Bits and Bytes from the PPAC Meeting

Notes from PPAC:

  • Eligibility: Gene Quinn discusses the patent eligibility debate and Robert Bahr’s update at IPWatchDog.
  • China: 2015 the Chinese Patent Office (SIPO) received 2.8 million patent applications.  The country is looking to move from a “big” IP country to a “strong” IP country. [Link]
  • Designs: Design patent applications expected to reach 40,000 for FY2016 – up from under 30,000 in FY2010. The PTO is working to improve design patent prosecution speed – current wait of more than a year for a first office action. [Link]
  • Regional Patent Offices: Around 500 examiners are working in the regional patent offices. [Link]
  • PTAB: David Ruschke is now fully in charge as PTAB Chief. Scott Boalick continues as deputy. Ruschke was Chief Patent Counsel of Medtronic for many years. [Link]
  • PGR Filings: Although there are now tens of thousands of issued AIA patents, very few PGR petitions have been filed.
  • Ex Parte Appeals: The number of pending Ex Parte appeals continue to drop. Great work PTO.


Finally, off topic – read Prof Holbrook’s essay on The Real Reason the EpiPen and other off-patents are so expensive at the conversation.

Plagiarism Actions

Drobetsky v. Chicago School of Prof. Psych. (Ill. App. 2016) [1152797_R23]

There is no general cause of action for ‘plagiarism’ – it comes up most often in student and employment cases.

Drobetsky was a masters degree student at the Chicago School of Professional Psychology.  In her assigned 5-page reflection paper of the Benjamin Button movie, she apparently copied from Wikipedia and a blog post by Richard Larson.   The allegations are “that a portion of one sentence in the reflection paper was copied word for word from the Wikipedia article, and portions of two other sentences were copied word for word from the Larson blog, without quotation marks, citation or attribution.”

The school dismissed Drobetsky for plagiarism in violation of school policy – she sued in Illinois state court for readmittance, recover of the $53,000 paid to the school, etc.

The trial court offered an interesting decision. On the one hand, it sided with Drobetsky that the school had breached its contract and acted in an arbitrary & capricious manner by: (1)  “failing to notify plaintiff in advance of … the names of the [campus hearing committee] members so that she could properly vet them”; (2) “failing to have Dr. Adames [the professor making the allegations] present at the hearing”; (3) “failing to consider Dr. Adames’ [own] plagiarism” (he had copied portions of his syllabus from another professor without attribution); and (4) “failing to inform plaintiff of the basis for her dismissal.”  Despite all these deficiencies, however, the court ruled in favor of the school because Drobetsky had failed to follow the internal appeal process and because the plaintiff had “failed to prove damages.”

On appeal, the Illinois court affirmed – but first rejected the finding that the school acted in an arbitrary & capricious manner in its hearing process. “[T]he trial court’s finding that plaintiff met her heavy burden of proving that defendant acted arbitrarily, capriciously, or in bad-faith by dismissing her without any discernible rational basis was against the manifest weight of the evidence.”




Defining OtterBox for Tariffs

by Dennis Crouch

A substantial portion of the Federal Circuit’s appellate involve customs disputes stemming from the Court of International Trade (CIT).  Usual disputes center on the proper tariff classification of goods being imported into the US.  The Harmonized Tariff Schedule of the United States (HTSUS) is the primary code-book that includes thousands of classifications  and a tariff rate (typically ad valorem).

In the new decision of Otter Producs  v. US (Fed. Cir. 2016), the Federal Circuit was simply asked the question of whether OtterBox phone cases being imported from China should be classified under HTSUS 4202.99.00 as “similar containers” or instead under 3926.90.9980 as “Other articles of plastics.”  The US Customs argued for the first classification – associated with a 20% ad valorem tax – while Otter preferred the second and its 5.3% rate.

As in patent law infringement analysis, the basic process is to look at the classification statements and determine whether the product in question fits within that description.  A major distinction, however, is the reality that every product must fit somewhere. That means that the process focused on the best fit rather than the yes/no analysis used in infringement cases.

The tariff schedule (HTSUS) was passed by congress and thus is interpreted as a statute.  And, as with patent claim construction, the court sees the tariff interpretation as the first step in Customs’ classification determinations and one that is a question of law reviewed de novo on appeal.  Once the tariff provision is interpreted, the court then goes to the second step of figuring out whether the product in question fits the interpreted tariff.  Of course, (as with claim construction) that process has to be somewhat iterative because needs of tariff interpretation (or claim interpretation) are driven by any unique features of the product.

In interpreting the statute, the Federal Circuit has taken the approach of construing HTSUS terms according to “common and commercial meanings, which we presume are the same.”  Although not required by the statute, the court has also taken to relying upon the explanatory notes in the World Customs Organization tariff schedule to aid its interpretation.

In OtterBox, the US proposes that that the the proper classification fit within the category 4202 that includes “Trunks, suitcases, … , binocular cases, camera cases, musical instrument cases … and similar containers; traveling bags, insulated food or beverage bags, toiletry bags, knapsacks and backpacks, handbags, shopping bags, wallets, purses, map cases, cigarette cases, tobacco pouches, tool bags, sports bags, bottle cases, jewelry boxes, powder cases, cutlery cases and similar containers, of leather or of composition leather, of sheeting of plastics, of textile materials, of vulcanized fiber or of paperboard, or wholly or mainly covered with such materials or with paper … .”  OtterBox proposes a broader category of “3926 Other articles of plastics …”

In siding with OtterBox, the federal circuit stepped through Heading 4202 and found, inter alia, that the OtterBox cases would only fit as “similar containers,” but that they were not really similar.  The important distinction is that OtterBox cases are designed so that the device is fully functional while in the case – that is not true for any of the cases listed in the heading.

The case is a good one to read for those interested in the court’s jurisprudence beyond their usual patent cases.

DuPont v. MacDermid Printing: The importance of a Patentee’s Pre-Filing Statements

by Dennis Crouch

A skilled patent attorney working with a qualified searcher could cobble together a colorable obviousness argument against the vast majority of issued patent claims.  Part of the difficulty for patentees stem from the the billions of prior art references available via increasingly effective search tools. Even when an invention results from a ‘flash of genius,’ patent law typically back-fills extensive knowledge for the obviousness analysis – even when that knowledge was not actually available at the time of the invention.  The larger difficulty though is likely the large number of hard-to-pin-down facts such as the motivations, common sense, and level of creativity of a person having ordinary skill in the art.

The “expansive and flexible” approach to nonobviousness is frustrating to many, but it is seen as a feature of the system fully supported by the Supreme Court.  In KSR, the court wrote:

Throughout this Court’s engagement with the question of obviousness, our cases have set forth an expansive and flexible approach. . . . Rigid preventive rules that deny fact finders recourse to common sense… are neither necessary under our case law nor consistent with it.

KSR v. Teleflex (2007) [04-1350].  Conventional wisdom post-1980 has been that the factual inquiry makes summary judgment of obviousness difficult for a patent challenger.  Rather, obviousness goes to the jury.  Since KSR, that attitude has shifted somewhat.  (The even newer model is that obviousness goes to the PTO in an IPR proceeding – save that for a different essay).

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Summary Judgment of Obviousness: In DuPont v. MacDermid Printing (Fed. Cir. 2016) [15-1777], the NJ district court granted summary judgment of obviousness against the patentee DuPont – holding that the asserted claims of DuPont’s U.S. Patent 6,773,859 invalid under 35 U.S.C. 103.   The ‘859 patent relates to the manufacture of  a flexo plate for digital printing — a plate used to print digital images on flexible materials.   The claimed advance involves heating-up the plate to remove unpolymerized material (rather than using a harsh solvent).

The obviousness case combines two prior art references: “Martens [a 3M patent] teaches a process for developing an analog plate using heat” and “Fan [DuPont patent] teaches developing a digital plate using solvents.”   The inventor (Roxy Fan) is also the first named inventor of DuPont’s ‘859 patent being challenged in this case. The Fan prior-art patent, however, was filed a decade prior.  Reviewing these two references, the court found that the ‘859 patent uses “the same technology and processes pertaining to digital imaging” previously disclosed by Fan and the same thermal development process disclosed in Martens.  In finding a motivation-to-combine these references, the district court walked through several factors.

  • Limited set of potential combinations: The prior art only had two imaging styles (digital and analog) and four development techniques (thermal, etc.) – this makes the ‘859 combination more likely obvious to try.
  • Benefits of Moving to Digital: The prior art taught benefits of switching to digital (thus suggesting the substitution), including an article published by DuPont
  • Market Incentive: DuPont marketing material suggest a “strong incentive” to combine the thermal process with digital plates.

The district court also rejected DuPont’s evidence of commercial success, longfelt need, and industry praise – finding them insufficient to overcome the “strong showing of obviousness.”

On appeal of this summary judgment finding, DuPont focused on the standard-of-review – noting that the district court had failed to “draw reasonable inferences” in its favor.  In the process, DuPont pointed to a long list of factual disputes between the parties where it would be reasonable to draw different conclusions from the evidences.

The Federal Circuit affirmed – finding that the strong undisputed evidence of prior art and motivation to combine fully supported the summary judgment finding.

[T]he record contains strong evidence that a skilled artisan would have had a reason to combine two known technologies and would have had a reasonable expectation of success in doing so. Indeed, DuPont itself promoted the digital and thermal technologies as technological breakthroughs in prior art publications. Thus, in view of the record as a whole, even drawing all justifiable inferences in favor of DuPont, the objective evidence is insufficient to preclude summary judgment on the ultimate legal conclusion of obviousness.

Doomed by Its Own Prior Statements: The obviousness case against DuPont here is interesting because (1) one of the core prior art references was a DuPont reference and (2) DuPont’s own statements regarding its prior inventions led to the motivation-to-combine finding.  DuPont’s private case study will likely walk through and consider whether it should have taken a different pathway regarding the public disclosures.

Caveat: Although the patentee’s pre-filing disclosures are important – it is also important to remember that the question of obviousness is an objective analysis focusing on the hypothetical mind of a person having ordinary skill in the art.  What this means is that the patentee’s disclosures are should not be treated as “party admissions” and given special treatment in the obviousness analysis.  Rather, the disclosures are simply added to the body of knowledge available to the artisan.  Here, the Federal Circuit came dangerously close to crossing the line into giving information actually available to and created by DuPont special weight in the obviousness analysis.


USPTO Launches Cancer Moonshot Challenge

The following was originally published on the USPTO Director’s Blog and is a guest post by USPTO Chief of Staff Vikrum Aiyer and Senior Advisor Thomas A. Beach

The USPTO is playing an important role in the National Cancer Moonshot, a Presidential initiative we blogged about earlier this summer, to speed up cancer advances, make more therapies available to more patients, and improve the ability to prevent cancer and detect it at an early stage. Today, we are launching the USPTO Cancer Moonshot Challenge to enlist the public’s help to leverage our intellectual property data, often an early indicator of meaningful research and development (R&D), and combine it with other economic and funding data (ie. U.S. Securities and Exchange Commission filings, Food and Drug Administration reporting, National Science Foundation grants vs. philanthropic investments, venture capital funding, etc.). This comes on the heels of our Patents 4 Patients program, which was launched in July and aims to cut in half the time it takes to review patent applications in cancer therapy.

The USPTO Cancer Moonshot Challenge will conclude on September 12 and winners will be announced on September 26. Learn more about the prizes.

Participants will have the opportunity to leverage USPTO Cancer Moonshot patent data to reveal new insights into investments around cancer therapy research and treatments. Some questions to address include: What are the peaks and valleys in the landscape of cancer treatment technologies? What new insights can be revealed by correlating R&D spending/funding to breakthrough technologies? What would trace studies of commercially successful treatments from patent to product tell us? With the data sets released through the USPTO Developer Hub, users will be able to use analytic tools, processes and complimentary data sets to build rich visualizations of intellectual property data, which will help illuminate trend lines for new treatments. During the three week challenge, the USPTO will hold a USPTO Cancer Moonshot Workshop to assist participants, on Thursday August 25.

After the challenge has concluded, the USPTO, in tandem with other Moonshot Task Force partners, will look at further ways to use the findings. By bringing together cancer experts, policymakers, and data scientists, we can explore and identify how intellectual property data can be better leveraged and combined with other data sets to support cancer research and the development of new commercialized therapies. This will empower the federal government—as well as the medical, research, and data communities—to make more precise funding and policy decisions based on the commercialization lifecycle of the most promising treatments, and maximize U.S. competitiveness in cancer investments.

 We recognize that by enlisting the public’s assistance through our USPTO Cancer Moonshot Challenge, we can identify new and creative ways to fight cancer and work towards breakthroughs in treatment.  And by harnessing the power of patent data, and accelerating the process for protecting the intellectual property undergirding cancer immunotherapy breakthroughs, the USPTO is standing up and doing its part to help bring potentially life-saving treatments to patients, faster. Are you up to the challenge?

Summary Judgment on Anticipation

Semcon Tech v. Micron (Fed. Cir. 2016) (non-precedential opinion)

One narrative of the decision here could focus on the difference between the expert appellate court willing to dig into the language of the patent documents themselves and the generalist trial court ready to rely upon expert testimony explaining the underlying documents.  It is also a reminder that, for the Federal Circuit, the underlying patent and prior art documents represent the most important evidence available in a patent validity dispute.

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Summary judgment is a mechanism for short-cutting a lawsuit prior to trial.  The basic jurisprudential approach asks whether there are any genuine disputes of any material fact and whether the moving-party is entitled to judgment as a matter of law.  Fed. R. Civ. Pro. 56.  When considering the evidence produced, all justifiable inferences must be drawn in the nonmovant’s favor.

Here, the district court ruled on summary judgments that Semcon’s asserted wafer finishing method patent claims are invalid as anticipated by a prior U.S. patent.  (Holding that the claim of Semcon’s U.S. Patent No. 7,156,717 is as anticipated by U.S. Patent No. 6,010,538 (“Sun”)).   On appeal, the Federal Circuit has vacated that judgment – finding that the prior art is not as clear as the district court concluded.

Anticipation is an area ripe for summary judgment because the doctrinal question is based primarily upon objective and verifiable facts — has a single prior art reference been identified that teaches the claimed invention – including “each and every element as set forth in the claim.”

The actual dispute focuses on whether the prior art Sun describes the claimed step of relying upon both “in-situ process information” and “tracked information” to modify control parameters during the finish cycle.  For its part, the district court adopted Micron’s expert’s conclusions that Sun disclosed that claimed process. Semcon did not present competing expert testimony that seemed to seal-the-deal for the district court.

On appeal, however, the Federal Circuit dug-into the patent documents and found (as suggested by Semcon) that the portions of Sun cited by Micron’s expert did not actually support the conclusions drawn. “In fact, however, the cited portions of Sun do not appear to support Dr. Dornfeld’s characterization.”  The court then pointed to several portions of Sun that suggested that the “tracked information” was not used as a finish cycle control parameter.

Addressing the lack of competing-expert, the Federal Circuit wrote that “textual arguments” regarding the prior art reference as well as identifying inconsistencies in the opposing expert’s testimony were sufficient to create a dispute of material fact as to what was disclosed by Sun.

Publication of the Patent Case Management Judicial Guide (3rd edition)

District Court judges (and their clerks) across the country now rely heavily upon Patent Case Management Judicial Guide – that has now published in its third edition.  Professor Peter Menell (Berkeley) has lead the multi-party effort in cooperation with the Federal Judicial Center. Its popularity with judges means that it is also a necessary tool for patent litigators.

Get it:

The Third Edition ads substantial coverage of managing litigation to deal with parallel proceedings at the PTAB, pleading standards, patentable subject matter, claim construction, enhanced damages following Halo, and reasonable royalty disputes. The treatise also covers recent developments in ANDA and biologics litigation, design and plant patent litigation, and litigation at the Federal Court of Claims. The appendices provide case management checklists and exemplars of patent management filings.

Expanding the Scope of Ex Parte Reexaminations MidStream

by Dennis Crouch

A new petition by Pactiv (a Reynolds Co.) asks the Supreme Court to consider whether the PTO can expand the scope of an ex parte reexamination beyond the “substantial new question of patentability” identified in the Director’s order granting the reexamination.   Basically, can the reexamination examiner rely upon prior art different from that in the petition.

Question as presented to the Supreme Court:

Whether, because [35 U.S.C. §] 304 requires the Director to issue an order for a reexamination “for resolution of the question,” the “substantial new question of patentability” included in the Director’s order delineates the scope of the ex parte reexamination.

[Pactiv v. Lee petition]  Pactiv argues that the scope of reexaminations were intended to be limited to avoid becoming an “unbridled review system [that] could impose enormous burden and undue harassment on patentees.” (Petition).

Section 304 explains that the PTO Director can order ex parte reexamination after finding that “a substantial new question of patentability affecting . . . is raised.”  The statute goes on to state flatly that the reexamination order should be “for resolution of the question” — i.e., for resolution of the substantial new question raised in the petition.  That part of the statute is clear, however, the statute does not flatly bar modification of the question during the substantive reexamination.

The PTO’s position that allows for shifting rejections appears to stem from Belkin Intl Inc. v. Kappos, 696 F.3d 1379 (Fed. Cir. 2012), a decision involving inter partes reexamination.  Belkin is something of a mixed-bag.  In its decision, the Federal Circuit wrote that the inter partes challenger could not raise new questions of patentability beyond those in the SNQ order.  At the same time, the court also wrote (in dicta) that the PTO may, on its own, raise other issues. The court wrote:

Inter partes reexamination is not totally limited to those issues suggested by the requester that present a substantial new question of patentability. Indeed, the PTO may make any new rejection, as long as that rejection also meets the substantial new question of patentability requirement. See 35 U.S.C. § 303(a) (“On his own initiative, and any time, the Director may determine whether a substantial new question of patentability is raised by patents and publications discovered by him . . . .”). Thus, the scope of reexamination may encompass those issues that raise a substantial new question of patentability, whether proposed by the requester or the Director. . .

Belkin.  Pactiv challenges this dicta portion of Belkin – arguing that it is a misinterpretation of the statute and, in any event, does not apply to ex parte reexamination.  I would agree with Pactiv in its reading of this portion of the statute – if the USPTO wants to raise a new question on its own, the statute provides for a process of ordering reexamination rather than the implicit addition as done here.  At the same time, the availability of amendments and addition of new claims mean that new searches must be available in some form.  See 35 U.S.C. § 305.

For its part in the case, the Federal Circuit affirmed the PTAB determination without opinion (R.36 Affirmance).

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The patents at issue in the case are U.S. Patent No. 6,315,921 and U.S. Patent No. 6,395,195.  They relate to an oxygen absorber used in meat packaging.



Obviousness of the New Mixture

Apotex v. Wyeth[1] is a relatively simple and straightforward nonobviousness decision in the pharma space (albeit non-precedential).  The Wyeth patent at issue here claims the compound that includes tigecycline mixed together with an acid as well as lactose.[2]  Although not claimed, the specification indicates that the mixture is beneficial because it helps tigecycline avoid degradation.  At the time of the invention (2005) tigecycline was a known tetracycline known to act as a broad spectrum antibiotic that degrades rapidly at a neutral PH.

The key prior art in the obviousness case was a Chinese patent publication that discloses minocycline mixed with both lactose and an acid in order to avoid degradation.[3]  Minocycline is a closely related tetracycline that is both structurally similar and operates by similar action.  (Tigecycline is a derivative of minocycline).

In both the Inter Partes Review proceedings and the appeal, the courts found insufficient motivation to combine the cited references by substituting the tigecycline into the minocycline compound.  Importantly here, the courts made this determination as a factual finding that “a skilled artisan would [not] have had a reason to combine the references.”[4]

Apotex (the challenger) argued that the similarity between the two forms of tetracycline and the fact that tigecycline was “known to work where other antibiotics have failed” both pushed toward a finding of a motivation to combine.  The courts however rejected this argument – finding that the structural similarities did not create “a potential motivating factor for a skilled artisan to substitute tigecycline for minocycline.”

[W]hile tigecycline is closely related to minocycline structurally and in terms of benefit, the Board did not err in concluding that there was insufficient basis in the record to show that it would have been obvious to a skilled artisan to substitute tigecycline in the prior art minocycline composition.

Although not mentioned by the courts, I would think it would also be important motivation to consider that – at the time of the invention here – tigecycline was not just some random minocycline derivative – rather tigecycline was being considered as an important last-resort MRSA treatment and under consideration for fast-track FDA approval.

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A first thought that comes to my head in this case is whether the outcome here stems from the fact that this is a pharmaceutical case rather than one focusing on electronics or mechanical engineering.  Perhaps not, the court does explain here the lack of assurances (pre-invention) that the claimed mixture would substantially reduce degredation.  That factual-setup can be distinguished from a case like KSR where a good engineer could give pre-assurances that they could get the combination to work.

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One aspect of the decision involves underlying distinctions between the ultimate question of obviousness (an issue of law) and the factual underpinnings (such as  motivation to combine references).  Here, of course, once the facts were determined, the question of law was instantly answered.

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[1] Apotex Inc. v. Wyeth LLC, App. No. 15-1871 (Fed. Cir. August 16, 2016).

[2] U.S. Patent No. 7,879,828, claim 1 taken as typical.

[3] Chinese Patent Pub. No. 139055A.

[4] See In re Hyon, 679 F.3d 1363 (Fed. Cir. 2012).

A Specification’s Focus on Particular Embodiment Not Limiting if Other Embodiments are also Expressly Contemplated

CollatingBottlesScriptPro v. Innovation Associates (Fed. Cir. 2016)

Very Slow Roller Coaster: This Kansas-based infringement lawsuit was filed back in 2006.  The case was stayed pending an inter partes reexamination.  Once re-opened, the district court held that ScriptPro’s asserted claims invalid for lack of written description under 35 U.S.C. § 112, ¶ 1.  In a 2014 appeal of that decision, the Federal Circuit reversed – finding genuine issues of material fact regarding whether a skilled artisan deem the patentee in possession of the invention upon reading the specification. On remand, the district court again held the claims invalid on written description grounds and citing the oft maligned ‘essential element’ cases of Gentry Gallery, Inc. v. Berkline Corp., 134 F.3d 1473 (Fed. Cir. 1988) and ICU Medical, Inc. v. Alaris Medical Systems, Inc., 558 F.3d 1368 (Fed. Cir. 2009).  On appeal, the Federal Circuit has now reversed again and remanded for trial.

The claim at issue is directed to a conveyor and “automatic” collating system for prescription containers. U.S. Patent No. 6,910,601, Claim 8.  The claim itself does not specify how the collation occurs, but throughout the specification the patentee indicates that the containers will be collated by patient name and storage space availability.  Seeing that distinction, the district court agreed with the challenger that the claims fail because they were not commensurate with the written description of the invention.

The District Court:

[O]ne of [the invention’s] central purposes is to collate and store prescriptions by patient. But the claims do not limit the ways in which the prescription containers are stored. They do not specify any type of collation or storage. . . .

These broad claims are not supported by the much-more-limited specification. They do not require that the control system organize containers based on patient name and space availability. During its appeal, ScriptPro repeatedly emphasized a central purpose of the ′601 patent: to “keep [ ] track of slot use by particular customers and slot availability.” [quoting Federal Circuit decision] This means that the use of any other method for automatic storage is outside this purpose. Based on the broad claim language that is outside a central purpose of the patent, the court determines that no reasonable jury could find the written-description requirement met. . . . ScriptPro argues, keeping track of slot use by particular customers and slot availability is only one of several goals. But ScriptPro does not identify any alternate goals.

The court finds ScriptPro’s argument unpersuasive. While every claim need not encompass every goal, here the claims do not address one of the invention’s central goals—one that ScriptPro repeatedly emphasized on appeal. It is disingenuous for ScriptPro to now downplay the significance of the goal. Without including a limitation to address the storage by patient name, the claims are simply too broad to be valid.

[District Court Decision]

On appeal, the Federal Circuit has reversed – holding that the patentee included a sufficient number of wobbly-words to avoid limiting the specification.

It is true, as Innovation argues, that much of the ’601 patent’s specification focuses on embodiments employing a sorting and storage scheme based on patient-identifying information. See, e.g., ’601 patent, 4:21–25 (“[t]he unit stores prescription containers according to a storage algorithm that is dependent on a patient name for whom a container is intended”), 5:40–47 (“a prescription for a patient is entered into the control system of the ADS along with identifying information for the prescription, such as the patient name . . . [t]he control system next determines in which holding area to store the container”), 6:36–37 (“[t]he collating unit is also operable to associate a stored container with a patient based on the patient’s name”). And it is also true that the specification explains that prior art automated control centers that store containers “based on a prescription number associated with the container, as opposed to storing the container based on a patient name” are “especially inconvenient for several reasons.” ’601 patent, 3:6–11. But a specification’s focus on one particular embodiment or purpose cannot limit the described invention where that specification expressly contemplates other embodiments or purposes.

[Appellate Decision]. (patent drafters consider the plural in of “other embodiments“)

An amazing aspect of this case is that the distinguishing feature for written description is the focus on whether a patient’s name is being used to sort bottles (vs some number).  On remand, the defendant’s next round involve Alice.



En Banc Query: Must the PTO Allow Amendments in IPR Proceedings?

AquaImageby Dennis Crouch

In its original Aqua Products decision, the Federal Circuit upheld the USPTO’s tight limits on amendment practice in IPR proceedings. Under the rules, a patentee has one opportunity to propose amendments or substitute claims. However, the proposal will only be granted if the patentee also demonstrates in the motion that the proposed amendments would make the claims patentable over the known prior art.

In a new order, the Federal Circuit has now granted the appellant’s en banc rehearing request – asking the parties to focus solely on the following questions regarding the burdens:

(a) When the patent owner moves to amend its claims under 35 U.S.C. § 316(d), may the PTO require the patent owner to bear the burden of persuasion, or a burden of production, regarding patentability of the amended claims as a condition of allowing them? Which burdens are permitted under 35 U.S.C. § 316(e)?

(b) When the petitioner does not challenge the patentability of a proposed amended claim, or the Board thinks the challenge is inadequate, may the Board sua sponte raise patentability challenges to such a claim? If so, where would the burden of persuasion, or a burden of production, lie?

En Banc Order.  The court has invited views of amici curiae.  Those briefs will be due October 5, 2016 (unless supporting the PTO’s position and then you get an extra month).  Appellant’s brief will be filed by September 26, 2016. Oral argument are already scheduled for Friday, December 9, 2016 at 10:00 a.m.

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The underlying case involves Aqua Products’ self-propelled robotic pool cleaner that uses an internal pump both as a vacuum cleaner to power the propulsion system.   U.S. Patent No. 8,273,183.  Competitor Zodiac Pool Systems filed for IPR which the PTO instituted as to some of the challenged claims and ultimately issued a final decision that the claims were invalid as obvious over a combination of two prior-art references.

Motion to Amend: In a timely motion, Aqua moved to amend three of the claims to include the limitations found in the non-instituted claims. (In particular, the patentee asked to substitute claims 1, 8, and 20 with claims 22-24 respectively.  The PTAB agreed that these new claims satisfied the formal requirements of Section 316(d), but refused to enter the amendment – finding that the patentee’s motion had failed to show that the substitute claims were distinguishable over the prior art.

The parties (Aqua & Zodiac) settled the underlying infringement case in April 2015 and so Zodiac did not participate in the appeal. However, the USPTO intervened in the case to defend Aqua’s appeal of the PTAB invalidity holding.

The PTO’s position in the case remains defiant.  The Agency argues that its rules regarding amendments and its application of those rules are both reasonable and entitled to substantial deference.

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GEA Process: Appealing IPR Termination Decision

Following Cuozzo, I largely wrote-off GEA Process (“GPNA”) v. Steuben as having any chance for certiorari. However, the petitioner’s newly filed reply brief offers an opportunity for revival.

In its decision on an IPR appeal, the Federal Circuit held that it lacked jurisdiction to review claims that the PTAB exceeded the PTO’s statutory authority by “terminating and vacating five instituted and near-final IPR proceedings, without determining patentability vel non as Congress had intended.”  Thus, the question presented is:

Whether the Federal Circuit erred in holding that, even if the Patent Trial and Appeal Board exceeded its statutory authority by terminating an instituted IPR proceeding with a final written decision, the PTAB’s final decision is judicially non-reviewable.

Following the original petition filing, the Supreme Court decided Cuozzo v. Lee and held that the PTO’s decision to institute an inter partes review is not appealable.

GPNA distinguishes its petition from Cuozzo on the grounds that it “is seeking to appeal is a final written decision terminating GPNA’s IPR proceedings without deciding patentability, nine months after granting institution (“Termination Decision”).”

GPNA is not appealing or seeking to change those institution decisions. . . . The Termination Decision was based upon the panel’s legal error in assuming that 35 U.S.C. § 312(a)(2) stated a jurisdictional requirement, the failure of which nullified the validity of the proceeding. . .

[T]his Petition addresses an agency action that is not barred from review by § 314(d) and it presents a legal issue as to which the salutary “presumption of reviewability” should apply. The Federal Circuit erred in summarily refusing jurisdiction, both by appeal and writ of mandamus, and this Petition should be granted.

[GEA Petition; Steuben Brief in OppositionGEA Process Reply]

The uphill battle for certiorari here begins with the fact that the PTAB has now changed its approach now interprets § 312(a)(2) as suggested by GPNA.  Going to the merits, the question is whether termination of an IPR because it never should-have-instituted is effectively a decision regarding institution.

The Supreme Court has scheduled its first conference on the case for September 26, 2016.

Apple v. Samsung: Justifying Profit Disgorgement

AppleBriefApple has filed its merits brief defending the longstanding principle of profit-disgorgement as a remedy for design patent infringement. [AppleResponse]

The statute states that an adjudged infringer “shall be liable to the owner to the extent of his total profit.” 35 U.S.C. 289.  Apple argues that the lower courts are correct in finding that Samsung should be liable for profits associated with sales of its Galaxy phones that were adjudged to be infringing Apple’s iPhone design patents.

Apple writes:

The only issue before this Court is whether Samsung will be able to avoid fairly compensating Apple for its adjudicated infringement. Samsung takes aim at 35 U.S.C. § 289, which provides that a design patent infringer is “liable … to the extent of his total profit” on the “article of manufacture” to which the patented design has been applied. Congress enacted this remedy because it recognized that “it is the design that sells the article” and, because profits attributable to design are often “not apportionable,” “[i]t is expedient that the infringer’s entire profit on the article should be recoverable, as otherwise none of his profit can be recovered.” 18 Cong. Rec. 834 (1887). As the Solicitor General correctly notes (Br. 10-15), Samsung’s effort to read an apportionment requirement into § 289 is at odds not only with the statute’s plain language, but also with Congress’s contemporaneous explanation that the remedy was enacted in response to decisions of this Court taking exactly the approach Samsung now advocates. And as the government also correctly explains (Br. 16-31), identification of the relevant “article of manufacture” on which § 289 allows an award of total profit is a factual question for the jury on which the defendant bears the burden of proof. . . .

Samsung invokes highly speculative policy grounds that it believes justify upending the settled interpretation of a statutory remedy first adopted in 1887, readopted in 1952, and left unchanged since then. Samsung’s arguments are addressed to the wrong branch of government: It is not for this Court to decide whether to alter the statutory balance that Congress has chosen and left undisturbed for decades. Samsung’s farfetched hypotheticals are just that; and they ignore the reality of this case. Samsung is a sophisticated company that chose to copy the design innovations of its biggest competitor and profited significantly from doing so. That is precisely the type of conduct Congress long ago decided deserves an effective remedy.

What makes this case so big is the numbers involved – Here, the profits disgorged are hundreds of millions of dollars.

Noted design patent attorney Perry Saidman filed an amicus brief supporting Apple’s case on behalf of a group of companies that rely upon design patents in their business.  Saidman argues that design patents are critical to allow companies to protect ‘visually striking products’, and that the profit disgorgement “gives teeth to design patents” in a way that promotes settlements.   [AppleSaidman]

An additional supportive brief was filed on behalf of a group of “113 distinguished industrial design professionals and educators.”  The brief – filed by Mark Davies – argues that a product’s visual design is critically important in the sales of complex products. “[A] product’s visual design has powerful effects on the human mind and decision making processes, and eventually comes to signify to the consumer the underlying function, origin, and overall user experience of that product. [AppleDesigners]

The these two friend-of-the-court briefs are interesting in that they essentially make the same argument that I made in my old paper on Design Patents as Trademarks.

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Oral arguments for the case are set for October 11, 2016 in Washington DC.

The Limited Role of Common Sense in the Obviousness Analysis

by Dennis Crouch

Decisions by the Patent Trial & Appeal Board are rarely overturned on appeal.  I expect that result is largely due to the fact that the Patent Office has staffed the Board with highly trained and skilled patent law experts.  The other important factor though, is the standard of review.  Factual findings made by the Board are reviewed for “substantial evidence” — meaning that the findings need not be “correct” but rather rather merely supported by “more than a mere scintilla of evidence.”  Thus, patentees are hard-pressed to get a reversal based upon erroneous factual conclusions.  (For a counter-example, see In re Warsaw Ortho (Fed. Cir. 2016).

In the new decision captioned Arendi S.A.R.L. v. Apple Inc., Appeal No. 15-2073 (Fed. Cir. 2016) [ArendiApple], the court has reversed the Board – finding an erroneous application of the law.  This approach to an appeal tends to work better – because issues of law decided by the PTAB are ordinarily reviewed de novo on appeal (except where the agency’s interpretation is given deference).

The holding:

Because the Board misapplied our law on the permissible use of common sense in an obviousness analysis, we reverse.

The software patent at issue involves a identifying a key in a document (such as a person’s name) and then searching a separate data-source for further information on that key. U.S. Patent No. 7,917,843 (claiming 1998 priority).

Single Reference Plus Common Sense: In its obviousness decision, the Board identified a single prior art reference (Pandit) that teaches the recognition of text classes (such as phone numbers) and then providing additional suggestions based upon that recognition (such as dial, add to contacts, etc.).  However, Pandit did not expressly teach a search of the separate data-source.  In concluding that the invention was obvious, the Board found that it would have been “reasonable . . . common sense” that Pandit would search through the contact list for the phone number before actually adding a new contact number. The board wrote:

[I]t would have been obvious to the ordinary artisan to utilize a computerized search for duplicate telephone entries when entering a telephone number in an electronic address book database as taught by Pandit.

In making its determination, the Board held that common sense must be applied throughout the obviousness analysis, and not only when combining references that disclose all the required limitations.

On appeal, the Federal Circuit rejected the Board’s analysis – holding that Common Sense must be confined to its “proper place in the obviousness inquiry.” (I expect that this line from the opinion is one that will likely upset members of the Supreme Court because it is ridiculous.).

Caveats to Common Sense: In confining the use of common sense, the Federal Circuit identified three “caveats” to its use:

  1. “First, common sense is typically invoked to provide a known motivation to combine, not to supply a missing claim limitation.”
  2. Second, when common sense is used to supply a missing claim limitation, it should only apply where the missing limitations is “unusually simple and the technology particularly straightforward.”
  3. “Third . . . common sense . . . cannot be used as a wholesale substitute for reasoned analysis and evidentiary support, especially when dealing with a limitation missing from the prior art references specified.”

Although not listed specifically as a caveat, the court also discussed a fourth – that statements of common sense or general knowledge cannot overcome “important” claim limitations without supporting evidence.

Question of Substantial Evidence: Stepping back from these broad statements of law, the court partially reforms its opinion to the proper question –  “whether there was substantial evidence supporting the Board’s finding that common sense would lead one to search for the telephone number in Pandit.”  In the appeal, the Federal Circuit found that no evidence had been presented regarding the common sense conclusion but rather only attorney argument. “Specifically, Appellees have failed to show why it would be common sense for the ‘Add to address book’ function to operate by first ‘search[ing] for entries with the same telephone number.'”

To be clear – I am 100% on board here – that an obviousness finding must be supported by evidence.  Unfortunately, that is not what the Supreme Court appeared to rule in KSR v. Teleflex — where it suggested that “analysis” can do the trick.

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Arendi has infringement cases pending in Delaware against Blackberry, Motorola, Google, Apple, Sony, Nokia, HTC, Yahoo!, Samsung, and LG.  Arendi is a Luxembourg patent owner created by the ‘843’s Norwegian inventor Atle Hedløy.

Some thoughts on Broadest Reasonable Interpretation

By Jason Rantanen

A few weeks ago, my curiosity took me into trying to figure out what broadest reasonable interpretation (BRI) actually means as an approach to claim construction and how it differs from claim construction in infringement proceedings.  Surprisingly, there’s relatively little in treatises or academic work on this subject so I ended up putting together a short essay on the subject.  Here are links to the essay on SSRN and SocArXiv.

The abstract:

In this essay, I examine the meaning of “broadest reasonable interpretation” along two dimensions: how it affects the Federal Circuit’s review of Patent Office claim constructions and what it seems to mean in substantive terms. Central to both is the term “reasonable.” How should that term be understood? Does it mean that the Federal Circuit grants deference to the Patent Office when reviewing its constructions, as some commentators describe and some opinions suggest? And, perhaps more importantly, what is a “broadest reasonable interpretation” and how does that fit into the process of claim construction generally?

Here, I argue that regardless of one’s view on the historical nature of judicial review of Patent Office claim interpretation, any deference is inconsistent with the Federal Circuit’s use of a de novo standard when reviewing claim interpretations by the Patent Office (with the exception of findings of fact relating to extrinsic evidence). Second, I argue that the still-developing jurisprudence at the Federal Circuit is coalescing around a meaning of “broadest reasonable interpretation” that allows for the existence of multiple ordinary meanings and reads the intrinsic evidence with a certain degree of “looseness,” but which is still hesitant to embrace ambiguity within the application of the tools of claim construction.

Enhancing Damages in Halo v. Pulse

The 2012 jury verdict form in Halo v. Pulse asks “Has Halo proven that it is highly probable that Pulse’s infringement was willful?”  The jury answered “YES.”


Judge Pro instructed the jury that:

Halo must prove willful infringement by clear and convincing evidence. This means Halo must persuade you that it is highly probable that prior to the filing date of the complaint, Pulse acted with reckless disregard of the claims of Halo’s patents. To demonstrate such reckless disregard, Halo must persuade you that Pulse actually knew or it was so obvious that Pulse should have known, that Pulse’s actions constituted infringement of a valid patent. In deciding whether Pulse acted with reckless disregard for Halo’s patents, you should consider all of the facts surrounding the alleged infringement including, but not limited to, whether Pulse acted in a manner consistent with the standard of commerce for its industry. You should base your decision on the issue of willful infringement on all of the evidence, regardless of which party presented it.

When it originally denied enhanced damages, the district court did not mention this verdict but rather focused on its conclusion that Pulse had a legitimate (but ultimately losing) obviousness defense sufficient to defeat the ‘objectively reckless’ portion of the Seagate willfulness analysis.

On remand the district court will be hard-pressed to find that the infringement was not willful – based upon the apparently unchallenged verdict.  Still, it will be within the district court’s discretion to decide whether the willfulness warrants enhanced damages under Section 284. If enhanced damages are warranted, the district court must then determine how much to award (with an upper limit of treble damages).

The setup thus-far appears to fairly neatly wrap up the case in Halo’s favor in terms of enhanced damages.  Perhaps the only abuse-of-discretion at this point would occur if the district court refused to award any enhancement at all.  In the four-years since the 2012 jury verdict, Judge Pro has retired and a new judge assigned to the case – it will be interesting to see his take on this decade-long litigation.

Indefiniteness: Terms Cannot be Moving Targets

IconIconby Dennis Crouch

Icon Health v. Polar Electro & Garmin Int’l. (Fed. Cir. 2016) [IconHealth]

In a non-precedential opinion, the Federal Circuit has affirmed that Icon’s asserted patent claims are invalid because they “fail to inform, with reasonable certainty, those skilled in the art about the scope of the invention.”  Although indefiniteness is a question of law subject to de novo review, the starting point of that review is almost always the district court opinion – thus the court here looked for errors in the district court decision.  That is especially true here where the district court decision was based in part on underlying factual conclusions that receive deference under Teva.

Claims define the scope of the exclusive patent right and there are a number of benefits associated with having that scope clearly delineated.  Because patentees have control of claim language, the law places a burden on patentees to also ensure clarity.  Section 112 of the Patent Act requires that requires “one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.” In Nautilus, the Supreme Court interpreted the statute as requiring claims to “inform those skilled in the art about the scope of the invention with reasonable certainty.”  As I have written before, “reasonable certainty” is generally thought of as a high standard that is difficult to meet, but the Supreme Court did not elaborate on its meaning in the patent context. Up to now, the Federal Circuit has also resisted an exploration of the term’s meaning other than noting that the standard is significantly higher than was was previously in play.

The patent at issue covers an “exercise system” that includes “in-band communication” with a local server; “out-of-band communication” with the user; and a “relationship” between the in-band and out-of-band communication.  Both the district and appellate courts found that this “relationship” was undefined and that the distinction between the two forms of communication was unduly ambiguous.

At the Markman hearing, the district court allowed expert testimony on the meaning and definiteness of these terms and the Federal Circuit approved of that approach – since “the indefiniteness of the claim terms simply cannot be resolved by reference solely to the intrinsic evidence (i.e., the claims, specification, and prosecution history).”  The defendants here took an interesting tack of presenting ten-different extrinsic references and showing that the meaning of the communication forms would vary depending upon which was chosen. Thus, based upon that evidence, the courts found “that those skilled in the art understand that the terms ‘in-band’ and ‘out-of-band’ are relative terms, and only have meaning in a given context with a defined reference, such as a frequency, a channel, a protocol, time slots, and data streams.”  Because the patents themselves offered no such context, they were deemed indefinite.

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I mentioned above that indefiniteness is a question of law.  A major limitation on that approach however comes from Teva, where the Supreme Court held that underlying factual conclusions regarding evidence extrinsic to the file history should be given deference on appeal.  Here, the court found that the conclusions regarding the ten extrinsic references “constitute findings of fact, and we review such factual findings for clear error. Teva.”

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Level of Proof Depends upon Purpose of Proof: Teva does offer an interesting dichotomy regarding factual conclusions that may need further exploration. Although parties may benefit from deference on appeal – there is also the higher standard of proof – “clear and convincing evidence” – that must be met before a claim may be found invalid.  The result of this evidentiary burden then is that the level of proof required to support factual conclusions underlying a claim construction determination will depend upon the purpose for which the claim construction is being used.  If invalidity then the underlying conclusions require presentation of clear-and-convincing evidence; if infringement then the court’s underlying conclusions require only a preponderance of the evidence.

Federal Circuit: District Courts Must Exercise their Discretion and in Deciding Whether to Enhance Infringement Damages

by Dennis Crouch

Halo Electronics v. Pulse Electronics (Fed. Cir. 2016)

On remand from the Supreme Court, the Federal Circuit has shifted its holding on enhanced damages (as required by the Supreme Court) and remanded for reconsideration:

Because the district court applied the Seagate test in declining to enhance damages . . . we vacate its unenhanced damages award with respect to products that were delivered in the United States, and remand for further proceedings consistent with the Supreme Court’s opinion on enhanced damages.

The only remaining in the case is that of enhanced damages under 35 U.S.C. § 284.  In its Halo decision, the Supreme Court held that the provision “gives district courts the discretion to award enhanced damages . . . in egregious cases of misconduct beyond typical infringement.”  The court rejected the Federal Circuit’s prior test under Seagate, noting that it was both “unduly rigid” and “impermissibly encumbers the statutory grant of discretion to district courts.” (quoting Octane Fitness).

According to the evidence previously presented,

“Pulse allegedly knew of the Halo patents as early as 1998. In 2002, Halo sent Pulse two letters offering licenses to its patents, but did not accuse Pulse of infringement in those letters. The president of Pulse contacted a Pulse engineer, who spent about two hours reviewing the Halo patents and concluded that they were invalid in view of prior Pulse products. Pulse did not seek an opinion of counsel on the validity of the Halo patents at that time and continued to sell its surface mount electronic package products. A Pulse witness later testified that she was “not aware of anyone in the company . . . that made a conscious decision” that “it was permissible to continue selling” those products.”

Hearing this evidence, the jury found that “it [was] highly probable that Pulse’s infringement was willful.”  However, the district court held that it could not find willfulness under Seagate because the obviousness defense was not objectively baseless.

On remand, the district court must now “exercise its discretion and to decide whether, taking into consideration the jury’s unchallenged subjective willfulness finding as one factor in its analysis, an enhancement of the damages award is warranted.”  The statement from the Federal Circuit here is interesting and important in its focus on the question of enhancement rather than willfulness. Notably, the court does not suggest that the district court first determine whether Pulse was a willful infringer and then determine whether to enhance damages.  Rather, the Federal Circuit indicates that the discretion for enhanced damages is a full bundle of discretion and willfulness only “one factor in [the] analysis.”  This approach matches with the statutory language of Section 284 that does not mention willfulness but rather simply indicates that “the court may increase the damages up to three times the amount found or assessed.”

florence-nightingale-1[1]At the Time of the Infringement: Of course, as the Supreme Court wrote, the discretion is not limited. In considering Pulse’s culpability, the Federal Circuit also noted the Supreme Court’s statement that “culpability is generally measured against the knowledge of the actor at the time of the challenged conduct.”   Thus, an important question on will be the level of culpability at the time of infringement. There will also be a question of who-knew-what and the extent that the court will follow Florence Nightengale’s opinion that the person ‘in charge’ must “not only to carry out the proper measures yourself but to see that every one else does so too; to see that no one either willfully or ignorantly thwarts or prevents such measures.”