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March 29, 2002, 9:00 AM ET, Alert No. 399.
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Fed Circuit Issues Opinion on Doctrine of Equivalents
3/28. The U.S. Court of Appeals (FedCir) issued its opinion in Johnson & Johnston Associates v. R.E. Service, a per curiam decision regarding the doctrine of equivalents in a patent infringement case involving printed circuit boards. The Appeals Court held that the doctrine of equivalents cannot be asserted to cover disclosed but unclaimed subject matter. Judge Newman wrote a stirring dissent.
Doctrine of Equivalents. Justice Thomas wrote in Warner Jenkinson v. Hilton Davis Chemical, 520 U.S. 17 (1997), that this doctrine provides that "a product or process that does not literally infringe upon the express terms of a patent claim may nonetheless be found to infringe if there is ``equivalence´´ between the elements of the accused product or process and the claimed elements of the patented invention." See also, Graver Tank v. Linde Air Products, 339 U.S. 605 (1950).
050 Patent. Johnson & Johnston Associates (JJA) is the holder of U.S. Patent No. 5,153,050, which relates to the manufacture of printed circuit boards. The Court of Appeals wrote the following explanation: "Printed circuit boards are composed of extremely thin sheets of conductive copper foil joined to sheets of a dielectric (nonconductive) resin-impregnated material called ``prepreg.´´ The process for making multi layered printed circuit boards stacks sheets of copper foil and prepreg in a press, heats them to melt the resin in the prepreg, and thereby bonds the layers. In creating these circuit boards, workers manually handle the thin sheets of copper foil during the layering process. Without the invention claimed in the '050 patent, stacking by hand can damage or contaminate the fragile foil, causing discontinuities in the etched copper circuits. The '050 patent claims an assembly that prevents most damage during manual handling. The invention adheres the fragile copper foil to a stiffer substrate sheet of aluminum. With the aluminum substrate for protection, workers can handle the assembly without damaging the fragile copper foil."
Defendants' Products. The defendants are R.E. Service Company, Inc. and Mark Frater (RES). In 1997 RES began making laminates for manufacture of printed circuit boards which joined copper foil to a sheet of steel as the substrate instead of a sheet of aluminum.
District Court. JJA filed a complaint in U.S. District Court (NDCal) against RES, alleging infringement of the 050 patent. The District Court granted RES summary judgment of no literal infringement. As for the doctrine of equivalents, RES argued that the 050 specification, which disclosed a steel substrate but did not claim it, constituted a dedication of the steel substrate to the public. JJA argued that the steel substrate was not dedicated to the public. The District Court denied RES's motion for summary judgment on this issue. The jury then found RES liable for willful infringement under the doctrine of equivalents and awarded JJA $1,138,764 in damages. The District Court doubled JJA's damages, pursuant to 35 U.S.C. § 284, and awarded attorney fees and expenses under 35 U.S.C. § 285. RES appealed.
Court of Appeals. A three judge panel of the Appeals Court heard oral argument on December 7, 1999. The Appeals Court then set the matter for rehearing en banc. This oral argument took place on October 3, 2001. The Appeals Court issued its collection of opinions on March 28, 2002. The Court issued a per curiam opinion, in which Mayer, Archer, Michel, Lourie, Clevenger, Rader, Schall, Bryson, Gajarsa, Linn, Dyk, and Prost joined, reversing the District Court. Newman wrote a solo dissent, in which she argued that the majority wrote new law, and overruled the Supreme Court opinion in Graver. Rader wrote a separate opinion, in which Mayer joined, which concurred as to the result, but offered an alternative reasoning, involving foreseeabilty. Lourie wrote a separate opinion on Rader's opinion. Clevenger wrote an opinion, in which Lourie, Schall, Gajarsa and Dyk joined, which rebutted Newman's dissent, and argued that the majority opinion is not new law. Dyk wrote an opinion, in which Linn joined, which argued that the majority opinion is consistent with Graver.
The Appeals Court heard the case en banc because of a conflict between two of its opinions: Maxwell v. J. Baker, 86 F.3d 1098 (1996), and YBM Magnex v. Int'l Trade Comm'n, 145 F.3d 1317 (1998). It held that "To the extent that YMB Magnex conflicts with this holding, this en banc court now overrules that case."
The majority concluded that RES, as a matter of law, could not have infringed the '050 patent under the doctrine of equivalents. It wrote that, "Having disclosed without claiming the steel substrates, Johnston cannot now invoke the doctrine of equivalents to extend its aluminum limitation to encompass steel. Thus, Johnston cannot assert the doctrine of equivalents to cover the disclosed but unclaimed steel substrate."
Newman Dissent. Judge Pauline Newman wrote the Court's opinion in YBM Magnex, and dissented vigorously from its being overturned. She wrote that "Instead of deciding this appeal on the basis on which it reaches us -- that is, whether to sustain the jury verdict that stainless steel and aluminum are equivalent substrates for copper foil laminates -- my colleagues launch yet another assault on the doctrine of equivalents. The court today holds that there is no access to equivalency for any subject matter that is disclosed in a patent specification but not claimed. Thus the court establishes a new absolute bar to equivalency, a bar that applies when there is no prosecution history estoppel, no prior art, no disclaimer, no abandonment."
She continued that "The court overrules not only its own decisions but also those of the Supreme Court, and reaches out to create a new, unnecessary and often unjust, per se rule. This decision jettisons even the possibility of relief when relief is warranted, and further distorts the long established balance of policies that undergird patent supported industrial innovation. It is self evident that the placement of an increasing number of pitfalls in the path of patentees serves only as a deterrent to innovation."
She added that "Even were this court expert in its understanding of technology policy and innovation economics, we have no authority to change the precedent that binds us. This en banc court has placed itself in egregious conflict with the Supreme Court's decisions in" Graver Tank and Warner Jenkinson.
See also, amicus curiae brief [PDF] of the American Intellectual Property Law Association (AIPLA).
FCC Creates Advisory Committee
3/28. The Federal Communications Commission (FCC) announced the creation of a federal advisory committee named the Media Security and Reliability Council (MSRC). The FCC stated in a release that the MSRC "will study, develop and report on best practices designed to assure the optimal reliability, robustness and security of the broadcast and multichannel video programming distribution industries."
Dennis FitzSimons, P/COO of Tribune Company, will be its first chairman. The Designated Federal Official (DFO) of the MSRC will be Barbara Kreisman. She is the Chief of the Video Division of the FCC's Media Bureau. Susan Mort, an Attorney Advisor in the Policy Division of the Media Bureau, will be the Deputy DFO.
People and Appointments
3/28. Peter Bonfield, Lena Torell and Michael Treschow were elected as new Directors of the Board of Ericsson. The new Board of Directors elected Treschow as Chairman. Tom Hedelius and Marcus Wallenberg were re-elected Vice Chairmen. See, Ericsson release.
FTC Backs Internet Sales of Contact Lenses
3/27. The Federal Trade Commission (FTC) filed a comment with the State of Connecticut regarding the sale of disposable replacement contact lenses over the Internet. The FTC wrote that "requiring stand alone sellers of replacement contact lenses to obtain Connecticut optician and optical establishment licenses would likely increase consumer costs while producing no offsetting health benefits" and "serve as a barrier to the expansion of Internet commerce".
The FTC noted that "competition has increased dramatically in the eye care marketplace since the 1970s", since the Supreme Court's decision in Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 78 (1976). The FTC continued that "The most recent step in the evolution of this market, and the one that brings us to the current controversy, is the development of stand alone sellers of replacement contact lenses. Such firms tend to focus on the sale of replacement lenses. They do not sell eyeglasses. They do not fabricate lenses or fit them to the eye ... Many of these businesses are located in a single state but ship orders to customers nationwide."
The FTC first noted that "In contrast to prescription drugs, virtually no consumer is likely to try to ``self prescribe´´ vision correcting contact lenses." Rather, wrote the FTC, "the medical purpose of the prescription requirement (aside from describing the proper lenses) is to induce the customer to have regular eye exams -- not to control where the customer may purchase replacement lenses with a valid prescription." (Parentheses in original.) The FTC concluded that there is "no systematic evidence that sales through alternative channels, such as Internet or mail order, pose any additional health risk as long as the retailer sells in accordance with a valid prescription."
The FTC wrote that "A variety of other laws and regulations help protect contact lens consumers and ensure that customers purchasing contact lenses from sources other than doctors receive the lenses that are specified in the prescription." It also stated that "Consumers have relatively easy recourse if an Internet or mail order firm fails to deliver the proper lenses. Unlike the situation with prescription drugs, consumers can easily determine if they have received the correct product by checking the box to ensure that it matches the prescription. In some instances, even if the consumer does not notice that he or she received the incorrect product, the customer may well discover the error when trying to wear the lenses. The customer can then simply remove the incorrect lens. Obviously, this does not rise to the kind of serious risk of harm as would occur if a consumer took the wrong prescription drug."
The FTC's comment concludes that "we believe that requiring stand alone sellers of replacement contact lenses to obtain Connecticut optician and optical establishment licenses would likely increase consumer costs while producing no offsetting health benefits. Indeed, such licensing could harm public health by raising the cost of replacement contact lenses, inducing consumers to replace the lenses less frequently than doctors recommend or to substitute other forms of contact lenses that pose greater health risks. An overly narrow interpretation of Connecticut law on these issues will likely have two significant detrimental effects: (1) it will restrict the choices available to Connecticut consumers, raise their costs, and reduce their convenience unnecessarily, and (2) it will serve as a barrier to the expansion of Internet commerce in the State of Connecticut. Current federal and state prescription requirements and consumer protection laws are sufficient to address the health problems associated with contact lens use. Such requirements can be implemented in ways that are either procompetitive or anticompetitive, and the FTC staff urge the Board to implement the prescription requirement in a way that protects consumers health, promotes competition, and maximizes consumer choice."
On March 13, 2002, the Progressive Policy Institute (PPI) released a related report [PDF] that addressed state regulation of e-commerce. It included a section on sale of contact lenses. This report concluded that "Buying contact lenses online can provide consumers with substantial savings. In addition, purchasing lenses online appears to pose no health risks, and in fact in some cases, may improve health since patients may replace older lenses more often. However, depending on the state in which they live, consumers may find it very easy or virtually impossible to buy contact lenses online."
However, this PPI report also found that "Under the guise of patient protection, optometrists and other contact lens providers have successfully lobbied in many states for laws that limit online competition. Fifteen states effectively prohibit competition from online lens providers. For example, Georgia requires contact lenses to be dispensed through a face to face transaction. Texas' law essentially prohibits purchasing contact lenses over the phone or through the Internet. Similarly, New Mexico requires that only a New Mexico licensed physician or optometrist can sell and dispense contact lenses."
The staff of the FTC's Office of Policy Planning and the Bureau of Consumer Protection submitted the comment as an intervenor. Connecticut's Department of Public Health, and its Board of Examiners for Opticians, are conducting a proceeding titled "In Re: Declaratory Ruling Proceeding on the Interpretation and Applicability of Various Statutes and Regulations Concerning the Sale of Contact Lenses". The FTC approved the filing of these comments by a vote of 4-0.
Walter Hewlett Sues Hewlett Packard Over Merger Vote
3/28. Walter Hewlett filed a complaint in Delaware Chancery Court against Hewlett Packard (HP) regarding its solicitation of votes for approval of the merger of HP and Compaq.
HP issued a release in which it stated that "We believe this suit is completely without merit and intend to vigorously defend it. We find it regrettable that Mr. Hewlett has chosen to resort to baseless claims without regard to the impact of his false accusations on HP's business reputation and employees. We continue our progress in planning for a successful integration of our merger with Compaq. We look forward to the receipt of the certified vote result from the HP shareowner meeting, which we expect within a few weeks."
See also, release [PDF] issued by group titled "Vote No on HP Compaq", which states that "Walter B. Hewlett, individually and as Trustee of the William R. Hewlett Revocable Trust, and Edwin E. van Bronkhorst as co-trustee of the William R. Hewlett Revocable Trust, today filed a complaint in the Delaware Chancery Court against Hewlett Packard Company (NYSE: HWP). The complaint raises issues about the process by which Hewlett Packard solicited votes for the approval of the proposed merger with Compaq Computer Corporation (NYSE: CPQ) -- particularly from large institutional stockholders including Deutsche Bank."
More News
3/28. Federal Trade Commission (FTC) extended its deadline to submit comments regarding proposed changes to its Telemarketing Sales Rule (TSR) to April 15 . See, notice to be published in the Federal Register, and FTC release.
3/29. The U.S. Patent and Trademark Office (USPTO) published in its web site the USPTO Business Plan: February 2002 [37 pages in PDF].
Friday, March 29
Good Friday.
The House and Senate are both in recess for the Spring District Work Period. Both bodies will return on Monday, April 8.
The Library of Congress's THOMAS web site will be unavailable from 6:00 AM to 1:00 PM due to system testing.
Extended deadline to submit public comments to the FTC regarding the use of disgorgement as a remedy for competition violations, including those involving the Hart Scott Rodino Premerger Notification Act, FTC Act, and Clayton Act. See, original FTC release and Federal Register notice, and FTC release and Federal Register notice extending deadline from March 1 to March 29.
Deadline to submit comments to the Federal Trade Commission (FTC) regarding proposed new Privacy Act system of records. This system, if adopted, would include telephone numbers and other information pertaining to individuals who have informed the Commission that they do not wish to receive telemarketing calls. See, notice to be published in the Federal Register.
Monday, April 1
The Supreme Court of the U.S. will go on recess until Monday, April 15.
The USTR will hold a hearing regarding negotiation of a U.S. Singapore Free Trade Agreement. The USTR stated in its notice in the Federal Register that the agreement is "expected to include provisions on trade in services, investment, trade related aspects of intellectual property rights, competition, government procurement, electronic commerce, trade related environmental and labor matters, and other issues."
10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Philip Jackson v. Casio PhoneMate, No. 01-1456, a patent infringement case involving telephone answering machines. The U.S. District Court (NDIll) granted summary judgment to Casio. Location: Courtroom 201, LaFayette Square, 717 Madison Place, NW.
EXTENDED TO APRIL 22. Deadline to file reply comments with the FCC in response to its notice of proposed rulemaking (NPRM) regarding the appropriate regulatory requirements for incumbent local exchange carriers' provision of broadband telecommunications services. The FCC adopted this NPRM at its December 12 meeting. This is CC Docket No. 01-337. See, notice in the Federal Register See, Order [PDF] extending deadline to April 22.
Deadline to submit written requests to participate as a panelist in the workshop to be hosted by the FTC on May 16 and 17 to explore issues relating to the security of consumers' computers and the personal information stored in them or in company databases. See, notice in Federal Register.
Tuesday, April 2
10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Netscape Communications v. Allen Konrad, No. 01-1455. Location: Courtroom 201, LaFayette Square, 717 Madison Place, NW.
1:00 PM ET. The FTC will hold a press conference to announce an international law enforcement initiative targeting deceptive spam and Internet fraud. See, FTC release. Location: the press conference will be held at the FTC office at 915 Second Ave., Suite 2896, Seattle, Washington. There will be a video link at the FTC headquarters, 600 Pennsylvania Ave., NW, Room 481.
2:00 PM. The Institute for Health Freedom will hold a press conference regarding medical privacy. For more information, contact Sue Blevins at 202 429-6610. Location: Lisagor Room, National Press Club, 529 14th St. NW, 13th Floor.
Wednesday, April 3
10:00 AM. Texas Instruments will sponsor an event titled High Tech Broadband Coalition Conference. For more information, contact Dan Larson at 202 628-3133. Location: Lisagor Room, National Press Club, 529 14th St. NW, 13th Floor.
12:15 PM. The FCBA's International Practice Committee will host a brown bag lunch. The speakers will be Tom Tycz (Chief of the FCC's International Bureau's Satellite Division), James Ball (Chief of the FCC's International Bureau's Policy Division), and Kathryn O'Brien (Chief of the FCC's International Bureau's Strategic Analysis and Negotiations Division). RSVP to Laurie Sherman at 202 223-7365 or Patricia Paoletta at 202 719-7532. Location: FCC, 445 12th Street, SW, Conference Room 6-B516.
Thursday, April 4
8:30 AM - 5:30 PM. Day one of a two day event hosted by the Department of Commerce's (DOC's) National Telecommunications and Information Administration (NTIA) titled "Spectrum Summit". The summit will address spectrum allocation and efficiency, the spectrum requirements of new technologies, and regulatory processes. See, NTIA notice and notice in Federal Register. Location: auditorium, Department of Commerce, 1401 Constitution Ave., NW.
2:00 - 4:00 PM. There will be a meeting of the FCC's Advisory Committee for the 2003 World Radiocommunication Conference. See, FCC notice [PDF], and notice in Federal Register. Location: FCC, Commission Meeting Room, Room TW-C305, 445 12th Street, SW.
4:00 PM. Dan Burk (Professor, University of Minnesota Law School) will give a lecture titled "Anti Circumvention Misuse". He will review the history of the equitable misuse doctrine in the context of patents and copyrights, and argue that the DMCA anti circumvention right is a new form of intellectual property that should be subject to the equitable misuse doctrine. For more information, contact Prof. Robert Brauneis at rbraun or (202) 994-6138. Location: The George Washington University Law School 720 20th Street, NW.
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