How PTO Submissions Can Waive Privilege to Future Communications – Even for Trial Counsel and Subsequent Patent Owners

In re OptiumInsight (Federal Circuit 2017)

The Federal Circuit has denied OptumInsight’s petition for writ of mandamus on privilege waiver.

In the underlying litigation, OptumInsight has sued Cave Consulting for infringement of several healthcare analytics patents.  One of the originally asserted patents – U.S. Patent No. 5,835,897 – was developed by Symmetry Health Data Systems who later merged with Optum. (In particular, Optum bought Symmetry as the settlement of Symmetry’s infringement case against Optum).

Antitrust claim: An element of the Cave Consulting defense is an antitrust claim against the patentee for “knowingly asserting a fraudulently procured patent.”  The allegations argue that Symmetry (now part of Optum) lied about the conception date of the ‘897 patent during a prior reexamination.  As the appellate court describes:

Symmetry submitted an Information Disclosure Statement and a supporting affidavit from its patent attorney. The affidavit asserted that the ETG Program was not ready for patenting at the time of [its] RFP response because the inventor did not conceive of all the claimed concepts until August 1994. Symmetry successfully persuaded the patent examiner that the RFP response was not an invalidating offer for sale, and Symmetry thereafter filed additional patent applications that claimed priority to the ’897 patent.

To pursue its antitrust claim, Cave Consulting then demanded discovery of information relating to conception and first-sale of the invention. Optum refused – claiming privilege, but the district court ordered disclosure, including post-merger-communications – finding that the PTO submissions constituted waiver.

Under the Federal Rule of Evidence 502(a), the disclosure of to a federal agency or court waives attorney-client privilege and work-product protection as to information disclosed.  That intentional disclosure also extends to otherwise undisclosed communications if they “concern the same subject matter” and “they aught in fairness to be considered together.”  As the Federal Circuit has explained: “The rule prevents parties from selectively disclosing privileged information as an affirmative legal strategy, but falling back on the privilege to conceal inconsistent information.” See Seagate.

Here, Optum argues that Symmetry’s waiver should not apply to its successor.  In response, the Federal Circuit refused to “adopt such a categorical rule.” Rather, the approach of Section 502 is to extend waiver to the scope deemed fair. Further, the court writes: “Logically, if a successor company can assert privilege over its predecessor’s communications, the flipside of that principle is that a successor company can also be subject to its predecessor’s intentional waiver in certain circumstances.”

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A big caveat here that the court determined was important is that the PTO submission by Symmetry was in a reexamination in the midst of a litigation campaign by Symmetry – asserting the very patent at issue.  Although attorney submissions during patent prosecution will also result in waiver, they are less likely to apply to extend to either (1) later communications with trial counsel or (2) subsequent owners of the patent rights.

Please Define What you Mean by Ordinary Meaning

CallerIDby Dennis Crouch

In NobelBiz v. Global Connect, a jury sided with the patentee-finding that global connect infringed the caller ID modifying patents.[1] On appeal however the Federal Circuit has reversed on claim construction – in a non-precedential opinion.

The claimed invention is associated with telemarketing, and the idea is to “provide a callback number … that may be closer to or local to the target.” (Quoting patent specification).  The claims themselves require an “outbound call,” “replacement telephone number,” and “modif[ing] caller identification data.” Pretrial, the District Court determined that these terms needed no further claim construction but instead should be given their “plain and ordinary meaning.”  However, during the jury trial technical experts from each side provided testimony as to the meaning of these claim terms.

On appeal Federal Circuit’s first holding is that “allowing the experts to make arguments to the jury about claim scope was erroneous.” Rather, claim construction is the responsibility and duty of the judge rather than the jury. The judge must inform the jury of the scope of the claims, enabling the jury to then determine whether those claims are infringed.

Further, the court also erred by failing to construe terms whose scope was disputed. Following its precedent of O2 Micro,[2] it is not enough for the court to simply state that the definition use “well understood” when the parties dispute the scope covered by the claims because that would leave the jury with the responsibility of determining the claim scope.

I will note here that the majority opinion was written by Judge Hughes and joined by Judge Dyk. Judge Newman wrote in dissent citing other Federal Circuit precedent such as Summit 6[3] were the Federal Circuit had approved of the District Court’s refusal to particularly construe common claim terms with clear meaning and no special definition in the art. “Because the plain and ordinary meaning of the disputed claim language is clear, the district court did not err by declining to construe the claim term.”

Judge Newman goes on to highlight the reality that the majority’s approach substantially undermines the fact-finding role of the jury in patent cases. Rather, in this case “[t]he district court declined to decide the question of infringement by way of claim construction.”

An oddity of the majority opinion is its sole focus on claim construction without considering the impact. Majority opinion has no discussion as to whether the minor tweaks that it provides for the meaning of a replacement telephone number would have any impact on the jury’s opinion, or if the jury could have reached the same conclusion of infringement under the modified claim construction. In her dissent judge Newman provides a reason for the majority’s lack of explanation: “We are not told how these corrected definitions could have changed the result at trial.”  Note here – for instance – the majority found that the claim construction should have specified that the claimed “replacement telephone number” must “replace something . . . [such as] an original phone number.”  Ordinarily, a minor tweak would not require vacatur of a jury verdict without first considering whether the change might have some impact on the outcome.  

I would also add some comment here that relates to the majority’s first holding: “Allowing the experts to make arguments to the jury about claim scope was erroneous.” Of course, whether certain testimony is permitted or not is ordinarily well within the discretion of the district court judge.  Here, the court found it reversible error without (1) providing deference to the lower court or (2) considering whether the testimony somehow threw the jury off track in an impermissible way.

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[1] U.S. Patent Nos. 8,135,122 and 8,565,399. Patents claim an invention for modifying the caller ID seen by a call target.

[2] O2 Micro Int’l Ltd. v. Beyond Innovation Tech. Co., 521 F.3d 1351, 1361 (Fed. Cir. 2008).

[3] Summit 6, LLC v. Samsung Elecs. Co., 802 F.3d 1283, 1291 (Fed. Cir. 2015).

Patentlyo Bits and Bytes by Anthony McCain

Get a Job doing Patent Law                  

When is an the inherent, but unexpected result obvious?

Millennium Pharma v. Sandoz (Federal Circuit 2017)

As part of a brand-generic pharma battle, the district court invalidated a set of Millennium’s patent claims covering its Velcade drug used to treat multiple myeloma.[1]  The district court held that the claims (covering the chemical compound active ingredient) were obvious as the inherent result of an obvious process.

In particular, the claims cover a freeze dried (“lyophilized”) version of the compound “D-mannitol N-(2- pyrazine) carbonyl-L-phenylalanine-L-leucine boronate.”  The active portion of the compound is the boronate (bortezomib), which was known to work but was unstable. Researchers tried and failed to create liquid formations and so turned to freeze-drying.  To achieve that end, mannitol was added to the compound in a way formed a chemical bond with the boronate – leading to dramatic improvement in stability.  When a patient ingests the new drug (a “prodrug”), the body breaks-down the compound and allows the active ingredient to work.

The boronate portion was known in the prior art for its medical use and the mannitol portion was a known bulking agent.  The process of freeze-drying was also known.  However:

No reference taught or suggested reacting bortezomib with mannitol, and no reference hinted that … an esterification reaction might occur during lyophilization. No reference taught or suggested that the product of such lyophilization would be a new chemical compound that would solve the problems that had inhibited development of bortezomib in oncology.

In its decision, the district court recognized that the resulting compound was likely unexpected, but focused on the process of getting to that result – holding that the claimed compound was simply the “natural result” inherent to the lyophilized process and that it would have been obvious to try the process on boronate + mannitol.   On appeal, the Federal Circuit has reversed.

The easy part of the decision for the district court focused-in on the motivation to combine boronate and mannitol.  The district court found that an Adams Patent “pointed directly to mannitol” for the combination.  However, according to the Federal Circuit, “the Adams Patent’s fail[s] to mention mannitol.”

In my view, this easy-part is sufficient for the patentee to win, and my preference would be for the court to delete the rest of its muddled opinion – and instead rest its case on the lack of the motivation to combine.  The remainder of the decision is somewhat difficult to follow because it jumps back and forth dancing around but never answering the basic question: If the combination would have been obvious to try, would its natural result also be considered obvious?  At times, the court appears to agree that obviousness would follow, while other sections of the opinion suggest the compound would not have been obvious since its actual structure was so unexpected.

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A patent claim is obvious when, “if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.”[2]  Here the appellate panel focused the question to: “whether a person of ordinary skill, seeking to remedy the known instability and insolubility and to produce an efficacious formulation of bortezomib, would obviously produce the D-mannitol ester of bortezomib, a previously unknown compound.”

On the topic of inherency in particular, the court seems to have simply strung together several loosely related sentences.  Take the following pair as an example:

Sandoz argues that although lyophilization in the presence of mannitol produced an unexpected result, the result was “inevitable” and thus “inherent,” and thus not “inventive.” However, invention is not a matter of what the inventor intended when the experiment was performed; obviousness is measured objectively in light of the prior art, as viewed by a person of ordinary skill in the field of the invention . . .

In the end, the reversal makes sense, but the law created is somewhat of a mess.

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[1] Millennium Pharm., Inc. v. Sandoz Inc., No. 12-1011, 2015 WL 4966438 (D. Del. Aug. 20, 2015); U.S. Patent No. 6,713,446.

[2] 35 U.S.C. 103.

Layering of Law upon the Injunctive Relief Standard.

Genband v. Metaswitch (Federal Circuit 2017)

At the close of trial, a jury found for the patentee Genband-ruling that Metaswitch infringed all of the asserted claims found in the eight asserted VoIP patents.[1] However, the District Court denied the patentee’s request for an injunction to stop the ongoing infringement. In its refusal, the District Court noted the lack of proof of a causal nexus between the ongoing infringement and the patentee’s allegedly irreparable harm of lost sales. Here in particular, focus is not on whether competition resulted in lost sales, but rather whether the inclusion of the infringing features caused the lost sales. As in the Apple and Samsung cases, this is a situation where the patents cover a few components of a multi-component product. The District Court also noted that the patentee’s delays in filing its infringement action also tended to support its conclusion of no irreparable harm.

On appeal, the Federal Circuit has vacated the injunction denial, holding that it is unclear whether the District Court properly applied the nexus requirement outlined by the Federal Circuit in its Apple v. Samsung decisions.[2]

In what the court is calling Apple II, Federal Circuit wrote that the irreparable harm calculus can be met when “a sufficiently strong casual nexus relates the alleged harm to the alleged infringement.” In Apple III and Apple IV, the court further developed its statement, requiring “some causal nexus between [defendant’s] infringing conduct and [patentee’s] alleged harm” and “a causal nexus linking the harm and the infringing acts” respectively. Here however Federal Circuit suggests that the District Court may have applied to stringent of a nexus requirement when it demanded proof that “the patented features drive demand for the product” before finding irreparable harm. In particular, the appellate court suggested that a patentee need not prove its features are “the driver” of demand but instead may rely upon evidence of being “a driver”. The appellate court also re-oriented the focus of inquiry toward ensuring that the allegedly irreparable injury is being caused by use of the infringing features. This is obviously tricky in a multi-component situation.

Regarding the delay in filing of the infringement lawsuit, the court did not truly review that portion of the decision other than to hold that the timing of the lawsuit filing and decision not to request preliminary relief may be relevant to the determination of irreparable harm.

So, to be clear, to obtain an injunction, the patentee must first win its lawsuit – proving infringement and overcoming any validity challenges (both direct and collateral).  At that point, the patentee must then prove the set of equitable “eBay” factors, that include proof that any ongoing infringement would cause irreparable harm. When proving irreparable harm the patentee must take pains to ensure that the claimed irreparable harm is being caused by the infringement rather than some other act by the infringer, and when doing this the appropriate analysis is to consider the extent that the infringing features are driving sales of the infringing device.

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[1] U.S. Patents Nos. 6,772,210; 6,791,971; 6,885,658; 6,934,279; 7,995,589; 7,047,561; 7,184,427; and 7,990,984.

[2] See, Apple, Inc. v. Samsung Electronics Co. (Apple III), 735 F.3d 1352, 1364 (Fed. Cir. 2013); and Apple, Inc. v. Samsung Electronics Co. (Apple IV), 809 F.3d 633, 641–42 (Fed. Cir. 2015), cert. denied, 136 S. Ct. 2522 (2016), petition for cert. filed, 85 U.S.L.W. 3460 (U.S. Mar. 10, 2017) (No. 16-1102).

 

BRI: Even under BRI Means Plus Function Claims Limited by Structure Recited in Specification

by Dennis Crouch

IPCom v. HTC (Fed. Cir. 2017)

After IPCom sued HTC for infringing its U.S. Patent No. 6,879,830, HTC countered with its PTO request for inter partes reexamination of the asserted claims.  While the AIA Trials (i.e. inter partes reviews) are heard directly by a PTAB panel, reexaminations are first decided by a patent examiner before being appealed to the PTAB.  Here, the examiner initially sided with the patentee – finding the challenged claims patentable.  However, the Board issued a new grounds of rejection for most of the claims.  That obviousness rejection was later sustained (even after a claim amendment).  On appeal, the Federal Circuit has largely affirmed, but reversed a portion of the claim construction — this time the limits of means-plus-function claiming has helped the patentee.

One limitation found in challenged claim 1 requires: an arrangement for reactivating the link with the first base station if the handover is unsuccessful.

Although not written in means-plus-function language, the nonce word “an arrangement for” without further recited structure easily qualifies under 35 U.S.C. 112 p6.

Section 112 p6 (now 112(f)): An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.

It turns out that the Federal Circuit already construed this very phrase as means-plus-function in its 2012 decision involving the same patent. HTC Corp. v. IPCom GmbH & Co., 667 F.3d 1270 (Fed. Cir. 2012).  However, when conducting its broadest reasonable construction of the claim limitation, the PTAB failed to particularly tie the MPF limitation to the structure (here algorithm) recited in the specification.  Rather, for the PTAB apparently any arrangement for achieving the stated function would fall within the claim scope.  On appeal, the Federal Circuit rejected the PTAB approach and instead held that a means plus function claim term is limited by the scope of the structural recitations found in the specification – even under the PTO’s broadest reasonable interpretation.

The decision here is not new law but instead parallels the important MPF case of In re Donaldson Co., 16 F.3d 1189, 1193 (Fed. Cir. 1994) (en banc).  In Donaldson, the PTO argued that the BRI construction of a means-plus-function claim term should encompass “any means capable of performing the recited function.”  On appeal, the en banc Federal Circuit rejected that argument – holding instead that even under BRI, construction of a means-plus-function limitation “must look to the specification and interpret that language in light of the corresponding structure, material, or acts described therein, and equivalents thereof.”

Like Donaldson, the Board here impermissibly treated the means-plus-function limitation in its patentability analysis as if it were a purely functional limitation.

On remand, the PTAB will need to reevaluate the scope of the claims and then determine whether the recited prior art discloses the requisite particulars.

[DECISION]

 

Claim Construction: Sweeping Reasonableness Under the Rug

by Dennis Crouch

Hitachi Metals v. Alliance of Rare-Earth Permanent Magnet Industry (Fed. Cir. 2017) (nonprecedential decision)

Rare-earth magnets are the strongest commercially available permanent magnets.  Hitachi’s U.S. Patent Nos. 6,491,765 and 6,537,385 are directed to important commercial methods of pulverizing an alloy in order to prepare a powder then used to make the magnets.

Hitachi had previously brought a USITC action against a host of industry players to stop importation of infringing magnets into the United States. Those actions settled for undisclosed royalty amounts [EarthMagnetSettlementA], but a group of the ITC-losers then filed for inter partes review (IPR) – after forming the aforementioned “Alliance.”  The Board granted the IPR request (on behalf of the Director) and eventually found the challenged claims obvious over a combination of prior art references (with one claim also anticipated).

In the non-precedential appellate opinion, the Federal Circuit has largely affirmed, but reversed on one particular claim – finding that the court had misconstrued claim 4 of the ’765 patent.

As compared with Claim 1, Claim 4 only adds a limitation within a “pulverization step” that “the alloy is finely pulverized in a high-speed flow of … oxygen.”  The problem though was that although Claim 1 identified two separate pulverization steps (a first and a second) plus sub-steps of pulveration, Claim 4 did not identify which one to associate with high-speed flow of oxygen.  In the appeal, the Federal Circuit dove into the written description – finding that:

We agree with Hitachi that claim 4 requires the use of a high-speed flow of gas comprising oxygen for the first sub-step of claim 1—the fine pulverization—rather than the umbrella “second pulverization step.”

The reasoning for this approach lies in the written description where exemplary processes described the step-by-step process of pulverization.  The change in claim construction meant that the obviousness case was also pulverized.  On remand, the PTAB will get a chance to determine validity under this new construction.

For me, the most interesting aspect of the opinion is its complete lack of discussion of the Broadest Reasonable Interpretation standard for claim construction.  The approach taken by the court here looks more like an in-court analysis looking for the best interpretation of the claims.  However, Federal Circuit precedent requires in this situation application of the broadest reasonable interpretation of the claims.  The lack of specificity in spelling-out which pulverization step is applicable should at least prompt a consideration as to whether the PTAB’s construction was reasonable.

The image above comes from TMNT episode with the Pulverizer.

I’m still posting remotely – this time from the Italian Alps near Molveno.

Image may contain: one or more people, mountain, outdoor and nature

Attorney Fee Award: District Court Erred in Not Awarding Fees

In another successful appeal by Prof. Mark Lemley, the Federal Circuit has reversed on fees – finding that the E.D. Texas Court (Judge Gilstrap) erred by not awarding fees to the successful defendant Newegg.

AdjustaCam v. Newegg (Fed. Cir. 2017) [16-1882.Opinion.6-29-2017.1] [regarding U.S. Patent No. 5,855,343]

AdjustaCam dropped its infringement case against Newegg following an adverse claim construction and reexamination. The basic issue on claim construction involved the claimed camera “rotatably attached . . . about a first axis of rotation” as compared with Newegg’s ball-and-socket attachment.  Under the district court’s construction, clearly no infringement.

After the voluntary dismissal, all that remained wasthe extent that AdjustaCam owes in attorney fees (if any).  Under Section 285 of the Patent Act, fees may be awarded in exceptional cases. The district court initially rejected any fee award, but that decision was vacated by the Federal Circuit in 2015 following Octane Fitness, LLC v. Icon Health & Fitness, Inc., 134 S. Ct. 1749 (2014).  Octane Fitness gave more discretion to district courts in awarding fees, but it also lowered the standards for proving an exceptional case (both eased the elements needed to be proven and the standard of proof required).  By the time remand came around, Judge Davis had retired and the case moved to Judge Gilstrap who again denied the fee award. Now, the appellate court has reversed Gilstrap’s decision – holding that a fee award is required.

The decision here is based upon two grounds:

(1) The remand required a re-evaluation of the evidence based upon the new totality-of-the-circumstance standard and lower-burden required by Octane Fitness.  Judge Gilstrap failed to conduct that review of the evidence and thus erred.

(2) In addition, the appellate panel found  “clearly erroneous findings about the substantive strength of AdjustaCam’s case [sufficient to] independently support reversal.”  Here, the appellate panel wrote that what began with a “weak infringement lawsuit . . . became baseless” after the claim construction order.  Based upon this claim construction, the appellate court found simply “AdjustaCam’s lawsuit was baseless.”

[Under the claim construction] there is no possible way for Newegg’s products to infringe the ’343 patent. No reasonable factfinder could conclude that Newegg’s products infringe; therefore, AdjustaCam’s litigation position was baseless. These are traits of an exceptional case. The district court’s contrary conclusion was based on “a clearly erroneous assessment of the evidence.” Highmark, 134 S. Ct. at 1748 n.2. Fees are warranted.

Note here that the claim construction and post-claim construction activity is an important aspect of the decision. Although not mentioned in the present decision, a difficult aspect of the case for the patentee is that it was not permitted to appeal the claim construction.  Rather, it did appeal the claim construction, but the Federal Circuit refused to hear that portion of the case since it was moot following the dismissal of the merits case.

In addition to the baselessness of the lawsuit, the Federal Circuit also found that the patentee litigated the case in an unreasonable manner as shown through “repeated use of after-the-fact declarations. . . .  [W]e recognize today, the totality of the circumstances demonstrates other dubious behavior that, when considered collectively, warrants fees under § 285.”

Finally, the court addressed the fact that the patentee’s strategy included a large number of low-dollar settlements (lower than the cost of litigation).  The appellate court began by noting that “there is no minimum damages requirement to file a patent infringement case” and a strategy that involves low damages against multiple defendants “does not necessarily make a case ‘exceptional.'”  However, practice further supports a fee award. “The irregularities in AdjustaCam’s damages model and the purported nuisance value of many of its settlements should have played a role in the evaluation of whether this is case exceptional.”

 

 

On remand, the district court will now determine the amount of attorney fees to award. Unanswered questions include whether (1) fee award should begin with the filing of the complaint (2) what level of fees is ‘reasonable,’ and (3) whether Lemley’s appellate costs can be included.

 

Lifting the Bar: Federal Circuit finds that the PTAB improperly allowed Amendments during IPR

US06681897-20040127-D00000Shinn Fu vs. Tire Hanger (Fed. Cir. 2017)

After receiving substantial criticism for refusing to allow claim amendments during Inter Partes Reviews (IPRs), the USPTO began to to relax its standards somewhat.  In this case, however, the Federal Circuit (C.J. Prost) has rejected the PTO’s expanded approach – holding that “the Board did not properly consider the arguments petitioner set forth in its opposition to the patent owner’s motion to amend.”

[16-2250.Opinion.6-29-2017.1][U.S. Patent No. 6,681,897][IPR2015-00208]

Tire Hanger’s patent covers a way of temporarily hanging a wheel that has been removed from a car on a mechanic’s lift.  Upon Shinn Fu’s request, the PTAB (acting on behalf of the Director) instituted the IPR and the patentee subsequently (and successfully) petitioned for an amendment to the claims in order to overcome the prior art.  Eventually, the PTAB agreed with the patentee that that amended claims were patentable — leading to this appeal by Shinn Fu.

In its decisions, the Board did not address Shinn Fu’s particular arguments regarding the reasons-to-combine the references and thus “did not meet its obligation here.”  Although the Board did generally address why it was not combining the references, it failed to particularly explain the problem’s with Shinn Fu’s arguments on that point.

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Perhaps the most important portion of the opinion comes in footnote 3.  There, the court writes about Shinn Fu’s reliance on additional references in its opposition – added after the amendment:

Although the Board faulted Shinn Fu for relying on additional references in its opposition, it is not surprising that it pursued this course of action in light of Tire Hanger’s amendments. In particular, those amendments added limitations that necessitate human involvement throughout the process. Indeed, the Board recognized this as the fundamental purpose of the amended claims in its Final Written Decision.

Although not a direct decision, the point from the court here is that an amendment by the patentee should likely open the door to allowing the patent challenger to add further references to its obviousness challenge.

 

 

Does the PTO have a Right to Intervene in IPR Appeals?

Knowles Electronics v. Matal (Fed. Cir. 2017)

In an interesting sua sponte order, the Federal Circuit has demanded briefing on whether the USPTO has the right to intervene in an appeal from an inter partes reexamination decision by the Patent Trial and Appeal Board (PTAB).

Analog Devices filed for the inter partes review against Knowles’ U.S. Patent No. 8,018,049 covering a Silicon Condenser Microphone Package.  The PTAB agreed with the challenge and found a substantial number of the claims unpatentable.

The setup here is that the patentee is appealing the PTAB unpatentability decision, but Analog has dropped its case.  As such, the PTO has stepped-in as an intervenor in the case.  The Federal Circuit then asks:

When the prevailing party in an inter partes reexamination proceeding before the USPTO’s Patent Trial and Appeal Board (“Board”) declines to appear before this court to defend the decision below, is the USPTO’s Director required to possess Article III standing in order to intervene?

If yes, does the Director possess such standing in this appeal?

Additionally, if the Director does in fact possess standing; must the Director defend the Board’s decision? Alternatively, what are the ramifications if the Director declines to defend the Board’s decision?

Although the case here focuses on the vestige inter partes reexamination system, it has obvious and direct implications for the replacement inter parties reviews.

[Order: KnowlesOrder]

Paying Attorney Fees on Appeal

Image result for natural born killersWhen the PTO refuses to issue a patent, the applicant can appeal directly to the Court of Appeals for the Federal Circuit or instead file a civil action under 35 U.S.C. 145.  The Section 145 action gives the applicant the opportunity to further develop facts, including live expert testimony and cross-examination.

An oddity of the statute is its statement that “all the expenses of the proceedings shall be paid by the applicant.”  In its 2010 Hyatt decision, the Federal Circuit ruled that the expenses are to be paid by the applicant “regardless of the outcome.”  In the new decision NantKwest v. Matal, the Federal Circuit has ruled that the provision includes attorney fees and thus allows the USPTO to recoup its expert witness fees, attorney fees and other expenses without any showing of exceptional case or even any merits.

[NantKwest v. USPTO]

Here, the majority opinion filed by Judge Prost and Joined by Judge Dyk found that the term “all expenses” was designed to “deter applicants” from choosing the civil action pathway. The dissent filed by Judge Stoll (her first in a patent case?) argues that the term “expenses” is not sufficient to overcome the traditional american rule regarding attorney fees.

The lucky-thing here is that USPTO attorneys are paid government salaries and so the attorney fees added up to only $78k before the district court granted summary judgment against NantKwest.

The patent application in this case is based upon a 2001 filing by Hans Klingemann directed to a method of treating cancer by administering natural killer cells.  Those Natural Born Killers will now be released on the public without the protections offered by the patent system.

Celgard: Important Challenge to the Federal Circuit’s Pervasive No-Opinion Judgments

IMG_20170623_221253_112By Dennis Crouch

In re Celgard (Supreme Court 2017) [2017-6-19 Celgard Cert Petition]

In what looks like a well-postured case, Celgard LLC has asked the Supreme Court to consider several questions stemming from the Patent Trial & Appeal Board (PTAB) decision that the claims of the company’s U.S. Patent No. 6,432,586 are invalid as obvious.  The patent claims a particular microporous membrane separator that adds a ceramic layer to effectively limit the growth of lithium dendrites – the major cause of lithium battery failures and overheating.  The approach created by Celgard has been widely copied (and further adapted) in the industry.

In order to avoid royalty payments and supply agreements with Celgard, a host of competitors filed at least six inter partes review (IPR) petitions against the ‘586 patent.[1] Although the bulk of the challenges have been rejected or found without merit by the PTO, the PTAB ultimately agreed with one of the several grounds presented by LG and ruled claims 1-6 and 11 obvious over a combination of two Japanese published patent applications in a parts-and-pieces analysis.[2] As it does with most appeals from the PTO, the Federal Circuit affirmed the PTO judgment without opinion. The petition explains:

The [Federal Circuit] decision was labeled as a “Notice of Entry of Judgment Without Opinion” and stated that “[t]he judgment of the court in your case was entered today pursuant to Rule 36. This Court affirmed the judgment or decision that was appealed. None of the relief sought in the appeal was granted. No opinion accompanied the judgment.”

The Federal Circuit also denied Celgard’s subsequent petition for rehearing and rehearing en banc.

With this basic setup, Celgard has petitioned the Supreme Court for writ of certiorari – asking four questions.

First, following identically from the pending case of Oil States, petitioner asks:

Whether inter partes review—an adversarial process used by the Patent and Trademark Office (“Patent Office”) to analyze the validity of existing patents—violates the Constitution by extinguishing private property rights through a non-Article III forum without a jury?

This question should at least serve as a place-holder pending outcome of Oil States.

The second question stems from my recent article on the Federal Circuit continued issuance of judgments without opinion in appeals of PTO decisions.  Petitioner asks:

Whether the Federal Circuit’s issuance of Rule 36 judgments without opinions for the disposition of appeals from the Patent Office violates 35 U.S.C. § 144’s requirement that the Federal Circuit “shall issue” its “mandate and opinion” for such appeals?

In addition, petitioner argues that the Federal Circuit’s continued and pervasive use of Rule 36 judgments without opinion is a violation of the principles of justice and should be rebuked by the Supreme Court:

Whether the Federal Circuit’s pervasive practice of issuing Rule 36 judgments without opinions to affirm more than 50% of appeals from the Patent Office has exceeded the bounds of reasonableness and is inconsistent with “principles of right and justice”?

Something that makes this a helpful case is the fact that Celgard also has a very strong argument on the substantive patent law merits (nonobviousness) and there are no serious troll or eligibility undertones.  In its final petition question, Celgard focuses on the obviousness question asking:

Whether the Patent Office’s consistent practice of failing to consider the claimed invention “as a whole” and failing to consider whether the combination of elements would lead to “anticipated success” in an obviousness determination conflicts with 35 U.S.C. § 103 and this Court’s precedent in KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 421 (2007)?

The obviousness analysis by the PTO is what I see as a somewhat typical pieces-and-parts analysis – finding that most of the elements of the claims were taught by one of the prior art references and then finding another reference that taught the remaining limitations.  Of course, this approach of using the invention as a blueprint for framing the prior art has the problem of likely hindsight bias – and is particularly troublesome where the invention is not simply a combination elements but instead is a new structure. Here, for instance, the claim requires, inter alia, “a ceramic composite layer . . . adapted to at least block dendrite growth. . .”  One reference purported to teach a non-ceramic layer used to block dendrite growth (Tobishima) and the second taught a ceramic layer – albeit one that that would not block dendrite growth because of large open holes (Tojo).  The PTO determined that it would be appropriate to combine the two references in a way that form a ceramic layer that blocks dendrite growth. In response, the petition argues:

Given the different problems addressed by Tobishima and Tojo (and their respective, different solutions), a threshold question for obviousness should have been whether it would have been obvious to combine the references to achieve a two-layer separator that blocks dendrite growth. Had this question been considered, which would have considered the claimed invention as a whole, the Patent Office would have found that the combination would destroy the very purpose of the references and would result in a separator with “open holes” that cannot block dendrite growth. Instead of considering the claimed invention “as a whole” and its unique ability to block dendrite growth through a ceramic composite layer, the Patent Office instead looked to whether the references contained all the elements of the claims. This analysis is not proper.

Although not the primary focus of the obviousness argument, the secondary factors of nonobviousness are interesting here.  The PTO gave them no weight even though LG apparently copied the invention and then touted the safety benefits of the ceramic layer in its advertising.

As in the Cuozzo case, the original IPR petitioner has dropped out of the case after a settlement, but the PTO is defending its own judgment.

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[1] See IPR2015-01511 (Ube Maxell); IPR2014-00679 (SK Innovation); IPR2014-00680 (SK Innovation); IPR2014-00692 (LG Chem); IPR2014-00524 (Mitsubishi Plastics); IPR2013-00637 (Sumimoto Chemical).  See also, Celgard, LLC v. LG Chem, Ltd. et al 3:14-cv-00043 (W.D.N.C.); Celgard, LLC v. SK Innovation Co., Ltd. 3:13-cv-00254 (W.D.N.C.); and Celgard, LLC v. Sumitomo Chemical Co., Ltd. 3:13-cv-00122 (W.D.N.C).

[2] References: Unexamined Japanese Patent Application No. H5-190208 (hereinafter, “Tobishima”) and unexamined Japanese Patent Application No. H11-80395 (hereinafter, “Tojo”).

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I’m writing this from the mountain village of Montefegatesi, shown in the picture above.  No internet here, but it will be posted soon.

Licensing matchmaking: the allure of reputation and organizational capital

Guest post by Ian McCarthy and Karen Ruckman, both from the Beedie School of Business, Simon Fraser University. This is based on the research article: Why do some patents get licensed while others do not?

If the deluge of reality television shows about the subject is any indicator, the public has an ongoing fascination with both inventors and their innovations. Entrepreneurship programs like Shark Tank or Dragons’ Den offer some entertaining glimpses into how venture capitalists decide upon the kind of people and ideas they want to invest it.

But do these insights extend to the licensing of patents? Not exactly. But for those wondering why some innovations and patents get licensed while others do not, a less intuitive reality television genre might provide more compelling insights. I’m referring here to the reality dating show. If there is a truism from programs like The Bachelor or The Bachelorette, it is that match-making is a complex affair that goes well beyond choices that can be made from reviewing what we know to be true on paper. Fans of these shows—you might secretly be one yourself—note that a much richer set of variables guide the decision-making process on the part of the relationship-seeking protagonists– which often creates a greater degree of unpredictability within the plotlines and consequently a more compelling reason for viewers to watch week after week.

So how does this all relate to the licensing of technology patents? We’ll get there in a minute. But first, it’s worth restating what readers of Patently-O already know: The global licensing of patents is serious business these days. Within just the U.S., it is estimated that the annual value of licensed technologies has increased from $50 billion in 1997 to $200 billion in 2017. As a result, the financial and economic stakes for this form of matchmaking are quite high. Such technology licensing involves the transfer of intellectual property rights between two parties: the owner of the patent (i.e., the licensor), and a potential buyer (i.e., the licensee). It’s a growing opportunity for companies, and an increasingly integral business activity for companies who buy and sell patents in order to develop new innovations and products. When companies aren’t in a position to develop their own patent, perhaps due to their size or a lack of financing or expertise, they are at least able to license it out. Such a proposition offers much for both sides of such a transaction. Yet much remains unknown about the interplay between buyers and sellers in the patent licensing market.

Our study in the journal Industry and Corporate Change sought to address this gap, and answer the question: Why do some patents get licensed while others do not? By focusing on patents that are technologically similar, our analysis has provided new insights into why some patents are more likely to be licensed out. We looked at U.S. biotechnology patents that had been licensed over a period spanning 1993 to 2007, and those equivalent technology patents that were not. Historically, patent licensing has been studied by looking at primary measures of the patent itself—using measures such as patent cites and patent claims that reflect potential patent quality and value. Through a quasi-experiment methodological approach, our study looked at not only these characteristics of the patent, but also the characteristics of the licensor.

And that brings us back to those dating programs. When the Bachelorette whittles down a field of serious relationship prospects from 30 eligible bachelors down to 1, she is making choices beyond the immediate appearance-based qualities of her suitors, such as intelligence and physical attractiveness. She also observes her suitors in a multitude of social, cultural, and athletic environments; and in some cases she visits their hometowns and meets their parents and old acquaintances. In short, the choices made by the Bachelorette (or Bachelor) hinge not just on the intrinsic qualities of the suitors, but also their connections, standing and reputation. So we shouldn’t be surprised when the brother of a famous NFL quarterback is selected in the season finale over other equally-qualified but ultimately frustrated candidates (this actually happened). This shows that perceptions of quality can be garnered by association.

The academic equivalent of this might be found in a PhD student applying for faculty jobs. Two top candidates for a professor posting might hold the same qualifications—number of journal publications, quality of journals where published, research awards, and teaching prizes. With other measures equal, however, the prestige of their institutions will play a major role in the final decision. Rightly or not, organizational reputation matters—candidate qualities are insufficient to explain who gets chosen.

The same phenomenon holds true in the licensing of patents. Some licences happen to be more desirable than others—and they appeal to their prospective licensees through a combination of patent attributes and their organization’s attributes: prestige, experience, brand, and reputation (See Figure 1). When a patent is associated with a licensor of high repute or prestige, it benefits from a halo effect. A patent may be deemed to be more appealing than it really is, if it comes from a company with a strong reputation for producing outstanding technology. Conversely, a groundbreaking patent might be ignored or undervalued if it is from a lesser known licensor.

Specific variables help dictate the outcomes of a patent. Technological prestige reflects the licensor’s reputation for high-quality technologies. Technological depth indicates the extent of a licensor’s existing knowledge in a particular technological area. Technological breadth is the knowledge scope of a licensor’s past patenting efforts. Other key variables include experience, size, and the licensor’s past relationships with the licensee.

Figure 1: The allure of patent and licensor characteristicsFigure1

In many ways this boils down to organizational capital, or the status of the licensor. When the qualities of a patent or technology are equal, licensees will seek out other information to make a decision, such as the status of the organization selling the licence. The owners are deemed to have more experience, alongside deeper and broader knowledge capabilities. We are looking at the characteristics of the licensor in terms of what makes them attractive beyond the technology itself. It’s not just the functional quality of the patent that takes priority—the appearance and prestige of the owner also matters. Bluntly put, it’s important to look good at producing good technology.

Granted, this doesn’t always produce reasonable outcomes. A PhD graduate from second-tier university might be just as qualified as a PhD grad from an Ivey League school, after all—but we can predict who stands the best chance of getting the faculty position. Similarly, a worthy patent from a lesser-known licensor might be overlooked in favor of technological similar inventions from licensors of higher repute or standing.

Our findings provide a reminder for licensors of all patents that halo effects are important—they play a major role in framing and licensing technologies. Technological brand and reputation directly influences one’s ability to licence a patent out. Licensees look not only to the qualities of patents, but also to the profile and prestige of their owners. Licensors can’t change these variables overnight, but they should be strategically aware of them. On the flipside, some high-value patents might be ignored or undervalued because they do not have this kind of halo effect working for them.

Ultimately, the matchmaking analogy holds true across different outcomes for patents. Licensors emit reputational signals to licensees, which in turn influence a firm’s success in licensing out patents. Impressions not only matter—they are the driving force in the licensing process for otherwise equal patents.

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Acknowledgements: We are grateful to Derek Moscato for his ideas and work on this posting.

 

Matal v Tam: Only I Can Disparage You!

The Supreme Court has affirmed that Trademark law’s restriction on registration of disparaging marks violates the free speech provision of the US Constitution.

Read it: 15-1293_1o13

Although the court’s logic is largely incomprehensible, the result is simple: the PTO will begin allowing registration of disparaging marks and will not cancel Registered marks because they are disparaging.

Although not at issue here, disparaging marks will likely be somewhat more difficult to enforce based upon the greater expressive content of the speech.

 

Where Does Infringement Occur?  Lessons from Extraterritoriality Cases

Guest post by Josh Landau, Patent Counsel for CCIA

It seems like a truly simple question to answer: where is an act of infringement committed?  And it’s one that became more important after TC Heartland’s decision that venue is proper “in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.”  There’s been a lot of discussion, here and elsewhere, of what “regular and established place of business” means, but less focus on where acts of infringement occur.

Fortunately, there is one place where the issue of where infringement happens has come up: extraterritorial infringement cases.

Methods Abroad in NTP

The Federal Circuit defined the location of infringement tautologically in NTP v. RIM, saying “[t]he situs of the infringement ‘is wherever an offending act [of infringement] is committed.’”  And for simple machines or processes that operate entirely in one place, this provides a simple and workable definition.  But what about more complex systems that have components or perform steps in disparate geographic locations, like the claims in NTP?

For system claims, NTP says that use occurs in “the place at which the system as a whole is put into service, i.e., the place where control of the system is exercised and beneficial use of the system obtained.”

But for method claims, we have to answer a different question.  The NTP court said that a process cannot be used “within” the United States unless each and every one of the steps is performed in the United States.  For a method claim, the place where infringement occurs is the place where each and every step is performed.

TC Heartland

While NTP was decided in reference to 35 U.S.C. § 271(a) and TC Heartland dealt with 28 U.S.C. § 1400(b), both sections include the notion of the location where the act of infringement occurs.  If the test for where use of a method claim occurs is a consistent test for both determining whether it’s within the United States and for whether it’s within a judicial district, then the NTP test would apply.

That would mean that the only place where venue may be proper for method claims with steps performed in multiple locations (e.g., cloud computing claims with both user and server limitations, or networking claims with client and server relationships) could be the district where the alleged infringer is incorporated.  If there’s a server in the Northern District of California and a user’s smartphone is in the Eastern District of Texas, then the method isn’t performed in either place under the NTP test.  That leaves a patent holder with the option of suing where the server is (assuming they can show a user within the same district as the server) or else suing where the company resides.

Indirect infringement

This is only for direct infringement, of course.  I’m unaware of comparable cases to NTP v. RIM that provide a definition for where indirect infringement takes place.  The limited set of extraterritoriality cases handling the issue don’t specifically address the location of the infringing act of indirect infringement; they focus more on whether a direct infringement has occurred within the United States in order to avoid raising concerns about extraterritorial applications of U.S. law.

So the question becomes: if I induce infringement by acts taken in the Northern District of California, but the direct infringement occurs elsewhere (or across multiple districts), did the act of inducing infringement occur in the place where I took the action that induced the infringement?  Or did it occur somewhere else?

The extraterritoriality cases with respect to inducement suggest that as long as there’s a directly infringing act in the district, actions taken outside the district to induce infringement would be subject to venue in the district.  However, as we saw above, there might not be a directly infringing act in the district, so inducement might not be available at all.  Contributory infringement might prove a stronger avenue, as it explicitly conceives of sale or importation of an article practicing the patent as the infringing act.

But all of this has to be taken in view of the existing difficulties for a plaintiff trying to assert induced or contributory infringement, such as the requirement to show specific intent to infringe or to show a lack of any substantial non-infringing use.  While a plaintiff might be able to use indirect infringement to manufacture venue for a method claim in order to choose a forum, it might not be a strong claim.

How much does this really matter?

It might not matter much.  While patents that only have method claims could have a limited set of venues in which they can be asserted, most patents include both method and apparatus claims and both sets are asserted together.  That could be enough to manufacture a “supplemental venue” over the method claims, even if there are method steps performed elsewhere.

The Federal Circuit doesn’t seem to have addressed this question, but other courts have.  Prior to the creation of the Federal Circuit, the 7th Circuit determined that when a patent has both method and apparatus claims, venue is proper for both the method and apparatus claims even if only the apparatus claim is infringed within the judicial district.  See General Foods Corporation v. Carnation Company, 411 F. 2d 528 (7th Cir. 1969).  The Carnation court’s concern was that, otherwise, “an action for patent infringement in a situation such as we have here would be tried piecemeal, some claims in one jurisdiction and others in another.”

But the Carnation court didn’t address the fact that the statute allows using the district “where the defendant resides” as an alternative to the district where acts of infringement occur.  In other words, the case wouldn’t have to be tried piecemeal at all, but could always be heard in one location—the place of incorporation of the defendant.  If the only interest weighing against severing the venue-less method claims into their own case and transferring that case is the interest in hearing claims with similar scopes in the same court, then the proper remedy is a requirement to transfer all of the claims to a location where venue is proper, not to create a “supplemental venue” provision.

 

Guest Post: Secret Software Sales

Guest post by Matthew Fagan, Principal at KDP where he handles patent matters.  Much of the post-Helsinn analysis has focused on its impact on pharma where substantial strategic pre-filing activity is the norm. I asked Mr. Fagan to come at the problem from the computer and software perspective.  – DC

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When the Federal Circuit decided Helsinn v. Teva last month, the patent world expected to the Court to resolve an issue simmering since 2011: namely, do purely private, secret sales toll the on-sale bar of post-AIA §102?  The court declined to provide an answer, instead reframing Helsinn’s activity as a public sale in which the details of the invention were not publicly disclosed.

Practitioners may be inclined to dismiss Helsinn as a judicial dodge in which the Court avoided the more interesting “secret sales” question.  But the issue the case turned on may ultimately be of more significance.  Cases of purely private sales are relatively rare as compared to public sales in which the details of an underlying technology are not fully disclosed or are actively hidden – especially in the software industry.

When combined with the Federal Circuit’s 2010 decision in Finjan v. Secure Computing and its 2006 decision in Plumtree Software v. Datamize, the Helsinn case raises interesting questions about how developers release software products.  There are several techniques available for distributing software to customers; after these cases, the date on which patented software is “sold” to the public may vary depending on the distribution method.  In fact, a patent directed to a single algorithm might have two different on-sale dates arising from the same transaction.

Most software patent claims are constructed as method claims or medium/apparatus claims.  In a computer-implemented method, a computing device performs a series of steps in an algorithm.  Plumtree offered two scenarios under which a computer-implemented method would be placed on sale: first, if the patentee “made a commercial offer to perform the patented method (even if the performance itself occurred after the critical date);” second, if the patentee “in fact performed the patented method for a promise of future compensation.

In medium claims, computer code is embedded in a computer-readable medium or implemented in an apparatus.  Finjan stands for the proposition that, because medium claims are directed to the device storing code rather than the actions embodied in the code, they do not necessarily require performance of a patented algorithm for infringement.  Any medium storing the instructions can infringe (or anticipate) a medium claim regardless of whether the claimed steps are actually performed.

What Helsinn adds to this line of cases is the concept that a sale of a medium holding an algorithm, or a performance of a method embodying the algorithm, will trigger the on-sale bar even if the invention is not discernible to the end-user.

Helsinn could be problematic for software developers using typical software development methods.  For example, one common software engineering strategy is the “continuous release” technique, whereby a publisher releases software and then rolls out updates repeatedly over short intervals (e.g., every two weeks).

Because the cycle is so rapid, oftentimes new features are partially developed but not ready for release by the time that the next update is due.  Accordingly, some developers use feature toggles or feature flags, like the following:

if(version == “test”)

              <implement new feature>

if(version == “release”)

              <implement old feature>

This allows the developer to control which version of the code is available to the public by changing the “version” variable: if set to “test,” the new features are enabled for use by programmers; if set to “release,” the old feature becomes active to avoid exposing undeveloped features to the end user.  When the new feature is tested and ready, the programmer can copy the code to the release section and the next version of the code can be implemented in the test section.  This technique is currently used by Netflix, Gmail, Reddit, Flickr, and Etsy, among others.

The critical observation is that, although the new feature will not be performed in the version of the software released to the public, the released software may include both the old version of the feature and an inaccessible copy of the code for the new version.  Even though users may not be able to invoke the test code, Helsinn does not require “that members of the public be aware that the product sold actually embodies the claimed invention.”  Consequently, under Finjan the on-sale bar may be triggered for a medium claim.

In contrast, under Plumtree this scenario may not implicate a corresponding method claim.  Assuming the public was not informed of the new features, there was likely no promise to perform the method in the future.  The method may not be considered sold until the code for the new feature is moved to the “release” section and performed by the user base.

Therefore, although the release might not immediately trigger the on-sale bar for a patented method arising out of the test code, it might trigger the on-sale bar for a patented medium.

Other software distribution methods raise similar risks.  One recent trend in software engineering is to leave software in an open- or limited-beta test for an extended period.  The beta may be offered at a reduced cost as compared to the full-release version (a similar trend has more recently been labeled as “early access”).  For example, Gmail remained in limited beta for five years before being identified as “released;” the popular simulation game Kerbal Space Program was in beta for nearly four.  The beta software might include under-development code callable only by developers, which is interspersed with active code invokable by end users.  If the developer-only portion of the code includes patentable technology, then beta users may unwittingly receive a medium embodying a patentable invention even though the corresponding method is not publicly performed.

Similarly, a normal software update cycle may incorporate “code freezes,” after which programmers are instructed not to modify certain portions of the source code.   When a code freeze is called, unfinished patentable features may become stranded in the source code; these unfinished features may be flagged for inclusion in a future patch or update.  Although not used in the released version, inactive features embodied in the source code could trigger the on-sale bar for the medium holding the code.

To some extent, this problem can be alleviated with optimizing compilers that remove dead or unreachable code.  However, such optimizations take time that developers of large, complex programs may not wish to spend.  Moreover, dead code elimination is primarily used to reduce the size of a deployed program and hence might not be prioritized by developers of code deployed on servers where storage space is readily available.

These release techniques could hurt a patentee’s chances to secure a medium claim, while still possibly rendering method claims patentable.  Another release scenario called “pre-patching” implicates the opposite combination: method claims may be placed on sale while medium claims might remain protectable.

Pre-patching is typically used when software developers provide client software that works with a back-end server.  On the software’s release date, the back-end server is activated and the client can access the server’s services.  Sometimes, if the client software is particularly large, developers may allow the end-users to purchase and download the client before the release date, even though the client will not be able to immediately access features on the server.  This technique is employed for complex online games such as World of Warcraft to avoid swamping download servers on release day.

In this case, patentable activities may be performed on the server, or through a combination of actions by the client and server.  Whether the server’s software was “sold” remains ambiguous in light of the Federal Circuit’s analysis in Minton v. National Association of Securities Dealers.  Consequently, there remains a chance that the on-sale bar is not triggered for medium claims directed to software partially or entirely stored on the server.

On the other hand, it seems clear that a sale of pre-patched software in which a patentable method is performed on the server constitutes a promise to perform the patentable method when the server code is unlocked, falling under the first “on-sale” scenario of Plumtree.  Consequently, the on-sale bar is likely triggered with respect to method claims even though the user base may not be aware that the method will be performed by the server.

In each of these release scenarios, the technology remains locked in unused or inaccessible software code prior to an official release.  Helsinn makes it clear that hiding away patentable features will not prevent the on-sale bar from being triggered in these situations.  Avoiding the on-sale bar may require that programmers be aware of these issues and take special care to remove test features from the release version of the software.

Although the situations described above specifically relate to software development, there are myriad examples from other industries in which an invention is sold without disclosing implementation details.  Thus, although Helsinn does not tell us whether purely secret sales will be patent invalidating, the case may ultimately have a greater impact than whichever dispute ultimately decides the private sales issue.

 

 

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