On February 19, the Supreme Court heard the oral argument in Bowman v. Monsanto on the application of patent exhaustion to patented self-replicating seeds.  Under the doctrine of patent exhaustion, “the initial authorized sale of a patented item terminates all of the patent owner’s rights in that item.”  Monsanto holds a patent on a gene which makes plants resistant to glyphosate herbicides.  Farmers use the herbicides on weeds and when using Monsanto’s seeds, has no effect on the plant.

Monsanto sells the herbicide resistant seeds to farmers and licenses the technology to seed producers.  As a condition of sale, all purchasers of the first generation seed must agree to limit the use of their seeds and the technology to a single season and cannot replant the second generation seeds.  This is because through the acts of nature, the herbicide resistant-trait is passed down to each successive generation of seeds.  However, Monsanto does allow farmers to sell the second-generation seeds (restriction free) to local grain elevators as animal feed or commodity seeds (which are purchased for various uses including planting).  Bowman purchased seeds from a local grain elevator and planted them as a second crop (the latter act in double cropping), later discovering that some of the commodity seeds he purchased, included herbicide-resistant seeds.  While Monsanto purchased first generation seeds from a licensed retailer for his first crop, he continued to use the seed offspring of his second crop supplemented with additional commodity seeds during subsequent years.

Monsanto sued Bowman for patent infringement of two of its patents.  Bowman argued that under the doctrine of patent exhaustion, Monsanto’s failure to restrict the authorized sale of second-generation seeds rendered its patents exhausted with respect to the use of that seed.  The district court disagreed, and the federal circuit affirmed, finding that Monsanto’s patents rights in the seeds were not exhausted once sold to a commodity dealer; and that the patent covered the technology of the original seed and all products of the original seeds.  In principle, the federal circuit basically held that patent exhaustion does not apply with respect to self-replicating technologies.  Bowman’s main argument is that the patented seeds were bought to be planted, and the expected and natural use of the product of such seeds is to be planted.  Any patent rights Monsanto had with regard to the sale of its seeds was exhausted with the sale of its second generation seeds without restriction to the grain elevators.  Monsanto claims its patent is on the trait (herbicide-resistance) and therefore seeds containing the trait are covered by the patent.

In a 2008 case involving Intel chips licensed from LG, the court held that once the chips were sold to computer manufacturers, LG’s rights were exhausted.  The case here is different as it involves not only a self-replicating invention, but an invention which self-replicates through mechanisms of nature.  Based on the oral argument, it seems the justices have taken the side of Monsanto.

However is it really the role of patent law to restrict the use of subsequent seed generations that were a known, natural byproduct of an authorized sale?  Or is this really an issue which would be better addressed by contract law.  Monsanto argues that a decision in favor of Bowman would “eviscerate patent protection.”  Couldn’t Monsanto structure its contracts differently or in a more effective matter in order to prevent farmers like Bowman from saving and using subsequent seed generations for planting?

Chief Justice John Roberts asked “Why in the world would anybody spend any money to try to improve the seed if as soon as they sold the first one anybody could grow more and have as many of those seeds as they want?”

Since when does a patent on an innovative invention guarantee a successful marketable product or a return on your investment?  Why should the court create a special exception to a long-standing doctrine to simply accommodate Monsanto?  Monsanto knew what it was doing when it entered the seed business.  Seeds grow into plants, plants produce seeds.  One could reasonable argue that Monsanto should have taken account for the qualities and characteristics of its own “invention” when marketing its product.  Monsanto argues that Bowman’s use of progeny seed is equivalent to making illegal copies of an invention.  Bowman isn’t taking the seed and making an exact copy of the seed.  The seed makes a plant which makes more seeds; this is the nature of the seed, and the natural use and purpose of the seed.  Couldn’t Monsanto modify its gene in a way which would not allow for subsequent generations of seed to maintain the herbicide-resistant trait (effectively making “sterile” seeds)?

Regardless of the justices’ decision here, the holding can potentially raise a broad range of implications and questions.  What happens when Monsanto seeds blow onto another farm…does that farmer then become liable for infringement?  If a grain elevator unknowingly sells Monsanto seeds, is the grain elevator infringing?  Some argue that a decision for Monsanto may increase monopolies and make it harder for the consumer to bring anti-trust suits.  Others argue a decision for Bowman has a negative impact on innovation and research in the seed market, cause an increase in price on the sale of seeds, and have an impact on the protection of patented software (which also has the ability to self-replicate).  We hope to have the answer to some of these questions by June.

The nonobviousness and written description requirements set forth in sections 103 and 112 of the Patent Act provide additional and, some argue, more effective filters for claims directed towards genetic material. According to some academics, these requirements have been much further developed in the case law, are more finely tuned to address patents on genetic material, and provide more appropriate filters for separating truly inventive additions to human knowledge from unpatentable matter. Two landmark cases illustrate how these requirements have been used to invalidate claims directed towards genetic material.

First, the Federal Circuit invalidated patent claims for failing to meet the written description requirement in Regents of the University of California v. Eli Lilly & Co. The patent specification described cDNA encoding rat insulin, which the court held did not give the patentee a right to also claim the cDNA encoding human insulin. The court emphasized that even if the disclosure was sufficient to enable a person of skill in the art to make and use that cDNA, it still failed to meet the written description requirement. On the other hand, the court noted, a recitation of the actual nucleotide sequence would suffice. As some scholars argue, the requirement so applied compels applicants “to spell out the exact sequence of all the DNA they hope to claim, rather than just the function of the genes.” Denise DeFranco argues that the primary goal of applying the requirement in this way to biotechnology patents “is to limit inventors to their actual inventions.” Indeed, at the time the Plaintiffs in Eli Lilly applied for the patent claiming human insulin, they had only cloned the rat insulin gene, and did not clone the human insulin gene until two years later.

In another significant biotechnology case in 2009, In re Kubin, the Federal Circuit invalidated patent claims on obviousness grounds. The case involved a claim to the isolation and sequencing of a gene encoding a protein domain known as NAIL. In light of the prior art references, which taught a prophetic method for isolating the gene that codes for the NAIL protein as well as a probe specific to the protein, the court held that the claims were invalid. Prior to this holding, similar patents had been upheld even when the prior art included as much or more information as that considered in Kubin, such as the actual polypeptide sequence of the protein at issue and not just a probe for the protein. This decision has thus been characterized as “a major change in the law that will lower the bar for finding biotechnology patents obvious.” Joanne Kwan postulates that following Kubin, biotech inventions such as claims to isolated genes that encode particular proteins may now be routinely invalidated as obvious under Section 103.

This post does not comment on the social desirability of allowing patents on genetic material, nor on the legal merits of the arguments in Myriad. Rather, it seeks to highlight that the question raised by the patentable subject matter challenge in Myriad is a narrow one, a “coarse eligibility filter” in the words of the Federal Circuit. The Patent Act provides a number of other requirements to ensure that patents on genetic material aren’t improvidently granted when, for example, the inventors have not actually cloned the gene they are claiming, or when the protein of interest, a motivation to isolate the gene coding for that protein, and illustrative instructions for cloning the gene already exist in the prior art. Regardless of the precedent ultimately set by Myriad, these and other additional statutory requirements will continue to have a significant impact on the validity of patent claims directed to genetic material.

This is not the end of the story, of course. As the case developed in the United States, Apple and Samsung were, and continue to be, in a legal battle all over the world. Seoul Central District Court compromised and ruled that Samsung didn’t copy the look and feel of Apple. It further ruled that Apple had infringed upon some of Samsung’s wireless technology, while Samsung had violated Apple’s bounce-back effect. The result was a light slap on the wrist. Both companies had to pay a minimal amount in damages and had some of their older devices banned. More recently on September 21, 2012, a German court ruled that Samsung’s products didn’t violate Apple’s patents.

The discrepancy between the federal jury decision and those of other international courts brings into question whether juries are equipped to handle these types of technical cases. The jury instruction was reportedly over 100 pages, but the jury was able to deliberate after only 3 days. Of course, patents are not the only technical subject where the jury has a say, and there may have been other factors that led to these differing opinions, such as having a home court advantage.

Regardless, Apple and Samsung plan to continue the case in the US. Apple reportedly has been seeking about $700 million in additional damages and a permanent injunction preventing the sale of several of Samsung’s products, while Samsung plans to appeal the verdict and may include a patent infringement claim for violation of Samsung’s patents in LTE technology. LTE is a technology that provides faster connectivity than the standard 3G technology included in the previous generations of iPhones and is included in the new iPhone 5.

Stakes are very high for both companies as they continue their legal battle. There are many differing arguments as to whether patents on software and the magnitude of Apple’s award really promote innovation and new inventions. However, it is important to note that most of the claims were directed towards Samsung’s implementation of Android and Google has already responded to the lawsuit by making changes like implementing a new way to integrate pinch-to-zoom in its latest software.

Furthermore, it likely gives a window of opportunity for Microsoft and Nokia, which increases consumers’ choices. Nokia has opted to stop the development of its own software and decided to bet its future on Microsoft’s new Windows 8 platform. Microsoft’s operating system features a completely different interface and Nokia’s Lumia phones sport a distinct look. While Microsoft has had trouble gaining traction, this controversy could arguably help Nokia and Microsoft’s push to be more main stream.

The mobile market is one of the fastest growing areas in technology. Despite the fact that software patents are controversial and the boundaries are not fully defined, with more companies trying to tap the growing market, consumers will see a lot of new options in the market.

The Prometheus patents covered the concept of adjusting the dosage of thiopurine drugs based on the level of metabolites in a patient’s blood. The patents on the thiopurine drugs involved have long since expired and the patents in question claim no specific method for measuring the metabolite level in a patient. The now invalidated claims had two steps. The first step was simply the administration of the drug. The second step was the measurement of the metabolite in the patient after the administration. The remainder of the claim describes the correlation. If the metabolite concentration is higher than a certain value, this “indicate[s] a need” to reduce the next dose and vice versa.

The Mayo Clinic used the thiopurine metabolites test developed by Prometheus until 2004 when it developed its own test. Prometheus sued Mayo in 2004, alleging that the patents covered more than just the particular test that Prometheus had developed. Prometheus argued that the patents covered the entire process in the claims without any restriction to a particular method of administration or measurement. In effect, this prevented anyone else from making use of the correlation between certain metabolite levels and drug dosages however the patents were allowed as applications of this correlation.

The district court held that patents were invalid under §101 because they claimed scientific correlations which were natural phenomena that resulted from natural body processes. However, the Federal Circuit overturned this ruling and upheld the validity of the patents. The Federal Circuit relied on the machine or transformation test in coming to its decision. Understanding that the machine or transformation test is only a “useful  and important clue, an investigative tool,” the Federal Circuit held that the steps in the claims comprised a method of treatment which was a proper application of a scientific principle. In addition, the Federal Circuit noted that the method of treatment claimed in the patents satisfied the transformation prong of the machine-or-transformation test. Prometheus Laboratories, Inc. v. Mayo Collaborative Services, 628 F.3d 1347, 1355-57 (Fed. Cir. 2010).

The Supreme Court started its analysis by noting that the relationship between the concentration of metabolite in a patient’s blood and the efficacy of another dosage of the thiopurine drug is a law of nature that is not patentable. The relationship itself is simply a consequence of how the metabolite interacts with one’s body in a way that is separate from any human action. Thus, to be patentable, the claims have to contain additional features that conclusively show that the process applies the law of nature.

Identifying three additional features in the Prometheus patents, the Court found them all to be insufficient to deem the process an application of a law of nature. The first feature, the administration step, was dismissed as only identifying the people interested in the correlation. Specifically, the people interested are doctors using thiopurine drugs and this group existed before these patents existed. The measuring step does not make this claim patentable because the methods of measuring metabolite levels are well known in the art. Telling doctors to engage in routine, well known activity does not make this process patentable. Lastly, the explanation of the correlation adds little to the actual application of the process and just describes the law of nature. At most, it suggests that doctors should consider the test results when deciding the next dosage of the drug.

Because the features in the Prometheus claims were simply drafting efforts rather than substantive additions, the Supreme Court struck down the patents. However, the Court did not shed much light on what exactly constitutes an additional feature that would demonstrate an application of a law of nature. Finding the three additional features in the Prometheus claims to be insufficient gives some guidance, but no other specific explanation was provided.

Flicking your index finger up to scroll through an address book? Pinching a map or image to zoom out? Slicing watermelons to bits in Fruit Ninja? They’re all (arguably) covered by United States patent number 7966578 (“the ’578 patent”). Though the capacitive touchscreen technology incorporated in the iPhone and most every modern smartphone is not itself claimed in Apple’s patent, the very means by which mobile phone users interact with that piece of hardware apparently is. The strength of the ’578 patent has more recently been called into question by Judge Lucy Koh of the Northern District Court of California, who in October of 2011 ruled that although Samsung’s devices indeed infringe Apple’s patent, Apple still bears the burden of demonstrating the patent’s validity before relief may be granted. Judge Koh more recently denied Apple’s zealous bid to enjoin sales of Samsung smartphones and tablets in the United States.[i]

Apple has additionally based a significant portion of its legal battle against Samsung on similarities in design between the companies’ respective device families. In a recent and rather embarrassing courtroom exchange, Samsung’s attorneys themselves were unable to differentiate their new Galaxy 10.1” tablet from Apple’s iPad 2 while the two were held over the presiding judge’s head at a distance of ten feet. Samsung’s lead mobile device designer last week voiced offense at Apple’s allegations concerning such similarities, declaring, “the Galaxy [smartphone] is original from the beginning,” and the child of Samsung’s own independent efforts. Hardware design similarities are further aggravated by software-based visual overlaps, including the incorporation of rounded square icons in the modified Android operating system that ships with so many of Samsung’s new phones.

Adding fuel to the fire, Samsung filed numerous countersuits hinging on its ownership of patents in standardized technologies like 3G and UMTS communications protocols. That move was frowned upon in the European Union, where Samsung is presently being investigated by the European Commission’s Directorate-General for Competition for alleged antitrust violations on that basis. Due to the necessity of wide access to those industry-standard protocols, Samsung is legally required to license the manufacture of devices incorporating those technologies in a fair, reasonable, and non-discriminatory manner. Samsung’s attempts to secure injunctions against Apple in Europe have failed as a result of those protocol patents’ essentiality to cross-compatibility between different manufacturers’ devices and the wireless networks on which they reside.

So what does this all mean for consumers?  Germany has granted a preliminary injunction against Apple’s sale of the iPhone, while Australia temporarily banned sales of Samsung’s Galaxy tablet. Apple’s litigation with Motorola over two patents unrelated to the Samsung dispute further prompted a German court to enjoin sales of certain Apple devices within its borders. German smartphone buyers are now faced with a market severely limited by the effects of these interwoven lawsuits. Samsung has further sought to enjoin the sale of Apple products in its home country of Korea, as well as in Italy, Japan, and a handful of other prominent markets. Indeed, the Apple-Samsung dispute now comprises at least 21 separate suits in ten countries. The outcomes of these lawsuits could have dire effects on the availability of the mobile technologies that consumers have already begun to take for granted.

Apple has never been friendly to the idea of licensing its technologies out to competitors, and unlike Samsung, does not hold patents subject to mandatory licensing under European Union law. Experts opined last year that Apple was trying to knock Samsung, HTC, and other prominent competitors as far down as possible in anticipation of the upcoming holiday season, but domestic sales figures have remained strong on all sides. Apple’s March 16 release of the iPad 3 brought with it nearly $1.5 billion in revenue when upwards of three million units were sold over the opening weekend. If not for the fact that Android device sales significantly eclipsed iOS units’ in 2011, Apple would not appear to need any additional assistance in securing mobile device market share.

As much as Apple fanboys (and girls) would love to see the company’s family of i-devices remain at the top of the pack, some argue that litigation wins on these patent and trademark issues could spell disaster for competitive, and therefore innovative, markets. Google’s Android operating system, which relies heavily on the methods of use allegedly covered in Apple’s patents, would likely suffer significant immediate losses, presenting the risk that consumers will be forced into a “very closed world of Apple’s making.”

On the contrary, the mobile device market has developed so rapidly since Apple’s 2007 release of the original iPhone that Apple’s legal victories could work to usher the development of revolutionary new interfaces for the next generation of mobile devices. In developing its Kindle Fire, released in November of last year, Amazon worked hard to dodge intellectual property infringement issues by designing a tablet that is more easily distinguishable from the iPad than the Galaxy has proven in court. The device is notably smaller and incorporates a proprietary set of algorithms governing the use of pinch-zoom functions and the like. Consumers appear to have greeted Amazon’s device warmly as a marriage of low price and respectable functionality, though solid sales figures have been difficult to pin down. Whether it, along with other Android-based devices, will maintain strong market presence over the long term depends largely upon the wider impacts of the Apple-Samsung litigation and concurrent government antitrust investigations.

Additional considerations in the present round of litigation include the fact that Apple is one of Samsung’s biggest parts consumers, regularly buying huge quantities of capacitive touchscreens and semiconductors from the vertically integrated Korean giant. Samsung further owns patents in the iPhone 4S antenna design, but has yet to use this ammunition to its advantage in the present rounds of litigation. How these factors play into the smartphone wars is a dynamic yet to be observed, but here’s hoping that whatever happens means more and cooler options at market in the months to come!

As ideal as the new system may sound, it does not come without criticism.  The America Invents Act is a federal statute, passed by Congress and signed into law by the President, which was the result of a push to reform U.S. patent laws. However, Article I, Section 8, Clause 8 of the Constitution empowers Congress “To promote the Progress of Science and useful Arts, by securing for limited Times to … Inventors the exclusive Right to their … Discoveries.”  The language of the Constitution indicates that “inventors” – the first person to invent or true inventors – should be awarded patents.  The new patent law, by changing the system from first-to-invent to first-to-file, could be considered unconstitutional as it changes the meaning of the constitutional language and allows a subsequent inventor to obtain a patent over the true inventor of a patentable invention.  In order to properly adopt a first-to-file system, it may be considered necessary to amend the Constitution.

It is argued by the proponents of the first-to-file system that the first-to-invent system rarely benefits the inventor, whether a small business or an independent inventor. Interference proceedings to determine who invented first can be substantially costly.  The cost of proving who was the first to invent is prohibitive to the individual inventor in comparison to large companies with deep pockets and unlimited resources.  An argument in favor of the first-to-file system is that it will eliminate interference proceedings and provide certainty as to the patent’s date of invention, which will benefit all regardless of size.

However, first-to-file creates a race for inventors to be the first to file a patent application.  Large companies have in-house patent attorneys and strong research and development teams so that patent applications can be filed swiftly. On the other hand, small companies and individuals do not have the financial resources to file costly patent applications that turn out to be useless.  Furthermore, the Patent Office itself will receive an increase of applications of lesser quality as large companies speculate and rush to file patents on every new idea.  Small companies or individuals with limited funding would be placed at an extreme disadvantage in comparison to large companies in a first-to-file system, whereas in the first-to-invent system, what matters is the invention itself and reducing it to practice – filing can come after.

The first-to-file system proposed by the America Invents Act, beyond its facial unconstitutionality, would likely have an adverse impact on the U.S. patent system.  Filing patent applications will become a more risky investment and turn into a business of speculation at a level at which startups, the main source of innovations, will be unable to compete.  With a decrease in the commercialization of inventions, the America Invent Act will disrupt the U.S. patent system and hurt the U.S. as an industrial powerhouse in comparison to competing nations.

• The FCC has filed its finalized net neutrality rules, set to take effect on November 20. The rules will almost certainly face legal challenges from Verizon and MetroPCS over the extent of the FCC’s jurisdiction.
• David Ignatius writes on legal uncertainty and difficult questions facing the future “rules of war” for drone strikes. The debate has gotten fresh attention over last week’s report that the Obama administration’s legal team is split on the extent of our ability to use lethal force in countries like Yemen and Somalia.
• In contrast to Sprint’s approach to AT&T’s proposed acquisition of T-Mobile, Verizon’s CEO has stepped up and defended the deal as a necessary outcome – “like gravity”.
• Samsung is seeking to ban iPhone 5 sales in South Korea for violating Samsung’s wireless technology related patents. The move comes on the heels of Apple’s latest success in banning Samsung’s Galaxy Tab 10.1 from Germany and an escalating international patent battle between the two tech giants.
• With an eye toward stock market volatility, the troubled GroupOn IPO is back on track with a late October-early November goal for going public.
• Three Boston University researchers have estimated that patent litigation by non-practicing entities, aka “patent trolls”, have cost publicly-traded defendants half a trillion dollars since 1990.

• Last week, the Justice Department filed suit in DC District court to block AT&T’s $39 billion acquisition of T-Mobile, arguing that the merger violates antitrust laws. Sprint has since filed its own lawsuit in DC District court to block the proposed deal.
• The Senate debates the America Invents Act on Patent Reform (H.R.1249). These proposed reforms to the patent system are expected to be passed and signed by President Obama within the next two weeks. Many argue that the new laws will harm small inventors and venture capital funded companies.
• TechCrunch reports on Google CEO Eric Schmidt’s own take on improving the quality of issued patents through crowdsourcing.
• Groupon is considering delaying its initial public offering due to recent public market uncertainty.
• The Electronic Frontier Foundation provides analysis on the recent Capitol Records v. MP3Tunes opinion issued by the New York Southern District.  The court held that file de-duplication on cloud-based music services falls within the safe harbor provisions of the DMCA.  The decision will lead to reduced costs for online music locker service providers.

37 CFR 1.56 (Rule 56) establishes that there is a duty to disclose information to the Patent Office. The regulation states that “[e]ach individual associated with the filing and prosecution of a patent application has a duty of candor and good faith in dealing with the Office, which includes a duty to disclose to the Office all information known to that individual to be material to patentability.” The failure to disclose information could result in a later ruling of inequitable conduct and an invalidation of the patent.

In 1998 the Federal Circuit wrote, “inequitable conduct resides in failure to disclose material information… with an intent to deceive.” It is clear that inequitable conduct is made up of two distinct elements and they are: (1) intent; and (2) materiality. These two elements must each be proven by clear and convincing evidence.

Relationship of Office Actions to the Duty to Disclose

A recent question that has been debated among patent prosecutors is whether the duty to disclose material information extends to a duty to disclose the contents of previous office actions from related and/or unrelated patent prosecutions. More practically, patent prosecutors are worried that if they make a decision not to disclose the contents of a previous office action, that failure to disclose will later be used in an allegation of inequitable conduct that could invalidate the patent.

An office action is a response from the examiner at the United States Patent and Trademark Office to a filing by a patent prosecutor in the course of prosecuting a patent. An office action can be an allowance of the claims, a rejection of the claims pursuant to substantive patentability rules, or an objection to the claims pursuant to procedural rules. By its very nature, an office action merely represents the opinions and conclusions of the examiner who sent it and that examiner’s subjective interpretation of patent law and procedure. It is therefore unclear whether office actions fit within the definition of material information.

To answer the question whether office actions must be disclosed, it is therefore necessary to investigate the meaning of “material information” as it is set forth in Rule 56 to determine the extent of the materiality prong of the inequitable conduct test.

Material Information

Is an office action “information”?

Prior to determining whether an office action is material information, it must be determined whether it is information in the first place. As stated above, an office action represents the opinions and conclusions of an examiner at the USPTO based on the facts, arguments, and assertions put forth by the applicant in the patent application and in the prosecution history. It is possible that this definition does not bring office actions within the meaning of information, such that a categorical rule that they need not be disclosed can be established.

However, the language of the regulation and the Manual of Patent Examining Procedure (MPEP) suggests that such a narrow reading of the word “information” should not be endorsed. Rule 56 states that “all information” must be disclosed and it is therefore clear that the regulation is not referring to only prior art. The MPEP says that “the term “information” in Rule 56(a) is intended to be all encompassing.” The MPEP specifically mentions that all information must be disclosed, “regardless of the source.” There is a duty to disclose “information… as to other co-pending United States applications which are “material to patentability.”

The fact that neither the regulation nor the MPEP go into great detail about the meaning of “information” seems to indicate a broad definition of information, particularly when it is modified by the word “all.” This suggests that the “information” requirement will not provide an easy categorical rule as to whether office actions from other patent prosecutions need be disclosed. Rather, an office action from a different patent prosecution probably fits within the meaning of “information” and therefore its materiality must be analyzed in the same way as the materiality of any other information for which there may be a duty to disclose.

Materiality

Once it is established that an office action fits within the meaning of information, the entire disclosure question stems from the definition of materiality provided by the regulation. Rule 56(b) says that information is only material “it is not cumulative to information already of record or being made of record in the application, and (1) [i]t establishes, by itself or in combination with other information, a prima facie case of unpatentability of a claim; or 2) [i]t refutes, or is inconsistent with, a position the applicant takes in: (i) [o]pposing an argument of unpatentability relied on by the Office, or (ii) [a]sserting an argument of patentability.

There are two aspects to the materiality question, which can be referred to as timing and substance. With regard to timing, information is only material if it is not cumulative to information already of record. This means that regardless of the substantive nature of the information, if it has already been disclosed (or at least a way of obtaining it has been disclosed) then there is no duty to disclose it.

Not surprisingly, the majority of the focus of the case law has tended to be about the substantive materiality question addressed in Rule 56(1) and the standard has evolved over time. Early doctrine regarding materiality of information involved three tests that the court laid out in In re Multidistrict Litigation Involving Frost Patent. There was an objective ‘but for’ test, a subjective ‘but for’ test, and a ‘but it may have test’.[1]

More recently, there are two different tests that the CAFC has used in determining whether information is material. Prior to 1992, the courts used a reasonable examiner test, asking whether a reasonable examiner would have deemed the information material. This was based on the language of Rule 56 prior to its being changed in 1992.

In 1992, the language of Rule 56 was amended to its current form, involving a prima facie case of unpatentability. It appeared that the reasonable examiner test was no longer pertinent. However, recently, the court in Digital Control, Inc. v. The Charles Machine Works suggested that the reasonable examiner test was still alive and the prima facie test provides an additional test of materiality.

Is an office action “material”?

Cumulativeness

It is possible that the timing aspect of at least some types of office actions makes them inherently cumulative to information already of record such that the substantive question of materiality need not be addressed. With regard to cumulativeness, it should be noted that there is a potential difference between office actions from parent applications of the application at issue and office actions from unrelated applications. It is likely that in a regular patent application, office actions from other unrelated patent applications fit within the rule and qualify as information known to the individual and they are not cumulative to information already of record. Therefore, because office actions from other unrelated applications are not of record in the present application, there may be a requirement to disclose them, depending on their substantive materiality.

With regard to the question of disclosure in continuing applications of office actions from parent applications and other related applications, it is more questionable whether office actions are not cumulative. MPEP 609.02 says that it is “not necessary for the applicant to submit an information disclosure statement in the continuing application that lists the prior art cited by the examiner in the parent application” and that “the examiner of the continuing application will consider information which has been considered by the Office in the parent application.” Therefore, in the filing of a continuing application, it would appear that the office actions are cumulative to information already of record and the substantive question of materiality need not be addressed.

However, recently, the court in Larson Mfg. Co. of South Dakota, Inc. v. Aluminart Products Ltd. said that office actions from related co-pending patent applications can be material to prosecution. The court emphasized that the knowledge of a potentially different interpretation is clearly information that an examiner would want to have and therefore is material. Therefore, it is important to note that the court seemed to endorse the reasonable examiner test that was kept alive by the Digital Control court and the court seemed to somewhat merge the timing/substance questions in evaluating the materiality of office actions.

It therefore seems apparent that no categorical rule can be derived either with respect to unrelated office actions or with respect to related office actions based on their cumulativeness. Thus, with regard to the question of whether office actions must be disclosed to the PTO, it depends on an evaluation of the substantive nature of the information contained in the office action.

The substantive aspect of office actions

Assuming that the relevant materiality question is whether information creates a prima facie case of unpatentability and that the question of whether a reasonable examiner would want to have the information is still relevant, it seems that there is a requirement to disclose the contents of office actions.

Under the reasonable examiner test, which is still relevant according to the Digital Control court, a reasonable examiner would want to know about office actions from other patent prosecutions and to know about other examiners’ views on the subject matter. With regard to the language of the current Rule 56, an examiner’s opinions and conclusions based on the application, the prosecution history, and the prior art is probably enough to establish a prima facie case of unpatentability.

Furthermore, in 1992 the Federal Circuit in LaBounty Mfg v. U.S. Int’l Trade Comm’n established that there is a duty to err on the side of disclosure in ‘close cases.’ Essentially, when in doubt about whether the information should be disclosed, it is not simply a recommendation that the disclosure should be made but rather there is a duty to disclose. Additionally, disclosing earlier office actions from other prosecution can be used in subsequent litigation to show good faith and negate deceptive intent.

Conclusion

All of this doctrine seems to suggest that there is nothing unique about office actions with respect to the duty to disclose. Office actions are information. They are not necessarily cumulative to information already of record, even in cases of continuing applications. The fact that they consist of an examiner’s opinions and conclusions does not inherently mean that they cannot establish a prima facie case of unpatentability pursuant to Rule 56(1). Therefore, the materiality of previous office actions must be analyzed exactly the same way as all other information with respect to the duty to disclose.

A common feature of modern human clinical trials is a double-blind placebo test. In such a trial, neither the doctor administering the drug nor the patient knows who is receiving the active drug and who is receiving a placebo. The placebo effect is well documented and commonly understood as a mental expectation response to being told that you are receiving a powerful drug. Patients taking a placebo report a variety of responses: some patients on the placebo report feeling better; some report no response and no side effects; others report that they are feeling worse or only experiencing side effects. Some patients, who are not experiencing side effects, believe they are receiving the placebo tend to drop out of studies. Patient drop out is a serious problem and in response, the “active placebo” was developed.

Active Placebos

An active placebo is a placebo that causes the same side effects as the active drug, but does not treat the patient’s disease. This helps to convince patients that they are receiving the active drug in the trial, and makes them less likely to drop out (but more likely to report side effects and curative effects of the drug).  Active placebos are commonly used in pain trials, giving people symptoms like drowsiness, nausea, or dry mouth.

Patentability under §101

35 U.S.C. §101 requires that a patent be given for any “new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof…” The “useful” requirement of §101 has been used to exclude immoral inventions from patentability. While this category used to include things like gambling machines, today things like suicide machines or a letter bomb would be excluded on an immorality basis. Could an active placebo fail the utility test of §101?

§101 utility requires a practical or specific utility, operability, and a beneficial utility. An active placebo would meet the operability requirement by showing that it did in fact give some people side effects. Presumably, the side effects would have to come from a pharmaceutically active ingredient in the placebo, and not be a result of mental expectation from the patient. The placebo would also pass the practical or specific utility test because it is useful in clinical trials for reducing the likelihood of patient drop out. However, is the active placebo beneficial? It is a device used to trick people into thinking they are taking a curative drug, when in fact the pill does nothing but give them a stomach ache!

The beneficial utility test is a very low bar, and a device that deceives the public may still have a beneficial utility. Here, it may come down to how the claims are written. A composition or compound claim for a drug to induce headaches or nausea would almost certainly be allowed. However, a method claim to tricking patients and taking advantage of the placebo or mental effects of the drug might tip the scales in the other direction. In the European Patent Office, the patent may fail, partly because the EPO expressly allows examiners to consider the morality of an invention, but also because the EPO, under the European Patent Convention, would not grant any method claims filed on an active placebo as being a surgical method.

The use of active placebos presents many regulatory and legal issues that the Bioethics Committee should consider, including patent eligibility. Some other issues involve the informed consent doctrine, the ethics of “do no harm”, and the integrity of clinical trials.  No matter what the committee recommends, they will face a tough decision that could affect many clinical study participants in the future.