Design Patent Term: 3½, 7, 14, and now 15 years?

New design patents have a term of 15 years from patent issuance — that is a 1 year bump from the 14 year term familiar to many patent attorneys.  The straight 14-year term took hold in 1982.  In the years leading up to 1982, most design patents also had a 14 year term, but applicants had the option of instead obtaining a term of 7 years or 3½ years at a lower fee.  In 1980, all design patents had an application fee of $20, and the issuance fee was $10, $20, or $30, depending upon whether the applicant wanted 3½, 7, or 14 years of patent term.  In 1930, the prices were $10, $15, and $20.

The chart below is a bit hard to read, but it basically shows the percentage of design patents associated with each of the three potential patent terms. The basic result is that in the 1910s, folks were obtaining all three sizes at roughly equivalent rates; By 1940, the short 3½ year term had become most popular; Then, by the 1970s the overwhelming majority of applicants were paying the extra $10 for 14 years.

This is part of a larger project that I’m working through on design patents, and I’ll be able to fill-in the gaps of the chart at a later date.  I’m downloading the TIFF images for these patents; running through OCR  software and then parsing that text output.  It is a bit of a process, and I probably need a multithreaded approach. 

The original design patent Act of 1840 included a 7 year term. I believe it was the the 1861 Act that added the spread term, and included a respective cost of  $10, $15, and $30 with an optional seven additional years.

AIA 10 year Survey Results

by Dennis Crouch

The patent system has seen tremendous change over the past decade.  A large part of the transformation stemmed from the Leahy-Smith America Invents Act of 2011 that was enacted ten years ago in September 2011.  Earlier this week, I conducted a quick survey of Patently-O readers asking for their thoughts on the impact of the AIA, which has repeatedly been heralded as the largest change to the U.S. patent system since the Patent Act of 1952.  We have about 600 responses.

Most of the survey question used a modified Likert Scale and asked about the importance of various statutory changes found within the AIA.  In order to run some statistics, I transformed the qualitative scale into a linear quantitative scale ranging from 1 (not important) to 5 (very important).

It is not surprising that creation of the Inter Partes Review (IPR) system is seen as the largest change to the system. IPRs have been used to cancel the claims of thousands of patents as obvious — only a small percentage of those would have been found obvious by a jury.   Although almost everyone agreed that IPRs were most important, Patent Attorneys and Patent Agents differed somewhat on other issues, with agents seeing changes to Section 102 as relatively more important to other issues. This included eliminating the date of invention as relevant to patentability and narrowing the pre-filing grace period.  On the other hand, Patent Attorneys gave more weight to PGR proceedings. Patent Office employees were the only ones to say that the addition of satellite offices was important.

The survey included an open-ended response block asking “What else do you have to say about the impact of the AIA?” About 1/3 of responses included these additional thoughts.  My survey tool (Qualtrics) used semantic analysis on these responses and reports that the sentiment expressed was most often generally either “negative” or “very negative.”   (65% Negative or Very Negative; 25% Mixed; 10% Positive or Very Positive).

Some comments focused on the AIA coupled with Eligibility Decisions have “decimated the patent system”; “Devalued IP”; and “greatly reduced the value of U.S. patents” all “to the benefit of large enterprises.” ” A real mess.”

Folks also mentioned the prior user defense; false marking; reducing your own secret prior art; classification system; The new declaration/oath filings was quite costly for applicants.  I’ll publish a more thorough report in the coming days.

Op Ed: Reflections on the American Invents Act on its Tenth Year Anniversary

by Hon. Michelle Lee. Lee was the Undersecretary of Commerce and Director of the United States Patent and Trademark Office (2015-2017).

The America Invents Act (AIA), which passed on September 16, 2011, brought about some of the most significant changes to our patent system in over 50 years. The Act included an assortment of reforms from a transition to first inventor to file in the United States, the establishment of processes for third party challenges to granted patents at the United States Patent and Trademark Office (USPTO), the creation of the first regional offices of the USPTO, providing inventors the option for accelerated patent examination, and more.

Many of the AIA reforms strengthened our patent system. For example, as a former Director of the USPTO, I cannot overstate the importance of the Agency’s ability to set its own fees and create an operating reserve. This enabled the USPTO to get through periods of government shutdown and to invest in longer-term initiatives such as much-needed information technology upgrades, hire more examiners to reduce the patent application backlog and provide additional training for examiners. The transition to a first inventor to file system was needed to harmonize the U.S. with the rest of the world. The establishment of the first regional offices of the USPTO made our intellectual property system more accessible to all, and of course, prioritized examination, allowing inventors to accelerate the examination of certain patents, makes business sense.

After passage by Congress, the attention turned to the USPTO, and its massive effort to implement the AIA. Then-USPTO Director David Kappos and his dedicated team at the Agency worked hard to implement the AIA in view of numerous proposed rules, soliciting input from stakeholders along the way. By 2013, the USPTO had completed substantially most of the initial AIA rulemaking, including for the post-patent grant review proceedings.

In 2015, I became Director of the USPTO, and the AIA changes had been in place for barely a few years. Leading the USPTO is a great honor that comes with a tremendous responsibility. As a result, I undertook as a priority to assess how these fledgling and complex reforms were going, and to make improvements where needed. Under my leadership, the USPTO continued to solicit feedback on the AIA reforms via numerous requests for comments to proposed rules and stakeholder engagements. This resulted in the implementation of multiple changes, including to the claim construction standard of soon-to-expire patents to be consistent with the (Phillips) standard used in district court litigation, submission of new testimonial evidence with a patent owner’s preliminary response, the addition of a Federal Rule of Civil Procedure 11-type certifications requiring a duty of candor in papers filed in AIA trials to prevent misuse of the proceedings, and more.

As anyone familiar with rulemaking knows, this process takes time, and that is the way it should be, as agency rules (like legislation) have significant and broad impact on all parts of our society. New rules (and laws) should be promulgated deliberately and with all due consideration of input from all stakeholders, driven by data, in compliance with the law, and with compromise to accommodate the often-times disparate and competing needs.

After the patent community had a reasonable period of time to adjust to and experience the many AIA reforms, we began hearing feedback about additional improvements needed to the AIA trials including, for example, in the areas of motions to amend, the claim construction standard and multiple petitions filed at or around the same time on a single patent. As expected for such complex policy and procedural matters, there was often little consensus on whether and what changes were needed. Given this, my team and I at the USPTO believed it important to gather data and broad stakeholder input on these and other issues raised. As a result of these efforts, we came up with a number of proposed changes and drafted proposed rules for comment. For instance, on the claim construction standard, we recognized the awkwardness and inconsistency of having the validity of patent claims construed under one standard in AIA trials, yet a different standard for patent infringement analysis in federal district court, especially when the petitioner in the USPTO proceeding was often the accused infringer in district court. To provide greater fairness and consistency, I thought it important to change the claim construction standard for all patents in AIA trials to the Phillips standard used in federal district courts.

Signing of the DTSA

Signing of the DTSA

By this time, it was the fall of 2016 with an election pending. As was customary, the then-current administration asked the USPTO to stop all significant rulemaking to allow the next administration the courtesy of defining and implementing its priorities. So, we had to pull the package of proposed reforms in the midst of being prepared for publication. While not published during my tenure, these proposals, studies and data put the Agency and my successor, former USPTO Director Andrei Iancu, in a better position to implement needed reforms more quickly. I was pleased to see one of the first reforms implemented in the next administration was changing the claim construction standard in AIA trials to that used in district court for all patents.

As I reflect on my tenure on this 10th anniversary of the AIA, the talented USPTO team and I accomplished much, including the establishment of regional offices to better support innovators (especially individual inventors and small businesses), achieving the passage of the Defend Trade Secrets Act of 2016, making initial improvements to the post-patent grant review proceedings while laying the foundation for more, numerous quality initiatives to ensure the issuance of stronger, more reliable patent rights, launching an open data initiative to provide access to the USPTO’s rich data, bringing artificial intelligence to the Agency to improve its operations, and spearheading the All-In-STEM initiative and other efforts to ensure our intellectual property system is more widely accessible to all.

Few people have had the privilege and responsibility of being the steward of this important Agency so critical to American innovation. As we await the nomination of a new USPTO Director, it is important to keep in mind the job of a USPTO Director is to keep a steady hand on the tiller and to make improvements thoughtfully and deliberately, with careful consideration of the law, stakeholder input and the data, recognizing that with complex policies and procedures and competing stakeholder interests, consensus is often difficult to achieve.

Former USPTO Directors Dickinson, Kappos, and Iancu, each of whom contributed to the enactment and/or implementation of the AIA, have all been dedicated leaders who did what they thought best when faced with the many challenges of their tenure. Just as I benefited from the foundations laid and works-in-progress achieved by my predecessors, the next Director will benefit from the cumulative efforts and learnings of all prior Directors. Our intellectual property system, like our innovations, is constantly evolving. Therefore, all stakeholders must constantly work together to achieve a balanced intellectual property system for the benefit of our inventors, economy and society. That is why I chose the dynamic and impactful practice of intellectual property law, and I wouldn’t have it any other way.

“The views expressed above are solely the author’s and do not represent the views of any organization with which Ms. Lee may be affiliated.”  Lee is vice president at Amazon Web Services and spent a decade at Google leading their patent team prior to her term as USPTO Director.

AIA – 10 Year Anniversary

Sept 16, 2021 is the 10 year anniversary of enactment of the Leahy-Smith America Invents Act of 2011.  I’ve got a quick anonymous survey below (5 minutes) on the impact.

* My general policy on anonymous comments and anonymous survey responses is that I endeavor to avoid any disclosure of personally identifiable information to third parties absent court order (which has never happened).

Link to Survey: https://missouri.qualtrics.com/jfe/form/SV_0qSs6aKqNZSZj2S

Or complete the survey below:

Guest Post by Prof. Contreras: HTC v. Ericsson – Ladies and Gentlemen, The Fifth Circuit Doesn’t Know What FRAND Means Either

Guest Post by Prof. Jorge Contreras of the University of Utah S.J. Quinney School of Law.  Disclosure statement: in 2019, the author served as an expert for HTC in an unrelated, non-U.S. case.

In August 31, 2021, the Court of Appeals for the Fifth Circuit ruled in HTC Corp. v. Telefonaktiebolaget LM Ericsson, 2021 U.S. App. LEXIS 26250, __ F.4th __ (Fed. Cir. 2021), affirming the judgment of the District Court for the Eastern District of Texas, 2019 U.S. Dist. LEXIS 170087 (E.D. Tex. 2019).  The decision is significant as it is the first by the Fifth Circuit to address the licensing of standards-essential patents and the meaning of “fair, reasonable and nondiscriminatory” (FRAND) licensing terms, adding to the growing body of jurisprudence already issued by the Third, Ninth and Federal Circuits in this area.  It is also significant because the court addresses several issues that have become increasingly important in standards-related litigation including (1) the apportionment of value among components of a multi-component product, (2) the proper choice of law for FRAND disputes, and (3) the interpretation of the “nondiscrimination” prong of the FRAND commitment.  These issues all arose in connection with HTC’s challenge to District Judge Rodney Gilstrap’s jury instructions regarding FRAND. His vague charge appears to reflect the general uncertainty in this area, not only of the Texas district court, but of the entire judicial system. One can almost hear the weariness permeating the final sentence of Judge Gilstrap’s charge to an admittedly perplexed jury: “Ladies and gentlemen, there is no fixed or required methodology for setting or calculating the terms of a FRAND license rate.”

Background

Though it was never a household name in the U.S., HTC — founded in Taiwan in 1997 — was an early smartphone pioneer.  In 2005 HTC released the world’s first Windows 3G smartphone (the clamshell HTC Universal) and followed in 2008 with the first smartphone running Google’s Android operating system (branded as the T-Mobile G1).  Most significantly, HTC was the developer and manufacturer of Google’s Nexus One Android phone, which was released in 2010.

The 2/3/4/5G wireless communication standards published by the European Telecommunications Standards Institute (ETSI) are incorporated into almost all smartphones (and many other devices) that have been sold over the past two decades.  These standards are covered by tens of thousands of patents around the world (standards-essential patents or SEPs), a respectable number of which are held by Swedish equipment manufacturer Ericsson.  Most standards-development organizations (SDOs) today recognize the potential leverage that the holders of SEPs may hold over manufacturers of standardized products. FRAND licensing commitments are designed to alleviate the risk that SEP holders will prevent broad adoption of a standard by asserting their patents against manufacturers of standardized products. As explained by the Fifth Circuit, “To combat the potential for anticompetitive behavior, standard setting organizations require standard-essential patent holders to commit to licensing their patents on … FRAND terms” (slip op. p. 4). Thus, under ETSI’s intellectual property policy, which dates back to 1993, Ericsson and other holders of patents that cover ETSI’s standards agree to grant manufacturers licenses on FRAND terms.

Ericsson and HTC entered into three such licensing agreements in 2003, 2008 and 2014. Under the 2014 agreement, HTC paid Ericsson a lump sum of $75 million for a 2-year license to use Ericsson’s 2/3/4G SEPs. In 2016, HTC and Ericsson began negotiations to renew the license. Ericsson proposed a rate of $2.50 per 4G device, which was based on the lump sum paid by HTC in 2014 divided by the number of phones sold by HTC over the license period. HTC did not accept this offer and instead conducted an assessment of the value of Ericsson’s SEPs. It made a counteroffer of $0.10 per device in March 2017.  Negotiations stalled, and in April, HTC brought an action in the Eastern District of Texas seeking a declaration that Ericsson had breached its obligation to offer HTC a license on FRAND terms.

The trial focused largely on the proper method for determining a FRAND royalty for Ericsson’s SEPs.  Because the actual FRAND royalty or royalty range in a given case is generally viewed as a question of fact, the case was tried a jury, and each party submitted a set of draft jury instructions to the court. As summarized by the Fifth Circuit, “HTC proposed highly detailed instructions to help the jury interpret FRAND, but Ericsson objected to most of these instructions and proposed a more general FRAND instruction. The district court considered the two proposals, but ultimately gave the following instruction to the jury: ‘Whether or not a license is FRAND will depend upon the totality of the particular facts and circumstances existing during the negotiations and leading up to the license. Ladies and gentlemen, there is no fixed or required methodology for setting or calculating the terms of a FRAND license rate.’ (slip op. at 6). The jury returned a verdict “finding that HTC had not proven that Ericsson had breached its FRAND duties and that both parties had breached their obligations to negotiate in good faith.” (slip op. at 9]. On the basis of the jury verdict, Ericsson moved for declaratory judgment that, in its dealings with HTC, it complied with its FRAND obligations.  The court granted Ericsson’s motion.

HTC appealed the district court’s ruling on three grounds:  it failed to adopt three of HTC’s proposed jury instructions, it incorrectly concluded that Ericsson’s licensing offer complied with its FRAND commitment, and it improperly excluded expert testimony as hearsay.  The Fifth Circuit, in an opinion authored by Judge Jennifer Walker Elrod, affirmed the lower court’s ruling on all three grounds.  Judge Stephen A. Higginson entered a separate concurring opinion, arguing that the district court erred by omitting HTC’s apportionment jury instruction, but this omission did not rise to the level of reversible error.

Apportionment

In patent infringement cases, it is well-established that a patentee’s damages should reflect only the value of the patented features of an infringing product. Thus, in assessing damages, courts routinely “apportion” the infringer’s profits between the infringing and noninfringing features of its product. See Garretson v. Clark, 111 U.S. 120, 121 (1884).  Accordingly, HTC argued that the district court erred by failing to give the jury specific instructions on apportionment.

However, this case did not sound in patent infringement, but in breach of contract.  As my co-authors and I have previously observed (see p. 162), it is a peculiar coincidence of U.S. law that both the statutory measure for patent damages under 35 USC § 284 and the FRAND commitment call for the imposition of a “reasonable” royalty.  For this reason, several U.S. courts that have calculated FRAND royalty rates (see, e.g., Ericsson v. D-Link (Fed. Cir. 2014), Microsoft v. Motorola (9th Cir. 2015); and Commonwealth Sci. & Indus. Research Org. (CSIRO) v. Cisco (Fed. Cir. 2015)) have looked to traditional methodologies for determining reasonable royalty patent damages, including the 15-factor Georgia-Pacific framework.  But while this methodology may be useful by analogy, it is not strictly required, as the damages flowing from a breach of the contractual FRAND commitment must, by their nature, be determined under applicable principles of contract law.  As the Fifth Circuit explains, “while the Federal Circuit’s patent law methodology can serve as guidance in contract cases on questions of patent valuation … it does not explicitly govern the interpretation of contractual terms, even terms that are intertwined with patent law” (slip op. at *15).  As such, the Fifth Circuit in this case held that the district court’s omission of a specific jury instruction on apportionment – a patent law doctrine – was not error.

Judge Higginson disagreed.  Citing D-Link and CSIRO, he observed the Federal Circuit’s “unmistakable command that a jury assessing patent value must be instructed on apportionment” and that “the failure to instruct a jury on proper apportionment is error when the jury is asked to assess patent value” (slip op. at *29-30, Higginson, J., concurring). And while he acknowledges that the instant case concerns breach of contract rather than patent infringement, he argues that the Federal Circuit’s precedent regarding apportionment is instructive “because a jury assessing patent infringement damages undertakes the same task of assessing whether an offered rate is FRAND” (citing Realtek Semiconductor, Corp. v. LSI Corp. (N.D. Cal., 2014) (slip op. at *30).  Moreover, Judge Higginson points out that both HTC and Ericsson, as well as the United States as amicus curiae, requested jury instructions on apportionment.  For all of these reasons, he concludes that the district court erred by omitting an instruction on apportionment.

Whether or not the district court erred, none of the Fifth Circuit judges felt that the omission of a specific apportionment instruction constituted reversible error because HTC had the opportunity to, and did, discuss apportionment during its closing argument before the jury.  This observation raises interesting questions regarding the basis on which juries are expected to make decisions in complex cases.  During trials that often last for weeks, the members of the jury hear hours upon hours of conflicting expert testimony and argumentation.  Under Rule 51 of the Federal Rules of Civil Procedure, a trial judge must instruct the jury regarding the substantive law governing the verdict. Its instructions are intended to distill the legal standards that the jury must apply during its deliberations.  Given that members of the jury are not permitted to take notes or make recordings during trial, they must rely heavily on these court-sanctioned instructions.  And contrary to the Fifth Circuit’s holding, it does seem problematic for a court to omit instructions that are germane to the jury’s deliberations concerning an area of law as complex as FRAND royalty determinations.  In such cases, irrespective of what courts and commentators believe the law to be, the results of cases on the ground depend heavily on the instructions given to the jury (we discuss the importance of jury instructions, especially model jury instructions, in FRAND cases in Jorge L. Contreras & Michael A. Eixenberger, Model Jury Instructions for Reasonable Royalty Patent Damages, 57 Jurimetrics J. 1 (2016) (“if … increasingly complex damages calculations are to remain in the hands of the jury, it is now more essential than ever that the instructions given to jurors be as clear, accurate, and understandable as possible.”)

 The French Connection

In considering HTC’s proposed jury instruction on apportionment, Judge Elrod also concluded that the proposed instruction was inaccurate because it summarized U.S. patent law with no reference to French contract law.  ETSI was formed in France in 1988 and approved its first patent policy in 1993.  That policy, and all subsequent ETSI policies, state that they are governed by the laws of France.  Judge Elrod observed that “HTC’s proposed jury instructions are based on United States patent law. HTC did not even attempt to justify its proposed instructions under French contract law or to argue that French contract law and United States patent law are equivalent” (slip op. *14).

This last point is particularly interesting.  In chastising HTC for failing to argue the equivalency of U.S. and French law, Judge Elrod refers to Apple v. Motorola, 886 F. Supp. 2d 1061, 1081 (W.D. Wis. 2012), in which a U.S. district court seemingly concluded, without any specific references, that there are no material differences between the laws of France and Wisconsin when it comes to interpreting a company’s FRAND commitment (discussed here at p.8).  In my experience that conclusion is widely ridiculed by European lawyers, and rightly so.  Yet Judge Elrod seems to imply that merely making a conclusory statement about the equivalency of French and U.S. law ought to suffice, or at least overcome one hurdle to the acceptance of a jury instruction grounded in principles of U.S. law.

 

Nondiscrimination

HTC also argued that the district court should have instructed the jury with respect to the nondiscrimination prong of Ericsson’s FRAND commitment.  HTC’s proposed jury instruction reads as follows (Appellant’s Opening Brief, p. 40):

The non-discrimination requirement of FRAND requires an SEP holder to provide similar licensing terms to licensees that are similarly situated. The financial terms do not have to be precisely identical, because the difference might be explained by other offsetting adjustments in other terms in the license. But, at a minimum, if the difference in terms creates a competitive disadvantage for a prospective licensee, then the offered royalty terms are discriminatory. Discrimination may exist even if preferential treatment is accorded to only one or a few companies.

The non-discrimination prong of FRAND serves to level the playing field among competitors, and to foster entry and innovation from new market participants, by prohibiting preferential treatment that imposes different costs to different competitors. Thus, for purposes of the non-discrimination prong of FRAND, licensees are “similarly situated” if they compete for the purchase or sale of a product or service. It would defeat the purpose of FRAND if a licensor could draw a distinction between entrenched and emerging firms.

To my eye, this is an accurate statement of the law and the general understanding of the nondiscrimination requirement under FRAND (see Jorge L. Contreras & Anne Layne-Farrar, Non-Discrimination and FRAND Commitments in Cambridge Handbook of Technical Standardization Law: Competition, Antitrust, and Patents, Ch. 12 (Jorge L. Contreras, ed., 2017)).  This formulation is also consistent with the most extensive analysis to-date of FRAND nondiscrimination by a U.S. district court (TCL v. Ericsson, 2017 U.S. Dist. LEXIS 214003 (C.D. Cal. 2017), rev’d on other grounds, 943 F.3d 1360 (Fed. Cir. 2019)).

Yet Judge Elrod writes that “HTC’s proposed instruction would transform the non-discrimination element of FRAND into a most-favored-licensee approach, which would require Ericsson to provide identical licensing terms to all prospective licensees” (slip op. *16). This statement is plainly incorrect.  The first sentence of HTC’s proposed jury instruction, which mirrors the model instruction published by the Federal Circuit Bar Association in 2020 and cited by the court (slip op. *17 n.3), refers to “similar licensing terms [for] licensees that are similarly situated”, not identical licensing terms for all prospective licensees.  HTC further clarifies that “The financial terms do not have to be precisely identical.” In explaining the meaning of “similarly situated”, HTC follows the reasoning of the district court in TCL, stating that a distinction should not be drawn between “entrenched and emerging firms”.  None of this suggests that all licensees should pay identical royalties.

Moreover, the parties clearly disputed at trial whether various “comparable” licensees identified by Ericsson were “similarly situated” to HTC (“HTC further argued that Ericsson’s licenses with companies like Apple, Samsung, and Huawei were much more favorable, but Ericsson presented additional evidence indicating that those companies were not similarly situated to HTC due to a variety of factors” (slip op. *22)). Thus, both parties appear to acknowledge the relevance of the “similarly situated” test for nondiscrimination, making it all the more puzzling why the district court and the Fifth Circuit found HTC’s proposed jury instruction on this point to be inaccurate.

Conclusion

Regrettably, the Fifth Circuit’s decision in HTC v. Ericsson does little to clarify the scope or nature of FRAND commitments for standards-essential patents.  Rather, by diverging from the guidance of the Federal Circuit in terms of the apportionment of value among patented and unpatented products, and misinterpreting the scope of the nondiscrimination prong of the FRAND commitment, the Fifth Circuit has substantially muddied the already turgid waters of this increasingly important area of law.  Unfortunately, Judge Gilstrap was right when he told the jury in Texas, “Ladies and gentlemen, there is no fixed or required methodology for setting or calculating the terms of a FRAND license rate.”  It might be helpful to the industry, however, if there were.

A Million Inventions Lost: Abandoned Provisional Applications

by Dennis Crouch

US provisional patent applications continue to be popular, with about 170,000 filed each year since 2013.  After filing a provisional, the applicant then has one-year to move the case to a non-provisional or PCT application, and eventually toward patent issuance.

If the applicant does not follow-up with these next steps, the provisional application is abandoned, and the file kept secret. About 40% are abandoned — and that adds up to 1.4 million application files lost to the public.  As you might expect, the abandonment rate depends upon the type of applicant:

  • Micro Entity: 78% Abandonment Rate
  • Small Entity: 44% Abandonment Rate
  • Large Entity: 25% Abandonment Rate

There is a good amount of talk about patent grant rate — what percentage of patent applications eventually end up as issued patents. In general though, I have never seen any grant rate calculation take these abandonment numbers into account.

I was considering calling for a new publication regime; Something along the lines of amending Section 122 with a statement to the effect that Any application that has not already been made publicly available 5-years after its effective filing date will be published by the USPTO.  My problem with an immediate call for publication here is that we cannot really tell whether these abandoned applications include any of the shoulders-of-giants that future innovation might stand upon.  Does a public interest in this unknown information outweigh the private benefit that the patent applicants receive by secrets kept.  Although these applications are all secret, the USPTO does have the power to conduct a study on the files to begin to help us understand their value. We’ll see if I can push the agency in that direction.

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Federal Circuit Approves of Order to Drop Patents from the Lawsuit to Facilitate Case Management

by Dennis Crouch

In re Midwest Athletics and Sports Alliance LLC (Fed. Cir. 2021)

MASA sued Xerox for infringing 20 different patents that all relate to printer related technology.   The district court felt that 20 patents was too many to handle and so ordered MASA to reduce the number of asserted patents to 8 patents by the summary judgment pre-trial stage; and then further drop down to only 4 asserted patents by trial.  The defendant agreed that the eliminated patents would be dismissed without prejudice and that any applicable statute of limitations would be tolled — allowing later refiling of those claims.

Courts regularly limit the number of claims that may be asserted, but here the district court “acknowledges that it knows of no other court that has similarly found that it has the authority to limit the number of patents that a plaintiff may assert (as opposed to the number of claims) in the context of case management.” MASA petition. Court’s regularly use case-management powers to limit issues brought to trial — and typically push parties to work together to resolve their issues through a sort of negotiation: Plaintiff drops claims / defendant drops defenses or counterclaims.  Here, MASA proposed such an approach “MASA proposed a balanced approach consistent with case narrowing precedent, in which MASA would narrow its infringement case by reducing the number of asserted claims at certain points in the case, and Xerox would narrow its invalidity case by reducing the number of its invalidity theories.”  Id. However, the the court instead ordered MASA to eliminate patents from the case entirely.

MASA argued that the order to eliminate entire patents is different than eliminating particular claims, since each patent offers a discrete cause of action. However, the Federal Circuit has denied MASA’s petition for writ of mandamus.  In particular the court found that the dismissal without prejudice and tolling provide sufficient safeguards and “negate any concern that MASA would be deprived of any substantive or procedural right here.”

= = = =

Patents at issue: U.S. Patent Nos. 7,502,582 (“‘582 Patent”), 7,720,425 (“‘425 Patent”), 8,005,415 (“‘415 Patent”), 6,203,005 (“‘3005 Patent”), 6,305,684 (‘‘684 Patent”), 8,019,255 (“‘255 Patent”), 8,634,113 (“‘113 Patent”), 6,718,285 (“‘285 Patent”), 6,909,856 (“‘856 Patent”), 6,799,005 (“‘9005 Patent”), 6,462,756 (“’756 Patent”), 6,509,974 (“‘974 Patent”), 6,411,314 (“‘314 Patent”), 6,724,998 (“’998 Patent”), 6,993,278 (“’278 Patent”), 7,658,375 (“’375 Patent”), 8,220,795 (“’795 Patent”), 8,554,089 (“’089 Patent”), 8,591,022 (“’022 Patent”) 8,805,239 (“’239 Patent”).  According to MASA, “the Asserted Patents can be grouped into four general categories: (1) Roller/Feeder Patents (‘3005, ‘255, and ‘113 Patents); Pentachrome Patents (‘415, ‘425, ‘582 Patents); (3) Printer  performance and Maintenance Patents (‘285 and ‘856 Patents); and Work Flow Patents (‘9005, ‘314, ‘974 and ‘756 Patents). MASA accuses different models of Xerox’s office equipment of infringement, including printers, scanners, and
multifunction systems.”

 

Post-IPR Estoppel: Printed Publication vs. Actual Product Shown in the Publication

In re DMF, Inc. (Fed. Cir. 2021)

The court has denied DMF’s mandamus petition on an interesting post-IPR estoppel question.

DMF sued ELCO Lighting in 2018 for infringing DMF’s U.S. Patent No. 9,964,266.  As is usual these days, ELCO turned-around and filed an inter partes review petition — challenging the patent’s validity based upon a 2011 product catalog (printed publication) that had featured the Hatteras lighting product.  Although the PTAB instituted the IPR, it eventually sided with the patentee in holding that the prior printed publication wasn’t enough render the invention obvious.

Back in the district court, ELCO is seeking again to invalidate the claims based upon the Hattaras lighting product.  The difference now is that they are not simply raising the defense based upon the printed publication but rather are presenting the actual product as prior art based upon it being “in public use, on sale, or otherwise available to the public.”  35 U.S.C. 102.

Section 315(e)(2) estops an IPR petitioner from later asserting in litigation that a “claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review.”  IPRs are limited only to arguments based upon patent documents and printed publications — and so the actual prior product could not have been used as the basis for the IPR.  The district court went a bit further and found that there must be “a substantive difference” between the publication and the physical product that is “germane to the invalidity dispute.”

Here, the district court found substantive, germane differences.  In particular, the failing of the prior art reference was that the elements of the invention required cobbling together images from different products in the catalog.  The PTAB found that mix-and-match approach improper.  In the district court litigation, ELCO is seeking to use the single product to show each element.

On Mandamus, the Federal Circuit did not delve into whether the substantive-germane legal standard was correct or whether the facts had been properly decided — but did find them not “clearly and indisputably erroneous.”  Further, the court found that mandamus was not necessary — the patentee should wait until final judgment and appeal. “DMF has not shown that a post-judgment appeal is an inadequate remedy for asserting a statutory estoppel argument.”

Data on Transition Phrases in Patent Cases

by Dennis Crouch

You may have heard that most US utility patent claims use the open transition phrase COMPRISING.  Here’s the data to support that hearsay. The chart below shows data from independent claims gleaned from issued US patens grouped by patent issue year.

To make the chart, I calculated the percentage of independent claims that include the phrase comprising or comprises or comprise as the first traditional (or only) transitional phrase within the claim text.

Patent courses traditionally talk about the three primary transition phrases:

  1. Comprising/Comprises/Comprised of (Open Transition)
  2. Consisting of (Closed Transition)
  3. Consisting Essentially Of (Hybrid Transition)

In recent patents, fewer than 1% of claims use “consisting of” or consisting essentially of.”  Rather, the biggest non-comprising segment is the category of claims that lack any traditional phrase as shown in the chart below.  These non-traditional claims might use the word “having” or “including” as a transitional phrase, or they might not use any word at all.

Here are a few examples of these non-traditional transitions from 2021 patents:

  • One or more non-transitory, computer-readable media having instructions that, when executed by one or more processors, cause a device to: …
  • A non-transitory computer-readable medium configured to store instructions that, when executed by one or more processors, cause the one or more processors to perform operations that include:
  • A handheld, self contained, air cooled induction heater including …
  • A compound or a pharmaceutically acceptable salt thereof, wherein said compound is: …
  • A compound, or a pharmaceutically acceptable salt thereof, having the structure of
  • A method, by one or more processors, for managing text in rendered images: [No transition at all except for a colon]
  • Intermediate of formula B-20 [showing structural diagram of compound and going on to include several markush groups]

In many cases it appears that attorneys may be using the alternative transitions as part of their claim stratification strategy.  Thus, many of the claims relying upon a non-traditional transition sit alongside other claims in the same patent that use “comprising.”

Arbitration Agreement Does Not Control Inter Partes Review Proceedings

by Dennis Crouch

The Supreme Court has strongly supported arbitration as an alternative dispute resolution mechanism.  The Federal Arbitration Act (FAA) codifies this “liberal federal policy favoring arbitration agreements.”  Quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983).  Although the right to arbitrate patent cases is seemingly clear from the FAA, Congress went further in its 1982 PTO appropriations bill to expressly codify the enforcement of arbitration agreements for “any dispute relating to patent validity or infringement.”  35 U.S.C. 294.  Sometimes a party subject to arbitration will still file their dispute in court. At that point, the opposing side will move to stay or dismiss the case and compel arbitration.

The core question in MaxPower Semiconductor (Fed. Cir. Sept 8, 2021), is whether the arbitration agreement can be used to cut-short an inter partes review (IPR) proceeding.  Here, the Federal Circuit effectively sided with the PTO and the patent challenger and refused to compel arbitration. The majority opinion is by Judge Reyna and joined by Judge Chen. Judge O’Malley dissented — arguing that the court failed to live up to the statute:

The majority’s denial of a writ of mandamus in this case allows the Patent Trial and Appeal Board to add a new caveat to Congress’s clear instruction that agreements to arbitrate patent validity shall be “valid, irrevocable, and enforceable”—i.e., except during inter partes review.

O’Malley in Dissent.

Background: MaxPower worked for several years with Rohm Semiconductor to develop RFP power transistor technology. MaxPower obtained the patents and licensed those to ROHM with an ongoing running royalty.  The license included an arbitration agreement.   Money flowed for several years.  Rohm eventually developed a new silicon carbide transistor and privately suggested new product was not covered by the agreement.   At that point, MaxPower provided notice that it was planning to initiate arbitration in 30 days.  ROHM acted first — filing the IPR petition at issue here as well as a lawsuit in N.D. Cal. seeking a declaration of non-infringement of the same patents.  The N.D. Cal. Judge granted MaxPower’s petition to compel arbitration, and the appeal of that determination is separately pending before the Federal Circuit.

The PTAB instituted the IPR — holding that it was not bound by the Federal Arbitration Act or Section 294 of the Patent Act. According to the PTAB, those provisions are tied to civil litigation, not USPTO proceedings.  PTAB explained:

After careful consideration of this issue, we conclude that the arbitration clause is not a reason to decline institution. Even if Patent Owner’s recitation of the facts is true, and even if the question of whether patentability falls within the scope of the agreement to arbitrate is committed to the arbiter, we nevertheless do not find a statute, rule, or policy that would preclude the Office from acting on the Petition.

Institution Decision. MaxPower immediately appealed.

NonAppealable: The first problem with MaxPower’s appeal is the statutory rule that institution decisions are nonappealable.  35 U.S.C. § 314(d). The court also ruled that mandamus  was not appropriate here because it was being used as a “means of avoiding the statutory prohibition on appellate review of agency institution decisions.” In re Power Integrations, Inc., 899 F.3d 1316 (Fed. Cir. 2018). Another way to get to appeal is via the collateral order doctrine, but, according to the court, that doctrine also requires an issue of rights that “will be irretrievably lost in the absence of an immediate appeal.” Apple Inc. v. Samsung Elecs. Co., 727 F.3d 1214 (Fed. Cir. 2013).

The FAA itself also creates a right of appeal for refusing to stay any action subject to arbitration.  However, the right to stay under the FAA is limited to stays of proceedings in Federal Court. As such, that provision also does not apply.

In the end, the Federal Circuit found no authority to hear the appeal, and thus dismissed the appeal and denied the mandamus petition.  The court suggested that it might be able to do something once the IPR concludes and a right to appeal attaches. However, the court also noted that the questions here might all be wrapped-up in non-appealable initiation questions. “If MaxPower is truly not raising matters that are absolutely barred from appellate review under section 314(d) (an issue we need not decide here), then MaxPower can meaningfully raise its arbitration-related challenges after the Board’s final written decisions.”

In dissent, Judge O’Malley would have heard the case on mandamus.  The court’s failure to hear the case “cast[s] a shadow over all agreements to arbitrate patent validity, which, after today, apply only in district courts and not in inter partes review proceedings.”

= = = =

I have not seen the arbitration agreement in this case. But there is usually a big question about whether patent validity and/or infringement are covered by the agreement that is particularly focused on licensing.   The district court’s parallel decision staying its case to await the arbitration outcome is set for Oral arguments in October.  The Judge did not actually determine the question of arbitrability, but rather found that issue was for the arbitrator to resolve.

 

Law School Canons: It’s a Pain to Opine

Editor’s Note: Avery Welker is a 2L at Mizzou and likely a future patent attorney. He authors a series linking law school canonical cases with intellectual property counterparts. You can email ideas for future posts to avery@patentlyo.com.  – Dennis Crouch

By Avery Welker

My Civil Procedure I outline turned out to be the longest outline of my first law school semester. Personally, I was betting on joinder and class actions to contain the most notes throughout the semester. As it turned out, discovery took the “most notes” crown. That makes sense – there’s a lot to discover in a lawsuit! Upon review of my outline, some of these rules started to come back to me.

That includes, of course, Rule 26, which outlines discovery generally and contains rules on the duty to disclose.[1] Wrapped within Rule 26 are details about expert testimony.[2] While Rule 26 didn’t end up wholly dispositive of this lawsuit, it certainly was the final nail in the coffin for an inventor’s testimony through the course of Pandrol USA, LP v. Airboss Railway Products, Inc.[3]

This appeal arose from a summary judgment grant to Pandrol[4] (Plaintiffs-Appellees) over Airboss[5] (Defendants-Appellants), declaring that Airboss failed to show clear and convincing evidence of patent invalidity.[6]

The patent at issue, U.S. Patent No. 5,110,046 (’046 Patent), relates to preventing abrasion on tie rail seats by using a plate designed to absorb abrasion between the rail pad and rail tie.[7] FIG. 1 below shows the abrasion plate (labeled 10) in between the pad (labeled 4) and the tie (labeled 1).[8]

One issue in the appeal centered on the testimony of the ’046 Patent’s inventor, Hartley Young.[9] Normally, an inventor testifies on behalf of the patentee. However, by the time of this lawsuit, Young had taken a job with the defendant, Airboss, and submitted a declaration supporting his new employer’s contention that the patent was invalid.[10] At the district court level, assignor estoppel quickly put a stop to that testimony.[11] The Federal Circuit agreed and noted that exclusion of the inventor’s anti-patent testimony was justified based on “unfairness and injustice.”[12]

Where Rule 26 comes into play is the rest of the testimony.[13] Under Rule 26(a)(2), Airboss was required to file an expert report for Young’s declaration because the declaration contained .[14] This declaration contained Young’s opinion on the patent specification interpretation to be used on other issues in the trial.[15] The district court noted that Young’s testimony falls under Federal Rule of Evidence 702 and requires an expert report.[16] On appeal, the Federal Circuit agreed. Even though Young was an inventor and thus a potential fact-witness, his declaration also “contains expert opinion because he opines on claim construction and interpretation of the original application.”[17]  In the end, the Federal Circuit affirmed district court’s exclusion of Young’s testimony on both the assignor estoppel and Rule 26 grounds, thus putting the final nail in his testimony.[18]

With Young’s testimony excluded entirely, clearly, that evidence could not come in. Many can speculate on what the outcome of this case would have been including Young’s testimony. No doubt that information from the inventor himself would be very relevant and accurate as to factual issues! However, one bullet point in my notes on expert witnesses lays out the base reasoning for this rule: “Essentially making sure experts are qualified and aren’t using ‘quack science.’”

Rule 26 certainly has plenty of moving parts. The overarching tools of discovery have many checkboxes and procedural steps to jump through. Sometimes I wonder how I kept it all straight on my final exam last year!

[1] Fed. R. Civ. P. 26.

[2] Id. at 26(a)(2).

[3] Pandrol USA, LP v. Airboss Ry. Prods., Inc., 424 F.3d 1161 (Fed. Cir. 2005).

[4] “Pandrol” includes Pandrol USA, LP and Pandrol Limited.

[5] “Airboss” includes Airboss Railway Products, Inc., Airboss of America Corp., Robert Magnuson, and Jose Mediavilla.

[6] Pandrol USA, LP, 424 F.3d at 1163.

[7] U.S. Patent No. 5,110,046 col 1 l. 38–43.

[8] Id. at col 2 l. 33–34, fig.1.

[9] Pandrol USA, LP, 424 F.3d at 1166; ’046 Patent at [75].

[10] Pandrol USA, LP v. Airboss Ry. Prods., Inc., No. 99-0182-CV-W-SOW, 2003 WL 24272366, at *4 (W.D. Mo. Oct. 15, 2003), aff’d 424 F.3d 1161 (Fed. Cir. 2005).

[11] Id.

[12] Pandrol USA, LP, 424 F.3d at 1167.

[13] Id.

[14] Id.

[15] Pandrol USA, LP, 2003 WL 24272366, at *4.

[16] Id.

[17] Pandrol USA, LP, 424 F.3d at 1166–67.

[18] Id.

Marking & Back Damages

by Dennis Crouch

Lubby Holdings v. Chung (Fed. Cir. 2021)

Lubby’s US9750284 covers a vape-pen (“personal vaporizer”). Lubby sued Henry Chung for patent infringement and won at trial with a jury verdict of almost $1 million. On appeal though the Federal Circuit has reversed-in-part — holding that the pre-suit damages were not available under 35 U.S.C. § 287.

In general, the patent laws bar a remedy for any infringement that occurred more than six years prior to the filing of the lawsuit.  “[N]o recovery shall be had for any infringement committed more than six years prior to the filing of the complaint or counterclaim for infringement in the action.” 35 U.S.C. § 286.  Back damages are further limited in by the patent marking statute of Section 287.  That provision calls for a patentee to to mark any “patented article” that it sells or licenses-for-sale with the patent number.  If the patentee sells/licenses-to-sell a product covered by the patent without so marking, then back damages can only be recovered for infringement after the infringer is “notified of the infringement and continues to infringe thereafter.” Id.; See also 35 U.S.C. § 287(a) (“Filing of an action for infringement shall constitute . . . notice.”).

Here, the patent covers an article (a personal vaporizor) and Lubby sells articles that appear to be covered by the patent (the J-Pen).  In this case, Lubby did not disclose its damages computations until the day before trial, and those computations included request for back damages.  The court’s approach is actually to assume marking unless the defense objects with at least some minimal evidence of the lack of marking.  Here, Chung objected on that same day and pointed to the J-Pen’s lack of marking of the patent number.  At that point, Lubby should have presented its evidence of marking. However, Lubby did not present any such evidence at trial.  As such, Lubby “can only recover damages for the period that it provided actual notice,” which is the date that it notified Chung of the infringement.

Chung did have notice that the patent existed, but that is also different than notice of infringement under the statute.  “[T]he actual notice requirement of § 287(a) is satisfied when the recipient is informed of the identity of the patent and the activity that is believed to be an infringement, accompanied by a proposal to abate the infringement, whether by license or otherwise.” SRI Int’l, Inc. v. Advanced Tech. Labs., Inc., 127 F.3d 1462 (Fed. Cir. 1997).

The appellate court ordered a new trial on remand to calculate the post-filing sales numbers that will serve as the appropriate damages award.

= = =

Chung also appealed on the merits of the infringement case.  However, Chung did not file a R.50(a) JMOL motion on the issue and therefore lost his primary right to appeal.  Chung did request a new trial under R.59, and the court does have power to hear an appeal of a denial of new trial. However, that standard is much higher — requiring an “absolute absence of evidence to support the jury’s verdict.”  Here, the court found some evidence supporting infringement and thus upheld the verdict.

Inequitable Conduct in the FDA/PTO Interplay

Belcher Pharma v. Hospira, Inc. (Fed. Cir. 2021)

The Federal Circuit has confirmed that Belcher’s U.S. Patent No. 9,283,197 is unenforceable due to inequitable conduct based upon materials withheld during prosecution.  The patent covers l-epinephrine formulations at pH between 2.8 and 3.3 and with certain impurity level limitations. During prosecution, the examiner found a prior art reference with a wider encompasing pH range of 2.2 to 5.0, but the patentee successfully argued that its narrower range was a critical element of the invention and necessary to prevent racemization of the l-epinephrine.

Prior to the application’s issuance, Belcher’s Chief Science Officer (Rubin) obtained possession and tested samples from two competing products (JHP & Sintetica) and found that they were both within the claimed pH range and within the claimed impurity levels.  In addition, Rubin was in possession of a reference (Stepensky) that disclosed an overlapping pH range (3.25 to 3.7).  In fact, while the application was pending, Rubin communicated with the FDA regarding these samples.  However, none of them were disclosed to the USPTO.

Patent applicants and their attorneys are bound by a duty of candor and good faith in dealing with the USPTO.  As part of this, 37 C.F.R. § 1.56 establishes a duty to disclose information material to patentability.  This duty exists as long as the patent application is pending and applies to all “individuals associated with the filing or prosecution of [the] patent application.” The Office has generally tied the duty only to human-persons, and so the duty has not been applied directly to corporate applicants.  As here, the focus is typically whether there is an individual person who has a duty and who failed their duty.

Patent examiners rarely exert their investigatory authority and so patents associated with a duty-of-candor violation are rarely uncovered until litigation.  At that point, the patent is not automatically invalid. Rather, the patent may be deemed unenforceable due to inequitable conduct during prosecution, but only if the violation is both material and intentional.

To prevail on an inequitable conduct defense, a defendant must establish both the materiality of the withheld reference and the applicant’s intent to deceive the PTO.

Aventis Pharma S.A. v. Hospira, Inc., 675 F.3d 1324, 1334 (Fed. Cir. 2012) (citing Therasense).

Duty: Rubin testified that he was helped draft the patent application, including the claims and also helped formulate responses to office actions. That was enough to bind Rubin with the duty of candor.

Materiality: Here, the claims were found obvious by the district court based upon the withheld prior art, a finding that was not appealed. That was enough for the Federal Circuit to conclude that the documents were material to patentability.

Intent: On deceptive intent, the case lacked direct evidence that Rubin intended to deceive the USPTO, but the district court found sufficient circumstantial evidence within the repeated discussion of the references with the FDA. In particular, Rubin modified the proposed pH range from a wider range to the narrower range in order to take advantage of the data from Sintetica reference product and thus expedite FDA approval.

Unenforceability affirmed.

I’ll note here that some of you might be thinking — but the claims are obvious anyway.  I’ll be curious to see whether the inequitable conduct finding results in an unfair competition claim against Belcher.

Second note – Belcher was a quite inexperienced patent applicant at the time that likely was part of the failures here.

 

Copyrightability of a Programming Language

by Dennis Crouch

This is a follow-up post on the pending SAS v. WPL appeal before the Federal Circuit.  The focus of the case is copyrightability of the SAS statistical software and  its outputs.  SAS argues that it made a “plethora of creative choices” in developing its material, and that creativity is more than sufficient to satisfy the originality requirements of copyright law.  Thus far, the courts have disagreed with SAS and rejected its copyright assertions.  However, the company has now positioned its case before the intellectual property friendly Court of Appeals for the Federal Circuit.

Copyrightability of Software: The Next Big Case

The software at issue here is most aptly described as a programming language that consists of a set of functions & options that the plaintiff calls “input formats” used to produce formatted reports. In addition, SAS argues that the formatting of the reports is also copyrighted.  There apparently is no claim of copying of any lines of software, but instead it is copying of the functionality and use of the particular  coding language.  My understanding is that WPL designed its software so that its software would execute the same input-procedure used on SAS and produce an equivalent output.  Although these are functional aspects, they also involve creative choices.

In a prior post, I wrote about the SAS appeal including a number of amicus briefs supporting their strong copyright claim.  Now the other-side has had its chance to respond, including substantial amicus support.  The Federal Circuit’s Google v. Oracle decisions are sitting in the background.  Although the Supreme Court eventually sided with Google on fair use grounds, it did not disturb the Federal Circuit’s copyrightability decision that strongly supported copyright protection even for functional software.  WPL’s amicus supporters are concerned that the Federal Circuit will reinvigorate its approach to copyrightability in SAS.

New briefs in support of the accused infringer WPL:

  • Electronic Frontier Foundation (EFF): The law treats copyrightability of software differently than other literary works (as it should).  Patents should be the go-to in this area.  I’ll note that EFF has also repeatedly argued against patentability of software.
  • 44 Intellectual Property Law Scholars: Focusing substantially on application and procedure for the abstraction-filtration-comparison (AFC) test — arguing that the AFC approach should not be rejected for a general “creative choices” test.
  • Computer & Communications Industry Association (CCIA): “A Copyright’s presumption of validity does not create a presumption that the entire work is protected expression.”
  • 54 Computer Scientists: This brief is helpful in understanding the details of how SAS and WPL operate in the context and history of computer programming languages.
  • GitHub, Inc.: “Vague allegations of nonliteral copyright infringement” lead to FUD — fear, uncertainty, and doubt.

Briefs filed so far:

Law Journal Reading List from the Briefs:

  • Paul Goldstein, Infringement of Copyright in Computer Programs, 47 U. Pitt. L. Rev. 1119 (1986) .
  • Richard H. Stern, Copyright in Computer Programming Languages, 17 Rutgers Computer & Tech. L.J. 321 (1991);
  • Ronald L. Johnston & Allen R. Grogan, Copyright Protection for Command Driven Interfaces, 12 COMPUTER L. INST. 1 (1991)
  • William M. Landes & Richard A. Posner, The Economic Structure of Intellectual Property Law (2003)
  • Pamela Samuelson, A Fresh Look at Tests for Nonliteral Copyright Infringement, 107 Nw. U. L. Rev. 1821 (2013)
  • Pamela Samuelson, Three Fundamental Flaws in CAFC’s Oracle v. Google Decision, 37 Eur. Intell. Prop. Rev. 702 (2015)
  • Lydia Pallas Loren & R. Anthony Reese, Proving Infringement: Burdens of Proof in Copyright Infringement Litigation, 23 Lewis & Clark L. Rev. 621 (2019).
  • Christopher Jon Sprigman & Samantha Fink Hedrick, The Filtration Problem in Copyright’s “Substantial Similarity” Infringement Test, 23 Lewis & Clark L. Rev. 571 (2019)

Still True: Name of the Game is the Claim

Data Engine Techs v. Google (Fed. Cir. 2021)

This is an old-school claim construction case.  The district court narrowly construed DET’s claim term “three-dimensional spreadsheet” and consequently ruled that Google does not infringe.  On appeal, the Federal Circuit has affirmed.

DET’s invention here is mainly about adding tabs to a spreadsheet to make it “three dimensional.”   In a prior decision, the Federal Circuit found the claims patent-eligible.  “[T]he claim is directed to a specific method for navigating through three-dimensional electronic spreadsheets. . . . The Tab Patents solved [a] known technological problem in computers in a particular way—by providing a highly intuitive, user-friendly interface with familiar notebook tabs for navigating the three-dimensional worksheet environment.”

Judge Stark had construed the claims prior to his eligibility ruling. On remand, however, Google asked for additional claim construction of the preamble term “three-dimensional spreadsheet” since that aspect of the invention had been critical to the Federal Circuit’s eligibility determination.

The district court did construe the term in a narrow fashion — requiring “a mathematical relation among cells on different spreadsheet pages.”  This construction essentially requires each tab to be a layer in a stack of sheets and that the order of the sheets have mathematical importance.   In the example above the “Salads” layer is one-page away from “Entrees”, and two pages from “Desserts.” A mathematical relationship is necessary to allow for 3-D features such as 3-D ranges. The specification explains that

Three-dimensional spreadsheets allow the user to create a worksheet having cells arranged in a 3-D grid. In this manner, the user can manipulate multi-dimensional ranges, i.e., Solid blocks of cells. This feature has distinct advantages. For example, the user can build a worksheet consisting of multiple two dimensional spreads, define 3-D ranges that span these spreads, and copy a range of rows and columns into each of many 2-D spreads at once. This feature eases difficult choirs, such as consolidation of multiple spreads.

‘259 Patent at Col. 2-3.   Further, in the prosecution history, the patentee distinguished a Lotus-123 prior art reference allowing linking between different pages as not representing a “true 3D spreadsheet.”

One issue here is that the 3D spreadsheet requirement is part of the preamble of the claim, not the body of the claim.

12. [A] computer-implemented method of representing a three-dimensional spreadsheet on a screen display, the method comprising . . .

Ordinarily, preambles are not limiting.  Here, the Federal Circuit though fell back on the nose-of-wax analogy — explaining that the patentee had already pushed the wax in one direction and is now estopped from pushing it back.  Namely, during the eligibility determination, the patentee pushed its case as an improvement to three-dimensional spreadsheets, and the court relied upon those arguments to find the invention eligible for patenting.

Non-infringement affirmed.