February 2016

Ethicon: What Powers Can the Director Delegate to the Patent Trial & Appeal Board?

Patent, , ,

By Dennis Crouch

This is my second post[1] on the Federal Circuit’s 2016 decision Ethicon.[2]  The case focuses on the institution and later proceedings of inter partes reviews (IPRs).  The first stage is known as institution that, according to the statute, is within the purview of the “Director” of the USPTO.  Once instituted, the case moves to the second stage where the Patent Trial and Appeal Board (PTAB) is tasked the trial and the final decision.  Despite the statutory separation, the USPTO has created a process where the PTAB (rather than the Director) makes both the institution and final decision.  In its panel decision, the Federal Circuit has agreed that the statute provides the Director with authority to make the institution decision, but found that she had properly delegated that authority to the PTAB.

Developing an Efficient Process: After the IPR statute was enacted as part of the 2011 AIA, the USPTO implementation team concerned itself with the practicalities of implementation.  A major concern whose impact is apparent throughout the IPR implementation rules stems from the statutory one-year deadline for issuing a final written decision.  That one-year deadline placed efficiency and timeliness as top USPTO priorities.  The Director saw one way to create efficiencies was to link the institution with the trial and final decision.  The setup then was (and is) to have PTAB judges decide the institution stage and then have those same judges handle the trial and final determination of patentability.  This structure gives a head-start on the one-year timeline and avoids any waste-of-resources involved requiring multiple individuals to get-up-to-speed on the issues for a particular case.  The majority agrees with this assessment: “The PTO has determined that, in the interest of efficiency, the decision to institute and the final decision should be made by the same Board panel.”  I buy into this efficiency argument – the question though is (1) whether it violates the decision-maker-separation written into the statute or (2) leads to unfair results.

Delegation by the Director: The Patent Act includes a number of roles of the USPTO Director, including issuing and rejecting patents[3], making copies of patent documents, classifying patents, etc.  The Director does not personally make these decisions, but delegates them to the Commissioner for Patents and other PTO employees.  That structure is usual for administrative agencies and also highlighted by the statutory structure.[4]  Both the commissioner and the “other employees” are – by statute – placed into the role of general management and duties.

The Patent Trial and Appeal Board and its associated Administrative Patent Judges are different.  Their authority is particularly spelled out as follows: The Patent Trial and Appeal Board shall—

  • on written appeal of an applicant, review adverse decisions of examiners upon applications for patents pursuant to section 134(a);
  • review appeals of reexaminations pursuant to section 134(b);
  • conduct derivation proceedings pursuant to section 135; and
  • conduct inter partes reviews and post-grant reviews pursuant to chapters 31 and 32.[5]

With regard to IPR proceedings, note here that the PTAB authority is to “conduct” IPR proceedings and not “institute” those proceedings.  As the Federal Circuit has previously held, those are distinct activities under the statute.  The Administrative Patent Judges are also somewhat different than ordinary PTO employees – they are judges and they are deemed Officers under the U.S. Constitution appointed by the Secretary of Commerce (rather than PTO director).[6]  Certainly, it would have been improper to take-away statutory authority from PTAB, the question though is whether it was proper for the Director to add these new duties.

The Statutory Structure Separating Institution from Proceedings: I described above how Section 6 of the Patent Act seems to limit the authority of the PTAB to IPR proceedings (rather than institutions).  The statute goes further into this: the Director determines whether an IPR review is to be instituted. 35 U.S.C. § 314(a).  If instituted by the Director, the Board then conducts the trial. 35 U.S.C. § 316(c).  The separation here, is further emphasized by the fact that the institution proceeding is not appealable while the final decision is appealable.  The idea that these are separate roles fit within the history and structure of the agency where no decision-making roles (beyond that authorized by Section 6) have been given to the PTAB other than this institution decision. Thus, the PTAB does not decide petitions (other than those directly related to PTAB operations), reissues, or reexaminations (except on appeal).

The majority opinion in this case was penned by Judge Dyk and joined by Judge Taranto glosses-over all of these arguments, writing:

There is nothing in the statute or legislative history of the statute indicating a concern with separating the functions of initiation and final decision. Ethicon ignores the longstanding rule that agency heads have implied authority to delegate to officials within the agency, even without explicit statutory authority and even when agency officials have other statutory duties.

The court particularly fails to consider the role of the PTAB and of its Judges and whether those bodies should be considered separate and distinct from other USPTO employees.  A request for rehearing is almost certainly coming that may well be followed by a petition for writ of certiorari.

I wonder if the court would have changed direction if the statutory structure of the IPR process had begun with a determination by the Director followed by a right of appeal to the PTAB (rather than institution followed by final decision). In that situation, would the Director be permitted to delegate the initial decision to the PTAB?

The decision here is not in a vacuum.  Rather, most believe that a separation-of-roles would reduce the likelihood of cancelling claims in IPRs.  This result will help to divide the parties doing the arguing according to whether they are enforcing patents or challenging patents.

= = = = =

[1] Read the first post: Crouch, Due Process and Separating Powers within an Agency, Patently-O (January 13, 2016) at https://patentlyo.com/patent/2016/01/process-separating-within.html.

[2] Ethicon Endo-Surgery v. Covidien, — F.3d —, 2016 WL 145576, (Fed. Cir. 2016) http://www.cafc.uscourts.gov/sites/default/files/opinions-orders/14-1771.Opinion.1-8-2016.1.PDF.

[3] 35 U.S.C. §§ 131 and 132.

[4] 35 U.S.C. § 3(b).

[5] 35 U.S.C. § 6(b).

[6] Following professor John Duffy’s 2007 article on-point, these roles have been tightened-up. https://patentlyo.com/media/docs/2011/10/Duffy.BPAI.pdf.

Patentlyo Bits and Bytes by Anthony McCain

Patent

Get a Job doing Patent Law

When a Consultant Starts Work Before He Signs the Agreement

Patent

by Dennis Crouch

A discussion of TriReme Medical v. AngioScore, Inc. (Fed. Cir. 2016)

Corporations must be getting somewhat annoyed with the antics of these pesky inventors. TriReme v. AngioScore centers on an inventorship dispute involving Dr. Chaim Lotan who was previously a paid consultant with AngioScore but who later sold his rights to a competitor TriReme.   In the lawsuit, TriReme sued for correction-of-inventorship of three AngioScore patents that do not currently list Lotan as an inventor.

The Supreme Court has repeatedly announced that ownership of potential patent rights initially vest with the inventor(s). So far in our law, the set of potential “inventors” is limited to human persons (not corporate persons or machines or macaques). The initial right may, however, be transferred to through an assignment agreement.

In this case, the district court found that Lotan had assigned his rights to AngioScore and that his later purported assignment to TriReme actually transferred no rights.  These two conclusions led to the final dismissal with a holding that TriReme had no standing to bring its claim.

On appeal, the Federal Circuit pulled-up the Consulting Agreement between Lotan and AngioScore that plainly indicates that Lotan “hereby assigns” all rights to his inventions, developments, and improvements made during the term of the Agreement. The problem with the agreement, however, was that Lotan had actually begun working prior to his signing of the agreement.  In particular, he had run a full day test on the proposed angio-balloon, discovered a retention problem and recommended a solution.  The later issued patents (that did not include Dr. Lotan’s name) did include an attachment structure similar to the one he had recommended.

The consulting agreement included a second provision that required Lotan to list all prior inventions relating to the work to be developed. Lotan did not include his suggested solution in that list.  The district court held that Lotan’s failure to include the pre-agreement solution on the list resulted in an assignment of his rights to that solution to AngioScore – based upon an understanding of the “purpose” of the agreement.

On appeal, the Federal Circuit rejected that analysis. Applying California law, the court found that nothing in the contract purported to assign pre-agreement rights.  Likewise, the Federal Circuit found no “estoppel-by-contract” since “neither Dr. Lotan nor his successor in interest (TriReme) seeks to enforce any rights under the contract.”

 

= = = = =

The situation highlighted here regularly arises when a third-party is initially approached informally before being contracted-in.  The solution to the problem is to add an ex post assignment of any pre-agreement innovations stemming from the informal work.

= = = = =

The patents at issue include U.S. Patent Nos. 8,080,026; 8,454,636; and 8,721,667.  To me it is somewhat interesting that one of the listed co-inventors (Eitan Konstantino) left AngioScore to found the competitor TriReme.

David Caine (Arnold & Porter) argued the case for TriReme while Peter Armenio (Quinn Emanuel) represented AngioScore.

Strictly Construing Amended Claims Against the Patentee

Patent,

by Dennis Crouch

In Cioffi v. Google, the Federal Circuit sided with the patentee, Cioffi — holding that the district court erred in its construction of the asserted patent claims and thus vacated the holdings non-infringement and invalidity via indefiniteness. (Non-precedential opinion).  Now, Google has petitioned the court for an en banc rehearing asking the court to “strictly construe” claim amendments against the patentee.

1. When construing a patent claim, should courts generally consult the prosecution history as context for resolving ambiguities, or is prosecution history relevant only if it clearly and unmistakably disavows claim scope?
2. When a patent applicant has amended a claim to overcome the Patent and Trademark Office’s earlier disallowance of the claim, should a court strictly construe the amended claim language against the applicant, as the Supreme Court has held, or consider the amendment history to be relevant only to the extent that it clearly and unambiguously disavows claim scope, as this Court has held

The issues raised here are parallel to those raised in the failed Google v. Vederi petition for writ of certiori. In that case, the Google asked (but the Supreme Court refused to answer):

Whether, when an applicant for a patent amends a claim to overcome the PTOs earlier disallowance of the claim, a court should (i) presume that the amendment narrowed the claim and strictly construe the amended claim language against the applicant, as this Court has held; or (ii) presume that the claim scope remained the same and require that any narrowing be clear and unmistakable, as the Federal Circuit has held.

In my 2015 discussion of Vederi, I wrote that the following:

[T]he Federal Circuit has strayed significantly from Pre-1952 disclaimer law exemplified by cases such as Supply Co. v. Ace Patents Corp., 315 U.S. 126, 137 (1942); Keystone Driller Co. v. Nw. Eng’g Corp., 294 U.S. 42, 48 (1935); Smith v. Magic City Kennel Club, Inc., 282 U.S. 784, 789–90 (1931); I.T.S. Rubber Co. v. Essex Rubber Co., 272 U.S. 429, 443–44 (1926); and Hubbell v. United States, 179 U.S. 77, 84 (1900).

Google relies upon many of these as well as additional cases for its argument. It writes:

The Supreme Court has long held that amendments made to overcome disallowance must be strictly construed against the applicant and in favor of the public. E.g., Exhibit Supply Co. v. Ace Patents Corp., 315 U.S. 126, 136-37 (1942); Smith v. Magic City Kennel Club, Inc., 282 U.S. 784, 789-90 (1931); Hubbell v. United States, 179 U.S. 77, 84 (1900).

In its decision in the case, the Federal Circuit considered prosecution history statements and actions, but was ultimately swayed by a claim differentiation argument. “We do not find, moreover, that anything in the prosecution history overcomes the presumption created by these claim differentiation principles.”  For me, an important question (that I cannot answer at this point) is whether Google’s legal argument is actually relevant to the facts-on-the-ground.  That is, would this shift in the law also shift the outcome of the case? That question is critical.

= = = = =

I’ll note here that the Federal Circuit’s recent decision in Columbia University v. Symantec appears roughly follow the suggestions outlined by Google here. That case, was decided by Chief Judge Prost along with Judges Dyk and Huges.  It is not surprising to me that those three judges reached a different result than the Cioffi panel of Judges O’Malley, Plager, and Bryson.

For this petition, Google added known Supreme Court and appellate litigator Daryl Joseffer to the brief. Joseffer also filed the Google v. Vederi petition. The hiring of Joseffer suggests that Google will push this case to the Supreme Court if it fails at the Federal Circuit.

Asserted patents in the case are U.S. Patent Nos. RE43,103; RE43,500; RE43,528; and RE43,529.

Claim Construction Leads to Nonsensical Result and thus Indefiniteness Holding

Patent, , ,

Columbia University v. Symantec Corp (Fed. Cir. 2015)

Back in 2013, the NPE known as Columbia University sued Symantec for infringing at least six of its data-analytics patents covering the process of detecting and blocking computer malware.[1]  Following a 2014 claim construction it was clear that all of the asserted claims were either (1) not infringed or (2) invalid as indefinite.  As a result, Columbia stipulated to such and filed its appeal of the claim construction order.[2]  On appeal, the Federal Circuit has affirmed the indefiniteness holding and substantially affirmed the claim construction, but did find enough problems with the lower-court decision to re-ignite the case.

Here, I’m just going to focus on the claim term “Byte Sequence Feature.”

Defining Byte Sequence Feature: The claim construction issues in this case are parallel to those debated in many cases – when a term is understood by one skilled in the art, does the specification limit that definition by using the term in particular ways (but not expressly re-defining the term), or does the term retain its ordinary and customary meaning?   Here, the court reiterated its en banc statements from Phillips that “the specification may define claim terms by implication.”

Columbia argued that the term “byte sequence feature” includes more than merely machine code instructions, and also extends to other non-compiled elements of an executable attachment.   On appeal, the Federal Circuit rejected that argument — finding that the specification indicates that the byte sequence feature “represents the machine code in an executable.”  The court also found that the machine-code limitation “most naturally aligns” with the inventor’s description of his invention.[3]

Since none of the accused products analyze machine code instructions, they don’t infringe (under this construction).

Loose Statements in the Provisional: Of interest to patent prosecutors, the associated provisional application included a statement essentially saying that the byte sequence feature does not include non-machine code “resource information.” That statement was removed from the non-provisional application, but the Federal Circuit indicated that the original definition still stands.[4]  This fits within the normal approach to patent prosecution that the mere withdrawal of a mis-statement is insufficient.  Rather, following a mis-statement or change-in-definition, the patent applicant should affirmatively identify the change for the examiner’s consideration.

Resource Code is Indefinite: I noted above that both courts agreed – the proper definition of “byte sequence feature” covers machine code and not ancillary resource information that may be part of the executable file.  Now, the confusing part is that many of these same claims include a express limitation that the “byte sequence feature” includes this resource information — exactly opposite of the court’s definition of the term.

It is a problematic ambiguity to have a claim element include embodiments excluded from the element’s definition.  As such, the court determined that those claims must be found invalid as failing the definiteness requirement of 35 U.S.C. 112. The court writes:

Claims 1 and 16 conflate a “byte sequence feature,” which is a feature extracted from machine code instructions, with the extraction of “resource information,” which is not a machine code instruction. Specifically, the claims describe the step of extracting machine code instructions from something that does not have machine code instructions. . . . The claims are nonsensical in the way a claim to extracting orange juice from apples would be, and are thus indefinite.

The court’s decision on indefiniteness appears correct but avoids the patentee’s actual argument that the claim terms should be construed so as to avoid this nonsense approach.

As noted in the intro, the Federal Circuit did reverse the claim construction as to the claims of two of the patents and vacated the non-infringement judgment. Thus, the patent case will continue on remand.  In the case, Columbia also sued Symantec for fraudulent concealment, unjust enrichment, and conversion. Those state law claims are apparently still pending before the district court.

= = = = =

[1] The asserted patents include Patent No. 7,487,544 (“the ’544 patent”), U.S. Patent No. 7,979,907 (“the ’907 patent”), U.S. Patent No. 7,448,084 (“the ’084 patent”), U.S. Patent No. 7,913,306 (“the ’306 patent”), U.S. Patent No. 8,074,115 (“the ’115 patent”), and U.S. Patent No. 8,601,322 (“the ’322 patent”).

[2] You might question whether the claims are valid under 35 U.S.C. § 101 for being directed to an unpatentable abstract idea.  Claim 1 of the ‘544 patent is directed to a “method for classifying” an executable file attached to an email by (1) extracting a byte sequence from the attachment “representative of resources referenced by the … attachment”; and (2) using a set of classification rules (not defined by the claim) to predict whether the byte sequence is malicious.  I suspect that the full-throated Section 101 argument was not raised because the defendant Symantec also supports broad subject matter eligibility.  In that situation, it may be the Court’s jurisdictional role to take up the mantle.

[3] See Renishaw PLC v. Marposs Societa’ per Azioni, 158 F.3d 1243, 1250 (Fed. Cir. 2003).

[4] See Advanced Display Sys., Inc. v. Kent State Univ., 212 F.3d 1272, 1282 (Fed. Cir. 2000) (provisional applications incorporated by reference are “effectively part of the” specification as though it was “explicitly contained therein.”).  This suggests that the oft-used approach of ‘fixing it in the non-provisional’ may need to be reconsidered.

[5] In the ‘115 and ‘322 patents.

Pending Supreme Court Patent Cases 2016 (February 3 Update)

Patent, , , , , , , , , , ,

by Dennis Crouch

With Washington DC snowed-in, action within the Supreme Court has also been somewhat slow.  Briefing is now complete in ePlus v. Lawson. In that case, a district court originally held an adjudged infringer in contempt-of-court for refusing to comply with its injunction order. Following the contempt order, the USPTO independently cancelled the patent claims and, at that point, the Federal Circuit vacated both the injunction and the contempt order. ePlus presents the following questions:

1. Whether civil contempt of a permanent injunction order that has been affirmed on appeal and is binding on the litigants under the law of judgments, may be set aside based on a legal development that came after both the permanent injunction and the contumacious conduct, and that did not call into question the correctness of the injunction when it was entered.
2. Whether, under Plaut v. Spendthrift Farm, 514 U.S. 211 (1995), the PTO, an administrative agency, may issue an order that retroactively overrides a federal court’s judgment on a question of law that is not subject to further judicial review, so long as some other part of the litigation is pending.

BIO/PhRMA filed a brief in support of the petition.  The ePlus case is one of several challenging the structure of administrative review proceedings running in parallel with court litigation.  William Jay (Goodwin Proctor) is representing ePlus with Mark Perry (Gibson Dunn)  on the other side.

Oral arguments for the parallel willfulness cases of Halo and Stryker are set for February 23, 2016.  The cases are consolidated to a single one-hour hearing. The attorneys for Halo/Stryker will chose a representative who gets 20-minutes; the US Department of Justice (who generally supports the Halo/Stryker position) will have 10-minutes of oral arguments; and Pulse/Zimmer will choose an attorney for a 30-minute opposition.  For those attending, the other case being heard that day is the criminal case of Taylor v. US involving the Hobbs Act that creates federal criminal liability for “interference with commerce by threats of violence.” 18 U.S.C. 1951.  The question is whether the required element of interstate commerce must be proven beyond a reasonable doubt in order to obtain a criminal conviction.

A new petition for certiorari has been filed in Cooper v. Lee, No. 15-955 (whether IPRs violate Separation of Powers).  The petition by Robert Greenspoon links itself with the Cuozzo challenge — noting that Cuozzo raises the “smaller issue” while Cooper raises “larger issues.”

Other new petitions include a filing from Joao Bock Transaction Systems, LLC v. Jack Henry & Associates, Inc., No. 15-974 (defining an abstract idea) and Systems, Inc. v. Nordock, Inc., No. 15-978 (design patent damage calculations).  The Federal Circuit decided Joao Bock with a R.36 affirmance (without opinion affirming that claim 30, et. al, of U.S. Patent No. 7,096,003 are invalid as effectively claiming abstract ideas).  Regarding Nordock, although it is not as high profile, its simplicity may make it a better vehicle than Samsung v. Apple for challenging design patent damage calculations. In any event Nordock’s timing is good and I would expect that the court will at least withhold judgment until it decides whether to grant certiorari in Samsung v. Apple.

1. Petitions Granted:

2. Petitions Granted with immediate Vacatur and Remand (GVR)

3. Petitions for Writ of Certiorari Pending:

  • Post Grant Admin: Cooper v. Lee, No. 15-955 (whether IPRs violate Separation of Powers).
  • Post Grant Admin: Achates Reference Publishing, Inc. v. Apple, Inc., et al., No. 15-842 (IPR institution decisions unreviewable, even when addressed in a final written decision by PTAB)
  • Post Grant Admin: Interval Licensing LLC v. Michelle K. Lee, No. 15-716 (Can the Patent and Trademark Office appropriately apply the “broadest reasonable interpretation” standard in construing patent claims in post-grant validity challenges?)
  • Design Patents: Samsung Electronics Co. v. Apple Inc., No 15-777 (design patent scope and damages calculation)
  • Design Patents: Systems, Inc. v. Nordock, Inc., No. 15-978 (design patent damage calculations – similar issues as Samsung v. Apple).
  • Inducement: Life Technologies Corporation, et al. v. Promega Corporation, No. 14-1538 (whether an entity can “induce itself” under 271(f)(1))(CVSG, awaiting government brief)
  • Inducement: Arthrex, Inc. v. Smith & Nephew, Inc., et al., No. 15-559 (Commil re-hash – if actions were “not objectively unreasonable” can they constitute inducement?)
  • Claim Construction: Universal Lighting Technologies, Inc., v. Lighting Ballast Control LLC, No. 15-893 (intrinsic vs extrinsic evidence for claim construction).
  • Preclusion or Jurisdiction: Vermont v. MPHJ Technology Investments, LLC, No. 15-838 (Federal court jurisdiction in anti-troll consumer protection case)
  • Preclusion or Jurisdiction: Alexsam, Inc. v. The Gap, Inc., No. 15-736 (appellate jurisdiction over patents that were dropped from case pre-trial)
  • Preclusion or Jurisdiction:
    ePlus, Inc. v. Lawson Software, Inc., No. 15-639 (what happens with a finally-determined permanent injunction after PTO cancels the patent claim?)
  • Preclusion or Jurisdiction: Biogen MA, Inc. v. Japanese Foundation for Cancer Research, et al., No. 15-607 (Whether AIA eliminated federal district courts’ jurisdiction over patent interference actions under 35 U.S.C. § 146.)
  • Eligibility Challenges: Retirement Capital Access Management Company, LLC v. U.S. Bancorp, et al., No. 15-591 (Whether subject matter eligibility under 35 U.S.C. § 101 is a ground specified as a condition for patentability under 35 U.S.C. § 282(b)(2))
  • Eligibility Challenges: Joao Bock Transaction Systems, LLC v. Jack Henry & Associates, Inc., No. 15-974 (defining an abstract idea)
  • Claim Construction: Media Rights Technologies, Inc. v. Capital One Financial Corporation, et al., No. 15-725 (Claim Construction: whether there a strong presumption against construing terms as subject to 35 U.S.C. § 112p6 that do not recite the term “means.”)
  • Patent Term Adjustment Dispute: Daiichi Sankyo Company, Ltd. v. Michelle K. Lee, No. 15-652 (Patent Term Adjustment – whether the 180 day deadline applies; could bleed into admin law issues)
  • Damages: STC, Inc. v. Global Traffic Technologies, No. 15-592 (Whether marking the packaging of a patented article with patent notification satisfies the marking provision of 35 U.S.C. § 287(a) where the patented article itself is undisputedly capable of being marked.)
  • Damages: Innovention Toys, LLC v. MGA Entertainment, Inc., et al., No. 15-635 (Stryker/Halo follow-on – potential wait-and-see)
  • Low Quality Brief: Morales v. Square, No. 15-896 (eligibility under Alice)

3. Petitions for Writ of Certiorari Denied:

  • Alps South, LLC v. The Ohio Willow Wood Company, No. 15-567
  • Allvoice Developments US, LLC v. Microsoft Corp., No. 15-538
  • OIP Technologies, Inc. v. Amazon.com, Inc., No. 15-642
  • Fivetech Technology Inc. v. Southco, Inc., No. 15-381
  • Tyco Healthcare Group LP, et al. v. Ethicon Endo-Surgery, Inc., No. 15-115
  • Nautilus, Inc. v. Biosig Instruments, Inc., No. 15-561
  • Chunghwa Picture Tubes, Ltd., et al. v. Eidos Display, LLC, et al., No. 15-288
  • Kenneth Butler, Sr. v. Balkamp Inc., et al., No. 15-273
  • Arthrex, Inc. v. KFx Medical Corporation, No. 15-291
  • Daiichi Sankyo, Inc., et al. v. Apotex Inc., No. 15-281
  • Mylan Pharmaceuticals Inc. v. Apotex Inc., No. 15-307
  • Luv N’ Care, Ltd. v. Munchkin, Inc., No. 15-242
  • Automated Merchandising Systems, Inc. v. Michelle K. Lee, Director, United States Patent and Trademark Office, No. 15-326
  • I/P Engine, Inc. v. AOL Inc., et al., No. 14-1358
  • Interval Licensing LLC v. AOL Inc., et al., No. 14-1362
  • Content Extraction and Transmission LLC v. Wells Fargo Bank, National Association, et al., No. 14-1473
  • W.L. Gore & Associates, Inc. v. Bard Peripheral Vascular, Inc., et al., No. 15-41
  • NetAirus Technologies, LLC v. Apple Inc., No. 14-1353
  • Muffin Faye Anderson v. Kimberly-Clark Corporation, No. 14-10337
  • MobileMedia Ideas LLC v. Apple Inc., No. 15-206
  • SpeedTrack, Inc. v. Office Depot, Inc. et al., No. 15-461 (Kessler doctrine)
  • Rodney K. Morgan, et al. v. Global Traffic Technologies LLC, No. 15-602
  • Lakshmi Arunachalam v. JPMorgan Chase & Co., No. 15-691

4. Prior versions of this report:

@Mizzou: Administrative Patent & Trademark Hearings & Symposium

Patent

Save the Date: On March 1, 2016, the University of Missouri School of Law and our Center for Intellectual Property and Entrepreneurship will host an event that we’re generically calling Patent and Trademark Administrative Hearings and Symposium.  Both the Patent Trial & Appeal Board (PTAB) and the Trademark Trial & Appeal Board will be hearing live contested cases in our courtroom. In addition, we will have a set of discussion panels with the judges as well as outside perspectives on the process. In addition to the Judges and USPTO Officials, speakers include, inter alia, Jason Mudd, Matthew Cutler, Erich Spangenberg, Ashley Keller, and Dennis Crouch (me).

The CLE event begins at 9:00 a.m. at the law school and runs through 3:00 p.m. Lunch is provided for those who register in advance.  [Register at this link: http://goo.gl/forms/QryUdcIcvM] We are also looking to live-stream the hearings if permitted by the USPTO.

The USPTO will also be holding similar hearings in Dallas (February 24), Salt Lake City (March 4) and Atlanta (February 26).  I’ll provide more information as it becomes available.

 

NewEgg Denied its Fees Again

Patent

Site Update v. CBS Corp and NewEgg (Fed Cir. 2016)

Back in 2010, Site Update sued a broad set of companies for infringing its Reissued Patent No. RE40,683. The patent claims appear to broadly cover a method of using an XML Sitemap to update search engine data.  As is its policy, NewEgg refused to settle the case and, following a claim construction decision favoring the defendant, the district court entered a stipulated dismissal with prejudice.  At that point, however, NewEgg requested that the case be deemed “exceptional” and that it be compensated its reasonable attorney fees under 35 U.S.C. § 285.

The district court originally rejected the fee request. However, that decision was prior to Octane Fitness and, on appeal, the Federal Circuit previously remanded and asked for reconsideration under the Supreme Court’s new precedent.  On remand, N.D. California Magistrate Judge Grewal* again denied a fee award — listing eight reasons:

(1) Site Update’s proposed claim constructions were not “so weak that this case stands out from others because [Site Update] abandoned its reliance on these constructions when it was given the opportunity to do so”;

(2) Site Update’s argument that its means-plus-function terms should be given a broad construction did not make the case exceptional;

(3) Site Update’s positions on necessary structures were “unartful,” but not so frivolous to be exceptional;

(4) Site Update’s position on structures “strains credibility,” but was not so unreasonable as to warrant fees;

(5) an incorrect proposed claim construction is not exceptional;

(6) Site Update’s infringement theories had flaws, but losing does not compel fees;

(7) Site Update’s willingness to settle does not make the case exceptional; and

(8) deterrent policy considerations are inapposite in this case

On appeal, the Federal Circuit directly followed Supreme Court precedent giving a district court discretional authority to determine fee awards and requiring deference on appeal.

Although reasonable minds may differ, the district court ruled from a position of great familiarity with the case and the conduct of the parties, and it determined that Site Update’s tactical blunders and mistakes do not warrant fees under 35 U.S.C. § 285. The district court noted that Site Update tried and failed, but losing a case does not make it exceptional. . . . [U]nder the circumstances of this case, our review authority is limited to whether a district court’s findings are supported by evidence and sound reasoning. . . . In this case, because we do not believe that the district court based its ruling on an erroneous view of the law and we are not left with a definite and firm conviction that the district court erred in its assessment of the evidence or otherwise abused its discretion, we cannot say that the district court erred. For these reasons, we affirm.

In the appeal, the Federal Circuit noted that – this time, NewEgg was the one with an unreasonable position — demanding a “de novo review of the district court’s findings” despite recent Supreme Court precedent to the contrary.   However, the Federal Circuit followed its usual practice of requiring each party to bear its own costs of the appeal.

= = = = =

* I assume that the parties agreed that these issued could be properly decided by the Magistrate Judge.

On Appeal, Abuse-Deterrent OxyContin Patents are Invalid

Patent, ,

By Dennis Crouch

Purdue Pharma v. Epic Pharma (Fed. Cir. 2016)[1]

In an important Hatch-Waxman related decision, the Federal Circuit has affirmed the lower court’s holding that Purdue Pharma’s abuse deterrent OxyContin patent claims are invalid as anticipated and/or obvious over the prior art.[2]

Of interest, it appears that the patentee was harmed here by the Patent Act’s objective approach to obviousness that, according to the statute, must be considered without regard to the actual “manner in which the invention was made.”  In particular, during the process of creating its low-ABUK oxycodone, the innovators first discovered an 8α impurity isomer created during drug manufacture that led to a problematic 14-hydroxy compound.  The claimed invention was a product having a reduced 14-hydroxy  level.  In the appeal, the Federal Circuit noted that, while the 8α impurity may have been a new discovery, it was not necessary to achieve the claimed low-ABUK results.  In particular, the court noted that reduction of both the 8α and 8β impurities would also achieve the same result without having to distinguish between the two — affirming that “a skilled artisan would recognize that hydrogenation could be used to remove the remaining 14-hydroxy, regardless of the source of the 14-hydroxy.”

Of course, the claims did expressly require that the impurity being reduced be “derived from 8α.”  That limitation, however, was deemed an illusory product-by-process limitation.

We also conclude that, because “derived from 8α[]” is a process limitation, the district court did not err in disregarding the limitation in its obviousness analysis. We have clearly stated that “‘[i]n determining validity of a product-by-process claim, the focus is on the product and not the process of making it.’” Greenliant Sys., Inc. v. Xicor LLC, 692 F.3d 1261 (Fed. Cir. 2012) (quoting Amgen Inc. v. F. Hoffman-La Roche Ltd., 580 F.3d 1340 (Fed. Cir. 2009)). “That is because of the . . . longstanding rule that an old product is not patentable even if it is made by a new process.” Id.; see also SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312, 1317 (Fed. Cir. 2006) (“It has long been established that one cannot avoid anticipation by an earlier product disclosure by claiming . . . the product as produced by a particular process.”); In re Thorpe, 777 F.2d 695, 697 (Fed. Cir. 1985) (“If the product in a product-by-process claim is the same as or obvious from a product of the prior art, the claim is unpatentable even though the prior product was made by a different process.”).

In Amgen, the Federal Circuit did find that the particular claimed process will be relevant if it imparts distinguishing structural differences on the resulting product.  Here, however, the court found that the fact that the negative 14-hydroxy byproduct was derived from 8α “imparts no structural or functional differences” over the prior art that already included low-ABUK product achieved without focusing on the 8α isomer.

Generic OxyContin has been on the market for the past year – following the district court judgment that has now been affirmed – and so this decision should not have a major market impact.

This case here is one part of a complex web of battles that Purdue appears to be fighting to protect its exclusive rights to sell OxyContin – or at least delay competition. Although these asserted claims have been found invalid, Purdue is asserting a set of new patents, including U.S. Patent Nos. 8,309,060, 8,337,888, 8,808,741, 8,894,987, 8,894,988, 9,060,976, 9,034,376 and 9,073,933.

= = = = =

[1] App. No. 2014-1294 (Fed. Cir. 2016); on appeal from In re OxyContin Antitrust Litig., 994 F. Supp. 2d 367 (S.D.N.Y. 2014).

[2] Asserted patents include U.S. Patent No. 7,674,799 (“’799 patent”), U.S. Patent No. 7,674,800 (“’800 patent”), U.S. Patent No. 7,683,072 (“’072 patent”) (collectively, “the low-ABUK patents”), and U.S. Patent No. 8,114,383 patent (“’383 patent”).