March 2012

Punishing Prometheus: Part IV – Machine or Transformation, We Hardly Knew Thee…

Patent,

Guest Post by Robert R. Sachs of Fenwick & West LLP
Read Part I; Part II; and Part III. 

It seems like only yesterday the Court told us that the “machine or transformation” test was “a useful and important clue, an investigative tool, for determining whether some claimed inventions are processes under § 101.” The Court’s reasoning suggested that while passing MoT was not necessary, it was still a sufficient condition for patent eligibility, and if nothing else indicated that the invention was not an abstract idea, law of nature, or natural phenomena.

Now, less than two years later, the Court diminishes the test further: “we have neither said nor implied that the [machine-or-transformation] test trumps the ‘law of nature’ exclusion.” What this means in practice is that even if a claim satisfies the MoT test, it could still be deemed unpatentable subject matter, especially by a fact which follows this Court’s method of a) stripping claims down to ”instruction manual” glosses, and b) finding the presence of “natural relations” to be dispositive evidence of a “natural law” in the claim.

In short, before Prometheus, you could assert that your claim was patentable subject matter because it satisfied MoT.  Now MoT does you little if any good—it’s gone from a sufficient condition to a mildly interesting one.

Standing Up for the Patent Bar

For some reason the Court seems to delight in denigrating the role of patent counsel in drafting claims, treating patent attorneys as either mere scriveners or crafty manipulators of words and phrases, clauses and conjunctions. “Those cases warn us against interpreting patent statutes in ways that make patent eligibility depend simply on the draftsman’s art.”  Indeed, in calling patent attorneys draftmen, apparently the Court believes that all we do is make fancy pictures.   Name me another legal discipline in which there is a special bar exam, not to mention to a requirement of an engineering or science degree.  What is it about patent law that makes the Court think we’re not lawyers? 

Second, I ask you: what’s wrong with making patent eligibility depend on our skill?  The patent is a contract, a quid quo pro:  disclose the invention and in exchange obtain the exclusive right.  The patent act requires patents to recite claims that define the invention, the USPTO examines the claims, and infringement is based on the claims. The validity of every other legal document depends on the “draftsman’s art,” upon the skill of the lawyer—just ask any licensing attorney, securities lawyer, or trusts and estate attorney.  Why are patent attorneys somehow not given the same level of recognition by the Court, that what we do is a legal activity, that claims are first and foremost legal definitions? That we are charged not just with describing the implementation of an invention to meet the legal test of an enabling disclosure—but with defining by way of a claim the “metes and bounds” of the invention.  We are trusted with carefully carving out a space for the broadest yet most precise statement of the invention, surrounded on all sides by the prior art, using nothing more than a single sentence.  Where other legal writers suffer no consequence for employing laundry lists of verbs, nouns, adjectives—to throw in the kitchen sink of do not fold, spindle, mutilate, tear, shred, distort, etc.—we are compelled by case law to consider every word as critical.  A misplaced comma, the use of “the” instead of “a,” “at least one” instead of “each,” can spell the difference between a patent worth millions and patent worth less than wallpaper.  The California Civil Code includes a section of codified Maxims of Jurisprudence; my favorite is “Superfluidity does not vitiate.”  True for every attorney but patent attorneys.  Show me another area of legal drafting that is as highly constrained in both form and substance as patent claim writing.

The Court also seems to think that inventors arrive at the patent attorney’s door step with their inventions fully formed, fully understood, and fully explained and explainable. In some cases, in some fields, that may be true—say for those funny hats with fans, beer cans, and scrolling LEDs. But for the majority of technologies, the patent attorney is an active and necessary participant in the creation of the patent and its value. Many inventors simply do not know what they have invented, they lack the framework for understanding their inventions, first in the context of the prior art, and second in the context of how the USPTO and the courts analyze inventions under the law.  Senior patent attorneys often have significantly more exposure and breadth of experience in their particularly technology areas than the inventors that they advise. They combine their understanding of the patent law, the technology, and the business goals of the inventor to create something that did not previously exist: an intellectual property right. This is no mere scrivener’s recording, from the inventor’s lips to the patent examiner’s ear to the court’s gavel.  This is legal counseling and crafting at its best. 

3M v. Avery: Walking the Line of Declaratory Judgment Jurisdiction

Patent

By Jason Rantanen

3M Company v. Avery Dennison Corporation (Fed. Cir. 2012) Download 11-1339
Panel: Rader, Lourie (author), Linn

There's a fine (and perhaps rather fuzzy) line between engaging in patent licensing discussions that are sufficient to trigger declaratory judgment jurisdiction and those that are not.  In 3M v. Avery, the court perhaps made that line a bit clearer for those trying to stay on one side of it.

According to 3M's declaratory judgment complaint, in March 2009 Avery's Chief IP Counsel called 3M's Chief IP Counsel to tell him that a new 3M product "may infringe" two of Avery's patents and "licenses are available."  3M subsequently rejected Avery's licensing offer, and in the course of that discussion was told that Avery had performed an analysis of 3M's product in connection with the two patents and that Avery would send claim charts.  No claim charts were ever sent.

Over a year later, 3M filed an action seeking a declaratory judgment of noninfringement, invalidity, and intervening rights as to the two Avery patents.  The district court dismissed the action, concluding that "'even accepting the facts as set forth by 3M,' subject matter jurisdiction did not exist at the time 3M filed its declaratory judgment complaint."  Slip Op. at 5.  In response to 3M's appeal, the Federal Circuit vacated and remanded for factual determinations.

Defining the line: In general, establishing the existence of a case or controversy for purposes of declaratory judgment jurisdiction requires something more than just "a communication from a patent owner to another party, merely identifying its patent and the other party's product line."  Slip Op. at 11 (citing Hewlett-Packard Co. v. Acceleron LLC, 587 F.3d 1358, 1362 (Fed. Cir. 2009)).  How much more is determined "on a case-by-case basis,"  Slip Op. at 11, although 3M v. Avery provides an important data point for identifying behavior that goes too far. 

In vacating the district court's dismissal, the CAFC concluded that the facts alleged by 3M in this case amounted to Avery "effectively charg[ing] 3M with infringement of [the patents-in-suit]."  Id.  That Avery's counsel (who initiated the communication) said "may infringe" rather than "does infringe" was immaterial in light of the license offer, the representation that Avery had analyzed 3M's product, and the statement that claim charts would be forthcoming. Especially in light of the facets of the case that the court held to be immaterial discussed below, the opinion suggests that there is a narrow gap indeed between the non-case or controversy creating communication discussed in Hewlett Packard and communications sufficient to establish jurisdiction.

Immaterial Facts: The CAFC considered several other facts in reaching its ultimate decision to vacate, but concluded that all were immaterial or equivocal. Two related to time: Avery had not provided a deadline for responding to its licensing offer and 3M's declaratory judgment action was filed more than a year after the parties' discussions.  Neither fact significantly favored the conclusion that a case or controversy was lacking.  "[W]e note that, as part of a pre-filing investigation, it takes time to review a set of asserted patents, the record generated before the PTO, and the accused products before a potential infringer can make an informed decision to file a declaratory judgment complaint."  Slip Op. at 15. 

On the other side of the equation, neither the history of litigation between the parties nor the fact that Avery had initiated reissue proceedings for the patents weighed strongly in favor of a finding a case or controversy.  Here, while there was much prior litigation between the parties, it involved different products and patents, and thus was not the type of pattern of litigation leading to the reasonable assumption that the patentee will bring suit based on the patents in suit.  Similiarly, as to the reissue proceedings, the court commented that "[t]he purpose of reissue proceedings is to correct errors in an issued patent…and, in this case, even with the unrelated litigation between the parties, there is no evidence that an objective observer in 3M's position would conclude that Avery initiated reissue proceedings for the purpose of bringing a lawsuit against 3M accusing [its product] of infringement."  Slip Op. at 14. 

Remand for factfinding: Because the district court concluded that 3M failed to allege a justiciable controversy on the fact of its complaint, it had not resolved two key factual disputes: the actual content of the statements made by Avery's counsel and whether the parties' discussions were covered by a confidentiality agreement that precluded their use to establish jurisdiction.  Given the disputed nature of these facts, the CAFC remanded to the district court for resolution.

District Court Concludes Therasense Patent Unenforceable On Remand

Patent,

By Jason Rantanen

Therasense, Inc. v. Becton, Dickinson and Company (N.D. Cal. 2012) Download 2012-03-28 Therasense v Becton Dickinson

Following the Federal Circuit's remand in Therasense v. Becton Dickinson, the district court has concluded that Patent No. 5,820,551 is unenforceable due to inequitable conduct under the higher standards for intent and materiality articulated by the en banc court.  Specifically, the judge found that the withheld briefs were material under the "but for" test for materaliality, that the Abbot attorney and scientist knew of that but-for materiality, and that they possessed specific intent to deceive the patent office. 

While all of the district judge's intepretations of Therasense are worth discussing, I find the characterization of Therasense as a whole to be the most interesting:

"Under the new standard, therefore, an applicant or attorney may knowingly and deliberately withhold from the PTO any reference known to be inconsistent with a position takeny by him or her before the PTO so long as the withholder does not know that the reference itself would lead to a rejection.  It would not be enough to prove that the applicant or attorney expected that the concealment would help win an allowance or expected that, if revealed to the examiner, the reference would cause the examiner to merely question patentability.  Rather, the applicant or attorney must know – and it must be later proven that he or she knew, that the item, if revealed, would lead to a rejection."

Slip Op. at 3. 

 

Punishing Prometheus: Part III – Conclusions Masquerading as Analysis

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Guest Post by Robert R. Sachs of Fenwick & West LLP; Read Part I and Part II. 

Patent attorneys are trained to draft claims using clear and precise language, and in particular to not rely upon relative terminology to define an invention–terms like “about,” “substantially,” “superior,” “better,” “good,” “sufficient” etc.  See, Manual of Patent Examination Procedure (MPEP), § 2173. After all, claims are definitions and indefiniteness is fatal.

So when the Court articulates expresses what is ostensibly a rule of analysis—a definition of what is patentable—patent attorneys naturally look for precision and clarity. Alas, we find a jumble of relative terminology and conclusory statements masquerading as legal reasoning. Consider the following samples:

The question before us is whether the claims do significantly more than simply describe these natural relations. To put the matter more precisely, do the patent claims add enough to their statements of the correlations to allow the processes they describe to qualify as patent-eligible processes that apply natural laws? We believe that the answer to this question is no.

[T]hose steps, when viewed as a whole, add nothing significant beyond the sum of their parts taken separately. For these reasons we believe that the steps are not sufficient to transform unpatentable natural correlations into patentable applications of those regularities.

The Court has repeatedly emphasized this last mentioned concern, a concern that patent law not inhibit further discovery by improperly tying up the future use of laws of nature.

What is “significant” or “enough” or “sufficient?” What would be “properly tying” up future uses? It is “not enough” to say that what’s in Prometheus’s claim is “not enough,” especially when, at the same time, the Court makes sweeping statements that the presence of “entirely natural processes” indicate that the patent recites a “natural law.”  These various statements or criteria are not functional tests—they are conclusions and nothing else.  This leads us to the next problem.

So Long Technology, Hello Business Methods!

The Court pays lip service to the principle that “all inventions at some level embody, use, reflect, rest upon, or apply laws of nature, natural phenomena, or abstract ideas.”  Indeed, any invention in the “hard sciences” of electronics, physics, chemistry, biology, engineering, etc. would perforce comply with the laws—or more properly—descriptive paradigms of the domain. An invention for a new electronic circuit clearly operates according to Maxwell’s equations. An invention for a new way of making a chemical compound necessarily recites steps that in essence are nothing more than chemical reactions—laws of nature in the Court’s book.

Let’s take a look the core of the Court’s analysis of the Prometheus claim and see what happens when we transport it to the domain of electronics, to a simple device such as loudspeaker:

Prometheus

While it takes a human action (the administration of a thiopurine drug) to trigger a manifestation of this relation in a particular person, the relation itself exists in principle apart from any human action. The relation is a consequence of the ways in which thiopurine compounds are metabolized by the body—entirely natural processes. And so a patent that simply describes that relation sets forth a natural law.

A loudspeaker

While it takes a human action (the activation of the amplifier) to trigger the output of the sound from the loudspeaker in response to an electrical signal, the relation itself exists in principle apart from any human action. The relation is a consequence of the ways in which electrical impulses are converted to mechanical movement—entirely natural processes. And so a patent that simply describes that relation sets forth a natural law.

There are—or should I say, were—by my estimate, approximately 10,000 patents on various types of loudspeakers. This is only one example, and a trivial one at that. A similar example could be constructed in any field of technology. And if that is the case, then no patent is immune from this line of attack. Well, no patent except one for a business method.

Business methods, being entirely the province of arbitrary human behavior such as advertising, finance and the like, are the one class of inventions clearly not based upon or using laws of nature and natural phenomenon. Yes, all inventions comply with the law of thermodynamics, etc., and perhaps all human behavior could be explained if we truly could model the regularities that govern the behavior of all fundamental particles, and as result we divorced ourselves from a persistent macro-phenomenon as free will and consciousness.   If we get that far, then we will have a more difficult problem on our hands, whether we can patent non-obvious applications of those laws.   Whether these methods are “abstract ideas” is another matter—but as should be clear from the above, it is my view that a method used in a business is not an abstract idea. If you can sell it, it’s patent-eligible. 

 

Punishing Prometheus: Part II – What is a Claim?

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Guest Post by Robert R. Sachs of Fenwick & West LLP; Read Part I

Yes, I said that: the Court does not understand the nature of patent law—more precisely, it does not understand what claims do. Reading the Court’s treatment of Prometheus’ claim, one would think that claims are some type of qualitative instruction manual, a recipe that speaks to “audiences” such as doctors, about which things are “relevant to their decision making.” Claims are no such thing: they are definitions that articulate a specific combination of steps or structures. They are objective in form and design, not subjective or advisory. The notion that the claims here “trust” doctors to “use those laws” is at best silly, and at worst badly misguided. Reducing the claim to this “instruction manual” allows the Court to analogize the claim to Einstein “telling linear accelerator operators about his basic law”—a low point in modern legal reasoning.

In this decision, as well as in Bilski, Benson, and Flook, the Court simply does not “get” what claims are about. The entire preemption analysis, born of a conflation of “algorithms” with “scientific truths” in Benson, is based on this misunderstanding. By definition claims preempt, that is what they are designed to do: to preclude one from making, using, selling, etc., the invention. A broadly drafted claim preempts broadly. And it is this further confusion—between “breadth” or “abstraction” and “abstract ideas”—that is the second damaging mistake the Court made (and continues to make).

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Gene Patents: AMP v. Myriad Genetics

Patent

The Supreme Court today vacated the Federal Circuit’s decision in AMP v. Myriad Genetics and has ordered the appellate court to reconsider the case in light of the recent Supreme Court decision in Mayo v. Prometheus. To be clear, the Supreme Court’s move here is not a ruling on the merits but rather merely a recognition that the validity of Myriad’s human gene patents may be impacted by the Mayo decision.

I previously wrote that one reasoned result of the Mayo decision is that Myriad’s claims directed toward isolated human DNA are now invalid.

Following Mayo, the court could logically find that the information in the DNA represents a law of nature, that the DNA itself is a natural phenomenon, that the isolation of the DNA simply employs an isolation process already well known and expected at the time of the invention, and ultimately that the isolated DNA is unpatentable because it effectively claims a law of nature or natural phenomenon. One distinguishing point is that Prometheus claimed a process while Myriad claims a composition of matter. As we have seen in recent cases, the Federal Circuit already largely rejects formalistic distinctions between process and composition claims. Here, that distinction is further minimized by the reality that the claimed DNA is functionally characterized by the already well known process of isolating human DNA.

 

Supreme Court: Solving Claim Construction?

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032312_0335_ClaimConstr1
by Dennis Crouch

Retractable Techs., Inc. v. Becton, Dickinson & Co. (on petition for certiorari 2012)

As its company name suggests, Retractable Technologies makes safety syringes that retract after completing a drug injection. Retractable sued BD for patent infringement and won $5 million in damages and permanent injunctive relief. This was the second time that Retractable had filed a lawsuit to enforce its patent. In both cases, the district court interpreted the claim term syringe "body" as encompassing a body "composed of one or multiple pieces." (In the first case, the accused infringer agreed to stop making its product and to pay a $1 million settlement).

On appeal here, BD was able to convince a two-member majority of its Federal Circuit panel to modify the claim construction in a way that limits the "body" element to a "one-piece body." (Majority opinion by Judges Lourie and Plager). The appellate panel narrowly construed the term based upon its reading of the patent specification and the notion that the claims should be limited to what "the inventor actually invented." In dissent, Chief Judge Rader argued that the majority had improperly confined claim scope to the specific embodiments of the invention." Chief Judge Rader also argued in favor of giving more weight to the doctrine of claim differentiation. Here, some of the non-asserted claims in the patent included an explicit "one-piece body" limitation – suggesting that the asserted claim without the "one-piece" limitation must be broader.

After losing the appeal, Retractable filed a petition for rehearing and rehearing en banc. The petition was denied, but Judges Moore and O'Malley each filed dissents.

Supreme Court Petition: Retractable has now filed a petition for writ of certiorari to the United States Supreme Court. The petition raises two questions:

1. Whether a court may depart from the plain and ordinary meaning of a term in a patent claim based on language in the patent specification, where the patentee has neither expressly disavowed the plain meaning of the claim term nor expressly defined the term in a way that differs from its plain meaning.

2. Whether claim construction, including underlying factual issues that are integral to claim construction, is a purely legal question subject to de novo review on appeal.

First Question Goes Nowhere: In my view, the first question presented is not well stated. Of course a court can use context to provide meaning to claim language. A formalistic and restrictive view of patent doctrine was rejected by the Supreme Court in virtually every recent decision, including Mayo, Bilski, KSR, eBay, and MedImmune. Further, many members of the Supreme Court have identified a problem with vague and over-broad claim limitations, and the majority opinion here provides a simple tool for limiting scope: interpret the claims within the context of what was demonstrably understood by the inventor and the examiner and by what would have been known by a reasonably skilled artisan.

Use Specification to Narrow (or Broaden): There are times when the context of the specification is used to broaden the scope of a claim term beyond its ordinary meaning. However, the Federal Circuit judges appear to believe that greater reliance on the specification will usually result in a narrowing of claim scope. Thus, the debate on the role of the specification in claim construction is at least partially a proxy for the debate on whether patents should be given a broad scope or narrow scope. I would again criticize the petition – this time for wholly agreeing that reliance on the specification results in a narrowed scope. Retractable frames the debate on trying to understand "the circumstances in which the language of the specification should narrow the plain meaning of a claim term."

The Second Question is more well framed, although I would have tweaked it slightly to ask: "Whether claim construction, including underlying factual issues that are integral to claim construction, is a purely legal question [that is therefore] subject to de novo review on appeal." The tweak here is important because Retractable is not challenging the Supreme Court's Markman decision but rather challenging the Federal Circuit's Cybor decision. In Markman, the Supreme Court recognized the reality that claim construction includes a number of factual determinations – calling the process a "mongrel" of fact and law. However, the court ruled that claim construction should be treated as an issue of law to be decided by a judge. In Cybor, the Federal Circuit applied its usual formalistic if-then approach to rule that appellate review must be de novo because claim construction is an issue of law. From the petition:

In Markman, this Court held that, for purposes of the Seventh Amendment, the task of construing patent claims falls to trial judges rather than juries. Markman did not decide the standard of review that an appellate court should apply to a district court's claim construction. The Court noted, however, that the process of construing a claim is a "mongrel practice," that "falls somewhere between a pristine legal standard and a simple historical fact." In holding that trial judges are "better suited" for this task than juries, the Court recognized that claim construction requires trial judges to exercise a "trained ability to evaluate the testimony in relation to the overall structure of the patent." Accordingly, the Court held that "there is sufficient reason to treat construction of terms of art like many other responsibilities that we cede to a judge in the normal course of trial, notwithstanding its evidentiary underpinnings." Thus, Markman recognized that claim construction involves underlying factual questions, and said nothing to indicate that the Federal Circuit should displace the district court's resolution of those questions.

There are lots of doctrines that receive de novo review that do not have a reversal rate anywhere near that of claim construction. I think that everyone agrees that claim construction is inherently difficult. Claim construction rulings do not provide a yes-no answer like you might find in an obviousness judgment. Rather, a judge is required to identify the best interpretation of all possible interpretations of each contested claim term. And, unlike statutory interpretation, we do not have the benefit of the scope being developed over time through a series of cases. Rather, in most instances, a court's construction is in the first instance. In addition to the inherent difficulty, claim construction is made more difficult because of the open panel dependence of claim construction decisions. For many years the Federal Circuit refused to admit any panel dependence in its decision making, that has changed.

Where to Focus Assurances?: District court judges complain about claim construction because of the high likelihood that their decisions will be reversed on appeal. Giving deference to district court judgments would likely mean fewer reversals. This approach gives us certainty earlier in the process, but only once the district court issues a final claim construction. That date still seems very late. The scope of patent claims is of critical importance to almost all patent monetization transactions. However, very few of those transactions take place in conjunction with a district court claim construction decision. We need a process for substantially understanding claim scope at a much earlier stage and without relying on a federal court.

One answer for an early understanding of claim scope: Define terms during prosecution. If applicants fail to define terms, examiners should provide their own definitions as part of the office action. In the short-term, the focus should be on terms that are (1) frequently debated in court (such as "server" or "coupled to"; (2) used in the specification in a way that is in tension with the ordinary meaning of a term; or (3) inherently imprecise (such as "about").

Notes: 

Punishing Prometheus: The Supreme Court’s Blunders in Mayo v. Prometheus

Patent, , ,

Guest Post by Robert R. Sachs of Fenwick & West LLP

“Not even wrong.” So said Wolfgang Pauli about a proposed analysis by a young physicist, meaning that the arguments were not subject to falsification, the basic tool of scientific analysis. So too it can be said about the Supreme Court’s decision in Mayo v. Prometheus. The Court’s analysis creates a framework for patent eligibility in which almost any method claim can be invalidated. Like so many pseudo-sciences in which every phenomenon can be rationalized and in which there is no test that can show the theory to be incorrect, under Prometheus seemingly anything can be “explained” as being unpatentable subject matter.

Let me say at the outset that I’ve been a student of patent law, and patent eligibility in particular, since 1993. My clients have frequently been those whose inventions bumped up against the boundaries of patentable subject matter—in software, e-commerce, finance, business operations, user interfaces, and bio-informatics to name a few—so I have become intimately acquainted with both the legal and practical implications of this question. As such my personal reaction to this decision is very strong, and I will be quite blunt in what follows.

Over the next several days I will address just some of the logical and legal errors in the Court’s decision.

What’s a Law of Nature?

The first critical mistake is the Court’s assumption that Prometheus’ claims recited a “law of nature:” “The claims purport to apply natural laws describing the relationships between the concentration in the blood of certain thiopurine metabolites and the likelihood that the drug dosage will be ineffective or induce harmful side-effects.” The facile assumption that this relationship is a “law of nature” is incorrect, and potentially the most damaging misstep by the Court.

First, let us assume for the moment that there are in fact such things as “laws of nature.” What would their characteristics be? A first approximation would suggest that a law of nature is immutable and universal, that it is not subject to change, and it applies in all circumstances. See, Evidence Based Science. Thus, gravity and the speed light apply to you and me equally, and under all conditions. (I’m purposely using these two examples, for reasons that will become clear.)  However, this is not the case with the toxicity of any drug, including thiopurines, as acknowledged by the Court: the amount of a toxic dose varies between individuals for two reasons. First, different people metabolize at different rates, thereby producing different metabolite levels for a given dose. Second, individuals have differential responses to a given amount of the metabolites; a given level of the metabolites may be toxic in one person and not toxic in another. Thus, while the patent sets forth metabolite levels for toxicity and effectiveness, these levels are necessarily probabilistic, as some patients could experience toxicity at levels below or above those specified in the patent claims. This is inherent in the way toxicity is determined using a median lethal dose, LD50. This is exactly the same reason that one person can be drop dead drunk after five drinks and another can be stone cold sober at the same level. Indeed, Mayo’s test used a higher threshold for toxicity—evidence that there is no “law of nature” as to what is a toxic dose of thiopurine in all humans.

The “natural relation” that Prometheus claims is, itself, not immutable in an even deeper sense. This relationship is a byproduct of human (or perhaps more generally mammalian) biology, which from a logical point of view is a contingent relationship that could have been otherwise: we could have evolved in such a way that the toxicity range was higher or lower, or the drug was entirely ineffective. That is, it’s an arbitrary and contingent fact that humans evolved so that thiopurine drugs were effective at all for treating immune-mediated gastrointestinal disorders, or that we metabolize them in a manner that makes them toxic at specific dosing ranges. Indeed, given that humans are not exposed to thiopurine in nature, it is hard to understand how it can even be argued that it is a “natural law” that these drugs have a specific range of toxic or effective dosages at all. That these drugs are effective (or toxic) is a classic discovery in the truest sense of the term.

At best, the relationship between the dosage and toxicity level may be a “natural phenomenon.” Let us assume that is the case. Natural phenomena are a different class of things than laws of nature. Lightning, mirages, tornadoes, superconductivity, rainbows, these are natural phenomena: events that take place in nature (or in the lab) under specific and contingent conditions. While these events are of course dependent on the laws of nature, they are different from them in kind. The prohibition of patent claims in this regard is for claims on the phenomenon itself, not on the specific application of a phenomenon. Indeed, most patents in the chemical, biological, and electrical arts are based precisely on this distinction, being able to induce, apply, or control a natural phenomenon for a particular purpose. For example, there are thousands of patents that expressly claim a particular use of the Hall effect, natural phenomena discovered in 1879. The Court’s failure to appreciate this distinction puts many patents that harness natural phenomena at risk.

In short, the relationship of thiopurine dosage to toxicity is a contingent, empirical fact and subject to discovery. Like other empirical facts, it is precisely the type of subject matter that has been patented in this country since the very first patent issued by the USPTO: Samuel Hopkins’ patent on an improved method for making potash, based on the discovery that burning the raw ashes a second time increased their carbonate production. Hopkins’ discovery is no different in kind from Prometheus’ discovery: in both cases empirical “scientific” facts about the world.

But let us return to the core assumption: that there are laws of nature in the first instance. The Court makes the obvious reference to Einstein’s E=mc2 equation as an example. But the great scientist would have readily dismissed this appellation, knowing full well that what he set forth was a theory, a model, a description that was subject to falsification. Indeed, Einstein’s work has been criticized as being incomplete, or valid only in limited circumstances.

The view that there are laws of nature reflects an 18th century view of the world, based no doubt upon the classical, Newtonian view of a reality of absolute space and time governed by the three “laws of motion”—laws that were thought to be immutable and universal—and which Einstein among others showed not to be “laws” at all.

Most modern scientists do not view reality as defined by “laws”—indeed, the very idea that we could “know” what the “laws” are itself begs the very questions that philosophers since Plato have struggled with, the questions of epistemology (what is knowledge, what can we know) and ontology (what exists).

In several places, the Court lumps laws of nature together with “abstract ideas,” for example by leaning on the analysis in Bilski and Benson. But again, this is a category error: abstract ideas are very different from laws of nature, and must be treated separately. “Ideas,” classically speaking, are the “impressions in your head” when you think about something—the thing you think about is a “concept.” When you think about concepts that have instances in the world—cats, dogs, and thiopurine—you are thinking of “concrete” concepts, and your ideas are “concrete.”  Even when you think of a unicorn or a flying purple people eater, you are thinking of a concrete concept because it could have an instance in the world. However, when you think about concepts that do not (or could not) have instances in the world—justice, eternity, infinitesimal, invisible green four sided triangles—or metaphors—All the world’s a stage, and all the men and women merely players—the “idea” in your head is “abstract.” (Of course, I know that this is (1) a gloss, and (2) subject to debate as much as anything else in philosophy. Arguably, there are no “abstract” concepts at all. I’ll leave that debate for another day).

To wit: the abstract idea of say, immortality, is clearly not a “law of nature,” describing something that by definition cannot have examples in the world, since nothing can be immortal (there could be unicorns however, thus the concept of “unicorn” is concrete). Conversely, Ohm’s Law—that the current through a conductor between two points is directly proportional to the potential difference across the two points—describes something inherently and entirely physical and real. Ohm’s Law is a description of the world (and it turns out, not always correct). That the Court attempts to put these two square pegs in the same round hole reveals just how little the Court understands the nuances of science, philosophy and language—let alone the patent law itself.

Tomorrow:  What’s a Claim? and Patent-Eligibility vs. Patentability

 

 

Examining Subject Matter Eligibility under Mayo v. Prometheus

Patent,

By Dennis Crouch

In the wake of the Supreme Court’s decision in Mayo v. Prometheus, the US Patent & Trademark Office has distributed a short memorandum to examiners providing additional guidance. One problem with the Prometheus decision is that it does not appear to consider administrative practicality and there be an ongoing open question as to whether the USPTO will be able to successfully implement the proffered rule of subject matter eligibility. Regardless, the USPTO must follow the law to the best of its abilities and that means that it must examine patents using the Mayo standards.

In the three page “preliminary” document sent to the examining corps, the PTO’s chief examination policy guru Drew Hirshfeld described the USPTO’s conservative new approach:

As part of a complete analysis under 35 U.S.C. § 101, examiners should continue to examine patent applications for compliance with section 101 using the existing Interim Bilski Guidance issued July 27, 2010, factoring in the additional considerations below. The Interim Bilski Guidance directs examiners to weigh factors in favor of and against eligibility and reminds examiners that, while the machine-or-transformation test is an investigative tool , it is not the sole or a determinative test for deciding whether an invention is patent-eligible.

Examiners must continue to ensure that claims, particularly process claims, are not directed to an exception to eligibility such that the claim amounts to a monopoly on the law of nature, natural phenomenon, or abstract idea itself. In addition, to be patent-eligible, a claim that includes an exception should include other elements or combination of elements such that, in practice, the claimed product or process amounts to significantly more than a law of nature, a natural phenomenon, or an abstract idea with conventional steps specified at a high level of generality appended thereto.    

If a claim is effectively directed to the exception itself (a law of nature, a natural phenomenon, or an abstract idea) and therefore does not meet the eligibility requirements, the examiner should reject the claim under section 101 as being directed to non-statutory subject matter. If a claim is rejected under section 101 on the basis that it is drawn to an exception, the applicant then has the opportunity to explain why the claim is not drawn solely to the exception and point to limitations in the claim that apply the law of nature, natural phenomena or abstract idea.

The USPTO is continuing to study the decision in Mayo and the body of case law that has evolved since Bilski and is developing further detailed guidance on patent subject matter eligibility under 35 U.S.C. § 101.

The document describes the Mayo decision as follows:

The Supreme Court found that because the laws of nature recited by the patent claims – the relationships between concentrations of certain metabolites in the blood and the likelihood that a thiopurine drug dosage will prove ineffective or cause harm – are not themselves patent eligible, the claimed processes are likewise not patent-eligible unless they have additional features that provide practical assurance that the processes are genuine applications of those laws rather than drafting efforts designed to monopolize the correlations. The additional steps in the claimed processes here are not themselves natural laws, but neither are they sufficient to transform the nature of the claims.

In this case, the claims inform a relevant audience about certain laws of nature. Any additional steps consist of well-understood, routine, conventional activity already engaged in by the scientific community. Those steps, when viewed as a whole, add nothing significant beyond the sum of their parts taken separately. The Court has made clear that to transform an unpatentable law of nature into a patent-eligible application of such a law, one must do more than simply state the law of nature while adding the words “apply it.” Essentially, appending conventional steps, specified at a high level of generality, to laws of nature, natural phenomena, and abstract ideas cannot make those laws, phenomena, and ideas patent-eligible.

… A claim that recites a law of nature or natural correlation, with additional steps that involve well-understood, routine, conventional activity previously engaged in by researchers in the field is not patent-eligible, regardless of whether the steps result in a transformation. On the other hand, reaching back to Neilson, the Court pointed to an eligible process that included not only a law of nature (hot air promotes ignition) but also several unconventional steps (involving a blast furnace) that confined the claims to a particular, useful application of the principle.

The document does not address whether examiners should use the same analysis when considering claims that include an “abstract idea” such as a mathematical algorithm (i.e., software).

I suspect that the USPTO will wait for additional movement on the Myriad case before releasing a full set of new guidelines to examiners.

Read the memo: /media/docs/2012/03/mayo_prelim_guidance.pdf

Non-Practicing Entities at the USITC

Patent

By Dennis Crouch

RPX today published a study of the increase in non-practicing entity (NPE) activity at the United States International Trade Commission (ITC). The charts above (that come from the RPX article) show annual numbers for ITC investigations on behalf of NPE patent holders and the cumulative number of respondents (i.e., number of defendants). Both figures show a major increase in NPE activity at the ITC. In its study, RPX points-out that “[f]ully 25% of ITC Investigations in 2011 were filed by an NPE and 51% of respondents hauled into the ITC were in response to an NPE complaint.”

The ITC is an agency of the US Government not an Article III court. However, its administrative law judges conduct hearings that look an awful-lot like bench trials. I don’t have the data here, but the number of “investigations” is typically a subset of the total number of complaints filed. It takes votes from three of the six ITC Commissioners to begin an official investigation.

Why the new demand?: (1) In 2010, the ITC generously interpreted the “domestic industry” requirement and ruled that NPEs will ordinarily have standing to pursue a complaint. (2) Although the ITC does not award money damages, the ITC does typically issue injunctive relief since the agency is not bound by eBay v. MercExchange; (3) The ITC is not bound by the new joinder rules that limit the number of accused infringers per action; and (4) The ITC tends to move much more quickly than ordinary patent litigation.

Injunction for an NPE?: In the vast majority of NPE cases, the patent holder is actually seeking money and would receive no direct benefit from the accused infringer ceasing operations. However, despite being of no direct value to an NPE, injunctive relief is a major bargaining chip because of its value to the accused infringer. The ITC’s injunctions are only directed at imports, but most high-tech consumer products are imported and therefore qualify.

Money Damages: Money damages are not available at the ITC for either past or ongoing infringement. However, pursuing an action at the ITC does not foreclose an NPE patent holder from also filing a complaint in a federal district court seeking monetary damages. In this sense, ITC litigation should likely be seen as an additional potential battle-front that may be fought in conjunction with district court litigation; reexamination (and future review) processes at the USPTO; and non-US patent litigation as well.

RPX: I should note here the source of this data is RPX – a company that has built its business on making NPEs appear to be the “bad guys.” RPX is currently defending its market-shaping activities in an antitrust lawsuit filed earlier this month. Although I believe the data presented here is correct, an anti-NPE bent is apparent from the text of the study.

Notes

 

A New Record Number of Patents

Patent

This week the USPTO issued a record number 4,976 utility patent — setting an all time single-week high. As it turns out, the top-ten single week issuance numbers all come from fiscal year 2012. (The top seven come from calendar year 2012 even though we are only 13-weeks into the year).  As the PTO continues to ramp-up examination throughput, we can expect these numbers to continue to rise.  The PTO does not regularly release information regarding the number of abandoned cases and so I have been unable to confirm whether those numbers have risen in parallel.

 
Top Grant Dates Count
3/20/2012 4,976
3/6/2012 4,880
1/10/2012 4,834
1/31/2012 4,831
2/14/2012 4,826
2/21/2012 4,825
2/28/2012 4,818
11/22/2011 4,778
11/15/2011 4,777
12/6/2011 4,777

The newest group of patents include No. 8,141,114 issued to Microsoft.The '114 patent is directed to a "content rating and recommendation system." I wonder whether the claim should be considered dead-on-arrival based upon its failure to claim patent eligible subject matter under 35 U.S.C. 101.  The examiner had initially rejected the claims as subject matter ineligible in a 2008 office action rejection. That rejection was withdrawn after Microsoft amended the claim preambles to include the phrase "computer-readable medium" in the system claims and "implemented using a processor" in the method claims.

The system claim:

1. A content ratings and recommendation system implemented using a computer-readable medium, comprising:

a ratings service configured to compile ratings of programs for a rating system that is associated with a group of viewers where at least one viewer of the group of viewers establishes the rating system including at least one standard of the rating system, and where at least some viewers of the group of viewers use the rating system to rate the programs for the group of viewers, wherein the rating system represents flexible characterization of the media content of the programs based on at least one of any possible descriptive aspect of the program;

a recommendation service configured to provide program recommendations to the viewers of the group of viewers based on the rating system, the recommendation further being configured to monitor viewing selections of a viewer that is not a member of the group of viewers, and to offer a membership into the rating system to the viewer based on the viewing selections of the viewer and the at least one standard of the rating system; and

a rater monitoring service configured to receive a rating of a particular viewer who used the rating system to rate a particular program and to provide the rating of the particular viewer to the viewers of the group of viewers, the rating of the particular viewer relating to a reliability or credibility of the ratings made by the particular viewer.

The patent application was originally filed six years ago in 2006.  The examiner issued a non-final rejection followed by a final rejection. At that point, Microsoft filed a first request for continued examination (RCE) and the examiner issued a non-final rejection followed by another final rejection.  At that point, Microsoft filed a second RCE and the examiner issued two more rejections. The examiner then considered Microsoft's amendment-after-final and allowed the case.  During this time, Microsoft amended the claims six different times before eventually finding a set of claims that the examiner found allowable. During this time, the examiner stuck with the same prior art rejections that were found in the original rejection with the caveat that the examiner added one additional reference to the fifth office action.

It is interesting (at least to me) that none of the three listed inventors work at Microsoft any longer.

USPTO Director Kappos on Increased USPTO Fees

Patent,

Oh his blog, USPTO Director Dave Kappos has written an important defense of proposed USPTO fee increases and his rejection of the normal Washington DC approach of including improbable efficiency gains as major budget elements. I have excerpted a portion of the Kappos post that he titles “Increased Fees v. Operational Efficiencies”:< ?xml:namespace prefix ="" o />

[S]ome stakeholders have taken the view—to caricature it slightly—that the USPTO does not need to increase fees; it needs to get more efficient.

We could not agree more on the importance of improving efficiency at the USPTO. . . . But attempting to draw a corollary between fee-setting and speculation about the possible impact of potential future efficiency gains is difficult without the benefit of hindsight. As we have outlined in our fee proposal, our fees must be set in a manner that enables us to continue investing in reducing the backlog and improving all other areas of our agency. Our experience also reminds us that implementing improvements frequently causes short term disruptions, and likely won’t immediately translate into efficiencies. Anyone who runs a business will tell you that productivity investments often take years to pay off.

Moreover, my judgment as the steward of this agency is that I cannot proceed with a funding model that assumes further efficiency gains, especially if we have not yet achieved them. It places our agency at risk, and is just not right for our employees or for our stakeholders.

The responsible approach is to rely on our experience and current cost model, factoring in the efficiency gains we have achieved to date, but not speculating about possible future gains. This approach of using current costs as a basis for setting prices is the common practice among businesses, and follows the sound advice of the accounting, finance, and economics professions.

Then the question becomes the one asked in our fee proposal: does the U.S. innovation community want us to continue investing to quickly reduce the backlog and fully capture the promise of the AIA, or does it want us to back off a bit and accept a longer trajectory to reducing the backlog, and a higher level of risk relative to future funding downturns? The answer will ultimately have consequences for the kinds of efficiencies the agency is able to realize in the future, and what level of services the USPTO can deliver in years to come.

Read the full post here.

 

Scholarship Cited by the Supreme Court in Mayo v. Prometheus

Patent,

Mayo v. Prometheus: Natural Process + Known Elements = Normally No Patent

Patent

by Dennis Crouch

Mayo Collaborative Services v. Prometheus Labs., Inc. (Supreme Court 2012)

A unanimous (9–0) Supreme Court has held that the personalized medicine dosing process invented by Prometheus is not eligible for patent protection because the process is effectively an unpatentable law of nature. This decision reverses the Court of Appeals for the Federal Circuit’s holding that the claims were patentable because they included substantial physical limitations.

The Prometheus invention identifies a “relationships between concentrations of certain metabolites in the blood and the likelihood that a dosage of a thiopurine drug will prove [either] ineffective or cause harm. Claim 1, for example, states that if the levels of 6–TG in the blood (of a patient who has taken a dose of a thiopurine drug) exceed about 400 pmol per 8×10(8) red blood cells, then the administered dose is likely to produce toxic side effects.”  In addition to claiming the boundaries between over and under dosage of thiopurine based upon measuring 6–TG in the blood, some of the Prometheus claims include additional limitations such as (1) administering thiopurine to a patient and (2) determining the blood level of 6–TG.

Law of Nature: In its decision, the Supreme Court first identified the correlation between 6–TG blood levels and over/under thiopurine dosage as an unpatentable law of nature.

The relation is a consequence of the ways in which thiopurine compounds are metabolized by the body—entirely natural processes. And so a patent that simply describes that relation sets forth a natural law.

As is usual in these cases, the Court referenced the groundbreaking discoveries by Einstein and Newton and noted that neither “E=mc²” nor the “law of gravity” would have been subject matter eligible.  Taking that as a premise, the court jumped to the conclusion that, therefore, the discovery that the blood level of 6–TG in a human correlates with either an overdose or underdose of thiopurine is also subject matter ineligible.

Additional Elements: The Supreme Court then considered the additional limitations and held them insufficient to transform the identified natural law into a patentable process.  The opinion repeatedly and favorably cites Parker v. Flook, 437 U. S. 584 (1978) in finding that the physical and transformative elements of the invention were not “genuine applications of those laws[, but] rather .. drafting efforts designed to monopolize the correlations.”  As to the claimed application of the law of nature, court here found it relevant and important that the additional steps were already known in the art.

Because methods for making such determinations were well known in the art, this step simply tells doctors to engage in well-understood, routine, conventional activity previously engaged in by scientists in the field. Such activity is normally not sufficient to transform an unpatentable law of nature into a patent-eligible application of such a law.

The conclusion here is that (1) a newly discovered law of nature is itself unpatentable and (2) the application of that newly discovered law is also normally unpatentable if the application merely relies upon elements already known in the art.  To be clear, the court still maintains the law of Diehr that “an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection.”  On the other hand, the “application” must be “significant,” not “too broadly preempt” use of the law, and include other elements that constitute an “inventive concept” that is significant and separate from the natural law itself.  Of note, it is likely important that in this decision the court unfavorably cites the limitation of Flook found in Diehr that eligibility under §  101 “must be” based on claims “considered as a whole.”

Process and Presumption: In addition to the legal elements, the decision can be read to create a process for determining patent eligibility for patent claims that include a law of nature.  The court wrote that the “additional features” that show an application of the law must “provide practical assurance that the [claimed] process is more than a drafting effort.”  This language suggests that the burden will be on the patentee to prove that its limitations are more than patent attorney tricks. 

Whither Myriad: Although no action has been taken yet, I presume that the Supreme Court will now vacate and remand the pending Myriad case with instructions to the Federal Circuit to reconsider its holding that isolated human DNA is patentable.  Following Mayo, the court could logically find that the information in the DNA represents a law of nature, that the DNA itself is a natural phenomenon,  that the isolation of the DNA simply employs an isolation process already well known and expected at the time of the invention, and ultimately that the isolated DNA is unpatentable because it effectively claims a law of nature or natural phenomenon.  One distinguishing point is that Prometheus claimed a process while Myriad claims a composition of matter.  As we have seen in recent cases, the Federal Circuit already largely rejects formalistic distinctions between process and composition claims. Here, that distinction is further minimized by the reality that the claimed DNA is functionally characterized by the already well known process of isolating human DNA.

Read the opinion by Justice Breyer here: LINK.

The following is the text of the now invalidated Claim 1 of the Prometheus U.S. Patent No. 6,355,623.

A method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising:

(a) administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointesti­nal disorder; and

(b) determining the level of 6-thioguanine in said subject having said immune-mediated gastrointesti­nal disorder,

wherein the level of 6-thioguanine less than about 230 pmol per 8×108 red blood cells indicates a need to increase the amount of said drug subsequently admin­istered to said subject and

wherein the level of 6-thioguanine greater than about 400 pmol per 8×108 red blood cells indicates a need to decrease the amount of said drug subsequently ad­ ministered to said subject.

AIA Changes The Role of the Eastern District of Texas

Patent

Jim Pistorino has updated his annual BNA report on patent lawsuit case filings. His biggest finding is that the new joinder provisions of the America Invents Act (AIA) appear to have had a major impact on the distribution of new lawsuit filings.

The new joinder rules became effective for all patent lawsuits filed on or after September 16, 2011 [updated to fix typo] and limit the ability of a plaintiff to join multiple unrelated defendants in a single action.  In addition to potential cost savings of a single-suit, the joining of geographically diverse defendants in a single suit is thought to make it more difficult for one of the defendants to force a transfer of venue. Thus, the idea behind limiting the joinder of unrelated defendants is that it may allow courts to more easily transfer venue and thus shift filing focus away from the Eastern District of Texas.

The punch line here from the preliminary data through December 2011 is that (1) post-AIA filings have dropped in the Eastern District of Texas and risen in other districts, namely Delaware; (2) more cases are now being filed in Delaware than any other district; (3) more defendants are being sued in Delaware than any other district. Prior to AIA, E.D. Texas was the clear leader in these categories; and (4) overall the number of defendants being sued has decreased.

Read the article: 2011 Trends in Patent Case Filings by James C. Pistorino and Susan Crane.

BPAI Ex Parte Results

Patent

by Dennis Crouch

Because of the availability of settlement, percentage win-rate is often given little policy consideration.  Ex parte appeals are no different.  Before reaching a BPAI decision, examiners can “settle” by withdrawing their pending rejection and then either allowing the patent to issue or else prepare a new and different rejection of the pending application.  Patent applicants can also settle cases by abandoning the case or else by filing an amendment and a request for continued examination (RCE). 

The chart above shows percentage win-rate for BPAI appeals in ex parte cases. In an earlier study, I showed that the vast majority of these decisions are on obviousness grounds. Note – I only considered appeals decided on the merits and excluded those remanded or dismissed on other grounds.

Old/Old Patent Applications

Patent

I received a note from a patent examiner regarding my estimate that there are now around 400 pre-URAA applications still pending at the USPTO.  According to the examiner, the actual number of still-pending applications is 216 (excluding applications being held under a secrecy order).  All of these applications have been pending since 1995 and, upon issue, will still have 17–years of patent term remaining.

This is now a miniscule number compared with the 1.2 million applications pending at the USPTO.  On the other hand, all of these applications are likely quite valuable.

See “New/Old Patents”