, wherein said
patient does not have severe heart failure, (i) wherein severe heart
 INDIRECT INFRINGEMENT 383

failure is indicated by: a) NYHA Class IV heart failure or b)

hospitalization for heart failure within the last month; and (ii) wherein
said patient has a history of, or current, paroxysmal or persistent non-
permanent atrial fibrillation or flutter; and (iii) wherein the patient has
at least one cardiovascular risk factor selected from the group
consisting of:

i. an age greater than or equal to 75;

ii. hypertension;

iii. diabetes;

iv. a history of cerebral stroke or of systemic embolism;

v. a left atrial diameter greater than or equal to 50 mm; and

vi. a left ventricular ejection fraction less than 40%.

’167 patent, col. 28, line 64 through col. 29, line 15.

6 The extensive information (the “label”) that Sanofi includes along with its
Multaq® product—which Watson and Sandoz propose to use for their generic versions
without any change material to this case—relies on the key studies described above.
Section 1 of the label, as revised in March 2014, is titled “Indications and Usage.” It
provides (emphasis and brackets in original):

Multaq® is indicated to reduce the risk of hospitalization for atrial

fibrillation in patients in sinus rhythm with a history of paroxysmal or
persistent atrial fibrillation (AF) [see Clinical Studies (14)].

That sentence says that Multaq® is indicated for use in certain patients and refers to
section 14 on “Clinical Studies” for identification of those patients. Section 14
primarily describes the ATHENA study (section 14.1), but also contains a short
description of the EURIDIS and ADONIS studies (section 14.2). And it refers to two
studies that had to be terminated early because of negative results in their patient
pools: the ANDROMEDA study (section 14.3) and the PALLAS study (section 14.4).

7 Both Watson and Sandoz plan to market their generic versions of Multaq® with
the same labeling, including sections 1 and 14. See AstraZeneca LP v. Apotex, Inc., 633
F.3d 1042, 1045–46 (Fed. Cir. 2010) (explaining that, in general, an applicant for an
abbreviated new drug application must “show that ‘the labeling proposed for the new
 384 MASUR & OUELLETTE ⋅ PATENT LAW

drug is the same as the labeling approved for the listed drug.’” (quoting 21 U.S.C.
§ 355(j)(2)(A)(v))).4

II

8 Watson and Sandoz challenge the district court’s inducement finding as to the
’167 patent [as well as other omitted issues].

9 Under 35 U.S.C. § 271(b), “[w]hoever actively induces infringement of a patent

shall be liable as an infringer.” Here, the district court found, the inducing act will be
the marketing by Watson and Sandoz of their generic dronedarone drugs with the
label described above. And the induced act will be the administration of dronedarone
by medical providers to patients meeting the criteria set forth in the ’167 patent
claims.

10 “In contrast to direct infringement, liability for inducing infringement attaches

only if the defendant knew of the patent and that ‘the induced acts constitute patent
infringement.’” Commil USA, LLC v. Cisco Sys., Inc., 575 U.S. 632 (2015) (quoting
Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754, 766 (2011)). Neither of those
two knowledge requirements is disputed here. If and when Watson and Sandoz receive
FDA approval and market dronedarone with the label at issue, they will know of the
’167 patent (they already do) and that a medical provider’s administration of the drug
to the claimed class of patients is an act of infringement (which Watson and Sandoz
do not dispute).

11 The dispute in this case involves an aspect of the connection between the
marketing and the medical providers’ infringement that is different from the two
knowledge requirements and is inherent in the word “induce” as it has been
understood in this area. The Supreme Court stated the following in Global-Tech:

The term “induce” means “[t]o lead on; to influence; to prevail on; to
move by persuasion or influence.” The addition of the adverb ‘actively’
suggests that the inducement must involve the taking of affirmative
steps to bring about the desired result.

563 U.S. at 760 (quoting Webster’s New International Dictionary (2d ed. 1945)). The
purposeful-causation connotation of that language is reinforced by the Court’s
statement: “When a person actively induces another to take some action, the inducer
obviously knows the action that he or she wishes to bring about.” Id.

12 Further reinforcement is found in the Supreme Court’s discussion of

inducement of copyright infringement in Metro-Goldwyn-Mayer Studios Inc. v.
Grokster Ltd., 545 U.S. 913, 936–37 (2005), which the Court in Global-Tech cited in

4 [Eds: Federal law requires a generic manufacturer to use the same label as originally

used for the patented drug (and approved by the FDA for that use) absent unusual
circumstances.]
 INDIRECT INFRINGEMENT 385

discussing patent infringement. In Grokster, the Court explained that inducement is

present where “‘active steps . . . taken to encourage direct infringement,’ such as
advertising an infringing use or instructing how to engage in an infringing use, show
an affirmative intent that the product be used to infringe.” 545 U.S. at 936. The Court
cited, for support, this court’s decision in Water Techs. Corp. v. Calco, Ltd., which
focused on intent and noted that intent is a factual determination that may rest on
circumstantial evidence. 850 F.2d 660, 668 (Fed. Cir. 1988). The Supreme Court in
Grokster held: “one who distributes a device with the object of promoting its use to
infringe copyright, as shown by clear expression or other affirmative steps taken to
foster infringement, is liable for the resulting acts of infringement by third parties.”
545 U.S. at 936–37.

13 This court has accordingly explained that, for a court to find induced
infringement, “[i]t must be established that the defendant possessed specific intent to
encourage another’s infringement.” DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1306
(Fed. Cir. 2006) (en banc in relevant part). The court has articulated certain necessary
conditions: the plaintiff must show “that the alleged infringer’s actions induced
infringing acts and that he knew or should have known his actions would induce
actual infringements.” DSU Med., 471 F.3d at 1306. And the court has repeatedly
explained that, for the finder of fact to find the required intent to encourage, “[w]hile
proof of intent is necessary, direct evidence is not required; rather, circumstantial
evidence may suffice.” Id. When proof of intent to encourage depends on the label
accompanying the marketing of a drug, “[t]he label must encourage, recommend, or
promote infringement.” Takeda Pharm. USA, Inc. v. West-Ward Pharm. Corp., 785
F.3d 625, 631 (Fed. Cir. 2015).

14 In this case, the district court relied on those standards. And, applying those
standards, the court found that Sanofi had proven intentional encouragement of
infringement of the [’167] claims. We review the district court’s finding of inducement
based on encouragement and inferred intent for clear error. See AstraZeneca LP v.
Apotex, Inc., 633 F.3d 1042, 1056 (Fed. Cir. 2010). We find no such error.

15 The label itself has a short “Indications and Usage” section, one sentence long.
It states what dronedarone is indicated for: it “is indicated to reduce the risk of
hospitalization for atrial fibrillation.” And it states which patients are covered by this
indication: “patients in sinus rhythm with a history of paroxysmal or persistent atrial
fibrillation (AF) [see Clinical Studies (14)].” The reference to the Clinical Studies
section (14) of the label expressly directs the reader to that section for elaboration of
the class of patients for whom the drug is indicated to achieve the stated objective,
i.e., reduced hospitalization. Section 14 leads with and features a subsection on the
ATHENA study, which sets forth the positive results, relating to reduced
hospitalization, for patients having the risk factors written into the ’167 patent. And
it is only the ATHENA subsection—not any of the three other brief subsections—that
identifies a class of patients as having been shown to achieve reduced hospitalization
from use of dronedarone. The EURIDIS/ADONIS subsection says nothing about
 386 MASUR & OUELLETTE ⋅ PATENT LAW

reduced hospitalization; and the ANDROMEDA and PALLAS subsections are

negative warnings, describing studies that had to be terminated early because of
adverse results. The label thus directs medical providers to information identifying
the desired benefit for only patients with the patent-claimed risk factors.

16 There was considerable testimony that this label encourages—and would be

known by Watson and Sandoz to encourage—administration of the drug to those
patients, thereby causing infringement. Approximately 77% of Multaq® prescriptions
have actually been written for patients with the claimed risk factors. Moreover, Dr.
Kim, an expert for Sanofi, testified that a person of ordinary skill in the art would
read the drug label and understand that the only FDA-approved use of dronedarone
came out of the ATHENA trial, and that a physician would find “clear encouragement”
from the label to use dronedarone in a manner that infringes the ’167 patent,
especially in light of label’s description of the ANDROMEDA study, which warns of
the safety concerns of using dronedarone on patients other than those for whom the
ATHENA trial showed reduced hospitalization. Dr. Zusman, who testified for Watson
and Sandoz, agreed that persons of skill in the art “look to drug labels, in part, for
information about the use of the drug in special or specific populations, and that it is
important for the [person of skill] to look at the label’s indications section to see if a
drug is indicated for administration to patients of certain characteristics with a
certain intent.” On the record in this case, the district court could draw the required
inducement inferences.

17 Watson and Sandoz contend that, because Multaq® has substantial

noninfringing uses not forbidden by the proposed labels, the district court could not
permissibly find intent to encourage an infringing use. But there is no legal or logical
basis for the suggested limitation on inducement. Section 271(b), on inducement, does
not contain the “substantial noninfringing use” restriction of section 271(c), on
contributory infringement. And the core holding of Grokster, a copyright decision that
drew expressly on patent and other inducement law, is precisely that a person can be
liable for inducing an infringing use of a product even if the product has substantial
noninfringing uses (like the peer-to-peer software product at issue there, which was
capable of infringing and non-infringing uses). 545 U.S. at 934–37. There is no basis
for a different inducement rule for drug labels.

18 The content of the label in this case permits the inference of specific intent to
encourage the infringing use. As noted above, inducement law permits the required
factual inferences about intended effects to rest on circumstantial evidence in
appropriate circumstances. Moreover, in AstraZeneca v. Apotex, the court upheld an
inducement finding without the kind of explicit limiting commands that Watson and
Sandoz suggest a label must contain. 633 F.3d at 1058–60. In Eli Lilly & Co. v. Teva
Parenteral Medicines, Inc., the court stated that “[d]epending on the clarity of the
[drug label’s] instructions, the decision to continue seeking FDA approval of those
instructions may be sufficient evidence of specific intent to induce infringement.” 845
F.3d 1357, 1368–69 (Fed. Cir. 2017). Unlike in Takeda, the inference in the present
 INDIRECT INFRINGEMENT 387

case is based on interpreting the label’s express statement of indications of use and
the internally referred-to elaboration of those indications. See 785 F.3d 625. And this
case is not like Vita-Mix Corp v. Basic Holding, Inc., in which the defendant, in its
(non-pharmaceutical) product instructions, encouraged a noninfringing use in a way
that showed an intent to discourage infringement. 581 F.3d 1317, 1328–29 (Fed. Cir.
2009). The evidence in this case supports the finding of intentional encouragement of
infringing use and, therefore, of inducement.

Note on Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011)

Sunbeam hired Global-Tech to produce a deep fryer meeting certain

specifications. Global-Tech purchased a deep fryer produced by another company and,
without telling its patent attorney that it was copying an existing product, asked its
attorney to investigate whether there were any patents covering the invention. The
attorney failed to locate the patent, Global-Tech produced the invention, and—having
induced Sunbeam to sell the infringing product—was sued by the patent owner for
inducement.

The problem for the patent owner was the difficulty in proving knowledge.
Global-Tech was aware of the potential that the deep fryer it was copying might be
covered by a patent, but it and its attorney never located the actual patent. Could
Global-Tech be said to have known of the patent’s existence?

In an 8-1 decision, the Supreme Court held that Global-Tech was liable for
inducement because it had engaged in “willful blindness”:

While the Courts of Appeals articulate the doctrine of willful blindness

in slightly different ways, all appear to agree on two basic
requirements: (1) The defendant must subjectively believe that there is
a high probability that a fact exists and (2) the defendant must take
deliberate actions to avoid learning of that fact. We think these
requirements give willful blindness an appropriately limited scope that
surpasses recklessness and negligence. Under this formulation, a
willfully blind defendant is one who takes deliberate actions to avoid
confirming a high probability of wrongdoing and who can almost be said
to have actually known the critical facts.

Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754, 769-70 (2011).

The best way to understand Global-Tech is as a slight expansion on the long-

standing requirement that the indirect infringer have knowledge of the infringement.
After Global-Tech, willful blindness will suffice. And though Global-Tech did not
involve contributory infringement under § 271(c), we can be almost certain that willful
blindness will suffice for contributory infringement liability as well. What do you
think motivated the court’s expansion of the knowledge standard? If the Court had
388 MASUR & OUELLETTE ⋅ PATENT LAW

not elected to adopt a “willful blindness” standard, would the patent holder have lost
the case? If you were Global-Tech’s lawyer, what would you have argued in defense of
your client?

It is notable that before Global-Tech, the Supreme Court had never definitively
decided whether willful blindness (or its close cousin, “deliberate indifference”) was
sufficient to satisfy a statutory requirement of knowledge, though several circuits had
found it to be. See U.S. v. Jacobs, 475 F.2d 270 (2d Cir. 1973); U.S. v. Giovannetti, 919
F.2d 1223 (7th Cir. 1990); U.S. v. Jewell, 532 F.2d 697 (9th Cir. 1976); U.S. v. Glick,
710 F.2d 639 (10th Cir. 1983). In his Global-Tech dissent, Justice Kennedy took the
Court to task for reaching a decision so critical to criminal law in a civil case, without
the benefit of briefing from the criminal bar. Glob.-Tech, 563 U.S. at 774 (Kennedy,
dissenting). This has been something of a quixotic quest on Justice Kennedy’s part.
Thirty-five years earlier, when he was “merely” Judge Kennedy of the Ninth Circuit,
he penned a dissent in an en banc case arguing against the adoption of willful
blindness as a substitute for knowledge in that circuit. Jewell, 532 F.2d at 705
(Kennedy, dissenting). However, Justice Kennedy was not able to convince a majority
of the Ninth Circuit—or even a single additional Supreme Court justice—to side with
him.

Discussion Questions: Inducement

1. Inducement and “Skinny” Labels. The outcome in Sanofi is driven by the

contents of the label that Sandoz and Watson planned to place on the drug. That label
directly referenced patented methods. Accordingly, it was reasonable to believe that a
doctor who read the label might be induced to practice the patented method. As the
opinion notes, Sandoz and Watson had little choice in the matter: under most
circumstances, the FDA requires generic drug labels to mirror the label on the brand-
name drug, and Sanofi’s label included the reference to the patented method.

However, under certain circumstances, a generic manufacturer is permitted to

use a so-called “skinny” label that describes some but not other potential uses for the
drug. See 21 U.S.C. § 355(j)(2)(A)(viii). Generic manufacturers employ these skinny
labels in order to avoid precisely the problem that confronted Sandoz and Watson:
manufacturing a drug where the patent on the chemical has expired, but one method
of using the drug remains patented. In GlaxoSmithKline v. Teva Pharmaceuticals, 7
F.4th 1320 (Fed. Cir. 2021), the Federal Circuit (over a dissent from Chief Judge
Sharon Prost) held that Teva had induced infringement of a patented method despite
its use of a skinny label that did not indicate the patented method. Part of the court’s
reasoning was that the label indicated that the generic drug was chemically and
therapeutically identical to the branded drug (as it must be), and that doctors would
have known to use the branded drug to practice the patented method. Does this seem
like the right outcome? How direct or explicit should a manufacturer’s labeling have
to be before the manufacturer becomes liable for inducing infringement?
 INDIRECT INFRINGEMENT 389

2. What Constitutes Inducement? Recall that 35 U.S.C. § 271(b) requires not

just inducement but “active inducement.” As Sanofi makes clear, providing a label
that references a patented method is enough to constitute active inducement. What
other sorts of activities are sufficient to constitute active infringement? Consider the
following problems; which of these cases should give rise to inducement liability?

(a) A firm sells a medical device used to practice a patented method and
provides instructions for how to use that product in the patented manner.
See C.R. Bard, Inc. v. Adv. Cardiovascular Sys., Inc., 911 F.2d 670 (Fed.
Cir. 1990).

(b) A firm floods the market with devices that cut vegetables into spiral curls
before a patent issues on the device. Once the patent is issued, the firm
stops selling the device. However, all of the customers who purchased the
device are now direct infringers each time they make use of it. See Nat’l
Presto Indus., Inc. v. W. Bend Co., 76 F.3d 1185, 1196 (Fed. Cir. 1996).

(c) One semiconductor firm provides technical support to another

semiconductor firm that is engaged in direct infringement. That technical
support includes offering technical presentations to the direct infringer on
how to use the infringing technology and helping to troubleshoot problems
that the direct infringer has with the technology. See MEMC Elec.
Materials, Inc. v. Mitsubishi Materials Silicon Corp., 420 F.3d 1369, 1372
(Fed. Cir. 2005).

3. The Targets of an Indirect Infringement Suit. Why do you think Sanofi

bothered to sue Sandoz and Watson? Why not just sue the direct infringers, the
doctors who are using the drug in a manner that violates the ’167 patent?5 After all,
it is easier to prove direct infringement than indirect infringement because direct
infringement is strict liability. More generally, why does indirect liability exist if there
is always also a direct infringer—isn’t it redundant?

4. The Difference Between Contributory Infringement and Inducement. Were

Sandoz and Watson liable as contributory infringers under § 271(c)? It’s not likely,
because the drug they planned to sell had substantial noninfringing uses. So this case
provides an example of parties who are liable for inducement without being liable as
contributory infringers. Contributory infringement also requires that the infringer
sell or import a component of a patented invention (or something used in practicing a
patented method). Accordingly, a party could be liable for inducing infringement by

5 Note that patentees have no remedy against infringement by medical practitioners

performing a “medical activity” under 35 U.S.C. § 287(c), but this exception does not apply here
because “medical activity” is defined to cover surgical methods but not methods of use of drugs:
“‘medical activity’ means the performance of a medical or surgical procedure on a body, but
shall not include (i) the use of a patented machine, manufacture, or composition of matter in
violation of such patent, (ii) the practice of a patented use of a composition of matter in
violation of such patent, or (iii) the practice of a process in violation of a biotechnology patent.”
390 MASUR & OUELLETTE ⋅ PATENT LAW

providing instructions for practicing a patented method without being liable for
contributory infringement if it did not sell anything.

But now consider the converse. Is it possible to be liable as a contributory

infringer without also being liable as an inducer? Consider what Aro was doing: it
manufactured and sold fabric pieces that could only be used in an infringing manner.
So far as we know, it did not provide instructions for how to use those pieces or
otherwise urge anyone to use them to infringe. But what could Aro have possibly
expected the purchasers to do with the fabric other than infringe? Is manufacturing
and selling the fabric enough, by itself, to constitute inducement? More generally, can
a party ever be a contributory infringer under § 271(c) without inducing infringement
under § 271(b)? Has contributory infringement become entirely redundant? Liability
for inducement does require a showing of specific intent to cause infringement that
isn’t required for contributory infringement, but this intent can often be inferred from
the kind of circumstantial evidence that gave rise to liability in Global-Tech.

5. Letters from Counsel and Commil v. Cisco. Both contributory infringement

and inducement depend on the indirect infringer having knowledge of both the patent
and the fact that it is infringing the patent. But of course the mere fact that there is a
patent does not mean that infringement is taking place. The patent might be invalid,
or the patent’s claim terms might be best construed in such a way that the patent is
not infringed. Even if a potential indirect infringer has knowledge of the existence of
a patent, it would seem that a reasonably grounded good-faith belief that the patent
is not infringed should defeat a claim of indirect infringement.

Based on this understanding, firms at risk of indirect infringement liability

have long solicited “opinion letters” from law firms stating that, in the opinion of the
attorney drafting the letter, the patent is invalid or not infringed.6 If the letter is
credible, it can defeat the knowledge requirement for indirect infringement. That is,
even if the letter is wrong, and the court holds that the patent is valid and infringed
(by the direct infringer), the indirect infringer might still escape liability because it
lacks the necessary knowledge. What sorts of incentives do you think this doctrine
creates for the law firms hired to produce opinion letters? Is it in the client’s interest
for the law firm to produce the most honest, accurate letter possible? What limits a
potential infringer’s ability to shop for a favorable letter, or what might limit a law
firm’s ability to write a letter in bad faith that reaches a legal conclusion the firm does
not believe?

In Commil USA, LLC v. Cisco Systems, Inc., 575 U.S. 63 (2015), the Supreme
Court held that while a good-faith belief that the patent was not infringed was a valid

6An accused infringer will typically seek an opinion letter from a law firm other than
the firm that will represent it at trial, in order to be able to disclose the letter to the court
without appearing to waive its attorney-client privilege. A thorough opinion letter by a
reputable firm can cost $10,000–$25,000, and firms often view them as a means of cultivating
business with potential new clients.
 INDIRECT INFRINGEMENT 391

defense against a charge of indirect infringement, a good-faith belief that the patent
was invalid was not. Wrote the Court:

The question the Court confronts today concerns whether a defendant’s

belief regarding patent validity is a defense to a claim of induced
infringement. It is not. The scienter element for induced infringement
concerns infringement; that is a different issue than validity. Section
271(b) requires that the defendant “actively induce[d] infringement.”
That language requires intent to “bring about the desired result,” which
is infringement. And because infringement and validity are separate
issues under the Act, belief regarding validity cannot negate the
scienter required under § 271(b).

Id. at 1928. Accordingly, for an opinion letter to be valuable, the letter must state that
the patent is not infringed. A belief that the patent is invalid is unhelpful to the
accused indirect infringer (unless that belief happens to be true).

Does the Court’s rule make any sense? In dissent, Justice Scalia wrote: “To
talk of infringing an invalid patent is to talk nonsense. . . . Because only valid patents
can be infringed, anyone with a good-faith belief in a patent’s invalidity necessarily
believes the patent cannot be infringed.” Id. at 1931. What is the best defense you can
offer for the distinction the Court draws between infringement and invalidity? What
incentives will this create for the lawyers who draft opinion letters after Commil? How
will such an attorney be inclined to interpret a patent’s claims—broadly or narrowly?

Commil was decided in the shadow of a perceived problem with non-practicing

entities (or, less charitably, “patent trolls”) asserting weak (i.e., very likely to be
invalid) patents. These patents were often drafted with implausibly broad claims, so
the best defense to them was frequently to claim that they were invalid, rather than
that they were not infringed. Even if the patent troll was likely to lose at trial, the
troll could often settle the lawsuit for nuisance value. And given the high cost of patent
lawsuits, nuisance value could be quite substantial—tens or even hundreds of
thousands of dollars. Cisco and other troll defendants had relied on opinion letters
asserting invalidity as a defense against trolls, an avenue that this opinion foreclosed.
In its opinion, the Court went so far as to mention the problem of patent trolls
explicitly. It explained that patent defendants could use other procedural tools to
defend themselves against shakedowns from trolls, including requesting Rule 11
sanctions or attorneys’ fees (which we will discuss in Chapter 16) in response to
frivolous lawsuits. Do you think these are equally effective mechanisms?

6. Other Indicators of Knowledge. A letter from counsel is of course not the only
means by which an accused indirect infringer can defeat the requirement of
knowledge. If the accused infringer obtains a favorable preliminary ruling in a case,
which seems likely to dispose of the case in the infringer’s favor, that too can eliminate
the knowledge necessary to be liable. At the same time, the preliminary ruling has to
be plausible, and the alleged infringer has to actually believe that it is likely to win
392 MASUR & OUELLETTE ⋅ PATENT LAW

the case! In one recent case, the defendant obtained a very favorable claim
construction that, if it had stood, would have essentially disposed of the case in the
defendant’s favor. However, the claim construction was self-evidently flawed, and the
district court later withdrew it and substituted a construction less favorable to the
defendant. The Federal Circuit held that the defendant could point to the initial claim
construction as a piece of evidence indicating that it lacked the necessary knowledge
while that claim construction was in effect. But the plaintiff was still entitled to argue
on remand that the defendant did not and could not have believed the claim
construction was correct and thus might still have the necessary knowledge. As the
court explained, the defendant “might have believed that the March 2011 claim-
construction ruling was erroneous (though reasonable) and would likely be reversed
(as it was in 2013).” TecSec, Inc. v. Adobe Inc., 978 F.3d 1278, 1287 (Fed. Cir. 2020).

This result stemmed from the fact that the knowledge standard is inherently
subjective, rather than objective. Id. at 1286-87. Even if the defendant has an
objectively strong argument that the patent is not infringed, the defendant can still
be held liable if it nonetheless believes that the patent is being infringed. And even if
the defendant has an objectively weak argument that the patent is not infringed, the
defendant cannot be held liable if it believes that the patent is not infringed. (For the
many infringers that are corporations, the relevant state of mind is the state of mind
of whomever is making decisions for the corporation.) At the same time, American
courts do not administer truth serum or lie detector tests to key witnesses, and it is
rare that the CEO of a corporation will Tweet that she is aware that the corporation
is inducing infringement. Accordingly, it is typically necessary to rely on objective
facts and circumstances—including the strength of the letter from counsel or judicial
decision being relied upon—when judging even subjective states of mind. Are there
other forms of evidence that might be probative of subjective knowledge? Is subjective
knowledge the right standard?
 OTHER INFRINGEMENT ISSUES 393

11. Other Infringement Issues

The majority of patent infringement cases will fall under the ordinary rules for
direct and indirect patent infringement that were discussed in Chapters 9 and 10. But
in some cases, an entity will engage in conduct that seems to undermine the patent
right but doesn’t fall within these rules. In this chapter, we discuss the law that has
evolved to cover four such situations: (A) divided infringement, where different
entities carry out different steps of a method patent; (B) cross-border infringement,
where some of the infringing conduct occurs overseas; (C) government infringement,
where the infringing entity has sovereign immunity; and (D) pharmaceutical
infringement, where specialized statutory frameworks allow resolution of patent
disputes before an infringing product is on the market.

A. Divided Infringement
Imagine a widget, covered by an existing patent, that is assembled in two
different locations. A firm in California builds half of the widget and then ships it to
a firm in Illinois, where the remainder of the widget is assembled. Despite the fact
that the widget was assembled in two different places, by two different firms, there is
still a direct infringer: the Illinois firm, which completed the widget. Indeed, when an
infringing product is created, there will always be a direct infringer: the party that
put the final components in place, thus creating the full invention.

But the same is not necessarily true for a patented method. Suppose that the
California firm performs some steps of a patented method, and then the Illinois firm
performs the remaining steps of the patented method. All of the elements of the claim
have been performed (by someone), but no single party has performed all of the steps.
Thus, it would seem that there is no direct infringer. And as the Supreme Court
explained in Aro II (in the previous chapter), without a direct infringer there can be
no indirect infringer. Is it possible, then, that no one can be held liable for infringing
the patent?

This is what is known as the “divided infringement problem”: all the elements
of the claim have been met, but not by any single party that can obviously be held
responsible. This issue has taken on much greater significance in the age of internet-
based firms and internet patents, because it is easier for two or more firms to
coordinate to perform the steps of a patented process. In fact, most interactive apps
and websites require the user to take some actions and the app’s owner or operator to
take some actions in order for the app to perform its stated functions. Think about
posting a tweet on Twitter, checking your account balance with a banking app, or
uploading a photo to Instagram—the app does not function without actions by both
 394 MASUR & OUELLETTE ⋅ PATENT LAW

the user and the firm that built the app. Depending upon how a patent covering this
type of invention is written, it is entirely possible that the users and the app’s firm
might collectively be performing all of the steps of the process, without any one entity
performing all of them itself.

When this is the case, should any party be held liable for infringement? If so,
what type of infringement, and on what basis? This is the question that the Federal
Circuit, and then the Supreme Court, and then the Federal Circuit again, confronted
in Limelight v. Akamai.

Limelight Networks v. Akamai Techs., 572 U.S. 915 (2014)

Justice Alito delivered the opinion of the Court.

1 This case presents the question whether a defendant may be liable for inducing
infringement of a patent under 35 U.S.C. § 271(b) when no one has directly infringed
the patent under § 271(a) or any other statutory provision. The statutory text and
structure and our prior case law require that we answer this question in the negative.
We accordingly reverse the Federal Circuit, which reached the opposite conclusion.

2 Respondent the Massachusetts Institute of Technology is the assignee of U.S.

Patent No. 6,108,703 (’703 patent), which claims a method of delivering electronic data
using a “content delivery network,” or “CDN.” Respondent Akamai Technologies, Inc.,
is the exclusive licensee. Proprietors of Web sites, known as “content providers,”
contract with Akamai to deliver their Web sites’ content to individual Internet users.
The ’703 patent provides for the designation of certain components of a content
provider’s Web site (often large files, such as video or music files) to be stored on
Akamai’s servers and accessed from those servers by Internet users. The process of
designating components to be stored on Akamai’s servers is known as “tagging.” By
“aggregat[ing] the data demands of multiple content providers with differing peak
usage patterns and serv[ing] that content from multiple servers in multiple locations,”
as well as by delivering content from servers located in the same geographic area as
the users who are attempting to access it, Akamai is able to increase the speed with
which Internet users access the content of its customers’ Web sites.

3 Petitioner Limelight Networks, Inc., also operates a CDN and carries out
several of the steps claimed in the ’703 patent. But instead of tagging those
components of its customers’ Web sites that it intends to store on its servers (a step
included in the ’703 patent), Limelight requires its customers to do their own tagging.
Respondents claim that Limelight “provides instructions and offers technical
 OTHER INFRINGEMENT ISSUES 395

assistance” to its customers regarding how to tag, but the record is undisputed that
Limelight does not tag the components to be stored on its servers.

4 In 2006, respondents sued Limelight, claiming patent infringement. The case

was tried to a jury, which found that Limelight had committed infringement and
awarded more than $40 million in damages. [The district court granted Limelight’s
motion for judgment as a matter of law in light of Muniauction, Inc. v. Thomson Corp.,
532 F.3d 1318 (2008), which held that direct infringement requires a defendant to
either perform each step of a claimed method itself, or to exercise control or direction
over performance of the steps it does not itself perform. A Federal Circuit panel
affirmed.]

5 The Federal Circuit granted en banc review and reversed. The en banc court
found it unnecessary to revisit its § 271(a) direct infringement case law. Instead, it
concluded that the “evidence could support a judgment in [respondents’] favor on a
theory of induced infringement” under § 271(b). This was true, the court explained,
because § 271(b) liability arises when a defendant carries out some steps constituting
a method patent and encourages others to carry out the remaining steps—even if no
one would be liable as a direct infringer in such circumstances, because those who
performed the remaining steps did not act as agents of, or under the direction or
control of, the defendant. The Court of Appeals did not dispute that “there can be no
indirect infringement without direct infringement,” but it explained that “[r]equiring
proof that there has been direct infringement . . . is not the same as requiring proof
that a single party would be liable as a direct infringer.”

6 Limelight sought certiorari, which we granted.

II

7 Neither the Federal Circuit nor respondents dispute the proposition that
liability for inducement must be predicated on direct infringement. One might think
that this simple truth is enough to dispose of this appeal. But the Federal Circuit
reasoned that a defendant can be liable for inducing infringement under § 271(b) even
if no one has committed direct infringement within the terms of § 271(a) (or any other
provision of the patent laws), because direct infringement can exist independently of
a violation of these statutory provisions.

8 The Federal Circuit’s analysis fundamentally misunderstands what it means

to infringe a method patent. A method patent claims a number of steps; under this
Court’s case law, the patent is not infringed unless all the steps are carried out. The
Federal Circuit held in Muniauction that a method’s steps have not all been performed
as claimed by the patent unless they are all attributable to the same defendant, either
because the defendant actually performed those steps or because he directed or
controlled others who performed them. See 532 F.3d at 1329–30. Assuming without
 396 MASUR & OUELLETTE ⋅ PATENT LAW

deciding that the Federal Circuit’s holding in Muniauction is correct, there has simply
been no infringement of the method in which respondents have staked out an interest,
because the performance of all the patent’s steps is not attributable to any one person.
And, as both the Federal Circuit and respondents admit, where there has been no
direct infringement, there can be no inducement of infringement under § 271(b).

9 The Federal Circuit’s contrary view would deprive § 271(b) of ascertainable

standards. If a defendant can be held liable under § 271(b) for inducing conduct that
does not constitute infringement, then how can a court assess when a patent holder’s
rights have been invaded?

10 Section 271(f)(1) reinforces our reading of § 271(b). That subsection imposes

liability on a party who “supplies or causes to be supplied in or from the United States
all or a substantial portion of the components of a patented invention . . . in such
manner as to actively induce the combination of such components outside of the
United States in a manner that would infringe the patent if such combination occurred
within the United States” (emphasis added). As this provision illustrates, when
Congress wishes to impose liability for inducing activity that does not itself constitute
direct infringement, it knows precisely how to do so. The courts should not create
liability for inducement of non-infringing conduct where Congress has elected not to
extend that concept.

11 The Federal Circuit seems to have adopted the view that Limelight induced
infringement on the theory that the steps that Limelight and its customers perform
would infringe the ’703 patent if all the steps were performed by the same person. But
we have already rejected the notion that conduct which would be infringing in altered
circumstances can form the basis for contributory infringement, and we see no reason
to apply a different rule for inducement. In Deepsouth Packing Co. v. Laitram Corp.,
406 U.S. 518 (1972), a manufacturer produced components of a patented machine and
then exported those components overseas to be assembled by its foreign customers.1
(The assembly by the foreign customers did not violate U.S. patent laws.) In both
Deepsouth and this case, the conduct that the defendant induced or contributed to
would have been infringing if committed in altered circumstances: in Deepsouth if the
machines had been assembled in the United States, and in this case if performance of
all of the claimed steps had been attributable to the same person. In Deepsouth, we
rejected the possibility of contributory infringement because the machines had not
been assembled in the United States, and direct infringement had consequently never
occurred. Similarly, in this case, performance of all the claimed steps cannot be
attributed to a single person, so direct infringement never occurred. Limelight cannot
be liable for inducing infringement that never came to pass.

1 [n.4 in opinion] Section 271(f) now prohibits the exporter’s conduct at issue in
Deepsouth.
 OTHER INFRINGEMENT ISSUES 397

12 Respondents, like the Federal Circuit, criticize our interpretation of § 271(b)

as permitting a would-be infringer to evade liability by dividing performance of a
method patent’s steps with another whom the defendant neither directs nor controls.
We acknowledge this concern. Any such anomaly, however, would result from the
Federal Circuit’s interpretation of § 271(a) in Muniauction. A desire to avoid
Muniauction’s natural consequences does not justify fundamentally altering the rules
of inducement liability that the text and structure of the Patent Act clearly require—
an alteration that would result in its own serious and problematic consequences,
namely, creating for § 271(b) purposes some free-floating concept of “infringement”
both untethered to the statutory text and difficult for the lower courts to apply
consistently.

III

13 Respondents ask us to review the merits of the Federal Circuit’s Muniauction

rule for direct infringement under § 271(a). We decline to do so today.

14 In the first place, the question presented is clearly focused on § 271(b), not
§ 271(a). We granted certiorari on the following question: “Whether the Federal
Circuit erred in holding that a defendant may be held liable for inducing patent
infringement under 35 U.S.C. § 271(b) even though no one has committed direct
infringement under § 271(a).” The question presupposes that Limelight has not
committed direct infringement under § 271(a). And since the question on which we
granted certiorari did not involve § 271(a), petitioner did not address that important
issue in its opening brief. Our decision on the § 271(b) question necessitates a remand
to the Federal Circuit, and on remand, the Federal Circuit will have the opportunity
to revisit the § 271(a) question if it so chooses.

The Aftermath of Akamai

On remand, the Federal Circuit did not take the hint. The Federal Circuit
panel ignored the Supreme Court’s rather unsubtle suggestion that it rethink the
Muniauction doctrine, which the Supreme Court had identified as the source of the
problem, and reaffirmed the Muniauction rule that one party was responsible for
another party’s actions only when there was (1) a joint enterprise or (2) direct
supervisory control.

That view did not stand long, however. The Federal Circuit quickly took the
case en banc and issued the following opinion:
 398 MASUR & OUELLETTE ⋅ PATENT LAW

Akamai Techs. v. Limelight Networks, 797 F.3d 1020 (Fed. Cir. 2015) (en banc)

Per Curiam.

1 This case was returned to us by the United States Supreme Court, noting “the
possibility that [we] erred by too narrowly circumscribing the scope of § 271(a)” and
suggesting that we “will have the opportunity to revisit the § 271(a) question.” We
hereby avail ourselves of that opportunity.

2 Sitting en banc, we unanimously set forth the law of divided infringement

under 35 U.S.C. § 271(a). We conclude that, in this case, substantial evidence supports
the jury’s finding that Limelight Networks, Inc. directly infringes U.S. Patent
6,108,703 under § 271(a). We therefore reverse the district court’s grant of judgment
of noninfringement as a matter of law.

I. Divided Infringement

3 Direct infringement under § 271(a) occurs where all steps of a claimed method
are performed by or attributable to a single entity. See BMC Res., Inc. v. Paymentech,
L.P., 498 F.3d 1373, 1379–81 (Fed. Cir. 2007). Where more than one actor is involved
in practicing the steps, a court must determine whether the acts of one are
attributable to the other such that a single entity is responsible for the infringement.
We will hold an entity responsible for others’ performance of method steps in two sets
of circumstances: (1) where that entity directs or controls others’ performance, and (2)
where the actors form a joint enterprise.

4 To determine if a single entity directs or controls the acts of another, we

continue to consider general principles of vicarious liability. In the past, we have held
that an actor is liable for infringement under § 271(a) if it acts through an agent
(applying traditional agency principles) or contracts with another to perform one or
more steps of a claimed method. We conclude, on the facts of this case, that liability
under § 271(a) can also be found when an alleged infringer conditions participation in
an activity or receipt of a benefit upon performance of a step or steps of a patented
method and establishes the manner or timing of that performance. Cf. Metro–
Goldwyn–Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 930 (2005) (stating that
an actor “infringes vicariously by profiting from direct infringement” if that actor has
the right and ability to stop or limit the infringement). In those instances, the third
party’s actions are attributed to the alleged infringer such that the alleged infringer
becomes the single actor chargeable with direct infringement. Whether a single actor
directed or controlled the acts of one or more third parties is a question of fact,
reviewable on appeal for substantial evidence, when tried to a jury.

5 Alternatively, where two or more actors form a joint enterprise, all can be
charged with the acts of the other, rendering each liable for the steps performed by
the other as if each is a single actor. A joint enterprise requires proof of four elements:
 OTHER INFRINGEMENT ISSUES 399

(1) an agreement, express or implied, among the members of the group;

(2) a common purpose to be carried out by the group;

(3) a community of pecuniary interest in that purpose, among the

members; and

(4) an equal right to a voice in the direction of the enterprise, which

gives an equal right of control.

Restatement (Second) of Torts § 491 cmt. c. As with direction or control, whether

actors entered into a joint enterprise is a question of fact, reviewable on appeal for
substantial evidence.

6 We believe these approaches to be most consistent with the text of § 271(a), the
statutory context in which it appears, the legislative purpose behind the Patent Act,
and our past case law. Section 271(a) is not limited solely to principal-agent
relationships, contractual arrangements, and joint enterprise, as the vacated panel
decision held. Rather, to determine direct infringement, we consider whether all
method steps can be attributed to a single entity.

II. Application to the Facts of this Case

7 The facts of this case need not be repeated in detail once again, but the
following constitutes the basic facts. In 2006, Akamai Technologies, Inc. filed a patent
infringement action against Limelight alleging infringement of several patents,
including the ’703 patent. The case proceeded to trial, at which the parties agreed that
Limelight’s customers—not Limelight—perform the “tagging” and “serving” steps in
the claimed methods. For example, as for claim 34 of the ’703 patent, Limelight
performs every step save the “tagging” step, in which Limelight’s customers tag the
content to be hosted and delivered by Limelight’s content delivery network. After the
close of evidence, the district judge instructed the jury that Limelight is responsible
for its customers’ performance of the tagging and serving method steps if Limelight
directs or controls its customers’ activities. The jury found that Limelight infringed
claims 19, 20, 21, and 34 of the ’703 patent. Following post-trial motions, the district
court [granted Limelight’s motion for judgment of noninfringement as a matter of
law].

8 We reverse and reinstate the jury verdict. The jury heard substantial evidence
from which it could find that Limelight directs or controls its customers’ performance
of each remaining method step, such that all steps of the method are attributable to
Limelight. Specifically, Akamai presented substantial evidence demonstrating that
Limelight conditions its customers’ use of its content delivery network upon its
customers’ performance of the tagging and serving steps, and that Limelight
establishes the manner or timing of its customers’ performance. We review the
 400 MASUR & OUELLETTE ⋅ PATENT LAW

evidence supporting “conditioning use of the content delivery network” and

“establishing the manner or timing of performance” in turn.

9 First, the jury heard evidence that Limelight requires all of its customers to
sign a standard contract. The contract delineates the steps customers must perform if
they use the Limelight service. These steps include tagging and serving content. As to
tagging, Limelight’s form contract provides: “Customer shall be responsible for
identifying via the then current [Limelight] process all [URLs] of the Customer
Content to enable such Customer Content to be delivered by the [Limelight network].”
In addition, the contract requires that Limelight’s customers “provide [Limelight]
with all cooperation and information reasonably necessary for [Limelight] to
implement the [Content Delivery Service].” As for the serving step, the form contract
states that Limelight is not responsible for failures in its content delivery network
caused by its customers’ failure to serve content. If a customer’s server is down,
Limelight’s content delivery network need not perform. Thus, if Limelight’s customers
wish to use Limelight’s product, they must tag and serve content. Accordingly,
substantial evidence indicates that Limelight conditions customers’ use of its content
delivery network upon its customers’ performance of the tagging and serving method
steps.

10 Substantial evidence also supports finding that Limelight established the

manner or timing of its customers’ performance. Upon completing a deal with
Limelight, Limelight sends its customer a welcome letter instructing the customer
how to use Limelight’s service. In particular, the welcome letter tells the customer
that a Technical Account Manager employed by Limelight will lead the
implementation of Limelight’s services. The welcome letter also contains a hostname
assigned by Limelight that the customer “integrate[s] into [its] webpages.” This
integration process includes the tagging step. Moreover, Limelight provides step-by-
step instructions to its customers telling them how to integrate Limelight’s hostname
into its webpages if the customer wants to act as the origin for content. If Limelight’s
customers do not follow these precise steps, Limelight’s service will not be available.
Limelight’s Installation Guidelines give Limelight customers further information on
tagging content. Lastly, the jury heard evidence that Limelight’s engineers
continuously engage with customers’ activities. Initially, Limelight’s engineers assist
with installation and perform quality assurance testing. The engineers remain
available if the customer experiences any problems. In sum, Limelight’s customers do
not merely take Limelight’s guidance and act independently on their own. Rather,
Limelight establishes the manner and timing of its customers’ performance so that
customers can only avail themselves of the service upon their performance of the
method steps.

11 We conclude that the facts Akamai presented at trial constitute substantial

evidence from which a jury could find that Limelight directed or controlled its
customers’ performance of each remaining method step. As such, substantial evidence
 OTHER INFRINGEMENT ISSUES 401

supports the jury’s verdict that all steps of the claimed methods were performed by or
attributable to Limelight. Therefore, Limelight is liable for direct infringement.

Discussion Questions: Divided Infringement

1. Expansion of Liability. Under the new Federal Circuit rule, a party is

responsible for the actions of another if it “conditions participation in an activity or
receipt of a benefit upon performance of a step or steps of a patented method and
establishes the manner or timing of that performance.” Why do you think the Federal
Circuit chose this language and this rule? What sort of conduct is it attempting to
reach? Which sorts of parties will be most obviously captured by the new rule?

2. Direct or Indirect Infringement? At the end of the day, is Limelight a direct

or indirect infringer? Does it matter? How do you think firms in Limelight’s position
viewed the outcome of this case?

3. Alternatives. Suppose the Federal Circuit had declined to revisit

Muniauction. Akamai would have lost this case, of course, but what about similarly
situated parties going forward? If you were advising a company like Akamai—or, for
that matter, any firm designing an app—can you think of a way of drafting your claims
to circumvent the divided infringement problem? Could Akamai’s claims have been
drafted to hold Limelight liable, even though some of the steps essential to the
invention were performed by a different party?

If your answer to the prior question is “yes,” and you believe that claims could
be drafted to capture Limelight’s actions even under the old law, do you think the
Federal Circuit’s en banc decision in Limelight was necessary? Would the Federal
Circuit have been better off leaving the law as it stood and relying on patent
applicants to draft better claims?

Practice Problems: Divided Infringement

Consider the following claims and allegedly infringing conduct involving more
than one party. For each claim:

(a) Is either party liable for infringement after Akamai v. Limelight?

(b) Would either party have been liable for infringement under Muniauction, before
Akamai was decided?
(c) If your answer to (b) is “no,” can you figure out a way to redraft the claim such that
one party would be liable?

Claim 1: A method of treating cancer, comprising administering an

effective amount of folic acid once daily for seven days, then
administering an effective amount of pemetrexed disodium.
402 MASUR & OUELLETTE ⋅ PATENT LAW

In practice, a drug company sells pemetrexed disodium with a prescribing physician

information sheet that states: “Instruct patients to initiate folic acid 400 micrograms
to 1000 micrograms orally once daily beginning seven days before the first dose of
pemetrexed disodium.” There is no evidence that doctors verify compliance with these
instructions or threaten denial of pemetrexed disodium treatment. Pemetrexed
disodium is administered intravenously to cancer patients by a doctor. See Eli Lilly &
Co. v. Teva Parenteral Medicines, 845 F.3d 1357 (Fed. Cir. 2017).

Claim 2: A method of allowing airline passengers to lock their luggage

while still enabling luggage inspection by the Transportation Security
Administration (TSA) comprising: (a) providing to a customer a special
luggage lock capable of being opened by a master key, (b) the TSA acting
pursuant to a prior agreement to look for the special luggage lock while
screening luggage, and, upon finding said special luggage lock, using
the master key to, if necessary, open the individual piece of luggage.

In practice, the lock manufacturer provides a master key to TSA and sells special
luggage locks. Some customers choose to lock their luggage. In some cases, TSA agents
elect to unlock a customer’s luggage to inspect its contents; in other cases, they do not.
See Travel Sentry v. Tropp, 877 F.3d 1370 (Fed. Cir. 2017).

B. Cross-Border Infringement
One of the key principles of private international law is territoriality: the idea
that a state’s laws only have force within the state’s boundaries. In general, there is a
strong presumption against the extraterritorial application of U.S. law. Patent law is
no exception. In Brown v. Duchesne, 60 U.S. 183 (1856), the Supreme Court stated
that the Constitution’s IP Clause grants a power that “is domestic in its character,
and necessarily confined within the limits of the United States.” The patentee’s rights
“cannot extend beyond the limits to which the law itself is confined.” Id.

But the original conception of territoriality, which limited legal effects to

geographic boundaries, was created when the effects of commercial behavior were
largely local. Over time, the United States has adopted the “effects doctrine,” under
which its laws may reach foreign conduct that has substantial effects within the
United States. As patentable goods have increasingly crossed national borders, this
controversial expansion in the reach of U.S. law has occurred in patent law as well. In
this section, we examine two recent additions to the patent infringement statute:
§ 271(f), which creates liability for exporting “components” of a patented invention for
“combination” abroad, and § 271(g), which creates liability for importing, offering to
sell, selling, or using within the United States a product made by a process patented
in the United States.
 OTHER INFRINGEMENT ISSUES 403

The direct patent infringement statute we have discussed so far, 35 U.S.C.

§ 271(a), is limited to “whoever without authority makes, uses, offers to sell, or sells
any patented invention, within the United States or imports into the United States”
(emphasis added). Performing a patented process or assembling a patented device
outside the United States is not an infringement under this statute. Thus, when a
manufacturer was sued under § 271(a) in 1967 for selling parts of a patented shrimp
deveining machine for assembly and use abroad, the Supreme Court held that this
was not a § 271(a) infringement. Deepsouth Packing Co. v. Laitram Corp., 406 U.S.
518 (1972). The Court stated that it would require “a clear congressional indication of
intent” to extend U.S. patent law “beyond the limits of the United States.” Id. at 531.

Congress responded with such a clear indication of intent in 1984 by enacting

§ 271(f) to create liability for this kind of activity:

35 U.S.C. § 271(f)

(1) Whoever without authority supplies or causes to be supplied in or

from the United States all or a substantial portion of the
components of a patented invention, where such components are
uncombined in whole or in part, in such manner as to actively induce
the combination of such components outside of the United States in
a manner that would infringe the patent if such combination
occurred within the United States, shall be liable as an infringer.

(2) Whoever without authority supplies or causes to be supplied in or

from the United States any component of a patented invention that
is especially made or especially adapted for use in the invention and
not a staple article or commodity of commerce suitable for
substantial noninfringing use, where such component is
uncombined in whole or in part, knowing that such component is so
made or adapted and intending that such component will be
combined outside of the United States in a manner that would
infringe the patent if such combination occurred within the United
States, shall be liable as an infringer.

Note the parallels between § 271(f)(1) and § 271(b) and between § 271(f)(2) and
§ 271(c): this new statute creates liability for exporting products that induce or
contribute to foreign conduct that would have been direct infringement under § 271(a)
had it occurred in the United States. As the Supreme Court stated in Limelight v.
Akamai, 572 U.S. 915, 922 (2014), “when Congress wishes to impose liability for
inducing activity that does not itself constitute direct infringement, it knows precisely
how to do so.”

One limitation on § 271(f) is that it doesn’t apply to method claims under the
Federal Circuit’s en banc decision in Cardiac Pacemakers v. St. Jude Medical, 576
404 MASUR & OUELLETTE ⋅ PATENT LAW

F.3d 1348 (Fed. Cir. 2009). The court noted that “a component of a tangible product,
device, or apparatus is a tangible part of the product, device, or apparatus, whereas a
component of a method or process is a step in that method or process,” and that the
component of a method cannot be “supplied” as required by the statutory language.
Id. at 1362–64.

In 1988, Congress closed another perceived loophole in the patent infringement

statute related to products made abroad by processes patented in the United States.
Here, the perceived problem was that parties would use a patented process overseas
to make a product and then import that product into the United States. If only the
process, and not the product, were patented, this would allow the importer to evade
the U.S. patent while still reaping the full benefits of infringement. Congress’s
response was to pass § 271(g):

35 U.S.C. § 271(g)

Whoever without authority imports into the United States or offers to

sell, sells, or uses within the United States a product which is made by
a process patented in the United States shall be liable as an infringer,
if the importation, offer to sell, sale, or use of the product occurs during
the term of such process patent.

In an action for infringement of a process patent, no remedy may be

granted for infringement on account of the noncommercial use or retail
sale of a product unless there is no adequate remedy under this title for
infringement on account of the importation or other use, offer to sell, or
sale of that product.

A product which is made by a patented process will, for purposes of this

title, not be considered to be so made after— (1) it is materially changed
by subsequent processes; or (2) it becomes a trivial and nonessential
component of another product.

This statute involves a number of limitations. The first paragraph limits it to

processes that result in a “product,” which has been interpreted as limited to physical
products; “the production of information is not covered.” Bayer AG v. Housey Pharms.,
340 F.3d 1367, 1377 (Fed. Cir. 2003). Under the second paragraph, noncommercial
users and retail sellers may not be sued “unless there is no adequate remedy” against
importers or commercial users or sellers. And under the third paragraph, a product is
not “made” by a patented process if it is then “materially changed”—such as an
intermediate chemical compound that is then transformed to a new chemical form,
Eli Lilly & Co. v. Am. Cyanamid Co., 82 F.3d 1568 (Fed. Cir. 1996)—or if it is “a trivial
and nonessential component.”
 OTHER INFRINGEMENT ISSUES 405

The presumption against extraterritoriality still applies when interpreting

§ 271(f)–(g), as the Supreme Court made clear in Microsoft v. AT&T, 550 U.S. 437
(2007). In that case, AT&T sued Microsoft for infringement under § 271(f), alleging
that Microsoft’s Windows software was a “component” that, when installed on
computers abroad, rendered them capable of infringing AT&T’s patent for digitally
compressing recorded speech. Importing those computers into the United States
would be infringement under § 271(a), but AT&T wanted Microsoft held liable solely
for its export of the Windows software for installation on computers made and sold
abroad. The Supreme Court held that software can be a “component,” but only if it is
a particular copy of Windows (such as a copy on a CD-ROM). What Microsoft actually
exported was a master disk from which further copies were made, which the Court
analogized to a blueprint or a single component to be replicated.

Any doubt that Microsoft’s conduct falls outside § 271(f)’s

compass would be resolved by the presumption against
extraterritoriality. The presumption that United States law governs
domestically but does not rule the world applies with particular force in
patent law.

As a principle of general application, moreover, we have stated

that courts should “assume that legislators take account of the
legitimate sovereign interests of other nations when they write
American laws.” F. Hoffmann–La Roche Ltd. v. Empagran S.A., 542
U.S. 155 (2004). Thus, the United States accurately conveyed in this
case: “Foreign conduct is generally the domain of foreign law,” and in
the area here involved, in particular, foreign law “may embody different
policy judgments about the relative rights of inventors, competitors,
and the public in patented inventions.” Brief for United States as
Amicus Curiae 28. Applied to this case, the presumption tugs strongly
against construction of § 271(f) to encompass as a “component” not only
a physical copy of software, but also software’s intangible code, and to
render “supplie[d] . . . from the United States” not only exported copies
of software, but also duplicates made abroad.

AT&T argues that the presumption is inapplicable because

Congress enacted § 271(f) specifically to extend the reach of United
States patent law to cover certain activity abroad. But as this Court has
explained, “the presumption is not defeated just because a statute
specifically addresses an issue of extraterritorial application,” Smith v.
United States, 507 U.S. 197 (1993); it remains instructive in
determining the extent of the statutory exception, see Empagran, 542
U.S. at 161–165.

AT&T alternately contends that the presumption holds no sway

here given that § 271(f), by its terms, applies only to domestic conduct,
406 MASUR & OUELLETTE ⋅ PATENT LAW

i.e., to the supply of a patented invention’s components “from the United

States.” § 271(f)(1). AT&T’s reading, however, “converts a single act of
supply from the United States into a springboard for liability each time
a copy of the software is subsequently made abroad and combined with
computer hardware abroad for sale abroad.” Brief for United States as
Amicus Curiae 29. In short, foreign law alone, not United States law,
currently governs the manufacture and sale of components of patented
inventions in foreign countries. If AT&T desires to prevent copying in
foreign countries, its remedy today lies in obtaining and enforcing
foreign patents.

Microsoft, 550 U.S. at 454–56. AT&T also argued that denying liability would create
a “loophole” for software makers, but the Court concluded that any such loophole “is
properly left for Congress to consider, and to close if it finds such action warranted.”
Id. at 457. Do you agree with the Court’s reasoning?

In contrast, the Federal Circuit interpreted § 271(g) broadly in Syngenta Crop

Protection v. Willowood, 944 F.3d 1344 (Fed. Cir. 2019). In that case, it held that
infringement under § 271(g) does not require a single entity to perform all the claim
steps, unlike for § 271(a)-(c) as interpreted by the Akamai decisions. The court stated
that “our conclusion that a single entity need not perform every step of a patented
process abroad under § 271(g) does not extend patent protection to cover
extraterritorial conduct that would not otherwise trigger liability within the United
States.” Do you agree?

The Supreme Court adopted a narrow reading of § 271(f) in Life Technologies

Corp. v. Promega Corp., 580 U.S. 140 (2017). In that case, the infringement claim was
based on the export of an enzyme known as Taq polymerase—one out of five
components of a patented toolkit for genetic testing. The enzyme has other uses, so
the suit could not be based on § 271(f)(2) for export of a component “especially made
or especially adapted for use in the invention and not a staple article or commodity of
commerce suitable for substantial noninfringing use.” Rather, the claim was for
inducement under § 271(f)(1), which requires export of “all or a substantial portion of
the components of a patented invention . . . in such manner as to actively induce
the[ir] combination.” The Court held that one component cannot be “all or a
substantial portion of the components.” Liability under § 271(f)(1) is thus narrower
than its domestic counterpart, § 271(b), which does not require the infringer to sell
anything.

In yet another § 271(f) case, WesternGeco LLC v. ION Geophysical Corp., 138
S. Ct. 2129 (2018), the Supreme Court reaffirmed the presumption against
extraterritoriality but held that the presumption had been overcome. WesternGeco
owned patents related to a system for surveying the ocean floor, and it proved at trial
that it had lost ten survey contracts due to ION Geophysical’s infringement under
§ 271(f)(2) and was awarded nearly $100 million in damages for its lost profits. The
 OTHER INFRINGEMENT ISSUES 407

infringer argued that awarding damages for lost foreign sales violated the
presumption against extraterritoriality, but the Court upheld the award because
“[t]he conduct that § 271(f)(2) regulates . . . is the domestic act of ‘suppl[ying] in or
from the United States.’” We will discuss lost profits damages in detail in Chapter 14.

C. Government Infringement
Infringement suits against governments raise special legal issues because of
sovereign immunity, which generally prevents sovereigns from being sued without
consent. As one of us wrote:

This doctrine might strike nonlawyers as bizarre, and is controversial

among lawyers and legal academics. Defenders of sovereign immunity
argue that the principle preserves each sovereign’s dignity and protects
public finance by stopping lawsuits seeking damages. Numerous
sovereigns enjoy immunity under U.S. law: the federal government, the
50 states (including their state universities) and the U.S. territories,
foreign nations, and the [574] federally recognized Indian tribes.

Gregory Ablavsky & Lisa Larrimore Ouellette, Selling Patents to Indian Tribes to
Delay the Market Entry of Generic Drugs, 178 JAMA Internal Med. 179 (2018).

Infringement of U.S. patents by foreign governments generally doesn’t arise

because patents are territorial, but the federal government, U.S. states, and Native
nations have all been defendants in patent lawsuits. In this section, we briefly review
how the rules of patent infringement change in each of these contexts.

1. Federal Government
Congress has enacted a limited waiver of federal sovereign immunity in 28
U.S.C. § 1498, which states that when a patented invention “is used or manufactured
by or for the United States without license of the owner thereof or lawful right to use
or manufacture the same, the owner’s remedy shall be by action against the United
States in the United States Court of Federal Claims for the recovery of his reasonable
and entire compensation for such use and manufacture.” In other words, if a patent
owner believes that the federal government has infringed its patent, it can bring suit
for damages in the Court of Federal Claims. The Court of Federal Claims is an Article
I court in D.C. that hears monetary claims against the U.S. government, with appeals
to the Court of Appeals for the Federal Circuit. This statute is the only option for
patent infringement suits against the federal government. The federal government
thus may not be sued for an injunction.
408 MASUR & OUELLETTE ⋅ PATENT LAW

Although § 1498 effectively grants the federal government a compulsory

license to use patented inventions, with the license fee determined by the Court of
Federal Claims, the government has not made aggressive use of this provision. There
is thus relatively little caselaw on how “reasonable and entire compensation” should
be determined. As we will discuss in Chapters 14 and 15, normal patent damages
allow recovery of “damages adequate to compensate for the infringement, but in no
event less than a reasonable royalty.” 35 U.S.C. § 284. Patent damages are thus based
on calculation of a “reasonable royalty” unless the patentee can prove other damages
such as lost profits. Similarly, in the § 1498 context, the Federal Circuit has stated
that “[g]enerally, the preferred manner of reasonably and entirely compensating the
patent owner is to require the government to pay a reasonable royalty for its license
as well as damages for its delay in paying the royalty.” Hughes Aircraft Co. v. United
States, 86 F.3d 1566, 1572 (Fed. Cir. 1996), vacated on other grounds, 520 U.S. 1183
(1997). But lost profits are also available, if proven: “Since both section 284 and section
1498 speak of ‘compensation,’ albeit ‘adequate’ compensation in the former and
‘reasonable and entire’ in the latter, lost profits should be recoverable in at least some
infringement actions against the government.” Gargoyles, Inc. v. United States, 113
F.3d 1572, 1576 (Fed. Cir. 1997).

Section 1498 has been in the spotlight recently as a potential tool for promoting
broader access to medicines:

We propose that the federal government invoke its power under

[§ 1498] to reduce excessive prices for important patent-protected
medicines. Using this law would permit the government to procure
generic versions of patented drugs and in exchange pay the patent-
holding companies reasonable royalties to compensate them for
research and development. This would allow patients in federal
programs, and perhaps beyond, to be treated with inexpensive generic
medicines according to clinical need—meaning that many more
patients could be reached for no more, and perhaps far less, money than
is currently spent. Another benefit would be a reduction in the
opportunity for companies to extract monopoly profits that far exceed
their risk-adjusted costs of research and development.

Amy Kapczynski & Aaron S. Kesselheim, ‘Government Patent Use’: A Legal Approach
to Reducing Drug Spending, 35 Health Aff. 791 (2016); see also Hannah Brennan, Amy
Kapczynski, Christine H. Monahan & Zain Rizvi, A Prescription for Excessive Drug
Pricing: Leveraging Government Patent Use for Health, 18 Yale J.L. & Tech. 275
(2016); Editorial Board, How the Government Can Lower Drug Prices, N.Y. Times
(June 20, 2018), https://www.nytimes.com/2018/06/20/opinion/prescription-drug-
costs-naloxone-opioids.html.

What are the advantages and disadvantages of this proposal? Do you think a
patent owner’s “reasonable and entire compensation” should be based on recovery of
 OTHER INFRINGEMENT ISSUES 409

risk-adjusted R&D costs? If this rule were widely applied, pharmaceutical innovators
would have the same incentive, in risk-adjusted terms, to work on any project,
regardless of social value. Are there ways to promote access to medicines while giving
firms incentives to focus on projects with the highest probability of saving lives and
generating the greatest health improvements? See Daniel J. Hemel & Lisa Larrimore
Ouellette, Valuing Medical Innovation, 75 Stan. L. Rev. 517 (2023).

2. State Governments
For suits against state governments, Congress unsuccessfully attempted to
abrogate state sovereign immunity with the 1992 Patent and Plant Variety Protection
Remedy Clarification Act (Patent Remedy Act). This Act added § 271(h) to the patent
infringement statute to specify that “any State, any instrumentality of a State, and
any officer or employee of a State or instrumentality of a State acting in his official
capacity” may be liable as an infringer and “shall be subject to the provisions of this
title in the same manner and to the same extent as any nongovernmental entity.”
Congress also addressed state sovereign immunity even more directly by adding 35
U.S.C. § 296, which provides that states and state officials “shall not be immune,
under the eleventh amendment of the Constitution of the United States or under any
other doctrine of sovereign immunity, from suit in Federal court by any person,
including any governmental or nongovernmental entity, for infringement of a patent
under section 271, or for any other violation under this title.”

The Supreme Court held these provisions unconstitutional in Florida Prepaid

Postsecondary Education Expense Board v. College Savings Bank, 527 U.S. 627 (1999).
The Court held that Congress may abrogate state sovereign immunity where
necessary to secure protections of the Fourteenth Amendment, but in enacting the
Patent Remedy Act, “Congress identified no pattern of patent infringement by the
States, let alone a pattern of constitutional violations.” Id. at 640. And even if it had
identified such a pattern, “only where the State provides no remedy, or only
inadequate remedies, to injured patent owners for its infringement of their patent
could a deprivation of property without due process result.” Id. at 643. The Court
noted that Congress “barely considered the availability of state remedies for patent
infringement,” and the limited testimony it heard was focused on the point “not that
state remedies were constitutionally inadequate, but rather that they were less
convenient than federal remedies, and might undermine the uniformity of patent
law.” Id. at 643–44.

What state remedies for patent infringement is the Court referring to? The
Federal Circuit provided some examples in Pennington Seed v. Produce Exchange, 457
F.3d 1334 (Fed. Cir. 2006), in which it rejected an argument that the University of
Arkansas was subject to suit due to a lack of state law remedies. The Court noted that
the Arkansas Claims Commission may hear claims against the state for damages up
to $10,000, that the state legislature may consider monetary awards greater than
410 MASUR & OUELLETTE ⋅ PATENT LAW

$10,000, and a judicial claim for conversion may be available. Id. at 1340. “While these
remedies may be ‘uncertain’ or ‘less convenient,’ or may ‘undermine the uniformity of
patent law,’ these attributes are not sufficient to show that the patentee’s due process
rights have been violated.” Id. at 1340–41 (quoting Florida Prepaid, 527 U.S. at 644–
45). Do those sound like useful or adequate remedies?

It is therefore difficult to obtain money damages for patent infringement from

state patent infringers, but it is possible to sue for an injunction against future
infringement. Under the doctrine established by Ex parte Young, 209 U.S. 123 (1908),
plaintiffs may obtain injunctions against state officials acting contrary to federal law,
even if the state retains sovereign immunity. Ex parte Young applies to state patent
infringement—“continuing prospective violations of a federal patent right by state
officials may be enjoined by federal courts under the Ex parte Young doctrine”—
although there must be a causal connection between the state officials and the
unlawful action in question. Pennington Seed, 457 F.3d at 1341. Thus, state patent
infringement may be enjoined by federal courts but not remedied by normal money
damages, whereas federal patent infringement may not be enjoined but does allow
suits for money damages in the Court of Federal Claims. Does this distinction make
sense?

States may use sovereign immunity as a shield when patents are asserted
against them, but not as a sword when asserting their own patents. The Federal
Circuit has rejected the argument that sovereign immunity protects state patent
plaintiffs from transfers for improper venue: “When a State sues in federal court, it
waives sovereign immunity with respect to its asserted claims, subjecting itself to the
jurisdiction of the federal courts, and must accept the federal statutory provisions that
govern the allocation of cases among the courts.” Board of Regents of the University of
Texas System v. Boston Scientific Corp., 936 F.3d 1365 (Fed. Cir. 2019).

Similarly, sovereign immunity cannot protect states from challenges to the

validity of their patents. As we will discuss in more detail in Chapter 17, the 2011
America Invents Act created new administrative procedures for the USPTO to review
the validity of patents it had previously granted, including inter partes review (IPR).
State universities argued that they enjoyed immunity from having their patents
challenged in IPR proceedings, but the Federal Circuit rejected this argument in
Regents of the University of Minnesota v. LSI Corp., 926 F.3d 1327 (Fed. Cir. 2019)—
relying on a recent case on tribal sovereign immunity that will be discussed in the
following section, Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc., 896 F.3d
1322 (Fed. Cir. 2018).

3. Native Nations
As of this writing, there are 574 federally recognized Native nations within the
United States with their own sovereign immunity. Caselaw on tribal sovereign
 OTHER INFRINGEMENT ISSUES 411

immunity is complex; for instance, Greg Ablavsky argues that “the status of Native
nations within federal law has almost always been defined with reference to other
sovereigns . . . ignoring the differences between the situation of tribes and other
sovereigns” to serve “a particular purpose: either to cabin the scope of tribal authority
or to aggrandize federal power.” Gregory Ablavsky, Sovereign Metaphors in Indian
Law, 80 Mont. L. Rev. 11, 12 (2019).

Like state governments, tribal governments are immune from suits for patent
infringement, although there is limited caselaw on the subject. See Specialty House of
Creation, Inc. v. Quapaw Tribe, 2011 WL 308903 (N.D. Okla. Jan. 27, 2011); Home
Bingo Network v. Multimedia Games, Inc., No. 1:05-CV-0608, 2005 WL 2098056
(N.D.N.Y. Aug. 30, 2005). Unlike state governments, however, many tribal
governments have not instituted separate procedures that would allow patent owners
to collect in cases of infringement. If Native nations began to engage in frequent and
intentional patent infringement, how do you think Congress and the federal courts
would respond?

Also like state governments, tribal governments cannot use sovereign

immunity to block most challenges to patent validity. Tribes are different from states
in that filing suit is not considered a waiver of sovereign immunity, so tribes can still
invoke sovereign immunity against counterclaims. See Oklahoma Tax Comm’n v.
Citizen Band Potawatomi Indian Tribe of Oklahoma, 498 U.S. 505 (1991). But a
defendant sued by a patent-owning tribe can still raise invalidity as an affirmative
defense,2 and a declaratory judgment of invalidity may also be available under Ex
parte Young.

Patents owned by a tribe can also be challenged in IPR. Tribal sovereign

immunity came to a prominent intersection with federal patent law in September
2017, when the global pharmaceutical company Allergan transferred six patents for
its blockbuster dry eye drug Restasis to the Saint Regis Mohawk Tribe, a federally
recognized tribe of about 15,000 members in upstate New York with a $50 million
annual budget. Under the deal, the Tribe received $13.75 million up front and the
possibility of $15 million in annual royalties—a fraction of Restasis’s $1.5 billion in
annual revenues. The deal also enabled the Tribe to assert sovereign immunity in an
IPR proceeding in which a generic manufacturer was challenging the patents.

In Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc., 896 F.3d 1322,
1327 (Fed. Cir. 2018), the Federal Circuit held that tribal sovereign immunity cannot
be asserted in IPR because IPR “is more like an agency enforcement action” in which
immunity does not apply “than a civil suit brought by a private party” in which it does.

2 Patent infringement defendants typically plead invalidity as both an affirmative

defense and a counterclaim. The counterclaim provides greater strategic leverage in that it
survives termination of the plaintiff’s claim. Thus, it can be upheld on appeal even if the court
also upholds a finding of noninfringement. See Cardinal Chem. Co. v. Morton Int’l, 508 U.S.
83 (1993).
412 MASUR & OUELLETTE ⋅ PATENT LAW

And as noted in the prior section, the Federal Circuit then relied on Saint Regis
Mohawk Tribe to reach the same result with respect to state sovereign immunity.

It is easy to understand deals such as this one from the tribe’s perspective
because of the limitations on tribes’ economic options. As one of us has explained:

For tribes, economic development and sovereignty are closely linked,

especially because federal law substantially limits tribes’ powers to tax.
American Indians and Alaska Natives have the highest poverty rate of
any racial group in the United States. A small fraction of tribes enjoy
large gaming revenues, but most must struggle for funds to supplement
chronically underfunded federal programs to provide services for their
citizens. . . . Responding to the Allergan deal requires more than a
stopgap narrowly focused on the use of tribal sovereign immunity in
IPR proceedings challenging drug patents.

Gregory Ablavsky & Lisa Larrimore Ouellette, Selling Patents to Indian Tribes to
Delay the Market Entry of Generic Drugs, 178 JAMA Internal Med. 179 (2018). Are
there better ways to address the underlying challenges that led the Saint Regis
Mohawk Tribe to pursue its deal with Allergan?

D. Pharmaceutical Infringement and the FDA

Patent scholars often distinguish the role of patents in the pharmaceutical
industry from their role in other sectors. For example, in their 2009 book The Patent
Crisis and How the Courts Can Solve It, Dan Burk and Mark Lemley write: “It is the
IT industries that are the poster child for the claims of a patent crisis . . . while for
most of the companies in the biomedical industry the patent system is working just
fine.” Patent skeptics James Bessen and Michael Meurer similarly single out
pharmaceuticals, concluding that “by the late 1990s litigation costs clearly exceeded
the profits from patents outside the chemical and pharmaceutical industries.” Patent
Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk (2008). As we
discussed in Chapter 1, pharmaceutical executives drop drugs without strong patent
protection from development pipelines, and drugs with shorter effective patent terms
(due to long clinical trials) receive less private R&D investment. See Benjamin N.
Roin, Unpatentable Drugs and the Standards of Patentability, 87 Tex. L. Rev. 503,
545 (2009); Eric Budish, Benjamin N. Roin & Heidi Williams, Do Firms Underinvest
in Long-Term Research? Evidence from Cancer Clinical Trials, 105 Am. Econ. Rev.
2044 (2015).

It should thus be unsurprising that some of the most important patent

litigation disputes involve pharmaceuticals. Pharmaceutical patent infringement
follows the same basic rules as patent infringement in other industries: an accused
drug infringes only if it has every element of a patent claim, or its equivalent. And as
 OTHER INFRINGEMENT ISSUES 413

you saw from Chapter 10, the mental state for indirect infringement is the same. You
have encountered many other pharmaceutical patent infringement cases in earlier
chapters, including Schering v. Geneva, 339 F.3d 1373 (Fed. Cir. 2003) (the inherent
anticipation case in Chapter 2), In re ’318 Patent Infringement Litigation, 583 F.3d
1317 (Fed. Cir. 2009) (the utility case in Chapter 4), and Idenix v. Gilead, 941 F.3d
1149 (Fed. Cir. 2019) (the enablement and written description case in Chapter 4). But
we discuss pharmaceutical patent infringement separately here because Congress has
created special statutory frameworks to resolve patent disputes in this industry, and
some familiarity with these statutes is important in patent litigation practice.

Unlike in most industries, the pharmaceutical market is strictly regulated by

an administrative agency: the Food and Drug Administration (FDA). Before a new
drug is allowed on the market, the FDA requires the drug’s sponsor to run costly
clinical trials to show that the drug is safe and effective. A second company that wants
to sell an equivalent drug could receive FDA approval by running its own clinical
trials, but duplicating the first company’s trials would be both wasteful and ethically
problematic (because it would require denying patients in the control group a drug
that has already been shown to be effective). The second company can thus seek
approval through an abbreviated process based on the data generated by the first
company’s trials.

The details of this abbreviated process depend on whether the drug is classified
as a small-molecule drug or a biologic. Small-molecule drugs are ones with simple
chemical structures, often around 20 to 100 atoms. They are relatively easy to
reproduce through chemical synthesis. Biologics, in contrast, range in size from
around 200 to 50,000 atoms, and their precise structures are often unknown and not
easily characterized. Biologics regulated by the FDA include a wide range of products,
including vaccines, therapeutic proteins, and gene therapy. The figure below
illustrates models of the small-molecule drug aspirin compared with a subclass of the
biologic antibody IgG. (An antibody is a type of protein used by the immune system to
identify foreign objects.)
414 MASUR & OUELLETTE ⋅ PATENT LAW

The other major class of medical technologies regulated by the FDA is medical
devices, a broad category that includes a wide array of products: bandages,
wheelchairs, MRI machines, diagnostic tests, pacemakers, surgical devices, etc.
Medical devices do not have a special statutory framework for resolving patent issues
the way small-molecule drugs and biologics do, although there is an unusual exception
from patent remedies for medical practitioners performing certain medical procedures
in 35 U.S.C. § 287(c). Because the physicians can still directly infringe—there is just
no remedy against them—this exception does not immunize the manufacturers of
medical devices used for those procedures from indirect liability.

Both small-molecule drugs and biologics are typically protected by numerous

patents. For small-molecule drugs, in addition to “primary” patents claiming the new
active ingredient, chemical compounds are protected by various “secondary” patents,
including formulation claims that claim a specific pharmaceutical preparation such
as a tablet or sustained-release form, method of use claims that claim a method of
treating a specific disease with the compound, and claims to minor chemical
modifications such as polymorphs, isomers, prodrugs, esters, and salts. Secondary
patents are most frequently used to extend the patent life of the most lucrative drugs,
a process known as “evergreening.” See Amy Kapczynski, Chan Park & Bhaven
Sampat, Polymorphs and Prodrugs and Salts (Oh My!): An Empirical Analysis of
“Secondary” Pharmaceutical Patents, 7 PLoS One e49470 (2012). They are also much
less likely to be upheld in patent litigation. C. Scott Hemphill & Bhaven Sampat, Drug
Patents at the Supreme Court, 339 Science 1386 (2013). What examples of
evergreening have you encountered in previous chapters?

For biologics, their greater scientific complexity is reflected in a more complex

patent landscape, and this landscape has also been more obscure due to the lack of
any patent listing requirement before December 2020 and the small number of cases
challenging these patents. As a rough comparison, best-selling small-molecule drugs
from 2002 to 2004 had an average of just over five patents per drug, while the best-
selling biologics in 2018 were estimated to have over seventy patents per drug.

For small-molecule drugs, the governing statute for promoting generic entry
and resolving disputes over these patents is the Drug Price Competition and Patent
Term Restoration Act of 1984, also known as the Hatch-Waxman Act. This Act was
very successful at increasing entry of generic drugs. Based on this success, Congress
enacted a similar framework for biologics as part of the 2010 Affordable Care Act: the
Biologics Price Competition and Innovation Act (BPCIA). The goal of the BPCIA was
to spur entry of generic versions of biologics, which are known as biosimilars.

In exchange for granting an abbreviated approval process to generic and

biosimilar entrants, the Hatch-Waxman Act and the BPCIA both gave a new benefit
to firms that bring new drugs to market: a non-patent form of intellectual property
protection known as regulatory exclusivity. There are two key types of regulatory
exclusivity: data exclusivity, which prevents a generic or biosimilar firm from relying
 OTHER INFRINGEMENT ISSUES 415

on the original firm’s clinical trial data for a certain period, and market exclusivity,
which prevents any new approval for an equivalent drug, even if the new entrant has
conducted its own clinical trials. As a practical matter, both effectively prevent generic
or biosimilar entry in most cases due to the cost and ethical concerns with conducting
new trials.

For small-molecule drugs, a firm hoping to bring a new drug to market files a
New Drug Application (NDA) with the FDA. After approval, the sponsor receives five
years of data exclusivity if the drug has a new active ingredient and three years of
data exclusivity for old drugs that required new clinical trials (such as to receive
approval for a new indication). For biologics, the process starts with a Biologics
License Application (BLA). After approval, the sponsor receives twelve years of data
exclusivity, including four years before the first biosimilar application may even be
filed.

Approval of an NDA or BLA also comes with a patent term extension. Under
35 U.S.C. § 156, the sponsor may extend one patent on the drug for half the time spent
in clinical trials, up to a maximum of five years, and with total life not to exceed 14
years after FDA approval. Additionally, the sponsor may request “orphan” designation
for the drug under 21 U.S.C. § 360bb(a)(2) if it treats a disease that either (A) “affects
less than 200,000 persons in the United States” at the time of the request or (B) “for
which there is no reasonable expectation that the cost of developing and making
available in the United States a drug for such disease or condition will be recovered
from sales in the United States of such drug.” Orphan designation grants the sponsor
a tax credit for 25% of its clinical trial expenses and a seven-year market exclusivity
period. Finally, under 21 U.S.C. § 355a, if the FDA sends the sponsor a written request
for pediatric clinical studies and the sponsor complies, the drug receives a six-month
“pediatric exclusivity” attached to the end of all other regulatory exclusivity and
patent periods.

To help potential generic and biosimilar manufacturers determine when they

will be able to enter the market, the FDA publishes information about approved drugs
and their exclusivity periods. For small-molecule drugs, the relevant database is the
Orange Book. The Orange Book has included patent information for each drug since
it was first published in 1985 and may be searched on the FDA’s website by brand
name, active ingredient, or NDA number. For biologics, the equivalent database is
known as the Purple Book. Biologic manufacturers were not originally required to list
patent information in the Purple Book, making it more difficult for potential
biosimilar manufacturers to understand the patent landscape for each drug. But in
the COVID-19 relief bill passed in December 2020, Congress amended 42 U.S.C.
§ 262(k) to require the FDA to include patent information.

A potential generic or biosimilar manufacturer begins the abbreviated

approval process by filing an abbreviated New Drug Application (ANDA) or an
abbreviated Biologics License Application (aBLA). (We don’t know why “abbreviated”
416 MASUR & OUELLETTE ⋅ PATENT LAW

is capitalized differently; it just is.) The scientific standard for demonstrating that the
product is sufficiently similar to rely on the original drug’s clinical trial data differs
between the two contexts due to the greater complexity of biologics. For small-
molecule drugs, the ANDA must provide evidence of “bioequivalence,” meaning that
there is no “significant difference in the rate and extent to which the active ingredient
. . . becomes available at the site of drug action.” 21 C.F.R. § 314.3. For biologics, the
aBLA must demonstrate “biosimilarity,” including evidence that the product is “highly
similar” to the reference product (based on characterizing structure and function to
the extent possible) and “has no clinically meaningful differences” from the reference
product, as demonstrated through clinical response studies (which are less
burdensome than randomized controlled trials). There is also a higher standard for
biologic “interchangeability,” meaning the biosimilar may be substituted for the
original biologic without intervention of the prescribing healthcare provider.

More relevantly for patent practitioners, filing an ANDA or aBLA can initiate
patent litigation. Under the Hatch-Waxman Act, an ANDA must include certifications
for each Orange Book patent, which are referred to by the paragraphs of 21 U.S.C.
§ 355(j)(2)(A)(vii): the applicant can certify under paragraph I or II that the patent
information has not been filed or has expired, under paragraph III that the applicant
will wait for the patent to expire, or—most importantly for us—under paragraph IV
that the patent is invalid or not infringed. To provide an incentive to challenge
patents, the first generic firm to file an ANDA with a paragraph IV certification
receives 180 days of generic market exclusivity once their ANDA is approved, meaning
that the FDA will not approve a second ANDA for the same drug.

Within 20 days of FDA receipt of the ANDA, the filer must notify the original
NDA sponsor. Under 35 U.S.C. § 271(e)(2)(A), filing an ANDA constitutes an artificial
act of patent infringement—in that the product is not yet on the market—and if the
NDA sponsor files suit within 45 days, ANDA approval is stayed for 30 months to
provide time to resolve the patent issues. If the NDA sponsor doesn’t file suit within
45 days, the FDA may approve the ANDA, but many generic companies would prefer
not to launch at risk of substantial patent damages. Hatch-Waxman addressed this
concern by allowing the generic to sue for a declaratory judgment of invalidity or
noninfringement under § 271(e)(5)).

Under the BPCIA, filing an aBLA can also initiate patent litigation, but the
BLA sponsor cannot sue right away: it must wait and see whether the applicant
initiates a complex back-and-forth under 42 U.S.C. § 262 known as the “patent dance.”
If the biosimilar applicant chooses to dance, it must send its aBLA to the original BLA
sponsor within 20 days after the FDA accepts it. Then the BLA sponsor has 60 days
to provide a list of patents that could be asserted, the biosimilar applicant has 60 days
to respond with invalidity and noninfringement contentions, the BLA sponsor has 60
days to reply with validity and infringement contentions, and then the parties jointly
negotiate a list of key patents to be adjudicated in the first litigation phase—with the
goal of increasing efficiency by leaving some patents for a second, later phase.
 OTHER INFRINGEMENT ISSUES 417

If the biosimilar applicant chooses to dance, the BLA sponsor may file a patent
infringement suit on the negotiated patents under 35 U.S.C. § 271(e)(2)(C)(i), and
neither party may file a declaratory judgment action on patents not selected for the
first wave of litigation. But the Supreme Court has held that the biosimilar applicant
cannot be forced to dance under federal law, Sandoz v. Amgen, 582 U.S. 1 (2017), and
the Federal Circuit has held that the dance also cannot be forced under state law,
Amgen v. Sandoz, 877 F.3d 1315, 1327 (Fed. Cir. 2017). If the biosimilar applicant
elects not to dance, then the BLA sponsor may sue under 35 U.S.C. § 271(e)(2)(C)(ii)
based on any patent it could have asserted through the dance.

The second wave of litigation contemplated by the BPCIA can commence after
the FDA approves the product and the biosimilar applicant provides notice to the
original BLA sponsor, the latter of which must occur 180 days before it intends to
market the drug. (The Supreme Court held in Sandoz v. Amgen that this 180-day
notice period may begin before FDA approval.) During the second wave, the BLA
sponsor can assert patents not included in the first wave and can seek a preliminary
injunction to prevent marketing. Both parties may file declaratory judgment actions
during this phase.

Like the Hatch-Waxman Act, the BPCIA incentivizes market entry by

providing a market exclusivity period to the first “interchangeable” biosimilar
applicant before subsequent biosimilars will be determined to be interchangeable.
Unlike the 180-day generic exclusivity period under Hatch-Waxman, the biosimilar
exclusivity varies in time, expiring on the earliest of: 1 year after marketing, 18
months after resolution of patent litigation, 42 months after approval if patent
litigation is ongoing at that point, or 18 months after approval if the applicant has not
been sued. 42 U.S.C. § 262(k)(6).

The complex BPCIA statutory scheme has led to numerous thorny questions of
statutory interpretation, including the issues that reached the Supreme Court in
Sandoz v. Amgen. In Sandoz, the Federal Circuit famously borrowed from Winston
Churchill to call the BPCIA “a riddle wrapped in a mystery inside an enigma.” Amgen
Inc. v. Sandoz Inc., 794 F.3d 1347, 1351 n.1 (Fed. Cir. 2015), rev’d in part, 137 582
U.S. 1 (2017). We will not attempt to canvass all the remaining open questions here;
we simply note that this is a wonderful area of practice for students interested in
detailed statutory interpretation, and that the legal issues require little
understanding of the science behind biologic medicines.

Has the BPCIA accomplished its goal of promoting biosimilar entrance? Yes,
but slowly. Through the end of 2017—six years after the BPCIA’s enactment—only
three biosimilars launched in the United States. At that point, the European Union
had thirty-three biosimilars on the market, largely due to an earlier regulatory
framework. Biosimilar launches have picked up speed since then, with three in 2018,
seven in 2019, and five in 2020, but these numbers are still tiny compared with the
number of generic small-molecule drugs.
418 MASUR & OUELLETTE ⋅ PATENT LAW

The following table summarizes the key differences between the legal
frameworks for allowing new entrants based on small-molecule drugs and biologics.

Small-Molecule Drugs Biologics

Governing Hatch-Waxman Act of 1984 Biologics Price Competition and
statute (amending Food, Drug and Innovation Act (BPCIA) (2010)
Cosmetic Act, 21 U.S.C. § 355, (amending Public Health
and the Patent Act, 35 U.S.C.) Service Act, 42 U.S.C. § 262,
and the Patent Act, 35 U.S.C.)
Initial FDA New Drug Application (NDA) Biologics License Application
application (BLA)
Data 5 years for new active 12 years (including 4 years
exclusivity ingredient; 3 years for other before the first biosimilar
drugs requiring clinical trials application may be filed)
Patent term up to 5 years for 1 patent same
extension under 35 U.S.C. § 156
Orphan drug 7 years market exclusivity same
benefits and 25% tax credit for clinical
trial expenses
Pediatric 6 months added to all same
exclusivity exclusivities (including
patents) for pediatric studies
Patent listing Orange Book Purple Book (new patent listing
requirement as of Dec. 2020)
Generic/ Abbreviated New Drug Abbreviated Biologics License
biosimilar Application (ANDA) showing Application (aBLA)
FDA bioequivalence; ¶ IV
application certification of invalidity or
noninfringement for each
listed patent
Statute 35 U.S.C. § 271(e)(2)(A) (if 35 U.S.C. § 271(e)(2)(C) (plus
making suit isn’t filed within 45 days, more complex declaratory
abbreviated courts have declaratory jurisdiction rules)
application an jurisdiction under § 271(e)(5))
act of patent
infringement
Incentive for 180-day market exclusivity for 12 to 42 months for first
patent first generic to file ¶ IV interchangeable biosimilar
challenge certification and then get
approved
 OTHER INFRINGEMENT ISSUES 419

Infringement Review Exercise

The following exercise reviews a number of concepts covered in this chapter.

Alizon is a magical wizard who works in the United States as a scientist. In

2010, she discovered a cure for the potentially fatal dragon pox disease. She named
her cure banefire potion, and she made it by heating equal parts of the common
ingredients blackthorn and snake bone in a caldron while stirring counterclockwise
until they react.

She immediately filed a patent application at the USPTO (where there is a

special division to deal with magical patents). Her patent specification described her
recipe and also noted that banefire potion unfortunately dissolves human teeth, but
that it can be administered to a patient by inserting it into a capsule that dissolves in
the stomach after it is swallowed. She also described her successful treatment of
dragon pox patients with her new potion. Her patent issued in 2014 with two claims:

1. Banefire potion, produced by heating approximately equal weights of

blackthorn and snake bone and stirring counterclockwise.

2. A method for treating dragon pox comprising: producing banefire

potion; and administering said potion to a dragon pox patient using a
means for preventing said potion from contacting said patient’s teeth.

Her treatment was a huge commercial success, selling for $50,000 a capsule.

Merlin runs a U.S. business exporting potions ingredients. After Alizon’s

discovery, Merlin’s firm experienced a spike in demand for exports of blackthorn and
snake bone. Magical doctors in other countries combined these ingredients purchased
from Merlin to produce banefire potion. Jealous of Alizon’s commercial success, Merlin
began experimenting with his ingredients and discovered that he could produce a
potion identical to banefire potion by combining two quite different ingredients—ash
and goldenseal—in a chilled container for 24 hours. He kept his process secret and
began selling his potion to U.S. doctors for $30,000 per dose, along with instructions
stating that doctors could use it to cure dragon pox by magically having it vanish and
reappear in the patient’s stomach. Most magical doctors find this method of
administration easier, although a few who have difficulty with spells prefer putting
the potion in dissolvable capsules. Merlin quickly overtakes Alizon in sales volume.

Alizon sues Merlin and the foreign doctors for patent infringement. What
result, and why? (Don’t stop your analysis just because you’ve found one argument
that seems dispositive.)
420 MASUR & OUELLETTE ⋅ PATENT LAW

12. Defenses
In this chapter, we consider the defenses to patent infringement. Patent rights
have fewer limitations than other intellectual property rights. For example, there is
no patent equivalent of copyright fair use—although some scholars have argued that
there should be. See Maureen A. O’Rourke, Toward a Doctrine of Fair Use in Patent
Law, 100 Colum. L. Rev. 1177 (2000); Katherine J. Strandburg, Patent Fair Use 2.0,
1 UC Irvine L. Rev. 265 (2011). But there are still many important defenses that
patent defendants can assert.

In Chapter 11, we encountered two specialized defenses: the sovereign

immunity of the defendant and the exemption from patent remedies for medical
practitioners performing surgical procedures under 35 U.S.C. § 287(c). This chapter
focuses on general defenses under substantive patent law. Defendants often also raise
procedural defects such as improper venue or lack of standing, which we will discuss
in Chapter 17.

A. Invalidity and Noninfringement

We have already discussed the most important and common defenses to a claim
of patent infringement: noninfringement or invalidity of the asserted claims. See 35
U.S.C. § 282(b). The leading patent treatise, Chisum on Patents § 19.01, quibbles that
“‘noninfringement’ is, precisely speaking, not a defense but, rather, a negation of the
patent owner’s case.” But § 282(b)(1) names noninfringement as a patent “defense,”
and we think it is usefully considered in the list of arguments a patent infringement
defendant should consider, even though the plaintiff bears the burden of proof on
infringement.

Patent defendants often raise arguments of both invalidity and

noninfringement, but there are practical tradeoffs between these defenses that lead
many defendants to focus on one or the other. As Roger Ford summarizes, these
include:

1. Claim construction strategy . . . In many patent cases—perhaps most

patent cases—the defendant must choose between arguing for broad
claim constructions that support its invalidity arguments and arguing
for narrow claim constructions that support its noninfringement
arguments.

2. Trial Narratives . . . [A] patent holder can always present a simple,

plausible narrative: “We invented this great new widget, and the
defendant used (or stole) our idea.” A defendant can counter with its
 DEFENSES 421

own simple narrative of invalidity (“The plaintiff didn’t invent

anything”) or noninfringement (“Our product is fundamentally
different”)—but only if it focuses on one defense. Otherwise, the
response is a story that pulls in multiple directions: “Our product is
fundamentally different from this thing the plaintiff invented—which,
by the way, wasn’t actually new but had been invented before by this
other inventor, or would have been obvious to any idiot in the field.”

3. Resource Constraints . . . Besides attorneys’ fees, parties can spend

heavily on expert fees, expenses from investigating the accused product
or process, and searching for prior art. Very few of these expenses apply
to both invalidity and noninfringement arguments, so the marginal cost
of pursuing both defenses can be substantial.

Roger Allan Ford, Patent Invalidity Versus Noninfringement, 99 Cornell L. Rev. 71,
94 (2013). Ford also notes three asymmetries that tend to push the choice toward
noninfringement: (1) invalidity has a higher standard of proof because of the
presumption of patent validity; (2) defendants often have a comparative informational
advantage on noninfringement (because they know about their own products) and a
disadvantage on invalidity (because they may have less experience with the patents
at issue); and (3) defendants do not internalize all the benefits of success on invalidity
(such as the ability of their competitors to freely enter the market).

Do you think underinvestment in invalidity defenses is a problem? If so, do you

have suggestions of how to address it? Suggestions proposed by commentators include
the following, which have met with varying degrees of success:

1. Reduce the Costs of Challenging Validity. In Chapter 17, we will discuss

post-grant proceedings at the USPTO that were created by the 2011 America Invents
Act to promote invalidity challenges in a less costly forum than the courts.

2. Reduce the Presumption of Validity. Some commentators have argued that

the standard for invalidating patents should be lowered, at least where the USPTO
hasn’t considered the relevant argument or prior art. The Supreme Court rejected this
argument in the litigation context in Microsoft v. i4i, 564 U.S. 91 (2001), but stated
that a jury may be instructed that “it has heard evidence that the PTO had no
opportunity to evaluate before granting the patent” and may “consider that fact when
determining whether an invalidity defense has been proved by clear and convincing
evidence.” Empirical work with mock jurors suggests that this instruction has the
same effect as explicitly lowering the standard to a preponderance of the evidence
standard. David L. Schwartz & Christopher B. Seaman, Standards of Proof in Civil
Litigation: An Experiment from Patent Law, 26 Harv. J.L. & Tech. 429 (2013). In post-
grant proceedings, the presumption of validity does not apply, so invalidity may be
established by a preponderance of the evidence.
422 MASUR & OUELLETTE ⋅ PATENT LAW

3. Allow More Parties to Challenge Validity. The Supreme Court has broadened
the range of parties who may challenge a patent’s validity in litigation. In Lear, Inc.
v. Adkins, 395 U.S. 653 (1969), the Court held that patentees may not contractually
prevent licensees from challenging patent validity. And in Minerva Surgical Inc. v.
Hologic Inc. (2021), the Court limited the doctrine of assignor estoppel, which
previously barred invalidity challenges from parties in privity with the assignors of
the patent. In Hologic, the Court held that assignor estoppel only applies if the
assignor made explicit or implicit representations that the patent was valid when
assigning it. Post-grant proceedings have gone further by allowing any party
challenge a patent. We discuss these doctrines further in Chapters 17–18.

4. Increase the Rewards of Challenging Validity. Some commentators have

proposed bounties for patent invalidation. See Anup Malani & Jonathan S. Masur,
Raising the Stakes in Patent Cases, 101 Geo. L.J. 637 (2013); Joseph Scott Miller,
Building a Better Bounty: Litigation-Stage Rewards for Defeating Patents, 19 Berkeley
Tech. L.J. 667 (2004). Successful invalidators could also recoup litigation costs from
other firms in the industry that benefit from the effort. See Gideon Parchomovsky &
Alex Stein, Intellectual Property Defenses, 113 Colum. L. Rev. 1483 (2013).

B. Licenses and Exhaustion

Another common defense to infringement is to have a license: recall that direct
infringement under § 271(a), (f), or (g) requires the infringing conduct to be conducted
“without authority,” meaning without an express or implied license. Of course, in some
cases a patent owner will explicitly grant a license by contract. But even where there
is no explicit license, courts have sometimes been willing to imply the existence of a
license from the patent owner’s behavior. As the Federal Circuit has explained,
implied licenses can be inferred from a variety of circumstances:

In patent law, an implied license merely signifies a patentee’s

waiver of the statutory right to exclude others from making, using, or
selling the patented invention. In the words of the Supreme Court, “No
formal granting of a license is necessary in order to give it effect. Any
language used by the owner of the patent, or any conduct on his part
exhibited to another from which that other may properly infer that the
owner consents to his use of the patent in making or using it, or selling
it, upon which the other acts, constitutes a license and a defense to an
action for a tort.” De Forest Radio Tel. Co. v. United States, 273 U.S.
236, 241 (1927).

Since De Forest, this court and others have attempted to identify

and isolate various avenues to an implied license. As a result, courts
and commentators relate that implied licenses arise by acquiescence,
by conduct, by equitable estoppel, or by legal estoppel. These labels
 DEFENSES 423

describe not different kinds of licenses, but rather different categories

of conduct which lead to the same conclusion: an implied license.

Wang Laboratories v. Mitsubishi Electronics Am., 103 F.3d 1571, 1580 (Fed. Cir.
1997). Equitable estoppel occurs when an infringer relies on misleading conduct of the
patent owner that suggests they will not be sued. Legal estoppel refers to the doctrine
of assignor estoppel, which as noted above, was limited by the Supreme Court in
Minerva Surgical Inc. v. Hologic Inc. (2021).

Under the doctrine of patent exhaustion, also known as the “first sale”
doctrine, the first authorized sale of a patented product—or a product that embodies
a patented method—exhausts the patent owner’s rights over that product. Thus,
further use, sale, and repair of the product is not “without authority” under § 271. The
first sale of a patented product effectively creates an implied license by operation of
law. This is why Apple can’t sue you for patent infringement when you sell your old
iPhone—though another patent owner could sue you if your phone embodies patents
of theirs that Apple failed to license.

But suppose Apple obtains a patent on a method of using the iPhone with
another valuable component—say, pairing the phone with an external keyboard. If a
third party sells iPhone keyboards without licensing this patent, does exhaustion
prevent Apple from suing the firm for inducing infringement by consumers who
practice the patented method? And can Apple avoid exhaustion of its U.S. patents by
contracting around the default rule or by selling iPhone in other countries, such that
consumers who buy iPhones with a “no resale” agreement or in other countries can
obtain them for a lower price? The following cases consider these questions.

Keurig v. Sturm Foods, 732 F.3d 1370 (Fed. Cir. 2013)

Alan D. Lourie, Circuit Judge.

1 Keurig manufactures and sells single-serve coffee brewers and beverage

cartridges for use in those brewers. Consumers insert a cartridge into the brewer, hot
water is forced through the cartridge, and a beverage is dispensed. Claim 6 of U.S.
Patent 6,606,938 is representative of the method claims at issue:

6. A method of brewing a beverage from a beverage medium contained

in a disposable cartridge, comprising the following steps, in sequence:

(a) piercing the cartridge with a tubular outlet probe to vent the
cartridge interior;

(b) piercing the cartridge with a tubular inlet probe;

(c) admitting heated liquid into the cartridge interior via the inlet probe
for combination with the beverage medium to produce a beverage; and
 424 MASUR & OUELLETTE ⋅ PATENT LAW

(d) extracting the beverage from the cartridge interior via the outlet
probe.

2 Sturm manufactures and sells cartridges for use in Keurig’s brewers under the
brand name “Grove Square.” Sturm does not make or sell brewers. [Keurig sued
Sturm for inducing infringement by customers who buy Grove Square cartridges and
use them in Keurig brewers, and the district court granted summary judgment of
noninfringement on the grounds that Keurig’s patent rights were exhausted.]

3 “The longstanding doctrine of patent exhaustion provides that the initial

authorized sale of a patented item terminates all patent rights to that item.” Quanta
Computer v. LG Electronics, 553 U.S. 617, 625 (2008). The rationale underlying the
doctrine rests upon the theory that an unconditional sale of a patented device
exhausts the patentee’s right to control the purchaser’s use of that item thereafter
because the patentee has bargained for and received full value for the goods.

4 In Quanta, the Court held that method claims for managing and synchronizing
data transfers between computer components were exhausted when the patent holder
licensed a manufacturer to produce and sell unpatented microprocessors and chipsets
that performed the patented methods when incorporated with memory and buses in
a computer system. The Court established that method claims are exhausted by an
authorized sale of an item that substantially embodies the method if the item (1) has
no reasonable noninfringing use and (2) includes all inventive aspects of the claimed
method. The Quanta opinion emphasized the unpatented nature of the products sold.
Thus, the substantial embodiment test provided a framework for determining
whether the sale of an unpatented component, which by itself does not practice the
patented method, is still sufficient for exhaustion. The Court held that it is.

5 But that is not the case before us, which presents a situation in which the
product sold by Keurig was patented. Keurig acknowledges that its brewers are
commercial embodiments of the apparatus claims of the ’938 patent. Keurig does not
dispute that its rights in its brewers were exhausted with respect to the apparatus
claims. Instead, Keurig alleges that purchasers of its brewers infringe its brewer
patents by using Sturm cartridges to practice the claimed methods and therefore that
Sturm is liable for induced infringement. However, as the Supreme Court long ago
held, “Where a person has purchased a patented machine of the patentee or his
assignee, this purchase carries with it the right to the use of the machine so long as it
is capable of use.” Quanta, 553 U.S. at 625 (quoting Adams v. Burke, 84 U.S. 453, 455
(1873)). The Court’s decision in Quanta did not alter this principle. Keurig sold its
patented brewers without conditions and its purchasers therefore obtained the
unfettered right to use them in any way they chose, at least as against a challenge
from Keurig. We conclude, therefore, that Keurig’s rights to assert infringement of the
method claims ’938 patent were exhausted by its initial authorized sale of Keurig’s
patented brewers.
 DEFENSES 425

6 To rule otherwise would allow Keurig what the Supreme Court has aptly
described as an “end-run around exhaustion” by claiming methods as well as the
apparatus that practices them and attempting to shield the patented apparatus from
exhaustion by holding downstream purchasers of its device liable for infringement of
its method claims—a tactic that the Supreme Court has explicitly admonished. Here,
Keurig is attempting to impermissibly restrict purchasers of Keurig brewers from
using non-Keurig cartridges by invoking patent law to enforce restrictions on the post-
sale use of its patented product.

7 Keurig’s argument that patent exhaustion must be adjudicated on a claim-by-

claim basis is unavailing. The Court’s patent exhaustion jurisprudence has focused on
the exhaustion of the patents at issue in their entirety, rather than the exhaustion of
the claims at issue on an individual basis. Keurig’s decision to have sought protection
for both apparatus and method claims thus means that those claims are judged
together for purposes of patent exhaustion.

8 The noninfringement judgment of the district court is affirmed.

Kathleen M. O’Malley, Circuit Judge, concurring in the result.

9 Keurig’s patent rights covering normal methods of using its brewers to brew
coffee would be exhausted by the sale of the Keurig brewers, regardless of which
patent or patents contain the relevant apparatus and method claims. Thus, the
majority’s conclusion that exhaustion should not be assessed on a claim-by-claim basis
is dicta. To the extent it could be characterized as anything other than dicta, I must
dissent from that conclusion. There could be instances where assessing exhaustion on
a claim-by-claim basis—the same way we conduct almost every analysis related to
patent law—would be necessary and appropriate.

Impression Products v. Lexmark International, 581 U.S. 360 (2017)

Chief Justice Roberts delivered the opinion of the Court.

1 A United States patent entitles the patent holder, for a period of 20 years, to
“exclude others from making, using, offering for sale, or selling [its] invention
throughout the United States or importing the invention into the United States.” 35
U.S.C. § 154(a). Whoever engages in one of these acts “without authority” from the
patentee may face liability for patent infringement. § 271(a).

2 When a patentee sells one of its products, however, the patentee can no longer
control that item through the patent laws—its patent rights are said to “exhaust.” The
purchaser and all subsequent owners are free to use or resell the product just like any
other item of personal property, without fear of an infringement lawsuit.

3 This case presents two questions about the scope of the patent exhaustion
doctrine: First, whether a patentee that sells an item under an express restriction on
 426 MASUR & OUELLETTE ⋅ PATENT LAW

the purchaser’s right to reuse or resell the product may enforce that restriction
through an infringement lawsuit. And second, whether a patentee exhausts its patent
rights by selling its product outside the United States, where American patent laws
do not apply. We conclude that a patentee’s decision to sell a product exhausts all of
its patent rights in that item, regardless of any restrictions the patentee purports to
impose or the location of the sale.

4 The underlying dispute in this case is about laser printers—or, more

specifically, the cartridges that contain the powdery substance, known as toner, that
laser printers use to make an image appear on paper. Respondent Lexmark
International, Inc. designs, manufactures, and sells toner cartridges to consumers in
the United States and around the globe. It owns a number of patents that cover
components of those cartridges and the manner in which they are used.

5 When toner cartridges run out of toner they can be refilled and used again.
This creates an opportunity for other companies—known as remanufacturers—to
acquire empty Lexmark cartridges from purchasers in the United States and abroad,
refill them with toner, and then resell them at a lower price than the new ones
Lexmark puts on the shelves.

6 Not blind to this business problem, Lexmark structures its sales in a way that
encourages customers to return spent cartridges. It gives purchasers two options: One
is to buy a toner cartridge at full price, with no strings attached. The other is to buy a
cartridge at roughly 20–percent off through Lexmark’s “Return Program.” A customer
who buys through the Return Program still owns the cartridge but, in exchange for
the lower price, signs a contract agreeing to use it only once and to refrain from
transferring the empty cartridge to anyone but Lexmark.

7 In 2010, Lexmark sued a number of remanufacturers for patent infringement

with respect to two groups of cartridges. One group consists of Return Program
cartridges that Lexmark sold within the United States. Lexmark argued that, because
it expressly prohibited reuse and resale of these cartridges, the remanufacturers
infringed the Lexmark patents when they refurbished and resold them. The other
group consists of all toner cartridges that Lexmark sold abroad and that
remanufacturers imported into the country. Lexmark claimed that it never gave
anyone authority to import these cartridges, so the remanufacturers ran afoul of its
patent rights by doing just that.

8 Eventually, the lawsuit was whittled down to one defendant, Impression

Products, and one defense: that Lexmark’s sales, both in the United States and
abroad, exhausted its patent rights in the cartridges, so Impression Products was free
to refurbish and resell them, and to import them if acquired abroad. Impression
Products filed separate motions to dismiss with respect to both groups of cartridges.
The District Court granted the motion as to the domestic Return Program cartridges,
 DEFENSES 427

but denied the motion as to the cartridges Lexmark sold abroad. Both parties
appealed.

9 The Federal Circuit considered the appeals en banc and ruled for Lexmark
with respect to both groups of cartridges. We granted certiorari to consider the Federal
Circuit’s decisions with respect to both domestic and international exhaustion, and
now reverse.

II

10 First up are the Return Program cartridges that Lexmark sold in the United
States. We conclude that Lexmark exhausted its patent rights in these cartridges the
moment it sold them. The single-use/no-resale restrictions in Lexmark’s contracts
with customers may have been clear and enforceable under contract law, but they do
not entitle Lexmark to retain patent rights in an item that it has elected to sell.

11 The Patent Act grants patentees the “right to exclude others from making,
using, offering for sale, or selling [their] invention[s].” 35 U.S.C. § 154(a). For over 160
years, the doctrine of patent exhaustion has imposed a limit on that right to exclude.
See Bloomer v. McQuewan, 14 How. 539 (1853). The limit functions automatically:
When a patentee chooses to sell an item, that product “is no longer within the limits
of the monopoly” and instead becomes the “private, individual property” of the
purchaser, with the rights and benefits that come along with ownership. Id. at 549–
50.

12 This well-established exhaustion rule marks the point where patent rights
yield to the common law principle against restraints on alienation. The Patent Act
“promote[s] the progress of science and the useful arts by granting to [inventors] a
limited monopoly” that allows them to “secure the financial rewards” for their
inventions. United States v. Univis, 316 U.S. 241, 250 (1942). But once a patentee sells
an item, it has “enjoyed all the rights secured” by that limited monopoly. Keeler v.
Standard Folding Bed Co., 157 U.S. 659, 661 (1895). Because “the purpose of the
patent law is fulfilled . . . when the patentee has received his reward for the use of his
invention,” that law furnishes “no basis for restraining the use and enjoyment of the
thing sold.” Univis, 316 U.S. at 251.

13 Congress enacted and has repeatedly revised the Patent Act against the
backdrop of the hostility toward restraints on alienation. That enmity is reflected in
the exhaustion doctrine. The patent laws do not include the right to “restrain [ ] . . .
further alienation” after an initial sale. Straus v. Victor Talking Machine Co., 243 U.S.
490, 501 (1917). “The inconvenience and annoyance to the public that an opposite
conclusion would occasion are too obvious to require illustration.” Keeler, 157 U.S. at
667.
 428 MASUR & OUELLETTE ⋅ PATENT LAW

14 But an illustration never hurts. Take a shop that restores and sells used cars.
The business works because the shop can rest assured that, so long as those bringing
in the cars own them, the shop is free to repair and resell those vehicles. That smooth
flow of commerce would sputter if companies that make the thousands of parts that
go into a vehicle could keep their patent rights after the first sale. Those companies
might, for instance, restrict resale rights and sue the shop owner for patent
infringement. And even if they refrained from imposing such restrictions, the very
threat of patent liability would force the shop to invest in efforts to protect itself from
hidden lawsuits. Either way, extending the patent rights beyond the first sale would
clog the channels of commerce, with little benefit from the extra control that the
patentees retain. And advances in technology, along with increasingly complex supply
chains, magnify the problem.

15 Turning to the case at hand, we conclude that this well-settled line of precedent
allows for only one answer: Lexmark cannot bring a patent infringement suit against
Impression Products to enforce the single-use/no-resale provision accompanying its
Return Program cartridges. Once sold, the Return Program cartridges passed outside
of the patent monopoly, and whatever rights Lexmark retained are a matter of the
contracts with its purchasers, not the patent law.

16 The Federal Circuit reached a different result largely because it got off on the
wrong foot. Exhaustion reflects a default rule that a patentee’s decision to sell an item
“presumptively grant[s] ‘authority’ to the purchaser to use it and resell it.” 816 F.3d
at 742. But, the Federal Circuit explained, the patentee does not have to hand over
the full “bundle of rights” every time. Id. at 741. If the patentee expressly withholds a
stick from the bundle—perhaps by restricting the purchaser’s resale rights—the
buyer never acquires that withheld authority, and the patentee may continue to
enforce its right to exclude that practice under the patent laws.

17 The misstep in this logic is that the exhaustion doctrine is not a presumption
about the authority that comes along with a sale; it is instead a limit on “the scope of
the patentee’s rights.” United States v. General Elec. Co., 272 U.S. 476, 489 (1926). The
right to use, sell, or import an item exists independently of the Patent Act. What a
patent adds is a limited right to prevent others from engaging in those practices.
Exhaustion extinguishes that exclusionary power.

18 The Federal Circuit also expressed concern that preventing patentees from
reserving patent rights when they sell goods would create an artificial distinction
between such sales and sales by licensees. Patentees, the court explained, often license
others to make and sell their products, and may place restrictions on those licenses.
A computer developer could, for instance, license a manufacturer to make its patented
devices and sell them only for non-commercial use by individuals. If a licensee
breaches the license by selling a computer for commercial use, the patentee can sue
the licensee for infringement. And, in the Federal Circuit’s view, our decision in
 DEFENSES 429

General Talking Pictures Corp. v. Western Elec. Co., 304 U.S. 175, aff’d on reh’g, 305
U.S. 124 (1938), established that—when a patentee grants a license “under clearly
stated restrictions on post-sale activities” of those who purchase products from the
licensee—the patentee can also sue for infringement those purchasers who knowingly
violate the restrictions. If patentees can employ licenses to impose post-sale
restrictions on purchasers that are enforceable through infringement suits, the court
concluded, it would make little sense to prevent patentees from doing so when they
sell directly to consumers.

19 The Federal Circuit’s concern is misplaced. A patentee can impose restrictions

on licensees because a license does not implicate the same concerns about restraints
on alienation as a sale. Patent exhaustion reflects the principle that, when an item
passes into commerce, it should not be shaded by a legal cloud on title as it moves
through the marketplace. But a license is not about passing title to a product, it is
about changing the contours of the patentee’s monopoly: The patentee agrees not to
exclude a licensee from making or selling the patented invention, expanding the club
of authorized producers and sellers. Because the patentee is exchanging rights, not
goods, it is free to relinquish only a portion of its bundle of patent protections.

20 A patentee’s authority to limit licensees does not, as the Federal Circuit

thought, mean that patentees can use licenses to impose post-sale restrictions on
purchasers that are enforceable through the patent laws. So long as a licensee
complies with the license when selling an item, the patentee has, in effect, authorized
the sale. That licensee’s sale is treated, for purposes of patent exhaustion, as if the
patentee made the sale itself. The result: The sale exhausts the patentee’s rights in
that item. A license may require the licensee to impose a restriction on purchasers,
like the license limiting the computer manufacturer to selling for non-commercial use
by individuals. But if the licensee does so—by, perhaps, having each customer sign a
contract promising not to use the computers in business—the sale nonetheless
exhausts all patent rights in the item sold. The purchasers might not comply with the
restriction, but the only recourse for the licensee is through contract law, just as if the
patentee itself sold the item with a restriction.

21 General Talking Pictures involved a fundamentally different situation: There,

a licensee “knowingly ma[de] . . . sales . . . outside the scope of its license.” 304 U.S. at
181–82. We treated the sale “as if no license whatsoever had been granted” by the
patentee, which meant that the patentee could sue both the licensee and the
purchaser—who knew about the breach—for infringement. General Talking Pictures
Corp. v. Western Elec. Co., 305 U.S. 124, 127 (1938). This does not mean that patentees
can use licenses to impose post-sale restraints on purchasers. Quite the contrary: The
licensee infringed the patentee’s rights because it did not comply with the terms of its
license, and the patentee could bring a patent suit against the purchaser only because
the purchaser participated in the licensee’s infringement. General Talking Pictures,
then, stands for the modest principle that, if a patentee has not given authority for a
licensee to make a sale, that sale cannot exhaust the patentee’s rights.
 430 MASUR & OUELLETTE ⋅ PATENT LAW

22 In sum, patent exhaustion is uniform and automatic. Once a patentee decides

to sell—whether on its own or through a licensee—that sale exhausts its patent rights,
regardless of any post-sale restrictions the patentee purports to impose, either directly
or through a license.

III

23 Our conclusion that Lexmark exhausted its patent rights when it sold the
domestic Return Program cartridges goes only halfway to resolving this case.
Lexmark also sold toner cartridges abroad and sued Impression Products for patent
infringement for “importing [Lexmark’s] invention into the United States.” 35 U.S.C.
§ 154(a). Lexmark contends that it may sue for infringement with respect to all of the
imported cartridges—not just those in the Return Program—because a foreign sale
does not trigger patent exhaustion unless the patentee “expressly or implicitly
transfer[s] or license[s]” its rights. The Federal Circuit agreed, but we do not. An
authorized sale outside the United States, just as one within the United States,
exhausts all rights under the Patent Act.

24 This question about international exhaustion of intellectual property rights

has also arisen in the context of copyright law. Under the “first sale doctrine,” which
is codified at 17 U.S.C. § 109(a), when a copyright owner sells a lawfully made copy of
its work, it loses the power to restrict the purchaser’s freedom “to sell or otherwise
dispose of . . . that copy.” In Kirtsaeng v. John Wiley & Sons, Inc., we held that this “
‘first sale’ [rule] applies to copies of a copyrighted work lawfully made [and sold]
abroad.” 568 U.S. at 525. What helped tip the scales for global exhaustion was the fact
that the first sale doctrine originated in “the common law’s refusal to permit restraints
on the alienation of chattels.” Id. at 538. That “common-law doctrine makes no
geographical distinctions.” Id. at 539.

25 Applying patent exhaustion to foreign sales is just as straightforward. Patent

exhaustion, too, has its roots in the antipathy toward restraints on alienation, and
nothing in the text or history of the Patent Act shows that Congress intended to
confine that borderless common law principle to domestic sales. And differentiating
the patent exhaustion and copyright first sale doctrines would make little theoretical
or practical sense: The two share a strong similarity and identity of purpose, and many
everyday products—“automobiles, microwaves, calculators, mobile phones, tablets,
and personal computers”—are subject to both patent and copyright protections. The
bond between the two leaves no room for a rift on the question of international
exhaustion.

26 Lexmark sees the matter differently. The Patent Act, it points out, limits the
patentee’s “right to exclude others” from making, using, selling, or importing its
products to acts that occur in the United States. 35 U.S.C. § 154(a). A domestic sale,
it argues, triggers exhaustion because the sale compensates the patentee for
surrendering those U.S. rights. A foreign sale is different: The Patent Act does not
give patentees exclusionary powers abroad. Without those powers, a patentee selling
 DEFENSES 431

in a foreign market may not be able to sell its product for the same price that it could
in the United States, and therefore is not sure to receive the reward guaranteed by
U.S. patent law. Absent that reward, says Lexmark, there should be no exhaustion.
In short, there is no patent exhaustion from sales abroad because there are no patent
rights abroad to exhaust.

27 The territorial limit on patent rights is, however, no basis for distinguishing
copyright protections; those protections do not have any extraterritorial operation
either. Nor does the territorial limit support the premise of Lexmark’s argument.
Exhaustion is a separate limit on the patent grant, and does not depend on the
patentee receiving some undefined premium for selling the right to access the
American market. The patentee may not be able to command the same amount for its
products abroad as it does in the United States. But the Patent Act does not guarantee
a particular price, much less the price from selling to American consumers.

28 This Court has addressed international patent exhaustion in only one case,
Boesch v. Graff, 133 U.S. 697 (1890), decided over 125 years ago. All that case
illustrates is that a sale abroad does not exhaust a patentee’s rights when the patentee
had nothing to do with the transaction. Our decision did not, as Lexmark contends,
exempt all foreign sales from patent exhaustion. Rather, it reaffirmed the basic
premise that only the patentee can decide whether to make a sale that exhausts its
patent rights in an item.

29 Finally, the United States, as an amicus, advocates what it views as a middle-

ground position: that “a foreign sale authorized by the U.S. patentee exhausts U.S.
patent rights unless those rights are expressly reserved.” Its position is largely based
on policy rather than principle. The Government thinks that an overseas “buyer’s
legitimate expectation” is that a “sale conveys all of the seller’s interest in the
patented article,” so the presumption should be that a foreign sale triggers exhaustion.
But, at the same time, “lower courts long ago coalesced around” the rule that “a
patentee’s express reservation of U.S. patent rights at the time of a foreign sale will
be given effect,” so that option should remain open to the patentee.

30 The theory behind the Government’s express-reservation rule wrongly focuses

on the likely expectations of the patentee and purchaser during a sale. Exhaustion
does not arise because of the parties’ expectations about how sales transfer patent
rights. More is at stake when it comes to patents than simply the dealings between
the parties, which can be addressed through contract law. Instead, exhaustion occurs
because, in a sale, the patentee elects to give up title to an item in exchange for
payment. Allowing patent rights to stick remora-like to that item as it flows through
the market would violate the principle against restraints on alienation. Exhaustion
does not depend on whether the patentee receives a premium for selling in the United
States, or the type of rights that buyers expect to receive. As a result, restrictions and
location are irrelevant; what matters is the patentee’s decision to make a sale.
 432 MASUR & OUELLETTE ⋅ PATENT LAW

31 [Justice Ginsburg dissented from the Court’s holding on international

exhaustion, noting that she dissented in Kirtsaeng, but even if she “subscribed to
Kirtsaeng’s reasoning with respect to copyright, that decision should bear little weight
in the patent context,” including because “[t]he Patent Act contains no analogue to 17
U.S.C. § 109(a),” and copyright law involves greater harmonization across countries.]

Discussion Questions: Exhaustion

1. Avoiding Method Claim Exhaustion. Keurig v. Sturm Foods left patentees

wondering how to avoid exhaustion of inventive method claims. Why was it relevant
in that case whether the brewer apparatus embodied “essential features” of the
method claims at issue? Would the result have been different if the cartridges had
been independently patentable? What if Keurig had distributed some of its brewers
for free, and only charged for the cartridges? See LifeScan Scotland v. Shasta Techs.,
734 F.3d 1361 (Fed. Cir. 2013) (considering these questions in the context of freely
distributed blood glucose monitoring systems and glucose test strips).

2. Patents Versus Contracts and Sales Versus Licenses. To understand what

was at stake in Impression, it is useful to consider Lexmark’s alternatives. Lexmark
could certainly have prohibited its customers from reselling the toner cartridges as a
matter of contract law; these contracts could have been an automatic condition of the
sale. That would have permitted Lexmark to sue anyone who resold the cartridge for
breach of contract. But Lexmark doesn’t want to sue the people who resell the
cartridges—Lexmark’s own customers—for the same reason that Aro didn’t want to
sue the individuals who repaired their fabric convertible tops in Aro and Sanofi didn’t
want to sue the patients who took the generic version of its drug in Sanofi (both in
Chapter 10). These individuals are dispersed and hard to find, and suing them
individually might well cost more than it is worth. Plus, it’s not a great business
practice to sue your customers or potential customers.

Instead, Lexmark wants to sue Impression. But the problem for Lexmark is
that it doesn’t have a contract with Impression, only with Lexmark’s customers.
Lexmark could try to sue Impression for tortious inducement of contract breach
(inducing Lexmark’s customers to breach their contracts with Lexmark) or some such
thing, but those are difficult suits to win, particularly across international lines. In
addition, it is easier to obtain treble damages (which we will discuss in Chapter 16)
and other enhanced remedies via patent law than via contract law. Much better, from
Lexmark’s perspective, if it could sue Impression for patent infringement.

Rather than relying on contract remedies, could patent owners circumvent

Impression through creative contract drafting? Exhaustion applies to authorized
sales, not licenses. Could Lexmark avoid exhaustion by licensing cartridges rather
than selling them? Or would a court reject this tactic as a “disguised sale”? See Daniel
Hemel & Lisa Larrimore Ouellette, Licensing in the Shadow of Impression Products,
 DEFENSES 433

Written Description (May 31, 2017),

https://writtendescription.blogspot.com/2017/05/licensing-in-shadow-of-
impression.html.

3. Patent Exhaustion Winners and Losers. The parties advocating for the broad
exhaustion rules adopted by the Supreme Court in Impression v. Lexmark argued that
exhaustion increases economic efficiency by decreasing information costs: parties will
no longer need to spend as much time verifying whether aspects of imported or resold
goods are protected by U.S. patents. Opponents argued that exhaustion increases
economic efficiency by increasing the ability of patent owners to price discriminate,
such as by charging lower prices in low-income countries. What are the distributive
effects of the Supreme Court’s ruling? Do you find it surprising that groups focused
on global access to medicines advocated in favor of a U.S. rule of international patent
exhaustion? See Daniel J. Hemel & Lisa Larrimore Ouellette, Trade and Tradeoffs:
The Case of International Patent Exhaustion, 116 Colum. L. Rev. Sidebar 17 (2016)
(arguing that “while the net winners and losers from a U.S. international exhaustion
rule are somewhat ambiguous, it seems clear that consumers in low-income countries
do not come out ahead”).

4. Repair Versus Reconstruction. We have already encountered one important

limitation on exhaustion: it permits authorized purchasers only to use, resell, or repair
their patented product, not to entirely reconstruct the product. In the Supreme Court’s
Aro II decision we read in Chapter 10, the Court discussed its holding in Aro I: the
authorized sale by GM of cars with a patented convertible top allowed purchasers to
replace the fabric in the tops because this was “repair” rather than “reconstruction.”
What does the repair/reconstruction doctrine permit purchasers of Keurig’s patented
brewers to do with those brewers? What can’t they do? Is repair vs. reconstruction a
useful dichotomy for courts to manage the underlying policy concerns?

5. Self-Replicating Technologies. Another limitation on exhaustion involves

products that generate new copies of themselves. In Bowman v. Monsanto, 569 U.S.
278 (2013), the Supreme Court held that exhaustion did not allow a farmer to
reproduce Monsanto’s patented “Roundup Ready” seeds that were genetically
engineered to be herbicide resistant. “[E]xhaustion applies only to the particular item
sold, and not to reproductions.” Id. at 287. How do you think this ruling has affected
the farming industry?

C. Inequitable Conduct
Recall from Chapter 1 that patent applicants are under no affirmative
obligation to search for prior art relevant to their applications. Finding prior art is the
USPTO examiner’s responsibility. However, applicants must identify to the USPTO
any relevant prior art of which they are aware. Failure to comply with this
requirement can get applicants into serious trouble.
434 MASUR & OUELLETTE ⋅ PATENT LAW

Inequitable conduct is an equitable defense to infringement rendering a patent

“unenforceable” if the patentee deceived the USPTO, such as by failing to disclose
devastating prior art. “Unenforceability” is listed as a defense to patent infringement
in 35 U.S.C. § 282(b)(1), and it is even more valuable for defendants than invalidity
because the entire patent is unenforceable, not just the specific claim at issue. The
unenforceability penalty has thus been called the “atomic bomb” of patent law.

In response to concerns about a perceived “plague” of inequitable conduct

counterclaims, the Federal Circuit cut back on this defense in Therasense, Inc. v.
Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc). The en banc court
held that the party asserting the defense must establish, by clear and convincing
evidence, two elements:

1. But-for materiality. The applicant failed to disclose material information or

materially false information, and the USPTO would not have allowed the claim
if it had been aware of the information.

2. Specific intent to deceive. The applicant knew of the information, knew it was
material, and made a deliberate decision to withhold it. Intent may be inferred
from circumstantial evidence, but not solely from materiality.

Successful inequitable conduct defenses have become less frequent since

Therasense. As one measure of prevalence, the number of Federal Circuit opinions
mentioning “inequitable conduct” dropped from a high of 43 in 2008 to only 4 in 2021.
The following facts have not resulted in inequitable conduct:

• The patentee failed to disclose a relevant reference during prosecution, but the
reference was cumulative of references the USPTO later considered in IPR
proceedings upholding the patents’ validity and was thus not but-for material.
California Inst. of Tech. v. Broadcom Ltd., 25 F.4th 976 (Fed. Cir. 2022).

• The patentee failed to disclose to the USPTO that the parent patent of the
application at issue was in litigation, but it was not material because invalidity
defenses had not yet been raised in the litigation, and there was no evidence
on which to base an inference of deceptive intent. Outside the Box Innovations
v. Travel Caddy, 695 F.3d 1285 (Fed. Cir. 2012).

• A search report from the European Patent Office cited the reference as relevant
to the counterpart application filed in that office, suggesting that the patentee
knew the reference was material, but there was no evidence of a “deliberate
decision to withhold it.” 1st Media v. Elec. Arts, 694 F.3d 1367 (Fed. Cir. 2012).

But the defense remains viable. For example, the Federal Circuit has affirmed
findings of inequitable conduct in the following circumstances:

• The patentee withheld information about an earlier sale that would have
barred the patent, made false statements about when the invention was
 DEFENSES 435

reduced to practice, and threatened a client with legal action if it did not
corroborate the patentee’s story, resulting in a straightforward case. GS
CleanTech v. Adkins Energy, 951 F.3d 1310 (Fed. Cir. 2020).

• The patent owner’s chief scientist told the FDA that the invention’s claimed
pH range was “old” in order to aid FDA approval of the product, but described
this range as a “critical” innovation with “unexpected” results to the USPTO,
serving as circumstantial evidence of deceptive intent. Belcher Pharms., LLC
v. Hospira, Inc., 11 F.4th 1345 (Fed. Cir. 2021).

• There was no direct evidence of specific intent to deceive the USPTO, but the
district court drew an adverse inference based on similar deceptive misconduct
during litigation, such as hiding material that should have been disclosed
during discovery. Regeneron Pharmaceuticals v. Merus, 864 F.3d 1343 (Fed.
Cir. 2017).

Consider the incentives this doctrine provides to patent applicants considering

whether to disclose material information. Inequitable conduct will only harm an
applicant if the buried information is eventually found. If that information is certain
to invalidate all claims of the patent, does the defense provide any deterrence? In other
words, is there any incentive to turn over information to the USPTO that would make
the entire patent invalid? On the other hand, what if the applicant makes only a very
small misstatement? Does it make sense to render the entire patent unenforceable
based on an act of deception that concerns only one or a few claims? Is this the optimal
relationship between deterrence and culpability? See Tun-Jen Chiang, The Upside-
Down Inequitable Conduct Defense, 107 Nw. U. L. Rev. 1243 (2013) (arguing that “the
unenforceability penalty creates too much deterrence against minor errors, but it also
produces inadequate deterrence against the most serious patentee frauds”).

A patentee’s duty of candor arises not only from the inequitable conduct
doctrine, but also from 37 C.F.R. § 1.56, which states that patent inventors,
prosecutors, and anyone else “substantively involved in the preparation or prosecution
of the application” has “a duty of candor and good faith in dealing with the [USPTO],
which includes a duty to disclose to the Office all information known to that individual
to be material to patentability as defined in this section.” The remedy for violations of
this rule is dismissal of the patent application (and, less commonly, discipline of the
patent prosecutor).

Of course, as we have said, none of these rules impose any search obligation on
patentees. Should patentees be encouraged to search for and disclose information to
examiners? Would it affect your answer if it turned out that examiners rarely use
applicant-submitted prior art, as one paper has argued? See Christopher A. Cotropia,
Mark A. Lemley & Bhaven Sampat, Do Applicant Patent Citations Matter?, 42 Res.
Pol’y 844 (2013). As discussed in Chapter 1, patent examiners do not have enough
time to conduct a thorough prior art search for every patent application on their
docket, and empirical evidence suggests that these time constraints cause examiners
436 MASUR & OUELLETTE ⋅ PATENT LAW

to erroneously grant many invalid patents. Are there other ways to reduce the
informational challenges faced by patent examiners?

D. Patent Misuse and Antitrust Violations

Under the judge-made doctrine of patent misuse, a patent is unenforceable
when the patentee has leveraged it to obtain market power beyond the scope of the
patent right. But this is a relatively limited rule. As explained in Chapter 1, providing
market power—even monopoly power—is the goal of patent law. The idea is that the
prospect of being able to charge prices above marginal cost will induce patent owners
to create more new products in the first place. In addition, “a patent does not
necessarily confer market power upon the patentee.” Illinois Tool Works Inc. v.
Independent Ink, Inc., 547 U.S. 28, 45 (2006). That is, the mere fact that a party owns
a patent will not be treated as sufficient evidence that the party has market power,
much less that it has misused the patent to obtain market power.

To emphasize the broad nature of patent rights, Congress has imposed

statutory limits on patent misuse by specifying in § 271(d) of the Patent Act that
certain activities such as refusal to license do not constitute misuse.

35 U.S.C. § 271(d)

No patent owner otherwise entitled to relief for infringement or

contributory infringement of a patent shall be denied relief or deemed
guilty of misuse or illegal extension of the patent right by reason of his
having done one or more of the following:

(1) derived revenue from acts which if performed by another without his
consent would constitute contributory infringement of the patent;

(2) licensed or authorized another to perform acts which if performed

without his consent would constitute contributory infringement of the
patent;

(3) sought to enforce his patent rights against infringement or

contributory infringement;

(4) refused to license or use any rights to the patent; or

(5) conditioned the license of any rights to the patent or the sale of the
patented product on the acquisition of a license to rights in another
patent or purchase of a separate product, unless, in view of the
circumstances, the patent owner has market power in the relevant
 DEFENSES 437

market for the patent or patented product on which the license or sale
is conditioned.

The Federal Circuit has also emphasized “the narrow scope of the doctrine”
and that “the defense of patent misuse is not available to a presumptive infringer
simply because a patentee engages in some kind of wrongful commercial conduct, even
conduct that may have anticompetitive effects.” Princo Corp. v. International Trade
Commission, 616 F.3d 1318, 1329 (Fed. Cir. 2010) (en banc); see also id. at 1342 (Dyk,
J., dissenting) (arguing that the court has “emasculate[d] the doctrine so that it will
not provide a meaningful obstacle to patent enforcement”).

So what kind of behavior might constitute patent misuse? Acts that could
trigger misuse include tying the sale of patented product to unpatented staple articles
of commerce, tying patent licenses to the license of other patents, and conditioning
licenses on agreements not to sell noninfringing alternatives.

One clear example of misuse is that under Brulotte v. Thys Co., 379 U.S. 29
(1964), a patentee cannot charge royalties for sales that occur after the patent term
expires. This rule has been criticized because it doesn’t actually extend the patent
monopoly beyond the patent term: after expiration, others may use the patent for free,
and there’s no good reason for preventing a licensee from entering a contract that
requires it to pay lower royalties for longer. Nonetheless, in Kimble v. Marvel
Entertainment, 576 U.S. 446 (2015), the Supreme Court declined to overrule Brulotte
on stare decisis grounds, largely due to the lack of evidence of a problem. Parties can
circumvent Brulotte by contract, such as by (1) deferring payments for pre-expiration
use to the post-expiration period, (2) specifying that some royalties are for non-patent
rights such as related know-how and trade secrets, or (3) licensing the IP to a separate
company that produces the product and giving the licensor some stake in that
company. What kind of patentees might be disadvantaged by the Brulotte rule?

Another consequence of the rule reaffirmed in Kimble is that if a patent is

declared invalid, any ongoing stream of royalty payments based on that patent can no
longer be collected. For instance, imagine that a firm licenses its patented touchscreen
technology to Apple in exchange for 0.00000001% of Apple’s revenues from iPhone
sales over a ten-year period. If the patent is declared invalid halfway through the ten-
year period, Apple no longer has to make the remaining payments. How do you think
this rule affects the type of licensing agreements that firms will negotiate? Is there
any harm from firms structuring their agreements to avoid this type of potential
problem?

Behavior that does not fall within the narrow scope of patent misuse may still
be an antitrust violation, and patent litigation sometimes involves antitrust
counterclaims. The Supreme Court’s most recent discussion of the intersection of
patent and antitrust was FTC v. Actavis, 570 U.S. 136 (2013). Actavis concerned the
common practice of “reverse-payment settlements” in pharmaceutical patent
infringement cases, in which the patent owner pays a prospective generic
438 MASUR & OUELLETTE ⋅ PATENT LAW

manufacturer to settle the case and stay off the market. Because of a concern that
such agreements may be used to shield invalid patents from review, the Court held
that reverse-payment settlements may be anticompetitive and should be scrutinized
under antitrust law’s “rule of reason.” Id. at 156. For a thorough exploration of the
patent-antitrust intersection, see Herbert Hovenkamp et al., IP and Antitrust: An
Analysis of Antitrust Principles Applied to Intellectual Property Law (3d ed. 2016).

E. Prior User Rights

As discussed in Chapter 9, direct patent infringement is strict liability. This
means that in general, there is no independent invention defense: someone who has
no knowledge of a patent and independently develops the invention is still liable. A
number of scholars have questioned this policy choice. See, e.g., Stephen M. Maurer &
Suzanne Scotchmer, The Independent Invention Defence in Intellectual Property, 69
Economica 535 (2002) (“We argue that the patent rule is inferior in any industry
where the cost of independently inventing a product is not too much less than the
inventor’s cost.”); Samson Vermont, Independent Invention as a Defense to Patent
Infringement, 105 Mich. L. Rev. 475 (2006).

Although U.S. patent law lacks a broad independent invention defense, 35

U.S.C. § 273 provides a defense to infringement based on prior commercial use in the
United States. This statutory defense for prior commercial use was first created in
1999 for business method patents, and it was then extended to all patents by the 2011
America Invents Act.

35 U.S.C. § 273(a)

A person shall be entitled to a defense [to patent infringement] if—

(1) such person, acting in good faith, commercially used the subject
matter in the United States, either in connection with an internal
commercial use or an actual arm’s length sale or other arm’s length
commercial transfer of a useful end result of such commercial use; and

(2) such commercial use occurred at least 1 year before the earlier of
either—

(A) the effective filing date of the claimed invention; or

(B) the date on which the claimed invention was disclosed to the
public in a manner that qualified for the exception from prior art
under section 102(b).
 DEFENSES 439

This defense is subject to a number of limitations. For example, it is a personal

defense that applies only to “the person who performed or directed the performance of
the commercial use” and may not be licensed or transferred to another party or
expanded to other worksites. § 273(e)(1). The defense “is not a general license under
all claims of the patent”; it only allows continuation of the existing commercial use.
§ 273(e)(3). Thanks to effective university lobbyists, the defense also does not apply to
academic patents. § 273(e)(5).

There are no reported cases in which the 1999 prior user rights defense was
raised, and a 2015 study found only three reported cases in which the expanded
defense was asserted, none of which were successful. Why do you think the defense
hasn’t been more popular? For example, if a defendant was engaged in prior
commercial use, are there any other defenses she could assert that aren’t subject to
the limitations described above?

The statutory defense for prior commercial use is related to a common-law

“shop rights” defense that gives an employer the right to use patented technologies
developed by an employee in the employer’s “shop.” Like prior user rights, shop rights
are rarely asserted, and they also seem to be subject to important limitations:

The “shop rights” doctrine is a judicially created defense to patent

infringement (sometimes described as an implied license). It applies
when an employer is sued for patent infringement by an employee who
created the patented invention with the employer’s resources while
under its employment, even though the employer otherwise has no legal
rights to the resultant invention. The doctrine has its limits, however;
for example, it seems an employer can only use the invention internally
in its own business. And the law regarding the doctrine’s scope is far
from clear. It is, at least, likely (if not certain) that the doctrine does not
extend to an employer’s sale of the patented invention to an unrelated
third-party for the latter’s unfettered use, since the “shop right” belongs
only to the employer.

Beriont v. GTE Labs., Inc., 535 F. App’x 919, 923 (Fed. Cir. 2013).

F. Experimental Use
In 1813, Justice Story developed a defense from patent liability for
experimental use, writing that “it could never have been the intention of the
legislature to punish a man, who constructed such a [patented] machine merely for
philosophical experiments, or for the purpose of ascertaining the sufficiency of the
machine to produce its described effects.” Whittemore v. Cutter, 29 F. Cas. 1120, 1121
(C.C.D. Mass. 1813). But the Federal Circuit has interpreted this doctrine narrowly,
limiting it to activities “for amusement, to satisfy idle curiosity, or for strictly
440 MASUR & OUELLETTE ⋅ PATENT LAW

philosophical inquiry.” Madey v. Duke Univ., 307 F.3d 1351, 1362 (Fed. Cir. 2002).
The doctrine does not exempt university research because even when the research has
“no commercial application . . . these projects unmistakably further the institution’s
legitimate business objectives, including educating and enlightening students and
faculty . . . increas[ing] the status of the institution, and lur[ing] lucrative research
grants, students and faculty.” Id.

Many countries have a broad defense from patent liability for research
activities, and some scholars have advocated for a similar rule in the United States.
See, e.g., Katherine J. Strandburg, What Does the Public Get? Experimental Use and
the Patent Bargain, 2004 Wis. L. Rev. 81. Do you think expanding the experimental
use defense is a good idea? If so, what additional conduct would you exempt? What is
the best argument against an experimental use exemption? In Madey v. Duke, the
Federal Circuit noted that Duke University, “like other major research institutions of
higher learning, is not shy in pursuing an aggressive patent licensing program from
which it derives a not insubstantial revenue stream.” 307 F.3d at 1362-63 n.7. Should
patenting activity affect whether an institution qualifies for the defense?

Even though the United States does not have a broad experimental use
defense, there is a specific statutory defense for uses related to submitting information
for regulatory purposes, which is distinct from the common law experimental use
exemption and is refered to by names including the “statutory experimental use
defense,” the “safe harbor” and the “Bolar exemption” (named after the case Roche v.
Bolar, 733 F.2d 858 (Fed. Cir. 1984), which inspired Congress to enact this provision).

35 U.S.C. § 271(e)(1)

It shall not be an act of infringement to make, use, offer to sell, or sell

within the United States or import into the United States a patented
invention (other than [new animal drugs involving gene manipulation])
solely for uses reasonably related to the development and submission of
information under a Federal law which regulates the manufacture, use,
or sale of drugs or veterinary biological products.

Under this provision, a generic pharmaceutical manufacturer that wishes to apply for
FDA approval may perform the tests required by the FDA without fear of liability.
But this safe harbor does not protect “[b]asic scientific research on a particular
compound, performed without the intent to develop a particular drug.” Merck KGaA
v. Integra Lifesciences I, Ltd., 545 U.S. 193, 205 (2005).

Caution: Both of these experimental use defenses are distinct from

“experimental use” in the § 102 context. As discussed in Chapter 2, a public use
sometimes does not count as prior art if it is experimental and the inventor does not
yet know that it will work for its intended purpose. In the § 102 context, the issue is
whether the experiment should count as prior art that bars the inventor from filing a
 DEFENSES 441

patent more than a year later. In the infringement context, the issue is whether the
experiment should subject the researcher to liability under someone else’s patent.

G. Laches
Laches is an equitable defense based on delay caused by the plaintiff. Two
types of laches have been recognized under U.S. patent law: (1) laches in suing for
infringement and (2) prosecution laches due to patentee-caused delay during
examination. Both require unreasonable delay by the patentee and prejudice to the
defendant. But neither type of laches is likely to continue to be important.

Patent law already has a six-year statutory limitations period for damages: 35
U.S.C. § 286 states that “no recovery shall be had for any infringement committed
more than six years prior to the filing of the complaint or counterclaim for
infringement in the action.” And in SCA Hygiene Products Aktiebolag v. First Quality
Baby Products, 580 U.S. 328 (2017), the Supreme Court held that laches in suing for
infringement can no longer be asserted as a defense against damages that occurred
within this six-year period. The six-year statutory limitations period governs, full
stop. (Laches can still be an effective defense to a permanent injunction under the
eBay framework described in Chapter 13.)

Prosecution laches can render a patent unenforceable if there is an

unreasonable and unexplained delay in prosecution. This doctrine was reaffirmed as
a defense to patent infringement in Symbol Technologies v. Lemelson Medical, 277
F.3d 1361, 1364 (Fed. Cir. 2002). Prosecution laches could be important for targeting
“submarine patents” that were intentionally delayed at the patent office until the
relevant technology matured, but intentional delay became a much less effective
strategy after the 1995 shift in patent term from 17 years from issue to 20 years from
filing. Now, an applicant who has already filed has nothing to gain (and much to lose)
from delaying the issuance of the patent.
442 MASUR & OUELLETTE ⋅ PATENT LAW

Practice Problems: Defenses

You are the general counsel for a small U.S. solar panel manufacturer,
SolarCo, and you just received a letter from PatentCo stating that you are infringing
one of their patents. Consider each of the following sets of facts. Do they suggest
particular defenses that are likely (or unlikely) to be successful?

1. PatentCo failed to search for relevant prior art when applying for the patent.

2. PatentCo searched for prior art when applying for the patent and decided to
not disclose one publication because it seemed related to one of the claims,
although it does not invalidate the claim.

3. PatentCo has purchased many solar panel patents, and your primary
competitors have agreed to license PatentCo’s portfolio for what strikes you as
an excessive royalty. You request a license agreement on these terms and the
firm refuses.

4. PatentCo became aware of SolarCo’s infringement five years ago, but because
SolarCo was not making any profits then, PatentCo decided to wait for
SolarCo’s sales to increase before seeking licensing revenue.

5. The asserted patent claims a solar panel design that SolarCo began using 2
years before the patent’s effective filing date. Two months ago, SolarCo
switched to a different panel design that is also within the scope of PatentCo’s
asserted patent.

6. The asserted patent claims a manufacturing process that SolarCo is using only
for research purposes, with no commercial application.

7. The asserted patent claims an electronic component that you purchased from
another U.S. firm, which has a license to the patent with a field-of-use
restriction stating that the firm may only sell the component for use in
personal computers.

8. The asserted patent claims an electronic component that you purchased from
a Japanese manufacturer, which has licensed PatentCo’s Japanese patent
portfolio but not its U.S. patent portfolio.
 REMEDIES 443

IV. Remedies
The following four chapters examine the remedies for patent infringement:

Remedy Overview

13. Injunctions Patentees may receive injunctions under § 283 if they

(§ 283) satisfy the four-part eBay framework. Injunctions are
more likely if the parties are in a competitive relationship,
if the patentee can show lost sales or loss of goodwill, or if
the patentee consistently refuses to license to others. They
are less likely if the patented invention is a small
component of a complex product.

14. Lost Profits Lost profits are available under § 284 if the patentee
Damages satisfies the four-part Panduit test, including by showing
(§ 284) the absence of acceptable noninfringing alternatives. The
goal of patent damages is to put the patentee in the
position they would have occupied but for the
infringement.

15. Reasonable If a patentee cannot prove lost profits, § 284 states that
Royalties (§ 284) damages shall be “in no event less than a reasonable
royalty,” which is calculated based on a hypothetical arms-
length negotiation before infringement began.

16. Enhanced § 284 also allows the court to “increase the damages up to
Damages and three times,” and § 285 permits the award of attorneys’
Attorneys’ Fees fees “in exceptional cases.” The Supreme Court recently
(§§ 284–85) rejected the Federal Circuit’s rigid tests for limiting these
awards.

As one measure of the relative frequency of different types of damages rewards:

The legal analytics site Lex Machina has recorded 440 federal district court patent
cases that led to a damages award during the decade from 2011 through 2020. Of
these, 30% included an award of lost profits, 76% included a reasonable royalty, and
28% included enhanced damages. (These numbers exceed 100% because all three
types of damages can be awarded in a single case.)

For a valuable overview of all of these remedies—including a comparison to

patent remedies in other countries—see Thomas F. Cotter, Comparative Patent
Remedies (2013).
 444 MASUR & OUELLETTE ⋅ PATENT LAW

13. Injunctions
As we noted at the beginning of the book, patents are best understood as a type
of property. And as you may recall from your 1L Property class, property can be
thought of as a “bundle of rights.” That is, to own property is to possess some set of
rights, with the type of rights depending on the particular form of property. Patent
law conveys only a limited set of rights from this bundle. For instance, recall that
patents do not include the right to make or use the subject matter of the patented
invention. Even if you own a patent over a particular type of invention, your patent
will not protect you from being sued by another patent holder whose rights you might
be infringing.

The principal right contained within the patent bundle is the right to exclude.
Patents exist to prevent other parties from making, using, or selling the patented
invention without the permission of the patent holder. Accordingly, injunctions—the
legal mechanism by which exclusion occurs—have long been available to patent
holders who prove infringement. Patent injunctions are governed by 35 U.S.C. § 283:

35 U.S.C. § 283

The several courts having jurisdiction of cases under this title may
grant injunctions in accordance with the principles of equity to prevent
the violation of any right secured by patent, on such terms as the court
deems reasonable.

Despite the “may” in this statute, injunctions were almost always granted as a
matter of course to prevailing plaintiffs before 2006. Under the Federal Circuit’s rules,
if a patentee proved infringement at trial, a permanent injunction was essentially
guaranteed. The statute’s “may” was effectively treated as a bright-line “will.” And
then, as we have seen in so many areas of patent law, the Supreme Court stepped in
to reject the Federal Circuit’s formalist, bright-line rules in favor of more flexible
standards.

eBay v. MercExchange, 547 U.S. 388 (2006)

Justice Thomas delivered the opinion of the Court.

1 Ordinarily, a federal court considering whether to award permanent injunctive

relief to a prevailing plaintiff applies the four-factor test historically employed by
courts of equity. Petitioner eBay Inc. argues that this traditional test applies to
disputes arising under the Patent Act. We agree and, accordingly, vacate the
judgment of the Court of Appeals.
 INJUNCTIONS 445

2 Petitioner eBay operates a popular Internet Web site that allows private
sellers to list goods they wish to sell, either through an auction or at a fixed price.
Respondent MercExchange, L.L.C., holds a number of patents, including a business
method patent for an electronic market designed to facilitate the sale of goods between
private individuals by establishing a central authority to promote trust among
participants. See U.S. Patent No. 5,845,265. MercExchange sought to license its
patent to eBay, as it had previously done with other companies, but the parties failed
to reach an agreement. MercExchange subsequently filed a patent infringement suit.
A jury found that MercExchange’s patent was valid, that eBay had infringed that
patent, and that an award of damages was appropriate.

3 Following the jury verdict, the District Court denied MercExchange’s motion
for permanent injunctive relief. The Court of Appeals for the Federal Circuit reversed,
applying its “general rule that courts will issue permanent injunctions against patent
infringement absent exceptional circumstances.” We granted certiorari to determine
the appropriateness of this general rule.

II

4 According to well-established principles of equity, a plaintiff seeking a

permanent injunction must satisfy a four-factor test before a court may grant such
relief. A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2)
that remedies available at law, such as monetary damages, are inadequate to
compensate for that injury; (3) that, considering the balance of hardships between the
plaintiff and defendant, a remedy in equity is warranted; and (4) that the public
interest would not be disserved by a permanent injunction. See, e.g., Weinberger v.
Romero–Barcelo, 456 U.S. 305, 311–13 (1982); Amoco Production Co. v. Gambell, 480
U.S. 531, 542 (1987). The decision to grant or deny permanent injunctive relief is an
act of equitable discretion by the district court, reviewable on appeal for abuse of
discretion. See, e.g., Romero–Barcelo, 456 U.S. at 320.

5 These familiar principles apply with equal force to disputes arising under the
Patent Act. As this Court has long recognized, “a major departure from the long
tradition of equity practice should not be lightly implied.” Id. Nothing in the Patent
Act indicates that Congress intended such a departure. To the contrary, the Patent
Act expressly provides that injunctions “may” issue “in accordance with the principles
of equity.” 35 U.S.C. § 283.

6 To be sure, the Patent Act also declares that “patents shall have the attributes
of personal property,” § 261, including “the right to exclude others from making, using,
offering for sale, or selling the invention,” § 154(a)(1). According to the Court of
Appeals, this statutory right to exclude alone justifies its general rule in favor of
permanent injunctive relief. But the creation of a right is distinct from the provision
of remedies for violations of that right. Indeed, the Patent Act itself indicates that
 446 MASUR & OUELLETTE ⋅ PATENT LAW

patents shall have the attributes of personal property “[s]ubject to the provisions of
this title,” 35 U.S.C. § 261, including, presumably, the provision that injunctive relief
“may” issue only “in accordance with the principles of equity,” § 283.

7 This approach is consistent with our treatment of injunctions under the

Copyright Act. Like a patent owner, a copyright holder possesses “the right to exclude
others from using his property.” Fox Film Corp. v. Doyal, 286 U.S. 123, 127 (1932); see
also id. at 127–28 (“A copyright, like a patent, is at once the equivalent given by the
public for benefits bestowed by the genius and meditations and skill of individuals
and the incentive to further efforts for the same important objects”). Like the Patent
Act, the Copyright Act provides that courts “may” grant injunctive relief “on such
terms as it may deem reasonable to prevent or restrain infringement of a copyright.”
17 U.S.C. § 502(a). And as in our decision today, this Court has consistently rejected
invitations to replace traditional equitable considerations with a rule that an
injunction automatically follows a determination that a copyright has been infringed.
See, e.g., New York Times Co. v. Tasini, 533 U.S. 483, 505 (2001); Dun v. Lumbermen’s
Credit Assn., 209 U.S. 20, 23–24 (1908).

8 Neither the District Court nor the Court of Appeals below fairly applied these
traditional equitable principles in deciding respondent’s motion for a permanent
injunction. Although the District Court recited the traditional four-factor test, it
appeared to adopt certain expansive principles suggesting that injunctive relief could
not issue in a broad swath of cases. Most notably, it concluded that a “plaintiff’s
willingness to license its patents” and “its lack of commercial activity in practicing the
patents” would be sufficient to establish that the patent holder would not suffer
irreparable harm if an injunction did not issue. But traditional equitable principles
do not permit such broad classifications. For example, some patent holders, such as
university researchers or self-made inventors, might reasonably prefer to license their
patents, rather than undertake efforts to secure the financing necessary to bring their
works to market themselves. Such patent holders may be able to satisfy the
traditional four-factor test, and we see no basis for categorically denying them the
opportunity to do so. To the extent that the District Court adopted such a categorical
rule, then, its analysis cannot be squared with the principles of equity adopted by
Congress. The court’s categorical rule is also in tension with Continental Paper Bag
Co. v. Eastern Paper Bag Co., 210 U.S. 405, 422–30 (1908), which rejected the
contention that a court of equity has no jurisdiction to grant injunctive relief to a
patent holder who has unreasonably declined to use the patent.

9 In reversing the District Court, the Court of Appeals departed in the opposite
direction from the four-factor test. The court articulated a “general rule,” unique to
patent disputes, “that a permanent injunction will issue once infringement and
validity have been adjudged.” The court further indicated that injunctions should be
denied only in the “unusual” case, under “exceptional circumstances” and “in rare
instances . . . to protect the public interest.” Just as the District Court erred in its
 INJUNCTIONS 447

categorical denial of injunctive relief, the Court of Appeals erred in its categorical
grant of such relief.

10 Because we conclude that neither court below correctly applied the traditional
four-factor framework that governs the award of injunctive relief, we vacate the
judgment of the Court of Appeals, so that the District Court may apply that framework
in the first instance. In doing so, we take no position on whether permanent injunctive
relief should or should not issue in this particular case, or indeed in any number of
other disputes arising under the Patent Act. We hold only that the decision whether
to grant or deny injunctive relief rests within the equitable discretion of the district
courts, and that such discretion must be exercised consistent with traditional
principles of equity, in patent disputes no less than in other cases governed by such
standards.

11 Accordingly, we vacate the judgment of the Court of Appeals and remand the
case for further proceedings consistent with this opinion.

Chief Justice Roberts, with whom Justice Scalia and Justice Ginsburg join,
concurring.

12 I agree with the Court’s holding that “the decision whether to grant or deny
injunctive relief rests within the equitable discretion of the district courts, and that
such discretion must be exercised consistent with traditional principles of equity, in
patent disputes no less than in other cases governed by such standards,” and I join
the opinion of the Court. That opinion rightly rests on the proposition that “a major
departure from the long tradition of equity practice should not be lightly implied.”

13 From at least the early 19th century, courts have granted injunctive relief upon
a finding of infringement in the vast majority of patent cases. This “long tradition of
equity practice” is not surprising, given the difficulty of protecting a right to exclude
through monetary remedies that allow an infringer to use an invention against the
patentee’s wishes—a difficulty that often implicates the first two factors of the
traditional four-factor test. This historical practice, as the Court holds, does not entitle
a patentee to a permanent injunction or justify a general rule that such injunctions
should issue. The Federal Circuit itself so recognized in Roche Products, Inc. v. Bolar
Pharmaceutical Co., 733 F.2d 858, 865–67 (1984). At the same time, there is a
difference between exercising equitable discretion pursuant to the established four-
factor test and writing on an entirely clean slate. “Discretion is not whim, and limiting
discretion according to legal standards helps promote the basic principle of justice that
like cases should be decided alike.” Martin v. Franklin Capital Corp., 546 U.S. 132,
139 (2005). When it comes to discerning and applying those standards, in this area as
others, “a page of history is worth a volume of logic.” New York Trust Co. v. Eisner,
256 U.S. 345, 349 (1921) (opinion for the Court by Holmes, J.).

Justice Kennedy, with whom Justice Stevens, Justice Souter, and Justice Breyer join,
concurring.
 448 MASUR & OUELLETTE ⋅ PATENT LAW

14 The Court is correct, in my view, to hold that courts should apply the well-
established, four-factor test—without resort to categorical rules—in deciding whether
to grant injunctive relief in patent cases. The Chief Justice is also correct that history
may be instructive in applying this test. (concurring opinion). The traditional practice
of issuing injunctions against patent infringers, however, does not seem to rest on “the
difficulty of protecting a right to exclude through monetary remedies that allow an
infringer to use an invention against the patentee’s wishes.” (Roberts, C.J.,
concurring). Both the terms of the Patent Act and the traditional view of injunctive
relief accept that the existence of a right to exclude does not dictate the remedy for a
violation of that right. To the extent earlier cases establish a pattern of granting an
injunction against patent infringers almost as a matter of course, this pattern simply
illustrates the result of the four-factor test in the contexts then prevalent. The lesson
of the historical practice, therefore, is most helpful and instructive when the
circumstances of a case bear substantial parallels to litigation the courts have
confronted before.

15 In cases now arising trial courts should bear in mind that in many instances
the nature of the patent being enforced and the economic function of the patent holder
present considerations quite unlike earlier cases. An industry has developed in which
firms use patents not as a basis for producing and selling goods but, instead, primarily
for obtaining licensing fees. See FTC, To Promote Innovation: The Proper Balance of
Competition and Patent Law and Policy, ch. 3, pp. 38–39 (Oct. 2003). For these firms,
an injunction, and the potentially serious sanctions arising from its violation, can be
employed as a bargaining tool to charge exorbitant fees to companies that seek to buy
licenses to practice the patent. When the patented invention is but a small component
of the product the companies seek to produce and the threat of an injunction is
employed simply for undue leverage in negotiations, legal damages may well be
sufficient to compensate for the infringement and an injunction may not serve the
public interest. In addition injunctive relief may have different consequences for the
burgeoning number of patents over business methods, which were not of much
economic and legal significance in earlier times. The potential vagueness and suspect
validity of some of these patents may affect the calculus under the four-factor test.

16 The equitable discretion over injunctions, granted by the Patent Act, is well
suited to allow courts to adapt to the rapid technological and legal developments in
the patent system. For these reasons it should be recognized that district courts must
determine whether past practice fits the circumstances of the cases before them. With
these observations, I join the opinion of the Court.

Discussion Questions: Injunctions

1. When Are Property Rules More Efficient? In other law school classes, you
have likely encountered the distinction between protecting legal entitlements with
property rules (injunctions) versus liability rules (damages), perhaps with reference
 INJUNCTIONS 449

to the classic article on this point: Guido Calabresi & A. Douglas Melamed, Property
Rules, Liability Rules, and Inalienability: One View of the Cathedral, 85 Harv. L. Rev.
1089 (1972). You have also likely encountered the “Coase theorem”: that if transaction
costs are sufficiently low, bargaining will lead to the efficient outcome regardless of
the initial entitlement. R. H. Coase, The Problem of Social Cost, 3 J.L. & Econ. 1
(1960). How do these ideas apply to patent law? If the patentee’s entitlement is treated
as a property rule with an injunction, does that mean that the infringer necessarily
must cease his activities? (Why not?) When is it more efficient to choose an injunction
over damages?

To answer this question, you might consider: How efficiently can the parties
bargain? As transaction costs rise, liability rules become more appealing. What
determines how large or small the transaction costs are? For instance, imagine two
types of products: a chemical covered by a single patent, and a smartphone covered by
thousands of patents (or more). Which product’s manufacturer will face higher
transaction costs in bargaining with all of the potential patent owners? As noted in
Chapter 1, the problem of needing to clear many uncertain and overlapping patent
rights is referred to as the problem of “patent thickets.”

On the other side, how difficult is it for courts to assess damages? Is clearing
rights through court-enforced damages easier than through private licenses? If
judicial damages awards are particularly error-prone or administratively costly,
property rules may be the better choice. You should keep this question in mind as you
learn the doctrines governing monetary damages in the following chapters.

Over four decades after authoring his famous article with Guido Calabresi,
Doug Melamed drew on this framework in the context of patent remedies in an article
with IP legend Bill Lee (who also happens to be the first Asian-American to lead a
major U.S. law firm). See William F. Lee & A. Douglas Melamed, Breaking the Vicious
Cycle of Patent Damages, 101 Cornell L. Rev. 385 (2016). They argue that existing
patent remedies were developed in an era “in which technology users are presumed to
be able to discover relevant patents in advance and either design around them or
negotiate patent licenses before using the patented technology”—which is quite
different from the reality of many high-tech fields today. How should patent law adapt
to the changing nature of technology?

2. Factors 1 and 2: Irreparable Injury and Inadequate Remedies at Law. The

first two factors of the eBay test are redundant: if monetary damages are adequate to
repair the patentee’s injury, then the injury is not irreparable. The Federal Circuit
has been more likely to hold an injury to be irreparable with money damages if the
parties are in a competitive relationship, if the patentee can show lost sales or loss of
goodwill, or if the patentee consistently refuses to license to other parties. To establish
irreparable harm, the Federal Circuit has held that “a patentee must establish that a
sufficiently strong causal nexus relates the alleged harm to the alleged infringement,”
which requires a showing that “the infringing feature drives consumer demand for the
450 MASUR & OUELLETTE ⋅ PATENT LAW

accused product—in other words, that consumers bought the accused product because
it was equipped with [the claimed invention].” TEK Global., S.R.L. v. Sealant Sys.
Int’l, 920 F.3d 777, 792 (Fed. Cir. 2019).

What are the circumstances under which we should expect that monetary
damages will not be adequate? Patent infringement cases do not typically involve
issues of human dignity, liberty, or other such values where money can be an
inadequate substitute. They are primarily about money. This is one regard in which
patent law plausibly diverges from copyright law. Copyright owners sometimes argue
that some aspect of their personhood is embedded in their copyrighted works, and
someone else’s unauthorized (and perhaps scandalous) use of that work enacts a
dignitary harm to their personhood. But one does not commonly hear patent owners
complain that unauthorized sales of their inventions harm their dignity. For that
matter, suppose that a firm will lose goodwill from infringement. What prevents that
from being valued as part of the monetary damages calculation as well?

Perhaps the best way to think of factors 1 and 2 is as directed not to the
question of when monetary damages will be inadequate, but instead to when
monetary damages will be hard to calculate accurately. Cf. Apple v. Samsung Elecs.,
809 F.3d 633, 645 (Fed. Cir. 2015) (holding that factor 2 “strongly weighs in favor” of
the patentee because the monetary losses “are very difficult to quantify”). In that vein,
consider the discussion of property rules and liability rules in Note 1. Does that type
of analysis provide a better basis for analyzing factors 1 and 2?

3. Factor 3: Balance of Hardships. The third factor of the eBay test balances
the plaintiff’s irreparable harm against the harm to the defendant. The harm to the
defendant is smaller if the activity is a small part of the defendant’s business or if the
defendant could easily switch to a noninfringing alternative. But courts do not
consider the inevitable costs to the defendant of stopping infringement and losing
revenue—this is a risk the infringer takes. Why should the harm to the defendant
from being forced to cease infringement matter? Suppose that the infringing product
is the defendant’s entire business, and ceasing infringement will devastate the
defendant’s bottom line. Why should this affect whether the court awards an
injunction? After all, this is to say that the defendant’s business is built entirely on
infringing behavior. Would it matter if, when the defendant designed its product to
include the patented technology, the technology was claimed only by a non-public
pending patent application? In some cases, injunctions have allowed continued use for
short periods using “sunset provisions” that provide time to design around the patent
where an immediate injunction would be likely to put the infringer out of business.

4. Factor 4: Public Interest. What sorts of issues should the court take into
account under the heading of the “public interest”? Courts don’t consider the public
interest in competition and lower prices; remember that patents are designed to allow
the patentee to exclude competitors and charge supracompetitive prices. But the
public interest may be disserved by an injunction if it would completely deprive the
 INJUNCTIONS 451

public of access to an essential product. For example, injunctions on medical

technologies without acceptable substitutes would disrupt patient care. What other
issues should the court consider? Suppose that the allegedly infringing technology
involves the national defense. Should a court consider whether issuing an injunction
will affect national security? Should it account for the potential harm to the employees
or other stakeholders in the infringing firm? Should it consider potential effects on
other issues of national concern? For instance, one district court granted a permanent
injunction related to patented wind turbine blades but crafted a carve-out to allow
projects already under contract, citing the climate crisis. Siemens v. General Electric,
626 F. Supp. 3d 468, 474 (D. Mass. 2022). (The case then settled with worldwide cross-
licenses.) Did this court act appropriately?

5. Combining the Factors. The Supreme Court is not entirely clear on whether
the four eBay factors should be weighed in a balancing test or whether they are
mandatory elements that must be established, and different Circuits have approached
this question differently. The Federal Circuit has at times described them as
mandatory elements. See Nichia v. Everlight Americas, 855 F.3d 1328, 1344 (Fed. Cir.
2017) (“Because [the patentee] failed to establish one of the four equitable factors, the
court did not abuse its discretion in denying [the patentee’s] request for an
injunction.”). How do you think the factors should be combined? More generally, do
these seem like the key considerations for determining whether an injunction should
be granted? Are there other factors you would consider?

6. Chief Justice Roberts Versus Justice Kennedy. Every Supreme Court justice
joined the majority and agreed that “[n]either the District Court nor the [Federal
Circuit] fairly applied these traditional equitable principles.” But the two
concurrences raised very different visions of how the new eBay test should be applied
in practice. Justice Roberts wrote that “there is a difference between exercising
equitable discretion pursuant to the established four-factor test and writing on an
entirely clean slate.” Justice Kennedy, by contrast, wrote that “it should be recognized
that district courts must determine whether past practice fits the circumstances of
the cases before them.” What exactly do the Justices mean by those phrases, and what
do they disagree on? Which view do you find more compelling? Which concurrence do
you think Lee and Melamed would side with?

7. The Kennedy Concurrence and the Problem of Holdup. Justice Kennedy

refers to an industry “in which firms use patents not as a basis for producing and
selling goods but, instead, primarily for obtaining licensing fees” and warns that in
some cases “the threat of an injunction is employed simply for undue leverage in
negotiations.” At first blush, this concern may be difficult to understand. What does
it mean to have “undue” leverage in negotiations? A patent holder has whatever
leverage the patent provides. If the patented technology is essential, the patent holder
might have a great deal of leverage, but this would seem appropriate. If the patent is
easily engineered around, it provides much less leverage.
452 MASUR & OUELLETTE ⋅ PATENT LAW

Part of the answer to this question lies with the fact that Justice Kennedy is
referring specifically to non-practicing entities (NPEs) that do not make or sell a
product, sometimes pejoratively termed “patent trolls.” One particular concern with
non-practicing entities is that (by definition) they do not make a substitute product
for the one being accused of infringement. That means that if the infringing product
is forced off the market due to an injunction, the public loses access to it. This was
potentially at issue in eBay, because eBay is a practicing entity and MercExchange
was not. Why would the non-practicing entity want to force the practicing entity out
of the market? If it did so, no one would earn any money. The patent would become
worthless. Can you envision how a service like eBay might end up being shut down by
an injunction even though that would be in neither party’s interest?

Another part of the explanation is the threat of patent holdup. Holdup occurs
when a party has already made technology-specific investments that would become
worthless (or much less valuable) if an injunction prevents the party from producing
the technology. To understand the problem, consider the following stylized example:

Suppose that A invents a new type of widget. A estimates that building a

specialized factory to produce widgets will cost $50, and actually producing a number
of widgets will cost an additional $50. But A will then be able to sell these widgets for
$110, thus earning a profit of $10. After A has spent $50 to build the factory, but before
A has constructed any widgets, A learns that B owns a patent that covers the same
technology. B sues A for patent infringement and obtains an injunction. If A were
perfectly rational, how much would A be willing to pay B to lift the injunction? Hint:
the answer is not $9.99, which would leave A with the minimal profit of $0.01.

The correct answer is $59.99. The reason is that after having already invested
$50 in building the factory (a sunk cost), A stands to gain $60 if it is able to
manufacture and sell the widgets: $110 in sales minus $50 in production cost. A
should thus be willing to pay up to $59.99 to lift the injunction, which would leave it
with a gain of $0.01 (compared with the current status quo). But if A pays B $59.99,
that would leave A with total expenses of $159.99 and total revenues of $110, for a
loss of $49.99—less than the net loss of $50 if the injunction is not lifted, but not a
business plan A would have embarked on at the outset. Even if A only pays B $30,
half of what it stands to gain from lifting the injunction, it will lose $20 (costs of $130,
revenues of $110) on the whole transaction. If A could repurpose its factory for other
ends without paying to lift the injunction, thus preserving its value, A would not be
in such a pickle. But if the factory can only be used to produce widgets, B has A over
a barrel and can hold up A for an exorbitant licensing fee. This problem is not limited
to NPEs—B could hold up A even if B were a productive firm—but it has been
particularly salient in that context.

A legal policymaker focused on efficiency should not necessarily care whether

A has to pay B a lot or a little. That is just a transfer from A to B and does not represent
social loss or waste. The problem is what hold-up does to A’s ex ante incentives. If A
 INJUNCTIONS 453

thinks that it might later be held up, it may shy away from developing the widget
technology in the first place. And A may be unable to assess its risk of hold-up if it
cannot locate B’s patent, or if B’s patent is still being examined. If A refrains from
inventing and producing the widget for fear of later being held up, that would create
social loss.

One solution to the hold-up problem is simply to award monetary damages.

This can be thought of as another reason to favor monetary damages over injunctions,
though again there is the question of whether the court will be able to assess damages
accurately. If you were a court evaluating the hypothetical situation above, what
amount of damages would you award to B? Is there an amount that would reward the
contributions of both A and B without greatly diminishing either’s incentives?

8. Anticommons and Royalty Stacking. Imagine a product, like a smartphone,

that is covered by a large number of patents, each of which involves a technology that
is essential to the creation of the smartphone. This is known as an “anticommons”:
many different parties (the patent owners) each have the ability to block the overall
invention from being assembled. One feature of an anticommons is that it can create
substantial transaction costs for the party attempting to assemble all of the individual
pieces of property. This is the problem of “patent thickets” we discussed in Note 1,
above. Another feature is that it can create opportunities for one or more parties to
hold up the product’s manufacturer; this is the problem we discussed in Note 7, above.
Yet another feature is that it can give rise to “holdout” problems (not to be confused
with “holdup” problems), in which each individual patent holder wants to “hold out”
and be the last to strike a deal with the product’s manufacturer. There is value to
being last because it creates greater opportunities for holdup or, more generally, to
extract a high licensing fee. When the manufacturer is negotiating with the first
parties to license their patents, the amount it is willing to pay is necessarily
moderated by its knowledge that it will have to pay many others in the future and the
probability that striking deals with all of them will turn out to be impossible. For the
last mover, these problems dissipate, and the manufacturer’s willingness to pay
increases. But if everyone is trying to be last, it may be difficult or impossible for the
manufacturer to ever strike deals with all of the patent holders.

In addition to these concerns, there is another problem with anticommons

situations: royalty stacking. Each individual patent owner will look to license its
patent at whatever quasi-monopoly price will maximize its own returns. Stacking one
profit-maximizing price on top of another will raise the overall price of the good beyond
even the monopoly price that a single firm would charge if it controlled all of the
relevant patents. See Mark A. Lemley & Carl Shapiro, Patent Holdup and Royalty
Stacking, 85 Tex. L. Rev. 1991 (2007). The mathematics behind this phenomenon are
complicated, but the intuition is simply that more than one firm will be looking to
454 MASUR & OUELLETTE ⋅ PATENT LAW

maximize its profits, and paying all of them is more expensive than just paying one.1
And as the price rises, fewer people will be able to afford the invention.

Of course, this issue, like many of the others described above, looms largest
when a patented product is covered by many patents, and not just one or two. There
are some industries, such as electronics, where most products are likely to incorporate
large numbers of patents, and some industries, such as small-molecule
pharmaceutical drugs, where most products involve a much smaller number of
patents. Does this suggest that courts should be more inclined to grant injunctions in
some industries than others? For an argument that patent law is actually quite
industry-specific and should remain so, despite its nominal facial neutrality, see Dan
L. Burk & Mark A. Lemley, Policy Levers in Patent Law, 89 Va. L. Rev. 1575, 1577
(2003).

Practice Problems: Injunctions

For each of the following examples, do you think the court should grant an
injunction to the victorious patent owner? If so, should the injunction begin to run
immediately, or should the court delay the injunction for a period of time, such as to
allow the infringer time to design around the patent? If the patents do not cover the
entire product, should the court enjoin the infringer from making or selling the entire
product or just the infringing features?

1. The patent owner is a manufacturer of emergency repair kits for fixing

punctured vehicle tires. The infringer did not infringe a patent covering the entire
repair kit, but it infringed patents covering features that drive consumer demand for
the kit. The patent owner introduced evidence at trial that it had lost customers to
the infringer in the years leading up to its successful lawsuit. The repair kit is the
plaintiff’s only product, and the plaintiff risks being driven out of business if an
infringer is permitted to continue selling the product, even if it is paid royalties. A
number of customers have already placed orders for the infringer’s (infringing)
product, which they expect to be filled within the next nine months. If the infringer is
prohibited from producing any additional products, those customers may not be able
to obtain the products they have ordered. See TEK Global v. Sealant Sys. Int’l, 920
F.3d 777 (Fed. Cir. 2019).

2. The patent owner and infringer are competitors in the market for a
controlled-release painkiller covered by the patent. At trial, the court found that the
patent owner had lost market share to the infringer as a result of the infringement.
This loss had forced the patent owner to cut its sales force, reduce its promotional

1Depending on the structure of the industry in which it arises, this phenomenon is

sometimes referred to as the “double marginalization” effect and sometimes as the “Cournot
complements” effect.
 INJUNCTIONS 455

expenses, and change its research and development strategies. The court also found
that the patent owner was at risk of harm to its reputation as a result of having had
to lay off much of its sales force, which could in turn make the company a less
attractive place to work in the future or reduce the value of its brand name with
potential consumers. See Endo Pharm. Inc. v. Teva Pharm. USA, Inc., 731 F. App’x
962 (Fed. Cir. 2018).

3. The patent owner (Apple) and infringer (Samsung) are competitors in the
market for smartphones. The patents cover a variety of smartphone features,
including the “slide-to-unlock” mechanism and software that detects phone numbers
and hyperlinks within smartphone applications. The patent owner demonstrated that
competition from the infringer had caused it to lose sales and market share. The
infringing features were not the sole driver of demand for the product, but the patent
owner was able to demonstrate that at least some small fraction of the demand for its
product was created by the infringing features. This included evidence that the
infringer had directly copied the infringing features, along with emails from engineers
working for the infringer who disparaged alternative features they had considered. It
also included survey evidence that consumers valued these features and were willing
to pay more for a smartphone that included them.

The monetary harm to the patent owner is hard to quantify because the patent
owner sells a variety of other products and services related to its smartphone. A
decrease in smartphone sales will reduce sales of these related products and services,
but it is difficult to determine in what amount. If the injunction is granted, some of
the infringer’s products would have to be removed from store shelves, where they are
currently available for sale. Some of the infringer’s customers would also be in
violation of the injunction if they continued to use their smartphones. See Apple v.
Samsung, 809 F.3d 633 (Fed. Cir. 2015).
456 MASUR & OUELLETTE ⋅ PATENT LAW

14. Lost Profits Damages

Patent plaintiffs often seek monetary damages to remedy infringing conduct.
As illustrated in the figure below, even if a preliminary or permanent injunction is
granted, damages may be awarded to compensate for infringement that occurred
before the injunction. Damages are awarded unless an injunction was granted before
infringement began. And the decreased availability of injunctions after eBay has
placed greater importance on damages calculations, including as a remedy for ongoing
infringement after the lawsuit has concluded.

Patent damages are covered by section 284 of the Patent Act:

35 U.S.C. § 284

Upon finding for the claimant the court shall award the claimant
damages adequate to compensate for the infringement, but in no event
less than a reasonable royalty for the use made of the invention by the
infringer, together with interest and costs as fixed by the court.

When the damages are not found by a jury, the court shall assess
them. In either event the court may increase the damages up to three
times the amount found or assessed. Increased damages under this
paragraph shall not apply to provisional rights under section 154(d)
[providing in certain cases “the right to obtain a reasonable royalty” for
the period between when a patent application is published and when it
is granted].
 LOST PROFITS 457

The court may receive expert testimony as an aid to the

determination of damages or of what royalty would be reasonable under
the circumstances.

As indicated by the first paragraph of this statute, ordinary patent damages

are intended “to compensate for the infringement,” meaning to put the plaintiff in the
position she would have occupied but for the infringement. This compensatory goal is
different from other potential remedial goals, including restitution (taking away the
defendant’s benefit even if it is larger than the plaintiff’s loss) and punitive damages
(deterring and punishing the defendant’s wrongful conduct). These other goals are
sometimes served by the second paragraph of § 284, which allows the court to
“increase the damages up to three times.” We will discuss these “enhanced” damages
in Chapter 16.

Putting the plaintiff in the position she would have occupied but for the
infringement is challenging because it requires the court to construct the
counterfactual. What would have happened in the hypothetical world in which the
infringement had not occurred? Consider some of the possibilities:

• The patentee might have made all or some of the infringer’s sales—that is, the
infringement may have caused the patentee to have lost profits.

• The infringer might have made all or some of the same sales by switching to a
similarly priced noninfringing substitute.

• The infringer’s sales might not have occurred at all; the market might have
simply been smaller.

• The patentee might have granted the infringer a license to the patent in
exchange for a reasonable royalty on the infringer’s sales.

Can you imagine other possibilities? Patent law divides damages into two categories:
lost profits and reasonable royalties. If the patentee can prove that she has lost profits,
these tend to be the largest damages. If the patentee cannot prove lost profits—
including because of noninfringement substitutes or the patentee’s inability to exploit
the demand—§ 284 guarantees that she will receive “in no event less than a
reasonable royalty.”

This chapter focuses on lost profits, and Chapter 15 explains how reasonable
royalties are calculated. We begin this chapter with a brief overview of the economics
of monopoly pricing before turning to the caselaw. But as we discuss the complex
economic and doctrinal framework for each form of damages, do not lose sight of the
overall goal: determining what would actually have happened in the market but for
the infringement. Damages determinations often involve expert testimony and
economic models, but you should not allow these models to get in the way of common
sense. Just as patent litigation does not require a technical degree, it does not require
458 MASUR & OUELLETTE ⋅ PATENT LAW

an economics degree, and patent litigators need to be able to explain the underlying
principles at an intuitive level to lay judges and jurors. This is an area with few hard-
and-fast rules, so it is useful to be able to think of different counterfactual scenarios,
and what kind of evidence might support them.

Monopoly Pricing 101

At first glance, one might think that calculating lost profits damages is easy,
in that courts could just attribute the
infringer’s sales and profits to the
patentee. If the patentee would have
had a monopoly but for the
infringement, and the infringer made
profits of $100 million, then the
patentee lost profits of $100 million,
right? Unfortunately, no. This kind of
analysis has logical flaws in both
directions: it can undercompensate
and overcompensate the patentee.

To understand these flaws, we

provide a crash course on monopoly
pricing. As noted in Chapter 1, few
patents truly confer monopoly power,
but a simple monopoly market
illustrates conceptual principles that
apply in many patent damages
calculations. For students who have
taken a course in economics or who
find graphs helpful to illustrate
economic principles, the simplified
figures at right may be useful, but
understanding the graphs isn’t
essential for understanding the
underlying economic logic.

For most products, a small

number of people would be willing to
pay very high prices, and many more
people would be willing to pay more
modest amounts. For example, if
pencils cost $1000 each, some pencils
would be purchased by wealthy
consumers who value the ability to
 LOST PROFITS 459

erase, but if pencils are priced at $1 each, demand would be much higher. This
principle is represented by downward-sloping demand curves.

In a competitive market, if one supplier prices pencils at $1000 each, another

would be able to steal the entire market by offering $900 pencils. Firms would have
incentives to keep entering at lower prices until the market price equals the price of
supplying another pencil (known as the marginal cost); based on current pencil prices,
this appears to be under $0.10. This market benefits consumers who value pencils at
more than $0.10 (a benefit known as consumer surplus) and producers who are able
to supply pencils at less than $0.10 (producer surplus).

Consider what happens if we give one producer a monopoly on pencils. What

price would they choose? They wouldn’t raise prices as high as possible, as this would
result in very few sales and few profits. But they also wouldn’t sell at the competitive
price. Rather, they would raise prices to the point that maximizes their profits—the
blue area in the monopoly pricing graph. (In economic terms, the producer chooses the
price at which their marginal revenue equals their marginal cost.)

Now suppose an infringer enters the market, so it becomes a duopoly rather

than a monopoly. The infringer has an incentive to set a price lower than the monopoly
price to steal market share from the patentee, and the patentee has an incentive to
respond by lowering its own prices, an effect known as price erosion. If the patentee
had chosen the profit-maximizing price, price erosion leads to a reduction in overall
profits from the market. The size of the reduction is difficult to model. The two firms
could compete the price down to the competitive price, but in practice, duopoly prices
often fall between the competitive and monopoly prices (such as due to tacit collusion
between the firms).

It should now be apparent why simply attributing the infringer’s profits to the
patentee can lead to undercompensation: if the infringer’s market entrance created
price erosion, then the duopoly profits will be less than the monopoly profits the
patentee would have made but for the infringement. We have illustrated this point in
a monopoly market for simplicity, but the price erosion that can be caused by the
market entrance of an infringer generalizes to more common situations in which the
patentee has market power that allows it to charge prices above marginal cost but not
so much market power that it can charge the monopoly price. Of course, the extent of
erosion depends on the details of the market, including how sensitive consumption is
to price—an economic factor known as elasticity of demand—and the extent to which
the infringer actually competed the price down. Furthermore, “in a credible economic
analysis, the patentee cannot show entitlement to a higher price divorced from the
effect of that higher price on demand for the product . . . the patentee must also
present evidence of the (presumably reduced) amount of product the patentee would
have sold at the higher price.” Crystal Semiconductor v. TriTech Microelectronics Int’l,
246 F.3d 1336, 1357 (Fed. Cir. 2001). These are the kinds of details each party’s
damages expert will debate.
 460 MASUR & OUELLETTE ⋅ PATENT LAW

Why might attributing the infringer’s profits to the patentee lead to

overcompensation? So far, we have treated the products sold in this market as
fungible, such that consumers are indifferent between products sold by the patentee
and the infringer. Can you think of any market in which all consumers are truly
indifferent to the producer? Even for pencils, there are elementary school teachers
who insist on Ticonderoga brand pencils for their classrooms. If the infringer hadn’t
entered the market, the infringer’s customers might not have purchased from the
patentee. Perhaps some would not have purchased anything. Perhaps some would
have bought an alternative product that isn’t infringing. Perhaps the patent holder
wouldn’t have had the manufacturing and marketing capacity to meet the additional
demand created by the entry of the infringer. Consider how the Federal Circuit
addresses these concerns in the following two cases.

Rite-Hite v. Kelley Co., 56 F.3d 1538 (Fed.Cir.1995) (en banc)

Alan Lourie, Circuit Judge.

1 Kelley Company appeals from a decision of the United States District Court
for the Eastern District of Wisconsin, awarding damages for the infringement of U.S.
Patent 4,373,847, owned by Rite-Hite Corporation. The district court determined,
inter alia, that Rite-Hite was entitled to lost profits for lost sales of its devices that
were in direct competition with the infringing devices, but which themselves were not
covered by the patent in suit. The appeal has been taken in banc to determine whether
such damages are legally compensable under 35 U.S.C. § 284. We affirm in part,
vacate in part, and remand.

Background

2 [Rite-Hite sued Kelley for infringement of the ’847 patent, which is directed to
a device for securing a vehicle to a loading dock. The patent was held to be not invalid
and infringed by Kelley’s “Truk Stop” vehicle restraint.]

3 Rite-Hite sought damages calculated as lost profits for two types of vehicle
restraints that it made and sold: the “Manual Dok–Lok” model 55 (MDL–55), which
incorporated the invention covered by the ’847 patent, and the “Automatic Dok–Lok”
model 100 (ADL–100), which was not covered by the patent in suit. The ADL–100 was
the first vehicle restraint Rite-Hite put on the market and it was covered by one or
more patents other than the patent in suit. The Kelley Truk Stop restraint was
designed to compete primarily with Rite-Hite’s ADL–100. Both employed an electric
motor and functioned automatically, and each sold for $1,000–$1,500 at the wholesale
level, in contrast to the MDL–55, which sold for one-third to one-half the price of the
motorized devices. Rite-Hite does not assert that Kelley’s Truk Stop restraint
infringed the patents covering the ADL–100.
 LOST PROFITS 461

4 Of the 3,825 infringing Truk Stop devices sold by Kelley, the district court
found that, “but for” Kelley’s infringement, Rite-Hite would have made 80 more sales
of its MDL–55; 3,243 more sales of its ADL–100; and 1,692 more sales of dock levelers,
a bridging platform sold with the restraints and used to bridge the edges of a vehicle
and dock. The court awarded Rite-Hite as a manufacturer the wholesale profits that
it lost on lost sales of the ADL–100 restraints, MDL–55 restraints, and restraint-
leveler packages. [It also awarded a reasonable royalty on other sales.]

5 On appeal, Kelley contends that the district court erred as a matter of law in
its determination of damages. Kelley does not contest the award of damages for lost
sales of the MDL–55 restraints; however, Kelley argues (1) that the patent statute
does not provide for damages based on Rite-Hite’s lost profits on ADL–100 restraints
because the ADL–100s are not covered by the patent in suit; and (2) lost profits on
unpatented dock levelers are not attributable to demand for the ’847 invention and,
therefore, are not recoverable losses. [Other issues on appeal are omitted.]

Discussion

I. Lost Profits on the ADL–100 Restraints

6 The district court’s decision to award lost profits damages pursuant to 35

U.S.C. § 284 turned primarily upon the quality of Rite-Hite’s proof of actual lost
profits. The court found that, “but for” Kelley’s infringing Truk Stop competition, Rite-
Hite would have sold 3,243 additional ADL–100 restraints and 80 additional MDL–
55 restraints.

7 Kelley maintains that Rite-Hite’s lost sales of the ADL–100 restraints do not
constitute an injury that is legally compensable by means of lost profits. It has
uniformly been the law, Kelley argues, that to recover damages in the form of lost
profits a patentee must prove that, “but for” the infringement, it would have sold a
product covered by the patent in suit to the customers who bought from the infringer.
Under the circumstances of this case, in Kelley’s view, the patent statute provides
only for damages calculated as a reasonable royalty. Rite-Hite, on the other hand,
argues that the only restriction on an award of actual lost profits damages for patent
infringement is proof of causation-in-fact. A patentee, in its view, is entitled to all the
profits it would have made on any of its products “but for” the infringement. Each
party argues that a judgment in favor of the other would frustrate the purposes of the
patent statute.

8 Our analysis of this question necessarily begins with the patent statute. The
statute [§ 284] mandates that a claimant receive damages “adequate” to compensate
for infringement. Section 284 further instructs that a damage award shall be “in no
event less than a reasonable royalty”; the purpose of this alternative is not to direct
the form of compensation, but to set a floor below which damage awards may not fall.
Thus, the language of the statute is expansive rather than limiting. It affirmatively
 462 MASUR & OUELLETTE ⋅ PATENT LAW

states that damages must be adequate, while providing only a lower limit and no other
limitation.

9 The Supreme Court spoke to the question of patent damages in General Motors,
stating that, in enacting § 284, Congress sought to “ensure that the patent owner
would in fact receive full compensation for ‘any damages’ [the patentee] suffered as a
result of the infringement.” General Motors v. Devex, 461 U.S. 648, 654 (1983). Thus,
while the statutory text states tersely that the patentee receive “adequate” damages,
the Supreme Court has interpreted this to mean that “adequate” damages should
approximate those damages that will fully compensate the patentee for infringement.

10 In Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476 (1964), the
Court discussed the statutory standard for measuring patent infringement damages,
explaining:

The question to be asked in determining damages is “how much had the

Patent Holder and Licensee suffered by the infringement. And that
question [is] primarily: had the Infringer not infringed, what would the
Patentee Holder–Licensee have made?”

377 U.S. at 507 (plurality opinion). This surely states a “but for” test. In accordance
with the Court’s guidance, we have held that the general rule for determining actual
damages to a patentee that is itself producing the patented item is to determine the
sales and profits lost to the patentee because of the infringement.

11 Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575 F.2d 1152 (6th Cir. 1978),
articulated a four-factor test that has since been accepted as a useful, but non-
exclusive, way for a patentee to prove entitlement to lost profits damages. The Panduit
test requires that a patentee establish: (1) demand for the patented product; (2)
absence of acceptable non-infringing substitutes; (3) manufacturing and marketing
capability to exploit the demand; and (4) the amount of the profit it would have made.
A showing under Panduit permits a court to reasonably infer that the lost profits
claimed were in fact caused by the infringing sales, thus establishing a patentee’s
prima facie case with respect to “but for” causation. A patentee need not negate every
possibility that the purchaser might not have purchased a product other than its own,
absent the infringement. The patentee need only show that there was a reasonable
probability that the sales would have been made “but for” the infringement. When the
patentee establishes the reasonableness of this inference, e.g., by satisfying the
Panduit test, it has sustained the burden of proving entitlement to lost profits due to
the infringing sales. The burden then shifts to the infringer to show that the inference
is unreasonable for some or all of the lost sales.

12 Applying Panduit, the district court found that Rite-Hite had established “but
for” causation. In the court’s view, this was sufficient to prove entitlement to lost
profits damages on the ADL–100. Kelley does not challenge that Rite-Hite meets the
Panduit test and therefore has proven “but for” causation; rather, Kelley argues that
 LOST PROFITS 463

damages for the ADL–100, even if in fact caused by the infringement, are not legally
compensable because the ADL–100 is not covered by the patent in suit.

13 Preliminarily, we wish to affirm that the “test” for compensability of damages

under § 284 is not solely a “but for” test in the sense that an infringer must
compensate a patentee for any and all damages that proceed from the act of patent
infringement. Notwithstanding the broad language of § 284, judicial relief cannot
redress every conceivable harm that can be traced to an alleged wrongdoing. For
example, remote consequences, such as a heart attack of the inventor or loss in value
of shares of common stock of a patentee corporation caused indirectly by infringement
are not compensable. Thus, along with establishing that a particular injury suffered
by a patentee is a “but for” consequence of infringement, there may also be a
background question whether the asserted injury is of the type for which the patentee
may be compensated.

14 Judicial limitations on damages, either for certain classes of plaintiffs or for

certain types of injuries have been imposed in terms of “proximate cause” or
“foreseeability.” Such labels have been judicial tools used to limit legal responsibility
for the consequences of one’s conduct that are too remote to justify compensation.

15 We believe that under § 284 of the patent statute, the balance between full
compensation, which is the meaning that the Supreme Court has attributed to the
statute, and the reasonable limits of liability encompassed by general principles of law
can best be viewed in terms of reasonable, objective foreseeability. If a particular
injury was or should have been reasonably foreseeable by an infringing competitor in
the relevant market, broadly defined, that injury is generally compensable absent a
persuasive reason to the contrary. Here, the court determined that Rite-Hite’s lost
sales of the ADL–100, a product that directly competed with the infringing product,
were reasonably foreseeable. We agree with that conclusion. Being responsible for lost
sales of a competitive product is surely foreseeable; such losses constitute the full
compensation set forth by Congress, as interpreted by the Supreme Court, while
staying well within the traditional meaning of proximate cause. Such lost sales should
therefore clearly be compensable.

16 Recovery for lost sales of a device not covered by the patent in suit is not of
course expressly provided for by the patent statute. Express language is not required,
however. Statutes speak in general terms rather than specifically expressing every
detail. Under the patent statute, damages should be awarded “where necessary to
afford the plaintiff full compensation for the infringement.” General Motors, 461 U.S.
at 654. Thus, to refuse to award reasonably foreseeable damages necessary to make
Rite-Hite whole would be inconsistent with the meaning of § 284.

17 Kelley asserts that to allow recovery for the ADL–100 would contravene the
policy reason for which patents are granted: “[T]o promote the progress of . . . the
useful arts.” U.S. Const., art. I, § 8, cl. 8. Because an inventor is only entitled to
exclusivity to the extent he or she has invented and disclosed a novel, nonobvious, and
 464 MASUR & OUELLETTE ⋅ PATENT LAW

useful device, Kelley argues, a patent may never be used to restrict competition in the
sale of products not covered by the patent in suit. In support, Kelley cites antitrust
case law condemning the use of a patent as a means to obtain a “monopoly” on
unpatented material.

18 The present case does not involve expanding the limits of the patent grant in
violation of the antitrust laws; it simply asks, once infringement of a valid patent is
found, what compensable injuries result from that infringement, i.e., how may the
patentee be made whole. Rite-Hite is not attempting to exclude its competitors from
making, using, or selling a product not within the scope of its patent. The Truk Stop
restraint was found to infringe the ’847 patent, and Rite-Hite is simply seeking
adequate compensation for that infringement; this is not an antitrust issue. Allowing
compensation for such damage will “promote the Progress of . . . the useful Arts” by
providing a stimulus to the development of new products and industries.

19 Kelley further asserts that, as a policy matter, inventors should be encouraged

by the law to practice their inventions. This is not a meaningful or persuasive
argument, at least in this context. A patent is granted in exchange for a patentee’s
disclosure of an invention, not for the patentee’s use of the invention. There is no
requirement in this country that a patentee make, use, or sell its patented invention.
If a patentee’s failure to practice a patented invention frustrates an important public
need for the invention, a court need not enjoin infringement of the patent. Whether a
patentee sells its patented invention is not crucial in determining lost profits
damages. Normally, if the patentee is not selling a product, by definition there can be
no lost profits. However, in this case, Rite-Hite did sell its own patented products, the
MDL–55 and the ADL–100 restraints.

20 [T]he only Panduit factor that arguably was not met in the present fact
situation is the second one, absence of acceptable non-infringing substitutes. Here,
the only substitute for the patented device was the ADL–100, another of the patentee’s
devices. Such a substitute was not an “acceptable, non-infringing substitute” within
the meaning of Panduit because, being patented by Rite-Hite, it was not available to
customers except from Rite-Hite. Rite-Hite therefore would not have lost the sales to
a third party. The second Panduit factor thus has been met. If, on the other hand, the
ADL–100 had not been patented and was found to be an acceptable substitute, that
would have been a different story, and Rite-Hite would have had to prove that its
customers would not have obtained the ADL–100 from a third party in order to prove
the second factor of Panduit.

21 Kelley’s conclusion that the lost sales must be of the patented invention thus
is not supported. Kelley’s concern that lost profits must relate to the “intrinsic value
of the patent” is subsumed in the “but for” analysis; if the patent infringement had
nothing to do with the lost sales, “but for” causation would not have been proven.
However, “but for” causation is conceded here. The motive, or motivation, for the
infringement is irrelevant if it is proved that the infringement in fact caused the loss.
 LOST PROFITS 465

We see no basis for Kelley’s conclusion that the lost sales must be of products covered
by the infringed patent.

II. Damages on the Dock Levelers

22 The district court awarded lost profits on 1,692 dock levelers that it found Rite-
Hite would have sold with the ADL–100 and MDL–55 restraints. Kelley argues that
this award must be set aside. We agree.

23 When a patentee seeks damages on unpatented components sold with a

patented apparatus, courts have applied a formulation known as the “entire market
value rule” to determine whether such components should be included in the damage
computation, whether for reasonable royalty purposes or for lost profits purposes. We
have held that the entire market value rule permits recovery of damages based on the
value of a patentee’s entire apparatus containing several features when the patent-
related feature is the “basis for customer demand.”

24 The entire market value rule has typically been applied to include in the
compensation base unpatented components of a device when the unpatented and
patented components are physically part of the same machine. The rule has been
extended to allow inclusion of physically separate unpatented components normally
sold with the patented components. However, in such cases, the unpatented and
patented components together were considered to be components of a single assembly
or parts of a complete machine, or they together constituted a functional unit.

25 Thus, the facts of past cases clearly imply a limitation on damages, when
recovery is sought on sales of unpatented components sold with patented components,
to the effect that the unpatented components must function together with the
patented component in some manner so as to produce a desired end product or result.
All the components together must be analogous to components of a single assembly or
be parts of a complete machine, or they must constitute a functional unit. Our
precedent has not extended liability to include items that have essentially no
functional relationship to the patented invention and that may have been sold with
an infringing device only as a matter of convenience or business advantage. We are
not persuaded that we should extend that liability. Damages on such items would
constitute more than what is “adequate to compensate for the infringement.”

26 The facts of this case do not meet this requirement. The dock levelers operated
to bridge the gap between a loading dock and a truck. The patented vehicle restraint
operated to secure the rear of the truck to the loading dock. Although the two devices
may have been used together, they did not function together to achieve one result and
each could effectively have been used independently of each other. The parties had
established positions in marketing dock levelers long prior to developing the vehicle
restraints. Rite-Hite and Kelley were pioneers in that industry and for many years
were primary competitors. Although following Rite-Hite’s introduction of its
restraints onto the market, customers frequently solicited package bids for the
 466 MASUR & OUELLETTE ⋅ PATENT LAW

simultaneous installation of restraints and dock levelers, they did so because such
bids facilitated contracting and construction scheduling, and because both Rite-Hite
and Kelley encouraged this linkage by offering combination discounts. The dock
levelers were thus sold by Kelley with the restraints only for marketing reasons, not
because they essentially functioned together.

27 We distinguish our conclusion to permit damages based on lost sales of the

unpatented (not covered by the patent in suit) ADL–100 devices, but not on lost sales
of the unpatented dock levelers, by emphasizing that the Kelley Truk Stops were
devices competitive with the ADL–100s, whereas the dock levelers were merely items
sold together with the restraints for convenience and business advantage. It is a clear
purpose of the patent law to redress competitive damages resulting from infringement
of the patent, but there is no basis for extending that recovery to include damages for
items that are neither competitive with nor function with the patented invention.
These facts do not establish the functional relationship necessary to justify recovery
under the entire market value rule. Therefore, the district court erred as a matter of
law in including them within the compensation base. Accordingly, we vacate the
court’s award of damages based on the dock leveler sales.

28 [The remainder of the majority’s opinion addresses separate issues and is

omitted.]

Helen Nies, Circuit Judge, with whom Glenn Archer, Chief Judge, Edward Smith,
Senior Circuit Judge, and Haldane Mayer, Circuit Judge join, dissenting-in-part.

29 The majority uses the provision in 35 U.S.C. § 284 for “damages” as a tool to
expand the property rights granted by a patent. I dissent.

30 No one disputes that Rite-Hite is entitled to “full compensation for any

damages suffered as a result of the infringement.” General Motors Corp. v. Devex
Corp., 461 U.S. 648, 653–54 (1983). “Damages,” however, is a word of art. Damages in
a legal sense means the compensation which the law will award for an injury done.
Thus, the question is, “What are the injuries for which full compensation must be
paid?”

31 The majority divorces “actual damages” from injury to patent rights. The
majority holds that a patentee is entitled to recover its lost profits caused by the
infringer’s competition with the patentee’s business in ADL restraints, products not
incorporating the invention of the patent in suit but assertedly protected by other
unlitigated patents. Indeed, the majority states a broader rule for the award of lost
profits on any goods of the patentee with which the infringing device competes, even
products in the public domain.

32 I would hold that the diversion of ADL–100 sales is not an injury to patentee’s
property rights granted by the ’847 patent. To constitute legal injury for which lost
profits may be awarded, the infringer must interfere with the patentee’s property
 LOST PROFITS 467

right to an exclusive market in goods embodying the invention of the patent in suit.
The patentee’s property rights do not extend to its market in other goods unprotected
by the litigated patent. Rite-Hite was compensated for the lost profits for 80 sales
associated with the MDL–55, the only product it sells embodying the ’847 invention.
That is the totality of any possible entitlement to lost profits. Under 35 U.S.C. § 284,
therefore, Rite-Hite is entitled to “damages” calculated as a reasonable royalty on the
remainder of Kelley’s infringing restraints.

33 An examination of pre–1946 Supreme Court precedent discloses that the legal

scope of actual damages for patent infringement was limited to the extent of the
defendant’s interference with the patentee’s market in goods embodying the invention
of the patent in suit. This limitation reflects the underlying public policy of the patent
statute to promote commerce in new products for the public’s benefit. More
importantly, it protects the only property rights of a patentee which are protectable,
namely those granted by the patent.

34 An inventor is entitled to a patent by meeting the statutory requirements

respecting disclosure of the invention. Prior commercialization of the invention has
never been a requirement in our law to obtain a patent. An inventor is merely required
to teach others his invention in his patent application. Thus, when faced with the
question of whether a patentee was entitled to enjoin an infringer despite the
patentee’s failure to use its invention, the Supreme Court held for the patentee.
Continental Paper Bag, 210 U.S. 405, 424–430 (1908).

35 These clearly established principles, however, do not lead to the conclusion

that the patentee’s failure to commercialize plays no role in determining damages.
That the quid pro quo for obtaining a patent is disclosure of the invention does not
dictate the answer to the question of the legal scope of damages. The patent system
was not designed merely to build up a library of information by disclosure, valuable
though that is, but to get new products into the marketplace during the period of
exclusivity so that the public receives full benefits from the grant.

36 Thus, a patentee may withhold from the public the benefit of use of its
invention during the patent term, and the public has no way to withdraw the grant
for nonuse. Like the owner of a farm, a patentee may let his property lay fallow. In
doing so, “he has but suppressed his own.” E. Bement & Sons v. National Harrow, 186
U.S. 70, 90 (1902). But it is anomalous to hold that Congress, by providing an incentive
for the patentee to enter the market, intended the patentee to be rewarded the same
for letting his property lay fallow during the term of the patent as for making the
investment necessary to commercializing a new product or licensing others to do so,
in order that the public benefits from the invention.

37 In the majority’s view, the consideration of patent rights ends upon a finding
of infringement. The separate question of damages under its test does not depend on
patent rights but only on foreseeable competitive injury. This position cannot be
squared with the premise that compensation is due only for injury to patent rights.
 468 MASUR & OUELLETTE ⋅ PATENT LAW

Thus, the majority’s foreseeability standard contains a false premise, namely, that the
“relevant market” can be “broadly defined” to include all competitive truck restraints
made by the patentee. The relevant market for determining damages is confined to
the market for the invention in which the patentee holds exclusive property rights.
The injury, thus, must be to the protected market in goods made in accordance with
the patent, not unprotected truck restraints. In sum, patent rights determine not only
infringement but also damages.

38 Nothing in the statute supports the majority’s “foreseeability” rule as the sole
basis for patent damages. To the contrary, no-fault liability is imposed on “innocent”
infringers, those who have no knowledge of the existence of a patent until suit is filed.
While unknowing infringers cannot “foresee” any injury to the patentee, they are
subject to liability for damages, including lost profits, for competition with the
patentee’s patented goods. Now they will be liable for diverting sales of the patentee’s
unprotected competitive products as well.

39 If damages are awardable based on lost sales of a patentee’s business in

established products not protected by the patent in suit, the patentee not only has an
easier case as a matter of proof, but also would receive greater benefits in the form of
lost profits on its established products than if the patentee had made the investment
necessary to launch a new product. This result is not in accordance with the purpose
of the patent statute. Actual damages are meant to compensate a patentee for losing
the reward of the marketplace which the patentee’s use of the invention would
otherwise reap. Without such loss, Congress has mandated compensation in the form
of a reasonable royalty.

40 It cannot be disputed that Congress intended that the patent grant provide an
incentive to make investments in patented products during the patent term. If a
patentee is rewarded with lost profits on its established products, the incentive is
dulled if not destroyed. Why make the investment to produce and market a new drug
if the patent on the new discovery not only protects the status quo in the market but
also provides lost profits for the old?

41 For the foregoing reasons, I would hold that an injury to the patentee’s
marketing of products protected only by other patents—if at all—does not fall within
the grant of rights protected by the ’847 patent in suit and is not compensable. Thus,
I would vacate the award of lost profits on 3,283 sales based on Rite-Hite’s loss of
business in ADL–100 restraints and remand for damages to be assessed on the basis
of a reasonable royalty for those infringements.

Pauline Newman, Circuit Judge, with whom Circuit Judge Rader joins, concurring-
in-part and dissenting-in-part.

42 The court today takes an important step toward preserving damages as an

effective remedy for patent infringement. Patent infringement is a commercial tort,
and the remedy should compensate for the actual financial injury that was caused by
 LOST PROFITS 469

the tort. Thus I concur in the majority’s result with respect to entitlement to damages
for lost sales of the ADL–100.

43 Yet the court draws a new bright line, adverse to patentees and the businesses
built on patents, declining to make the injured claimants whole. The majority now
restricts en banc the patentee’s previously existing, already limited right to prove
damages for lost sales of collateral items—the so-called “convoyed” sales. Such remedy
is now eliminated entirely unless the convoyed item is “functionally” inseparable from
the patented item. The court thus propounds a legally ambivalent and economically
unsound policy, authorizing damages for the lost sales of the ADL–100 but not those
dock levelers that were required to be bid and sold as a package with the MDL–55 and
the ADL–100.

44 I know of no law or policy served by eliminating recovery of actual damages

when patents are involved. In holding that those injured by the infringement shall
not be made whole, the value of the patent property is diminished. The majority’s half-
a-loaf award, wherein the patentee and the other plaintiffs are denied recovery of a
significant portion or all of their proven damages, is an important policy decision.

45 The basic principle of damages law is that the injured party shall be made
whole. On the facts on which the district court awarded damages for certain lost sales
of dock levelers, the relationships were direct, causation was proved, the scope of
recovery was narrow, and the circumstances were unusual. Reversing the district
court, the majority holds that if the patented and convoyed items also have a separate
market, there can never be recovery for the lost sales of the convoyed items.

46 The record shows that Kelley foresaw the potential loss of dock leveler sales,
and that this contributed to Kelley’s infringement of Rite-Hite’s truck restraint
patent. The record shows Kelley and Rite-Hite both bidding on the same
restraint/leveler packages. The evidence established that Rite-Hite’s loss of 1,692 dock
leveler sales was the direct, foreseeable, and indeed intended result of Kelley’s
infringement.

47 Kelley bore the risk that if it was found to infringe Rite-Hite’s restraint patent,
it would be liable for compensatory damages on the restraint/leveler packages. By
eliminating recovery for this proven loss, this court makes a policy decision contrary
to the principles of compensatory damages. Heretofore Federal Circuit precedent
treated lost convoyed sales as a matter of fact and proof. I discern no clear error or
discretionary abuse in the district court’s award of actual damages for these specific
lost sales of restraint/leveler packages.
 470 MASUR & OUELLETTE ⋅ PATENT LAW

Grain Processing v. American Maize-Products, 185 F.3d 1341 (Fed. Cir. 1999)

Randall Rader, Circuit Judge.

1 The United States District Court for the Northern District of Indiana denied
Grain Processing Corporation lost profits for American Maize–Products’ infringement
of U.S. Patent No. 3,849,194 (the ’194 patent). The district court instead awarded
Grain Processing a 3% royalty on American Maize’s infringing sales.

2 The district court found that American Maize proved that a noninfringing
substitute was available, though not on the market or for sale, during the period of
infringement. The court found further that this substitute was acceptable to all
purchasers of the infringing product and concluded that American Maize rebutted the
inference of “but for” causation for Grain Processing’s alleged lost sales. Upholding
the district court’s findings and conclusions, this court affirms.

I.

3 [Claim 12 of the ’194 patent, the only claim at issue, claims: “A waxy starch
hydrolysate having a dextrose equivalent value between about 5 and about 25 . . .”
and other elements. Starch hydrolysates are a category of chemical products used as
food additives, and dextrose equivalence (D.E.) is a measure of sugar content, where
higher D.E. values indicate greater sweetness and different functional properties.
Maltodextrins are starch hydrolysates that have a D.E. of less than 20.]

4 Grain Processing [the assignee of the ’194 patent] has manufactured and sold
a line of maltodextrins under the “Maltrin” brand name since 1969. The Maltrin line
includes “Maltrin M100,” a 10 D.E. maltodextrin. None of the Maltrin products,
including M100, fall within claim 12 because they are all made from a non-waxy
starch.

5 American Maize began selling maltodextrins in 1974. It made and sold several
types of maltodextrins, including “Lo–Dex 10,” a 10 D.E. waxy starch maltodextrin.
American Maize sold Lo–Dex 10 (called Fro–Dex 10 before 1982) during the entire
time Grain Processing owned the ’194 patent rights, from 1979 until the patent
expired in 1991. During this time, however, American Maize used four different
processes for producing Lo–Dex 10.

6 [After being sued by Grain Processing for infringement in 1981, American

Maize attempted to avoid infringement by switching from Process I to Process II and
then Process III, but the Federal Circuit eventually ruled in 1991 that American
Maize hadn’t used the correct test to measure D.E., so these processes were
infringing.]

7 American Maize then adopted a fourth process (Process IV) for producing Lo–
Dex 10. In Process IV, American Maize added a second enzyme, glucoamylase, to the
reaction. From the time American Maize began experimenting with the glucoamylase-
 LOST PROFITS 471

alpha amylase combination, or the “dual enzyme method,” it took only two weeks to
perfect the reaction and begin mass producing Lo–Dex 10 using Process IV. According
to the finding of the district court, this two-week development and production time is
“practically instantaneous” for large-scale production. American Maize did not change
any equipment, source starches, or other ingredients from Process III. Glucoamylase
has been commercially available and its effect in starch hydrolysis widely known since
the early 1970’s, before the ’194 patent issued. American Maize had not used Process
IV to produce Lo–Dex earlier because the high cost of glucoamylase makes Process IV
more expensive than the other processes.

8 The parties agree that Process IV yielded only noninfringing Lo–Dex 10 and
that consumers discerned no difference between Process IV Lo–Dex 10 and Lo–Dex
10 made by Processes I–III. American Maize used Process IV exclusively to produce
Lo–Dex 10 from April 1991 until the ’194 patent expired in November 1991, and then
switched back to the cheaper Process III.

9 Grain Processing claimed lost profits in the form of lost sales of Maltrin M100,
price erosion, and American Maize’s accelerated market entry after the patent
expired. Grain Processing further claimed that, for any of American Maize’s infringing
sales not covered by a lost profits award, Grain Processing should receive a 28%
royalty. After a three day bench trial, the district court denied lost profits and
determined that a 3% reasonable royalty was adequate to compensate Grain
Processing.

10 The trial court determined that Grain Processing could not establish causation
for lost profits, because American Maize “could have produced” a noninfringing
substitute 10 D.E. maltodextrin using Process IV. The district court also found that
American Maize’s production cost difference between infringing and noninfringing
Lo–Dex 10 effectively capped the reasonable royalty award. American Maize showed
that it cost only 2.3% more to make noninfringing Process IV products than it did to
make infringing Process I–III products. The district court also found that “buyers
viewed as equivalent” the Process I–III and Process IV output. The district court
concluded that under these facts, American Maize, when faced with a hypothetical
offer to license the ’194 patent, would not have paid more than a 3% royalty rate. The
court concluded that if Grain Processing had insisted on a rate greater than 3% in the
hypothetical negotiations, American Maize instead would have chosen to invest in
producing noninfringing Lo–Dex 10 with Process IV.

11 Grain Processing appealed the district court’s denial of lost profits, alleging
that American Maize cannot escape liability for lost profits on the basis of a
noninfringing substitute that did not exist during, and was not developed until after,
the period of infringement. This court reversed and remanded. This court noted that
a product or process must be “available or on the market at the time of infringement”
to qualify as an acceptable non-infringing substitute. Grain Processing VII, 1997 WL
71726 (Fed. Cir. 1997).
 472 MASUR & OUELLETTE ⋅ PATENT LAW

12 On remand, the district court again denied Grain Processing lost profits. The
district court found that Process IV was “available” throughout the period of
infringement. Grain Processing VIII, 979 F. Supp. at 1235.1

II.

13 Upon proof of infringement, Title 35, Section 284 provides that “the court shall
award [the patent owner] damages adequate to compensate for the infringement but
in no event less than a reasonable royalty for the use made of the invention by the
infringer.” 35 U.S.C. § 284. The phrase “damages adequate to compensate” means “full
compensation for ‘any damages’ [the patent owner] suffered as a result of the
infringement.” General Motors Corp. v. Devex Corp., 461 U.S. 648, 654 (1983). Full
compensation includes any foreseeable lost profits the patent owner can prove. See
Rite-Hite v. Kelley, 56 F.3d 1538, 1545–47 (Fed. Cir. 1995).

14 To recover lost profits, the patent owner must show “causation in fact,”
establishing that “but for” the infringement, he would have made additional profits.
When basing the alleged lost profits on lost sales, the patent owner has an initial
burden to show a reasonable probability that he would have made the asserted sales
“but for” the infringement. Once the patent owner establishes a reasonable probability
of “but for” causation, “the burden then shifts to the accused infringer to show that
[the patent owner’s ‘but for’ causation claim] is unreasonable for some or all of the lost
sales.” Rite Hite, 56 F.3d at 1544.

15 At trial, American Maize proved that Grain Processing’s lost sales assertions
were unreasonable. The district court adopted Grain Processing’s initial premise that,
because Grain Processing and American Maize competed head-to-head as the only
significant suppliers of 10 D.E. maltodextrins, consumers logically would purchase
Maltrin 100 if Lo–Dex 10 were not available. However, the district court found that
American Maize proved that Process IV was available and that Process IV Lo–Dex 10
was an acceptable substitute for the claimed invention. In the face of this
noninfringing substitute, Grain Processing could not prove lost profits.

1 [Eds: The district court—Judge Frank Easterbrook of the Seventh Circuit, sitting by
designation—seemed frustrated with the Federal Circuit for not understanding the point the
first time: “I do not wish to be presumptuous, but it seems to me that my opinion did what the
court of appeals believes ought to have been done. That is, I found as a matter of fact that a
‘noninfringing product’ was available ‘no later than October 1979.’ The Federal Circuit did not
conclude that this finding was clearly erroneous; instead it believed that there had been a legal
blunder. Yet, as the court of appeals wrote, ‘to be an acceptable noninfringing substitute, the
product or process must have been available or on the market at the time of infringement’
(emphasis added). I found and reiterate (a) that noninfringing substitutes for the patented
product were on the market at the time of infringement, and (b) that American Maize had
‘available’ at the critical time a process that would have ensured that its own product did not
infringe the patent.” The second time around, the Federal Circuit got it.]
 LOST PROFITS 473

16 American Maize concedes that it did not make or sell Lo–Dex 10 from Process
IV until 1991, after the period of infringement. However, an alleged substitute not “on
the market” or “for sale” during the infringement can figure prominently in
determining whether a patentee would have made additional profits “but for” the
infringement. As this court stated in Grain Processing VII, “to be an acceptable non-
infringing substitute, the product or process must have been available or on the
market at the time of infringement.” 1997 WL 71726, at *2. This statement is an apt
summary of this court’s precedent, which permits available alternatives—including
but not limited to products on the market—to preclude lost profits damages.

17 In Aro Manufacturing, the Supreme Court stated that the statutory measure
of “damages” is “the difference between [the patent owner’s] pecuniary condition after
the infringement, and what his condition would have been if the infringement had not
occurred.” Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476, 507 (1964)
(plurality opinion). The determinative question, the Supreme Court stated, is: “had
the Infringer not infringed, what would the Patent Holder–Licensee have made?” Id.
at 507. The “but for” inquiry therefore requires a reconstruction of the market, as it
would have developed absent the infringing product, to determine what the patentee
“would . . . have made.” See Grain Processing VIII, 979 F. Supp. at 1236.

18 Reconstructing the market, by definition a hypothetical enterprise, requires

the patentee to project economic results that did not occur. To prevent the hypothetical
from lapsing into pure speculation, this court requires sound economic proof of the
nature of the market and likely outcomes with infringement factored out of the
economic picture. Within this framework, trial courts, with this court’s approval,
consistently permit patentees to present market reconstruction theories showing all
of the ways in which they would have been better off in the “but for world,” and
accordingly to recover lost profits in a wide variety of forms. See, e.g., King
Instruments v. Perego, 65 F.3d 941, 953 (Fed. Cir. 1995) (upholding award for lost
sales of patentee’s unpatented goods that compete with the infringing goods); Rite-
Hite, 56 F.3d at 1550 (holding that a patentee may recover lost profits on components
that have a functional relationship with the patented invention); Brooktree v.
Advanced Micro Devices, 977 F.2d 1555, 1580 (Fed. Cir. 1992) (upholding award for
price erosion due to infringer’s marketing activities); Minnesota Mining & Mfg. v.
Johnson & Johnson Orthopaedics, 976 F.2d 1559, 1579 (Fed. Cir. 1992) (upholding
award for price erosion due to infringing sales); State Indus. v. Mor-Flo, 883 F.2d 1573,
1580 (Fed. Cir. 1989) (upholding award of lost profits in proportion to patentee’s
market share of the relevant market including acceptable noninfringing substitutes);
Paper Converting Mach. v. Magna–Graphics, 745 F.2d 11, 22 (Fed. Cir. 1984)
(upholding award compensating the patentee for its decreasing marginal cost of
producing the good, i.e., its increasing marginal profit, as its volume of production
would have increased); Lam v. Johns-Manville, 718 F.2d 1056, 1065 (Fed. Cir. 1983)
(upholding lost profits award for future lost sales, and for the patentee’s increased
promotional expenses); BIC Leisure Products v. Windsurfing Int’l, 687 F. Supp. 134,
137–38 (S.D.N.Y. 1988), rev’d in part on other grounds, 1 F.3d 1214 (Fed. Cir. 1993)
 474 MASUR & OUELLETTE ⋅ PATENT LAW

(permitting recovery for future depressed prices, i.e., “projected price erosion,” and for
accelerated market reentry by the infringer). In sum, courts have given patentees
significant latitude to prove and recover lost profits for a wide variety of foreseeable
economic effects of the infringement.

19 By the same token, a fair and accurate reconstruction of the “but for” market
also must take into account, where relevant, alternative actions the infringer
foreseeably would have undertaken had he not infringed. Without the infringing
product, a rational would-be infringer is likely to offer an acceptable noninfringing
alternative, if available, to compete with the patent owner rather than leave the
market altogether. The competitor in the “but for” marketplace is hardly likely to
surrender its complete market share when faced with a patent, if it can compete in
some other lawful manner. Moreover, only by comparing the patented invention to its
next-best available alternative(s)—regardless of whether the alternative(s) were
actually produced and sold during the infringement—can the court discern the market
value of the patent owner’s exclusive right, and therefore his expected profit or
reward, had the infringer’s activities not prevented him from taking full economic
advantage of this right. Thus, an accurate reconstruction of the hypothetical “but for”
market takes into account any alternatives available to the infringer.

20 Accordingly, this court in Slimfold Manufacturing Co. v. Kinkead Industries,

Inc. held that an available technology not on the market during the infringement can
constitute a noninfringing alternative. 932 F.2d 1453 (Fed. Cir. 1991). In Slimfold,
the patent owner (Slimfold) claimed lost profits on its bi-fold doors with a patented
pivot and guide rod assembly. This court noted, however, that Slimfold did not show
“that the alleged infringer [Kinkead] would not have made a substantial portion or
the same number of sales had it continued with its old hardware or with the hardware
utilized by any of the other companies.” Id. at 1458. On the basis of this noninfringing
substitute, which was not on the market at the time of infringement, this court
affirmed the district court’s denial of lost profits. This court determined that the
record supported the district court’s finding that this noninfringing “old hardware”
was available to Kinkead at the time of the infringement. Furthermore, consumers
considered Kinkead’s noninfringing alternative an acceptable substitute for the
infringing doors. Therefore, this court upheld the district court’s award of a “small”
royalty, rather than lost profits.

21 [The court clarifies some (misguided) dicta from an earlier case, Zygo v. Wyko,
79 F.3d 1356 (Fed. Cir. 1996), which had stated that “it is axiomatic that if a device is
not available for purchase, a defendant cannot argue that the device is an acceptable
noninfringing alternative.” This is inconsistent with earlier cases like Slimfold and
“at most reflects a finding [limited to] the record in Zygo.”]

22 Grain Processing asserts that permitting the infringer to show substitute

availability without market sales, thereby avoiding lost profits, undercompensates for
infringement. Section 284, however, sets the floor for “damages adequate to
 LOST PROFITS 475

compensate for the infringement” as “a reasonable royalty.” 35 U.S.C. § 284. Thus, the
statute specifically envisions a reasonable royalty as a form of adequate
compensation. While “damages adequate to compensate” means “full compensation,”
General Motors, 461 U.S. at 654, “full compensation” does not entitle Grain Processing
to lost profits in the absence of “but for” causation. Rite-Hite, 56 F.3d at 1545.
Moreover, although Grain Processing stresses that American Maize should not reap
the benefit of its “choice” to infringe rather than use the more expensive Process IV,
Grain Processing does not allege willful infringement and the record shows none. To
the extent that Grain Processing feels undercompensated,2 it must point out a
reversible error in the district court’s fact-finding, reasoning, or legal basis for denying
lost profits or in its reasonable royalty determination.3

III.

23 This court next turns to the district court’s findings that Process IV was in fact
“available” to American Maize for producing Lo–Dex 10 no later than October, 1979,
and that consumers would consider Process IV Lo–Dex 10 an acceptable substitute.
This court reviews these factual findings for clear error. See Gargoyles v. United
States, 113 F.3d 1572, 1573 (Fed. Cir. 1997); Slimfold, 932 F.2d at 1458.

24 The critical time period for determining availability of an alternative is the

period of infringement for which the patent owner claims damages, i.e., the
“accounting period.” Switching to a noninfringing substitute after the accounting
period does not alone show availability of the noninfringing substitute during this
critical time. When an alleged alternative is not on the market during the accounting
period, a trial court may reasonably infer that it was not available as a noninfringing
substitute at that time. The accused infringer then has the burden to overcome this
inference by showing that the substitute was available during the accounting period.
Mere speculation or conclusory assertions will not suffice to overcome the inference.
After all, the infringer chose to produce the infringing, rather than noninfringing,
product. Thus, the trial court must proceed with caution in assessing proof of the
availability of substitutes not actually sold during the period of infringement.
Acceptable substitutes that the infringer proves were available during the accounting

2 [n.4 in opinion] The district court’s 3% royalty rate yielded damages of approximately
$2.4 million; Grain Processing sought lost profits of $35 million, which with applicable interest
presently implies an award approaching $100 million.
3 [n.5 in opinion] The district court appears to have conducted a thorough royalty
analysis, challenged by neither party on appeal. The court candidly stated that the 3% rate is
its “best estimate,” an honest observation that would apply to most reasonable royalty
analyses, given the difficulty of determining a hypothetical agreement between parties which
did not actually agree on anything at all. The determination is perhaps more difficult when
the patentee is not selling the patented product, as is the case here. Nevertheless, the district
court supported its royalty amount with sound economic data and with actual, observed
behavior in the market. Though both parties maintained at trial that they would not have
agreed to a license including 3% royalties at the time of infringement, the appropriateness of
the rate is perhaps reflected in the decision of the parties to forego an appeal on this issue.
 476 MASUR & OUELLETTE ⋅ PATENT LAW

period can preclude or limit lost profits; substitutes only theoretically possible will
not.

25 In this case, the district court did not base its finding that Process IV was
available no later than October 1979 on speculation or possibilities, but rather on
several specific, concrete factual findings, none of which Grain Processing challenges
on appeal. The district court found that American Maize could readily obtain all of the
materials needed for Process IV, including the glucoamylase enzyme, before 1979. The
court also found that the effects of the enzymes in starch hydrolysis were well known
in the field at that time. Furthermore, the court found that American Maize had all
of the necessary equipment, know-how, and experience to use Process IV to make Lo–
Dex 10, whenever it chose to do so during the time it was instead using Processes I, II
or III. American Maize “did not have to ‘invent around’ the patent,” the district court
observed; “all it had to do was use a glucoamaylase enzyme in its production process.”

26 The trial court also explained that “the sole reason [American Maize did not
use Process IV prior to 1991] was economic: glucoamylase is more expensive than the
alpha amylase enzyme American Maize had been using,” and American Maize
reasonably believed it had a noninfringing product. While the high cost of a necessary
material can conceivably render a substitute “unavailable,” the facts of this case show
that glucoamylase was not prohibitively expensive to American Maize. The district
court found that American Maize’s “substantial profit margins” on Lo–Dex 10 were
sufficient for it to absorb the 2.3% cost increase using glucoamylase.

27 Moreover, the district court’s unchallenged finding that there is no

“economically significant demand for a product having all of the [claimed] attributes”
supports its conclusion of availability. Consumers demand “low-dextrose
maltodextrins of which the patented product is just one exemplar.” Because consumers
find the “waxy” and “descriptive ratio” elements of claim 12 “irrelevant,” the prospect
of an available, acceptable noninfringing substitute expands because a competitor
may be able to drop or replace the “irrelevant” elements from its product. Compare
Rite-Hite, 56 F.3d 1538 (upholding lost profits award for patentee’s vehicle restraint—
not covered by the patent in suit—because the patentee could exclude alleged
substitute products with another patent) with King Instruments, 65 F.3d 941
(upholding only a partial award of lost profits for patentee’s tape rewinder—not
covered by any patent—due to the availability of alternatives acceptable to some
consumers); see also Panduit, 575 F.2d at 1156, 1160–61 (holding that consumer
demand for the “unique advantages” of the patented invention, as opposed to
substitutes lacking some elements, and the infringer’s “inability to avoid infringement
even if it had wanted to,” established the lack of available, acceptable noninfringing
alternatives). Grain Processing cannot exclude Process IV Lo–Dex 10 because it does
not have a patent on 10 D.E. maltodextrins, “the economically significant product” as
the district court stated, but rather on a particular variety of 10 D.E. maltodextrins.
 LOST PROFITS 477

28 This court therefore does not detect, and the parties do not suggest, clear error
in the district court’s factual findings on the availability of Process IV. These factual
findings support the district court’s conclusion that Process IV was available to
American Maize for making noninfringing Lo–Dex 10, no later than October 1991.
American Maize had the necessary chemical materials, the equipment, the know-how
and experience, and the economic incentive to produce Lo–Dex 10 by Process IV
throughout the entire accounting period. Whether and to what extent American
Maize’s alleged alternative prevents Grain Processing from showing lost sales of
Maltrin 100 depends not only on whether and when the alternative was available, but
also on whether and to what extent it was acceptable as a substitute in the relevant
market. Consumer demand defines the relevant market and relative substitutability
among products therein. Important factors shaping demand may include consumers’
intended use for the patentee’s product, similarity of physical and functional
attributes of the patentee’s product to alleged competing products, and price. Where
the alleged substitute differs from the patentee’s product in one or more of these
respects, the patentee often must adduce economic data supporting its theory of the
relevant market in order to show “but for” causation.

29 In this case, the parties vigorously dispute the precise scope of the relevant
market. The district court’s uncontroverted factual findings, however, render this
dispute moot. In the eyes of consumers, according to the district court, Process IV Lo–
Dex 10 was the same product, for the same price, from the same supplier as Lo–Dex
10 made by other processes. Process IV Lo–Dex 10 was a perfect substitute for
previous versions, and therefore Grain Processing’s efforts to show a distinct 10 D.E.
maltodextrin market do not assist its lost profits case.

30 Market evidence in the record supports the district court’s uncontroverted

findings and conclusions on acceptability. First, for example, American Maize’s high
profit margin on Lo–Dex 10 and the consumers’ sensitivity to price changes support
the conclusion that American Maize would not have raised the price of Process IV Lo–
Dex 10 to offset the cost of glucoamylase. Further, American Maize’s sales records
showed no significant changes when it introduced Process IV Lo–Dex 10 at the same
price as previous versions, indicating that consumers considered its important
properties to be effectively identical to previous versions. Witness testimony
supported this market data. Thus, this court discerns no clear error in the district
court’s finding that Process IV Lo–Dex 10 was an acceptable substitute in the
marketplace.

31 It follows from the district court’s findings on availability and acceptability

that Grain Processing’s theory of “but for” causation fails. As the district court
correctly noted, “[a]n [American Maize] using the dual-enzyme method between 1979
and 1991 . . . would have sold the same product, for the same price, as the actual
[American Maize] did . . .” and consequently would have retained its Lo–Dex 10 sales.
Grain Processing did not present any other evidence of lost profits, such as individual
lost transactions as in Rite-Hite Corp. v. Kelley Co., 774 F. Supp. 1514, 1525–26, 1528–
 478 MASUR & OUELLETTE ⋅ PATENT LAW

29 (E.D. Wis. 1991), aff’d in part and vacated on other grounds, 56 F.3d 1538. Thus,
the district court properly determined that, absent infringing Lo–Dex 10, Grain
Processing would have sold no more and no less Maltrin 100 than it actually did.

IV.

32 In summary, this court requires reliable economic proof of the market that
establishes an accurate context to project the likely results “but for” the infringement.
The availability of substitutes invariably will influence the market forces defining this
“but for” marketplace, as it did in this case. Moreover, a substitute need not be openly
on sale to exert this influence. Thus, with proper economic proof of availability, as
American Maize provided the district court in this case, an acceptable substitute not
on the market during the infringement may nonetheless become part of the lost profits
calculus and therefore limit or preclude those damages.

33 This court concludes that the district court did not err in considering an
alternative not on the market during the period of infringement, nor did it clearly err
in determining that the alternative was available, acceptable, and precluded any lost
profits. Accordingly, the district court did not abuse its discretion in denying lost
profits. This court affirms the district court’s decision.

Discussion Questions: Lost Profits Damages

1. Panduit Factors. Under the four-part Panduit test presented in Rite-Hite,

one way for a patentee to prove entitlement to lost profits damages is to show
(1) demand for the patented product; (2) the absence of acceptable noninfringing
substitutes; (3) its own manufacturing and marketing capability to exploit the
demand; and (4) the amount of the profit it would have made. The fourth element of
the Panduit test is really the ultimate question rather than an independent factor.
Why do the other elements make sense as a matter of economic logic? Which do you
think are most likely to be contested? How does Grain Processing allow infringers to
demonstrate acceptable noninfringing substitutes?

2. Defining the Market. A key issue in most lost profits cases is how to define
the relevant market. The patentee wants the market defined broadly enough to
include whatever she is selling, but not so broadly that it includes noninfringing
substitutes. What’s wrong with just defining the market as “products covered by the
patent”? For a discussion of different approaches to defining markets in IP and
antitrust law, see Mark A. Lemley & Mark P. McKenna, Is Pepsi Really a Substitute
for Coke? Market Definition in Antitrust and IP, 100 Geo. L.J. 2055 (2012).

In Rite-Hite, the majority held that the patentee could recover lost profits
because it was selling a product in the same market as the infringing product, even
though the patentee’s product was not covered by the patent in suit. What do Judge
Nies and the judges who join her dissent think is wrong with this rule? Which view
 LOST PROFITS 479

do you find more compelling? What if Rite-Hite were not selling any products covered
by the patent-in-suit? Which rule creates a stronger incentive for industry
consolidation?

How do the courts define the relevant market in each case? If you were
representing the losing party in each appeal—the infringer in Rite-Hite or the
patentee in Grain Processing—how would you try to define the market to obtain a
different result?

What happens if the patentee is not the only firm in the market other than the
infringer? In State Industries v. Mor–Flo Industries, 883 F.2d 1573 (Fed. Cir. 1989),
the court allowed recovery under a “market-share rule,” under which the patent
holder can recover for lost sales proportional to its market share. In Mor–Flo, the
patent owner had a 40% share of the relevant market (the national market for foam
water heaters), and the Federal Circuit affirmed an award of lost profits on 40% of the
infringing sales and a reasonable royalty on the other 60%. What economic
assumptions is the market-share rule premised on? Given the assumption that the
patentee would not have made the other 60% of sales, why should it receive a
reasonable royalty on those sales?

Antitrust economists have developed more sophisticated tools than Mor–Flo’s

crude approach for assessing lost market share when products are differentiated (as
is the case for most products). See, e.g., Carl Shapiro, The 2010 Horizontal Merger
Guidelines: From Hedgehog to Fox in Forty Years, 77 Antitrust L.J. 49 (2010). Why do
you think these tools aren’t reflected in Federal Circuit doctrine on patent damages?

3. Convoyed Sales. In Rite-Hite, the court states that lost profits for unpatented
components sold with patented components are available only when all the
components are “analogous to components of a single assembly or be parts of a
complete machine, or they must constitute a functional unit.” 56 F.3d at 1550. Sale of
the functionally related unpatented components is known as a “convoyed sale.” Lost
profits aren’t available if the components don’t have a functional relationship and are
sold together merely because of customer demand, business convenience, or a
marketing advantage. See, e.g., American Seating Co. v. USSC Group, Inc., 514 F.3d
1262 (Fed. Cir. 2008) (no functional relationship between patented wheelchair tie-
down restraint system for buses and bus passenger seats from same supplier);
Warsaw Orthopedic, Inc. v. NuVasive, Inc., 778 F.3d 1365 (Fed. Cir. 2015) (no
functional relationship between patented spinal implants and medical kits with
unpatented screws and rods for holding the implants in place). If a patentee can prove
that but for the infringement, she would have sold more of the unpatented
components, why should the functional relationship matter? See Thomas F. Cotter,
Comparative Patent Remedies 117–18 (2013) (“This rule is somewhat difficult to
square with the overall thrust of the Rite-Hite opinion, with its emphasis on restoring
the patentee to the position it would have occupied but for the infringement.”).
480 MASUR & OUELLETTE ⋅ PATENT LAW

4. Apportionment. In Mentor Graphics v. EVE-USA, 851 F.3d 1275 (Fed. Cir.

2017), the Federal Circuit held that where the Panduit test is satisfied, the patent
holder is entitled to lost profits for the entire product, even if the patent covers only
one component of a multicomponent product. Many commentators argued that this
decision contravened the principle that damages should be based on the value of the
patented invention, not the value of the product incorporating the invention, and that
damages must be “apportioned” between those attributable to infringing versus
noninfringing features. Do you think this is an important concern? For an argument
that these concerns are alleviated by limiting Mentor Graphics to its unusual facts—
only two market competitors, only one of which holds a patent on an essential
feature—see Jason Reinecke, Note, Lost Profits Damages for Multicomponent
Products: Clarifying the Debate, 71 Stan. L. Rev. 1621 (2019).

5. Lost Profits for Foreign Sales. As discussed in Chapter 11, in WesternGeco

LLC v. ION Geophysical Corp., 138 S. Ct. 2129 (2018), the Supreme Court held that
lost profits are available for foreign sales in cases of infringement under 35 U.S.C.
§ 271(f). The patent related to a system for surveying the ocean floor, and the patentee
demonstrated at trial that it had lost ten specific contracts due to infringement by a
firm that manufactured components for a competing system and then shipped them
to companies abroad. After WesternGeco, what kind of evidence would you look for if
you represented an infringer arguing against lost profits for foreign sales?

Practice Problems: Lost Profits Damages

Juting exclusively licensed all substantial rights in her widget patent to Mateo.
In 2019, Lizy sold 100 infringing widgets for $2 each. Mateo sued. In 2019, Mateo had
the capacity to sell 1000 widgets. Each widget cost him $1 to manufacture, and he
ended up selling 500 widgets at $2 each, for a total profit of $500. Lizy’s manufacturing
cost was $1.50 per widget, so her profits were $50. There are no noninfringing
substitutes, and from the perspective of consumers, Mateo’s and Lizy’s widgets are
identical.

1. Based solely on these facts, what damages should Mateo receive?

2. What if Mateo sold only 100 widgets rather than 500?

3. What if Mateo only had capacity to sell 500 widgets?

4. What if Lizy’s manufacturing cost was only $0.50 per widget?

5. Mateo asserts that without Lizy’s competition, he would have been able to
charge $3 per widget. If Mateo can prove this, what would the damages be?
How should Lizy respond to this argument?

6. What if Mateo proves that he would have been able to charge $3 per widget,
and Lizy shows that at the $3 price, Mateo would have made only 500 sales?
 LOST PROFITS 481

7. What if Mateo shows that if he had made Lizy’s 100 additional sales, his
manufacturing cost for those additional widgets would have been $0.50 per
widget due to economies of scale (and the cost for his first 500 widgets would
still be $1 each)?

8. What if Mateo shows that Lizy’s competition required him to spend $100 on
advertising to maintain his market share?

9. What if Lizy shows that she could have easily switched to selling a
noninfringing widget that is still identical to consumers, and which would have
cost her $1.75 per widget to manufacture?

10. What if widget sales in 2019 comprised (a) 500 sales by Mateo under the
patent, (b) 100 infringing sales by Lizy, and (c) 500 sales by Kevin of a version
that is identical to consumers, with all sales being made at $2 per widget?

11. What if the widget market is growing, and Mateo argues that the year of
infringement damaged his brand and hurt his sales by 10% indefinitely going
forward?

12. What if Mateo shows that Lizy’s widget sales also caused him to lose sales of
doodads needed to make a widget usable to customers, but he does not have a
patent on doodads?

13. What if widgets cost Mateo $1 to manufacture regardless of the quantity, and
the demand curve is as follows (and widgets can only be made in 100-unit
increments)? Hint: If no one else enters the market, what quantity of widgets
would Mateo choose to make?
 482 MASUR & OUELLETTE ⋅ PATENT LAW

15. Reasonable Royalties

Lost profits damages might be thought of as the most straightforward means
of compensating the patent owner for the infringement. But in some cases, a patent
owner will be unable to prove lost profits damages. The patent owner might be a non-
practicing entity (including, possibly, a research university) that does not
manufacture or sell a product. It might instead be in the business of licensing its
patents to firms that want to use the technology. Or it might simply have difficulty
(or be uninterested) in trying to prove lost profits. As Chapter 14 should make clear,
the lost profits calculation can be complex and challenging, given that it requires
constructing a counterfactual world in which the infringement did not occur.

To address these circumstances, 35 U.S.C. § 284 allows successful patent

plaintiffs to collect damages equal to a “reasonable royalty” for the patent(s) at issue.
Just as lost profits damages are meant to compensate the patent holder by awarding
it whatever profits it would have made if infringement had not occurred, reasonable
royalty damages are meant to compensate the patent holder by awarding it whatever
licensing fee it would have negotiated with the infringer had the infringer negotiated
rather than infringing. However, just as lost profits can be difficult to calculate
because they require constructing a counterfactual marketplace that never existed, so
too reasonable royalty damages can be difficult to calculate because they involve
constructing a hypothetical negotiation that never took place. The following case
explores these issues.

LaserDynamics v. Quanta Computer, 694 F.3d 51 (Fed. Cir. 2012)

Jimmie Reyna, Circuit Judge.

1 These appeals come before us after two trials in the district court—a first trial
resolving the claims of patent infringement and damages, and a second trial ordered
by the district court to retry the damages issues.

I. Background

The Patented Technology and the Optical Disc Drive Industry

2 LaserDynamics, Inc. is the owner of U.S. Patent No. 5,587,981, which was
issued in 1996. The patent is directed to a method of optical disc discrimination that
essentially enables an optical disc drive (ODD) to automatically identify the type of
optical disc—e.g., a compact disc (CD) versus a digital video disc (DVD)—that is
inserted into the ODD. Claim 3, which was asserted at trial, is representative:
 REASONABLE ROYALTIES 483

3. An optical disk reading method comprising the steps of:

processing an optical signal reflected from encoded pits on an

optical disk until total number of data layers and pit
configuration standard of the optical disk is identified;

collating the processed optical signal with an optical disk

standard data which is stored in a memory; and

settling modulation of servomechanism means dependent upon

the optical disk standard data which corresponds with the
processed optical signal;

(c) [sic] the servomechanism means including:

a focusing lens servo to modulate position of a focusing lens; and

a tracking servo to modulate movement of a pickup.

3 This automated process saves the user from having to manually identify the
kind of disc being inserted before the ODD can begin to read the data on the disc. The
patented technology is alleged to be particularly useful in laptop computers where
portability, convenience, and efficiency are essential. At least as early as 2006, a
laptop computer was not commercially viable unless it included an ODD that could
automatically discriminate between optical discs. [Eds: As with many technologies,
this success was short-lived; Apple started eliminating ODDs from laptops in 2012,
and other firms have followed suit.]

4 Yasuo Kamatani is the sole inventor of the ’981 Patent. In 1998, viewing DVD
technology as the next major data and video format, Mr. Kamatani founded
LaserDynamics and assigned the ’981 Patent to the company. Mr. Kamatani is the
sole employee of LaserDynamics, which is exclusively in the business of licensing Mr.
Kamatani’s patents to ODD and consumer electronics manufacturers.

5 When LaserDynamics was founded, the DVD market had reached few
mainstream consumers, and there was some skepticism as to the likely success of this
technology compared with the established VHS format. By 2000, however, DVD sales
and the ODD market were sharply rising. By 2003, most homes had DVD players and
nearly every computer had an ODD. An ODD having automatic disc discrimination
capability quickly became the industry standard for DVD players and computers.

LaserDynamics’ Licensing History of the ’981 Patent

6 According to LaserDynamics, it was initially difficult to generate interest in

licensing the ’981 Patent, due to the novelty of the technology and LaserDynamics’
limited operating capital and bargaining power. Nevertheless, LaserDynamics
entered into sixteen licensing agreements from 1998 to 2001. These licenses were
granted to well known electronics and ODD manufacturers such as Sony, Philips,
 484 MASUR & OUELLETTE ⋅ PATENT LAW

NEC, LG, Toshiba, Hitachi, Yamaha, Sanyo, Sharp, Onkyo, and Pioneer. All of the
licenses were nonexclusive licenses granted in exchange for one time lump sum
payments ranging from $57,000 to $266,000. These sixteen licenses were admitted
into evidence in the first trial, as explained below.

7 Several other lump sum licenses were granted by LaserDynamics between

1998 and 2003 to other ODD and electronics manufacturers via more aggressive
licensing efforts involving actual or threatened litigation by LaserDynamics.

8 On February 15, 2006, LaserDynamics entered into a license agreement with

BenQ Corporation to settle a two-year long litigation for a lump sum of $6 million.
This settlement agreement was executed within two weeks of the anticipated trial
against BenQ. By the time of the settlement, BenQ had been repeatedly sanctioned
by the district court for discovery misconduct and misrepresentation.

9 Finally, in 2009 and 2010, LaserDynamics entered into license agreements

with ASUSTeK Computer and Orion Electric Co., Ltd., respectively, for lump sum
payments of $1 million or less.

10 In total, twenty-nine licenses were entered into evidence in the second

damages trial. With the exception of the $6 million BenQ license, all twenty-nine
licenses were for lump sum amounts of $1 million or less.

Quanta Computer Inc. and Quanta Storage Inc.

11 Quanta Storage, Inc. (QSI) is a manufacturer of ODDs that was incorporated

in 1999. QSI is headquartered in Taiwan and is a partially-owned subsidiary of
Quanta Computer, Inc. (QCI), with which it shares some common officers, directors,
and facilities. QCI’s corporate headquarters are also located in Taiwan, and its
factories are located in China. QCI holds a minority share in QSI and does not control
QSI’s operations.

12 QCI assembles laptop computers for its various customers, which include name
brand computer companies such as Dell, Hewlett Packard (HP), Apple, and Gateway.
QCI does not manufacture ODDs, but will install ODDs into computers as instructed
by its customers. QSI first sold its ODDs for integration into laptop computers in the
United States in 2001. In 2002, LaserDynamics offered QSI a license under the ’981
Patent, but QSI disputed whether its ODDs were within the scope of the ’981 Patent
and declined the offer. QCI sold its first computer in the United States using an ODD
from QSI in 2003. It was not until August 2006 that LaserDynamics offered a license
to QCI concurrently with the filing of this lawsuit. To date, neither QSI nor QCI has
entered into a licensing agreement with LaserDynamics relating to the ’981 Patent.

II. Procedural History

13 Based on [pretrial] rulings [on exhaustion and implied licenses],

LaserDynamics dropped its claims against QSI and opted to pursue its active
 REASONABLE ROYALTIES 485

inducement of infringement claims against QCI only at trial. QCI was first on notice
of the ’981 Patent in August 2006 when the complaint was filed. Between August 2006
and the conclusion of the first trial in June 2009, QCI sold approximately $2.53 billion
of accused laptops into the United States. LaserDynamics sought reasonable royalty
damages under 35 U.S.C. § 284. Pursuant to the analytical framework for assessing a
reasonable royalty set forth in Georgia-Pacific Corp. v. United States Plywood Corp.,
318 F. Supp. 1116 (S.D.N.Y. 1970), the date of the “hypothetical negotiation” between
the parties was deemed by the district court to be August 2006—the date that QCI
first became aware of the ’981 Patent and was therefore first potentially liable for
active inducement of infringement.

The First Trial

14 The damages theory advanced by LaserDynamics in the first trial was

presented chiefly through LaserDynamics’ expert, Mr. Emmett Murtha. Mr. Murtha
opined that a running royalty of 2% of the total sales of laptop computers by QCI is
what the parties would have agreed to as a reasonable royalty had they engaged in a
hypothetical negotiation in August 2006.

15 To arrive at his 2% per laptop computer royalty rate, Mr. Murtha began by
finding that 6% would be a reasonable royalty rate to pay with respect to an ODD
alone. Mr. Murtha reached his conclusion of a 6% per ODD royalty by relying on
“comparable rates in two separate licensing programs involving DVDs where the rates
were 3.5 in one case and 4 percent in another case.” He also relied on “a very
comprehensive royalty survey that was done by the Licensing Executive Society in
1997,” which he viewed as “a standard textbook for people who are seeking to set
reasonable royalty rates.” The licensing survey “was across whatever technologies
were being licensed by the people who responded,” and suggested that in general,
across all of those unrelated technologies, “for a minor improvement, we would charge
2 to 5 percent. For a major improvement, we would charge 4 to 8 percent. And for a
major breakthrough, 6 to 15 percent . . . .”

16 Based on his discussions with LaserDynamics’ other experts, Mr. Murtha

concluded that the patented technology in the ODD is responsible for one-third of the
value of a laptop computer containing such an ODD. Thus, he arrived at his 2% per
laptop computer rate simply by taking one-third of the 6% rate for the ODD. When
Mr. Murtha’s proffered 2% running royalty rate was applied to QCI’s total revenues
from sales of laptop computers in the United States—$2.53 billion—the resulting
figure presented to the jury was $52.1 million.

17 By contrast, QCI’s theory of damages was that a lump sum of $500,000 would
be a reasonable royalty. QCI’s expert found the 16 licenses in evidence—all lump sums
ranging between $50,000 and $266,000—to be highly indicative of the value of the
patented technology according to LaserDynamics, and of what a reasonable accused
infringer would agree to pay for a license.
 486 MASUR & OUELLETTE ⋅ PATENT LAW

The First Jury Verdict and Post–Trial Proceedings

18 The jury ultimately returned a verdict finding QCI liable for active inducement
of infringement, and awarded $52 million in damages to LaserDynamics, almost the
exact amount proffered by Mr. Murtha. After the verdict, QCI filed a motion for a
remittitur or new trial pursuant to Federal Rule of Civil Procedure 59(a). In this
motion, QCI argued that the verdict was grossly excessive and against the great
weight of the evidence, and for the first time argued that Mr. Murtha’s testimony
should have been excluded due to his unreliable methodology in applying the “entire
market value rule”—i.e., using the revenues from sales of the entire laptop computers
as the royalty base—without having established that the patented feature drives the
demand for the entire laptop computer. The district court granted QCI’s motion,
finding that LaserDynamics had indeed improperly invoked the entire market value
rule.

The Second Trial

19 [Before and during the second trial on damages, QCI made various objections
that are discussed in detail below.] LaserDynamics offered testimony that damages
should be $10.5 million based on a running royalty of 6% of the average price of a
standalone ODD. QCI’s expert testified that the appropriate damages amount was a
lump sum payment of $1.2 million, based in large part on the fact that none of the
now twenty-nine licenses in evidence (excluding the BenQ settlement) exceeded lump
sum amounts of $1 million. Based on evidence that QCI could have switched from QSI
drives to other licensed ODD suppliers to avoid infringement at a cost of $600,000,
QCI’s expert also opined that QCI would have paid twice that amount to have the
freedom to use ODDs from any supplier. The jury ultimately awarded a lump sum
amount of $8.5 million in damages.

20 [Both parties appealed on multiple grounds.]

III. Discussion

21 For reasons explained in detail below, we hold: [1] that the district court
properly granted a new trial on damages following the first jury verdict; . . . [2] that
the district court erred by setting the hypothetical negotiation date as August 2006;
[3] that the district court erred in admitting the BenQ settlement agreement into
evidence; and [4] that the district court erred in permitting Mr. Murtha to offer his
opinion concerning a 6% per ODD running royalty rate based on ODD average price
as a proper measure of reasonable royalty damages in the second trial. We address
each of these issues in turn.

The District Court Properly Granted a New Trial on Damages

22 By statute, reasonable royalty damages are deemed the minimum amount of

infringement damages “adequate to compensate for the infringement.” 35 U.S.C.
§ 284. Where small elements of multi-component products are accused of
 REASONABLE ROYALTIES 487

infringement, calculating a royalty on the entire product carries a considerable risk

that the patentee will be improperly compensated for non-infringing components of
that product. Thus, it is generally required that royalties be based not on the entire
product, but instead on the “smallest salable patent-practicing unit.”

23 The entire market value rule is a narrow exception to this general rule. If it
can be shown that the patented feature drives the demand for an entire multi-
component product, a patentee may be awarded damages as a percentage of revenues
or profits attributable to the entire product. Rite-Hite v. Kelley Co., 56 F.3d 1538, 1549,
1551 (Fed. Cir. 1995) (en banc). In other words, “[t]he entire market value rule allows
for the recovery of damages based on the value of an entire apparatus containing
several features, when the feature patented constitutes the basis for customer
demand.” Lucent Techs. v. Gateway, 580 F.3d 1301, 1336 (Fed. Cir. 2009).

24 Importantly, the requirement to prove that the patented feature drives

demand for the entire product may not be avoided by the use of a very small royalty
rate. We recently rejected such a contention and clarified that “[t]he Supreme Court
and this court’s precedents do not allow consideration of the entire market value of
accused products for minor patent improvements simply by asserting a low enough
royalty rate.” Uniloc USA v. Microsoft, 632 F.3d 1292, 1319–20 (Fed. Cir. 2011). We
reaffirm that in any case involving multi-component products, patentees may not
calculate damages based on sales of the entire product, as opposed to the smallest
salable patent-practicing unit, without showing that the demand for the entire
product is attributable to the patented feature.

25 Regardless of the chosen royalty rate, one way in which the error of an
improperly admitted entire market value rule theory manifests itself is in the
disclosure of the revenues earned by the accused infringer associated with a complete
product rather than the patented component only. In Uniloc, we observed that such
disclosure to the jury of the overall product revenues “cannot help but skew the
damages horizon for the jury, regardless of the contribution of the patented component
to this revenue.” Id. at 1320 (noting that “the $19 billion cat was never put back into
the bag,” and that neither cross-examination nor a curative jury instruction could
have offset the resulting unfair prejudice). Admission of such overall revenues, which
have no demonstrated correlation to the value of the patented feature alone, only serve
to make a patentee’s proffered damages amount appear modest by comparison, and to
artificially inflate the jury’s damages calculation beyond that which is “adequate to
compensate for the infringement.” Id.; see 35 U.S.C. § 284.

26 Turning to the facts of this case, LaserDynamics and Mr. Murtha

unquestionably advanced an entire market value rule theory in the first trial. Mr.
Murtha opined that a 2% running royalty applied to QCI’s total revenues from sales
of laptop computers in the United States—$2.53 billion—was an appropriate and
reasonable royalty. The resulting figure presented to the jury was $52.1 million, and
the jury awarded damages in nearly that exact amount.
 488 MASUR & OUELLETTE ⋅ PATENT LAW

27 LaserDynamics’ use of the entire market value rule was impermissible,

however, because LaserDynamics failed to present evidence showing that the
patented disc discrimination method drove demand for the laptop computers. It is not
enough to merely show that the disc discrimination method is viewed as valuable,
important, or even essential to the use of the laptop computer. Nor is it enough to
show that a laptop computer without an ODD practicing the disc discrimination
method would be commercially unviable. Were this sufficient, a plethora of features
of a laptop computer could be deemed to drive demand for the entire product. To name
a few, a high resolution screen, responsive keyboard, fast wireless network receiver,
and extended-life battery are all in a sense important or essential features to a laptop
computer; take away one of these features and consumers are unlikely to select such
a laptop computer in the marketplace. But proof that consumers would not want a
laptop computer without such features is not tantamount to proof that any one of
those features alone drives the market for laptop computers. Put another way, if given
a choice between two otherwise equivalent laptop computers, only one of which
practices optical disc discrimination, proof that consumers would choose the laptop
computer having the disc discrimination functionality says nothing as to whether the
presence of that functionality is what motivates consumers to buy a laptop computer
in the first place. It is this latter and higher degree of proof that must exist to support
an entire market value rule theory.

28 Our decision in Lucent is illustrative. There, the patent at issue involved a

helpful and convenient “date picker” feature that was being used within the grand
scheme of Microsoft’s Outlook email software. We held that because the patented
feature was “but a tiny feature of one part of a much larger software program,” a
royalty could not be properly calculated based on the value of the entire Outlook
program because “there was no evidence that anybody anywhere at any time ever
bought Outlook . . . because it had [the patented] date picker.” Lucent, 580 F.3d at
1332–33.

29 In this case, Mr. Murtha never conducted any market studies or consumer
surveys to ascertain whether the demand for a laptop computer is driven by the
patented technology. On the record before us, the patented method is best understood
as a useful commodity-type feature that consumers expect will be present in all laptop
computers.

30 Furthermore, Mr. Murtha’s one-third apportionment to bring his royalty rate

down from 6% per ODD to 2% per laptop computer appears to have been plucked out
of thin air based on vague qualitative notions of the relative importance of the ODD
technology. The district court correctly concluded that “[a]lthough [LaserDynamics]
argues that the many activities that may be performed on a computer using a disk
drive, such as playing movies, music and games, transferring documents, backing up
files, and installing software comprise a third of the value of a computer, [Mr. Murtha]
offers no credible economic analysis to support that conclusion.” This complete lack of
economic analysis to quantitatively support the one-third apportionment echoes the
 REASONABLE ROYALTIES 489

kind of arbitrariness of the “25% Rule” [as a starting point for royalty calculations]
that we recently and emphatically rejected from damages experts, and would alone
justify excluding Mr. Murtha’s opinions in the first trial.

31 Finally, we reject the contention that practical and economic necessity

compelled LaserDynamics to base its royalty on the price of an entire laptop computer.
LaserDynamics emphasizes that QCI is in the business of assembling and selling
complete laptop computers, not independent ODDs, and that QCI does not track the
prices, revenues, or profits associated with individual components. Likewise,
LaserDynamics points out that QCI purchases ODDs for a “mask price,” which the
district court described as “nominal” and essentially “an accounting fiction” that offers
“little evidence of the drives’ actual value.”

32 LaserDynamics overlooks that a per-unit running royalty is not the only form
of a reasonable royalty that the parties might have agreed to in a hypothetical
negotiation. An alternate form is evidenced by the many license agreements to the
’981 Patent in the record for lump sum royalties that are not calculated as a
percentage of any component or product, which immediately belies the argument that
using a laptop computer as the royalty base is “necessary.” LaserDynamics’ necessity
argument also fails to address the fundamental concern of the entire market value
rule. If difficulty in precisely identifying the value of the ODDs is what justifies using
complete laptop computers as the royalty base, when it comes time to then apportion
a royalty rate that accounts for the ODD contribution only, the exceedingly difficult
and error-prone task of discerning the ODD’s value relative to all other components
in the laptop remains.

The District Court Erred by Setting the Hypothetical Negotiation Date

as August 31, 2006

33 During both trials, QCI was bound by the district court’s ruling that the
hypothetical negotiation date for purposes of the Georgia-Pacific reasonable royalty
analysis was August 2006—i.e., when the lawsuit was filed. The district court
reasoned that since QCI was being accused of active inducement of infringement,
which requires knowledge of the patent, and since QCI was not notified of the patent
until August 2006, this date was when QCI first became liable to LaserDynamics.
Based in large part on this late date, LaserDynamics’ expert Mr. Murtha testified that
he disregarded almost all of LaserDynamics’ twenty-nine licenses in evidence that
were executed earlier, reasoning that the economic landscape had since changed.

34 We have explained that “[t]he correct determination of [the hypothetical

negotiation] date is essential for properly assessing damages.” Integra Lifesciences I,
Ltd. v. Merck KGaA, 331 F.3d 860, 870 (Fed. Cir. 2003). In general, the date of the
hypothetical negotiation is the date that the infringement began.

35 We have also been careful to distinguish the hypothetical negotiation date from
other dates that trigger infringement liability. For example, the six-year limitation on
 490 MASUR & OUELLETTE ⋅ PATENT LAW

recovery of past damages under 35 U.S.C. § 286 does not preclude the hypothetical
negotiation date from taking place on the date infringement began, even if damages
cannot be collected until some time later. Similarly, the failure to mark a patented
product or prove actual notice of the patent pursuant to 35 U.S.C. § 287 precludes the
recovery of damages prior to the marking or notice date, but the hypothetical
negotiation date may nevertheless be properly set before marking or notice occurs. In
sum, “[a] reasonable royalty determination for purposes of making a damages
evaluation must relate to the time infringement occurred, and not be an after-the-fact
assessment.” Riles v. Shell Exploration & Prod. Co., 298 F.3d 1302, 1313 (Fed. Cir.
2002).

36 Here, there is no dispute that while QCI first became liable for active
inducement of infringement in August 2006, QCI’s sales of accused laptop computers
into the United States began causing the underlying direct infringement by end users
in 2003. From the premise that the hypothetical negotiation must focus on the date
when the infringement began, we note that active inducement of infringement is, by
definition, conduct that causes and encourages infringement. Thus, we hold that in
the context of active inducement of infringement, a hypothetical negotiation is deemed
to take place on the date of the first direct infringement traceable to QCI’s first
instance of inducement conduct—in this case, 2003.

37 Our holding is consistent with the purpose of the hypothetical negotiation

framework, which seeks to discern the value of the patented technology to the parties
in the marketplace when infringement began. In considering the fifteen Georgia-
Pacific factors, it is presumed that the parties had full knowledge of the facts and
circumstances surrounding the infringement at that time. Indeed, the basic question
posed in a hypothetical negotiation is: if, on the eve of infringement, a willing licensor
and licensee had entered into an agreement instead of allowing infringement of the
patent to take place, what would that agreement be? This question cannot be
meaningfully answered unless we also presume knowledge of the patent and of the
infringement at the time the accused inducement conduct began. Were we to permit
a later notice date to serve as the hypothetical negotiation date, the damages analysis
would be skewed because, as a legal construct, we seek to pin down how the
prospective infringement might have been avoided via an out-of-court business
solution.

The District Court Erred in Admitting the BenQ Settlement Agreement

38 Before the second trial, QCI filed a motion in limine seeking to exclude the
2006 LaserDynamics–BenQ settlement agreement from evidence pursuant to Federal
Rule of Evidence 403. QCI’s motion emphasized the unique circumstances of the BenQ
settlement, which was entered into on the eve of trial after BenQ had been repeatedly
sanctioned by the district court. We conclude that the district court abused its
discretion in denying QCI’s motion and allowing the agreement into evidence.
 REASONABLE ROYALTIES 491

39 Rule 403 provides for the exclusion of otherwise relevant evidence when the
probative value of that evidence is substantially outweighed by the danger of unfair
prejudice, confusing the issues, or misleading the jury. Along these lines, Federal Rule
of Evidence 408 specifically prohibits the admission of settlement offers and
negotiations offered to prove the amount of damages owed on a claim. The notion that
license fees that are tainted by the coercive environment of patent litigation are
unsuitable to prove a reasonable royalty is a logical extension of Georgia-Pacific, the
premise of which assumes a voluntary agreement will be reached between a willing
licensor and a willing licensee, with validity and infringement of the patent not being
disputed. See 318 F. Supp. at 1120.

40 Despite the longstanding disapproval of relying on settlement agreements to

establish reasonable royalty damages, we recently permitted such reliance under
certain limited circumstances. See ResQNet.com v. Lansa, 594 F.3d 860, 870–72 (Fed.
Cir. 2010) (explaining that a settlement license to the patents-in-suit in a running
royalty form was “the most reliable license in [the] record” when compared with other
licenses that did not “even mention the patents-in-suit or show any other discernible
link to the claimed technology”). We permitted consideration of the settlement license
on remand, but we cautioned the district court to consider the license in its proper
context within the hypothetical negotiation framework to ensure that the reasonable
royalty rate reflects “the economic demand for the claimed technology.” Id. at 872.

41 Unlike the license in ResQNet, the BenQ settlement agreement is far from
being the “most reliable license in [the] record.” 594 F.3d at 872. Indeed, the BenQ
settlement agreement appears to be the least reliable license by a wide margin. The
BenQ settlement agreement was executed shortly before a trial—a trial in which
BenQ would have been at a severe legal and procedural disadvantage given the
numerous harsh sanctions imposed on it by the district court. The $6 million lump
sum license fee is six times larger than the next highest amount paid for a license to
the patent-in-suit, and ostensibly reflects not the value of the claimed invention but
the strong desire to avoid further litigation under the circumstances. LaserDynamics
executed twenty-nine licenses for the patent-in-suit in total, the vast majority of which
are not settlements of active litigation and do not involve the unique coercive
circumstances of the BenQ settlement agreement, and which are therefore far more
reliable indicators of what willing parties would agree to in a hypothetical negotiation.
Additionally, in light of the changing technological and financial landscape in the
market for ODDs, the BenQ settlement, entered into a full three years after the
hypothetical negotiation date, is in many ways not relevant to the hypothetical
negotiation analysis. This record stands in stark contrast to that in ResQNet, where a
lone settlement agreement stood apart from all other licenses in the record as being
uniquely relevant and reliable. This case is therefore well outside the limited scope of
circumstances under which we deemed the settlement agreement in ResQNet
admissible and probative. The probative value of the BenQ settlement agreement is
dubious in that it has very little relation to demonstrated economic demand for the
patented technology, and its probative value is greatly outweighed by the risk of
 492 MASUR & OUELLETTE ⋅ PATENT LAW

unfair prejudice, confusion of the issues, and misleading the jury. Fed. R. Evid. 403.
Accordingly, we conclude that the district court abused its discretion by admitting the
BenQ settlement agreement into evidence, and must exclude the agreement from the
proceedings on remand.

The District Court Erred in Admitting Mr. Murtha’s Opinions Concerning a 6%

Royalty Rate Per $41 ODD

42 Because we are remanding to the district court for a new trial on damages
under the proper 2003 hypothetical negotiation date, we do not reach QCI’s argument
that the second jury verdict of an $8.5 million lump sum lacks evidentiary support, so
as to entitle QCI to a $1.2 million judgment on damages as a matter of law. However,
for the purposes of remand, we do reach QCI’s Daubert challenge1 to Mr. Murtha’s
methodology in the second trial and find that the district court erred in allowing the
jury to hear his testimony concerning a 6% royalty rate derived from the Sony-made
$41 ODDs.

1. Mr. Murtha’s Use of the Sony–Made $41 ODDs

43 QCI argues that Mr. Murtha’s testimony in the second trial was unreliable for
using a $41 per ODD value that was calculated based on a relatively small sample of
about 9,000 non-infringing drives made by Sony, not by QSI. We disagree.

44 LaserDynamics contends that the $41 price of the Sony ODDs was more
appropriate than the $28 mask price used in the first trial with respect to QSI-made
ODDs. According to LaserDynamics, since QCI does not track prices and revenues of
the ODDs that it buys to incorporate into laptop computers, and does not generally
sell stand alone ODDs, the $41 Sony-made drives that QCI sells as replacement parts
better reflect the market value for ODDs independent of the completed laptop
computers. QCI counters that the $41 price was unreliable because it was based on a
small sample size of licensed and therefore non-infringing drives, which is irrelevant
to the price of the accused drives, and because the record shows that the $28 mask
price of the accused QSI-made drives is always higher than the price to the consumer.

45 As the district court explained, “[Mr. Murtha’s] approach appears to be a

reasonable attempt to value [QCI’s] drives based on arms-length transactions.
Although the jury may ultimately determine that [Mr. Murtha’s] approach is
unreasonable, the approach is not subject to a Daubert challenge.” We conclude that
the district court did not abuse its discretion in declining to exclude Mr. Murtha’s use
of the $41 Sony-made ODDs on Daubert grounds.

2. Mr. Murtha’s 6% Royalty Rate Per ODD

1 [Eds: Under Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), trial

judges serve as gatekeepers for expert evidence, excluding testimony that is not reliable and
relevant.]
 REASONABLE ROYALTIES 493

46 QCI contends that Mr. Murtha’s opinion that a reasonable royalty in this case
would be 6% of each ODD sold within a laptop computer by QCI was unreliable under
Federal Rule of Evidence 702 and should have been excluded. We agree.

47 The first of the fifteen factors in Georgia-Pacific is “the royalties received by

the patentee for the licensing of the patent in suit, proving or tending to prove an
established royalty.” 318 F. Supp. at 1120. Actual licenses to the patented technology
are highly probative as to what constitutes a reasonable royalty for those patent rights
because such actual licenses most clearly reflect the economic value of the patented
technology in the marketplace.

48 When relying on licenses to prove a reasonable royalty, alleging a loose or

vague comparability between different technologies or licenses does not suffice. For
example, in Lucent, where the patentee had relied on various licenses in the same
general computer field without proving a relationship to the patented technology or
the accused infringing products, we insisted that the “licenses relied upon by the
patentee in proving damages [be] sufficiently comparable to the hypothetical license
at issue in suit,” and noted that the patentee’s failure to prove comparability “weighs
strongly against the jury’s award” relying on the non-comparable licenses. 580 F.3d
at 1325, 1332.

49 Likewise, in ResQNet, the patentee’s expert “used licenses with no relationship

to the claimed invention to drive the royalty rate up to unjustified double-digit levels,”
and which had no “other discernible link to the claimed technology.” 594 F.3d at 870.
We rejected this testimony, holding that the district court “must consider licenses that
are commensurate with what the defendant has appropriated. If not, a prevailing
plaintiff would be free to inflate the reasonable royalty analysis with conveniently
selected licenses without an economic or other link to the technology in question.” Id.
at 872.

50 Actual licenses to the patents-in-suit are probative not only of the proper
amount of a reasonable royalty, but also of the proper form of the royalty structure.
In Wordtech Systems v. Integrated Network Solutions, the patentee relied on thirteen
patent licenses that it previously granted to third parties. 609 F.3d 1308, 1319 (Fed.
Cir. 2010). We rejected the patentee’s reliance on eleven of the thirteen licenses for
being in the form of a running royalty (whereas the patentee had sought a lump sum
payment) and for including royalty rates far lower than the jury returned. Id. at 1320–
21. The remaining two licenses, although in the form of lump sums, were also rejected
for not describing how the lump sums were calculated or the type and volume of
products intended to be covered by the licenses. Id. at 1320. We ultimately reversed
the $250,000 verdict and remanded for a new trial on damages because “the verdict
was clearly not supported by the evidence and based only on speculation or
guesswork.” Id. at 1319–22.

51 In this case, the district court denied QCI’s Daubert motion and permitted Mr.
Murtha to testify concerning his opinion of a 6% running royalty rate. However, the
 494 MASUR & OUELLETTE ⋅ PATENT LAW

district court insisted that LaserDynamics prove that two DVD-related patent
licensing programs and the 1997 Licensing Executives Survey relied on by Mr.
Murtha (to the exclusion of the many past licenses for the ’981 patent) were
sufficiently comparable to the hypothetically negotiated license Mr. Murtha proffered.

52 The DVD-related patent licensing programs did not involve the ’981 Patent,
and no evidence shows that it even involves a disc discrimination method. The 1997
licensing survey was even further removed from the patented technology, since it was
not even limited to any particular industry, but “was across whatever technologies
were being licensed by the people who responded.” Like the licenses we rejected in
ResQNet, this licensing evidence relied upon by Mr. Murtha “simply [has] no place in
this case.” 594 F.3d at 871. Relying on this irrelevant evidence to the exclusion of the
many licenses expressly for the ’981 Patent served no purpose other than to “to
increase the reasonable royalty rate above rates more clearly linked to the economic
demand for the claimed technology.” Id. at 872–73.

53 Aside from the BenQ settlement agreement discussed above, the licenses to the
patents-in-suit were all for lump sum amounts not exceeding $1 million. Mr. Murtha’s
6% running royalty theory cannot be reconciled with the actual licensing evidence,
which is highly probative of the patented invention’s economic value in the
marketplace, and of the form that a hypothetical license agreement would likely have
taken. Although Mr. Murtha conceded that QCI would be aware of LaserDynamics’
prior licenses in the hypothetical negotiation, he dismissed the probative value of the
licenses because they were entered into between 1998 and 2003, before the August
2006 hypothetical negotiation date. Mr. Murtha reasoned that, by 2006, the DVD
market was larger and more established such that the value of the patented
technology was better appreciated and LaserDynamics had more bargaining power to
insist on a running royalty. Thus, in his view, LaserDynamics’ past licenses could not
reflect an appropriate royalty for QCI in 2006.

54 This reasoning is not supported by the record, however, which undisputedly

shows that by around 2000, the DVDs and ODD markets were already experiencing
tremendous growth such that by 2003 those markets were highly saturated. Most of
the early lump sum licenses that were summarily rejected by Mr. Murtha were thus
entered into when the value of the patented technology was readily apparent and
demand was already projected to greatly increase. The resetting of the hypothetical
negotiation date to 2003, the date of first direct infringement induced by QCI’s
conduct, further undercuts Mr. Murtha’s reasoning that the licenses to the ’981 patent
from the 1997 to 2001 time frame were too early to be probative. That the Licensing
Executives Survey relied upon by Mr. Murtha—which has no meaningful ties to the
patented technology—was created in 1997 highlights the inconsistency in Mr.
Murtha’s selective reasoning. Such strained reasoning is unreliable and cannot be
used to ignore LaserDynamics’ long history of licensing the ’981 Patent.
 REASONABLE ROYALTIES 495

55 In sum, the 6% royalty rate was untethered from the patented technology at
issue and the many licenses thereto and, as such, was arbitrary and speculative. A
new trial is required because the jury’s verdict was based on an expert opinion that
finds no support in the facts in the record. On remand, LaserDynamics may not again
present its 6% running royalty damages theory.

56 As a final matter, we do not hold that LaserDynamics’ past licenses create an

absolute ceiling on the amount of damages to which it may be entitled, see 35 U.S.C.
§ 284, or that its history of lump sum licenses precludes LaserDynamics from
obtaining damages in the form of a running royalty. Full consideration of all the
Georgia-Pacific factors might well justify a departure from the amount or even the
form of LaserDynamics’ past licensing practices, given the appropriate evidence and
reasoning.

Discussion Questions: Reasonable Royalties

1. The Date of the Hypothetical Negotiation. Reasonable royalty damages are

based on imagining a hypothetical negotiation that takes place between the patent
owner and the infringer “on the eve of infringement.” The goal for the court is to
reconstruct what would have happened if, instead of infringing, the infringer had
negotiated a royalty with the patent holder. Whatever royalty the two parties would
have negotiated at that moment is by definition a reasonable royalty. As an initial
matter, why does the date of the negotiation matter, particularly in a case such as this
one? Why are the parties fighting over a few years?

Note that Quanta is not a direct infringer. The direct infringers are the users
who employ the optical disc drive technology. Quanta is liable indirectly for inducing
that infringing behavior. Quanta thus did not become liable on the date that direct
infringement began (2003). Rather, it only became liable somewhat later, when it
acquired the necessary knowledge (2006). Given that fact, why does the court pick the
earlier date (2003) as the date of the hypothetical negotiation? Should it have chosen
that date, or should it have chosen the date when Quanta’s liability began?

What about the questions of hold-up and technology-specific sunk costs we

discussed in Chapter 13? Suppose that before a firm begins infringement, it spends
$100 million to construct a factory that can only be used to manufacture the infringing
technology. Should the court set the date of the hypothetical negotiation after the
construction of this factory and on the eve of when infringement begins? Should it
take the possibility of hold-up into consideration when determining a reasonable
royalty, and increase the royalty paid to the patent owner accordingly? For an
argument that reasonable royalties systematically overcompensate due to a failure to
account for lock-in costs, see William F. Lee & A. Douglas Melamed, Breaking the
Vicious Cycle of Patent Damages, 101 Cornell L. Rev. 385 (2016).
496 MASUR & OUELLETTE ⋅ PATENT LAW

2. Assumptions Built into the Hypothetical Negotiation. What other types of

assumptions should be built into the court’s construction of the hypothetical
negotiation? The court says that when constructing the hypothetical negotiation, it
will “presume knowledge of the patent and of the infringement.” This means that the
court will imagine that LaserDynamics and Quanta agreed that the patent was
infringed at the time they were engaged in the hypothetical negotiation. What about
presuming validity of the patent? Should the court similarly presume that
LaserDynamics and Quanta agreed that the patent was valid when it constructs the
hypothetical negotiation?

Suppose that LaserDynamics and Quanta had in fact negotiated a license in

2003. Do you think both parties would have agreed that the patent was valid and
infringed? If the court’s goal is to award LaserDynamics the same amount of money
that it would have received in an actual negotiation, is it appropriate to assume that
the patent is valid and infringed?

On the other hand, can you think of a reason why the court might want to
assume that the patent is valid and infringed for purposes of constructing the
reasonable royalty, even if the parties would not have assumed this if they had
negotiated? That is, is there a reason to award LaserDynamics greater damages than
it would have received in an actual negotiation in 2003? Suppose that Quanta would
have paid LaserDynamics a $1 million licensing fee in 2003, and then the court in
2012 awarded LaserDynamics the same $1 million in reasonable royalty damages.
What sorts of incentives does this create for Quanta?

3. The Entire Market Value Rule. The court spends a fair amount of time
discussing the entire market value rule, which prohibits basing damages on the entire
market value of the product being sold unless the patented invention is “driving
demand” for the full product. First of all, why would it be inappropriate to use the
entire market value in this case? In 2006, it would have been very unlikely that a
consumer would have wanted to purchase a computer that could not tell the difference
between DVDs and CDs.

Second, more generally, why is the entire market value rule necessary? It is
easy to see the attraction of the entire market value rule. A court can easily determine
the price of a Quanta computer, the final product being sold; as the case explains, it
is much more difficult to determine the true price of some internal component. So,
suppose the court allows the reasonable royalty calculation to be based on the entire
market value of the product being sold. It can just reduce the royalty rate
correspondingly. If the appropriate royalty rate were 5% of some component, it could
simply assign a royalty rate of less than 5% to the entire market value of the product.
What would be the problem with this approach?

4. The Georgia-Pacific Factors and the Determination of a Royalty Rate. In

order to calculate the appropriate royalty rate, courts look to what are known as the
 REASONABLE ROYALTIES 497

“Georgia-Pacific factors,” from Georgia-Pacific Corp. v. United States Plywood Corp.,

318 F. Supp. 1116, 1119–20 (S.D.N.Y. 1970). Those factors are:

(1) Royalties patentee receives for licensing the patent in suit

(2) Rates licensee pays for use of comparable patents
(3) Nature and scope of license in terms of exclusivity and territory /
customer restrictions
(4) Licensor’s established policy of not licensing the invention
(5) Commercial relationship between licensor and licensee, such as
whether they are competitors or inventor and promoter
(6) Effect of selling the patented invention on sales of other items not
covered by patents by the licensee and licensor
(7) Duration of patent and term of license
(8) Established profitability of products made under the patent
(9) Utility and advantages of patent over old modes and devices
(10) Nature of the patented invention; the character of the commercial
embodiment of it as owned and produced by the licensor; and the benefit
of those who have used the invention
(11) Extent to which the infringer has made use of the invention and the
value of such use
(12) Portion of profit or selling price customarily allowed for the use of the
invention
(13) Portion of realizable profit attributable to the invention as
distinguished from nonpatented elements
(14) Opinion testimony of qualified experts
(15) Outcome of hypothetical arm’s length negotiation at the time the
infringement began
Even within an area of law that enjoys multi-factor tests (remember the eight Wands
factors?), this is a doozy. At the same time, there is nothing magical about any or all
of these factors. Not all of them are always relevant, and they’re also not exclusive.
Other factors that have affected royalty rates include the cost savings to the infringer
of adopting the patented technology, the availability of noninfringing alternatives,
and the infringer’s ability to design around the patent. The best way to think of the
Georgia-Pacific factors is as ideas to guide a court’s consideration of the royalty rate.
They have also been subject to plenty of criticism. A recitation of all fifteen factors will
not generally be useful to a litigant (or to a student writing a patent law exam
response).

Here, the LaserDynamics court spends the most time talking about factor 1:
other licenses issued for the patent-in-suit. Does that seem like the right approach?
Are there reasons a patentee might offer different rates to different licensees? Are
there other factors to which the court should have paid greater attention? The court
498 MASUR & OUELLETTE ⋅ PATENT LAW

did not scrutinize any other licenses granted by Quanta for other patents, which is
factor 2. Assuming that such licenses existed, should it have?

5. Relying on Prior Licenses. In light of the previous two notes, consider the
licenses the court actually relied upon in LaserDynamics. As its guide to the proper
award in this case, the court focused on the twenty-eight licenses that LaserDynamics
had issued in the past. (Recall that it excluded the infamous BenQ license.) But keep
in mind (from Note 3) that, when constructing the hypothetical negotiation, the court
is supposed to presume that the parties to the negotiation agree the patent is
infringed. When LaserDynamics negotiated these licenses, do you think its counter-
parties believed that the patent was infringed (or valid)? Is there any way to know? If
the counter-parties had agreed that the LaserDynamics patent was valid and
infringed, do you think that the licensing prices they would have been willing to pay
would have been lower, higher, or the same as the prices they did pay?

The problem with the court’s approach is that the counterparties with whom
LaserDynamics negotiated licenses almost certainly had some degree of skepticism
toward whether the patent was valid and infringed, and that skepticism was almost
certainly reflected in a reduced price. So these licenses might not be accurate
measures of what the court claims to be seeking, namely the result of a hypothetical
negotiation in which both parties presume that the patent is valid and infringed.

Moreover, the problem could become recursive. Suppose that the district court
eventually awards LaserDynamics reasonable royalty damages of $500,000 based on
these pre-existing licenses. Now, imagine that LaserDynamics sues another firm (say,
Apple) for infringing its patent. Apple can observe the damages verdict in
LaserDynamics v. Quanta, and it will understand that if it loses to LaserDynamics at
trial, it will likely be forced to pay $500,000. If Apple believes that a court is only 50%
likely to find that it is infringing the patent, then its expected damages from
proceeding to trial are $500,000 × 50%, or $250,000. It will only be willing to pay
LaserDynamics that much for a license. And then the next time LaserDynamics goes
to trial, the court will be able to observe the Apple license for $250,000. This might
cause the court to award LaserDynamics less than $500,000 the next time around,
reducing the value of its patent even further. The result is a potential downward
spiral, driven by the court treating licenses negotiated under conditions of uncertainty
as if they had been negotiated with both parties presuming the patent valid and
infringed. See Jonathan S. Masur, The Use and Misuse of Patent Licenses, 110 Nw. U.
L. Rev. 115 (2015).

What should the court have done differently? How can it try to address this
problem, given that it cannot know exactly what the parties believed about the
validity or infringement of the patent when LaserDynamics negotiated its licenses? Is
there a license the court could have relied upon that would have provided a more
accurate picture of the price a defendant would have been willing to pay if it knew
that the patent was valid and infringed—that is, if it knew it would lose at trial?
 REASONABLE ROYALTIES 499

6. Overcompensation. Relying on prior licenses can lead to undercompensation

for the reasons described in Note 5, but it can also lead to overcompensation. For one
thing, patent owners who know that their early licenses will be used to set later
royalty awards in court have an incentive not to enter agreements with any low-value
licensees, skewing the evidence available to courts. See Erik Hovenkamp & Jonathan
Masur, How Patent Damages Skew Licensing Markets, 36 Rev. Litig. 379 (2017). For
another, licenses are negotiated in the shadow of litigation, and if judicial damages
awards are inflated due to a failure to account for lock-in costs as described in Note 2,
then infringers will have to pay more to avoid litigation—and those inflated licenses
could then feed back into future judicial calculations. See Lee & Melamed, supra, at
438.

7. But in No Event Less Than a Reasonable Royalty. Recall that § 284 states
that the patent owner is entitled to “damages adequate to compensate for the
infringement, but in no event less than a reasonable royalty.” This sets reasonable
royalty damages as a floor, but a patent holder can always seek lost profit damages if
it thinks they will be greater than reasonable royalty damages. In essence, a patent
owner who has lost profits has a one-way option: it can choose between pursuing lost
profit and reasonable royalty damages, depending on which it believes will be greater.
Do you think this option could distort the amount of damages patent plaintiffs receive?
See Omri Ben-Shahar, Damages for Unlicensed Use, 78 U. Chi. L. Rev. 7 (2011). But
see Thomas F. Cotter, Comparative Patent Remedies 71-72 (2013).

When is it reasonable for the royalty to be zero? In Apple v. Motorola, Judge

Richard Posner (sitting as a district court judge by designation) awarded zero
damages on summary judgment after excluding the majority of damages expert
testimony. On appeal, the Federal Circuit reversed, holding that “a fact finder may
award no damages only when the record supports a zero royalty award.” 757 F.3d
1286, 1328 (Fed. Cir. 2014). What incentives does this create for patentees? See Tun-
Jen Chiang, The Information Forcing Dilemma in Damages Law, 59 Wm. & Mary L.
Rev. 81 (2017). The Federal Circuit has affirmed a district court’s reduction of a jury’s
damages award to zero where the patentee presented no damages evidence. TecSec v.
Adobe, 978 F.3d 1278 (Fed. Cir. 2020).
500 MASUR & OUELLETTE ⋅ PATENT LAW

16. Enhanced Damages and Attorneys’ Fees

The damages described in Chapters 14 & 15—lost profits and reasonable
royalties—are compensatory damages, designed to place the patent owner in the
position it would have been in had infringement never occurred. But the Patent Act
also permits victorious patent owners in particular cases to collect both enhanced
damages—up to triple the amount of compensatory damages awarded—and attorneys’
fees. These can be enormously powerful remedies. The patent defendant that finds
itself paying treble damages is likely to end up far worse off than if it had never
infringed in the first place. And given the high cost of patent litigation, which can
often run into the millions of dollars, attorneys’ fees can carry a hefty price tag and
often represent a sizable proportion of the total patent award. For that matter, the
Patent Act also permits victorious defendants to collect attorneys’ fees from plaintiffs
who bring frivolous cases. This chapter discusses why these enhanced rewards have
been made available and the standards for determining when they should be awarded.

A. Enhanced Damages
The previous two chapters centered on 35 U.S.C. § 284, the provision of the
Patent Act that requires a court to award damages for infringement. We have largely
focused on the first paragraph, which discusses lost profit and reasonable royalty
damages. But there is also a second paragraph to the statutory section, which reads
(in relevant part): “the court may increase the damages up to three times the amount
found or assessed.” 35 U.S.C. § 284. When we say “relevant part,” we really do mean
that this is the only relevant part. The statute nowhere says when damages should be
awarded or what standard the courts should use. In Aro II (a case that keeps coming
up), the Supreme Court held that enhanced damages should be applied only in cases
of “willful or bad-faith infringement.” But even that standard largely begged the
question as to what “willful” meant in the context of patent infringement.

To fill this void, the Federal Circuit formulated an evolving series of doctrines
to lend content to the notion of willfulness. The most recent stemmed from In re
Seagate Technology, LLC, 497 F.3d 1360 (Fed. Cir. 2007) (en banc), which the
Supreme Court discusses at the beginning of the following opinion. However, over the
course of a decade, critics exposed flaws in the Seagate test and eventually persuaded
the Supreme Court to again take up the issue.

Halo Electronics v. Pulse Electronics, 579 U.S. 93 (2016)

Chief Justice John Roberts delivered the opinion of the Court.

 ENHANCED DAMAGES & ATTORNEYS’ FEES 501

1 Section 284 of the Patent Act provides that, in a case of infringement, courts
“may increase the damages up to three times the amount found or assessed.” 35 U.S.C.
§ 284. In In re Seagate Technology, LLC, 497 F.3d 1360 (Fed. Cir. 2007) (en banc), the
United States Court of Appeals for the Federal Circuit adopted a two-part test for
determining when a district court may increase damages pursuant to § 284. Under
Seagate, a patent owner must first “show by clear and convincing evidence that the
infringer acted despite an objectively high likelihood that its actions constituted
infringement of a valid patent.” Id. at 1371. Second, the patentee must demonstrate,
again by clear and convincing evidence, that the risk of infringement “was either
known or so obvious that it should have been known to the accused infringer.” Id. The
question before us is whether this test is consistent with § 284. We hold that it is not.

2 Enhanced damages are as old as U.S. patent law. The Patent Act of 1793
mandated treble damages in any successful infringement suit. In the Patent Act of
1836, however, Congress changed course and made enhanced damages discretionary,
specifying that “it shall be in the power of the court to render judgment for any sum
above the amount found by [the] verdict . . . not exceeding three times the amount
thereof, according to the circumstances of the case.” Patent Act of 1836, § 14, 5 Stat.
123. In construing that new provision, this Court explained that the change was
prompted by the “injustice” of subjecting a “defendant who acted in ignorance or good
faith” to the same treatment as the “wanton and malicious pirate.” Seymour v.
McCormick, 57 U.S. (16 How.) 480, 488 (1854). There “is no good reason,” we observed,
“why taking a man’s property in an invention should be trebly punished, while the
measure of damages as to other property is single and actual damages.” Id. at 488–
89. But “where the injury is wanton or malicious, a jury may inflict vindictive or
exemplary damages, not to recompense the plaintiff, but to punish the defendant.” Id.
at 489.

3 Some early decisions did suggest that enhanced damages might serve to
compensate patentees as well as to punish infringers. See, e.g., Clark v. Wooster, 119
U.S. 322, 326 (1886). Such statements, however, were not for the ages, in part because
the merger of law and equity removed certain procedural obstacles to full
compensation absent enhancement. In the main, moreover, the references to
compensation concerned costs attendant to litigation. See Clark, 119 U.S. at 326
(identifying enhanced damages as compensation for “the expense and trouble the
plaintiff has been put to”). That concern dissipated with the enactment in 1952 of 35
U.S.C. § 285, which authorized district courts to award reasonable attorney’s fees to
prevailing parties in “exceptional cases” under the Patent Act. See Octane Fitness,
LLC v. ICON Health & Fitness Inc., 572 U.S. 545, 553 (2014).

4 It is against this backdrop that Congress, in the 1952 codification of the Patent
Act, enacted § 284. “The stated purpose” of the 1952 revision “was merely
 502 MASUR & OUELLETTE ⋅ PATENT LAW

reorganization in language to clarify the statement of the statutes.” Aro Mfg. Co. v.
Convertible Top Replacement Co., 377 U.S. 476, 505, n.20 (1964). This Court
accordingly described § 284—consistent with the history of enhanced damages under
the Patent Act—as providing that “punitive or ‘increased’ damages” could be recovered
“in a case of willful or bad-faith infringement.” Id. at 508.

5 In 2007, the Federal Circuit decided Seagate and fashioned the test for
enhanced damages now before us. Under Seagate, a plaintiff seeking enhanced
damages must show that the infringement of his patent was “willful.” 497 F.3d at
1368. The Federal Circuit announced a two-part test to establish such willfulness:
First, “a patentee must show by clear and convincing evidence that the infringer acted
despite an objectively high likelihood that its actions constituted infringement of a
valid patent,” without regard to “[t]he state of mind of the accused infringer.” Id. at
1371. This objectively defined risk is to be “determined by the record developed in the
infringement proceedings.” Id. “Objective recklessness will not be found” at this first
step if the accused infringer, during the infringement proceedings, “raise[s] a
‘substantial question’ as to the validity or noninfringement of the patent.” Bard
Peripheral Vascular, Inc. v. W.L. Gore & Assoc., Inc., 776 F.3d 837, 844 (Fed. Cir.
2015). That categorical bar applies even if the defendant was unaware of the arguable
defense when he acted.

6 Second, after establishing objective recklessness, a patentee must show—again

by clear and convincing evidence—that the risk of infringement “was either known or
so obvious that it should have been known to the accused infringer.” Seagate, 497 F.3d
at 1371. Only when both steps have been satisfied can the district court proceed to
consider whether to exercise its discretion to award enhanced damages. Id.

7 Under Federal Circuit precedent, an award of enhanced damages is subject to

trifurcated appellate review. The first step of Seagate—objective recklessness—is
reviewed de novo; the second—subjective knowledge—for substantial evidence; and
the ultimate decision—whether to award enhanced damages—for abuse of discretion.

8 [The Supreme Court granted certiorari in two cases addressing the Seagate
test: Halo v. Pulse and Stryker v. Zimmer. In Halo, Pulse continued to sell allegedly
infringing products even after Halo sent Pulse two letters offering to license the
patents because a Pulse engineer concluded that Halo’s patents were invalid. The
district court declined to award enhanced damages because Pulse presented a defense
that “was not objectively baseless, or a ‘sham,’” and the Federal Circuit affirmed. In
Stryker, the district court awarded treble damages—for a total award over $288
million—based on “the one-sidedness of the case and the flagrancy and scope of
Zimmer’s infringement,” such as testimony that Zimmer had “all-but instructed its
design team to copy Stryker’s products” and “to worry about the potential legal
 ENHANCED DAMAGES & ATTORNEYS’ FEES 503

consequences later.” The Federal Circuit vacated the treble damages award because
the defendant had asserted “reasonable defenses” at trial.]

II

9 The pertinent text of § 284 provides simply that “the court may increase the
damages up to three times the amount found or assessed.” 35 U.S.C. § 284. That
language contains no explicit limit or condition, and we have emphasized that the
“word ‘may’ clearly connotes discretion.” Martin v. Franklin Capital Corp., 546 U.S.
132, 136 (2005).

10 At the same time, “[d]iscretion is not whim.” Martin, 546 U.S. at 139. In a
system of laws discretion is rarely without limits, even when the statute does not
specify any limits upon the district courts’ discretion. “[A] motion to a court’s
discretion is a motion, not to its inclination, but to its judgment; and its judgment is
to be guided by sound legal principles.” Martin, 546 U.S. at 139. Thus, although there
is “no precise rule or formula” for awarding damages under § 284, a district court’s
“discretion should be exercised in light of the considerations” underlying the grant of
that discretion. Octane Fitness, 572 U.S. at 554.

11 Awards of enhanced damages under the Patent Act over the past 180 years
establish that they are not to be meted out in a typical infringement case, but are
instead designed as a “punitive” or “vindictive” sanction for egregious infringement
behavior. The sort of conduct warranting enhanced damages has been variously
described in our cases as willful, wanton, malicious, bad-faith, deliberate, consciously
wrongful, flagrant, or—indeed—characteristic of a pirate. District courts enjoy
discretion in deciding whether to award enhanced damages, and in what amount. But
through nearly two centuries of discretionary awards and review by appellate
tribunals, “the channel of discretion ha[s] narrowed,” Friendly, Indiscretion About
Discretion, 31 Emory L.J. 747, 772 (1982), so that such damages are generally
reserved for egregious cases of culpable behavior.

12 The Seagate test reflects, in many respects, a sound recognition that enhanced
damages are generally appropriate under § 284 only in egregious cases. That test,
however, “is unduly rigid, and it impermissibly encumbers the statutory grant of
discretion to district courts.” Octane Fitness, 572 U.S. at 553 (construing § 285 of the
Patent Act). In particular, it can have the effect of insulating some of the worst patent
infringers from any liability for enhanced damages.

13 The principal problem with Seagate’s two-part test is that it requires a finding
of objective recklessness in every case before district courts may award enhanced
 504 MASUR & OUELLETTE ⋅ PATENT LAW

damages. Such a threshold requirement excludes from discretionary punishment

many of the most culpable offenders, such as the “wanton and malicious pirate” who
intentionally infringes another’s patent—with no doubts about its validity or any
notion of a defense—for no purpose other than to steal the patentee’s business.
Seymour, 16 How. at 488. Under Seagate, a district court may not even consider
enhanced damages for such a pirate, unless the court first determines that his
infringement was “objectively” reckless. In the context of such deliberate wrongdoing,
however, it is not clear why an independent showing of objective recklessness—by
clear and convincing evidence, no less—should be a prerequisite to enhanced
damages.

14 Our recent decision in Octane Fitness arose in a different context but points in
the same direction. In that case we considered § 285 of the Patent Act, which allows
district courts to award attorney’s fees to prevailing parties in “exceptional” cases. 35
U.S.C. § 285. The Federal Circuit had adopted a two-part test for determining when
a case qualified as exceptional, requiring that the claim asserted be both objectively
baseless and brought in subjective bad faith. We rejected that test on the ground that
a case presenting “subjective bad faith” alone could “sufficiently set itself apart from
mine-run cases to warrant a fee award.” 572 U.S. at 555. So too here. The subjective
willfulness of a patent infringer, intentional or knowing, may warrant enhanced
damages, without regard to whether his infringement was objectively reckless.

15 The Seagate test aggravates the problem by making dispositive the ability of
the infringer to muster a reasonable (even though unsuccessful) defense at the
infringement trial. The existence of such a defense insulates the infringer from
enhanced damages, even if he did not act on the basis of the defense or was even aware
of it. Under that standard, someone who plunders a patent—infringing it without any
reason to suppose his conduct is arguably defensible—can nevertheless escape any
comeuppance under § 284 solely on the strength of his attorney’s ingenuity.

16 But culpability is generally measured against the knowledge of the actor at the
time of the challenged conduct. In Safeco Ins. Co. of America v. Burr, 551 U.S. 47
(2007), we stated that a person is reckless if he acts “knowing or having reason to
know of facts which would lead a reasonable man to realize” his actions are
unreasonably risky. The Court found that the defendant had not recklessly violated
the Fair Credit Reporting Act because the defendant’s interpretation had “a
foundation in the statutory text” and the defendant lacked “the benefit of guidance
from the courts of appeals or the Federal Trade Commission” that “might have warned
it away from the view it took.” Id. at 69–70. Nothing in Safeco suggests that we should
look to facts that the defendant neither knew nor had reason to know at the time he
acted.

17 Section 284 allows district courts to punish the full range of culpable behavior.
Yet none of this is to say that enhanced damages must follow a finding of egregious
misconduct. As with any exercise of discretion, courts should continue to take into
 ENHANCED DAMAGES & ATTORNEYS’ FEES 505

account the particular circumstances of each case in deciding whether to award

damages, and in what amount. Section 284 permits district courts to exercise their
discretion in a manner free from the inelastic constraints of the Seagate test.
Consistent with nearly two centuries of enhanced damages under patent law,
however, such punishment should generally be reserved for egregious cases typified
by willful misconduct.

18 The Seagate test is also inconsistent with § 284 because it requires clear and
convincing evidence to prove recklessness. On this point Octane Fitness is again
instructive. There too the Federal Circuit had adopted a clear and convincing standard
of proof, for awards of attorney’s fees under § 285 of the Patent Act. Because that
provision supplied no basis for imposing such a heightened standard of proof, we
rejected it. We do so here as well. Like § 285, § 284 “imposes no specific evidentiary
burden, much less such a high one.” 572 U.S. at 557. And the fact that Congress
expressly erected a higher standard of proof elsewhere in the Patent Act, see 35 U.S.C.
§ 273(b), but not in § 284, is telling. Furthermore, nothing in historical practice
supports a heightened standard. As we explained in Octane Fitness, “patent-
infringement litigation has always been governed by a preponderance of the evidence
standard.” 572 U.S. at 557. Enhanced damages are no exception.

19 Finally, because we eschew any rigid formula for awarding enhanced damages
under § 284, we likewise reject the Federal Circuit’s tripartite framework for appellate
review. In Highmark Inc. v. Allcare Health Management System, Inc., 572 U.S. 559
(2014), we built on our Octane Fitness holding to reject a similar multipart standard
of review. Because Octane Fitness confirmed district court discretion to award
attorney fees, we concluded that such decisions should be reviewed for abuse of
discretion. Highmark, 572 U.S. at 561.

20 The same conclusion follows naturally from our holding here. Section 284 gives
district courts discretion in meting out enhanced damages. It “commits the
determination” whether enhanced damages are appropriate “to the discretion of the
district court” and “that decision is to be reviewed on appeal for abuse of discretion.”
Id. at 563.

21 That standard allows for review of district court decisions informed by “the
considerations we have identified.” Octane Fitness, 572 U.S. at 554. The appellate
review framework adopted by the Federal Circuit reflects a concern that district
courts may award enhanced damages too readily, and distort the balance between the
protection of patent rights and the interest in technological innovation. Nearly two
centuries of exercising discretion in awarding enhanced damages in patent cases,
however, has given substance to the notion that there are limits to that discretion.
The Federal Circuit should review such exercises of discretion in light of the
 506 MASUR & OUELLETTE ⋅ PATENT LAW

longstanding considerations we have identified as having guided both Congress and

the courts.

III

22 At the end of the day, respondents’ main argument for retaining the Seagate
test comes down to a matter of policy. Respondents and their amici are concerned that
allowing district courts unlimited discretion to award up to treble damages in
infringement cases will impede innovation as companies steer well clear of any
possible interference with patent rights. They also worry that the ready availability
of such damages will embolden “trolls.” Trolls, in the patois of the patent community,
are entities that hold patents for the primary purpose of enforcing them against
alleged infringers, often exacting outsized licensing fees on threat of litigation.

23 Respondents are correct that patent law reflects “a careful balance between
the need to promote innovation” through patent protection, and the importance of
facilitating the “imitation and refinement through imitation” that are “necessary to
invention itself and the very lifeblood of a competitive economy.” Bonito Boats, Inc. v.
Thunder Craft Boats, Inc., 489 U.S. 141, 146 (1989). That balance can indeed be
disrupted if enhanced damages are awarded in garden-variety cases. As we have
explained, however, they should not be. The seriousness of respondents’ policy
concerns cannot justify imposing an artificial construct such as the Seagate test on
the discretion conferred under § 284.

Justice Breyer, with whom Justice Kennedy and Justice Alito join, concurring.

24 I agree with the Court that In re Seagate Technology, LLC, 497 F.3d 1360 (Fed.
Cir. 2007) (en banc), takes too mechanical an approach to the award of enhanced
damages. But, as the Court notes, the relevant statutory provision, 35 U.S.C. § 284,
nonetheless imposes limits that help produce uniformity in its application and
maintain its consistency with the basic objectives of patent law. I write separately to
express my own understanding of several of those limits.

25 First, the Court’s references to “willful misconduct” do not mean that a court
may award enhanced damages simply because the evidence shows that the infringer
knew about the patent and nothing more. Here, the Court’s opinion, read as a whole
and in context, explains that “enhanced damages are generally appropriate . . . only
in egregious cases.” They amount to a “punitive” sanction for engaging in conduct that
is either “deliberate” or “wanton.” And while the Court explains that “intentional or
knowing” infringement “may” warrant a punitive sanction, the word it uses is may,
not must. It is “circumstanc[e]” that transforms simple knowledge into such egregious
behavior.

26 Second, the Court writes against a statutory background specifying that the
“failure of an infringer to obtain the advice of counsel . . . may not be used to prove
that the accused infringer willfully infringed.” § 298. The Court does not weaken this
 ENHANCED DAMAGES & ATTORNEYS’ FEES 507

rule through its interpretation of § 284. Nor should it. It may well be expensive to
obtain an opinion of counsel. An owner of a small firm, or a scientist working there,
might, without being “wanton” or “reckless,” reasonably determine that its product
does not infringe a particular patent, or that that patent is probably invalid. Congress
has thus left it to the potential infringer to decide whether to consult counsel—without
the threat of treble damages influencing that decision. That is, Congress has
determined that where both “advice of counsel” and “increased damages” are at issue,
insisting upon the legal game is not worth the candle. Compare § 298 with § 284.

27 Third, as the Court explains, enhanced damages may not “serve to compensate
patentees” for infringement-related costs or litigation expenses. That is because § 284
provides for the former prior to any enhancement. And a different statutory provision,
§ 285, provides for the latter.

28 Patent infringement, of course, is a highly undesirable and unlawful activity.

But stopping infringement is a means to patent law’s ends. Through a complex system
of incentive-based laws, patent law helps to encourage the development of,
disseminate knowledge about, and permit others to benefit from useful inventions.
Enhanced damages have a role to play in achieving those objectives, but, as described
above, that role is limited.

29 Consider that the U.S. Patent and Trademark Office estimates that more than
2,500,000 patents are currently in force. Moreover, Members of the Court have noted
that some “firms use patents . . . primarily to obtain licensing fees.” eBay Inc. v.
MercExchange, L.L.C., 547 U.S. 388, 396 (2006) (Kennedy, J., concurring). Amici
explain that some of those firms generate revenue by sending letters to “tens of
thousands of people asking for a license or settlement” on a patent “that may in fact
not be warranted.” How is a growing business to react to the arrival of such a letter,
particularly if that letter carries with it a serious risk of treble damages? Does the
letter put the company “on notice” of the patent? Will a jury find that the company
behaved “recklessly,” simply for failing to spend considerable time, effort, and money
obtaining expert views about whether some or all of the patents described in the letter
apply to its activities (and whether those patents are even valid)? These investigative
activities can be costly. Hence, the risk of treble damages can encourage the company
to settle, or even abandon any challenged activity.

30 To say this is to point to a risk: The more that businesses, laboratories,

hospitals, and individuals adopt this approach, the more often a patent will reach
beyond its lawful scope to discourage lawful activity, and the more often patent-
related demands will frustrate, rather than “promote,” the “Progress of Science and
useful Arts.” U.S. Const., Art. I, § 8, cl. 8; see, e.g., Eon–Net LP v. Flagstar Bancorp,
653 F.3d 1314, 1327 (Fed. Cir. 2011) (patent holder “acted in bad faith by exploiting
the high cost to defend [patent] litigation to extract a nuisance value settlement”); In
re MPHJ Technology Invs., LLC, 159 F.T.C. 1004, 1007–12 (2015) (patent owner sent
more than 16,000 letters demanding settlement for using “common office equipment”
508 MASUR & OUELLETTE ⋅ PATENT LAW

under a patent it never intended to litigate). Thus, in the context of enhanced

damages, there are patent-related risks on both sides of the equation. That fact
argues, not for abandonment of enhanced damages, but for their careful application,
to ensure that they only target cases of egregious misconduct.

Discussion Questions: Enhanced Damages

1. The Flaws with Seagate. What was it about the Seagate test that the
Supreme Court did not like? What was the conduct that the Seagate test would not
have reached—that is, would not have classified as willful—that the Supreme Court
believed should be understood as willful? Do you agree with the Court that treble
damages should extend to that type of conduct?

Note that the Supreme Court describes the Seagate test as “unduly rigid.”
What other rules that we have studied has the Supreme Court described as “unduly
rigid?” Why do you think the Federal Circuit continues to devise rules that the
Supreme Court views as unduly rigid, and why do you think the Supreme Court
continues to reject those rules? Does it have something to do with the respective roles
of those courts and their positions in the judicial hierarchy?

This case involves yet another unanimous reversal of the Federal Circuit. The
list of other unanimous reversals of the Federal Circuit in this book includes (but is
not limited to) Alice, Nautilus, Akamai, Myriad, Mayo, KSR, eBay, and Festo, all of
which were decided in a 12-year period. That’s a lot for one court. There are certainly
aspects of the Seagate test that made it a target for revision. As the Supreme Court
notes, it was subject to trifurcated review: the objective risk of infringement was
reviewed de novo, the subjective question of whether the infringer knew of the risk
was reviewed for substantial evidence, and the overall conclusion of willfulness was
reviewed for abuse of discretion. Yet that alone was not the reason the Supreme Court
took this case and undid Federal Circuit law. Is there something about the Federal
Circuit that creates more opportunities for unanimous reversals? Should this be seen
as a feature of patent law, a feature of that court, or just a statistical anomaly?

2. The Mens Rea of Willful Infringement. The Court does not explicitly say what
sort of mens rea is required to make a party liable for willful infringement, but it
appears from the opinion that willfulness should be judged on the basis of what the
infringer knew or believed at the time of infringement. This is a subjective standard:
the infringer’s subjective knowledge is at issue.

This means, in turn, that an infringer who is completely unaware of the fact of
infringement (or unaware of the existence of the patent being infringed) cannot be
liable for willfulness damages. This type of subjective standard should remind you of
the standard for contributory infringement and inducement. Accordingly, willfulness
liability is often triggered the same way that contributory infringement and
inducement liability is triggered: with a letter informing the putative infringer of the
 ENHANCED DAMAGES & ATTORNEYS’ FEES 509

existence of the patent and the possibility of infringement. Are there circumstances
under which a failure to search for relevant patents could (or should) trigger
willfulness liability? On remand, the Federal Circuit in Halo said the jury should
consider “what Pulse knew or had reason to know at the time of the infringement”;
how might an infringer have “reason to know” of the infringement without actual
knowledge?

The Federal Circuit seems to be hewing to the view that only knowledge of the
patent—or perhaps willful blindness or the equivalent—is sufficient to create liability
for willful infringement. By way of example, in SRI International v. Cisco Systems,
930 F.3d 1295 (Fed. Cir. 2019), the defendant’s engineers had not read the patents-
in-suit until just before they were set to be deposed for the case, and the patent owner
argued that this failure to read relevant patents was evidence of willfulness. Absent
further evidence of knowledge, the Federal Circuit held that a jury verdict finding
willful infringement could not stand. However, the court held that the defendant
might still be liable for willful infringement as of the date it received a letter from the
plaintiff informing it of the patent. (The defendant did not seek an opinion from
counsel or pursue what the court referred to as an “advice-of-counsel” defense.)

What are the likely policy implications of the fact that enhanced damages (and
indirect infringement liability) are only available when a party is aware of the patent
it might be infringing? Suppose you were the general counsel of a technology firm.
What advice would you give to the engineers and scientists in your firm to try and
minimize your firm’s legal risk from patent infringement? By shifting the relevant
willfulness inquiry away from the objective risk of infringement and toward the
subjective perspective of the infringer, has Halo made this problem better or worse?

It is worth noting that despite these rules, engineers and scientists appear to
continue to read and learn from patents, though it is difficult to know whether they
would do so more or less under different legal rules. See Lisa Larrimore Ouellette, Do
Patents Disclose Useful Information?, 25 Harv. J.L. & Tech. 545 (2012); Lisa
Larrimore Ouellette, Who Reads Patents?, 35 Nature Biotechnology 421 (2017)
(reporting that fewer than 10% of surveyed scientists said they had been instructed
to not read patents because of possible adverse legal consequences).

3. Opinion Letters and the Breyer Concurrence. In his concurring opinion,

Justice Breyer raises the issue of opinion letters and the role they play in willfulness
analysis. As with indirect infringement, the subjective state of mind necessary for
willfulness damages makes opinion letters from counsel an important mechanism by
which infringers can defend themselves. Suppose that a firm is informed of the
existence of a patent and seeks an opinion from counsel before deciding what course
of action to take. A reputable law firm produces a sound, reasonable letter concluding
that the patent is infringed but invalid, and thus the firm will not be held liable. At
trial, however, the court holds that the patent is in fact valid and infringed, and the
defendant is liable as an infringer. Will this letter that concluded that the patent was
510 MASUR & OUELLETTE ⋅ PATENT LAW

invalid protect the defendant from willfulness damages? Recall the holding of Commil
v. Cisco from Chapter 10: with respect to indirect infringement, only belief of
noninfringement—and not belief of invalidity—will protect a defendant from indirect
infringement liability.

Justice Breyer suggests that obtaining an opinion letter may be financially

impossible or impractical for a small firm. He emphasizes that the failure to obtain
an opinion letter should not in and of itself be grounds for finding the small firm liable
for willful infringement. In such circumstances, how should we judge the state of mind
of the firm? Whose views matter, and what inferences should be drawn from those
views?

4. The Problem of Patent Trolls. In Part III of its opinion, the Court discusses
the concern that non-practicing entities will too easily be able to extract treble
damages from patent defendants. Here, the Court even goes so far as to call them
“trolls” for the first time. The Court’s answer to this concern is that treble damages
will only be available in exceptional cases, not in run-of-the-mill cases. Do you think
that is right? What are the barriers to patent trolls extracting treble damages after
Halo?

5. Policy and Purpose? Why do enhanced damages exist, or why should they
exist? It seems clear that courts view willful infringers as particularly bad actors. But
this is patent law, not criminal law—this type of morality doesn’t usually play much
of a role in the doctrine. One way to think about treble damages is that they are akin
to punitive damages in tort. Classic economic theory suggests that punitive damages
should be assessed when it is difficult to detect or punish wrongdoing. For instance, if
there is only a 25% chance that A will be caught or found liable if A harms B, then in
the event that A is found liable for harming B, the damages assessed against A should
be quadrupled in order to adequately deter A’s bad actions. How well does this
translate to patent law? In a case like Halo v. Pulse, or in another typical patent case,
how likely do you think it is that infringement will go undetected or uncompensated?
Are there particular factors that will make it easier or harder to detect infringers? Is
being a willful infringer a good proxy for engaging in infringement that is unlikely to
be detected?

What other values or policy might the availability of treble damages be

serving?

6. How Much Should a Court Enhance Damages? Note that 35 U.S.C. § 284
allows a court to increase damages by “up to three times.” It does not necessarily have
to treble them. How should a court decide by how much to increase damages? Before
Halo, courts looked to the nine factors in Read Corp. v. Portec, Inc., 970 F.2d 816 (Fed.
Cir. 1992), to determine whether infringement had been willful and, if so, how much
to increase damages. Those factors are:
 ENHANCED DAMAGES & ATTORNEYS’ FEES 511

(1) whether the infringer deliberately copied the ideas of another;

(2) whether the infringer, when he knew of the other’s patent protection,
investigated the scope of the patent and formed a good-faith belief that
it was invalid or that it was not infringed;

(3) the infringer’s behavior as a party to the litigation;

(4) the defendant’s size and financial condition;

(5) the closeness of the case;

(6) the duration of the defendant’s misconduct;

(7) remedial action by the defendant;

(8) the defendant’s motivation for harm; and

(9) whether the defendant attempted to conceal its misconduct.

As originally envisioned by the Federal Circuit in Portec, the first three factors
speak more to whether infringement was willful in the first place, and the last six to
how much damages should be increased. In theory, then, the first three factors would
have been largely superseded by Halo. Nonetheless, since Halo the Federal Circuit
and lower courts have continued to rely upon all nine factors, even though the Federal
Circuit has acknowledged that they are not mandatory. See, e.g., Polara Engr. Inc v.
Campbell Co., 894 F.3d 1339 (Fed. Cir. 2018); Georgetown Rail Equip. Co. v. Holland
L.P., 867 F.3d 1229 (Fed. Cir. 2017).

Consider the defendants in Halo v. Pulse and Stryker v. Zimmer: Pulse

continued infringing after being offered a license because its engineer (incorrectly)
determined the patents were invalid, and Zimmer instructed its design team to copy
Stryker’s products. How would you apply the Portec factors in either case? How much
would you increase the damages assessed against either defendant?

Practice Problems: Enhanced Damages

For all of the following problems, assume you are the CEO of a small tech
startup with approximately 20 employees. You receive a letter informing you that your
firm is infringing a patent. You then take the following actions, your firm is eventually
sued for patent infringement, and your firm is found liable as an infringer. Do you
think you will be held liable for treble damages as a willful infringer?

1. You consult your patent attorney, and she says there is “probably about a 50%
chance that the patent is valid and you’re infringing it.”
512 MASUR & OUELLETTE ⋅ PATENT LAW

2. You consult your general counsel, and she says: “I’m no patent expert, but I
don’t think this is a problem.”

3. The same situation as #2, but this time you just consult your lead engineer
(who says the same thing).

4. You consult a reputable outside law firm, which says your firm is definitely
infringing. Accordingly, you don’t hire this firm to write an opinion letter. Then
you consult a slightly shadier firm, which is quite happy to write an opinion
letter stating that your firm is not infringing.

• If your answer to this question was that your firm will be on the hook
for treble damages, please explain the mechanism by which the court
will learn that you consulted the first firm.

5. You consult your patent attorney, who says that there is no way on earth that
the patent is valid and infringed. At trial, however, the district court concludes
that the patent is valid and infringed and that this is not even a close case. The
court says that the letter you received from your patent attorney could not have
been more off-base.

6. In response to the letter you take no action whatsoever. You consult no lawyer;
you just continue your activities. When you’re eventually sued and get to court,
you lose, but the district court judge concludes that it was a very close case and
you had an excellent defense (that just wasn’t quite excellent enough).

• If your answer to this question is that the conduct was willful, please
specify what the firm has done that is wrong in this case. What is the
argument for punishing the firm described here more than the firm
described in #5?

B. Attorneys’ Fees
The so-called “American rule” in civil litigation is that the parties bear their
own costs: each side must pay for its own attorneys, experts, and so forth. Indeed, as
the name would suggest, that is the rule that prevails in the mine run of American
civil litigation. However, there are exceptions, including in patent law. 35 U.S.C. § 285
states: “The court in exceptional cases may award reasonable attorney fees to the
prevailing party.” (That is the entirety of the statute; it gives no hint as to the
standard for an “exceptional case.”) As we will discuss at the beginning of the next
chapter, patent litigation is often very expensive, so fee awards can be significant. The
Federal Circuit has upheld attorneys’ fee awards in the millions and even tens of
millions of dollars.
 ENHANCED DAMAGES & ATTORNEYS’ FEES 513

The evolution of the law on attorneys’ fees may sound familiar—stop us if

you’ve heard this one before. Over a period of decades, the Federal Circuit cycled
through a series of doctrines, finally settling on a rule that attorneys’ fees were only
available if the suit was both “objectively baseless” and “brought in subjective bad
faith.” Brooks Furniture Mfg., Inc. v. Dutailier Int’l, Inc., 393 F.3d 1378 (Fed. Cir.
2005). This standard was itself the subject of criticism for nearly a decade before the
Supreme Court was persuaded to take up the issue in Octane Fitness, LLC v. ICON
Health & Fitness, Inc., 572 U.S. 545 (2014). There, the Court stated that the Federal
Circuit’s framework was “unduly rigid” and that district courts should determine
whether a case is “exceptional” as a “case-by-case exercise of their discretion,
considering the totality of the circumstances.”

Octane Fitness was decided two years before Halo, and it was the Court’s
decision in Octane Fitness that put the patent community on notice that the Supreme
Court was likely to change the legal standard for willfulness damages as well.
However, we have elected to present the cases out of order in this book (and to provide
a substantial portion of Halo, and not of Octane Fitness) because of the greater
importance of willfulness damages. Even though attorneys’ fees in patent cases can
be substantial, treble damages can add up to quite a bit more.

The standard the Court settled on in Octane Fitness is not identical to the one
it propounded in Halo. The Court held that an “exceptional” case is “one that stands
out from others with respect to the substantive strength of a party’s litigating position
(considering both the governing law and the facts of the case) or the unreasonable
manner in which the case was litigated.” 572 U.S. at 554. Accordingly, “a case
presenting either subjective bad faith or exceptionally meritless claims may
sufficiently set itself apart from mine-run cases to warrant a fee award.” Id. at 555.
Like the law of willfulness damages, bad faith in litigation can give rise to attorneys’
fees. This includes misconduct during the litigation itself, such as discovery-related
abuses or presenting arguments that the party knows to be meritless. But in addition,
the Court made clear that a very weak case, even if brought in good faith, could
similarly give rise to an award of attorneys’ fees.

Finally, under prior Federal Circuit law, prevailing parties had to prove that
they were entitled to attorneys’ fees by clear and convincing evidence. The Court in
Octane Fitness reduced that burden to preponderance of the evidence. Id. at 557–58.
All told, these two changes in the law made it much easier for prevailing parties to
obtain attorneys’ fees.

One important feature of 35 U.S.C. § 285 is that it is two-sided: a court can

assess attorneys’ fees against either the plaintiff or the defendant for “exceptional”
behavior. This provides both parties with an incentive to conform their conduct to the
requirements of Octane Fitness. What are the likely policy implications of this two-
sided threat? You might consider more generally what it would mean for the patent
system if the United States departed from the American rule and adopted a “loser
514 MASUR & OUELLETTE ⋅ PATENT LAW

pays” rule for civil litigation, which is common in many other countries. For an
argument that attorneys’ fees are only a start, and courts should assess even higher
penalties against both sides for bringing losing claims, see Anup Malani & Jonathan
S. Masur, Raising the Stakes in Patent Cases, 101 Geo. L.J. 637 (2013).

Practice Problems: Attorneys’ Fees

Consider the following situations. Which cases should be viewed as

“exceptional,” thus warranting an award of attorneys’ fees? If you view a case as
exceptional, would you award the prevailing party its full costs and fees, or only
partial costs and fees?

1. The plaintiff to a lawsuit improperly paid its fact witnesses for their testimony,
in violation of ethical rules of conduct, and failed to prevent document
spoliation over a number of years. The plaintiff itself did not destroy any
documents, but it did not prevent the party from whom it was acquiring
patents from destroying documents related to those patents, even when it
anticipated forthcoming litigation related to those patents. In addition, the
plaintiff asserted two patents that it should have known were unenforceable
because their owner had failed to pay the necessary USPTO fees on time. See
In re Rembrandt Techs. LP Pat. Litig., 899 F.3d 1254 (Fed. Cir. 2018).

2. In the course of a deposition related to litigation, the patent’s inventor testified

about the patent’s alleged innovation: “I realize there is nothing novel about
it.” The patent was later declared invalid by the USPTO in an IPR.
Nonetheless, the plaintiff did not drop the lawsuit until the claims were
cancelled by the USPTO. See Stone Basket Innovations, LLC v. Cook Med. LLC,
892 F.3d 1175 (Fed. Cir. 2018).

3. The University of Utah filed suit for correction of ownership, claiming that one
of its faculty members should have been listed as a joint owner of a valuable
patent. During her deposition, however, that faculty member made several
admissions undermining the university’s claims. When asked if she ever did
“any of the experiments or generate[d] any of the data that is included in the
[relevant] patents,” she responded: “Not that I know of.” She also stated that
her lab does not study the particular scientific process at issue in the patents.
After these admissions, the University of Utah declined to withdraw its claims
of joint inventorship, and those claims were eventually rejected at trial. See
Univ. of Utah v. Max-Planck-Gesellschaft zur Foerderung der Wissenschaften
e.V., 851 F.3d 1317 (Fed. Cir. 2017).
 U.S. PATENT LITIGATION PROCEDURE 515

V. U.S. and International Patent

Systems

17. U.S. Patent Litigation Procedure

This chapter provides an overview of some of the rules of U.S. patent litigation
procedure: (A) the law of jurisdiction, standing, and venue as applied in patent cases;
(B) the specialized patent local rules adopted by many federal districts to govern
patent cases; (C) the procedures for post-issuance review of granted patents at the
USPTO; and (D) the law governing patent litigation at the alternative forum of the
International Trade Commission.

Our brief overview only scratches the surface of the complexity of patent
litigation. Patent lawsuits are often lengthy and expensive—a recent survey of patent
practitioners estimated the median cost of litigation through appeal at $675,000 when
less than $1 million is at stake and $4 million when at least $25 million is at stake.
American Intellectual Property Law Association, Report of the Economic Survey
(2021). And patent lawsuits involve numerous specialized rules of procedure not
covered here—the rules for joinder of multiple defendants, procedures for bifurcation
of liability and damages, the use of neutral experts to provide technology tutorials,
etc. A useful additional free resource is the Federal Judicial Center’s Patent Case
Management Judicial Guide (3d ed. 2016),
https://www.fjc.gov/sites/default/files/2017/PCMJG3d_2016_final.pdf.

A. Jurisdiction, Standing, and Venue

All of the basic rules you encountered in 1L Civil Procedure also apply in patent
cases. For example, like other civil cases, a patent lawsuit commences with an
adequate complaint. In 2015, a rule that allowed patent complaints to state general
allegations (former Fed. R. Civ. P. 84) was withdrawn, so patent complaints must now
satisfy the general pleading standards set by the Supreme Court in Bell Atlantic Corp.
v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S. 662 (2009).

In this section, we briefly review how the foundational concepts of

(1) jurisdiction, (2) venue, and (3) standing apply to patent litigation.
516 MASUR & OUELLETTE ⋅ PATENT LAW

1. Jurisdiction. Courts have power to decide cases only when they have
jurisdiction, including both subject matter jurisdiction over the cause of action and
personal jurisdiction over the defendant.

As noted in Chapter 1, patent law is unusual in that the federal courts have
exclusive subject matter jurisdiction under 28 U.S.C. § 1338(a). If a suit contains any
claims under the Patent Act, it thus must be brought in federal court, even if the
patent claims are a minor part of the lawsuit. Cases must also be removed to federal
court if the defendant successfully asserts a patent counterclaim. Patent law may still
be involved in state court lawsuits that do not arise under the Patent Act, and the
Supreme Court has held that “state legal malpractice claims based on underlying
patent matters will rarely, if ever, arise under federal patent law for purposes of
§ 1338(a).” Gunn v. Minton, 568 U.S. 251, 258 (2013); see also Intellisoft v. Acer
America, 955 F.3d 927 (Fed. Cir. 2020) (trade secret claim did not require resolution
of substantial issue of federal patent law).

A case may also be dismissed for lack of personal jurisdiction over the
defendant, which can be general (such as based on the state where the defendant
resides) or specific to the asserted cause of action (including activities purposefully
directed at residents of the forum state). The requirement of personal jurisdiction,
unlike subject matter jurisdiction, can be waived. To determine whether specific
jurisdiction exists, the Federal Circuit applies a three-part test: “(1) whether the
defendant purposefully directed activities at residents of the forum; (2) whether the
claim arises out of or relates to those activities; and (3) whether assertion of personal
jurisdiction is reasonable and fair.” Nuance Communications v. Abbyy Software
House, 626 F.3d 1222, 1231 (Fed. Cir. 2010). For example, California courts were held
to have specific jurisdiction over foreign defendants who have imported allegedly
infringing goods to the state. Id. And in a declaratory judgment action, California
courts were held to have specific jurisdiction over a foreign non-practicing patent
holder that had sent cease-and-desist letters to the plaintiff and traveled to the state
to discuss potential licensing arrangements. Xilinx v. Papst Licensing, 848 F.3d 1346
(Fed. Cir. 2017).

2. Standing. A patent suit can also be dismissed if the plaintiff lacks standing,
either because it fails to meet the constitutional requirements of the Case and
Controversy Clause of Article III or because it fails to accord with various prudential
requirements that the Court has developed to define the domain of the judiciary.
There are three categories of plaintiffs for standing issues. First, the owner of a patent,
or of “all substantial rights” in the patent (as assessed based on the totality of the
agreement), meets both constitutional and prudential standing requirements. Second,
exclusive licensees who don’t hold “all substantial rights” have standing as a
constitutional matter, but joinder of the patent owner (typically under Fed. R. Civ. P.
19) is required to satisfy prudential standing concerns. (University patent owners are
often joined to lawsuits asserted by their licensees for this reason.) Third, parties
without exclusionary rights lack constitutional standing, and this defect cannot be
 U.S. PATENT LITIGATION PROCEDURE 517

cured by joining the patent owner. See Morrow v. Microsoft, 499 F.3d 1332, 1339 (Fed.
Cir. 2007); Lone Star Silicon Innovations v. Nanya Technology, 925 F.3d 1225 (Fed.
Cir. 2019).

Patent lawsuits may also be commenced as declaratory judgment actions, in

which a potential infringer seeks a declaratory judgment that a patent is invalid or
not infringed. As summarized by the Federal Circuit:

A party has standing to bring an action under the Declaratory

Judgment Act if an “actual controversy” exists, 28 U.S.C. § 2201(a),
which is the same as an Article III case or controversy.

In MedImmune, Inc. v. Genentech, Inc., the Supreme Court

rejected our prior, more stringent standard for declaratory judgment
standing insofar as it required a “reasonable apprehension of imminent
suit.” 549 U.S. 118 (2007). Under the Court’s new standard, an Article
III case or controversy exists when “the facts alleged, under all the
circumstances, show that there is a substantial controversy, between
parties having adverse legal interests, of sufficient immediacy and
reality to warrant the issuance of a declaratory judgment.” Id. at 127.

An “adverse legal interest” requires a dispute as to a legal

right—for example, an underlying legal cause of action that the
declaratory defendant could have brought or threatened to bring. In the
absence of a controversy as to a legal right, a mere adverse economic
interest is insufficient to create declaratory judgment jurisdiction.

Arris Group v. British Telecommunications, 639 F.3d 1368, 1373–74 (Fed. Cir. 2011).

In Chapters 10 and 16, we discussed the letters that patent owners send to
putative infringers to create the knowledge necessary to trigger liability for indirect
infringement and treble damages. These letters can also have the effect of triggering
declaratory judgment jurisdiction if they threaten legal action. In turn, this could
allow the putative defendant to file a declaratory judgment action against the putative
plaintiff before the plaintiff sues for infringement. Importantly, this allows the
putative defendant to choose the judicial district where the case will be litigated. If
you are the CEO of Intel, and you are facing litigation against Texas Instruments, you
would much rather litigate in the Northern District of California, where your company
headquarters is located, than in the Northern District of Texas, where Texas
Instruments’ corporate headquarters is located.

As a result, these notice letters are often worded quite strangely in an effort to
avoid creating declaratory judgment jurisdiction. Instead of notifying a potential
defendant that a patent exists and the owner is considering suing, the letter might
simply observe that “there are some patents you might want to be aware of,” and
“perhaps the two firms should discuss their mutual economic interests.” To the
518 MASUR & OUELLETTE ⋅ PATENT LAW

untrained eye, these letters might seem to be friendly suggestions that the two firms
consider a joint venture; to the trained eye, they are the opening salvo in a patent war.

3. Venue. Patent lawsuits must also be filed in an appropriate venue. Patent

law is unusual in having its own venue statute:

28 U.S.C. § 1400(b)

Any civil action for patent infringement may be brought in the judicial
district where the defendant resides, or where the defendant has
committed acts of infringement and has a regular and established place
of business.

Before 2017, the Federal Circuit interpreted this statute such that corporate
defendants are deemed to “reside” in any district where the defendant is subject to the
court’s personal jurisdiction, rendering the second portion of the statute superfluous.
This broad venue rule led many patent plaintiffs to shop for favorable locations in
which to file suit, and even led some locations to market themselves as friendly venues
for patent plaintiffs. See Daniel Klerman & Greg Reilly, Forum Selling, 89 S. Cal. L.
Rev. 241 (2016). The most egregious example was the Eastern District of Texas, where
the largest city is Plano, and which successfully earned a reputation as a highly
favorable venue for patent plaintiffs. (Because the plaintiff picks the venue, a venue
that wants to attract business only has to be favorable to plaintiffs.) The Eastern
District of Texas heard so many patent cases that beleaguered repeat defendants
started to invest in the community in an effort to curry favor with potential jurors.
Samsung (in)famously sponsored an ice rink in the town square in Marshall, Texas
(where most of the cases were tried), directly across from the federal courthouse.

Almost needless to say, this is not how things are supposed to work. In TC
Heartland v. Kraft Foods, 581 U.S. 258 (2017), the Supreme Court narrowed this rule
and held that for purposes of the patent venue statute, a corporation only “resides” in
its state of incorporation. Since TC Heartland, the Federal Circuit has provided
additional guidance as to the second portion of the venue statute: “where the
defendant has committed acts of infringement and has a regular and established place
of business.” For example, this test is not satisfied by an executive working out of his
home in the district, In re Cray Inc., 871 F.3d 1355 (Fed. Cir. 2017), or by the mere
presence of computer servers, In re Google LLC, 949 F.3d 1338 (Fed. Cir. 2020). This,
in turn, has led some potential patent defendants to eliminate their physical presences
in plaintiff-friendly districts in order to defeat venue there. For instance, you will
search in vain for an Apple Store in the Eastern District of Texas—Apple closed all of
its locations there after TC Heartland.

TC Heartland did not address venue for foreign corporations. The Federal
Circuit has since held that venue for foreign firms is governed by the general venue
statute, which states that “a defendant not resident in the United States may be sued
 U.S. PATENT LITIGATION PROCEDURE 519

in any judicial district.” 28 U.S.C. § 1391(c)(3). See In re HTC Corp., 889 F.3d 1349
(Fed. Cir. 2018).

As illustrated in the following table, TC Heartland has led to a substantial

shift in patent filings away from the Eastern District of Texas, which is often no longer
an appropriate venue. The District of Delaware (where many companies are
incorporated) and the Western District of Texas (which includes Austin and San
Antonio, where many defendants have operations) have seen the largest gains in
share of patent cases; other districts have also seen upticks. The growth in patent
litigation in the Western District of Texas was largely driven by the lone judge in the
Waco division (Judge Alan Albright). In response to criticism of Judge Albright’s vast
patent docket, the Western District of Texas announced in July 2022 that patent cases
would be randomly distributed among the district’s 12 judges.

Most Popular Districts for Patent Case Filings (from Lex Machina)

2014–2016 2020–22

E.D. Tex. 37% 10%

D. Del. 13% 18%

C.D. Cal. 6% 7%

D.N.J. 5% 4%

N.D. Cal. 4% 6%

N.D. Ill. 4% 5%

S.D.N.Y. 3% 3%

W.D. Tex. 1% (15th most popular) 22%

If venue is proper in more than one district, then a defendant can file a motion
to transfer venue under 28 U.S.C. § 1404(a), which allows a district court to transfer
a case “[f]or the convenience of parties and witnesses [and] in the interest of justice.”
For example, after patent-assertion entity Uniloc sued Apple for patent infringement
in the Western District of Texas, Apple moved to transfer the case to the Northern
District of California on the basis that it would be more convenient to litigate where
the accused products were designed, developed, and tested. The district court denied
the motion, but Apple successfully petitioned the Federal Circuit for a writ of
mandamus directing the district court to transfer the case. In re Apple Inc., 979 F.3d
1332 (Fed. Cir. 2020). The Federal Circuit has granted an unusual number of
mandamus petitions to transfer cases out of Texas for improper venue. See J. Jonas
520 MASUR & OUELLETTE ⋅ PATENT LAW

Anderson, Paul R. Gugliuzza & Jason A. Rantanen, Extraordinary Writ or Ordinary

Remedy? Mandamus at the Federal Circuit, 100 Wash. U. L. Rev. 327 (2022).

B. Patent Local Rules

Many federal district courts have “local rules,” which are procedural guidelines
that supplement the Federal Rules of Civil Procedure. Local rules often establish
timing and style guidelines for filing motions, holding status conferences, mediating
disputes, and other procedural details. In 2000, the Northern District of California
became the first district to adopt specialized local rules for patent infringement cases
in particular. Since then, over thirty districts have promulgated their own patent local
rules. See Jean Dassie, District Court Local Rules for Patent Infringement Cases,
Federal Circuit Damages (Dec. 27, 2019), http://www.fedcirdamages.com/district-
court-local-rules-for-patent-infringement-cases/. Of the jurisdictions that hear the
most patent cases, only the District of Delaware and the Western District of Texas do
not have district-wide patent local rules, although some individual judges in these
districts have adopted standard procedures for patent cases. As an example, here is a
rough overview of the schedule provided under the Northern District of California
Patent Local Rules, which was used as a model by many other districts:

• Initial Case Management Conference. During this conferral, the parties can
discuss any modifications to Patent Local Rules.

• Disclosure of Asserted Claims and Infringement Contentions (14 days later).

The plaintiff’s initial disclosure requirements include infringement claim
charts showing how each “Accused Instrumentality” infringes each asserted
claim, as well as documents related to issues such as patent ownership.

• Invalidity Contentions and Defendant’s Document Production (45 days later).

The defendant must provide any asserted grounds of invalidity, with §§ 102 &
103 arguments supported by invalidity claim charts showing how each
asserted claim element can be found in each alleged item of prior art. Later
amendments to invalidity or infringement contentions require good cause. The
defendant’s required document production can also be quite burdensome,
including “[s]ource code, specifications, schematics, flow charts, artwork,
formulas, or other documentation sufficient to show the operation of any
aspects or elements of an Accused Instrumentality identified by the patent
claimant.”

• Claim Construction:
o Exchange of Proposed Terms for Construction (14 days after Invalidity
Contentions). The parties exchange lists of terms they would like
 U.S. PATENT LITIGATION PROCEDURE 521

construed and then “jointly identify the 10 terms likely to be most

significant to resolving the parties’ dispute.”
o Exchange of Preliminary Claim Constructions and Extrinsic Evidence
(21 days later). The parties exchange proposed constructions and
references to supporting evidence, including proposed testimony of
experts.
o Joint Claim Construction and Prehearing Statement (60 days later).
The parties file a joint statement with their respective constructions.
o Completion of Claim Construction Discovery (30 days later). The parties
finish discovery related to claim construction, including depositions.
o Claim Construction Briefs (45 days later). The plaintiff files an opening
claim construction brief. The defendant then has 14 days to respond,
and the plaintiff has 7 days to reply.
o Claim Construction Hearing (2 weeks after reply brief, subject to the
court’s convenience). If necessary, the court holds a hearing, including
testimony of any expert witnesses.

• Damages Contentions (50 days after Invalidity Contentions). The plaintiff

must explain the categories of damages it is seeking and its theories of
recovery. (The defendant has 30 days to explain why it disagrees.)

The predictability provided by this timeline can be particularly helpful for

clients, who often want to know the expected timeline on which litigation costs will be
incurred. These patent local rules also highlight the detailed information that will be
needed early in a case for infringement and invalidity contentions. Patent plaintiffs
will generally want to prepare infringement claim charts before filing suit if possible,
and defendants will need to begin searching for invalidating prior art as early as
possible.

Does it make sense to have specialized procedural rules for patent cases? If so,
should there be specialized procedures for other types of civil cases? Should patent
local rules be standardized across jurisdictions? What rules might parties want to
change in the initial case management conference?
522 MASUR & OUELLETTE ⋅ PATENT LAW

C. Post-Issuance Review at the USPTO

In addition to challenging the validity of patents in court, potential infringers
and other parties can also bring challenges at the USPTO. This section summarizes
the three USPTO administrative procedures for invalidating granted patents: ex parte
reexamination, post grant review (PGR), and inter partes review (IPR). Ex parte
reexamination (sometimes shortened to “ex parte reexam”) was introduced in 1981;
PGR and IPR were created by the 2011 America Invents Act (AIA).1

Ex parte reexamination allows any person—including the patent owner2—to

request that the USPTO reexamine any patent, but only based on novelty and
nonobviousness arguments involving paper prior art (patents and printed
publications). As its name suggests, this procedure is largely ex parte: If the USPTO
determines that the petition raises “a substantial new question of patentability,” the
patent owner may respond to the petition, and the third-party requester “may file and
have considered in the reexamination a reply to any statement filed by the patent
owner.” 35 U.S.C. § 304. Otherwise, third parties have no involvement in the
proceeding. Reexamination is similar to the initial examination except that it is
conducted by a panel of three examiners in the USPTO’s “central reexamination unit,”
and the patentee cannot amend the patent after the initial response to the petition.
As with initial examination, the patentee may appeal a negative decision to the PTAB,
and from there to the Federal Circuit.

In contrast to ex parte reexamination, the AIA’s PGR and IPR proceedings

allow active participation by a third-party challenger in a trial-like proceeding before
the PTAB. The AIA trials are adversarial proceedings that afford the parties some
discovery and an oral hearing, although both are more limited than in district court,
and the timeline is much shorter. After a petition is filed, the patent owner has three
months to file a preliminary response, and then the USPTO has three months to
decide whether to “institute” the proceeding and begin the trial phase. By statute, the
trial phase is supposed to be concluded within twelve months, with a six-month
extension for good cause.

PGR and IPR petitions differ in what kinds of arguments may be raised and
when they may be filed. For the first nine months after an AIA patent is issued, it is
eligible for PGR, which allows validity to be challenged by any third party who has
not filed a civil action challenging the patent’s validity. All validity issues that are

1 The AIA also created a post-grant proceeding known as covered business method
(CBM) review, which applied to non-technological financial product or service patents, but
CBM review sunset in September 2020. PGR and IPR replaced another type of post-grant
proceeding, inter partes reexamination, which had been created in 1999.
2 Why would anyone challenge their own patent? The most common use is to test and
strengthen the validity of a patent in light of a newly discovered piece of prior art before
asserting the patent in a costly infringement suit.
 U.S. PATENT LITIGATION PROCEDURE 523

defenses to infringement may be asserted in a PGR petition, including issues under

§§ 101, 102, 103, and 112 as well as double patenting, but not § 112’s best mode
requirement. The USPTO will institute a PGR proceeding if the petition shows “that
it is more likely than not that at least 1 of the claims challenged in the petition is
unpatentable” or of it “raises a novel or unsettled legal question.” 35 U.S.C. § 324.

All patents that are not eligible for or currently subject to PGR are eligible for
the third type of proceeding, IPR, which allows validity to be challenged by any third
party who has not filed a civil action challenging validity or been sued for infringement
of the patent more than one year earlier. The petitioner may only raise novelty and
nonobviousness arguments involving paper prior art (as with ex parte reexam). The
USPTO will institute an IPR proceeding if “there is a reasonable likelihood that the
petitioner would prevail with respect to at least 1 of the claims challenged in the
petition.” 35 U.S.C. § 314. Only about half of IPR petitions are instituted; the others
are denied for failure to meet this standard or are dismissed due to settlement
between the challenger and the patent owner.

Of the three post-grant proceedings, IPRs are by far the most popular. In fiscal
year 2021, the USPTO received about 300 petitions for ex parte reexam, 90 for PGR,
and 1,300 for IPR. The growth in IPR proceedings has also reshaped the Federal
Circuit docket: in 2011, the court heard fewer than 150 appeals from the USPTO and
over 400 appeals from patent infringement lawsuits in district courts; in 2021, there
were over 500 USPTO appeals and fewer than 300 appeals from patent infringement
suits. Over this same time, patent law has grown from 42% to 51% of the court’s
caseload.3 What are the advantages of challenging validity through post-grant
proceedings at the USPTO rather than in federal district court, and how do parties
choose among these options?

One important factor is cost. As of June 2023, USPTO filing fees were $12,600
for regular ex parte reexam (or half that price for a “streamlined” filing with fewer
pages), $19,000 for IPR (plus another $22,500 if instituted), and $20,000 for PGR (plus
$27,500 if instituted), with lower fees for “small” or “micro” entities. In addition,
according to a survey of practitioners, the average legal cost for ex parte
reexamination is about $17,000. For IPR and PGR, the median cost of attorneys’ fees
to file a petition is $120,000 to $250,000 (depending on field), and the median total
attorneys’ fees through appeal is $450,000 to $650,000. (The cost of filing an IPR
petition and defending a patent in an IPR proceeding are roughly the same.) These
costs can be significant for some firms, but all of these proceedings are less expensive
than the millions of dollars it might cost to litigate in court, as noted at the beginning

3 This shift has exacerbated concerns about the negative effects of judicial
specialization. See generally Paul R. Gugliuzza, Rethinking Federal Circuit Jurisdiction, 100
GEO. L.J. 1437 (2012); Laura G. Pedraza-Fariña, Understanding the Federal Circuit: An Expert
Community Approach, 30 Berkeley Tech.L.J. 89 (2015).
524 MASUR & OUELLETTE ⋅ PATENT LAW

of this chapter. See American Intellectual Property Law Association, Report of the
Economic Survey (2021).

Another advantage of these USPTO proceedings for those challenging validity

is that the presumption of validity does not apply. That is, invalidity is established by
a preponderance of the evidence rather than the higher standard of clear and
convincing evidence. The agency also used to use the “broadest reasonable
interpretation” claim construction standard from the examination context rather than
the “ordinary meaning” Phillips standard used in the courts, and the Supreme Court
granted Chevron deference to this choice in Cuozzo Speed Technologies v. Lee, 579 U.S.
261 (2016). (Chevron deference means that the statute is ambiguous and that the
agency has discretion to choose from among reasonable interpretations.) The USPTO
then decided in 2018 that it would use the Phillips standard for AIA trial proceedings
(PGR and IPR); the “broadest reasonable interpretation” standard still applies in ex
parte reexamination.

Challengers should also consider the effect of USPTO proceedings on other

proceedings, including pending or future district court litigation. Ex parte reexam
petitions can be filed anonymously and have no estoppel effect. IPR and PGR
proceedings bar challengers from later raising invalidity questions that were “raised
or reasonably could have been raised” in the IPR or PGR proceeding. 35 U.S.C.
§§ 315(e), 325(e). Most IPR petitions are filed after a patent has been asserted in
district court litigation, and district courts typically stay litigation pending the
USPTO proceeding. That is to say, many patent defendants prefer to litigate the
validity of the patent in an IPR proceeding rather than in the course of the district
court litigation, largely for the reasons described above. When litigation is not stayed,
non-final judgments—including large damages awards—have sometimes been
vacated in light of invalidations in parallel USPTO proceedings. See Fresenius USA v.
Baxter International, 721 F.3d 1330 (Fed. Cir. 2013); Paul R. Gugliuzza, (In)valid
Patents, 92 Notre Dame L. Rev. 271 (2016). Patent defendants generally praise IPR
proceedings as a more cost-effective way to challenge patents, whereas patent owners
have argued that IPRs have undermined confidence in the U.S. patent system.

IPR critics have launched a number of legal challenges to the IPR process and
the PTAB. The Supreme Court has already heard five cases involving the PTAB: the
2016 Cuozzo case mentioned above on claim construction standards; SAS Institute v.
Iancu, 138 S. Ct. 1348 (2018) (rejecting the USPTO’s “partial institution” practice of
sometimes granting an IPR petition on only some of the challenged claims); Oil States
Energy v. Greene’s Energy Group, 138 S. Ct. 1365 (2018) (rejecting constitutional
challenges to IPRs); Thryv v. Click-To-Call Technologies, 140 S. Ct. 1367 (2020)
(holding that certain challenges to PTAB decisions are nonappealable); and United
States v. Arthrex, 141 S. Ct. 1970 (2021) (holding that under the Appointments Clause,
because PTAB judges were not appointed and confirmed by the Senate, their decisions
should be reviewable by the USPTO director).
 U.S. PATENT LITIGATION PROCEDURE 525

How should policymakers evaluate these different proceedings for invalidating

patents? Should they be expanded, such as by allowing IPR petitions to raise
invalidity issues beyond §§ 102 and 103 challenges based on paper prior art?

The following table summarizes the key differences between ex parte

reexamination, PGR, and IPR.

Ex Parte Post Grant Review Inter Partes

Reexamination (PGR) Review (IPR)

Statute 35 U.S.C. §§ 301–07 35 U.S.C. §§ 321–29 35 U.S.C. §§ 311–19

Petitioner anyone (including anyone who is not the anyone who is not the
the patent owner); patent owner and has patent owner, has not
can be anonymous; not filed a civil action filed a civil action
no estoppel challenging validity challenging validity,
and has not been
sued over the patent
more than one year
prior

Eligible all patents in force only AIA patents in all patents in force,
Patents first nine months unless eligible for or
after issuance currently subject to
PGR

Basis for only §§ 102 and 103 all validity issues only §§ 102 and 103
Challenge based on paper prior that are defenses to based on paper prior
art (patents and infringement art (patents and
printed printed publications)
publications)

Total Cost around $30,000 around $500,000 around $500,000

Estimate

Legal no presumption of “more likely than not” “reasonable

Standards validity; claims get institution standard; likelihood” institution
broadest reasonable no presumption of standard; no
interpretation validity; Phillips presumption of
claim construction validity; Phillips
claim construction

Estoppel none issues that were issues that were

raised or reasonably raised or reasonably
could have been could have been
raised raised
526 MASUR & OUELLETTE ⋅ PATENT LAW

D. Litigation at the International Trade Commission

The federal courts and the USPTO are not the only institutions that resolve
U.S. patent law issues: the International Trade Commission (ITC) also has authority
to resolve certain patent infringement claims. The ITC is an independent agency in
DC with jurisdiction over various trade disputes. The ITC shouldn’t be confused with
the Court of International Trade (or “Trade Court”), an Article III court in New York
that hears some appeals from the ITC and other trade disputes, and which is also
under the jurisdiction of the Federal Circuit. The ITC’s patent decisions don’t go
through the Trade Court; they are appealed directly to the Federal Circuit. Private
parties may bring an action in the ITC under Section 337 of the Tariff Act of 1930, 19
U.S.C. § 1337, and about 90% of Section 337 cases are patent cases.

There are two important prerequisites for ITC jurisdiction over patent
disputes:

First, the infringing goods must be imported. The ITC may investigate claims
of “[t]he importation into the United States, the sale for importation, or the sale within
the United States after importation by the owner, importer, or consignee, of articles
that . . . infringe a valid and enforceable United States patent . . . or are made,
produced, processed, or mined under, or by means of, a process covered by the claims
of a valid and enforceable United States patent.” 19 U.S.C. § 1337(a)(1)(B). This
statute also covers “importation of goods that, after importation, are used by the
importer to directly infringe at the inducement of the goods’ seller.” Suprema v. Int’l
Trade Comm’n, 796 F.3d 1338 (Fed. Cir. 2015) (en banc). Because ITC cases are in
rem proceedings, with jurisdiction over the accused imported articles, issues
regarding personal jurisdiction over foreign entities are simplified.

Second, the patentee (referred to as the “complainant”) must have a domestic

industry related to the patent. The ITC has jurisdiction “only if an industry in the
United States, relating to the articles protected by the patent . . . exists or is in the
process of being established.” § 1337(a)(2). A domestic industry exists “if there is in
the United States, with respect to the articles protected by the patent
. . . (A) significant investment in plant and equipment; (B) significant employment of
labor or capital; or (C) substantial investment in its exploitation, including
engineering, research and development, or licensing.” § 1337(a)(3). Note that it is the
investments, not the patent owner, that must be “in the United States.” A domestic
patent owner that invests in foreign plants, labor, or licensing does not satisfy the
domestic industry requirement. And a foreign patent owner can satisfy the
requirement if it has made one of these investments in exploiting the invention in the
United States (simply importing the finished product into the United States is not
enough). The patent owner doesn’t need to manufacture the patented goods itself, but
expenses asserting the patent in litigation are not enough to establish a domestic
industry. See John Mezzalingua Assocs. v. Int’l Trade Comm’n, 660 F.3d 1322 (Fed.
 U.S. PATENT LITIGATION PROCEDURE 527

Cir. 2011); InterDigital Commc’ns v. Int’l Trade Comm’n, 707 F.3d 1295 (Fed. Cir.
2013).

If the ITC finds a Section 337 violation, the only remedy is prospective
injunctive relief through exclusion orders and cease-and-desist orders, both of which
are subject to presidential review. An exclusion order prohibits further entry of
infringing goods, enforced by Customs and Border Protection at the border, and can
be limited to specific infringing products or general orders covering products from
importers who were not parties to the investigation. Cease-and-desist orders are
enforced by the ITC (using civil and criminal penalties) and prohibit continued
distribution of products that were already imported. The ITC may not award money
damages. But because of the availability of injunctions, the ITC grew in popularity as
a patent litigation forum post-eBay, with about 50–70 complaints per year. Patent
owners may file in both the ITC for an exclusion order and in district court for
damages, although the district court action must be stayed pending the outcome of
the ITC dispute. See 28 U.S.C. § 1659; In re Princo, 478 F.3d 1345 (Fed. Cir. 2007).
About 70% of Section 337 cases have a district court counterpart. But note that ITC
cases do not have preclusive effect on district court cases. If one party wins before the
ITC, the district court case can continue (and that court can reach a different result).

Procedurally, litigating in the ITC is different from litigating in district court.

Cases move more quickly, with the entire dispute typically resolved within 10–15
months. There are also fewer limits on discovery than in district court, which can be
particularly burdensome for the accused infringer (referred to as the “respondent”).
Most cases go to trial, and trials are in front of one of six Administrative Law Judges
(ALJs) rather than a jury. The costs of ITC litigation are thus extremely high and
rapidly incurred, typically favoring complainants who can prepare for these costs and
use them to exert settlement pressure. There is also a third party to each dispute: the
Commission Investigative Attorney (or “Staff”) represents the public interest and has
the same rights as the complainant and respondent to gather and present evidence.
Convincing the staff of the merits and policy arguments in favor of your position can
bring an important strategic advantage.

What are the public benefits of patent litigation at the ITC? Should anything
be done to address the litigation advantages to wealthy plaintiffs that this forum
creates?

E. Alternative Dispute Resolution

Although this casebook is focused on patent litigation, the vast majority of uses
of patented technology do not involve the courts. Rather, parties often reach an
agreement such as a patent license without formal legal proceedings through
processes known as alternative dispute resolution (ADR). We provide a brief overview
of the law of patent licensing and patent transactions in Chapter 18.
528 MASUR & OUELLETTE ⋅ PATENT LAW

The most informal ADR method is negotiation, or unstructured discussions

between the parties to determine whether they can reach a mutually beneficial
outcome. Patent mediation involves a neutral third party to facilitate non-binding
negotiations in a more structured way. Mediation is often used to encourage
settlement after a lawsuit is filed, and the Federal Judicial Center has produced a
comprehensive patent mediation guide.4 Finally, arbitration can provide a binding
dispute resolution process that is often cheaper and faster than litigation.

The United States is an outlier in allowing arbitration of patent validity

claims. The Patent Act expressly recognizes that agreements “requiring arbitration of
any dispute relating to patent validity or infringement . . . shall be valid, irrevocable,
and enforceable, except for any grounds that exist at law or in equity for revocation of
a contract.” 35 U.S.C. § 294(a). The American Arbitration Association and the
International Institute for Conflict Prevention and Resolution each maintain
specialized exemplary rules for arbitration of patent disputes, which are similar to the
patent local rules discussed above in setting out a structure for exchanging
infringement contentions, invalidity contentions, discovery, and claim construction.

Although arbitration is private, making it easier to maintain confidentiality,

§ 294(d) requires notice of the arbitration and of the resulting award to be provided to
the USPTO. Parties may thus choose to limit the proceedings to only infringement
and damages issues to avoid any record of an invalidity finding that third parties
might rely on in the future.

4 https://www.fjc.gov/sites/default/files/materials/05/Patent_Mediation_Guide.pdf
 U.S. PATENT LITIGATION PROCEDURE 529

Practice Problems: Patent Litigation Procedure

1. Amandeep is the general counsel for a German consumer electronics firm,

ALO. Two years ago, ALO exclusively licensed U.S. patent rights for a new invention
called a thingamajigger, which ALO has developed for commercial production and
begun exporting to the United States. Amandeep just learned that a Japanese firm,
Wonoly, is also exporting thingamajiggers to the United States. ALO’s CEO has asked
Amandeep what their options are for stopping Wonoly’s sales in the United States.
What should she recommend?

2. Although Amandeep’s legal department coordinated a patent search on the

thingamajigger before ALO began thingamajigger production, she recently came
across a U.S. patent issued to a Delaware corporation six months ago which the new
thingamajigger might infringe. Amandeep’s team has studied the claims and does not
think the patent is obvious in light of the earlier patent ALO licensed, but they do
think the patent is likely invalid for indefiniteness. What course of action should
Amandeep recommend for ALO?

3. Amandeep has recently become aware that an American electronics firm,

xJigger, is selling a facsimile of the thingamajigger to American consumers. xJigger
is incorporated in the state of South Dakota, where it also has its main production
facilities and most of its employees. xJigger sells thingamajiggers nationwide via its
website, with roughly 55% of its business flowing to the Western District of
Washington, where ALO has its American headquarters. There is also a trade show
(“JiggerCon”) held every year in the Western District of Washington. xJigger always
sends a representative, and a large proportion of its sales are generated at this trade
show. In addition, xJigger operates a small facility in Rhode Island where it produces
components for the thingamajigger, to be assembled at the plant in South Dakota. In
which of these three judicial districts—the District of South Dakota, the Western
District of Washington, and the District of Rhode Island—would venue be proper if
ALO were to sue xJigger? Which district or districts should ALO prefer to sue in, and
which district or districts should it try to avoid?
530 MASUR & OUELLETTE ⋅ PATENT LAW

18. Patent Licensing and Transactions

Much of this book has focused on the legal rules governing obtaining and
litigating patents. But most uses of patented technology do not involve litigation:
instead, a potential infringer can license the patent. That is, the putative infringer
could reach an agreement with the patent owner that permits the infringer to use the
patented technology in exchange for some amount of money (or something else of
value). Licensing is important both to patent owners and the potential users of
patented technology. For owners, licensing can be a significant source of revenue—
sometimes the only source of revenue, if the owner is a non-practicing entity. For
potential users, licensing creates freedom to operate: the firm can employ the patented
technology without having to be concerned about being sued for infringement.
Potential licenses can also be valuable bargaining chips: if one firm is threatened with
suit by a competitor in the same industry, it can sometimes defend itself by
threatening to counter-sue its competitor. The eventual solution may be a cross-
license, in which each firm grants the other the right to use its patented technology.

For the most part, licenses are simply contracts and evaluated under standard
contract principles. That is, the question of which patented technology a licensee is
permitted to use, what activities a license covers, or how much the patent owner is to
be paid in exchange for granting the license are all questions of contract
interpretation. The same is true for mergers & acquisitions, assignments, and other
transactions in which patent rights are bought and sold. They are creatures of
contract, and the transfer of patent rights is evaluated under the same contract
principles that are used to evaluate the merger or acquisition itself.

However, patents can also give rise to particular issues or complexities when
they are licensed or transferred. In some cases, these issues concern the uneasy
interaction between patent law and antitrust law. As explained in Chapter 1, patents
create an incentive for innovation by offering the possibility of a quasi-monopoly for
the patent owner, allowing it to charge supra-competitive prices. But under certain
circumstances, particularly when patents are aggregated, that power can become
excessive and lead to antitrust concerns. In other cases, patent law has developed a
series of specialized rules to govern issues that arise in licensing and other
transactions. This chapter briefly canvasses some of these specialized concerns that
stem from patent transactions and the rules that have evolved to address those
concerns.

For those looking for more details on the law of IP transactions and licensing,
Jorge Contreras has written an excellent open access casebook, which is available at
https://doi.org/10.1017/9781009049436.
 PATENT LICENSING & TRANSACTIONS 531

A. Standards-Essential Patents, FRAND Licensing,

Patent Pools, and Monopoly
A great deal of modern technology, particularly consumer electronics, runs on
technical “standards.” A standard is a set of technical specifications that establishes
how the technology will work, how it can be operated, and how it interacts with other
types of technology. DVDs, Bluetooth, Wi-Fi, 4G and 5G cellular networks—these are
all technical standards. The value of a technical standard is that it allows a panoply
of different companies to create a wide variety of products that will all operate and
interact seamlessly. You can connect a Samsung phone, an Apple tablet, an Amazon
Fire Stick, and even a GE oven to a Wi-Fi router made by Netgear, and they’ll all
function properly. In the modern era it is easy to take this type of technical
interoperability for granted, but there is nothing inevitable about it. It’s easy to
imagine an alternative universe in which Apple tablets only worked with Apple
wireless routers and Samsung phones only worked with Samsung wireless routers,
just as only some versions of software will run on the iOS operating system that
powers Apple devices. Standards are what make this type of interoperability possible.

The problem with standards is that, when coupled with patents, they create
the potential for severe monopoly power and anticommons problems. Imagine that
Cisco owned a patent on some essential aspect of Wi-Fi, without which a Wi-Fi
network would not be operable. (This is in fact the case.) This is known as a
“standards-essential patent” or “SEP,” in that it is impossible to construct a device
that uses the standard without infringing the patent. In a world without standards, a
competing company that did not want to license Cisco’s patent could simply create
and sell its own wireless network—imagine Wi-Apple—to avoid infringing the patent.
But if Wi-Fi has been adopted as the industry standard by every other firm in the
market, Wi-Apple becomes nearly worthless. Who would buy or install a wireless
network that will only connect with Apple products, rather than a Wi-Fi network that
works with everything else? Once Wi-Fi has been selected as the industry standard,
every firm in the market has little choice but to use Wi-Fi and make their devices
interoperable with Wi-Fi. This bestows tremendous market power on Cisco and any
other company whose patented technology is essential to the standard. Cisco can
charge every market participant an exorbitant price for licensing its technology, and
so can any other party that owns an essential patent. There is no alternative and no
way to design around Cisco’s patent. A firm must either pay or leave the industry.

The industries that employ standards have tried to avoid this problem through
governance systems. Technical standards are typically established by international
non-governmental organizations known as “standard-setting organizations.” The
Institute of Electrical and Electronics Engineers, known as IEEE, is one of the most
famous of these standard-setting organizations, responsible for many widely used
standards. Generally, the organization that selects a standard will require every party
532 MASUR & OUELLETTE ⋅ PATENT LAW

that owns a standard-essential patent to agree ahead of time to license that patent to
any manufacturer of a standardized product either for free, or on “fair, reasonable,
and non-discriminatory” (“FRAND”) terms. In many instances, this means in practice
that before a standard such as Wi-Fi is adopted by the relevant standard-setting
organization, the owner of each relevant patent must sign a contract or otherwise
promise that it will license the patent on FRAND terms. The patent owner is then
bound to this agreement, and failure to license on those terms in the future can subject
the patent owner to contractual or antitrust liability.

What are FRAND terms? The “non-discriminatory” part of FRAND means that
the patent owner must license the patent on the same terms to similarly situated
licensees. That means it cannot grant more favorable licensing terms to a corporate
partner than to a competitor. As for the requirements that the licensing terms be “fair”
and “reasonable,” they have been the subject of substantial litigation and much
scholarly discussion, with no definitive resolution. The general consensus seems to be
that the patent owner must license at a price that allows it to recoup value but does
not eliminate the licensee’s profits and does not exploit its powerful bargaining
position. But as one might imagine when it comes to terms like “fair” and “reasonable,”
there is still quite a bit of debate as to whether the licensors of standards-essential
patents are fulfilling their FRAND obligations in any given case.

Of course, even with FRAND terms, negotiating a license with every firm that
owns a standards-essential patent can involve significant transaction costs. There are
often hundreds or thousands (or more) of such patents that are essential to a given
technological standard, and striking a deal with every such firm can be time-
consuming and costly. Usefully, however, standards-essential patents also open up
the possibility of “patent pools.” A patent pool is a collection of patents that all concern
a particular technology, such as Bluetooth or Wi-Fi. The advantage of a patent pool is
that a potential licensee can license all patents in the pool in one fell swoop, often for
a flat price, rather than having to negotiate separately with all of their owners.

Patent pools are voluntary associations. A group of firms that own the relevant
patents can agree to form a patent pool, aggregating their patents and making them
collectively available. However, patent pools are generally prohibited under antitrust
law when the patents involved are substitutes for one another, rather than
complements. The reason is that patent pool that involves substitute patents can
constitute classic horizontal agreements in restraint of trade. They force a potential
licensee who wants access to one patent to purchase access to all the patents. To
understand the problem, imagine that there are three methods for manufacturing an
automobile engine, each protected by a patent. In theory, this is a semi-competitive
marketplace: an automobile manufacturer could negotiate separately with all three
patent-holders and elect to license whichever technology is being offered at the best
value. But now imagine that the three patent owners reached an agreement: anyone
who wanted to license the technology from one of them would have to license the
technology from all of them. This would create a full-fledged monopoly and
 PATENT LICENSING & TRANSACTIONS 533

dramatically raise the price that licensees would be forced to pay. And this monopoly
would be the result of a contract between the patent owners—an agreement in
restraint of trade—rather than merely the result of the patents alone. This is why
patent pools that include substitute patents are generally prohibited.

On the other hand, patent pools are typically permitted when the patents
involved are complements—that is, when a firm that licenses one of the patents would
benefit from licensing the others as well. In such cases, there is no horizontal
agreement because the firm is not being deprived of a choice between options. Instead,
the firm is licensing a package of patents that are more valuable together than
separately. Standards-essential patents are complementary in exactly this regard. By
definition, a patentee must license all the relevant patents to construct a device that
operates according to the standard. (That’s what it means for patents to be “standards-
essential.”) A patent pool thus does not restrain trade or create an artificial monopoly;
the potential licensee never had any option other than to license all the patents.
Accordingly, antitrust regulators have generally permitted patent pools involving
standards-essential patents. This has redounded to the benefit of both patent owners
and patent licensees, who no longer need negotiate separately with each patent owner.

B. Kimble v. Marvel and the Structure of Licenses

As we detailed in Chapter 15 (and as LaserDynamics v. Quanta makes clear),
there are multiple ways to structure a patent license. The two most common forms
are lump sum licenses and running royalty licenses. When a license is structured as
a lump sum, the licensee pays one fixed amount of money for the license. When a
license is structured as a running royalty, the licensee pays some percentage of its
revenues (or profits, or sales) as a royalty, extending into the future.

In some cases, licensees or licensors might prefer a lump sum royalty. For the
licensee, it allows them to pay one amount of money, once, and never worry about the
patent owner again, no matter how successful the licensee’s product or how much
money they make in the future. For the licensor, it shifts the risk that the product will
fail to the licensee. In other cases, licensees or licensors might prefer to negotiate
running royalties. A running royalty shifts some of the risk of the product
underperforming to the licensor; and at the same time, it gives the licensee some stake
in the ongoing success of the product, which can be lucrative if the product performs
well. More generally, if the parties do not know how much the technology will
eventually be worth, or how successful the licensee’s product will eventually be, a
running royalty offers a compromise solution that allows the two sides to reach
agreement under conditions of uncertainty. The licensee will pay much more if the
technology turns out to be more valuable, and much less if it turns out to be less
valuable.
534 MASUR & OUELLETTE ⋅ PATENT LAW

However, there are other considerations at play as well. As we explained in

Chapter 12, in Kimble v. Marvel Entertainment, 576 U.S. 446 (2015), the Supreme
Court upheld the longstanding Brulotte rule, which prohibits patent owners from
continuing to collect royalties on a patent after that patent has been declared invalid
by a court or the USPTO. Suppose that Firm A agrees to license a patent to Firm B
for ten years in exchange for 1% of Firm B’s sales revenue in each of those ten years.
In year five of this arrangement, Firm C files an IPR against Firm A and the USPTO
declares the patent invalid. Firm A can no longer enforce its agreement against Firm
B—it can no longer collect revenues under the license. This is the case even if the
contract between Firm A and Firm B explicitly states: “Firm B is obligated to pay
Firm A 1% of its sales revenue each year even if Firm A’s patent is declared invalid.”
That is, this is a hard and fast rule of patent licensing, not a default rule of contract
interpretation. It is also an extra-textual rule, created by the courts without obvious
warrant in the Patent Act.

This might seem at first blush like a sensible rule—why should a patent owner
be allowed to collect royalties on an invalid patent? The problem is that the parties
may have explicitly wanted to allocate the risk of the patent being invalidated to the
licensee, as in the example above. There might be any number of reasons why the
parties would want to structure their license this way, including the possibility that
the licensee is best positioned to bear the risks of an uncertain future. (For instance,
the patentee might be a large company, and the patent owner a small entity or solo
inventor.) The Brulotte rule may thus skew decision-making by firms negotiating
licenses. Licensors may lean more toward lump sums than they otherwise would,
because a lump sum insulates them against the risk of the patent being invalidated.
Licensees might lean more than they otherwise would toward running royalties for
the opposite reason. The result may be that more firms will end up compromising on
the economic suitability of licenses in order to avoid the legal risk created by the
Brulotte rule. In any event, this is an important rule for IP attorneys to keep in mind
when negotiating licensing arrangements.

C. Patents in Mergers, Acquisitions, and Other Deals

In the modern technology economy, the physical assets owned by businesses—
factories, machines, land—have diminished in importance, and the intangible assets
owned by businesses—patents, trade secrets, technical know-how, and other
intellectual property—have grown in importance. As a result, patents are often an
important component of corporate mergers and acquisitions. This means that
transactional attorneys who work on deals will often need to be well-versed in patent
law or able to call upon attorneys who are.

The issues surrounding patents that can arise during merger and acquisition
deals are a microcosm of the issues that those deals involve more generally. A target
 PATENT LICENSING & TRANSACTIONS 535

firm (the firm being acquired) will often be involved in patent law as both a “seller”
and “buyer.” That is, the target will frequently have a portfolio of patents that it
licenses, enforces, or simply uses as a potential deterrent against competitors. The
target will also frequently be a licensee of others’ patents, or it will depend on being
able to navigate the thicket of patent rights in a manner that leaves it with ample
freedom to operate its business.

This means that transactional attorneys must be careful to assess both the
quality of the patents held by a target firm and that firm’s potential susceptibility to
patent suits by competitors when structuring or advising on a deal (for find another
attorney who can do it for them). The strength of a firm’s patent portfolio, or that
firm’s vulnerability to suit by other patent-holding firms, can affect the firm’s value
quite substantially.

The situation becomes even more complex when one firm is acquiring a piece,
but not the entirety, of another firm. Imagine, for instance, that Firm A is acquiring
the personal computer division of Firm B but not its mainframe server division, which
primarily sells to large web business. Firm A would presumably like to acquire all of
the patents involved in Firm B’s personal computer division. However, these patents
may overlap to some degree with Firm B’s server division, which could cause problems
for Firm B if the patents were sold. In addition, ownership of the patents is not strictly
necessary to the personal computer division’s operations. After all, patents do not
provide a right to manufacture anything; they offer (only) a right to exclude others.
The personal computer division merely needs a license to continue using the patented
technology. Thus, an acquisition of all assets necessary to operate the personal
computer division will not necessarily include that division’s intellectual property,
which might be one of its most valuable assets.

In some cases, corporate deals of this sort can also raise antitrust concerns. For
instance, it is not uncommon for large, entrenched firms to deal with new entrants by
simply acquiring them, thereby eliminating the threat of competition. In a world
without patents, however, one acquisition may not be enough to make competition
disappear. For instance, imagine that Facebook is concerned about competition from
Small Startup A. It acquires Small Startup A and folds its business into Facebook’s
own operations—or shuts it down completely. Even then, there is nothing to stop
another entrepreneur (or even the same entrepreneur) from opening Small Startup B
and pursuing precisely the same line of business as Small Startup A. The threat of
serial challenges of this nature will often deter large firms from pursuing these “killer
acquisitions” as a strategy in the first instance.

The calculus changes, however, when Small Startup A owns critical patents.
In that case, acquiring Small Startup A allows Facebook not only to swallow that
potential competitor, but then to force other competitors out of the market as well.
Facebook would of course argue that it is only using its patents as they were intended.
But this type of action has echoes of the sort of horizontal agreement in restraint of
536 MASUR & OUELLETTE ⋅ PATENT LAW

trade that justifies prohibiting patent pools and other horizontal arrangements in
most circumstances. For this reason, acquisitions of this type often draw antitrust
scrutiny, though they are rarely invalidated. Nonetheless, it is useful to think of
patents as “force multipliers”—they make killer acquisitions and other types of deals
much more profitable for incumbent firms and potentially much more deleterious to
competition. For an empirical study suggesting that incumbent pharmaceutical firms
acquire startups for the purpose of discontinuing research projects that would compete
with the incumbent’s existing products, see Colleen Cunningham, Florian Ederer &
Song Ma, Killer Acquisitions, 129 J. Pol. Econ. 649 (2021).

Even simple licensing arrangements can raise significant antitrust concerns.

For instance, imagine two competitors, A and B, that each produce a particular
product such as a large piece of machinery. Imagine that A and B each own a series
of overlapping patents, such that A may be infringing B’s patents and B may be
infringing A’s patents. Suppose that A sues B and B counter-sues A. The two parties
then settle their lawsuit, with A granting B a license covering any sales made east of
the Mississippi River and B granting A a license covering any sales made west of the
Mississippi River.

At first glance, this looks like a standard patent litigation settlement via cross-
license: the two parties have reached an agreement that will allow both to operate
without infringing. But in fact what they have done is divided the country
geographically in such a way as to eliminate competition. Customers east of the
Mississippi have only one option, and customers west of the Mississippi have only one
option. Of course, it is possible that a customer could purchase a machine in Illinois
and transport it to California, thus creating some level of competition. But this may
be challenging and costly, particularly for larger products. What was once a duopoly
has become a monopoly. That would be unlawful in the absence of patents, and the
fact that it occurs as the result of patent litigation does not shield it from antitrust
liability.

D. Assignor Estoppel
A distant cousin to the rule prohibiting royalties after a patent has been
invalidated is the doctrine of “assignor estoppel.” Perhaps the most common context
in which this doctrine arises involves serial entrepreneurs who sell one business and
then begin another. Imagine that Juanita starts a high-tech firm and successfully
applies for several patents. Juanita then sells her firm—including her patents—to
Motorola and begins another startup venture involving a similar type of technology.
If Juanita’s new venture involves technology that is too similar to the work she did
previously, she might find herself as the target of a patent infringement suit, filed by
Motorola, asserting her own patents. Juanita might then try to defend herself by
 PATENT LICENSING & TRANSACTIONS 537

arguing that the patents she is being accused of infringing—the patents she sold to
Motorola—are invalid.

For decades, the Federal Circuit has prohibited any party who assigns (sells or
gives) a patent to any other party from thereafter challenging the validity of that
patent. Diamond Scientific Co. v. Ambico, Inc., 848 F.2d 1220 (Fed. Cir. 1988). The
court based this rule on equitable considerations: having sold a patent, it did not seem
fair for the assignor to turn around and argue that the patent it sold was invalid, and
thus a nullity. In the same vein, it seemed to be violating the principle that patent
owners should not be receiving payment for patents that are invalid.

At the same time, there are evident downsides to such a rule. In some cases,
the assignor might be the party best positioned to challenge a patent’s validity.
Prohibiting the assignor from bringing such a challenge, ostensibly in the name of
fairness, could have the effect of forcing other parties to pay for licenses to the (invalid)
patent and thus create unfairness for them. In addition, this is another rule without
textual warrant in the Patent Act, created out of whole cloth by the Federal Circuit.
More than 50 years ago, the Supreme Court abolished the related doctrine of licensee
estoppel, which barred the licensee to a patent from challenging that patent’s validity.
Lear, Inc. v. Adkins, 395 U.S. 653 (1969). Yet the doctrine of assignor estoppel has
persisted.

Litigants continue to test and probe the contours and limits of this doctrine. In
Arista Networks v. Cisco Systems, 908 F.3d 792 (Fed. Cir. 2018) and Hologic v.
Minerva Surgical, 957 F.3d 1256 (Fed. Cir. 2020), the Federal Circuit refused to
extend the doctrine of assignor estoppel to IPR proceedings. It held first in Arista that
the doctrine of assignor estoppel did not prevent an assignor from filing for IPR of a
patent it had previously assigned. Then, in Hologic, it held that an assignor who
prevailed in the IPR could use the patent’s invalidation as a defense in litigation, even
though it could not separately have asserted in litigation that the patent was invalid.
The Supreme Court granted certiorari in Hologic and carved back on the doctrine even
further in 2021. The Court held that assignor estoppel only applies if the assignor
made explicit or implicit representations regarding the validity of the patent when
assigning it.

These decisions are a rather formalist gloss on what was, at least in theory, an
equitable doctrine based in fairness. If it is unfair for an assignor to argue that a
patent it has sold is invalid during district court litigation, it does not seem any less
unfair for the same assignor to argue that the same patent is invalid in an IPR,
particularly if that IPR will (if successful) end the litigation in favor of the assignor.
The compromise position struck by the Federal Circuit and Supreme Court may thus
prove to be unstable. It would not be surprising to see either court further limit the
doctrine of assignor estoppel in the coming years.
538 MASUR & OUELLETTE ⋅ PATENT LAW

19. Other U.S. Intellectual Property Rights

This casebook has focused on U.S. utility patents, but patents are only one of
a number of types of legal entitlements over knowledge goods, which are grouped
under the umbrella of “intellectual property.” U.S. patent lawyers should be familiar
with other forms of IP, both because legal arguments from one IP field are often
imported to another and because a given product can often be protected with
numerous IP rights.

Consider a wrist-worn fitness tracker, like a Fitbit. By now, you should

recognize that this product can be covered by thousands of utility patents, such as on
the microprocessor, battery, heartrate monitor, motion sensing, GPS tracking,
wireless connectivity (e.g., Wi-Fi or Bluetooth standards), novel materials in the
wristband, waterproofing technology, and more. But the tracker can also be protected
with other forms of IP in the United States:

• Trade secret law protects any confidential information related to the tracker,
such as manufacturing techniques that are not disclosed in a patent, the source
code for the tracker’s software, business plans, and lists of suppliers and
customers.

• Copyright law protects original creative expression, including not just

artistic expression such as graphics on the display screen and perhaps the
overall design of the tracker, but also the software source code.

• Trademark law protects symbols or product designs that tell consumers

about the source of the tracker, which can include not just the product name
and logo but also aspects of the product design like the color or shape.

• Regulatory exclusivity attaches to some kinds of information submitted to

regulatory agencies like the FDA; for example, certain medical devices
(including some fitness trackers) receive six years of data exclusivity.

• Design patents protect new designs, which can include not just the overall
product design but also individual features like the shape of the graphics
display, aspects of the wristband design, and icons displayed on the screen.

We have already described the key forms of regulatory exclusivity associated

with FDA approval in Chapter 11(D). This chapter provides a brief overview of the
most prominent other forms of non-patent IP (trade secrets, copyright, and
trademark), as well as the two other kinds of U.S. patents (design patents and plant
patents). For those interested in learning about these areas in more depth, links to
other free or low-cost IP casebooks have been collected by James Grimmelmann at
https://james.grimmelmann.net/files/casebooks.
 OTHER U.S. INTELLECTUAL PROPERTY RIGHTS 539

A. Non-Patent IP

1. Trade Secrets
U.S. trade secret law evolved as a matter of state common law, but every state
except New York has now enacted a trade secrets statute based on the Uniform Trade
Secrets Act (UTSA), although the specific language and interpretation vary by state.1
The 2016 Defend Trade Secrets Act (DTSA) also provides a federal civil cause of action
modeled on the UTSA, which doesn’t preempt state law. In addition, trade secret
misappropriation of commercial information may be criminally punished under the
federal Economic Espionage Act of 1996.

Some of the underlying justifications for trade secret law are similar to those
for utility patents: trade secret protection can encourage investment in information,
limit the secrecy arms race, and encourage efficient disclosure and licensing. But trade
secret law is also influenced by tort-based deterrence theories grounded in industry
norms and good faith.

The definition of a “trade secret” is provided by UTSA § 1(4) and by the DTSA
at 18 U.S.C. § 1839(3). Under both, establishing a trade secret involves three
elements:

1. The information must be secret, meaning “not . . . generally known to, and not
. . . readily ascertainable” by other persons. (Some states, such as California,
do not have the “not readily ascertainable” language.)

2. The information must have “independent economic value” due to its secrecy.
This is usually easily established; why would the information have been
misappropriated if it wasn’t valuable?

3. The owner must have taken “reasonable” efforts to maintain its secrecy. This
may be assessed through an economic cost-benefit analysis, comparing the cost
of precautions to the value of the secret.

Trade secrecy protection can last forever, but it is lost once the information is
disclosed, including by third parties who have independently invented or reverse
engineered the secret. Thus, the choice of whether to patent an invention or protect it
as a trade secret may be informed by comparing the patent term with the expected
lifespan of the secret. In practice, inventors can often patent one aspect of an invention

1 The UTSA is at https://www.wipo.int/edocs/lexdocs/laws/en/us/us034en.pdf. North

Carolina is the only state whose statute is not explicitly based on the UTSA, but it is very
similar. New York’s trade secret law remains heavily influenced by the 1939 Restatement of
Torts.
540 MASUR & OUELLETTE ⋅ PATENT LAW

while maintaining trade secrecy protection over any aspects that are not disclosed in
the patent application.

Trade secrecy “misappropriation” is defined by UTSA § 1(1)–(2) and by the

DTSA at 18 U.S.C. § 1839(5)–(6). It includes acquisition, disclosure, or use of a trade
secret by “improper means,” which “includes theft, bribery, misrepresentation, breach
or inducement of a breach of a duty to maintain secrecy, or espionage through
electronic or other means.” A comment to the UTSA also specifies: “Improper means
could include otherwise lawful conduct which is improper under the circumstances;
e.g., an airplane overflight used as aerial reconnaissance to determine the
competitor’s plant layout during construction of the plant. E. I. du Pont de Nemours
& Co., Inc. v. Christopher, 431 F.2d 1012 (5th Cir. 1970).” The majority of trade secret
misappropriation cases involve violation of an express or implied confidential
relationship, such as disclosure of trade secrets by a former employee.

Trade secret law can be a rewarding practice area because it is geographically

flexible, it often involves substantial client counseling and corporate work in addition
to litigation, and there are many major open questions that still need to be resolved
by the courts. There is also substantial overlap with patent practice because many
lawsuits involve both patent infringement and trade secret misappropriation claims.

2. Copyright
Copyright law protects a wide variety of creative expression, including not only
works that might be the subjects of literature, art, and film classes, but also product
designs and computer programs. Like patent law, copyright law is grounded in the IP
Clause: “To promote the progress of science and useful arts, by securing for limited
times to authors and inventors the exclusive right to their respective writings and
discoveries.” But the “limited times” for copyrights are far longer than for patents: 70
years after the death of the author, or for corporate works, 120 years after creation or
95 years after publication, whichever is shorter.

The primary source of U.S. copyright law is the federal Copyright Act at Title
17 of the U.S. Code, although there are also limited state law protections. You don’t
need a formal registration or a © notice to have a valid copyright, although registering
a work with the U.S. Copyright Office at copyright.gov provides important benefits.
For example, copyright registration is required before filing most infringement suits,
can serve as prima facie evidence of validity, and is a prerequisite for statutory
damages and attorneys’ fees.

Under 17 U.S.C. § 102, copyright protects “original works of authorship,”

which courts have interpreted to require both a modicum of creativity—a much lower
bar than patent law’s nonobviousness requirement—and independent creation. Thus,
unlike in patent law, an independent creator can receive their own copyright
 OTHER U.S. INTELLECTUAL PROPERTY RIGHTS 541

protection. If you take a photograph that happens to look strikingly similar to someone
else’s, you can copyright your photograph (because of the minimal creativity involved
in arranging the photo composition) and your photo doesn’t infringe the earlier
photographer’s copyright. A copyrighted work must also be “fixed in any tangible
medium of expression,” meaning that some embodiment “is sufficiently permanent or
stable to permit it to be perceived, reproduced, or otherwise communicated for a period
of more than transitory duration.” §§ 101–102. This broad language is intended to
cover future technological development: works can be fixed using canvas, paper,
sculpture, records, DVDs, MP3s, and a variety of other digital or nondigital formats.

Copyright law doesn’t protect ideas—only expressions of ideas. Copyright thus

cannot cover useful methods (that’s for utility patent law), whether a method of
accounting, a cooking recipe, or a functional computer algorithm. But it can protect a
particular creative expression of any of these ideas, such as the text of a book
describing how to use the accounting method, a cookbook author’s asides about the
memories a recipe evokes, or software in which a programmer has made one of many
choices in how to express an algorithm in code. Of course, the dividing line between
idea and expression can be murky. See Google v. Oracle, 141 S. Ct. 1183 (2021)
(sidestepping the issue of whether the code at issue was copyrightable).

Copyright also doesn’t protect facts, such as a factual database. (Other

countries offer sui generis IP protection for databases.) If after painstaking archival
research you develop a new theory about how a statute should be interpreted and you
write a seminar paper describing your ideas about the facts you have uncovered,
copyright law would not prevent another student from copying your ideas and facts
without attribution if they do not copy the creative expression you used. (However,
they will have committed plagiarism and may be sanctioned for academic
misconduct!) Although facts are not themselves copyrightable, you can receive
copyright protection for a compilation of facts (or other works, as in a cookbook or
poetry anthology) based on minimal creativity in the selection and arrangement.

You also generally cannot copyright a “useful article”—one with “an intrinsic
utilitarian function that is not merely to portray the appearance of the article or to
convey information”—unless the “design incorporates pictorial, graphic, or sculptural
features that can be identified separately from, and are capable of existing
independently of, the utilitarian aspects of the article.” 17 U.S.C. § 101. For example,
you cannot use copyright law to protect the design of a simple utilitarian shovel or T-
shirt—this is the domain of utility patent law. But you can copyright a shovel with
elaborate handle carvings or a T-shirt with a creative graphic design. As with the
idea/expression dichotomy, the dividing line has been contentious, and recent
Supreme Court intervention has done little to resolve the issue. In a recent case that
upheld the copyrightability of cheerleader uniforms, the Court held that the design of
a useful article is copyrightable if the feature “(1) can be perceived as a two- or three-
dimensional work of art separate from the useful article and (2) would qualify as a
protectable pictorial, graphic, or sculptural work—either on its own or fixed in some
542 MASUR & OUELLETTE ⋅ PATENT LAW

other tangible medium of expression—if it were imagined separately from the useful
article into which it is incorporated.” Star Athletica v. Varsity Brands, 580 U.S. 405
(2017).

A valid copyright provides protection against reproduction, adaptation into a

“derivative work” (like a translation, movie version, or sequel), distribution,
performance, or display. This protection extends not only to exact copies, but also to
substantially similar variations, such as borrowing part of a song’s melody for another
song. Establishing an infringement claim requires showing (1) that the infringing
work was actually copied from the original rather than independently created, and (2)
that the works have “substantial similarity” from the perspective of an ordinary
consumer. Before the works are compared for similarity, it is important to “filter out”
any unprotected elements, such as abstract ideas, facts, and public domain materials.

Copyright protection has many statutory limitations and compulsory licensing

regimes, but the most prominent limitation is the doctrine of fair use under 17 U.S.C.
§ 107. Use of a copyrighted work is more likely to be fair use when the use is
noncommercial or for critique or research, when the copyrighted work is factual, when
only a small portion of the work is used, and when the use doesn’t supplant potential
markets for the copyrighted work. Under the Supreme Court’s interpretation of the
fair use statute, the most important factor has become whether the use is
“transformative”: whether it “adds something new, with a further purpose or different
character, altering the first with new expression, meaning, or message.” The Supreme
Court relied on this transformativeness inquiry in holding Google’s repurposing of
certain computer software owned by Oracle to be fair use. Google v. Oracle, 141 S. Ct.
1183 (2021). See also Andy Warhol Foundation v. Goldsmith, 143 S. Ct. 1258 (2023)
(discussing the fair use inquiry in the context of a portrait of the musician Prince by
pop artist Andy Warhol).

Finally, note that just because the author of a copyrighted work has made it
available for free download online doesn’t mean you are free to copy, edit, or distribute
it yourself. So before you copy an image from Google search into your PowerPoint
presentation, check whether the author has placed the image under an open license
such as those available from Creative Commons. For example, this casebook is under
a CC BY-NC-ND license, allowing you to download the casebook and share it with
others in the original form (including attribution to us), but not to edit the casebook
or use it commercially. But as noted at the start of the book, we are likely willing to
authorize many derivative uses!

3. Trademark
Unlike patent, trade secret, and copyright law, trademark law is not designed
to provide incentives for innovation. Rather, trademark law is meant to improve the
quality of information about the source of goods and services, which can have benefits
 OTHER U.S. INTELLECTUAL PROPERTY RIGHTS 543

such as reducing search costs for consumers and providing

incentives for firms to invest in consistent quality.
Nonetheless—for better or worse—trademark law often allows
producers to charge supracompetitive prices without using
patent law. Consider, for example, the higher price charged for
Tylenol than for store-brand acetaminophen, even though the
products are chemically identical.

The sources of U.S. trademark law include the federal

Lanham Act at 15 U.S.C. § 1051 et seq. and state common law.
Like for copyright law, registration is not required for federal
trademark protection; trademark rights are established
through use in commerce. But registering a trademark with the
USPTO provides benefits such as making it harder to argue
that the mark is invalid and serving as a prerequisite for treble damages and
attorneys’ fees.

Trademark law can protect “any word, name, symbol, or device” used “to
identify and distinguish” the source of goods or services. 15 U.S.C. § 1127. Courts have
interpreted this coverage expansively to include aspects of product design, including
color, shape, sound, and even fragrance (collectively referred to as “trade dress”). If
consumers would immediately view a mark as signifying source, such as for coined
terms like “Zappos” shoes, it is deemed “inherently distinctive” and is immediately
protectable. Other marks are only protectable once they have “acquired
distinctiveness,” meaning that consumers have learned to view it as identifying
source. For example, “American” airlines could initially be viewed as signifying a
generic U.S. air carrier, but over time it has acquired distinctiveness and come to be
viewed as signifying the brand American Airlines. Product design features can also
gain acquired distinctiveness, as in the three chimes that signify NBC, the red shoe
soles that signify Louboutin (at least among those who purchase $700 shoes), the
purple color of Nexium acid reflux pills, and product shapes of everything from Lego
minifigs to Pepperidge Farm Milano cookies.

Like copyright law, trademark law attempts to channel IP protection for useful
product features to utility patent law by denying protection to “functional” features.
The Supreme Court has defined a functional feature as one that “is essential to the
use or purpose of the article” or that “affects the cost or quality of the article.” TrafFix
Devices v. Marketing Displays, 532 U.S. 23, 32 (2001). “A utility patent is strong
evidence that the features therein claimed are functional.” Id. at 29. Product features
can also have “aesthetic” functionality—where a design is valued for the way it looks
rather than for the source it signifies—which is unprotectable if it puts competitors at
“a significant non-reputation-related disadvantage.” Id. at 33. As with copyright’s
useful article doctrine, the dividing line between functional and non-functional trade
dress has proven difficult to police.
544 MASUR & OUELLETTE ⋅ PATENT LAW

A valid trademark provides protection against “likelihood of confusion” by

others’ use, which is evaluated by multi-factor tests that vary by federal appellate
circuit. Confusion is more likely when the mark is strong, when the defendant’s use is
more similar to the mark, and when the defendant’s goods or services are more
proximate to the plaintiff’s. If the mark is “famous” (think Coca-Cola or Louis Vuitton),
trademark also protects against “dilution,” or use of similar marks on dissimilar goods
or services.

Trademark law has its own fair use doctrines, although they operate
differently from copyright fair use. Descriptive fair use allows a third party to use a
descriptive mark in good faith to describe their own goods—so even though American
Airlines is a strong mark, a different airline may describe themselves as “an American
air carrier.” Nominative fair use, also known as non-trademark use, allows a third
party to use a mark to refer to the mark owner’s product for purposes like comparative
advertising, parody, or artistic expression. The use of Mattel’s “Barbie” trademark in
the title and lyrics of Aqua’s “Barbie Girl” song is a well-known example of permissible
nominative use. See also Jack Daniel’s v. VIP Products, 143 S. Ct. __ (2023)
(considering trademark infringement of the “Bad Spaniels” squeaky dog toy designed
to parody a bottle of Jack Daniel’s whiskey).

B. Design Patents
As noted in Chapter 1, in 2020, the USPTO granted 34,877 design patents in
addition to 352,049 utility patents. Under 35 U.S.C. § 171, design patents are
available for “any new, original and ornamental design for an article of manufacture.”
This broad language applies to designs of products ranging from app icons to cement
mixers, and design patents can cover either surface ornamentation (like the pattern
of a rug) or three-dimensional product configuration (like the shape of a chair). Many
of these design features can also be protected using copyright and trademark law.
What are the costs and benefits of IP protection for designs? Does it make sense to
allow protection through overlapping IP regimes? See Christopher Buccafusco, Mark
A. Lemley & Jonathan S. Masur, Intelligent Design, 68 Duke L.J. 75 (2018).

Like utility patents, design patents are examined for compliance with 35
U.S.C. §§ 102, 103, and 112, although these requirements are implemented differently
and examination is far less stringent. Design patents also must be “ornamental”
rather than functional. The lifespan of a design patent is 15 years from the date of
grant (14 years for design patents filed before May 13, 2015). 35 U.S.C. § 173.

This section briefly reviews how the legal requirements for a design patent
differ from those for a utility patent; for more in-depth coverage, see the design patent
chapter of the free casebook by Sarah Burstein, Sarah Wasserman Rajec, and Andres
Sawicki available at https://ssrn.com/abstract_id=3866658.
 OTHER U.S. INTELLECTUAL PROPERTY RIGHTS 545

1. Claiming and Disclosing Design Patents

The disclosure requirements of 35 U.S.C. § 112(a) and the definiteness
requirement of § 112(b) also apply to design patents, but unlike for utility patents,
both disclosure and definiteness requirements are satisfied through drawings of the
design at issue, along with a statement of the type of article of manufacture to which
the design is applied. Each design patent has a single claim. Design patent drawings
use solid lines to define the scope of the claim and dashed lines to provide context.
Below are drawings from three different vacuum design patents owned by Dyson,
where the first claims the whole vacuum design, the second focuses on the vacuum
head, and the third focuses on the sphere at the bottom. Each claim consists of the
statement “We claim the ornamental design for a vacuum cleaner, as shown and
described” along with seven drawings showing the vacuum from different angles.

As long as the configuration of the design for which protection is sought is clear
(e.g., there aren’t inconsistencies between drawings) and an ordinary designer could
make an article having that design, the § 112 requirements are satisfied.

2. Novelty and Nonobviousness

Like utility patents, design patents must be novel and nonobvious relative to
the prior art under §§ 102 and 103, but small modifications are often enough to clear
these bars. The prior art is defined using § 102 with the same broad definitions of
categories like “printed publication” and “public use” as in the utility patent context.

The test for whether a prior art reference anticipates a design patent is
whether an “ordinary observer,” considering the designs as a whole, would think that
the two designs are “substantially the same.” International Seaway Trading Corp. v.
Walgreens Corp., 589 F.3d 1233, 1239–40 (Fed. Cir. 2009).
546 MASUR & OUELLETTE ⋅ PATENT LAW

The doctrinal framework for evaluating obviousness is more complicated. The

test is from the perspective of “a designer of ordinary skill who designs articles of the
type involved” rather than an “ordinary observer,” and the obviousness assessment
must start by identifying a “primary reference” that creates “basically the same visual
impression” as the patented design as a whole. Campbell Soup Co. v. Gamon Plus,
Inc., 939 F.3d 1335, 1339–40 (Fed. Cir. 2019) (summarizing earlier caselaw). In most
cases, no single reference meets the high standard of “basically the same,” so the
claimed design is nonobvious. If there is a primary reference, then the question is
whether modifying that reference with related secondary references to arrive at the
claimed design would have been obvious to the designer of ordinary skill. See id.

3. Ornamentality
Design patents have an additional validity requirement that is in some ways
the opposite of the requirement that utility patents be “useful”: under 35 U.S.C. § 171,
the claimed design must be “ornamental,” as opposed to useful or functional. As
summarized by the Federal Circuit:

A design patent cannot claim a purely functional design—a design

patent is invalid if its overall appearance is “dictated by” its function.
But as long as the design is not primarily functional, the design claim
is not invalid, even if certain elements have functional purposes. That
is because a design patent’s claim protects an article of manufacture,
which necessarily serves a utilitarian purpose. So a design may contain
both functional and ornamental elements, even though the scope of a
design patent claim must be limited to the ornamental aspects of the
design. Where a design contains both functional and non-functional
elements, the scope of the claim must be construed in order to identify
the non-functional aspects of the design as shown in the patent.

Sport Dimension, Inc. v. Coleman Co., 820 F.3d 1316, 1320 (Fed. Cir. 2016). Factors
for determining whether a design is “dictated by” function include the availability of
alternative designs, whether the protected design is “the best design,” and the
existence of utility patents. See id. at 1322.

Like the useful article doctrine in copyright law and the functionality doctrine
in trademark law, the ornamentality doctrine attempts to channel protection for new
functional features to utility patent law. But each area of IP law defines functionality
differently. For a comparison of these different channeling doctrines, see Christopher
Buccafusco & Mark A. Lemley, Functionality Screens, 103 Va. L. Rev. 1293 (2017).
 OTHER U.S. INTELLECTUAL PROPERTY RIGHTS 547

4. Design Patent Infringement

The infringement rules of 35 U.S.C. § 271 discussed in Chapters 9–11 also
apply to design patents, but the test for evaluating infringement differs. Claim
construction is a more flexible process that recognizes that design patents are claimed
using drawings, so that in some cases, verbal descriptions are unnecessary.

As for utility patents, design patents have infringement-anticipation

symmetry: any product that would infringe if it postdates the patent should anticipate
if it predates the patent. The test for infringement thus mirrors the anticipation test
described above: whether an “ordinary observer,” considering the designs as a whole,
would think that the two designs as “substantially the same.” See Seaway, 589 F.3d
at 1239–40 (quoting Egyptian Goddess v. Swisa, 543 F.3d 665, 676 (Fed. Cir. 2008)
(en banc)). In making this comparison, the ordinary observer is “deemed to view the
differences between the patented design and the accused product in the context of the
prior art” because “when the claimed design is close to the prior art designs, small
differences between the accused design and the claimed design are likely to be
important to the eye of the hypothetical ordinary observer.” Id. (quoting Egyptian
Goddess). This is the only test for infringement; there is no doctrine of equivalents.

5. Design Patent Damages

In addition to all the patent remedies covered in Chapters 13–16, design patent
owners who succeed in proving infringement are also entitled to disgorgement of an
infringer’s profits. Under 35 U.S.C. § 289, someone who makes or sells an infringing
article of manufacture “shall be liable to the [design patent] owner to the extent of his
total profit, but not less than $250,” although the owner “shall not twice recover the
profit made from the infringement.”

This provision could lead to enormous profits when the patented design is a
small component of a product, although the Supreme Court limited the potential scope
of this remedy in Samsung v. Apple, 580 U.S. 53 (2016). In that case—a separate piece
of the multinational patent war that also led to the obviousness decision you read in
Chapter 3—Apple sued Samsung for infringement of numerous design patents,
including on the iPhone’s rounded rectangular shape and on the grid of app icons on
the home screen.
548 MASUR & OUELLETTE ⋅ PATENT LAW

A jury found that some of Samsung’s smartphones infringed Apple’s design

patents, and Apple was awarded $399 million in design patent damages—the entire
profit Samsung made from sales of those phones. But the Supreme Court held that
the “article of manufacture” for which § 289 allows total profits to be awarded can be
merely a component of an article sold to consumers. Yet the Court declined to decide
what the relevant “article of manufacture” was for Samsung’s infringing phones. On
remand, the jury was instructed to consider this issue and ended up awarding even
more than the first jury: $533 million in design patent damages. The parties then
settled before appealing this verdict.
 OTHER U.S. INTELLECTUAL PROPERTY RIGHTS 549

Practice Problems: Designs

Consider the following design patent claims and products, which are drawn
from the listed cases. If the product comes later in time, do you think it infringes? If
it came earlier, do you think it anticipates the claim or renders it obvious? Should the
design patent claim be invalidated for lack of ornamentality (i.e., functionality)? How
would your answers differ if you were evaluating the designs for copyright or trade
dress infringement?

1. Sport Dimension, Inc. v. Coleman Co., 820 F.3d 1316, 1320 (Fed. Cir. 2016):

2. Richardson v. Stanley Works Inc., 597 F.3d 1288 (Fed. Cir. 2010):
550 MASUR & OUELLETTE ⋅ PATENT LAW

3. Spigen Korea Co. v. Ultraproof, Inc., 955 F.3d 1379 (Fed. Cir. 2020):

C. Plant Protection
In J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred International, Inc., 534 U.S. 124
(2001), the Supreme Court held that utility patents may be issued for new plants such
as hybrid varieties as long as they satisfy the patentability requirements discussed
earlier in this casebook. Sometimes a biological deposit is necessary to satisfy the
enablement requirement, as discussed in Chapter 4. Utility patents may also be
obtained for plant-related inventions such as methods of breeding plants, chemicals
made by plants, and plant seeds. New plant varieties are also often protected as trade
secrets, and new variety names can be protected with trademarks.

But these are not the only forms of IP protection for plants. Plant inventors
may also seek plant patents or plant variety protection certificates, and these are not
mutually exclusive with utility patents. This section briefly reviews these plant-
specific forms of IP; for more in-depth coverage, see Daniel J. Knauss, Erich E.
Veitenheimer, and Marcelo Pomeranz, Protecting Plant Inventions, 11 Landslide,
July–Aug. 2019.

1. Plant Patents
Under 35 U.S.C. § 161, a plant patent is available to “[w]hoever invents or
discovers and asexually reproduces any distinct and new variety of plant, including
cultivated sports, mutants, hybrids, and newly found seedlings, other than a tuber
propagated plant or a plant found in an uncultivated state.” As noted in Chapter 1,
 OTHER U.S. INTELLECTUAL PROPERTY RIGHTS 551

the USPTO granted 1,398 plant patents in 2020—0.4% of the number of utility patent
grants. Plant patents have a term of 20 years from the date of filing.

Like design patents, plant patents contain only a single claim. The utility
patent requirements of §§ 102, 103, and 112 generally apply, although § 112 is less
stringent and no biological deposit is required; § 162 specifies that “[n]o plant patent
shall be declared invalid for noncompliance with section 112 if the description is as
complete as is reasonably possible.” Drawings or photographs “must disclose all the
distinctive characteristics of the plant capable of visual representation” and “must be
in color if color is a distinguishing characteristic of the new variety.” 37 C.F.R.
§§ 1.165.

A granted plant patent “shall include the right to exclude others from asexually
reproducing the plant, and from using, offering for sale, or selling the plant so
reproduced, or any of its parts, throughout the United States, or from importing the
plant so reproduced, or any parts thereof, into the United States.” 35 U.S.C. § 163.
Thus, infringement is limited to plants asexually reproduced from the patent owner’s
plant. An independently reproduced plant with similar characteristics does not
infringe.

2. Plant Variety Protection Certificates

Plant variety protection certificates are available under the Plant Variety
Protection Act, 7 U.S.C. §§ 2321–2583. Unlike plant patents, which are limited to
asexually reproduced plants and exclude protection for tubers, plant variety
protection certificates can be obtained by “[t]he breeder of any sexually reproduced,
tuber propagated, or asexually reproduced plant variety (other than fungi or bacteria)
who has so reproduced the variety.” 7 U.S.C. § 2402. Plant variety protection
certificates have a term of 20 years from the date of issuance, or 25 years for trees or
vines.

In addition to a written description of the new variety, applications for plant

variety protection certificates must include “[a] declaration that a viable sample of
basic seed (including any propagating material) necessary for propagation of the
variety will be deposited and replenished periodically in a public repository in
accordance with regulations to be established hereunder.” 7 U.S.C. § 2422.

A plant variety protection certificate is infringed by activities including sale,

import, export, or reproduction of the protected variety, with exceptions for “plant
breeding or other bona fide research.” 7 U.S.C. §§ 2541, 2544.
552 MASUR & OUELLETTE ⋅ PATENT LAW

20. International and Comparative Patent

Law
In Chapter 11(B), we discussed territoriality, the international law principle
that a country’s laws only have force within its boundaries. Congress has extended
the reach of U.S. patent law through 35 U.S.C. § 271(f)-(g), but the presumption
against extraterritoriality still applies. Recall Microsoft v. AT&T, 550 U.S. 437 (2007),
in which the Supreme Court held that § 271(f) could not reach copies of Windows
software made abroad, and that “if AT&T desires to prevent copying in foreign
countries, its remedy today lies in obtaining and enforcing foreign patents.”
Understanding the basics of obtaining and enforcing foreign patents has only become
more important for U.S. patent lawyers as patentable goods and services increasingly
cross national borders.

In this chapter, we provide an overview of the following issues: (A) the key
treaties and international institutions that constrain and enhance domestic patent
laws; (B) the procedures for acquiring multinational patent rights; (C) a comparison
of how different countries define patentability requirements within international
constraints (“pre-grant flexibilities”); (D) a comparison of how countries define the
rights and remedies available for patent infringement (“post-grant flexibilities”); and
(E) the main legal and strategic factors businesses consider when coordinating
multinational patent litigation. Each of these topics could occupy a full textbook on its
own, but we hope to provide an accessible overview, as well as the vocabulary and
framework for conducting further research.

Although this chapter focuses on international equivalents of utility patents,

many other countries have equivalents of design patents (typically called industrial
designs) and plant patents (sometimes as sui generis systems for plant variety
protection). Some countries also have a patent-like form of IP not available in the
United States: the utility model or petty patent (not to be confused with the utility
patent), which provides cheaper and narrower protection for minor inventions for
terms that typically run 6–15 years.1 The legal doctrines governing a utility model are
similar to those for a patent except that the nonobviousness requirement is usually
lower or absent. Utility models are typically registered rather than examined,
allowing them to be obtained quickly. Countries offering utility models include
Austria, China, France, Germany, Japan, Russia, Spain, and Taiwan, and many
patent offices allow utility patent applications to be converted to utility model

1 For more information, see

https://www.wipo.int/patents/en/topics/utility_models.html.
 INTERNATIONAL & COMPARATIVE PATENT LAW 553

applications. U.S. patent lawyers advising clients about possibilities for IP protection
abroad should keep this option in mind.

A. International Patent Institutions and Treaties

1. WIPO, WTO, and Other Fora

The first major international agreement on intellectual property was the 1883
Paris Convention for the Protection of Industrial Property, which created a framework
to allow inventors from one signatory to the Convention to obtain utility patents in
other members of the Paris Union (among other things). The Paris Convention is still
in force, but in 1970, its governance structure was replaced with the new Geneva-
based World Intellectual Property Organization (WIPO), which then became a
specialized agency of the United Nations in 1974. WIPO also administers the Patent
Cooperation Treaty (PCT)—signed in 1970 and effective as of 1978—which facilitates
patent filings in multiple countries and is discussed in more detail in section (B) below.
WIPO treaties may be joined à la carte. As of June 2021, there were 193 members of
the WIPO Convention (the agreement establishing WIPO), 175 members of the Paris
Union, and 153 members of the PCT.

If a member fails to comply with its WIPO treaty obligations, there are no
effective remedies, but WIPO treaties are still important for harmonizing procedures,
setting norms, and creating the possibility that agreements will be imported into other
treaties or into domestic law. For example, the U.S. Supreme Court still applies the
Charming Betsy canon that domestic statutes should be construed so as not to conflict
with international law. See, e.g., F. Hoffmann-La Roche v. Empagran, 542 U.S. 155,
164 (2004) (citing Murray v. Schooner Charming Betsy, 6 U.S. 64 (1804)).

WIPO receives most of its income from PCT filing fees, giving it an institutional
interest in encouraging more global patent filings. It provides training, advice, and
technical infrastructure to support domestic patent systems. But the agency is no
longer the forum of choice for negotiating new treaties focused on strengthening or
harmonizing patent law; rather, its current treaty-making activities are largely
driven by developing countries and focused on non-patent areas. For example, in 2013,
WIPO concluded negotiations on a treaty to facilitate access to published works for
persons with visual impairments, and it is currently working on treaties related to
protecting traditional knowledge and genetic resources.

The other key institution for international patent governance is the World
Trade Organization (WTO), which was created in 1995 to regulate international trade.
The negotiations that led to the WTO also created a comprehensive IP treaty, the
Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Unlike
554 MASUR & OUELLETTE ⋅ PATENT LAW

the Paris Convention, the TRIPS Agreement set a minimum patent term (20 years
from filing), which is why the U.S. patent term shifted from 17 years from issuance to
20 years from filing for patents filed on or after June 8, 1995. TRIPS also states that
patents must be available in “all fields of technology” based on criteria similar to the
U.S. novelty, obviousness, utility, and enablement requirements, which was an
important change in countries that had limited patents on inventions such as
pharmaceuticals. (Least-developed countries need not offer pharmaceutical patents
until 2033.) We discuss these requirements further in section (C).

TRIPS was an important change from Paris not only because it set minimum
substantive standards, but also because it has teeth. WTO members may not pick and
choose which WTO treaties to comply with, so TRIPS binds all WTO members—which
includes almost every country.2 And the WTO has an effective enforcement
mechanism: trade sanctions. Under the WTO Dispute Settlement Understanding
(DSU), disputes are heard by panels of three or five experts appointed on an ad hoc
basis, with review by an Appellate Body comprised of seven experts serving four-year
terms. From 1995 to 2022, WTO members initiated 615 disputes, 44 of which involved
TRIPS.3 Many disputes end with a mutually agreed-upon solution. If a member found
to be in violation of TRIPS does not bring its law into conformity, the complaining
member may then impose economic sanctions such as withdrawing trade concessions.
This enforcement mechanism has been somewhat effective—except against the
United States.4 However, the future of WTO dispute resolution is unclear: the Obama,
Trump, and Biden Administrations have blocked appointment of new Appellate Body
members, leaving the Body without a quorum and with a growing backlog of pending
appeals since December 2019.

Both high- and low-income countries have become dissatisfied with WTO’s
consensus-based decisionmaking process. Instead, countries have looked to new fora
that might serve their interests for further international negotiations, similar to
“forum shopping” for a favorable court. Laurence Helfer calls this process “regime
shifting”:

With negotiations in the WTO effectively stalled, both

proponents and opponents of stronger intellectual property rules sought
out greener pastures in other international regimes. Developing
countries decamped to the World Health Organization (WHO), Food

2 Only a few countries are neither members nor observers negotiating accession, such

as North Korea, Monaco, and Palau. See

https://www.wto.org/english/thewto_e/countries_e/org6_map_e.htm.
3 For more details, see https://www.wto.org/english/tratop_e/dispu_e/dispustats_e.htm.
4 The United States did not change domestic laws after losing two non-patent WTO
disputes: one involving a law prohibiting registration and enforcement of Cuban trademarks
(in particular, “Havana Club” rum), and one for blocking Antigua and Barbuda’s online
gambling industry.
 INTERNATIONAL & COMPARATIVE PATENT LAW 555

and Agriculture Organization (FAO), and Convention on Biological

Diversity (CBD). These organizations and negotiating venues offered
these states advantages that they did not possess in the WTO and in
WIPO. First, the goals of these institutions—to promote public health,
plant genetic sources, and biodiversity—predisposed them to view
challenges to expansive intellectual property rights sympathetically.
Second, industrialized nations were either absent from these venues
(the United States has never ratified the CBD, for example) or were
represented by government ministries whose negotiating objectives
were more sympathetic to developing country concerns. Third and
finally, the WHO, FAO, and CBD, unlike the WTO, were relatively open
to civil society, including NGOs that were highly critical of TRIPS and
that worked with developing states to fashion strategies for challenging
the treaty.

The United States and the European Communities, by contrast,

shifted their efforts from the WTO and WIPO to bilateral and regional
trade and investment treaties, incorporating IP protection rules into
these agreements. Industrialized states could more easily leverage their
economic and political clout in these intimate negotiating forums. In
exchange for enhanced access to their markets, these states demanded
that developing countries ratify the new WIPO treaties or adhere to
intellectual property protection standards that exceeded those found in
TRIPS. Opponents derisively labeled these bilateral and regional
agreements as “TRIPS plus” treaties.

As compared to a single-venue regime, the existence of

overlapping and parallel regimes modifies implementation politics in
two distinct and opposing ways. First, the multiplicity of legal rules
generated in nested, overlapping, and parallel institutions can make it
more difficult to claim that states have implemented those rules in ways
that violate their treaty obligations. Decision 486 of the Andean
Community provides an apt illustration. Adopted by the biodiversity-
rich nations of this South America sub-region in 2000, Decision 486
attempts to reconcile the intellectual property protection rules of TRIPS
with the biodiversity preservation measures of the CBD. It does so by
imposing various restrictions on patents derived from biological
materials found in Andean Community member states. Whether these
restrictions are in fact compatible with TRIPS’ patent protection rules
is open to debate. Yet no state has filed a WTO dispute settlement
complaint challenging Decision 486 as a violation of TRIPS. To the
contrary, Andean Countries have promoted the legislation as a good
faith attempt to harmonize the two multilateral treaties, albeit an
attempt that furthers their own interests in safeguarding the region’s
biological heritage.
556 MASUR & OUELLETTE ⋅ PATENT LAW

Second, international regime complexity provides opportunities

for powerful states to narrow the options available to weaker countries
to implement intellectual property rules into their national legal
systems. For example, TRIPS requires WTO members to protect new
plant varieties. But it allows them to do so “either by patents or by an
effective sui generis system or by any combination thereof.” Developing
countries interpreted this provision as permitting them to tailor plant
variety protection laws to their domestic agricultural needs. Yet the
United States and the European Union have used “TRIPS plus” treaties
to restrict this discretion, pressuring several of these countries to enact
legislation that favors the interests of foreign commercial plant
breeders.

Laurence R. Helfer, Regime Shifting in the International Intellectual Property System,

7 Persp. Pol. 39, 41 (2009). For a discussion of how the World Health Organization
(WHO) has regained influence in international IP law since TRIPS, see Laura G.
Pedraza-Fariña, The Intellectual Property Turn in Global Health: From a Property to
a Human Rights View of Health, 36 Osiris (2021).

As Helfer suggests, the United States has recently focused on bilateral and
regional trade agreements such as the 1994 NAFTA agreement with Canada and
Mexico, which are negotiated through the Office of the U.S. Trade Representative
(USTR).5 For an argument that USTR has exported a captured version of U.S. IP law,
see Margot E. Kaminski, The Capture of International Intellectual Property Law
Through the U.S. Trade Regime, 87 S. Cal. L. Rev. 977 (2014). For example, some
agreements have banned rules of international exhaustion, required attorneys’ fees in
patent cases “at least in exceptional cases,” or automatically blocked generic
pharmaceutical entry even if the patent owner does not initiate litigation. Id. at 1021–
26. One controversial expansion in the rights of patent owners has been to allow
certain private parties to challenge countries’ compliance with international
obligations—although these rights have had limited impact on patent law so far. Most
prominently, in 2012 Eli Lilly challenged Canada’s interpretation of the utility
doctrine (which had led to the revocation of its patents on two drugs) under NAFTA,
but in 2017, the tribunal found against Eli Lilly and ordered them to pay most of the
costs of the dispute. Three months later, the Canadian Supreme Court adopted a more
forgiving utility standard. For a discussion of more positive provisions, such as on
transparency and cooperation among national IP offices, see Marketa Trimble,
Unjustly Vilified TRIPS-Plus?: Intellectual Property Law in Free Trade Agreements,
71 Am. U. L. Rev. (2022).

The USTR also exerts unilateral pressure on countries whose IP systems are
viewed as non-compliant. Section 301 of the Trade Act of 1974 requires the USTR to
“identify those foreign countries that deny adequate and effective protection of

5 For agreement texts, see https://ustr.gov/trade-agreements.

 INTERNATIONAL & COMPARATIVE PATENT LAW 557

intellectual property rights,” which it does in its annual “Special 301” Report. The
“Priority Foreign Countries” with inadequate IP laws may be subject to sanctions, and
countries with concerning IP practices are placed on the “Watch List” or “Priority
Watch List.” Many countries were placed on these lists at the request of industry
groups like the Pharmaceutical Research and Manufacturers of America (PhRMA).

2. Paris Convention and TRIPS: Basic Principles

Because of the prominence of the TRIPS Agreement in shaping domestic
patent laws, and its explicit incorporation of most of the Paris Convention in Article
2.1, it is worth understanding the basic principles contained in these agreements.
Their full texts are freely available online.6 For a comprehensive guide on interpreting
TRIPS, see Daniel Gervais, The TRIPS Agreement: Drafting History and Analysis (5th
ed. 2021).

The principle of national treatment requires member countries to treat

foreigners no less favorably than locals. In particular, Article 2.1 of the Paris
Convention states that nationals of any Paris member state “shall, as regards the
protection of industrial property, enjoy in all the other countries of the Union the
advantages that their respective laws now grant, or may hereafter grant, to
nationals.” Articles 2.2 and 3 specify that national treatment applies to nationals of
Paris members domiciled in non-Paris members and to nationals of non-Paris
members who are domiciled in Paris members. The TRIPS Agreement incorporates
this requirement (Article 2.1 incorporates Paris Articles 1–12 and 19) and has its own
substantively equivalent national treatment rule at Article 3.1:

Each Member shall accord to the nationals of other Members treatment

no less favourable than that it accords to its own nationals with regard
to the protection7 of intellectual property, subject to the exceptions
already provided in, respectively, the Paris Convention [and other
treaties].

Paris Article 2.3 provides a limited exception to national treatment for laws “relating
to judicial and administrative procedure,” and TRIPS Article 3.2 states that such
exceptions may be used only where not inconsistent with TRIPS or “a disguised
restriction on trade.”

6 TRIPS is at https://www.wto.org/english/docs_e/legal_e/trips_e.htm and the Paris

Convention is at https://wipolex.wipo.int/en/text/288514.
7 [n.3 in original] For the purposes of Articles 3 and 4, “protection” shall include
matters affecting the availability, acquisition, scope, maintenance and enforcement of
intellectual property rights as well as those matters affecting the use of intellectual property
rights specifically addressed in this Agreement.
558 MASUR & OUELLETTE ⋅ PATENT LAW

TRIPS Article 4 sets forth the most-favored-nation principle, which requires

that member countries give the same advantages to foreigners from different
countries:

With regard to the protection of intellectual property, any advantage,

favour, privilege or immunity granted by a Member to the nationals of
any other country shall be accorded immediately and unconditionally
to the nationals of all other Members.

There is an exception for advantages “deriving from international agreements related

to the protection of intellectual property which entered into force prior to the entry
into force of the WTO Agreement,” which includes an agreement among European
Union members for common IP rules that did not necessarily benefit non-EU persons.

Paris Article 4 (incorporated by TRIPS 2.1) provides for a right of priority: once
an inventor has filed for a patent in one Paris member, a twelve month period starts
“from the date of filing of the first application” under which “any subsequent filing in
any of the other countries of the Union before the expiration of [twelve months] shall
not be invalidated by reason of any acts accomplished in the interval, in particular,
another filing [or] the publication or exploitation of the invention . . . and such acts
cannot give rise to any third-party right or any right of personal possession.”

Finally, Paris Article 4bis (incorporated by TRIPS 2.1) provides for

independence of patents: patents applied for in one country “shall be independent of
patents obtained for the same invention in other countries.”8 In other words, one
country’s decision to grant or refuse a patent does not oblige any other country to do
the same. In addition, Article 4bis discusses patent term: “Patents obtained with the
benefit of priority shall, in the various countries of the Union, have a duration equal
to that which they would have, had they been applied for or granted without the
benefit of priority.”

Practice Problems: Basic Principles of Paris and TRIPS

1. Under the national-treatment and most-favored-nation obligations, can China:

a. Give Japanese nationals 20 years of patent protection, and Chinese

nationals 30 years?

b. Give Japanese nationals 30 years of patent protection, and Chinese

nationals 20 years?

8 Paris also has Articles 4ter and 4quater, with the suffixes “bis,” “ter,” and “quater”
derived from Latin for “twice,” “three times,” and “four times” and indicating that these articles
were inserted between Articles 4 and 5 during negotiations.
 INTERNATIONAL & COMPARATIVE PATENT LAW 559

c. Give Japanese nationals 30 years of patent protection, and U.S.

nationals 20 years?

d. Require foreigners but not domestic parties to make a security deposit

for litigation costs?

2. Nitisha, a U.S. citizen, files a patent application in China on her computer-

related invention, which is not patentable in the United States but is
patentable in China.

a. Do national treatment rules require the Chinese patent office (CNIPA)

to grant her patent?

b. If CNIPA grants Nitisha’s application after six months, and two months
later she files an application in Japan claiming priority to her Chinese
application, is Japan’s patent office (JPO) obligated to grant the patent?

c. May JPO reject Nitisha’s application because Zach filed a Japanese

patent application for the same invention four months before Nitisha
did?

d. If the JPO grants Nitisha’s application, when does it expire (assuming

no patent term adjustment)?

e. If Nitisha files a patent application in Germany ten months after her

JPO application, may she claim priority to the Japanese filing?

3. Article 3.2 of the DSU says WTO agreements will be clarified “in accordance
with customary rules of interpretation of public international law.” This
includes Article 31 of the Vienna Convention on the Law of Treaties: a treaty
shall be interpreted based on the “ordinary meaning” of its terms “in their
context and in light of its object and purpose.” That context includes the
preamble, subsequent agreements, and subsequent practices. Look at the
preamble and Part I of TRIPS on the WTO website. If you were representing a
developing country that was concerned about strong IP protection interfering
with its technological development goals, what parts would you point to?9

3. Justifying International Patent Coordination

Many commentators have been skeptical of the necessity of global coordination
on IP law and view TRIPS as benefiting the United States and other wealthy nations
at the expense of low-income countries. For example, Susan Sell describes the role of

For an Appellate Body decision using these sources, see India – Patent Protection for
9

Pharmaceutical and Agricultural Chemical Products, WT/DS50/AB/R, 19 December 1997.

560 MASUR & OUELLETTE ⋅ PATENT LAW

U.S. multinationals in bringing TRIPS into being, concluding: “In effect, twelve
corporations made public law for the world.” Susan K. Sell, Private Power, Public Law:
The Globalization of Intellectual Property Rights 96 (2003). Amy Kapczynski similarly
concludes that TRIPS reflected “a new mode of conquest and imperium” and was “an
exceptionally audacious attempt to extract value from and exert control over
informational domains in virtually all of the countries of the world.” Amy Kapczynski,
Access to Knowledge: A Conceptual Genealogy, in Access to Knowledge in the Age of
Intellectual Property 26 (2010). For the perspective of negotiators from India, Brazil,
Argentina, Malaysia, and Hong Kong, including the countervailing benefits they saw
in terms of favorable trade terms from the broader WTO negotiations, see The Making
of the TRIPS Agreement: Personal Insights from the Uruguay Round Negotiations
209–93 (Jayashree Watal & Antony Taubman eds., 2015).

Hemel and Ouellette offer the following qualified defense of international

coordination on patent law and other forms of IP:

All members of the WTO are bound by the 1994 TRIPS

Agreement, which requires all but the least-developed nations to
protect the IP rights of all TRIPS members at or above a basic level. For
example, TRIPS members must offer twenty-year patents in “all fields
of technology” to inventors in any member country, including for novel
pharmaceuticals and food products that some countries had previously
excluded from patentability. TRIPS is a significant step in the longer
trend of IP standards gradually being revised upwards to require
greater and different protection through international agreements.

But this international framework and domestic IP policy are

largely separable. Even the strongest international IP regime does not
lead ineluctably to the use of IP-based innovation incentives or
allocation mechanisms at the domestic level. On the incentives side,
countries can still comply with TRIPS while using non-IP tools to
encourage domestic innovation. For example, a country could provide
incentives only though grants and prizes conditioned on relinquishing
IP rights, while the national government itself retains revenues from
licensing the knowledge good in other countries. Or—as is more
common—countries can both subsidize the domestic production of
knowledge goods through grants and tax credits and purchase domestic
patent rights from the producer, while still allowing the producer to
collect overseas profits (with the state potentially collecting some of
those profits through a tax on the domestic producer).

On the allocation side, countries can (and often do) choose

nonprice mechanisms—closer to open access than to proprietary
pricing—to distribute knowledge goods at the domestic level. For
instance, a country that wants to make a patented pharmaceutical
 INTERNATIONAL & COMPARATIVE PATENT LAW 561

available to its own citizens at zero or marginal cost can purchase a

license from the patentee and pay for the license using funds raised
through broad-based taxation. Countries with single-payer health care
systems generally follow a version of this model, respecting the
patentee’s IP rights while avoiding domestic deadweight loss from
proprietary pricing. Even countries without single-payer health care,
such as the United States, often allocate access to patented
pharmaceutical products through nonmarket mechanisms (e.g., the
Medicaid program).

We have argued that rather than dictating domestic policy, the

role of international IP law is to provide a serviceable (if imperfect)
framework for cost sharing among countries that produce and consume
knowledge goods. Without such a framework, certain goods for which
demand transcends national boundaries would be underproduced.
Absent an international cost-sharing mechanism, rational and self-
interested countries will finance knowledge goods only up to the point
that the marginal cost equals the marginal benefit to their own citizens,
rather than the marginal benefit to all people everywhere.
International IP law addresses this underinvestment problem by
ensuring that when Country A produces a knowledge good that benefits
consumers in Country B, Country B will provide at least some
compensation to Country A. As a general matter, TRIPS prohibits
Country B from using the Country-A-produced knowledge good without
first reaching some sort of cost-sharing agreement with Country A (such
as a license from the private producer in Country A, who may be
separately subsidized or taxed by Country A’s government). In this
respect, TRIPS functions as an “agreement to agree”: signatory states
commit to reaching an arrangement under which knowledge-good
consumers share costs with knowledge-good producers. The agreement
to agree operates against the background rule that absent a further
arrangement, the consumer state cannot use the knowledge good for
which the producer state (or one of its citizens or firms) holds a patent.

While cost-sharing through TRIPS can address the global

underinvestment problem, international IP law is not the only possible
cost-sharing framework. We can imagine a global prize fund or a global
R&D organization, financed by mandatory national contributions, that
would also provide for cost sharing among producer and consumer
states. Yet international IP law has the advantage of establishing a link
between the benefits to the consumer country and the size of the
transfer from the consumer country to the producer country. Under
international IP law, no country ever needs to pay for knowledge goods
it doesn’t use. No such assurance would exist with respect to a global
prize fund or global R&D organization. Such an institution might
562 MASUR & OUELLETTE ⋅ PATENT LAW

channel more of its funding to “first-world problems” than to problems

facing less-developed nations. (Indeed, if wealthier nations control the
institutional levers of power, then this prediction seems not just
plausible but likely.)

Importantly, the argument for using international IP law as a

cross-border cost-sharing mechanism does not depend on whether
individual countries use IP to incentivize innovation or allocate access
to knowledge goods at the domestic level. International and domestic
innovation policy choices are separable.

Daniel J. Hemel & Lisa Larrimore Ouellette, Innovation Policy Pluralism, 128 Yale
L.J. 544, 588–92 (2019). For a detailed discussion of qualifications to this account,
including examples of knowledge goods that are not global public goods and
alternative accounts of state action, see Daniel J. Hemel & Lisa Larrimore Ouellette,
Knowledge Goods and Nation-States, 101 Minn. L. Rev. 167 (2016).

Discussion Questions: Justifying International Patent Coordination

1. Should India Weaken Pharmaceutical Patents? Before TRIPS, India did not
grant patents on pharmaceutical products, and it developed a robust generic drug
manufacturing industry. After a transition period for developing countries, India
began allowing these patents in 2005. But countries can still weaken their patent
systems within the TRIPS framework, as illustrated by the many limitations on U.S.
patent rights in recent decades (e.g., the increased ease of invalidating patents for
lack of patentable subject matter and the decreased availability of injunctions).
Sections (C) and (D) of this chapter will discuss additional “flexibilities” countries have
in implementing TRIPS. Should India take advantage of these flexibilities to limit
pharmaceutical patents as much as possible? See generally Amy Kapczynski,
Harmonization and Its Discontents: A Case Study of TRIPS Implementation in India’s
Pharmaceutical Sector, 97 Cal. L. Rev. 1571 (2009).

How does this issue differ from the analysis of the U.S. patent system discussed
in Chapter 1? Does your answer differ if you focus on Indian patients or Indian
pharmaceutical companies rather than total Indian social welfare? Does it matter
whether the patents are on treatments for hypertension (a global concern) or dengue
fever (which is endemic in India but not in high-income countries)? Does it affect your
analysis to know that in practice, after India’s TRIPS implementation, the average
price increase for patented medicines was just 3–6%, and that there was little impact
on quantities sold or on the number of domestic pharmaceutical firms? See Mark
Duggan, Craig Garthwaite & Aparajita Goyal, The Market Impacts of Pharmaceutical
Product Patents in Developing Countries: Evidence from India, 106 Am. Econ. Rev. 99
(2016).
 INTERNATIONAL & COMPARATIVE PATENT LAW 563

2. Changing Patent Importers and Exporters. Each year since 2008, the USPTO
has granted more utility patents of foreign origin than domestic origin, and the gap
continues to grow. China now has the world’s largest patent office, the China National
Intellectual Property Administration (CNIPA). How do these changes affect the
winners and losers from TRIPS and other agreements setting minimum patent
standards?

B. Acquiring Multinational Patent Rights with the PCT

As discussed above, Article 4 of the Paris Convention, which was incorporated
by TRIPS, established the right of priority: filing a patent application in one national
or regional office starts a one-year period during which applicants can file in other
offices, claiming priority to the first application. If the applicant runs out this clock,
they generally can’t get a patent in that country later. This is a relatively short time
period for applicants to decide which offices to file in, to find local patent agents to
prosecute their applications, and to pay the costs for application translation, filing,
and prosecution. Translation and filing costs can exceed ten thousand dollars for each
patent office added, and each round of prosecution could add another ten thousand
dollars per patent office. When deciding whether to file in a given office, applicants
must balance these costs against the value that patent protection in that jurisdiction
might add. For example, is it a large market? An important part of a competitor’s
supply chain? A forum in which the applicant would want to litigate or negotiate
licensing fees? For inventions whose future value is uncertain, answering these
questions early in the development process may be challenging.

The Patent Cooperation Treaty (PCT) provides a simpler process for obtaining
patent protection in a large number of jurisdictions.10 As illustrated on the timelines
below, rather than directly filing separate patent applications in every patent office of
interest within 12 months of an initial filing, applicants may initiate the PCT process
by filing a single “international” application with a “receiving office” (including the
USPTO or WIPO) within that 12-month period. The PCT application doesn’t directly
provide any patent rights; rather, it initiates a streamlined procedure for pursuing
applications with individual national or regional patent offices. Perhaps most
valuably, it allows applicants to delay the choice of where to pursue patent
protection—and the associated costs of local patent agents, translators, and filing
fees—for up to 30 months from the initial filing date (31 in some jurisdictions).

The PCT receiving office transmits the application to a patent office that serves
as an International Searching Authority (ISA)—which includes the USPTO—by 13

10 The PCT is available at https://www.wipo.int/pct/en/texts/articles/atoc.html, and the

implementing regulations are at https://www.wipo.int/pct/en/texts/rules/rtoc1.html. The
description here provides the most common time limits, but they may be different if, for
example, applicants file the international application closer to the priority date.
564 MASUR & OUELLETTE ⋅ PATENT LAW

months from the priority date. The ISA then has 3 months to produce an international
search report listing relevant prior art along with a written opinion as to “whether the
claimed invention appears to be novel, to involve an inventive step (to be non-obvious),
and to be industrially applicable [i.e., useful].” PCT Rule 43bis. The application,
international search report, and written opinion are published 18 months from the
priority date. Within 22 months of the priority date, the applicant has the option of
requesting international preliminary examination, which is the only chance to
actively participate in the “international phase” of the PCT process. International
preliminary examination, which must be completed by 28 months, provides an
evaluation of patentability by a second ISA and gives applicants a chance to submit
amendments and arguments and to interview the examiner. Finally, by 30 months
from the initial priority date, applicants enter the “national phase” by directly
pursuing applications with the national or regional patent offices of interest.

The national phase looks something like the patent prosecution process at the
USPTO described in Chapter 1—multiplied by the number of patent offices the
applicant is trying to obtain a patent from—although the procedures for each national
or regional patent office differ. During the national phase it is generally necessary to
translate the application into the local language and to work with a local patent
attorney. Because patent laws differ by country, applicants often obtain somewhat
different claims in different countries. It is also important to coordinate across offices
so the applicant doesn’t make inconsistent arguments. Failing to disclose something
that came up in one country to an examiner at the USPTO can constitute inequitable
conduct.

If an applicant begins with a non-provisional U.S. application, followed by a

PCT application one year later, then the U.S. patent will expire 20 years from the U.S.
application—one year earlier than the national or regional patents resulting from the
PCT application (assuming no patent term adjustment). Applicants can avoid this
disadvantage by starting with a provisional U.S. patent application and then filing a
 INTERNATIONAL & COMPARATIVE PATENT LAW 565

PCT application one year later; as noted in Chapter 1, U.S. patents expire 20 years
from the filing date of the earliest non-provisional application.

The non-U.S. patent office where U.S. applicants most commonly file—either
through the PCT or direct filing—is the European Patent Office (EPO), a regional
office created in 1977 by the European Patent Convention (EPC).11 The EPC is
separate from the European Union; for example, Switzerland, Iceland, Norway, and
now the United Kingdom are members of the EPC but not the EU. The EPC created
a unified process for prosecuting patent applications at the EPO in one of three official
languages (English, French, and German). Before 2023, the EPO could only grant a
“European patent” that is effectively a bundle of individual national patents. Once a
European patent is granted, it must be “validated” in designated countries for
additional fees and any necessary translation costs. Under Article 2 of the EPC, a
European patent “shall, in each of the Contracting States for which it is granted, have
the effect of and be subject to the same conditions as a national patent granted by that
State.” For the first nine months after a European patent is granted, a third party
may file an opposition proceeding (similar to a post-grant review proceeding at the
USPTO). After that, the validity and infringement of the patent have been assessed
independently by national courts in designated countries. As of June 1, 2023, EPO
applicants may also request a “European patent with unitary effect” (or “unitary
patent”). Infringement and revocation proceedings for unitary patents are held before
the new Unified Patent Court (which may also hear cases involving regular European
patents, which will continue to coexist with unitary patents).

The other regional patent offices are the African Intellectual Property
Organization (OAPI) (which includes mostly French-speaking African countries), the
African Regional Intellectual Property Organization (ARIPO) (English-speaking
African countries), the Eurasian Patent Organization (EAPO) (members of the former
Soviet Union), and the Patent Office of the Cooperation Council for the Arab States of
the Gulf (GCC Patent Office). National offices used frequently by U.S. applicants
include the other members of the five largest patent offices—known as the “IP5”—
besides the USPTO and EPO: the China National Intellectual Property
Administration (CNIPA), Japan Patent Office (JPO), and Korean Intellectual
Property Office (KIPO). U.S. applicants also file frequently in other high-income,
English-speaking countries: the Canadian Intellectual Property Office (CIPO) and IP
Australia.

Discussion Questions: Acquiring Multinational Patent Rights

1. How Does Filing Strategy Vary by Industry? Throughout this casebook, we

have emphasized differences in how patents are used in different industries. How

11 The EPC text is at https://www.epo.org/law-practice/legal-

texts/html/epc/2016/e/ma1.html.
566 MASUR & OUELLETTE ⋅ PATENT LAW

would your multinational patent acquisition strategy differ if you represented a

biotechnology corporation versus a developer of microprocessors? For instance, how
many different countries would you seek patent rights in?

2. A Global Patent? The PCT streamlines multinational patent acquisition, but

applicants still face the substantial costs of hiring local patent agents and translators
so that “applying for patents all over the world is an option feasible only to the
wealthiest and most sophisticated of inventors.” Marketa Trimble, Global Patents:
Limits of Transnational Enforcement (2012). And many local patent offices still
duplicate some efforts by conducting their own searches and examinations after
receiving the ISA’s search report and written opinion. Are there ways to improve the
system? Trimble argues for a more global approach, such as a global version of the
EPC that allows global enforcement and makes widespread patent protection feasible
for individual inventors and small businesses. What are the benefits and costs of this
approach? How would it affect patent search costs?

3. Ending Government Patent Office Monopolies? Michael Abramowicz and

John Duffy have argued that the rise in multinational filing provides an opportunity
to rethink the idea that each country’s patent office should have a monopoly on
deciding whether patent rights are available. The creation of the EPO caused national
patent offices in Europe to become entrepreneurial; for example, the UK can deliver a
low-cost examination report in four months that can help evaluate whether investing
more is worthwhile, and Denmark offers opinions on patentability of either new ideas
or existing patents in ten working days for an hourly charge. And with the rise of
work-sharing programs among patent offices like the Patent-Prosecution Highway,12
“applicants might have significant incentives to forum shop for better examination”
such that “[a] small country like Denmark or Singapore could become the ‘Delaware’
of patent offices.” Michael Abramowicz & John F. Duffy, Ending the Patenting
Monopoly, 157 U. Pa. L. Rev. 1541, 1572 (2009). But see Jonathan S. Masur, The PTO’s
Future: Reform or Abolition?, 158 U. Pa. L. Rev. PENNumbra 1 (2009) (casting doubt
on whether the Abramowicz and Duffy proposal will make much of a difference). Do
you think private patent offices with appropriate incentives (e.g., fines for mistakes
found in random audits) could improve global examination quality?

12 The Patent-Prosecution Highway allows applications that have been allowed in

participating offices to be fast-tracked. See https://www.wipo.int/pct/en/filing/pct_pph.html.
 INTERNATIONAL & COMPARATIVE PATENT LAW 567

C. Pre-Grant Flexibilities: Comparative Patent

Validity
At a high level, the basic requirements of patentability are largely harmonized
across the globe. The TRIPS Agreement requires every WTO member to have
equivalents of the U.S. requirements of novelty, nonobviousness, utility, and
enablement, as specified in Articles 27 and 29:

TRIPS Article 27: Patentable Subject Matter

1. Subject to the provisions of paragraphs 2 and 3, patents shall be

available for any inventions, whether products or processes, in all
fields of technology, provided that they are new, involve an
inventive step and are capable of industrial application.13 Subject to
[exceptions related to the TRIPS transition] and paragraph 3 of this
Article, patents shall be available and patent rights enjoyable
without discrimination as to the place of invention, the field of
technology and whether products are imported or locally produced.

2. Members may exclude from patentability inventions, the prevention

within their territory of the commercial exploitation of which is
necessary to protect ordre public or morality, including to protect
human, animal or plant life or health or to avoid serious prejudice
to the environment, provided that such exclusion is not made merely
because the exploitation is prohibited by their law.

3. Members may also exclude from patentability:

(a) diagnostic, therapeutic and surgical methods for the

treatment of humans or animals;

(b) plants and animals other than micro-organisms, and

essentially biological processes for the production of plants
or animals other than non-biological and microbiological
processes. However, Members shall provide for the
protection of plant varieties either by patents or by an
effective sui generis system or by any combination thereof.
The provisions of this subparagraph shall be reviewed four

13 [n.5 in original] For the purposes of this Article, the terms “inventive step” and
“capable of industrial application” may be deemed by a Member to be synonymous with the
terms “non-obvious” and “useful” respectively.
568 MASUR & OUELLETTE ⋅ PATENT LAW

years after the date of entry into force of the WTO

Agreement.

TRIPS Article 29: Conditions on Patent Applicants

1. Members shall require that an applicant for a patent shall disclose

the invention in a manner sufficiently clear and complete for the
invention to be carried out by a person skilled in the art and may
require the applicant to indicate the best mode for carrying out the
invention known to the inventor at the filing date or, where priority
is claimed, at the priority date of the application.

2. Members may require an applicant for a patent to provide

information concerning the applicant’s corresponding foreign
applications and grants.

Requiring patents in “all fields of technology” and “without discrimination as

to . . . the field of technology” was an important change from prior international law.
The exceptions are relatively limited. Article 27.2 allows exclusions to protect morality
or “ordre public”—a French legal term covering important public policy exceptions.
Importantly, these exceptions apply only where a country wants to prevent
exploitation of the invention, not to increase exploitation by eliminating patent rights.
Thus, this exception could be used to ban patents on stem cells if a country wants to
avoid any stem cell research or products within its borders, but it couldn’t be used to
ban patents on AIDS medicines “to protect human . . . life or health” by increasing
access through generic production.

Despite the harmonization provided by international patent treaties, countries

still retain substantial “flexibilities,” or discretion in how they implement their
domestic patent laws. See generally Graeme Dinwoodie & Rochelle Dreyfuss, A
Neofederalist Vision of TRIPS: The Resilience of the International Intellectual Property
Regime (2012). For example, many other countries have a more limited (or
nonexistent) grace period for whether pre-filing disclosures constitute prior art and
do not have a separate written description requirement. India specifies that secondary
pharmaceutical inventions such as new formulations are not inventions under the
India Patent Act unless the inventor demonstrates “enhancement of the known
efficacy” of the pharmaceutical. See Bhaven N. Sampat & Kenneth C. Shadlen, Indian
Pharmaceutical Patent Prosecution: The Changing Role of Section 3(d), 13 PloS ONE
e0194714 (2018). WIPO maintains tables of information about national and regional
patent laws.14 Thomas Cotter’s Comparative Patent Remedies (2013) provides a useful

14 See https://www.wipo.int/patents/en/topics/laws.html.
 INTERNATIONAL & COMPARATIVE PATENT LAW 569

overview of the law of patentability in key jurisdictions, as well as the relevant legal
institutions.

As one illustration, consider how the EPO approach to assessing patentable

subject matter for software differs from that in the United States. For software, Article
52 of the EPC excludes patents from “non-technical” categories including
“mathematical methods” and “programs for computers,” but “only to the extent to
which [the patent] relates to such subject-matter or activities as such.” In the 2010
decision G 3/08 (Programs for computers), the EPO Enlarged Board of Appeal15
summarized current case law as indicating that “a claim in the area of computer
programs can avoid [this exclusion] merely by explicitly mentioning the use of a
computer or a computer-readable storage medium.” But the Enlarged Board also
found it “quite clear” that a “a claim which specifies no more than ‘Program X on a
computer-readable storage medium,’ or ‘A method of operating a computer according
to program X,’ will always still fail to be patentable for lack of an inventive step [i.e.,
obviousness].” In other words, adding “generic computer implementation” to a U.S.
patent is insufficient to transform an abstract idea into patentable subject matter
under Alice v. CLS Bank, 573 U.S. 208 (2014), but in the EPO, it does make the
invention eligible—it just requires evaluation under their equivalent of the
nonobviousness requirement.

Similarly, in the diagnostics context, Article 53(c) of the EPC states that
European patents shall not be granted for “diagnostic methods practised on the
human or animal body.” In the 2005 opinion 1/04 (Diagnostic methods), the EPO
Enlarged Board of Appeal specified that “diagnostic methods” must include each of
four steps: (i) “collection of data” (including “interaction with” a human or animal
body), (ii) “comparison of these data with standard values,” (iii) “the finding of any
significant deviation, i.e. a symptom, during the comparison,” and (iv) “attribution of
the deviation to a particular clinical picture,” i.e., “diagnosis for curative purposes.”16
A method that does not claim one of these steps is patent eligible, including in vitro
diagnostics and methods that include data acquisition without diagnosis, unless the
omitted step is essential. Furthermore, Article 53(c) states that the exclusion “shall
not apply to products, in particular substances or compositions, for use in any of these
methods.” Patentees can thus avoid the exclusion by claiming pharmaceutical
products, medical devices, or computer systems related to the diagnostic method.

Do you think all of these rules are consistent with TRIPS’s requirement that
patents be available “without discrimination as to . . . the field of technology,” aside
from the exceptions in Article 27?

15 The EPO Boards of Appeal are similar to USPTO PTAB panels, and an Enlarged
Board is similar to taking a decision en banc and may involve amicus briefing. Decisions are
available at https://www.epo.org/law-practice/case-law-appeals.html, and G 3/08 is at
https://www.epo.org/law-practice/case-law-appeals/recent/g080003ex1.html.
16 G 1/04: https://www.epo.org/law-practice/case-law-appeals/recent/g040001ex1.html.
570 MASUR & OUELLETTE ⋅ PATENT LAW

Practice Problem: Patentable Subject Matter in the USPTO and EPO

Researchers at ThermCo invented forehead infrared thermometers, which can

determine a person’s temperature by measuring the thermal radiation emitted from
their forehead. The idea that body temperature could be determined from skin
temperature was novel and defied conventional wisdom: scientists previously thought
that skin temperature couldn’t be independently correlated with internal body
temperature. The recent iterations of ThermCo’s invention exploded in popularity
during the COVID-19 pandemic.

ThermCo sought a number of patents on this invention at patent offices

worldwide. One claim, which was successfully prosecuted through both the USPTO
and the EPO, reads as follows:

A method of detecting human body temperature comprising:

(a) measuring radiation as target skin surface of the forehead is viewed,

and

(b) processing the measured radiation to provide a body temperature

approximation based on heat flow from an internal body
temperature to ambient temperature.

A number of companies have sought to imitate ThermCo’s successful product.

In response to legal threats by ThermCo, the most successful competitor, GeneriCo,
has filed post-grant opposition proceedings to challenge the validity of both the U.S.
and European patents on patentable-subject matter grounds. What are the best
arguments on behalf of each company in each jurisdiction?

D. Post-Grant Flexibilities: Rights, Exceptions, and

Remedies
Countries have substantial flexibilities not only in deciding which kinds of
inventions receive patents in the first place, but also in setting the exclusive rights
protected by a patent, exceptions to those rights such as experimental use or
compulsory licensing, and the remedies available for infringement. We refer to these
as “post-grant flexibilities.”

1. Rights
TRIPS Article 28 defines the exclusive rights protected by a patent: “making,
using, offering for sale, selling, or importing,” including for “the product obtained
 INTERNATIONAL & COMPARATIVE PATENT LAW 571

directly by [a patented] process.” TRIPS does not require countries to provide rights
against indirect infringement, but most major economies have. In Europe,
infringement statutes have largely been harmonized based on the 1989 Agreement
Relating to Community Patents (even though not enough countries ratified the
agreement to cause it to enter into force):

Article 25 – Right to prevent “direct use”: (a) “making, offering, putting

on the market or using a [patented] product . . . or importing or stocking
the product for these purposes”; (b) “using a [patented] process” or
“offering the process for use within . . . the Contracting States”;
(c) “offering, putting on the market, using, or importing or stocking for
these purposes the product obtained directly by a [patented] process.”

Article 26 – Right to prevent “indirect use”: (1) “supplying or offering to

supply within the territories of the Contracting States a person, other
than a party entitled to exploit the patented invention, with means,
relating to an essential element of that invention, for putting it into
effect therein, when the third party knows, or it is obvious in the
circumstances, that these means are suitable and intended for putting
that invention into effect” except (2) “when the means are staple
commercial products, except when the third party induces the person
supplied to [infringe].”

For example, these provisions are codified by Sections 9 and 10 of the German Patent
Act, and by Articles 53 and 73 of the Dutch Patent Act. The resulting scope of liability
is similar to that created by 35 U.S.C. § 271(a)-(c). The current Chinese Patent Law
does not have express provisions for indirect infringement, but indirect liability can
be available under tort law principles.

Countries also vary in how infringement is evaluated, such as the rules for
claim construction or infringement under the doctrine of equivalents, although
different formal rules can lead to similar results. For example, the UK uses
“purposive” construction, while German courts “focus on the objective meaning of
claims” in a way that some view as distinct from the UK approach, but “in substance
both U.K. and German courts today adhere to something of a middle ground.” Thomas
F. Cotter, Comparative Patent Remedies 226 (2013).

2. Exceptions
TRIPS Articles 30 and 31 allow explicit exceptions to the rights that must
generally be conferred on patent owners.
572 MASUR & OUELLETTE ⋅ PATENT LAW

TRIPS Article 30: Exceptions to Rights Conferred

Members may provide limited exceptions to the exclusive rights

conferred by a patent, provided that such exceptions do not
unreasonably conflict with a normal exploitation of the patent and do
not unreasonably prejudice the legitimate interests of the patent owner,
taking account of the legitimate interests of third parties.

A WTO panel decision from 2000 provides the clearest guidance on the
meaning of terms like “limited exceptions.” The panel evaluated two exceptions from
liability under Canada’s Patent Act: one for activities related to regulatory review
(e.g., allowing generic firms to produce patented pharmaceuticals for submission to
the Canadian equivalent of the FDA), and one allowing generic firms to manufacture
drugs for six months prior to patent expiration so they have a stockpile ready when
the patent expires. The panel held that the stockpiling provision was not a “limited
exception[],” including because “there were no limits at all on the volume of production
allowed, or the market destination of such production.” In contrast, the regulatory
review provision was “limited” because it was limited to regulatory purposes, it didn’t
conflict with “normal exploitation” because most patent holders don’t get the benefit
of exclusivity due to regulatory review, and the interest was “neither so compelling
nor so widely recognized that it could be regarded as a ‘legitimate interest’ within the
meaning of Article 30.” Canada – Patent Protection of Pharmaceutical Products
(“Canada Generics”), WT/DS114/R, 17 March 2000.

As discussed in Chapter 12, the United States also has an exception for
activities related to regulatory review at 35 U.S.C. § 271(e)(1), but lacks a broad
experimental use defense for other research. See Madey v. Duke, 307 F.3d 1351 (Fed.
Cir. 2002). Many other countries do have a general experimental use exception, which
is generally accepted as TRIPS compliant. Indeed, the Canada Generics panel took
“as an illustration one of the most widely adopted Article 30-type exceptions in
national patent laws—the exception under which use of the patented product for
scientific experimentation, during the term of the patent and without consent, is not
an infringement.”

Article 30 is not helpful to a country that wants to issue a compulsory license

for patents on a particular pharmaceutical to promote generic manufacturing.
Instead, that country would have to turn to Article 31, “Other Use Without
Authorization of the Right Holder.” Article 31 sets out numerous conditions, including
that “the proposed user has made efforts to obtain authorization from the right holder
on reasonable commercial terms” (except in cases of “extreme urgency” or “public non-
commercial use”), the use must be limited in “scope and duration,” and the use must
be terminated when no longer necessary. If a compulsory license is issued, “the right
holder shall be paid adequate remuneration in the circumstances of each case, taking
into account the economic value of the authorization.” Originally, Article 31 was
limited to use “predominately for the supply of the domestic market of the Member
 INTERNATIONAL & COMPARATIVE PATENT LAW 573

authorizing such use,” raising concerns about its infeasibility for countries without
domestic manufacturing capacity. The 2001 Doha Declaration on TRIPS and Public
Health proposed amendments to permit compulsory licenses for export, which are now
incorporated in Article 31bis.

The Doha Declaration and the ratification of Article 31bis were hailed as
important successes by advocates for global access to medicines, but in practice, they
have had little impact. The only actual use of the system was in 2007, when Rwanda
notified for an HIV/AIDS drug (Apo-TriAvir), and Canada filed a generic export
notification and sent two shipments, one in 2008 and one in 2009. There have been a
number of compulsory licenses issued under Article 31, mostly between 2003 and 2005
over HIV/AIDS drugs, although “activity has diminished markedly since 2006.” Reed
Beall & Randall Kuhn, Trends in Compulsory Licensing of Pharmaceuticals Since the
Doha Declaration: A Database Analysis, 9 PLoS Med e1001154 (2012).

3. Remedies
Part III of TRIPS covers enforcement of intellectual property rights, including
remedies. These rules allow substantial flexibility in how a country implements its
domestic IP enforcement system. For an excellent overview of patent remedies in
jurisdictions with the most patent cases, see Thomas F. Cotter, Comparative Patent
Remedies (2013), and his blog at https://comparativepatentremedies.blogspot.com.

For injunctions, TRIPS Article 44 specifies that judges “shall have the
authority to order a party to desist from an infringement” but doesn’t suggest that
injunctions are mandatory or must be available in all cases. Additionally, Article 44
specifies that injunctions need not be available for “protected subject matter acquired
or ordered by a person prior to knowing or having reasonable grounds to know that
dealing in such subject matter would entail the infringement of an intellectual
property right.” In other words, countries may limit injunctions to knowing
infringement rather than adopting a strict liability approach.

Injunctions are more routinely granted to successful patent litigants in most

other jurisdictions than they have been in the United States after eBay, and they are
particularly likely in Germany. See Cotter, supra. Preliminary injunctions are more
variable. “Patent owners often view the Netherlands as a desirable forum in which to
seek preliminary injunctions, given the availability there of a type of speedy pretrial
hearing (known as the kort geding) and the importance of the Netherlands as a center
for the distribution of products throughout Europe.” Id. at 5. The Netherlands is also
attractive for its willingness to issue cross-border preliminary injunctions throughout
Europe.

TRIPS Article 45 permits similar flexibility in how countries award damages,

including the ability to limit damages to cases of knowing infringement:
574 MASUR & OUELLETTE ⋅ PATENT LAW

TRIPS Article 45: Damages

1. The judicial authorities shall have the authority to order the

infringer to pay the right holder damages adequate to compensate
for the injury the right holder has suffered because of an
infringement of that person’s intellectual property right by an
infringer who knowingly, or with reasonable grounds to know,
engaged in infringing activity.

2. The judicial authorities shall also have the authority to order the
infringer to pay the right holder expenses, which may include
appropriate attorney’s fees. In appropriate cases, Members may
authorize the judicial authorities to order recovery of profits and/or
payment of pre-established damages even where the infringer did
not knowingly, or with reasonable grounds to know, engage in
infringing activity.

Average U.S. damage awards are higher than in any other jurisdiction. In
other countries, damages “often can be calculated on the basis of the defendant’s
profits (a type of monetary award abolished in utility patent actions in the United
States in 1946), or published reports of typical industry-wide royalties (as in
Germany), or as in China as a fixed sum of so-called statutory damages.” Cotter, supra
at 7–8.

Discussion Questions: Post-Grant Flexibilities

1. Local Working Requirements. Can patentees lose any rights through failure
to practice their patents? Requirements that patentees “work” their inventions locally
(beyond simply importing them) are pervasive; in 1968, every industrialized country
except the United States and the Soviet Union had local working requirements, and
many countries still have them today, such as in Section 84 of India’s Patents Act
(which has resulted in India’s listing in the USTR’s Special 301 Report). Why would
countries have such requirements? Under what theories do you think they are (or
aren’t) justified? See Jorge L. Contreras, Rohini Lakshané & Paxton M. Lewis, Patent
Working Requirements and Complex Products, 7 NYU J. Intell. Prop. & Ent. L. 1
(2017) (empirically studying the high degree of non-compliance with working
requirements in India).

In 2001, after Brazil threatened to issue compulsory licenses for patented AIDS
drugs based on failure to manufacture locally, the United States filed a WTO
complaint based on TRIPS Article 27.1, which proscribes “discrimination as to . . .
whether products are imported or locally produced.” For bargaining leverage, Brazil
countered with its own request for a WTO panel, arguing that the Bayh-Dole Act, 35
U.S.C. § 204, violates TRIPS by requiring government-funded inventions that are
 INTERNATIONAL & COMPARATIVE PATENT LAW 575

exclusively licensed to be manufactured “substantially in the United States.” The

dispute settled. How do you read 27.1 in light of the compulsory licensing provisions
of Articles 30 and 31, and Article 5A of the Paris Convention (incorporated by TRIPS
Article 2.1), which provides that countries “shall have the right to take legislative
measures providing for the grant of compulsory licenses to prevent abuses [such as]
failure to work”? Were Brazil or the United States in violation? See Paul Champ &
Amir Attaran, Patent Rights and Local Working Under the WTO TRIPS Agreement:
An Analysis of the U.S.–Brazil Patent Dispute, 27 Yale J. Int’l L. 365 (2002).

2. Exhaustion. Another post-grant flexibility is the right of each country to

determine its rules for patent exhaustion; TRIPS Article 6 specifies that “nothing in
this Agreement shall be used to address the issue of the exhaustion of intellectual
property rights.” As discussed in Chapter 12, the U.S. Supreme Court changed the
U.S. exhaustion rule such that sales in foreign countries now exhaust U.S. patent
rights, and exhaustion cannot be contracted around. What countries would benefit
from adopting similar exhaustion rules?

3. COVID-19 IP Waiver. In October 2020, India and South Africa asked the
WTO to waive enforcement of TRIPS for all intellectual property related to the
prevention, containment, and treatment of COVID-19, arguing that “[a] particular
concern for countries with insufficient or no manufacturing capacity are the
requirements of Article 31bis and consequently the cumbersome and lengthy process
for the import and export of pharmaceutical products.” The proposal was supported
by many countries but opposed by others, including governments from the United
States, EU, UK, Switzerland, Japan, Brazil, Canada, and Australia. In May 2021,
amid a devastating wave of infections in India, the Biden Administration shifted its
position to support IP waiver as applied to COVID-19 vaccines. What effect do you
think removal of the TRIPS requirements would have in the vaccine context? Are
there other tools for expanding global vaccine distribution?

E. Coordinating Multinational Patent Litigation

Developing a legal and business strategy for multinational patent litigation
draws together many of the topics from this chapter. Although U.S. lawyers will not
themselves be litigating overseas, they often help U.S. clients determine their global
litigation strategy and help coordinate with local counsel. This chapter begins with
practical questions to ask when choosing among potential forums before presenting
two exercises: one advising a hypothetical client, and one focused on Apple’s and
Samsung’s strategies in their global patent litigation war.
576 MASUR & OUELLETTE ⋅ PATENT LAW

1. Choosing Among Forums

Where Can You File?

The first question to ask when determining where to file a patent lawsuit is:
where can you file? Your options may be limited by many of the topics covered in 1L
civil procedure:

• Where can you get personal jurisdiction over the defendant? It usually exists
in in any state where the defendant resides or takes substantial acts to further
infringement; mere ownership of IP, nationality, or physical service are
typically insufficient.

• Where do courts have subject matter jurisdiction? This depends on where your
client has relevant patents because courts are reluctant to adjudicate
infringement of foreign patents (although some will do so if validity is not at
issue).

• Are there forum selection clauses in any contracts between the parties?
Selection clauses are usually enforced unless they are against public policy.

• Were there any earlier disputes that create collateral estoppel or res judicata
issues?

o Courts in the United States have adopted factual findings from foreign
proceedings as long as the issue was identical and actually litigated and
the proceedings were fundamentally fair, but they have refused to adopt
conclusions as to the validity of corresponding parallel patents.

o European courts will attach some weight to decisions in other European

countries on parallel patents.

• If your client is the accused infringer, you often have the option of filing an
action for a declaratory judgment of noninfringement or a patent invalidation
request, but the rules for establishing declaratory judgment jurisdiction vary.

Where Should You File?

Just because your client can file a patent lawsuit somewhere doesn’t mean it
is a wise business move. Here are some additional questions that may inform the
choice:

• What are your client’s business goals? Money, market dominance, or

something else?
 INTERNATIONAL & COMPARATIVE PATENT LAW 577

o Do the available remedies in the forum serve those goals? In some cases,
preliminary and permanent injunctions and border measures may be
crucial; in others, clients may be interested in large damage awards.
Germany is a top jurisdiction for patent plaintiffs because of the speed
with which an injunction can be obtained, with parallels to the ITC in
the United States. China is also increasingly popular because of the
availability of injunctions against manufacturing, export, and in-
country sales, but damages are very low.

o How important is the forum for serving those goals in terms of its
market share and role in supply chains? Some countries with small
markets may still be key manufacturing hubs; for example, India and
Israel attract patent lawsuits because they are important generic
pharmaceutical manufacturers.

• How expensive is it to litigate in the forum, and can your client afford it? Is
straining your adversary’s resources a goal in itself? The United States is
generally the most expensive place to litigate due to expansive discovery and
high legal fees. Continental Europe has lower costs, and the United Kingdom
is expensive by European but not U.S. standards.17 Japan can be moderately
expensive due to many rounds of briefing without page limits. China has lower
costs than any of these forums. In many other countries, attorneys’ fees are
routinely awarded to the prevailing party, although they are not always fully
compensatory.

• Is key evidence available only in one venue, and how can that evidence be made
available? The availability of discovery closely tracks litigation costs: discovery
is broadly available in the United States, more difficult in Europe, and very
limited in China. Note that evidence in the United States doesn’t mean you
need to litigate in the United States; under 28 U.S.C. § 1782, a party may ask
a U.S. district court to compel production of evidence needed for a proceeding
in a foreign tribunal.

• How important is timing to your client? Jurisdictions vary in how quickly

litigation will proceed and whether the case will be stayed for a validity
challenge; for example, trials in Germany or the Netherlands can begin less
than a year after filing, but in France it might take two years to reach trial.
China is also known for often resolving disputes within a year. Where slowing
down litigation is a goal, it can be useful to file in a slow EU jurisdiction
because other countries often grant stays for related actions. For example,
actions for a declaratory judgment of noninfringement in Italy against a
patentee not domiciled in Italy were known as “Italian torpedoes,” although

17 The average cost of patent litigation has been estimated at 50,000–200,000 € in

Germany, France, and the Netherlands, and 2,000,000–4,000,000 € in the UK. Katrin Cremers
et al., Patent Litigation in Europe, 44 Eur. J.L. & Econ. 1 (2017).
578 MASUR & OUELLETTE ⋅ PATENT LAW

both Italian and other European courts have cabined use of this strategy. More
recently, some courts have been willing to issue an “anti-suit injunction” to
prevent a party from pursuing litigation in another jurisdictions—and others
have responded with anti-anti-suit injunctions and anti-anti-anti-suit
injunctions—making timing critical. See Jorge L. Contreras, It’s Anti-Suit
Injunctions All the Way Down – The Strange New Realities of International
Litigation Over Standards-Essential Patents, 26 IP Litigator (2020).

• How logistically difficult is it to litigate in the forum? What language are

proceedings conducted in? Can you find local counsel you trust?

• Finally, how likely to win is your client, and how predictable is the outcome?
The likelihood of success may be affected by many factors beyond substantive
law:

o Is there a forum where one party will have home field advantage, or
where national attitudes toward the parties or patents may favor one
party?

o Are the judges specialists or generalists? Many non-U.S. jurisdictions

have specialized IP trial courts (or specialized IP chambers within a
court of general jurisdiction), including the UK, Germany, France,
China, and Japan. Specialists are sometimes viewed as more pro-
patent, but they may also focus more on the specific requirements of
patent law and less on secondary considerations like a party’s
reputation and commercial success.

o Are there forum choices within a jurisdiction? For example, the forum
shopping opportunities in Germany are similar to those that have
favored E.D. Tex. and W.D. Tex. in the United States. In China, parties
may litigate infringement at the patent office (which is inexpensive, but
which may not award preliminary injunctions or damages), or in court,
or both. Some countries offer ITC-like proceedings against imports.

o Are validity and infringement assessed in separate (“bifurcated”)

proceedings? In some countries, such as Germany and China,
challenges to validity must be brought in separate proceedings.
Bifurcation can give rise to an “injunction gap” where infringement is
found and an injunction issued before validity review is complete. A
recent amendment to Germany’s Patent Act is intended to reduce but
may not eliminate this gap.

Is Alternative Dispute Resolution a Better Option?

Although this casebook is focused on formal legal proceedings, as we noted in

Chapter 17, patent disputes may also be resolved through alternative dispute
 INTERNATIONAL & COMPARATIVE PATENT LAW 579

resolution (ADR), including arbitration, mediation, and negotiation. As one option,

WIPO runs an Arbitration and Mediation Center, which it advertises as flexible,
confidential, and capable of efficiently resolving multinational disputes in a single
proceeding without the complexity of multi-jurisdictional litigation or the risk of
inconsistent results.18 Most countries do not allow arbitration of patent validity
claims, but arbitration or mediation may be an attractive option for disputes involving
patent ownership, license interpretation, or infringement.

2. Advising a Hypothetical Client

Your client, Drivera Inc., is an LA-based electric car startup. Drivera has
developed an improved electric car battery with a faster charging time and has used
the PCT to acquire numerous patent rights. The plug-in electric vehicle market is
rapidly growing; in terms of vehicles sold, it is largest in China, Europe, and the
United States. Drivera is currently focused only on the U.S. market, where it exceeded
expectations with sales last year. Its cars are entirely manufactured in the United
States have received great acclaim from reviewers, largely due to the improved
battery. Drivera hopes to build on this momentum by focusing on marketing its cars
to consumers who prioritize very rapid charging, but it currently has cash-flow
difficulties and was recently sued for failure to pay a contractor for work on its
headquarters.

Drivera’s innovative battery design has been independently developed by

Shenzhen-based XFA, another innovative electric car startup with its own global
patent portfolio (though not on the battery design). XFA has deep cash reserves. Last
year, XFA’s global sales of cars with the new battery design were ten times as high as
Drivera’s, with most sales in China but a growing number throughout Europe. It has
shipped a few cars to the United States to generate press, and it has signaled its
intention to enter the U.S. market in 2019. It manufactures the key component of the
battery, the flux capacitor, in China. (The flux capacitor has no current known use
besides this battery.) XFA ships the flux capacitor to a factory in Germany that
manufactures the battery and assembles the cars. The cars are shipped globally via
Rotterdam, Netherlands (the largest port in Europe). Drivera’s GC has told you that
the firm views XFA as an existential threat, and that it is imperative that XFA be
kept out of the U.S. market for as low a budget as possible.

You have determined that Drivera has used the PCT to acquire the following
global patent rights:

• United States: Drivera has a U.S. patent on the flux capacitor, which it
features in all its promotional materials. But in-house counsel located
devastating prior art from an obscure prior use by Dr. Brown, so you think

18 More information is available at https://www.wipo.int/amc/en/.

580 MASUR & OUELLETTE ⋅ PATENT LAW

there is a 90% chance of invalidation if the patent is challenged. Drivera has a

stronger U.S. patent on the process of assembling the battery components
(including the flux capacitor) into a battery. You predict a 5% chance of
invalidation if it is challenged in district court or the ITC and a 10% chance of
invalidation in an inter partes review proceeding before the USPTO.

• Europe: Drivera’s EPO patents (designating Germany, France, the

Netherlands, and the UK) have passed the nine-month EPO opposition period.
As in the United States, Drivera has a well-publicized patent on the flux
capacitor. But in light of the prior use by Dr. Brown, there is a 60–80% chance
of invalidation if the patent is challenged (with variation by country). Drivera
also has a stronger EPO patent on the process of assembling the battery
components (including the flux capacitor). You estimate a less than 5% chance
of the process patent being invalidated in any given country.

• China: Drivera also has a Chinese patent on the flux capacitor, and under
China’s patent law, you think there is only a 10% chance that the patent would
be invalidated if challenged. And Drivera has a Chinese patent on the process
of assembling the battery components (including the flux capacitor), which you
predict to have a 5% chance of invalidation. Drivera’s GC has expressed
uncertainty and concern about litigating in China, particularly against a
Chinese firm. But you have seen studies suggesting that foreign firms have
been more successful in China in recent years.19

What course of action do you recommend? Are there additional issues you
would want to research, either about the facts or the law in different jurisdictions?

3. Case Study: Apple v. Samsung Smartphone Patent Wars

In Chapter 3, you read the Apple v. Samsung decision on the use of secondary
considerations in nonobviousness, and Chapter 19 described their trip to the Supreme
Court in a separate case involving design patents. But these two cases were only part
of the global IP war between these companies.

When the iPhone was launched in 2007 after a top-secret three-year research
project, Steve Jobs noted: “Today, Apple is going to reinvent the phone . . . . And boy,
have we patented it.”20 Apple obtained utility patents in many jurisdictions on easy-

19 One study reviewed all 1663 publicly available patent infringement decisions in 2014
and found that plaintiffs won in 80% of cases and received permanent injunctions in 90% of
those cases, and that foreign patent holders received better results than domestic ones. The
injunction rate may be misleadingly low, as the primary reasons injunctions were not granted
were failure to ask and expired patents. Renjun Bian, Patent Litigation in China: Challenging
Conventional Wisdom, 33 Berkeley Tech. L.J. 413 (2018).
20 You can hear the applause at https://www.youtube.com/watch?v=8JZBLjxPBUU.
 INTERNATIONAL & COMPARATIVE PATENT LAW 581

to-understand elements of the iPhone and iPad, including touch gestures like “pinch
to zoom” and the “rubber-banding” feature in which the screen bounces back up when
you pull down past the bottom. It also obtained many design patents for features
including the icons, uncluttered front face, edge-to-edge glass, and rounded corners.
The press lauded the phone as “revolutionary,” and demand soared. By 2010, Apple
had 16% of the smartphone market.

Then, in spring 2010, Samsung launched the Galaxy S, with an appearance

and touch gestures that appeared to be directly copied from the iPhone. By the end of
the first quarter of 2011, Samsung had over 300% growth in smartphone sales and
had risen in market share from 5% to 13%. When Apple’s lawyers accused Samsung
of copying, Samsung’s vice president denied the allegation and noted that Samsung
had been developing mobile phones since 1991, including with $435 billion in R&D
between 2005 and 2010 and numerous parts that it supplies to Apple for the iPhone
(including memory and processors). According to Samsung, it was already developing
products with the allegedly copied elements before the iPhone was announced. Like
Apple, Samsung held many patents across the globe, including standard-essential
patents on 3G technology that had been licensed by virtually every major mobile
firm—except Apple, which argued that Samsung hadn’t followed FRAND procedures.

Apple and Samsung attempted to negotiate a resolution, but in March 2011,

Samsung introduced a tablet that appeared similar to the iPad. Before looking at the
timeline, imagine you are outside counsel for either firm. Apple wants to leverage its
multinational patent portfolio to wipe Samsung’s products from the global market;
Samsung wants to keep selling its very successful products and to avoid substantial
damages or attorney fees. The most important markets are the United States, the
European Union (including Germany, France, the UK, Italy, and the Netherlands),
Australia, Japan, and South Korea. Assume that Apple and Samsung have patents
similar to those described above in all these jurisdictions, but you needn’t delve into
the details of whether these patents are valid or infringed. Rather, focus on the
differences in litigation procedures and remedies. Where should Apple file suit, and
why? Should Samsung file suits proactively based on its standard-essential patents,
or simply play defense? What additional information do you want to know?

After you have considered these questions, compare the actual strategies the
two companies followed based on the timeline below. Why do you think they made the
choices they did? Did anyone “win” the patent war?

Simplified Timeline of Apple v. Samsung Global Smartphone Patent War

Apple Samsung
2011 sues in US (N.D. Cal.) alleging sues in South Korea, Japan,
April infringement of design patents and Germany; countersues in US
trade dress
582 MASUR & OUELLETTE ⋅ PATENT LAW

June countersues in Germany & South sues in UK, Italy, and the US (the
Korea, sues in the Netherlands ITC and D. Del.)
July sues in Australia and the US ITC sues in France
August wins injunctions in Australia, EU
(scaled back to just Germany) & the
Netherlands (where Samsung
designs around)
sues in German Federal Patent Court
to invalidate Samsung’s EU patents
November loses Australian injunction on appeal convinces Australian Court to force
Apple to reveal iPhone 4S source
code
December loses US preliminary injunction
request
2012 new patent suit in Germany; EU
January begins antitrust investigation v.
Samsung based on Apple’s claim of
not getting FRAND offer
February files 2nd US suit in N.D. Cal. on “slide
to unlock” etc.
March loses request for injunction in
Netherlands
June wins US injunctions on some products wins damages in the Netherlands
July stay of US injunction by Fed. Cir. (and
then reversal in October)
wins EU ban on some but not all
products
Australian patent hearings begin (and continue until June 2013, though no
substantive rulings before Aug. 2014 settlement)
August wins $1B jury verdict in US
loses case in Japan
split decision in South Korea: both companies got small damages award and
temporary injunction, but only against old models
September loses in Germany on touch-screen tech
October loses UK design appeal, ordered to
run public notice that Samsung
didn’t infringe & to pay Samsung’s
legal fees
based on Apple complaints, US DOJ
investigates Samsung over FRAND
abuse
December loses US permanent injunction withdraws EU standards-based
request injunction requests in
(unsuccessful) effort to prevent
preliminary EC antitrust ruling;
will just seek damages
 INTERNATIONAL & COMPARATIVE PATENT LAW 583

2013 wins ITC exclusion order

June after reexam (likely requested by
Samsung), USPTO confirms
patentability of Apple rubber-band
patent
April German Federal Patent Court
invalidates Apple’s slide-to-unlock
patent (affirmed Aug. 2015 by
Federal Court of Justice)
August wins ITC exclusion order against loses ITC ban on iPhone 4 and
older Samsung products iPads when USTR vetoes it
October USPTO confirms patentability of
touchscreen patent on reexam
November German court stays Samsung suit
pending Federal Patent Court
decision on validity
2014 wins $120M jury verdict in 2nd US wins $158K jury verdict in 2nd US
May case (had asked for $2B) case (had asked for $6M)
August all non-US patent suits dropped (including ongoing litigation in Germany,
UK, France, Italy, Netherlands, South Korea, Australia, Japan)
USPTO non-final action invalidates
Apple design patents on reexam
December USPTO affirms rejection of Apple
pinch-to-zoom patent on reexam
2015 Fed. Cir. reduces $1B US jury verdict
May from 1st case (reversing trade dress
portion)
September Fed. Cir. vacates denial of injunction
in 2nd US case (over dissent),
modifies opinion slightly in Dec.
N.D. Cal. enters partial final
judgment in 1st case of $548M
2016 Fed. Cir. panel finds slide-to-unlock
February patents obvious and data-detection
patent not infringed, reversing
Apple’s win in 2nd case
October en banc Fed. Cir. sua sponte vacates
Feb. panel decision, reinstates N.D.
Cal. judgment for 2nd case
December Supreme reverses & remands on
design patent damages in 1st case
2018 N.D. Cal. jury awards $539M to Apple
May
June settlement of all claims on undisclosed terms