by Dennis Crouch

Earlier this month, the Federal Circuit issued a decision in the case of In re Chestek that, on its face, simply upheld the USPTO’s requirement that trademark applicants provide their domicile address. But contained within the court’s ruling is language that could have some major implications — essentially giving the USPTO carte blanche ability to sidestep administrative rulemaking procedures for any new requirements it imposes, as long as they are deemed “procedural” in nature.  And on this point the Federal Circuit appears to establish a wide permissive definition that the rulemaking is procedural so long as does not affect the substantive patent or trademark standards.  Of course, the USPTO generally does not have substantive rulemaking authority regarding the patent standards, and so everything is procedure.

Chestek centered around amendments made to trademark regulations in 2019 requiring that applicants provide their domicile address, defined as their permanent legal residence or principal place of business — mailing address is insufficient. The USPTO argued that this new address requirement was needed to help enforce its parallel new rule mandating that foreign applicants retain U.S. licensed counsel. Chestek PLLC, a law firm run by Pamela Chestek and specializing in trademark law, challenged the domicile address rule itself, saying its imposition failed to comply with the notice and comment requirements of the Administrative Procedure Act (APA).

In what appears to be largely a test case, Chestek applied to register the mark CHESTEK LEGAL, but refused to include her personal home address.  She argued that for privacy reasons her personal home address is not generally known and that its submission risks major breaches in privacy. But, the USPTO refused to register her mark based upon her failure to comply with the domicile rule. After losing at the USPTO, Chestek appealed to the Federal Circuit.

On the core issue, the Federal Circuit sided resoundingly with the USPTO. The court held that the domicile address rule was clearly procedural in nature rather than substantive, and thus was exempted from APA notice and comment strictures. The key passage from the court reads:

[T]he new rule requires additional information about applicants, i.e., their domicile address. Requiring different or additional information from applicants regarding their addresses merely ‘alter[s] the manner in which the [applicants] present themselves…to the agency.’ It does not alter the substantive standards by which the USPTO evaluates trademark applications.

Chestek at 8 (Quoting JEM Broadcasting Co. v. F.C.C., 22 F.3d 320 (D.C. Cir. 1994).   In other words, because the domicile address rule does not itself change the substantive legal criteria for granting or denying trademarks, the court sees it as merely a procedural step in the application process. And crucially, procedural rules are exempt from notice and comment requirements under APA section 553(b)(A).

Under the statute, an agency must publish notice of proposed rules prior to them becoming law. BUT the requirement does not apply “(A) to interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice; or (B) [when] impracticable, unnecessary, or contrary to the public interest.” 5 U.S.C. § 553(b).  I.e., the notice-and-comment requirements don’t apply to changes of agency procedure or practice.  Although the rule was deemed procedural, it still has substantial impact — i.e., Chestek loses her rights.  Of course any lawyer will agree failing to follow procedures can result in major consequences.

In finding the address rule procedural, the court asked the simple question: Does the rule “affect the substantive trademark standards by which the Office examines a party’s application.”  Here, the answer is clearly “no” and therefore, according to the Federal Circuit, the rule is procedural and thus exempt from notice-and-comment rulemaking.

Having found the challenged rules within the procedural exception to notice-and-comment rulemaking, we need not address Chestek’s argument that the proposed rule failed to provide sufficient notice of the domicile address requirement.

I am not worried about trademark applicants providing a residential address (although Chestek’s privacy argument seems to have some merit).  But, the Federal Circuit’s decision here appears quite sweeping and may provide the USPTO with enough authority avoid almost any future notice-and-comment in its rulemaking.

The notice and comment requirements serve a vital purpose, even when an agency does not incorporate public feedback into the final rule. The process provides transparency by allowing the public to understand what changes an agency is considering and why. It also fosters deliberation – the agency must provide a reasoned explanation if it rejects commenters’ concerns and proceeds to adopt the rule as originally proposed. Additionally, notice and comment creates a record for judicial review. If a party challenges the rule, the court can examine whether the agency fully considered and responded to material critiques raised during the process. An agency does not have free rein just because it technically “considered” comments before rejecting them. The record must substantiate that it took serious public input under advisement and had adequate grounds for sticking with the original course. Simply going through the motions of notice and comment without meaningfully wrestling with opposing views raised by stakeholders risks reversal upon legal challenge – and is bad policy for a nation that sees itself as promoting popular sovereignty. Even if not determinative, airing criticism, gathering diverse perspectives, and requiring a reasoned response uphold good governance norms and the model of administrative law. Allowing agencies to bypass this process denies public participation that bolsters legitimacy.

The logic of this case sweeps broadly and sets up the USPTO to potentially make more “procedural changes” without meaningful external input or following the traditional notice-and-comment approach.

Carl Oppedahl has been writing about the impact of the new .DOCX standard associated with a $400 fee for non-compliance as a typical procedural rule with substantive impact created without notice-and-comment because it merely involves procedural aspects of the patent application process — despite the large penalty for noncompliance. Other potential examples:

• Requiring that every application include a signed statement from the inventor explaining their contribution in detail, or face immediate abandonment.
• Mandating that the background section of specifications provide explicit citations to the closest statement of the problem as found in the prior art
• Imposing a $1000 processing fee for any application that the USPTO deems improperly formatted

None of these hypothetical new rules have any direct bearing on the substantive bases on which the USPTO evaluates patentability. But forcing applicants to jump through more procedural hoops and face steeper penalties would clearly make pursuing and maintaining protection more onerous. Without formal notice and comment, however, aggrieved parties would have little recourse to contest such impositions or to help guide the potential policy decisions.

One potential catch, alluded to in passing in Chestek, is the stipulation that procedural rules cannot “affect individual rights and obligations.” And indeed, one could argue that layered procedural requirements that make the patenting process drastically more expensive or convoluted would impinge on inventors’ substantive rights. Moving forward we will have to see which of these threads of thought the court and the PTO will follow.

To be clear, I believe the Federal Circuit followed administrative law precedent here, and I raise the issue just to recognize the power of the USPTO.  We can also recognize that, for the most part, USPTO leadership is generally open to hearing direct feedback and suggestions from constituents.  The notice-and-comment approach is not so necessary because the Patent Bar remains much like a small town. where many of us know each other at a personal level.  In Chestek, for instance, the USPTO has heard the privacy complaints regarding requiring home address, but ultimately weighed that against the ongoing problems facing the agency from faulty foreign applications.  That is effectively the same approach as notice-and-comment. The key difference though, is that USPTO official availability is a choice that might not be made by every administration, whereas notice-and-comment are required by law.

by Dennis Crouch

In Vanda v. Teva, the Federal Circuit confirmed the obviousness of Vanda’s claims covering use of tasimelteon (Hetlioz) to treat circadian rhythm disorders (Non-24-Hour Sleep-Wake Disorder).  Teva and Apotex, filed Abbreviated New Drug Applications (ANDAs) with the FDA seeking to market generic versions of the $100m+ drug.  Vanda sued, but lost on obviousness grounds — with the court holding that the claimed combination was obvious because it was directed to a set of known elements and a person of ordinary skill would have a “reasonable expectation of success” in reaching the resulting invention.  The rulings here included a conclusion that – even if the particular limitations were not obvious, it would have been obvious for a skilled artisan to try them out.

Vanda argues that the law of obviousness requires more than simply a reasonable expectation of success. Rather, in their petition to the Supreme Court, the patentee argues that the resulting invention must have been “predictable” or an “plainly indicated by the prior art.”

The question presented is: Whether obviousness requires a showing of “predictable” results, as this Court held in KSR, or a mere “reasonable expectation of success,” as the Federal Circuit has held both before and after KSR?

VandaCertPetition.

A new amicus brief strongly supports the petition with an interesting historical review of obviousness doctrine from the past 150 years.  The brief, filed by The National Association of Patent Practitioners and Professor Christopher Turoski (current NAPP president) brief argues that the Federal Circuit’s “reasonable expectation of success” standard for assessing obviousness departs from longstanding Supreme Court precedent on obviousness that was subsequently codified in 35 U.S.C. § 103.  NAPP Amicus Brief.

Under Pre-1952 “Invention” Standard

The brief traces the obviousness requirement back to Hotchkiss v. Greenwood, 52 U.S. (11 How.) 248 (1850), where the Court held that simply substituting one known material for another in an otherwise unchanged device was obvious and lacked “that degree of skill and ingenuity which constitute essential elements of every invention.” In the 100 years of “invention” cases following Hotchkiss, the Court consistently held that an invention “must be the result of invention, and not the mere exercise of the skill of the calling or an advance plainly indicated by the prior art.” Altoona Publix Theatres, Inc. v. Am. Tri-Ergon Corp., 294 U.S. 477 (1935). The key question was whether the advance would “occur to any mechanic skilled in the art” or was “plainly foreshadowed by the prior art.” Loom Co. v. Higgins, 105 U.S. 580, 591 (1881); Textile Machine Works v. Louis Hirsch Textile Machines, Inc., 302 U.S. 490, 498 (1938).  None of the Supreme Court cases, either pre- or post-1952, rely upon reasonable expectation of success as a determinative factor in assessing the obviousness of an invention.

In Altoona Publix Theatres, the patentee sought to enforce its patent covering covering the use of a flywheel to sound recording and reproduction equipment in order to make the film movement more uniform. The Supreme Court held the patent claims invalid for lack of invention. The Court explained that a flywheel was a very old and common mechanism for improving uniformity of motion in machinery. Its addition here merely involved “the skill of the calling” rather than the inventive faculty, as the flywheel’s use was plainly indicated by prior art showing flywheels applied in other sound recording devices. The Court relied on longstanding precedent that an improvement is not patentable unless it required invention, not just ordinary skill, and was not “plainly indicated” in the prior art.

An improvement to an apparatus or method, to be patentable, must be the result of invention, and not the mere exercise of the skill of the calling or an advance plainly indicated by the prior art. . . . The inclusion of a flywheel in any form of mechanism to secure uniformity of its motion has so long been standard procedure in the field of mechanics and machine design that the use of it in the manner claimed by the present patent involved no more than the skill of the calling. . . . [The prior art] plainly  foreshadowed the use made of the flywheel in the present patent, if they did not anticipate it. The patentees brought together old elements, in a mechanism involving no new principle, to produce an old result, greater uniformity of motion. However skilfully this was done, and even though there was produced a machine of greater precision and a higher degree of motion-constancy, and hence one more useful in the art, it was still the product of skill, not of invention.

Altoona Publix Theatres, Inc. v. Am. Tri-Ergon Corp., 294 U.S. 477 (1935).  In Altoona, the court thus concluded that the added flywheel failed this “invention” test, so the patent claims were held invalid.  The standard in Altoona of “plainly indicated” in the prior art is foreshadowed in the Supreme Court’s prior cases such as Slawson v. Grand Street, P.P. & F.R. Co., 107 U.S. 649 (1883) (cannot patent “an idea which would naturally and spontaneously occur to any skilled mechanic or operator in the ordinary progress of manufactures”); see also Altantio Works v. Brady, 107 U.S. 192 (1883).

Section 103 Codifies Prior Precedent

Prior to 1952, the patent act did not include a statutory obviousness standard. Rather, both the statute and the US constitution simply required an “invention.”

Congress created Section 103 obviousness standard in the 1952 Patent Act that we all rely upon today.  But, in its key and still leading analysis of the statute, the Supreme Court explained that the new law was “intended merely as a codification of judicial precedents embracing the Hotchkiss condition.” Graham v. John Deere Co., 383 U.S. 1, 17 (1966). Assessing obviousness under § 103 thus follows the Hotchkiss line of cases by determining whether the advance was “plainly evident from the prior art” such that one skilled in the art “would immediately see” that it was obvious based on the existing disclosures.

Of course, one change with the addition of Section 103 is the final sentence of the provision stating that the “manner in which the invention was made” will not negate patentability. The legislative history and Graham are both clear that this provision was intended “to abolish the test [Congress] believed [the Supreme Court] announced in the controversial phrase ‘flash of creative genius,’ used in Cuno.”  What is left then is a focus on whether the invention would be within the mere skill of the calling and plainly evident from the prior art. In its most recent analysis of KSR, the court did not use the plainly evident standard, but rather focused on situations where the elements of an invention were all known and the combination was nothing more than “predictable use of prior art elements.” KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007). Throughout this time the Supreme Court has never used a “reasonable expectation of success” test.

Departure from Binding Precedent

According to the petition and the amicus brief, the Federal Circuit’s “reasonable expectation of success” test sets a lower bar, finding obviousness wherever a skilled artisan might reasonably expect to achieve the result, even if it was not plainly foreshadowed in the prior art.  This includes situations where it might be obvious to pursue a research question — but where the answer to the question is unknown or unpredictable.

The first court reference that I have found for “reasonable expectation of success” standard appears to have originated in the case of Cmmw. Engr. Co. of Ohio v. Watson, 293 F.2d 157 (D.C. Cir. 1961).The Patent Office Board had originally stated that “Appellant has merely applied an old process to another analogous material with at least reasonable expectation of success. It is well settled that this does not constitute invention.”  The District Judge affirmed this holding in a Section 145 action, as did the D.C. Circuit Court on appeal. Cmmw. Engr. Co. of Ohio v. Watson, 188 F. Supp. 544 (D.D.C 1960), aff’d, 293 F.2d 157 (D.C. Cir. 1961).

I did also find a 1925 decision by the Commissioner of Patents office affirming a rejection. Ex parte McElroy, 337 Off. Gaz. Pat. Office 475 (1925).  In the case, the patent applicant argued that the cited reference was not sufficient to render the invention unpatentable — arguing “a reference must do more than suggest a possibility, that it must also postulate a reasonable expectation of success.”  The Assistant Commissioner rejected this argument, stating that Richter “carefully sets out the process of the present application and indicates its success.” The decision appears to agree with the  reasonable expectation of success standard, but concluded that the reference provided at least that level of teaching. But, it is not clear to me when this standard became sufficiently “settled” as recited in the 1960-61 Commonwealth Engineering decisions.  It was not until 1995 that reasonable-expectation-of-success was added to the MPEP, but by that time there had already been a number of Federal Circuit decisions on point.

In any event, I hope the Supreme Court will take up this case and push it forward — hopefully further developing obviousness doctrine.  Respondents in the case Teva and Apotex had waived their right to respond, but the Supreme Court expressed some interest in the case by requesting a response in a February 15 order (due March 18, 2024).

Parties:

• Vanda Pharmaceuticals Inc., Petitioner, represented by Paul Hughes (McDermott Will & Emery)
• Apotex Inc. and Apotex Corp., Respondent, represented by Aaron Lukas (Cozen O’Connor)
• Teva Pharmaceuticals USA, Inc., Respondent,  represented by J.C. Rozendaal (Sterne Kessler)

Amici Curiae

• American Council of the Blind, Blinded Veterans Association, and PRISMS, Amicus Curiae, represented by Mark Davies (Orrick)
• Professor Christopher M. Turoski and The National Association of Patent Practitioners, Amicus Curiae, represented by Ryan Morris (Workman Nydegger)
• Salix Pharmaceuticals, Inc. and Ocular Therapeutix, Inc., Amicus Curiae, represented by Justin Hasford (Finnegan)

by Dennis Crouch

Promptu Systems v. Comcast (Fed. Cir. 2024)

The Federal Circuit released two opinions today involving these two parties.  The first sides with Promptu on claim construction – remanding the case back to the Pennsylvania district court for further development.  The second concludes that reprimands Comcast’s attorney for trying to sneak-in extra words into its appellate brief.  This post will focus on the second case.

Mark Perry is a leading appellate expert from Weil, Gotshal & Manges LLP representing Comcast in the litigation and various IPRs between the parties.  There are four related IPRs on appeal, and in its briefing petitioner used somewhat different arguments in its briefs and then stated that it was “incorporation by reference” arguments made in other briefs.  The problem here is that appellate judges see the briefing word limit as a feature of the appellate system — forcing parties to limit their briefs to their best arguments rather than allowing scattershot appeals.  Perry noted that his incorporation by reference was targeted to only about 2000 words from one brief that he hoped would aid in court efficiency.  At oral arguments, the Federal Circuit ordered counsel to show cause why he should not be sanctioned for violating its prohibition on using incorporation by reference “to exceed word count.” The court explained this is “fundamentally unfair” and forces the opposing party to respond to arguments beyond the permitted length.  This is not the court’s first time addressing this issue — it did so previously in with the same result. Microsoft Corp. v. DataTern, Inc., 755 F.3d 899 (Fed. Cir. 2014).

In response to a show-cause order, counsel argued he was simply trying to “enhance efficiency,” “streamline the briefing,” and “save the time and resources of the Court.”  In a brief filed and signed only by Perry, he stated that “Comcast and its counsel were unaware of this Court’s decision in Microsoft, until Promptu’s reply brief was filed.”  It is not clear what is limited to “counsel,” but the crazy aspect of this case is that the same firm – Weil Gotshal – was chastised in that case for similar actions. The brief here was joined by attorneys at Farella Braun & Martel LLP.

Counsel argued that he and Appellee were unaware of our decision in Microsoft until Appellant’s Reply Brief was filed, Show Cause Br. at 3, and had they been aware, they would not have included the incorporation by reference, id. at 4. Microsoft is not only a precedential decision of this Court, but a precedential decision of this Court that admonished the exact same law firm before us now for the exact same behavior. We accept as true Counsel’s claim that he was not aware of the Microsoft decision until the Reply Brief referenced it. When it becomes apparent that a lawyer has violated a court rule, as an officer of the court, it would be best for that lawyer to bring it to the court’s attention and withdraw the improper argument. Here, Appellee was made aware of our case law, but chose to do
nothing.

The court’s statement here is important – the rule for attorneys is that they have an affirmative duty to correct misstatements to the court.

Perry argued that the Federal Circuit had not previously ruled on incorporating arguments between companion appeals — the Microsoft case was about incorporating from other-party briefs. But, the court quickly rejected this weak distinction.

The Federal Rules of Appellate Procedure allow parties to incorporate by reference certain materials rather than reproducing them. Fed. R. App. P. 28(a)(viii). But the Federal Circuit has repeatedly held Rule 28 does not permit incorporating substantive legal arguments between briefs. See also Medtronic, Inc. v. Teleflex Life Scis. Ltd., 86 F.4th 902 (Fed. Cir. 2023). Parties cannot use incorporation to end-run word limits or avoid repeating arguments responding to the unique issues in each appeal.

In the end, the court decided not to sanction Perry, Comcast, or the Weil firm.  I’m sure Mr. Perry’s longstanding and excellent reputation helped him avoid direct penalty.  If I were the court, I would have put more pressure on the firms itself to ensure excellence.

On the merits, Perry’s approach won, with the Federal Circuit affirming the PTAB judgment cancelling claims in a R.36 judgment.

= = =

by Dennis Crouch

One of the more shocking patent decisions of 2023 was Judge Alsup’s holding in Sonos, Inc. v. Google LLC, No. C 20-06754 WHA, 2023 WL 6542320 (N.D. Cal. Oct. 6, 2023).  The scathing opinion left two Sonos multi-zone smart-speaker patents unenforceable due to prosecution laches and a rejection of the $32 million jury verdict.  Sonos had amended its claims after after learning of Google’s particular product, and Judge Alsup found that approach inequitable, concluding that the patentee was “wringing fresh claims to read on a competitor’s products from an ancient application.”  But, Sonos’ prosecution approach in the case is a widespread practice in the field and so the case raises significant questions about both patent enforcement strategies and equitable loss of rights based upon “late claiming” where claims are amended in response to market conditions.

The Appeal Brief: A Closer Look

Sonos has now filed an appeal brief that challenges Judge Alsup’s decision on several grounds, emphasizing the fairness of their patent prosecution process and arguing against the application of prosecution laches. The brief details the timeline of Sonos’s patent filings, innovations, and claim amendments, arguing these were done in good faith and within the bounds of patent law norms.  I’ll reprint the introduction here:

The district court has strong views about “the way the patent system should work.” But those views conflict with the Patent Act, the Federal Rules of Civil Procedure, and this Court’s precedent. Undeterred, the district court rewrote patent law and reconstituted the judicial role to erase a $32.5 million jury verdict and throw out other patent claims that should have been tried.

To override the jury verdict, the district court recast the doctrine of prosecution laches in an unprecedented way to declare two of Sonos’s patents unenforceable. The court recognized that Sonos prosecuted the patent family diligently through several continuation applications off a 2006 provisional application. The court also acknowledged that Sonos did nothing that extended its patents’ terms. Yet the court held that Sonos took too long to prosecute the specific claims it asserted against Google here. The court was most troubled that Sonos added the asserted claims in a continuation application after Google brought its infringing products to market. But Sonos disclosed the invention years before Google even began investing in those products, and informed Google about that patent family. In fact, Sonos had already secured patents in the same family with broader claims covering Google’s products. At any rate, “amend[ing] [to] insert claims intended to cover a competitor’s product” is not “in any manner improper”—and, in fact, is entirely compatible with Congress’s design. Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 874 (Fed. Cir. 1988). If this Court condones this novel application of prosecution laches, it will endanger many thousands of patents secured through standard continuation practice and discourage the early and complete disclosure of new innovations.

The district court also found the asserted claims invalid on the ground that Sonos did not supply adequate written description as of the claimed priority date. The court had previously rejected Google’s summary judgment motion on written description, and Google did not try that defense or a priority-date challenge to the jury. Yet the court took the reins of Google’s defense and crafted a narrative of Sonos’s subterfuge to justify its invalidity ruling. The court hinted at this story for the first time in the middle of trial, but waited until after trial to recount it fully, depriving Sonos of any opportunity to present testimony refuting it. The court found that written description for the asserted claims depended on a single sentence that Sonos added to the specification by amendment in 2019. It ignored that the specification contained additional support for the claims and the sentence in question had been incorporated by reference into every earlier application in the priority chain. Nevertheless, the court concluded that Sonos had tricked the Patent Office into allowing the amendment. That finding was inconsistent with the record evidence and depended on multiple disputed facts that would have been for jurors to decide—if anyone had ever presented the issues to them.

These intrusions into the jury’s domain were not isolated to the two patents that went to trial. On two other patents, the district court granted Google summary judgment of invalidity. But it did so only by resolving factual disputes about the prior art. This is not how Congress said the patent system should work, nor how the Federal Rules say the judicial system should work. This Court should reverse the post-trial laches and invalidity rulings on the ’885 and ’966 patents. And it should vacate the summary judgment rulings on the ’615 and ’033 patents to allow Sonos to try its case to a jury.

SonosBrief.

The outcome of the appeal could have significant implications for how patents are prosecuted and enforced. A reversal of Judge Alsup’s ruling might affirm the validity of strategic claim amendments, provided they are done within the legal boundaries.  Conversely, upholding the decision could set a precedent that restricts how patent holders can amend claims in response to emerging technologies and competitors.

Sonos lead appellate counsel is Joshua Rosenkranz (Orrick), and the team includes George Lee (Lee Sullivan).  Dan Bagatell (Perkins Coie) is lead appellate counsel for Google.  Google has 40 days to file its responsive brief.

by Dennis Crouch

Federal Circuit Judge Pauline Newman has been fighting for her right to judge after charges implicating her fitness for office.  Earlier this month, a committee of federal judges upheld Newman’s one-year suspension from new case assignments for refusing to cooperate with a misconduct investigation.  Newman had separately sued her colleagues in DC District Court, but Judge Cooper has now dismissed most of that lawsuit on jurisdictional grounds. While a few counts remain, the court’s ruling deals a serious blow to Judge Newman’s attempt to challenge the judiciary’s self-policing procedures.  Newman v. Moore, 23-cv-01334 (D.D.C., February 12, 2024). Newman v. Moore Decision. (more…)

I have a poll running LinkedIn about whether the Federal Government should more aggressively use its march-in rights to ensure public access to federally funded inventions. Add your vote: LinkedInVote

Yesterday in my patent prosecution course, students turned to AI tools to help them draft patent claims.  None of the AI-proposed claims were ready for prime-time, but they served as a useful starting point as the students organized their thoughts.  More and more attorneys are turning to these same AI tools to help them be more productive and efficient while delivering a higher quality work product.  It is tough, for instance, to read all the prior art. AI tools can help mine the references for potential obviousness problems — and provide a pin cite to the key language in the art.

USPTO Director Vidal recently released a new memorandum concerning the use of artificial intelligence (AI) in patent office proceedings.  directorguidance-aiuse-legalproceedings. The memo recognizes that AI tools can be powerful both for applicants and for USPTO examiners.  But, AI tools cannot be used to avoid ethical duties.  The memo thus provides firm guidance that existing ethics rules on candor and misconduct apply even when AI tools are used to generate legal filings and evidence. This comes on the heels of several high-profile cases of “AI hallucination” outside of the PTO context, where language models like ChatGPT produced false information that lawyers presented as fact or law.

For example, submissions to the USPTO generally require a signature, and by affixing a signature, the signatory-who has to be a person-certifies, among other things, that “All statements made therein of the party’s own knowledge are true,” that “all statements made therein on information and belief are believed to be true,” that “after an inquiry reasonable under the circumstances” any “legal contentions are warranted by existing law” or “by a nonfrivolous argument for the extension … or reversal of existing law,” and that “factual contentions have evidentiary support” or likely will have evidentiary support after a reasonable opportunity for discovery.

Quoting from USPTO Rule 11.18.  This rule is based directly on the Federal Rule of Civil Procedure , Rule 11 that has been applied in the AI context.  Dir. Vidal goes on to highlight a few particular circumstances:

• Simply assuming the accuracy of an AI tool is not a reasonable inquiry.  
• A submission (including an AI-generated or Al-assisted submission) that misstates facts or law could also be construed as a paper presented for an improper purpose because it could “cause unnecessary delay or needless increase in the cost of any proceeding before the Office.”
• Etc.

Be careful out there everyone!

by Dennis Crouch

The Judicial Conduct and Disability Committee has denied Federal Circuit Judge Pauline Newman’s petition challenging the Federal Circuit Judicial Council’s misconduct finding against her. The Committee includes seven Federal Judges from around the country, chaired by Fourth Circuit Judge Traxler. The particular finding here is an affirming the Federal Circuit’s determination that Judge Newman committed serious misconduct by refusing to undergo a requested medical examination to assess whether she has a disability rendering her unable to discharge her judicial duties. In re Newman.

The complaint originated in March 2023 when the Federal Circuit Chief Judge Moore identified concerns about Judge Newman’s fitness for office based on incidents suggesting significant cognitive impairment. A Special Committee of Federal Circuit judges was appointed to investigate whether Judge Newman has a disability. The Committee ordered Judge Newman to undergo neurological and neuropsychological testing to make this determination. Judge Newman refused, arguing the special Committee lacked reasonable basis for the testing and her due process rights were violated.

The Special Committee and Judicial Council (consisting of all Federal Circuit judges except for Judge Newman) found Judge Newman’s refusal to comply constituted serious misconduct under the Rules for Judicial-Conduct and Judicial-Disability Proceedings. Her failure to cooperate meant that her “fitness” could not be determined.  As sanction, Judge Newman was barred from hearing cases for one year, subject to renewal if she continues refusing to comply.

In her petition to the Broader Committee, Judge Newman argued the Council abused discretion by not transferring her case to another circuit and that alleged due process violations established good cause for her noncompliance. She also challenged the sanction as exceeding the Council’s authority.

The Committee upheld the misconduct finding and sanction.  It found the Chief Judge and Judicial Council properly exercised discretion not to request a transfer per the Rules’ exceptional circumstances standard. Judge Newman’s due process arguments also failed since she received required procedures and access to evidence. The one-year case suspension comported with the Council’s responsibility to ensure effective court administration under the circumstances and was “not grossly in excess of other suspensions imposed under the Act.”

By unanimously affirming the finding against Judge Newman, the Committee reinforced judicial councils’ broad authority to investigate disability complaints and impose sanctions for noncompliance. However, its opinion indicates that a transfer may be warranted if, for instance, Judge Newman calls Judicial Council members as witnesses regarding her fitness in future Judicial Council proceedings.

Judge Newman’s lawsuit in the D.C. Circuit is ongoing, with the district court considering the motion to dismiss filed by her co-judges.  Newman v. Moore, et al., Docket No. 1:23-cv-01334 (D.D.C. Filed May 10, 2023).

The Federal Circuit is hearing oral arguments today in the design patent case of  LKQ Corporation v. GM Global Technology Operations LLC 21-2348.  Judge Stoll’s opinion in the case sides with the patentee GM on the issue of obviousness — affirming a PTAB decision in favor of the patentee.  LKQ’s appellate team led by Prof. Mark Lemley argues that Federal Circuit’s obviousness standard (known here as the Rosen-Durling test) makes it too difficult to actual reject or cancel design patent claims.  Lemley argues for a much more flexible and common sense approach as required by KSR.  The USPTO’s amicus agrees Federal Circuit law should be expanded, but not as far as suggested by LKQ.  GM argues for the status quo.

According to the listing, the en banc panel today consist of Chief Judge Moore,  and Circuit Court Judges Lourie, Dyk, Prost, Reyna, Taranto, Chen, Hughes, Stoll, and Stark.  Not listed is Judges Cunningham and Newman.  

Livestream below: (more…)

by Dennis Crouch

LKQ’s brief for today’s en banc rehearing begins with the following interesting statement: “As with utility patents, the U.S. Constitution and the Patent Act prohibit design patents on ordinary innovations.” It is the Constitutional question that is most interesting and calls forth the concurring opinion by Justice Douglass in the Great A&P Case.

The attempts through the years to get a broader, looser conception of patents than the Constitution contemplates have been persistent. The Patent Office, like most administrative agencies, has looked with favor on the opportunity which the exercise of discretion affords to expand its own jurisdiction. And so it has placed a host of gadgets under the armour of patents—gadgets that obviously have had no place in the constitutional scheme of advancing scientific knowledge. . . . The fact that a patent as flimsy and as spurious as this one has to be brought all the way to this Court to be declared invalid dramatically illustrates how far our patent system frequently departs from the constitutional standards which are supposed to govern.

Great A&P Tea Co. v. Supermarket Equip. Corp., 340 U.S. 147, 156 (1950). Although case applied pre-1952 law, the reminder here is poignant. Justice Douglas goes on:

It is worth emphasis that every patent case involving validity presents a question which requires reference to a standard written into the Constitution. . . .  The Congress does not have free reign, for example, to decide that patents should be easily or freely given. . . . Every patent is the grant of a privilege of exacting tolls from the public. The Framers plainly did not want those monopolies freely granted. The invention, to justify a patent, had to serve the ends of science—to push back the frontiers of chemistry, physics, and the like; to make a distinctive contribution to scientific knowledge. That is why through the years the opinions of the Court commonly have taken ‘inventive genius’ as the test. It is not enough that an article is new and useful. The Constitution never sanctioned the patenting of gadgets. Patents serve a higher end—the advancement of science.

The standard of patentability is a constitutional standard; and the question of validity of a patent is a question of law.

Id.   Later, in Deere, the Supreme Court suggests found that the newly written Section 103 was properly seen as statutory codification of the court’s standard “which exists in the law and has existed for more than 100 years, but only by reason of decisions of the courts.”  And, that standard is derived from the Court’s understanding of the U.S. Constitution’s requirement that the patent laws be designed to “promote the Progress of Science and useful Arts.”

The Congress in the exercise of the patent power may not overreach the restraints imposed by the stated constitutional purpose. Nor may it enlarge the patent monopoly without regard to the innovation, advancement or social benefit gained thereby. Moreover, Congress may not authorize the issuance of patents whose effects are to remove existent knowledge from the public domain, or to restrict free access to materials already available. Innovation, advancement, and things which add to the sum of useful knowledge are inherent requisites in a patent system which by constitutional command must ‘promote the Progress of * * * useful Arts.’ This is the standard expressed in the Constitution and it may not be ignored. And it is in this light that patent validity requires reference to a standard written into the Constitution.

Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 5–6 (1966).

Bringing this back to design patents and the LKQ case, the patent challenger here does not deeply engage with the constitutional question, but rather appears to use it as a constant interpretative reminder. GM’s brief does not mention the Constitution or its requirement to “promote the Progress.”  Likewise, none of the Federal Circuit’s obviousness decisions from the past year discussed the doctrine in light of the Constitutional requirement.

by Dennis Crouch

On Monday, February 5, 2024, the Federal Circuit will sit together for the first time in years to hear an en banc patent case.  In LKQ Corporation v. GM Global Technology Operations LLC, the court will consider whether to apply a more stringent obviousness test to design patents.  In a 2010 article, I concluded that “the current design patent examination system operates as a de facto registration system” with very little obviousness analysis except in cases of clear copying.  Although design patent examination has become more rigorous, obviousness rejections remain relatively rare in comparison to their utility patent brethren.

Oral arguments will include the 11 Federal Circuit judges (absent Judge Newman) along with Mark Lemley (arguing for the accused infringer and seeking a more rigorous obviousness test); Joe Herriges (arguing for the patentee GM largely seeking to preserve the status quo); and USPTO Acting Solicitor Farheena Rasheed (for amicus USPTO).  The case particularly focuses on whether the Supreme Court’s flexible test for obviousness from KSR v. Teleflex also applies to design patents.  In particular, the Federal Circuit’s Rosen-Durling test for design patent obviousness requires a primary reference as a starting point that is “basically the same” as the design being patented.  Lemley would throw out this approach entirely.  In its brief, the USPTO agrees that KSR requires more flexibility and that Rosen-Durling is “overly restrictive in several respects.” However, the USPTO suggests retaining the basic framework as a standard approach to obviousness, while permitting other approaches as necessitated by particular cases — allowing for both flexibility and the application of common sense.

On Feb 6 I am gathering online for a Suffolk Law School event to debate the case and its potential outcome and impact.  I will be joining Suffolk professor Sarah Burstein along with Meredith Lowry (Wright Lindsey); Darrell Mottley (Banner + Howard University); and Laura Sheridan (Google). See you there (REGISTRATION).