April 2023

Eligibility and the U.S. Solicitor General: Patenting the Scientific, Technological, and Industrial Arts

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by Dennis Crouch

A decade ago, the US Supreme Court issued a pair of decisions that upended substantial aspects of patent practice. Mayo Collaborative Servs. v. Prometheus Labs., Inc., 566 U.S. 66 (2012); and Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 573 U.S. 208 (2014).  These cases broadened scope of the “abstract idea” and “law of nature” exclusions in ways that largely overlap with other patent law doctrines, such as obviousness, indefiniteness, and even enablement.  But, unlike those doctrines, subject-matter eligibility jurisprudence is more of free-wheeling approach that typically does not require evidence.  In court, these cases are often decided at pleading-stage, before any evidence is introduced or considered.

Many thousands of patents have been denied or invalidated under the expanded doctrine.  Opponents of the change argue that it has created unpredictability, lack of respect for the law, and overreach that inhibits our culture of innovation historically fostered by the fuel of potential exclusive rights.

One difficulty with the law here is that it is entirely judge made.  The statute isclear that patents should be awarded to “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof” so long as the other requirements of patentability are met.  35 U.S.C. 101.  The Supreme Court added its admittedly atextual gloss of excluding “laws of nature, natural phenomena, and abstract ideas.”  And, although those limits have been longstanding, the court expanded their scope and simplified the procedures for invalidating patents in Mayo and Alice. A substantial number of prior petitions have asked the Supreme Court to clarify and revise its stance on Section 101 eligibility, but the Supreme Court has repeatedly denied certiorari.  We may be moving to the next step with the two pending cases discussed below.

Most recently, the Solicitor General has provided its views in two pending cases and has recommended that the court grant certiorari and revise its eligibility doctrine. “These cases would be suitable vehicles for providing much-needed clarification in this area.”

In its briefing, the SG ties itself to the idea of “technological inventions”; arguing that “quintessentially technological inventions” should be patent eligible. SG Brief. A positive SG amicus brief usually indicates a high likelihood that the Supreme Court will hear the case. The two parallel pending cases are:

  • Interactive Wearables, LLC, v. Polar Electro Oy, 21-1281.  Interactive Wearables asserts two patents covering a wearable content player connected to a screen-based remote control that permits users to view information about the song being played from the remote. U.S. Patent Nos. 9,668,016 and 10,264,311.  The district court dismissed the case with prejudice on the pleadings for lack of eligibility. On appeal, the Federal Circuit affirmed without opinion.
  • Tropp v. Travel Sentry, Inc., 22-22.  Tropp’s asserted patents claim a method of improving airline luggage inspection by selling TSA-labelled locks having a master key held by TSA authorities.  If TSA needs to open the luggage for inspection, they use their key rather than cutting the lock. U.S. Patent Nos. 7,021,537 and 7,036,728. The district court found the claims ineligible on summary judgment.  On appeal, the Federal Circuit affirmed with a non-precedential per curiam opinion. Importantly, Tropp does not claim to have created any new technology here, but rather a new process.  Of course, Section 100 of the Patent Laws defines process to “include[] a new use of a known process, machine, manufacture, composition of matter, or material.”

In its brief filed jointly in both cases, the Solicitor General distinguishes between the inventions in Interactive and in Tropp; arguing that only the first represents a patent eligible invention because it is directed to the “scientific, technological, [or] industrial arts” rather than “non-technological methods of organizing human activity.”

Properly construed, [the abstract idea] exception helps cabin Section 101’s reach to patent law’s traditional bailiwick of the scientific, technological, and industrial arts. The category of patent-ineligible abstract ideas thus does not encompass quintessentially technological inventions, like the improved content player that the patentee claimed in Interactive. By contrast, as the court of appeals correctly recognized, Section 101 excludes non-technological methods of organizing human activity like the luggage-inspection method claimed in Tropp.

SG Brief.  In looking at the court decisions, the SG also argued that the lower courts had unduly considered other doctrines such as novelty, obviousness, and enablement and overlayed them into the obviousness analysis.

A court at step two therefore should ask whether a claimed invention sufficiently transforms an abstract idea into the kind of innovation eligible for patent protection. Rather than undertake that inquiry, however, the Interactive court placed undue emphasis on considerations of novelty, obviousness, and enablement. Although those considerations may sometimes overlap with the abstract-idea inquiry, they are the purview of different statutory provisions and perform different functions. See 35 U.S.C. 102, 103, 112. By contrast, the Tropp court correctly held that nothing in the claimed method transforms it into a technological invention.

Id. Although not clear, the Supreme Court may consider whether to grant or deny certiorari in these cases as early as its May 18, 2023 conference.  Meanwhile, a third eligibility case of Avery Dennison v. ADASA is also pending and could be taken-up on the same date.

It is of some importance here that the USPTO also signed the brief – indicating that it is on board with creating a technological invention dividing line.

Federal Circuit: Construing the Term “A” once Again

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by Dennis Crouch

In Salazar v. AT&T Mobility LLC, the Federal Circuit affirmed the district court’s judgment of noninfringement. Once again, the Federal Circuit was called upon to interpret the claim term “a,” this time to determine if Salazar’s claim requiring “a microprocessor” was limited to a single microprocessor. While “a ___” is usually interpreted to include “one or more ___,” the court upheld Judge Gilstrap’s narrower singular construction in this case, finding it limited by later references to “said microprocessor.”

Salazar’s US Patent No. 5,802,467 claims a communication system for interacting with multiple external devices. The system comprises “a microprocessor” that generates reprogrammable communication protocols, a memory device for efficient storage of command code sets retrieved by “said microprocessor,” a user interface for user selections and menu displays rendered by “said microprocessor,” and an infrared frequency transceiver coupled to “said microprocessor” enabling bidirectional communication with external devices.

AT&T systems may have the capability to achieve all these steps, but the defendant argued that each step utilized different processors or multiple processors. Thus, as the District Court explained, the dispute centered on “whether the claims require one microprocessor that is capable of performing the recited ‘generating,’ ‘creating,’ ‘retrieving,’ and ‘generating’ functions.” According to the district court construction, the patentee needed to identify a single processor that performed “all the functional (and relational) limitations recited for ‘said microprocessor.'” As a result, the court found no infringement. The Federal Circuit affirmed this decision on appeal.

While the indefinite article “a” is generally interpreted broadly as not limited to one item, this presumption can shift when necessitated by the patent documents. In this case, the patentee repeatedly used “said microprocessor” to refer back to the already claimed term in a way that “reinvokes [the] non-singular meaning” of the word “a.” Slip Op. (quoting Baldwin Graphic Sys., Inc. v. Siebert, Inc., 512 F.3d 1338 (Fed. Cir. 2008). According to the court, an alternative interpretation would ignore the meaning of “said.”

The key takeaway is that each time the claim uses “said microprocessor,” it refers back to the originally identified microprocessor. This interpretation prevented the argument that the claim covers the use of multiple microprocessors working together to achieve the described functionality.  Non-infringement affirmed.

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The jury sided with the patentee on anticipation. AT&T also appealed this issue. However, the Federal Circuit declined to hear the question, holding that AT&T failed to move for a Rule 50(a) JMOL before the case was submitted to the jury, thus waiving its right to appeal the sufficiency of the evidence on that issue.

Federal Circuit Narrows Scope for Copyrighting Software Function

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by Dennis Crouch

The copyright lawsuit between the data-software company SAS Institute and its scrappy copycat World Programming has been interesting to follow over the past several years, and the Federal Circuit has now issued a controversial opinion in the case.  SAS Inst. v. World Programming Ltd., — F.4th — (Fed. Cir. 2023).  The majority opinion authored by Judge Reyna and joined by Judge Wallach affirmed the lower court ruling that SAS failed to establish copyrightability of its claimed program elements.  Writing in dissent, Judge Newman argued that the majority’s rejection of copyrightability represents a “far-reaching change” not supported by either precedent or good policy.  I called this outcome controversial. The outcome would also be controversial had Judge Newman’s position prevailed.

The case is properly seen as an extension of the Supreme Court’s decision in Google
LLC v. Oracle America, Inc., 141 S. Ct. 1183 (2021).  In that case, the Court found that Google’s use of Java API naming conventions in its Android operating system was fair use under copyright law.  Because its fair use decision decided the case, the court did not rule separately on whether the API was even copyrightable in the first place.  In SAS v. WPL, the Federal Circuit squarely addressed the copyrightability question.

To be clear, computer software can still be copyrightable.  But, parties asserting protection will need to do a much better job of showing how their creative authorial input survives the “abstraction-filtration-comparison test,” which the Federal Circuit  applied in its decision.

Copyright law’s abstraction-filtration-comparison (AFC) test is used to determine whether a particular work is entitled to copyright protection. The AFC test involves breaking down a work into its constituent parts, abstracting the unprotectable elements, filtering out any remaining unoriginal or unprotectable elements, and then comparing the remaining protectable elements to the allegedly infringing work. The AFC test has been previously adopted by the Second, Fifth, and 10th Circuits.

Here, the court did not delve into the comparison step — and instead simply held that there was nothing left to infringe after abstraction & filtration.

The decision is also substantially procedural.  The district court held a copyrightability hearing and followed a burden shifting procedure created by the 11th Circuit in Compulife Software Inc. v. Newman, 959 F.3d 1288 (11th Cir. 2020).  In particular, the court first assumed that the work was copyrightable based upon the registration documents.  It then allowed the defense to present its filtration argument to show a lack of copyrightability.  If that evidence is sufficient (as it was here), the burden then shifts back to the copyright holder to rebut — and “to establish precisely which parts of its asserted work are, in fact, protectable.”   The difficulty for SAS is that it offered no rebuttal and instead “refused to engage in the filtration step and chose instead to simply argue that the SAS System was ‘creative.'” Slip Op. SAS presented an expert witness on copyrightability, but the district court found it extremely unreliable and thus excluded the testimony.  (The expert had not seen anything to filter out — even clearly unprotectable elements).

The majority walked through each of these issues and ultimately affirmed on all grounds.

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Some background: SAS makes data analysis software. A key feature of the SAS product is that folks can write programs using SAS syntax in order to get certain results. Thus there are a number of data jockeys who are experts in SAS code.  WPL is a UK based software company who obtained several copies of SAS statistical software and made their own clone version by rewriting the code and by relying upon an early version of SAS that is not protected by copyright.  The WPL version allows folks to use SAS language to get the same results — but at a much lower price.   When I sa “same results” — the clone pretty much identically copied output styles so that a chart made with WPL looks basically identical to a chart made in SAS using the same code.

SAS sued in E.D.Tex for copyright infringement.  Judge Gilstrap dismissed the copyright claims — holding that the software was unprotectable.  Copyright infringement appeals are ordinarily not heard by the Federal Circuit, but in a case of what appears to be appellate-forum shopping, SAS had also included patent infringement allegations that they eventually stopped pursuing.  Under the rules of procedure, if patent claims were raised in the case at some point, then the appeal heads to the Federal Circuit.

The copyright case is not about copying code.  It appears rather to be about copying the input syntax format used by individuals to input their programs and the output design styles for outputting data in some particular style. In the filtration analysis, WPL provided a host of evidence to show that these features should be “filtered out” of the SAS copyrights.

  • WPL established that an earlier version of the SAS System, “SAS 76,” was in the public domain.
  • WPL showed that many Input Formats and Output Designs in the current SAS System are identical or nearly identical to those in SAS 76 and should be filtered.
  • WPL demonstrated that the SAS Language should be filtered because it is open and free for public use.
  • WPL’s expert identified various allegedly copied materials that contained unprotectable elements such as open-source, factual, data, mathematical, statistical, process, system, method, and well-known and conventional display elements.

Bringing these together the Federal Circuit concluded that the defense had presented sufficient evidence to show uncopyrightability and that the district court was justified in requiring SAS to directly and particularly rebut the evidence rather than simply allowing a trial on the copyright as a whole.

The district court was correct to exercise its authority and require SAS to articulate a legally viable theory on which it expected to base its copyright infringement claims. Conversely, it would be improper for a district court to permit a matter to proceed to trial on the basis of vague and unidentified theories.

Slip Op.

Writing in dissent, Judge Newman argued that Fifth Circuit law protects this sort of computer software architecture even from non-literal copying.  The key citation is likely to a the Fifth Circuit’s 1994 Engineering Dynamics case:

Most courts confronted with the issue have determined that copyright protection extends not only to the literal elements of a program, i.e., its source code and object code, but also to its “nonliteral” elements, such as the program architecture, “structure, sequence and organization,” operational modules, and computer-user interface.

Eng’g Dynamics, Inc. v. Structural Software, Inc., 26 F.3d 1335 (5th Cir. 1994).   Judge Newman noted that “computer programs” are expressly protected within the Copyright Act

Copyright protection subsists . . . in original works of authorship . . . including . . . (5) computer programs.

17 U.S.C. 102. As the Nimmer treatise explains, this 1980 amendment to the laws “dispels any lingering doubts as to the copyrightability of computer programs. It is
therefore now firmly established that computer programs qualify as work of authorship in the form of literary works, subject to full copyright protection.”
1 NIMMER ON COPYRIGHT § 2A.10(B) (2022 ed.).

Here, Judge Newman particularly noted that the collection of the various input functions and output designs is easily copyrightable. And, this is the same analysis done by the Federal Circuit in its original Oracle v. Google decision.

Judge Newman also concluded that the district court improperly shifted the burden of proof to the copyright holder.

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What should the patent attorney do? 

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After coming up with a core idea for a new product, Inventor jumps on chatGPT and asks the AI to expand upon the product idea, including providing additional design elements based upon the inventor’s original description. ChatGPT comes through with flying colors and provides several detailed designs that inventor had not considered.  Inventor is diligent in their disclosure docs to include the chatGPT transcript.  Patent search reveals that Inventor’s original idea is not patentable by itself, but it is likely patentable when combined with the chatGPT input. The patent attorney sees value  in having claims directed solely to the features provided by chatGPT.

You are the patent attorney, what do you do in this situation?

eGrants and Quick Issuances

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by Dennis Crouch

Later this month the USPTO will transition to electronic patent grants or eGrants.  This primarily a cost-savings mechanism, although it saves some paper too.  Going forward, patentees will be able to obtain a paper ceremonial copy for a $25 fee.

This result does not have a direct major impact on patent practice, but as part of the change, the USPTO is issuing patents at a quicker pace following the issue fee.  That issue date is important because it is the final day for filing a follow-on application claiming priority.

Best Practices: With the compressed issuance timeline, a growing number of patent practitioners are moving to a standard practice of only filing the issue fee once a firm decision has been made as to whether to file a continuation.  And, if the decision is to file a continuation, delay the issue fee payment until the continuation is ready to go.

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Small Jazz Musician Foils Apple Music Trademark Registration

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by Dennis Crouch

Bertini v. Apple Inc., — F.4th — (Fed. Cir. 2023)

Apple Records was founded by The Beatles in 1968 and quickly became a success, producing many hit records in the late 1960s and early 1970s. Apple Computer Company was founded in the mid-1970s and almost immediately sued for trademark infringement by Apple Corps (the parent company of Apple Records).  The companies eventually settled the case with Apple Computer paying $80k and agreeing to stay out of the music business.  The companies clashed again in the 2000s as Apple Computer (now Apple Inc.) expanded into music via iTunes and other services.  The two eventually reached another settlement that transfers substantial rights over to Apple Inc. to use the mark in connection with its music-related products and services.

In 2015 Apple began using the mark APPLE MUSIC as its new music streaming service. It also filed to register a trademark on the mark.

Meanwhile, Charlie Bertini created his band AppleJazz Band back in 1984 to perform at the AppleJazz festival.  He also created the AppleJazz record label.  Bertini filed an opposition to Apple’s TM registration which the TTAB eventually dismissed.  On appeal here, however, the Federal Circuit has reversed — holding that Apple had not proven a sufficient right of priority.

Tacking: The basic issue in the case is whether Apple Inc. can claim priority use back to the founding of Apple Records in 1968 (or sometime before 1984). Of importance, the pre-84 use of Apple mark was solely for “gramophone records” and other record formats.  In its registration application, Apple is seeking to register APPLE MUSIC for “15 broad categories of services, from the production and distribution of sound recordings, to presenting live musical performances, to providing websites featuring entertainment and sports information.”  Slip Op.

On appeal, the Federal Circuit held that the tacking analysis must be pursued for each service listed its application.

The Board legally erred by permitting Apple to claim absolute priority for all of the services listed in its application based on a showing of priority for one service listed in the application. Tacking a mark for one good or service does not grant priority for every other good or service in the trademark application. A trademark owner must show tacking is available for each good or service for which it claims priority on that ground. . . . The trademark applicant cannot establish absolute priority for the full application simply by proving priority of use for a single service listed in the application.

Slip Op.  Here, Apple has not shown that taking is proper for live musical performances and therefore the application must be rejected.  On remand, Apple will likely be able to narrow its application to only services that are properly covered by its assignment from Apple Records.

In her analysis, Federal Circuit Chief Judge Moore repeatedly stated that tacking is an exception to the ordinary rule and should be narrowly construed.  American courts “uniformly apply the tacking doctrine narrowly.”  Although tacking allows for minor changes in services and in the mark itself, tacking requires “substantial identity.” “[G]oods or services must be substantially identical for tacking to apply.” Id.  In the context here, in order to have tacking for musical performances “Apple must therefore show live musical performances are substantially identical to gramophone records.” Although substantial identity is a question of fact, the Federal Circuit concluded that there was no need for the TTAB to determine this question — “no reasonable person could conclude … that gramophone records and live musical performances are substantially identical.”

Accordingly, Apple is not entitled to tack its use of APPLE MUSIC for live musical performances onto Apple Corps’ 1968 use of APPLE for gramophone records. Because Apple began using the mark APPLE MUSIC in 2015, Bertini has priority of use for APPLE JAZZ as to live musical performances. We therefore reverse the Board’s dismissal of Bertini’s opposition to Apple’s application to register APPLE MUSIC.

Id.

Note that Apple has substantially moved-on from this issue and redid its logo as shown below using a design-plus-word mark.

Skilled Searcher Test Allows Estoppel for Unknown References

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by Dennis Crouch

Ironburg Inventions Ltd. v. Valve Corp., — F.4th —, 21-2296 (Fed. Cir. Apr. 3, 2023)

The recent decision in Ironburg Inventions Ltd. v. Valve Corp. has significant implications for post-IPR estoppel under 35 U.S.C. § 315(e)(2). In this case, the Federal Circuit adopted a “skilled searcher” standard to determine whether grounds not raised in the original IPR “reasonably” could have been raised at the time. The court also addressed the burden of proof in estoppel cases, with the Federal Circuit holding that it lies with the party seeking the estoppel — a ruling that aligns with traditional practice and the best reading of the statute.  These standards and procedures are important because they provide clarity on the scope of estoppel and help stabilize the law, particularly given diverging district court rulings on these issues. One interesting aspect of Ironburg is the split 2-1 decision on indefiniteness, which I’ll address in a separate post.

Before delving into the case, it is also worth noting that the issue of estoppel and its nuances are currently pending before the U.S. Supreme Court in Apple v. CalTech. In Apple, the Federal Circuit broadly applied the estoppel doctrine, and the Supreme Court is now considering whether to grant certiorari.

Lack of Knowledge and a Skilled Searcher Test: After being sued for infringement, Valve challenged Ironburg’s game controller patent via inter partes review (IPR).  That administrative action ended with a final written decision favoring the patentee — i.e., Valve lost.  Back in district court, Valve attempted to challenge the validity again – this time based upon non-petitioned grounds that it gleaned from a competitor’s IPR petition against the same Ironburg patent. The district court barred Valve’s defenses as estopped under § 315(e)(2)  after concluding Valve “reasonably could have raised” those grounds in its original IPR. Valve argued that it had no knowledge of those references at the time of its IPR petition and therefore could not have included them as challenge grounds. However, both the district court and the Federal Circuit held that lack of knowledge is not a complete excuse.  Rather, in cases where the IPR challenger lacks knowledge of the prior art the appropriate test for estoppel is what “a skilled searcher conducting a diligent search reasonably could have been expected to discover.”

Burden Shifting: One question on appeal is which party has the burden of proving that the ground reasonably could have been raised in the IPR.  The district court (seemingly) placed the burden on the patent challenger to prove that it could not have reasonably raised the issue. In some ways, that burden makes sense because the IPR challenger is in the best position to understand and prove its level of knowledge  (or lack thereof) at the time.  On appeal, however, the Federal Circuit flipped that ruling — holding instead that the burden lies with the party seeking the estoppel to prove estoppel.  In my view, this result better aligns with both tradition and the reading of the statute.

Digging a bit into the weeds: the district court’s holding basically concludes that Valve reasonably should have been able to find the references since the other IPR challenger found them.  On appeal, the appellate court found some faulty logic — an inherent and unproven assumption made by the district court was that the other IPR challenger used only reasonable diligence to find the art. If, on the other hand, it took “extraordinary measures” to find the references and construct the challenge ground, then no estoppel should apply.

The patentee had won a $4 million judgment at the original trial, but on remand, the district court will need to reconsider its estoppel decision. If the result is no-estoppel, Valve will get a third chance at invalidating the patent. This case underscores the importance of conducting a diligent search to identify all potential grounds for invalidity and then putting the best grounds forward in the IPR petition.