UCP International Company Ltd. v. Balsam Brands Inc., Appeal No. 18-2231 (Fed. Cir. 2019)

In a separate post, I’ll write about the underlying decision here. This post is about the opening paragraph that begins with a reference to companion case (18-1256) involving the same case:

The instant appeal is the companion to concurrently issuing Appeal No. 18-1256 (“the Merits Appeal”), where we determined that the U.S. District Court for the Northern District of California misconstrued the “pivot joint” claim term of U.S. Patent Nos. 8,062,718 (“the ’718 patent) and 8,993,077 (“the ’077 patent”) (collectively, “the Patents-inSuit”). See UCP Int’l Co. v. Balsam Brands, Inc., No. 2018-1256, slip op. at 27 (Fed. Cir. Sept. 19, 2019). We presume familiarity with our opinion in the Merits Appeal which recites the same technology and patents as the instant appeal. We, therefore, only recite the facts necessary to understand the issues on appeal here.

Unfortunately, the referenced merits decision was issued under seal and so cannot be referenced as suggested by the appellate panel.

In the lawsuit, Balsam sued Frontgate for infringing its patents covering an artificial Christmas tree. Frontgate brought-in the manufacturer UCP for indemnification. Balsam then settled with Frontgate (without notifying UCP) and in a manner that left UCP liable for infringement. The confidential information is apparently related to the settlement between Balsam and Frontgate whose contents were designated as “Highly Confidential – Outside Attorneys’ Eyes Only” in the district court litigation.  In its briefing, Balsam identified the settlement terms as “highly confidential, sensitive information.”

The Federal Circuit has asked the parties to “show cause” as to why the under seal opinion should remain under seal with briefing due by October 3. The Federal Circuit has a particular rule limiting confidential marking to 15-words.  Fed. Cir. R. 28(d)(1). “A party seeking to mark confidential more than fifteen words in any brief must file a motion with this court establishing that the additional confidentiality markings are appropriate and necessary pursuant to a statute, administrative regulation, or court rule.”  Id.

I have included the redacted sections from UCP’s brief (BELOW) and I really can’t see how it can only be 15 words that are redacted. Note that the rule does allow for “repeating the marked words” without recounting. But, there are more than 15 lines of text marked confidential with usual average of 10+ words per line.

. . . 

. . .

by Dennis Crouch

Earlier this week, the jury returned with an interesting verdict in PPS DATA, LLC v. Jack Henry & Associates, Inc. (E.D. Tex. Sept 2019).  In the case, PPS sued Jack Henry for infringing its patented method of centrally processing remotely deposited checks.  The defendant argued that the claims improperly encompassed an abstract idea.  However, following Berkheimer, refused invalidate the claims on summary judgment — finding genuine disputes of material fact:

Having considered the § 101 Motion, the Court finds it should be and hereby is DENIED. The Court finds that there are genuine disputes of material fact with respect to whether “the claim limitations involve more than performance of ‘well-understood, routine, and conventional activities previously known to the industry.’” Berkheimer v. HP Inc., 881 F.3d 1360, 1367 (Fed. Cir. 2018) (quoting Alice Corp. v. CLS Bank Int’l, 573 U.S. 208, 224 (2014)).

Those disputed facts were then put on trial and given to the jury to decide. The verdict particularly asked whether the asserted claims “ONLY involve activities that were well-understood, routine, and conventional” as of the application’s priority date.  The verdict – reproduced below – sided with the defendant in finding that the claims were only directed to such non-inventive elements.

The jury also sided with the defendant on infringement — finding none.

With that verdict in hand, Judge Gilstrap has already issued a final judgment in the case — finding (1) no infringement; and (2) that the asserted claims are “invalid for being directed to patent-ineligible subject matter.”

Facebook, Inc. v. Windy City Innovations, LLC (Fed. Cir. 2019)

In a sua sponte order, the Federal Circuit asked the parties to and the U.S. Gov’t to answer the following question:

[W]hat, if any, deference should be afforded to decisions of a Patent Trial and Appeal Board Precedential Opinion Panel (‘POP’), and specifically to the POP opinion in Proppant Express Investments, LLC v. Oren Technologies, LLC, No. IPR2018-00914, Paper 38 (P.T.A.B. Mar. 13, 2019).

The Federal Circuit requested briefing from the U.S. Gov’t (filed on Sept 17, 2019) followed by party briefs within 14 days (October 1, 2019).  David Boundy has also already submitted an amicus brief on the topic.

• US Gov’t Brief
• Boundy Brief

In its brief, the Gov’t argues that the PTAB-POP decisions should be given deference–Chevron Deference–when interpreting AIA Trial provisions of the Patent Act. “The POP’s interpretations of the Leahy-Smith America Invents Act (AIA) qualify for deference under Chevron U.S.A. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).”

The POP’s precedential opinions readily qualify for Chevron deference. . . . Congress has expressly delegated authority to adjudicate IPRs, see 35 U.S.C. §§ 311-319, as well as authority to enact regulations “establishing and governing inter partes review under this chapter,” id. § 316(a)(4). Thus, both of the quintessential forms of lawmaking authority discussed in Mead, “adjudication [and] notice-and-comment rulemaking,” are present here. Moreover, the AIA is a complex, specialized statutory regime implicating a “vast number of claims” with a “consequent need for agency expertise and administrative experience.” Barnhart.

In his brief, Boundy focuses on the grant of rulemaking authority found in the AIA — that the PTO Director “shall prescribe regulations.”  35 U.S.C. 316(a) & 326(a).  Those provisions indicate ordinary notice-and-comment rulemaking procedures.  He explains:

Many agencies have a propensity to avoid rulemaking, because of the workload and oversight that comes with it. . . . The POP process takes that avoidance to a new level. Over the last seven months, instead of “prescribing regulations,” the POP has issued eighteen precedential decisions, mostly on issues that are recurring and predictable. This avoidance of rulemaking process denies all parties the benefits and predictability of careful, informed “regulation,” evades oversight by OIRA and the Small Business Administration, and as this case demonstrates, poses entirely novel legal questions. The PTAB’s shortcutting creates uncertainty for the public, and will burden this Court as procedural breaches get litigated.

Boundy Brief.

This particular case involves a quirky question of joinder under 35 U.S.C. 315(c) that allows the director to join someone “as a party.” In Proppant, the PTAB POP concluded that “§ 315(c) provides discretion to allow a petitioner to be joined to a proceeding in which it is already a party.”  Absent deference, I’m betting that the Federal Circuit will reject that rule.

= = = =

The consolidated case on appeal involves seven inter partes review proceedings filed by Facebook against four different patents owned by Windy City.  Facebook filed successive petitions against several of the patents and then requested joinder under § 315(c). The PTAB granted those requests. The final written decision cancelled some claims three of the patents, but upheld claims in all four.

by Dennis Crouch

Inspired Development Group and Mitchell Prine v. Inspired Products Group (dba KidsEmbrace) (Fed. Cir. 2019)

Mr. Prine is the listed inventor of U.S. Design Patent No. D524,559 and several other super-hero related car seats. Prine formed Inspired Development and assigned patent ownership to that company. Prine then formed another company, KidsEmbrace, to sell the car seats with an exclusive license from Inspired Development.  KidsEmbrace was then bought-out by Boliari who later terminated the license agreement. Prine sued for the money — suing for breach and unjust enrichment under Florida law.

(more…)

Ed. Note: I summarized the Federal Circuit’s design patent decision in Curver Luxembourg v. Home Expressions in a recent post titled Federal Circuit Rejects Patenting Designs “in the Abstract.” Prof. Burstein has previously written about the case and the topic and I invited her to provide some remarks on the case. – D.Crouch

_______

By Sarah Burstein, Professor of Law at the University of Oklahoma College of Law (@designlaw)

Two quick observations at the outset:

1. This decision is consistent with previously-decided case law on infringement.* (For a full run-down, see my law review article: The Patented Design.)
2. This decision not consistent with the USPTO’s current novelty rule. According to the MPEP, “[a]nticipation does not require that the claimed design and the prior art be from analogous arts,” relying on an out-of-context quote (which, as the Federal Circuit pointed out, was also dicta) from In re Glavas. See MPEP § 1504.02. The court’s ruling on this point is a welcome correction and should spur the USPTO to revise its examination procedures.

This case also raises a deeper and more important question—namely, what does it mean for something to be a “design for an article of manufacture”?

Design patents are available for “any new, original and ornamental design for an article of manufacture,” subject to the other requirements of Title 35. See 35 U.S.C. § 171(a). Prior to this case, some suggested that a “design for an article” refers to merely a design that is capable of being applied to one or more articles, not a design that is in any sense “for” any particular article. Under this view, the longstanding USPTO requirement that an applicant identify an article could be viewed as a type of reduction-to-practice requirement or mere formality that should not (or even must not) limit the scope of the claim.

The Federal Circuit’s decision in Curver seems to reject that conception of the patentable “design.” Although it doesn’t fully answer the question of what it means to be a “design for an article of manufacture,” this decision is a step in the right direction.

So what happens now? The USPTO requires a design patent applicant to identify an article in the verbal portion of the claim and (the same article) in the title. See 37 CFR § 1.153. But it also instructs examiners to “afford the applicant substantial latitude in the language of the title/claim” because, under 35 U.S.C. § 112, “the claim defines ‘the subject matter which the inventor or joint inventor regards as the invention.’” MPEP § 1503.01(I).

The Federal Circuit’s decision in Curver creates incentives for applicants to seek broader titles in order to obtain broader scope. In theory, that incentive would be counter-balanced by the fact that a broader title would create a broader universe of § 102 prior art. But given how difficult it is for patent examiners and accused infringers to find relevant prior art (an issue I discuss here), that seems unlikely to be a significant deterrent to over-claiming.

The risk of prosecution history estoppel might be a more significant practical deterrent. Curver initially claimed a “design for a furniture part.” When the examiner deemed that “too vague,” Curver amended the claim to refer to a “chair.” The Federal Circuit ruled that this amendment did limit the claim. Future applicants will have every incentive to push back on these types of rejections, putting pressure on the USPTO to enunciate clearer rules about how specific article identifications need to be.

In that respect, the USPTO (and anyone who’s interested in this topic) may want to revisit the CCPA’s 1931 decision in In re Schnell. In that case, the applicant attempted to frame its claim very broadly and the CCPA rejected that attempt. In doing so, the CCPA engaged in a thoughtful and nuanced discussion about how different types of designs might lend themselves to different types of claiming and how those claims might affect a design patent’s scope. The approach taken in Schnell is not the only possible (or necessarily the best) approach, but it’s worth considering.

I’ve also been asked how Curver might affect arguments about what constitutes the “relevant article” for the purposes of § 289. (For more on that issue, see this previous post.) At this point, it’s hard to answer that question with any certainty because the Federal Circuit has still not picked a test for Samsung step one. If it adopts the test proposed by the U.S. Government in its Samsung v. Apple amicus brief, the article identification in the patent would be relevant to the damages inquiry. This approach gives applicants incentives to direct the verbal portions of their claims to he largest salable unit. See, e.g., U.S. Patent No. D852,236 (stating that the design is “for a refrigerator” but only actually claiming a small part of the shape of the interior of a refrigerator). In some circumstances, these incentives might conflict with the ones provided by Curver; it will be interesting to see how applicants balance them in future applications.

And while Curver is only directly relevant to the scope of § 102 prior art, I suspect applicants will also argue that it should also narrow the universe of § 103 prior art. But when it comes to designs, it actually makes sense for the universe of § 103 prior art to be broader than the universe of § 102 prior art. (For more on these points, see here and here).

One final note: In Curver, the panel described the asserted patent as “atypical” because “all of the drawings fail to depict an article of manufacture for the ornamental design.” But it’s actually quite common for surface-ornamentation designs to be illustrated in this way. Whether or not that is a good policy (and whether it is consistent with § 112) is another question. The answer probably depends on what it means for a surface design to be “for an article of manufacture”? Even for repeating patterns like the one claimed in Curver, it could be argued that placement and proportion are still essential elements of a design for a particular article. If that’s true, then the disembodied-fragment drawing convention also needs to be reconsidered.

_______
* Other commentators have asserted that, in the past, courts treated surface-ornamentation as designs per se. But they cited no cases in support of that assertion and I have not been able to find any. For more details, see FN 480 here.

Mayo Foundation v. Iancu (Fed. Cir. 2019)

This case involves a patent term adjustment (PTA) challenge by Mayo, the owner of of U.S. Patent 8,981,063.  On appeal, the Federal Circuit has affirmed the PTO’s statutory interpretation — holding that the RCE period (pausing PTA Calculation) is not ended by an interference proceeding.

Utility patents have a term of 20-years from the effective filing date of the patent application (not counting national-stage priority or provisional applications).  Since patent rights are not complete until the patent issues, a long period of prosecution can eat-into the effective length of the patent term.  However, Congress has provided for a generous Patent Term Adjustment (PTA) designed to add extra days to the patent term in order to compensate for lengthy prosecution periods.

This appeal is focused on the PTA guarantee of “no more than 3-year application pendency.”  35 U.S.C. § 154(b)(1)(B).  If the application is pending for more than three years, then the patentee will receive day-for-day additional patent term.  One major exception to the 3-year timeline is that it does not include RCE time: “not including — (i) any time consumed by continued examination of the application requested by the applicant under § 132(b).”

In Novartis AG v. Lee, 740 F.3d 593 (Fed. Cir. 2014), the Federal Circuit held that this RCE-time exception stops at the mailing of the notice-of-allowance.

Mayo’s here prosecution was complicated by an interference proceedings that was declared after Mayo initially filed its RCE. Timeline below comes from Mayo’s brief.

From the chart above: Mayo filed an RCE and then a few months later the PTO declared an interference (at Mayo’s suggestion).  Once the interference ended, the PTO sua sponte re-reopened prosecution before finally issuing a notice of allowance.

Mayo’s argued that the time “consumed by continued examination” was only Period-1 that ended with the interference declaration.  Its reasoning has to do with interference declarations that require examination to be “completed” and the invention otherwise “patentable” before declaring the interference.

On appeal here, the Federal Circuit sided with the PTO — holding that a declaration of an interference not is the equivalent of a Notice of Allowance.  Rather, here “examination clearly did not end until the date the Notice of Allowance was mailed.”  Bottom line was that the court counted the post-interference examination time as caused by the RCE filing — and thus not eligible for PTA.

Although interference proceedings are now rare (and on their way out), the reasoning here would apply equally to cases where an examiner reopens prosecution following a successful appeal by the patent applicant. 

The majority opinion was penned by Judge Lourie and joined by Judge Dyk.  Writing in dissent, Judge Newman sided with Mayo since all of the claims pending in the interference had been indicated to be allowable by the examiner.

Regents of the University of Minnesota v. LSI Corporation (Supreme Court 2019) (petition stage)

Question presented in this new petition:

Whether the inter partes review proceedings brought by private respondents against the University of Minnesota in this case are barred by sovereign immunity.

UMN Petition.

UMN sued LSI and Ericsson for infringing several of its semiconductor related patents. U.S. Patents 5,859,601, 7,251,768, RE45,230, 8,588,317, 8,718,185, and 8,774,309. Those two companies then petitioned the USPTO for inter partes review (IPR) of the asserted claims.  The PTAB then dismissed the proceedings – holding that 11th Amendment sovereign immunity applied to IPR proceedings.  On appeal, however, the Federal Circuit reversed – holding that sovereign immunity does not protect state-owned patents from being cancelled by the PTAB.

A key Supreme Court precedent on-point is Fed. Mar. Comm’n v. S.C. State Ports Auth., 535 U.S. 743  (2002) (FMC) (presumptive state immunity even in administrative adjudications).  Here a major difference is that we have property-rights at stake that create special in rem jurisdiction potential and that UMN has already attacked the IPR petitioners by suing them for infringement, creating potential waiver.

This case is parallel to the Indian Tribe immunity case of Saint Regis Mohawk Tribe v. Mylan Pharmaceuticals Inc., 896 F.3d 1332 (Fed. Cir. 2018).  The Supreme Court denied certiorari in that case earlier this year.  A major difference here is that Indian Tribe immunity stems from common law and statutory law (and sometimes treaty) while State immunity is grounded in the U.S. Constitution.

by Dennis Crouch

Curver Luxembourg, SARL v. Home Expressions Inc. (Fed. Cir. 2019)

The district court dismissed Curver’s design patent infringement lawsuit for failure-to-state-a-claim.  Asserted U.S. Design Patent D677,946 is titled “Pattern for a Chair”
and claims an “ornamental design for a pattern for a chair, as shown and described.”

Note from the figure above that the drawings (and thus the claims) are not dirercted to a whole chair, but only a pattern that apparently could be used on a chair.

The accused product is not a chair but instead a basket that (arguably) uses the same pattern.  The district court looked to the “for a chair” limitation in the claim and made the easy conclusion that a basket is not a chair. Before moving forward, I’ll note the famous Van Gogh chalk drawing titled “woman sitting on a basket with head in hands.”  I wonder if she just tried to reconcile a set of Federal Circuit precedents.

On appeal, the Federal Circuit has affirmed — holding that claim language specifying a particular article of manufacture (a chair) limits the scope of the design patent in cases where “the claim language supplies the only instance of an article of manufacture that appears nowhere in the figures.”

In this case, the patentee essentially asked for the Federal Circuit to construe the patent as covering a disembodied design that could be applied to any article of manufacture.  In rejecting that argument, the court first noted that it “has never sanctioned granting a design patent for a surface ornamentation in the abstract such that the patent’s scope encompasses every possible article of manufacture to which the surface ornamentation is applied.”

Given that long-standing precedent, unchallenged regulation, and agency practice all consistently support the view that design patents are granted only for a design applied to an article of manufacture, and not a design per se, we hold that claim language can limit the scope of a design patent where the claim language supplies the only instance of an article of manufacture that appears nowhere in the figures.

Slip opinion.  As the court notes, PTO design patent practice bars patentees from obtaining coverage for an abstract design.

The title of the design must designate the particular article. No description, other than a reference to the drawing, is ordinarily required. The claim shall be in formal terms to the ornamental design for the article (specifying name) as shown, or as shown and described.

37 C.F.R. § 1.153.  This provision has not been challenged at the Federal Circuit (and this litigation appeal does not allow for a direct challenge of the PTO regulation).  However, the court suggests that the limit is also good policy — citing Prof. Sarah Burstein’s work on-point:

If we adopted a design per se rule, “the title and claim language would provide no useful information at all.” Sarah Burstein, The Patented Design, 83 TENN. L. REV. 161 (2015). In contrast, tying the design pattern to a particular article provides more accurate and predictable notice about what is and is not protected by the design patent.

Id.

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The Samuelson Clinic at Berkeley Law filed an amicus brief on behalf of the Open Source Hardware Association. The brief argues that allowing patenting of designs in the abstract would deter innovation.

= = = =

Although the design patent here was ‘examined,’ the examiner did not issue a single office action rejection.  Both the examiner’s search and references cited by the applicant focus on material for the backing or seat of a chair.

= = = =

Note here that the inventor has patented a number of baskets, and Curver sells baskets using this patented design.  But, Curver did not patent its basket with the design.

by Dennis Crouch

Patent reform legislation continues its slow pathway through Congress.  The leading bill is the STRONGER Patents Act of 2019 (“‘Support Technology and Research for Our Nation’s Growth and Economic Resilience”) with identical bills pending in both the House and Senate. H.R.3666; S. 2082.

Upcoming Hearing: September 11, 2019 held by the Intellectual Property Subcommittee of the Senate Judiciary Committee with testimony from: Bradley Ditty (InterDigital); Prof. Mossoff (Scalia Law); Prof. Cotter (Minnesota); Dan Lang (Cisco); Josh Landau (CCIA); and Eb Bright (ExploaMed). [Written testimony will be available on the Hearing website sometime on the 11th.]

The Bill is designed to strengthen the power of an individual patent — making it harder to invalidate and easier to enforce as follows:

• AIA Trials: PTAB must require clear and convincing evidence before invalidating an issued patent;
• AIA Trials: Petitioner must have standing (business or financial reason to challenge a patent’s validity);
• AIA Trials: Bar multiple trials on the same claims; Bar multiple petitions on the same patent by a single petitioner.
• AIA Trials: Allowing petitioner to appeal most insitution question; barring appeal of institution denials;
• AIA Trials: Splitting institution judges from trial judges;
• Enforcement: Presume that infringement causes irreparable harm and that the remedy at law is inadequate.
• . . .

[Read the Bill]

A group of law professors have submitted a letter to Congress arguing against the STRONGER Patent Act.  The core argument of the letter is that the inter partes review (IPR) system “has proven to be a robust and efficient check on patent validity, and has had a positive impact across industries, including high-tech, Main Street, and pharmaceuticals, where invalid patents can keep drug prices high.”   [Read it here]  Prof. Cotter signed the letter; Prof. Mossoff did not.

by Dennis Crouch

Valspar Sourcing, Inc. (Sherwin Williams) v. PPG Indus. (Fed. Cir. 2019) (nonprecedential) (Valspar II)

This short decision reads like a study of my parenting style — “You should have understood my meaning based upon my facial expression!”  From a patent-law perspective, the Federal Circuit here has vacated an entire IPR proceeding because the challenger lacks standing to appeal.  Note here that the “R” is reexamination rather than review and the decision is nonprecedential.

This case involves two inter partes reexaminations filed by PPG back in 2012. U.S. Patents 7,592,047 and 8,092,876.  On reexamination, the examiner rejected all the claims; then the Board (PTAB) reversed all of those rejections (favoring the patentee).

On appeal, the Federal Circuit refused to hear the case on standing grounds — holding that Valspar had granted a covenant-not-to-sue that mooted the appeal.  PPG Industries, Inc. v. Valspar Sourcing, Inc., 679 Fed. Appx. 1002 (Fed. Cir. Feb. 9, 2017)(nonprecedential) (Valspar I).  Still, although it did not hear the merits of the case, the court still vacated the PTAB Final decisions in the interests of “justice.” In particular, the court appeared to be looking to punish Valspar for filing its covenant-not-to-sue late in the appeal — “tardily and unilaterally.”

“If a judgment has become moot, this Court may not consider its merits, but may make such disposition of the whole case as justice may require.” Walling v. James V. Reuter, Inc., 321 U.S. 671 (1944). . . .

“A party who seeks review of the merits of an adverse ruling, but is frustrated by the vagaries of circumstance, ought not in fairness be forced to acquiesce in the judgment. The same is true when mootness results from unilateral action of the party who prevailed below.” U.S. Bancorp Mortg. Co. v. Bonner Mall P’ship, 513 U.S. 18 (1994). . . .

VACATED, and . . . DISMISSED

Valspar I.  Here, the vacatur is seen as an equitable remedy and, it turns out that the Federal Circuit was not interested in punishing the patentee for its late action, but only to ensure that the mootness holds.

Following Valspar I on “remand” and with its decision upholding the patent vacated, the Board went the other way and ordered the examiner to issue reexamination certificates cancelling all of the challenged claims.  In particular, the Board found that the vacatur of its prior decision terminated the appeal and thus the examiner was required by law to issue the reexamination certificate upholding the claims.

The Federal Circuit, now in Valspar II, found the Board’s approach inequitable — the very opposite of equitable.

The ordered vacatur was designed to protect the challenger from being forced to acquiesce to an unreviewable adverse ruling by the Board. But by effectively canceling all the challenged claims, the Board’s approach unfairly converted the vacatur shield into a sword for the challenger. That is an inequitable result—especially here, where the Board previously determined that the challenged claims are not invalid.

Had we intended such an incongruous result, we would have made that intent explicit in our opinion. The Board should have interpreted the scope of the vacatur based on the context provided by this court’s opinion. . . . With this context, it was clear that this court’s intent was to nullify the entire inter partes reexamination without any collateral effect on other litigation.

Valspar II.  On remand here, the Board is instructed to either (1) do nothing or (2) “To the extent the Patent Office interprets our mandate to require further action, such action should be limited to concluding the reexaminations by vacating the proceedings without any further adjudication, and without the issuance of any reexamination certificate.”

Issues Here: To my knowledge, the Federal Circuit has not begun vacating Inter Partes Review proceedings based upon lack of appellate jurisdiction, but this decision shows how it is within the court’s equitable power.

Query: Is anyone else a little bit creeped out by the Sherwin Williams logo?

= = = =

Andy Baluch (Smith Baluch) represented the patentee Valspar on appeal; Tony Figg (Rothwell Figg) represented PPG.

= = = =

Note that Valspar has an ongoing lawsuit against PPG that asserts continuations of the disclaimed patents here.

In re Greenstein (Fed. Cir. 2019) (nonprecedential decision)

Mark Greenstein is trying to patent an automated investment system to “automatically adjust the amount [a] person saves” in order to achieve a projected income amount. A key element of the claims, according to Greenstein, is to “utilize a projected amount of income at a future date for at least one person.”  The Examiner and PTAB found the claims unpatentable as both lacking eligibility and as either anticipated or obvious.

On appeal, the Federal Circuit has affirmed the eligibility rejection — finding:

1. Alice Step 1: Representative claim 1 recites receiving investment data, adjusting an individual’s savings, and investing the adjusted savings to achieve a projected retirement income. This describes no more than the automation of the longstanding fundamental economic concept of personal financial planning. We have routinely held that such claims are directed to abstract ideas.
2. Alice Step 2: The claims merely recite an abstract idea with instructions to implement it “using one or more computers with associated software.” And as the Board correctly stated, these are “generic, purely conventional elements.”

On appeal, Greenstein argued that the claimed utilization of projected income was an inventive concept and noted that it “was the basis for the successful commercial launch of a new product, demonstrating its material advantages to persons in the relevant market.” On appeal, the Federal Circuit found that argument failed to connect the dots.

Even if Mr. Greenstein is correct that the claimed utilization of a projected future income was the basis for a commercially successful product, this is insufficient to transform the claims into a patent-eligible application. It is well-settled that a claimed invention’s “use of the ineligible concept to which it is directed cannot supply the inventive concept that renders the invention ‘significantly more’ than that ineligible concept.”

Slip opinion, Quoting BSG Tech LLC v. Buyseasons, Inc., 899 F.3d 1281 (Fed. Cir. 2018).

Greenstein filed this application back in 2014 (provisional in 2013). He was represented by Bacon Thomas before the PTO, but took it on pro-se before the Federal Circuit.

by Dennis Crouch

University of Texas v. Boston Scientific Corp. (Fed. Cir. 2019)

UT sued Boston Scientific for patent infringement in its home district of W.D. Texas (Austin).  BSC responded with a motion to transfer/dismiss on venue grounds — arguing that venue was improper under 28 U.S.C. 1400(b).  BSC is not a Texas corporation and has no regular-and-established place of business in W.D. Texas.  As such, the district court found venue improper and transferred the case to D.Delaware. (BSC does have a few dozen employees in W.D.Tex., all of whom work from home, but that did not create proper venue.)

UT appealed the transfer — arguing sovereign immunity, sovereignty, and “State Dignity”.  In particular, UT argued that an implicit exception to the venue statute allows for State of Texas has a right to sue for patent infringement in the state of Texas. The argument:

Venue is proper in the Western District of Texas because UT is an arm of the State of Texas, has the same sovereign immunity as the State of Texas, it would offend the dignity of the State to require it to pursue persons who have harmed the State outside the territory of Texas, and the State of Texas cannot be compelled to respond to any counterclaims, whether compulsory or not, outside its territory due to the Eleventh Amendment. . . .

[T]he federal patent venue statute cannot abrogate a State’s right to choose the forum when asserting infringement of its federal patent rights. UT also argues that the District
of Delaware lacks jurisdiction because UT never consented to suit in Delaware, never waived its sovereignty in Delaware, and never had its sovereignty abrogated by statute.

On appeal, the Federal Circuit “disagree[d] with UT on all grounds. . .  state sovereignty principles asserted by UT do not grant it the right to bring a patent infringement suit in an improper venue.”

We acknowledge that States are sovereign entities that entered the Union with particular sovereign rights intact. We are not convinced, however, that the inherent powers of Texas as a sovereign allow UT to disregard the rules governing venue in patent infringement suits once it chose to file such a suit in federal court.

Here, the appellate panel is effectively making a waiver argument — since UT filed suit in Texas, it implicitly agreed that the suit might be transferred to another state if such a transfer fit under the rules of civil procedure.

When a State voluntarily appears in federal court . . . [i]t logically follows that the State must then abide by federal rules and procedures—including venue rules—like any other plaintiff. We see nothing in UT’s cited authorities that suggests  otherwise. Indeed, it would be “anomalous or inconsistent” for UT to both invoke federal question jurisdiction and then to assert sovereignty to defeat federal jurisdiction.

Slip opinion.

Of some interest — UT might be able to refile the case directly to the U.S. Supreme Court under the “original Jurisdiction” clause of Article III, Section 2 of the U.S. Constitution.

In all Cases affecting Ambassadors, other public Ministers and Consuls, and those in which a State shall be Party, the supreme Court shall have original Jurisdiction.

This jurisdiction is not ‘exclusive’ to the Supreme Court and so the normal route is to go through the district courts.

= = = =

Note that ordinarily parties do not have a right to directly appeal a transfer order. Here, however the court found appellate jurisdiction under the collateral order doctrine.

= = = =

The patents at issue here cover implantable drug-releasing biodegradable fibers used in stents. U.S. Patent Nos. 6,596,296 and 7,033,603.  The patents are exclusively licensed to TissueGen, another Delaware Corp.

Uniloc 2017 v. Apple (Fed. Cir. 2019) (appeal pending)

As in most patent cases, the parties to this litigation stipulated to a fairly tight protective order that was entered by Judge Alsup. Many of the documents filed in the case were filed under seal, including elements of the motion to dismiss for lack of standing (arguing that the plaintiff doesn’t actually own the patent).

However, in January 2019, the Electronic Frontier Foundation (“EFF”) moved to intervene and request unsealing of the parties various briefs and documents “for the limited purpose of vindicating the public’s right to access court records.”  EFF explained:

Defendant Apple has filed a dispositive motion asking the Court to dismiss this case on the basis of lack of subject matter jurisdiction. But page after page of the public briefing relating to that motion is hidden behind redactions. The public has no access to the underlying facts. Even lengthy sections of the legal argument are redacted, leaving the public with no way to understand the dispute. This conflicts with the public’s common law and First Amendment right of access.

The Ninth Circuit has held that “compelling reasons,” are required to seal documents used in dispositive motions. . . . While all court proceedings are presumptively open, the public interest in patent disputes is particularly strong because patents potentially govern the conduct of anyone who wants to make, use, or sell the claimed inventions. Thus, the public has an interest in knowing who owns, or might claim rights to enforce, a patent. Plaintiffs in this case appear determined to hide such facts from the public. But Plaintiffs’ desire to confound the public cannot trump the public’s First Amendment right of access. The Court should deny the motions to seal and ensure access to court records.

[EFFMotion] In response, Judge Alsup denied the motion to seal documents — holding that the parties had failed to provide compelling reasons to justify sealing and that generalized assertions of “potential competitive harm” are insufficient to outweight the public’s right to know. [DenialOfMotionToSeal]

Although Judge Alsup agreed to unseal the documents, he also granted a stay of deadlines pending appeal. Thus, the question of sealing is now pending before the Federal Circuit.  Meanwhile, Uniloc has agreed that it was initially overzealous in its approach to sealing documents (offering to unseal 90% of the materials originally filed under seal), but also argues that the court should particularly avoid unsealing a a document that includes “a table of the 109 of licenses Uniloc entered into between 2010 and mid-2017 [that] identifies the licensee, the date of the license, the amount paid and the license type for each license.”  According to Uniloc, the names of patent licensees and their payments are rightfully kept confidential. [Uniloc2017AppealBrief]

[To be updated as EFF and Apple weigh in].