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IP Update, August 2009 - Part 2.

Article Excerpt
Patent Unobvious If Examiner Fails to Articulate Factual Basis for Rejection

Massachusetts Attorney's Lien Statute Applies to Patent Prosecution Costs

".com" Does Not Convert a Generic Term into a Brand Name

Similarity of Marks Should Be Determined by Marks as Encountered in the Marketplace

A Champagne Toast to Reversal of Laches Decision

European Court of Justice Delivers Judgment on the Meaning of "Unfair Advantage"

Parallel Imports in China Are Forbidden for Goods Without 3C Approval

"Objectionable Material" Under CDA Means More than Just Porn

Copyright Registrations Can Be Invalidated Based on Intentional Misrepresentations of Originality

Four Factor Test when Use of Information Is Business Tort

Trade Secret Plaintiff Loses Customers to Defendant but Is Not Entitled to Damages

Patent Unobvious If Examiner Fails to Articulate Factual Basis for Rejection By Aamer S. Ahmed

The U.S. Patent and Trademark Office Board of Patent Appeals and Interferences (Board) recently reversed a final rejection in the reexamination of Competitive Technologies, Inc's. U.S. Patent No. 4,940,658, for which the U.S. Supreme Court previously granted and subsequently dismissed certiorari over a spirited dissent by Justice Breyer. The Board found the rejection of claims lacked a sufficient factual basis to support the conclusion of obviousness. Ex parte Competitive Technologies, Inc., Appeal No. 09/5519 (B.P.A.I., July 30, 2009) (Spiegel, APJ).

Illustrative claim 13 of the patent was directed to "a method for detecting a deficiency of cobalamin or folate in warm-blooded animals comprising the steps of: assaying a body fluid for an elevated level of total homocysteine; and correlating an elevated level of total homocysteine in said body fluid with a deficiency of cobalamin or folate." The '658 patent was licensed to Metabolite, which in turn sublicensed the patent to LabCorp. LabCorp originally performed total homocysteine assays under the sublicense, but later switched to an assay developed by Abbott Laboratories and discontinued royalty payments to Metabolite. In response, Metabolite sued LabCorp for infringement.

In requesting certiorari, LabCorp asserted that the '658 patent was invalid under 35 U.S.C. s.101 because it was attempting to patent a natural phenomenon. This came after a decision from the Federal Circuit rejecting LabCorp's appeal alleging that claim 13 was invalid under s.s. 112, 102 and 103.

In his dissent from the decision to dismiss certiorari, Justice Breyer contended that claim 13 was invalid no matter how narrowly the natural phenomenon doctrine is interpreted. In his view, there could be little doubt that the correlation between homocysteine and vitamin deficiency set forth in claim 13 was a "natural phenomena," citing respondent's brief for the assertion that the correlation recited in claim 13 is an observable aspect of biochemistry in at least some human populations.

Reversing the examiner's rejection of claim 13, the Board explained that the dispositive issue was whether the applied prior art teaches, or would have suggested, all of the claim limitations to one of ordinary skill in the art. The Board found that, according to the '658 patent, both cobalamin (vitamin B12) and folate deficiencies result in an elevated homocysteine level, but an elevated homocysteine level cannot distinguish between a folate and/or cobalamin deficiency. The primary reference was found to disclose a method to determine total homocysteine, but the three secondary references were not found to fairly teach or suggest a correlation between elevated total homocysteine levels and a folate deficiency, as recited in claim 13.

Basing its decision solely on the issue of obviousness under s. 103(a) and not addressing whether or not the subject matter of claim 13 was patent eligible (per Justice Breyer's dissent), the Board held that the examiner failed to provide a sufficient factual basis for her conclusion that the applied prior art teaches or suggests all of the claim limitations.

Massachusetts Attorney's Lien Statute Applies to Patent Prosecution Costs By Leigh J. Martinson

The Supreme Judicial Court of Massachusetts determined, in a case of first impression, that Massachusetts's attorney's lien statute permits placing a lien on a patent (and any proceeds later derived from that patent) for legal fees earned while representing a client before the U.S. Patent and Trademark Office (USPTO). Ropes & Gray LLP v. Jalbert, Case No. SJC-10333 (Mass. S.J.C., July 28, 2009) (Spina, J.)

R&G represented Engage, Inc. (Engage) from approximately June 2002 through May 2003 in connection with the prosecution of various patents. On June 19, 2003, Engage filed bankruptcy petitions under Chapter 11 in Massachusetts. In a filing with the Bankruptcy Court, R&G asserted that it was owed over $100,000 for patent prosecution work, secured by an attorney's lien under Massachusetts law. Engage sold off its patents and applications before and after filing under Chapter 11.

In the bankruptcy proceedings, Engage's liquidating supervisor, Jalbert, contended that the attorney's lien did not apply to patents and that the debt owed to R&G was therefore unsecured. After the bankruptcy court agreed, R&G appealed first to the U.S. District Court, which affirmed the bankruptcy court, and then to the U.S. Court of Appeals for the First Circuit, which decided to certify the following two questions to the Supreme Judicial Court of Massachusetts for its interpretation of Massachusetts law on two issues:

1. Does the statute grant a lien on patents and patent applications to a Massachusetts attorney for patent prosecution work performed on behalf of a client?

2. If the statute does grant a lien and the issued patents or patent applications are sold, does the attorney's...

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