Chisum on Patent Law Themes and Inequitable Conduct

    By Donald Zuhn --

Earlier this month, Donald Chisum (at right), who for the past 31 years has authored the patent treatise Chisum on Patents, was in Chicago to give a luncheon presentation on recent patent law developments to a group of local practitioners.  Mr. Chisum, who was professor of law at the University of Washington from 1969 to 1996 and professor of law at Santa Clara University from 1997 to 2006, is also the author of the Patent Law Digest.  Both Chisum on Patents and the Patent Law Digest are published by LexisNexis, which sponsored the luncheon.

Mr. Chisum began the presentation by noting that he had given his very first talk on patent law (outside of Seattle) at Chicago's John Marshall Law School nearly 27 years earlier.  During his latest talk, Mr. Chisum touched on a number of topics, focusing primarily on what he saw as four general themes that explain "what is going on in patent law" and discussing four recent inequitable conduct cases.  With oral argument before the Supreme Court scheduled to take place only four days after his talk, Mr. Chisum told the gathering that In re Bilski would "probably be the patent case of the century" -- with the caveat that "we're only nine years into the century."

Turning to his general themes, Mr. Chisum explained that the first was the "continuing tango" between the Federal Circuit and the Supreme Court.  He informed practitioners that this dance "made it more important than ever to think about Supreme Court precedent on a given issue."  Mr. Chisum noted that when he first started writing his treatise, he tried to identify and discuss every Supreme Court case that addressed a major patent law issue.  He recalled, however, that following the creation of the Federal Circuit in 1982, no one really seemed to care about all of those old Supreme Court cases anymore, and instead only cared about what the Federal Circuit had to say about an issue.  Stating that "now we know today that Supreme Court cases are still good precedent," Mr. Chisum opined that "the Supreme Court seems bound and determined to make sure that the Federal Circuit respects the precedent of the Supreme Court."  As a result, practitioners "need to look at Supreme Court precedent on a question even if it's ancient."  He added that because of the "tango" between the two courts, the Federal Circuit sometimes "overreacts" to the Supreme Court.  Citing the Federal Circuit's response to Medimmune, Inc. v. Genentech, Inc. as an example, Mr. Chisum said that the Federal Circuit seemed to be saying "well, everything has changed, let's start all over again."

Mr. Chisum's second theme concerned the Federal Circuit's desire to clarify certain problem areas in patent law that have provoked reform proposals, such as changing the standards for permanent injunctions, measuring damages, or proving inequitable conduct.  Moving onto the third theme -- the Federal Circuit's handling of fundamental patent law issues that "have been around for almost forever" -- Mr. Chisum briefly discussed the basic standard of obviousness in light of KSR International Co. v. Teleflex Inc., and claim interpretation following Phillips v. AWH Corp.

Mr. Chisum's final theme concerned what he called the "possible emergence of a patent restrictive bloc on the Federal Circuit."  He noted that some judges on the Federal Circuit tend to look more favorably on the importance of patent rights while others view patent rights from the perspective that they should be considered a narrow exception to the general policy of free competition.  While "we have tended to think of the Federal Circuit in its first 25 years as being generally supportive of the patent system," Mr. Chisum suggested that the Court as whole could no longer be characterized as such.  He noted that while Judge Newman believes that "patents are an important part of national policy"; Judge Dyk appears to have become more patent skeptical; and Judge Lourie, who tends to uphold patents "but only if they're narrowly drawn and very clearly and specifically disclosed," is "less easy to characterize."  Mr. Chisum pointed to Judges Rader and Moore as examples of what he called "patent law intellectuals," who "like to stir up doctrine."  Finally, he said that some judges are sui generis; for example, "it's hard to characterize Chief Judge Michel other than he writes very long opinions and seems obsessed with saving the Federal Circuit's reputation in the Supreme Court."

Mr. Chisum spent the last part of his presentation discussing four recent inequitable conduct cases:  Scanner Technologies Corp. v. ICOS Vision Systems (Fed. Cir. 2008), Star Scientific, Inc. v. R.J. Reynolds Tobacco Co. (Fed. Cir. 2008), Larson Mfg. Co. v. Aluminart Products Ltd. (Fed. Cir. 2009), and Exergen Corp. v. Wal-Mart Stores, Inc. (Fed. Cir. 2009).  He noted that collectively the cases "don't change the established elements of the inequitable conduct defense," but added that they do demonstrate the Federal Circuit's interest in addressing the "plague" of inequitable conduct charges by tightening the standards of proof and creating a higher threshold for pleading inequitable conduct.  With regard to Larson Mfg., Mr. Chisum observed that Judge Linn, in a concurring opinion, had "protested that we have way too many charges of inequitable conduct and that the problem is attributable in part to the ease with which intent to deceive is inferred."  Mr. Chisum explained that Judge Linn had "serious problems" with all three prongs of the test for inferring deceptive intent, namely (1) whether highly material information was withheld, (2) whether the applicant knew about the information and knew or should have known of its materiality, and (3) whether the applicant could provide a credible explanation for withholding the information.  Judge Linn's serious problems included defining "highly material" information; ensnaring negligent conduct through the "should have known" portion of the test; and transferring the burden of proof from infringer to the patentee with respect to providing a "credible" explanation for withholding information.

Comments

[EG]

Don,

Chisum is probably right that we need to pay a bit more attention to SCOTUS precedent, especially the recent precedent. But the trouble is that what SCOTUS has recently said is so murky and muddled that, until the Federal Circuit "refines" it, we've got no clue where the law is going. KSR International is an awful example of this problem. SCOTUS has no more clarified the standard for patentability under 35 USC 103 in KSR International than Graham did 40 years ago.

At this point, I'm hopeful, based on the Bilski oral argument, that SCOTUS won't do anything particularly "harmful" regarding "patent-eligible" subject matter under 35 USC 101. But I still "shudder" somewhat at how certain members of SCOTUS conflate (and confuse) "patent-eligible" with "patentable" under 35 USC 102/103. What would really make me "gasp" is if they took an "inequitable conduct" case. No telling what SCOTUS would do to make the standard for "inequitable conduct" unfathomable for us "mere mortal" patent attorneys.