U.S. Patent No. 10,285,922 (110 days from earliest priority to issuance). The ‘922 Patent claims a “topical exfoliating formulation” that includes papain enzyme. Case was subject to a petition to make special based upon the inventor’s age of 65+. Applicant cited no references and the (primary) examiner only found two.
U.S. Patent No. 10,343,988 (111 days from earliest priority to issuance). The ‘988 patent is directed to a new compound known as hydroxytyrosol thiodipropionic acid apparently useful for food preservation.
The patent claims priority to a Chinese application filed March 1, 2019. The U.S. application was then filed March 20, 2019 and issued on June 19, 2019. Applicant cited no references and the (primary) examiner only found one.
U.S. Patent No. 10,336,689 (114 days from earliest priority to issuance). The ‘689 patent has a similar path to the ‘988 patent (and is owned by the same entity (Shaanxi University of S&T) and examined by the same primary examiner — but is directed to a totally different compound that exhibits “antitumor activities.”
U.S. Patent No. 10,302,471 (116 days from earliest priority to issuance). The ‘471 also stems from China, but does not rely on foreign priority. The patent claims a device for observing “abyssal flow” and was subject to a “track one” petition.
Westech sued 3M for patent infringement in W.D.Washington. On motion from 3M, the district court then dismissed the case for improper venue under 28 U.S.C. 1400(b). Under the statute, infringement cases can only be brought in a judicial district where the defendant either (1) resides (i.e., is incorporated) or (2) infringed the patent and has a regular and established place of business. Here, the focus is on 3M’s sales activities with vendors, distributors, and sales professionals — and whether those activities constitute a “regular and established place of business.” Two key precedential cases: In Cray, the Federal Circuit held that a “place of business” must be a “physical place in the district.” In ZTE, the Federal Circuit held that it is the plaintiff’s burden of establishing proper venue (burden of persuasion).
Westech’s amended complaint states:
3M has one or more regular and established places of business in this judicial district. Furthermore, on information and belief, Defendants maintain contractual relationships with distributors of the infringing products who are located in this judicial district, Defendants have sales representatives located in this judicial district, Defendants represent that they sell products in this judicial district, and Defendants earn substantial sales revenue from sales of the infringing products in this judicial district.
Sufficient for venue? The district court saw these allegations as insufficient and the Federal Circuit has affirmed on appeal. On point – The asserted facts do not lead to a conclusion that 3M has a physical place of business in the district, and the allegation that 3M has “regular and established places of business” is a legal conclusion not given any weight in the analysis. The court explains:
Simply stating that 3M has a regular and established place of business within the judicial district, without more, amounts to a mere legal conclusion that the court is not bound to accept as true. . . .
A presumption that facts pleaded in the complaint are true does not supplant a plaintiff’s burden to plead specific facts showing that the defendant has a regular and established place of business physically located in the judicial district.
Question of Law: The statements by the court here is a bit oblique, but it may be the first precedent expressly stating that whether the defendant “has a regular and established place of business” in the district is a question of law and not a question of fact. In Cray, the court indicated that the analysis will be based upon underlying facts: “In deciding whether a defendant has a regular and established place of business in a district . . . each case depends on its own facts.”
We recently launched an updated version of the Compendium of Federal Circuit Decisions that contains information on decisions posted to the Federal Circuit’s website for all origins, not just appeals arising from the USPTO and District Courts (although the richest data is still for appeals from those sources). Data is current through June 28, 2019.
For those who aren’t familiar with the Compendium, it’s a database designed specifically to support quantitative empirical research about the Federal Circuit’s decisions. We’ve coded an array of basic information about Federal Circuit decisions to make it as easy as possible for anyone to do their own empirical studies. There’s data on document type to panel judges to authorship information and more. We’re constantly working on adding new types of data, so if there’s something specific that you’d like empirical data on, just let me know.
Below are a few basic highlights through the first six months of 2019. As always, the usual disclaimers when working with quantitative data about court decisions apply. Large-scale quantitative overviews only provide one perspective into judicial decisions and are subject to various selective forces that are described in various sources including this one.
Decisions by Origin
As the below chart shows, the gap between decisions (which we define as opinions and Rule 36 summary affirmances) in appeals arising from the USPTO and the District Courts continues to widen. Both are a little lower so far in 2019 than 2018. Through the first six months of 2019, the number of decisions arising from the district courts is about 20 fewer than in 2018 (106 through June 30 in 2018 vs. 87 in 2019) and the number of decisions arising from the USPTO is about 10 fewer (132 in 2018 vs. 121 in 2019).
Keep in mind that the Federal Circuit’s output of decisions is dependent on appeals, and appeals form both sources have shown a slight decline from peaks in 2015 (docketed appeals from district courts) and 2016 (docketed appeals from the USPTO). The next chart shows data from the Federal Circuit’s monthly reports (not the Compendium) about appeals docketed. While the number of appeals arising from the USPTO will likely go up this year, the number of appeals arising from the district courts is likely to continue declining (consistent with a decline in the number of patent cases filed over the last few years).
I have a chart that shows how many appeals arise from the PTAB versus the TTAB, but it’s not very interesting because the vast majority of appeals every year come from the PTAB (these days, by an order of magnitude). A bit more interesting is the below chart, which shows Federal Circuit decisions by dispute type in appeals arising from the USPTO. Consistent with conventional wisdom, most of these involve appeals from inter partes review proceedings, although there was a bump in appeals from rejections of patent applications last year.
Not shown are a handful of miscellaneous types, such as two appeals from post-grant review proceedings in 2018.
Decision Type
Generally, the Federal Circuit tends to use Rule 36 affirmances more frequently in appeals arising from the PTAB than in appeals arising from the district courts. Through the first six months of 2019, about half of the court’s decisions in appeals arising from the PTAB have been affirmed via Rule 36 summary affirmances.
The Federal Circuit’s opinions arising from the district courts tend to be designated precedential more often than decisions from the USPTO, although the raw numbers of precedential opinions are getting closer.
Outcomes of appeals from inter partes review proceedings
The below chart shows the outcomes of appeals from inter partes review proceedings. Since 2016, the court’s affirmance rate of these decisions has remained around 70% (affirmance-in-full) and 80% (including affirmances-in-part). While selection effects are still important to consider here, keep in mind that these decisions represent a substantial portion of all completed inter partes review proceedings, so there’s less selection taking place between the USPTO’s determination and the Federal Circuit’s decision than in other forms of appeal. Edit: District court decisions likely have a similar high frequency of appeal characteristic; this is more of an observation relative to appeals generally.
We haven’t yet completed outcome-coding of all the decisions arising from the district courts, so comparative data isn’t available yet. (Soon, hopefully!)
Want the data analyzed in a different way?
You’re welcome to play around with the data on your own. If you do use it for something that you publish, please include a citation to the Compendium. There’s a convenient cite form on the landing page for the database.
Thanks to my research assistants for their work on the Compendium, especially John Miscevich, Joseph Bauer and Lucas Perlman.
In its reissue application, Global IP asked the PTO to broaden its carpeted-car-floor patent by changing the “thermoplastic” requirement to simply “plastic.” The PTO rejected the reissue application on written description grounds — noting that the specification only discloses the use of thermoplastics and not parts “formed generally from plastic materials.” According to the examiner, the broader scope constituted “new matter.” The PTAB made clear that the, although “plastics” might be enabled and within the skill of someone in the art, the patent document does not show possession of that invention:
[R]egardless of the predictability of results of substituting alternatives, or the actual criticality of thermoplastics in the overall invention,[Global’s] Specification, as a whole, indicates to one skilled in the art that the inventors had possession only of the skins and core comprising specifically thermoplastic.
PTAB Decision.
On appeal, the Federal Circuit has vacated — can you spot the written description error?
In its opinion, the Federal Circuit explained that the level of written description required to show possession “varies depending on the nature and scope of the claims and on the complexity and predictability of the relevant technology.” Ariad. Thus, the Board erred by stating that the predictability and criticality made no difference.
Contrary to the Board’s statement, the predictability of substituting generic plastics for thermoplastics … is relevant to the written description inquiry. . . . In addition to predictability, we have held that the criticality or importance of an unclaimed limitation to the invention can be relevant to the written description inquiry.
In other words, a variation predictable to PHOSITA is more likely to covered by the written description (as compared with an unpredictable variation). Likewise, variation of a non-critical component of the invention is more likely to be covered by the written description (as opposed to a component at the point of novelty).
= = = = =
Note here that in this case the Examiner/Board raised a standard written description challenge. On remand, they might achieve better results by focusing on the heightened written description standard for broadening reissues.
Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC (Fed. Cir. 2019)
In a 7-5 decision, the Federal Circuit has denied Athena’s petition for en banc rehearing on the question of eligibility of diagnostic patents. As discussed below, the en banc denial includes eight (8) separate opinions — all of which call for Supreme Court or Congressional intervention. Judge Moore explains:
This is not a case in which the judges of this court disagree over whether diagnostic claims, like those at issue in Athena, should be eligible for patent protection. They should. None of my colleagues defend the conclusion that claims to diagnostic kits and diagnostic techniques, like those at issue, should be ineligible. The only difference among us is whether the Supreme Court’s Mayo decision requires this outcome.
Athena and its co-petitioners Oxford University and the Max-Planck institute asked the Federal Circuit to address two particular questions:
Whether this Court now recognizes a categorical bias against patent claims to methods of diagnosis, an impermissible expansion of the Supreme Court’s narrowly defined judicial exception to patent eligible subject matter under 35 U.S.C. § 101.
Whether courts may now exclude claim elements that they deem “conventional” in determining whether the claim is “directed to” patent eligible subject matter, or does Supreme Court authority requiring that claims be assessed “as a whole” still apply in Section 101 analysis.
Athena’s claim at issue covers a method for diagnosing neurotransmission disorders by obtaining “bodily fluid” and running a set of lab tests to identify whether the fluid contains a “MuSK” complex. I described the patent in a prior post:
In its original decision, the Federal Circuit found the claim directed to an ineligible preexisting law of nature: “the correlation between the presence of naturally-occurring MuSK autoantibodies in bodily fluid and MuSK-related neurological diseases.” The court found the additional concrete steps in the claim were all “standard techniques in the art” and thus did not rise to a patentable inventive concept.
The en banc denial includes eight (8) separate opinions
Concurring opinion by Judge Lourie: Although we disagree with the Supreme Court, we are bound by its precedent. Thus, there is no need to revisit this case. (joined by Judges Reyna and Chen)
Concurring opinion by Judge Hughes: “[T]his is not a problem that we can solve. As an inferior appellate court, we are bound by the Supreme Court. . . . I, for one, would welcome further explication of eligibility standards in the area of diagnostics patents.” (joined by Chief Judge Prost and Judge Taranto)
Concurring opinion by Judge Dyk: Section 101 is necessary — sometimes it is the only defense against overbroad patents that would stifle future discoveries. However, the claims in this case are specific enough and have proven utility an provide the Supreme Court with a good vehicle “to refine the Mayo framework.” (Joined by Judge Hughes, and partially joined by Judge Chen)
Concurring opinion by Judge Chen: Under Diehr, the claims are patent eligible — but not under Mayo.
Dissenting opinion by Judge Moore: The claims in this case should be held eligible, and they are distinguishable from Mayo — especially when that case is read in light of Myriad. (joined by Judges O’Malley, Wallach, and Stoll)
Dissenting opinion by Judge Newman: Medical diagnostics methods are critically important for society and the patent system should encourage their development. Mayo does not create any anti-diagnosis rule. (joined by Judge Wallach)
Dissenting opinion by Judge Stoll: Although the decision here is foreclosed by Mayo, the court should rehear the case because it is so important. (joined by Judge Wallach)
Dissenting opinion by Judge O’Malley: The Supreme Court is simply wrong in its statutory interpretation of 35 U.S.C. 101.
The statements here by the judges have no direct impact on the law and are all 100% dicta. That said, this collection of opinions is designed to send a powerful signal to both the Supreme Court and – perhaps more importantly to Congress – that all members of the “high patent court” see a major problem with the law as it stands now.
Of some interest – the judges were almost uniformly all careful to focus their attention on medical diagnosis inventions — suggesting a targeted solution that would not extend to business methods and other information-based inventions.
Innovation Sciences, LLC v. Amazon.com, Inc. (Fed. Cir. 2019)
Eligibility: Of the three patents in suit, the district court found one ineligible under 35 U.S.C. § 101. U.S. Reissue Patent No. 46,140 (asserted claim 17). The patent claims an use of a “payment server” in an online transaction to enhance transaction security, and the district found “securely processing a credit card transaction with a payment server” to be an unpatentable abstract idea. The key claim step includes the following limitation:
[R]eceiving credit card payment information at the payment server to buy items from a website … “wherein the credit card payment information is received after online communication of the buyer has been switched from the website listing the items to a website supported by the payment server, wherein the switching of the online communication of the buyer is after an indication from the buyer to buy the one or more of the items”
On appeal, the Federal Circuit affirmed the holding — finding that the claim “is directed to the abstract idea of securely processing a credit card transaction with a payment server.” In reaching that conclusion, the court noted that the claim elements are written in “merely functional, result-oriented terms” — “an idea, having no particular concrete or tangible form.” (quoting Ultramercial). Further, the recitation of “servers” limited the invention’s use to particular area of existing technology, but did not “render the claims any less
abstract.” (quoting Affinity Labs).
Regarding the wherein clause for switching from a regular server to a payment server, the court explained that the claim is merely directed to the abstract idea of switching — not any particular implementation or system improvement.
In Alice step two, the court explained “[t]here is no inventive concept in the claim’s use of a generic payment server ‘to perform well-understood, routine, and conventional activities commonly used in industry.'”
= = = = =
In the lawsuit, Innovation Services also asserted two other patents with claims that the Federal Circuit explained “are not a model of clarity and stray from the embodiments described in the specification.”
Still, with that framework, the court chose to give the claims their express meaning — broad enough to allow for infringement. On remand though the court suggests review of the written description and enablement requirements. (“We do not express an opinion as to whether they satisfy the
requirements of § 112.”)
Romag Fasteners, Inc. v. Fossil, Inc., et al., No. 18-1233 (Supreme Court 2019).
The Supreme Court has granted writ of certiorari in the trademark case of Romag Fasteners involving profit disgorgement under 15
U.S.C. § 1117(a).
The statute appears to provide profit disgorgment (i.e., awarding the defendant’s profits) as a regular remedy for trademark infringement although “subject to the principles of equity.” In its decision, the Federal Circuit (following 2nd Circuit law) held that profit disgorgment must be associated with a more-egregious activity – such as willful infringement – before being awarded. Here, the jury found no willful infringement and so that foreclosed the award of the defendant’s profits. We are now set-up for the Supreme Court to decide the following question presented:
Whether, under section 35 of the Lanham Act, 15 U.S.C. § 1117(a), willful infringement is a prerequisite for an award of an infringer’s profits for a violation of section 43(a), id. § 1125(a).
Question presented in petition. The adjudged infringer Fossil provided its alternative question as follows:
Whether the Court should address the standard for an accounting of a defendant’s profits even though (a) regardless of the different formulations of “principles of equity” invoked by lower courts, their application in the overwhelming majority of cases results in an accounting being ordered when the infringement was willful and denied when it was not; and (b) the trial court’s findings in this case bar petitioner from recovering respondents’ profits under either standard applied by the courts of appeals.
The relevant statute itself reads as follows:
When a violation of any right of the registrant of a mark registered in the [PTO], a violation under section 1125(a) or (d) of this title, or a willful violation under section 1125(c) of this title, shall have been established in any civil action arising under this chapter, the plaintiff shall be entitled, subject to the provisions of sections 1111 and 1114 of this title, and subject to the principles of equity, to recover (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action.
My reading of the statute itself suggests that non-willful infringement can support an award of defendant’s profits, so long as that award is in accord with “the principles of equity.” And, those principles are not fully defined for this particular question. There is also a question of timing — principles of equity as of when? Are these 18th; 19th; 20th; or 21st century equity principles?
In the patent world, profit disgorgment is permitted as a remedy for design patent infringement. That remedy is not expressly limited to willful infringement or limited by the principles of equity. However, the remedy does require on-its-face an “imitation,” which in my mind should be read to require some amount of copying.
Polygroup Limited MCO v. Willis Electric Co., LTD (Fed. Cir. 2019)
In a rare split decision, the PTAB upheld the patentability of Polygroup’s U.S. Patent No. 8,974,072 (2-1 decision). On appeal, however, the Federal Circuit has vacated that decision with an oddly written double-negative conclusion: “substantial evidence does not support the Board’s finding that Polygroup failed to establish a rationale to combine the prior art.”
This case is part of ongoing litigation between these makers of pre-lit artificial trees. The appeal here was already pending when the Federal Circuit decided a separate set of IPR appeals – holding that the PTAB had been unduly narrow in its claim construction on the claim term “tree portion” and had also failed to address a single-reference obviousness argument. [prior decision] The patent at issue here is a child of that at issue in the prior case. On appeal here, those same issues were raised and – in a conclusory statement – the appellate panel found them resolved for the child as a matter of collateral estoppel (issue preclusion):
[B]ecause we have already decided [these issues] in Polygroup’s favor in a previous appeal concerning U.S. Patent No. 8,454,186, a parent of the ’072 patent, [these arguments have] been resolved against Willis as a matter of collateral estoppel.
The court here does not explain its view of whether claim construction associated with a parent patent always decides the issue for a child patent. In the case, we apparently had a lack of good briefing. Apparently neither party provided supplemental authority to this panel regarding the intervening decision, and the court provided a little chastising footnote:
Although Polygroup notified us that it anticipated an earlier decision … would control the “tree portion” construction issue in this appeal, see Appellant’s Br. 1, we expected more. Pertinent and significant authority came to the parties’ attention after the briefing in this appeal concluded, yet both parties failed to notify the Panel about this occurrence. Rule 28(j) contemplates the submission of such supplemental authority. Fed. R. App. P. 28(j).
To be clear, 28(j) does not require supplemental submissions, but only states that “a party may promptly advise” the court of “pertinent and significant authorities” identified after briefing or oral arguments. At oral arguments, the Judges went further to state that the failure to submit supplemental authority “is no small matter; its your duty to ensure to ensure to the best you can, that the court doesn’t go down blind alleys.” “Both [counsel] had an obligation to advise us of these cases.” The court’s upset here is a bit odd since the parties had designated these cases as related and one of the judges (Judge Dyk) was on both sets of panels.
Regarding the actual underlying obviousness decision: The big question was whether someone of skill in the art would alter “snap-fitting” electrical connectors with the claimed tapered compression-fitted electrical connectors. In its decision, the Board found that these were not known alternatives. On appeal, the Federal Circuit vacated that conclusion — finding that the board made several errors in its reasoning that were not supported by substantial evidence. On that portion, I’ll just say that it appears to be a poorly written decision.
