It has been over two decades since the Nikes worn by Michael J. Fox’s character Marty McFly laced themselves in “Back to the Future II.”  However despite the passage of time the web is abuzz following reports that Nike, Inc. has filed a patent for sneakers with an automatic lacing system similar to the ones featured in the film.  Filed with the World Intellectual Property Organization on May 11, 2009, the patent was only discovered and reported last week.

The invention is described as an “article of footwear with an automatic lacing system” that provides “a set of straps that can be automatically opened and closed to switch between a loosened and tightened position of the upper.”  The article also includes “an automatic ankle cinching system that is configured to automatically adjust an ankle portion of the upper.”

While the sneakers will have an on-board battery to power the lacing system, TechNewsDaily notes that the “patent reveals that Nike hasn’t decided to whether to go with a USB or a mini-USB port to charge the shoe.”

The inventors listed in the patent filing are Tiffany A. Beers, Michael R. Friton, and Tinker L. Hatfield, and the Portland Business Journal notes that Hatfield, Nike’s vice president of creative design, is “one of the industry’s most prolific designers.”

Michael S. Lee of Plumsea Law Group, LLC is listed as the agent of record.  Plumsea Law Group has offices in Portland, Oregon, and Bethesda, Maryland.

July 2, 2010, Myriad Genetic, Inc., et al., Defendants-Appellants from the now infamous summary judgment decision Association for Molecular Pathology v. USPTO, filed a response to Plaintiffs-Appellees’, The Association for Molecular Pathology, et al., Motion for Recusal of Chief Judge Randall R. Rader.

The Plaintiffs-Appellees preemptively, moved for Chief Judge Rader’s recusal, as Judge Rader may not be assigned to the panel that will hear the appeal.  Appellee argued that on two occasions the Chief Judge created an appearance of partiality. The first instance was as a panelist and attendant of the conference Patenting Genes: In Search of Calmer Waters, which was a Biotechnology Industry Organization (BIO) Conference. BIO filed an amicus curiae brief in the district court supporting Defendants-Appellants.  BNA’s Patent, Trademark & Copyright Journal reported Rader, while at the BIO Conference, as saying,

A troublesome question for me is the lack of legal standard for making this decision. In an obviousness analysis, there are some neutral steps that I can apply. But using Section 101 to say that the subject matter is unpatentable is so blunt a tool that there is no neutral step to allow me to say that there is a line here that must be crossed and that this particular patent claim crosses it or does not.

The second occasion, Chief Judge Rader asked a question at the Eighteenth Annual Conference on International Intellectual Property Law & Policy.

In the Plaintiffs-Appellants response, Appellants asserted that Appellee’s arguments as being conclusory and unreasonable.  Appellants six point response poignantly stated that attendance at a legal symposia, by itself, does not render impartiality reasonably questionable. In addition, judges are not forbidden from expressing their opinions on legal issues in general.  Appellants argued that Rader’s above quoted statement when viewed in the context is nothing more than a general legal opinion, as it was in response to a comments about the U.S. Supreme Court’s lack of detail to exceptions to patentability.  Secondly, Rader’s question at the Annual Conference on International Intellectual Property Law & Policy regarded whether water purification was a sufficient invention. As the questions are not related to the facts of the case on appeal, there was no reasonable appearance of partiality.

The European Union’s July 6th pronouncement in Monsanto Technology v. Cefetra confirms earlier concerns regarding the EU’s stance toward gene patents. Monsanto sought to prevent imports of soya meal containing traces of its patented seed, Roundup Ready soya seed, arriving into Dutch ports from Argentina. The Court of Justice of the EU found that ”the protection for a patent relating to a DNA sequence is limited to the situations in which the genetic information is currently performing the functions described in the patent.” Specifically, traces of the genetic material within soya meal could not infringe Monsanto’s patent where the soya meal was not used for the same purpose, i.e. to protect the seed from the harmful effects of herbicide.

In making its decision, the Court relied on Article 9 of the Biotechnology Directive, which states in relevant part that “the protection conferred by a patent on a product containing or consisting of genetic information shall extend to all material… in which the product in incorporated and in which the genetic information is contained and performs its function” [emphasis added]. In a press release issued by the Court of Justice, the Court made clear that Monsanto could not dispute its failure to satisfy Article 9 and that actual performance of a patent’s stated function is required for the harmonization of the Directive in the EU. This ruling will apply retroactively affecting all patents currently held in EU member countries and those obtained after the Directive was signed into law.

In a July 7,  2010 ruling (In re Giacomini), the Court of Appeals for the Federal Circuit affirmed the Board of Patent Appeals and Interference’s rejection of U.S. Patent Application No. 09,725,737 (“the ’737 application”) pursuant to 35 U.S.C. § 102(e) as being anticipated by U.S. Patent No. 7,039,683 (“the ’683 patent”) which was issued to Vinh Tran.  The ’737 application was filed on November 29, 2000 and was directed to a method of efficiently populating a cache with resources.  The ’683 patent was filed on December 29, 2000 as a Non-Provisional Application, but claimed priority to a Provisional Application which was filed on September 25, 2000.  Consequently, the filing date of the Provisional would make the ’683 patent prior art under 35 U.S.C. § 102(e) whereas the filing date of the Non-Provisional would not.

The Board determined, and the Applicants did not dispute, that the ’683 patent taught all of the claimed features of the ’737 application.  Section 102(e) states that a person shall be entitled to a patent unless the invention was described in “(2) a patent granted on an application for patent by another filed in the United States before the invention by the applicant for patent” (emphasis added).  Applicants argument was that since a Provisional Patent Application does not itself lead to the issuance of a patent, that its filing date cannot be used in formulating a rejection under 35 U.S.C. § 102(e).  However, the Federal Circuit sided with the Board’s ruling and quoted 35 U.S.C. § 111(b)(8) , the pertinent part of which states that “[t]he provisions of this title relating to applications for patent shall apply to provisional applications for patent.”

The Federal Circuit clarified an important limitation in that the Provisional must have support for the invention disclosed and claimed in the Non-Provisional.  Furthermore, since Applicants did not argue a lack of written description support before the Board, the argument was waived because Applicants failed to timely raise it below.  The Federal Circuit’s ruling was also distinguished over In re Hilmer, which clarified that a U.S. Patent Application claiming priority to a foreign application has a priority date as of the filing date of the foreign application, but is only effective as 102(e) prior art as of its U.S. filing date.  This difference arises from the wording of Section 102(e) wherein the application for patent must be “filed in the United States.” These subtle distinctions should be included among the considerations given precedence when determining whether to file first in the U.S. or abroad.

The U.S. Patent and Trademark Office (USPTO) recently released new interim guidelines to its patent examining corps in view of the U.S. Supreme Court’s decision in Bilski v. Kappos. The interim guidelines, which were issued on July 27, 2010, provide factors to be considered by Patent Examiners in determining whether method claims contain patentable subject matter under 35 U.S.C. § 101. As set forth in the U.S. Supreme Court’s Bilski decision, the “machine or transformation test” is no longer the sole test for patent eligibility, but rather is used as “useful and important clue” as well as an “investigative tool” in determining whether a claimed process is patent-eligible.

According to the guidelines issued by the USPTO, if the claim either expressly or inherently recites a machine or transformation, then this is a factor pointing towards patent-eligibility. If the claim does not recite a machine or transformation, then this is considered a factor weighing against an indication of patentable subject matter. An ultimate determination of patentability under 35 U.S.C. § 101 requires that a number of additional factors be carefully analyzed and weighed to determine whether the claimed process recites an abstract idea. Examples of factors which weigh for and against patent eligibility are provided at the end of the interim guidelines.  Under the proposed guidelines, there may be situations where a claim that satisfies the “machine or transformation test” may, in fact, be patent-ineligible, whereas a claim that does not meet the “machine or transformation test” is still determined to be patent-eligible. There is no single bright-line rule, but rather the claim as a whole and all relevant factors must be considered in determining patent eligibility.

The concept that an abstract idea is not patent-eligible is not new. However, the removal of the “machine or transformation test” as the sole test for determining whether a process is patent-eligible now requires a more detailed analysis of all relevant factors in order to determine whether a process is directed to an abstract idea. The interim guidelines are the USPTO’s attempt to define these factors. The public is invited to comment up to September 27, 2010, such that a final set of guidelines may be issued.

Despite the National Institutes of Health (NIH) denial of three previous requests, three persons petition the Department of Health and Human Services to exercise its “march-in rights” under the Bayh-Dole Act. The petitioners, Joseph M. Carik, Anita Hochendoner, and Anita Bova, are representatives of the entire class of patients with Fabry disease. Fabry is a rare, genetic disease that affects the body’s ability to break down fats causing kidney and heart problems that can lead to death. The petitioners claim that they are suffering from a return of symptoms of Fabry disease due to Genzyme’s rationing plan, which cut their allowance to less than a third of the recommended dose. Genzyme issued its rationing plan following manufacturing problems in its Allston plant.

The Bayh-Dole Act granted universities the ability to control the rights of their inventions that resulted from federal funding, but also retained the ability to abrogate those rights under certain circumstances (“march-in”). Under 35 U.S.C. §203, a Federal agency, here the NIH, has the right to require the exclusive licensee of an invention, created under its funding agreement, grant a license to a “responsible applicant,” so long as the action “is necessary to alleviate health or safety needs which are not reasonably satisfied by the . . . licensee[.]”

Petitioners contend that NIH funding awarded to Dr. Robert J. Desnick of Mount Sinai School of Medicine lead to the discovery that enzyme replacement therapy with agalsidase beta (Fabrazyme®) can effectively treat Fabry patients. Under the Act, Mount Sinai exclusively licensed its subsequent patents, Nos. 5,356,804 “Cloning and expression of biologically active human alpha-galactosidase A,” and 5,580,757 “Cloning and expression of biologically active alpha-galactosidase A as a fusion protein,” to Genzyme. Petioners argue that Genzyme’s current inability to manufacture the requisite amount has adversely affected the health and safety of those patients with Fabry disease. Accordingly, the petition seeks an open license from NIH in order to allow responsible entities to manufacture, import, export, or sell Fabrazyme®.

Last week the Court of Justice of the European Union, the highest judicial body of the European Union, interpreted Article 9 of Directive 98/44/EC to have a functional limitation. Article 9 of the Directive states that patent protection “on a product containing or consisting of genetic information shall extend to all material . . .  in which the product in incorporated and in which the genetic information is contained and performs its function.” (emphasis added) 

At issue in Monsanto Technology, LLC v. Cefetra BV and Ors is Monsanto’s European patent EP0546090 for an isolated gene sequence conferring resistance to “Roundup” herbicide. The case involved transgenic soybean plants that were cultivated in Argentina, a country where the isolated gene lacked patent protection. The issue before the court was whether importation of soy meal containing remnants of the herbicide resistant gene from Argentina into Amsterdam, a member of the EU, was permissible — in other words, whether the gene presence alone was sufficient to constitute infringement of the European patent.

The court held that “Article 9 of the Directive[] places all material in which the DNA is incorporated within the scope of the exclusive right of the proprietor of the patent if the genetic information is found in that material and performs its function therein.” Since the soy meal is not living, the DNA remnants cannot function and therefore no longer protected by patent law. Thus, Article 9 affords exhaustive patent protection, which does not extend to mere gene presence.  Accordingly, the Court’s interpretation provides a design around scheme for gene patents by permitting the importation of a nonfunctional product from a territory where the invention lacks patent protection.

A huge sigh of relief could be felt across the business and legal communities in the wake of the Supreme Court’s ruling in Bilski v. Kapos. While the Court affirmed the Court of Appeals for the Federal Circuit’s decision to invalidate Bilski’s patent, it declined to endorse the “machine or transformation test,” and in turn seemingly preserved the status quo in the patent world. This means that business method, computer software and certain biotech patents are safe…for now. While commentators debate the merits of the decision, most agree that the Court ensured that the continued fight over method patents not tied to a particular machine or apparatus will be waged in the District Courts and at the Federal Circuit.

Opponents of these method patents, especially in the biotech industry, deride the Court for “punting” on one of the most important patent issues in recent memory. Dan Ravicher, executive director of the Public Patent Foundation–a group opposing gene patents not tied to a particular drug–called the decision “a waste of paper.” According to Ravicher, the Bilski decision is especially disturbing because “[e]veryone can claim victory, except of course Mr. Bilski himself.”

Amazon.com can be counted as one of the biggest winners after Bilski. The Tech Cheat Sheet blog notes that the decision preserves Amazon’s patent on “one-click” shopping, which the company has used to its advantage. Some believe that the Court’s reluctance to adopt the “machine or transformation test” is vital to helping the struggling economy. Attorney Michael Bednarek adds in the Wall Street Journal, “[l]ook, the smartest people are going into financial services, medical technologies, computer technologies . . . this isn’t the industrial age anymore, and the innovation in this country isn’t solely in the rust belt. To hold that would be to help foreign economies at our own expense.”

Since the book on business methods hasn’t been fully closed in the wake of Bilski, yet another winner is the legal industry itself. Patent attorneys and agents will continue to bring in revenue prosecuting method patents, while litigators will have their work cut out for them sorting through the hundreds of patent challenges heading to federal district courts throughout the country.

Wither Bilski? No one is certain, for now at least.

Under 35 U.S.C. 120, an application for patent may benefit from the priority date of an earlier filed application if the following four conditions are met: (1) the invention was properly disclosed in the earlier application; (2) there is at least one inventor in common; (3) the application is copending with the earlier filed application; and (4) there is a specific reference to the earlier application. In Encyclopaedia Brittanica Inc. v. Alpine Electronics of America Inc., the application of conditions (3) and (4) to each individual patent application in a continuation chain played a central role in determining the validity of two issued patents.

Encyclopaedia Brittanica Inc., assignee of U.S. Patent Nos. 7,051,018 and 7,082,437, attempted to assert these patents against Alpine Electronics of America Inc. as well as a plurality of other entities that produce in-car navigation systems. Both patents were filed in 2005 and claimed priority dating back to 1989 through a chain of patents and patent applications. Priority was at issue as a foreign patent application to the same invention was filed and subsequently published in 1991. The original U.S. application was filed in 1989 and a continuation application was filed in the U.S. in 1993. The 1993 application was submitted absent the filing fee, signed declaration, and first page. Furthermore, the 1993 application was filed on the same day the 1989 application issued as a patent.

The Court of Appeals for the Federal Circuit affirmed a grant of summary judgment in favor of the defendants and noted that 35 U.S.C. 120 grants the priority date benefit if the application was “filed before the patenting or abandonment of or termination of proceedings on … an application similarly entitled to the benefit of the filing date of the first application” (emphasis added). The phrase ‘similarly entitled’ was held to mean that each application in a chain of continuation applications must meet the requirements of Section 120.

Since the 1993 application did not contain a proper priority claim to the 1989 application it was determined to be anticipated by the 1991 foreign publication pursuant to 35 U.S.C 102(b). This break in the continuity chain also meant that all subsequent continuation applications, which attempted to claim priority through the 1993 application, were not entitled to the 1989 priority date. Consequently, the asserted patents were held to be invalid. The court left unanswered the question of whether the filing of the 1993 application on the same day the 1989 patent issued satisfied the co-pendency requirement of Section 120.

After more than seven months, the Supreme Court issued its decision on Bilski v. Kappos. The Court unanimously affirmed the judgment of the Federal Circuit, ruling that the claims at issue are not eligible subject matter as they merely claim an abstract idea.   The Court ruled that business methods are eligible subject matter, but rejected the Federal Circuit’s machine-transformation test as the sole test to determine patentablity under Section 101.

The Court in interpreting Section 101 confirmed a broad and dynamic patent-eligibility principle, consistent with Congressional intent as evidenced by the use of the term “any” in the Patent Act.  Accordingly, the Court rejected the categorical limitations on “process” patents, expressly the machine-or-transformation test and the categorical exclusion of business methods. Although the Court disapproved of limiting Section 101 determinations to a single test, the Court “by no means foreclose[d] the Federal Circuit’s development of other limiting criteria that further the purposes of the Patent Act[.]” Thus, although business method patents are not foreclosed under the majority’s opinion, the decision may signal a narrowing of this category of claims.

Rather than announcing a categorical rule, Justice Kennedy’s opinion for the majority resolved the case narrowly based on prior precedents, particularly Benson, Flook, and Diehr. In Benson, a claim covering an algorithm that coverts numerals to pure binary code was not patent eligible as the claim was in effect is a formula.”  Flook stands for the proposition that the prohibition against patenting abstract ideas “cannot be circumvented by attempting to limit the use of the formula to a particular technological environment’ or adding ‘insignificant postsolution activity.” The Diehr Court held that application of mathematical formulas and laws of nature may be patented.  The claims at issue in Bilski, the Court held, were similar to those at issue in Flook and Benson.

Justice Stevens’ concurring opinion was joined by Justices Breyer, Ginsburg, and Sotomayor. Justice Stevens said, “The wiser course would have been to hold that petitioners’ method is not a ‘process’ because it describes only a general method of engaging in business transactions—and business methods are not patentable.”

Justice Breyer wrote separately, despite joining Stevens’s opinion in full, and was joined in part by Justice Scalia.  Justice Breyer noted that, despite the disagreement about the patentability of business methods generally, all the members of the Court agreed on the following points: (1) “although the text of §101 is broad, it is not without limit”; (2) “the so-called ‘machine-or-transformation test’ has thus repeatedly helped the Court to determine what is a patentable process”; (3) “while the machine-or-transformation test has always been a ‘useful and important clue,’ it has never been the ‘sole test’ for determining patentability”; and (4) “although the machine-or-transformation test is not the only test for patentability, this by no means indicates that anything which produces a ‘useful, concrete, and tangible result’ is patentable.”