by Dennis Crouch

This is an important case in a few ways.  The biggest holding, I think, is the court’s statements that “method patents” cannot be used to “circumvent” the marking requirement of Section 287.  In addition, although not covered in depth here, the software claims were found patent eligible. 

Packet Intelligence LLC v. NetScout Systems, Inc. (Fed. Cir. 2020)

A jury sided with the patentee Packet Intelligence–finding its three patents willfully infringed by NetScout and the claims not-invalid.  The jury also awarded the patentee $5.75 million in a running royalty. US6665725; US6839751; US6954789. Judge Gilstrap topped the awarded with extra $2.8 million in enhanced damages and also denied a variety of post-verdict JMOL motions.  On appeal, the Federal Circuit has affirmed most aspects of the decision, but has reversed the pre-suit portion of the damage award.

Pre-Suit Damages and Patent Marking:

35 U.S.C. § 287(a) provides a limitation on damages in patent cases.  If authorized patented articles are being sold or imported, they should be marked as patented (with the patent numbers). If not marked, then the statute bars any damages from before “the infringer was notified of the infringement.”  The statute was amended as part of the AIA to allow for “virtual marking” that has now become common.

Although Packet Intelligence doesn’t make any products itself, it has licensed its patents, and the marking requirement extends to authorized (i.e., licensed) products made under the patent.

In Arctic Cat Inc. v. Bombardier Recreational Prods. Inc., 876 F.3d 1350 (Fed. Cir. 2017), the Federal Circuit endorsed a burden-shifting process associated with patent marking:

1. The infringer has the initial burden of production to provide evidence of unmarked products. “[T]his is a low bar” and one that would seemingly be confronted as summary judgment. Arctic Cat.
2. However, if the case gets to trial, the patentee then has the burden of proving that it complied with Section 287 (either showing that the products were marked or they didn’t need to be marked).

Arctic Cat was decided after the jury verdict in this case and the district court followed a different approach — placing the entire burden on the defendant of proving the existence of a licensed product.  The question of marking was given to the jury with instructions for the jury to award six-years of back damages unless NetScout “show[s] the existence of a … a licensed product that practices one or more claims of the ’789 patent.” (Note below, NetScout did not object to this portion of the verdict).

On appeal, the Federal Circuit reversed the pre-suit damage award — finding that NetScout had met its burden-of-production by identifying a product that arguably embodied the invention and that the patentee had not proven that the product “does not practice the []patent.”

“Method Patents” and Patent Marking:  The claims in two of the patents were all method claims — not subject to the marking requirement which focuses on “patented articles.”  However, on appeal, the Federal Circuit also found that no substantial evidence supported the jury verdict for back damages of those method claims.

Packet Intelligence cannot simply count sales of the software accused of infringing the ’789 patent as sales of the method claimed in the ’725 and ’751 patents. Instead, Packet Intelligence was required to produce evidence that the claimed method was actually used and hence infringed.

Apparently some evidence was produced of infringement-by-use, but it was all regarding internal-use, sales, and training — and there is “no evidence supporting damages caused by or resulting from these pre-suit activities.”  Instead, all of the damages calculations focused on sales.

The court went-on to hold that it would be improper to allow the patentee to “circumvent § 287” by capturing sales of an unmarked product with its method claims:

Packet Intelligence is barred from recovering damages for pre-suit sales of the [accused] products because it failed to comply with the marking requirement. It cannot circumvent § 287 and include those products in its royalty base simply by arguing that NetScout’s infringement of related method claims drove sales. Because neither the record nor the law supports Packet Intelligence’s recovery of pre-suit damages for any of the asserted patents, NetScout is entitled to judgment as a matter of law on this issue.

Id. In the end, the court found that the infringer was entitled to judgment as a matter of law cancelling the pre-suit damage award.  I would have thought that a new trial would be preferred because of the faulty jury instructions.

= = = =

The jury instructions were in error because they placed the burden on the infringer of proving no-marking rather than on the patentee of proving that it properly marked.  However, the infringer (NetScout) did not object to those particular instructions.  Failure to object normally means no appeal, unless there is a “plain error” in the instructions.  Fed. R. Civ. Pro. R. 51(d). In this case, the court did not find “plain error” but instead pursued an alternative approach on appeal.

According to the court, jury instructions do not become “law of the case” for evaluating sufficiency of the evidence. Rather, the appellate panel will not look to see whether the jury followed the instructions as presented but rather they should have been presented:

We are bound by the law, not by the jury charge, even if the charge was not objected to. Markman v. Westview Instruments, Inc., 52 F.3d 967, 975 n.5 (Fed. Cir. 1995) (en banc). And NetScout’s failure to object to the district court’s jury instruction does not render the instruction law of the case for evaluating the sufficiency of the evidence. Boyle v. United Techs. Corp., 487 U.S. 500, 514 (1988) (citing City of St. Louis v. Praprotnik, 485 U.S. 112, 120 (1988) (plurality opinion)).

I’ll note that on this point that the Federal Circuit cites its own law and not 5th Circuit as it did for other procedural matters in the case. One reason for this is that the Federal Circuit’s approach is not in the majority. See:

When a party fails to object to instructions in the trial court, those instructions normally become the law of the case, and appellate review is precluded unless plain or fundamental error can be found.

Corpus Juris Secundum, 89 C.J.S. Trial § 876 (2020). A number of sources disagree on this front.

=  == = =

Finally I’ll note that Judge Reyna dissented-in-part. He would have found the asserted claims ineligible under Section 101:

In my view, the claims are directed to the abstract idea of identifying data packets as belonging to “conversational flows” rather than discrete “connection flows.” While the claimed implementations of this idea may ultimately contain inventive concepts that save the claims, it was clear error for the district court to base its finding of inventiveness on the abstract idea itself and its attendant benefits.

Slip Op.  The majority disagreed — holding that “The claim solves a technological problem by identifying and refining a conversational flow such that different connection flows can be associated with each other and ultimately with an underlying application or protocol.”

A few days ago I posted a chart showing the number of patents granted per year.  That chart had a major error.  I had inadvertently included data from all issued patents (utility + design + plant + reissue) for the pre-2020 bars, but the 2020 forecast only included utility patents.  This made the current year forecast appear small in comparison. Sorry for temporarily leading folks astray.

Please find a corrected chart below (with 1-additional week of data). The chart still shows a forecast of 2020 ending behind 2019 in terms of sheer numbers, but only slightly.  After my post, folks at the PTO also told me that examiners have been working full steam through the COVID pandemic.

by Dennis Crouch

Thomas v. Iancu (Supreme Court 2020)

Doug Thomas is a silicon valley patent attorney at a small (and thriving) firm. Thomas is also a prolific inventor and entrepreneur. In April 2020, I wrote about the Federal Circuit’s opinion affirming a USPTO rejection of his claimed method of “notifying users having patents of subsequent publications that reference the patents.”  The April decision was one of four cases that he has brought to the Federal Circuit:

1. In re Thomas, Appeal No. 17-1100 (November 17, 2017) (Affirming anticipation rejection for Application No. 12/878,19–method for creating an electronic document using a word processing program).
2. In re Thomas, Appeal No. 17-1149 (December 13, 2017) (Affirming rejection for Application No. 13/099,285 without opinion– managing computer
   temperature by measuring temp and changing fan speed) [ThomasThermalTemp].
3. In re Thomas, Appeal No. 19-2053 (March 5, 2020) (Affirming 101 rejection for Application No. 11/253,299 without opinion–method for producing an online survey).
4. In re Thomas, Appeal No. 19-1957 (April 8, 2020) (Affirming 101 rejection of method for notifying users of publications that reference their patent). See, Dennis Crouch, Patenting the Patenting Process, Patently-O (April 8, 2020).

Thomas now filed a petition to the Supreme Court in the third case (the ‘299 application) that was rejected for lack of eligibility. Thomas writes the question as follow:

Contrary to Congress’ directives and this Court’s guidance, the United States Court of Appeals for the Federal Circuit (“Federal Circuit”) fabricated legal theories to unfairly discriminate against software innovations. The Federal Circuit incorrectly held that the Patent Trial and Appeal Board of the United States Patent and Trademark Office (“USPTO”) did not commit legal error when, under the guise of following the framework provided in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347, 2354 (2014) (so called “Alice/Mayo framework”), it (i) excessively abstracted the claims, and (ii) ignored claim limitations that were found to be nonobvious when concluding that the claims lacked an inventive concept. The questions presented are:

1. Whether software innovations, simply because they are implemented on a general purpose computer, are ineligible for patenting unless they claim some hardware limitations beyond a general purpose computer that provide an improvement to computer technology.

2. Whether, contrary to Diehr, claim limitations can be ignored, under the guise of the Mayo/Alice framework, when a claim is evaluated for presence of an inventive concept, even when the ignored claim limitations were found to be nonobviousess.

Thomas Petition. The basic thrust of the petition is that innovative engineering solutions do not require a new physical technological component — and that the claimed creation of online documents should be treated as eligible.

The petition goes on to argue that the abstract idea exception should be eliminated or severely curtailed:

The time has come for this Court to reevaluate the abstract idea exception to Section 101. This exception is entirely a judicial creation, having no basis in the text of the statute. The Court should undertake to implement Section 101’s broad and explicit language. Thus, where, as here, the patents claim a “new or useful process” or new and useful improvement to a process, the inventions should be eligible under Section 101 as Congress intended based on the language of that provision.

Id. The 15-step method claim at issue is listed below — directed to a method for producing an online survey:

20. A method for producing an on-line survey through interaction with a remote server from a network browser operating on a client computer associated with a requestor of the online survey, the network browser and the remote server capable of communicating via a data network, said method comprising:

(a) requesting initial survey remarks to be provided for the on-line survey;

(b) receiving, at the remote server, the initial survey remarks from the survey requestor;

(c) requesting identification of one or more participant groups from a plurality of available participant groups;

(d) receiving, at the remote server, selection from the survey requestor of one or more participants groups from the plurality of available participant groups;

(e) requesting at least one survey question;

(f) receiving, at the remote server, at least one survey question from the survey requestor;

(g) requesting an answer format for the at least one survey question;

(h) receiving, at the remote server, the answer format from the survey requestor;

(i) receiving content for at least one answer choice for the at least one survey question;

(j) repeating (e) – (i) for one or more additional survey questions;

(k) requesting subsequent survey remarks to be provided for the online survey;

(l) receiving, at the remote server, the subsequent survey remarks from the survey requestor; and

(m) producing, at the remote server, the on-line survey to include the initial survey remarks, the survey questions, the answer choices corresponding to the survey questions and the answer format utilizing the answer formats, and the subsequent survey remarks;

(n) providing and storing the on-line survey in an electronic manner to an Internet-based survey manager that hosts the on-line survey; and

(o) thereafter inviting a plurality of survey participants that are classified to be within the selected one or more participant groups to take the on-line survey by interaction with the Internet-based survey manager.

The application here claims priority back to a 1996 provisional application filed by Thomas. The provisional was followed by a non-provisional application that was prosecuted for 8 years before being abandoned following a Board decision affirming an obviousness rejection. (At the time, the process only had steps a-f). At that time, Thomas filed the present continuation and prosecution kept going for 15 more years.  Much of this time has been occupied by two appeals. The first appeal was actually successful with the examiner being reversed with the Board finding no prima facie case of obviousness. [11253299 First Board Decision].  However, by that time Alice had been released and the examiner added the new eligibility rejection.

by Dennis Crouch

ESIP Series 2, LLC v. Puzhen Life USA, LLC (Fed. Cir. 2020)

In its original decision, the Federal Circuit affirmed a PTAB IPR decision invalidating ESIP’s claimed essential-oil-diffuser and “method for introducing a scent into breathable air,” US9415130; IPR2017-02197.  ESIP then petitioned for rehearing en banc and the Federal Circuit has now denied that petition as well. [ESIP-petition][Original Fed.Cir. Decision]

In the petition, the patentee focuses on a family-member (continuation) patent application that had recently received a notice of allowance after the examiner expressly considered the same prior art being applied in the inter partes review.  (That application is now US9943621).  Thus, ESIP asked the following question:

Whether a Notice of Allowability in a child application of a patent in an Inter Partes Review proceeding, facing the same prior art relied upon in the Inter Partes Review, is objective evidence that must be properly considered by the Board.

During the IPR, the PTAB refused to give any weight to the examiner’s decision in a parallel case–reasoning that it should not give weight to a collateral decision since it gives no weight to the examiner’s original decision.

If the Office’s allowance of the very claims at issue does not render the challenged claims non-obvious, it is unclear why the Office’s allowance of merely similar claims would do so.

PTAB Final Decision. On appeal, the Federal Circuit panel decision did not address the issue even though it had been fully briefed. Now, the Federal Circuit has also refused to consider the issue via rehearing or en banc.

So, the question remains: What deference or consideration should be given to a contemporary examiner determination involving the same patentee and the same prior art? 

The issue here is similar to what the PTAB has been working through over the past five years regarding prior decisions by Article III courts, just closer to home.

Question: When you first talk with a new potential client, do you ask about potential bar dates?

Eakin Enterprises, Inc. v. Stratton Ballew, PLLC, 2020 Wash. App. LEXIS 691 (Wash. Ct. App. March 24, 2020)

John Eaken publicly displayed his cattle-foot-bath invention and then waited more than a year before filing a patent application.  During that time, Eaken had called-up a patent attorney (Svendsen, then of Stratton Ballew) who spoke to Eaken before running a conflict check with the firm.  During the call, Svendsen did not ask the status of invention development, or whether it had been on public use or display (or would be in the near future).  Eaken then hired Svendsen

Eaken later learned that his public displays would limit his patent protection and then sued the firm for malpractice.  The district court, however dismissed the case–holding that there was no duty-to-warn until the the creation of an attorney-client relationship and that the initial screening call did not create such a relationship.

On appeal, the Washington Court of Appeals has reversed — asking the lower court to delve deeper into whether an attorney-client relationship had been created.  The reversal – I believe – was primarily based upon one answer in Svendsen’s deposition where he stated that the client considered their relationship to have started in the fall of 2006:

Q When do you believe the attorney-client relationship began for the effort to get a patent for the cattle foot-bath system?

A I would say that that would have been in the mind of John Eakin and — and is a big part of that. And I’m sure he considered this in the fall here of 2006. That that—that relationship was—a formal relationship had started.

Slip Op.

One of the judges wrote in dissent — arguing that Eaken failed his burden of producing sufficient evidence to prove the existence of an attorney-client-relationship.

Note about the invention: The cattle-foot-bath seems all spa-like when you hear the name, but actually it is a mechanism for coating the feet with chemical fungicide (concentrated medicinal agent).

by Dennis Crouch

Toyota Motor Corp. v. Reactive Surfaces Ltd., LLP (Fed. Cir. 2020) (nonprecedential)

Toyota’s US8394618 covers a method of removing fingerprints using a lipase “capable of enzymatically degrading a component of the fingerprint” by vaporization.

Reactive had previously attempted to trigger an interference proceeding at the PTO and then unsuccessfully sued in Federal Court to have the patent rendered unenforceable (or to transfer ownership rights).  Those approaches failed.

This inter partes review is what worked.  After granting the IPR petition, the Board conducted a trial and then issued a Final Written Decision that the challenged claims were unpatentable as obvious. On appeal, the Federal Circuit affirmed with the following notes:

Analogous arts: The Board relied upon a scientific article titled “Chemical characterization of fingerprints from adults and children” in part of its obviousness analysis. On appeal, Toyota argued that the article should not have been available for obviousness because it was not “analogous art” to the invention.

Analogous prior art includes art from the same field as the invention at issue. But it also encompasses references from other fields if such reference is “reasonably pertinent to the particular problem with which the inventor is involved.”

Slip Op. Here, the court found substantial evidence to support the Board’s finding that the scientific article would be a “natural starting point” for an inventor looking to vaporize finger prints. (The test is for substantial evidence, because analogous art is a factual finding given deference on appeal).

What the combination inherently teaches:  The method claim at issue includes three steps:

1. provide a substrate
2. associate a lipase with the substrate (where the lipase is “capable of enzymatically degrading a component of a fingerprint”)
3. facilitate “the removal of a fingerprint by vaporization from the lipase associated substrate … when contacted by a fingerprint.”

A combination of references provided by the Board taught the first two steps, but did not expressly teach the third step.  The Board concluded that step three is simply an inherent result of the first two steps: “any combination of prior art that teaches the first two limitations of the challenged claims inherently would teach the [facilitating step]. . . . [A] surface-associated lipase . . . capable of degrading lipids . . . inherently will facilitate the removal of lipid-containing stains, such as fingerprints, by vaporization from the surface.”

While prior art may include a variety of inherent teachings, the Federal Circuit requires evidence that “the limitation at issue necessarily must be present, or the natural result of the combination of elements explicitly disclosed by the prior art.”  PAR Pharm (Fed. Cir. 2014).  Because of this “exacting” standard, inherency is typically difficult for an Examiner to show during ex parte examination. However, during an IPR the patent challenger is able to marshal expert testimony that connects the dots.  Here, the petitioner’s expert explained the connection and inherent result.  That was enough for the Board and the Federal Circuit on appeal.

Obviousness affirmed.

Woops – The original post had a big error on the chart – I’ve replaced the chart with one that is accurate.

What is happening here – Although the PTO was set to continue its trend from 2019, COVID-19 has stalled everything.  Patent examination is going slower, and patent applicants are also delaying prosecution.  That said, although 2020 will not be an all-time-high, it is likely to be in the top-5 years in terms of number of patents issued.

by Dennis Crouch

Primbas, et al. v. Iancu (Supreme Court 2020)

This new petition for certiorari asks the following question:

Whether recitation in a patent claim of a combination of steps determined to be inventive over an idea is “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [idea] itself.”

Petition, quoting Alice.

Christopher Primbas and his co-inventor Philip Stamataky are seeking to patent their method of eliminating coins from cash transactions. [claim 1 is below].  The figures below attempt to highlight the invention — instead of receiving coins from a transaction, you receive a merchant credit.

The examiner actually allowed the claims back in 2014 with a notice of allowance just before the Supreme Court’s decision in Alice. The applicant paid the issue fee, but the PTO withdrew the application from issue.  The examiner then issued a new rejection — finding the claims ineligible as directed to an abstract idea under Alice. That decision was affirmed by the PTAB and by the Federal Circuit (R.36 judgment without opinion).  This setup leads folks to fight hard — they were given real hope via notice of allowance and that was pulled-out from under them.

The basic

Here is the claim now on appeal:

1. A method involving a retail cash transaction in which a customer uses physical currency to pay a merchant for goods or services received, in which an amount between 1¢ and 99¢ in coin change is due to the customer and used as payment for credit purchased, the method comprising the steps of:

the customer tendering cash to the merchant as payment for the goods or services and there being an amount of coin change due back to the customer, which amount the customer does not receive in the form of physical coins but rather in the form of a cash purchase of credit equal to the amount of coin change otherwise due;

in a different financial transaction than the cash-tender transaction, debiting, using an electronically readable device physically present at the customer-merchant transaction and in electronic communication with an electronic processor and a financial network, one or more accounts associated with the customer in an amount equal to a tracking fee, which is equal to the entire amount of the cash purchase of credit; and

subsequently crediting to the one or more accounts associated with the customer the sum of both the cash purchase of credit and the tracking fee;

wherein the debiting and crediting steps are performed electronically and the tracking fee reflects both the cash purchase of credit and its transfer into the one or more customer accounts.

See Petition Appendix.  The petition argues that the claim here recites a patent-eligible “technical solution” that the patent office has expressly admitted is a novel solution to a long-considered problem.

The petition particularly point to its claims that require debiting with a e-readable device (credit card) and communication with a financial network.  The petitioner argues that a benefit of the solution here is that it works with existing credit card networks and thus does not need an expensive merchant retrofit. “[T]he ability to use a conventional card reader and an existing credit card network are advantages of this technical solution, as the use of conventional electronic hardware and card networks that are already in use at most point of sale registers allows for use of this solution by retailers without purchasing or installing any new hardware.”

Jeremy Doerre filed the petition in this case and also filed Judge Rader’s recent amicus brief in Chamberlain Group.

by Dennis Crouch

Uniloc 2017 LLC v. Apple, Inc. and the Electronic Frontier Foundation (EFF) (Fed. Cir. 2020)

This is a case about open courts and the public nature of our civil justice system. During litigation, Uniloc designated some amount of material as “highly confidential” as defined by a protective order entered by N.D. Cal. Judge Alsup.  Apple then referenced the material in a motion to dismiss as did Uniloc in its brief-in-opposition. The parties filed motions to seal the material with the district court–with Uniloc indicating that the documents “contain sensitive, confidential and proprietary information related to financial data, licensing terms and business plans with respect to various Uniloc entities … disclosure of this extremely sensitive information would create a substantial risk of serious harm to the Uniloc entities.”

EFF then intervened into the case requesting the documents be unsealed (after first asking the parties to un-seal). The sealed information related to Uniloc’s ownership of its patents.  Because Uniloc was in the process of threatening and suing a dozens of of entities, that information was especially of-interest to the public.

The district court agreed with EFF, concluding that the “generalized assertions” of secrecy and harm were insufficient to “outweigh the public’s right” to know about the patent ownership.  The district court also noted that the sealed portions were “astonishing[ly]” broad – even including quoted portions of Federal Circuit decisions. Uniloc then submitted a revised motion to seal, which the district court rejected — holding that Uniloc should have done it right the first time but instead began its case by “over-classifying and then trying to get away with [it].”

The Federal Circuit has taken-up the interlocutory appeal under the non-statutory Collateral Order Doctrine:

To fall within the collateral order doctrine, “an order must at a minimum satisfy three conditions: It must [1] ‘conclusively determine the disputed question,’ [2] ‘resolve an important issue completely separate from the merits of the action,’ and [3] ‘be effectively unreviewable on appeal from a final judgment.’” Richardson-Merrell, Inc. v. Koller, 472 U.S. 424 (1985). . . . These requirements are met here.

Slip Op.

On the merits the Federal Circuit affirmed the original no-seal order but then vacated to consider interests of third-party licensees who had been promised confidentiality. In its decision, the court contrasted a prior decision in Apple v. Samsung.

Our decision in Apple I [ordering partial sealing] is not to the contrary. There, we concluded that the district court abused its discretion in refusing to redact certain product-specific financial information, such as profit, cost, and margin data, as well as certain proprietary market research reports. Importantly, however, the parties in that case supported the need for such redactions with detailed declarations describing both the competitive injury that would result if such information were disclosed and the significant efforts they had made to keep their product-specific financial information confidential. Furthermore, because the documents in question were not “introduced into evidence . . . the financial information at issue was not considered by the jury and [was] not essential to the public’s understanding of the jury’s damages award.”

Apple Inc. v. Samsung Elecs. Co., 727 F.3d 1214 (Fed. Cir. 2013).

The court went on:

In denying Uniloc’s sweeping motion to seal, the district court sent a strong message that litigants should submit narrow, well-supported sealing requests in the first instance, thereby obviating the need for judicial intervention. Because the court “took seriously the presumption of public access and did so in accord with precedent from the Supreme Court and [the Ninth Circuit],” Kamakana, we conclude that there was no abuse of discretion in its decision to deny Uniloc’s requests to seal its purportedly confidential information and that of its related entities.

Slip Op. With regards to the refusal for reconsideration, the court found that the local rules put the parties sufficiently on notice of what was required and so there was no compelling reason to give Uniloc a re-do.

Regarding third-party licensees, Several licensees submitted declarations to the court indicating that they wanted their material kept secret as was required by contract and separate court order (from prior litigation).  On remand, the district court should consider whether that third-party information includes any information “protectable as a trade secret or otherwise entitled to protection under the law” and thst should be redacted from public view.

= = = =

An important aspect of the decision is that it asks district courts to balance the sealing factors on a case-by-case basis.  For each portion being redacted, the court should consider both any “compelling reasons” for redacting from public view against the public’s interest in viewing the particular material.  In this process, the court should recognize that the party or parties asking for sealing have the burden of persuasion.

The court also spells out the process: (1) make sure that the party/parties asking for redaction have presented compelling reasons for redaction supported by evidence.  If not, then no redaction.  (2) If compelling reasons have been presented, then also consider the public’s interest in viewing the particular material. One important implicit point here is that even if there are compelling reasons to seal, that may still be outweighed by the public interest.  Here, the district court considered both the compelling reasons and the public’s interest.  On appeal, the Federal Circuit stopped at step-1 and held that Uniloc failed to present a compelling reason to seal.  Thus, the appellate panel did not “address” whether the lower court’s public interest findings were correct. Slip Op. at FN 6.

One note – the Federal Circuit attempted to follow 9th Circuit law in this case and so the approach will be different in different venues.

by Dennis Crouch

Fitbit, Inc. v. Valencell, Inc. (Fed. Cir. 2020)

In this decision, the Federal Circuit makes two important statements going forward relating to inter partes review proceedings:

• A joined party has full rights to appeal a PTAB final decision – even as to claims or grounds not raised by the joined party.
• During an IPR, the PTAB must correct errors in a patent when a certificate of correction would be appropriate and when requested by the parties.  (When you read the case, you’ll note that the court doesn’t quite say this, but almost.)

Valencell’s US8923941 covers methods of generating data relating to blood oxygen level, heart rate, and other physical activity.  The claimed method includes two primary steps: (1) sensing; and (2) processing.  The sensing step requires a single device “attached” to a user that includes a motin sensor (accelerometer) and a pulse-oximeter (photoplethysmography – PPG).  The processing step creates a signal that includes heart rate, respiration rate, and a plurality of physical activity parameters.

This setup is now common with many millions of such devices being sold across the country.  According to its court filings, Valencell repeatedly approached various major players–including Fitbit and Apple–looking for partnership & licensing opportunities. The companies refused and Valencell eventually filed a set of infringement lawsuits back in 2016.  Apple & Fitbit then petitioned for inter partes review.

This case is partically an IPR procedure case and so the following timeline is somewhat important:

• Apple filed its IPR petition on claims 1-13. The Board partially granted the petition in part — only as to claims 1, 2, and 6-13.
• Fitbit then filed its IPR petition on claims 1, 2, and 6-13 and moved for joinder with Apple’s case. The Board granted that motion.
• The Supreme Court then issued SAS — barring the practice of partial institution.  As such, the Board issued a new institution decision adding all of the challenged claims (3-5).
• The Board then found the originally granted claims to be unpatentable, but found no problem with claims 3-5 (“not unpatentable.”)

Apple did not appeal, but Fitbit has appealed — arguing that claims 3-5 are also invalid.

Joinder and Right of Appeal: The first question in the case is whether Fitbit has a right to appeal regarding claims that it did not challenge in the first place.  Here, the Federal Circuit says yes they do get to appeal — holding that a joined party’s rights apply “to the entirety of the proceedings and includes the right of appeal.” The court here was primarily guided by the right-of-appeal statute that states plainly “Any party to the inter partes review shall have the right to be a party to the appeal.” 35 U.S.C. § 319.  And, the joinder provision indicates that the new entity is “join[ed] as a party.” 35 U.S.C. § 315(c).

On the merits of obviousness: I discussed the general scope of claim 1 above.  Claims 3-5 are all dependent and add a few additional limitations:

• Claim 3 – the processed data is usable with an application specific interface (abbreviated API)
• Claim 4 – the “the application” generates statistical relationships between the various parameters. [Note – there is no antecedent basis for “the application”]
• Claim 5 – adds further definition to the stats developed, including “Bland-Altman plots.”

Do the Analysis: As to claim 3, the parties had offered competing constructions of the term application-specific-interface.  The Board chose the patentee’s narrower construction and ruled the claim not-proven-unpatentable. On appeal, the Federal Circuit ruled that the Board should have completed its analysis and walked through whether the claim was obvious under the narrow construction.

Lack of Antecedent Basis: The limitations of claims 4 & 5 lack antecedent basis. In particular, the claims appear to add limitations to “the application” but that portion of the invention is not previously claimed.   The Board didn’t get into its obviousness analysis because of this technical issue with the claims:

Although we agree that the recitation of the term “the application” in claim 4 lacks antecedent basis in claim 1, we declined to speculate as to the intended meaning of the term.   Although Petitioner and Patent Owner now seem to agree on the nature of the error in claims 4 and 5 [citing briefs], we find that the nature of the error in claims 4 and 5 is subject to reasonable debate in view of the language of claims 1 and 3–5 and/or that the prosecution history does not demonstrate a single interpretation of the claims.

Board Op.

It turns out that during prosecution, the patent applicant cancelled a dependent claim discussed the Application, and the stray reference was not caught by either the attorney nor the examiner.

On appeal, the Federal Circuit holds that the Board should have fixed the error here.

The preferable agency action is to seek to serve the agency’s assignment under the America Invents Act, and to resolve the merits of patentability. Although the Board does not discuss its authority to correct errors, there is foundation for such authority in the America Invents Act, which assured that the Board has authority to amend claims of issued patents. See 35 U.S.C. § 316(d). . . . The concept of error correction is not new to the Agency, which is authorized to issue Certificates of Correction.

In particular, all the parties agreed that the error was inadvertent and could be corrected by the Board.

Although the Board states that the intended meaning of the claims is “subject to reasonable debate,” we perceive no debate. Rather, the parties to this proceeding agree as to the error and its correction. The Board erred in declining to accept the parties’ uniform position and correct the error that claim 4 depend from claim 3. With this correction, the rejection of claims 4 and 5 for absence of antecedent basis for “the application” disappears.

Slip Op. On remand, the Board will correct the error and actually judge the obviousness of these three remaining claims.

by Dennis Crouch

Regeneron Pharmaceuticals Inc. v Kymab Ltd., [2020] UKSC 27.

This important patent decision comes from the UK Supreme with a holding that Regeneron’s patents are invalid for insufficiency of the disclosure.  The insufficiency doctrine in the UK is parallel to US enablement law.

In the U.S., the courts have limited the enablement doctrine – especially considering McRO, Inc. v. Bandai Namco Games Am. Inc., 959 F.3d 1091 (Fed. Cir. 2020) (claims are valid absent identification of “concrete” and “particular” embodiment covered by the claim but not enabled).  Of course, the US now has a powerful eligibility doctrine that overlaps as well.

The Regeneron patents cover transgenic mice that produce human immunoglobulin used to create drugs.

1. A transgenic mouse that produces hybrid antibodies containing human variable regions and mouse constant regions, wherein said mouse comprises

an in situ replacement of mouse VDJ regions with human VDJ regions at a murine chromosomal immunoglobulin heavy chain locus and

an in situ replacement of mouse VJ regions with human VJ regions at a murine chromosomal immunoglobulin light chain locus.

EP2264163 (EP1360287 also asserted).  If I understand this correctly, mice were first generically modified to contain DNA sequences for creating the human antibody.  However, those mice died easily and so the researchers added back some amount of murine (mice) DNA.  With just the right mix, the mice lived well and also produced antibodies that could be given to humans without triggering a human anti-mouse antibody response (HUMA).

UK statutory law requires:

The specification of an application shall disclose the invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the art.

14(3) of the UK Patents Act 1977 (Replicating the EPC Article 83). In the UK and Europe, courts have also used the undue-experimentation test and have also considered whether a skilled person would need create a follow-on invention in order to practice the invention.

Typically a claimed “range” in patent law is thought of as a numerical spread with the claim covering all potential embodiments in-between.  The full-scope of a claimed range must be enabled, and this is a common attack-point for defendants.  Here, the claims do not specify such a range, but the defendant was able to characterize the claimed replacement regions as constituting a wide swath of potential transgenic mice — thus a range (“range of products”).  The Supreme Court agreed here that it is the full scope of claimed “range of products” that must be enabled.

In the case, the trial court sided with the defendants — holding that “the teaching in the patent did not enable any type of mouse within the range to be made, let alone mice across the whole of the relevant range.” (quoting here from the Supreme Court opinion).  The appellate court disagreed — finding that the claim did enable something within the claimed scope — and that the disclosure was sufficient because the invention was inventive and groundbreaking.

Finally, at the Supreme Court, the Lord Justices followed a third path – that ultimately resulted in the claims being invalid. Like the appellate court, the Supreme Court agreed that some embodiments covered by the claim were enabled.  However, the court ruled that “some embodiments ” was not enough.

Patentees are free to choose how widely to frame the range of products for which they claim protection. But they need to ensure that they make no broader claim than is enabled by their disclosure.

A claim which seeks to protect products which cannot be made by the skilled person using the disclosure in the patent will, subject to de minimis or wholly irrelevant exceptions [such as the length of a mouse’s tail], be bound to exceed the contribution to the art made by the patent, measured as it must be at the priority date.

Enablement across the scope of a product claim is not established merely by showing that all products within the relevant range will, if and when they can be made, deliver the same general benefit intended to be generated by the invention, regardless how valuable and ground-breaking that invention may prove to be.

Id. In applying these principles to the Regeneron patents, the court found that the wide-range of potential products claimed were not sufficiently disclosed. In particular, the claimed range of products included transgenic mice with long segments of the human variable region gene locus.  But, the specification only taught how to do this with short-segments.  Invalid.