IP for the immature: Putzmeister vs. Schwing and the Bastardring

The tragedy unfolding in Fukushima is no laughing matter, but some could not hide a chuckle when it was announced that giant concrete pumps known under their brand name "Putzmeister" were sent to Japan to pour water on the damaged reactors, or, as some have re-phrased it, squirt liquid over the hot core.

The IP angle to the story comes into play when we learn that Putzmeister was sued by their biggest competitor Schwing GmbH over a seal technology referred to as the "Bastardring" (Schwing GmbH vs Putzmeister AG, 305 F.3d 1318). The case involved issues of claim construction regarding Schwing's US patent RE 32,657 "Two-cylinder pump for heavy flowable materials, such as concrete".

Pumping highly viscous material such as concrete over great distances requires a lot of pressure, and correspondingly strong seals. Schwing’s ’657 patent discloses a concrete pump in which the tight metal-to-metal seal between the cutting ring and the face plate is maintained by the use of a flexible elastic ring that is compressed between the cutting ring and the shutter mechanism, shown below in cross-section in Figure 4 of the ’657 patent.

The flexible elastic ring 23, located between shutter mechanism 3 and cutting ring 14, serves as a spring that pushes the cutting ring 14 tightly against the face plate. When the pump is assembled, the flexible elastic ring is mechanically pre-stressed. As the surfaces of the cutting ring and the face plate wear away, the compressed flexible elastic ring expands axially to compensate for the wear, thereby maintaining a tight seal between the cutting ring and the face plate. In order to prevent the flexible elastic ring from being dislodged from its seating by the intense compression of the parts, the ’657 patent discloses the use of an annular extension 33 on the cutting ring 14, and a corresponding annular extension 34 on the shutter mechanism 3, to hold the flexible elastic ring in place.

In 1989, Schwing and Putzmeister settled an infringement dispute regarding the ’657 patent by entering into an agreement in which Putzmeister agreed to stop manufacturing concrete pumps in which the flexible elastic ring was held in place by the placement of annular extensions on both the cutting ring and the shutter mechanism. In return, Schwing agreed not to sue Putzmeister for infringement based on concrete pumps that held the flexible elastic ring in place with an annular extension on the shutter mechanism, but with no annular extension on the cutting ring. The parties also agreed that Putzmeister could optionally place a metal insert in the flexible elastic ring. Putzmeister referred to that configuration as the “Bastardring I” (in other news: someone at Putzmeister has a sick sense of humour).

And if that wasn't enough, there is a Bastardring II, as well: Putzmeister changed the configuration of its pumping technology in 1992 to the “Bastardring II.” The Bastardring II has an annular extension on the cutting ring, but not on the shutter mechanism. Instead of the annular extension on the shutter mechanism, a metal ring is embedded in the flexible elastic ring near the shutter mechanism.

Schwing claimed that the Bastardring II infringed the '657 patent. The district court entered two orders granting summary judgment in favor of Putzmeister, holding that the Bastardring II and a modified version of the Bastardring II do not literally infringe the ’657 patent because they do not have an annular extension on the shutter mechanism. It relied on prosecution history estoppel based on remarks Schwing made to overcome a rejection, and held that prosecution history estoppel absolutely barred infringement by equivalent means. The Court of Appeal affirmed in part, vacated in part and remanded:

In Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 234 F.3d 558 (Fed. Cir. 2000) (en banc), this court held that prosecution history estoppel acts as a complete bar to the doctrine of equivalents, so that a claim limitation that has been narrowed by amendment must be limited to its strict literal terms. Shortly before oral argument in this case, the Supreme Court vacated our decision in that case. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 122 S. Ct. 1831 (2002). The Supreme Court rejected the “complete bar” approach and required instead an examination of the subject matter surrendered by the narrowing amendment. Id. at 1840. In so doing, the Court adopted a rebuttable presumption that the narrowing amendment surrendered the particular equivalent in question, and discussed several ways in which the patentee could overcome that presumption. Id. at 1842. The patentee can overcome the presumption that prosecution history estoppel bars a finding of equivalence, the Court explained, if the patentee can show that the asserted equivalent was unforeseeable, that the rationale underlying the amendment bears only a tangential relation to the equivalent in question, or that there is some other reason that the patentee could not reasonably be expected to have described the substitute in question. Id. at 1841-42.

At oral argument, Schwing contended that if we conclude that the amendment narrowed the annular extension limitations, we should remand the case to the district court to determine, in light of the Supreme Court’s Festo opinion, whether Schwing can successfully rebut that presumption. We agree with Schwing that, at least as to the modified Bastardring II device, the case should be remanded to the district court to determine, in the first instance, whether Schwing can rebut the Festo presumption. A remand is not necessary with respect to the Bastardring II device, however, because in light of the written description of the ’657 patent the embedded metal ring in the Bastardring II cannot be deemed equivalent to the annular extension on the shutter mechanism recited in claim 1.

So there you go. You're a bastard if you smirked.

Letter from AmeriKat: Return of the AmeriKat

For anyone who knows the AmeriKat personally and professionally, they will know that during the past seven weeks the AmeriKat has faced a flurry of deadlines, deliberations, duplicitous documents and a dosing of sleep deprivation. Her absence from her beloved letters was not one of choice, but one of necessity as every two days she was hit with another deadline. (picture, left - the AmeriKat up late in front of one of her many outstanding deadlines) The deadlines were increasing in frequency, but as the old saying goes “absence makes the heart grow fonder”, especially when the absence is not voluntary. When the AmeriKat was writing this post, she was curled up on her bed, watching her clock until she had to leave to catch a flight for yet another deadline. However, now with the passing of the last seven weeks, she has returned to first give you a brief glimpse of the first of the latest US IP tails. She will be back later throughout the week with more detailed posts on some of the most important news in US IP law.

Patent Reform Act 2011 Gets Senate’s Thumbs-Up

Two weeks ago the US Senate passed by overwhelming majority (95-5) the America Invents Act (“AIA”) (a.k.a. the Patent Reform Act 2011). Mr. IP himself, Senator Patrick Leahy (D-Vermont) introduced the Patent Reform Act 2011 to the Senate Judiciary Committee this past January. The AmeriKat has set out below the main provisions that the original draft bill contained before the Senate and what the AIA now contains below (a comparison of the two can be found here):

First -to-File: The biggest change introduced by the AIA would be the transition in the US from a first-to-invent system towards a first-to-file system where each patent application would be allocated an “effective filing date”. Similar to that in the EU, the application’s novelty and obviousness is then judged on the prior art available before the effective filing date of the patent, but with a one year grace period still remaining in effect in respect of the inventor’s own disclosures. Democratic Senator Dianne Feinstein had proposed an amendment (Amendment No. 133) that would have removed these provisions arguing that their effect would be especially burdensome to small independent inventors (click here to watch her introduction of the amendment.) However, the Senate voted down the amendment by 87-13 with proponents of the first-to-file provision arguing that the availability of applications such as pre-issue disclosure, post-grant review and inter-partes review would rebalance any alleged burden that the first-to-file paradigm could create. Opponents to the first-to-file system also believe that this introduction will worsen the huge backlog of patents faced by the USPTO (see post here) and result in the system being clogged up with thousands of unmeritorious inventions.

Damages: The review of the assessment of patent damages that was taken up by Microsoft in their initial appeals in the i4i case last year (see AmeriKat posts here) evidenced only a sliver of general unrest with the assessment of US patent damages. The original draft of the Patent Reform Act 2011 introduced proposed amendments that would provide for specific procedures on how judges in patent cases manage the damages assessment. These included mechanisms for the court to consider the evidentiary merit of each parties’ case on damages and then the judge introducing a methodology that would be used in assessing the damages awards. Close the AmeriKat’s heart at the moment was the old text also requiring a judge to split the damages portion of a trial at a parties request and only rejecting that request in the absence of a good cause, such as “the absence of “issues of significant damages or infringement and validity”. All of these draft provisions did not make it past the Senate's approval perhaps signaling a reluctance to delve into the problematic pool of patent damages which may have held the entire bill’s passage hostage.

Enhanced Damages: In the current US Patent Act, there is not specific reference that the increase of patent damages should only be reserved to cases of willful infringement. Section 284 of the current statute, instead, states that “the court may increase the damages up to three times the amount found or assessed.” The Federal Circuit’s interpretation has limited this section to cases to willful infringement and where the defendant’s actions were objectively reckless. The draft text of the Patent Reform Act had basically codified this precedent, but again, like with general damages, this did not make it to the final text.

USPTO Proceedings: The AIA also introduces under Sec 135 a “derivation proceeding” that arises when an original inventor claims that a patent applicant derived their invention from the original. Third parties will also be allowed to submit any prior art documentation with accompanying relevant reasons for the submission to the USPTO prior to the examination proceedings. A post-grant review proceeding would also be created and which allow any party within 9 months of the patent’s issue to present a validity challenge to one or more of the patent claims. Replacing the inter partes reexamination would be the inter partes review which would limit reviews to issues of novelty and obviousness arising from prior art patents and printed publications. The effect of the post-grant review has been considered by some as not ensuring the quality of the granted patents, but as potentially increasing the expense a patent-holder could face during the adversarial proceedings.

Besides deleting more interesting parts of the bill, the Senate did add Section 18 which deals with provisional measures for the establishment of post-grant review proceedings for the review of the validity of business-method patents. False marking lawsuits would be eliminated under the proposed 146 (k) except for ones filed by the US government or by a competitor who can prove competitive injury as a result of false marking. Also, reduced fees for small entities were also introduced.

The American Innovators for Patent Reform (AIPR), a trade association which promotes innovation by strengthening the US patent system, has opposed the AIA. Alexander Poltorak, the founder and President of AIPR and AIPR stated that the AIA, in particular the first-to-file provision would be viewed as a “defeat by many inventors”, however the removal of the damages provisions (which were referred to as the “most damaging provisions” – no pun intended) were heralded as a success. David Kappos, the USPTO's Director, has said that the US is already operating a pseudo-first-to-file system because in 2007 there have only been 7 interference applications (where two inventors file their patents nearly simultaneously) of which only one was decided on priority of the invention and "the truth is that only .01% of all patent applications could be affected" by the change.

The next stage of the bills life will be in the House (watch the life of a bill, courtesy of Schoolhouse Rock). If passed by Congress , the AIA could well be on its way of becoming the first substantial change to patent law in the U.S. in almost 60 years, but a bill’s life in Congress can be a rocky ride and can usually, as has been seen in IP legislation, die a quite death.

So what do non-US readers think? Is the introduction of the first-to-file system the end of civilization as we know it, or if the AIA is passed by Congress is Director Kappos correct and US inventors will not notice any difference at all?

Tuesday Tiddlywinks

Another dreary day in Londontown, but the IPKat Team is here to wish you a very happy day filled with intellectual property goodness.

US Supreme Court to hear Stanford v Roche patent fight: Yesterday the US Supreme Court justices agreed to hear Stanford University's claim against Roche Holding AG in respect of patents for methods of testing the effectiveness of AIDS treatments by measuring the HIV concentration in blood plasma. Scientists at Stanford created the invention while under a contract to promise to assign the inventions to the university. However, one of the inventors, Professor Mark Holodniy, had also, prior to the invention, actually assigned his rights in future inventions to Cetus (now Roche). Stanford filed a patent application and demanded a royalty from Roche for their use of the patent. The case reached the US Court of Appeals for the Federal Circuit (the appeals court where all the appealed patent cases go to from the federal district courts) who held that Roche was not liable for patent infringement because they held ownership rights derived from Holodniy's assignment. In their appeal to the Supreme Court, Stanford are arguing that because they were beneficiaries of federal funding for the research, under Sections 200-212 of the Bahy-Dole Act their rights trump that of Roche. The university's question to the Supreme Court reads as follows:

Whether a federal contractor university's statutory right under the Bayh-Dole Act, 35 U.S.C. §§ 200-212, in inventions arising from federally funded research can be terminated unilaterally by an individual inventor through a separate agreement purporting to assign the inventor's rights to a third party.

The US Department of Justice (DoJ) filed an amicus curiae brief in support of Stanford's writ and argue that the Bahy-Dole Act does indeed trump the general proposition that ownership of a patent vests first with the inventor. This case will be a somewhat obscure but important case for university and federally funded research institutions. The lesson being, make sure your researchers and scientists have entered into strict assignment agreements with your institution. Thanks to Dr. Ward for alerting the AmeriKat to this story.

UK MP to "bang heads" of ISPs and music industry: The UK Minister for Culture, Communications and Creative Industries, Ed Vaizey, (picture, left)has called for a joint meetin between music industry and ISP representatives to progress the implementation of the Digital Economy Act (DEA). Readers will note that the crucial piece to this legislative nightmare is Ofcom's final "Initial Obligations Code", which is still missing. Ofcom received a further three month extension for the Code in September to allow for consultation about its costs provisions with the EU. Judicial review of the DEA applied for by BT and TalkTalk is expected any time. For more information see this report from MusicWeek. This IPKat has searched online to find any further information about the agenda for this meeting without joy. If anyone has any info on this, please let the IPKat know.

Apple sues Motorola: This Kat has just given up trying to follow who is suing who in the mobile patent wars (see previous posts here). As of Friday, Apple has again gotten into the mix by filing two complaints (here and here) in the the US District Court for the Western District of Wisconsin against Motorola for infringement of a number of patents of its android handsets. The patents, for the most part, are for touchscreen technology. Motorola, maybe anticipating the descending cloud of Apple, filed four separate complaints against Apple as well as applying to the court to invalidate over 20 iPhone patents for want of novelty. It hasn't been a good month for Motorola who was on the receiving end of another lawsuit from Microsoft earlier last month. For more information see this report in the Wall Street Journal and CNet.

Court of Appeal Judgment Alert! Mr Justice Kitchen, sitting in the Court of Appeal with Lord Justice Jacob and Longmore, dismissed the appeal in the case of Softlanding Systems Inc v KDP Software Limited and Unicom Systems Inc ([2010] EWCA Civ 1172) last week. The case was on appeal from Mr Justice Wilcox of the Technology and Construction Court for England and Wales (see previous 1709 blog post by IPKat Jeremy). This Kat has not had an opportunity to digest the judgment, but there will be a full IPKat report on the judgment soon!