Collateral Estoppel between IPRs

by Dennis Crouch

Google v. Hammond Development, — F.4th — (Fed. Cir. 2022)

We have an important IPR collateral estoppel decision from the Federal Circuit. The basic outcome here is that issues litigated and decided in one IPR will be seen as fixed and finally decided as between the parties in future IPRs.  For family member patents, the courts will ask if the first case answered the same patentability questions at issue as the second case.  Preclusion decisions should not be taken lightly because they bar a party the opportunity to defend its rights in court.

Hammond sued Google for infringing a family of three patents and that case is still pending in Waco.  Google responded with three IPR petitions. For two of the patents, the PTAB sided entirely with Google and found the claims obvious.  Hammond did not appeal those findings.  In the third patent–the one at issue here on appeal–the PTAB issued a split decision with six of the thirty claims surviving, including claim 18 in US10270816.

Google’s argument on appeal: Google argues that the issues of patentability with regard to claim 18 of the ‘816 are identical to those already decided by the PTAB in its prior decision invalidating a parallel claim in a family-member patent.   Since the issue was already litigated and decided in the first case, Hammond is estopped from relitigating that same issue.

The two patent claims are not identical, but are quite close.  Here, the Federal Circuit found that to be good enough based upon prior precedent that issue preclusion can still apply despite language differences in the claims. The question is whether the differences “materially alter the question of invalidity. Ohio Willow Wood Co. v. Alps S., LLC, 735 F.3d 1333 (Fed. Cir. 2013).

Here, the appellate court identified the differences in the claims and found them insignificant.  That conclusion appears shaky somewhat shaky. My reading of the claims is that the previously invalidated claim required certain activities on “one or more application servers.”  On the other hand, the claim at issue now expressly divides the activities between a “first application server” and a “second application server.”  Thus, for these elements, the already invalidated claim is broader and, in my view, shouldn’t preclude the patentee from arguing those differences.   In its analysis, the appellate panel satisfied itself by pointing to a conclusion in the first case that “distributing software applications across multiple servers was well known to the artisan.”  But, that conclusion does not appear to directly implicate the specific first and second server configuration as claimed.  But, the Federal Circuit is the one that decides, not Crouch.

Collateral estoppel questions always involve at least two cases, and the question is whether some decision in the first case precludes relitigation of an issue in the second case.  Federal Circuit doctrine bars the party from re-litigating an issue of fact or law if the following four elements are met:

  1. The issue in the second case is identical to one decided in the first action;
  2. The issue was actually litigated in the first action;
  3. Resolution of the issue was essential to a final judgment
    in the first action; and
  4. The party being estopped had a full and fair opportunity to litigate the issue in the first action.

In re Freeman, 30 F.3d 1459 (Fed. Cir. 1994) (in the context of litigation).  In this case, the patentee admitted element 2-4, and only challenged the first prong.  As noted above, the appellate panel disagreed and found the first prong met.

Timing is a big issue in these cases.  The general rule is that issue preclusion attaches as soon as the first case is made final.  At times, that “made final” element can be a bit confusing–does it apply at the point of the final written decision by the PTAB, once the Director denies review, or only once all appeals are exhausted?  Here, the Federal Circuit did not address that issue since the appeals in the first case had already been exhausted (Hammond did not appeal).  Once the first case is final, collateral estoppel will immediately apply and preclude arguments even in parallel ongoing litigation.

The collateral estoppel decision eliminates two more of Hammond’s claims, but the patentee still has four claims that have survived.  Hammond may still see this as a partial win. When it comes to patent litigation, the patentee needs just one claim able to run the gauntlet of validity, enforceability, and infringement.  We’ll see how that works once the case moves forward before Judge Albright.

In defense of Rosen references

By Sarah Burstein, Professor of Law at Suffolk University Law School

LKQ Corporation v. GM Global Technology Operations LLC, No. 2021-2348 (submitted but not decided) (oral argument recording available here)

On December 5, 2022, the Federal Circuit heard oral arguments in two cases between LKQ and GM. In one of them, LKQ asked the court to rule that the current primary reference requirement for design patent obviousness, as stated in In re Rosen and Durling v. Spectrum Furniture is inconsistent with the Supreme Court’s decision in KSR v. Teleflex.

The panel did not seem convinced that it had the authority to overrule those prior panel decisions and at least one judge expressed doubt that KSR even applies to designs. But the issue is an important one and well worth discussing, even if the panel declines to address the issue in this case.

As I’ve explained previously:

Under Federal Circuit case law, “the ultimate inquiry under section 103 is whether the claimed design would have been obvious to a designer of ordinary skill who designs articles of the type involved.” To this end, the Federal Circuit has created a two-part test. First, the court must identify a primary reference—“a something in existence, the design characteristics of which are basically the same as the claimed design.” If there is a proper primary reference, then “other ‘secondary’ references may be used to modify it to create a design that has the same overall visual appearance as the claimed design.” To qualify as a proper secondary reference, a design must be “so related [to the primary reference] that the appearance of certain ornamental features in one would suggest the application of those features to the other.”

The primary reference requirement comes from the CCPA case In re Rosen. These references are, therefore, sometimes referred to as “Rosen references.” Durling is perhaps the clearest statement of the Federal Circuit’s current § 103 test for designs, which incorporates the Rosen requirement.

There is certainly much to criticize about the Federal Circuit’s approach to § 103 and designs. For example, the “so related” language has a long pedigree but its meaning has never been particularly clear. And these days, it seems like the Federal Circuit hardly ever reaches step 2 of the Durling test because it has applied such a high standard of visual similarity for the first step that it sometimes seems hard to see any blue sky between a design that looks “basically the same” (and is, therefore, a proper Rosen reference) and one that is “the same” (and thus anticipates the claimed design).

As currently applied, the Durling test—and in particular the Rosen reference requirement—seems to be just as rigid, if not more so, as the TSM approach the Supreme Court rejected in KSR. But does that mean the Rosen requirement is the problem? Or is the problem the way it is being applied?

As I wrote in my very first design patent article, “[t]he primary reference requirement performs the valuable function of focusing the nonobviousness inquiry on the design ‘as a whole.’ If a new design is so different from other products of its type that no primary reference can be found, that would generally be strong evidence of nonobviousness.” I continue to believe that, properly and flexibly applied, this general approach makes sense for designs and is consistent with KSR. (If you’d like to read more, you can find those arguments here.)

Unmooring the § 103 inquiry from this primary reference requirement would allow challengers to pick and choose visual elements from the prior art to combine into “Frankenart.” The Frankenart approach would devolve the § 103 inquiry into whether a designer technically could have created the claimed design based on the prior art, as opposed to (the more proper question of) whether it would have been visually obvious to do so.

Yes, it’s true that challengers can effectively use a Frankenart approach in most utility patent cases. But a design patent covers a different type of invention that is claimed in a different way. It makes perfect sense to apply the general command of § 103 in a different way when it comes to designs.

It’s also worth noting that while the primary reference requirement looks different from how we do § 103 in most utility patent cases, it’s not totally without cognates. It is at least reasonably analogous to the “lead compound” approach used in some chemical cases.

To be clear, this is not to say that the Federal Circuit’s current § 103 case law is great. It’s not. The cases apply the proper primary reference requirement too strictly. And it’s not at all clear how Durling step two does or should work. But that doesn’t mean we should abandon the primary reference framework entirely.



En Banc Question: When does Remote Work Become an “Established Place of Business?”

by Dennis Crouch

In re Monolithic Power Systems, Inc. (Fed. Cir. 2022) (MonolithicEnBancPetition)

Back in 2021, Bel Power sued Monolithic for patent infringement in Waco Texas. 21-cv-00655.  Monolithic did not want to be a defendant before Judge Albright and so moved to dismiss/transfer:

  1. to dismiss/transfer the case for improper venue, 28 U.S.C. 1400(b), and alternatively
  2. to transfer the case on convenience grounds. 28 USC 1404(a).

Judge Albright denied both motions and Monolithic immediately petitioned the Federal Circuit for a writ of mandamus.  In September 2022, that petition was denied with a 2-1 decision. Judges Chen and Stark joined together in a per curiam majority opinion and Judge Lourie wrote in dissent.  Dennis Crouch, Remote Work and Patent Venue, Patently-O (Sept 30, 2022).

Now Monolithic has asked the Federal Circuit to reconsider its case en banc., focusing on the interpretation of 28 U.S.C. § 1400(b)’s requirement of a “regular and established place of business” in today’s remote-work and global-shipping world.  Here, Monolithic has several employees who work in the district for the purpose of serving customers in the district.  This includes both sales and engineering. And, at least according to Judge Abright this is not a ‘work-wherever-you-want’ situation. Rather, Monolithic wants some boots on the ground in Austin and other WDTX. locations to serve their clients in those locations.  In that regard, Judge Albright concluded that Monolithic maintains a continuous physical presence within the district by replacing the local employees that leave/move.  There is an expectation that those folks will keep MPS stored property in WDTX as well, both for sales and service.  In its en banc petition, Monolithic cites a long line of cases going back 100+ years that employee homes don’t count.

Proper venue is rarely a big deal these days in Federal Litigation.  Congress amended the venue statutes so that, in most cases, venue rises and falls with personal jurisdiction.   But, patent law is different.  In the late 1800s Congress created a special venue statute for patent cases that has stuck despite changes in the general law.  A US corporate defendant can be sued either:

  1. In the state of incorporation; or
  2. In a district where the defendant (a) “has committed acts of infringement” and (b) “has a regular and established place of business.”

28 U.S.C. 1400(b).  When a lawsuit is filed based upon improper venue, the district court will need to either dismiss the action or transfer the case to a district having proper venue.  Here, Monolithic argues that venue is improper because it lacks “a regular and established place of business” within the Western District of Texas. Meanwhile, the case is proceeding before Judge Albright. Claim construction is complete and discovery is ongoing. Trial is set for May 12, 2023.

One thing I’ll note is that in 2020, Monolithic filed two different patent infringement lawsuits in Waco as plaintiff.  22-cv-00320; 20-cv-00876.  But, there is no “good for the gander” principle for proper venue.  The statute has no clause indicating that suing a third party does not generally serve as an admission of proper venue.  (I believe it should serve as an admission that venue is likely convenient under 1404(a)).  What it does do, however, is make Monolithic an unsympathetic mandamus petitioner.

Patents at issue: U.S. Patent Nos. 6,936,999, 6,949,916, 7,000,125, 7,049,798, 7,080,265, and 7,456,617.  The primary accused product is a power management bus (MPM3695) used on integrated circuits.

= = =

Both parties have a team of lawyers, but it appears that Bell Power is primarily represented by Brian Sodikoff’s team at Katten Muchin.  Morrison & Foerster’s Deanne Maynard is representing Monolithic at the Federal Circuit.  MoFo is also at the district court, along with attorneys from Perkins Coie.

Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

PPAC 2022 Annual Report

The Patent Public Advisory Committee (PPAC) includes nine voting members appointed by the Secretary of Commerce.  The committee is charged with reviewing “policies, goals, performance, budget, and user fees of the United States Patent and Trademark Office … and advise the Director on these matters.”  35 USC 5. The statute also charges the committee with preparing an annual report.  This year’s report is one of the most thoughtful that I have read and focuses the adjectives that we’d like to see in our patent system:  accessible, predictable, durable, enforceable, affordable, and understandable patent rights.

Read the report here:

Fifth Circuit Seems to Raise the Bar on Venue Transfer Mandamus

by Dennis Crouch

The Federal Circuit has been extremely active over the past few years in hearing mandamus petitions filed under the convenient venue provisions of 28 U.S.C. 1404(a).  Most often, these petitions have come from patent infringement defendants who were sued in Judge Albright’s Waco court.  To be clear, these are cases where venue is proper, but where the defendant argue that a different venue will be clearly more convenient:

For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.

28 U.S.C. 1404(a).  Convenient venue is not a patent-specific doctrine and so the Federal Circuit follows the law of the regional circuits when deciding these cases.  For cases out of Texas, this is 5th Circuit law.   The 5th Circuit very rarely decides mandamus cases, so the Federal Circuit has actually been substantially developing the law in the interim.  But, the 5th Circuit recently issued a mandamus denial that  should tend to help Judge Albright (and other patent law loving district court judges) keep their patent cases.

In re Planned Parenthood Fedn. of Am., Inc., 52 F.4th 625 (5th Cir. 2022).

This case started as a qui tam false claims act against Planned Parenthood–alleging millions of dollars of false or fraudulent Medicaid claims.  The case was originally filed in Amarillo (N.D.Tex.), and Planned Parenthood moved for a transfer of venue to Austin (W.D.Tex) as a much more convenient forum.  The district court denied the motion and Planned Parenthood filed this mandamus petition.

The 5th Circuit has denied the petition on several grounds. Although all three members of the panel agreed to the denial, only one other judge joined Judge Elrod’s decision (Joined by Judge Graves; with Judge Ho concurring in judgment).

The opinion walks through several important elements of 5th Circuit venue-mandamus jurisprudence, but the opinion repeatedly returns to the broad discretion given to district courts in deciding convenient venue questions:

We reiterate that district courts have broad discretion in deciding motions to transfer; they need only grant such a motion where the evidence demonstrates that the destination venue is “clearly more convenient” than the chosen venue. We review that decision “only for clear abuses of discretion that produce patently erroneous results.” The district court carefully considered each of the private and public interest factors, ultimately concluding that they do not weigh in favor of transfer. The standard for reversing that holding is high.

Id.  These statements are all found in prior precedent, but the forceful new precedent may shift Federal Circuit’s doctrine.

The Federal Circuit has been reticent to give Judge Albright credit for his familiarity with technology and patent law (as well as that of his magistrate judge).  In Planned Parenthood, the Amarillo district court had noted his familiarity with the law as one factor for keeping the case.  On mandamus, the appellate panel found no abuse of discretion with that approach.

One common factor analyzed by the courts is location of the evidence.  Here, the appellate panel explained that factor can be important, but not where the “vast majority of the evidence [is] electronic, and therefore equally accessible in either forum.”  In its prior precedent of Volkswagen, the 5th Circuit had placed greater weight on this factor, but that was because the evidence was “physical in nature.”

The court also felt it was appropriate to take into account the low cost of staying in hotels and eating in Amarillo as compared to Austin.  Although Waco may be a bit more costly than Amarillo, it is so much cheaper than Silicon Valley or Delaware.  “[W]e cannot say that this analysis is based on incorrect legal principles or erroneous factual findings such that it would constitute an abuse of discretion.”

A key factor in this caw that weighed against transfer is that Planned Parenthood first made a 12(b)(6) motion to dismiss the case and then, after losing that motion, filed its motion to transfer. “inexcusable delay” can strongly weigh against transfer.

More on the Patent Attorney Rolls

by Dennis Crouch

The USPTO Office of Enrollment & Discipline’s list of registered patent attorneys and agents includes 48,625 individuals. Since there are no annual dues, CLE requirement, or even check-in many folks continue to stay on the rolls even though they are not practicing patent law.  One example is my colleague Professor Royce Barondes who passed the patent bar exam prior to law school and then never practiced in the field. Instead, he practiced law at Cravath in NYC and now teaches business courses, contracts, and firearms law. I wanted to get a more accurate number of folks currently practicing in the patent prosecution area. Do do this, I downloaded and parsed through USPTO records for utility patent applications filed since mid 2018 and that have been made public. (Series codes 16 and 17).

The Totals: 26,756 practitioners are associated with at least one application filed over the past four years; with 23,793 associated with at least 10 different utility patent applications.  About 80% are attorneys with the remaining 20% being patent agents. The result here does not necessarily mean that all of these attorneys worked on patent prosecution because many firms use a comprehensive customer number that lists all registered attorneys in the firm’s patent group.  This leads to crazy situations like patent agent Maki Saitoh of Oblon being associated with 31,000+ laid open applications filed over the past 4 years.  In addition, we have some undercounting because some folks doing patent prosecution work are not listed in the customer number (e.g., often in house counsel will not be listed).

I mentioned Oblon above. Although Oblon is not in the top-25 of firms in terms of patent attorneys, they are the #1 filer of US patent applications followed closely by Sughrue.  They are able to file so many applications because most of their apps claim priority to a foreign or PCT filing — so they don’t need to write a new original application.  Some firms with lots of patent attorneys don’t do much patent prosecution work.  An extreme of this is Kirkland & Ellis that has over 100 patent attorneys but does not do any patent prosecution.

Firms with the Most Patent Attorneys and Agents

The following list ranks the top 25 firms with the most registered  patent law professionals.  All of these firms have 100+ patent attorneys/agents.  I also include a note following the firm with some information about how the numbers have changed since 2010.

  1. Fish & Richardson (Steady)
  2. Finnegan Henderson (Down 50+, Spin-off firms, including Bookoff McAndrews & McNeill Baur)
  3. Wilson Sonsini (More than doubled, mostly new attorneys/agents)
  4. Knobbe Martens (Steady)
  5. Kilpatrick Townsend (Big growth from merger of firms)
  6. Foley & Lardner (Steady)
  7. Baker Botts (Steady)
  8. IBM (Steady)
  9. Perkins Coie (More than doubled)
  10. Morrison & Foerster (Steady)
  11. Cooley (More than doubled, mostly new attorneys/agents)
  12. Sterne Kessler (Some growth)
  13. Morgan Lewis (Some growth)
  14. Jones Day (Some decline)
  15. Schwegman Lundberg (Doubled)
  16. Wolf Greenfield (Doubled)
  17. Banner & Witcoff (Some growth)
  18. Polsinelli PC (Huge growth, including folks from Novak Druce;  Dorsey; etc. and also new attorneys)
  19. Johnson & Johnson (company)
  20. Alston & Bird (Steady)
  21. Kirkland & Ellis (Steady)
  22. Haynes and Boone (Growth – mostly new attorneys)
  23. Mintz Levin (Doubled – mostly new attorneys)
  24. Qualcomm (Some growth)
  25. Harness IP (Some decline)

Firms with the biggest losses of folks since 2010 include Kenyon & Kenyon (firm closed — 150 people); Brinks (down to 86 from 160, folks left to go to lots of different places); Woodcock (most joined BakerHostetler); Blakely Sokoloff (firm closed an many joined Womble Bond but also spin-off firms of Jaffery Watson; Nicholson De Vos); Connolly Bove (firm closed); Fitzpatrick Cella (Firm closed with many joining Venable); Ropes & Gray (lots of folks left to other firms, including spin-off Haley Guiliano); Novak Druce (lots of poaching, including by Polsinelli; Duane Morris, etc.).

The list has a some big caveats.  (1) The data comes from the USPTO register, and some attorneys are not good at updating their information. For example. Kenyon & Kenyon closed its doors in 2016, but 30+ registrations still list the firm.  (2) A number of folks use their home (or some other) address rather than firm address for the registration. (3) Retired folks often do not update their registration.

Buyers Guide for your Patent Attorney

Happy Thanksgiving to Patently-O readers out there — new and old!   I am grateful to you for all your kindness, trust, and support through the years. Let me know how I can help in the future!

If you are shopping for holiday gifts for the patent attorney in your life (or perhaps self-indulging), here are a few gift ideas.

  1. Autonomous Vacuum: If they don’t have a robot vacuum. Oh my.  Any real patent law firm will have a few of these always skirting around. The iRobot Roomba j7 is a great option.
  2. Dyson Airwrap.  This device is super cool and “makes hair styling a breeze”(TM).  It is also the subject of dozens of patent and trademark infringement lawsuits with Dyson relentlessly pursuing knock-off brands.  Knock-offs are  still profitable because this baby costs $$$.
  3. Pad and Paper. Many of us work on computers all day and it is helpful to get offline whenever possible. But, searching for notebooks online is pretty tricky because Google thinks we’re wanting to buy a computer.  The German-made LEUCHTTURM1917 cuts through the tech with 251 numbered pages of DOTTED paper for your dreams, thoughts & ideas.
  4. Patent Art. I have a Wright-brothers patent on the wall in my office as well as a couple of products that I helped protect back-in-the-day.  There are lots of suppliers of these.  I bought mine from My Patent Prints as with most things, Amazon also has a wide variety.
  5. Spill-Free Mug: I ride my bicycle to work and so a non-spillable mug is important. This Contigo Coffee Mug takes a licking without any leaking (and dishwasher safe).
  6. Camping Gear: I do short solo camping trips a couple of times every year.  Although it is a bit harsher, I prefer the winter because usually I’m the only human in the woods at an otherwise popular campsite.  You don’t need much gear to get started: (1) tent; (2) sleeping bag.  One key is to have a nice thick sleeping pad.  These were developed by Therm-a-Rest, but their patents seem to have expired and so there are thousands on the market.
  7. Red Light Therapy: A couple of years ago while my spouse was away at a conference, I ordered a bunch of cedar and a sauna in my house.  I have a 220v Finnish style heater, and I also have an array of red-lights for red-light therapy.  I went all-out, but it is easy to get started with simply the red-lights that have been shown to provide lots of health benefits.  My set comes from a friend of mine who runs the company Sauna Space.  His are incandescent bulbs and so also give off lots of heat.  Lots of LED versions are also available.
  8. EMS: OK – The Katalyst Fit just looks super cool to me.  It uses “electro muscle stimulation” to help you lift and shock your muscles into action.
  9. Sony Playstation Classic: This classic console comes pre-loaded with 20 games from the late 1990s, including Final Fantasy 7.

I left off the one thing I’ve been thinking about – a fancy espresso machine.  I am usually the first one up in my house and take a few minutes to make myself an espresso coffee. But, it is a bit of a process because I use an Italian stove-top espresso pot – a Moka Pot.  After that, I usually add some almond milk and some protein powder.  What do folks think about the small Breville machine?  OK – after watching this video on Cleaning the Breville, my process seems much simpler, faster, and cheaper.

Jack Daniel’s Properties v. v. VIP Products (Supreme Court 2022)

Link to the docket:

Happy thanksgiving everyone.


Is TRUMP TOO SMALL for the Supreme Court?

by Dennis Crouch

Vidal v. Elster (2022)

Over the past decade, a number of traditional prudential limits on trademark coverage have been found to be unconstitutional limits on free speech. See, Matal v. Tam, 137 S. Ct. 1744 (2017) (disparaging marks) and Iancu v. Brunetti, 139 S. Ct. 2294 (2019) (immoral . . . or scandalous matter).  The most recent showdown involves Steve Elster’s attempt to register the mark TRUMP TOO SMALL.  The USPTO refused to register the mark based upon the statutory requirement barring registration of “a name, portrait, or signature identifying a particular living individual except by his written consent.”  Lanham Act Section 2(c).  On appeal, however, the Federal Circuit ruled that that the limit here is content-based and that the Government had not provided a compelling or even substantial government interest.

[T]he government does not have a privacy or publicity interest in restricting speech critical of government officials or public figures in the trademark context–at least absent actual malice, which is not alleged here.

In a new request-for-extension filing, the US Gov’t has indicated that it is considering petitioning the case to the U.S. Supreme Court as a step too far.  The request does not detail the potential question presented but simply that time is needed.

The Solicitor General has not yet determined whether to file a petition for a writ of certiorari in this case. Additional time is needed for further consultation within the Department of Justice and with the Department of Commerce and the USPTO regarding the potential legal and practical ramifications of the court of appeals’ decision.

The petition is now due December 29, 2022.

Trade Dress Product Design: Power of the Presumption of Validity

by Dennis Crouch

SoClean v. Sunset Healthcare Solutions (Fed. Cir. 2022)

The SoClean’s eponymous product cleans CPAP machine parts. Sunset was a former distributor for SoClean, but has now become a competitor.  The SoClean device has a compact filter that should be replaced every six-months–creating a nice subscription market. Sunset sells a generic version of the same filter. Litigation ensued.

SoClean’s problem back in 2018 was how to protect these filters with intellectual property.  The company had waited too long to file for patent protection and so it turned to trademark.  The USPTO complied and issued registered two trademarks on the filter shape.  The two (shown below) are almost identical except for some dashed lines.

With the trademark registration in-hand, the district court partially granted SoClean’s motion for preliminary injunction.  However, instead of barring Sunset from selling its competing products, it prohibited Sunset marketing or advertising its filter in any bare form.  Rather, the defendant must “prominently display the Sunset brand name in a manner that leaves no reasonable confusion that what is being sold
is a Sunset brand filter.” District Court Opinion.   The case is still pending at the district court (involving other products and claims), but an order granting a preliminary injunction is automatically appealable.  And, because the complaint includes patent infringement claims, the appeal was directed to the Federal Circuit.

On appeal, the Federal Circuit affirmed, but only after reviewing some interesting arguments from Sunset.

Secondary Meaning: Trade dress is only protectable upon showing of secondary meaning.  Here, however, Federal Registration serves as prima facie evidence of validity. 15 U.S.C. § 1057(b).  Sunset pointed to mistakes made by the trademark examiner, but the appellate court found those complaints legally insufficient.  In particular, the court concluded that the statutory presumption of validity implicitly forbids simply reviewing and reconsidering the work already done by the TM examiner.

[S]crutinizing the application process and deciding whether the trademark examiner was correct to issue the registration in the first place is the opposite of presuming that the registration as issued is valid.

Slip Op.  Sunset can undermine secondary meaning, but it must do so by providing evidence rather than simply poking holes in the prosecution process.

Important note here.  I mentioned errors by the trademark examiner.  They are actually quite significant.  I read looked through the USPTO file jacket and was unable to see any evidence presented of secondary meaning except for a self-serving statement from SoClean’s VP of IP that the product was distinctive and had been used for at least five years in a manner that was “substantially exclusive and continuous.”  In general, that amount of evidence is insufficient to support a product design trade dress registration.

In order to protect trade dress, the courts apply a “vigorous evidentiary requirement” to ensure that the mark has obtained secondary meaning.  Because the burdens had shifted upon registration, the district court wrote that Sunset now had the “vigorous” requirement.  On appeal, the Federal Circuit rejected the “vigorousness” portion of the district court’s opinion, but fount that a harmless error.  Sunset’s burden is simply to provide a preponderance of the evidence showing that the mark lacks secondary meaning.  But here, presented evidence that was “equivocal, at best.”

Equivocal evidence plainly fails to satisfy a preponderance-of-the-evidence standard, so Sunset is wrong to suggest that the district court would have reached a different result had it applied the correct standard. The district court’s misstatement of the applicable standard of  roof is harmless error.

Slip Op.

Functionality: You likely considered the filter above and thought – this seems like the purview of patents rather than trademarks. Here, Sunset argues that the trade dress design “is entirely utilitarian” and therefore not protectable as trade dress.  The district court concluded that the filter head design includes “some arbitrary elements” — enough so that the presumption of validity applies here.

Irreparable Harm: The Trademark Modernization Act of 2020 states that a TM plaintiff seeking any injunction “shall be entitled to a rebuttable presumption of irreparable harm.” 15 U.S.C. § 1116.  Sunset did not attempt to rebut that presumption in this case.

Illusion Systems

Mike Brister is a theme park designer and I love his 2022 patent directed to a “vanishing illusion system.”  U.S. Patent No. 11,235,258 .

The basic idea is that a portion of the glass is reflective while other portions are transparent. But, the room on the other side is a mirror-image room–identical except that for the person trying to see himself in the mirror. A higher tech-version involves moving the mirror/transparent portions for various effects.

Patent examiner issued a first-action allowance on the following claim:

1. A system for generating a vanishing illusion, the system comprising: a first room; a second room, wherein the second room mirrors the first room; a wall separating the first room from the second room, wherein the wall comprises: a transition glass comprising a mirrored portion and a transparent portion; and a frame through which the transition glass is configured to move; and an actuator configured to move the transition glass with respect to the frame such that the mirrored portion is in alignment or out of alignment relative to the frame based on a trigger or a condition being met.

= = = =

Query: If an illusionist had used something similar to fool audiences in public performances, would it be prior art?

You can find a great post on magical patents from Leopoldo Belda Soriano on his blog: Magical Patents.

MAGICAL PATENTS (When magic is patented)

Dual-Purpose Communications and Privilege

by Dennis Crouch

The NY IP Law Association (NYIPLA) recently filed an amicus brief in the pending  anonymous Supreme Court case captioned In re Grand Jury, 21-1397 (2022).  The case focuses on the scope of attorney client privilege, especially with regard to dual-purpose communications.

Petitioner is a law firm specializing in international tax and had provided tax law advice to an expatriation client and also prepared individual tax returns for the client.  Later, the US Gov’t began a criminal tax investigation of the client and subpoenaed the law firm to provide Grand Jury testimony and evidence.  The law firm resisted, but both the district court and Ninth Circuit Court of Appeals ordered compliance.  In prior precedent, the courts have ruled that preparation of a tax return is a non-legal function, and thus, communications for that purpose are not privileged.  However, advice regarding tax planning and tax controversies is legal advice and thus communications are privileged. The attorney-client communications in this case thus fall under the category of dual-purpose communications where some aspect of the communications are privileged and other aspects are not privileged.

The lower court approach was two-fold. First, the court concluded that dual-purpose communications are entirely protected only when the primary purpose of the communication involved seeking legal advice.  Using that test, the court found that some of the communications were not privileged because they were primarily associated with tax return prep.  Thus, the law firm was ordered to deliver the documents.  Still, the court did not run entirely roughshod over attorney-client privilege. Rather, the second part of the lower court approach that any portions of the communications that contain attorney-client privileged material can be redacted.  Still, the law firm doesn’t want to disclose the communications at all and suggests that communications should entirely protected when the legal advice was “one of [its] significant purposes.” The Supreme Court recently agreed to hear the case with oral arguments set for January 2023.

Question Presented: Whether a communication involving both legal and non-legal advice is protected by attorney-client privilege where obtaining or providing legal advice was one of the significant purposes behind the communication

[Petition]. In its responsive briefing, the U.S. Government reframed the question as follows:

Whether the district court permissibly denied petitioner’s general claim of attorney-client privilege over communications, related to the preparation of a tax return, that did not have obtaining legal advice as their primary purpose, while instructing that all legal advice contained in the communications be redacted

[Gov’t Opposition].  The “significant purpose” test comes from a 2014 D.C. Circuit decision by Judge Kavanaugh, who is now a member of the Supreme Court. In re Kellogg Brown & Root, 756 F.3d 754 (D.C. Cir. 2014).

In their Amicus Brief, NYIPLA argues that the situation faced by the tax lawyers here is also prevalent for IP attorneys because IP lawyers are often experts in both the law and in the relevant field of the IP. For example, many patent attorneys also hold advanced degrees in a particular technical field and regularly use that knowledge in providing advice.  Likewise, many patent attorneys (especially in-house counsel) develop extensive knowledge of the firm’s business activities and goals and integrates those into their analysis.  According to the briefs, the 9th circuit rule “which requires courts to balance the legal and nonlegal aspects of a communication to determine its predominant purpose, hamstrings IP attorneys and clients.”   Irena Royzman (Kramer Levin) is counsel of record for the NYIPLA brief.



Patently-O Bits and Bytes by Juvan Bonni

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Cross-Border Inventing

by Dennis Crouch

The chart below highlights an important trend in patenting: increased joint-inventorship where the inventors reside in different countries.  The top (blue-circle) series looks generally at cross-border joint-inventing while the lower (orange-square) series reports a subset where at least one of the inventors has a US residence.

One important caveat here is that the inventor’s permanent residence does not necessarily mean that the inventors where physically distant since one or more inventors may have been temporarily on location.  Further, residence is typically designated at the time the patent application is filed, and inventors may have moved in the interim between inventing and their US filing.  The rise in cross-border inventing also correlates with the rise in joint inventorship.  From 2005 to 2022, the average number of inventors per patent rose from 2.5 up to over 3.   If we reach back to 1985, most US patents listed only one inventor. By 2005, only 37% of utility patents were single inventor endeavors.  Today, the figure is down to 26%.


Disclaimer: Now and Later

by Dennis Crouch

The Federal Circuit’s decision in CUPP Computing v. Trend Micro includes a big discussion on treatment of disclaimers.  The patentee (CUPP) filed the appeal after the PTAB issued its final written IPR decisions finding the claims of three mobile device cybersecurity patents to be unpatentably obvious. IPR2019-00764, -00765, -00767.

In the IPR, CUPP was seeking a narrow construction of its claims in order help it skirt the prior art.  The claims all require a “security system processor” that is “different than” from the mobile device processor.  During prosecution, CUPP distinguished prior art that included both processors using the same motherboard as not “different.”  Later during the IPR, CUPP argued that this distinction meant that the two processors must be “separate and remote” from one another.  During the IPR, CUPP also expressly disavowed claim coverage where the security system processor is embedded in the mobile device.  Despite these arguments, the PTAB gave the claims a broad construction that allowed for both processors to be embedded next to one another.  This interpretation meant that the prior art killed the claims.

On appeal, the Federal Circuit has affirmed on this point.  First, as to the original prosecution.  The court concluded that the statements were not a clear disavowal of scope.  The court noted that the statements could be reasonably interpreted in more than one way and thus failed to meet the high burden of prosecution disclaimer.

The doctrine of prosecution disclaimer precludes patentees from recapturing through claim interpretation specific meanings disclaimed during prosecution. However, a patentee will only be bound to a disavowal that was both clear and unmistakable.

Slip Op. (quotation marks, alterations, and citations omitted).

As to disavowal during the IPR, the Federal Circuit has previously held the PTAB is not required to accept a disavowal of scope during an IPR.  However, that prior decision was non-precedential. VirnetX Inc. v. Mangrove Partners Master Fund,
Ltd., 778 F. App’x 897, 910 (Fed. Cir. 2019).  Here, the court makes the ruling binding:

The Board concluded that it could ignore this disavowal in construing the claims. We agree. . . . The Board is not required to accept a patent owner’s arguments as disclaimer when deciding the merits of those arguments. A rule permitting a patentee to tailor its claims in an IPR through argument alone would substantially undermine the IPR process. . . .

If patentees could shapeshift their claims through argument in an IPR, they would frustrate the Patent Office’s power to “revisit” the claims it granted, and require focus on claims the patentee now wishes it had secured.

Slip Op. (citations removed).

The court goes on to make a some what powerful extension of issue preclusion doctrine:

To be clear, a disclaimer in an IPR proceeding is binding in later proceedings, whether before the PTO or in court. We hold only that a disclaimer is not binding on the PTO in the very IPR proceeding in which it is made, just as a disclaimer in a district court proceeding would not bind the district court in that proceeding. This follows from the adjudicatory nature of IPR proceedings as contrasted with initial examination.

Id. Truthfully, it is difficulty to this aspect of the court’s decision as it relates to preclusion law in general.  But, perhaps the court is simply saying that if the disclaimer had been successful during the IPR, then it would be binding before a subsequent tribunal.

= = =

Also note that all this law of prosecution disclaimer is made-up law by the judges based upon their preferred policy arguments.  The statute does discuss disclaimer under Section 253, but this is disclaimer of a claim as a whole. “[A] patentee … may disclaim any complete claim . . . Such disclaimer shall be in writing and recorded.”

Prosecution Delays and Patent Term Adjustment on the Rise Again

by Dennis Crouch

In the standard case, a US utility patent will expire 20 years from its effective filing date.  But, there are several circumstances that might alter the patent term. As a consequence, only a minority of patents fit the standard.  One circumstance involves unduly delayed patent prosecution that results in “patent term adjustment” or PTA under 35 U.S.C. 154(b).  The two chart below show PTA awards over the past 17 years.  Of some importance here — over the past 18 months PTA has been steadily creeping-up.  This is generally an indication that the prosecution process has slowed down.

These numbers will likely continue to rise as indicated by the USPTO’s delays in issuing an initial office action rejection — only about 30% of cases are receiving a first office action within the 14 months allotted by Congress.  I’ll note here that the PTA does not ‘cost’ the USPTO anything in terms of up-front money and, may make it more likely that the patentee will pay the issue and back-end maintenance fees.