Supreme Court Slows its Patent Law Jurisprudence?

The Supreme Court had denied petitions for certiorari in three IP cases out of the Federal Circuit:

  • Google v. Oracle (Federal Circuit held that the Java API naming scheme was copyrightable and not an ineligible “system or method of operation”).
  • Google v. Vederi (Federal Circuit held that an amendment during prosecution to overcome a rejection need not be “strictly construed against the applicant”).
  • Ultramercial v. WildTangent (Federal Circuit held the patented method of distributing media content with advertising to be a patent ineligible abstract idea).

Apart from leaving-stand the particular holdings, these outcomes may collectively signal a time of out-breath for Supreme Court patent law jurisprudence.  By my count, there are no patent decisions pending before the Court (with certiorari granted) and none of the petitions on file carry a substantial chance of being granted.

Guest Post: Keys to Success of the Florida Patent Pro Bono Program

Guest Post by Jennifer McDowell, USPTO Pro Bono Program Coordinator and Courtney Caliendo, Florida Patent Pro Bono Program Manager

Florida may have been among the last states to offer Patent Pro Bono services to qualified inventors and small businesses, but it was also among the quickest to launch. The United States Patent and Trademark Office (USPTO) identified the Institute for Commercialization of Public Research (Florida Institute) as a potential statewide program coordinator in January 2015, finalized a partnership agreement in March, and Florida Patent Pro Bono (FloBonoSM) officially launched statewide with a series of activities during the first week of May.

Formed by the Florida Legislature in 2007, the Florida Institute is a nonprofit organization that supports new company and job creation based on publicly-funded research. Working collaboratively with Florida’s many universities and private research institutions, the Florida Institute helps uncover commercially viable startup company opportunities, and provides both company building support and seed funding to help them grow.  The organization maintains extensive relationships with the service provider, business, and investment communities, and as a catalyst for innovation, capital attraction and economic development the Institute is an ideal administrator of the Florida Patent Pro Bono Program.

“This Program aligns well with the Florida Institute’s mission to create new companies and jobs in industries that are driving the global economy,” said Jamie Grooms, Florida Institute Chief Executive Officer. “We are pleased to be administering this important Program for Florida inventors with the support of the USPTO, and to expand our programming in support of entrepreneurship, job growth, and innovation-based economic development across the state.”

Like entrepreneurs who know all too well the importance of time to market, the Florida Institute realized it had to design and begin delivering the Program quickly to meet the needs of Florida’s vast, diverse, and widespread innovation community who collectively submit approximately 10,000 patent applications each year to the USPTO, making it one of the leading sources of patent application filings in the nation.[1] The Florida Program expands the national Patent Pro Bono Program that started in 2011 when the U.S. Congress passed the Leahy-Smith America Invents Act (AIA), encouraging the USPTO to support intellectual property law associations across the country to establish pro bono programs that assist financially under-resourced independent inventors and small businesses. Florida’s engagement also represents the successful outcome of one of President Obama’s seven Executive Actions for the USPTO to assist innovators by expanding the pro bono programs in all 50 states and increasing accessibility to legal assistance from registered patent professionals.

Between 2011 and early 2015, 46 states had entered into partnership agreements with the USPTO. As the 47th state to come on board, Florida was tasked with developing a program quickly in order to process not only new applicants, but to also deal with a backlog of approximately 50 inventor applications received before the Patent Pro Bono Program became available in Florida. As the third most populous state in the country with nearly 20 million residents, Florida is so large it spans two time zones and includes multiple metropolitan centers as well as vast rural areas.[2] The state is ethnically diverse as well, with over 27% of its residents, over the age of 5, speaking languages other than English in Florida households.[3]  Significantly, in Fiscal Year 2014, inventors in the state of Florida ranked tenth in the country in the number of patent application filed at USPTO.[4]

In order to meet the unique challenges posed by such a large and culturally-diverse state, the Florida Institute, with support from the USPTO, worked quickly to understand best practices put into place by states that had launched earlier, and referred often to the Patent Pro Bono Program Handbook created in Minnesota by the original pilot program team and to the USPTO itself. With a keen sense of urgency, coupled with the freedom to develop a program uniquely suited to meet the needs of Florida inventors, the Florida Institute embarked on community outreach to build a statewide coalition, and took the following key steps to expedite program launch in under 90 days:

  • Identified intellectual property lawyers who would assist early on with program guideline development;
  • Developed a database of registered intellectual property lawyers and agents who would be instrumental in providing patent pro bono services;
  • Identified law school faculty and administration for guidance and preliminary formation of a Steering Committee;
  • Created and filled the Program Manager position with an attorney;
  • Established eligibility criteria;
  • Contacted numerous legal and intellectual property associations;
  • Developed necessary applications, forms, and policy documents;
  • Created a website with program information, inventor application, and patent attorney and agent volunteer information and registration forms;
  • Assessed a backlog of program inquiries;
  • Planned two launch events, one in Miami and one in Tampa Bay, to provide program information as broadly as possible; and
  • Collected and began responding to new and previously submitted applications.

Critical to the early success of the Florida Patent Pro Bono Program was the Florida Institute’s decision to hire an attorney with experience practicing in the field of intellectual property law as its Program Manager. Before joining the Florida Institute, Courtney Caliendo practiced law at a boutique intellectual property law firm based in Fort Lauderdale, Florida; and is the current Vice President of the Intellectual Property Law Association of Florida (“IPLAF”). “Ms. Caliendo’s knowledge of the intellectual property system, combined with her ties to various legal and intellectual property organizations, facilitates activities such as patent attorney outreach, document drafting, and liaising between inventors and attorneys,”  Jane Teague, Florida Institute Chief Operating Officer.

Support from intellectual property organizations such as the American Intellectual Property Law Association (AIPLA), the Intellectual Property Law Association of Florida (IPLAF), the Florida Bar Business Law Section Intellectual Property Committee and the American Bar Association (ABA) was also a key to the expedient start of the Florida program.  Working with the USPTO and the FloBonoSM team, these organizations publicized the existence of the program and the launch events.  Through the AIPLA’s IP Law Associations and the IP Law Association of Florida, the USPTO facilitated key connections with local contacts in Florida, targeting audiences in the most efficient way.  Working in synchronization with these groups enabled the program to grow rapidly the number of volunteer attorneys on its roster, so that it could deliver the much-requested services to inventors in a timely manner.

The first event, held in Miami, put the Florida Institute (literally) on Center Stage at the widely-attended eMerge Americas Conference, to announce the Program’s debut. The session featured technology and social entrepreneur Traver Kennedy, who was ranked by NetworkWorld magazine as one of the “25 Most Powerful People” in computing, and has worked on special projects with the World Intellectual Property Organization (WIPO), a division of the United Nations. eMerge Americas was attended by over 10,000 people, and provided broad exposure to print and network media outlets as well as members of the business and academic communities. The second event was held in Tampa and featured T. David Petite, a prolific inventor in the field of computer networking, and founder of the Native American Intellectual Property Enterprise Council, a non-profit organization helping Native American inventors and communities.

The FloBonoSM team conducted extensive media outreach both before and during the events, and associated press releases were posted in over 180 publications in 25 states and 35 countries worldwide. At last count, well over 2,000 people had viewed the FloBonoSM press release. Both the media outreach and the launch events succeeded in promoting the Program and resulted in increases in inquiries and applications from both inventors and patent attorneys. Since its inception, the Florida Patent Pro Bono Program has received over approximately 72 inventor applications as well as numerous inquiries from inventors and commitments from patent attorneys and agents interested in providing program support.[5]

The newly-minted USPTO-Florida Institute collaboration is now providing under-resourced inventors with improved access to the patent system, streamlining the patent application process and supporting the submission of higher quality patent applications.  By matching qualified inventors to patent professionals around the state who provide pro bono legal assistance on specific aspects of the patent process, inventors and small businesses may avoid common pit falls and errors often seen in pro se patent applications. This Program ultimately fosters the growth of Florida’s innovation economy by supporting the protection and commercialization of new technologies.

If “necessity is the mother of invention”[6] then the Patent Pro Bono Program is its greatest champion.


[1] USPTO Patent Application Locating and Monitoring System 2015

[2] Census Data retrieved from:  on May 20, 2015.

[3] Id.

[4] USPTO Patent Application Locating and Monitoring System 2015

[5] Data taken as of June 11, 2015.

[6] Quote attributed to Plato.

Next Step: Substantive Harmonization of Patent Eligibility?

Broad subject matter eligibility had a strong run from 1980-2014. Although eligibility in the U.S. was broad, Europe was somewhat more narrow on various fronts.  With Alice Corp v. CLS Bank and Mayo v. Prometheus, that framework is now historic. Although some amount of shaking-out is still ongoing, in many ways European subject matter eligibility is now broader than U.S. eligibility.

Now that those of us favoring broad eligibility have been taken-down several pegs, we may now have ripe timing for substantive harmonization on eligibility grounds both with Europe and through the Trans-Pacific-Partnership (TPP).

Federal Circuit: Bad Lawyering != Sanctionable Litigation Misconduct

by Dennis Crouch

Attorney fee awards have been on a hot-streak since the Supreme Court’s 2014 Octane Fitness decision lowering the standard for proving an “exceptional case” under 35 U.S.C. Section 285.

Under the statute, a district court judge is empowered to award “reasonable attorney fees to the prevailing party” to a patent infringement lawsuit, but only in “exceptional cases.” Id.  In Octane Fitness, the Supreme Court gave the lower court fairly wide latitude in deciding exceptional case judgment and the award of fees.  In particular, courts are given authority to consider the totality-of-the-circumstances when determining whether a fee award is appropriate. In the parallel case of Highmark, the court held that those lower-court determinations should be given deference on appeal.

The current patent litigation between Gaymar Indus and Cincinnati Sub-Zero began when the patentee (Gaymar) filed its lawsuit alleging infringement of its Patent No. 6,517,510.  CSZ’s response was to file an inter partes reexamination petition that eventually led to a judgment that the asserted claims were not patentable and thus cancelled.  That outcome effectively ended the (stayed) litigation as well.

However, when the triumphant defendant asked for attorney fees, the district court (through its magistrate judge) refused.  Supporting its no-fee judgment, the lower court first noted that the case was not objectively baseless and thus would have failed under the old standard.  In addition, the court found that the defendant also had unclean-hands based upon its own litigation misconduct.

On appeal, the Federal Circuit has vacated that no-fee determination — finding that the district court abused its discretion and committed clear error by finding litigation misconduct by the defendant CSZ.  To reach its conclusion, the appellate panel walked through the four examples of litigation misconduct cited by the district court and showed how they were either not misconduct or else not-that-bad.  The court concludes as follows:

Without question, CSZ’s arguments . . . could be properly characterized as overstatements. But none of the cited examples amounts to misrepresentation or litigation misconduct. In addressing potential litigation misconduct in analogous contexts, other circuits have concluded that isolated overstatements do not rise to the level of sanctionable litigation misconduct under Federal Rule of Civil Procedure 11. . . .

[The examples cited by the district court—whether considered in isolation or in the aggregate—amount to sloppy argument, at worst. While such sloppiness on the part of litigants is unfortunately all too common, it does not amount to misrepresentation or misconduct. In view of the serious consequences of a finding of misconduct, it is important that the district court be particularly careful not to characterize bad lawyering as misconduct.

With this new guidance, the district court will likely again be asked to consider whether the facts justify an award of fees.

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The opinion here was authored by Judge Dyk and joined by Chief Judge Prost and Judge Bryson.(Read the decision: Gaymar v. CSZ)

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Although the opinion here favors the accused infringer, its precedential value is more generally party neutral.  Rather than favoring one side over the other, the decision here basically acts to keep a high threshold for what counts as litigation misconduct.  The decision here is also somewhat parallel to that in Biax v. Nvidia where Judge Dyk vacated an attorney-fee award after finding that the defendant did have a reasonable basis for its infringement content and that the district court misinterpreted an expert’s deposition.


Independent Patent Claims

As with dependent claims, the average number of independent claims per patent has also dropped significantly over the past decade. (From around 3.2 to 2.5 independent claims per patent).  As the histogram shows below, the decline comes primarily from a rise in the percentage of applications with three-or-fewer independent claims.


In particular, the chart shows a histogram of independent claim counts for two sets of patents — those issued in 2005 and those issued thus far in 2015.  This change is largely driven by PTO fees and the ongoing commodification of patent prosecution.

About half of the patents include a “method” or “process” claim. However, among what I term “computer related” patents, the percentage with method claim rises to over 80%. (Here, I defined ‘computer related’ patents ones that use any of the following terms in an independent patent claim: computer; processor; software; machine readable; information; memory; data; database; virtual; storage media.)




Patentlyo Bits and Bytes by Anthony McCain

Get a Job doing Patent Law

Judge Newman: Functional Claim at Point of Novelty => Abstract Idea

by Dennis Crouch

Internet Patents Corp. v. Active Networks (Fed. Cir. 2015)

In an opinion by Judge Newman, the Federal Circuit has affirmed the lower court dismissal of IPC’s infringement lawsuit — holding that the claims of U.S. Patent No 7,707,505 are invalid for lacking patent eligible subject matter under 35 U.S.C. 101 as interpreted by Alice Corp.

The claims are directed to a method of providing a multi-pane (tab) user interface with icons as follows:

1. A method of providing an intelligent user interface to an online application comprising the steps of:

furnishing a plurality of icons on a web page displayed to a user of a web browser, wherein each of said icons is a hyperlink to a dynamically generated online application form set, and wherein said web browser comprises Back and Forward navigation functionalities;

displaying said dynamically generated online application form set in response to the activation of said hyperlink, wherein said dynamically generated online application form set comprises a state determined by at least one user input; and

maintaining said state upon the activation of another of said icons, wherein said maintaining allows use of said Back and Forward navigation functionalities without loss of said state.

Walking through the two-step analysis of Alice Corp., Judge Newman first identified the gist of the invention or “the basic character of the subject matter.”   In reading the patent document, the court found that it described the “most important aspect” of the invention is that it “maintains data state across all [browser] panes.”  In other words, the basic function of the invention is “the idea of retaining information in the navigation of online forms.”  Without further analysis, Judge Newman identified this basic function as an unpatentable abstract idea and immediately moved to Alice/Mayo step-2.

In Step 2, the Supreme Court instructs us to seek-out an “inventive concept” within the claims that goes beyond the unpatentable abstract idea and that is more than “well-understood, routine, conventional activities previously known.”  In reviewing the claim, Judge Newman could find nothing beyond conventional browser elements and the claimed end-result of “maintaining [the] state.”  However, that final and admittedly critical element of the invention was not limited to any particular method or mechanism and thus remained abstract.

The mechanism for maintaining the state is not described, although this is stated to be the essential innovation. The court concluded that the claim is directed to the idea itself—the abstract idea of avoiding loss of data. IPC’s proposed interpretation of “maintaining state” describes the effect or result dissociated from any method by which maintaining the state is accomplished upon the activation of an icon. Thus we affirm that claim 1 is not directed to patent-eligible subject matter.

The court also invalidated parallel system and computer claims — noting that “the statement that the method is performed by computer does not satisfy the test of ‘inventive concept.'”  The court also held that dependent claim limitations requiring differing responses to ‘quasistatic’ and ‘dynamically generated’ content was insufficient to overcome the Section 101 hurdle because they merely represent “the siting the ineligible concept in a particular technological environment.”

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Judges Moore and Reyna joined Judge Newman on the panel.

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Major case here that again appears to coincide with the ongoing battles over functional claim limitations.  Here, Judge Newman focuses on the reality that the admittedly fundamental aspect of the invention was claimed in functional form without providing any limitations as to its particular mechanism of function.  Result: unpatentable as an abstract idea.

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Mike Borella covers the case at Patent Docs. (“The general rule that many of us follow post-Alice is to draft rich, detailed, technical specifications, and undoubtedly we will double-down on that approach in light of this decision.”)



Bring Back the Means: “Voltage Source Means” Not a Means-Plus-Function Term

by Dennis Crouch

Lighting Ballast v. Philips Electronics (Fed. Cir. 2015)

In its 2014 en banc decision in Lighting Ballast, the Federal Circuit confirmed that all aspects of claim construction are reviewed de novo on appeal without giving any deference to findings made by the District Court in its original judgment.  While Lighting Ballast was pending certiorari, the Supreme Court decided Teva v. Sandoz that altered claim construction appeals by ruling that a district court’s factual conclusions regarding extrinsic evidence should be given deference on appeal. (All other aspects of claim construction decisions will continue to be reviewed de novo). Following Teva, the Supreme Court issued a G-V-R for the pending Lighting Ballast petition for certiorari with an order that the Federal Circuit reconsider its position based upon the outcome of Teva.

On remand to the original panel*, the Federal Circuit has flipped its original decision — now affirming the district court’s claim construction that was supported by its now undisturbed factual findings.

As with many recent cases, this one also focuses on the difficulty of defining the scope of a functionally claimed element. Here, the Lighting Ballast patent at issue claims a “voltage source means” and the question is whether that limitation should be deemed a means-plus-function element to be interpreted under 35 U.S.C. 112(6).  The problem for the patentee is that the specification does not spell-out any embodiments of a voltage-source-mean – and that resulted in the Federal Circuit originally holding that the claim term was indefinite and the claim invalid.

The district court had a different opinion. In particular, the district court heard expert testimony that one of skill in the art would easily understand a “voltage source means” to be an AC/DC rectifier or similar structure.  As such, the district court found that the term had sufficient structure to avoid the limits of Section 112(6).

In this new appeal of the same issue, the Federal Circuit has affirmed the lower court findings.  In particular, the Federal Circuit found no clear error with the district court’s conclusion that the “voltage source means” is “understood by persons of skill in the lighting ballast design art to connote a class of structures, namely a rectifier, or structure to rectify the AC power line into a DC voltage for the DC input terminals” because it was supported by the evidence of record.  Further the extrinsic evidence and resulting factual conclusions were allowed based upon the Federal Circuit’s de novo conclusion that and the conclusions were not contradicted by the intrinsic record. The court writes:

Under the circumstances, it was not legal error for the district court to rely on extrinsic evidence, because the extrinsic evidence was “not used to contradict claim meaning that is unambiguous in light of the intrinsic evidence.” Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005). For example, the district court determined that “while the ‘voltage source means’ term does not denote a specific structure, it is nevertheless understood by persons of skill in the lighting ballast design art to connote a class of structures, namely a rectifier, or structure to rectify the AC power line into a DC voltage for the DC input terminals.” The district court went on to note that the language following “voltage source means” in the claim—“providing a constant or variable magnitude DC voltage between the DC input terminals”—“when read by one familiar with the use and function of a lighting ballast, such as the one disclosed by the 529 Patent, [sic] would understand a rectifier is, at least in common uses, the only structure that would provide ‘a constant or variable magnitude DC voltage’”. The district court further noted that “[i]t is clear to one skilled in the art that to provide a DC voltage when the source is a power line, which provides an AC voltage, a structure to rectify the line is required and is clear from the language of the ‘voltage source means’ term.” We defer to these factual findings, absent a showing that they are clearly erroneous.

The district court’s factual findings are supported by the record. Specifically, these factual findings are supported by the testimony of Dr. Roberts and Mr. Bobel. Mr. Bobel testified in his deposition that the “voltage source means” limitation connotes a rectifier to one skilled in the art. Mr. Bobel further explained that a battery could likewise provide the necessary DC supply voltage described in the patent. Similarly, Dr. Roberts explained that the “voltage source means” limitation suggests to him a sufficient structure, or class of structures, namely a rectifier if converting AC from a “power line source” to DC for a “DC supply voltage” or a battery if providing the DC supply voltage directly to the DC input terminals. This expert testimony supports a conclusion that the limitations convey a defined structure to one of ordinary skill in the art. See Rembrandt Data Techs., LP v. AOL, LLC, 641 F.3d 1331 (Fed. Cir. 2011). Because the district court’s factual findings demonstrate that the claims convey sufficient structure, the district court was correct to conclude that the term “voltage source means” is not governed by § 112 ¶ 6. As such, we affirm the district court’s decision concerning “voltage source means.”

The analysis here is confusing on a number of levels.  How does the presumption of 112(6) applicability to ‘means’ elements fit in the analysis? What impact of Williamson? A factual finding is never the claim construction – thus how does the factual finding fit into the ultimate claim construction decision? . . .

This case does again raise the likelihood of testimony-intensive claim construction hearings as predicted post Teva.

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This affirmance reinstates the $3 million in damage verdict going to Lighting Ballast. (Plus pre- and post- verdict interest).

Supreme Court Declines to Overrule Brulotte

By Jason Rantanen

Kimble v. Marvel Entertainment, LLC (2015) Download Opinion

Opinion by Justice Kagan.  Justice Alito filed a dissenting opinion joined by Chief Justice Roberts and Justice Thomas.

Drawing heavily on stare decisis, the  Supreme Court has declined to overrule the rule in Brulotte v. Thys that a patentee cannot continue to receive royalties for sales made after the expiration of the patent based on principles of stare decisis.  However, the Court leaves open the possibility of creative license drafting.  From the opinion:

Patents endow their holders with certain superpowers, but only for a limited time. In crafting the patent laws, Congress struck a balance between fostering innovation and ensuring public access to discoveries. While a patent lasts, the patentee possesses exclusive rights to the patented article—rights he may sell or license for royalty payments if he so chooses. See 35 U. S. C. §154(a)(1). But a patent typically expires 20 years from the day the application for it was filed. See §154(a)(2). And when the patent expires, the patentee’s prerogatives expire too, and the right to make or use the article, free from all restriction, passes to the public. See Sears, Roebuck & Co. v. Stiffel Co., 376 U. S. 225, 230 (1964).  This Court has carefully guarded that cut-off date, just as it has the patent laws’ subject-matter limits: In case after case, the Court has construed those laws to preclude measures that restrict free access to formerly patented, as well as unpatentable, inventions.


Brulotte was brewed in the same barrel. There, an inventor licensed his patented hop-picking machine to farmers in exchange for royalties from hop crops harvested both before and after his patents’ expiration dates. The Court (by an 8-1 vote) held the agreement unenforceable—“unlawful per se”—to the extent it provided for the payment of royalties “accru[ing] after the last of the patents incorporated into the machines had expired.” 379 U. S., at 30, 32. To arrive at that conclusion, the Court began with the statutory provision setting the length of a patent term. See id., at 30 (quoting the then-current version of §154). Emphasizing that a patented invention “become[s] public property once [that term] expires,” the Court then quoted from Scott Paper: Any attempt to limit a licensee’s post-expiration use of the invention, “whatever the legal device employed, runs counter to the policy and purpose of the patent laws.” 379 U. S., at 31 (quoting 326 U. S., at 256).


As against this superpowered form of stare decisis, we would need a superspecial justification to warrant reversing Brulotte. But the kinds of reasons we have most often held sufficient in the past do not help Kimble here. If anything, they reinforce our unwillingness to do what he asks.

Slip Op. at 3-4, 6, 10.  Nonetheless, wary license drafters can work around Brulotte:

Yet parties can often find ways around Brulotte, enabling them to achieve those same ends. To start, Brulotte allows a licensee to defer payments for pre-expiration use of a patent into the post-expiration period; all the decision bars are royalties for using an invention after it has moved into the public domain. See 379 U. S., at 31; Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U. S. 100, 136 (1969). A licensee could agree, for example, to pay the licensor a sum equal to 10% of sales during the 20-yearpatent term, but to amortize that amount over 40 years.That arrangement would at least bring down early outlays, even if it would not do everything the parties might want to allocate risk over a long time frame. And parties have still more options when a licensing agreement covers either multiple patents or additional non-patent rights. Under Brulotte, royalties may run until the latest-running patent covered in the parties’ agreement expires. See 379 U. S., at 30. Too, post-expiration royalties are allowable so long as tied to a non-patent right—even when closely related to a patent. See, e.g., 3 Milgrim on Licensing §18.07, at 18–16 to 18–17. That means, for example, thata license involving both a patent and a trade secret can set a 5% royalty during the patent period (as compensation for the two combined) and a 4% royalty afterward (as payment for the trade secret alone). Finally and most broadly, Brulotte poses no bar to business arrangements other than royalties—all kinds of joint ventures, for example—that enable parties to share the risks and rewards of commercializing an invention.

Slip Op. at 6. Tom Cotter has already provided his own insightful commentary on the opinion over on ComparativePatentRemedies.

Side note: this may be the only judicial opinion ever to quote both my colleague Herb Hovenkamp and Stan Lee & Steve Ditko.

Guest Post by Prof. Collins – Williamson v. Citrix Online: And Now Comes the Difficult Part

Guest post by Professor Kevin Emerson Collins, Professor of Law at Washington University Law School. 

In its en banc decision in Williamson v. Citrix Online, the Federal Circuit held that there is no “strong” presumption that functional claim limitations that do not use the term “means” are not subject to the rules of means-plus-function claim construction laid out in section 112(f). There is still a presumption that claims that do not employ the term “means” are not means-plus-function claims, as Jason Rantanen explains in his earlier PatentlyO post on Williamson, but, in theory, this only requires the patent challenger to satisfy a more-likely-than-not burden of persuasion.

I understand Williamson to shift Federal Circuit case law on two distinct axes at the same time. First, as a matter of substance, it makes broad, functionally defined claims more difficult to obtain. The scope-narrowing rules of 112(f) now apply to a larger number of functionally defined limitations: a limitation that not employ the term “means” should now be governed by 112(f) whenever it “fails to ‘recite sufficiently definite structure’ or else recites ‘function without reciting sufficient structure for performing that function.’” Second, as a matter of form, Williamson makes patent law less rule-like and more standard-like. Courts may no longer use the rule-like, strong presumption that 112(f) does not apply when functional limitations do not employ the term “means.” Rather, whenever prompted to do so by a patent challenger, they must scrutinize the claim language on a case-by-case basis to see if it recites a sufficient quantum of structure in order to determine whether section 112(f) applies.

In my opinion, all things being equal, the substantive shift discussed above is a positive development. Unbridled functional claims over-reward an inventor and impose undue costs on society.[i] The strong presumption that functional claim limitations not using “means” avoided the scope-narrowing rules of 112(f) made such functional claims too easy to obtain. However, there is more work to be done to fully effectuate this substantive shift. For example, it is far from clear that the Federal Circuit will ever apply 112(f) to a method claim, despite the express mention of “step for” claims in the text of the statute. So, patentees can perform an end-run around Williamson and obtain broad, functionally defined claims simply by seeking a method claim rather than a product claim—a tactic that is particularly useful in the software arts where claims can be easily transformed from systems to methods and back again.

Nevertheless, being in a charitable mood, let’s assume all of the loopholes get closed and that all claims reciting “function without reciting sufficient structure for performing that function” are really subject to 112(f) after Williamson. It is at this point that we have to roll up our sleeves and begin the truly hard part of the work that is needed to reform functional software patents.

Bringing 112(f) to bear on software patents is tricky because the statute depends on a dichotomy between structure and function that simply does not exist in the software arts as a matter of fact. Although there is unquestionably a gray area, the structural and functional properties of a technology in the mechanical arts are, at their core, ontologically distinct to a philosopher and intuitively distinct to the rest of us. The description “coiled spring” denotes structure; the description “capable of generating kinetic energy when jostled” denotes function. However, this distinction vanishes in the software arts: most software inventions are function all the way down.[ii] Software is a powerful technology precisely because a programmer can remain ignorant of the physical, structural properties of a computer while specifying the functions that the software performs. Software functionality is therefore like a never-ending set of nested Russian dolls: you open up one more general functional description to look for structure, and all you find is another, more specific functional description. Patent law can, and does, identify an “algorithm” for performing a function as structure for legal purposes in a software claim, but it is importantly only metaphorical structure. An algorithm is a series of more specific steps for performing a more general function, but each of the steps in an algorithm is, in turn, specified only in functional terms. What is an algorithm as the term is used in patent law? It is a functional description of a software program that is specific enough that we are willing as a matter of patent policy to treat it like we treat a structural description in other arts. That is, the function-structure distinction in software is not a difference of kind but a difference of degree. Structure in the law of software patents is a legal fiction that has been manufactured to achieve patent policy goals.

The true challenge post-Williamson will therefore be identifying the level of specificity at which a functional description should count as metaphorical structure. Michael Risch alludes to this problem in his blog post on Williamson when he asked “[H]ow much structure is enough?” However, I think that a question precedent to Risch’s question is both more difficult and fundamental, namely “When is there any structure at all?” What level of specificity in a functional description counts as metaphorical structure?

To date, the Federal Circuit has answered this question with another layer of formalism that Williamson does not touch: any functional description in the specification that is more specific than the functional description in claims is likely to be metaphorical structure and thus an algorithm. This rule makes no sense from a policy perspective because the level of generality specified in a claim is often arbitrary. If a claim recites function A and the specification recites algorithmic steps 1, 2, and 3 for function A, a valid claim encompasses steps 1, 2, and 3 and their equivalents. However, if the claim were to directly recite functions 1, 2, and 3 (which are identical to steps 1, 2, and 3) without a more specific set of algorithms for those functions in the specification, then the claim is invalid for indefiniteness.[iii] The Federal Circuit’s approach to identifying algorithms is more like ducking the important question than providing an answer to it.

To be honest, I still waffle in my opinion on how hard the challenge of assessing the validity and permissible scope of functional software claims will be after Williamson. Some days, the problem seems difficult but tractable (although maybe not by an Article III court). Perhaps what we need to do is get patent lawyers, software engineers, and economists around a table. Perhaps they can articulate clear guidelines identifying a level of specificity at which functional software claims should be upheld, i.e., a level that identifies an algorithm and thus metaphorical structure. But, on other days, I’m less convinced that there is a tractable solution. Maybe the difference between a functional description of software and a software algorithm is like the difference between ideas from expression in copyright law, given that both differences are based on a levels-of-generality problem. Maybe therefore “[n]obody has ever been able to fix that boundary, and nobody ever can.”[iv] While the amount of uncertainty that follows from the idea/expression dichotomy may be acceptable in copyright law, the same amount of uncertainty in a function/algorithmic-step dichotomy in the law of software patents may not be.

In sum, although I believe that Williamson shifts the substantive reach of patent protection in the right direction, the costs of the inextricably linked shift toward a standard and away from a rule may, or may not, turn out to be too much to bear. If they are too much, then the need for a more rule-like patent regime will force us to choose doctrine that is either quite over-protective (e.g., that returns to the pre-Williamson strong presumption) or quite under-protective (e.g., that eliminates pure software patents altogether) as a substantive matter. Yet, despite the existence of these many possible futures, at least one thing is clear in the immediate aftermath of Williamson: the hard work of reforming functional software patents can now begin.

[i] The normative argument here is more complicated than is often presumed. For my take on why functional claiming should not be allowed, see Kevin Emerson Collins, Patent Law’s Functionality Malfunction and the Problem of Overbroad, Functional Software Patents, 90 Wash U. L. Rev. 1399, 1411–24 (2013).

[ii] To be clear, software only works because a programmed computer has certain physical, structural properties. But, the physical, structural properties of the programmed hardware are irrelevant to the definition of what constitutes a software invention. For more on what it means to say software is “function all the way down,” or to call software a purely functional technology, see id. at 1440–43.

[iii] Id. at 1463–67.

[iv] Nichols v. Universal Pictures Corp., 45 F.2d 119, 121 (2d Cir. 1930).

ePlus: Injunctions, Contempt, Law of the Case, and the Final Judgment Rule

An important role of our court system it to provide a final judgment that settles a dispute between parties.  The final judgment rule is strong and – in most cases – bars any re-judgment even when post-judgment events & revelations would impact the outcome.   For patent cases, one area of distinction is that of ongoing relief – such a ‘permanent’ injunction or ongoing royalties.

In ePlus v. Lawson Software, the patentee (ePlus) won its infringement case and the court ordered a permanent injunction against the adjudged infringer. Despite the court order, Lawson continued to violate the injunction and was socked with an $18 million contempt sanction.  However, prior to the appeal of that sanction-order being completed the USPTO cancelled the infringed claims (reexamination finding affirmed on appeal).  With that result in hand, the court here vacates the injunction and the contempt order – finding that the cancelled patent leaves them with no further legal basis.

It is well established that an injunction must be set aside when the legal basis for it has ceased to exist. . . . [U]pholding injunctions would be anomalous in the extreme in connection with patents this court has just held invalid. (citing Mendenhall v. Barber-Greene Co., 26 F.3d 1573 (Fed. Cir. 1994)).

Regarding the contempt holding, the court found it important that the district court’s holding was one of civil rather than criminal contempt.  In dissent, Judge O’Malley argued that the contempt holding should have remained in place.

The court also released a denial of an en banc rehearing request in the same case – with a 5 to 5 vote. [LINK]


Teva v. Sandoz: On remand, Still No Deference and Claim is Indefinite

Taking up the remand from the Supreme Court, a divided Federal Circuit panel has held true to its prior decision in Teva v. Sandoz – holding once again that the lower court’s claim construction was incorrect and that the asserted claims (Group I) are invalid as indefinite.  The majority (led by Judge Moore and joined by Judge Wallach) did give deference to the lower court’s particular fact-finding, but found that the lower court had drawn incorrect conclusions-of-law from the factual bases.  Further, the new ‘reasonable certainty’ definiteness requirement under Nautilus made the invalidity holding even easier to justify.

[Read Teva v. Sandoz (Fed. Cir. 2015)]

= = = =

In Teva, the Supreme Court held that findings-of-fact subsidiary to a claim construction decision should be given deference on appeal.  However, the court also noted that most claim construction issues remain questions of law reviewed without deference to the trial court’s findings. These de novo issues include ultimate claim construction outcome, findings regarding intrinsic evidence, and (according to this opinion) the decision on how to apply any subsidiary factual findings in the analysis.

Here, the patent claims include a copolymer “having a molecular weight of about 5 to 9 kilodaltons.” The problem is that polymer chemists have three different ways that molecular weight could be calculated in this context (peak average; number average; and weight average).

Although ostensibly a claim-construction case, the ultimate issue here is actually whether the “molecular weight” term is unduly indefinite under the standards of 35 U.S.C. 112(b).  Indefiniteness is considered part of the claim construction analysis and thus is also a question of law.  While the case was pending, the Supreme Court decided the important indefiniteness case of Nautilus v. Biosig. In Nautilus, the court  lowered-the-bar by making it much easier to find a patent indefinite whenever a claim’s scope lacks “reasonable certainty.”

In addressing the details of this case on remand, the Federal Circuit first noted that there is no express definition of the molecular weight term and that the patentee’s expert had admitted that the term has no “default” meaning even to a person of skill in the art.

The patentee’s expert testified that one of skill in the art would understand that the the calculation should be peak-average molecular weight because it would be more straightforward to calculate peak-average based upon the data presented in Example 1 and Figure 1 of the patent document.  The district court relied upon that conclusion in its analysis. On appeal, the Federal Circuit gave deference to the district court’s factual conclusion but noted that the analysis only goes so far and cannot overcome the claim language itself:

A party cannot transform into a factual matter the internal coherence and context assessment of the patent simply by having an expert offer an opinion on it. The internal coherence and context assessment of the patent, and whether it conveys claim meaning with reasonable certainty, are questions of law. The meaning one of skill in the art would attribute to the term molecular weight in light of its use in the claims, the disclosure in the specification, and the discussion of this term in the prosecution history is a question of law. The district court should not defer to Dr. Grant [Teva’s Expert’s] ultimate conclusion about claim meaning in the context of this patent nor do we defer to the district court on this legal question. To the extent that Teva argues that this ultimate determination deserves deference, it is in error. . . .

Even accepting as correct the district court’s factual determinations about .. the transfer of chromatogram data to create Figure 1, these facts do not resolve the ambiguity in the Group I claim about the intended molecular weight measure.

The intrinsic evidence seen by the Federal Circuit here actually came from the prosecution history of a continuation application related to the patent-in-suit.  In that later-case, the examiner rejected a claimed “molecular weight” term as indefinite under 112(b) and the applicant at that time responded that the best definition of molecular weight used weight average rather than peak average. The confusion arises now because the patentee is arguing that the proper definition is peak average. In my view, it is really this late-stage change-in-definition that led to the Federal Circuit’s indefiniteness holding.

Writing in dissent, Judge Mayer argued that the expert testimony should be seen as dispositive here and that the Federal Circuit improperly rejected factual expert testimony.  Judge Mayer also suggested that the proper course of action when vacating a lower court claim construction is not to find the claim indefinite but instead to remand to consider whether further factual development is needed.

= = = = =

Of interest, the majority strongly implies that “clear and convincing evidence” is required to hold a claim invalid for indefiniteness:

We hold that claim 1 is invalid for indefiniteness by clear and convincing evidence because read in light of the specification and the prosecution history, the patentee has failed to inform with reasonable certainty those skilled in the art about the scope of the invention. On this record, there is not reasonable certainty that molecular weight should be measured using Mp. This is the legal question—and on this question—we reverse the district court.

Of course, the clear-and-convincing standard is associated with factual conclusions not questions of law and the Federal Circuit here does not appear to have relied upon any factual conclusions for its decision.


Patent Pendency Redux


by Dennis Crouch

Readers asked for a bit more detail on the patent pendency chart that I posted a few days ago.  The first chart below again shows median patent prosecution pendency for utility patents grouped according to issue-year. The chart now includes ‘whiskers’ that show the 25%-75% interquartile range.  The second chart shows a more detailed prosecution pendency histogram for all patents issued January-May 2015. The lightly colored bars again represent the median and interquartile range.  You’ll note that the pendency histogram is skewed with a long tail.  For the chart, I cut-off the display at 10-years even though there are some (a small handful of) patents issued that took more than 10 years to issue.  This type of skew typically results in (1) the average pendency being greater than the median and (2) the mode pendency being less than the median. Both of these are true here.



With the amount of data here (over 100,000 patents), I would have expected the histogram to be much smoother.  My guess is that much of the jumpiness is due to artifacts caused by my monthly grouping and the PTO’s release of patents on a weekly basis.

Williamson v. Citrix: En Banc Opinion on § 112, para. 6

By Jason Rantanen

Richard A. Williamson v. Citrix Online, LLC (Fed. Cir. 2015) Download Opinion
Panel: Moore, Linn (author), and Reyna.  Part II.C.1. decided by the court en banc.
Judge Reyna concurred as to the conclusion of indefiniteness, but maintained his dissent as to a claim construction issue decided by the panel.  Judge Newman dissented as to Part II.C.1.

In the original panel opinion in Williamson v. Citrix (discussed here), the majority held that the use of the word “module” does not invoke the means-plus-function language of 35 U.S.C. § 112, para. 6, and thus the claim was not indefinite under the Federal Circuit’s § 112, para. 6 precedent.  In reaching that conclusion, the majority held that because the claim did not use the word “means,” there was a “strong” presumption that § 112, para. 6 does not apply.  Citrix sought en banc review.  (Disclosure: I joined an amicus brief encouraging the court to grant en banc review due to the intra-circuit split on this issue).

This morning the Federal Circuit withdrew the earlier opinion and substituted a new one, with an en banc section addressing the means-plus-function issue.  The en banc court reversed the precedent creating a “strong” presumption,  holding that the standard is “whether the words of the claim are understood by person of ordinary skill in the art to have a sufficiently definite meaning as the name for structure.”  Slip Op. p. 16.  If the words of the claim do not meet that standard, § 112, para. 6 (now § 112(f)) applies.

35 U.S.C. § 112, para. 6 states:

An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding
structure, material, or acts described in the specification and equivalents thereof.

Although there is a presumption based on the presence or absence of the word “means,” that presumption is rebuttable:

In making the assessment of whether the limitation in question is a means-plus-function term subject to the strictures of § 112, para. 6, our cases have emphasized that the essential inquiry is not merely the presence or absence of the word “means” but whether the words of the claim are understood by persons of ordinary skill in the art to have a sufficiently definite meaning as the name for structure.

Id. at 14. Under Federal Circuit precedent from the 1990’s, “the presumption can be overcome and § 112, para. 6 will apply if the challenger demonstrates that the claim term fails to “recite[] sufficiently definite structure” or else recites “function without reciting sufficient structure for performing that function.”  Id. (citing Watts v. XL Sys., Inc., 232 F.3d 877, 880 (Fed. Cir. 2000).

Subsequent cases raised that presumption first to a “strong” one (Lighting World), then to a “strong one that is not readily overcome” (Inventio), and then to an even higher bar: “[w]hen the claim drafter has not signaled his intent to invoke § 112, ¶ 6 by using the term ‘means,’ we are unwilling to apply that provision without a showing that the limitation essentially is devoid of anything that can be construed as structure” (Flo Healthcare Solutions) (emphasis added by court).

The court considered this heightened standard and eliminated it:

Our consideration of this case has led us to conclude that such a heightened burden is unjustified and that we should abandon characterizing as “strong” the presumption that a limitation lacking the word “means” is not subject to § 112, para. 6. That characterization is unwarranted, is uncertain in meaning and application, and has the inappropriate practical effect of placing a thumb on what should otherwise be a balanced analytical scale. It has shifted the balance struck by Congress in passing § 112, para. 6 and has resulted in a proliferation of functional claiming untethered to § 112, para. 6 and free of the strictures set forth in the statute. Henceforth, we will apply the presumption as we have done prior to Lighting World, without requiring any heightened evidentiary showing and expressly overrule the characterization of that presumption as “strong.” We also overrule the strict requirement of “a showing that the limitation essentially is devoid of anything that can be construed as structure.”

The standard is whether the words of the claim are understood by persons of ordinary skill in the art to have a sufficiently definite meaning as the name for structure. Greenberg, 91 F.3d at 1583. When a claim term lacks the word “means,” the presumption can be overcome and § 112, para. 6 will apply if the challenger demonstrates that the claim term fails to “recite sufficiently definite structure” or else recites “function without reciting sufficient structure for performing that function.” Watts, 232 F.3d at 880. The converse presumption remains unaffected: “use of the word ‘means’ creates a presumption that § 112, ¶ 6 applies.” Personalized Media, 161 F.3d at 703.

Applying the pre-Lighting World standard, the court concluded that the term “distributed learning control module” was governed by § 112, para. 6.  That term is part of a larger passage that is “in a format consistent with traditional means-plus-function limitations.  It replaces the term ‘means’ with the term ‘module’ and recites three functions performed by the ‘distributed learning control module.'” Slip Op. at 17.  That term – module – is “a well-known nonce word that can operate as a substitute for ‘means’ in the context of § 112, para 6.”  Id. “Generic terms such as ‘mechanism,’ ‘element,’ ‘device,’ and other nonce words that reflect nothing more than verbal constructs may be used in a claim in a manner that is tantamount to using the word ‘means’ because they ‘typically do not connote sufficiently definite structure’ and therefore may invoke § 112, para. 6.” Id.  And here, “the word ‘module’ does not provide any indication of structure because it sets forth the same black box recitation of structure for providing the same specified function as if the term ‘means’ had been used.”  Id. at 19.  Nor was there any other evidence that indicated that the term recited sufficiently definite structure.

The consequence of concluding that § 112, para. 6 applies was that the court moved to the second step of the means-plus-function construction: looking to the specification for corresponding structure.  Because the specification did not disclose adequate corresponding structure, the claim was indefinite.

Judge Reyna concurred in the conclusion reached by the court en banc, but expressed concern that the court’s approach sidesteps “underlying fundamental issues involving the development of functional claiming law since 1952 when 35 U.S.C. § 112, paragraph 6 was passed.”  Concurrence at 3-4.  Judge Reyna also dissented as to a claim construction issue decided by the panel.

Judge Newman dissented from the en banc ruling in Section II.C.1.  In Judge Newman’ view, the result of the court’s decision is clear: “additional uncertainty of the patent grant, confusion in its interpretation, invitation to litigation, and disincentive to patent based innovation.”

Update: Prof. Risch offers his thoughts on Williamson on the Written Description blog:

Expedited Patent Appeals

For a patent applicant, the appeals process is slow – adding years to the patent prosecution process.  While the USPTO is slowly addressing its unduly large backlog of appeals, it is also proposing a new Track-1 for ex parte appeals in the form of an Expedited Patent Appeals pilot program.

Although no petition fee will be required, the cost of the program may be too great. Namely, applicants must (1) Withdraw a pending ex parte appeal of another application (without refund); and (2) Agree to no oral hearing.  The withdrawal process can be accomplished with the filing of a request for continued examination (RCE).

The goal will be to reach a decision on the merits within six months of the petition filing.

[Read the Fed.Reg. Notice]

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I should note that the PTAB continues to hire new judges, and is currently conducting a search for a new Chief Judge. [LINK]


Eligibility 101: Motion to Dismiss Ends Another Patent

OIP v. Amazon (Fed. Cir. 2015)

In a short-but-important opinion, the Federal Circuit has affirmed a district court’s finding (on motion-to-dismiss) that OIP’s patent claims are invalid as lacking patent eligible subject matter.

The claims are directed to a multi-step process of using an offer-based inquiry method for setting product price.  (U.S. Patent No. 7,970,713).  The basic problem is that it is difficult to figure-out the profit-maximizing price for any given product. The inventor’s insight here is that, unlike a land-based grocery store where prices are publicly labeled, an internet-based store can offer a different price to each consumer.  The invention spells out a method of testing various price-points by actually offering the product for sale to consumers different consumers being given different prices.  The results of those offers (whether or not consumers purchased at the given price) can then be used to automatically calculate the price-point.

In reviewing the claimed invention, the Federal Circuit found it to be “no more than an abstract idea coupled with routine data-gathering steps and conventional computer activity.” As such, the claims are ineligible for patent protection.


Following the two-step approach of Alice Corp v. CLS Bank, the Federal Circuit first found that the claims did encompass an abstract idea — namely the abstract idea of “offer-based price optimization.”  We know that the price optimization is an abstract idea because it is similar to the “fundamental economic practices” that the Supreme Court has previously found to be abstract ideas.  (Note – here the appellate panel misquotes the Supreme Court as saying “fundamental economic concepts” rather than practices.)  The court also states: the fact that “the claims do not preempt all price optimization or may be limited to price optimization in the e-commerce setting do not make them any less abstract.”

The second step of Alice Corp considers whether the claims include an additional inventive concept sufficient to transform the abstract idea into a patent eligible invention.  Here, the court finds that additional limitations and concepts are all well understood, routine, and conventional activities that merely require conventional computer technology.  “[R]elying on a computer to perform routine tasks more quickly or more accurately is insufficient to render a claim patent eligible.”

The opinion of the court was penned by Judge Hughes and joined by Judge Taranto. Judge Mayer published an additional concurring opinion indicating that eligibility is properly addressed at the motion-to-dismiss stage.

Failure to recite statutory subject matter is the sort of “basic deficiency,” that can, and should, “be exposed at the point of minimum expenditure of time and money by the parties and the court,” Twombly, 550 U.S. 544 (2007). Addressing 35 U.S.C. § 101 at the outset not only conserves scarce judicial resources and spares litigants the staggering costs associated with discovery and protracted claim construction litigation, it also works to stem the tide of vexatious suits brought by the owners of vague and overbroad business method patents. Accordingly, where, as here, asserted claims are plainly directed to a patent ineligible abstract idea, we have repeatedly sanctioned a district court’s decision to dispose of them on the pleadings. . . . I commend the district court’s adherence to the Supreme Court’s instruction that patent eligibility is a “threshold” issue, Bilski v. Kappos, 561 U.S. 593 (2010), by resolving it at the first opportunity.

Still fighting against this tide, Judge Gilstrap (E.D. Tex.) requires an accused infringer to must obtain leave of the court after showing good cause before filing a motion to dismiss on patent eligiblity. (Joe Mullin Article).

Despite the suggested cost of patent litigation, I expect that winning on motion-to-dismiss is considerably less expensive than the IPR/PGR/CBM process.


Electronic Commerce Patenting

On June 16, I will be taking part in an ABA-hosted Webinar on Patent Subject Matter Eligibility Post-Alice Corp. Our 1.5 hour panel includes myself, Charles Bieneman, Robert Sachs and Alexis Liistro as moderator.  Interesting mix of folks and our focus will be on patent practice.

Register here:

From the brochure:

There have been many articles forecasting the fall of e-commerce patents after Alice Corp. v. CLS Bank International. These predictions have been supported recently by the high number of e-commerce patents being held invalid by United States Courts and the Patent Trial and Appeal Board. However, this panel does not believe that Alice sounds the death knell for e-commerce patents.

In addition to discussing Alice, faculty will also review other guidelines, such as those issued by the United States Patent and Trademark Office and use real-world examples to illustrate the differences between an unenforceable and enforceable e-commerce patent. After attending this program, participants should feel confident in preparing effective and valid e-commerce patents.


Median Patent Prosecution Pendency

The chart below shows the median patent prosecution pendency over the past decade (2005-2015).  You’ll note a steady rise in pendency up until 2010 with a subsequent steady fall since that time. I expect that median pendency will continue to fall over the next couple of years, but is unlikely to fall below 24 months.

Here, I define pendency as the number of months from filing to issuance on a straight application-by-application bases In this calculation I did not consider priority, PCT, provisional, or RCE filings.


One major area of difficulty is that of ex parte appeals.  Patents that were involved in an appeal of an examiner’s decision during prosecution have an average pendency of over 7 years.



Guest Post by Prof. Lefstin: Ariosa v. Sequenom and the Path Ahead for Subject-Matter Eligibility

Guest post by Jeffrey A. Lefstin, Professor of Law at the University of California Hastings College of Law.  Professor Lefstin’s forthcoming article, Inventive Application: a History, was cited by Judge Linn in his concurrence in Ariosa

The Federal Circuit has issued its decision in a closely-watched biotechnology case, Ariosa Diagnostics v. Sequenom. The opinion clarifies several aspects of the patent-eligibility inquiry in the wake of Mayo v. Prometheus, and has significant long-term implications for patent-eligibility not only in biotechnology, but in other fields where invention is based primarily on discovery.

The invention in the case derived from the inventors’ discovery that the cell-free fractions (serum and plasma) of a pregnant woman’s blood contain surprisingly large amounts of DNA from the fetus. Based on this discovery, the Sequenom patents claimed methods for prenatal diagnosis of fetal abnormalities, the methods comprising amplifying paternally-inherited sequences from the cell-free fractions of the mother’s circulation.

Applying Mayo, the Federal Circuit held all the claims in suit ineligible. In step one of the Mayo inquiry, the court found that the claims were all directed to a natural phenomenon: the existence of paternally-inherited cell-free fetal DNA (cffDNA) in the maternal bloodstream. In step two, the search for an ‘inventive concept,’ the court invoked Parker v. Flook for the following proposition:

For process claims that encompass natural phenomenon [sic], the process steps are the additional features that must be new and useful.

Because methods of amplifying DNA were well-known at the time of the invention, the court determined that the claims disclosed only well-understood, routine, conventional activity beyond the underlying natural phenomenon. The claims therefore lacked an inventive concept sufficient to transform the natural phenomena into a patent-eligible application. So Ariosa makes clear that the test for patent-eligibility is whether a claim represents an ‘inventive’ application of an underlying natural phenomenon, at the time the invention was made.

Another notable aspect of the case is the court’s discussion of preemption. After Mayo and Alice, some district courts have treated preemption as an operative test for patent-eligibility, while others have regarded preemption as the underlying justification for the doctrine. In Ariosa, the Federal Circuit seemed to adopt the latter view, stating that once claims are determined to disclose only ineligible subject matter under the Mayo test, “preemption concerns are fully addressed and made moot.” However, the court also wrote that “[w]hile preemption may signal ineligible subject matter, the absence of complete preemption does not demonstrate patent eligibility.” So the Federal Circuit seems to be suggesting that arguments regarding preemption can be taxed against the patentee in the § 101 inquiry, but not counted in the patentee’s favor.

In Ariosa, the Federal Circuit has endorsed a highly restrictive interpretation of the test for patent-eligibility, one that was not mandated by Mayo itself. A test for ‘inventive’ application was only one of several possible analytical approaches set forth in Mayo. Mayo also suggested a test of non-generic application for patent-eligibility: that a claim must do more than state a law of nature or abstract idea, and append an instruction to ‘apply it.’ That was the aspect of Mayo stressed by Alice, which emphasized generic application far more than inventive application.

As I argued in a recent paper, under a test of generic application, the claims in Ariosa might fare differently than the claims in Mayo. The claims in Mayo represented generic applications, because they did no more than reveal the results of the underlying relationship between 6-thioguanine levels and therapeutic efficacy. Arguably, at least some of the Ariosa claims do more than that: rather than claiming the natural phenomenon (cffDNA in the maternal circulation) itself, they employ the natural phenomenon as a means to a achieve a different end (diagnosing a genetic condition of the fetus).

Moreover, the Ariosa opinion appears to endorse dissection of the claim to a degree not only contrary to Diehr, but beyond that suggested by Flook itself. While Flook explained that “the process itself” must be new and useful, Ariosa suggests that the individual steps of the process must be new and useful, and identifies the discovery of cffDNA as “[t]he only subject matter new and useful as of the date of the application.” Given that most inventions consist of rearrangements of old elements, it is difficult to understand how the court can refrain from addressing the claim steps as an ordered whole, as mandated by Mayo itself.

And that highlights what is perhaps the most puzzling (or disturbing) aspect of Ariosa. According to Judge Linn’s concurrence, the steps of the method were new: at the time of the invention, no one was amplifying paternally-inherited sequences from maternal serum or plasma, because no one thought that those fractions contained significant amounts of fetal DNA. That contrasts with Mayo, where the acts recited in the method were identical to those performed in the prior art. Yet Judge Linn believed that the Supreme Court’s “blanket dismissal of conventional post-solution steps” in Mayo left no room to distinguish the Ariosa claims on those grounds.

If the step of amplifying paternally inherited DNA from serum or plasma was new, by what analysis could the court could regard it as “well-understood, routine, and conventional activity”? One way would be to sub-dissect that step into the conventional step of obtaining a cell-free fraction, and the conventional step of amplifying a sample containing DNA. That approach seems to lead to the reductio ad absurdum that most biotechnology processes are patent-ineligible, because they consist of the conventional steps of transferring drops of fluid from one tube to another.

The alternative way would be to ask if the step of amplifying paternally inherited DNA would be obvious once it was known that there was cffDNA in the maternal bloodstream. In other works, assume the patentee’s discovery to be already known, and ask if the invention is obvious once the discovery is assumed away. If that is truly the interpretation of Mayo signaled by Ariosa, then the case promises to cast a long shadow on the patent-eligibility of inventions based on discovery in the future.


Guest Post: Technical Detail in Senate PATENT Act Could Have Major Impact in Eastern District of Texas Patent Litigation

Guest Post by Christian E. Mammen.  Dr. Mammen is a litigation partner in the San Francisco office of Hogan Lovells.

The recently-introduced PATENT Act (S. 1137) tracks, in substantial part, many of the reforms proposed in the House’s Innovation Act (H.R. 9). However, the PATENT Act differs in several ways from the Innovation Act. Many of the differences between the two bills have been discussed elsewhere at length.   This article focuses on just one feature of the PATENT Act, which has some potentially far-reaching implications for patent litigation in the Eastern District of Texas, the nation’s most popular patent litigation forum.[1]

Discovery is one of the most costly and time-consuming phases of patent litigation. In patent litigation brought by NPEs, the burdens of discovery are asymmetrical, with the burden falling more heavily on the accused infringer. Particularly where the NPE-plaintiff acquired the patent on the secondary market, it will have few or no documents to produce relating to the invention process, patent-related products, or the like. The cost of discovery, which falls disproportionately on accused infringers, can motivate those accused infringers to settle patent litigation for valuations based on the cost of avoiding further litigation, rather than on the value of the patented technology.

To address this issue, the Innovation Act initially proposed that discovery be stayed until the court issues a claim construction ruling. However, this proposal was in tension with widely accepted practices concerning discovery prior to claim construction. For example, a 2008 Federal Judicial Center report indicated that most courts surveyed held claim construction after at least some fact discovery, and Berkeley Law Professor Peter Menell’s Patent Case Management Judicial Guide (2d ed. 2012), explains, “it is only by knowing the details of the accused product and the relevant prior art that the parties are able to determine which claim terms need construction.” Further, many courts have now adopted Patent Local Rules that require early production of infringement contentions and related documents, and invalidity contentions and related documents, and it is not clear whether those disclosures would also be stayed under the Innovation Act.[2]

Presumably in order to balance these competing concerns, the PATENT Act also includes the idea of a discovery stay in early phases of patent cases, but changes the triggering event. Rather than staying discovery until claim construction, the PATENT Act would stay discovery only while any one of three pre-answer motions is pending: (1) motions to dismiss, (2) motions to transfer venue, or (3) motions to sever accused infringers.

At first glance, this proposed scheme is a bit puzzling, since all three types of motions are typically filed – and resolved – early in the case, generally before discovery even starts.[3] Under the Federal Rules of Civil Procedure, discovery is stayed until the parties have held an initial conference concerning case management under Fed. R. Civ. P. 26(f). The Rule 26(f) conference generally happens about 3-4 months after the case is filed.

However, on closer examination, the PATENT Act’s proposed discovery stay has the potential to disrupt the status quo in one important circumstance. While there is a general preference that motions to transfer venue be brought as quickly as possible (generally before the answer is filed—indeed, the PATENT Act would only stay discovery when such motions are “filed prior to the first responsive pleading”), some courts delay resolution of these motions, and the PATENT Act’s stay of discovery would remain in place until the court rules on the motion. Furthermore, if the motion to transfer venue were filed sequentially after a motion to dismiss—a not implausible scenario under plausible readings of the PATENT Act—the filing date of the venue transfer motion could approach the date of the Rule 26(f) conference, thus extending the discovery stay well into the case’s discovery period. And if the court delays ruling on the motion, the commencement of discovery could be significantly delayed as well.

Famously, the Eastern District of Texas has gained a reputation for deferring rulings on venue transfer motions until the case is substantially advanced. As the Federal Circuit observed in one recent case challenging the Eastern District of Texas’ ruling on a transfer motion, “This case is a prime example of the importance of addressing motions to transfer at the outset of litigation … Congress’ intent to prevent the waste of time, energy and money and to protect litigants, witnesses and the public against unnecessary inconvenience and expense may be thwarted where, as here, defendants must partake in years of litigation prior to a determination on a transfer motion.” In re EMC Corp., 501 Fed. Appx. 973, 975-976 (Fed. Cir. 2013) (citations omitted).

Data recently obtained from Lex Machina indicates that, on average, when motions to transfer cases out of the Eastern District of Texas are granted, the ruling comes in 143 days, or about 4½ months. But when such motions are denied (meaning the case remains in the Eastern District of Texas), the ruling languishes for an average of 225 days, or 7½ months. According to Lex Machina, there were 33 cases in the Eastern District of Texas between January 1, 2010 and May 1, 2015 in which a venue transfer motion was pending for over a year before being ruled on – and only five of those longest-pending motions were ultimately granted in whole or in part. [4]

Particularly for Eastern District of Texas cases in which transfer is denied, the PATENT Act’s proposed discovery stay would prevent the start of discovery for up to 7-10 months from filing. This could have several effects. Without any other changes to the status quo, it could significantly clog the docket with discovery-stayed cases. Additionally, it will provide defendants with a strong incentive to file venue transfer motions, probably as late as possible before the start of discovery, in order to maximize the discovery-stay effect. Alternatively, the court could respond by substantially speeding up its rulings on venue transfer motions.

It is difficult at this time to say whether the drafters of the PATENT Act intended this particular scenario. But if they did, it is very clever indeed, and it will be interesting to watch it play out.

UPDATE: On June 10, Rep. Goodlatte introduced a Manager’s Amendment to the Innovation Act that scales back its proposed discovery stay. Like the PATENT Act, it would stay discovery during the pendency of pre-answer motions[5] to transfer venue or to sever claims or dismiss parties (but it does not provide for a stay pending motions to dismiss).[6] Additionally, the Manager’s Amendment would require the court to rule on any such motion before the court issues a case management order under Federal Rule of Civil Procedure 16. In view of the deadlines specified in the Federal Rules of Civil Procedure, the discovery stay in the Manager’s Amendment would normally only last for a maximum of three to four weeks (from the Rule 26(f) conference until the case management order issues). But it would also (albeit in a roundabout way) require courts to provide timely rulings on venue motions.

[1] In 2014, an estimated 32% of all patent infringement cases, and 48% of all NPE patent cases, were filed in the Eastern District of Texas.

[2] The Innovation Act is silent on whether early Patent Local Rule disclosures would be blocked by such a stay. However, the PATENT Act explicitly exempts from its proposed discovery stay early exchanges of infringement and invalidity contentions (whether by local rule or interrogatory).

[3] “Motions to dismiss” presumably refers primarily to pre-answer motions brought pursuant to Rule 12(b) of the Federal Rules of Civil Procedure, including motions based on lack of jurisdiction, failure to state a claim, improper venue or improper service. Such motions must be brought within 21 days of service of the summons and complaint, and are frequently resolved substantially before the Rule 26(f) conference. Actually, though, “motion to dismiss” is ambiguous, and could also refer to other procedures, such as a motion to dismiss brought by a plaintiff pursuant to Rule 41(a)(2). It is not immediately clear, however, what purpose would be served by staying discovery pending a plaintiff’s Rule 41 motion to dismiss.

“Motions to sever accused infringers” evidently refers to motions to sever a claim or drop a party for misjoinder under Rule 21. While such motions should ordinarily be brought as soon as practicable, on its face, Rule 21 motion permits the court to provide such remedies “at any time, on just terms.” Although not fully analyzed here, motions to sever could potentially provide leeway for the same kind of procedural gamesmanship described in this article in relation to venue transfer motions.

[4] Complete data on file with the author.

[5] During the committee markup on June 11, the committee approved a further amendment, permitting stays to be triggered by such motions if they are filed “within 90 days of service of the complaint” rather than “before a responsive pleading is due.”

[6] The Manager’s Amendment remains silent on the status of early disclosures under Patent Local Rules.