September 2017

Claim construction by any other name…

Patent,

By Jason Rantanen

…is still claim construction in my book.  This is true even when the claim construction focuses less on the specific meaning of individual words or phrases and more on construing the invention as a whole.

***

One of the most enjoyable things about teaching a course like Patent Law, which I’m doing again this fall, is that you get to re-read all the old classics and work through them from first principles with students who are not (yet) locked in the dogma of accepted narratives.  In other words, to see cases such as Mayo, Myriad, and Alice through fresh eyes, or to explore the evolution of post-Markman claim construction from Markman to Cybor to Phillips to Teva.  Today we worked through some of the examples that the PTO has published–for those who aren’t aware, there’s a host of them on the PTO’s website.

As I’ve read through the patent eligible subject eligibility cases again, I’m struck by the extent to which the courts engage in what I can only describe as claim construction–but a very different type of claim construction than what’s contained in the countless opinions deciding the meaning of individual claim terms over the last two decades.  Those cases address the meaning of individual terms or phrases in a patent claim, often in a way that is dispositive of an infringement, novelty or nonobviousness issue.

The different type of claim construction that I’m talking about is what courts necessarily do when conducting a patent eligible subject matter analyses (and perhaps nonobviousness and enablement as well): construe the invention from the claims rather than interpret a particular word or phrase. None of the judicial opinions talk about what they’re doing as claim construction, but that seems to me to be exactly what it is.

The idea that courts describe patent claims in words other than those of the claims themselves during patent eligible subject matter inquiries is nothing new–to the contrary, it’s a frequent complaint about the Supreme Court’s patent eligible subject matter cases.  Usually, it’s referred to as determining what the claims are “directed to,” or, in the second part of the Mayo/Alice inquiry, the search for an “inventive concept.”

But if claim construction is understood as the translation  of the words of a patent claim into text that will have meaning for the person deciding a legal issue such as infringement or validity, then discussions of the patent claims in the context of patent eligible subject matter analyses would seem to be exactly that.  Alice offers an obvious example: there, the Supreme Court explained that “[o]n their face, the claims before us are drawn to the concept of intermediated settlement,” (an abstract idea, failing Mayo step 1), and that “viewed as a whole, petitioner’s method claims simply recite the concept of intermediated settlement as performed by a generic computer” (thus failing Mayo step 2).  Put another way, the Court took the words of the claim, gave them legally operative meaning, and then assessed whether that legally operative meaning against the criteria of abstract idea and inventive concept.  That’s claim construction.

I can see some pushback here from folks who think of claim construction solely as the process of determining the meaning of individual words or phrases in a claim–in other words, as  questions of accuracy about the meaning of words.  The sharp focus on the meaning of individual claim terms has dominated thinking about patent law for the last two decades, but I think it’s a mistake to view claims only as individual limitations.  That approach is useful for inquiries such as literal infringement or novelty, but it’s of less use when conducting other types of patentability or validity analyses.  I’m not suggesting that claim term interpretation is irrelevant to patent eligible subject matter or enablement inquiries–sometimes the meaning of individual terms matters quite a bit.  But what I see courts doing again and again in the patent eligible subject matter cases is to read the claims to arrive at a construction of the invention, rather than resolve disputes about the meaning of particular terms.

My thinking in this area is heavily influenced by Andres Sawicki’s forthcoming article The Central Claiming Renaissance.  Professor Sawicki argues that the Supreme Court’s re-invigoration of patent eligible subject matter has been accompanied by a rebirth of “central claiming”: the idea that “courts use both the specification and the claims to situate the inventor’s work in the context of the technological field to understand just what it is that the inventor contributed.”  Id. at 10.  Sawicki observes that the Mayo/Alice analysis necessarily requires a determination of the inventor’s contribution–and particularly, whether that is the type of thing that is patent eligible subject matter.  Consistent with the idea of central claiming, he suggests that in identifying the inventor’s contribution, the Supreme Court looked mostly to the the specification when making this determination in Bilski, Mayo, and Alice,  even as he acknowledges the important role the claims play in what the Court was doing.  Id. at 23-35.

While I mostly agree with Professor Sawicki’s analysis of the Supreme Court’s patent eligible subject matter cases,  I think the article gets over-invests in the concept of “central claiming.”  As Sawicki recognizes, even when conducting the Mayo/Alice analysis, courts are still construing the actual claims, not the written description, to identify the invention.   They draw on the written description, but so too does conventional claim term interpretation.  I’m also hesitant because what’s involved isn’t “claiming;” it’s the process of construing an existent claim.   That said, I don’t have any sticky words to describe this alternate approach to claim construction.  The best I’ve come up with are “whole claim construction,” “invention-focused construction,” or “inventive contribution construction” as contrasted with “claim term interpretation.”

***

Why does it matter whether we call what the court’s doing “claim construction?” After all, a rose by any other name still smells as sweet.

There are a few reasons.  First, the old adage that “the name of the game is the claim” is just as true when courts are construing the claims in a general sense as it is when courts are engaged in term-based constructions.  As patent practitioners know, how the court articulates the claims for Mayo steps 1 and 2 matters–and can even be dispositive, as the recent case of Visual Memory LLC v. NVIDIA Corp. shows.  Recognizing that the courts are engaged in type of claim construction has the benefit of focusing the parties’ arguments on an issue that may determine the outcome of the case.

A second benefit from recognizing that courts are engaged in claim construction in the patent eligibility inquiry is that the discussion can then turn to what constitutes an abstract idea.  Sure, the court’s construction matters, but so too does the question of what an abstract idea actually is.  Untangling these two issues–the construction of the claim and the meaning of “abstract idea”–may bring clarity to the second one.

A third reason why we should acknowledge that there’s a type of claim construction going on in patent eligible subject matter analysis is because the Federal Circuit’s opinions don’t.  Recognizing that the courts are engaged in a type of claim construction raises an important question: we have a complex methodology and approach to interpreting claim terms; what then is the methodology for this other type of claim construction that the courts are doing?  As the patent eligible subject matter jurisprudence develops, methodological variants are emerging that reflect sharp differences in the way that claims are being construed when conducting the patent eligible subject inquiry.  Some of these divisions present the same types of issues as the conventional claim term interpretation cases raise, such as “how much weight to give the specification?,” while others present new divisions, such as the question of “at what level of generality the claims should be read?”

As a first pass at this idea, here are a few different ways that “invention-focused construction” can be done:

  • At one extreme is the ipsis verbis methodology: to repeat the words of the claim and nothing but.  Only those words, and perhaps interpretations of some key terms, suffice.  One might picture an attorney standing before a judge who repeatedly asks “what’s the invention?” while the attorney dutifully recites the words of the claim again and again, neither understanding why the other doesn’t get it.
  • At the other extreme is a claim construction untethered from the claims themselves.  An example might be to construe a claim to a typewriter as being to a hot dog.  While this example is absurd, the point is to illustrate that there is a range from ipsis verbis to a construction of the invention that has no connection to the claims.
  • Another dimension of the invention-focused construction involves the degree to which the construction hones in on the inventor’s contribution.  To borrow from the USPTO’s gunpowder example, the “inventive concept” of a claim to “an intimate finely-ground mixture of 75% potassium nitrate, 15% charcoal and 10% sulfur” isn’t the individual ingredients; those already exist in nature.  Rather, the “invention” is the combination of the ingredients, or the specific ratios, or that they are finely ground in the mixture.
  • Alternately, the court may treat the claim as a whole as the “invention,” not caring about which part of it constitutes the inventor’s contribution to the art.  I struggle with applying this approach: how do you conduct an analysis of whether the invention is eligible subject matter when you aren’t focusing in on what is new?

In my next post I’ll write more about how these different approaches recently manifested in the Visual Memory case that Dennis blogged about last month.

Prosecution Histories as Prior Art

Patent,

Perhaps the most debated issue in obviousness disputes is the question of whether a person of ordinary skill in the art would have been motivated to combine prior art references in order to form the invention as claimed. In KSR, the Supreme Court made the process a little bit easier for patent examiners by permitting a common sense analysis. Still, 10 years later, the issue arises on a daily basis for patent attorneys and in the vast majority of obviousness challenges to issued patents.

I have long felt that prosecution history files may serve as key evidence in justifying the motivation to combine. As an example, consider a patent prosecution file history from several years ago that that includes an office action rejection based upon the patent examiners conclusion the two prior art references should be combined. Regardless of whether the examiners assertions were correct at the time, that document seems to be pretty good evidence someone actually considered combining references together.  In general, a prior art statement that expressly suggests and provides reasons for combining Reference A with Reference B is really good evidence for combining the two.

There are several difficulties with my “patent prosecution as prior art” theory.  A first problem is that, although patent prosecution files are open to the public once a patent issues or the application publishes, the prosecution history files are not well indexed or searchable in any meaningful way. As far as I know, there is no publicly accessible database of prosecution history files that is either indexed or searchable.  That problem is becoming a historic problem.

Beginning this week, the USPTO has transitioned its Private Pair system to include text versions of its office action rejections as well as notices of allowances (actual XML and DOCX versions).  It is a straightforward step to move these documents into a searchable database available for public consumption.

I’ll note here that the XML/DOCX files are quite nice and, although not well tagged, will make it easy for patent attorneys to cut & paste from the OA in their responses or client emails. The system also includes a new mechanism for submitting documents to the PTO.

Is the Federal Circuit Under Water?: In re Aqua still Awaiting Decision

Patent

As a placeholder – I’ll note here that the pending en banc case of In re Aqua Products regarding amendments during IPR Proceedings is still pending before the Federal Circuit. The court asked two questions:

(a) When the patent owner moves to amend its claims under 35 U.S.C. § 316(d), may the PTO require the patent owner to bear the burden of persuasion, or a burden of production, regarding patentability of the amended claims as a condition of allowing them?  Which burdens are permitted under 35 U.S.C. § 316(e)?

(b) When the petitioner does not challenge the patentability of a proposed amended claim, or the Board thinks the challenge is inadequate, may the Board sua sponte raise patentability challenges to such a claim?  If so, where would the burden of persuasion, or a burden of production, lie?

The en banc order was released in August 2016, and oral arguments heard in December 2016.  The 8-month delay in writing the opinion is unusually long.

In re Aqua: Amending Claims Post Grant in an IPR

In re Aqua: Ambiguity in the Statute Means Deference to the PTO

In re Aqua Products

Lifting the Bar: Federal Circuit finds that the PTAB improperly allowed Amendments during IPR

En Banc Query: Must the PTO Allow Amendments in IPR Proceedings?

 

 

 

 

 

Claiming Said Invention

Patent

SaidInventionII

The chart above provides an update to my prior post – looking at patents issued over the past 40 years and finding the proportion of patents that use the word “SAID” within the patent claims.

During this time, there has been a general trend in legal writing toward the use of Plain English rather than legalese, and I believe that the chart here is generally representative of that trend.  Some agencies, such as the SEC, have required the use of plain English in documents submitted for public disclosure. The USPTO has not yet taken that route. However, the USPTO is required to ensure that its own publications are “clear, concise, and well organized.” Plain Writing Act of 2010.

How I describe Said Invention

More on Tribal Immunity: Is a Tribal-Owned Patent Immune from IPR Challenge?

Patent

US Law generally holds that Indian Tribes are “Sovereign Powers” that “possess immunity from suit,” although only “to the extent that Congress has not abrogated that immunity and the tribe has not clearly waived its immunity.”  Breakthrough Management Group, Inc. v. Chukchansi Gold Casino and Resort 629 F.3d 1173 (10th Cir. 2010), cert denied.  As the Supreme Court wrote, “without congressional authorization,” the “Indian Nations are exempt from suit.” United States v. United States Fidelity & Guaranty Co., 309 U.S., at 512 (1940).

Questions in patent law remain, primarily: (1) Does the exemption from suit extent to exemption from an administrative action to cancel a tribal owned patent?; and (2) by purchasing a patent does a Tribe implicitly waive sovereign immunity regarding validity challenges to the patent.

In 2006, an en banc Federal Circuit decided the somewhat parallel case of Intel v. CSIRO, holding that the Foreign Sovereign Immunities Act (FSIA) permitted suit against Australia’s national science agency based upon the agency’s commercial activity — attempting to licence its WIFI patents. The Statute provides that:

[a] foreign state shall not be immune from the jurisdiction of courts of the United States or of the States in any case … in which the action is based upon a commercial activity carried on in the United States by the foreign state; or upon an act performed in the United States in connection with a commercial activity of the foreign state elsewhere; or upon an act outside the territory of the United States in connection with a commercial activity of the foreign state elsewhere and that act causes a direct effect in the United States. . . . Here, we are persuaded that these declaratory-judgment actions are “based on” CSIRO’s commercial acts of obtaining and asserting a United States patent.

My understanding is that FSIA does not apply directly to the Tribal immunity, which is judge-made-law.

 

Did the Abrogation of Form 18 Raise Pleading Standards?

Patent

by Dennis Crouch

Lifetime Indus v. Trim-Lok (Fed. Cir. 2017)

The district court dismissed Lifetime’s infringement complaint for failure to state a claim. Fed. R. Civ. Pro. 12(b)(6).  On appeal, the Federal Circuit reversed – holding that the inducement and contributory infringement claims were sufficiently pled.

The most interesting aspect of the decision is actually a bit of dicta regarding the now abrogated Form 18. Prior to December 2015, the Federal Rules of Civil Procedure included a set of Form complaints – the patent complaint (Form 18) was truly bare-bones.  Following Iqbal and Twombly, many of us saw a real tension between the permissible forms and the plausibility requirements of Twiqbal. Thus, when the forms were eliminated in 2015, I assumed that pleading standards had been effectively raised. Here, the Federal Circuit pushes back against that assumption:

The parties assume that there is a difference between the requirements of Form 18 and Iqbal / Twombly; however, we have never recognized such a distinction. See KTech (“That Form 18 would control in the event of a conflict between the form and Twombly and Iqbal does not suggest, however, that we should seek to create a conflict where none exists.”). In any event, we need not resolve the question whether there is a difference between the two standards here because, as we explain, the SAC met the Iqbal / Twombly standard for pleading direct infringement.

When they think you are wrong, double-down.

Lifetime’s U.S. Patent 6,966,590 claims a two-part seal used in RV slide-out rooms.  In 2013, two of Lifetime’s seal-designers left the company and joined Trim-Lok.  Although neither were named inventors on the asserted patent, Lifetime alleged that both had knowledge of the patent.  Although the accused infringer only manufactured only one of two components of the claimed invention, the Federal Circuit ruled that the patentee pled facts sufficient to reasonably infer that an infringing combination was created once installed in a Forest River RV. (Two components: a seal installed on an RV).

US06966590-20051122-D00000

Holdings:

  • Direct Infringement Properly Pled: Lifetime did allege that TrimLok installed the seal onto the RV; that is, Lifetime alleged that Trim-Lok made an infringing seal-RV combination.”
  • Inducement Properly Pled: Alleged prior knowledge of the patent by the two former employees which allows us to presume intent.
  • Contributory Infringement Properly Pled: Knowledge of patent sufficiently alleged.

To be clear, the patentee did not simply allege these conclusively but went well beyond a typical Form-18 complaint to specify:

  • where the alleged infringement occurred (the Forest River plant);
  • when it occurred (in or around June 2013);
  • who performed the allegedly infringing act (an agent or employee of Trim-Lok); and
  • why (to test fit the seal onto the RV and to solicit sales).

These particular factual allegations – according to the court – easily push the complaint over the plausibility threshold.

Dismissal Reversed and remanded – the district court should now pick-up the case again and give the patentee a chance.

 

 

Allergan: Creating Sovereign Immunity with Tribal Pass-Through

Patent

by Dennis Crouch

It appears that Allergan’s attorneys have been working overtime.  In a bold move, Allergan has transferred title to all of its Restasis patents to the Saint Regis Mohawk Tribe.  I don’t know if I’m laughing or crying, but there’s not a dry eye in the house.

Image result for Restasis

The move is designed to prop the patents up against challenge via a tribal sovereign immunity claim.   (Several of the transferred patents are being challenged before the PTAB in AIA Trials). Parallel claims have been quite successful for public universities in fending of both IPR and declaratory judgment lawsuits – even when the patents are exclusively licensed to commercial entities.  In fact, this is one reason why public universities almost never sell their patent assets, but instead merely license them.  Of course, a major difference with the university situation is that the university patents are the outcome of original university research.  In Allergan’s case one question will be whether the ownership structure creates a sham that can be pierced as if a fraudulent corporate veil. I’m confident, however, that Allergan’s lawyers worked through the analysis.  One element of the potential sham – the Tribe reports that it is being paid $13.75 million to buy the patents and will receive up to $15 million in annual royalties.

Allergan is a frequent player of jurisdictional games.  Its corporate “headquarters” is in Dublin for the tax benefits, although it is “actually” sited in New Jersey.

Patents involved: United States Patent Nos. 8,629,111; 8,633,162; 8,642,556; 8,648,048; 8,685,930 and 9,248,191.

Functional Limitation Not Inherent, but Still Obvious

Patent,

by Dennis Crouch

In a new decision, the Federal Circuit has ruled that the PTAB erred in its inherency analysis, but ultimately affirmed the claim cancellation after finding the error harmless. Southwire v. Cerro Wire (Fed. Cir. 2017) [Southwire]

Back in 2012, Cerro Wire filed an inter partes reexamination request against Southwire’s U.S. Patent No. 7,557,301.  The slow process apparent here is one reason why this type of reexamination was phased-out and replaced by the more aggressive AIA-Trials.  With reexaminations, the issued patent is sent first to a patent examiner for consideration with any decision then being appealable to the PTAB and eventually to the Federal Circuit.

The prior art is our primary source of evidence as to whether a patent claims a new invention.  The best evidence comes from express teachings in the prior art.  However, the courts also allow for teachings to be derived from the prior art so long as they are “inherent” within the evidence.

Example: Prior art disclosing a automobile wheel might not expressly state that the wheel is made of molecules, but that teaching would be seen as inherent.  Thus, an invention directed toward a “wheel comprising molecules” would be anticipated by the reference. 

Although inherency is sometimes useful, its scope has been limited by the courts only to cases where the proposed inherent element is “necessarily … present” in the prior art. See PAR Pharm., Inc. v. TWI Pharm., Inc., 773 F.3d 1186, 1194–95 (Fed. Cir. 2014).

Here, the patented method is directed toward making electric cable.  Lubricant is added to reduce friction and allow the wires to be more easily pulled into the sheath.  The claims require that the lubricant result in “at least about a 30% reduction” in pulling force. (Note here that the claim is written in Jepson form.)

WirePuller

In its decision, the PTAB (board) used inherency in a particular way – finding first that it would have been obvious to combine the prior art to use the method described;  and then finding that the 30% reduction would have inherently resulted from the combination.  On appeal, the Federal Circuit rejected that analysis – holding that “the Board cited no evidence that a reduction of 30% in the pulling force would necessarily result from the claimed process, which contains no steps that ensure such reduction.”  Rather, as the patentee argued, the 30% reduction serves as a guide for selecting the particular lubricants and arrangements.

We have an error, but as I mentioned, it turns out to be harmless because the Board “made the necessary underlying factual findings to support an obviousness determination.”

In particular, the prior art teaches the “substantially identical” process as that claimed with no claim element differing “in any material way” from the prior art, and the prior art might have produced the claimed “30% reduction” in pulling force.  Keeping that in mind, the court looked back to the CCPA’s 1977 In re Best holding:

Where, as here, the claimed and prior art products are identical or substantially identical, or are produced by identical or substantially identical processes, the PTO can require an applicant to prove that the prior art products do not necessarily or inherently possess the characteristics of his claimed product.

In re Best, 562 F.2d 1252 (C.C.P.A. 1977). In Best, the court noted that inherency would be properly used in this situation for an anticipation decision, but that for obviousness, the PTO can simply find a prima facie obviousness case.

Cancellation affirmed.

Federal Circuit: Even the Best Secondary Indicia Cannot Overcome this Prima Facie case of Obviousness

Patent, ,

In a split opinion, the Federal Circuit has affirmed summary judgment of obviousness in Intercontinenntal Great Brands (Kraft) v. Kellogg (Fed. Cir. 2017). Writing in dissent, Judge Reyna argued that the majority improperly applied a shortcut “prima facie obviousness test” without allowing for a full consideration of the patentee’s objective indicia of non-obviousness that the district court found both substantial and compelling.

The majority opinion, authored by Judge Taranto and joined by Chief Judge Prost begins with a discussion of the resealable cookie package covered by Kraft’s U.S. Patent No. 6,918,532.  Essentially, we have a wet-wipes package for cookies.

US06918532-20050719-D00001

One difference from wet-wipes is that the cookies need a frame to avoid crushing.  The defendants here relied upon a prior art reference showing a rigid re-sealable sushi container (image below).  The container has a tray, and the claimed frame is essentially a tray with higher sides.  When combined with known cookie packaging frames — the district court found that “the only reasonable inference on the record was that a relevant skilled artisan would have been motivated to combine those prior-art references.”

PriorArtCookieBox

In particular, the court noted that the difficulty with opening and closing cookies was well known, and the tray in the Machine Update prior art could simply be replaced with a more complete frame (i.e., a tray with higher sides) to protect the cookies.

In reviewing the lower court decision, the majority wrote:

[T]he court considered the simple and clear teachings of the art, the importance of common sense and ordinary creativity, and the conclusory character of Kraft’s expert’s assertions of nonobviousness.

Despite my love of cookies, I have to admit that I have never purchased one of these re-sealable containers as my preference is to complete a package within a single sitting.  However, the product packaging has apparently met with some amount of commercial success.

Regarding objective indicia of non-obviousness, the district court found it to be highly “substantial” and “compelling” with great commercial success tied to the packaging, industry praise, and copying by the defendant here.  On balance, however, the district court found (on summary judgment) the evidence was insufficient to raise a jury question.

Quite simply, according to the district court, there are some prima facie obviousness cases so strong that they are impossible to overcome even with the best possible secondary indicia of nonobviousness.   On appeal, the majority affirmed this reasoning with a quote from the Supreme Court’s KSR analysis:

Where, as here, the content of the prior art, the scope of the patent claim, and the level of ordinary skill in the art are not in material dispute, and the obviousness of the claim is apparent in light of these factors, summary judgment is appropriate.

KSR v. Teleflex (2007) (note that KSR elsewhere notes the weak objective indicia in that particular dispute).

To be fair, the majority is clear that the ultimate conclusion of obviousness still requires consideration of the objective indicia (even if they could not make a difference).  However, the majority finds that conclusions regarding the evidence – such as a motivation to combine references — may be drawn without consideration of the objective indicia.

Judge Reyna’s dissent goes the other way:

I would find that the district court improperly found a prima facie case of obviousness before considering Kraft’s evidence of objective indicia of nonobviousness. . . . I am left to wonder how “substantial” and “compelling” evidence of objective indicia cannot overcome a prima facie showing. If such significant evidence does not make a difference in this case, it is hard to imagine a situation in which it would.

For many, the problem with Reyna’s dissent is quite simply that it will make summary judgment more difficult — and the conventional wisdom is that winning an obviousness case is extremely difficult before a jury.

The majority-dissent also battle over the ‘correct’ order of consideration of the questions of operation. I’ll save that issue for a separate post.

 

PTO Director (Nominee) Andrei Iancu

Patent

Andrei Iancu’s nomination to be the next Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office has now been delivered to the Senate.  The nomination will be considered by the Judiciary Committee with likely confirmation this fall.

At age 49, Mr. Iancu is Managing Partner at Irell & Manella (LA) where he is a patent attorney but these days primarily focuses on intellectual property litigation.

Iancu has participated in a number of Inter Partes Review proceedings – both as petitioner (challenging the patent) and representing the patentee.  He regularly works with Michael Flemming who is of-counsel at Irell and former PTAB Chief Judge.  Iancu has also been part of dozens of patent infringement lawsuits, again representing both patentees and accused infringers.

Iancu is also a prolific author of patent law materials – the following are a few examples:

  • Andrei Iancu, Jeremiah Helm, Code on Disks and Hat Tricks – Is Computer Software on A Medium Really Patentable?, 90 J. Pat. & Trademark Off. Socy. 97, 98 (2008) (“In the absence of legislative changes to what constitutes patentable subject matter, there really is no debate that a claim for software code by itself is not patentable.”)
  • Andrei Iancu, Ben Haber, Post-Issuance Proceedings in the America Invents Act, 93 J. Pat. & Trademark Off. Socy. 476, 486 (2011) (“Congress clearly intends to make the PTO a viable alternative to district court litigation for answering questions of patent validity.”)
  • Andrei Iancu, Michael Fleming, C. Maclain Wells, Indefiniteness in Inter Partes Review Proceedings, 98 J. Pat. & Trademark Off. Socy. 4, 5 (2016) (proposing that the PTAB allow the parties to fully brief indefiniteness issues before the PTAB issues express indefiniteness findings at the IPR initiation stage)
  • Benjamin Hattenbach, Andrei Iancu, Kenneth Weatherwax, Patent Prosecution Pitfalls: Perspectives from the Trenches of Litigation, 92 J. Pat. & Trademark Off. Socy. 340, 341 (2010) (“Those writing patents must recognize the various uncertainties, embrace them, and take steps that will improve the odds of prevailing in litigation in spite of them.”)
  • Andrei Iancu, Jay Chung, Real Reasons the Eastern District of Texas Draws Patent Cases-Beyond Lore and Anecdote, 14 SMU Sci. & Tech. L. Rev. 299, 308 (2011) (“[T]he presence of local patent rules, judges well versed in patent litigation, and a relatively quick docket mean that a patent case can often be resolved more efficiently and effectively in the Eastern District of Texas than in many other districts. Plus, it is more likely that a case will get to the jury in East Texas.”)
  • Andrei Iancu, Ben Haber, Elizabeth Iglesias, Inter Partes Review Is the New Normal: What Has Been Lost? What Has Been Gained?, 40 AIPLA Q.J. 539, 592 (2012) (“Only time will tell whether this is an improvement over the old inter partes reexamination process.”)

It is the first time in a while that we’ve had a PTO director with this level of litigation experience, and it will be interesting to see how that develops in terms of policy goals.

Another Client Loses Privilege Because Employer Policies Allowed Monitoring

Ethics

I’ve written about this a few times but, sadly, no one listens to me!

Here’s the fact pattern:  your client is emailing you from their work email account, or your client is using a computer that its employer owns.  (Your client is not the employer, but an individual.)  Whether your client is in litigation with its employer — or someone else! — if the employer has policies in place and in use that allow it to monitor employee email or the computer itself, there likely is no reasonable expectation of privacy in those emails or in the files on the computer and, if so, no privilege.

Another case, this one from New York and involving an employer’s laptop and a suit with the company, applied the leading test to determine whether the employee knew that monitoring was allowed, and in fact occurred, and found the employee– former general counsel —  could not withhold more than 106 files that he had created after he had been fired by the company on its laptop.  Miller v. Zara USA, Inc., (N.Y. App. Div. June 6, 2017).  The appellate court remanded the case to the trial court to determine if any of the documents were, although not privileged, nonetheless protected by work product.

Realize this: even if the dispute is between your client and some third party, that third party can also rely on the lack of a reasonable expectation of confidentiality and show there is no privilege.  And, finally, if you draft these policies, your client’s employees may not realize that this isn’t just “gee my employer can review my emails if I get in a fight with it,” it’s “if you get in a fight with anyone, you’re not going to have privilege.”  I bet your clients would like it if you made that really clear, since that’s not intuitive.

More on Patent Citations and the Impossibility Skew

Patent

This post adds somewhat to my prior one titled Citing References.

Citing References

A recent draft article by Professors Jeffrey Kuhn (UNC-Business) and Kenneth Younge (EPFL) along with former USPTO Economist (and former now professor) Alan Marco looks more in-depth at patent citations and arrived at a conclusion parallel to mine:

Specifically, we observe a dramatic increase in the number of citations generated per year and relate that change to a small proportion of patents flooding the patent office with an overwhelming number of references.

Read the article: https://ssrn.com/abstract=2714954.

The paper divides patents four categories according to the quantity of prior art citations.  Rather than call them “quartiles” the authors opt for names that relate to the examiner’s ability to review the corpus of submissions (given their time constraints):

  • 0-20 References – Routine
  • 21-100 References – Difficult
  • 101-250 References – Extreme
  • 251+ References – Impossible

Matching my parallel work, the authors write: “By 2014, patents that cite an “extreme” or “impossible” number of citations are responsible for more than 46% of all patent citations, even though they comprise less than 5% of all patents issued in that year.”  In my data – looking at patents issued Jan-Aug 2017 – I found that the skew has increased so that the “impossible” patents now cite half of all applicant-submitted patent citations.  [Note Here that Kuhn looks at citation of US patent documents only, while my approach considered all citations, but limited them to  those designated as applicant cited.]

Figure 1 from the article provides further information.

KuhnCitations

When focusing on those “impossible” patents, the team concluded that “the citations generated by highly citing patents appear to be particularly uninformative.”  This conclusion is based upon their conclusion that many of the cited references are dissimilar to the claimed invention.

Kuhn, et al., is directed at academic researchers who use patent citation in their empirical research on business and technological trends.  Thus, the conclusions drawn are not designed to either indict or improve the patent system – rather, the primary conclusion is that researchers should consider this skew when making assumptions about the importance of patent citations.  “The main contribution of this article is to provide prima facie evidence that the citation generating process is now generating significant measurement error for many academic studies.”

Gender Analytics: Using Litigation Data to Evaluate Law Firm Diversity  

Patent

 Guest Post by By Michael Sander,[1] Tara Klamrowski, and Rachel Sander

Legal analytics can now identify law firms committed to gender diversity by analyzing the gender of attorney appearances. Docket Alarm has done so for the United States Supreme Court and specialized patent courts. The lack of gender diversity is significant, especially in patent cases. Here we highlight firms breaking the mold.

More women are entering the legal profession than ever —women now make up about half of all law students and 36% of all licensed attorneys— but these ratios are not reflected at the highest levels of firm positions. Judges anecdotally report that women rarely act as lead counsel in litigation, and the percentage of female partners at firms hovers around 22%.

Corporate clients are aware of the gender imbalance and actively seek out firms that reflect their own commitment to gender diversity. Clients now regularly request firm diversity statistics as part of law firm pitches, putting pressure on firms to support female attorneys at the highest ranks.

Law firms typically measure diversity by tracking headcount; the number of male and female associates and partners in their ranks. These metrics can ignore the often more meaningful metric of how often female attorneys actually appear in court-room litigation.

How Legal Analytics Can Help Quantify Firm Diversity

Modern legal analytics can play an important role in increasing transparency in law firm gender diversity. Traditional legal analytics show how often parties or law firms win cases, or the likelihood of winning legal relief in front of a particular judge. However, they can also be used to rank and analyze more general litigation trends, including gender diversity.

To identify firms with the most balanced male-female attorney ratio, Docket Alarm scours the litigation record, looking at the names of attorneys and their law firm. The gender of each attorney in a case is identified based on the attorney’s first name and other factors.[2]

The result is that we can now measure firm gender diversity based on attorneys actually staffed on cases, i.e., those that most substantively participate in litigation, not just by firm head-count.

Gender Analytics in the Patent Trial and Appeal Board AIA Trials

The analysis began with the Patent Trial and Appeal Board (“PTAB”), a specialized court focused on patent validity. The analysis shows that patent litigation is dominated by male attorneys. Of the top 100 law firms, 55 have less than 10% female attorneys on cases, and 8 firms have never had a single female attorney work on their PTAB AIA-Trial cases. On average, attorney appearances are only 12% female. When representing patent owners, the percentage of female attorneys drops further to 9.8%.

However, some firms buck the trend. According to Docket Alarm’s statistics, the firms with the highest ratios of female attorneys working on PTAB patent cases are as follows:

Rank Firm Percentage Female
1 Osha Liang 72%
2 Goodwin Proctor 48%
3 Crowell & Moring 47.3%
4 McCarter English 46.7%
5 Arnold & Porter 42%

The “percentage female” here is calculated by dividing the number of female attorney appearances by the number of male and female attorney appearances for each firm.

Other runners up that have at least 25% of their AIA-Trial representations staffed by female attorneys include: Kasha Law; Covington & Burling; Mayer Brown; Drinker Biddle & Reath; Ascenda Law Group; Keker & Van Nest; Ropes & Gray; WilmerHale; and Venable.

The firms listed above, either by chance or design, have far more female attorneys working on cases than the average firm.

PTABGenderDiversity

Fig. 1: Screenshot of Docket Alarm’s Gender Diversity Statistics in the PTAB

 Gender Analytics in the U.S. Supreme Court

Compared to patent law, the male-female gap in Supreme Court practice is less severe, but by no means diverse. For the Supreme Court, Docket Alarm examined petitions for certiorari, analyzing the gender of the attorneys representing certiorari petitioners and respondents. Only two private law firms have half of their attorney appearances staffed by female attorneys, and only 7 have more than 25%. They are as follows:[3]

Rank Firm Percentage Female
1 Dykema Gossett 75%
2 Quinn Emanuel Urquhart & Sullivan 57%
3 Arnold & Porter 35%
4 Morgan, Lewis & Bockius 32.3%
5 Littler Mendelson 32.2%
6 Latham & Watkins 30.0%
7 Hogan Lovells 29.9%

In the rarefied world of Supreme Court practice, having just one or two top female attorneys on the team can make the firm a leader in gender diversity. Jill Wheaton leads Dykema’s Supreme Court practice. At Quinn Emanuel, it is Kathleen Sullivan and Sheila Birnbaum. Similarly, Deanne Maynard and Beth Brinkmann take the majority of cases at MoFo. These firms can attribute their strong diversity numbers to just a few highly specialized attorneys.

Win Rates and Gender Diversity

In addition to identifying the most gender diverse law firms, Docket Alarm’s analytics also show how case success rates are related to gender diverse firms. Docket Alarm found no statistically significant correlation between gender diversity and a firm’s win rate in the PTAB.[4]

PTABGenderDiversityWinRate

Fig. 2: Petitioner Win Rates Plotted Against Gender Diversity in the PTAB

The Future of Diversity Analytics

Now that gender diversity is becoming part of the law firm sales pitch to clients, there is demand to identify firms committed to gender diversity, and for law firms to track diversity recruitment efforts.

Analytics can also identify gender diversity of a particular client’s legal team across law firms. This metric can help clients identify the progress of diversity efforts.

Analytics are leading the way for a new look at diversity in law, one that relies on actual client representation, and not just firm head-count. The initial statistics are not encouraging, especially in patent law, but they highlight firms that are making progress, and provide a baseline to measure future progress for everyone else.

= = = = =

[1] Michael Sander is the founder of Docket Alarm (https://www.docketalarm.com).

[2] Attorneys where the gender cannot be determined due to a gender-neutral first name are not included in the statistics so as to not skew the results one way or another.

[3] The analysis did not consider firms that made fewer than 30 appearances as either a petitioner or respondent in petitions for certiorari since 2000. In an effort to home in on private civil litigation, the analysis disregarded cases filed forma pauperis.

[4] The methodology used a bivariate linear regression model. From a sample of the most active 100 law firms, gender diversity (measured as a percentage of female attorneys at the firm) was regressed on both petition institution as well as claim cancelation. The analysis was run separately for firms representing petitioners and patent owners.

35 U.S.C. 103   CONDITIONS FOR PATENTABILITY; NON-OBVIOUS SUBJECT MATTER.

Patent,

35 U.S.C. 103 CONDITIONS FOR PATENTABILITY; NON-OBVIOUS SUBJECT MATTER.

A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.

Patentability shall not be negated by the manner in which the invention was made.

37 C.F.R. § 1.75(e), Jepson claims, and the Administrative Procedure Act

Patent

By David Boundy

The following is a guest post by David Boundy – a Cambridge Massachusetts attorney with a specialty at the intersection of patent and administrative law. In 2007-09, David led the teams that quashed the Continuations, 5/25 Claims, IDS, Markush, and appeal rules under the Paperwork Reduction Act.

This is a follow-up to Dennis’s two posts on Jepson claims, of Sept 1, 2017 and Aug. 30, 2017.

Wherein the Improvement Comprises

Jepson Claims (Part II)

37 C.F.R. § 1.75(e), recommending that applicants “should” use Jepson form, is a classic case of a “general statement of policy” under the Administrative Procedure Act, 5 U.S.C. § 553(b)(A).  It’s only hortatory, with no force of law.  The PTO did exactly the right thing, stating that its preference is non-binding, by using the word “should.”  Patent attorneys do exactly the right thing in recognizing the multiple substantive perils of Jepson claims, and ignoring § 1.75(e).

The point that controls everything else is that the PTO has no relevant substantive rule making authority, and therefore has no power to dictate any matter of claim form that might have substantive consequences.  The PTO is permitted to announce any preference it likes on issues of claim drafting, and can even alert the public that life is easier for the PTO if applicants follow this preference for Jepson form.  But the PTO has no authority to require any claim drafting technique that has substantive impact.

Because this is an issue where the PTO has no rule making authority, § 1.75(e) could not be promulgated as a “must” binding regulation.  To bind the public with force of law, an agency must have authority for the particular rule, and follow Congress’ procedures for promulgating it (35 U.S.C. § 2(b)(2)(B), the Administrative Procedure Act, Paperwork Reduction Act, Regulatory Flexibility Act, Executive Order 12,866, and all the rest).  So even though the PTO jumped all the procedural hoops and ended up with something that looks facially like a “regulation” in CFR (rather than in guidance), without authority, that regulation has no force of law (and would not, even if § 1.75(e) had used the word “must”).

The Administrative Procedure Act, § 553(b)(A), creates a pigeonhole for this kind of expression of agency preference, called a “general statement of policy.”  (I wrote about “policy statements” earlier this summer.)  “General statements of policy” are often used by an agency to offer helpful suggestions (at least suggestions that the agency thinks might be helpful to it).  But conversely, “policy statements” are purely hortatory, with no binding effect against the public.  That’s exactly what the PTO did here, using the word “should” in § 1.75(e) to indicate a non-binding preference, rather than “must” to indicate a requirement.

Article withdrawn

“Policy statements” are also used to unilaterally promise a quid pro quo or set a floor (“If you the public do x, we the agency promise favorable outcome y.  If you don’t do x, you can still convince us to do y if you convince us under the controlling law.”)  Such quid pro quo policy statements bind the agency to give favorable action y for any member of the public that relies on x, but impose no binding requirement on the public to do x.  Here, the PTO made no promise of any favorable result that would occur if an applicant uses Jepson form, so § 1.75(e) signifies nothing—and does it without sound and fury.

When the PTO has preferences of this sort, there is no requirement to put them in CFR regulations—§ 553(b)(A) expressly exempts “statements of policy” from any requirement to be stated in regulation.  (They still have to be published, § 552(a)(1)(B), but need not be baked into CFR and notice-and-comment.)  The PTO’s preference for Jepson claims could just as well have been in a guidance document like the MPEP.  There’s no error or harm in putting a “should” policy statement in a regulation rather than guidance, but no requirement either.

The only ethical principle for patent attorneys that I see, in absence of force of law, is to avoid doing dumb stuff that hurts the client.  Patent attorneys have ethical obligations to their clients to avoid all the substantive pitfalls of Jepson claims.  I see no “ethical guideline” that would pull in the direction of § 1.75(e)—though of course I’d love to learn something new, and I look forward to the comments.

Two meanders on a rainy Labor Day weekend that were prompted by looking at  § 1.75(e)—

First—

37 C.F.R. § 1.75(d)(1) says “ terms and phrases used in the claims must find clear support or antecedent basis in the description.”  There are multiple drafting errors here, and the PTO should correct them.

(a)  There is no requirement whatsoever for “antecedent basis” agreement between the spec and claims.  Sure, § 1.75(d)(1) blurs the “must” requirement by adding an alternative, “clear support or antecedent basis,” but the Paperwork Reduction Act requires that regulations be “written using plain, coherent, and unambiguous terminology.”  Agencies are not permitted to waste the public’s time by tossing red herrings and irrelevancies into their regulations and leaving it to the public to decipher the agency’s sleight of hand (or spend hours over the years pointing examiners to the word “or” that so many overlook).

(b) § 112(b) permits “written description” and enablement support to be drawn from the drawings as well as the specification.  A rule that says it “must” be in the “description” is at the best unclear, and at worst over-prescriptive.

I get it, it’s easier for the PTO to examine an application when the claims and specification use the same terms.  But the PTO has no authority to put that preference in a “must” regulation.

Second—

The “single sentence rule” of MPEP § 608.01(m), affirmed by the D.C. District Court in Fressola v. Manbeck, 36 USPQ2d 1211 (D.D.C. 1995), stands on flimsy ground, though I’m not sure which way a better-argued case under today’s law would come out.

The D.C. District Court noted that claims can be drafted in single sentences or multiple, as only a matter of form, with no substantive effect, and the rule is thus “procedural” and not subject to requirements for notice and comment.  Even assuming that the Court’s characterization as “procedural” is correct, it doesn’t answer the question—the APA’s §§ 552 and 553 set procedural requirements for any rule that an agency wants to promulgate with binding effect, even procedural rules, and the MPEP doesn’t qualify and never did (an administrative law point that Fressola didn’t argue).  Today’s 35 U.S.C. § 2(b)(2) is even clearer, requiring § 553 “regulations” for procedural rules, and forbidding the PTO’s practice of promulgating procedural requirements in guidance.  Further, the language of today’s § 2(b)(2)(B) (especially when contrasted to pre-1999 § 6) is similar to the language in other statutes for other agencies, and the agencies accept that the language means they “must” use notice and comment.  See, e.g., Department of State, Notice of Proposed Rulemaking, 64 Fed. Reg. 53632 (Oct 4, 1999) (“Pursuant to [9 U.S.C. § 553], the rulemaking procedures of [5 U.S.C. § 553] apply to any determination to effectuate such a modification or amendment [of the Department’s procedural rules for international arbitration]. In accordance with those procedures, notice must be published in the Federal Register, time for comment provided, and the final rule published for 30 days before the rule may become effective.”).

The Fressola court stated (citing Chevron) “the Plaintiff must nonetheless overcome a quite deferential standard of review in order to justify the invalidation of a portion of the MPEP by a reviewing court.”  Nonsense.  That kind of deference only applies to interpretations (not rules cut out of whole cloth, like the single sentence rule), issued in a reasonably formal form published to the regulated public (not squirreled away in guidance directed to agency employees).  Subsequent developments in the Chevron administrative law space (specifically Mead and Christensen) make even clearer that informal guidance is not entitled to high deference.   An agency only gets that kind of deference after it earns it by jumping several hoops of formality for its interpretation.

The reasoning of Fressola is a terribly confused mish-mash of incompatible legal principles (see my upcoming article in ABA Landslide, later this fall, which provides a helpful taxonomy of rules).  The single sentence rule and Fressola have been entirely undercut by developments since 1995.  (The continuing vitality of Ex parte Quayle practice also comes to mind.)

But at the end of the day, the “single sentence” rule could squeak through a challenge, under the administrative law standing principles of “suffering legal wrong” and “harmless error”—even Fressola admitted that his single-sentence claims suffered no substantive disadvantage relative to his multi-sentence claims.

Citing References

Patent

For patents issued thus far in 2017, the average patent lists 44 references submitted by the patent applicant for the examiner to consider. The median patent, however, only has 10 applicant cited references.  The gulf between the mean and median is the result in skew in the dataset — here caused by a fairly small percentage of patents that cite a disproportionately large number of references.  Thus, if you pick a few patents at random, about half of them will have <10 references cited by the applicant.  Every once in a while, though, you’ll come across a big papi – see, for example U.S. Patent No. 9,535,563 and its 7,800 references cited by the applicant (inventor-patent attorney Steven Hoffberg).  At the other end of the spectrum, about 12% of applicants cite no prior art at all — this is down from about 20% in 2005.

One way to think about the skew is to look patents where applicants submit cite 250+ references — that represents about 3.5% of patents issued in 2017 thus far (though only 0.5% of patents issued in 2005).  Those 3.5% of issued patents account for half of the prior art submitted to the PTO.

To be clear – I’m not demonizing patentees who submit lots of references.  What I’m working toward is whether the large number of references creates any special difficulty or benefits for the examination process and whether examiners receive any special assistance in considering the large number of references submitted.

I think the chart below is interesting. I took the 2017 patents and grouped them in quintiles according to the number of references cited.  For each quartile, I then found the average pendency (in months) for the issued patents.  The results are clear – patents with more citations correlate with longer pendency.  (Note that the auto-created axis does not reach ZERO – this makes the slope appear more dramatic than reality).  Obviously we should be a bit cautious in interpreting this chart as suggesting a causal role.

ReferencesCitedQuint

 

 

 

New York City Bar Cautions Lawyers to Use Care if U.S. Customs Asks to Review Electronically-Stored Information

Ethics

New York City Bar Opinion 2017-5 (July 2017), here, provides some interesting information about the care lawyers must take before allowing a lawful search of an attorneys’ smartphone, laptop, or the like.  The opinion is obviously important given the international nature of intellectual property practice and the growing frequency (still small, though) with which Customs officials ask for passwords that could reveal client confidences.

The opinion states in part that lawyers should consider whether they should not carry electronic devices that could permit disclosure to sensitive client information when traveling abroad, and, if asked upon return to provide access to the device, the opinion states:

At the border, if government agents seek to search the attorney’s electronic device pursuant to a claim of lawful authority, and the device contains clients’ confidential information, the attorney may not comply unless “reasonably necessary” under Rule 1.6(b)(6), which permits disclosure of clients’ confidential information to comply with “law or court order.”  Under the Rule, the attorney first must take reasonable measures to prevent disclosure of confidential information, which would include informing the border agent that the device or files in question contain privileged or confidential materials, requesting that such materials not be searched or copied, asking to speak to a superior officer and making any other lawful requests to protect the confidential information from disclosure. To demonstrate that the device contains attorney-client materials, the attorney should carry proof of bar membership, such as an attorney ID card, when crossing a U.S. border.

Finally, if the attorney discloses clients’ confidential information to a third party during a border search, the attorney must inform affected clients about such disclosures pursuant to Rule 1.4.

I’ve never been asked to provide a password, or to handover an electronic device, but the opinion provides some useful reminders of precautions that may be necessary in today’s world.