Circuit Check v. QXQ, Inc.: Analogous Art Doctrine

By Jason Rantanen

Circuit Check Inc. v. QXQ Inc. (Fed. Cir. 2015) Download Opinion
Panel: Louie, Dyk, Moore (author)

Although it shows up only occasionally in the Federal Circuit’s opinions, the analogous arts doctrine can play an important role in structuring and limiting obviousness determinations.  Here, it is a key component of the Federal Circuit’s reversal of the district judge’s grant of Judgment as a Matter of Law that the patents-in-suit were obvious.  An important limitation of this decision, of course, is that the consequence is to reinstate the jury verdict that the patent was not obvious.  Put another way, although the Federal Circuit uses the analogous arts doctrine to restrict the scope of obviousness here, the procedural posture of its review maintains   some degree of indeterminacy.

While obviousness determinations often invoke the hypothetical person having ordinary skill in the art sitting at a lab bench on which is arrayed every existing prior art reference, the analogous art doctrine functions to limit those references.   The basic elements are well established:

To be considered within the prior art for purposes of the obviousness analysis, a
reference must be analogous. Wang Labs., Inc. v. Toshiba Corp., 993 F.2d 858, 864 (Fed. Cir. 1993). Whether a reference is analogous art is a question of fact. Wyers v. Master Lock Co., 616 F.3d 1231, 1237 (Fed. Cir. 2010). Prior art is analogous if it is from the same field of endeavor or if it is reasonably pertinent to the particular problem the inventor is trying to solve. Id.

Here, there was no question that “the disputed prior art—rock carvings, engraved signage, and Prussian Blue—is not part of the field of circuit board testers and test figures.”  Slip Op. at 6.  Thus, the issue was whether the prior art “is reasonably pertinent to the particular problem solved by the inventor.”  The Federal Circuit concluded that a reasonable jury could  have found that it was not:

Although “familiar items may have obvious uses beyond their primary purposes,” KSR Int’l Co. v. Teleflex, Inc., 550 U.S. 398, 420 (2007), a reference is only reasonably pertinent when it “logically would have commended itself to an inventor’s attention in considering his problem,” In re Clay, 966 F.2d 656, 659 (Fed. Cir. 1992). The jury heard testimony that a person of ordinary skill in the art would not have thought about rock carvings, engraved signage, or Prussian Blue in considering how to mark interface plates. J.A. 1387–88, 1397, 1430–32, 1434, 1443–44, 1447. The jury was entitled to weigh this testimony, find that an ordinarily skilled artisan would not find that the disputed prior art “logically would have commended itself to an inventor’s attention,” and thus find the disputed prior art not analogous. See In re Clay, 966 F.2d at 659.

The district judge’s opinion also referenced the idea of keying a car, noting that “any vandal who has ‘keyed’ a car knows that stripping the paint with a key will result in
the underlying metal color showing through.”  Slip Op. at 4 (quoting district court).  But

Just because keying a car, for example, is within the common knowledge of humankind does not mean that keying a car is analogous art. An alleged infringer should not be able to transform all systems and methods within the common knowledge into analogous prior art simply by stating that anyone would have known of such a system or method. The question is not whether simple concepts such as rock carvings, engraved signage, or Prussian Blue dye are within the knowledge of lay people or even within the knowledge of a person of ordinary skill in the art. Rather, the question is whether an inventor would look to this particular art to solve the particular problem at hand. Here, Circuit Check put forward evidence that an inventor would not have considered the disputed prior art when trying to improve marking. It is not hard to arrive at that conclusion. Even though an inventor may be aware of rock carvings, it is not surprising that the inventor would not have looked to rock carvings to improve the process of painting small dots on interface plates for expensive circuit board testers. And, even though an inventor may work in an office with engraved signage, the inventor would not necessarily have considered using the techniques disclosed in engraved signage to solve the problem of marking circuit board tester interface plates.

The Federal Circuit also found substantial evidence to support the jury’s presumed finding of substantial differences between the prior art and the claims, and in support that objective considerations support nonobviousness.

Read This: USPTO’s New Examination Guidelines Subject Matter Eligibility Provide “Pathways to Eligibility”

By Dennis Crouch

The Supreme Court’s decisions in Alice Corp v. CLS Bank and Mayo v. Prometheus serve as dramatic turning points in the conventional wisdom of subject matter eligibility.  Inventions that were previously thought to be patent eligible are no longer; and we continue to re-calibrate toward this new normal. The USPTO has found some amount of understandable difficulty in implementing the two step Alice/Mayo eligibility test.  In a chicken-and-egg problem, the test has major gaps in its structure, but the USPTO lacks substantive rulemaking authority to fill those gaps. 

The USPTO’s Office of Patent Examination Policy (under Mr. Drew Hirshfeld) has released a new set of Eligibility Examination Guidelines intended to supplement those released in 2014 with the intent of both educating examiners on best practices and also informing applicants of the agency’s approach. I spoke with Hirshfeld who reiterated that these guidelines are incremental and that the USPTO continues to welcome input from the patent law community.

The July 2015 update builds upon Federal Circuit eligibility decisions made during interim and also responds to user comments.  The guidelines major thrust, however, appears to be its attempt to offer a counterweight against those announcing that “nothing is patentable.” In the words of the notice, the idea is to provide “pathways to eligibility.”  To be clear, the update does not cancel the prior guidance but only serves as a supplement.

Identifying Abstract Ideas and Laws of Nature: “Don’t Get Creative.” Although we know that “abstract ideas” are not patent eligible, the courts have chosen not to provide any crisp definition or description of that set of concepts. As I mentioned earlier, the USPTO also lacks authority to further define that question of law. Rather than guessing at the vast gray areas, the agency is instructing examiners to only find an abstract idea when the concept in question parallels one found to be abstract in a court decision.

“These associations define the judicial descriptors in a manner that stays within the confines of the judicial precedent . . . a claimed concept [should] not [be] identified as an abstract idea unless it is similar to at least one concept that the courts have identified as an abstract idea.”

Here, it also appears that the “court decisions” to be followed are primarily those of the Federal Circuit or Supreme Court rather than district courts.

The examples provided in the most recent guidelines include a further focus on business methods and human-mind-activities. , graphical user interface (GUI), and software areas. (This update does not include the most recent decisions such as Versata, Intellectual Ventures, Webb, Internet Patents, Sequenom, and OIP Tech.) The on its guidelines page, the PTO continues to maintain a list of the court decisions.

One way to think about an abstract idea is a concept defined at a high level of abstraction and likely in functional form – here, the PTO does not take that approach but rather continues to define “abstract” as something akin to a category of subject matter that is excluded from eligibility.

The PTO’s Streamlined Analysis: The guidelines continue to promote its “streamlined analysis” for eligibility – essentially a shortcut for examiners when an abstract idea or law of nature is clearly only tangential to the thrust of the claim and therefore that eligibility is self-evident.

Requirement of “Evidence” for Eligibility Rejections:  The most controversial aspect of the guidelines will likely turn out to be the PTO’s decision that evidence is not needed as a prerequisite to an eligibility rejection. “For subject matter eligibility, the examiner’s burden is met by clearly articulating the reason(s) why the claimed invention is not eligible.” The PTO’s reasoning makes sense – eligibility has been repeatedly seen as a pure question of law adjudged without reliance upon any ‘evidence’ beyond that intrinsic to the patent documents themselves. “[C]ourts do not rely on evidence that a claimed concept is a judicial exception, and in most cases resolve the ultimate legal conclusion on eligibility without making any factual findings.”

To be clear, the PTO is requiring a “clear articulation” of an examiner’s reasons for rejection, but nothing more is required. Here, of course, the devil will be in the details of what is sufficient to constitute such clarity. To help settle that debate, the PTO has provided a further set of examples and reasoning seen sufficient. Interestingly, however, a “clear articulation” does not necessarily include determining the type of exception (abstract idea, law of nature, product of nature) that is being highlighted – “examiners are not required to distinguish between exceptions which can prove to be difficult.” This approach makes some sense in that the “law of nature” vs “abstract idea” distinction is likely merely philosophical. The one major difference is that both the Supreme Court and the USPTO appear to treat “products of nature” somewhat different. For products of nature only, the PTO includes a “markedly different characteristics” (MDC) shortcut to eligibility.

For further consideration of sufficient evidence, the PTO has also provides a set of worksheets (esp. Worksheets 5-8) that give explanations that satisfy the clear articulation burden. Although not “law,” these worksheets and examples are designed to carry weight with examiners and I would expect applicants to cite them directly in office action responses.

Preemption: I have mentioned this oddity before – although the eligibility test is designed to prevent a single entity from privatizing/preempting an abstract idea or law of nature, the eligibility test does not actually ask whether the invention as claimed accomplishes the prohibited preemption. Here, the PTO repeats that approach – noting that “the absence of complete preemption does not guarantee that a claim is eligible.”

Training: Examiners have apparently not yet been trained on the new guidance, and so someone immediately relying upon the guidance may need to self-educate the examiner. If I had a pending eligibility rejection that does not fit within the guidelines, I would talk through the situation with the examiner in an interview with the hope of having the rejection withdrawn.

Seeking the AntiCommons

Interesting historical look at patent-pools and ‘transaction entrepreneurs’ by USC law professor Jonathan Barnet leads him to the conclusion that the “anti-commons” concerns in the patent context don’t hold weight in practice.

IP scholars and policymakers often maintain that [anti-commons] effects are endemic in IP-governed markets and therefore tend to endorse the view that IP rights should be reduced to mitigate those effects. The descriptive component of that proposition cannot be reconciled with the clear weight of contemporary and historical evidence—covering more than a century’s worth of experience—that AC effects are repeatedly mitigated through independent market action by affected constituencies or transactional entrepreneurs. This is true both in concentrated markets, in which repeat-players have incentives and capacities to converge on a knowledge-sharing arrangement, and dispersed markets, in which intermediaries commonly enter to supply transactional solutions that ameliorate AC frictions. Remarkably, recent historical research shows that this proposition holds true even in “easy” cases that have long been assumed to provide clear illustrations of AC effects. Recognizing the shortcomings of the AC thesis as a descriptive proposition rebuts normative intuitions that intensive levels of IP acquisition and enforcement trap markets in a transaction-cost web that depresses innovation. This sophisticated view of AC effects as a potential but rarely realized outcome provides the basis for a more nuanced appreciation of the role of IP rights in creative and technology markets.



Patent Office Issues Updated “Interim Guidance” on Patent Subject Matter Eligibility

By Jason Rantanen

This morning, the USPTO issued a substantial update to its December 2014 “Interim Guidance” on patent subject matter eligibility.  The update addresses comments on the 2014 Guidance and includes several new examples of eligible and ineligible claims.  The update is available here:  (The title says 2014 Interim Guidance, but the contents include the 2015 update.)

The new examples are directed to abstract ideas rather than biotechnology based inventions, although the commentary notes that the office is working on additional biotech-based examples.  According to the update,

These examples provide additional eligible claims in various technologies, as well as sample analyses applying the Supreme Court and Federal Circuit’s considerations for determining whether a claim with additional elements amounts to significantly more than the judicialexception itself. The examples, along with the case law precedent identified in the training materials as pertinent to the considerations,3 will assist examiners in evaluating claim elements that can lead to eligibility (i.e., by amounting to significantly more) in a consistent manner across the corps.

While these examples will likely be welcomed by attorneys practicing in this area, a substantial limitation is that the only recent Federal Circuit opinion finding an abstract idea-based claim eligible is DDR Holdings v.  Thus, while there are several other examples of claims that the PTO would find eligible, those examples are based on either (1) PTO (as opposed to Federal Circuit) precedent; (2) hypothetical situations; or (3) pre-Mayo/Alice decisions (such as Diamond v. Diehr).

A particularly interesting part of the examples are two directed to use of the “streamlined” patent eligible subject matter analysis.  Those examples analyze claims directed to an internal combustion engine and remote storage of BIOS.  For these claims, the examiner would conduct only a “streamlined” analysis that would not become part of a written rejection.

As with the earlier Interim Guidance, the PTO is seeking public feedback on the  update.  From the website:

Any member of the public may submit written comments by electronic mail message over the Internet addressed to (link sends e-mail). Electronic comments submitted in plain text are preferred, but also may be submitted in ADOBE® portable document format or MICROSOFT WORD® format. The comments will be available for public inspection here at this Web page. Because comments will be available for public inspection, information that is not desired to be made public, such as an address or a phone number, should not be included in the comments. Comments will be accepted until October 28, 2015.

More on post-eBay injunctions

by Dennis Crouch

Earlier this month I highlighted Professor Kesan’s reports on post-eBay injunction jurisprudence. Professor Chris Seaman (W&L) has posted a parallel (draft) report titled Permanent Injunctions in Patent Litigation After eBay: An Empirical Study. The paper provides an in depth analysis of the decisions – below I highlight three of the charts that help to tell the story. In general, Seaman’s results confirm what I see as conventional wisdom regarding the likelihood of obtaining injunctive relief.

The one perhaps-surprising element of Seaman’s report is that he found no correlation between any of the commonly intrinsic patent measures that have previously been correlated with patent value, such as the number of patent claims, higher citation to prior art, higher forward-looking citation counts, and a larger patent family.


Guest Post: Digital Information at the Border

Guest post by Sapna Kumar.  Prof. Kumar is an Associate Professor at the University of Houston Law Center, where she teaches patents and administrative law. She has written extensively about the ITC. Her most recent article, Regulating Digital Trade, discusses the ClearCorrect decision at length and is available here (

Next week, the Federal Circuit will hear oral arguments for ClearCorrect Operating, LLC v. International Trade Commission. It will decide whether the International Trade Commission’s (ITC’s) jurisdiction extends to digital information. Much is at stake.


The ITC has jurisdiction over infringing “articles” that are imported into the country, under § 337 of the Tariff Act. Patent holders use the ITC because it can grant exclusion orders that block infringing goods from entering the country and are enforced by Customs and Border Patrol at ports of entry. The ITC can also issue cease-and-desist orders.

As discussed in an earlier post, the technology at issue involves plastic dental aligners. Align Technology’s (Align’s) patents cover methods of making aligners by generating the digital data sets for the aligners and then using the data to make the aligners, generally through 3D printing. ClearCorrect found what it thought was a clever way to circumvent the patent: patients were seen in Houston (where digital scans were made of the patients’ teeth), but a Pakistani counterpart created digital models of the patients’ teeth and created digital treatment plans. These data sets were uploaded to a Houston server; ClearCorrect then used 3D printers in Houston to create physical models of the patient’s teeth, and used the models to create the aligners.

Align argues that the digital data sets are “articles,” and claims that §337 was triggered when the data was uploaded to the Houston server. In April 2014, a majority of the ITC Commissioners agreed, interpreting the term “articles” to include digital information. Although the majority conceded that the ITC doesn’t have the power to exclude digital information from the U.S., it did order ClearCorrect to cease and desist importing data sets. Commissioner Johanson vigorously dissented, maintaining that Congress failed to delegate power to the ITC to remedy the importation of digital information.

Problems and Pitfalls

On the surface, the ITC’s decision seems like the right one—ClearCorrect was clearly trying to circumvent Align’s patents. But this case raises difficult questions regarding the scope of the agency’s authority. The core of the ITC’s jurisdiction is in rem, meaning that its jurisdiction isn’t over people, but rather, the articles themselves. In rem jurisdiction has been found to exist over intangible property such as domain names. In several domain name cases, courts emphasized the fact that in rem jurisdiction was appropriate because the court could exercise exclusive control over the property at issue. But nobody can control digital information in the abstract, making in rem jurisdiction a poor fit.

Even if in rem jurisdiction exists, there is still a question of what the term “articles” means. Here, the ITC’s statutory analysis is weak. It ignores Congress’s use of restrictive terms such as “goods” in the Tariff Act’s legislative history. More importantly, the ITC fails to address how Congress could have intended the ITC to have power over intangible articles in 1930 when the ITC lacked cease-and-desist authority until 1974.

But it gets worse. The ITC claims that the Supreme Court’s decision in International News Service v. Associated Press is relevant because it involved newspaper articles that were transmitted by telegraph, disregarding the fact that the case involved a different statute and an entirely different type of article. It also attempts to interpret “articles” in light of the Driver’s Privacy Protection Act, which was passed more than 60 years after the original Tariff Act. Going forward, the Federal Circuit should consider providing guidance to the ITC on how to engage in proper statutory interpretation.

This appeal is being closely watched. After the Sony Hack, a leaked memo emerged showing that the Motion Picture Association of America (MPAA) wants the ITC to order internet service providers to block customer access to websites with pirated content. To do this, the MPAA needs the ITC to have jurisdiction over infringing digital information. Given that there is no “digital border,” this also raises questions regarding when information has entered the country and links up to issues from Suprema, Inc. v. International Trade Commission regarding when § 337 is triggered.

Furthermore, this appeal will require the Federal Circuit to grapple with the issue of proper standard of review for ITC decisions. Because the ITC was interpreting the ambiguous term “articles” during formal adjudication, it is potentially eligible for strong deference under the Supreme Court’s Chevron U.S.A. v. Natural Resources Defense Council decision. Yet, the Federal Circuit has historically resisted applying Chevron deference to ITC patent decisions.

No matter how the Federal Circuit rules, its decision will not be the final word on digital trade regulation. One attempt has already been made to expand the ITC’s jurisdiction through legislation, and more attempts will likely follow.

Public Confidential Information: California Weighs In, Asks for Comments

By David Hricik


I’d normally only put this on the ethics page, but Dennis is on vacation and this issue pops up a lot in patent practice.

Suppose you get a call from a third party about a matter you’re handling for a client.  She tells you that she had written a blog post about a prior dispute she had had with your client, which your client had paid to settle.  Per your request, she emails you a link to the blog post.  You forward the link to a friend, saying nothing about it other than “this is interesting.”

Did you do anything wrong?

The information you forwarded was not privileged:  it came from a third party, so that doctrine doesn’t apply.  But, lawyers’ obligation of confidentiality extends far beyond privileged information, to protecting “confidential” information.  Whether information is “confidential” turns on applicable law, and in some states it includes even information that was publicly available when the lawyer was representing the client.  Generally, confidential information must be kept confidential if revealing it would be detrimental to the client, or former client, or the client had asked it not be revealed.

The California bar association has a proposed bar opinion that would make it clear that, while not privileged, even public information must be accorded protection as confidential information. The California bar has asked for comments, and you can do so here, and find the entire opinion.

Now think about patent practice.  You learn about a piece of prior art while representing Client A.  For whatever reason, it wasn’t pertinent to Client A’s application, so you didn’t disclose it.  Patent issues. Matter ends.

Now you’re representing Client B in prosecution. You remember that piece of prior art, and if you disclose it in Client B’s case, it is more likely that Client B will get a patent that, let’s say, will aid it compete with former Client A.  Can you?  Must you?

There are a lot of ways this issue comes up in patent practice, and some states like this proposed California opinion take a counterintuitive view of what is confidential.

Be careful out there and be sure to think about whether the USPTO rules, or your state rules, would control on that question.

Patents for Startups

Google’s cross-licensing program “LOT” continues to grow and apparently now includes more than 300,000 patent properties.

LOT Network operates as a poison pill for patent rights. In particular, members agree to license their entire portfolio of patents to all other members. However, the license only becomes effective if the patent is transferred to a non-LOT member, such as a patent assertion entity.

For many major operating companies, the most dangerous new patents will likely come from the start-up world and so Google (and others) have been considering how get start-ups to join the network. The company’s most recent proposal is its “Patent Starter Program” where Google will give away patent two families to start-up companies who agree to join the LOT Network.

It will be interesting to watch as this development moves forward.

Patentlyo Bits and Bytes by Anthony McCain

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Sensor Based Motion Tracking System Ineligible under Section 101

Thales Visionix v. USA and Elbit Systems (Ct. Fed. Clm. 2015).

Suing the government is always an interesting proposition because it is government-employed judges who decide whether or not the government is liable. In the U.S. claims of patent infringement against the Federal Government (or its contractors, typically) are brought in the Court of Federal Claims (CFC).

Here, Thales sued the Government and its contractor Elbit systems for infringing its U.S. Patent No. 6,474,159 used to track the relative motion between two moving objects. The allegation is that the invention is used in F-35 helmet-mounted displays – when the pilot turns his head, the relative tracking system shifts the display information.

The ‘159 patent is expressly directed to “cockpit helmet-tracking,” although it is not expressly limited to those applications. See Claim 1:

1. A system for tracking the motion of an object relative to a moving reference frame, comprising:

a first inertial sensor mounted on the tracked object;

a second inertial sensor mounted on the moving reference frame; and

an element adapted to receive signals from said first and second inertial sensors and configured to determine an orientation of the object relative to the moving reference frame based on the signals received from the first and second inertial sensors.

Reading claim 1, you’ll note the requirement of two sensors physically mounted upon two different objects as well as a signal receiver configured to receive data and compute the relative orientations. Further claims define the types of sensors as well as mechanisms for computation.

In the lawsuit, the United States Government raised the defense that the patent lacks subject matter eligibility – as impermissibly directed to an abstract idea. In its opinion, the CFC agrees;

Here, the Court … finds that TVI fails the first prong of the Alice analysis because the independent claims of the ‘159 Patent are directed to mathematical equations for determining the relative position of a moving object to a moving reference frame. Derived from Newtonian principles of motion and “borrowing the mathematics that an inertial navigation system uses to track an airplane relative to a rotating earth”, the navigation equation is undoubtedly a complex mathematical concept, and a solution to the problem of tracking two moving objects in relation to each other. However, the Court finds that this concept is a “building block of human ingenuity”, and the solution lies in the mathematical formulae, not the generic devices listed in the system claim. Accordingly, TVI’s claims fail the first prong of the Alice analysis because the claims are directed to the abstract idea of tracking two moving objects, and incorporate laws of nature governing motion, both of which are ineligible for patent protection.

[Regarding Alice Step 2] the system claim fails to transform the method claim into a patent-eligible invention. The plain language of Claim 1 describes generic, fungible inertial sensors that admittedly have already gained “widespread acceptance” in the field of motion tracking. Like the computer elements in Alice, these inertial trackers, when considered as an ordered combination in the claimed system, add nothing transformative to the patent. Although the concept of tracking the motion of a moving object relative to a moving reference frame may have been novel and nonobvious, the claimed system does nothing to ground this abstract idea in a specific way. The claims allow for the application of the navigation equation in almost endless environments, and are not limited to a fighter jet and a pilot’s helmet. . . .

Ultimately, the concern that drives the exclusionary exceptions for abstract ideas and laws of nature from § 101 eligibility “[i]s one of pre-emption.” Alice. The Court finds that the scope of the subject patent’s claims is insufficiently limited under the holdings of Mayo and Diehr, and if the patent were considered to protect eligible subject matter, it would pre-empt the use of the underlying abstract idea of relative motion tracking by others in the field. The patent’s ineligibility is confirmed by the machine-or-transformation test, under which the claims are not tied to any specific machine and do not transform the nature of the patent into something more than the abstract mathematics behind it. At its core, the patent is seeking protection for the mathematical formulae used in determining the relative orientation of two moving objects. The Court is unwilling to afford patent protection to Plaintiff’s claim on this building block of motion tracking technology.

101 – Read the Court Decision.

Using U.S. Discovery in Foreign Proceedings

In re POSCO (Fed. Cir. 2015)

On writ of mandamus, the Federal Circuit has vacated N.J. District Court Judge Chesler’s decision to allow confidential documents disclosed in the U.S. patent case to be used in the somewhat parallel actions in Japan and Korea.

The underlying infringement action here involves Nippon Steel suing the Korean company POSCO for infringing its patents covering a grain-oriented electrical steel strip having high magnetic flux density. (See., e.g., Patent No. 7,442,260).  Additionally, Nippon Steel sued POSCO in Japan for trade secret infringement and POSCO filed a declaratory judgment action in Korea asking for a no-infringement holding.

In the U.S. lawsuit, the district court entered a discovery protective order that disclosed confidential materials ‘be used by the receiving Party solely for purposes of the prosecution or defense of this action.’  U.S. discovery rules require much more extensive disclosures than do those in Korea or Japan. Thus, when POSCO disclosed “several million pages of documents containing confidential information” in the U.S. lawsuit, Nippon Steel looked to use some of those documents in the foreign courts.  In particular, Nippon Steel asked for, and the district court granted, a modification of the protective order that would allow it to use about 200 pages of documents relating to POSCO’s manufacturing process in the foreign court actions.  POSCO then petitioned for a writ of mandamus to stop the disclosure.

Here, the district court relied upon the Third Circuit precedent of Pansy v. Borough of Stroudsburg, 23 F.3d 772 (3d Cir. 1994), which holds that a “party seeking to modify the order of confidentiality must come forward with a reason to modify the order. Once that is done, the court should then balance the interests, including the reliance by the original parties to the order, to determine whether good cause still exists for the order.”  Based upon that holding, the district court determined that the foreign court proceeding was sufficient justification for the modification.

In its mandamus decision, the Federal Circuit found that Pansy should not be controlling but that the court should also consider 28 U.S.C. § 1782 and Intel Corp. v. Advanced Micro Devices, Inc., 542 U.S. 241 (2004) when determining whether to allow disclosure of confidential protected information to a foreign court.

Section 1782 provides that a U.S. district court “may order” disclosures for use in a foreign tribunal.  In Intel, the Supreme Court recognized that a district court should consider “comity and parity concerns” when deciding whether to grant disclosure. In particular, there is a recognized concern that parties will “abuse” the U.S. discovery process and “attempt to circumvent foreign proof-gathering restrictions.”

On remand, the district court will “conduct the proper assessment giving due consideration to the Intel factors.”

Maintenance Fees 2015

By Dennis Crouch

A substantial percentage of the USPTO budget arrives in the form of maintenance fee payments. This is “easy money” for the USPTO because the Office has already done the work of examination. A patent’s term runs 20-years from the effective filing date, not counting provisional or foreign national priority filing and with the addition of any patent term adjustment. They typical result is a term of 17 years post-issuance, give or take. During that time, a patent applicant must continue to pay maintenance fees at regular intervals: due 3 ½, 7 ½, and 11 ½ years from issuance (with an additional six-month grace-period added on).

The chart below shows the percentage of patents whose maintenance fees have been paid at each of the three stages. You’ll see that the vast majority of applicants pay the first maintenance fee (currently set at $1,600 for large entities); More patents drop out as the second maintenance fee is due ($3,600), and fewer than half of the cases see the third maintenance fee paid ($7,400). I expect that a number of factors drive the apparent trends in maintenance fee payments, including the ever-rising cost, the perceived value of future patent right, patent term remaining, general economic outlook, and current access to funds, for example.

The current fees were put into place in March 2013. It is not surprising that the increased price resulted in the diminished number demanded as shown in the chart. Importantly, however, the drop in maintenance fee payments was slight in comparison to the size of fee increase (3rd Fee increased by 50%).

In addition to the revenue generated, a number of folks (often non-patent-holders) see maintenance fees as a costly-screen configured to weed-out relatively worthless patents so as to ease any freedom-to-operate search.

Biologics Price Competition and Innovation Act: Refusal to Dance

By Dennis Crouch

The 2009 Biologics Price Competition and Innovation Act (BPCIA) was created as the Hatch-Waxman Act for Biologics – a mechanism for both protecting innovator investment and for encouraging third-party follow-ons albeit through “biosimilars” rather than “generics.” While parallel in theory to Hatch-Waxman, BPCIA includes many complicating twists that on the already complex innovator-generic dance. In recent oral arguments, Judge Lourie stated that Congress might be awarded “the Pulitzer Prize for complexity or uncertainty” based upon its drafting of the BPCIA.

Amgen v. Sandoz (Fed. Cir. 2015) offers the Federal Circuit a case of first-impression regarding an important element of the BPCIA – what happens when the biosimilar applicant refuses to play?

Under the BPCIA, the ‘patent-dance’ is kicked-off by the filing of a biosimilar application. Under, the statute, that applications “shall” include a set of disclosures. 42 U.S.C. § 262(l)(2). In a three-way split decision, the Federal Circuit holds that an applicant is not actually required to make the disclosure (i.e., not a “must” requirement) but instead that failure to make the disclosure merely results in the penalty defined by statute – permitting the “reference product sponsor” but not the biosimilar applicant to bring an action of declaratory judgment for infringement based merely upon the filing of the application.

My University of Missouri Law School colleague Erika Lietzen was deeply involved in the legislative negotiations and believes that the decision here is “inconsistent with the intent at the time.”


Judges Lourie, Newman, and Chen all filed separate opinions. Undoubtedly, the case will receive a petition for en banc rehearing as well as a petition for writ of certiorari.

Read the Decision:

Patentlyo Bits and Bytes by Anthony McCain

Get a Job doing Patent Law


Eligibility Discussion: Christal Sheppard will be visiting the University of Missouri System on  Thursday, July 23 at the University of Missouri Kansas City (UMKC) Law School Campus.  Sheppard is Director of the Detroit Patent Office.  Sheppard along with Prof Chris Holman, Michael Cygan from the PTO’s OPLA, Crissa Cook (Hovey Williams), and Jason Mudd (Erise IP) will be discussing the PTO’s new approach to subject matter eligibility and may delve into the expected new examiner guidance. Pre-register here.


Fighting for Peace and Love

Juice Generation v. GS Enterprises (Fed. Cir. 2015)

PLJJuice Generation has been seeking a registration on its mark “Peace Love and Juice” for its juice bar business but has been challenged by GSE who holds a family of marks with the phrase “Peace & Love” used in the restaurant business. The question for registration is whether the Juice Bar mark creates a likelihood of confusion with the GSE marks.  The Trademark Trial & Appeal Board (TTAB) found that the marks were too similar and thus could not both be registered. On appeal, however, the Federal Circuit has vacated that decision based upon its opinion that the TTAB should more thoroughly reevaluate the strength/weakness of GSE’s marks.  In particular, the court found that the TTAB should more fully consider the extent of third-party use of the Peace & Love phrase.

The fact that a considerable number of third parties use similar marks was shown in uncontradicted testimony. In addition, “[a] real evidentiary value of third party registrations per se is to show the sense in which . . . a mark is used in ordinary parlance.” 2 McCarthy on Trademarks and Unfair Competition § 11:90 (4th ed. 2015) (emphasis added). “Third party registrations are relevant to prove that some segment of the composite marks which both contesting parties use has a normally understood and well recognized descriptive or suggestive meaning, leading to the conclusion that that segment is relatively weak.” Id.

In its decision, the Federal Circuit repeatedly emphasized that the strength or weakness of a mark is not a binary question, but rather one that fits on a spectrum of possibilities.  Although a weaker mark can be registered and protected, its penumbra of power will be much narrower than would a stronger mark. “The Board here did not conduct an analysis of all evidence relevant to where on that spectrum GS’s marks fall and the resulting effect on the overall likelihood-of-confusion determination.”


Judge Stoll

On July 17, 2015, Kara Farnandez Stoll took the oath of office as Circuit Judge of the United States Court of Appeals for the Federal Circuit with a lifetime appointment from the President of the United States.

The court has now returned to its full panel of twelve regular status judges along with six senior-status judges. Of the twelve, seven are Obama appointees.


Ex Parte Reexam Filings

By Jason Rantanen

In my Patent Law Year in Review talk this morning at the Wisconsin Bar Association’s Tenth Annual Door County Intellectual Property Law Academy, I touched briefly on ex parte reexamination filings.  With the heavy interest in inter partes reviews, ex parte reexam filings probably haven’t been on most people’s radar.  And until recently, data from the past year wasn’t available on the PTO’s website.   Recently, though, the PTO updated the data on ex parte reexamination filings (available here:  As the below figure shows, although there was a drop-off following the steep increase in the fee for filing ex parte reexamination and launch of inter partes review proceedings, parties are still filing about 50-100 requests for ex parte reexamination per quarter.  (For comparison, there are about 400-450 requests for inter partes review filed per quarter).

Ex Parte Reexam FIlings

I’d also like to give a shoutout for the assistance I received from calling the PTO’s ex parte reexamination hotline (571-272-7703).  It’s always great when a helpful voice is on the other end of the line.