Intellectual Property - Laurence P. Colton, Todd Williams, and Dana T. Hustins

• Publication year: 2009

Intellectual Propertyby Laurence P. Colton^* Todd Williams^** and Dana T. Hustins^***

I. Introduction

This Article surveys caselaw developments in the area of intellectual property, including patents, copyrights, and trademarks, relevant to Georgia during the 2008 calendar year. Intellectual property law comprises several discrete yet overlapping areas of law. The four primary areas of intellectual property law are patent law, trademark law, copyright law, and trade secret law.¹ Because patent law and copyright law are provided for in the united States constitution,² cases in these areas are based in federal law and are litigated in federal courts. Trademark law and trade secret law have both federal³ and state aspects, and the cases regarding these areas can be based on federal or state law. However, the more interesting cases often are litigated in the federal courts.

The Authors have not included all cases touching upon intellectual property but instead have selected decisions that are of more significance or interest or that may indicate a particular direction in the areas of law. While the cited cases often have multiple issues, the Authors have reported only on the more relevant or interesting intellectual property issues.

II. Patent

In one of the most important cases of the year, and indeed in many years, the United States Court of Appeals for the Federal Circuit in In re Bilski⁴ strongly limited the patentability of business methods and software algorithms.⁵ Business method patents and software patents have often been considered as being on the far end of the patentability continuum. So-called business method patents are patents directed to various processes or algorithms for performing business tasks. In Bilski, the Federal Circuit delivered strong precedent for whether and to what extent business methods are patentable.⁶ In so doing, the Federal Circuit expressly overruled portions of its landmark 1998 decision in State Street Bank & Trust Co. v. Signature Financial Group, Inc.⁷ In State Street, the Federal Circuit held that under Sec. 101 of the Patent Act,⁸ any process that creates "a useful, concrete and tangible result" was eligible for patentability.⁹ The decision in Bilski overruled this portion of State Street and announced a new test for patentability of processes or methods, relying on United States Supreme Court precedent.¹⁰

Under the new Bilski machine-or-transformation test, a process must meet one of two criteria to be patentable subject matter.¹¹ A process is statutory if it "is tied to a particular machine or apparatus."¹² Alternatively, a process is statutory if it "transforms a particular article into a different state or thing," including processes that transform data representative of a particular article into a different state or thing.¹³ The court in Bilski expressly left unanswered what type of "particular machine" would be eligible under the machine prong of the test and whether a general-purpose computer would qualify.¹⁴ As for the transformation prong of the test, the court left little doubt that many business processes that merely transform data representative ofabstract concepts such as "financial risks" or "legal liabilities" are not patent eligible under the second prong of the test.¹⁵

In Bilski the Federal Circuit also attempted to clarify this more esoteric category of patents.¹⁶ By holding that a process must be tied to a machine or transform a particular article, the Federal Circuit appears to have narrowed the subject matter for business method patents.¹⁷ It is inevitable that the Federal Circuit will decide additional cases on business method patents in the near future, which will help further define the subject matter parameters for business method patents.

The Supreme Court, in Quanta Computer, Inc. v. LG Electronics, Inc.,¹⁸ held that the patent exhaustion doctrine applies to method patents just as it does to other types of patents.¹⁹ The patent exhaustion doctrine states that an authorized sale of a patented item terminates all of the patentee's patent rights with respect to that particular item.²⁰ At issue in Quanta were several method patents pertaining to communication and processing functions between computer components. LG Electronics (LGE) owned the patents-in-suit and licensed them to Intel Corporation. Pursuant to the license agreement, Intel was permitted to manufacture and sell computer components that were designed to function according to LGE's patents. LGE's license agreement attempted to prohibit downstream purchasers of the Intel components from practicing the LGE patents using non-Intel components. After purchasing some licensed components from Intel, Quanta combined the licensed components with unlicensed (non-Intel) compo- nents. LGE sued, alleging that Quanta's computer systems infringed LGE's patents during operation.²¹

The Supreme Court overruled the United States Court of Appeals for the Ninth Circuit, holding that the patent exhaustion doctrine exhausted LGE's patent rights once the authorized sale of components from Intel to Quanta occurred.²² The Court reasoned that the authorized components sold to Quanta "substantially embodied" the methods of LGE's patents because the components had no other purpose but to be used in a manner described by the patents-in-suit.²³ The Court elaborated that to hold otherwise would allow patentees to circumvent the patent exhaustion doctrine merely by drafting method claims in addition to apparatus claims.²⁴ The Court left open the possibility, however, that patentees could control the downstream use of their products through properly drafted contracts or licensing agreements rather than the outright sales involved in this case.²⁵

In Net MoneyIn, Inc. v. Verisign, Inc.,²⁶ the Federal Circuit clarified what constitutes "anticipation" of an inventor's disclosure.²⁷ According to Sec. 102 of the Patent Act,²⁸ an inventor cannot obtain a patent if the invention was described in a printed publication prior to the invention by the applicant.²⁹ Thus, if a single document in the prior art discloses all the inventive features of the applicant's application, the applicant is not entitled to a patent.

In Net MoneyIn, the Federal Circuit ruled that a prior art document is not anticipatory merely by describing all the inventive features of an applicant's claim somewhere "within the four corners of the docu-ment."³⁰ Rather, the prior art document must describe the inventive features "arranged or combined in the same way as in the [applicant's] claim."³¹ Thus, a prior art publication that describes all the features of the applicant's claim, yet does not combine those features in a similar way as does the applicant, cannot be regarded as anticipatory under Sec. 102. This can be especially helpful to the patent drafter in responding to United States Patent and Trademark Office (USPTO) actions on patent applications. The USPTO examiners will often issue a rejection based on merely finding each element of an invention within a prior art reference, even if the prior art reference does not combine the elements in the same way as disclosed in the patent application.

The Federal Circuit, sitting en banc, revised the test for determining infringement of a design patent in its decision Egyptian Goddess, Inc. v. Swisa, Inc.³² Design patents cover the ornamental aspects of a functional item, rather than the function of the item itself. The patent-in-suit involved a design for a "nail buffer." Egyptian Goddess, Inc. (EGI) sued Swisa, Inc., alleging that Swisa's product infringed EGI's patent. The district court, applying the "point of novelty" test, first analyzed EGI's patent to determine how the patented design was different from the prior art.³³ After identifying these points of novelty, the district court then examined Swisa's product to determine if the product contained "substantially the same points of novelty that distinguished the patented design from the prior art."³⁴ Finding that Swisa's product did not contain any of the same points of novelty as the EGI patent, the district court granted summary judgment of noninfringe-ment to Swisa.³⁵

On appeal, the Federal Circuit rejected the point of novelty test and held that the Supreme Court's "ordinary observer" test from its 1871 decision in Gorham Co. v. White³⁶ was the sole test for determining infringement of design patents.³⁷ Under this test, an article infringes a design patent if, in the eye of an ordinary observer knowledgeable of the prior art, the two designs are "substantially the same" so that the observer might "purchase one supposing it to be the other."³⁸ Thus, the ordinary observer test focuses on the totality of the design rather than the individual design elements that comprise the points of novelty. Even under the revised test, however, the court ruled that Swisa's product did not infringe EIG's patent.³⁹ Overall, this decision strengthens design patent protection relative to the point of novelty test for many patent practicioners.

In In re Alonso,⁴⁰ the Federal Circuit reiterated that a patent applicant must "describe the invention in sufficient detail so 'that one skilled in the art can clearly conclude that the inventor invented the claimed invention as of the filing date sought.'"⁴¹ This "written description" requirement is mandated by Sec. 112 of the Patent Act.⁴² In exchange for the limited monopoly of a patent grant, the patent laws require that the applicant clearly disclose the invention.⁴³

In Alonso the applicant described a method for treating a rare form of cancer, neurofibrosarcoma, using certain monoclonal antibodies (MAbs). His application included several examples of such MAb's, all of which were developed from a particular cell line. The patent claim at issue, however, was not limited to methods involving the particular "species" of antibodies disclosed in the specification.⁴⁴ Rather, the court concluded that Alonso was attempting to...