by Dennis Crouch

For the most part, Certificates of Correction are boring, simple, and quite common. 35 U.S.C. § 254 & 255 provide for correction of minor mistakes by the PTO and applicant respectively.  PTO mistakes are fixed when a mistake is “clearly disclosed by the records of the Office.”  For applicant-mistakes, the correction is allowed for “clerical or typographical nature, or of minor character” made in good faith.  Larger mistakes should be corrected via Reissue.  Errors can also be corrected as part of a reexamination or AIA trial (such as inter partes review).  In most cases applicants prefer the certificate of correction route because the procedures and approval process tend to be much more patentee friendly.  And, the minor corrections are more likely to have retroactive effect against past infringers.

The PTO grants the vast majority of requests for correction.  The most common denials are based upon the patentee’s failure to submit the correct forms.

The chart above shows the number of certificates of correction issued by the USPTO each year with a forecast through the end of 2021.* The chart shows a fairly small downward trend over the past several years.  Although the trend above is fairly small, I believe that it will actually prove dramatic — with a ~50% reduction in the number of corrections issued moving forward.  We can see forecast with some more clarity in the chart below.

The next chart shows the percentage of patents that have been corrected (patents grouped according to the date they issued).  Since this data only goes through March 31, 2021, only a very small percentage of patents issued in 2021 have been corrected. There simply has not been enough time for the patents to issue and be corrected within this three month period.  On the other hand, the pre-2020 data is fairly accurate because  85%+ of corrections are typically issued within the first two-years of issuance.**

I wrote above that patentees would generally prefer to amend claims as part of a certificate of correction rather than within an AIA trial.  The correction process is simpler, there is no opposing party, and the PTO rarely demands much evidence.

In Honeywell Intl. Inc. v. Arkema Inc., 939 F.3d 1345 (Fed. Cir. 2019), the Federal Circuit chastised the PTAB for creating roadblocks against a patentee from seeking correction in the midst of an AIA Trial.  The court explained that “the Director has not delegated its Section 255 authority to the Board.”  Id.  After the court decision, Honeywell was permitted by the PGR Panel to file a petition for Certificate of Correction of the priority claims.  “Honeywell’s mistake was inadvertently, i.e., unintentionally, failing to include a claim to the priority of three other Honeywell applications.” The petition was filed in May 2020 and is still pending before the Petitions Office.

There are currently dozens of certificate of correction fights going on within AIA trials (IPRs and PGRs).  Basic questions in the cases: (1) When should the PTAB permit a certificate of correction to be filed; (2) Should the PTAB await the outcome of the correction petition before issuing a final written decision; (3) Will the correction be given retroactive effect?

In the recent decision in Election Sys. & Software, LLC v. Hart Intercivic, Inc., PATENT 10,445,966 B1, 2021 WL 409335, at *4 (Patent Tr. & App. Bd. Feb. 5, 2021), the Board permitted the patentee to seek a certificate of correction as follows:

 The method of claim 25, wherein the data set wherein includes a candidate’s name . . .

Here, the second “wherein” was clearly a typo and the petitions office agreed to the correction.  When the correction got back to the Board, the panel refused to take the correction into account — explaining that “shifting the scope of this proceeding to consider the corrected claims could impede the Board’s ability to meet its statutory deadlines. By declining to give effect to the correction, we keep the proceeding properly moored to the Petition that was the basis for instituting this trial.”  A final written decision is not yet issued in the case.

SIPCO, LLC v. Emerson Elec. Co., No. 2018-1364 (Fed. Cir. May 3, 2018) involves a situation where the Certificate of Correction issued after the PTAB decision cancelling the claims, but before the appeal was heard.  Rather than deciding the case, the Federal Circuit ordered the PTAB to address “what, if any, impact the certificate of correction has on its final written decision in this case.” Id.   On remand, the PTAB held that

the Certificate, which issued after the Final Decision and after Patent Owner filed an appeal to the Federal Circuit, has no impact on the Final Decision in this case because it was not in effect during the proceeding.

Emerson Elec. Co. v. Sipco, LLC, IPR2016-00984, 2020 WL 407144, at *8 (Patent Tr. & App. Bd. Jan. 24, 2020). The Federal Circuit then affirmed the case without opinion.  There were several reasons why the Federal Circuit may have affirmed and therefore we don’t know their thoughts on the issue.  It also is not clear whether the correct claims can now be asserted (even retroactively).

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* The first chart includes all certificates of correction for utility patents. About 5% of patents are associated with two or more certificates of correction.  Those are included within the first chart. I excluded those figures from the second chart which shows the percentage of patents with at least one certificate of correction.

** The large bump of 2009 patents was associated with a retroactive change in patent term adjustment calculation.  A cumulative frequency chart is provided below using certificates of correction issued Jan 2014 through March 2021.

In re Hu (Fed. Cir. 2021)

Huping Hu (PhD, JD) and his spouse Maoxin Wu (MD, PhD) have been working for many years to understand human consciousness and its relationship to quantum theory.  In a series of patent applications, the pair have disclosed and claimed various applications of quantum entanglement.

Pending claim 1 of their Application No. 11/944,631 lists three easy steps for taking advantage of quantum entanglement. The basic approach:

1. Create quantum entanglements between an originating & a targeting substance (“by irradiating said substance with magnetic pulse, laser light or microwave, or letting said substance sit for at least thirty days”);
2. Separate the substances;
3. Heat/cool/alter the originating substance.

The result then is a “change in weight, temperature and/or pH value of said target substance.”  The figure above shows a schema “for non-locally influencing a biological system in vivo such as a human body by first applying said target substance into said system in vivo and then manipulating the originating substance quantum-entangled with said target substance. [Published Application: 20090114526A].  This application as well as two others are pending in the case:

1. Application No. 11/944,631 (non-local effects via quantum entanglement);
2. Application No. 13/449,739 (treatment device for humans emitting quantum-entangling photons or magnetic pulses);
3. Application No. 13/492,830 (treatment with water-based target);
4. Application No. 11/670,996 (similar)

The Patent Office rejected applications as inoperative and the Federal Circuit has affirmed.  Operability is not expressly required by the patent act, but is directly derived from the utility doctrine of 35 U.S.C. § 101 (“new and useful”).  In addition, an inoperative creation also lacks enablement — especially in situations like this where the claims are directed to a functional result and not just the machine assembly.

On appeal, Hu argued that the USPTO based its decision on speculation, skepticism and ignorance rather than evidence.  The USPTO presented no prior art or any other contrary evidence.

On appeal, though, the Federal Circuit found that the USPTO had presented a prima facie case by noting that the invention: “violates the first law of thermodynamics,” is “contrary to traditional understanding of chemistry,” and “violates the classical laws of physics” including conservation of mass.   The Board noted an “absence of any known scientific principles explaining how Appellant’s invention could possibly operate in this manner, the absence of any cogent explanation in Appellant’s Specification regarding the general principals [sic] or mechanisms causing this to occur, and the absence of any verifiable test data reasonably attributable to the purported result, the Examiner reasonably characterized Appellant’s invention as being of an incredible nature.” Although Hu presented 25 scientific articles, the Board failed to find any scientific basis supporting the particular claims in Hu’s applications.

The appellate panel explained its support for the conclusion:

The PTO, as the nation’s guardian of technologic invention, must be receptive to unusual concepts, for the core of invention is unobviousness. However, concepts that strain scientific principles are properly held to a heightened standard, typically measured by reproducibility of results. Here the Board was presented with an apparent departure from conventional scientific understanding, and the Board appropriately sustained the examiners’ requirements for experimental verification. The Board applied a reasonable and objective standard, and acted reasonably in sustaining the examiners’ requirements. Should further investigation bring peer recognition and verifiable results, the PTO and the scientific community would surely be interested.

Id.

Note here – the result of this decision is not barring patentability of this type of invention, but rather a requirement that the inventor provide a better showing that the invention actually works as claimed.

by Dennis Crouch

I previously wrote about the Federal Circuit’s decision in WPEM, LLC v. SOTI Inc., 2020-1483 (Fed. Cir. Dec. 9, 2020).  The case focuses on pre-filing investigation — the amount of investigation that a patentee must conduct before filing a patent infringement lawsuit.

Here, WPEM filed an infringement action against SOTI, but later dismissed the action after learning that the patent claims were very likely invalid.  The district court awarded attorney fees to the defendant based upon the fact that “WPEM conducted no pre-filing investigation into the validity and enforceability of the Asserted Patent.” WPEM, LLC v. SOTI Inc., 2020 WL 555545 (E.D. Tex. Feb. 4, 2020).  On appeal, WPEM argued that the law strongly presumes that a patent is valid and, as such, does not require any pre-filing investigation of patent validity.  The Federal Circuit did not disagree with this argument in principle, but found this particular case to be a special case because the accused product is also the prior art.  According to the Federal Circuit the fact that the accused product was on-sale before the patent’s priority date means that the dismissal also very-much about infringement.  The federal Circuit explained:

Instead, the court [implicitly] based its award of attorneys’ fees, in part, on the frivolous nature of WPEM’s infringement position . . . an issue that could have easily been foreseen with an adequate pre-suit investigation. . . . As the court reasoned, because the Accused Technology is prior art to the ’762 patent, “if WPEM prevailed on its assertion that the Accused Technology is covered by the Asserted Patent, it would have had the effect of invalidating, rather than infringing, the Asserted Patent.” Because it is undisputed that the Accused Technology is prior art to the ’762 patent, WPEM could not bring a successful infringement suit.

What the court wrote here makes sense at one level, but it also proves too much.  A patentee will never win an infringement lawsuit after admitting that the prior art anticipates the invention.  Still, I don’t believe that the court intended to conclude that pre-filing investigation requires an investigation of validity issues.

In its new petition for writ of certiorari, WPEM asks two questions:

1. Does a patent’s presumption of validity afforded by 35 U.S.C. §282 limit a district court’s discretion to find a case exceptional under 35 U.S.C. §285 when it is only later discovered the accused technology is prior art?

2. Given the clear and convincing evidence standard to invalidate a patent, does a district court have the discretion to find a case exceptional under 35 U.S.C. §285 based upon asserted but unproven grounds of invalidity and unenforceability?

[Petition].

The requirement for pre-filing investigation is substantially written-down in Rule 11 of the Federal Rules of Civil Procedure:

(b) Representations to the Court. By presenting to the court a pleading … an attorney or unrepresented party certifies that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances:

(1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation;

(2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law;

(3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and

(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on belief or a lack of information.

FRCP 11(b). Rule 11 has its own sanctions regime, but egregious violations of the requirements may also serve as a basis for fee shifting under the Patent Act as an “exceptional cases.”  In its decision, the Federal Circuit did not discuss Rule 11.

Transtex v. Laydon Composites (Fed. Cir. 2021)

If you have driven on American highways, then you have seen semi-tractor-trailers with the under-body aerodynamic skirt.  I was viscerally disappointed when these first came-out because I have a movie scene lodged in my childhood memory of a Lamborghini driver hiding from the police by driving under a trailer. (Cannonball Run?).  I’m over that now.  These things are super cool.

The patent here covers a “resilient strut” that holds the skirt in place. I guess its like a petticoat.  The basic problem the inventors faced was that rocks and other solid objects would hit the skirt and bend them out of shape.  The resilient strut allows the skirt to deflect and then to bounce back.  Figure 4 below shows one configuration of the strut.

Trasntex sued Laydon and WABCO for patent infringement, and each responded with a petition for inter partes review. The PTAB reached a final decision with a split result:

• Claims 1, 5–11, and 15–19 proven obvious.
• Claims 2-4, 12-14, and 20 not proven obvious.

Both sides appealed and the Federal Circuit has affirmed “in all respects.”

The basic issue for the patentee is that the broadest claims do not include any structural requirements for the resilient strut except that it includes “a longitudinal shape variation.” Rather, the limits are stated in functional form:

the resilient strut being adapted to sustain an elastic deformation when a load is applied to the resilient strut … and to self-recover the resilient strut original shape when the load is removed,

the resilient strut including a longitudinal shape variation adapted to change a mechanical strength of the resilient strut and influence a stiffness of the resilient strut.

This made somewhat easy work for the PTO, although it had to combine one reference focusing on flexible trailer skirts with another reference disclosing a resilient strut holding an air-scoop that goes on the back of a trailer. (Diagram below).

The valid claims were different because they include particular limitations requiring a “‘U’ shaped section” or “concave portions” which was not shown in the prior art asserted in the IPR. The challengers argued for a particular font where the U was more open-box shaped because that was shown in one of the references, but neither the PTAB or Federal Circuit found the arc compelling.

Affirmed.

by Dennis Crouch

In re True Chemical Solutions, LLC (Fed. Cir. 2021)

This is another mandamus petition out of Judge Albright’s courtroom — this time denied.  The patentee True Chem filed the declaratory-judgment lawsuit against PCC in the Midland division of W.D.Tex. back in 2018, before Judge Albright joined the bench.   In 2019 the case was reassigned to Judge Albright who conducted some of the proceedings in his Waco courtroom. Texas is big — the Western District of Texas is larger than most state, and the drive from Midland to Waco is 300+ miles (both parties are from Midland/Odessa).

Judge Albright suggested to the parties that the trial may also be handled in Waco.  Although True Chem wanted a Midland jury, PCC moved to transfer the case to the Waco Division, and Judge Albright granted the motion.  A primary reason for the transfer was that Waco already had proven procedures for a socially-distanced trial.  True Chem then petition for writ of mandamus to the Federal Circuit.

Most litigation regarding venue transfer is inter-district — from one district to another district.  This case is about intra-district — from one division to another division within the same district.  Both situations are captured by 28 U.S.C. 1404(a).

For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.

Id.  In its opinion denying mandamus, the Federal Circuit noted that the law generally gives district court “broad discretion” on this issue, and the discretion is “even greater” when the transfer is intra-district.   Although the appellate court did not fully endorse Judge Albright’s decision and reasoning, it found no clear abuse of discretion.

We are not prepared to say that the district court clearly abused that discretion. The district court meaningfully analyzed the transfer factors. The court found that the more congested docket in plaintiff’s chosen forum would likely cause additional delay and prejudice to PCC, particularly given it was seeking injunctive relief. The district court further found that no non party witness resides within the Midland-Odessa Division and several non-party witnesses residing in other parts of Texas would find it significantly easier, safer, and cheaper to travel to Waco for trial. The district court added that it was unlikely that an actual physical trailer located in Midland would be an exhibit during the trial and did not foresee the opportunity for any field trips during a trial. Under these circumstances, we cannot say True Chem has established a clear and indisputable right to relief.

Slip opinion.

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The lawsuit focuses on Performance Chemical Company’s  U.S. Patent No. 9,834,452 (“water treatment trailer”).   The complaint by True Chem seeks a declaratory judgment of non-infringement and invalidity.  The complaint walks through PCC’s use of this type of trailer going back to 2014 — three years before the application was filed.  True Chem then counterclaimed alleging infringement of the ”452 patent as well as the child; U. S. Patent 10,011,501.

I’ll note here the patent prosecution timeline.  PCC filed a provisional application in April 2017, followed by a non-provisional in July 27, 2017.  The patent issued December 5, 2017.  This is less than 4.5 months following Track One (prioritized examination).

The pending Supreme Court case of Warsaw v. Sasso offers an interesting question about whether there is actually some middle ground of patent-related cases subject to dual Federal and State jurisdiction. 

by Dennis Crouch

There are two different statutes regarding Federal Court exclusive jurisdiction over patent cases.  One giving US district courts exclusive original jurisdiction over US patent cases and the second giving the Federal Circuit exclusive appellate jurisdiction over appeals in patent cases.  28 U.S.C. § 1338(a) provides Federal district courts with “original jurisdiction of any civil action arising under any Act of Congress relating to patents.”  The provision goes on to make clear state courts do not have jurisdiction: “No State court shall have jurisdiction over any claim for relief arising under any Act of Congress relating to patents.”  Id.  The second provision relates to appellate courts: The United States Court of Appeals for the Federal Circuit shall have exclusive jurisdiction over final decisions from US district courts “in any civil action arising under . . . any Act of Congress relating to patents” or where a “compulsory counterclaim” has been asserted “arising under, any Act of Congress relating to patents.” 28 U.S.C. § 1295(a).

Lots of work over the years has gone into determining whether a particular cause of action meets the arising under requirement of these provisions. See, for example, Gunn v. Minton, 568 U.S. 251 (2013) (patent litigation attorney malpractice lawsuit does not arise under the Patent Act).  You’ll note here that the term “arising under” comes from the U.S. Constitution:

The judicial power [of US Courts] shall extend to all cases, in law and equity, arising under this Constitution, the laws of the United States …

U.S. Const. Art. III, Section 2.  The Supreme Court has repeatedly found this clause to also limit jurisdiction — cases that do fit one of the enumerated frames cannot be heard by US Courts.  An example is a breach of contract dispute between two parties from the same U.S. state.  That case will typically arise under state law and thus not be the subject of a Federal lawsuit — barred by the US Constitution.  Some contract cases to wind their way into federal courts — typically under a principle of citizenship diversity or supplemental jurisdiction.

The US Constitution link is important. The statute abuts and parallels the Constitution, and that means statutory interpretation becomes constitutional interpretation. In the recent case of Gunn v. Minton, for instance, the court based its decision on general concepts of federalism and states rights. These are principles that regularly drive US Constitutional decisions, but rarely control statutory interpretation.

The most recent dispute on point is Warsaw v. Sasso (Supreme Court 2021).  The case adds an important layer: the doctrine of abstention.

Sasso licensed his patents to Warsaw (Medtronic).  The parties had a dispute over which products were covered under the license, and Sasso sued in Indiana state court for breach of contract (seeking money damages).   The outcome of the contract claim (apparently) largely depends upon whether the products are “covered by a valid claim” of one of Sasso’s patents.   So, there probably should have been some detailed patent analysis in the case.

Medtronic wanted the case in Federal Court where it could use more sophisticated tactics to invalidate the patent or avoid claim scope.  Medtronic first attempted to remove the case to Federal Court.  However, the Federal Judge remanded it back down. Sasso v. Warsaw Orthopedic, Inc., No. 3:13-cv-1031 (N.D. Ind. Apr. 2, 2014). Then, Medtronic filed for reexamination and a number of claims were cancelled. (Note here, that at this time Medtronic was owner of the patents and pursued ex parte reexamination as a “friendly” way to limit claim scope.)  The state court apparently refused to consider these validity issues in the contract case.

Finally, Medtronic filed a declaratory judgment action in Federal Court — asking for a declaration of “No Breach … Because No Valid Claim of the ‘313 or ‘046 Patent Covers the Medtronic Products for Which Dr. Sasso Seeks Royalties.”  The district court refused to hear the case — but rather dismissed the case on grounds of abstention.

Discretion under the DJ Act: In particular, the declaratory judgment act offers discretionary jurisdiction: “any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration.” 28 U.S.C. § 2201.  On appeal, the Federal Circuit affirmed that the court acted appropriately. See Wilton v. Seven Falls Co., 515 U.S. 277, 286 (1995) (“substantial discretion in deciding whether to declare the rights of litigants”).

To be clear, in its decision, the Federal Circuit found that the DJ action filed by Medtronic did arise under the patent laws, but that it was still appropriate to dismiss the case in favor of the state court action.  “[T]his declaratory action is within the district court’s jurisdictional authority, and we have jurisdiction to receive this appeal and to determine whether the district court abused its discretion in abstaining from exercise of declaratory jurisdiction.”

The outcome though creates a conundrum: If the Federal Courts have exclusive jurisdiction over patent cases, how can a court determine that this is a patent case but still remand it for state court determination? 

Now come the petition for writ of certiorari on the following question:

Whether a federal court with exclusive jurisdiction over a claim may abstain in favor of a state court with no jurisdiction over that claim.

[Warsaw Petition for Writ of Certiorari].   Although this appears to be a case of first impression, Warsaw grounds its petition in the language of prior abstention cases. In particular, a key focus in those cases is whether the dispute “can better be settled in the proceeding pending in the state court.”  Wilton. Here, Warsaw argues, the state is actually precluded from deciding the key issues.

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Middle Ground Overlap: The statutes are worded in a way creates bright-line rules: Federal courts have exclusive authority over cases arising under the patent laws; Federal courts have no authority over patent-related disputes that don’t meet that threshold (absent other justification for Fed. Ct. Jurisdiction).  The appellate decision in this case though appears to present a middle ground — cases where dual Federal/State authority is appropriate.  Although this result is perhaps surprising, there is nothing Constitutionally troubling about dual jurisdiction.  At the same time, the answer will almost necessarily come from analyzing and interpreting the Constitution.

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Note: Justice Barrett may end up recusing herself. Her husband at one time represented Warsaw in the case .