Ajinomoto Co. v. ITC, 2009-1081 (Fed. Cir. Mar. 8, 2010)

In a rare best mode case, the Federal Circuit confirmed invalidity of two patents for failure to disclose the best mode.  The claims at issue claimed methods of producing L-lysine with E. coli genetically engineered with mutations of either the gene responsible for inhibiting further lysine production once a certain amount has been produced or the gene responsible for  breaking down excess lysine.  Each claim had steps of cultivating the mutated microorganism to produce L-lysine and collecting the L-lysine.  The patents described preparing mutant strain having these modifications that were deposited in an international depository.  The patents did not describe, however, that these strains has two additional genetic modifications to encode an enzyme in the synthesis and to allow use of sucrose as a carbon source in the synthesis.  Because the claims were for “producing L-lysine,” and because these two additional, undisclosed features were part of the inventor’s contemplated best mode for carrying out the claimed process—producing lysine—the requirement to disclose best mode had not been met.

The patentee argued that “best mode” was limited to production of lysine by the claimed genetic mutations; however, the claimed invention was a process of making lysine by cultivating genetically altered E. coli, and this process was admittedly enhanced by the other, undisclosed features.  The inventors were obligated to disclose the preferred bacterial strain they used to practice the invention, as well as the undisclosed modification that allowed them to use sucrose.

Practice tip: There is no “gist of the invention” doctrine for best mode.

A JMOL on validity of the dependent claims to cure an inconsistent jury verdict for obviousness of  claims dependent on nonobvious  independent claims could not stand because the district court’s basis for finding nonobviousness, that the asserted prior art was not analogous to the invention, was faulty.  Both the prior art and the invention pertained to cooling computers and electronic components.  The evidence supported the jury’s decision that the dependent claims were obvious, so the Federal Circuit remanded for a new trial on invalidity.  Just six months earlier the Federal Circuit dealt with another such inconsistent jury finding in Callaway Golf Co. v. Acushnet Co., 576 F.3d 1331, 1344 (Fed. Cir. 2009).

On claim construction issues, the court held that when the patent specification does not provide or suggest a particular definition for a term (here, “case”), interpretation may use a general dictionary definition.  There is an inference that different terms (“drive bay” versus “drive bay  slot”) are used to mean different things; here, intrinsic evidence supported giving the terms different meanings (amendment made during prosecution distinguishing prior art made prior art’s use of “slot” significant).

 Comparer Corp. v. Antec, Inc., 2009-1248, -1249 (Fed. Cir. Mar. 1, 2010)

A divided Federal Circuit panel affirmed summary judgment that claims in Media Tech’s two patents to trading cards with attached items or fragments of memorabilia were obvious over prior art that had been considered in reexamination proceedings: a Marilyn Monroe trading card with diamond, hotel stationary with piece of sheet one of the Beatles slept on, a holy card of a Capuchin friar with attached piece of his clothing, and a James Dean greeting card with jeans material. (In an interesting decision on petition to dismiss the reexamination because the unique cards with attached objects were not “printed publications,” the PTO held there was a “colorable argument” that they were so that the reexamination could proceed; the patent owner would be able to raise the issue again on appeal. The decision noted evidence showed public availability and accessibility. Reexamination certificates were issued without an appeal being taken.) The panel found the claims obvious as an expert opinion showed sports card designers adopted ideas from other card genres, with no mention of the PTO’s decision to issue reexamination certificates after considering the same prior art.

Media Tech argued inability to predict a trading card would convey authenticity to the memorabilia, but the court held acceptance was due to the history and reputation of the trading card industry. Media Tech also argued “unpredictable solution,” but the court found the variations available to present a trading card and memorabilia were limited by a card’s dimensions. The patentee’s combined secondary objective evidence of long-felt need and failure of others, commercial success, initial skepticism and later industry recognition, and unexpected results failed to weigh in favor of patentability. Success of cards with non-memorabilia attachments refuted the failure of others claim, while the commercial success of the memorabilia cards could have been attributed to other factors like the particular assembly or packaging of the cards. The panel dismissed the unexpected results argument as arguing instead that the commercial success was unexpected, and did not discuss the evidence of initial skepticism and later industry recognition.

In dissent, Judge Rader berated the majority for harboring a bias against low-tech inventions. He characterized the prior art as “wholly irrelevant” and the secondary indicia, particularly the evidence of initial skepticism and later industry accolades that the panel had not deigned to discuss, as “significant.” At the least, Judge Rader found the record undeserving of summary judgment.

Media Technologies Licensing, LLC. v. Upper Deck Co., 2009-1022 (Fed. Cir. Mar. 1, 2010)

Pension Committee of the Univ. of Montreal Pension Plan et al. v. Banc of America Securities, LLC, et al., — F.R.D. —–, 2010 WL 184312 (S.D.N.Y. Jan. 15, 2010)

The Southern District of New York’s Judge Scheindlin, who issued the influential Zubulake series of opinions in 2003, has again issued an opinion and order addressing litigants’ duty to collect and preserve electronic documents such as emails and word processing documents (“ESI”).  In this recent decision, Judge Scheindlin found that litigation hold letters issued by counsel, which direct clients to preserve and collect ESI that is relevant to the case, are now the accepted standard of conduct such that “the failure to issue a written litigation hold constitutes gross negligence because that failure is likely to result in the destruction of relevant information.” (first emphasis supplied by the Court).  The Court also stated that such a litigation hold letter must do more than direct employees to preserve information; it must also provide instructions as to how to effect both this preservation and the collection of potentially relevant ESI.

In addition to addressing the sanctions related to the duty to preserve evidence, Judge Scheindlin’s opinion discusses levels of culpability—from negligence, to gross negligence, to willfulness—in the discovery context, and also the appropriate burden-shifting parameters in determining whether an adverse inference jury instruction is appropriate.  The Court also stated that the mere fact that a destroyed document was “relevant” under the Federal Rules of Evidence is not sufficient to support an adverse inference sanction; rather, the “innocent party” must show prejudice due to the destruction.  Moreover, the spoliating party is then given the opportunity to rebut this showing of prejudice.

Based on the facts of this case, Judge Sheindlin found that some of the plaintiffs in this securities action had been either negligent or grossly negligent in failing to properly preserve ESI, such that monetary sanctions and jury instructions permitting adverse inferences based on the absence of certain evidence were appropriate.

Suppose you represent a company whose former employee has either started a competing company or now works for a competitor.  Unfortunately, the company did not have a non-compete agreement with this employee and, perhaps it is unclear whether the former employee has misappropriated any “trade secrets” belonging to the employer.  What can you do?  One possibility is to consider the actions of the former-employee before he or she left the company.  Did the employee go beyond mere planning and preparation and actually compete or aid the competitor while still employed?  If the answer is, yes, then you may have a cause of action for breach of the duty of loyalty.

What is the Duty of Loyalty?

In the context of the employer-employee relationship, the duty of loyalty requires an employee, while employed, not to act contrary to the employer’s interests.[i]  In the “most common manifestation of the duty,” the duty of loyalty prohibits an employee from aiding a competitor, or competing themselves with the current employer, while still employed.[ii]  Employees, while still employed, may plan and prepare to compete, including agreeing to start a competing business, but they may not go beyond the planning stages and engage in active competition or employ confidential information of their current employer.[iii]

While this might seem to restrict a relatively narrow field of activity, the duty of loyalty is broad in the sense that it applies to all employees, regardless of their title, rank, or pay grade.  There is no special relationship (beyond employer-employee) required to trigger the duty, and the duty applies even in the absence of written non-compete or confidentiality agreements.  Moreover, as indicated above, this is only the “most common manifestation of the duty.”  Though it is unclear under Missouri law what other manifestations of the duty may be, the astute practitioner should consider whether any act taken by the former employee was contrary to the employer’s interest and might support the cause of action.[iv] 

Note, too, that non-compete and confidentiality agreements do not preclude a claim for breach of the duty of loyalty.  Ideally, a company would have its employees sign a well-crafted intellectual property agreement that places reasonable restraints on competition, protects trade secrets and confidential information, and addresses the company’s ownership of inventions and works of authorship, etc. . . .  In that model circumstance, a claim for breach of the duty of loyalty may be only one of several claims that could be brought against a wayward employee.  

History of the Doctrine in Missouri

The existence of a “duty of loyalty”, and the potential for a cause of action based on a breach of this duty, was recognized back in 1966 in the seminal case of National Rejectors, Inc. v. Trieman, 409 S.W.2d 1 (Mo. 1966) (en banc).  Though ultimately reversing in large part the trial court’s determination of liability against the former employees, the Missouri Supreme Court in National Rejectors nevertheless indicated that every employee owes his or her employer a duty of loyalty “‘as one of the incidents of the employer-employee relationship.’”[v]  The National Rejectors court, however, also noted that there is a conflicting public policy favoring free competition and an individual’s right to “improve his socioeconomic status” and earn a living.[vi]  The court, therefore, concluded that there must be a balancing of the equities between these two rights and that “[e]ach case of this nature must be decided upon its particular facts.”[vii]

Applying these precepts, the court in National Rejectors concluded that the ex-employees in that case had committed no wrong when they secretly decided to leave the plaintiff-company and start a competing company.  Citing the Restatement, the court explained that “[t]he law recognizes that employees may agree among themselves to compete with their then employer upon termination of their employments.”[viii]  Moreover, “[s]uch employees are not limited merely to so agreeing during their employment with the employer with whom they intend to compete.  They may plan and prepare for their competing enterprises while still employed” and they may do so in secret.[ix]  For these reasons, the court found that the employee-defendants were generally not liable for covertly organizing a new corporation, obtaining equipment and beginning design work before tendering their resignations.  The court stated that while employed, an employee may “make plans for his new enterprise so long as he does not use his employer’s time or any trade secrets in so doing.”[x] 

In the years following National Rejectors, a handful of Missouri cases addressed the duty of loyalty.  The first federal court to do so was Metal Lubricants Co. v. Engineered Lubricants Co., 411 F.2d 426 (8th Cir. 1969).   In Metal Lubricants, the manager of the St. Louis division of the plaintiff-company resigned to form a competing company, taking most of the other employees of the St. Louis division with him.[xi]  In addition to claims for trade secret misappropriation and violation of the Sherman Act, the company sued for breach of the duty of loyalty.  In affirming the lower court’s denial of preliminary relief to the company-plaintiff, the Eighth Circuit found that there was no breach of the duty of loyalty.  In particular, the Court noted the total absence of evidence indicating:

(1) soliciting of plaintiff’s customers while defendants were still employed by the plaintiff,

(2) wrongfully disparaging plaintiff or plaintiff’s product or

(3) hiring of employees to obtain confidential information or trade secrets.[xii] 

Relying on National Rejectors, the court concluded that under Missouri law, “absent [a] covenant not to compete or breach of a confidential relationship, an employee is free to leave his employment and enter into competition with his former employer.”[xiii] 

After Metal Lubricants several published opinions discussed the duty of loyalty concept, but did so in the context of other causes of action.[xiv]  For example in Zemitzsch, the appellate court cited National Rejectors and Metal Lubricants, but in the context of claims of trade secret misappropriation and breach of fiduciary duty.  These other causes of action led the court to examine the former vice-president’s role within the plaintiff-company and to consider to what extent the ex-employee was a fiduciary of the company.[xv]  In so doing, the court noted that “an employer-employee relationship, without more, is insufficient to cause a confidential relationship to exist as to knowledge naturally acquired during employment.”[xvi] 

The “duty of loyalty” as a distinct cause of action faded from the discourse of Missouri cases, and it is perhaps for this reason, coupled with language from cases like the one discussed above, that in 1998 the Eighth Circuit Court of Appeals, when faced with a dismissal of duty of loyalty claims brought against former employees, concluded that “[i]f in fact Missouri recognizes a breach of a duty of loyalty, it is only within the larger class of actions of breach of a fiduciary duty.”[xvii]  The court went on to conclude that in the employer-employee context, the existence of fiduciary obligations, and any concordant duty of loyalty, depends on the existence of a confidential relationship between the employer and the employee – a relationship not found in just any employer-employee setting.[xviii]

The Scanwell Decision

In 2005, the Missouri Supreme Court corrected this mistaken-impression and re-confirmed the holding of National Rejectors that every employee owes a duty of loyalty to his or her employer and must not act contrary to that duty.[xix]  In reaching this conclusion, the Missouri Supreme Court addressed, in part, the confusion between claims for breach of fiduciary duty and claims for breach of the duty of loyalty.  The court explained that “[a]lthough the law is unclear whether or to what degree the two concepts overlap, in this case the question need not be resolved.  In the employer-employee relationship, this Court, drawing on the Restatement (2d) of Agency, has implicitly recognized a separate cause of action for breach of the duty of loyalty” and the court found that it was this separate cause of action that was implicated in the case.[xx] 

In Scanwell, the defendant was a former general manager of the plaintiff-company.  While still employed by Scanwell, the defendant made arrangements with Dimerco, a Scanwell competitor, to open a Dimerco office in St. Louis.  At Dimerco’s request, the general manager also created a business plan and arranged for Dimerco to take over Scanwell’s lease when it expired; a lease that the defendant had originally obtained for Scanwell, and that defendant let lapse without bringing the impending expiration to the attention of anyone at Scanwell.  Five days after signing the lease on behalf of Dimerco, the general manager tendered her resignation.[xxi] 

Though reversing the judgment for Scanwell based on an improper jury instruction, the Missouri Supreme Court held that the plaintiff had made out a submissible case for breach of the duty of loyalty.[xxii]  Noting that the case, in fact, involved the “most common manifestation” of the duty of loyalty (i.e. an allegation for breach of the duty of loyalty presented in the context of an employee acting in competition), the court explained that while an employee may make arrangements to compete, he may not “use confidential information peculiar to his employer’s business and acquired therein” nor may he “solicit customers for such rival business before the end of his employment” or otherwise act in direct competition, as “even ‘slight assistance to a direct competitor can constitute a breach of the employee’s duty of loyalty.’”[xxiii]  Based on the facts presented, the court found that a jury issue existed as to whether the duty of loyalty was breached. 

Importantly, liability also potentially existed for Dimerco, the competitor that hired the ex-Scanwell employee.  Though the court said little about this, the jury had awarded Scanwell $54,000 in damages from the ex-employee, and $254,000 from the competitor, Dimerco, under a conspiracy theory.  Though also reversing the award against Dimerco because it was “derivative” of the breach of duty of loyalty claim, the court implicitly approved of the result had the correct jury instruction been employed.  On remand, the court directed that a proper definitional instruction must set out the following elements: 

1) [i]n general, an employee must not, while employed, act contrary to the employer’s interest;

2) however, an employee may agree with others to compete upon termination of employment and may plan and prepare for their competing enterprise while still employed; and

3) but an employee may not, while still employed, go beyond mere planning and preparation and act in direct competition with the employer.[xxiv]     

The Post-Scanwell Landscape

Since Scanwell, a few cases have addressed the duty of loyalty, though several only in cursory way due to the nature of the claims or the type of review at issue in those cases.[xxv]  One case to look at the doctrine in more depth was Synergetics, Inc. v. Hurst, 477 F.3d 949 (8th Cir. 2007).  In Synergetics, two high-level sales associates, while still employed by the plaintiff-company, decided to form a competing business.  As part of this plan and while still employed, the sales associates (1) entered into a confidentiality agreement with a manufacturer (that was also a manufacturer for Synergetics) so that they could discuss the production of competitive products, (2) contacted Synergetics’ customers to discuss formation of the new company and (3) hired a prototype maker, who was also a consultant for Synergetics and who used spare parts belonging to Synergetics, to make competing products.[xxvi] 

Following the sales associates’ departure and incorporation of a competing company, Synergetics filed suit against them, ultimately trying to a jury claims of trade secret misappropriation, breach of confidentiality agreements (but not non-compete agreements which were not at issue in the case), tortious interference and breach of the duty of loyalty.[xxvii]  In affirming the judgment in favor of Synergetics on all counts, the Eighth Circuit confirmed that the evidence supported the verdict for breach of the duty of loyalty:

When viewed in the light most favorable to the verdict, it is clear that the Appellants’ actions violated their duty of loyalty to Synergetics.  Appellants used confidential trade secret information to begin the design of competitive products, used pricing and product information to target Synergetics’ customers, and began solicitation of Synergetics customers prior to the termination of their employment.[xxviii] 

Relying on Scanwell and the Restatement, the Eight Circuit emphasized that though permitted to make preparations to compete, an employee may not use confidential information peculiar to or acquired from his employer, or solicit customers for the competing enterprise.[xxix] 

Another development since Scanwell is codification of a form instruction on the duty of loyalty.  Effective January 1, 2006 the Missouri Approved Jury Instructions included a new verdict directing form for breach of the duty of loyalty by an employee.  The instruction, re-produced below, is as follows:

23.14 [2006 New] Verdict Directing—Employee’s Breach of Duty of Loyalty (Approved August 30, 2005; Effective January 1, 2006)

Your verdict must be for plaintiff if you believe;

First, defendant was employed by plaintiff, and 

Second, while so employed, defendant (here describe the act(s) alleged to be beyond mere planning and preparation for a competing enterprise that constitute direct competition with the plaintiff), and

Third, defendant thereby went beyond mere planning and preparation and acted in direct competition with plaintiff, and

Fourth, as a direct result of such conduct, plaintiff sustained damage. *[unless you believe plaintiff is not entitled to recover by reason of Instruction No. _____ (here insert number of affirmative defensive instruction)][xxx]

Interestingly, while this instruction allows some flexibility to describe the acts alleged to go beyond mere planning and preparation, the instruction generally contemplates only a scenario in which it is alleged that the former employee competed with the former employer.  Other possible breaches of loyalty, i.e. breaches of other “manifestation[s] of the duty of loyalty” are not addressed.  What these other manifestations of the duty may be or the boundaries of these manifestations is not clear.  For example, could an employee breach his duty of loyalty without the element of competition?  What if in Scanwell, the office manager had allowed the lease to expire not for the purpose of aiding a competitor, but instead out of a motive for deliberate sabotage?  Though the Missouri Supreme Court’s language in Scanwell would seem to suggest that this scenario could breach the duty of loyalty (as an action contrary to the employer’s interests), the new jury instruction does not fit that factual scenario. 

As a practitioner, then, the new jury instruction should be seen as a guide to only the most common breach of the duty of loyalty scenario, and care should be taken to consider any action by an employee that was contrary to the employer’s interests. 

Conclusion

Though employees, absent a non-compete agreement, are free to compete with former employers upon termination of the employment relationship, employees may not go beyond mere planning and preparation while still employed.  To the extent they do, the Missouri Supreme Court has empowered employers to take action against them for breach of the duty of loyalty, and, as an advocate, the doctrine can serve as an effective tool in obtaining relief for your client-companies when employees have acted contrary to the employers’ interests.

*Reprinted with permission of the Bar Association of Metropolitan St. Louis and the St. Louis Bar Journal.

[i]   See Scanwell Freight Express STL, Inc. v. Chan and Dimerco Express (U.S.A.) Corp., 162 S.W.3d 477, 479-481 (Mo. 2005) (citing Restatement (Second) of Agency §387 (1958) and National Rejectors v. Trieman, 409 S.W.3d 1 (Mo. 1966)). 

[ii]   Id.  

[iii]   Id.; see also Synergetics v. Hurst, 477 F.3d 949, 959 (8th Cir. 2007); Restatement (Second) of Agency §393, cmt. e (1958).

[iv]   This article focuses on Missouri jurisprudence and the duty of loyalty as it is articulated here.  According to a leading treatise, “[t]here is some dispute over the nature and extent of an employee’s duty of loyalty to his or her employer,” depending on whether the courts of that jurisdiction maintain that a disloyalty claim must be based on a breach of a fiduciary duty or not. See Richard A. Lord, 19 Williston on Contracts § 54:26 (4^th ed. 2006) (citing case examples by jurisdiction).  If you represent a company in another jurisdiction and another state’s law applies, you will want to research the law of that jurisdiction carefully to gain an understanding of the types of activities that courts in that specific jurisdiction have found violate the duty, as well as, the types of employment relationships that have formed the basis of successful claims.

[v]   National Rejectors, 409 S.W.3d at 41 (quoting Midland-Ross Corp. v. Yokana, 293 F.2d 411, 412-13 (3d Cir. 1961) and citing Restatement (Second) of Agency § 387).

[vi]   Id. at 39. 

[vii]  Id. at 39-40.

[viii]   Id. at 26 (citing Restatement (Second) of Agency § 393, cmt e (1958)).

[ix]   Id. at 26-27.

[x]   Id. at 52.

[xi]   Metal Lubricants Co. v. Engineered Lubricants Co., 411 F.2d 426, 427-28 (8th Cir. 1969).

[xii]   Id. at 431. 

[xiii]   Id. at 429-30. 

 [xiv]   See, e.g., Thau-Nolde, Inc. v. Krause Dental Supply & Gold Co., Inc., 518 S.W.2d 5 (Mo. 1975) (discussing employee duty in context of cause of action for conspiracy in violation of antitrust laws); Salomon v. Crown Life Insurance, 536 F.2d 1233 (8th Cir. 1976) (discussing employee duty in context of tortious interference claim); Zemitzsch v. Harrison, 712 S.W.2d 418 (Mo. Ct. App. 1986) (discussing employee duty in context of trade secret misappropriation, unfair competition and breach of fiduciary duty claim); Dwyer, Costello and Knox, P.C. v. Diak, 846 S.W.2d 742 (Mo. Ct. App. 1993) (discussing employee duty in context of breach of fiduciary duty claim).

[xv]   Zemitzsch v. Harrison, 712 S.W.2d 418, 421 (Mo. Ct. App.1986)

[xvi]   Id.

[xvii]   Pony Computer, Inc. v. Equus Computer Sys. of Mo., 162 F.3d 991, 999 (8th Cir. 1998).

[xviii]   Id.

[xix]   See Scanwell Freight Express STL, Inc., 162 S.W.3d at 479-80.

[xx]   Id. at 479 (citing National Rejectors, Inc., 409 S.W.2d at 41).

[xxi]   Id. at 478-81.

[xxii]   Id.  480-82.

[xxiii]   Id. at 480 (quoting Restatement (Second) of Agency, § 393, cmt e and Cameco, Inc. v. Gedicke, 724 A.2d 783, 789 (1999)).

[xxiv]   Id. at 481.

[xxv]   See, e.g., Terminix Inter’l Co. v. Ferrario, 2006 WL 2546814 (E.D. Mo.  Aug. 31, 2006) (discussing duty of loyalty only in context of deferential standard of review of arbitration award); Healthcare Service of the Ozarks, Inc. v. Copeland, 198 S.W.3d 604, 610, n.3 (Mo. 2006) (en banc) (contrasting non-compete agreements with duty of loyalty); In re McGregory, 340 B.R. 915, 920 (8th Cir. 2006) (examining duty of loyalty in context of conflict of interests).

[xxvi]   Synergetics, Inc, 477 F.3d at 953-54.

[xxvii]   Id. at 954, 957-59.

[xxviii]   Id. at 959.

[xxix]   Id.

[xxx]   Mo App’d Jury Instruct (Civil) 23.14 (6^th ed. 2007).

Week of January 18, 2010

United States Patent No: 7,649,131                 

Issue Date: January 19, 2010

Title: Wind Instrument Stand

Inventor: Tsung-Yao Yu, Daya Township, Taichung County, Taiwain

Other Musical Instrument Utility Patents Issued on Jan. 19, 2010

7,650,468  Device For Processing Access Concurrence To Shared Memory

7,649,137  Signal Processing Apparatus And Method, Program, And Recording Medium

7,649,136  Music Reproducing System For Collaboration, Program Reproducer, Music Data Distributor And Program Producer

7,649,135  Sound Synthesis

7,649,134  Method For Displaying Music Score By Using Computer

7,649,133  Striking Member For Use With A Percussion Instrument

7,649,132  Snare Drum Assemblies, Including Assemblies With Flexible Snare Anchors, And Associated Methods

7,648,416  Information Expressing Method

 Musical Instrument Design Patents Issued on Jan. 19, 2010

D608,386  Rear mounted tremolo bar

Musical Instrument Patent Applications Published on Jan. 21, 2010

20100017034  Beat Tracking Apparatus, Beat Tracking Method, Recording Medium, Beat Tracking Program, And Robot

20100011942  Laser Pick-Up For A Stringed Musical Instrument

20100011941  Automatic Recognition And Matching Of Tempo And Phase Of Pieces Of Music, And An Interactive Music Player

20100011940  Music Composition Reproduction Device And Composite Device Including The Same

20100011939  Robot

20100011938  Electronic System, Methods And Apparatus For Teaching And Examining Music

20100011937  Mouthpiece Of Brass Instrument

20100011936  Musical Instrument Vibrato Mounting Adapter Plate

United States Patent No: D607,920 

Title: Guitar pick with ergonomic shape

Inventor: Jeff Bartel, Seattle, WA

Other Musical Instrument Utility Patents Issued on Jan. 12, 2010

7,645,929  Computational music-tempo estimation

7,645,928  Bass drum system and method

7,645,927  Pitch adjustment device for string instruments

7,645,926  Fiddolin

 Musical Instrument Design Patents Issued on Jan. 12, 2010

D607,922  Electronic drum

D607,921  Electronic cymbal

Musical Instrument Patent Applications Published on Jan. 14, 2010

20100005954  Sound Sensing Apparatus And Musical Instrument

20100005953  Volume Adjusting Apparatus And Volume Adjusting Method

20100005952  Method And Apparatus For Teaching Keyboard Persons With Developmental Disabilities

20100005951  Method For Synchronizing At Least One Multimedia Peripheral Of A Portable Communication

20100005950  Crash ‘N Flash Lighting System

20100005949  Tuner With Clothes-Pin Design

20100005948  Hi-Hat Universal Foot Pedal Lock

20100005947  Musical Percussion Instrument

20100005946  Drum Shell

20100005945  Percussion Instrument With Helical Coil And Resonant Chamber

20100005944  Compensated Adjustable Nut For A Stringed Instrument

20100005943  Stringed Instrument Having Components Made From Glass

20100005942  Ergonomic Guitar

Federal Circuit vacated district court’s grant of summary judgment of noninfringement and remanded for further proceedings in accordance with its broadened claim construction.  The district court’s construction of “information transmitter” and “recognition device” was found too narrow in light of the claim language, specification, and prosecution history. 

Schindler appealed the district court’s grant of summary judgment, in favor of Otis, of noninfringement of U.S. Patent No. 5,689,094, which is directed to an elevator system including a “recognition device” that detects a user’s “information transmitter” when he/she enters a building and then dispatches an elevator to bring the user to a destination floor based on user-specific data.  Otis’s accused device requires that a user position his/her RFID card in close proximity to a reader on a lobby security turnstile, which reads the card.  An elevator is dispatched for the user and its number is displayed on the turnstile. 

The district court construed “information transmitter” to mean “a device that communicates with a recognition device via electromagnetic waves, after being actuated by that recognition device, without requiring any sort of personal action by the passenger.”  It construed “recognition device” to mean “a device that actuates and reads data transmitted by an information transmitter without requiring any sort of personal action by the passenger.”  “[W]ithout…personal action” was defined such that an accused device would not infringe if it required “any and all types of personal action,” other than simply “walking into the monitored area.”

Otis argued that its device did not infringe because it required “personal action” – passengers must use their hands to bring their card within the 3.5-inch range of the reader.  The district court agreed and granted summary judgment in its favor. 

The Federal Circuit held that the construction was too narrow – it struck “without requiring any sort of personal action by the passenger” from each construction and remanded.  It reached this conclusion after examining the claim language, specification, and prosecution history. 

Claim language:  Claim 1 requires that the transmitter be “carried by an elevator user” – a type of “personal action.”  Dependent Claim 7 recites that the information transmitter can include a building key actuated by a recognition device mounted near a “door lock” or a “time clock,” which would require the user to use his/her hands to bring the transmitter within the range of the recognition device.  Thus, the Federal Circuit concluded that the “claims appear to permit at least those types of personal action that are necessary to bring the information transmitter within range of the recognition device.”

Specification:  The term “personal action” was used only once in the specification – to explain that personal action is not required to communicate with the elevator control, not to refer to transport of the transmitter to within recognition range.  This communication was also described using the terms “hands-free,” “automatic,” and “contactless.”  The specification described a number of “personal actions” that may be used to bring the transmitter within range, such as pushing a cart with the transmitter mounted thereto and the “key” embodiment of Claim 7. 

Prosecution history:  In distinguishing the prior art, which disclosed manual operation of a transmitter by pressing buttons, Schindler described its invention as operating “automatically, contactlessly, and independently of the orientation of the information transmitter.”  The Federal Circuit held that these terms modify actions that take place only after the passenger has brought the transmitter within range of the recognition device.  It disagreed with the district court’s conclusion that Schindler disavowed the use of a passenger’s hands for any and all purposes and held that Schindler’s prosecution statements did not constitute a “clear and unmistakable” disavowal of personal action for the limited purpose of bringing the transmitter within range of the recognition device. 

Dyk:  Concurring in the result and dissenting in part

Judge Dyk agreed that “without requiring any sort of personal action” unduly limited the scope of the claims.  But he disagreed with the majority’s interpretation of Claim 1, believing it to be too broad and not giving effect to Schindler’s disclaimer of devices that are not “hands-free” and “automatic.”  Dyk rejected the majority’s distinction between actions taken within the range of, versus outside the range of, the recognition device, finding the distinction not supported by the specification or prosecution history.  He thought that the majority should have only relied on Claim 7, which covers using a card to enter a building and simultaneously transmit user elevator data, to find that the claim limitations were satisfied by the Otis device because using the building key to call the elevator requires no additional personal action.

United States Patent No: US 7,642,439

Date of Patent: Jan. 5, 2010

Title: Electronic drum and its drum head

Inventor(s): Fujii

Assignee(s): Yamaha Corporation

Abstract: An electronic drum 30 comprises a hollow body part 10 having an opening side, a drum head stretched over the opening side of the hollow body part 10 and having a stroked surface, an elastic cushion part 40 arranged to touch with a reverse side of the stroked surface of the drum head 30, a vibration absorber 43 that is arranged inside the body part 10 and absorbs a vibration transmitted from the body part 10, and a sensor 41 that is arranged in the vibration absorber 43 to touch with the elastic cushion part 40 and outputs a result of detecting a stroke on the drum head 30 transmitted by the elastic cushion part 40. The drum head 30 is made of a lamination of a plurality of elastic films and has a plurality of holes 30h pierced thorough all layers of the laminated films.

Other Musical Instrument Utility Patents Issued On Jan. 5, 2010

Musical Instrument Design Patents Issued On Jan. 5, 2010

Musical Instrument Patent Applications Published On Jan. 7, 2010

In Wyeth v. Kappos the Federal Circuit affirmed summary judgment for Wyeth that the USPTO has been calculating patent term adjustments under 35 U.S.C. § 154 incorrectly, and that Wyeth was entitled to an additional 294 days adjustment for U.S. Patent No. 7,179,892 and an additional 386 days adjustment for U.S. Patent No. 7,189,819.

When the U.S. went to a twenty year patent term, 35 U.S.C. § 154 provided certain patent term guarantees.  § 154(b)(1)(A) provides patent term adjustments in the event of USPTO delays in acting – the “A Adjustment,” and § 154(b)(1)(B) provides patent term adjustment if the application is pending more than three years – the “B Adjustment.”  § 154(b)(2)(A) provides that to the extent the delays overlap, the adjustment should not exceed the actual delay.  A recent patentlyo.com study found that more than 75% of patents issued over the past four years were awarded additional patent term.  Looking at the 3,187 utility patents issued on January 12, 2010, patentlyo found that 80% were awarded additional patent term, the average adjustment being 14.5 months and the longest being more than six years for U.S. Patent No. 7,647,402, which would be extended almost two additional years under Wyeth.

The USPTO construed § 154(b)(2)(A) to mean that the patentee gets the longer of the A Adjustment or the B Adjustment, while Wyeth contended that the applicant gets both the A Adjustment and the B Adjustment less the time that these adjustments overlap (i.e., the amount of A Adjustment occurring more than three years after the filing date). § 154(b)(1)(C)  provides for a reduction of the adjustment for applicant-caused delays.

To illustrate the difference, Wyeth’s U.S. Patent No. 7,179,892 had 610 days of A Adjustment (51 of which occurred more than three years after the application was filed) and 345 days of B Adjustment, and 148 days of applicant-caused delay.  Using its greater of A or B construction, the USPTO calculated the adjustment as the 610 days of A Adjustment, less the 148 days of applicant-caused delay, or 462 days; while Wyeth calculated the adjustment as the 610 days of A Adjustment plus the 345 days of B adjustment less the 51 days that the A Adjustment overlapped the B Adjustment and less the 148 days of applicant-caused delay, or 756 days.

As a matter of pure statutory construction, the district court agreed with Wyeth’s interpretation of § 154, as did the Federal Circuit.

In response to the decision, the USPTO announced an interim procedure for requesting a patent term adjustment recalculation:

WASHINGTON (January 28, 2010) – The Commerce Department’s United States Patent and Trademark Office (USPTO) is providing patentees with the ability to request a recalculation of their patent term adjustment without a fee or petition as is normally required pending completion of necessary modifications to the USPTO’s computer program for calculating patent term adjustments.  The agency expects to complete by March 2, 2010, the software modification necessary to comply with the U.S. Court of Appeals for the Federal Circuit’s recent decision in Wyeth v. Kappos regarding the overlapping delay provision of 35 USC 154(b)(2)(A).   In the meantime, the USPTO will be processing recalculation requests under an interim procedure that is available to a patentee whose patent issues prior to March 2, 2010, and who requests it no later than 180 days after the issue date.  This procedure is available only for alleged errors in calculation that are specifically identified in Wyeth.   A copy of the notice submitted to the Federal Register for publication and the form for patentees to use in requesting a recalculation of patent term is on the USPTO Web site at http://www.uspto.gov/patents/announce/pta_wyeth.pdf.

“The USPTO is working to modify its computer program to comply with the Federal Circuit’s decision as soon as possible,” said Commissioner for Patents Robert Stoll.  “Until then, this interim procedure will enable patentees to request a recalculation quickly and at no charge.”

An applicant is entitled, subject to certain conditions and limitations, to patent term adjustment if (1) the USPTO fails to take certain actions during the examination and issue process within specified time frames; (2) if the USPTO fails to issue a patent within three years of the actual filing date of the application; and (3) for delays due to interference, secrecy order, or successful appellate review.

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[F]or patents issuing on or after March 2, 2010, a patentee who believes that the patent term adjustment calculation for his or her patent is not correct must file a request for reconsideration under 37 CFR 1.705(d) that complies with the requirements of 37 CFR 1.705(b)(1) and (b)(2) within two months of the date the patent issued. 

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Patentees are reminded that [the interim procedure] is an optional procedure, and that any patentee who wishes to preserve his or her right to review in the United States District Court for the District of Columbia of the USPTO’s patent term adjustment determination must ensure that he or she also takes the steps required under 35 U.S.C. 154(b)(3) and (b)(4) and 37 CFR 1.705 in a timely manner. 

What to do: 

(1) Any applicant who has an original, allowed application that has been pending for more than three years (i.e., potentially has both A Adjustments and B Adjustments) should double check the USPTO’s patent term adjustment calculation, and consider filing a request for reconsideration under the USPTO’s interim procedure or 35 U.S.C. § 154(b)(3)(B)(ii) and 37 C.F.R. § 1.705(a-c) if the USPTO was incorrect.

(2)  Any patentee whose patent issued in the last six months, on an original application that was pending for more that three years, should double check the USPTO’s patent term adjustment calculation, and consider filing a request for reconsideration under the USPTO’s interim procedure or 37 C.F.R. § 1.705(d) (due two months after issuance) or an appeal under 35 U.S.C. § 154(b)(4)(A) (due six months after issuance), if the USPTO was incorrect.

(3) It is unclear whether a patentee whose patent issued more than six months ago has any remedy, but if an increase in the patent term would be valuable, there are a number of possibilities to explore, including a Certificate of Correction, a Reissue, and even a Petition to the Commissioner for waiver or suspension of the rules.

Other things to look for: PCT applicants who enter the National Phase in the U.S. should watch the USPTO closely.  B Adjustment is defined as the failure to issue a patent “within 3 years after the actual filing date of the application in the United States.”  The Patent Office has been measuring this date from the entry into the national phase, not the filing of the PCT application designating the U.S (which under the PCT Treaty is supposed to have the same effect as an application filed in the U.S.), and this interpretation might also be subject to challenge.