Patent Digests

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PATENT LAW I. Introduction A. Overview of intellectual property law B. History of development C. Philosophical aspects of patent protection D. Significance in the IP regime and economy E. Principles of Protection F. Constitution Article XII Section 6. The use of property bears a social function, and all economic agents shall contribute to the common good. Individuals and private groups, including corporations, cooperatives, and similar collective organizations, shall have the right to own, establish, and operate economic enterprises, subject to the duty of the State to promote distributive justice and to intervene when the common good so demands. Section 14. The sustained development of a reservoir of national talents consisting of Filipino scientists, entrepreneurs, professionals, managers, high-level technical manpower and skilled workers and craftsmen in all fields shall be promoted by the State. The State shall encourage appropriate technology and regulate its transfer for the national benefit. The practice of all professions in the Philippines shall be limited to Filipino citizens, save in cases prescribed by law. Article XIV Section 10. Science and technology are essential for national development and progress. The State shall give priority to research and development, invention, innovation, and their utilization; and to science and technology education, training, and services. It shall support indigenous, appropriate, and self-reliant scientific and technological capabilities, and their application to the country’s productive systems and national life. Section 11. The Congress may provide for incentives, including tax deductions, to encourage private participation in programs of basic and applied scientific research. Scholarships, grants-in-aid, or other forms of incentives shall be provided to deserving science students, researchers, scientists, inventors, technologists, and specially gifted citizens. Section 12. The State shall regulate the transfer and promote the adaptation of technology from all sources for the national benefit. It shall encourage the widest participation of private groups, local governments, and community-based organizations in the generation and utilization of science and technology. Section 13. The State shall protect and secure the exclusive rights of scientists, inventors, artists, and other gifted citizens to their intellectual property and creations, particularly when beneficial to the people, for such period as may be provided by law. Section 14. The State shall foster the preservation, enrichment, and dynamic evolution of a Filipino national culture based on the principle of unity in diversity in a climate of free artistic and intellectual expression. Section 15. Arts and letters shall enjoy the patronage of the State. The State shall conserve, promote, and popularize the nation’s historical and cultural heritage and resources, as well as artistic creations. ALS2014B

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Section 16. All the country’s artistic and historic wealth constitutes the cultural treasure of the nation and shall be under the protection of the State which may regulate its disposition. Section 17. The State shall recognize, respect, and protect the rights of indigenous cultural communities to preserve and develop their cultures, traditions, and institutions. It shall consider these rights in the formulation of national plans and policies. Section 18. 1. The State shall ensure equal access to cultural opportunities through the educational system, public or private cultural entities, scholarships, grants and other incentives, and community cultural centers, and other public venues. 2. The State shall encourage and support researches and studies on the arts and culture. G. Universal Declaration of Human Rights Article 17. (1) Everyone has the right to own property alone as well as in association with others. (2) No one shall be arbitrarily deprived of his property. Article 19. Everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers. Article 26. (1) Everyone has the right to education. Education shall be free, at least in the elementary and fundamental stages. Elementary education shall be compulsory. Technical and professional education shall be made generally available and higher education shall be equally accessible to all on the basis of merit. (2) Education shall be directed to the full development of the human personality and to the strengthening of respect for human rights and fundamental freedoms. It shall promote understanding, tolerance and friendship among all nations, racial or religious groups, and shall further the activities of the United Nations for the maintenance of peace. (3) Parents have a prior right to choose the kind of education that shall be given to their children. Article 27. (1) Everyone has the right freely to participate in the cultural life of the community, to enjoy the arts and to share in scientific advancement and its benefits. (2) Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author. Article 29. (1) Everyone has duties to the community in which alone the free and full development of his personality is possible. (2) In the exercise of his rights and freedoms, everyone shall be subject only to such limitations as are determined by law solely for the purpose of securing due recognition and respect for the rights and freedoms of others and of meeting the just requirements of morality, public order and the general welfare in a democratic society. (3) These rights and freedoms may in no case be exercised contrary to the purposes and principles of the United Nations.

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H. Civil Code Art. 712. Ownership is acquired by occupation and by intellectual creation. Ownership and other real rights over property are acquired and transmitted by law, by donation, by estate and intestate succession, and in consequence of certain contracts, by tradition. They may also be acquired by means of prescription. Art. 721. By intellectual creation, the following persons acquire ownership: (1) The author with regard to his literary, dramatic, historical, legal, philosophical, scientific or other work; (2) The composer; as to his musical composition; (3) The painter, sculptor, or other artist, with respect to the product of his art; (4) The scientist or technologist or any other person with regard to his discovery or invention. (n) Art. 722. The author and the composer, mentioned in Nos. 1 and 2 of the preceding article, shall have the ownership of their creations even before the publication of the same. Once their works are published, their rights are governed by the Copyright laws. The painter, sculptor or other artist shall have dominion over the product of his art even before it is copyrighted. The scientist or technologist has the ownership of his discovery or invention even before it is patented. (n) Art. 723. Letters and other private communications in writing are owned by the person to whom they are addressed and delivered, but they cannot be published or disseminated without the consent of the writer or his heirs. However, the court may authorize their publication or dissemination if the public good or the interest of justice so requires. (n) Art. 724. Special laws govern copyright and patent. Art. 520. A trade-mark or trade-name duly registered in the proper government bureau or office is owned by and pertains to the person, corporation, or firm registering the same, subject to the provisions of special laws. (n) Art. 521. The goodwill of a business is property, and may be transferred together with the right to use the name under which the business is conducted. (n) Art. 522. Trade-marks and trade-names are governed by special laws. (n) II. Legislative History Intellectual Property Code Section 239. Repeals. — 239.1. All Acts and parts of Acts inconsistent herewith, more particularly Republic Act No. 165, as amended; Republic Act No. 166, as amended; and Articles 188 and 189 of the Revised Penal Code; Presidential Decree No. 49, including Presidential Decree No. 285, as amended, are hereby repealed. Section 235. Applications Pending on Effective Date of Act. — 235.1. All applications for patents pending in the Bureau of Patents, Trademarks and Technology Transfer shall be proceeded with and patents thereon granted in accordance with the Acts under which said applications were filed, and said Acts are hereby continued to be enforced, to this extent and for this purpose only, notwithstanding the foregoing general repeal thereof: Provided, That applications for utility models or industrial designs pending at the effective date of this Act, shall be proceeded with in accordance with the provisions of this Act, unless the applicants elect to prosecute said applications in accordance with the Acts under which they were filed. Section 236. Preservation of Existing Rights. — Nothing herein shall adversely affect the rights on the enforcement of rights in patents, utility models, industrial designs, marks and works, acquired in good faith prior to the effective date of this Act. (n)

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III. Definition of Patentable Inventions Intellectual Property Code Section 21. Patentable Inventions. — Any technical solution of a problem in any field of human activity which is new, involves an inventive step and is industrially applicable shall be Patentable. It may be, or may relate to, a product, or process, or an improvement of any of the foregoing. (Sec. 7, R.A. No. 165a) IV. Purpose

Manzano v. CA (1997) (LPG Burner) Note: The part relevant to the heading is in the doctrine, this was mentioned only once at the start of the case as some sort of intro, the rest of the case is about novelty, the digest is long because I included the evidences relied on, just in case. Doctrine: •

The primary purpose of the patent system is not the reward of the individual but the advancement of the arts and sciences. The function of a patent is to add to the sum of useful knowledge and one of the purposes of the patent system is to encourage dissemination of information concerning discoveries and inventions. This is a matter which is properly within the competence of the Patent Office the official action of which has the presumption of correctness and may not be interfered with in the absence of new evidence carrying thorough conviction that the Office has erred. Since the Patent Office is an expert body preeminently qualified to determine questions of patentability, its findings must be accepted if they are consistent with the evidence, with doubts as to patentability resolved in favor of the Patent Office.

Facts: Manzano filed with the Philippine Patent Office an action for the cancellation of Letters Patent for a gas burner registered in the name of Madolaria who subsequently assigned the letters patent to New United Foundry and Manufacturing Corporation (United Foundry). Manzano alleged that the utility model covered by the letters patent of Madolaria had been known or used by others in the Philippines for more than one (1) year before she filed her application for letters patent on 9 December 1979. Manzano presented the following evidence (a) affidavit alleging the existence of prior art, a brochure distributed by Manila Gas Corporation disclosing a pictorial representation of Ransome Burner made by Ransome Torch and Burner Company, USA, and (b) a brochure distributed by Esso Gasul or Esso Standard Eastern, Inc., of the Philippines showing a picture of another similar burner with top elevation view and another perspective view of the same burner. According to Manzano her husband Tua worked as a helper in the United Foundry where Madolaria used to be affiliated with; that Ong helped in the casting of an LPG burner which was the same utility model of a burner for which Letters Patent in issue was issued, and that after her husband’s separation from the shop she organized Besco Metal for the casting of LPG burners one of which had the configuration, form, and component parts similar to those being manufactured by United Foundry. Manzano then presented two (2) other witnesses, her husband Ong Bun Tua and Fidel Francisco. Ong testified that he worked as a helper in the United Foundry where he helped in the casting of LPG burners with the same configuration as the Letters Patent issued. Francisco testified that he had been employed with the Manila Gas Corporation and that Manila Gas Corporation imported “Ransome” burners way back in 1965 which were advertised through brochures to promote their sale. Madolaria, presented one witness, Rolando Madolaria, who testified, that he was the General Supervisor of United Foundry in the foundry, machine, and buffing section; that the company manufactured early models of singlepiece types of burners where the mouth and throat were not detachable; that in the latter part of 1978 Melecia Madolaria confided in him that complaints were being brought to her attention concerning the early models being manufactured; that he was then instructed to cast several experimental models based on revised sketches and specifications; that Madolaria ALS2014B

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(respondent) again made some innovations; and after, under the supervision of Melecia Madolaria (respondent), they obtained perfect results. Manzano lost in the Director of Patents and the CA. Issue: 1. W/N the Letter of Patents should be cancelled? Held/Ratio: 1. No. Under Section 7 of RA No. 165, as amended, which is the law on patents, expressly provides, “Inventions patentable. Any invention of a new and useful machine, manufactured product or substance, process or an improvement of any of the foregoing, shall be patentable.” Further, Sec. 55 of the same law provides, “Design patents and patents for utility models. - (a) Any new, original and ornamental design for an article of manufacture…” The element of novelty is an essential requisite of the patentability of an invention or discovery. If a device or process has been known or used by others prior to its invention or discovery by the applicant, an application for a patent therefor should be denied; and if the application has been granted, the court, in a judicial proceeding in which the validity of the patent is drawn in question, will hold it void and ineffective. In issuing Letters Patent to Madolaria for an “LPG Burner,” the Philippine Patent Office found her invention novel and patentable. The issuance of such patent creates a presumption which yields only to clear and cogent evidence that the patentee was the original and first inventor. The burden of proving want of novelty is on him who avers it and the burden is a heavy one which is met only by clear and satisfactory proof which overcomes every reasonable doubt. Hence, a utility model shall not be considered “new” if before the application for a patent it has been publicly known or publicly used in this country or has been described in a printed publication or publications circulated within the country, or if it is substantially similar to any other utility model so known, used or described within the country. As found by the Director of Patents, the standard of evidence is insufficient to overcome the presumption of legality of the issuance of the patent. The Director of Patents explained — Scrutiny of Evidence readily reveals that the utility model (LPG Burner) is not anticipated. Not one of the various pictorial representations of burners (evidence of Manzano) clearly and convincingly show that the device presented therein is identical or substantially identical in construction with the aforesaid utility model. It is relevant and material to state that in determining whether novelty or newness is negatived by any prior art, only one item of the prior art may be used at a time. For anticipation to occur, the prior art must show that each element is found either expressly described or under principles of inherency in a single prior art reference or that the claimed invention was probably known in a single prior art device or practice. Even assuming gratia arguendi that the aforesaid brochures (evidence of Manzano) do depict clearly on all fours each and every element of the patented gas burner device so that the prior art and the said patented device become identical, although in truth they are not, they cannot serve as anticipatory bars for the reason that they are undated. The dates when they were distributed to the public were not indicated and, therefore, they are useless prior art references. ... Furthermore, and more significantly, the model marked Exh. “K” does not show whether or not it was manufactured and/or cast before the application for the issuance of patent for the LPG burner was filed by Melecia Madolaria. With respect to Exh. “L,” Manzano claimed it to be her own model of LPG burner allegedly manufactured sometime in 1974 or 1975 and sold by her in the course of her business operation ALS2014B

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in the name of Besco Metal Manufacturing, which burner was denominated as “Ransome” burner. But a careful examination of Exh. “L” would show that it does not bear the word “Ransome” which is the burner referred to as the product being sold by the Petitioner. Exh. “L” was also undated It must likewise be pointed out that Ong Bun Tua testified on the brochures allegedly of Manila Gas and of Esso Gasul and on the alleged fact that Manila Gas Corporation was importing from the United States “Ransome” burners. But the same could not be given credence since he himself admitted during cross-examination that he has never been connected with Manila Gas Corporation. The validity of the patent issued by the Philippine Patent Office in favor of private respondent and the question over the inventiveness, novelty, and usefulness of the improved model of the LPG burner are matters which are better determined by the Patent Office. There is a presumption that the Office has correctly determined the patentability of the model and such action must not be interfered with in the absence of competent evidence to the contrary. The rule is settled that the findings of fact of the Director of Patents, especially when affirmed by the Court of Appeals, are conclusive on this Court when supported by substantial evidence. Petitioner has failed to show compelling grounds for a reversal of the findings and conclusions of the Patent Office and the Court of Appeals.

Pearl & Dean v. Shoemart Incorporated (2003) (lightboxes not patented) Doctrine •

The Patent Law has a three-fold purpose: first, patent law seeks to foster and reward invention; second, it promotes disclosures of inventions to stimulate further innovation and to permit the public to practice the invention once the patent expires; third, the stringent requirements for patent protection seek to ensure that ideas in the public domain remain there for the free use of the public

Facts: Pearl & Dean (P&D) is engaged in the manufacture of advertising display units referred to as light boxes. These units utilize specially printed posters sandwiched between plastic sheets and illuminated with backlights. It was able to secure a certificate of copyright registration over these illuminated display units. The advertising light boxes were marketed under the trademark “Poster Ads.” The application for registration of the trademark was filed with the Bureau of Patents, Trademarks, and Technology. P&D employed the services of Metro Industrial Services (MIS) to manufacture its advertising displays. In 1985, P&D negotiated with defendant Shoemart, Inc. (SMI) for the lease and installation of the light boxes in SM North Edsa. However, since SM North Edsa was under construction, SMI offered as alternative SM Makati and Cubao. During the signing of the Contract, SMI only returned the Contract with SM Makati. Manager of petitioner reminded SMI that their agreement includes SM Cubao. However, SMI did not bother to reply. Instead, respondent informed petitioner that they are rescinding the contract for SM Makati due to non-performance. Two years later, MIS offered to construct light boxes for SMI’s chain of stores. MIS subsequently fabricated 10 light boxes for SMI. After this contract, SMI engaged the services of EYD Rainbow Advertising to make the light boxes. These were delivered in a staggered basis and installed at SM Megamall and SM City. In 1989, petitioner received reports that exact copy of its light boxes was installed by SMI. It further discovered that North Edsa Marketing Inc. (NEMI), sister company of SMI, was set up primarily to sell advertising space in lighted display units located in SMI’s different branches. Petitioner sent letters to respondents asking them to cease using the light boxes and demanded the discontinued use of the trademark “Poster Ads.” Claiming that both SMI and NEMI failed to meet its demands, P&D filed a case for infringement of trademark and copy right, unfair competition, and damages. SMI maintained that it independently developed its poster panels using commonly known techniques and available technology without notice of or reference to P&D’s copyright. In addition, it said that registration of “Poster Ads” obtained by petitioner was only for stationeries such ALS2014B

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as letterheads, envelopes, and the like. “Poster Ads” is a generic term which cannot be appropriated as trademark, and, as such, registration of such mark is invalid. It also stressed that P&D is not entitled to the reliefs sought because the advertising display units contained no copyright notice as provided for by law. RTC found SMI and NEMI jointly and severally liable for infringement of copyright and trademark. CA reversed saying that it agreed with SMI that what was copyrighted was the technical drawings only and not the light boxes. Light boxes cannot be considered as either prints, pictorial illustrations, advertising copies, labels, tags, or box wraps, to be properly classified as copyrightable class “O” work. In addition, CA stressed that the protective mantle of the Trademark Law extends only to the goods used by the first user as specified in its certificate of registration. The registration of the trademark “Poster Ads” covers only stationeries such as letterheads, envelopes, and calling cards and newsletter. Issue: [I did not include the issues concerning copyright and trademark anymore.] 1. W/N the light box should be registered separately and protected by a patent issued by Intellectual Property Office. Held/Ratio: 1. Yes. Petitioner never secured a patent for the light boxes. It therefore acquired no patent rights which could have protected its invention, if in fact it really was. And because it had no patent, petitioner could not legally prevent anyone from manufacturing or commercially using the contraption. To be able to effectively and legally preclude others from copying and profiting from the invention, a patent is a primordial requirement. No patent, no protection. In Creser Precision Systems Inc v. CA, it was held that “there can be no infringement of a patent until a patent has been issued, since whatever right one has to the invention covered by the patent arises alone from the grant of the patent.” A patent gives the inventor the right to exclude all others. As a patentee, he has the exclusive right of making, selling, or using the invention. On the assumption that the petitioner’s advertising units were patentable inventions, P&D revealed them fully to the public by submitting the engineering drawings thereof to the national library (when it filed for copyright). The ultimate goal of a patent system is to bring new designs and technologies into the public through disclosure. Ideas, once disclosed to the public without protection of a valid patent, are subject to appropriation without significant restraint. As held in Bauer & Cie v. O’Donnel, “The Act secured to the inventor the exclusive right to make use and vend the thing patented, and consequently to prevent others from exercising like privileges without the consent of the patentee. It was passed for the purpose of encouraging useful invention and promoting new and useful inventions by the protection and stimulation given to inventive genius, and was intended to secure to the public, after the lapse of the exclusive privileges granted the benefit of such inventions and improvements.” The Patent Law has a three-fold purpose: first, patent law seeks to foster and reward invention; second, it promotes disclosures of inventions to stimulate further innovation and to permit the public to practice the invention once the patent expires; third, the stringent requirements for patent protection seek to ensure that ideas in the public domain remain there for the free use of the public. It is only after an exhaustive examination by the patent office that a patent is issued. Therefore, not having gone through the arduous examination for patents, petitioner cannot exclude others from the manufacture, sale, or commercial use of the light boxes on the sole basis of its copyright certificate over the technical drawings. V. Non-patentable inventions Intellectual Property Code (as Amended by R.A. 9502) Section. 22. Non-Patentable Inventions. — The following shall be excluded from patent protection: 22.1. Discoveries, scientific theories and mathematical methods, and in the case of drugs and medicines, the mere discovery of a new form or new property of a known substance which does not result in the enhancement of the known efficacy of that substance, or the mere discovery of any new property or new use for a known substance, ALS2014B

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or the mere use of a known process unless such known process results in a new product that employs at least one new reactant. For the purpose of this clause, salts, esters, ethers, polymorphs, metabolites, pure form, particle size, isomers, mixtures of isomers, complexes, combinations, and other derivatives of a known substance shall be considered to be the same substance, unless they differ significantly in properties with regard to efficacy; 22.2. Schemes, rules and methods of performing mental acts, playing games or doing business, and programs for computers; 22.3. Methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practiced on the human or animal body. This provision shall not apply to products and composition for use in any of these methods; 22.4. Plant varieties or animal breeds or essentially biological process for the production of plants or animals. This provision shall not apply to micro-organisms and non-biological and microbiological processes. Provisions under this subsection shall not preclude Congress to consider the enactment of a law providing sui generis protection of plant varieties and animal breeds and a system of community intellectual rights protection; 22.5. Aesthetic creations; and 22.6. Anything which is contrary to public order or morality. (Sec. 8, R.A. No. 165a) Agreement on Trade-Related Aspects of Intellectual Property (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. Subject to paragraph 4 of Article 65, paragraph 8 of Article 70 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 years after the date of entry into force of the WTO Agreement. The Indigenous People’s Rights Act of 1997 Section 32. Community Intellectual Rights. — ICCs/IPs have the right to practice and revitalize their own cultural traditions and customs. The State shall preserve, protect, and develop the past, present, and future manifestations of their cultures as well as the right to the restitution of cultural, intellectual, religious, and spiritual property taken without their free and prior informed consent or in violation of their laws, traditions, and customs. Section 34. Right to Indigenous Knowledge Systems and Practices and to Develop own Sciences and Technologies. — ICCs/IPs are entitled to the recognition of the full ownership and control and protection of their cultural and intellectual rights. They shall have the right to special measures to control, develop, and protect their sciences, technologies, and cultural manifestations, including human and other genetic resources, seeds, including derivatives ALS2014B

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of these resources, traditional medicines and health practices, vital medicinal plants, animals and minerals, indigenous knowledge systems and practices, knowledge of the properties of fauna and flora, oral traditions, literature, designs, and visual and performing arts. A. Discoveries, scientific theories, and mathematical methods

O’Reilly v. Morse (1854) Doctrine: •

Whoever discovers that a certain useful result will be produced in any art, machine, manufacture, or composition of matter by the use of certain means is entitled to a patent for it, provided he specifies the means he uses in a manner so full and exact that anyone skilled in the science to which it appertains can, by using the means he specifies, without any addition to or subtraction from them, produce precisely the result he describes. And if this cannot be done by the means he describes, the patent is void. And if it can be done, then the patent confers on him the exclusive right to use the means he specifies to produce the result or effect he describes, and nothing more. And it makes no difference in this respect whether the effect is produced by chemical agency or combination, or by the application of discoveries or principles in natural philosophy known or unknown before his invention, or by machinery acting altogether upon mechanical principles. In either case, he must describe the manner and process as above mentioned and the end it accomplishes. And anyone may lawfully accomplish the same end without infringing the patent if he uses means substantially different from those described.

Facts: The complainants allege that Morse is the true and original inventor of the Electro-Magnetic Telegraph, which uses electro-magnetism to transmit intelligence from one place to other distant places. Complainants also allege that defendant O’Reilly had disturbed their enjoyment of the right granted to them through the patent by constructing a line of posts using a telegraph substantially the same with that invented by Morse. O’Reilly apparently used the mechanism patented and were receiving compensation from such service — in violation of the rights granted by the patent or some of the parts thereof. The original patent was granted in 1840. It was cancelled and a new one was issued in 1848 containing several additions and improvements to the telegraph. The Decision of the Circuit Court that is appealed from states that the patents are valid and effectual on the ground that the complainants’ claim was well supported by evidence. The court also stated that the defendants had clearly violated and infringed the rights of the complainants because the mechanism used had substantially the same plan of construction and principle of operation. Issues: 1. Whether Morse was the first and original inventor? 2. Whether or not the patent issued in 1840, which was reissued in 1848, is valid? (Related to Non-Patentable Inventions) Held/Ratio: 1. Yes. The defendants state that there have been others who have invented the telegraph before Morse. The court ruled that from the evidence, it is of no contest that Morse preceded other inventions; also, he is the inventor of the process and method in his specification. The fact that he had consulted books and other people does not invalidate his patent. 2. No as to the 8th invention in the specification of his claims, which states that “Eighth. I do not propose to limit myself to the specific machinery or parts of machinery described in the foregoing specification and claims; the essence of my invention being the use of the motive power of the electric or galvanic current, which I call electromagnetism, however developed for marking or printing intelligible characters, signs, or letters, at any distances, being a new application of that power of which I claim to be the first inventor or discoverer.” He claims that he ALS2014B

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has the exclusive right to every improvement where the motive power is the electric current and the result is the marking or printing intelligible characters, signs, or letters at a distance. The court ruled that it was too broad and that it basically says that whatever process or machinery is used, as long as the result is the one he specified, it will be covered by his patent and thus cannot be used by the inventor. Morse claims a monopoly in the use of the machinery or parts of it, however developed. He claims an exclusive right to use a manner and process which he has not described and invented. Morse has been able, by a new combination of known powers (including electro-magnetism), to discover a method by which intelligible marks or signs may be printed at a distance but he has not discovered that the electro-magnetic current, in any other method and combinations, will do as well. The law requires that a specification be made as part of the patent and such patent will only be issued for the invention described in the specification. He thus prevents others from attempting to improve upon the manner and process described and deters the public from using it, even if discovered. He can lawfully claim only what he has invented and described and if he claims more, his patent is void. The patent here therefore is void only in part.

Telephone Cases (1888) (http://supreme.justia.com/cases/federal/us/126/1/case.html) The case is super long. Bulk of the case is explaining scientific stuff about the patent claims (as in super scientific). I lifted some from different summaries, Wikipedia, and from the case itself. Actually, it is a collection of cases. Basically, maraming kontrabida kay Graham Bell. Doctrines: •

The law does not require that a discoverer or inventor, in order to get a patent for a process, must have succeeded in bringing his art to the highest degree of perfection; it is enough if he describes his method with sufficient clearness and precision to enable those skilled in the matter to understand what the process is, and if he points out some practicable way of putting it into operation.

•

In order to procure a patent for a process, the inventor must describe his invention with sufficient clearness and precision to enable those skilled in the matter to understand what his process is, and must point out some practicable way of putting it into operation; but he is not required to bring the art to the highest degree of perfection.

Facts: It appears from the proof in these causes that Alexander Graham Bell was the first discoverer of the art or process of transferring to, or impressing upon, a continuous current of electricity in a closed circuit, by gradually changing its intensity, the vibrations of air produced by the human voice in articulate speech in a way to cause the speech to be carried to and received by a listener at a distance on the line of the current, and this discovery was patentable under the patent laws of the United States. In order to procure a patent for a process, the inventor must describe his invention with sufficient clearness and precision to enable those skilled in the matter to understand what his process is, and must point out some practicable way of putting it into operation; but he is not required to bring the art to the highest degree of perfection The Telephone Cases were a series of U.S. court cases in the 1870s and 1880s related to the invention of the telephone, which culminated in the 1888 decision of the United States Supreme Court upholding the priority of the patents belonging to Alexander Graham Bell. The Cases: 1. Dolbear v. American Bell Telephone Company 2. Molecular Telephone Company v. American Bell Telephone Company 3. American Bell Telephone Company v. Molecular Telephone Company 4. Clay Commercial Telephone Company v. American Bell Telephone Company ALS2014B

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5. People’s Telephone Company v. American Bell Telephone Company 6. Overland Telephone Company v. American Bell Telephone Company The objector (or plaintiff) in the notable Supreme Court case was initially the Western Union telegraph company, which was at the time a far larger and better financed competitor than American Bell Telephone. Western Union advocated several more recent patent claims of Daniel Drawbaugh, Elisha Gray, Antonio Meucci and Philip Reis in a bid to invalidate Alexander Graham Bell’s master and subsidiary telephone patents dating back to March 1876. Bell got his patent March 7, 1876, and the fortunate accident which led to his discovery occurred June 2, 1875. Active litigation to enforce his patented rights was begun by his company on the 12th of September, 1878, with a suit, in the Circuit Court of the United States for the District of Massachusetts, against Richard A. Dowd. This suit was defended by the Western Union Telegraph Company and vigorously contested. The answer was filed November 4, 1878, setting up alleged anticipations by Gray, Edison, Dolbear, and others. The record fills 1,200 printed pages, but before a decision was reached, the case was compromised and a decree entered by consent. The litigation ended at some time in the latter part of the year 1879. The last deposition was taken on the 19th of September in that year. Had Western Union succeeded it would have immediately destroyed the Bell Telephone Company and then Western Union stood to become the world’s largest telecommunications monopoly in Bell’s place. The U.S. Supreme Court came within one vote of overturning the Bell patent, thanks to the eloquence of lawyer Lysander Hill for the Peoples Telephone Company. It was claimed by the People’s Company that Drawbaugh’s inventions and the inventions covered by Bell’s patents were for substantially the same thing. The main issues in this respect argued by counsel were issues of fact — whether Drawbaugh’s instruments were made prior to Bell’s discovery and were practically operative, and whether the Drawbaugh witnesses to these points were to be believed. The record contains a great mass of testimony on these issues. The court Affirmed several other lower court cases Dolbear et al. v. American Bell Tel. Co., Molecular Te. Co. et al. v. American Bell Tel. Co, People’s Tel. Co. et al. v. American Bell Tel. Co. Well reversing American Bell Tel Co. et al. v. Molecular Tel. Co et al. The Supreme Court clarified the line dividing permissible claims from those that were too broad under the Morse rule. Alexander Graham Bell applied for a patent on the telephone. Fifth claim covered The method of and apparatus for transmitting vocal or other sounds telegraphically, as herein described, by causing electrical undulations, similar in form to the vibrations of the air accompanying the said vocal or other sounds, substantially as set forth. It is contended that this embraces the art of transferring to or impressing upon a current of electricity the vibrations of air produced by the human voice in articulate speech, in a way that the speech will be carried to and received by a listener at a distance on the line of the current. Bell’s claim, said the Court, differed from Morse’s claim because Bell claimed only the use of electric current for transmitting the human voice. From the case (Prepare! Nose bleed!) In O’Reilly v. Morse, it was decided that a claim in broad terms for the use of the motive power of the electric or galvanic current called “electromagnetism, however developed, for making or printing intelligible characters, letters, or signs at any distances,” although “a new application of that power” first made by Morse, was void, because it was a claim “for a patent for an effect produced by the use of electromagnetism, distinct from the process or machinery necessary to produce it;” but a claim for “making use of the motive power of magnetism, when developed by the action of such current or currents, substantially as set forth in the foregoing description, ... as means of operating or giving motion to machinery, which may be used to imprint signals upon paper or other suitable material, or to produce sounds in any desired manner, for the purpose of telegraphic communication at any distances,” was sustained. The effect of that decision was therefore that the use of magnetism as a motive power, without regard to the particular process with which it was connected in the patent, could not be claimed, but that its use in that ALS2014B

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connection could. The Court noted that “it may be that electricity cannot be used at all for the transmission of speech except in the way Bell has discovered.” Summary from Internet: http://danfingerman.com/law/cases/TelephoneCases1.html Procedural Posture: Defendant telephone companies and manufacturer sought review of the judgments of the Circuit Courts of the United States for the Districts of Massachusetts, Southern District of New York, and Eastern District of Pennsylvania, which entered a perpetual injunction against the telephone companies and the manufacturer in favor of plaintiff patent owners in their claim alleging patent infringement. Overview: The patent holders filed an infringement claim against the telephone companies and the manufacturer and a perpetual injunction was issued. On appeal, the telephone companies and the manufacturer contested the validity of the patents and the scope of claim five, alleging that they did not use instruments which were identical with the forms shown in the drawings of that patent claim. The telephone companies and the manufacturer also denied that the patent holders were the original and first inventors. The court affirmed in part and reversed in part, holding that the charge of a fraudulent interpolation in the patent holders’ specifications was not sustained. The court held that the patent claimed but one method of transmitting vocal and other sounds, which method converted the energy of sound-waves into magnetic energy and then into vibratory currents of electricity. The court reversed the decree against the manufacturer regarding the fifth claim, holding that the battery, primary circuit, transmitter diaphragm, its electrodes, and the coil and magnet in the primary or transmitter circuit of the manufacturer’s apparatus, did not involve the patent method described in claim five. Outcome: The court affirmed the perpetual injunction issued against the telephone companies and reversed the decree in the manufacturer’s case, so far as it was against that company on the fifth claim of the patent. B. Living Things and natural substances

Diamond v. Chakrabarty (1980) Facts: Chakrabarty, a microbiologist, filed a patent application involving the invention of a “bacterium from the genus Pseudomonas containing therein at least two stable energy-generating plasmids, each of said plasmids providing a separate hydrocarbon degradative pathway.” This human-made, genetically engineered bacterium is capable of breaking down multiple components of crude oil. This bacterium does not occur naturally, and therefore, is believed to have significant value for the treatment of oil spills. Chakrabarty’s patent claims were of three types: first, process claims for the method of producing the bacteria; second, claims for an inoculum comprised of a carrier material floating on water, such as straw, and the new bacteria; and third, claims to the bacteria themselves. The first two types were allowed by the patent examiner. But the claims for the bacteria was rejected on the grounds that microorganisms are products of nature and that Title 35 U.S.C. 101 states that living things are not patentable. Title 35 U.S.C. 101 provides, “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.” Chakrabarty appealed to the Patent Office Board of Appeals but it affirmed the decision. Diamond’s argument is that the passage of the previous laws (1930 Plant Patent Act and Variety Protection Act) evidences congressional understanding that the terms “manufacture” or “composition of matter” does not include living things and that microorganisms cannot qualify as patentable subject matter until Congress expressly authorizes such protection. The Court of Customs and Patent Appeals reversed, concluding that the fact that micro-organisms are alive is without legal significance for purposes of the patent law.

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Issue: 1. W/N a live, human-made micro-organism is patentable subject matter under 35 U.S.C. 101 Held/Ratio: 1. YES. The case involves the proper interpretation of the 35 U.S.C. 101, specifically the phrases “manufacture” and “composition of matter” and on whether these include living things. The Court has read the term “manufacture” in accordance with its dictionary definition to mean “the production of articles for use from raw or prepared materials by giving to these materials new forms, qualities, properties, or combinations, whether by hand-labor or by machinery.” Similarly, “composition of matter” has been construed consistent with its common usage to include “all compositions of two or more substances and ... all composite articles, whether they be the results of chemical union, or of mechanical mixture, or whether they be gases, fluids, powders or solids.” In choosing such expansive terms as “manufacture” and “composition of matter,” modified by the comprehensive “any,” Congress plainly contemplated that the patent laws would be given wide scope. And the relevant legislative history also supports a broad construction. The only limit is that laws of nature, physical phenomena, and abstract ideas are not patentable. In the case, the patentee has produced a new bacterium with markedly different characteristics from any found in nature and one having the potential for significant utility. The micro-organism plainly qualifies as patentable subject matter. His claim is not to an unknown natural phenomenon, but to a non-naturally occurring manufacture or composition of matter — a product of human ingenuity “having a distinctive name, character, and use.” The patentee has produced a new bacterium with markedly different characteristics from any found in nature and one having the potential for significant utility. His discovery is not nature’s handiwork, but his own; accordingly, it is patentable subject matter. Also, the passage of the 1930 Plant Patent Act, which afforded patent protection to certain asexually reproduced plants, and the 1970 Plant Variety Protection Act, which authorized protection for certain sexually reproduced plants but excluded bacteria from its protection, does not evidence congressional understanding that the terms “manufacture” or “composition of matter” do not include living things. Nor does the fact that genetic technology was unforeseen when Congress enacted U.S.C. 101 require the conclusion that micro-organisms cannot qualify as patentable subject matter until Congress expressly authorizes such protection. The unambiguous language of the law fairly embraces respondent’s invention. Arguments against patentability, based on potential hazards that may be generated by genetic research, should be addressed to the Congress and the Executive, not to the Judiciary.

Parke-Davis & Co. v. H.K. Mulford Co. (1911) patentability of adrenalin Doctrine: •

Patents on purified naturally occurring substances are valid.

•

Creation of a new invention that has commercial and therapeutic novelty is patentable.

Facts: Dr. Jokichi Takamine was the inventor of 2 patents (dry product version and solution version) that isolated a purified substance of significant medical use from the suprarenal glands of animals. Parke Davis who was the assignee of the patents called the product Adrenalin. Takamine’s adrenalin was medically superior to the older isolates of this gland that had been in use. Defendant made and sold a similar product called Adrin. In this suit for patent infringement, the question before the court was whether the patent was valid because the substance itself was naturally occurring therefore not novel. Issue: 1. Whether a person could obtain a patent for isolation of a purified substance that is a naturally occurring product of nature. ALS2014B

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Held/Ratio: 1. Yes, a person could obtain a patent for isolation of a purified substance even if that is a naturally occurring product of nature. Even if it were merely an extracted product without change, there is no rule that such are not patentable. The crucial step which Takamine discovered was that the base could be directly precipitated by an addition of ammonia or strictly caustic alkali and ammonium chloride, which together liberate ammonia, which in turn effects precipitation. Takamine was the first to isolate any base whatever, all other older products existing in the form of a salt. “At best, the former experimenters had only wise surmises, excellent lanterns of approach by which science alone can advance, but quite different from the full light of discovery.” The invention was therefore novel. He made it available for any use by removing it from the other gland tissue in which it was found, and while it is of course possible logically to call this a purification of the principle (some scientific process not really explained), it became for every practical purpose a new thing commercially and therapeutically. The transformation that took place was a result of human ingenuity, which produces a product, an innovation as socially marketable and publicly useful is deserving of a patent grant. According to Justice Learned Hand, there were “ample differences” between the claimed purified substance and the prior natural substance. The line between different substances and degrees of the same substance is to be drawn from the common usages of men than from nice considerations of dialectic. Requirements for Patentability (from a case brief) •

Patentable Subject Matter

•

Utility

•

Novelty

•

Non-Obviousness

•

Enableness

Funk Bros. Seed Co. v. Kalo Inoculant Co. (1948) The properties of inhibition or of noninhibition in the bacteria were “the work of nature,” and therefore not subject to being patented. Facts: Leguminous plants are able to take nitrogen from the air and fix it in the plant for conversion to organic nitrogenous compounds. The ability of these plants to fix nitrogen from the air depends on the presence of Rhizaobium bacteria that infect the roots of the plant and form nodules on them. Rhizobium has 6 different species which may produce an inhibitory effect on each other when mixed. These species of Rhizobium bacteria have long been packaged for sale to and use by farmers in the inoculation of the seeds of leguminous plants, with each package containing only 1 species of root nodule Rhizobium bacteria to avoid its mutual inhibition. The packaged inoculant could therefore be used successfully only in plants of the particular group corresponding to this bacterial species. Bond (patenteed), discovered that there are strains of each species which do not exert a mutually inhibitive effect on each other. Thus, he was able to provide a mixed culture of Rhizobia capable of inoculating plants belonging to several groups. Kalo Inoculenat, Co. exploited the claimed invention by selling multi-purpose packages containing a mixture of different species of Rhizobia suitable for different plants. Funk infringed by selling similar packages and Kalo sued for patent infringement. While the patent had claims both to the method of producing a multi-purpose inoculant by mixing together mutually non-inhibitive strains of Rhizobia and to the inoculant product comprising a mixture of mutually noninhibitive strains of Rhizobia, the case before the Court involved only the product claims. ALS2014B

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Issue: 1. W/N properties of inhibition or of noninhibition in the bacteria were “the work of nature,” and therefore not subject to being patented. Held/Ratio: 1. SC held that the properties of inhibition or of noninhibition in the bacteria were “the work of nature.,” and therefore not subject to being patented. Patents cannot issue for the discovery of the phenomena of nature.” The Court added: The qualities of these bacteria, like the heat of the sun, electricity, or the qualities of metals, are part of the storehouse of knowledge of all men. They are manifestations of laws of nature, free to all men and reserved exclusively to none. He who discovers a hitherto unknown phenomenon of nature has no claim to a monopoly of it which the law recognizes. If there is to be invention from such a discovery, it must come from the application of the law of nature to a new and useful end. The court of appeals thought that packaging the non-inhibitory strains together went beyond the discovery of a phenomenon of nature and conferred patentability, because a “new and different composition of noninhibitive strains…contributed utility and economy to the manufacture and distribution of commercial inoculants.” But the Supreme Court disagreed, and reversed, because the “aggregation of species fell short of invention within the meaning of the patent statutes.” The Court explained: The aggregation of select strains of the several species into one product is an application of that newly discovered natural principle. But however ingenious the discovery of that natural principle may have been, the application of it is hardly more than an advance in the packaging of the inoculants. Each of the species of root nodule bacteria contained in the package infects the same group of leguminous plants which it always infected. No species acquires a different use. The combination of species produces no new bacteria, no change in the six species of bacteria, and no enlargement of the range of their utility. Each species has the same effect it always had. The bacteria perform in their natural way. Their use in combination does not improve in any way their natural functioning. They serve the ends nature originally provided, and act quite independently of any effort of the patentee. The application of this newly discovered natural principle to the problem of packaging of inoculants may well have been an important commercial advance. But once nature’s secret of the noninhibitive quality of certain strains of the species of Rhizobium was discovered, the state of the art made the production of a mixed inoculant a simple step. Even though it may have been the product of skill, it certainly was not the product of invention. There is no way in which we could call it such unless we borrowed invention from the discovery of the natural principle itself. That is to say, there is no invention here unless the discovery that certain strains of the several species of these bacteria are noninhibitive, and may thus be safely mixed, is invention. But we cannot so hold without allowing a patent to issue on one of the ancient secrets of nature now disclosed. Since we conclude that the product claims do not disclose an invention or discovery within the meaning of the patent statutes, we do not consider whether the other statutory requirements are satisfied. The Court decided this case under the patent statute in effect before the 1952 recodification, which distinguished obviousness from “invention.” It is therefore not certain from the language used whether the Court is holding that the claimed invention was too obvious to justify a patent or, as appears more likely, that when the discovery of a phenomenon of nature is implemented in a facially trivial manner the subject matter is not patent-eligible. However, on the basis of how subsequent Supreme Court opinions, such as Benson[2] and Flook,[3] treat Funk, it appears that the opinion is one on patent-eligibility. A lower court opinion illustrating the application of the doctrine of the Funk case is Armour Pharmaceutical Co. v. Richardson Merrell, Inc.[4] In that case, the patentee desired to administer trypsin orally for use as an antiinflammatory. He discovered that trypsin could be absorbed effectively in the lower small intestine (ileum). However, stomach acids destroyed trypsin. The patentee proposed and claimed coating trypsin with an enteric coating (stomach-acid-resistant coating), which permitted the trypsin to pass through the stomach to the small intestine without damage where it would be absorbed and then act as an anti-inflammatory or analgesic. However, ALS2014B

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the enteric coating expedient was already known for other products. The United States Court of Appeals for the Third Circuit invalidated the patent on the basis of Funk not to be confused with a style of jazz: Our reading of the Supreme Court’s opinion in Funk leads us to conclude that the test of patentability of a natural phenomenon is as follows: Would an artisan, knowing the newly discovered natural phenomenon require more than ordinary skill to discover the process by which to apply that phenomenon as the patentee had done? Once nature’s secret that the ileum would absorb trypsin was uncovered, any artisan would have known the process of enterically coating the trypsin to enable it to pass through the acidic environment of the stomach and continue into the ileum. ...[The inventor’s] application of that newly discovered principle would itself have to be inventive in order to sustain patent. The court held that according to Funk the manner of implementation of a natural principle must itself be patentable, as Flook subsequently held.

Ex Parte Allen (1987) Facts: Two of the most important species of edible oysters in the United States are the Atlantic (or American) oyster found generally in the Atlantic Ocean and the Pacific oyster (Crassostrea gigas ) found in the cooler waters of the Pacific Ocean. The main difference between the two species is the percentage of body weight that is involved in producing gametes during the breeding season. The Atlantic oyster devotes up to 40 percent of its body weight to gamete production; the Pacific oyster expends up to twice that amount. The Atlantic oyster is edible throughout the year whereas the Pacific oyster is soft and unsuitable for human consumption during its reproductive phase. The appellants’ application discloses (1) a method of producing sterile Pacific oysters, which are edible year round, by inducing polyploidy in the oysters, and (2) the oysters produced by that method. Most cells are “diploid” or have two sets of chromosomes. “Polyploid” cells have three or more sets of chromosomes. Appellants induce polyploidy by fertilizing oyster eggs under controlled temperatures and applying hydrostatic pressure to the zygotes. The zygotes are then cultivated using known techniques until they develop into adult oysters. The claimed process is used only on Pacific oysters. The product claims, 8 and 12 and dependent claims 13 and 14, cover polyploid Pacific oysters produced by the process. Issue: 1. Whether the Board of Patent Appeals and Interferences should grant the four claims of a patent application for a type of oyster? Held/Ratio: 1. The Board of Patent Appeals and Interferences rejected the four claims of a patent application for a type of oyster. The examiner allowed the process claims but rejected the product claims as not disclosing patentable subject matter under 35 U.S.C. s 101 (1982) (“Section 101”)1 and as obvious under 35 U.S.C. s 103 (1982) (“Section 103”).2 The Board reversed the Section 101 rejection because “the Supreme Court made it clear in its decision in Diamond v. Chakrabarty, [447 U.S. 303 (1980) ], that Section 101 includes man-made life forms.” 1.

35 USC § 101 - Inventions patentable - 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.

2.

35 USC § 103 - (a) A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. Patentability shall not be negatived by the manner in which the invention was made. XXX

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The Board affirmed the Section 103 rejection in light of a prior art publication by Stanley et al., which discloses a method of chemically inducing polyploidy in more than half of the Atlantic oysters so treated. The Board stated: Stanley et al. recommend the induction of polyploidy in oysters as a way to increase growth as follows: “We have shown a clear growth advantage in triploid American oysters produced by blocking the first meiosis division. We recommend induction of polyploidy as a way to increase growth in cultured oysters.” The Board concluded that in view of the express recommendation by Stanley et al., experts in the art who have successfully induced polyploidy in one species of oysters, it would have been obvious to one of ordinary skill in the art to induce polyploidy in Pacific Crassostrea gigas oysters. Allen’s argument that the claimed polyploid c. gigas oysters are unobvious because they are sterile and do not devote significant portions of their body weight to reproduction, thereby remaining edible year around, is not persuasive. It was known in the art that polyploids exhibit sterility, thus, it is not unexpected that sterile, polyploid c. gigas oysters do not devote significant portions of their body weight to reproductive gamete formation. The polyploid oysters have very predictable properties: they are sterile and, therefore, larger. Old, while not binding precedent, notes that until the process was performed, the properties of the resultant product were unknown and therefore would not be obvious. A polyploid oyster produced by any process has known properties and is prima facie obvious. The Allen declaration states that the Stanley techniques are not effective in producing polyploidy in the Pacific oyster, which it asserts has distinctly different characteristics from the Atlantic oyster. Allen describes the applicants’ experiments and uses general terms to describe the results (e.g., “near total mortality,” “extremely low yields,” “very low survival rates”). The declaration concludes that “extensive experimentation with all possible variables would be required in order to develop a process that would work with C. gigas.” The Board considered the Allen declaration and “agree[d] with the Examiner that the Allen declaration is not persuasive of non-obviousness.” The Board noted that the Allen declaration contained “mere conclusory statements ... entitled to little weight when the Patent and Trademark Office questions the efficacy of the statements.” The fact that the Stanley process may require “extensive experimentation ... in order to develop a process that would work with [Pacific oysters]” does not render polyploid Pacific oysters themselves unobvious. To state that the Pacific oyster is genetically and phenotypically distinct from the Atlantic oyster does not rebut the prima facie case. Both are a species of oyster which are sterile and, therefore, larger when polyploid. The Board found that the Allen declaration did not rebut the prima facie obviousness determination. C. Software

Gottschalk v. Benson (1972) Facts: Respondents filed in the Patent Office an application for an invention which was described as being related “to the processing of data by program and more particularly to the programmed conversion of numerical information” in general purpose digital computers. They claimed a method for converting binary-coded decimal (BCD) numerals into pure binary numerals. The claims were not limited to any particular art or technology, to any particular apparatus or machinery, or to any particular end use. They purported to cover any use of the claimed method in a general purpose digital computer of any type. Engineers Gary Benson and Arthur Tabbot invented a faster and more efficient mathematical procedure for transforming the normal “decimal” type of numbers (base 10) into true “binary” numbers (base 2) which are simpler to process within computers. Their mathematical procedure was somewhat akin to long division, albeit with different steps. Their attorney argued before the patent examiner that the inventors were entitled to a broad patent covering any use of their new mathematical procedure, even use of it by a human using pencil and paper. The examiner rejected their ALS2014B

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invention. An appellate court overruled the examiner and ordered a patent to issue. The Commissioner of Patents then petitioned successfully to have the Supreme Court review this decision. Before the Supreme Court, the inventors’ attorney backed down from his earlier position and argued that the inventors were entitled to a patent covering all uses of their new mathematical procedure in computers, but not necessarily to its use by humans using pencil and paper. (The members of the Supreme Court at that time knew very little about computers.) The case is here on a petition for a writ of certiorari. Issue: 1. WON the method described and claimed is a “process” within the meaning of the Patent Act. Held/Ratio: 1. A digital computer, as distinguished from an analog computer, operates on data expressed in digits, solving a problem by doing arithmetic as a person would do it by head and hand. Some of the digits are stored as components of the computer. Others are introduced into the computer in a form which it is designed to recognize. The computer operates then upon both new and previously stored data. The general purpose computer is designed to perform operations under many different programs. The representation of numbers may be in the form of a time series of electrical impulses, magnetized spots on the surface of tapes, drums, or discs, charged spots on cathode-ray tube screens, the presence or absence of punched holes on paper cards, or other devices. The method or program is a sequence of coded instructions for a digital computer. The patent sought is on a method of programming a general purpose digital computer to convert signals from binary-coded decimal form into pure binary form. A procedure for solving a given type of mathematical problem is known as an “algorithm.” The procedures set forth in the present claims are of that kind; that is to say, they are a generalized formulation for programs to solve mathematical problems of converting one form of numerical representation to another. From the generic formulation, programs may be developed as specific applications. The decimal system uses as digits the 10 symbols 0, 1, 2, 3, 4, 5, 6, 7, 8, and 9. The value represented by any digit depends, as it does in any positional system of notation, both on its individual value and on its relative position in the numeral. Decimal numerals are written by placing digits in the appropriate positions or columns of the numerical sequence. The pure binary system of positional notation uses two symbols as digits -- 0 and 1, placed in a numerical sequence with values based on consecutively ascending powers of 2. In pure binary notation, what would be the tens position is the twos position; what would be hundreds position is the fours position; what would be the thousands position is the eights. Any decimal number from 0 to 10 can be represented in the binary system with four digits or positions as indicated in the following table. The method sought to be patented varies the ordinary arithmetic steps a human would use by changing the order of the steps, changing the symbolism for writing the multiplier used in some steps, and by taking subtotals after each successive operation. The mathematical procedures can be carried out in existing computers long in use, no new machinery being necessary. And, as noted, they can also be performed without a computer. Mackay Co. v. Radio Corp.,”while a scientific truth, or the mathematical expression of it, is not a patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be.” That statement followed the longstanding rule that “an idea, of itself, is not patentable.” “A principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right.” 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. We dealt there with a “product” claim, while the present case deals with a “process” claim. But we think the same principle applies. ALS2014B

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Here the “process” claim is so abstract and sweeping as to cover both known and unknown uses of the BCD to pure binary conversion. The end use may (1) vary from the operation of a train to verification of drivers’ licenses to researching the law books for precedents and (2) be performed through any existing machinery or futuredevised machinery or without any apparatus. The Court said, “That a process may be patentable, irrespective of the particular form of the instrumentalities used, cannot be disputed. If one of the steps of a process be that a certain substance is to be reduced to a powder, it may not be at all material what instrument or machinery is used to effect that object, whether a hammer, a pestle and mortar, or a mill. Either may be pointed out; but if the patent is not confined to that particular tool or machine, the use of the others would be an infringement, the general process being the same. A process is a mode of treatment of certain materials to produce a given result. It is an act, or a series of acts, performed upon the subject matter to be transformed and reduced to a different state or thing.” Transformation 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. So it is that a patent in the process of “manufacturing fat acids and glycerine from fatty bodies by the action of water at a high temperature and pressure” was sustained in Tilghman v. Proctor. The Court said, “The chemical principle or scientific fact upon which it is founded is that the elements of neutral fat require to be severally united with an atomic equivalent of water in order to separate from each other and become free. This chemical fact was not discovered by Tilghman. He only claims to have invented a particular mode of bringing about the desired chemical union between the fatty elements and water.” It is argued that a process patent must either be tied to a particular machine or apparatus or must operate to change articles or materials to a “different state or thing.” We do not hold that no process patent could ever qualify if it did not meet the requirements of our prior precedents. It is said that the decision precludes a patent for any program servicing a computer. We do not so hold. It is said that we have before us a program for a digital computer but extend our holding to programs for analog computers. We have, however, made clear from the start that we deal with a program only for digital computers. It is said we freeze process patents to old technologies, leaving no room for the revelations of the new, onrushing technology. Such is not our purpose. What we come down to, in a nutshell, is the following. It is conceded that one may not patent an idea. But, in practical effect, that would be the result if the formula for converting BCD numerals to pure binary numerals were patented in this case. The mathematical formula involved here has no substantial practical application except in connection with a digital computer, which means that, if the judgment below is affirmed, the patent would wholly preempt the mathematical formula and, in practical effect, would be a patent of the algorithm itself. It may be that the patent laws should be extended to cover these programs, a policy matter to which we are not competent to speak. “The Patent Office now cannot examine applications for programs because of a lack of a classification technique and the requisite search files. Even if these were available, reliable searches would not be feasible or economic because of the tremendous volume of prior art being generated. Without this search, the patenting of programs would be tantamount to mere registration, and the presumption of validity would be all but nonexistent.” “It is noted that the creation of programs has undergone substantial and satisfactory growth in the absence of patent protection, and that copyright protection for programs is presently available. “ If these programs are to be patentable, considerable problems are raised which only committees of Congress can manage, for broad powers of investigation are needed, including hearings which canvass the wide variety of views which those operating in this field entertain. The technological problems tendered in the many briefs before us indicate to us that considered action by the Congress is needed. Reversed. ALS2014B

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Diamond v. Diehr (1981) Facts: Respondents filed a patent application claiming invention for a process for molding raw, uncured synthetic rubber into cured precision products. While it was possible, by using well-known time, temperature, and cure relationships, to calculate by means of an established mathematical equation when to open the molding press and remove the cured product, according to respondents the industry had not been able to measure precisely the temperature inside the press, thus making it difficult to make the necessary computations to determine the proper cure time. Respondents characterized their contribution to the art to reside in the process of constantly measuring the temperature inside the mold and feeding the temperature measurements into a computer that repeatedly recalculates the cure time by use of the mathematical equation and then signals a device to open the press at the proper time. The patent examiner rejected the respondents’ claims on the sole ground that they were drawn to nonstatutory subject matter. He determined that those steps in respondents’ claims that are carried out by a computer under control of a stored program constituted nonstatutory subject matter under this Court’s decision in Gottschalk v. Benson. The remaining steps -- installing rubber in the press and the subsequent closing of the press -- were “conventional and necessary to the process, and cannot be the basis of patentability.” The examiner concluded that respondents’ claims defined and sought protection of a computer program for operating a rubber-molding press. Issue: 1. Whether a process for curing synthetic rubber which includes in several of its steps the use of a mathematical formula and a programmed digital computer is patentable subject matter Held/Ratio: 1. YES. Analyzing respondents’ claims, we think that a physical and chemical process for molding precision synthetic rubber products falls within the categories of possibly patentable subject matter. That respondents’ claims involve the transformation of an article, in this case raw, uncured synthetic rubber, into a different state or thing cannot be disputed. The respondents’ claims describe in detail a step-by-step method for accomplishing such, beginning with the loading of a mold with raw, uncured rubber and ending with the eventual opening of the press at the conclusion of the cure. Industrial processes such as this are the types which have historically been eligible to receive the protection of our patent laws. A “process” is “an act, or a series of acts, performed upon the subject-matter to be transformed and reduced to a different state or thing. If new and useful, it is just as patentable as is a piece of machinery. . . . The machinery pointed out as suitable to perform the process may or may not be new or patentable.. Industrial processes such as respondents’ claims for transforming raw, uncured synthetic rubber into a different state or thing are the types which have historically been eligible to receive patent-law protection. (b) While a mathematical formula, like a law of nature, cannot be the subject of a patent, respondents do not seek to patent a mathematical formula, but instead seek protection for a process of curing synthetic rubber. Although their process employs a well-known mathematical equation, they do not seek to pre-empt the use of that equation, except in conjunction with all of the other steps in their claimed process. A claim drawn to subject matter otherwise statutory does not become non statutory simply because it uses a mathematical formula, computer program, or digital computer. Respondents’ claims must be considered as a whole, it being inappropriate to dissect the claims into old and new elements and then to ignore the presence of the old elements in the analysis. The questions of whether a particular invention meets the “novelty” requirements or the “non obviousness” requirements do not affect the determination of whether the invention falls into a category of subject matter that is eligible for patent protection. (c) When a claim containing a mathematical formula implements or applies the formula in a structure or process which, when considered as a whole, is performing a function which the patent laws were designed to protect then the claim satisfies the patent’s requirements. IN SUM, ALS2014B

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We have before us today only the question of whether respondents’ claims fall within the categories of possibly patentable subject matter. We view respondents’ claims as nothing more than a process for molding rubber products, and not as an attempt to patent a mathematical formula. We recognize, of course, that, when a claim recites a mathematical formula (or scientific principle or phenomenon of nature), an inquiry must be made into whether the claim is seeking patent protection for that formula in the abstract. A mathematical formula, as such, is not accorded the protection of our patent laws, and this principle cannot be circumvented by attempting to limit the use of the formula to a particular technological environment. Similarly, insignificant post-solution activity will not transform an unpatentable principle into a patentable process. To hold otherwise would allow a competent draftsman to evade the recognized limitations on the type of subject matter eligible for patent protection. On the other hand, when a claim containing a mathematical formula implements or applies that formula in a structure or process which, when considered as a whole, is performing a function which the patent laws were designed to protect (e.g., transforming or reducing an article to a different state or thing), then the claim satisfies the requirements. Because we do not view respondents’ claims as an attempt to patent a mathematical formula, but rather to be drawn to an industrial process for the molding of rubber products, we affirm the judgment of the Court of Customs and Patent Appeals.

State Street Bank & Trust Co. v. Signature Financial Group Inc. (1998) (Hindi to mahaba. I just added an unnecessary discussion of another issue that was discussed in this case. Just skip that part if you’re cramming. Hehe) Doctrine: •

In effect, the ‘056 Patent grants Signature a monopoly on its idea of a multi-tiered partnership portfolio investment structure; patenting an accounting system necessary to carry on a certain type of business is tantamount to a patent on the business itself. Because such abstract ideas are not patentable, either as methods of doing business or as mathematical algorithm, the ‘056 Patent must fail.

(This case has two doctrines – one on the patentability of mathematical algorithms and the other is on the patentability of an accounting system used in a “hub-and-spoke” business method. Maybe we should focus more on the second doctrine. Nevertheless, I also made a digest on the first doctrine just in case he asks for it.) Facts: The patent at issue in that case concerned a data processing system for implementing an investment structure known as a “Hub and Spoke” system. This system allowed individual mutual funds (“Spokes”) to pool their assets in an investment portfolio (“Hub”) organized as a partnership. According to the patent, this investment regime provided the advantageous combination of economies of scale in administering investments coupled with the tax advantages of a partnership. The patented system purported to allow administrators to monitor financial information and complete the accounting necessary to maintain this particular investment structure. In addition, it tracked “all the relevant data determined on a daily basis for the Hub and each Spoke, so that aggregate year end income, expenses, and capital gain or loss can be determined for accounting and tax purposes for the Hub and, as a result, for each publicly traded Spoke.” Litigation arose between Signature, the patent owner, and State Street Bank over the latter firm’s alleged use of the patented invention. Among the defenses offered by State Street Bank was that the asserted patent claimed subject matter that was not within one of the four categories of statutory subject matter, and hence was invalid. Issue: 1. The core issue on summary judgment is whether computer software that essentially performs mathematical accounting functions and is configured to run on a general purpose (i.e., personal) computer is patentable under 35 U.S.C § 101. (whether computer-related inventions driven by mathematically-based software deserve the market protection afforded under federal patent law) In addition, there is also an issue of whether an accounting system used in a business is patentable. ALS2014B

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Held/Ratio: 1. The statute sets out four categories of subject matter -- process, machine, manufacture, and composition of matter -- that are entitled to patent protection provided that the other requirements of patentability (i.e., novelty and nonobviousness under 35 U.S.C. §§ 102-103) are satisfied. However, the laws of nature, physical phenomena, and abstract ideas have been held not patentable. Thus, a new mineral discovered in the earth or a new 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.” The determination of patentability of computer software is particularly difficult because a computer program directs the computer to perform mathematical functions (i.e., process data) to achieve a desired result. The Court resolved the issue using two tests – the Mathematical Algorithm test and the Physical Transformation test. (Before you continue reading the next paragraphs, please read first the Business Methods exception.) In the former test, the issue to be determined is whether it recites, directly or indirectly, a mathematical algorithm (which the Supreme Court in Benson described as “a procedure for solving a given type of mathematical problem.”) Although the ‘056 Patent claims do not directly recite a mathematical formula, the data processing system is an apparatus specifically designed to solve a mathematical problem. These calculations, among others, include: (1) daily allocating the assets of two or more funds that are invested in the partnership portfolio; (2) determining each fund’s percentage share in the partnership entity, taking into consideration incremental changes in the portfolio’s investment securities and the amount of each fund’s assets; (3) allocating to each fund the portfolio’s daily income, expenses, and net unrealized gain or loss; and (4) tracking and storing this information for calculating annual tax information. Interpreted in light of the specification, the ‘056 Patent claims recite means for solving a series of mathematical problems. In the latter test, the issue to be determined is “whether the claimed invention is applied to or limited by physical elements or process steps.” (a.k.a. Freeman-Walter-Abele test) If it transforms or reduces subject matter to a different state or thing, it is statutory under § 101. The Court holds that Signature’s data processing system fails this physicality test. Signature’s invention does not involve this type of transformation. Rather, like other accounting methods, it is designed to manipulate and record numbers. Unlike the electrocardiograph in Arrhythmia and the CAT scan in Abele, Signature’s data processing system does not “involve[] the transformation or conversion of subject matter representative of or constituting physical activity or objects.” Schrader, 22 F.3d at 294. And, unlike the rasterizer in Alappat, the invention does not physically convert the data upon which it operates into a new and totally different form. A change of one set of numbers into another, without more, is insufficient to confer patent protection. The invention does nothing other than present and solve a mathematical algorithm and, therefore, is not patentable. The Business Method Exception – (I think we should focus more on this.) The Court’s decision comports with another doctrinal exclusion from subject matter patentability known as the “business methods exception.” Numerous patent treatises recite the long-established principle that “business ‘plans’ and ‘systems’ are not patentable, even though they may not be dependent upon the aesthetic, emotional, or judgmental reactions of a human.” As established by a series of older cases, business methods are unpatentable abstract ideas. If Signature’s invention were patentable, any financial institution desirous of implementing a multi-tiered funding complex modeled on a Hub and Spoke configuration would be required to seek Signature’s permission before embarking on such a project. This is so because the ‘056 Patent is claimed sufficiently broadly to foreclose virtually any computerimplemented accounting method necessary to manage this type of financial structure. Indeed, during licensing ALS2014B

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negotiations, Signature informed State Street that any data processing system designed to perform book accounting for a multi-tiered fund based on a partnership portfolio configuration would infringe the ‘056 Patent. In effect, the ‘056 Patent grants Signature a monopoly on its idea of a multi-tiered partnership portfolio investment structure; patenting an accounting system necessary to carry on a certain type of business is tantamount to a patent on the business itself. Because such abstract ideas are not patentable, either as methods of doing business or as mathematical algorithm, the ‘056 Patent must fail. D. Business Methods

State Street Bank & Trust Co. v. Signature Financial Group Inc. (1996) Doctrine: •

Business `plans’ and `systems’ are not patentable. Whereas an apparatus or system capable of performing a business function may comprise patentable subject matter, the law remains that a method of doing business whether or not generated by an apparatus or system does not constitute patentable subject matter. Patenting an accounting system necessary to carry on a certain type of business is tantamount to a patent on the business itself.

Facts: State Street and Signature are companies that act as administrators and accounting agents of mutual funds. Signature owns “056 Patent,” entitled “Data Processing System for Hub and Spoke Financial Services Configuration.” The claimed invention provides a data processing system and method for monitoring and recording the information flow and data, and making all calculations, necessary for maintaining a partnership portfolio and partner fund (Hub and Spoke) financial services configuration. Hub and Spoke Configuration The invention relates to a newly-developed financial investment vehicle, which State Street terms a “multi-tiered fund complex” and Signature calls a “Hub and Spoke” configuration. In essence, a Hub and Spoke arrangement is an investment structure whereby mutual funds (“Spokes”) pool their assets in an investment portfolio (“Hub”) organized as a partnership. The 056 Patent, enabling mutual funds to pool their assets, provides for economies of scale with regard to the costs of fund administration and has beneficial tax consequences. This complex financial structure creates its own set of administrative challenges. As a partnership, the Hub portfolio assesses all economic gains and losses with respect to the Spoke funds on a pro rata basis. Because each of the Spokes are themselves investment vehicles, which are subject to constant changes in assets as individual investors add or withdraw funds and market prices fluctuate, the partnership interest of the Spokes in the Hub constantly varies. Administering this structure requires a daily allocation of income, capital gains, and expenses or investment losses. The Claimed Invention Signature’s invention is directed to a data processing system for administering this Hub and Spoke configuration. The system is operated by means of a personal computer, software capable of performing the various functions described in the claims and detailed in the preferred embodiment and flowcharts, data storage means such as a floppy disk, and display means such as printed output and a computer screen. Specifically, the invention calculates and stores data representing: the percentage share that each Spoke fund holds in the Hub portfolio; any daily activity affecting the portfolio’s assets; allocations of gains, losses and expenses to each of the Spoke member funds; and tracking and updating data that are used to determine aggregate year-end income, gains, losses, and expenses for accounting and tax purposes. The invention is claimed in means-plus-function language as an apparatus. The specification discloses the specific structure, circuitry or other devices by which the invention operates as follows: The portfolio/fund accountant makes use of a personal computer 44 programmed with software 50. One example of software 50 is the “HandS” computer program. The personal computer 44 used by portfolio/fund accountant is capable of producing printed output 46 and storing data on data disk 52. ALS2014B

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Signature informed State Street that any data processing system designed to perform book accounting for a multitiered fund arranged in a Hub and Spoke configuration likely would infringe the ‘056 Patent. State Street serves as the custodian and accounting agent for several multi-tiered fund complexes and had negotiated with Signature for a license for its patented data processing system. When negotiations broke down, State Street brought the present declaratory judgment action seeking to invalidate Signature’s patent. State Street alleges that Signature’s patent is not drawn to statutory subject matter under 35 U.S.C. § 101 because the invention claims an unpatentable mathematic algorithm. Signature counters that its data processing system is a computer-implemented invention that is patentable both under recent Federal Circuit precedent and guidelines for patent examiners issued by the U.S. Patent and Trademark Office (PTO). Issue: 1. Whether Signature’s claimed invention, a data processing system, is patentable. Held/Ratio: 1. No. Section 101 of Title 35 of the U.S. Code provides: “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.” Although §101 has been broadly construed to include anything under the sun that is made by man, this is not to suggest that §101 has no limits or that it embraces every discovery. At bottom, Signature’s claimed invention is an accounting system for a certain type of financial investment vehicle claimed as means for performing a series of mathematical functions. It involves inputting numbers, calculating numbers, outputting numbers, and storing numbers. The same functions could be performed by an accountant armed with pencil, paper, calculator, and a filing system. The Business Methods Exception Business `plans’ and `systems’ are not patentable. Whereas an apparatus or system capable of performing a business function may comprise patentable subject matter, the law remains that a method of doing business whether or not generated by an apparatus or system does not constitute patentable subject matter. Business methods are unpatentable abstract ideas. If Signature’s invention were patentable, any financial institution desirous of implementing a multi-tiered funding complex modelled on a Hub and Spoke configuration would be required to seek Signature’s permission before embarking on such a project. In effect, the ‘056 Patent grants Signature a monopoly on its idea of a multi-tiered partnership portfolio investment structure. Patenting an accounting system necessary to carry on a certain type of business is tantamount to a patent on the business itself. OTHER ISSUES/DOCTRINES: A patent is presumed valid, and the presumption of validity places the burden of going forward and of persuasion on the party asserting invalidity. Distinction between abstract idea and patentable subject matter An idea is itself not patentable, but a new device by which it may be made practically useful is. The laws of nature, physical phenomena, and abstract ideas are not patentable. Thus, 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. 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. Granting a patent monopoly on the use of a scientific principle, rather than on its particular practical application, would impede rather than promote the Progress of Science and useful Arts. PTO Examination Guidelines The Guidelines state that, “a process that merely manipulates an abstract idea or performs a purely mathematical algorithm is non-statutory despite the fact that it might inherently have some usefulness.” The Guidelines also provide: “If ALS2014B Page 24 of 99

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the `acts’ of a claimed process manipulate only numbers, abstract concepts or ideas, or signals representing any of the foregoing, the acts are not being applied to appropriate subject matter. Thus, a process consisting solely of mathematical operations, i.e., converting one set of numbers into another set of numbers, does not manipulate appropriate subject matter and thus cannot constitute a statutory process.” The Guidelines point out that a claimed process “that consists solely of mathematical operations is non-statutory whether or not it is performed on a computer.” However, a process will receive statutory protection if it is limited to a practical application of the abstract idea or mathematical algorithm in the technological arts (i.e., involve some species of physical transformation of input data). The Freeman-Walter-Abele Test “It is first determined whether a mathematical algorithm is recited directly or indirectly in the claim. If so, it is next determined whether the claimed invention as a whole is no more than the algorithm itself; that is, whether the claim is directed to a mathematical algorithm that is not applied to or limited by physical elements or process steps. Such claims are nonstatutory. However, when the mathematical algorithm is applied to one or more elements of an otherwise statutory process claim, the requirements of section 101 are met.” To be patentable under this test, an invention must comprise an otherwise statutory process whose mathematical procedures are applied to physical process steps. Signature seeks to avoid application of this test by arguing that its patent claims a machine rather than a process, and a machine is explicitly statutory under §101. Labels are not determinative in §101 inquiries because the form of the claim is often an exercise in drafting. Moreover, that the claimed computing system may be a `machine’ within `the ordinary sense of the word,’ is irrelevant. The analysis of the patentability of claimed subject matter therefore does not hinge on whether the claim is drafted in means-plus-function language. When determining whether computer software is patentable, the manner in which it is claimed is not itself determinative, particularly when the claim language is so broad that any and all means of implementing the claimed functions on a computer would be covered by the patent. If the underlying process performed by the software is nonstatutory, a machine claim for the same invention is non-statutory. The best test for determining the patentability of computer software remains the mathematical algorithm/physical transformation test. Step One: Mathematical Algorithm Test The first step in determining whether the ‘056 Patent is drawn to statutory subject matter is deciding whether it recites, directly or indirectly, a mathematical algorithm (a procedure for solving a given type of mathematical problem). Under this definition, any series of mathematical operations or calculations recite a mathematical algorithm. Although the ‘056 Patent claims do not directly recite a mathematical formula, the data processing system is an apparatus specifically designed to solve a mathematical problem. The claims themselves recite calculating data as a function of the machine. These calculations include: (1) daily allocating the assets of two or more funds that are invested in the partnership portfolio; (2) determining each fund’s percentage share in the partnership entity, taking into consideration incremental changes in the portfolio’s investment securities and the amount of each fund’s assets; (3) allocating to each fund the portfolio’s daily income, expenses, and net unrealized gain or loss; and (4) tracking and storing this information for calculating annual tax information. An invention that inputs, processes, and outputs numbers must by definition perform mathematical operations. Step Two: Physical Transformation Test The second step under the Freeman-Walter-Abele test is determining whether the claimed invention is applied to or limited by physical elements or process steps. Regardless of whether the invention performs mathematical operations, if it transforms or reduces subject matter to a different state or thing, it is statutory under §101. While not conclusive, the clue is physical transformation. Signature’s data processing system fails this physicality test. Alappat held patentable a device for transforming numerical values to display smooth waveform data on an oscilloscope. The physical transformation (i.e., discrete waveform data samples into anti-aliased pixel illumination data to ALS2014B

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be displayed on a display means) went beyond manipulation of mathematical constructs. Similarly, Arrhythmia involved an invention that enabled a certain type of human heart activity to be measured, processed, and displayed electronically. Although mathematical calculations were part of the process, the invention was properly viewed as a method of analyzing electrocardiograph signals in order to determine a specified heart activity. Signature’s invention, like other accounting methods, is designed to manipulate and record numbers. Signature’s data processing system does not involve the transformation or conversion of subject matter representative of or constituting physical activity or objects. A change of one set of numbers into another, without more, is insufficient to confer patent protection. Signature’s data processing system similarly does not fall within § 101’s enumeration of patentable subject matter. Like the business-related systems, the ‘056 Patent claims an invention that essentially performs mathematical calculations on data gleaned from pre-solution activity and stores and displays the results. That those numbers represent financial constructs does not save Signature’s patent. The claims do not recite any significant pre- or post-solution activity. E. Medical Procedures

Pallin v. Singer (1995) First infringement case brought against a physician for infringing a medical method patent Doctrine: •

In determining whether an invention would have been obvious at the time it was made, §103 requires a Court to: (1) determine the scope and content of the prior art; (2) ascertain the differences between the prior art and the claims at issue; and (3) resolve the level of ordinary skill in the pertinent art. “Secondary considerations[such] 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.”

Facts: This is action for patent infringement. Dr. SAMUEL PALLIN alleges that DR. JACK SINGER and the HITCHCOCK ASSOCIATES OF RANDOLPH are infringing on a patented surgical technique developed by Dr. Pallin for use during cataract surgery. Pallin allegedly developed a method for making the surgical incision in the eye in a manner that would allow the wound to be “substantially self-sealing” (i.e. requiring no sutures to heal). Pallin obtained patent number 5,080,111 (“111 Patent”) for the technique. Pallin alleges that Singer and Hitchcock have carried out hundreds of operations that infringe on his patent and even taught the technique to other ocular surgeons. Factual background: CATARACT SURGERY is necessary when the natural lens of the eyes becomes cloudy and can no longer effectively pass light through to the light and image sensing portion of the eye. Traditionally, upon completion of the cataract surgery, surgeons use SUTURES to close the incision of surgery. Sutures were necessary to prevent “wound separation” due to pressure from both within and without the eye. Sutures, however, often cause the patient to develop an astigmatism. Hence, in 1990, doctors began to look for ways to perform surgery without using sutures. 111 Patent: According to the patent, the configuration of the incision allows it to seal as the eye is inflated following surgery, eliminating the need for sutures. Pallin, however, was not the onlyu surgeon working towards the development of a sutureless technique. Drs. Michael McFarland, James Gills and Singer anticipated (s102g) Pallin’s patent and rendered it obvious (s103). ALS2014B

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Issue: 1. WON motion for summary judgment must be granted – NO Held/Ratio: 1. The 111 Patent is Presumed Valid. Under 35 USC § 282, a US patent is presumed valid. Thus, the party asserting the invalidity must overcome the presumption by lean and convincing evidence. However, despite such presumption, summary judgment may be granted in a patent suit when there is no genuine issue of material fact. In this case, there are complex factual disputes, thus, summary judgment cannot be granted. Prior Art. Under §102g, a patent is invalid if it was previously made in this country by another who had not abandoned, suppressed, or concealed it. The patentee need not have knowledge of the prior art. Nevertheless, for the prior art to anticipate under §102 a single teaching must anticipate every element of the claimed invention. Our comparison of the surgical techniques practiced by Drs. McFarland, Bills and Singer with the asserted claims of the 111 Patent reveals that genuine issues of material fact exist as to whether the works of any of these doctors fully anticipated Pallin’s claims. We find complex issues exist as to the following issues: (1) WON Dr. McFarland’s straight incision and vertical cuts fall within the ambit of Pallin’s claims, (2) WON the distance from the limbus of the incisions made by Dr. Gills during the March 1990 surgeries fall within the 1.5-3.0 millimeter range advocated by Pallin’s patent, and (3) WON the incision by Dr. Singer in his March 1990 surgery was capable of self-sealing. Obviousness. The determination o obviousness under §103 is a legal conclusion that rests on the factual determination required by statute. In determining whether an invention would have been obvious at the time it was made,§103 requires a Court to: (1) determine the scope and content of the prior art; (2) ascertain the differences between the prior art and the claims at issue; and (3) resolve the level of ordinary skill in the pertinent art. “Secondary considerations[such] 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.” Defendants argue that a determination of OBVIOUSNESS is appropriate in this case because the scope & content of prior art, the differences between the prior art and the claims at issue, and the level of ordinary skill in the pertinent art of all render the claims of the 111 Patent obvious to one of ordinary skill in the art. Defendants, do not, however, elaborate by demonstrating that no factual dispute exists with respect to the JOHN DEERE test set forth above. We conclude, therefore, that Defendants have failed to meet their burden of proof under the summary judgment standard to establish that there is genuine issue of material fact as to obviousness. CONCLUSION: The motion for summary judgment of patent invalidity is denied. VI. Kinds of “patents” A. Inventions B. Utility Models   C. Industrial Designs   D. Lay-Out Designs of Integrated Circuits Regulations ALS2014B

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VII. Requirements for patentability   A. Novelty

Maguan v. CA (1986) (powder puff) Doctrine: •

SEC. 9. Invention not considered new or patentable. — An invention shall not be considered new or capable of being patented: a. If it was known or used by others in the Philippines before the invention thereof by the inventor named in an application for patent for the invention; or b.

If it was patented or described in any printed publication in the Philippines or any foreign country more than one year before the application for a patent therefor; or

c. If it had been in public use or on sale in the Philippines for more than one year before the application for a patent therefor; or d. If it is the subject matter of a validly issued patent in the Philippines granted on an application filed before the filing of the application for patent therefor. Facts: Petitioner Rosario Maguan is doing business under “Swan Manufacturing” and is a patent holder of powder puff.3 In a letter, petitioner informed private respondent Luchan (of Susana Luchan Powder Puff Manufacturing) that the powder puff it was manufacturing and selling, particularly those to the cosmetics industry, resemble were identical or substantially identical to the powder puff petitioner had patented therefore the production and sale of the same by the latter constituted infringement. In her defense, respondent stated the following: First, that her powder puff was different; second, that the petitioner’s patents were void because the utility models applied for were not new and patentable, and lastly, that the person to whom the patent was issued was not the true and actual owner nor were her rights derived from that author. Specifically, respondent further alleged: a. Years prior to the application for the patents, powder puffs of that kind already existed and publicly sold in the market both in the Philippines and abroad b. Applicant’s claim for the “construction” or process of manufacturing the utility models were but a complicated and impractical version of an old simple one which has been well known in the cosmetics industry (as early as 1963) thereby belonging to no one except the general public. Hence, petitioner filed a complaint for damages with injunction and preliminary injunction. The trial court granted the writs prayed for. Upon petition for certiorari, the CA issued a writ of preliminary injunction enjoining the orders of the trial court but subsequently dismissed the case for lack of merit (issue decided was only whether the court acted with grave abuse of discretion, not on whether the patents had been infringed). However upon reconsideration, injunction was granted. Issues: 1. W/N in an action for infringement the court had jurisdiction to determine the invalidity of the patents at issue which invalidity was still pending in consideration in the Patent Office 2. W/N the court committed grave abuse of discretion in the issuance of the writ of preliminary injunction 3. W/N certiorari was the proper remedy 3.

1. UM-423 (extended and/or renewed under Extension No. UM-109 for a period of 5 years from October 6, 1971)

2. UM-450 (extended and/or renewed under Extension No. UM110 for a period of 5 years from January 26, 1972) 3. UM 1184, for a period of 5years from April 5, 1974.

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Held/Ratio: 1. YES. When a patent is sought to be enforced, the questions of invention, novelty or prior use, are open to judicial examination. Under the Patent Law, the trial court has jurisdiction to declare patents in question invalid. A patentee shall have the exclusive right to make, use and sell the patented article or product and the making, using, or selling by any person without the authorization of the patentee constitutes infringement of the patent (Sec. 37, R.A. 165). Any patentee whose rights have been infringed upon may bring an action before the proper CFI now (RTC) and to secure an injunction for the protection of his rights (Sec. 42, R.A. 165). Under Sec. 46 of the same law, if the Court shall find the patent or any claim thereof invalid, the Director shall on certification of the final judgment ... issue an order cancelling the patent or the claims found invalid and shall publish a notice thereof in the Official Gazette.” Upon such certification, it is ministerial on the part of the patent office to execute the judgment 2. YES. The validity of petitioner’s patents is in question for want of novelty. Trial court committed grave abuse of discretion when it failed to determine the validity of the patents before issuance of the writ. For an injunction to issue, 2 requisites must be satisfied: First, the existence of the right to be protected and second, the violation of said right. The burden of proof to substantiate a charge of infringement is with the plaintiff. But where the plaintiff introduces the patent in evidence, and the same is in due form, there is created a prima facie presumption of its correctness and validity. The decision of the Director of Patent in granting the patent is presumed to be correct. The burden of going forward with the evidence (burden of evidence) then shifts to the defendant to overcome by competent evidence this legal presumption After review of 64 exhibits and oral testimonies of 5 witnesses, there is a prima facie showing of a fair question of invalidity of petitioner’s patents on the ground of lack of novelty. The evidence appeared not to have been considered at all by the court a quo for alleged lack of jurisdiction, on the mistaken notion that such question in within the exclusive jurisdiction of the patent office. An invention must possess the essential elements of novelty, originality and precedence and for the patentee to be entitled to protection; the invention must be new to the world. Accordingly, a single instance of public use of the invention by a patentee for more than two years (now for more than one year only under Sec. 9 of the Patent Law) before the date of his application for his patent will be fatal to, the validity of the patent when issued. Under American Law from which our Patent Law was derived it is generally held that in patent cases a preliminary injunction will not issue for patent infringement unless the validity of the patent is clear and beyond question. The issuance of letters patent, standing alone, is not sufficient to support such drastic relief. In cases of infringement of patent no preliminary injunction will be granted unless the patent is valid and infringed beyond question and the record conclusively proves the defense is sham. 3. YES. For an injunction to issue, 2 requisites must be satisfied: First, the existence of the right to be protected, and second, the violation of said right. In this case, the injunctive order is so general that the petitioner may be totally barred from the sale of any kind of powder puff. Under the circumstances, ordinary appeal is inadequate. In the past, the Court has recognized that a petition for certiorari may be applied for by the proper petition notwithstanding the existence of the regular remedy of an appeal when among other reasons, the broader interests of justice so require or an ordinary appeal is not an adequate remedy.

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Vargas v. F.M. Yaptico & Co. (1919) Facts: Angel Vargas, a farmer acquainted with local conditions and alive to the commercial possibilities, took it upon himself to produce, with a native plow as the model, an improved, adjustable plow. On July 22, 1910, he made application for a United States patent to cover his so-called invention. On March 12, 1912, letters patent were issued by the United States Patent Office in his favor. A certified copy of the patent was filed in the Division of Patents, Copyrights, and Trademarks of the Executive Bureau, Government of the Philippine Islands. Since 1910, Vargas has engaged in the manufacture of these plows in the city of Iloilo, Philippine Islands. On the plows there was first stamped the words “Patent Applied For,” later after the patent had been granted, changed to “Patented Mar. 12, 1912.” 90% of the plows in use in the Visayas (Iloilo and vicinity) are said to be Vargas plows. The defendant, F.M. Yaptico & Co. is a manufacturer of plow parts. It has in fact produced points, shares, shoes, and heel pieces in a considerable amount adapted to replace worn-out parts of the Vargas plow. In 1918, Vargas filed an action in the CFI of Iloilo to enjoin the alleged infringement of his patent by Yaptico. The latter answered that the patent lacked novelty or invention, that there was no priority of ideas or device in the principle and construction of the plow, and that the plow, whose manufacture it was sought to have enjoined by the plaintiff, had already been in public use for more than two years before the application of the plaintiff for his patent. The CFI ruled in favor of Yaptico and declared the patent as null and without effect. Issue: 1. W/N the CFI was correct in declaring the patent as invalid Held/Ratio: 1. YES. When a patent is sought to be enforced, “the question of invention, novelty, or prior use, and each of them, are open to judicial examination.” The burden of proof to substantiate a charge of infringement is with the plaintiff. Where, however, the plaintiff introduces the patent in evidence, if it is in due form, it affords a prima facie presumption of its correctness and validity. The decision of the Commissioner of Patents in granting the patent is always presumed to be correct. The burden then shifts to the defendant to overcome by competent evidence this legal presumption. In this case, Yaptico relies on 3 special defenses: 1. The element of novelty is lacking. The Court ruled that the CFI may have been right in saying that the Vargas plow is not different from the native plow, except in the material, in the form, in the weight and the grade of the result, the said differences giving it neither a new function nor a new result distinct from the function and the result obtained from the native plow. Its production does not presuppose the exercise of the inventive faculty but merely of mechanical skill, which does not give a right to a patent of an invention under the provisions of the Patent Law. 2. Yaptico never made a complete Vargas plow, but only points, shares, shoes, and heel pieces to serve as repairs. The Court recognized that there is a difference between repairing and reconstructing a machine. If, for instance, partial injuries, whether they occur from accident or from wear and tear, to a machine for agricultural purposes, are made this is only re-fitting the machine for use, and thus permissible. 3. An inventor’s creation must not have been in public use or on sale in the U.S. and the Philippines for more than two years prior to his application, as provided in the U.S. Patent Laws. Yaptico has shown that the invention was used in public at Iloilo by others than Vargas, the inventor, more than two years before the application for the patent. Yaptico was able to prove the invalidity of the patent through the testimonies of certain persons. Nicolas Roces, a farmer, testified that in 1907, he was able to buy plows completely identical with that for which Vargas had received a patent. Salvador ALS2014B

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Lizarraga, a clerk, also admitted to receiving similar plows from the business partner of Vargas, Bonifacio Araneta. George Saul, a mechanic working in “Taller Visayas”, testified that in 1906, he had made a Vargas plow of the present form upon order of Araneta and Vargas. This was verified by the proprietor, William MacMurray. The Court concluded that for more than two years before the application for the original letters patent, there was, by the consent and allowance of Vargas, a public use of the invention covered by them.

Vargas v. Chua (1933) (Plow) Doctrine: •

A single instance of public use of the invention by a patentee of more than two years before the date of his application for his patent will be fatal to the validity of the patent when issued

Facts: Angel Vargas (plaintiff) that manufactures plows, which Patent No. 1,507,530 was issued in his favor by the United States Patent Office. Coo Pao and Petronila Chua (defendants) have been manufacturing plows similar to Angel Vargas’ plows, since 1918. Angel Vargas is now asking to restrain Chua et. al. form manufacturing the plows, and for damages. In their defense Chua presents the case of Vargas vs. F. M. Yap Tico & Co. (40 Phil., 195) where the supreme court declared as null and void, one of Vargas’ patents for a plow (Patent No. 1,020,232). They are saying that that the patent which was declared void is a patent for the same plow, which is the subject of the case. (Basically there are 2 patents, one was already declared void, and now they are saying the 2 patent contain the same design, so that the other patent is void) Issue: 1. Whether the plow, Exhibit F (plow in this case), constitutes a real invention or an improvement for which a patent may be obtained, or if, on the contrary, it is substantially the same plow (the other case) represented by Exhibit 3Chua the patent for which was declared null and void in the aforementioned case of Vargas vs. F. M. Yaptico & Co.? Held/Ratio: 1. No, there is no substantial difference exists between the plow, Exhibit F, and the plow, Exhibit 3-Chua which was originally patented by Vargas. The only difference noted by us is the suppression of the bolt and the three holes on the metal strap attached to the handle bar. These holes and bolt with its nut were suppressed in Exhibit F in which the beam is movable as in the original plow. The members of this court, with the plows in view, arrived at the conclusion that not only is there no fundamental difference between the two plows but no improvement whatever has been made on the latest model, for the same working and movement of the beam existed in the original model with the advantage, perhaps, that its graduation could be carried through with more certainty by the use of the bolt which as has already been stated, was adjustable and movable. Exhibit F, does not constitute an invention in the legal sense, and because, according to the evidence, the same type of plows had been manufactured in this country and had been in use in many parts of the Philippine Archipelago, especially in the Province of Iloilo, long before he obtained his last patent.

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Frank v. Kosuyama (1933) Facts: The case involves a patent on “improvement in hemp stripping machines,” issued by the US PATENT OFFICE, but registered in the BUREAU OF COMMERCE AND INDUSTRY of the Philippines. Frank and Gohn filed a case against Kosuyama. They asked for the following: 1. that Kosuyama be ordered to refrain from manufacturing and selling machines similar to their patent 2. render an accounting for all the profits from his machine sales, or, in the alternative, to pay P60 as profit on each machine sold by him 3. that he pay costs and damages against Frank and Gohn. In spite of the fact that they filed an amended complaint from which the “spindle” or conical drum, which was the only characteristic feature of the machine mentioned in the original complaint, was eliminated, the plaintiffs insisted that the said part constitutes the essential difference between the machine in question and other machines and that it was the principal consideration upon which their patent was issued. The TRIAL COURT analyzed each of the parts of the machines and came up with the conclusion that Frank and Gohn merely made minor improvements on machines already in use at the time: •

It cannot be said that they have invented the ‘spindle’ inasmuch as this was already known since the year 1909 or 1910.

•

Neither can it be said that they have invented the stripping knife and the contrivance which controls the movement and pressure thereof on the ground that stripping knives together with their control sets were already in actual use in the different stripping machines long before their machine appeared.

•

Neither can it be said that they invented the flywheel because that part or piece thereof, so essential in every machine from time immemorial, was already known and actually employed in hemp stripping machines.

•

Much less can it be said that they invented the pedal to raise the knife in order to allow the hemp to be stripped to pass under it, on the ground that the use of such contrivance has, likewise, been known since the invention of the most primitive of hemp stripping machines

Issue: 1. Did Kosuyama infringe on the patent? Held/Ratio: 1. The SC agrees with the trial court, that, “strictly speaking, the hemp stripping machine of the plaintiffs does not constitute an invention on the ground that it lacks the elements of novelty, originality and precedence. Thus, Kosuyama cannot be held civilly liable for alleged infringement of the patent as there is no essential part of the machine manufactured and sold by him, which was unknown to the public in the Province of Davao at the time the plaintiffs applied for and obtained their patent for improved hemp stripping machines. OTHER NOTES Frank and Gohn relied on an earlier case involving their same patent, but against another defendant, in which the SC ruled in their favor. The SC said that the former case was not applicable because Kosuyama, in this latter case, alleged different special defenses. Moreover, in the earlier case, the decision relied on the presence of the “spindle” element of the machine which was copied by the earlier defendant. However, in this case, it was discovered that the spindle is not even an integral part of the machine, and that it was even eliminated from the patent application, as shown by evidence presented during the trial.

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In Re: Robertson (1999) Facts: The patent application is for “an improved mechanical fastening system for disposable absorbent articles [i.e., diapers] that provides for its convenient disposal. The Board of Patent Appeals and Interference (BOARD) rejected the application on the ground that it was anticipated by and obvious over the Wilson Patent. Both the patent applied for (CLAIM 76) and Wilson involve fastening and disposal systems for diapers. In both, the body of the diaper features a small front and a larger rear section. The outer edges of those sections are attached at the wearer’s waist in the hip area. Once the diaper is soiled and then removed, the smaller front section is rolled up into the larger rear section and secured in this rolled-up configuration by fasteners. Claim 76 provides for two mechanical fastening means to attach the diaper to the wearer and a third such means for securing the diaper for disposal.4 The Wilson Patent discloses two snap elements on fastening strips attached to the outer edges of the front and rear hip sections of the garment. The fastening strips may also include “secondary load-bearing closure means” – additional fasteners to secure the garment;   they may be identical to the snaps.” It also states “disposal of the soiled garment upon removal from the body is easily accomplished by folding the front panel inwardly and then fastening the rear pair of mating fastener member to one another, thus neatly bundling the garment into a closed compact package for disposal.” Wilson does not provide a separate fastening means to be used in disposing of the diaper. It suggests that disposal of the used diaper may be “easily accomplished” by rolling it up and employing the same fasteners used to attach the diaper to the wearer to form “a closed compact package for disposal.” The Board rejected the application saying that Wilson anticipated Claim 76 under principles of inherency. It said that “an artisan would readily understand the disposable absorbent garment of Wilson as being inherently capable of making the secondary load-bearing closure means (third fastening element) mechanically engageable with the other snap fasteners on the fastening strip (first fastening element)” Issue: 1. W/N the Board correctly disallowed the patent application on the ground of anticipation? Held/Ratio: 1. No. Anticipation requires that “each and every element as set forth in the claim is found, either expressly or inherently described, in a single prior art reference.” The Wilson patent does not expressly include a third fastening means for disposal of the diaper, as Claim 76 requires. That means is separate from and in addition to the other mechanical fastening means and performs a different function than they do. Wilson merely suggests that the diaper may be closed for disposal by using the same fastening means that are used for initially attaching the diaper to the body. If the prior art reference does not expressly set forth a particular element of the claim, that reference still may anticipate if that element is “inherent” in its disclosure. To establish inherency, the extrinsic evidence “must make 4.

Claim 76 covers “a mechanical fastening system for forming side closures, comprising:

1.

A Closure Member: comprising a first mechanical fastening means for forming a closure, said first mechanical fastening means comprising a first fastening element;

2.

A Landing Member: comprising a second mechanical fastening means for forming a closure with said first mechanical fastening means, said second mechanical fastening means comprising a second fastening element mechanically engageable with said first element;   and

3.

Disposal means for allowing the absorbent article to be secured in a disposal configuration after use, said disposal means comprising a third mechanical fastening means for securing the absorbent article in the disposal configuration, said third mechanical fastening means comprising a third fastening element mechanically engageable with said first fastening element․

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clear that the missing descriptive matter is necessarily present in the thing described in the reference, and that it would be so recognized by persons of ordinary skill.” Inherency may not be established by probabilities or possibilities. The mere fact that a certain thing may result from a given set of circumstances is not sufficient.” In finding anticipation by inherency, the Board ignored the foregoing critical principles. The Board made no attempt to show that the fastening mechanisms of Wilson that were used to attach the diaper to the wearer also “necessarily” disclosed the third separate fastening mechanism of Claim 76 used to close the diaper for disposal, or that an artisan of ordinary skill would so recognize. It cited no extrinsic evidence so indicating. Instead, the Board ruled that one of the fastening means for attaching the diaper to the wearer also could operate as a third fastening means to close the diaper for disposal and that Wilson therefore inherently contained all the elements of Claim 76. In doing so, the Board failed to recognize that the third mechanical fastening means in Claim 76, used to secure the diaper for disposal, was separate from and independent of the two other mechanical means used to attach the diaper to the person. The Board’s theory that these two fastening devices in Wilson were capable of being intermingled to perform the same function as the third and first fastening elements in Claim 76 is insufficient to show that the latter device was inherent in Wilson. Indeed, the Board’s analysis rests upon the very kind of probability or possibility-the odd use of fasteners with other than their mates-that this court has pointed out is insufficient to establish inherency.

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In re Seaborg (1964) Doctrine •

The accidental production of a substance does not anticipate a later patent on that substance

Facts: The patent application is for the newly discovered element 95 (now known as Americium or Am) having the mass number 241. The application and the claims in issue relate to the isotopes thereof and to methods of producing and purifying said element and compositions thereof. 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 and neutrons and (2) in a neutronic reactor operated at a relatively high power level (about 200 kw) for an extended period of time (approximate 100 days). The application for patent of element 95 having the mass number 241 was rejected because it is claimed that it must be inherently produced in the operation of Fermi reactors (which is already patented). The Fermi, et. al patent discloses several nuclear reactors. The patent, however, does not mention elements 95 and 96. The Patent office rejected the application of Seaborg based on the exemplary statement of the reactor operation contained in the patent of Fermi reactors: After operation of the reactor for a sufficient length of time for an amount of 94 to be created sufficient for chemical separation, such as for example 100 days at 500 killowatts, the reactor is shut down by inserting the control rod fully into the reactor. After about one-half hour’s wait, during which all delayed neutron emission will have ceased and more highly radioactive material decayed sufficiently, the reactor may be unloaded. After 100 days’ operation the aging period may be 30 days Seaborg claims that if these statements are accepted, the maximum amount of Americium 241 that could have been produced in the reactor which operated for 100 days at 500 killowatts power can be calculated to be 6.15 x 10-9 gram. Thus the Fermi reactor could have produced no more than one billionth of a gram of Americium 241, and this one billionth gram would have been distributed throughout 40 tons of intensely radioactive uranium reactor fuel. This amount of an unknown, unconcentrated isotope, would have been undetectable. Solicitor did not accept such assertion by Seaborg and states that “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. This conclusion is based upon the comparison of the method disclosed in Seaborgs’s application for producing the product with the method for operation of Fermi’s reactors.” Further, the solicitor applies in this case the “inherency doctrine”, 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 applied to these facts, the doctrine establishes a broader basis for refusing the patent. Issue: 1. Whether or not the application for patent of Seaborg should be approved Held/Ratio: 1. YES. The claimed product, element 95, if produced in the Fermi process, was produced in such miniscule amounts and under such conditions that its presence was undetectable. There is no positive evidence that americium was produced inherently in the natural uranium fuel by the operation of the reactor for times and at the intensity mentioned in the exemplary statement relied upon by the Patent office. The calculations, however, that the maximum amount of Americium 241 which could have been produced by the operation of the reactor disclosed in the Ferni Patent for 100 days at 500 killowatts would have been one billionth of one gram (1/1,000,000,000 gram), 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. ALS2014B

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The possibility although a minute amount of americium may have been produced in the Fermi reactor, it was not identified (nor it could have been identified) would preclude the application of the Fermi patent as a reference to anticipate the present invention.

In Re Hafner (1969) (enablement standard for anticipation) Doctrine: •

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 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. The reason is that section 112 “provides that the specification must enable one skilled in the art to `use’ the invention whereas [section] 102 makes no such requirement as to an anticipatory disclosure.

Facts: On August 17, 1959, appellant filed two German applications, one relating to certain fulvene derivatives and the other to certain cyclopentadiene derivatives. By appellant’s admission, neither German application contained any disclosure of utility, such disclosure having been unnecessary in Germany. On August 1, 1960, within one year of the German filings, appellant filed a U. S. application (the ”parent” of the instant application) combining the two German disclosures. A claim of priority was made and the necessary certified copies of the German applications were filed. Although the parent application alleged that the claimed compounds are useful as intermediates for preparing certain artificial resins and indicated a manner in which such resins can be prepared, all claims were finally rejected under 35 U.S.C. § 112 because of an alleged failure of the specification to disclose how those resins might be put to use. Appellant urges that these references do not qualify as “enabling” disclosures because they allegedly do not “teach the public `how to use’ the invention.” 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 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 Held/Ratio: Parent application is fatally defective. The examiner held appellant not entitled to the filing date of either his German applications or his parent U. S. application because the latter allegedly did not comply with § 112 (as required by § 120) in that the ”how to use” requirement of § 112 was not met. The only “how to use” disclosure in the parent application reads: (in case Sir will ask): The new products are valuable intermediate products especially for preparing artificial resins and plastic masses such as unsaturated linear or cross-linked long-chained acetal resins or mixed acetal-polyester resins which may be copolymerized with monomeric vinyl compounds such as styrene or diallylphthalate. 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. 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.

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The examiner and board were of the view that, although persons skilled in the art might well have no difficulty preparing acetal resins from the compounds of appellant’s invention, the parent application disclosure was still inadequate under § 112 because there is no express disclosure of a specific use to which the resulting resins can be put, and appellant has not shown that such a use would be obvious. While arguing that his parent application did in fact comply with the first paragraph of § 112, appellant also maintains that § 120 only requires that a “previously filed” U. S. application disclose the ”invention” as required by § 112 and does not require that it also disclose “the manner and process of making and using it” (emphasis added).Appellant correctly points out that the utility of an invention is distinct from “the invention” per se and from this argues that only “the invention” need be disclosed. If § 120 spoke only of an “invention disclosed in an application previously filed in the United States,” which it does not, appellant’s interpretation might well be unassailable. This section, however, also makes specific reference to the first paragraph of § 112. From this we think it clear that § 120 means that, to be entitled to the benefits provided by that section, the invention disclosed in the “previously filed” application must be described therein in such a manner as to satisfy all the requirements of the first paragraph of § 112 as the courts have construed it, including that which requires the description to be sufficient to enable one skilled in the art to use the same for a legally adequate utility. We therefore find appellant not entitled to the benefit of the parent filing date.

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Titanium Metals Corp. v. Banner (1985) Facts: Titanium Metals Corp. of America (TMCA) (plaintiff) sued Banner (defendant) in his capacity as Commissioner of Patents and Trademarks. TMCA originally claimed a metal alloy, which is a blend of distinct metals, and alleged that it had certain desirable properties. The claims were: 1. A titanium base alloy consisting essentially by weight of about 0.6% to 0.9% nickel, 0.2% to 0.4% molybdenum, up to 0.2% maximum iron, balance titanium, said alloy being characterized by good corrosion resistance in hot brine environments. 2. A titanium base alloy as set forth in Claim 1 having up to 0.1% iron, balance titanium. 3. A titanium base alloy as set forth in Claim 1 having 0.8% nickel, 0.3% molybdenum, up to 0.1% maximum iron, balance titanium. The patent examiner, however, rejected two of the claims as anticipated by a Russian article and a third claim as obvious, also in light of the Russian article. The Board of Patent Appeals affirmed, but mistakenly ruled that all claims were anticipated, having not addressed obviousness. Proceeding only on anticipation, the Board argued that all of the claimed alloys were anticipated by the Russian reference, even though the Russian reference was silent on at least one claimed physical feature of the invention. The Board argued that one of skill in the art would be able to review the date plots and information on the Russian reference, would see that the claimed alloys were already known, and that the silence was irrelevant. TMCA filed suit against Banner, asking the district court to require the patent office to grant the patent application claims. After a brief bench trial, where the patent office called no witnesses, the district court found for TMCA, and the patent office appealed. Issue: 1. Whether or not the metal alloy was patentable Held/Ratio: 1. NO. NOVELTY/ANTICIPATION Section 102, the usual basis for rejection for lack of novelty or anticipation, lays down certain principles for determining the novelty required by Sec. 101, among which are the provisions in Sec. 102(a) and (b) that the claimed invention has not been “described in a printed publication in this or a foreign country,” either (a) before the invention by the applicant or (b) more than one year before the application date to which he is entitled (strictly a “loss of right” provision similar to novelty). Either provision applies in this case, the Russian article having a date some 5 years prior to the filing date and its status as “prior art” not being questioned. The PTO was never specific as to what part of Sec. 102 applies, merely rejecting on Sec. 102. The question, therefore, is whether claims 1 and 2 encompass and, if allowed, would enable plaintiff-appellee to exclude others from making, using, or selling an alloy described in the Russian article. To answer the question we need only turn to the affidavit of James A. Hall, a metallurgist employed by appellee’s TIMET Division, who undertook to analyze the Russian article disclosure by calculating the ingredient percentages shown in the graph data points, which he presented in tabular form. There are 15 items in his table. The second item shows a titanium base alloy containing 0.25% by weight Mo and 0.75% Ni and this is squarely within the ranges of 0.2-0.4% Mo and 0.6-0.9% Ni of claims 1 and 2. As to that disclosed alloy of the prior art, there can be no question that claims 1 and 2 read on it and would be infringed by anyone making, using, or selling it. Therefore, the statute prohibits a patent containing them. This seems to be a case either of not adequately ALS2014B

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considering the novelty requirement of the statute, the true meaning of the correlative term “anticipation,” or the meaning of the claims. By reason of the court’s quotations from cases holding that a reference is not an anticipation which does not enable one skilled in the art to practice the claimed invention, it appears that the trial court thought there was some deficiency in the Russian article on that score. Enablement in this case involves only being able to make the alloy, given the ingredients and their proportions without more. The evidence here, however, clearly answers that question in two ways. Appellee’s own patent application does not undertake to tell anyone how to make the alloy it describes and seeks to patent. It assumes that those skilled in the art would know how. Secondly, appellee’s expert, Dr. Williams, testified on cross examination that given the alloy information in the Russian article, he would know how to prepare the alloys “by at least three techniques.” Enablement is not a problem in this case. As we read the situation, the court was misled by the arguments and evidence to the effect that the inventors here found out and disclosed in their application many things that one cannot learn from reading the Russian article and that this was sufficient in law to justify granting them a patent for their contributions--such things as what good corrosion resistance the claimed alloys have against hot brine, which possibly was not known, and the range limits of the Ni and Mo content, outside of which that resistance diminishes, which are teachings of very useful information. These things the applicants teach the art and the Russian article does not. It is the correct and necessary construction of all three claims that they simply define titanium base alloys. Claims 1 and 2 state certain narrow limits within which the alloying ingredients, Mo and Ni, are present and necessarily cover a number of alloys. Claim 3 is specific to a single alloy. This said, it is immaterial, on the issue of their novelty, what inherent properties the alloys have or whether these applicants discovered certain inherent properties. Wilder argued “that even though there may be a technical anticipation, the discovery of the new property and the recitation of this property in the claims ‘lends patentable novelty’ to the claims.” The court answered: However, recitation, in a claim to a composition, of a particular property said to be possessed by the recited composition, be that property newly-discovered or not, does not necessarily change the scope of the subject matter otherwise defined by that claim. We start with the proposition that claims cannot be obtained to that which is not new. It is also an elementary principle of patent law that when, as by a recitation of ranges or otherwise, a claim covers several compositions, the claim is “anticipated” if one of them is in the prior art. For all of the foregoing reasons, the court below committed clear error and legal error in authorizing the issuance of a patent on claims 1 and 2 since, properly construed, they are anticipated under Sec. 102 by the Russian article which admittedly discloses an alloy on which these claims read. OBVIOUSNESS Little more need be said in support of the examiner’s rejection of claim 3, affirmed by the board, on the ground that its more specific subject matter would have been obvious at the time the invention was made from the knowledge disclosed in the reference. As admitted by appellee’s affidavit evidence from James A. Hall, the Russian article discloses two alloys having compositions very close to that of claim 3, which is 0.3% Mo and 0.8% Ni, balance titanium. The two alloys in the prior art have 0.25% Mo--0.75% Ni and 0.31% Mo--0.94% Ni, respectively. The proportions are so close that prima facie one skilled in the art would have expected them to have the same properties. Appellee produced no evidence to rebut that prima facie case. The specific alloy of claim 3 must therefore be considered to have been obvious from known alloys.

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C. Industrial Application Section 27. Industrial Applicability. - An invention that can be produced and used in any industry shall be industrially applicable. (n)

In re Cortright (1999) (baldness balm) Facts: In 1992, Cortright filed a patent application concerning a method for treating baldness by applying Bag Balm, a commercially available product used to soften cow udders, to human scalp. Claim 1 and Claim 15 were rejected for lacking utility. Claims

Description

Claim 1

A method of “treating scalp baldness with an antimicrobial to restore hair growth, which comprises rubbing into the scalp the ointment wherein the active ingredient 8-hydroxyquinoline sulfate 0.3% is carried in a petrolatum and lanolin base.”

Claim 15

A method of “offsetting the effects of lower levels of a male hormone being supplied by arteries to the papilla of scalp hair follicles with the active agent 8-hydroxyquinoline sulfate to cause hair to grow again on the scalp, comprising rubbing into the scalp the ointment having the active agent 8-hydroxy-quinoline sulfate 0.3% carried in a petrolatum and lanolin base so that the active agent reaches the papilla.”

According to the examiner, Cortright's statements of utility, namely, her claims of treating baldness, are suspect because “baldness is generally accepted in the art as being incurable․” And when the examiner required clinical evidence to establish the claimed utility, Cortright did not supply the same. The examiner also rejected the claims under 35 U.S.C. §101(a) (1994), arguing that the admitted prior art anticipates the claims because the written description discloses that Bag Balm® has been applied to human skin and the “scalp is the skin of the head.” Eventually these alleged grounds for denial were overturned but then the Board found a new ground for rejecting these claims. The board found that Cortright's written description does not teach those of ordinary skill in the art how to make and use the claimed invention without undue experimentation because it “fails to provide any teachings as to the administration of Bag Balm® in a manner which (i) restore[s] hair growth (claim 1), or (ii) ‘offset [s] the effects of lower levels of male hormone being supplied by arteries to the papilla of scalp hair follicles' (claim 15).” Issues: 1. Whether making and using an invention would have required undue experimentation, and thus whether a disclosure is enabling as required by 35 U.S.C 112?5 a. W/N claim 1 is enabled? b. W/N claim 15 is enabled? 5.

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.

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Held/Ratio: 1. An applicant's failure to disclose how to use an invention may support a rejection under either section 112,   for lack of enablement as a result of “the specification's failure to disclose adequately to one ordinarily skilled in the art ‘how to use’ the invention without undue experimentation,” or section 101 for lack of utility “when there is a complete absence of data supporting the statements which set forth the desired results of the claimed invention.” However, the PTO cannot make this type of rejection, however, unless it has reason to doubt the objective truth of the statements contained in the written description. The PTO has the initial burden of challenging a presumptively correct assertion of utility in the disclosure. Only after the PTO provides evidence showing that one of ordinary skill in the art would reasonably doubt the asserted utility does the burden shift to the applicant to provide rebuttal evidence sufficient to convince such a person of the invention's asserted utility.” The PTO may establish a reason to doubt an invention's asserted utility when the written description “suggests an inherently unbelievable undertaking or involves implausible scientific principles.” Treating baldness was once considered an inherently unbelievable undertaking, but not anymore. a. Claim 1= YES The board explained that claim 1 is not enabled because it claims “restoring hair growth,” which the board interpreted as requiring the user's hair “to return to its original state,” that is, a full head of hair. The board's rejection was not based on complete non-enablement but on the claim not being commensurate with the scope of the disclosure. (Scope Enablement Rejection)6 PTO must give claims their broadest reasonable interpretation; this interpretation must be consistent with the one that those skilled in the art would reach. The PTO's interpretation of claim terms should not be so broad that it conflicts with the meaning given to identical terms in other patents from analogous art. PTO's construction of “restore hair growth” in the present case is inconsistent with its previous definitions. Ex. 748 Patent: “subject's hair began to fill-in in the previously balding and thinning areas and the subject achieved a significant degree of improvement or partial filling-in and restoration of the bald spot on the top of the subject's head.” 378 Patent: “[m]any sprouts of new hair” 599 Patent: increased growth of hair compared to those using minoxidil alone. Nevertheless, the patent does not show that this method completely cured baldness by producing a full head of hair. Consistent with Cort right's disclosure and that of other references, one of ordinary skill would construe this phrase as meaning that the claimed method increases the amount of hair grown on the scalp but does not necessarily produce a full head of hair. Properly construed, claim 1 is amply supported by the written description because Example 1 discloses the amount of Bag Balm® to apply (about one teaspoon daily) and the amount of time (about one month) in which to expect results. These dosing instructions enable one of ordinary skill to practice the claimed invention without the need for any experimentation. b. Claim 15= NO Board Reason #1: The board stated that because the written description “merely ‘surmises'  ” that the active ingredient, 8-hydroxy-quinoline sulfate reaches the papilla and offsets the lower levels of male hormone, it did not teach how to use the method of claim 15. It observed further that the written description fails to provide a working example of the subject matter of claim 15 or any evidence that “the

6.

Scope Enablement Rejection- written description enables something within the scope of the claims, but the claims are not limited to that scope, where the specification does not enable one of ordinary skill to use the invention commensurate with the scope of the claims.

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effects of lower male hormone levels have been offset [by the claimed method], or even if Bag Balm®) has reached the papilla.” (General Non Enablement Rejection)7 Claim 15 should be rejected because the written description fails to disclose that the active ingredient reaches the papilla or that offsetting occurs. What is necessary to satisfy the how-to-use requirement of §112 is the disclosure of some activity coupled with knowledge as to the use of this activity. Here, although the written description states that people observed hair growth after applying Bag Balm® to the scalp, it does not disclose that anyone observed the active ingredient reach the papilla and offset the effects of lower levels of male hormones. It states, rather, that “it is believed that the rubbed-in ointment offsets the effects of lower levels of male hormones in the papilla and/or provides an antimicrobial effect on infection,” and that “Applicant surmises that the active antimicrobial agent, 8-hydro[x]y-quinoline sulfate, reaches the papilla, and is effective to off-set the male hormones such as testosterone and/or androsterone, and/or kill or seriously weaken any bacteria about or in the papilla ․” These statements reflect no actual observations. Moreover, we have not been shown that one of ordinary skill would necessarily conclude from the information expressly disclosed by the written description that the active ingredient reaches the papilla or that off-setting occurs. Board Reason #2: The written description indicates that “the underlying basis for the observed physiological phenomenon can not [sic] be predicted from the results obtained,” and that this type of unpredictability alone may “provide a reasonable doubt as to the accuracy of broad statements made in support of the enablement of a claim.” It is not a requirement of patentability that an inventor correctly set forth, or even know, how or why the invention works. An inventor need not comprehend the scientific principles on which the practical effectiveness of his invention rests. Furthermore, statements that a physiological phenomenon was observed are not inherently suspect simply because the underlying basis for the observation cannot be predicted or explained. Therefore, the board erred in suggesting that Cortright was required to prove the cause of the resultant hair growth.

7.

General Enablement Rejection- specification does not teach how to make or use the invention.

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Lowell v. Lewis (1817) Facts: This is an action for an infringement of a patent right. In 1813, Jacob Perkins obtained a patent for a new and useful invention in the construction of pumps. He assigned his interest to Lowell. In 1817, James Baker invented a similar improvement and was able to obtain a patent. Lewis became his assignee. Lowell sued Lewis for infringement of Perkins’ patent. Defendant Lewis asserts that the invention of Perkins was neither new nor useful so it is not entitled to a patent. The invention of Baker is not of the same construction as that of Perkins’ pumps. He also contends that it is necessary for Lowell to prove that the invention is of general utility – it must supersede the pumps in common use. Issues: 1. W/N the term “useful” means that the invention must be superior to all preceding machines with the same function 2. W/N Baker’s invention is sufficiently described 3. W/N Baker’s invention violated the patent of Perkins Held/Ratio: 1. NO. To warrant a patent, the applicant must establish, that his machine is a new and useful invention. All that the law requires is, that the invention should not be frivolous or injurious to the well-being, good policy, or sound morals of society. The word "useful," therefore, is incorporated into the act in contradistinction to mischievous or immoral. For instance, a new invention to poison people, or to promote debauchery, or to facilitate private assassination, is not a patentable invention. But if the invention steers wide of these objections, whether it be more or less useful is a circumstance very material to the interests of the patentee, but of no importance to the public. “Usefulness” for the purposes of patent eligibility requires only that the claimed invention performs some non-trivial function. The claimed invention need not be so superior as to replace generally all preceding devices performing the same function. 2. YES. The specification should be in full, clear, and exact terms, as not only to distinguish the same from all things before known, but “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. It should be expressed in such terms that a person skilled in the art or science would be able to construct the patented invention. 3. It ruled that it would depend upon whether the pumps of Perkins and Baker are substantially the same invention. A mere change of the form or proportions of any machine cannot, per se, be deemed a new invention. If they are the same invention, Perkins, being clearly the first inventor, is entitled exclusively to the patent right. The manner, in which Mr. Perkins's invention is, in his specification, proposed to be used, is in a square pump, with triangular valves, connected in the centre, and resting without any box on the sides of the pump, at such an angle as exactly to fit the four sides. The pump of Mr. Baker, on the other hand, is fitted only for a circular tube, with butterfly valves of an oval shape, connected in the centre, and resting, not on the sides of the pump, but on a metal rim, at a given angle, so that the rim may not be exactly in contact with the sides, but the valve may be. [The Court left this matter to the sound judgment of the jury.]

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Juicy Whip, Inc., v. Orange Bang, Inc. (1999) Doctrine: •

The fact that one product can be altered to make it look like another is in itself a specific benefit sufficient to satisfy the statutory requirement of utility.

Facts: Juicy Whip, Inc., is the assignee of a Patent entitled "Post-Mix Beverage Dispenser With an Associated Simulated Display of Beverage." A "post-mix" beverage dispenser stores beverage syrup concentrate and water in separate locations until the beverage is ready to be dispensed. The syrup and water are mixed together immediately before the beverage is dispensed, which is usually after the consumer requests the beverage. In contrast, in a "pre-mix" beverage dispenser, the syrup concentrate and water are pre-mixed and the beverage is stored in a display reservoir bowl until it is ready to be dispensed. The display bowl is said to stimulate impulse buying by providing the consumer with a visual beverage display. A pre-mix display bowl, however, has a limited capacity and is subject to contamination by bacteria. It therefore must be refilled and cleaned frequently. The invention claimed is a post-mix beverage dispenser that is designed to look like a pre-mix beverage dispenser. The claims require the post-mix dispenser to have a transparent bowl that is filled with a fluid that simulates the appearance of the dispensed beverage and is resistant to bacterial growth. The claims also require that the dispenser create the visual impression that the bowl is the principal source of the dispensed beverage, although in fact the beverage is mixed immediately before it is dispensed, as in conventional post-mix dispensers.8 Juicy Whip sued Orange Bang, alleging that they were infringing the claims of the patent. The lower court granted Orange Bang’s motion for summary judgement on the ground that the invention lacked utility and thus was unpatentable. The lower court concluded that the invention lacked utility because its purpose was to increase sales by deception, i.e., through imitation of another product. The court explained that the purpose of the invention "is to create an illusion, whereby customers believe that the fluid contained in the bowl is the actual beverage that they are receiving, when of course it is not." Although the court acknowledged Juicy Whip’s argument that the invention provides an accurate representation of the dispensed beverage for the consumer’s benefit while eliminating the need for retailers to clean their display bowls, the court concluded that those claimed reasons for the patent’s utility "are not independent of its deceptive purpose, and are thus insufficient to raise a disputed factual issue to present to a jury." The court further held that an invention lacks utility, the court stated, if it confers no benefit to the public other than the opportunity for making a product more salable. Finally, the court ruled that the invention lacked utility because it is merely an imitation of the premix dispenser. Issue: 1. W/N The district court therefor erred in holding that the invention of the ’405 patent lacks utility because it deceives the public through imitation in a manner that is designed to increase product sale?

8.

Claim 1 is representative of the claims at issue. It reads as follows: In a post-mix beverage dispenser of the type having an outlet for discharging beverage components in predetermined proportions to provide a serving of dispensed beverage, the improvement which comprises: a transparent bowl having no fluid connection with the outlet and visibly containing a quantity of fluid; said fluid being resistant to organic growth and simulating the appearance of the dispensed beverage; said bowl being positioned relative to the outlet to create the visual impression that said bowl is the reservoir and principal source of the dispensed beverage from the outlet; and said bowl and said quantity of fluid visible within said bowl cooperating to create the visual impression that multiple servings of the dispensed beverage are stored within said bowl.

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Held/Ratio: 1. Yes, The patent act provides that "[w]hoever 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 on the invention or discovery. The threshold of utility is not high: An invention is "useful" under if it is capable of providing some identifiable benefit. The principle that inventions are invalid if they are principally designed to serve immoral or illegal purposes has not been applied broadly in recent years. For example, years ago courts invalidated patents on gambling devices on the ground that they were immoral, but that is no longer the law. In holding the patent in this case invalid for lack of utility, the district court relied on two Second Circuit cases, The Rickard case, where the court held invalid a patent on a process for treating tobacco plants to make their leaves appear spotted. The court noted the only effect, if not the only object, of such treatment, is to spot the tobacco, and counterfeit the leaf spotted by natural causes. The Aristo Hosiery case held that the seamless stocking has imitation marks for the purposes of deception, and the idea prevails that with such imitation the article is more salable, was not enough to render the invention patentable. We decline to follow Rickard and Aristo Hosiery, as we do not regard them as representing the correct view of the doctrine of utility under the Patent Act of 1952. The fact that one product can be altered to make it look like another is in itself a specific benefit sufficient to satisfy the statutory requirement of utility. The fact that customers may believe they are receiving fluid directly from the display tank does not deprive the invention of utility. Orange Bang has not argued that it is unlawful to display a representation of the beverage in the manner that fluid is displayed in the reservoir of the invention, even though the fluid is not what the customer will actually receive. Moreover, even if the use of a reservoir containing fluid that is not dispensed is considered deceptive, that is not by itself sufficient to render the invention unpatentable. The requirement of "utility" in patent law is not a directive to the Patent and Trademark Office or the courts to serve as arbiters of deceptive trade practices. As the Supreme Court put the point more generally, Congress never intended that the patent laws should displace the police powers of the State. Of course, Congress is free to declare particular types of inventions unpatentable for a variety of reasons, including deceptiveness. Until such time as Congress does so, however, we find no basis in section 101 to hold that inventions can be ruled unpatentable for lack of utility simply because they have the capacity to fool some members of the public. The Case was reversed and remanded.

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Brenner v. Manson (1966) Facts: Howard Ringold and George Rosenkranz applied for a patent on an allegedly novel process for making certain known steroids. Respondent Manson, a chemist engaged in steroid research, filed an application to patent precisely the same process described by Ringold and Rosenkranz. He asserted that it was he who had discovered the process, and that he was the first one to do so. Accordingly, he requested that an ‘interference’ be declared in order to try out the issue of priority between his claim and that of Ringold and Rosenkranz. A Patent Office examiner denied Manson's application. The ground for rejection was the failure ‘to disclose any utility for’ the chemical compound produced by the process. Manson had tried to claim usefulness because a compound similar to the one produced by his process had proven to be effective in inhibiting tumors in mice. Issue: 1. Whether the practical utility of the compound produced by a chemical process is an essential element in establishing a prima facie case for the patentability of the process. Held/Ratio: 1. For failing to show utility, respondent may not be granted a patent. •

One may patent only that which is “useful”

•

Even on the assumption that the process would be patentable were respondent to show that the steroid produced had a tumor-inhibiting effect in mice, we would not overrule the Patent Office finding that respondent has not made such a showing.

•

o

The Patent Office held that, despite the reference to the adjacent homologue (I think homologue refers to a chemical that is similar), respondent's papers did not disclose a sufficient likelihood that the steroid yielded by his process would have similar tumor-inhibiting characteristics.

o

Indeed, respondent himself recognized that the presumption that adjacent homologues have the same utility has been challenged in the steroid field because of ‘a greater known unpredictability of compounds in that field.'

In support of his argument, respondent relies on a statement made by Justice Story that a useful invention is one “which may be applied to a beneficial use in society, in contradistinction to an invention injurious . . . or frivolous and insignificant.” o

•

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Justice Story's language sheds little light on our subject. It places such a special meaning on the word ‘useful’ that we cannot accept, in the absence of evidence that Congress so intended. There are, after all, many things in this world which may not be considered ‘useful’ but which, nevertheless are totally without a capacity for harm.

A process patent in the chemical field, which has not been developed and pointed to the degree of specific utility, creates a monopoly of knowledge which should be granted only if clearly commanded by the statute. o

Until the process claim has been reduced to production of a product shown to be useful, the metes and bounds of that monopoly are not capable of precise delineation. It may engross a vast, unknown, and perhaps unknowable area. Such a patent may confer power to block off whole areas of scientific development, without compensating benefit to the public.

o

The basic quid pro quo contemplated by the Constitution and the Congress for granting a patent monopoly is the benefit derived by the public from an invention with substantial utility. Unless and until a process is refined and developed to this point—where specific benefit exists—there is Page 46 of 99

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insufficient justification for permitting an applicant to engross what may prove to be a broad field. •

IN SHORT: In order to be granted a patent, the inventor must be able to specifically show how his/her invention is useful.

In re Brana (1995) Doctrine •

The Burden is initially on the PTO to raise doubt about alleged utility alleged in disclosure

•

Usefulness in patent law, and in particular in the context of pharmacological inventions, necessarily includes the expectation of further research and development. The stage at which an invention in this field becomes useful is well before it is ready to be administered to humans

Facts: (sorry if this is long) Miguel Brana, et.al (applicants) filed patent application Serial no. 213,690 (‘690 application) directed to nonsymmetrically 5-nitrobenzo[de]isoquinoline-1,3-dione compounds, for use as antitumor substances. The specification stated that non-symmetrical substitutions provide compounds with “a better action and a better action spectrum as antitumor substances” than known benzo-isoquinolines, namely those in K.D. Paull et. al, Computer assisted StructureActivity Correlations, Drug Research. Paull describes a computer assisted evaluation of benzo[de] isoquinolines- 1,3diones and related compounds which have been screened for antitumor activity by testing their efficacy in vivo against two specific implanted murine (utilizing mice as test subjects) lymphocytic leukemias, P388 and L1210. These two in vivo tests are widely used by the National Cancer Institute (NCI) to measure the antitumor properties of a compound. In addition to comparing the effectiveness of the claimed compounds with structurally similar compounds in Paull, applicants’ patent specification illustrates the cytotoxicity of the claimed compounds against human tumor cells, in vitro and concludes that these tests “had good action”. The examiner initially rejected the claims as obvious over US Patent 4,614,820 to Zee-Cheng, et al. The reference was cited disclosing structurally similar symmetrically substituted compounds for use as antitumor agents. In response, the applicants submitted declaration evidence showing that the claimed non-symmetrically substituted compounds were far more effective as antitumor agents than the symmetrically substituted compounds disclosed by Zee-Cheng et al. Furthermore, the applicants urged that even though the differences in structure were slight, there was no suggestion in the art that the improved results would have been expected. The examiner withdrew the rejection over prior art but rejected the claims on other grounds. The claims were finally rejected under 35 USC §112, first paragraph. The basis for rejection was that the specification failed to describe any specific disease against which the claimed compounds were active. The examiner also concluded that prior art tests performed by Paull (in vivo models) and the tests disclosed in the specification (activity against human tumor cells in vitro) were not sufficient to establish a reasonable expectation that the claimed compounds had a practical utility (antitumor activity in humans). The examiner further noted a rejection also could have been made under 35 USC §101 for failure to disclose a practical utility. During the prosecution of the application, the applicants submitted a declaration under 37 CFR §1.132 of Michael Kluge showing the antitumor activity of several compounds within the scope of the claims. Based thereon, Kluge concluded that these compounds would likely be clinically useful as anti-cancer agents. The applicants appealed the final rejection to the Board of Appeals. The Board affirmed the rejection based on: (1) The applicants’ specification failed to disclose a specific disease against which the claimed compounds are useful, and therefore, absent undue experimentation, one of ordinary skill in the art was precluded from using the invention; (2) even if the specification did allege a specific use, the applications failed to prove that the claimed compounds are useful. More particularly, the Board found that the tests offered by the applicants failed to prove utility were inadequate to convince one of ordinary skill in the art that the claimed compounds were useful as antitumor substances. The applicants appealed the decision to the Court of Appeals for the Federal Circuit. ALS2014B

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Issue: 1. Whether or not the applicant must proved the practical utility or usefulness of an invention for which patent protection is sought Held/Ratio: 1. No. The court found that the applicants’ favorable comparison (in its specification) to Paull’s symmetrically substituted compounds implicitly asserts that the claimed compounds are highly effective against lymphocytic leukemia. Based thereon, the court held that in light of the explicit reference to Paull, the specification does allege a sufficiently specific use. The court also pointed out that the intial burden is on the PTO to make a prima facie showing that the claimed invention lacks utility.Only after the PTO provides evidence showing that once of ordinary skill in the art would reasonably doubt the asserted utility does the burden shift to the applicant to provide rebuttal evidence sufficient to convince such a person of the invention’s asserted utility. Also, even if f the PTO had met its initial burden thereby shifting the burden to the applicants to offer rebuttal evidence (even if one skilled in the art would have reasonably questioned the asserted utility), the applicants submitted sufficient evidence to convince one of ordinary skill in the art of the asserted utility. The in vivo test results presented in the Kluge declaration (showing that several compounds within the scope of the claims exhibited significant antitumor activity in a standard murine tumor model) alone would have been sufficient to rebut a prima facie case of utility. ‘ The Commissioner took the position that such in vivo tests in animals are only preclinical tests to determine whether a compound is suitable for testing in humans, and that these tests are not reasonably predictive of the success of the claimed compounds for treating cancer in humans. However, the court declared that the Commissioner should not confuse the requirements for obtaining government approval to market a drug 9testing for safety and effectiveness) with the requirements for obtaining a patent. In this regard, the court noted as follows: “Usefulness in patent law, and in particular in the context of pharmacological inventions, necessarily includes the expectation of further research and development. The stage at which an invention in this field becomes useful is well before it is ready to be administered to humans. Were we to require Phase II testing 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, through research and development, potential cures in many crucial areas such as the treatment of cancer.” Additionally, the court noted that its predecessor court (the CCPA) had long ago determined that proof of an alleged pharmaceutical property for a compound by statistically significant tests with standard laboratory animals is sufficient to establish utility. Namely, one who has taught the public that compound exhibits some desirable pharmaceutical property in a standard laboratory animal has made a significant and useful contribution to the art, even though it may eventually appear that the compound is without value in the treatment of humans. Moreover, the court took notice that NCI is of the opinion that the tests are statistically significant because the NCI has explicitly recognized the subject murine tumor models as standard screening tests for determining whether new compounds may be useful as antitumor agents.

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VIII. Ownership of Patent Section 28. Right to a Patent. - The right to a patent belongs to the inventor, his heirs, or assigns. When two (2) or more persons have jointly made an invention, the right to a patent shall belong to them jointly. (Sec. 10, R.A. No. 165a) Section 29. First to File Rule. - If two (2) or more persons have made the invention separately and independently of each other, the right to the patent shall belong to the person who filed an application for such invention, or where two or more applications are filed for the same invention, to the applicant who has the earliest filing date or, the earliest priority date. (3rd sentence, Sec. 10, R.A. No. 165a.) Section 30. Inventions Created Pursuant to a Commission. 30.1. The person who commissions the work shall own the patent, unless otherwise provided in the contract. 30.2. In case the employee made the invention in the course of his employment contract, the patent shall belong to: (a) The employee, if the inventive activity is not a part of his regular duties even if the employee uses the time, facilities and materials of the employer. (b) The employer, if the invention is the result of the performance of his regularly-assigned duties, unless there is an agreement, express or implied, to the contrary. (n) Section 67. Patent Application by Persons Not Having the Right to a Patent. . 67.1. If a person referred to in Section 29 other than the applicant, is declared by final court order or decision as having the right to the patent, such person may, within three (3) months after the decision has become final: (a) Prosecute the application as his own application in place of the applicant; (b) File a new patent application in respect of the same invention; (c) Request that the application be refused; or (d) Seek cancellation of the patent, if one has already been issued. 67.2. The provisions of Subsection 38.2 shall apply mutatis mutandis to a new application filed under Subsection 67. 1(b). (n) Section 68. Remedies of the True and Actual Inventor. - If a person, who was deprived of the patent without his consent or through fraud is declared by final court order or decision to be the true and actual inventor, the court shall order for his substitution as patentee, or at the option of the true inventor, cancel the patent, and award actual and other damages in his favor if warranted by the circumstances. (Sec. 33, R.A. No. 165a) Section 69. Publication of the Court Order. - The court shall furnish the Office a copy of the order or decision referred to in Sections 67 and 68, which shall be published in the IPO Gazette within three (3) months from the date such order or decision became final and executory, and shall be recorded in the register of the Office. (n) Section 70. Time to File Action in Court. - The actions indicated in Sections 67 and 68 shall be filed within one (1) year from the date of publication made in accordance with Sections 44 and 51, respectively. (n) Section 236. Preservation of Existing Rights. - Nothing herein shall adversely affect the rights on the enforcement of rights in patents, utility models, industrial designs, marks and works, acquired in good faith prior to the effective date of this Act. (n)

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LECTURE ON INFRINGEMENT OF PATENTS Maguan v. CA (1986) (powder puff) Doctrine: •

SEC. 9. Invention not considered new or patentable. — An invention shall not be considered new or capable of being patented: a. If it was known or used by others in the Philippines before the invention thereof by the inventor named in an application for patent for the invention; or b.

If it was patented or described in any printed publication in the Philippines or any foreign country more than one year before the application for a patent therefor; or

c. If it had been in public use or on sale in the Philippines for more than one year before the application for a patent therefor; or d. If it is the subject matter of a validly issued patent in the Philippines granted on an application filed before the filing of the application for patent therefor. Facts: Petitioner Rosario Maguan is doing business under “Swan Manufacturing” and is a patent holder of powder puff.9 In a letter, petitioner informed private respondent Luchan (of Susana Luchan Powder Puff Manufacturing) that the powder puff it was manufacturing and selling, particularly those to the cosmetics industry, resemble were identical or substantially identical to the powder puff petitioner had patented therefore the production and sale of the same by the latter constituted infringement. In her defense, respondent stated the following: First, that her powder puff was different; second, that the petitioner’s patents were void because the utility models applied for were not new and patentable, and lastly, that the person to whom the patent was issued was not the true and actual owner nor were her rights derived from that author. Specifically, respondent further alleged: a. Years prior to the application for the patents, powder puffs of that kind already existed and publicly sold in the market both in the Philippines and abroad b. Applicant’s claim for the “construction” or process of manufacturing the utility models were but a complicated and impractical version of an old simple one which has been well known in the cosmetics industry (as early as 1963) thereby belonging to no one except the general public. Hence, petitioner filed a complaint for damages with injunction and preliminary injunction. The trial court granted the writs prayed for. Upon petition for certiorari, the CA issued a writ of preliminary injunction enjoining the orders of the trial court but subsequently dismissed the case for lack of merit (issue decided was only whether the court acted with grave abuse of discretion, not on whether the patents had been infringed). However upon reconsideration, injunction was granted. Issues: 1. W/N in an action for infringement the court had jurisdiction to determine the invalidity of the patents at issue which invalidity was still pending in consideration in the Patent Office 2. W/N the court committed grave abuse of discretion in the issuance of the writ of preliminary injunction 3. W/N certiorari was the proper remedy

9.

1. UM-423 (extended and/or renewed under Extension No. UM-109 for a period of 5 years from October 6, 1971) 2. UM-450 (extended and/or renewed under Extension No. UM110 for a period of 5 years from January 26, 1972) 3. UM 1184, for a period of 5years from April 5, 1974.

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Held/Ratio: 1. YES. When a patent is sought to be enforced, the questions of invention, novelty or prior use, are open to judicial examination. Under the Patent Law, the trial court has jurisdiction to declare patents in question invalid. A patentee shall have the exclusive right to make, use and sell the patented article or product and the making, using, or selling by any person without the authorization of the patentee constitutes infringement of the patent (Sec. 37, R.A. 165). Any patentee whose rights have been infringed upon may bring an action before the proper CFI now (RTC) and to secure an injunction for the protection of his rights (Sec. 42, R.A. 165). Under Sec. 46 of the same law, if the Court shall find the patent or any claim thereof invalid, the Director shall on certification of the final judgment ... issue an order cancelling the patent or the claims found invalid and shall publish a notice thereof in the Official Gazette.” Upon such certification, it is ministerial on the part of the patent office to execute the judgment 2. YES. The validity of petitioner’s patents is in question for want of novelty. Trial court committed grave abuse of discretion when it failed to determine the validity of the patents before issuance of the writ. For an injunction to issue, 2 requisites must be satisfied: First, the existence of the right to be protected and second, the violation of said right. The burden of proof to substantiate a charge of infringement is with the plaintiff. But where the plaintiff introduces the patent in evidence, and the same is in due form, there is created a prima facie presumption of its correctness and validity. The decision of the Director of Patent in granting the patent is presumed to be correct. The burden of going forward with the evidence (burden of evidence) then shifts to the defendant to overcome by competent evidence this legal presumption After review of 64 exhibits and oral testimonies of 5 witnesses, there is a prima facie showing of a fair question of invalidity of petitioner’s patents on the ground of lack of novelty. The evidence appeared not to have been considered at all by the court a quo for alleged lack of jurisdiction, on the mistaken notion that such question in within the exclusive jurisdiction of the patent office. An invention must possess the essential elements of novelty, originality and precedence and for the patentee to be entitled to protection; the invention must be new to the world. Accordingly, a single instance of public use of the invention by a patentee for more than two years (now for more than one year only under Sec. 9 of the Patent Law) before the date of his application for his patent will be fatal to, the validity of the patent when issued. Under American Law from which our Patent Law was derived it is generally held that in patent cases a preliminary injunction will not issue for patent infringement unless the validity of the patent is clear and beyond question. The issuance of letters patent, standing alone, is not sufficient to support such drastic relief. In cases of infringement of patent no preliminary injunction will be granted unless the patent is valid and infringed beyond question and the record conclusively proves the defense is sham. 3. YES. For an injunction to issue, 2 requisites must be satisfied: First, the existence of the right to be protected, and second, the violation of said right. In this case, the injunctive order is so general that the petitioner may be totally barred from the sale of any kind of powder puff. Under the circumstances, ordinary appeal is inadequate. In the past, the Court has recognized that a petition for certiorari may be applied for by the proper petition notwithstanding the existence of the regular remedy of an appeal when among other reasons, the broader interests of justice so require or an ordinary appeal is not an adequate remedy.

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W. Graham v. J. Deere (1966) Doctrine: 1. The only requirements for patentability before were novelty and utility. The Patent Act codified another requirement – non-obviousness – which was found only in jurisprudence before. 2. Section 103 required a determination of the following questions of fact to resolve the issue of obviousness: 1. the scope and content of the prior art; 2. the differences between the claimed invention and the prior art; and 3. the level of ordinary skill in the prior art. The Court also recognized that these questions would likely need to be answered on a case-by-case basis, first by the United States Patent and Trademark Office (USPTO), then by the courts. Facts: This is a consolidation of two appealed cases. Case # 1 – Graham v. John Deere, Co. Graham sued Deere for patent infringement. Graham invented a device that was designed to absorb shock from chisel plows. He invented this because when chisel plows were used on rocky soil, the plows get damaged because of all the shock. Graham did this by attaching plow shanks to spring clamps to allow them to flex freely under the frame of the plow. A patent was granted. He made an improvement by placing the hinge plate beneath the plow shank rather than above it, in order to minimize the outward motion of the shank away from the plate. Another patent was granted. Case # 2 – Calmar, Inc. v. Cook Chemical Co. and Colgate-Palmolive Co. v. Cook Chemical Co. Calmar was a producer of “hold-down” sprayers for bottles of chemicals such as insecticides, and ColgatePalmolive was a purchaser of these sprayers. Inventor Baxter I. Scoggin, Jr. had assigned his patent for sprayer design to Cook Chemical Co. The invention patented was a cap to cover insecticide spray cans that had a rib seal. Although rib seals were used for caps to cover other types of cans, this was the first time a rib seal was used in the context of an insecticide spray can. Calmar and Colgate-Palmolive sought a declaration of invalidity and non-infringement of the patent, and Cook Chemical Co. sought to maintain an action for infringement. The validity of the patent was sustained by the District Court, and the Eighth Circuit affirmed. Issue: 1. W/N the patented inventions pass the test of non-obviousness Held/Ratio: 1. In the Graham case, the '798 (second) patent was originally rejected by the patent examiner as being insufficiently distinguished from the previous '811 (first) patent. The only two claims which differed between the two patents were (1) the stirrup and the bolted connection of the shank to the hinge plate do not appear in '811; and (2) the position of the shank is reversed, being placed in patent '811 above the hinge plate, sandwiched between it and the upper plate. One argument which Graham raised before the court, but had not raised before the USPTO, was that in the new '798 design, the flexing of the plow shank was limited to the points between the spring clamp and the tip of the plow shank, absorbing the shock of hard objects on the ground more efficiently. The court rejected this argument and invalidated the '798 patent for two reasons: first, Graham had not raised this “flexing” argument before the USPTO, and second, the parts in the '798 patent served the same purposes as those in the prior art. In the matters concerning Cook Chemical, Scoggin, a corporate officer at Cook, had originally based his design on Calmar’s previous unpatented design, but later claimed that the integration of the sprayer and container solved the problem of external leakage during assembly and shipping of insecticide products. The district court held that Scoggin’s sprayer was not obvious because even though its individual elements were not novel, nothing in the ALS2014B

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prior art would have suggested the combination of elements. After the initial rejection of his patent, Scoggin drafted claims more carefully to distinguish the prior art, limiting new claims to the use of a rib seal, rather than a washer or gasket, to maintain a seal, as well as the existence of a small space between the overcap and the sprayer. Because Scoggin narrowed his claims to meet the limitations requested by the patent examiner, Cook Chemical could not now claim broader subject matter and further held that the differences between Scoggin’s design and the prior art were simply too minor and non-technical to maintain the validity of Cook’s patent.

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Dann (Commisioner of Patents and Trademarks) v. Johnston (1976) Facts: Respondent has applied for a patent on what is described in his patent application as a "machine system for automatic record-keeping of bank checks and deposits." The system permits a bank to furnish a customer with subtotals of various categories of transactions completed in connection with the customer's single account, thus saving the customer the time and/or expense of conducting this bookkeeping himself. As respondent has noted, the "invention is being sold as a computer program to banks and to other data processing companies so that they can perform these data processing services for depositors." After reviewing respondent's patent application, the patent examiner rejected all the claims therein. He found that respondent's claims were invalid as being anticipated by the prior art, 35 U. S. C. § 102, and as not "particularly pointing out and distinctly claiming" what respondent was urging to be his invention. Respondent appealed to the Patent and Trademark Office Board of Appeals. The Board rejected respondent's application on several grounds. o

It found first that under § 112, the application was indefinite and did not distinctly enough claim what respondent was urging to be his invention.

o

It also concluded that respondent's claims were invalid under § 101 because they claimed nonstatutory subject matter. According to the Board, computer-related inventions which extend "beyond the field of technology . . . are nonstatutory," and respondent's claims were viewed to be "non-technological."

o

Finally, respondent's claims were rejected on grounds of obviousness. 35 U. S. C. § 103. The Board found that respondent's claims were obvious variations of established uses of digital computers in banking and obvious variations of an invention, developed for use in business organizations, that had already been patented.

Issue: 1. W/N Respondent’s system is patentable (obviousness) Held/Ratio: 1. No. Unpatentable on grounds of obviousness As a judicial test, "invention"—i. e., "an exercise of the inventive faculty has long been regarded as an absolute prerequisite to patentability. However, it was only in 1952 that Congress, in the interest of "uniformity and definiteness," articulated the requirement in a statute, 226*226 framing it as a requirement of "nonobviousness." Section 103 of the Patent Act of 1952, 35 U. S. C. § 103, provides in full: A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. Patentability shall not be negatived by the manner in which the invention was made. It must be remembered that the "obviousness" test of § 103 is not one which turns on whether an invention is equivalent to some element in the prior art but rather whether the difference between the prior art and the subject matter in question "is a difference sufficient to render the claimed subject matter unobvious to one skilled in the applicable art. . . ." As compared to Dirks Case: There is no need to make the obviousness determination in this case turn solely on the nature of the current use of data processing and computer programming in the banking industry. For, as noted, the Board pointed to a second factor—a patent issued to Gerhard Dirks—which also supports a conclusion of obviousness. The Dirks patent discloses a complex automatic data processing system using a programmed digital computer for use in a large business organization. Under the system transaction and balance files can be ALS2014B

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kept and updated for each department of the organization. The Dirks system allows a breakdown within each department of various areas, e. g., of different types of expenses. Moreover, the system is sufficiently flexible to provide additional breakdowns of "sub-areas" within the areas and can record and store specially designated information regarding each of any department's transactions. Thus, for instance, under the Dirks system the disbursing office of a corporation can continually be kept apprised of the precise level and nature of the corporation's disbursements within various areas or, as the Dirks patent terms them, "Item Groups." Again, as was the case with the prior art within the banking industry the Dirks invention is not equivalent to respondent's system. However, the departments of the business organization and the areas or "Item Groups" under the Dirks system are closely analogous to the bank customers and category number designations respectively under respondent's system. And each shares a similar capacity to provide breakdowns within its "Item Groups" or category numbers. While the Dirks invention is not designed specifically for application to the banking industry many of its characteristics and capabilities are similar to those of respondent's system. In making the determination of "obviousness," it is important to remember that the criterion is measured not in terms of what would be obvious to a layman, but rather what would be obvious to one "reasonably skilled in [the applicable] art." In the context of the subject matter of the instant case, it can be assumed that such a hypothetical person would have been aware both of the nature of the extensive use of data processing systems in the banking industry and of the system encompassed in the Dirks patent. While computer technology is an exploding one, "[i]t is but an evenhanded application to require that those persons granted the benefit of a patent monopoly be charged with an awareness" of that technology. Assuming such an awareness, respondent's system would, we think, have been obvious to one "reasonably skilled in [the applicable] art." There may be differences between respondent's invention and the state of the prior art. Respondent makes much of his system's ability to allow "a large number of small users to get the benefit of largescale electronic computer equipment and still continue to use their individual ledger format and bookkeeping methods." It may be that that ability is not possessed to the same extent either by existing machine systems in the banking industry or by the Dirks system. But the mere existence of differences between the prior art and an invention does not establish the invention's nonobviousness. The gap between the prior art and respondent's system is simply not so great as to render the system nonobvious to one reasonably skilled in the art.

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Aguas v. De Leon (1982) Doctrines: •

Any invention of a new and useful machine, manufactured product or substance, process, or an improvement of the foregoing, shall be patentable. Where improvement in tile making is inventive and different from old process of tile making, improvement is patentable.

•

The validity of the patent issued by the Philippines Patent Office in favor of the private respondent and the question over the inventiveness, novelty and usefulness of the improved process therein specified and described are matters which are better determined by the Philippines Patent Office.

Facts: On April 14, 1962, Conrado G. de Leon filed in the Court of First Instance of Rizal at Quezon City a complaint for infringement of patent against Domiciano A. Aguas and F.H. Aquino and Sons alleging that being the original first and sole inventor of certain new and useful improvements in the process of making mosaic pre-cast tiles, he lawfully filed and prosecuted an application for Philippine patent, and having complied in all respects with the statute and the rules of the Philippine Patent Office, Patent No. 658 was lawfully granted and issued to him; that said invention was new, useful, not known or used by others in this country before his invention thereof, not patented or described in any printed publication anywhere before his invention thereof, or more than one year prior to his application for patent thereof, not patented in any foreign country by him or his legal representatives on application filed more than one year prior to his application in this country; that plaintiff has the exclusive license to make, use and sell throughout the Philippines the improvements set forth in said Letters Patent No. 658; that the invention patented by said Patent No. 658 is of great utility and of great value to plaintiff and of great benefit to the public who has demanded and purchased tiles embodying the said invention in very large quantities and in very rapidly increasing quantities; that the defendant Domiciano A. Aguas infringed Letters of Patent No. 658 by making, using and selling tiles embodying said patent invention and that defendant F.H. Aquino & Sons is guilty of infringement by making and furnishing to the defendant Domiciano A. Aguas the engravings, castings and devices designed and intended for use and actually used in apparatus for the making of tiles embodying plaintiff’s patented invention. Thereafter, an order granting the plaintiff’s petition for a Writ of Preliminary Injunction was issued. On May 23, 1962, the defendant Domiciano A. Aguas filed his answer denying the allegations of the plaintiff and alleging that: the plaintiff is neither the original first nor sole inventor of the improvements in the process of making mosaic pre-cast tiles, the same having been used by several tile-making factories in the Philippines and abroad years before the alleged invention by de Leon; that Letters Patent No. 658 was unlawfully acquired by making it appear in the application in relation thereto that the process is new and that the plaintiff is the owner of the process when in truth and in fact the process incorporated in the patent application has been known and used in the Philippines by almost all tile makers long before the alleged use and registration of patent by plaintiff Conrado G. de Leon; that the registration of the alleged invention did not confer any right on the plaintiff because the registration was unlawfully secured and was a result of the gross misrepresentation on the part of the plaintiff that his alleged invention is a new and inventive process. The trial court rendered a decision in favor of the plaintiff. Aguas appealed to the Court of Appeals. The CA affirmed the decision of the trial court, with the modification that plaintiff-appellee’s award of moral damages was reduced. Aguas filed a petition for certiorari to the SC. Issue: 1. Whether the Patent issued to de Leon was legally issued. Held/Ratio: 1. Yes. The Court finds that Patent No. 658 was legally issued, the process and/or improvement being patentable. The petitioner questioned the validity of the patent of the private respondent, Conrado G. de Leon, on the ground that the process, subject of said patent, is not an invention or discovery, or an improvement of the old system of making tiles. It should be noted that the private respondent does not claim to be the discoverer or inventor of the old process of tilemaking. He only claims to have introduced an improvement of said process. In fact, Letters ALS2014B

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Patent No. 658 was issued by the Philippine Patent Office to the private respondent, Conrado G. de Leon, to protect his rights as the inventor of “an alleged new and useful improvement in the process of making mosaic precast tiles.” Indeed, Section 7, Republic Act No. 165, as amended provides: “Any invention of a new and useful machine, manufactured product or substance, process, or an improvement of the foregoing, shall be patentable”. The Claims and Specifications of Patent No. 658 show that although some of the steps or parts of the old process of tile making were described therein, there were novel and inventive features mentioned in the process. Some of the novel features of the private respondent’s improvements are the following: critical depth, with corresponding easement and lip width to such degree as leaves the tile as thin as 1/8 of an inch at its thinnest portion, ideal composition of cement and fine river sand, among other ingredients that makes possible. The production of tough and durable wall tiles, though thin and light; the engraving of deep designs in such a way as to make the tiles decorative, artistic and suitable for wall ornamentation, and the fact that the tiles can be mass produced in commercial quantities and can be conveniently stock-piled, handled and packed without any intolerable incidence of breakages. The petitioner also contends that the improvement of respondent is not patentable because it is not new, useful and inventive. This contention is without merit. The records disclose that de Leon’s process is an improvement of the old process of tile making. The tiles produced from de Leon’s process are suitable for construction and ornamentation, which previously had not been achieved by tiles made out of the old process of tile making. De Leon’s invention has therefore brought about a new and useful kind of tile. The old type of tiles was usually intended for floors although there is nothing to prevent one from using them for walling purposes. These tiles are neither artistic nor ornamental. They are heavy and massive. The respondent’s improvement is indeed inventive and goes beyond the exercise of mechanical skill. He has introduced a new kind of tile for a new purpose. He has improved the old method of making tiles and pre-cast articles which were not satisfactory because of an intolerable number of breakages, especially if deep engravings are made on the tile. He has overcome the problem of producing decorative tiles with deep engraving, but with sufficient durability. Durability inspite of the thinness and lightness of the tile, is assured, provided that a certain critical depth is maintained in relation to the dimensions of the tile. The validity of the patent issued by the Philippines Patent Office in favor of the private respondent and the question over the inventiveness, novelty and usefulness of the improved process therein specified and described are matters which are better determined by the Philippines Patent Office. The technical staff of the Philippines Patent Office, composed of experts in their field, has, by the issuance of the patent in question, accepted the thinness of the private respondent’s new tiles as a discovery. There is a presumption that the Philippines Patent Office has correctly determined the patentability of the improvement by the private respondent of the process in question.

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Albana v. Director of Patents (1953) Facts: Pending examination of the patent application of Tapinio and Feliciano, Meliton Albaña filed a motion to intervene claiming that the applicant-inventors had "sold and assigned to him the right to contract or deal the sale of their invention called Fel-Tap Meter Guard and Detector through the Corporation that they were then organizing under his direction and to fix and decide on the purchase price of it. Albaña prayed that (1) Tapinio be compelled to sign their contract, which was already signed by Feliciano (2) have such contract acknowledged before a notary public, (3) have it recorded in the Patent Office and Register of Deeds, and (4) patent be issued in his name and in the name of the inventors. The motion to intervene was denied on the ground that the Director of Patents has no jurisdiction on the question submitted to him. Albaña filed an amended motion to intervene, now claiming "that he is the assignee of the inventors of the undivided part interests in the invention..." The amended motion was still denied on the ground that the assignment made to the movant is not one of exclusive right to make, use and sell the electrical contrivance for which patent is applied for; that it is just an authority to act as the selling agent for the inventors and to receive compensation; and that not being entitled to have his name included as one of the patentees, the movant has no right to intervene. Issue: 1. W/N Director of Patent has jurisdiction/ authority to act on Albaña's motion. NO. Held/Ratio: 1. What Albaña attempted to secure by his motion to intervene is beyond the jurisdiction and authority of the Director of Patents to grant. Despite the amendment to the first motion, still it remains that the alleged assignment is not of the invention but it is an agreement whereby he is to act as selling agent for the inventors of the patent and of the invention while receiving compensation therefor. This is clearly supported by the clauses found in their contract. Assignments of patents and inventions be recorded in books and records kept for the purpose in the Patent Office if presented in due form; but Albaña does not ask for the registration of the alleged agreement between him and the inventors, and because it is not in due form it cannot be recorded. Under the provisions of the Patent Law, the Director of Patents has no power and authority to compel the applicant-inventors to do what Albaña is asking them to perform. What he asked the Director of Patents to do for him is essentially a judicial function which would require the determination or finding by a court of competent jurisdiction as to whether there was a meeting of the minds of the contracting parties before it could compel the applicant-inventors to perform what he prays the court to order them to do. Aside from want of authority and power, the Director of Patents lacks the means to make such determination and finding which would be necessary before he could act on the appellant's motion.

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Quanta Computer Inc. v. LG Electronics (2008) Facts: LG Electronics (LGE), the plaintiffs in the case owned patents on microprocessors, chipsets, systems containing such microprocessors and chipsets and methods of operating systems containing such chipsets and microprocessors. LGE had granted a license under the patents to Intel which contained no limitations on how Intel could exploit its rights under the license and specifically stated that “notwithstanding anything to the contrary contained in this Agreement, the parties agree that nothing herein shall in any way limit or alter the effect of patent exhaustion that would otherwise apply when a party hereto sells any of its Licensed Products”. By a separate agreement, Intel agreed that it would give notice to its customers that the license given to Intel by LGE and which covered the product sold by Intel to its customers “does not extend expressly or by implication to any product you make by combining an Intel product with any non-Intel product.” Intel manufactured microprocessors and chipsets under the agreements and sold them to Quanta which incorporated them into “systems” (i.e. computers) covered by the licensed patents. Intel gave Quanta the notice required under its agreement with LGE, but Quanta nevertheless combined the purchased microprocessors and chipsets with parts not obtained from Intel. LGE sued Quanta for infringement of its claims relating to the systems and methods but not for infringement of patents relating to the microprocessors or chipsets themselves. The district court found that LGE’s rights in the system patents had been exhausted by Intel’s sale of microprocessors that could effectively only be used in the patented systems, but, relying on some bald statements in earlier Federal Circuit decisions, held that sale of a product could not exhaust rights in a method patent. In this context, the court pointed out the differences between the exhaustion doctrine and that of an implied license in the following terms: The patent exhaustion doctrine applies when a patentee has, in essence, sold its statutory right to exclusivity through the unrestricted sale or license of the patent. A patentee who has not abandoned its statutory right to exclude others from the use of its patent may nevertheless, through conduct that induces reliance, grant to particular parties an implied license to practice the patent. The court held that there was no implied license in the present case because of the notice given to Quanta by Intel. On appeal to the Court of Appeals for the Federal Circuit, that court simply stated that there was no exhaustion of rights in patents to either the systems or the methods. The “exhaustion doctrine does not apply to an expressly conditional sale or license”. According to Quanta, LGE’s and Intel’s rights to restrict the use of articles after an authorized sale, were confined to what could be secured under contract law in the same way as for articles that had not been patented. Such a rule was also correct in making sound economic and policy sense: it required the patent owner (or manufacturing licensee) “to extract the full value of its patent rights in one negotiation with the first purchaser, which can then share the burden with the rest of the distribution chain by charging a higher price”. Down-stream purchasers were then safe to use what they had bought without fear of being sued for patent infringement. Quanta also argued that the exhaustion doctrine was equally applicable to method claims and system claims when the articles sold had no other reasonable use than in the systems and methods claimed and that this had been found by the district court and was unchallenged by the Federal Circuit. According to LGE the traditional exhaustion doctrine is that the unconditional sale of a patented article exhausts patent rights in that article, but not in other patented systems of which that article might become a component. LGE further argued that the exhaustion doctrine could only apply to acts of selling or using a patented article obtained from the patent owner or its licensee. It could not apply to the separate right of making a patented system, which of necessity had to be a different invention from the invention embodied in the article that had been sold. What Quanta was doing in the present case was making the systems covered by the patents in suit. What Quanta was seeking to do was to trivialize the value of combination inventions by requiring patent owners to extract full economic value of all their the patent rights from the original purchaser of any component that was to be used in a patented combination. This would discourage innovation and rational risk and cost allocations among different users of technology.

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The United States government filed an amicus brief in support of Quanta arguing that any restrictions on “downstream use or resale” of an article “embodying patentees invention” had to be a matter of contract law rather than patent law. Those who acquired valid title to such an article also acquire the right to use it and sell it without fear of patent infringement claims. According to the government’s argument, the Court of Appeals for the Federal Circuit had been wrong to create an exception from the traditional rule on patent exhaustion by holding that it could be avoided by imposing conditions on the sale. Creation of such an exception meant that the patent owner could demand royalties along the entire length of the distribution chain. This went beyond what the patent statute was intended to provide and gave inadequate scope to the antitrust laws. Held/Ratio: The Supreme Court’s decision was unanimous and delivered by Justice Thomas. It succinctly disposed of arguments that there could be no exhaustion of patent rights just because the claims in question were directed to a combination including the article sold or to a method involving use of the article sold. On the question of whether sale of an article by the patent owner or its licensee could exhaust rights in method claims, the court held: Nothing in this Court’s approach to patent exhaustion supports LGE’s arguments that method patents cannot be exhausted. …Eliminating exhaustion for method patents would seriously undermine the exhaustion doctrine. Patentees seeking to avoid patent infringement could simply draft patent claims to describe a method rather than an apparatus. … This case illustrates the danger of allowing such an end run around exhaustion. On LGE’s theory, although Intel is authorized to sell a completed computer system that practices the LGE patents, any downstream purchasers of the system could nevertheless be liable for patent infringement. … We therefore reject LGE’s argument that method claims, as a category, are never exhaustible. On the question of whether sale of a component in a patented combination could exhaust rights in such method or combination patents, the court held that the products sold by Intel: constitute a material part of the patented invention and all but completely practice the patent. … the incomplete article substantially embodies the patent because the only step necessary to practice the patent is the application of common practices or standard parts. Everything inventive about each patent is embodied in the [products sold by Intel]. … Quanta was not required to make any creative or inventive decision when it added [these products]. Indeed Quanta had no alternative but to follow Intel’s instructions in incorporating [such] products into its computers because it did not know their internal structure, which Intel guards as a trade secret. The mere fact that the microprocessors and chipsets were claimed in different patents from those which were being sued upon did not help either. The Court noted: With regard to LGE’s argument that exhaustion does not apply across patents, we agree on the general principle. The sale of a device that practices patent A does not, by virtue of practicing patent A exhaust patent B. But if the device practices patent A, while substantially embodying patent B, its relationship to patent A does not prevent exhaustion of patent B. (Emphasis in the original). This then left the question of whether the initial sale was of a type that could trigger patent exhaustion. Well, because the license from LGE to Intel (as opposed to any other agreement) did not in itself impose any conditions on Intel and because Intel did not impose any conditions on its purchasers, the initial sale was an unconditional one and so clearly fell within any definition of the type of sale that would trigger patent exhaustion.

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United States v. Unives Lens Co. (1942) QUICK FACTS: UC has a patent over the finished multi-focal lenses. However, it delivers to licensees (wholesalers and finishing retailers) only blank lenses so that these 2 groups will be the ones to make the finished lenses. UC has a licensing system which imposes fixed prices on the finished products sold by its licensees. Is such system valid? Is it covered by patent monopoly? NO. The patentee may surrender his monopoly in whole by the sale of his patent, or in part by the sale of an article embodying the invention. His monopoly remains so long as he retains the ownership of the patented article. But sale of it exhausts the monopoly in that article, and the patentee may not thereafter, by virtue of his patent, control the use or disposition of the article. Doctrines: 1. Sale by a patent owner of an article which is capable of use only in practicing the patent is a relinquishment of the patent monopoly with respect to that article. 2. A patent does not confer the right to control the resale prices of the patented articles after their sale by the patentee. 3. That, with the sale of the lens blanks for use in manufacturing lenses, the patent owner conferred on the buyer the right to practice the patent with respect to the blanks, and parted with the right to assert its patent monopoly with respect to them, and could no longer control the price at which they might be sold in their unfinished, or their finished, forms. Facts: Univis Lens Company was the owner of a number of patents (and trademarks) relating to multi-focal lenses. In 1931, it organized Univis Corporation (UC). After the organization of the latter, the Lens Company transferred all its interest in the patents involved. Since then, the Corporation set up the LICENSING SYSTEM which is in issue in this case. Under the SYSTEM, UC licenses the Lens Company to manufacture lens blanks and sell them to designated licensees of UC, upon payment of an agreed royalty (50 cents a pair) to UC. Description of the lens blanks: rough opaque pieces of glass of suitable size, design, and composition for use, when ground and polished, as multi-focal lenses in eyeglasses. Each blank is composed of two or more pieces of glass of different refractive power of such size, shape, and composition, and so disposed that, when fused together in the blank, it is said to conform to the specifications and claims of some one of the UC's patents. UC issues 3 classes of licenses: (1) licenses to Wholesalers, (2) to finishing retailers, and (3) to prescription retailers. 1. The license to wholesalers authorize the latter to purchase the blanks from Lens Company, finish them by grinding and polishing, and sell them to prescription licensees only at a price fixed by UC. Similarly, the license to finishing retailers allows the latter to purchase the blanks from Lens Company and sell them to their customers at prices prescribed by UC. 2. The license to prescription retailers (PR), (who are without facilities for grinding and finishing the lenses by who prescribe and adjust glasses for their customers), are signed by UC only when prescription retailers agree to sell the only finished lenses to customers and only at prices prescribed by UC. Also, not everyone can become prescription retailers. UC screens its prescription retailers so that those who are price-cutters would not be qualified to offer their product. 3. IN SUM, UC retains control of the prices and of who can be licensed up to the prescription retailer. The parties in this case are the government and the UC. The government is praying for an injunction for alleged violation of sections 1 and 3 of the Sherman Act which make unlawful any contract, combination or conspiracy in restraint of trade or commerce among the states. ALS2014B

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The LICENSING SYSTEM of UC is allegedly violating these provisions. The District court found that the patents are for finished lens, and that, consequently, the grinding and polishing of the lenses by the wholesalers and finishing retailers after they get the blank lens, is part of the manufacturing of the patented product. The court thought that, without the granted license, the final step in finishing the lens would infringe the patent. For this reason, UC could validly condition its licenses upon compliance with the fixed prices. But it held that the prescription retailer licenses (3rd type) are not within the patent monopoly, and are proscribed by the Sherman Act. Issues: 1. WON the SYSTEM (for licensing the manufacture and sale of patented multifocal eyeglass lenses) of UC is excluded by the patent monopoly --- YES Held/Ratio: 1. The mere fact that the licensee takes the final step in the manufacture of the patented product, it does not follow that the patentee can control the price at which the finished lens is sold. (So, the system fixing the prices is not valid.) Thus, the sale of a blank lens by the patentee or his licensee is thus, in itself, a complete transfer of ownership of the blank and a license to complete the final stage of the patent procedure or production of the lenses. In the present case, the entire consideration and compensation is the purchase price paid by the finishing licensee to UC. The question is WON the patentee, no longer aided by the patent, may lawfully exercise control over the disposition of the patented article after the sale to the licensee. --- NO The declared purpose of the patent law is to promote the progress of science and the useful arts by granting to the inventor a limited monopoly, the exercise of which will enable him to secure the financial rewards for his invention. The full extent of the monopoly is the patentee's "exclusive right to make use, and vend the invention or discovery." The patentee may surrender his monopoly in whole by the sale of his patent, or in part by the sale of an article embodying the invention. His monopoly remains so long as he retains the ownership of the patented article. But sale of it exhausts the monopoly in that article, and the patentee may not thereafter, by virtue of his patent, control the use or disposition of the article. Hence, the patentee cannot control the resale price of patented articles which he has sold, either by resort to an infringement suit or, consistently with the Sherman Act by stipulating for prince maintenance by his vendees. After selling the blank lenses, he has thus arted with his right to assert the patent monopoly with respect to it and is no longer free to control the price at which it may be sold, either in its unfinished or finished form. No one would doubt that, if the patentee's licensee had sold the blanks to a wholesaler or finishing retailer, without more, the purchaser would not infringe by grinding and selling them. The added stipulation by the patentee fixing resale prices derives no support from the patent, and must stand on the same footing under the Sherman Act as like stipulations with respect to unpatented commodities. Whether the licensee sells the patented article in its completed form or sells it before completion for the purpose of enabling the buyer to finish and sell it, he has equally parted with the article, and made it the vehicle for transferring to the buyer ownership of the invention with respect to that article. To that extent, he has parted with his patent monopoly and has received the benefit of the patent law when he received the purchase price. If he were permitted to control the price at which it could be sold by others, he would extend his monopoly quite as much in the one case as in the other, and he would extend it beyond the fair meaning of the patent statutes and the construction which has hitherto been given to them. Thus, the price-fixing features of the licensing system which are not within the protection of the patent law violate the Sharman Act (save only as to the fair trade agreeements). Agreements for price maintenance of articles moving in interstate commerce are, without more, unreasonable restraints within the meaning of the Sherman Act ALS2014B Page 62 of 99

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because they eliminate competition, and restrictions imposed by the seller upon resale prices of articles moving in interstate commerce.

Roche Products v. Bolar Pharmaceuticals (1984)

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Autogiro Company of America v. United States (1967) Doctrines: •

The determination of patent infringement is a two step-process First, the meaning of the claims in issue must be determined by a study of all relevant patent documents. Second, the claims must be read on the accused structures.

Interpreting the Meaning of the Claims The claims of the patent provide the concise formal definition of the invention. They are the numbered paragraphs which particularly point out and distinctly claim the invention. Courts can neither broaden nor narrow the claims to give the patentee something different than what he has set forth. They only interpret them. However, in doing so, they are not confined to the language of the claims. A claim cannot be interpreted without going beyond the claim itself. No matter how clear a claim appears to be, there are documents that may completely disrupt initial views on its meaning. Claims are best construed in connection with the other parts of the patent instrument and with the circumstances surrounding the inception of the patent application. In deriving the meaning of a claim, the “felt meaning” of the claim shall be reached after all useful documents are inspected. In seeking this goal, three parts of the patent are used: 1) specification; 2) drawings; 3) file wrapper. Specification. Section 112 of the 1952 Patent Act requires the specification to describe the manner and process of making and using the patent so that any person skilled in the art may utilize it. The specification sets forth the best mode contemplated by the inventor of carrying out his invention. Claim interpretation must not make use of the best mode terms inasmuch as the patentee need not guard against infringement by listing every possible infringing device in the specification. Drawings. Where a visual representation can flesh out words, drawings may be used in the same manner and with the same limitations as the specification. File wrapper. The file wrapper contains the entire record of the proceedings in the Patent Office from the first application papers to the issued patent. One use of the same is file wrapper estoppel, which is thus illustrated: When the application is rejected, the applicant will insert limitations and restrictions for the purpose of inducing the Patent Office to grant his patent. When the patent is issued, the patentee cannot disclaim these alterations and seek an interpretation that ignores them. File wrapper estoppel serves two functions: the applicant’s statements not only define terms, but also set the barriers within which the claim’s meaning must be kept. The file wrapper can also be utilized to determine the scope of claims. In file wrapper estoppel, it is not the prior art that provides the guidelines, but the applicant’s acquiescence with regard to the prior art. Reading the Claims on the Accused Structures If the claims read literally on the accused structures, an initial hurdle in the test for infringement is cleared. The patentee may bring the defendant within the letter of his claims, but if the latter has changed the principle of the device that the claims of the patent, literally construed, have ceased to represent his actual invention, he can no longer be adjudged an infringer. However, if the claims do not read literally on the accused structures, infringement is not necessarily ruled out. The doctrine of equivalence provides that a structure infringes, without there being literal overlap, if it performs substantially the same function in substantially the same way and for substantially the same purpose as the claims set forth. To permit imitation of a patented invention which does not copy every literal detail would be to convert the protection of the patent grant into a useless thing. Such would encourage the copyist to make unimportant and unsubstantial changes in the patent which, though adding nothing, would be enough to take the copied matter outside the claim.

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Some guidelines as regards the range of equivalence are drawn: 1) whether persons reasonably skilled in the art would have known of the interchangeability of an ingredient not contained in the patent with one that was; 2) pioneer patents are to be given wider ranges of equivalence than minor improvement patents. The doctrine of equivalence is subservient to file wrapper estoppel. It may not include within its range anything that would vitiate limitations expressed before the Patent Office. Facts: The Autogiro Company, a Delaware corporation owning all patents involved in this litigation, sues to recover the reasonable and entire compensation for the Government’s unauthorized use of 16 of its patented inventions. The patents in suit are concerned with rotor structures and control systems on rotary wing aircrafts: the helicopter and the autogiro/gyroplane. The autogiro has both fixed wings and rotary blades – a cross between an airplane and a helicopter; while a helicopter only has rotary blades. THE CLAIMS: Claim 3 is a combination claim, the important element of which states: A sustaining rotor construction having blades mounted for movement with respect to an axis member and so proportioned that, under the influence of air currents, the blades have an average autorotational speed at the tip substantially in excess of the maximum flight speed of which the craft is capable. Claims 28, 29, 36, 37, 38, and 42 contain an element which defines a non-manual mechanism for regulating the rotational speed of rotary wing aircraft rotors. Such changes are achieved through the use of movable weights mounted in each rotor and attached to the collective pitch control system. The ‘581 specification states that the purpose is to provide governing means in cooperation with blade incidence control which will tend to maintain constant rotational speed of the rotor. Claim 64 states that the rotor blade’s sectional mass center be at least as far forward as its aerodynamic center. It states: adjustment of the weight as well as of the sectional and longitudinal location of the center of gravity of the blade may thus also be obtained. Claim 59 provides for the placement of weights along the leading edge of the blade near the tip. This helps bring the mass center of the blade forward of the aerodynamic center to achieve negative pitching moment. The claims of the ‘162 patent teach a manual means of obtaining a measure of vertical rise capacity. The ‘364 patent provides nonmanual means to accomplish a vertical take-off. When power is connected to the rotor hub, the blades will lag behind the hub. When the power is stopped, the blades’ inertial force will swing them in advance of the hub. These lead-lag tendencies can be translated into actual blade movement if the blade is mounted on a free axis that permits it to move back and forth without restriction. The ‘580 patent teaches cyclic pitch control by tilting the real axis. Claim 16 teaches cyclic pitch control by tilting the virtual axis. Issues: 1. W/N Claim 3 is infringed. 2. W/N Claims 28, 29, 36, 37, 38, and 42 are infringed. 3. W/N Claim 64 is infringed. 4. W/N Claim 59 is infringed. 5. W/N the claims of the ‘162 patent are infringed. 6. W/N the ‘364 patent is infringed. 7. W/N the ‘580 patent is infringed. 8. W/N Claim 16 is infringed. ALS2014B

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Held/Ratio: 1. No. Claim Interpretation. The term “so proportioned” is defined in terms of function or result, however, a reading of the term in light of the patent documents shows that it includes a means of accomplishing its function. The specification shows that the proportioning is a relationship between rotor blades and a fixed wing. The file wrapper does not compel a different interpretation. This interpretation does not ignore the concept of claim differentiation, which states that claims should be presumed to cover different inventions. This means that an interpretation of a claim should be avoided if it would make the claim read like another one. Claim differentiation is a guide, not a rigid rule. If a claim will bear only one interpretation, similarity will have to be tolerated. Claims 4-7 of the ‘901 patent refer to a substantially fixed aerofoil. Claims 8-17 refer to a relatively fixed lifting aerofoil surface. Interpreting Claim 3 to refer to a fixed wing would not render any of these claims redundant. Claim 3 refers to maximum flight speed; Claims 4-5 refer to translational flight. Also, Claim 3 does not have the specificity of these claims. Accused Structures. The Vertol, Hiller, and Bell helicopters do not have a fixed wing. They do not operate in substantially the same way as the claim requires. 2. No. Plaintiff’s contention that there must be centrifugal means plus a resilient means to obtain governing means is rejected. Claim interpretation. The file wrapper supports the idea that the resilient means is not necessary in the governing means. It only acts as an aid to the maintenance of a constant rotational speed. Accused structures. The weights on the Bell and Hiller helicopters do not perform a rotor speed governing function. Rotor speed is manually controlled by the pilot. 3. Yes. Claim interpretation. The term “sectional” has a directional meaning. Its juxtaposition with “longitudinal” indicates that it refers to the front-rear or chordwise direction of the blade. 4. No, the bar does not operate in a way substantially similar to the teachings of Claim 59 and with a substantially similar result. The Bell and Hiller helicopters have a steel bar on their rotor blades, which is close to the leading edge, but is not concentrated near the tip of the blade. The bar aids in achieving negative pitching moment, but not in economically increasing the moment of inertia. 5. No. The autogiro cannot use its rotor to achieve vertical take-offs (since it is autorotatively operated) unless it is equipped with some additional mechanism such as that taught by the ‘162 patent. The accused structures, being helicopters, do not require vertical take-off assistance. Hence, they do not achieve the same or a substantially similar result. 6. No. The Bell and Hiller helicopters do not have a free axis; their blades are affixed to the rotor hub with no leadlag flexibility. These helicopters achieve vertical take-offs by the power directed to their rotors and have no use for a non-manual take off. 7. No. The Kaman, McCulloch, and Vertol helicopters do not achieve cyclic pitch control by tilting the real axis. The Bell and Hiller helicopters impose control through various linkages on the rotor blades. A member of the real axis of these two crafts may tilt when control is achieved. However, this tilting is not by itself cyclic pitch control; it is a coincidental accompaniment to the imposition of cyclic pitch control. Even though all the accused structures achieve horizontal movement by cyclic pitch control as the ‘580 patent teaches, they do not do so in the same or substantially the same way. 8. No. The cyclic pitch system of Claim 16 is interposed between the flapping pivot and the blade mounting; while Bell’s cyclic pitch control pivot is located at a point higher in the rotor hub assembly than either the blade mounting or the longitudinal axis of the blade. ALS2014B

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Claim 16 can be read on a combination of the helicopter cyclic and collective pitch control systems since the latter control is interposed between the flapping pivot and the blade mounting. A combination of these two systems seems to infringe; however, these systems do not interact or contribute together to produce the result taught by the claim. There must be an essential correlation or coordination of the systems which mutually contributes to a common result.

Smith Kline v. CA (2003) Doctrines (relevant to the topic heading): •

When the language of its claims is clear and distinct, the patentee is bound thereby and may not claim anything beyond them. And so are the courts bound which may not add to or detract from the claims matters not expressed or necessarily implied, nor may they enlarge the patent beyond the scope of that which the inventor claimed and the patent office allowed, even if the patentee may have been entitled to something more than the words it had chosen would include.

•

When two or more inventions are claimed in a single application but are of such a nature that a single patent may not be issued for them. The applicant thus is required to divide, that is, to limit the claims to whichever invention he may elect, whereas those inventions not elected may be made the subject of separate applications which are called divisional applications.

Facts: •

Smith Kline Beckman Corporation - a US corporation licensed to do business in the Philippines filed as assignee, before the Philippine Patent Office (now Bureau of Patents, Trademarks and Technology Transfer) an application for patent over an invention entitled Methods and Compositions for Producing Biphasic Parasiticide Activity Using Methyl 5 Propylthio-2-Benzimidazole Carbamate. (Serial No. 18989)

•

Letters Patent for the invention was issued to petitioner for a term of 17 years. o

The letters patent provides in its claims: the patented invention consisted of a new compound (methyl 5 propylthio-2-benzimidazole carbamate) and the methods or compositions utilizing the compound as an active ingredient in fighting infections caused by gastrointestinal parasites and lungworms in animals such as swine, sheep, cattle, goats, horses, and even pet animals.

•

Tryco Pharma Corporation (respondent) is a domestic corporation that manufactures, distributes and sells veterinary products including Impregon, a drug that has Albendazole for its active ingredient and is claimed to be effective against gastro-intestinal roundworms, lungworms, tapeworms and fluke infestation in carabaos, cattle and goats.

•

Smith Kline sued Tryco Pharma for infringement of patent and unfair competition before the Caloocan (RTC).

SMITH KLINE’s claimed •

its patent covers or includes the substance Albendazole such that Tryco Pharma by manufacturing, selling, using, and causing to be sold and used the drug Impregon without its authorization, infringed various Claims of Letters Patent

•

committed unfair competition under Article 189, paragraph 1 of the Revised Penal Code and Section 29 of Republic Act No. 166 (The Trademark Law) for advertising and selling as its own the drug Impregon although the same contained petitioners patented Albendazole

Caloocan RTC issued a TRO against private respondent enjoining it from committing acts of patent infringement and unfair competition. A writ of preliminary injunction was subsequently issued. Tryco Pharma averred •

Letters Patent does not cover the substance Albendazole for nowhere in it does that word appear; that even if the patent were to include Albendazole, such substance is unpatentable;

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•

that the Bureau of Food and Drugs allowed it to manufacture and market Impregon with Albendazole as its known ingredient;

•

there is no proof that it passed off in any way its veterinary products as those of petitioner;

•

Letters Patent No. 14561 is null and void, the application for the issuance thereof having been filed beyond the one year period from the filing of an application abroad for the same invention covered thereby, in violation of Section 15 of RA No. 165 (The Patent Law);

•

petitioner is not the registered patent holder.

•

lodged a Counterclaim against petitioner for such amount of actual damages as may be proven; P1,000,000.00 in moral damages; P300,000.00 in exemplary damages; and P150,000.00 in attorneys fees. TC: Complaint dismissed. Writ dissolved. Letters Patent null and void. CA: upheld TC but Letter Patent not void

Smith Kline argues •

under the doctrine of equivalents for determining patent infringement, Albendazole, the active ingredient it alleges was appropriated by private respondent for its drug Impregon, is substantially the same as methyl 5 propylthio-2-benzimidazole carbamate covered by its patent since both of them are meant to combat worm or parasite infestation in animals. o

It cites the unrebutted testimony of its witness Dr. Orinion that the chemical formula in Letters Patent No. 14561 refers to the compound Albendazole.

•

Two substances substantially do the same function in substantially the same way to achieve the same results, thereby making them truly identical.

•

CA should have gone beyond the literal wordings used in Letters Patent No. 14561, beyond merely applying the literal infringement test, for in spite of the fact that the word Albendazole does not appear in petitioners letters patent, it has ably shown by evidence its sameness with methyl 5 propylthio-2benzimidazole carbamate.

•

its application with the Philippine Patent Office on account of which it was granted Letters Patent No. 14561 was merely a divisional application of a prior application in the U. S. which granted a patent for Albendazole.

•

both methyl 5 propylthio-2-benzimidazole carbamate and the U.S.-patented Albendazole are dependent on each other and mutually contribute to produce a single result, thereby making Albendazole as much a part of Letters Patent No. 14561 as the other substance is.

•

although methyl 5 propylthio-2-benzimidazole carbamate is not identical with Albendazole, the former is an improvement or improved version of the latter thereby making both substances still substantially the same.

TRYCO contends that application of the doctrine of equivalents would not alter the outcome of the case, Albendazole and methyl 5 propylthio-2-benzimidazole carbamate being two different compounds with different chemical and physical properties. It stresses that the existence of a separate U.S. patent for Albendazole indicates that the same and the compound in Letters Patent No. 14561 are different from each other; that since it was on account of a divisional application that the patent for methyl 5 propylthio-2-benzimidazole carbamate was issued, then, by definition of a divisional application, such a compound is just one of several independent inventions alongside Albendazole under petitioners original patent application. Issue: 1. WON there was Patent Infringement by Tryco because Albendazole (the active ingredient in trycos impregon drug) is included in Smith Kline’s Letters Patent. ALS2014B

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Held/Ratio: 1. CA Decision affirmed. Tryco was not liable for any infringement of the patent of Smith Kline since Smith Kline failed to show that Albendazole is the same as the compound subject of Letters Patent No. 14561. From a reading of the 9 claims of Letters Patent No. 14561 in relation to the other portions thereof, no mention is made of the compound Albendazole. When the language of its claims is clear and distinct, the patentee is bound thereby and may not claim anything beyond them. And so are the courts bound which may not add to or detract from the claims matters not expressed or necessarily implied, nor may they enlarge the patent beyond the scope of that which the inventor claimed and the patent office allowed, even if the patentee may have been entitled to something more than the words it had chosen would include. Mere absence of the word Albendazole in Letters Patent No. 14561 is not determinative of Albendazoles noninclusion in the claims of the patent. While Albendazole is admittedly a chemical compound that exists by a name different from that covered in petitioners letters patent, the language of Letter Patent No. 14561 fails to yield anything at all regarding Albendazole. And no extrinsic evidence had been adduced to prove that Albendazole inheres in petitioners patent in spite of its omission therefrom or that the meaning of the claims of the patent embraces the same. While petitioner concedes that the mere literal wordings of its patent cannot establish private respondents infringement, it urges this Court to apply the doctrine of equivalents. The doctrine of equivalents provides that an infringement also takes place when a device appropriates a prior invention by incorporating its innovative concept and, although with some modification and change, performs substantially the same function in substantially the same way to achieve substantially the same result. Yet again, a scrutiny of petitioners evidence fails to convince this Court of the substantial sameness of petitioners patented compound and Albendazole. While both compounds have the effect of neutralizing parasites in animals, identity of result does not amount to infringement of patent unless Albendazole operates in substantially the same way or by substantially the same means as the patented compound, even though it performs the same function and achieves the same result. In other words, the principle or mode of operation must be the same or substantially the same. The doctrine of equivalents thus requires satisfaction of the function-means-and-result test, the patentee having the burden to show that all three components of such equivalency test are met. As stated early on, petitioners evidence fails to explain how Albendazole is in every essential detail identical to methyl 5 propylthio-2-benzimidazole carbamate. Apart from the fact that Albendazole is an anthelmintic agent like methyl 5 propylthio-2-benzimidazole carbamate, nothing more is asserted and accordingly substantiated regarding the method or means by which Albendazole weeds out parasites in animals, thus giving no information on whether that method is substantially the same as the manner by which petitioners compound works. The testimony of Dr. Orinion lends no support to petitioners cause, he not having been presented or qualified as an expert witness who has the knowledge or expertise on the matter of chemical compounds. As for the concept of divisional applications proffered by petitioner, it comes into play when two or more inventions are claimed in a single application but are of such a nature that a single patent may not be issued for them. The applicant thus is required to divide, that is, to limit the claims to whichever invention he may elect, whereas those inventions not elected may be made the subject of separate applications which are called divisional applications. What this only means is that petitioners methyl 5 propylthio-2-benzimidazole carbamate is an invention distinct from the other inventions claimed in the original application divided out, Albendazole being one of those other inventions. Otherwise, methyl 5 propylthio-2-benzimidazole carbamate would not have been the subject of a divisional application if a single patent could have been issued for it as well as Albendazole. Re: damages (not really that important) ALS2014B

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Court does not sustain the award of actual damages and attorneys fees in favor of Tryco. The claimed actual damages of P330,000.00 representing lost profits or revenues incurred by private respondent as a result of the issuance of the injunction against it, computed at the rate of 30% of its alleged P100,000.00 monthly gross sales for 11 months. Court does not sustain the grant of attorneys fees to Tryco having been allegedly forced to litigate as a result of petitioners suit. Even if a claimant is compelled to litigate with third persons or to incur expenses to protect its rights, still attorneys fees may not be awarded where no sufficient showing of bad faith could be reflected in a party’s persistence in a case other than an erroneous conviction of the righteousness of his cause. There exists no evidence on record indicating that petitioner was moved by malice in suing private respondent. Court grants Tryco temperate or moderate damages in the amount of P20,000.00 which it finds reasonable under the circumstances, it having suffered some pecuniary loss the amount of which cannot, be established with certainty.

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Creser Precision System v. Court of Appeals (1998) Doctrine: •

Only the patentee or his successors-interest may file an action for infringement.

•

There can be no infringement until a patent has been issued, since whatever right one has to the invention covered by the patent arises alone from the grant of patent.

Facts: Floro International Corp. is a domestic corporation engaged in the manufacture, production, distribution and sale of military armaments, munitions, airmunitions and other similar materials. On Jan. 23, 1990, the Bureau of Patents, Trademarks and Technology Transfer (BTTT) granted a Letter Patent No. UM-6938 covering an aerial fuze which was published in the Sept-Oct 1990 Bureau of Patent’s Official Gazette. Sometime in November 1993, Floro Intl, through its President, Gregory Floro Jr., discovered that Creser Precision Systems submitted samples of its parented aerial fuze to the Armed Forces of the Philippines (AFP) for testing. He learned that petitioner was claiming the aerial fuze as its own and planning to bid and manufacture the same commercially without license or authority from Floro Intl. To protect its right, Floro Intl. sent a letter to Creser advising it from its existing patent and its rights thereunder, warning Creser of a possible court action and/or application for injunction, should it proceed with the scheduled testing by the military. In response to the demand, Creser filed a complaint for injunction and damages arising from the alleged infringement before the RTC of QC. The complaint alleged, among others: that petitioner is the first, true and actual inventor of an aerial fuze denominated as “Fuze, PDR 77 CB4” which is developed as early as December 1981 under the Self-Reliance Defense Posture Program (SDRP) of the AFP; that sometime in 1986, Creser began supplying the AFP with the said aerial fuze; that Floro’s aerial fuze is identical in every respect to Creser’s fuze; and that the only difference between the two are miniscule and merely cosmetic in nature. RTC issued a TRO and eventually a writ of preliminary injunction in favor of Creser. CA reversed. Creser argues that it can file, under Section 42 of the Patent Law, an action for infringement not as patentee but as entity in possession of a right, title or interest to the patented invention. It claims that while the absence of a patent may prevent one from lawfully suing another for infringement of said patent, such absence does not bar the first true and actual inventor of the patented invention from suing another who was granted a patent in a suit for declaratory relief recognized under Patent Laws. Issue: 1. Whether or not Creser correctly filed a complaint for injunction and damages against Floro Intl? Held/Ratio: 1. NO. Section 42 of the Patent Law (RA 165) provides: Sec.42 Civil action for infringement-Any patentee, or anyone possessing any right, title or interest in and to the patented invention, whose rights have been infringed, may bring a civil action before the proper CFI (now RTC), to recover from the infringer damages sustained by reason of the infringement and to secure an injunction for the protection of his right. Xxx Under this law, only the patentee or his successors-interest may file an action for infringement. There can be no infringement until a patent has been issued, since whatever right one has to the invention covered by the patent arises alone from the grant of patent. In short, a person or entity who has not been granted letters patent over an invention and has not acquired any right or title thereto either as assignee or as licensee, has no cause of action for infringement because the right to maintain an infringement suit depends on the existence of the patent. Creser admits it has no patent over it aerial fuze. Therefore, it has no legal basis or cause of action to institute petition for injunction and damages arising from the alleged infringement. While Creser claims to be the first ALS2014B

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inventor of the aerial fuze, still it has no right of property over the same upon which it can maintain a suit unless it obstains a patent therefor. Under American Jurisprudence, an inventor has no common-law right to a monopoly of his invention. He has the right to make, use and vend his own invention, but if he voluntarily discloses it, such as by offering it for sale, the world is free to copy and use it with impunity. A patent, however, gives the inventor the right to exclude all other. As patentee, he has the exclusive right of making, using, or selling the invention. Thus, Creser cannot file a declaratory judgment or injunctive suit on the alleged patent invalidity against Floro because such remedy is available only to the patent holder or his successors-in-interest. The remedy of Creser would have been to file a petition for cancellation of the patent and raise as a ground therefor that the person to whom the patent was issued is not the true and actual inventor. Under Sec.28, this action for cancellation is available within 3 years from the publication of said patent with the Director of Patents.

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Phil. Pharma Wealth v. Pfizer (2010) Doctrine: •

Patentee’s exclusive rights exist only during the term of the patent. No injunctive relief can be granted based on an expired patent.

•

The Director General of the IPO exercises exclusive appellate jurisdiction over decisions rendered by the Director of BLA-IPO but interlocutory orders are under the jurisdiction of the Court of Appeals

•

Forum shopping is the act of a party against whom an adverse judgment has been rendered in one forum, of seeking another (and possibly favorable) opinion in another forum (other than by appeal or the special civil action of certiorari), or the institution of two (2) or more actions or proceedings grounded on the same cause on the supposition that one or the other court would make a favorable disposition.

Facts: This case involves a patent infringement complaint filed by Pfizer against Phil Pharma with the Bureau of Legal Affairs of the Intellectual Property Office (BLA-IPO). Pfizer alleged that it was the registered owner of Sulbactam Ampicillin (SA), marketed under the brand name “Unasyn,” which was issued Phil patent 21116 on July 16, 1987 to be valid until July 16, 2004. Sometime in January 2003, Pfizer found that Phil Pharma submitted bids to several hospitals offering SA. Pfizer wrote letters to the said hospitals to disregard the bids and for Phil Pharma to cease and desist from supplying SA. When the demands were unheeded, Pfizer applied for a TRO and a preliminary injunction that would prevent Phil Pharma, its agents, representatives and assigns, from importing, distributing, selling or offering the subject product for sale to any entity in the Philippines. BLA-IPO granted the 90-day preliminary injunction but upon motion for extension, was denied. Pfizer filed a special civil action for certiorari with the CA assailing the denial of the extension and subsequent motion for reconsideration assailing the denial. While the case was pending with the CA, Pfizer filed a complaint with the Makati RTC for infringement, unfair competition with damages against Phil Pharma praying for a TRO and preliminary injunction. RTC directed the issuance of a writ of preliminary injunction “prohibiting and restraining Phil Pharma, its agents, representatives and assigns from importing, distributing or selling SA products to any entity in the Philippines.” Phil Pharma filed a Motion to Dismiss the petition filed with the CA on the ground of forum shopping because both CA and RTC cases had the same objective, which is to prohibit Phil Pharma from importing, distributing and selling SA products. CA approved the requested TRO on Jan 18, 2005. On Feb 7, 2005 Phil Pharma filed another Motion to Dismiss claiming the case was moot and academic, as Pfizer’s patent had already elapsed. On Apr 11 2005, the CA denied the motion to dismiss. Hence, this petition for review on certiorari. Issues: 1. Can an injunctive relief be issued based on an action of patent infringement when the patent allegedly infringed has already lapsed? 2. Who has jurisdiction to review interlocutory orders of the Bureau of Legal Affairs, the CA or the Director General? 3. Is there forum shopping when a party files two actions with two seemingly different causes of action and yet pray for the same relief? Held/Ratio: 1. NO. Section 37 of (RA) 165 which was the governing law at the time of the issuance of the patent provides that Section 37. Rights of patentees. A patentee shall have the exclusive right to make, use and sell the patented machine, article or product, and to use the patented process for the purpose of industry or commerce, throughout the territory of the Philippines for the term of the patent; and such making, using, or selling by any person without the authorization of the patentee constitutes infringement of the patent. ALS2014B

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Pfizer admitted that their patent was only valid until July 16, 2004 pursuant to Sec 21 of RA 165, providing that the term of a patent shall only be 17 years from the date of issuance. Sec 4, Rule 129 of the Rules of Court provides that an admission, verbal or written, made by a party in the course of the proceedings in the same case, does not require proof and that the admission may be contradicted only by showing that it was made through palpable mistake or that no such admission was made. Two requisites must exist to warrant the issuance of an injunctive relief (1) the existence of a clear and unmistakable right that must be protected; and (2) an urgent and paramount necessity for the writ to prevent serious damage. In this case, Pfizer no longer had a right to be protected because the patent, upon which it is claiming their right, had expired. 2. Court of Appeals. Section 7(b) of RA 8293 or the Intellectual Property Code, the Director General of the IPO exercises exclusive appellate jurisdiction over all decisions rendered by the Director of the BLA-IPO. However, what is being questioned before the CA is not a decision, but an interlocutory order of the BLA-IPO denying respondents' motion to extend the life of the preliminary injunction issued in their favor. RA 8293 is silent with respect to any remedy available to litigants who intend to question an interlocutory order issued by the BLA-IPO. Moreover, Section 1(c), Rule 14 of the Rules and Regulations on Administrative Complaints for Violation of Laws Involving Intellectual Property Rights simply provides that interlocutory orders shall not be appealable. The said Rules and Regulations do not prescribe a procedure within the administrative machinery to be followed in assailing orders issued by the BLA-IPO pending final resolution of a case filed with them. In the absence of a remedy, the provisions of the Rules of Court shall apply in a suppletory manner, as provided under Section 3, Rule 1 of the same Rules and Regulations. Hence, in the present case, Phil Pharma correctly resorted to the filing of a special civil action for certiorari with the CA to question the assailed Orders of the BLA-IPO, as they cannot appeal therefrom and they have no other plain, speedy and adequate remedy in the ordinary course of law. 3. YES. The elements of forum shopping are: a. identity of parties, or at least such parties that represent the same interests in both actions; i. same parties b. identity of rights asserted and reliefs prayed for, the reliefs being founded on the same facts; i. cause of action in their complaint filed with the IPO is the alleged act of Phil Pharma in importing, distributing, selling or offering for sale SA products, acts that are supposedly violative of Pfizer’s right to the exclusive sale of the said products which are covered by the latter's patent. ii. Complaint filed with the Makati RTC claims that they have the exclusive right to make, use and sell SA products and that Phil Pharma iii. reliefs in both cases: damages for the alleged violation of their right to exclusively sell SA products and to permanently prevent or prohibit Phil Pharma from selling said products to any entity. c. identity of the two preceding particulars, such that any judgment rendered in the other action will, regardless of which party is successful, amount to res judicata in the action under consideration. i. Owing to the substantial identity of parties, reliefs and issues in the IPO and RTC cases, a decision in one case will necessarily amount to res judicata in the other action. Additional: Pfizer’s initial complaint with the BLA-IPO, instead of the regular courts, is in keeping with the doctrine of primary jurisdiction owing to the fact that the determination of the basic issue of whether Phil Pharma violated Pfizer’s patent rights requires the exercise by the IPO of sound administrative discretion which is based on the agency's special competence, knowledge and experience.

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However, the propriety of extending the life of the writ of preliminary injunction issued by the BLA-IPO in the exercise of its quasi-judicial power is no longer a matter that falls within the jurisdiction of the said administrative agency, particularly that of its Director General. The resolution of this issue which was raised before the CA does not demand the exercise by the IPO of sound administrative discretion requiring special knowledge, experience and services in determining technical and intricate matters of fact. It is settled that one of the exceptions to the doctrine of primary jurisdiction is where the question involved is purely legal and will ultimately have to be decided by the courts of justice.This is the case with respect to the issue raised in the petition filed with the CA

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Gsell v. Yap Jue (1909) Facts: The plaintiff, Henry Gsell, was able to establish his title to a valid patent covering the manufacture of curved handles for canes, parasols, and umbrellas. Thus, the court granted a perpetual injunction restraining defendant from manufacturing canes and umbrellas with a curved handle by means of a lamp or blowpipe fed with mineral oil or petroleum, since that process was already covered by the patent. The patent of Gsell is for the industrial product "cane handles for walking sticks and umbrellas, curved by means of a small lamp or blowpipe, fed by petroleum or mineral fuel." Process: After the canes have been cut for cane or umbrella handles, the outsides are thoroughly cleaned. This operation having been performed, they are then trimmed and the interior cleaned by means of a gimlet of about 15 centimeters in length operated by a wheel, by means of which the knots inside are broken. There is then introduced to a depth of about 15 centimeters a piece of very clean bamboo, which completely fills the hole made by the gimlet, thereby giving to the cane the necessary strength to resist the heat of the lamp or blowpipe without breaking or cracking. Despite the court order, defendant still proceeded to manufacture curved cane handled for walking sticks and umbrellas by a process identical to that covered by the patent, except that he substituted for a lamp fed with petroleum or mineral oil, lamp fed with alcohol. So Gsell instituted contempt proceedings against defendant for disobeying the order of the court. The trial court ruled that the act was not contrary to the precise terms of the prohibition since the defendant used an alcohol-burning lamp instead of a coal or mineral oil-burning lamp. It was held that defendant was not guilty of contempt since Gsell failed to prove the facts. But the defendant still continued to use the patented process with the substitution of the mineral-oil burning lamp for a lamp fed by alcohol. Issue: 1. W/N there was infringement of Gsell’s patent when the defendant substituted alcohol for petroleum or mineral oil Held/Ratio: 1. YES. Gsell has established the existence of two facts: (1) That the use of the lamp fed with petroleum or mineral oil was an unessential part of the patented process the use of which by the defendant was prohibited by the said judgment; and (2) that alcohol is an equivalent and proper substitute, well known as such, for mineral oil or petroleum in connection with the said process. It was clearly proven at the trial, that kerosene and alcohol blast lamps are agencies for producing and applying heat, well known throughout the world long prior to 1906, the date of the issue of the patent; that it is and for many years has been known that one may for all ordinary purposes be used in the place of the other. It is true that defendant's blast lamp is fed with alcohol, and its shape varies in unimportant details, for the purpose of accommodating the principle, by which the flame is secured, to the different physical and chemical composition of the fuel used therein; but the principle on which it works, its mode of application, and its general design distinguish it in no essential particular from that used by the plaintiff. The doctrine of “mechanical equivalents” was also invoked by Gsell and the Court ruled that it is applicable in this case. The doctrine may properly be invoked to protect the patentee from colorable invasions of his patent under the guise of substitution of some part of his invention by some well known mechanical equivalent. As quoted by the Court from a U.S. case: “the inventor of an ordinary machine is, by his letters patent, protected against all mere formal alterations and against the substitution of mere mechanical equivalents. Why should not the inventor of a new combination receive the same protection? If he can not, then will his patent not be worth the parchment on which it is written.” ALS2014B

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No one infringes a patent for a combination who does not employ all of the ingredients of the combination; but if he employs all the ingredients, or adopts mere formal alterations, or substitutes, for one ingredient another which was well known at the date of the patent as a proper substitute for the one withdrawn, and which performs substantially the same function as the one withdrawn, he does infringe. An alteration in a patented combination which merely substitutes another old ingredient for one of the ingredients in the patented combination, is an infringement of the patent, if the substitute performs the same function and was well known at the date of the patent as a proper substitute for the omitted ingredient.

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Godines v. Court of Appeals (1993) Doctrine: •

according to the doctrine of equivalents, (a)n infringement also occurs when a device appropriates a prior invention by incorporating its innovative concept and, albeit with some modification and change, performs substantially the same function in substantially the same way to achieve substantially the same result.

Facts: Villaruz had a patent. It covers a utility model for a hand tractor or power tiller.10 The above mentioned patent was acquired by SV-Agro Industries Enterprises, Inc., herein private respondent. On October 31, 1979, SV-Agro Industries caused the publication of the patent in a newspaper of general circulation. In accordance with the patent, SV-Argo manufactured and sold the patented power tillers. In 1979, SV-Agro Industries suffered a decline of more than 50% in sales in its Molave, Zamboanga del Sur branch. Upon investigation, it discovered that power tillers similar to those patented were being manufactured and sold by Godines (petitioner). Consequently, SV-Argo notified Godines about the existing patent and demanded that the latter stop selling and manufacturing similar power tillers. Upon petitioner's failure to comply with the demand, SV-Agro Industries filed before the RTC a complaint for infringement of patent and unfair competition. Godines defense was that the hand tractors that he made by him were different. SV- Argo won in the RTC and CA Issue: 1. W/N there was infringement? Held/Ratio: 1. Yes, Tests have been established to determine infringement. These are (a) literal infringement; and (b) the doctrine of equivalents. In using literal infringement as a test, ". . . resort must be had, in the first instance, to the words of the claim. If accused matter clearly falls within the claim, infringement is made out and that is the end of it." Samples of the Godines’ floating power tiller have been produced and inspected by the trial court and compared with that of the turtle power tiller of SV-Argo. In appearance and form, both the floating power tillers of the defendant and the turtle power tiller of the plaintiff are virtually the same.11 Also according to the doctrine of equivalents, (a)n infringement also occurs when a device appropriates a prior invention by incorporating its innovative concept and, albeit with some modification and change, performs substantially the same function in substantially the same way to achieve substantially the same result. The reason 10. Components: "(1) a vacuumatic house float; (2) a harrow with adjustable operating handle; (3) a pair of paddy wheels; (4) a protective water covering for the engine main drive; (5) a transmission case; (6) an operating handle; (7) an engine foundation on the top midportion of the vacuumatic housing float to which the main engine drive is detachedly installed; (8) a frontal frame extension above the quarter — circularly shaped water covering hold (sic) in place the transmission case; (9) a V-belt connection to the engine main drive with transmission gear through the pulley, and (10) an idler pulley installed on the engine foundation." 2 Who it works: "the engine drives the transmission gear thru the V-belt, a driven pulley and a transmission shaft. The engine drives the transmission gear by tensioning of the V-belt which is controlled by the idler pulley. The V-belt drives the pulley attached to the transmission gear which in turn drives the shaft where the paddy wheels are attached. The operator handles the hand tractor through a handle which is inclined upwardly and supported by a pair of substanding pipes and reinforced by a U-shaped G.I. pipe at the V-shaped end." 11. Both have the circularly-shaped vacuumatic housing float, a paddy in front, a protective water covering, a transmission box housing the transmission gears, a handle which is V-shaped and inclined upwardly, attached to the side of the vacuumatic housing float and supported by the upstanding G.I. pipes and an engine base at the top midportion of the vacuumatic housing float to which the engine drive may be attached. In operation, the floating power tiller of the defendant operates also in similar manner as the turtle power tiller of plaintiff.

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for the doctrine of equivalents is that to permit the imitation of a patented invention which does not copy any literal detail would be to convert the protection of the patent grant into a hollow and useless thing. In this case, the trial court observed that, between the two power tillers operate on the same fundamental principles. And it is sufficient to constitute equivalency that the same function can be performed in substantially the same way or manner, or by the same or substantially the same, principle or mode of operation; but where these tests are satisfied, mere differences of form or name are immaterial. Also to establish an infringement, it is not essential to show that the defendant adopted the device or process in every particular; Proof of an adoption of the substance of the thing will be sufficient. "In one sense," said Justice Brown, "it may be said that no device can be adjudged an infringement that does not substantially correspond with the patent. But another construction, which would limit these words to exact mechanism described in the patent, would be so obviously unjust that no court could be expected to adopt it. EXTRA INFO: The court refused Godines’ defense that he only made hand tractors based on the specifications of the customer (ala contractor), because as observed by the RTC Godines’ own answer admitted manufacturing the hand tractors, plus it highly unlikely that Godines’ built hand tractors based on the customers verbal instruction only, without written instructions. Also SV-Argos hand tractor were called turtle power tiller while Godines’ was floating power tiller. Also the case is really short.

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Del Rosario v. Court of Appeals (1996) Doctrines: •

Any new model of implements or tools of any industrial product even if not possessed of the quality of invention but which is of practical utility is entitled to a patent for utility model.

•

Where a party introduces the patent in evidence, if it is in due form, it affords a prima facie presumption of its correctness and validity—the decision of the Director of Patents in granting the patent is always presumed to be correct, and the burden then shifts to the other party to overcome this presumption by competent evidence.

•

A utility model shall not be considered “new” if before the application for a patent it has been publicly known or publicly used in this country or has been described in a printed publication or publications circulated within the country, or if it is substantially similar to any other utility model so known, used or described within the country.

•

A patentee shall have the exclusive right to make, use and sell the patented machine, article or product for the purpose of industry or commerce, throughout the territory of the Philippines for the term of the patent, and such making, using or selling by any person without authorization of the patentee constitutes infringement of his patent.

•

In order to infringe a patent, a machine or device must perform the same function, or accomplish the same result by identical or substantially identical means and the principle or mode of operation must be substantially the same.

Facts: On 18 January 1993, Roberto del Rosario (Petitioner), holder of two Letters Patent dated 1983 and 1986 for audio equipment commonly known as the sing-along system or karaoke, filed a complaint for patent infringement against Janito Corporation (Respondent). Respondent allegedly manufactured and sold sing-along systems bearing the trademark “miyata” or “miyata karaoke” substantially similar if not identical to the sing-along system covered by the patents. Petitioner sought the issuance of a writ of preliminary injunction, which the trial court granted. However, the Court of Appeals reversed, saying there was no infringement of the patents, reasoning that the karaoke system was a universal product manufactured, advertised, and marketed in most countries of the world long before the Petitioner’s patents were issued. Hence, Petitioner went to the SC. Issue: 1. Is the petitioner entitled to the writ of preliminary injunction? Held/Ratio: 1. YES. There are only two requisites to be satisfied for an injunction to issue, namely, the existence of a right to be protected, and that the facts against which the injunction is to be directed are violative of said right. In this case, Petitioner is shown to be a holder of Letters Patents for utility models. In the issuance of patents, the Director of Patents determines whether the patent is new and whether the machine or device is the proper subject of patent. In passing on an application, the Director decides not only questions of law but also questions of fact, i.e. whether there has been a prior public use or sale of the article sought to be patented. Where the Letters Patent are introduced in evidence and are in due form, it affords a prima facie presumption of its correctness and validity. The decision of the Director is presumed correct, and the burden shifts to the respondent to overcome such presumption. Under the [then] Patent Law, a utility model shall not be considered “new” if before the application for a patent, it has been publicly known or publicly used in this country or has been described in a printed publication or publications circulated within the country, or if it is substantially similar to any other utility model so known, used, or described within the country. Respondent failed to present evidence to show that the utility models covered by Petitioner’s patents were not new. The witness stated in court that there were a lot of sing-along systems sold prior to the patents, but his testimony was destroyed on cross examination upon showing that the ALS2014B

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alleged dates when they were supposedly sold publicly were all inaccurate or fabricated, and no other evidence was presented to back up such claims. The rights of the Petitioner have been sufficiently established. Petitioner as patentee shall have the exclusive right to make, use, and sell the patented machine, article, or product for the purpose of industry or commerce, throughout the territory of the Philippines for the term of the patent, and such making, using, or selling by any person without authorization of the patentee constitutes patent infringement. Petitioner likewise established that Respondent was manufacturing a similar sing-along system which infringed Petitioner’s patented models. While Respondent tried to show the differences between its miyata equipment and petitioner’s products, Respondent merely focused on the differences with the first patent, ignoring the second, which was an improvement of the first. It was shown that Respondent’s equipment involved substantially the same modes or operation and produce substantially the same if not identical results when used. Respondent likewise did not present a comparison of his own and Petitioner’s equipment to refute such finding. Thus, the issuance of a writ of preliminary injunction is justified.

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Graver Tank & Manufacturing Company v. Linde Air Products Company (1950) Facts: The case began with a brief summation of jurisprudence relating to the Doctrine of Equivalents: •

A patentee may invoke doctrine of “equivalents” to proceed against producer of a device if it performs substantially the same function in substantially the same way to obtain same result as patentee's device.

•

The theory on which the doctrine of “equivalents” is founded is that if two devices do the same work in substantially the same way, and accomplish the same result, they are the same, even though they differ in name, form, or shape.

•

The doctrine of equivalents operates not only in favor of patentee of a pioneer or primary invention, but also for patentee of a secondary invention consisting of a combination of old ingredients which produce new and useful results.

•

The doctrine may also be used AGAINST a patentee: Where a device is so far changed in principle from a patented article that it performs the same or similar function in a substantially different way, but nevertheless falls within literal words of the claim, the doctrine of equivalents may be used to restrict the claim and defeat patentee's action for infringement. The case involves two electric welding compositions (“fluxes.”)

Linde owns the patent to the Unionmelt Grade 20 composition. Lincoln and the two Graver companies made use of the Lincolnweld 660 composition. Unionmelt uses silicates of calcium and magnesium. Lincolnweld uses silicates of calcium and manganese. Linde brought an action for infringement. Issue: 1. Were the differences between manganese and magnesium really insubstantial enough to justify the application of the Doctrine of Equivalents? Held/Ratio: 1. The trial court judge was able to hear testimony of several experts; chemists, and metallurgists. Recognized texts on chemistry were presented, as well as two prior patents. The trial judge was also able to visit laboratories and observe actual demonstrations as well as motion pictures relating to the subject. A finding of equivalence is a determination of fact. The trial court’s decision should generally not be disturbed unless clearly erroneous. 2. Though infringement was not literal, the changes which avoid literal infringement are colorable only. We conclude that the trial court's judgment of infringement respecting the four flux claims was proper, and we adhere to our prior decision on this aspect of the case.

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Warner-Jekinson Company v. Hilton Davis Chemical Company Festo Corporation v. Shoketsu Kinzoku Kogyo Kabushiki Co. Ltd.

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Manzano v. CA (1997) (LPG Burner) Note: The part relevant to the heading is in the doctrine, this was mentioned only once at the start of the case as some sort of intro, the rest of the case is about novelty, the digest is long because I included the evidences relied on, just in case. Doctrine: •

The primary purpose of the patent system is not the reward of the individual but the advancement of the arts and sciences. The function of a patent is to add to the sum of useful knowledge and one of the purposes of the patent system is to encourage dissemination of information concerning discoveries and inventions. This is a matter which is properly within the competence of the Patent Office the official action of which has the presumption of correctness and may not be interfered with in the absence of new evidence carrying thorough conviction that the Office has erred. Since the Patent Office is an expert body preeminently qualified to determine questions of patentability, its findings must be accepted if they are consistent with the evidence, with doubts as to patentability resolved in favor of the Patent Office.

Facts: Manzano filed with the Philippine Patent Office an action for the cancellation of Letters Patent for a gas burner registered in the name of Madolaria who subsequently assigned the letters patent to New United Foundry and Manufacturing Corporation (United Foundry). Manzano alleged that the utility model covered by the letters patent of Madolaria had been known or used by others in the Philippines for more than one (1) year before she filed her application for letters patent on 9 December 1979. Manzano presented the following evidence (a) affidavit alleging the existence of prior art, a brochure distributed by Manila Gas Corporation disclosing a pictorial representation of Ransome Burner made by Ransome Torch and Burner Company, USA, and (b) a brochure distributed by Esso Gasul or Esso Standard Eastern, Inc., of the Philippines showing a picture of another similar burner with top elevation view and another perspective view of the same burner. According to Manzano her husband Tua worked as a helper in the United Foundry where Madolaria used to be affiliated with; that Ong helped in the casting of an LPG burner which was the same utility model of a burner for which Letters Patent in issue was issued, and that after her husband’s separation from the shop she organized Besco Metal for the casting of LPG burners one of which had the configuration, form, and component parts similar to those being manufactured by United Foundry. Manzano then presented two (2) other witnesses, her husband Ong Bun Tua and Fidel Francisco. Ong testified that he worked as a helper in the United Foundry where he helped in the casting of LPG burners with the same configuration as the Letters Patent issued. Francisco testified that he had been employed with the Manila Gas Corporation and that Manila Gas Corporation imported “Ransome” burners way back in 1965 which were advertised through brochures to promote their sale. Madolaria, presented one witness, Rolando Madolaria, who testified, that he was the General Supervisor of United Foundry in the foundry, machine, and buffing section; that the company manufactured early models of singlepiece types of burners where the mouth and throat were not detachable; that in the latter part of 1978 Melecia Madolaria confided in him that complaints were being brought to her attention concerning the early models being manufactured; that he was then instructed to cast several experimental models based on revised sketches and specifications; that Madolaria (respondent) again made some innovations; and after, under the supervision of Melecia Madolaria (respondent), they obtained perfect results. Manzano lost in the Director of Patents and the CA. Issue: 1. W/N the Letter of Patents should be cancelled?

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Held/Ratio: 1. No. Under Section 7 of RA No. 165, as amended, which is the law on patents, expressly provides, “Inventions patentable. Any invention of a new and useful machine, manufactured product or substance, process or an improvement of any of the foregoing, shall be patentable.” Further, Sec. 55 of the same law provides, “Design patents and patents for utility models. - (a) Any new, original and ornamental design for an article of manufacture…” The element of novelty is an essential requisite of the patentability of an invention or discovery. If a device or process has been known or used by others prior to its invention or discovery by the applicant, an application for a patent therefor should be denied; and if the application has been granted, the court, in a judicial proceeding in which the validity of the patent is drawn in question, will hold it void and ineffective. In issuing Letters Patent to Madolaria for an “LPG Burner,” the Philippine Patent Office found her invention novel and patentable. The issuance of such patent creates a presumption which yields only to clear and cogent evidence that the patentee was the original and first inventor. The burden of proving want of novelty is on him who avers it and the burden is a heavy one which is met only by clear and satisfactory proof which overcomes every reasonable doubt. Hence, a utility model shall not be considered “new” if before the application for a patent it has been publicly known or publicly used in this country or has been described in a printed publication or publications circulated within the country, or if it is substantially similar to any other utility model so known, used or described within the country. As found by the Director of Patents, the standard of evidence is insufficient to overcome the presumption of legality of the issuance of the patent. The Director of Patents explained — Scrutiny of Evidence readily reveals that the utility model (LPG Burner) is not anticipated. Not one of the various pictorial representations of burners (evidence of Manzano) clearly and convincingly show that the device presented therein is identical or substantially identical in construction with the aforesaid utility model. It is relevant and material to state that in determining whether novelty or newness is negatived by any prior art, only one item of the prior art may be used at a time. For anticipation to occur, the prior art must show that each element is found either expressly described or under principles of inherency in a single prior art reference or that the claimed invention was probably known in a single prior art device or practice. Even assuming gratia arguendi that the aforesaid brochures (evidence of Manzano) do depict clearly on all fours each and every element of the patented gas burner device so that the prior art and the said patented device become identical, although in truth they are not, they cannot serve as anticipatory bars for the reason that they are undated. The dates when they were distributed to the public were not indicated and, therefore, they are useless prior art references. ... Furthermore, and more significantly, the model marked Exh. “K” does not show whether or not it was manufactured and/or cast before the application for the issuance of patent for the LPG burner was filed by Melecia Madolaria. With respect to Exh. “L,” Manzano claimed it to be her own model of LPG burner allegedly manufactured sometime in 1974 or 1975 and sold by her in the course of her business operation in the name of Besco Metal Manufacturing, which burner was denominated as “Ransome” burner. But a careful examination of Exh. “L” would show that it does not bear the word “Ransome” which is the burner referred to as the product being sold by the Petitioner. Exh. “L” was also undated It must likewise be pointed out that Ong Bun Tua testified on the brochures allegedly of Manila Gas and of Esso Gasul and on the alleged fact that Manila Gas Corporation was importing from ALS2014B

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the United States “Ransome” burners. But the same could not be given credence since he himself admitted during cross-examination that he has never been connected with Manila Gas Corporation. The validity of the patent issued by the Philippine Patent Office in favor of private respondent and the question over the inventiveness, novelty, and usefulness of the improved model of the LPG burner are matters which are better determined by the Patent Office. There is a presumption that the Office has correctly determined the patentability of the model and such action must not be interfered with in the absence of competent evidence to the contrary. The rule is settled that the findings of fact of the Director of Patents, especially when affirmed by the Court of Appeals, are conclusive on this Court when supported by substantial evidence. Petitioner has failed to show compelling grounds for a reversal of the findings and conclusions of the Patent Office and the Court of Appeals.

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Pearl & Dean v. Shoemart Incorporated (2003) (lightboxes not patented) Doctrine •

The Patent Law has a three-fold purpose: first, patent law seeks to foster and reward invention; second, it promotes disclosures of inventions to stimulate further innovation and to permit the public to practice the invention once the patent expires; third, the stringent requirements for patent protection seek to ensure that ideas in the public domain remain there for the free use of the public

Facts: Pearl & Dean (P&D) is engaged in the manufacture of advertising display units referred to as light boxes. These units utilize specially printed posters sandwiched between plastic sheets and illuminated with backlights. It was able to secure a certificate of copyright registration over these illuminated display units. The advertising light boxes were marketed under the trademark “Poster Ads.” The application for registration of the trademark was filed with the Bureau of Patents, Trademarks, and Technology. P&D employed the services of Metro Industrial Services (MIS) to manufacture its advertising displays. In 1985, P&D negotiated with defendant Shoemart, Inc. (SMI) for the lease and installation of the light boxes in SM North Edsa. However, since SM North Edsa was under construction, SMI offered as alternative SM Makati and Cubao. During the signing of the Contract, SMI only returned the Contract with SM Makati. Manager of petitioner reminded SMI that their agreement includes SM Cubao. However, SMI did not bother to reply. Instead, respondent informed petitioner that they are rescinding the contract for SM Makati due to non-performance. Two years later, MIS offered to construct light boxes for SMI’s chain of stores. MIS subsequently fabricated 10 light boxes for SMI. After this contract, SMI engaged the services of EYD Rainbow Advertising to make the light boxes. These were delivered in a staggered basis and installed at SM Megamall and SM City. In 1989, petitioner received reports that exact copy of its light boxes was installed by SMI. It further discovered that North Edsa Marketing Inc. (NEMI), sister company of SMI, was set up primarily to sell advertising space in lighted display units located in SMI’s different branches. Petitioner sent letters to respondents asking them to cease using the light boxes and demanded the discontinued use of the trademark “Poster Ads.” Claiming that both SMI and NEMI failed to meet its demands, P&D filed a case for infringement of trademark and copy right, unfair competition, and damages. SMI maintained that it independently developed its poster panels using commonly known techniques and available technology without notice of or reference to P&D’s copyright. In addition, it said that registration of “Poster Ads” obtained by petitioner was only for stationeries such as letterheads, envelopes, and the like. “Poster Ads” is a generic term which cannot be appropriated as trademark, and, as such, registration of such mark is invalid. It also stressed that P&D is not entitled to the reliefs sought because the advertising display units contained no copyright notice as provided for by law. RTC found SMI and NEMI jointly and severally liable for infringement of copyright and trademark. CA reversed saying that it agreed with SMI that what was copyrighted was the technical drawings only and not the light boxes. Light boxes cannot be considered as either prints, pictorial illustrations, advertising copies, labels, tags, or box wraps, to be properly classified as copyrightable class “O” work. In addition, CA stressed that the protective mantle of the Trademark Law extends only to the goods used by the first user as specified in its certificate of registration. The registration of the trademark “Poster Ads” covers only stationeries such as letterheads, envelopes, and calling cards and newsletter. Issue: [I did not include the issues concerning copyright and trademark anymore.] 1. W/N the light box should be registered separately and protected by a patent issued by Intellectual Property Office. Held/Ratio: 1. Yes. Petitioner never secured a patent for the light boxes. It therefore acquired no patent rights which could have protected its invention, if in fact it really was. And because it had no patent, petitioner could not legally prevent anyone from manufacturing or commercially using the contraption. To be able to effectively and legally preclude others from copying and profiting from the invention, a patent is a primordial requirement. No patent, no protection. ALS2014B

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In Creser Precision Systems Inc v. CA, it was held that “there can be no infringement of a patent until a patent has been issued, since whatever right one has to the invention covered by the patent arises alone from the grant of the patent.” A patent gives the inventor the right to exclude all others. As a patentee, he has the exclusive right of making, selling, or using the invention. On the assumption that the petitioner’s advertising units were patentable inventions, P&D revealed them fully to the public by submitting the engineering drawings thereof to the national library (when it filed for copyright). The ultimate goal of a patent system is to bring new designs and technologies into the public through disclosure. Ideas, once disclosed to the public without protection of a valid patent, are subject to appropriation without significant restraint. As held in Bauer & Cie v. O’Donnel, “The Act secured to the inventor the exclusive right to make use and vend the thing patented, and consequently to prevent others from exercising like privileges without the consent of the patentee. It was passed for the purpose of encouraging useful invention and promoting new and useful inventions by the protection and stimulation given to inventive genius, and was intended to secure to the public, after the lapse of the exclusive privileges granted the benefit of such inventions and improvements.” The Patent Law has a three-fold purpose: first, patent law seeks to foster and reward invention; second, it promotes disclosures of inventions to stimulate further innovation and to permit the public to practice the invention once the patent expires; third, the stringent requirements for patent protection seek to ensure that ideas in the public domain remain there for the free use of the public. It is only after an exhaustive examination by the patent office that a patent is issued. Therefore, not having gone through the arduous examination for patents, petitioner cannot exclude others from the manufacture, sale, or commercial use of the light boxes on the sole basis of its copyright certificate over the technical drawings.

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O’Reilly v. Morse (1854) Doctrine: •

Whoever discovers that a certain useful result will be produced in any art, machine, manufacture, or composition of matter by the use of certain means is entitled to a patent for it, provided he specifies the means he uses in a manner so full and exact that anyone skilled in the science to which it appertains can, by using the means he specifies, without any addition to or subtraction from them, produce precisely the result he describes. And if this cannot be done by the means he describes, the patent is void. And if it can be done, then the patent confers on him the exclusive right to use the means he specifies to produce the result or effect he describes, and nothing more. And it makes no difference in this respect whether the effect is produced by chemical agency or combination, or by the application of discoveries or principles in natural philosophy known or unknown before his invention, or by machinery acting altogether upon mechanical principles. In either case, he must describe the manner and process as above mentioned and the end it accomplishes. And anyone may lawfully accomplish the same end without infringing the patent if he uses means substantially different from those described.

Facts: The complainants allege that Morse is the true and original inventor of the Electro-Magnetic Telegraph, which uses electro-magnetism to transmit intelligence from one place to other distant places. Complainants also allege that defendant O’Reilly had disturbed their enjoyment of the right granted to them through the patent by constructing a line of posts using a telegraph substantially the same with that invented by Morse. O’Reilly apparently used the mechanism patented and were receiving compensation from such service — in violation of the rights granted by the patent or some of the parts thereof. The original patent was granted in 1840. It was cancelled and a new one was issued in 1848 containing several additions and improvements to the telegraph. The Decision of the Circuit Court that is appealed from states that the patents are valid and effectual on the ground that the complainants’ claim was well supported by evidence. The court also stated that the defendants had clearly violated and infringed the rights of the complainants because the mechanism used had substantially the same plan of construction and principle of operation. Issues: 1. Whether Morse was the first and original inventor? 2. Whether or not the patent issued in 1840, which was reissued in 1848, is valid? (Related to Non-Patentable Inventions) Held/Ratio: 1. Yes. The defendants state that there have been others who have invented the telegraph before Morse. The court ruled that from the evidence, it is of no contest that Morse preceded other inventions; also, he is the inventor of the process and method in his specification. The fact that he had consulted books and other people does not invalidate his patent. 2. No as to the 8th invention in the specification of his claims, which states that “Eighth. I do not propose to limit myself to the specific machinery or parts of machinery described in the foregoing specification and claims; the essence of my invention being the use of the motive power of the electric or galvanic current, which I call electromagnetism, however developed for marking or printing intelligible characters, signs, or letters, at any distances, being a new application of that power of which I claim to be the first inventor or discoverer.” He claims that he has the exclusive right to every improvement where the motive power is the electric current and the result is the marking or printing intelligible characters, signs, or letters at a distance. The court ruled that it was too broad and that it basically says that whatever process or machinery is used, as long as the result is the one he specified, it will be covered by his patent and thus cannot be used by the inventor. Morse claims a monopoly in the use of the machinery or parts of it, however developed. He claims an exclusive right to use a manner and process which he has not described and invented. Morse has been able, by a new combination of known powers ALS2014B

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(including electro-magnetism), to discover a method by which intelligible marks or signs may be printed at a distance but he has not discovered that the electro-magnetic current, in any other method and combinations, will do as well. The law requires that a specification be made as part of the patent and such patent will only be issued for the invention described in the specification. He thus prevents others from attempting to improve upon the manner and process described and deters the public from using it, even if discovered. He can lawfully claim only what he has invented and described and if he claims more, his patent is void. The patent here therefore is void only in part.

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Telephone Cases (1888) (http://supreme.justia.com/cases/federal/us/126/1/case.html) The case is super long. Bulk of the case is explaining scientific stuff about the patent claims (as in super scientific). I lifted some from different summaries, Wikipedia, and from the case itself. Actually, it is a collection of cases. Basically, maraming kontrabida kay Graham Bell. Doctrines: •

The law does not require that a discoverer or inventor, in order to get a patent for a process, must have succeeded in bringing his art to the highest degree of perfection; it is enough if he describes his method with sufficient clearness and precision to enable those skilled in the matter to understand what the process is, and if he points out some practicable way of putting it into operation.

•

In order to procure a patent for a process, the inventor must describe his invention with sufficient clearness and precision to enable those skilled in the matter to understand what his process is, and must point out some practicable way of putting it into operation; but he is not required to bring the art to the highest degree of perfection.

Facts: It appears from the proof in these causes that Alexander Graham Bell was the first discoverer of the art or process of transferring to, or impressing upon, a continuous current of electricity in a closed circuit, by gradually changing its intensity, the vibrations of air produced by the human voice in articulate speech in a way to cause the speech to be carried to and received by a listener at a distance on the line of the current, and this discovery was patentable under the patent laws of the United States. In order to procure a patent for a process, the inventor must describe his invention with sufficient clearness and precision to enable those skilled in the matter to understand what his process is, and must point out some practicable way of putting it into operation; but he is not required to bring the art to the highest degree of perfection The Telephone Cases were a series of U.S. court cases in the 1870s and 1880s related to the invention of the telephone, which culminated in the 1888 decision of the United States Supreme Court upholding the priority of the patents belonging to Alexander Graham Bell. The Cases: 1. Dolbear v. American Bell Telephone Company 2. Molecular Telephone Company v. American Bell Telephone Company 3. American Bell Telephone Company v. Molecular Telephone Company 4. Clay Commercial Telephone Company v. American Bell Telephone Company 5. People’s Telephone Company v. American Bell Telephone Company 6. Overland Telephone Company v. American Bell Telephone Company The objector (or plaintiff) in the notable Supreme Court case was initially the Western Union telegraph company, which was at the time a far larger and better financed competitor than American Bell Telephone. Western Union advocated several more recent patent claims of Daniel Drawbaugh, Elisha Gray, Antonio Meucci and Philip Reis in a bid to invalidate Alexander Graham Bell’s master and subsidiary telephone patents dating back to March 1876. Bell got his patent March 7, 1876, and the fortunate accident which led to his discovery occurred June 2, 1875. Active litigation to enforce his patented rights was begun by his company on the 12th of September, 1878, with a suit, in the Circuit Court of the United States for the District of Massachusetts, against Richard A. Dowd. This suit was defended by the Western Union Telegraph Company and vigorously contested. The answer was filed November 4, 1878, setting up alleged anticipations by Gray, Edison, Dolbear, and others. The record fills 1,200 printed pages, but before a decision was reached, the case was compromised and a decree entered by consent. The litigation ended at some time in the latter part of the year 1879. The last deposition was taken on the 19th of September in that year. ALS2014B

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Had Western Union succeeded it would have immediately destroyed the Bell Telephone Company and then Western Union stood to become the world’s largest telecommunications monopoly in Bell’s place. The U.S. Supreme Court came within one vote of overturning the Bell patent, thanks to the eloquence of lawyer Lysander Hill for the Peoples Telephone Company. It was claimed by the People’s Company that Drawbaugh’s inventions and the inventions covered by Bell’s patents were for substantially the same thing. The main issues in this respect argued by counsel were issues of fact — whether Drawbaugh’s instruments were made prior to Bell’s discovery and were practically operative, and whether the Drawbaugh witnesses to these points were to be believed. The record contains a great mass of testimony on these issues. The court Affirmed several other lower court cases Dolbear et al. v. American Bell Tel. Co., Molecular Te. Co. et al. v. American Bell Tel. Co, People’s Tel. Co. et al. v. American Bell Tel. Co. Well reversing American Bell Tel Co. et al. v. Molecular Tel. Co et al. The Supreme Court clarified the line dividing permissible claims from those that were too broad under the Morse rule. Alexander Graham Bell applied for a patent on the telephone. Fifth claim covered The method of and apparatus for transmitting vocal or other sounds telegraphically, as herein described, by causing electrical undulations, similar in form to the vibrations of the air accompanying the said vocal or other sounds, substantially as set forth. It is contended that this embraces the art of transferring to or impressing upon a current of electricity the vibrations of air produced by the human voice in articulate speech, in a way that the speech will be carried to and received by a listener at a distance on the line of the current. Bell’s claim, said the Court, differed from Morse’s claim because Bell claimed only the use of electric current for transmitting the human voice. From the case (Prepare! Nose bleed!) In O’Reilly v. Morse, it was decided that a claim in broad terms for the use of the motive power of the electric or galvanic current called “electromagnetism, however developed, for making or printing intelligible characters, letters, or signs at any distances,” although “a new application of that power” first made by Morse, was void, because it was a claim “for a patent for an effect produced by the use of electromagnetism, distinct from the process or machinery necessary to produce it;” but a claim for “making use of the motive power of magnetism, when developed by the action of such current or currents, substantially as set forth in the foregoing description, ... as means of operating or giving motion to machinery, which may be used to imprint signals upon paper or other suitable material, or to produce sounds in any desired manner, for the purpose of telegraphic communication at any distances,” was sustained. The effect of that decision was therefore that the use of magnetism as a motive power, without regard to the particular process with which it was connected in the patent, could not be claimed, but that its use in that connection could. The Court noted that “it may be that electricity cannot be used at all for the transmission of speech except in the way Bell has discovered.” Summary from Internet: http://danfingerman.com/law/cases/TelephoneCases1.html Procedural Posture: Defendant telephone companies and manufacturer sought review of the judgments of the Circuit Courts of the United States for the Districts of Massachusetts, Southern District of New York, and Eastern District of Pennsylvania, which entered a perpetual injunction against the telephone companies and the manufacturer in favor of plaintiff patent owners in their claim alleging patent infringement. Overview: The patent holders filed an infringement claim against the telephone companies and the manufacturer and a perpetual injunction was issued. On appeal, the telephone companies and the manufacturer contested the validity of the patents and the scope of claim five, alleging that they did not use instruments which were identical with the forms shown in the drawings of that patent claim. The telephone companies and the manufacturer also denied that the patent holders ALS2014B

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were the original and first inventors. The court affirmed in part and reversed in part, holding that the charge of a fraudulent interpolation in the patent holders’ specifications was not sustained. The court held that the patent claimed but one method of transmitting vocal and other sounds, which method converted the energy of sound-waves into magnetic energy and then into vibratory currents of electricity. The court reversed the decree against the manufacturer regarding the fifth claim, holding that the battery, primary circuit, transmitter diaphragm, its electrodes, and the coil and magnet in the primary or transmitter circuit of the manufacturer’s apparatus, did not involve the patent method described in claim five. Outcome: The court affirmed the perpetual injunction issued against the telephone companies and reversed the decree in the manufacturer’s case, so far as it was against that company on the fifth claim of the patent.

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Diamond v. Chakrabarty (1980) Facts: Chakrabarty, a microbiologist, filed a patent application involving the invention of a “bacterium from the genus Pseudomonas containing therein at least two stable energy-generating plasmids, each of said plasmids providing a separate hydrocarbon degradative pathway.” This human-made, genetically engineered bacterium is capable of breaking down multiple components of crude oil. This bacterium does not occur naturally, and therefore, is believed to have significant value for the treatment of oil spills. Chakrabarty’s patent claims were of three types: first, process claims for the method of producing the bacteria; second, claims for an inoculum comprised of a carrier material floating on water, such as straw, and the new bacteria; and third, claims to the bacteria themselves. The first two types were allowed by the patent examiner. But the claims for the bacteria was rejected on the grounds that microorganisms are products of nature and that Title 35 U.S.C. 101 states that living things are not patentable. Title 35 U.S.C. 101 provides, “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.” Chakrabarty appealed to the Patent Office Board of Appeals but it affirmed the decision. Diamond’s argument is that the passage of the previous laws (1930 Plant Patent Act and Variety Protection Act) evidences congressional understanding that the terms “manufacture” or “composition of matter” does not include living things and that microorganisms cannot qualify as patentable subject matter until Congress expressly authorizes such protection. The Court of Customs and Patent Appeals reversed, concluding that the fact that micro-organisms are alive is without legal significance for purposes of the patent law. Issue: 1. W/N a live, human-made micro-organism is patentable subject matter under 35 U.S.C. 101 Held/Ratio: 1. YES. The case involves the proper interpretation of the 35 U.S.C. 101, specifically the phrases “manufacture” and “composition of matter” and on whether these include living things. The Court has read the term “manufacture” in accordance with its dictionary definition to mean “the production of articles for use from raw or prepared materials by giving to these materials new forms, qualities, properties, or combinations, whether by hand-labor or by machinery.” Similarly, “composition of matter” has been construed consistent with its common usage to include “all compositions of two or more substances and ... all composite articles, whether they be the results of chemical union, or of mechanical mixture, or whether they be gases, fluids, powders or solids.” In choosing such expansive terms as “manufacture” and “composition of matter,” modified by the comprehensive “any,” Congress plainly contemplated that the patent laws would be given wide scope. And the relevant legislative history also supports a broad construction. The only limit is that laws of nature, physical phenomena, and abstract ideas are not patentable. In the case, the patentee has produced a new bacterium with markedly different characteristics from any found in nature and one having the potential for significant utility. The micro-organism plainly qualifies as patentable subject matter. His claim is not to an unknown natural phenomenon, but to a non-naturally occurring manufacture or composition of matter — a product of human ingenuity “having a distinctive name, character, and use.” The patentee has produced a new bacterium with markedly different characteristics from any found in nature and one having the potential for significant utility. His discovery is not nature’s handiwork, but his own; accordingly, it is patentable subject matter. Also, the passage of the 1930 Plant Patent Act, which afforded patent protection to certain asexually reproduced plants, and the 1970 Plant Variety Protection Act, which authorized protection for certain sexually reproduced plants but excluded bacteria from its protection, does not evidence congressional understanding that the terms “manufacture” or “composition of matter” do not include living things. Nor does the fact that genetic technology was unforeseen when Congress enacted U.S.C. 101 require the conclusion that micro-organisms cannot qualify as ALS2014B

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patentable subject matter until Congress expressly authorizes such protection. The unambiguous language of the law fairly embraces respondent’s invention. Arguments against patentability, based on potential hazards that may be generated by genetic research, should be addressed to the Congress and the Executive, not to the Judiciary.

Funk Bros. Seed Co. v. Kalo Inoculant Co. (1948) The properties of inhibition or of noninhibition in the bacteria were “the work of nature,” and therefore not subject to being patented. Facts: Leguminous plants are able to take nitrogen from the air and fix it in the plant for conversion to organic nitrogenous compounds. The ability of these plants to fix nitrogen from the air depends on the presence of Rhizaobium bacteria that infect the roots of the plant and form nodules on them. Rhizobium has 6 different species which may produce an inhibitory effect on each other when mixed. These species of Rhizobium bacteria have long been packaged for sale to and use by farmers in the inoculation of the seeds of leguminous plants, with each package containing only 1 species of root nodule Rhizobium bacteria to avoid its mutual inhibition. The packaged inoculant could therefore be used successfully only in plants of the particular group corresponding to this bacterial species. Bond (patenteed), discovered that there are strains of each species which do not exert a mutually inhibitive effect on each other. Thus, he was able to provide a mixed culture of Rhizobia capable of inoculating plants belonging to several groups. Kalo Inoculenat, Co. exploited the claimed invention by selling multi-purpose packages containing a mixture of different species of Rhizobia suitable for different plants. Funk infringed by selling similar packages and Kalo sued for patent infringement. While the patent had claims both to the method of producing a multi-purpose inoculant by mixing together mutually non-inhibitive strains of Rhizobia and to the inoculant product comprising a mixture of mutually noninhibitive strains of Rhizobia, the case before the Court involved only the product claims. Issue: 1. W/N properties of inhibition or of noninhibition in the bacteria were “the work of nature,” and therefore not subject to being patented. Held/Ratio: 1. SC held that the properties of inhibition or of noninhibition in the bacteria were “the work of nature.,” and therefore not subject to being patented. Patents cannot issue for the discovery of the phenomena of nature.” The Court added: The qualities of these bacteria, like the heat of the sun, electricity, or the qualities of metals, are part of the storehouse of knowledge of all men. They are manifestations of laws of nature, free to all men and reserved exclusively to none. He who discovers a hitherto unknown phenomenon of nature has no claim to a monopoly of it which the law recognizes. If there is to be invention from such a discovery, it must come from the application of the law of nature to a new and useful end. The court of appeals thought that packaging the non-inhibitory strains together went beyond the discovery of a phenomenon of nature and conferred patentability, because a “new and different composition of noninhibitive strains…contributed utility and economy to the manufacture and distribution of commercial inoculants.” But the Supreme Court disagreed, and reversed, because the “aggregation of species fell short of invention within the meaning of the patent statutes.” The Court explained: The aggregation of select strains of the several species into one product is an application of that newly discovered natural principle. But however ingenious the discovery of that natural principle may have been, the application of it is hardly more than an advance in the packaging of the inoculants. Each of the species of root nodule bacteria contained in the package infects the same group of leguminous plants which it always infected. No species acquires a different use. The combination of species produces no new bacteria, no change in the six species of ALS2014B

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bacteria, and no enlargement of the range of their utility. Each species has the same effect it always had. The bacteria perform in their natural way. Their use in combination does not improve in any way their natural functioning. They serve the ends nature originally provided, and act quite independently of any effort of the patentee. The application of this newly discovered natural principle to the problem of packaging of inoculants may well have been an important commercial advance. But once nature’s secret of the noninhibitive quality of certain strains of the species of Rhizobium was discovered, the state of the art made the production of a mixed inoculant a simple step. Even though it may have been the product of skill, it certainly was not the product of invention. There is no way in which we could call it such unless we borrowed invention from the discovery of the natural principle itself. That is to say, there is no invention here unless the discovery that certain strains of the several species of these bacteria are noninhibitive, and may thus be safely mixed, is invention. But we cannot so hold without allowing a patent to issue on one of the ancient secrets of nature now disclosed. Since we conclude that the product claims do not disclose an invention or discovery within the meaning of the patent statutes, we do not consider whether the other statutory requirements are satisfied. The Court decided this case under the patent statute in effect before the 1952 recodification, which distinguished obviousness from “invention.” It is therefore not certain from the language used whether the Court is holding that the claimed invention was too obvious to justify a patent or, as appears more likely, that when the discovery of a phenomenon of nature is implemented in a facially trivial manner the subject matter is not patent-eligible. However, on the basis of how subsequent Supreme Court opinions, such as Benson[2] and Flook,[3] treat Funk, it appears that the opinion is one on patent-eligibility. A lower court opinion illustrating the application of the doctrine of the Funk case is Armour Pharmaceutical Co. v. Richardson Merrell, Inc.[4] In that case, the patentee desired to administer trypsin orally for use as an antiinflammatory. He discovered that trypsin could be absorbed effectively in the lower small intestine (ileum). However, stomach acids destroyed trypsin. The patentee proposed and claimed coating trypsin with an enteric coating (stomach-acid-resistant coating), which permitted the trypsin to pass through the stomach to the small intestine without damage where it would be absorbed and then act as an anti-inflammatory or analgesic. However, the enteric coating expedient was already known for other products. The United States Court of Appeals for the Third Circuit invalidated the patent on the basis of Funk not to be confused with a style of jazz: Our reading of the Supreme Court’s opinion in Funk leads us to conclude that the test of patentability of a natural phenomenon is as follows: Would an artisan, knowing the newly discovered natural phenomenon require more than ordinary skill to discover the process by which to apply that phenomenon as the patentee had done? Once nature’s secret that the ileum would absorb trypsin was uncovered, any artisan would have known the process of enterically coating the trypsin to enable it to pass through the acidic environment of the stomach and continue into the ileum. ...[The inventor’s] application of that newly discovered principle would itself have to be inventive in order to sustain patent. The court held that according to Funk the manner of implementation of a natural principle must itself be patentable, as Flook subsequently held.

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Gottschalk v. Benson (1972) Facts: Respondents filed in the Patent Office an application for an invention which was described as being related “to the processing of data by program and more particularly to the programmed conversion of numerical information” in general purpose digital computers. They claimed a method for converting binary-coded decimal (BCD) numerals into pure binary numerals. The claims were not limited to any particular art or technology, to any particular apparatus or machinery, or to any particular end use. They purported to cover any use of the claimed method in a general purpose digital computer of any type. Engineers Gary Benson and Arthur Tabbot invented a faster and more efficient mathematical procedure for transforming the normal “decimal” type of numbers (base 10) into true “binary” numbers (base 2) which are simpler to process within computers. Their mathematical procedure was somewhat akin to long division, albeit with different steps. Their attorney argued before the patent examiner that the inventors were entitled to a broad patent covering any use of their new mathematical procedure, even use of it by a human using pencil and paper. The examiner rejected their invention. An appellate court overruled the examiner and ordered a patent to issue. The Commissioner of Patents then petitioned successfully to have the Supreme Court review this decision. Before the Supreme Court, the inventors’ attorney backed down from his earlier position and argued that the inventors were entitled to a patent covering all uses of their new mathematical procedure in computers, but not necessarily to its use by humans using pencil and paper. (The members of the Supreme Court at that time knew very little about computers.) The case is here on a petition for a writ of certiorari. Issue: 1. WON the method described and claimed is a “process” within the meaning of the Patent Act. Held/Ratio: 1. A digital computer, as distinguished from an analog computer, operates on data expressed in digits, solving a problem by doing arithmetic as a person would do it by head and hand. Some of the digits are stored as components of the computer. Others are introduced into the computer in a form which it is designed to recognize. The computer operates then upon both new and previously stored data. The general purpose computer is designed to perform operations under many different programs. The representation of numbers may be in the form of a time series of electrical impulses, magnetized spots on the surface of tapes, drums, or discs, charged spots on cathode-ray tube screens, the presence or absence of punched holes on paper cards, or other devices. The method or program is a sequence of coded instructions for a digital computer. The patent sought is on a method of programming a general purpose digital computer to convert signals from binary-coded decimal form into pure binary form. A procedure for solving a given type of mathematical problem is known as an “algorithm.” The procedures set forth in the present claims are of that kind; that is to say, they are a generalized formulation for programs to solve mathematical problems of converting one form of numerical representation to another. From the generic formulation, programs may be developed as specific applications. The decimal system uses as digits the 10 symbols 0, 1, 2, 3, 4, 5, 6, 7, 8, and 9. The value represented by any digit depends, as it does in any positional system of notation, both on its individual value and on its relative position in the numeral. Decimal numerals are written by placing digits in the appropriate positions or columns of the numerical sequence. The pure binary system of positional notation uses two symbols as digits -- 0 and 1, placed in a numerical sequence with values based on consecutively ascending powers of 2. In pure binary notation, what would be the tens position is the twos position; what would be hundreds position is the fours position; what would be the ALS2014B

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thousands position is the eights. Any decimal number from 0 to 10 can be represented in the binary system with four digits or positions as indicated in the following table. The method sought to be patented varies the ordinary arithmetic steps a human would use by changing the order of the steps, changing the symbolism for writing the multiplier used in some steps, and by taking subtotals after each successive operation. The mathematical procedures can be carried out in existing computers long in use, no new machinery being necessary. And, as noted, they can also be performed without a computer. Mackay Co. v. Radio Corp.,”while a scientific truth, or the mathematical expression of it, is not a patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be.” That statement followed the longstanding rule that “an idea, of itself, is not patentable.” “A principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right.” 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. We dealt there with a “product” claim, while the present case deals with a “process” claim. But we think the same principle applies. Here the “process” claim is so abstract and sweeping as to cover both known and unknown uses of the BCD to pure binary conversion. The end use may (1) vary from the operation of a train to verification of drivers’ licenses to researching the law books for precedents and (2) be performed through any existing machinery or futuredevised machinery or without any apparatus. The Court said, “That a process may be patentable, irrespective of the particular form of the instrumentalities used, cannot be disputed. If one of the steps of a process be that a certain substance is to be reduced to a powder, it may not be at all material what instrument or machinery is used to effect that object, whether a hammer, a pestle and mortar, or a mill. Either may be pointed out; but if the patent is not confined to that particular tool or machine, the use of the others would be an infringement, the general process being the same. A process is a mode of treatment of certain materials to produce a given result. It is an act, or a series of acts, performed upon the subject matter to be transformed and reduced to a different state or thing.” Transformation 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. So it is that a patent in the process of “manufacturing fat acids and glycerine from fatty bodies by the action of water at a high temperature and pressure” was sustained in Tilghman v. Proctor. The Court said, “The chemical principle or scientific fact upon which it is founded is that the elements of neutral fat require to be severally united with an atomic equivalent of water in order to separate from each other and become free. This chemical fact was not discovered by Tilghman. He only claims to have invented a particular mode of bringing about the desired chemical union between the fatty elements and water.” It is argued that a process patent must either be tied to a particular machine or apparatus or must operate to change articles or materials to a “different state or thing.” We do not hold that no process patent could ever qualify if it did not meet the requirements of our prior precedents. It is said that the decision precludes a patent for any program servicing a computer. We do not so hold. It is said that we have before us a program for a digital computer but extend our holding to programs for analog computers. We have, however, made clear from the start that we deal with a program only for digital computers. It is said we freeze process patents to old technologies, leaving no room for the revelations of the new, onrushing technology. Such is not our purpose. What we come down to, in a nutshell, is the following. It is conceded that one may not patent an idea. But, in practical effect, that would be the result if the formula for converting BCD numerals to pure binary numerals were patented in this case. The mathematical formula involved here has no substantial practical application except in connection with a digital computer, which means that, if the judgment below is affirmed, the patent would wholly preempt the mathematical formula and, in practical effect, would be a patent of the algorithm itself. ALS2014B

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It may be that the patent laws should be extended to cover these programs, a policy matter to which we are not competent to speak. “The Patent Office now cannot examine applications for programs because of a lack of a classification technique and the requisite search files. Even if these were available, reliable searches would not be feasible or economic because of the tremendous volume of prior art being generated. Without this search, the patenting of programs would be tantamount to mere registration, and the presumption of validity would be all but nonexistent.” “It is noted that the creation of programs has undergone substantial and satisfactory growth in the absence of patent protection, and that copyright protection for programs is presently available. “ If these programs are to be patentable, considerable problems are raised which only committees of Congress can manage, for broad powers of investigation are needed, including hearings which canvass the wide variety of views which those operating in this field entertain. The technological problems tendered in the many briefs before us indicate to us that considered action by the Congress is needed. Reversed.

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