Teaching a Result vs Guaranteeing a Result

In re Facebook (Fed. Cir. 2018) (nonprecedential opinion)

Facebook’s U.S. Patent Application No. 13/715,636 claims a method for displaying a set of images after reshuffling or resizing the images.  The Examiner rejected Claim 1 (below) as anticipated; and that rejection was affirmed by the Patent Trial and Appeal Board.  Now on appeal, the Federal Circuit has reversed and remanded — finding that the USPTO had too loosely interpreted the prior art.

The claimed image rendering process begins with a sequence of images. Each image is assigned a “first position” within an “array of contiguous image elements” — in other words, the images are put in a particular order.  When a user adjusts the position or size of an image — there may be a need for reshuffling of the images into “second positions.”  The claimed method includes a requirement that the reshuffled sequence “be contiguous.” — i.e., no gaps in the array.

Notice the reshuffle above that occurred from 1A to 1B when a user resized image 130.

The claims expressly require that the reshuffle retain contiguity.  The problem for the PTO is that the identified prior art (Perrodin) did not require contiguity “in all cases.”   The court wrote:

Nothing about Perrodin’s algorithm required contiguity. It is true that the example depicted in Figures 18 and 19 happened to result in contiguity. But that cannot represent a general rule that would demand contiguity for all images, as required by the claims here. . . . Perrodin’s algorithm could not guarantee contiguity.

So, we have a situation here where the prior art teaches contiguity-after-reshuffle, but is also open to situations where a reshuffle might result in non-contiguity.  The claims – on the other hand – include “a rule requiring [contiguity].”  Since the prior art does not include the rule requiring contiguity, it cannot anticipate.

The court here did not discuss obviousness because the PTO had conceded that “the anticipation and obviousness rejections rise and fall together.”

= = = = =

Claim 1 of the Facebook application reads as follows:

1. A method comprising:

by a computing device, determining a sequence of image elements;

by the computing device, determining, for each image element in the sequence, a first position in an array of contiguous image elements, the first position being based on a size of the image element, an order of the image element in the sequence, and dimensions of the array;

by a computing device, determining, in response to an instruction to adjust the position or size of a first image element, a second position in the array for at least one second image element, the second position determined based on a rule requiring the image elements to be contiguous such that each available image position between the first image element in the sequence and the last image element in the sequence is occupied by an image element; and

by the computing device, providing information to render the array of contiguous image elements.

Coming Soon: Annual Bar Dues and CLE Requirements

The USPTO has quietly proposed adding new annual bar dues ($240 – $410) for patent practitioners as well a continuing legal education (CLE) requirement.  The proposal is buried in the Table of Proposed Fees that will serve as the basis for an upcoming September 6, 2018 PPAC meeting on fees.

The Agency has not yet released any other information regarding the proposal. However, the suggestion from the fee requirement here is that the CLE requirement would only be a “soft” requirement — if you complete the CLE then the Annual Active Patent Practitioner Fee would be reduced.  The USPTO previously proposed annual fees back in 2003.

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Rejoining Written Description and Enablement in Amgen v. Sanofi

by Dennis Crouch

In July 2018, Amgen filed its petition for certiorari asking the Supreme Court to reject the Federal Circuit’s imposition of separate “written description” and “enablement” requirements along with their various requirements and standards.  Amgen argues that the Court should simply follow the statute — requiring “a written description of the invention . . . in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains . . . to make and use the same.”  Amgen Inc. v. Sanofi, Aventisub LLC, SCT Docket No. 18-127 (Petition filed July 23, 2018) (Cert Petition).

The basic push here is against the “possession” standard that serves as the core of the Federal Circuit’s written description requirement.  Apart from any policy arguments — Amgen argues that the statute spells out the test — and it is enablement, not possession.  Rather than focusing on what the inventor possesses, the Act requires the specification simple teach others — “as to enable an person skilled in the art . . . to make and use” the invention.

The brief provides a statutory linguistic argument that makes sense — the “grammatical structure [is] inescapable” and shows that statute provides one standard for judging the written description — the enablement standard.

This statutory argument goes a long way, but in my view will lack compelling force to the Supreme Court (as it did for the Federal Circuit in Ariad).  Rather, for 112(a), historical cases are the key since the language of 112(a) all stems directly from the Patent Act of 1793.  A grammar diagram (seemingly based upon modern language usage) is a rather weak argument for interpreting this olde language.  Rather, a successful argument here should seen in light of the history of the statute and how it has been directly addressed by the Supreme Court over the past 225 years.  In Ariad, the Supreme Court looked particularly to the Supreme Court decision in Schriber-Schroth Co. v. Cleveland Trust Co., 305 U.S. 47 (1938) as recognizing a separate written description (possession) requirement that goes beyond mere enablement.  Although the cert petition repeatedly cites Schriber-Schroth it doesn’t actually address the portion relied upon by the Federal Circuit that served as the crux of its decision.


Takings: A Costly Screen for IPRs.

by Dennis Crouch

In Oil States, the patentee lost its broad challenge to the AIA Post Issuance trial system. However the majority opinion penned by Justice Thomas hinted that other collateral attacks on the system could find more success.  Particularly, the court wrote that “our decision [finding that patents are public rights] should not be misconstrued as suggesting that patents are not property for purposes of the Due Process Clause or the Takings Clause.”

A Costly Screen: The takings clause is an interesting limit on government power. Rather than serving as an absolute limit, the clause creates a costly screen.  Although the government has power to take private property for public use, it is required to provide “just compensation” for every such taking.  “[N]or shall private property be taken for public use, without just compensation.” U.S. Const. 5th Amendment (1791).

If the government cancels my land ownership rights to instead create a public commons — the takings clause would require just compensation.  Imagine for a moment that the PTO’s cancellation of established patent rights is also categorized as a taking — the PTO would need to provide just compensation to the patentee.  The question now being raised in various cases — including the recent petition in Advanced Audio Devices, LLC v. HTC Corp.

One starting point: It is certainly a taking for the government to cancel patent rights in merely because it wants to use the invention or to give the public free access to the invention.  IPRs also involve cancelling patent rights.  However, in IPRs the patents are cancelled based upon a different justification — a non-patentability determination rather than merely a desire for unfettered public use of the invention.  The question though is whether this different justification will serve as a cognizable distinction.

The Advanced Audio petition adds the additional twist that its patents were filed pre-AIA.  Thus, the patentee asks the following question:

Whether inter partes review (“IPR”) of patents filed before enactment of the Leahy-Smith America Invents Act (“AIA”) violates the Takings Clause of the Fifth Amendment to the U.S. Constitution.

[Advanced Audio Devices SCOTUS Cert Petition (Final)].  Similar arguments are being raised in other cases, including the class action Christy v. USA.

Just Compensation for Cancelling My Patent

Put it Into Hyperdrive: New Car

by Dennis Crouch

I just bought my first electric car – 2018 Honda Clarity.  Love it.  I should say that it is not fully electric — rather it is a PHEV (Plug-in Hybrid Electric Vehicle).  When fully charged, the car goes about 50 miles on battery — then becomes a hybrid vehicle once the battery juice is spent.  Since we generally drive less than 50 miles per day, the car has used almost no gasoline — although the engine will kick-in as a support at times when you need extra power.

The dual power vehicle system has been the subject of lots of patent litigation stemming from Paice LLC’s enforcement of its U.S. Patent Nos. 7,237,634 and 8,214,097.  The Paice inventor, Alex Severinsky, claims to have invented the “hyperdrive power-amplified internal combustion engine power train” that uses a variety of metrics to determine whether to use the Battery, the Engine, or Both Simultaneously.

Back to my new Clarity.  I tend to be fairly slow to change cars – until last week I was still driving my 1998 Honda Civic from law school days.

In addition to the “Severenski hyperdrive” possibilities — I’m also enamored with the fact that I’ll only be stopping at the gas station when taking a road trip.  In general, electric motors are more efficient than gas engines. Electricity production tends to have a better environmental impact than burning gas, and the zero exhaust in my garage is really nice.  For this battery size, the car fully charges in about 6 hours with my ordinary 110 power supply.

I had been eyeing other PHEV’s such as Volvo’s XC90 or the Porsche Cayenne. However, those vehicles have a much lower electric-only range and are well beyond my law-professor-salary range.  In addition to being much cheaper, the Clarity also qualifies the buyer for a $7,500 federal tax credit.

Finally, I’ll note that the Clarity is my first electric car — but not my first electric vehicle.  I still ride my Volton eBike to the law school several days each week (depending on the weather).



Standing on Appeal: Being a Competitor with ongoing Product Development Not Sufficient for IPR Appellate Standing

JTEKT Corp. v. GKN Auto (Fed. Cir. 2018)

GKN’s Patent No. 8,215,440 covers a 2wd/4wd dual drivetrain.  This general type of drivetrain was already well known in the automotive industry — and the claims of the patent appear to my eyes to be quite broadly written.

JTEKT (a subsidiary of Toyota) makes automotive components.  Although JTEKT does not yet have a competing product on the market, saw the ‘440 patent as a major roadblock and filed an Inter Partes Review (IPR) proceeding — asking the USPTO to cancel the patent claims. During the IPR, GKN disclaimed the broadest claims — and the PTO confirmed the validity of the remaining claims. (The key limitation appears to be that the system coupling is “without a differential gearing”.)

On appeal the Federal Circuit has refused to hear the case — finding that the case lacked Constitutional standing since JTEKT had not alleged any “actual injury.”  The case here follows Phigenix, Inc. v. Immunogen, Inc., 845 F.3d 1168 (Fed. Cir. 2017).  In that case the patent challenger Phigenix was not planning to actually use the Immunogen patent, but argued its injury was based upon the competitive advantage that the patent gave to its owner.  Although that injury might be sufficient for standing purposes — the Federal Circuit still dismissed the case because Phigenix failed to present sufficient facts to make the injury plausible.

Standing is an oddball with IPRs.  Anyone can file an IPR request and the USPTO will consider that request.  The Patent Act directly states that a losing petitioner has a right to appeal if it loses the IPR.  (A party “who is dissatisfied with the final written decision of the Patent Trial and Appeal Board . . . may appeal the Board’s decision . . . to the United States Court of Appeals for the Federal Circuit.” 35 U.S.C. § 141(c).) Still, the Supreme Court has repeatedly held that the Constitution requires an actual controversy between the parties — and that the Article III courts cannot offer advisory opinions. A particular element in question for appellate IPR standing is injury-in-fact —  “an injury that is both ‘concrete and particularized.’” Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016)(non-IPR case).

In ordinary lawsuits, this sort of standing is established at the lower court level. Here, however, it must be done at the appellate level (since the PTO doesn’t worry about the issue).  On appeal, JTEKT was given an opportunity to provide evidence of injury-in-fact – but failed:

While JTEKT has submitted two declarations in support of its standing, JTEKT’s problem is that these declarations do not establish that its planned product would create a substantial risk of infringing [the particular claims on appeal] or likely lead to charges of infringement.

Appeal dismissed.

Note here – Folks interested in this issue should consider the pending Supreme Court petition in RPX Corporation v. ChanBond LLC (SCT Docket No. 17-2346).

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Updates from USPTO Public Meeting from Aug 2, 2018

By Dennis Crouch

(1) Under Dir. Iancu, the USPTO appears to be moving away from eligibility rejections. The chart below shows that the past year about 8% of all examiner rejections were eligibility rejections. Over the past three months, that statistic has dropped to about 6.6%. During that time, the PTO has officially changed its approach via the Berkheimer memo, and Dir. Iancu’s leadership lends authority to the Office’s approach to broader eligibility.

(2) AIA Trial institution rates continue to fall – although slightly. Post-Grant Review proceedings are not becoming popular. Several hundred patents have been subjected to multiple (3+) petitions challenging validity.

(3) Although I am not clear how this will happen, the USPTO expects that its spending and revenue will level out perfectly by the end of the fiscal year.

(4) Several bills are pending in Congress. None are currently likely to pass.

(5) Draft of 2018-2022 USPTO Strategic Plan to be released later in August.

(6) USPTO AI Conference set for December 5th, 2018, USPTO Madison Auditorium.

PTO: Patent Quality Chat and Fee Setting

Upcoming PTO Events in at the HQ in Arlington:

  1. August 2, 2018 (9 am to 3 pm ET): PPAC Meeting [Webcast]
  2. August 14, 2018 (Noon to 1 pm ET): Patent Quality Chat: AIA Trial Statistics from PTAB and Using AIA Trials to Enhance Patent Examination
  3. September 6, 2018 (9 am to 11 am ET): PPAC discussion of New FEES. 

USPTO is planning to exercise its fee setting authority to set or adjust patent fees. As part of the rulemaking proceeding for the issuance of regulations under Section 10, the USPTO will publish a proposed patent fee schedule and related supplementary information for public viewing no later than August 29, 2018.

Design Patent: Surrendering Scope During Prosecution

by Dennis Crouch

Advantek Mktg. v. Shanghai Walk-Long Tools (Fed. Cir. 2018)

Advantek’s U.S. Design Patent No. D715,008 covering the above-pictured “pet gazebo” that Advantek also sells as its flagship product. Long-Walk allegedly copied the design in its “pet companion” product.  However, the district court dismissed the case on the pleadings — finding that the prosecution history barred any infringement finding.  On appeal, however, the Federal Circuit has reversed.  This is one of the few cases considering prosecution history of a design patent.

The Prosecution: The design patent application included Figures 1-4 (kennel without a cover) as well as Figure 5 (kennel with a cover) and explained that the embodiments are identical except for the cover.  In its initial action, the Examiner issued a restriction requirement dividing between Group I – Figs 1-4 (kennel without a cover); and Group II – Fig 5 (Kennel with a cover) — finding that the two groups are distinct embodiments and further that the single claim requirement of design patent bars the inclusion of figures having distinct combinations of elements.  The applicant “disagreed” but still elected Group I and withdrew Figure 5.  The patent issued without the applicant filing a divisional application to cover the withdrawn claimed figure.  Note here that the figures of a design patent are effectively the claim — thus any amendment to the figures is also a change to the claim scope and coverage.

In the litigation, Walk-Long’s product does have a cover and the basic question is whether the design patent can cover a product with the cover — knowing that the patentee originally claimed a kennel with/without a cover – but but then dropped the with-a-cover portion.

Doctrine of Surrender: In Pacific Coast Marine Windshields Ltd. v. Malibu Boats, LLC, 739 F.3d 694 (Fed. Cir. 2014), the Federal Circuit explained that prosecution surrender does apply in design patent cases. Here, however, Advantek argues that its design without-a-cover is present in the accused kennel (as a substructure of the whole).  Although Walk-Long sells the kennel with a cover, it is first assembled without the cover — and remains without a cover until the cover is installed. Although eliminating the cover appears to actually broaden the claims — the appellate court did not particularly decide whether there was surrender. Rather, the Federal Circuit determined that at a minimum, anything surrendered was outside the scope of the accused product.

Regardless of whether Advantek surrendered claim scope during prosecution, the accused product falls outside the scope of the purported surrender, contrary to the district court’s conclusion. Advantek elected to patent the ornamental design for a kennel with a particular skeletal structure. A competitor who sells a kennel embodying Advantek’s patented structural design infringes the D’006 patent, regardless of extra features, such as a cover, that the competitor might add to its kennel.

On appeal, the Federal Circuit noted particularly that a claimed article of manufacture can include a whole product or components thereof. Samsung Electronics Co. v. Apple Inc., 137 S. Ct. 429 (2016); Gorham Manufacturing Co v. White, 81 U.S. 511 (1872).

As a footnote, the court tied-back to Samsung — noting in dicta that any damages collected should be on the profits of the structure without the cover.  “Of course, if the accused skeletal structure is only a component of an accused multicomponent product, Advantek would only be able to seek damages based on the value of the component, not the product as a whole.”


Patent Grants

With two-months left in the fiscal year, the USPTO is on-track for another 300,000+ patent year. The chart above shows the number of utility patents issued each fiscal year for the past two decades. The current forecast for FY2018 is a bit below FY2017 – but still the second highest number of patents issued in a single year. Examiners will push to make their quotas prior to the end of the year – however those will not be reflected in issued patents in FY18 because of the lag between allowance and issuance.

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Patent Office Updates

  • The next PPAC Meeting will be on August 2, 2018 starting at 9:00 a.m. I usually attend via webcast that works well. [Agenda and Links]
  • Former Acting PTO Director Joseph Matal has moved into the role of Acting Solicitor of the agency as well as Acting Deputy General Counsel for Intellectual Property Law.  Congratulations Joe! Former Solicitor Nathan Kelley has left the office that he joined originally back in 1993 as an examiner.
  • EPO is highlighting its new office in The Hague. The Video below is worth watching if only for the dramatic background music.

En Banc Federal Circuit: PTO Does Not Automatically Get Attorney Fees in Appeals and Civil Action Claims

by Dennis Crouch

In its new en banc opinion, the Federal Circuit has confirmed that the Patent Act does not require patent applicants to pay the USPTO’s attorney fees in Section 145 actions.  The USPTO had requested $100,000+ to compensate for the time of its in-house attorneys.

NantKwest, Inc. v. Iancu, 16-1794, 2018 U.S. App. LEXIS 20932 (Fed. Cir. 2018) (en banc).

35 U.S.C. 145 provides an unsuccessful patent applicant with the option of either (a) appealing the PTAB decision to the Federal Circuit or (b) filing a “civil action” in district court.  One kicker though – the statute provides that “All the expenses of the proceedings shall be paid by the applicant.”

Back in 2010, the Federal Circuit ruled that the statute allows the USPTO to collect expenses “regardless of the outcome.” Hyatt v. Kappos, 625 F.3d 1320 (Fed. Cir. 2010) (en banc).

In NantKwest, the original panel split on the meaning of “all the expenses” — with the majority holding that “expenses” include USPTO attorney fees (including in-house salaried attorney fees)..  That panel decision has now been rejected in a 7-4 decision with Judge Stoll penning the majority decision. Chief Judge PROST wrote in dissent and was joined by Judges Dyk, Reyna, and Hughes.

The court’s reasoning here is that the “American rule” on fees (each party pays for its own attorney fees) is a strongly embedded and any statutory rejection of the rule must be “specific and explicit.” The “all the expenses” language here does not meet that requirement — especially since such an interpretation would render this the only federal statute requiring “a private litigant to pay the government’s attorneys’ fees without regard to the party’s success in the litigation.”

The bottom line here is that patent applicants who challenge a PTAB decision will still be forced to pay other expenses such as printing costs and expert fees — but will not be required to pay the PTO attorney fees as a matter of course.

Trustees of Boston University v. Everlight: (Non)enablement of permutation #6

By Jason Rantanen

Trustees of Boston University v. Everlight Electronics Co., Ltd. (Fed. Cir. 2018) Download Opinion
Panel: Prost (author), Moore, Reyna

This opinion provides an example of how Section 112 can function as a commensurability requirement.  The court’s final lines say as much:

“Having obtained a claim construction that included a purely amorphous
layer within the scope of the claim, BU then needed to successfully defend against an enablement challenge as to the claim’s full scope…Put differently, if BU wanted to exclude others from what it regarded as its invention, its patent needed to teach the public how to make and use that invention. That is ‘part of the quid pro quo of the patent bargain.'”

Slip Op. at 14 (citations omitted).

I like the opinion because the court’s analysis fits neatly with my conceptual explanation of how enablement analyses are actually performed: it’s a two-step process, with the first step being the articulation of the relevant target and the second asking whether the patentee managed to hit that target.  Here, the court defined the target as consisting of one of six possible permutations under the claim construction the patent owner had sought.  Unfortunately, the evidence did not support the conclusion that a person having ordinary skill in the art could make that permutation without undue experimentation.

In the Federal Circuit’s words, Patent No. 5,686,738 “relates to the preparation of monocrystalline GaN films via molecular beam epitaxy.”  Slip Op. at 4. These films are used in creating blue light LEDs.  The plaintiff, Trustees of Boston University (BU), sued defendants for infringing the ‘738 patent.  Following a jury trial, BU obtained a verdict of infringement and no invalidity.  The district judge subsequently denied defendants’ renewed motion for judgment as a matter of law, in which defendants had argued that the asserted claim was not enabled.  Defendants appealed.

Only claim 19 of the ‘738 patent was at issue.  That claim states:

A semiconductor device comprising:

a substrate, said substrate consisting of a material selected from the group consisting of (100) silicon, (111) silicon, (0001) sapphire, (11-20) sapphire, (1-102) sapphire, (111) gallium aresenide, (100) gallium aresenide, magnesium oxide, zinc oxide and silicon carbide;
a non-single crystalline buffer layer, comprising a first material grown on said substrate, the first material consisting essentially of gallium nitride; and
a growth layer grown on the buffer layer, the growth layer comprising gallium nitride and a first dopant material.

Two constructions were key here.  The court construed “grown on” to mean “formed indirectly or directly above” and “a non-single crystalline buffer layer” to mean “a layer of material that is not monocrystalline, namely, [1] polycrystalline, [2] amorphous or [3] a mixture of polycrystalline and amorphous, located between the first substrate and the first growth layer.”  (emphasis added).  It also understood “growth layer” as including within its scope a monocrystalline growth layer.  BU did not challenge any of these constructions on appeal.

In the Federal Circuit’s view, collectively these constructions raised six possible permutations for the relationship between growth layer and buffer layer:

  • (1) monocrystalline growth layer formed indirectly on a polycrystalline buffer layer;
  • (2) monocrystalline growth layer formed indirectly on a buffer layer that is a mixture of polycrystalline and amorphous;
  • (3) monocrystalline growth layer formed indirectly on an amorphous buffer
  • (4) monocrystalline growth layer formed directly on a polycrystalline buffer layer; (5) monocrystalline growth layer formed directly on a buffer layer that is a mixture of polycrystalline and amorphous; and
  • (6) monocrystalline growth layer formed directly on an amorphous buffer layer.

Slip Op. at 6. Of these six permutations, defendants focused their enablement argument on #6: whether a person of ordinary skill in the art could practice the invention with a monocrystalline growth layer formed directly on an amorphous buffer layer.

With the court’s attention focused on permutation #6, the enablement analysis was relatively straightforward.  The evidence supporting enablement of #6 was weak: the only technique described in the patent, epitaxy, doesn’t work to grow a growth layer directly on an amorphous structure.  BU tried to argue that the patent didn’t actually teach epitaxy, but the court was unpersuaded: “The ’738 patent’s specification is concise—just over four columns of text—and focuses on epitaxy. Indeed, it is saturated with the word ‘epitaxy’ or variants thereof.”  Id. at 9.  BU also argued that what the patent taught could not be epitaxy “because epitaxy invovles a crystalline layer on top of another crystalline layer,” and an amorphous layer is not “crystalline.”  Id. at 10.  But regardless of whether one called it epitaxy or not, the problem was that  BU couldn’t identify anywhere in the specification that taught how to grow a monocrystalline layer directly on an amorphous layer.  Nor was the expert testimony sufficient as it consisted of conclusory statements.  Testimony that other people had successfully grown a monocrystalline layer on top of an amorphous buffer layer didn’t help either, as “[s]imply observing that it could be done–years after the patent’s effective filing date–bears little on the enablement inquiry.”  Id. at 12.

In light of how the court understood the focus of the enablement issue, BU’s final argument–that the specification enabled 5 out of the 6 permutations and that was enough–didn’t work.  The court cited the “full scope” language from precedent here, and the “gap-filling” approach didn’t work here since that concept “is merely supplemental; it cannot substitute for a basic enabling disclosure.”   Ultimately, the court concluded that the patent needed to enable all six permutations–a result consistent, the court noted, with the claim constructions that BU itself had sought.  In the end, the court saw this as being in the vein of Liebel-Flarsheim: if you get the claim scope you ask for through construction, you’re also going to need to show enablement of that scope.

For enablement-timing gurus, there’s some interesting language in the section about the post-application successes to ponder.

Fourth Estate Public Benefit Corp. v. Wall-Street.com

In addition to the one patent case (Helsinn), the Supreme Court also has one Copyright case lined-up for its October 2018 term:

Fourth Estate Public Benefit Corp. v. Wall-Street.com, No. 17-571

Section 411(a) of the Copyright Act provides that “no civil action for infringement of the copyright in any United States work shall be instituted until” either (1) “registration of the copyright claim has been made in accordance with this title,” or (2) “the deposit, application, and fee required for registration have been delivered
to the Copyright Office in proper form and registration has been refused.” 17 U.S.C. 411(a).

The question presented is as follows: Whether a copyright owner may commence an infringement suit after delivering the proper deposit, application, and fee to the Copyright Office, but before the Register of Copyrights has acted on the application for registration.

ScotusBlog has the Briefs

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Saint Regis Mohawk Tribe, Allergan v. Mylan: No Tribal Immunity for IPR

By Jason Rantanen

Saint Regis Mohawk Tribe, Allergan, Inc. v. Mylan Pharmaceuticals Inc., Teva Pharmaceuticals USA, Inc., AKORN, Inc. (Fed. Cir. 2018) Download Opinion

Panel: Dyk (concurring), Moore (author), Reyna

Last fall, Allergan transferred a set of patents relating to its Restasis product (the “Restasis Patents”) to the Saint Regis Mohawk Tribe (“the Tribe”). The Tribe promptly asserted tribal sovereign immunity in the pending inter partes review proceedings involving the Restasis patents.  In February, the PTAB denied the Tribe’s motion to terminate the IPRs, a decision the Tribe appealed.  Following an expedited briefing schedule, the Federal Circuit has now affirmed the PTAB’s denial of sovereign immunity.

The panel opinion, joined by all three judges, addressed only one of the arguments against sovereign immunity: that under the Supreme Court’s analysis in Fed. Maritime Comm’n v. S.C. State Ports Auth., 535 U.S. 743 (2002), tribal sovereign immunity does not apply.  It’s important to note at the outset that “Generally, immunity does not apply where the federal government acting through an agency engages in an investigative action or pursues an adjudicatory agency action.”   Slip Op. at 5.

The Court in FMC looked to whether the adjudications at issue were “the type of proceedings from which the Framers would have thought the States possessed immunity when they agreed to enter the Union.”  Id. at 5-6. In particular, the Federal Circuit observed that “[i]n doing so, the Court recognized a distinction between adjudicative proceedings brought against a state by a private party and agency-initiated enforcement proceedings.”  Id. at 6.

This question is similar to that of whether an administrative agency can hear a dispute at all, and unsurprisingly the court looked to the Supreme Court’s recent decisions for guidance.  “IPR is neither clearly a judicial proceeding instituted
by a private party nor clearly an enforcement action brought by the federal government,” the court observed, before comparing the views offered by the Court in Oil States v. Greene’s Energy and SAS v. Iancu.  Ultimately, the court concluded, “IPR is more like an agency enforcement action than a civil suit brought by a private party….”  Thus, “we conclude that tribal immunity is not implicated.”  Id. at 8.

How is IPR more like an agency enforcement action?  For one thing, the Director chooses whether to institute an IPR.  And while that discretion is limited to an all-or-none decision under SAS, “if the Director decides not to institute, for whatever reason, there is no review.”  Id. at 8.  In addition, “the Board may choose to continue review even if the petitioner chooses not to participate,” reinforcing “the view that IPR is an act by the agency in reconsidering its own grant of a public franchise.”   Id. at 9.  There are also differences between the IPR rules of procedure and the Federal Rules of Civil Procedure; because of these distinctions “the agency procedures in FM much more closely approximated a civil litigation than those in IPR.”  Id. at 10.  Nor does the existence of more “inquisitorial” proceedings in which sovereign immunity would not apply, such as ex parte and inter parte reexamination, mean that sovereign immunity must apply to IPRs.

Judge Dyk joined the panel opinion in full, but wrote separately to describe the history of inter partes review and why those reviews are not adjudications between private parties.  His opinion is a great reference if one wants a thorough description of the history of the proceeding, complete with numerous source citations.

This dispute is clearly not at an end, and I suspect that the Tribe and Allergan will seek en banc review, if not head straight for a cert petition.  Given the expedited briefing schedule, I expect this issue to continue to move quickly.  At the same time, however, keep in mind that in the parallel infringement proceeding in the Eastern District of Texas,  Judge Bryson (sitting by designation) found the Restasis Patents obvious following a bench trial.  Allergan (now joined by the Tribe) appealed that determination.  Oral argument is currently scheduled for September.

Supreme Court Update – July 2018

by Dennis Crouch

Each summer, the Supreme Court takes a recess and patent cases begin to pile-up in the high-court’s docket. Only a handful of intellectual property petitions are granted certiorari each year, but almost all of the petitions raise interesting and important issues of law and policy.

The following is a comprehensive list of Patent cases pending before the Supreme Court.  I have excluded a small handful that have (in my estimation) no shot at certiorari and also fail to raise interesting patent law issues.

Petitions Granted:

  1. Prior Art – On Sale Bar: Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., et al., No. 17-1229. This case questions whether 102(a) prior art under the AIA is limited to publicly available prior art. Particularly, does a pre-filing sale of the invention count as “on sale” prior art where the sale was a private sale that did not publicly disclose the invention? Merits briefing should be complete in October with oral arguments likely held in November 2018.

Petitions for Writ of Certiorari Pending:

  1. Inequitable Conduct: Regeneron Pharmaceuticals, Inc. v. Merus N.V., No. 17-1616. The question presented is “Whether a patent right can be fully extinguished based on misconduct committed by the patentee’s counsel during federal district court litigation to enforce the patent right.”
  2. Validity – Indefiniteness: American Technical Ceramics Corp. v. Presidio Components, Inc., No. 17-1497 (Can a patent’s definiteness be proven based wholly upon post-filing evidence?)
  3. Damages – Enhanced Damages: Bombardier Recreational Products Inc., et al. v. Arctic Cat Inc., No. 17-1645 (Can treble damages for “willful infringement” be based upon a “should have known” standard?)
  4. Validity – Obviousness: Nichia Corporation, et al. v. Everlight Electronics Co., Ltd., et al., No. 17-1707 (Treating obviousness as a question of fact vs law).
  5. Validity – Obviousness: B/E Aerospace, Inc. v. C&D Zodiac, Inc., No. 17-1252 (Process of obviousness analysis — is there first a prima facie obviousness analysis followed by consideration of objective indicia of non-obviousness?)
  6. Procedure – Standing for AIA Trials: Return Mail, Inc. v. United States Postal Service, No. 17-1594 (Whether the government is a “person” who can petition to institute a CBM;  Does a 1498(a) action count as an infringement action?)
  7. Procedure – Standing of AIA Trials: RPX Corporation v. ChanBond LLC, No. 17-1686 (What is required for a petitioner to have standing to appeal an AIA Trial final decision?)
  8. Procedure – Impact of Factual Stipulation: Allergan Sales, LLC v. Sandoz, Inc., et al., No. 18-21 (may the court “ignore a factual stipulation”).
  9. Procedure – Federal Court Patent Jurisdiction: Alexsam, Inc. v. Wildcard Systems, Inc., et al., No. 17-1483 (Does a breach-of-patent-license lawsuit arise under the Federal Patent laws?)
  10. Procedure – Joinder of Co-Owner: Advanced Video Technologies LLC v. HTC Corporation, et al., No. 18-77 (When we have co-owners of a patent, can one co-owner use Fed. R. Civ. Pro. R. 19 to force joinder of the other co-owner in an infringement lawsuit?)
  11. Procedure – Timing of New Trial Motion: Promega Corporation v. Life Technologies Corporation, et al., No. 17-1669.
  12. Inventor Rights: Leitner-Wise v. LWRC International, LLC, et al., No. 18-52.  Leitner-Wise (the inventor) assigned his patent rights as part of a royalty agreement that have not been by the subsequent assignee.  May he now sue the assignee for infringement?
  13. Patent Eligibility: Integrated Technological Systems, Inc. v. First Internet Bank of Indiana, No. 17-1590 (“Does 35 U.S.C. § 282 allow for challenges to a patent’s validity based on patent eligibility under 35 U.S.C. § 101?”)
  14. AIA Trials and Appeals: Stambler v. Mastercard International Inc., No. 17-1140 (Can Congress revoke a patent owner’s right to have the validity of his patent determined by a jury trial before an Article III forum after his patent issues; and (2) whether Federal Circuit Rule 36 contravenes 35 U.S.C. § 144.).
  15. Infringement — Ensnarement as a Defense: Jang v. Boston Scientific Corporation, et al., No. 17-1332 (“Whether the Federal Circuit’s “ensnarement” defense to infringement [under the doctrine of equivalents] violates patent holders’ Seventh Amendment jury-trial rights.”)
  16. Prior Art – Effective Date of Prior Art: Ariosa Diagnostics Inc. v. Illumina Inc, No. 18-****.  (“If a patent discloses but does not claim an invention, does that disclosure qualify as prior art as of the date of the application in which it was first made, such that no one else may patent the same invention based on a later-filed application?”)