They Patented a Better SandBox — Obviousness IPRs

by Dennis Crouch

Today’s decision by the Federal Circuit includes an example of thinly sliced bologna, with the court rejecting a PTAB IPR decision because the precise obviousness argument regarding a functional limitation was not expressly stated.  The court also does another go-round with the PTAB failing to consider commercial success. 

Oren Tech v. Proppant Express (Fed. Cir. 2021)

Lots of petroleum is trapped by deep rock formations that are difficult to drill-out one-by-one. Hydraulic fracturing (fracking) gets access to those stores by using high-pressure injection of a slurry of water, chemical additives and proppant (such as sand or other granular).  The high-pressure water causes cracking of the rocks. Proppant residue is left behind and holds the cracks open — allowing the petro to flow out more easily.

Oren’s parent company US Silica competes with PropX for delivering proppant (sand) for fracking.  As part of this competition, Oren holds several patents related to storage of proppant and sued PropX for infringement. US Patent Nos. 9,403,626; 9,511,929; and 9,296,518.  PropX responded with petitions for IPR.  This case involves the ‘626 patent and the PTAB’s ruling cancelling all the challenged claims as obvious. On appeal, the Federal Circuit has rejected the PTAB decision for two reasons: (1) the PTAB decision strayed too far from the grounds of unpatentability found in the petition; and (2) the PTAB improperly disregarded the commercial success of Oren’s container.

The ‘626 patent is directed to a stackable storage container for sand.  Each container has a bottom hinged-hatch that allows sand to flow to the next lower container and eventually out through the bottom of the stack.

The closest identified prior publication was the now-abandoned U.S. Patent Publication No. 2008/0226434 (“Smith”, image below).  During prosecution its patent, Oren had already encountered a Smith rejection, and overcame that rejection by adding a functional claim limitation that the container is designed to support “volumes” of “at least 30,000 pounds.”  Smith expressly limited its double container payload to 52,500 pounds, or 26,250 pounds each.   The examiner accepted this limitation as sufficient to skirt the prior art. 

The IPR Grounds: The IPR petition reintroduced Smith and argued that Smith’s design could be reinforced (via Hendrick) to take advantage of the unused volume and that the the 30,000 pound limit was already met by engineering safety tolerance.  The Board did not buy the safety tolerance argument since that was not mentioned in the reference, but still found that the 30,000 pound limit would be inherently met through the proposed reinforcement.

The problem: Although the IPR petition raised Smith, it did not raise this exact argument — that the proposed reinforcement would inherently satisfy the 30,000 pound requirement.

[T]he Board erred by repurposing the theory of a motivation to modify Smith to increase its capacity as a basis for finding the 30,000 pound limitation met. PropX did not assert this theory of obviousness in its petition. Nor was the theory raised by the Board’s institution decision (or at any time before the final written decision). Therefore, relying on this theory in finding claims obvious was reversible error because the petitioner bears the burden of proving obviousness and Oren had no notice or opportunity to respond.

Slip Op.

Does not sit well: The Federal Circuit’s conclusion here does not sit well with me since both the petition and the institution decision indicate that the purpose of the reinforcement was “increasing the maximum payload of Smith’s containers”; PropX provided evidence that the reinforcement would increase the payload beyond 30,000 pounds; and it was through the claimed reinforcement that Oren itself met the functional 30,000 pound limitation. It does appear true, however, that neither the petition nor institution decisions particularly stated that the increased payload would meet the claim limitation itself.  This decision comes down to a choice of how thin to slice the bologna.

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“The Reason” versus “A Reason” for the Commercial Success: Oren’s “Sandbox” product has also been commercially successful (sold through another US Silica company) and Oren presented that evidence as objective evidence of nonobviousness.   In this case, the product is “commensurate in scope” with the  patented claims — thus creating a presumption of nexus between the claims and the commercial success.  However, the Board still gave the commercial success no weight because PropX provided evidence that the success was due to a convoyed leasing program that included certain trade secrets as well as a “special forklift,” “special mats,” and “special truck,” and not the claimed features of the box.

On appeal, the Federal Circuit vacated this portion of the decision — holding that there can be a number of contributors to commercial success, and the PTAB failed to specifically consider Oren’s evidence showing that its container design was “also an important contributor to the commercial success and praise of the system.”

Arguing Obviousness: Teaching Away versus an Alternative Approach

by Dennis Crouch

Obviousness is the central doctrine of patent law.  It is both the most common reason for rejection and often the most complicated issue because of both factual and legal complexities.  The new Chemours Co. decision provides an important addition to obviousness doctrine in two areas: (1) teaching away; and (2) commercial success.  The majority sided with the patentee and reversed the IPR Board’s single-reference obviousness determination.  The dissent argued that the opinion gives too much power to the teaching-away doctrine.

Chemours Company v. Daikin Industries (Fed. Cir. 2021)

Chemours is a 2015 spin-off from Du Pont. Its patents at issues here relate to a polymer having a high melt flow to allow high-speed extrusion to cover electrical wires.  U.S. Patent Nos. 7,122,609 and 8,076,431.  The claims require a standardized melt flow rate range: 30±3 g/10 min along with other physical properties.

Daikin petitioned for inter partes review, and the PTAB agreed that the claims were invalid as obvious based upon a single prior art reference, U.S. Patent No. 6,541,588 (“Kaulbach”).  Judge Dyk’s dissenting opinion in this case explains that “[t]he only material difference between [Chemours] claim 1 and Kaulbach is that Kaulbach discloses (in Sample A11) a melt flow rate of 24 g/10 min, slightly lower than 27 g/10 min, the lower bound of the 30 ± 3 g/10 min rate claimed in claim 1 of the ’609 patent.”  Actually, Kaulbach goes even further and expreslly discloses a melt flow rate of “15 g/10 min or greater” and includes the example of 24 g/10 min MFR.

On its face, Kaulbach discloses a flow rate that encompasses Chemours’ claimed rate — pretty good prima facie that this element was disclosed, but the Board hung its hat on the particular example and concluded that it would have been obvious to modify Kaulbach’s 24 example so that it fit Chemours’ 27 requirement.

The problem: Kaulbach also focused on having a narrow distribution of molecule sizes within its polymer, and those skilled in the art apparently did not know how to increasing flow rate from 24 to 27 while maintaining the narrow distribution. The Board resolved this tension in favor of an obviousness finding, but you can see from the patent that the inventors push against broad molecular weight approach:

[The prior art] mixtures have a very broad molecular weight distribution which according to conventional wisdom, results in an improved extrudability. . . . [However, our invention] has a very narrow molecular-weight distribution. i.e., a ratio of Mw to Mn of less than about 2.

Kaulbach prior art patent.

Teaching Away: On appeal, the Federal Circuit reversed the obviousness determination and held that the Board should have taken more care in considering Kaulbach’s teaching-away from broader molecular weight distribution:

[T]he Board appears to have ignored the express disclosure in Kaulbach that teaches away from the claimed invention and relied on teachings from other references that were not concerned with the particular problems Kaulbach sought to solve. In other words, the Board did not adequately grapple with why a skilled artisan would find it obvious to increase Kaulbach’s melt flow rate to the claimed range while retaining its critical “very narrow molecular-weight distribution.”

Slip Op.  You’ll note that the an inventor would not need to shift far from Kaulbach’s 24 g/10 min example flow rate to get within Chemours’ claimed rate that includes about 27 g/10 min.  But, to do so pushes against the fundamental inventive concept of Kaulbach of a narrow molecular distribution. The PTAB’s decision “does not explain why a POSA would be motivated to increase Kaulbach’s melt flow rate to the claimed range, when doing so would necessarily involve altering the inventive concept of a narrow molecular weight distribution polymer.” Slip Op.  An important caveat here is that Chemours’ patent does not actually claim any particular molecular weight distribution, but expert testimony apparently convinced the Board that a broad molecular distribution was required.

In its decision, the majority ties concludes that the teaching-away negates a motivation to modify the prior art reference.  One oddity of the decision is that the court also spends some time reciting precedent on pertinent prior art, but does not apply that doctrine in any meaningful way.

= = = =

The majority opinion was authored by Judge Reyna and joined by Judge Newman. Judge Dyk wrote in partial dissent.  According to Judge Dyk, the majority placed too much weight on the teaching-away doctrine.

In particular, Judge Dyk reads the the prior art patent as providing an alternative narrow molecular weight distribution while also acknowledging the conventional wisdom and feasibility of having a high distribution. “This is not a teaching away from the use of a higher molecular weight distribution polymer. . . . The majority’s approach impermissibly expands the teaching away doctrine such that it encompasses a reference’s mere preference for a particular alternative. ” Slip Op. Dissent.

= = = =

Secondary Indicia of Nonobviousness: During the IPR, Chemours  presented evidence of commercial success as objective indicia of nonobviousness.  Generally, the commercial success of an invention can be used as circumstantial evidence to prove that the invention is non-obvious.  The basic idea here is that an obvious valuable invention would already be in the market place.  Since there are a number of reasons why any particular product might be successful, patent law generally requires a showing of nexus between the claimed invention and the success — that the innovation (rather than marketing or non-claimed design elements) is responsible for the commercial success.

Here, the Board found the commercial success evidence lacking and thus gave it no weight in the obviousness analysis.  On appeal, the Federal Circuit found three ways that the Board’s decision failed to follow the law.

Nexus and Commercial Success: First, the Board found no nexus because commercial success could not be tied directly to inventive contribution of the Chemours patents.  Here, the Board’s decision was odd.  The Board essentially found that the Chemours patent had no inventive contribution (i.e., had no points of novelty) and therefore could have no nexus.  On appeal, the Federal Circuit rejected that analysis as contrary to law.

The Board found no nexus between the claimed invention and the alleged commercial success because Kaulbach disclosed all features except for the claimed melt flow rate. The Board then found that other prior art of record disclosed melt flow rates of 50 g/10 min.

Contrary to the Board’s decision, the separate disclosure of individual limitations, where the invention is a unique combination of three interdependent properties, does not negate a nexus. Concluding otherwise would mean that nexus could never exist where the claimed invention is a unique combination of known elements from the prior art.

Slip op.

Market Share vs Sales Numbers: The Board also held that market share evidence (rather than merely sales numbers) is required for a showing of commercial success. The Federal Circuit disagreed. “[M]arket share data, though potentially useful, is not required to show commercial success.”

Blocking Patents: Still on Commercial Success, the Board also rejected the commercial success argument after finding that Chemours patents at issue blocked market competition — so that any commercial success would be due to the patent’s existence rather than the innovation’s marketability.   On appeal, the Federal Circuit rejected this conclusion also as contrary to law, finding that the Board totally misapplied the blocking patent doctrine.

The Board erred by misapplying the “blocking patents” doctrine to the challenged patents themselves. A blocking patent is one that is in place before the claimed invention because “such a blocking patent may deter non-owners and non-licensees from investing the resources needed to make, develop, and market such a later, ‘blocked’ invention.’” However, the challenged patent, which covers the claimed invention at issue, cannot act as a blocking patent.

Slip Op. On this point, while I agree that Board’s decision did not follow traditional blocking patent doctrine its approach is interesting.

Right to Repair at the FTC

by Dennis Crouch

In a unanimous vote among the five commissioners, the Federal Trade Commission (FTC) will move forward with a new policy regarding the right-to-repair.  This decision was foreshadowed by a 2019 workshop and 2021 report to Congress.

The Commission is taking four steps:

  • Stepping up enforcement of the Magnuson-Moss Warranty Act prohibitions on tie-in sales, inter alia.
  • Scrutinizing repair restrictions to determine whether they violate US antitrust laws.
  • Scrutinizing repair restrictions to determine whether they constitute unfair competition or deceptive trade practices.
  • Coordinating with state law enforcement and policymakers to “advance the goal of open repair markets.”

Read the Policy Statement.  FTC commissioners are nominated by the President and serve for Seven year terms, and no more than three Commissioners (out of Five) can be from the same political party.  FTC Chair Lina Khan is a recent law school graduate (2017), although she had already focused on antitrust and platform monopoly issues (such as Amazon) for more than a decade at the New America Foundation. The remaining four were all nominated by President Trump, although two are Democrats and two Republicans.

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A big next question is the extent we can encourage manufacturers to produce repairable products. To what extent can easy-to-repair fit into the marketing strategy? And, can Patent Law do something with this regard?


Contempt Order for Violating Injunction Not Immediately Appealable; Sanctions

by Dennis Crouch

Shure v. ClearOne (Fed. Cir. 2021)

I previously mentioned this appellate case and the oral arguments remarks by Chief Judge Moore suggesting that ClearOne file a motion for sanctions against Shure for bringing the appeal.

Stinging Oral Arguments from Chief Judge Moore

At the district court, N.D. Ill. Judge Edmond Chang had issued a preliminary injunction prohibiting Shure from certain actions regarding its drop-ceiling microphone product. Later, Judge Chang found that Shure had violated the preliminary injunction.  In its new opinion, the court has dismissed the case, finding that it lacks appellate jurisdiction over the interlocutory contempt order.  ClearOne has also moved for sanctions.

Right to Appeal: Although a losing party has a right to appeal, the rules of civil procedure strictly limit the timing of appeals.  Generally, a losing party has a right to appeal only after the case is fully and finally decided by the district court. 28 USC 1291.  This is known as the “final judgment rule.” The contempt order that Shure appealed did not end the case. Rather the case is still pending before the district court and thus is not yet final.

Appeal Injunction Order: In addition to the final-judgment timing, a party has a right to appeal an injunction related orders.  28 USC 1292(a)(1).  The statute is written quite broadly to include orders “granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions.” 28 USC 1292(a)(1).  Notably, however, the statute does not expressly call-out contempt orders for violation of an injunction.

Here, Shure argued that Judge Chang had modified the preliminary injunction in the contempt order by enjoining all sales of Shure’s MXA910-A.  The appellate court disagreed. Although that particular product was not particularly named in the contempt order, it is a colorable imitation of the named MXA910 and fits within the injunction’s language of being “capable of being installed in a drop-ceiling” configuration.

With no right to appeal, the appellate court dismissed the case. “[W]e have no jurisdiction over this interlocutory appeal.”  The court explained that Shure should have appealed the preliminary injunction order itself. Of course, that deadline is in the rear view camera.

= = = =

ClearOne’s sanctions motion argues that Shure’s appeal was frivolous and seeks “just damages” as permitted by FRAP 38.  Here, in particular, the court has previously ruled (repeatedly) that an order interpreting an injunction is not immediately appealable. Sanctions Motion ClearOne.

Notes on Ex Parte Appeals of Patent Cases

by Dennis Crouch

  1. The vast majority of ex parte patent appeals (92%) are focused on obviousness, with 2/3 of those only addressing obviousness questions.
  2. It is rare for any other issue to be the sole issue on appeal:
    • 2.5% of appeals solely focus on Section 101;
    • 1% of appeals solely focus on Section 102;
    • 2.2% of appeals solely focus on Section 112 (including 112(a) and 112(b)).
  3. Applicants regularly win obviousness appeals — winning reversal of the obviousness issue in about 35% of cases and partial reversal of the obviousness issue in at least 5% more.
  4. Applicants rarely win appeals based upon Section 101 — Eligibility rejections are affirmed in 90%+ of cases.
  5. Perhaps not surprising, the most cited case appears to be the Supreme Court’s obviousness decision in KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007).

* These notes come from a set of recently decided ex parte appeals that I have been working throuhg – DC

Congratulations to Judge Tiffany Cunningham

The Senate has confirmed Tiffany Cunningham, President Biden’s first pick for the Court of Appeals for the Federal Circuit.  Judge Cunningham is expected to be sworn in this week and immediately step into her new role (although the court typically slows down during August).  Judge Cunningham will be the first African American judge on the Federal Circuit. The vote was bipartisan, although 33 republicans voted NO, including my two senators (Josh Hawley and Roy Blunt).

PTAB Generally Affirms Eligibility Rejections

by Dennis Crouch

If affirmances by the Patent Trial and Appeal Board (PTAB) are any guide, patent examiners appear to now have a good handle on applying the PTAB eligibility examination guidance.  I looked at  PTAB patent eligibility decisions from the past month and found that examiner eligibility rejections were affirmed in 92% of cases (55 of 60 decisions). There were also five cases where the PTAB added eligibility as a new ground for rejection.

92% affirmance for eligibility issues is quite high compared to other issues being appealed.  So far in FY2021, the PTAB is fully affirming examiner decisions in only 56% of cases and partially affirming in an addition 10%.

The PTAB’s general approach is to follow the USPTO’s eligibility examination guidance and then supplement that approach with Federal Circuit and Supreme Court cases.  Most often, the PTAB is able to draw a direct analogy with a prior appellate decision.

The following are three recent affirmances:

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Ex Parte Ausubel, Appeal No. 2021-000765, 2021 WL 2982136 (PTAB)

Lawrence Ausubel is a Professor of Economics at Maryland and has published dozens of articles on efficient auction design and holds several patents. His pending patent application claims a computer-implemented system for allowing smaller-quantity intra-round bidding during a “clock auction.”

The examiner rejected the claims as directed to a fundamental economic practice rather than a practical invention and that, absent the computer limitations, the method is a mental process (with pencil + paper). On appeal though the PTAB affirmed:

Hedging risk is a fundamental economic practice. … Here, claim 1 seeks to hedge risk in a clock auction by using intra-round bids with generic computers and components that perform generic data processing of sending and receiving data to auction securities, contracts, commodities, spectra, and other items.

The Board’s analysis directly analogized to Bilski’s patent application which the Supreme Court rejected.

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Ex parte Knoll, Appeal No. 2021-000035, 2021 WL 3015118 (PTAB) (Philips Medizin)

The invention here is directed to a method of approximating a patient’s pulse-wave using the pressure signal from a blood pressure cuff.  The claims require receipt of repeated measurement of pulse-curves as the clamp pressure changes.  Those curves are weighted and combined to create the approximated pulse wave.  The examiner rejected the claims as directed toward ineligible abstract idea.   On appeal, the PTAB has affirmed, finding the claims directed to a series of mathematical calculations based upon selected information.  Further, the fact that data is received from a blood-pressure cuff does not transform the idea into a patent eligible practical application.

= = = =

Ex Parte Tazono, Appeal No. 2021-000816, 2021 WL 3015120 (PTAB) (Alpine Electronics).

Tazano’s application is directed to methods of acquiring and presenting information about upcoming events.  The PTAB affirmed the examiner rejection — finding the claims directed to the abstract idea of organizing human activities.  Further, the claims rely only upon generic computer technology and do not “recite an improvement to a particular computer technology. . . . All purported inventive aspects reside in how the data is interpreted and the results desired, and not in how the process physically enforces such a data interpretation or in how the processing technologically achieves those results.”


Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

Pleading Infringement: Twombly does not Require Element-by-Element Infringement Pleading

by Dennis Crouch

BOT M8 v. Sony (Fed. Cir. 2021)

Pleading Standards: The starting point of a civil lawsuit is the filing of the complaint that makes a claim for relief.  FRCP 3.  In order to properly state a claim, the rules require “a short and plain statement of the claim showing that the pleader is entitled to relief.” FRCP 8.  For many years, the rules included an Appendix of Form Complaints deemed legally sufficient to satisfy R. 8. Form 18 focused on patent infringement and included a bare-bones set of allegations that (1) the plaintiff owns a particular patent and (2) the defendant has infringed that patent. (Image of Form 18 below).   In general, Form 18 was plaintiff friendly, making it easy to file a patent infringement lawsuit without providing any details beyond the patent number at issue.  That approach was in place for a number of years and only began to crumble with the Supreme Court’s decision in  Bell v. Twombly, 550 U.S. 544 (2007), followed by Ashcroft v. Iqbal, 556 U.S. 662 (2009).  Those cases interpreted the “short and plain statement” requirement as requiring “facial plausibility” that can be satisfied by the inclusion of factual allegations that lead to a reasonable inference of liability.  Still, even after Iqbal, the form-pleading-sufficiency rule was still in place in a way that forestalled complete implementation of the Iqbal regime. In 2015, Form 18 was removed and the transformation complete.

Element-by-Element Claim Analysis in Pleadings: Post-Iqbal, the courts have struggled with line-drawing-what quality of factual allegations are sufficient to survive the plausibility test.  In patent cases, one question is whether then plaintiff needs to provide an element-by-element analysis of how the accused activity practices each element of the asserted claims.   Here, the Federal Circuit holds (again) that element-by-element analysis is not a pleading requirement:

To the extent this district court and others have adopted a blanket element-by-element pleading standard for patent infringement, that approach is unsupported and goes beyond the standard the Supreme Court articulated in Iqbal and Twombly.

Slip Op.

In Bot M8 v. Sony, the district court dismissed Bot M8’s infringement claims against Sony’s PlayStation 4 (PS4). (Dismissing claims stemming from four patents).   On appeal, the Federal Circuit has reversed-in-part.  While plausibility is required, the court repeated its prior statement that the plaintiff “need not prove its case at the pleading stage.” Bill of Lading (Fed. Cir. 2012).

Regarding infringement, the court found that a complaint may be sufficient without an element-by-element infringement analysis. “A plaintiff is not required to plead infringement on an element-by-element basis.”  Rather, the focus of complaint sufficiency is notice — a complaint needs to provide fair notice of what activities by the defendant constitute infringement.

The court then tried to draw some lines:

  • Insufficient: merely alleging an entitlement to relief (as was done in Form 18)
  • Insufficient: reciting claim elements and “merely concluding that the accused product has those elements.”
  • Sufficient: providing factual allegations that, when taken as true, articulate why it is plausible that the accused product infringes.

Again, the focus is on fair notice to the defendant and “specific facts are not necessary” when the general allegations are sufficient.

Although the district court required too much by demanding element-by-element analysis in the complaint, the Federal Circuit still affirmed the dismissal with regard to two of the four patents.  For those two patents, the court concluded that allegations found in the complaint actually disprove infringement.  The complaint “contains too much rather than too little, to the point that Bot M8 has essentially pleaded itself out of court.”  In particular, Bot M8 alleges that the “authentication program” is stored on the motherboard, but the claims require the program to be stored on a separate board. “That allegation renders Bot M8’s infringement claim not even possible, much less plausible. While claim 1 requires that the game program and authentication program be stored together, separately from the motherboard, the [complaint] alleges that the authentication program is located on the PS4 motherboard itself.”

The conclusion here warns against a “kitchen sink” approach to infringement assertions within a patent complaint. In particular, patentees will need to be cautious when alleging infringement of alternative claim language such as below.

  1. A system comprising an authentication program stored in a first memory and a motherboard…
  2. The system of claim 1 where the first memory is located on the motherboard.
  3. The system of claim 1 where the first memory is not located on the motherboard.

Barring unusual claim construction, an accused system cannot infringe both claims 2 and 3 since they are claimed in the alternative.  It turns out that you might not know at the time of filing the exact location of the motherboard.  Although some amount of pre-filing investigation is required, the rules allow for plaintiffs to rely upon  potential discoverable evidence when making the complaint. In Bot M8, plaintiff’s counsel argued that it “had not previously reverse engineered the PS4 to support the prior pleadings because ‘jailbreaking’ the PS4 is illegal under the Digital Millennium Copyright Act (“DMCA”) and other anti-hacking statutes.”  In this particular case, the district court did not rule on the merits of the of the excuse, but ruled that that the concern had been raised too late in the litigation to be viable. “Because Bot M8 did not raise any concerns about its ability to reverse engineer the PS4 until after the district court issued its decision on Sony’s motion to dismiss, the court found that Bot M8 was not diligent.”

An easy solution here is to “plead in the alternative.” The FRCP permits parties to set out two different statements of a claim “alternatively or hypothetically . . . A party may state as many separate claims or defenses as it has, regardless of consistency.” FRCP 8(d).  One difficulty though is that each alternative pathway must meet the plausibility standard. The difficulty for Bot M8 is that it did not plead in the alternative. “Notably, Bot M8’s allegations were not pled in the alternative.” Slip Op. at Note 3.  Rather, Bot M8 told one story that effectively disproved infringement for two of the asserted patents.

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Claim 1 of another asserted patent had also been determined invalid as ineligible. On appeal, the Federal Circuit affirmed that the asserted claim 1 “recites the abstract idea of increasing or decreasing the risk-to-reward ratio, or more broadly the difficulty, of a multiplayer game based upon previous aggregate results. But the claim leaves open how to accomplish this, and the specification provides hardly any more direction.”  Slip Op. (quoting district court and affirming on the same reasoning).

= = = =

  • US 8,078,540: Dismissal affirmed, claims contradict factual assertions in claim (memory location)
  • US 8,095,990: Dismissal affirmed, claims contradict factual assertions in claim (memory location)
  • US 7,664,988: Dismissal reversed, element-by-element infringement analysis not required in the complaint.
  • US 8,112,670: Dismissal reversed, element-by-element infringement analysis not required in the complaint.
  • US 7,338,363: Dismissal affirmed, claims lack eligibility.

Artesano Bread vs Artisan Bread

Interesting pending civil action in Grupo Bimbo v. Hirshfeld (E.D.Va. 2021).

The Mexican company Grupo Bimbo makes more bread than any other company — including Wonder Bread and Sara Lee brands in the USA.  Bimbo is attempting to register a mark for its “ARTESANO” line of bread — after apparently selling more than $1 billion in pre-packaged sliced bread product.

The PTO found that “Artisan Bread” is a generic term, and that consumers will translate the Spanish word “ARTESANO” to its English equivalent when purchasing.

In this appeal, the resemblance between ARTESANO and the word “Artisan” is so evident in both sound and appearance that the average American consumer will automatically translate ARTESANO and equate ARTESANO and the word “artisan.”

Bimbo has now filed a civil action under 15 U.S.C. 1071(b) seeking a declaration from the District Court that its mark is not generic but instead is distinctive.

Bimbo Complaint.

Stinging Oral Arguments from Chief Judge Moore

Chief Judge Moore does not mince words — especially when she senses that a party is attempting to mislead her as to the record.  I transcribed the following from recent oral arguments in Shure Incorporated v. ClearOne, Inc.  This is a discussion between Chief Judge Moore and ClearOne’s attorney Christina V. Rayburn — discussing whether Shure’s briefing was frivolous.

Chief Judge Moore: Did you file a motion asking us to contemplate whether the brief as written [by Shure] was frivolous . . . given the clear inconsistencies between the brief and [Shure’s] statements to the district court?

Ms. Rayburn: We seriously considered it, your honor, but we chose not to.

Chief Judge Moore: Well, you can always do it after arguments.

Ms. Rayburn: Thank you your honor.

[Oral Arg Recording]




Proving Printed Publications

Ex parte Zhang, Reexam No. 90/014,234, 2021 WL 633718 (PTAB)

Folks continue to file anonymous ex parte reexaminations.  Michael Piper of Conley Rose filed this one on behalf of an anonymous party challenging Zhang’s U.S. Design Patent No. D810,925 (“breast pump”).   The reexamination examiner agreed with the challenge and issued a final rejection that the claimed design was anticipated by four different prior art references.  Note that design patent anticipation asks whether the design to be patented is “substantially the same” as the prior art in the eyes of an ordinary observer.

Two designs are substantially the same if their resemblance is deceptive to the extent that it would induce an ordinary observer, giving such attention as a purchaser usually gives, to purchase an article having one design supposing it to be the other.

Door-Master Corp. v. Yorktowne Inc., 256 F.3d 1308 (Fed. Cir. 2001) (citing Gorham Co. v. White, 81 U.S. 511 (1871)).

Not Prior Art: On appeal, the PTAB has reversed — finding that cited references are not prior art at all.

First to Disclose: Two of the references were Chinese Design Registrations filed and published a couple of months before Zhang’s filing date.  Prior to that date, but still within one-year, Zhang had already licensed the design and licensed pumps embodying the patented design were on sale in China. The timing of this prior public disclosure was just right to save the day under Section 102(b)(1)(B).

(b)(1) A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if—(B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor … or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.

Zhang apparently did not make this argument until the appeal, and, the examiner withdrew his rejection after receiving the declaration with supporting evidence.

The other two references were internet publications purportedly published online two-years before Zhang’s application filing date.  However, the PTAB found insufficient evidence proving their publication dates.

Here, an anonymous third party, through counsel, provided the USPTO with copies of two webpages in a foreign language … each paired with an uncertified English translation. Both documents and translations were submitted by a third party requester in a very unclear, grainy or pixelated manner and the text and details over the figures are very difficult to discern.

The submitted material do include printed dates, but the PTAB found them unclear and insufficient without any corroborating evidence regarding context or accuracy. Further, no evidence was submitted showing that the sites were publicly accessible as of those dates, and the pages are no longer available on the internet.

There is simply no explanation or verification of the source, date or accessibility of the information presented on these documents. While we can put some weight in the duty of a signatory of a registered patent attorney in accordance with 37 C.F.R. § 11.18 that statements of fact are “believed to be true,” we simply cannot find the evidence sufficient to establish the documents as prior art.

Zhang.  Thus, the PTAB reversed the rejection.

Another week, another mandamus

by Dennis Crouch

In re Uber Technologies, Inc. (Fed. Cir. 2021)

Another week, another mandamus. This case is parallel to In re Samsung discussed earlier where Ikorongo divided its patent rights between Ikorongo-Texas (right to enforce in W.D.Tex.) and Ikorongo-Tech (right to enforce elsewhere in USA).  In Samsung, the appellate court rejected this brazen attempt to manipulate venue. Here, the court found “no basis for a disposition different from the ones reached in Samsung” and ordered transfer to N.D.Cal.

Bald-Faced Attempt to Manipulate Venue Rejected


Patently-O Bits and Bytes by Juvan Bonni

Recent Headlines in the IP World:

Commentary and Journal Articles:

New Job Postings on Patently-O:

Executive Order on Promoting Competition in the American Economy

President Biden is expected to sign an executive order today focusing on competition that includes 72 separate initiatives.  The following are a few.

  • Non-Compete Agreements: About half of private-sector businesses require non-compete agreements.  This stifle’s competitions and limits workplace mobility. The FTC is being asked to either ban or significantly limit non-compete agreements.
  • License Requirements: About 1/3 of jobs in the US require some sort of license from a state authority.  These licenses limit mobility and lock folks out of certain jobs.  The FTC is being asked to ban occupational licensing requirements that impede economic mobility.
  • Prescription Drugs: Drug prices are higher in the US than in any other country — even for the identical product.  This is largely a construct of Federal Law.  The FDA is directed to begin importing prescription drugs from Canada (in cooperation with states and tribes); The HHS is directed to support for generic and biosimilars and create a comprehensive plan (within 45 days) to combat high prescription drug prices and price gouging; FTC is asked to ban “pay for delay” agreements between patent owners and generic competitors.
  • Right to Repair: The FTC is encouraged to “limit powerful equipment manufacturers from restricting people’s ability to use independent repair shops or do DIY repairs.” This is particularly focused on farmers, but will likely extend to other areas.
  • Hearing Aids: Sell these over the counter.
  • Hospitals: Complete implementation of hospital price transparency rules. Recognize that hospital mergers are usually not good for patients.
  • Obamacare: Do a post-Trump revamp of the National Health Insurance Marketplace to standardize plans and make it much easier for consumers to understand and comparison shop.
  • Internet: Restore net neutrality rules; limit early termination fees for home internet; require more transparency in pricing; limit private deals between ISPs and landlords that limit tenant access to competition and benefit the landlord.
  • Internet Mergers: Apply greater scrutiny of mergers, especially by dominant internet platforms.
  • Privacy: The FTC is encouraged to develop rules on surveillance and the accumulation of data by big-tech and to bar unfair competition in internet marketplace.
  • Passenger Train: Encourage the Surface Transportation Board to require railroad track owners to provide rights of way to passenger rail and to strengthen their obligations to treat other freight companies fairly.

More to come on this topic.  Note, the statement does not mention patent rights or intellectual property, but several of the orders have IP implications.


It is Time to Tell Your Eligibility Stories

by Dennis Crouch

At the behest of several leading Senators, the USPTO has begun a study on the “Current State of Patent Eligibility Jurisprudence.”  To that end, the agency is seeking comments from the public that will be due by Early September.  The agency would like input from various stakeholders, including inventors, owners, investors, licensees, users, and patent attorneys. The agency appears to be looking from key insight regarding the actual experience of parties involved — telling a story of the impact of patent eligibility doctrine.

Acting Director Hirshfeld has made clear in some settings his predilection for broad subject matter eligibility, and the wording of the questions suggest that the Agency is looking for reasons to decry the current state of narrowed eligibility.

The exact topic of comments are not limited, but the Agency has created a list of 13 questions that may guide input. I have paraphrased:

  1. How does eligibility jurisprudence impact business in your tech area (be specific)?
  2. What impacts have you experienced because based upon changes over the past decade? This  includes patent prosecution, enforcement, R&D, employment, innovation, sales, competition, etc.
  3. How is eligibility jurisprudence impacting the following: quantum computing; AI; precision medicine; diagnostic methods; pharmaceutical treatments; and other computer-related inventions?
  4. How does US eligibility jurisprudence differ from your experience in other leading patent regimes?
  5. Provide details on cases that were denied based upon eligibility in the US, but were allowed in other leading patent regimes.
  6. Explain if US eligibility doctrine has shifted research/investment/jobs to other parts of the world.
  7. Explain if US eligibility doctrine has shifted IP strategy toward trade secrecy.
  8. Explain if US eligibility doctrine has shifted how you license or purchase patents.
  9. Explain how US eligibility doctrine has shifted your litigation strategies.
  10. What is the impact of US eligibility jurisprudence on the “global strength of US intellectual property.”
  11. What is the impact of US eligibility jurisprudence on the US economy as a whole.
  12. What is the impact of US eligibility jurisprudence on particular market areas?
  13. How is the public impacted by the state of US eligibility jurisprudence?

Read more here:

I expect that the comments here will also be relevant to the views of the solicitor general that will be submitted in Am. Axle.

Submit comments via the Federal Register portal using Docket No: PTO-P-2021-0032.




Iconic Timberland Boots — Trade Dress Worthy?

by Dennis Crouch

Timberland has been selling its iconic boots back in 1973 – almost 50 years ago.  Actually, at the time the company name was Abington Shoes, but quickly changed its name to Timberland Boot because of the popularity.  Timberland did not patent or register a copyright the design, and the market it rife with copycat boots.

Over the past several years, Timberland has been attempting to register the shape of the boots as protectable trade dress. However, the USPTO’s Trademark Trial & Appeal Board (TTAB) rejected the application, finding that the the company had failed to demonstrate that the boot shape had acquired secondary meaning in the eyes of consumers.  The examiner had also rejected the trade dress registration as  improperly functional, but the TTAB did not reach that issue.

In a new lawsuit, Timberland has asked a district court judge to overturn these rulings and find that the trade dress is distinctive and registrable.

Complaint: TBL Registering TM on Timberlands

In its brief, Timberland provides examples of other shoe shape trade dress that have been registered, including the classic low-top Converse sneakers.



Dismissal on the Pleadings — for Indefiniteness

DataCloud Techs v. SquareSpace (D.Del. 2021)

Eligibility and indefiniteness are both judged primarily as questions of law, although both can occasionally depend upon some underlying factual finding.  And, even when questions of fact are at issue, it is a judge (rather than a jury) that hears the evidence and determines the facts.

In recent years, eligibility determinations have moved forward in the litigation context and become a true “threshold test.”  See Bilski v. Kappos, 561 U.S. 593 (2010).   Often, eligibility is the first substantive determination in patent litigation and it is typically decided either on a motion to dismiss (12(b)(6)) or motion on the pleadings (12(c)).

With all the parallels, it is not surprising that some litigants are also suggesting that indefiniteness be decided at the pleadings stage.

The recent motion for dismissal by SquareSpace is on point — arguing that DataCloud’s patent claims indefinite functional limitations parallel to those rejected by the Supreme Court in O’Reilly v. Morse. [Brief in Support of Motion to Dismiss].

The brief walks through Supreme Court history in indefiniteness associated with functional claim limitations.

  • O’Reilly v. Morse, 56 U.S. (15 How.) 62 (1854)
  • Corning v. Burden, 56 U.S. (15 How.) 252 (1854)
  • Burr v. Duryee, 68 U.S. (1 Wall.) 531 (1864)
  • Fuller v. Yentzer, 94 U.S. 288 (1877)
  • Risdon Iron & Locomotive Works v. Medart, 158 U.S. 68 (1895)
  • Westinghouse v. Boyden Power Brake Co., 170 U.S. 537 (1898)
  • Busch v. Jones, 184 U.S. 598 (1902)
  • Holland Furniture Co. v. Perkins Glue Co., 277 U.S. 245 (1928)
  • General Electric Co. v. Wabash Appliance Corp., 304 U.S. 364 (1938)
  • United Carbon Co. v. Binney & Smith Co., 317 U.S. 228 (1942)
  • Halliburton Oil Well Cementing Co. v. Walker, 329 U.S. 1 (1946)
  • Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 336 U.S. 271 (1949) (“Graver I”)

SquareSpace filed its motion to dismiss in May and DataCloud has recently filed an amended complaint and has argued that the amended complaint renders the motion “a nullity.”  The new complaint adds three additional patents and also includes an allegation that attempts to skirt the indefiniteness question:

A person skilled in the art … would understand that each of the limitations and/or steps in the claims … are defined by what they do (not what they are). Even if any limitation and/or step of the claims is “functional”— and none are—the teachings of the … Patent provides to any skilled artisan sufficient structure, material, or acts necessary to perform the recited function or provides information sufficiently identifying a finite group of structures, materials, or acts necessary to perform the recited function that were well known to skilled artisans at the priority date.

Amended Complaint.

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Lawyers on the brief include James Dabney and Sue Robinson (as well as others).


En Banc: When Employees Leave with a Half-Baked Invention

I have been following the patent ownership lawsuit of Bio-Rad Laboratories, Inc. v. International Trade Commission and 10X Genomics.  The case is now pending on a petition for en banc rehearing before the Federal Circuit.

Several former Bio-Rad employees left to form 10X Genomics.  While at Bio-Rad, the individuals began development of a number of ideas but did not complete conception or reduction-to-practice.  Some months later, after leaving and forming 10X, they completed the inventions and filed patent applications. Bio-Rad now argues that it has partial ownership rights to the inventions based upon the inventor’s contributions while employees.

In the appeal, the Federal Circuit sided with 10X, holding that the terms of the employment agreement were limited to Intellectual Property, and pre-conception ideas were not enough.

Pre-Invention Innovations Not Captured by Employment Agreement Duty to Assign

Now, Bio-Rad  has petitioned for en banc rehearing arguing that the decision is contrary to a host of Federal Circuit decisions:

First, the panel’s decision conflicts with this Court’s precedent that employment contracts such as Bio-Rad’s are to be given their full import and not limited to a final conceived patentable invention.  See, e.g., AT&T v. Integrated Network Corp., 972 F.2d 1321 (Fed. Cir. 1992).

Second, the panel’s decision also conflicts with precedent regarding joint inventorship that can occur serially over time and that contribution of a single idea to a final invention can qualify as joint inventorship, which is a protectable right subject to contract. See, e.g,. Vanderbilt Univ. v. ICOS Corp., 601 F.3d 1297 (Fed. Cir. 2010).  Precedent does not impose a temporal restriction on when a person can become a co-inventor. The analysis requires comparing the significance of the work alleged to be an inventive contribution to the claims as a whole. Fina Oil & Chem Co. v. Ewen, 123 F.3d 1446 (Fed. Cir. 1997).


Bio-Rad is correct that the Federal Circuit appears to have been too tight in its statements of the law, but it may well be that the contributions made while employees at Bio-Rad were still insufficient.

What is Your Preferred Method for Attacking Functional Claims?

by Dennis Crouch, Inc. v. Apple, Inc., No. 20-1809 (Supreme Court 2021)

VoIP-Pal sued Apple for infringing its U.S. Patent Nos. 9,537,762; 9,813,330; 9,826,002; and 9,948,549.  Apple filed four petitions for for inter partes review, but all four were denied by the PTAB. Judge Koh then dismissed the infringement case in Apple’s favor–finding that all asserted claims were directed to ineligible subject matter.  On appeal, the Federal Circuit affirmed without opinion (R.36). Now, VoIP-Pal has petitioned for writ of certiorari.  The case is now part of a trio of eligibility cases pending before the Court. See American Axle & Manufacturing, Inc. v. Neapco Holdings LLC, No. 20-891; iLife Technologies, Inc. v. Nintendo of America, Inc., No. 20-1760.

The patents here are all directed routing calls using Voice Over Internet Protocol (VoIP) communications.  The basic idea is to rout calls based upon a user identification, rather than using key parts of a telephone number (such as country codes; area codes; and other signals).  Once the recipient ID is entered, the system would look-up their location and route the communications accordingly.   Judge Koh found the claims were directed to the abstract idea of “Routing a communication based on characteristics of the participants.”  Judge Koh did not attempt to define “abstract idea,” but noted some hallmarks found in VoIP’s claims:

Claim 1 is directed to an abstract idea: (a) the claimed method discloses only generalized steps drafted in purely functional terms; (b) it is analogous to well-known, longstanding practices; and (c) it does not recite an improvement in computer functionality.

In its petition for writ of certiorari, VoIP-Pal asks three questions:

1. What is the appropriate standard for determining whether a patent claim is “directed to” a patent-ineligible concept under step one of the Court’s two-step framework for determining whether an invention is eligible for patenting under 35 U.S.C. §101?

2. Is patent eligibility (at each step of the Court’s two-step framework) a question of law for the court based on the scope of the claims or a question of fact for the jury based on the state of art at the time of the patent?

3. Is it improper to apply 35 U.S.C. § 112 considerations to determine whether a patent claims eligible subject matter under 35 U.S.C. § 101?

[Petition] The 112 discussion is basically an argument that any problems with functional claim limitations should be dealt with under §112 rather than §101.

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The chart above shows the number of U.S. patents issued each year that include the phrase “VoIP” somewhere in the document.  Folks were already doing some packet-switched voice communications before the 2000’s, but typically used a different name.