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Court To Decide Patent Dispute

November 2, 1998

WASHINGTON (AP) _ The Supreme Court today agreed to resolve a patent-law dispute the justices were told ``has flooded the patent system with uncertainty.″

The court said it will decide how stringently a federal appeals court that specializes in technical cases may second-guess the Patent and Trademark Office.

That federal agency is seeking greater judicial deference for its decisions on whether particular inventions deserve patent protection.

At issue is whether the U.S. Circuit Court of Appeals for the Federal Circuit should continue its traditional practice of reversing Patent and Trademark Office decisions if they are found to be ``clearly erroneous.″

Government lawyers contend that a federal law, the Administrative Procedures Act, requires a more deferential standard. But the 11-judge appeals court unanimously rejected that argument last May in a patent case involving Compaq Computers Inc., the world’s largest manufacturer of personal computers.

Nine individuals applied for a patent on a method for improving security for certain computer transactions, such as credit card purchases or banking on the Internet. They assigned their interest in the invention to the Houston-based Compaq.

Their application was denied after the Patent and Trademark Office determined that their method was merely an ``obvious″ variation of previous inventions.

An appeals court panel, and then the full appeals court, ruled that the federal agency’s decision was wrong and that a patent should be awarded. That sparked the Supreme Court appeal acted on today.

In a friend-of-the-court brief supporting the government’s appeal, patent-holder Theis Research Inc. said the longstanding dispute over what standard of judicial review applies in such cases ``has flooded the patent system with uncertainty _ casting a chilling effect on the inventive community, investment and the marketing of new technologies.″

Lawyers for Compaq urged the justices to reject the appeal, calling it part of the patent commissioner’s ``unremitting campaign to increase his power over patentability claims.″

The case is Lehman vs. Zurko, 98-377.

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