New Patent Appeal Rules Stayed

Another alert from Ury Fischer:  “A controversial set of new rules for appeals before the Board of Patent Appeals and Interferences (“BPAI”) which was supposed to take effect on December 10, 2008 has been indefinitely stayed.  The BPAI decides appeals of decisions made by patent examiners in connection with patent applications filed with the USPTO.   The new rules had been heavily criticized by patent practitioners across the board as they were seen to needlessly increase the expense of filing appeal briefs.  The Federal Register Notice announcing the stay can be found here.  The delay was necessary because a review of the new rules by the Office of Management and Budget (“OMB”) has not yet been completed.  According to the Notice, ‘the [USPTO] will notify the public when the revised effective and applicability dates are set. In the subsequent notification, the Office will provide at least a 30-day time period before the BPAI final rule 2008 becomes effective.’  Many believe, however, that there is a good chance the new rules will not go into effect under the Obama administration.”

Model Jury Instructions for Patent Cases Released for Comment

This from Ury Fischer of Lott & Friedland: “The National Patent Jury Instructions Project, an informal committee of patent litigators and district judges assembled by Chief Judge Michel of the Federal Circuit, has just released for public comment a new set of Patent Model Jury Instructions.  The model instructions can be downloaded here: Model Patent Jury Instructions.  Although the instructions will not be endorsed by the Federal Circuit, they do represent the consensus of a committee of national scope and are intended to be a helpful model for judges and lawyers.  The model instructions draw from draw from previous sets of instructions developed by committees in the Northern District of California, the Federal Circuit Bar Association, the AIPLA and the District of Delaware.  The period for public comments runs through February 1, 2009.  Comments should be sent to: [email protected].”

Microsoft Seeks DJ Against Patent Holder Based on Customer Suits

Ury Fischer has brought to our attention a recently-filed suit in which Microsoft seeks a declaratory judgment of patent invalidity, unenforceability and non-infringement against WebXchange.  The asserted basis for the DJ action is a series of three patent infringement suits that WebXchange filed against Microsoft customers based on the customers’ use of web services created using Microsoft’s Visual Studio software.  According to Microsoft’s Complaint, a copy of which can be accessed by clicking here, the three customers had demanded that Microsoft indemnify them and “Microsoft is facing potential indemnification demands from additional customers who are sued by WebXchange for patent infringement in the future.”  Ury comments that this “is a declaratory judgment action against a patent holder who has repeatedly sued Microsoft’s customers for infringement based in Microsoft products but has carefully avoided suing or even contacting Microsoft.  It is an interesting case to follow to see how far the courts are willing to push the envelope on declaratory judgment in the wake of the Medimune case.”  Ury has agreed to keep us posted on interesting developments in this case.

IN RE BILSKI – The Federal Circuit Limits Business Method Patents

Doug McDonald, of Carlton Fields in Tampa, has provided this concise summary of the Federal Circuit’s recent decision in In re Bilski:

On October 30, 2008, an en banc Federal Circuit overruled portions of its opinion in State Street Bank and Trust Company v. Signature Financial Group, 149 F.3d 1368 (Fed. Cir. 1998), and narrowed the availability of patent protection for business methods. The majority opinion, written by Chief Judge Michel and joined by eight of the other eleven active judges on the Federal Circuit, cited the Supreme Court decisions in Gotttschalk v. Benson, 409 U.S. 63 (1972), Parker v. Flook, 437 U.S. 584 (1978), and Diamond v. Diehr, 450 U.S. 175 (1981), approving of the “definitive test” set forth in those decisions for determining the Section 101 patent eligibility of a process. The court stated that a process is “surely patent-eligible if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.” This overrules the portion of its opinion in State Street Bank that held a claim to be patent-eligible if it “produces a useful, concrete and tangible result.”

This decision leaves for future resolution the meaning of “tied to a particular machine” and could simply result in a reworking/reissuance of business methods patents so that the claims are tied more directly to actual machines. The decision also puts at risk a broad range of computer-implemented and information-based patents that have been issued over the past 10 years. It is possible, and even likely, that Bilski will seek certiorari, but careful reliance of the Federal Circuit on specific precedent from the Supreme Court may cause the Court to pass on the issue at this time. Between the impact of this decision and the enormous expansion of design patent rights in the recent Egyptian Goddess decision, patent attorneys, and especially patent litigators, may be very busy in the future.