All posts by Dennis Crouch

About Dennis Crouch

Law Professor at the University of Missouri School of Law.

Three Topics: Construing AND as OR; Preserving O2Micro demand; Denying interest

by Dennis Crouch

Michael Kaufman v. Microsoft Corp. (Fed. Cir. 2022)

Kaufman’s US7885981 has a 2000 priority date and claims a method of automatically creating a database front-end for user access.  Kaufman sued Microsoft–asserting that its Dynamic Data product infringed the claims.  A jury agreed, finding the patent claims valid and infringed and awarded $7 million in damages.  Both parties appealed.

The broadest claim has three steps that basically require

  • providing an output stream from from the server that defines a user interface paradigm (including user-interaction modes, such as “create, retrieve, update and delete” and display formats for each mode)
  • scanning the database to create a data model; and
  • using the data model to construct a client application also with the user interface paradigm.

‘918 patent.

The body of the claim does not include the an “automatic” requirement, but the preamble does: “A method for operating a server comprising a processor for automatically generating an end-user interface for working with the data within a relational database … , said method comprising …”


Much of Microsoft’s argument focuses on the term “automatic.” During claim construction, Microsoft had asked for the term to be construed as meaning “no human labor required.” At the summary judgment motion hearing, the Judge found no disagreement about the meaning of “automatic,” but rather concluded that the disagreement was about which parts of the process had to be automatic. Microsoft’s counsel then asked, “Can we resolve the claim construction issue?” and the district court responded , “You agreed on a definition.” At that point, Kaufman’s counsel agreed with the court “I think we have resolved it.”  There was no further briefing on the issue pre trial.

Preserving o2Micro Issue for Appeal: On appeal, Microsoft argued that the district court should have resolved the claim construction issue as required by O2Micro.  The Federal Circuit has refused to consider the argument — holding that Microsoft failed to preserve the issue.

Once litigation extends beyond pre-trial and into trial, claim construction should be seen as an issue of jury instructions.  In general, pre-trial objections made during the pleadings or summary judgment stage must be reiterated during trial in order to preserve those objections for appeal. FRCP Rule 51(c) requires a timely objection on the trial record to any jury instructions (or the failure to provide sufficient instructions).  Here, the Federal Circuit holds that same approach should apply to claim construction.

A proper claim construction provides a legal standard for the jury to apply, and so the requirement of clear, timely raising of an argument for a claim construction reflects the strong requirement of timely raising of distinct objections to jury instructions.

Kaufman, Slip Op.  One problem with this panel decision is that there are quite a few cases where the appellate court has permitted claim construction appeals despite the absence of on-point jury instruction objection.  Here, the appellate panel recognized that situation as “an exception to [the] requirement” that can apply when the issue was “sufficiently raised and settled earlier.”  In particular, as the Court wrote in 02Micro, the trial-objection requirement is only preserved in a situation where the claim construction arguments had been “made clear to the district court” and then “fully litigated in and decided” by the district court in such a way that further objection would be “futile [and] unnecessary.” Id.

On appeal, Microsoft also argued that the jury verdict of infringement was not supported by substantial evidence since its Dynamic Data program required substantial user input – and thus was not automatic.  On appeal though, the Federal Circuit concluded that claim language permitted some human actions (i.e., triggering the various operations).  And, the jury heard expert testimony that separated out the human actions of setting-up the operation from the claimed automatic steps of scanning”, etc.

And: One of the more litigated claim terms is the word “and.”  Here, the claims require several display modes: “create, retrieve, update and delete.”  Later, the claims require that “each said mode display processes for representing, navigating, and managing” data relationships.  The question here is whether the claims actually require each display mode provide the user all three options: represent, navigate, and manage.  Microsoft’s product includes some modes that do not display all the options  as required by the claims and so argues that it does not infringe.

The district court concluded in a post-verdict ruling that the term “and” should be construed as including “or.” On appeal, the Federal Circuit has affirmed. In its decision, the court particularly noted that the sole working embodiment described in the specification would only be covered by the claims under an “or” interpretation.  “A claim construction that excludes a preferred embodiment is rarely, if ever correct and would require highly persuasive evidentiary support.” Epos Technologies Ltd. v.
Pegasus Technologies Ltd., 766 F.3d 1338 (Fed. Cir. 2014).  The court also noted that the specification repeatedly used the word “and” in ways that clearly included “or.”

Infringement Affirmed.

= = =

Although Kaufman won at trial, he appealed the district court’s denial of pre-judgment interest that could potentially double the award.  The patent statute particularly identifies interest as an element of compensation:

Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court.

35 U.S.C. § 284. “Generally, prejudgment interest should be awarded from the date of infringement to the date of judgment.” Nickson Industries, Inc. v. Rol Mfg., 847 F.2d 795 (Fed. Cir. 1988). The Supreme Court interpreted this provision in its 1983 General Motors case, concluding that prejudgment interest is “typically” awarded in patent cases.  The Supreme Court also noted that the statute indicates interest is “fixed by the court” and may be denied by a district court based upon “some justification.”  General Motors Corp. v. Devex Corp., 461 U.S. 648 (1983).  In Nickson the Federal Circuit found that undue delay by the patentee in bringing the lawsuit could justify denying interest. See also, Crystal Semiconductor Corp. v. Tritech Microelectronics International, Inc., 246 F.3d 1336 (Fed. Cir. 2001).

Here, the district court gave two reasons for denying the award of pre-judgment interest.

  1. The jury verdict took into account the interest (because the instructions asked the jury to provide an award “discounted to present value”).
  2. Kaufman was responsible for undue delay in bringing the lawsuit.

On appeal, the Federal Circuit found the denial of interest a clear abuse of discretion.  The discounting portion of the verdict was tied to testimony regarding standard discount rates, but did not include any evidence or basis for the jury to also calculate or award interest.

Regarding undue delay, the district court identified a delay, but did not identify evidence that the delay was “undue,” i.e,. that it caused some prejudicial impact on the defendant.  In particular, Microsoft indicated that it “could have” altered its product back in 2011, but did not produce evidence that it “would have” done so.

On remand, the district court will need to add up that interest (and, likely add post-judgment interest as well based upon the appeal).

NetChoice v. Paxton: Briefs are in.

NetChoice, LLC v. Ken Paxton, Attorney General of Texas, 21A720 (Supreme Court 2022)

I previously wrote about the Texas Social Media Censorship Law known as HB20.  A portion of the case is pending before the Supreme Court on an emergency motion to vacate the 5th Circuit’s recent decision allowing the law to come into force even as it is being challenged.  After NetChoice filed its petition, Justice Alito requested responsive briefing from the state of Texas.

Those briefs have now been filed and provided below with a small excerpt or comment for each amicus brief.

= = =

  • Appendix containing lower court opinions.
  • Party Briefs:
  • Amicus Briefs Supporting NetChoice.
    • Rep Chris Cox: Amicus Brief Supporting NetChoice.  Cox is an author of Section 230 and provides its explanation of its importance and relevance to the case.
    • Prof. Eric Goldman: Amicus Brief Supporting NetChoice.  Goldman adds that the “editorial transparency requirements [of HB20] violate the First Amendment.”
    • EFF, Wikimedia, et al.: Amicus Brief Supporting NetChoice. “Allowing HB20 to go into effect will cause social media platforms to alter their content moderation practices in ways that will harm the public interest.”
    • Cato Institute, Amicus Brief Supporting NetChoice. “The public interest is harmed by allowing the law to go into effect because most users do not want to see animal abuse, terrorist recruitment material, or racial slurs when they go on Facebook, nor do Facebook and other social media platforms want to host such material.”
    • ACLU, Reporters Committee for Freedom of the Press, et al.: Amicus Brief Supporting NetChoice. The brief argues that editorial autonomy is critically important. Although HB20 applies to social media and not newspapers the brief suggests it will have a chilling effect.
    • FLOOR64: Amicus Brief Supporting NetChoice.  The owner of  HB20 “takes aim at the entire Internet ecosystem and its ability to facilitate any online expression at all.”
    • TechFreedom: Amicus Brief Supporting NetChoice. “The Fifth Circuit panel order is poised to unleash a torrent of awful content.”
    • Chamber of Progress, Anti-Defamation League, IP Justice, LGBT Tech, et al.: Amicus Brief Supporting NetChoice. The law would force publication of wasteful speech and would “render content moderation functionally impossible.”
  • Amicus Briefs in Support of Texas.
    • State of Florida, Amicus Brief in Support of Texas. Social media platforms “have supplanted the telephone for interpersonal communication, traditional television for news consumption, and the 24-hour cable news cycle in the potential to swing an election.” They should be regulated as such.
    • Professor Philip Hamburger, et al.  Amicus Brief in Support of Texas. Hamburger explains that he has studied and written “on how governments, in the seventeenth century and again today, tend to privatize their censorship, leaving their dirty work to less accountable, private actors.”  He argues that common carrier style regulation is  an appropriate mechanism to promote speech.

The Inventive Entity and Prior Publication by Another

by Dennis Crouch

Here is the setup in the Federal Circuit’s recent decision in Google LLC v. IPA Techs. Inc. (Fed. Cir. 2022):

  • March 23, 1998. Cheyer, Martin, and Moran co-author academic paper describing their Open Agent Architecture (“OAA”) project being developed at Stanford’s SRI International.
  • January 5 & March 17, 1999. Cheyer & Martin (but not Moran) file for patent protection on aspects of the OAA that were not fully disclosed within the original publication.

And the Question: Does the prior publication count as prior art in an IPR obviousness analysis?

= = =

After IPA sued Google for infringement, Google petitioned for inter partes review (IPR).  Although the Board granted the petition, it eventually concluded that the prior publication was not prior art and thus sided with the patentee in its final written decision. On appeal, the Federal Circuit has vacated and remanded–asking for further fact finding on the contribution of Moran.

IPR proceedings are limited to challenges anticipation and obviousness challenges and only those based upon prior patents & printed publications.  Prior art used for  an obviousness rejection must first qualify as prior art under Section 102.  Since the patents here are pre-AIA, we focus on the old Sections 102(a) and 102(b):

Pre-AIA 102. A person shall be entitled to a patent unless —

(a) the invention was … patented or described in a printed publication … before the invention thereof by the applicant for patent, or

(b) the invention was patented or described in a printed publication … more than one year prior to the date of the application for patent in the United States, or

We can quickly eliminate the 102(b) time-bar because the patent applications at issue here were filed within the one-year grace period.  102(a) prior art asks whether the IPA invention was already the subject of a printed publication prior by the time the IPA inventors created their invention.  In the obviousness context, we break this down a bit further and ask whether some aspect of the invention was disclosed in a printed publication prior to the applicant’s invention date.

Courts also added a “by another” limitation into this portion of Section 102(a).  Thus, a prior publication by inventors (or a subset of the inventors) does not count as prior art under 102(a).  In re Katz, 687 F.2d 450 (CCPA 1982).

In IPA’s case, the problem is that the prior publication was by the inventors and an additional third party. If the third-party contributed fully to the publication then it counts as prior art.  But, the courts have recognized that listing of authors operates by a different norm than listing of inventors and so delve into whether or not the additional author actually contributed to the particular disclosure being relied upon.  In the context of pre-AIA 102(e) (that expressly included the “by another” provision), the Federal Circuit provided a three step process:

  1. determine what portions of the reference patent were relied on as prior art to anticipate the claim limitations at issue,
  2. evaluate the degree to which those portions were conceived ‘by another,’ and
  3. decide whether that other person’s contribution is significant enough, when measured against the full anticipating disclosure, to render him a joint inventor of the applied portions of the reference patent.

Duncan Parking Techs., Inc. v. IPS Grp., Inc., 914 F.3d 1347 (Fed. Cir. 2019).

In IPA, the Board concluded that Google had failed to show Moran had participated in the conception of the relevant portions.  On appeal, the Federal Circuit vacated the ruling — concluding that the Board had failed to “complete the full Duncan analysis” but rather disregarded testimony from Dr. Moran regarding his contribution as lacking corroboration.  On appeal, the Federal Circuit concluded that the original co-authorship represents “significant corroborating evidence.”  On remand, the court will need to actually consider the testimony and decide the factual questions of Moran’s contribution to the prior publication.

= = =

Note – the case has a few other interesting and important procedural aspects that I’m not covering in this post.

= = =

Under the AIA: Section 102 was substantially rewritten in the Leahy-Smith America Invents Act of 2011.  The revised provisions no longer consider the date-of-invention as relevant.   If the patents were being considered under the AIA, we would  still first look to Section 102(a) and find that the prior publication seemingly qualifies since the publication occurred prior to the applicant’s effective filing date:

Post-AIA. (a) Novelty; Prior Art.—A person shall be entitled to a patent unless— (1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.

We should not expect courts to read-in the “by another” limitation into this new Section 102(a), which is more properly thought of as a modification of the pre-AIA bar of 102(b) (despite its reference to “novelty”).   Thus, any publication prior to the effective filing date qualifies for consideration under Section 102(a).  But, prior art consideration under the AIA always require consideration of the exceptions found under Section 102(b).  Importantly, prior disclosures via the inventors within 1-year of the effective filing date are excluded from prior art consideration.

Post-AIA. 102(b) Exceptions.— (1) Disclosures made 1 year or less before the effective filing date of the claimed invention.—

A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if—

(A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or

(B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.

The new statute does not provide any direct guidance as to how courts will treat  pre-filing disclosures akin to the one in IPA where the authors include both the listed inventors and also non-inventors.   On the one hand, the court could continue to require the same Duncan Parking analysis where we delve into the details of who conceived of the various aspects of the pre-filing disclosure. On the other hand, the court could simply whether an inventor is one of the listed authors — if so, the disclosure “was made by the inventor or joint inventor.”

The USPTO appears to largely be applying the Duncan Parking approach — its  examination guidance particularly focuses attention upon whether the 102(b)(1) disclosure is made solely by the listed inventors (or a subset).  See also Ex Parte Chowdhury, APPEAL 2020-006272, 2021 WL 4306675 (Patent Tr. & App. Bd. Sept. 20, 2021) (prior publication by a subset of inventors qualifies as a 102(b)(1) exception); and MPEP 2153.01(a) (“If … the application names fewer joint inventors than a publication (e.g., the application names as joint inventors A and B, and the publication names as authors A, B and C), it would not be readily apparent from the publication that it is by the inventor (i.e., the inventive entity) or a joint inventor and the publication would be treated as prior art under AIA 35 U.S.C. 102(a)(1).”).



Means Plus Function; Nonce Words; and En Banc Petitions

by Dennis Crouch

Back in March 2022, I wrote an essay on the spectrum of structural and functional claiming, particularly commenting on the Federal Circuit’s decisions in Dyfan, LLC v. Target Corp., 28 F.4th 1360 (Fed. Cir. 2022) and VDPP LLC v. Vizio, Inc., 2021-2040, 2022 WL 885771 (Fed. Cir. Mar. 25, 2022). See, Dennis Crouch, Discerning the Purpose and Means of Williamson v. Citrix, Patently-O (March 30, 2022).

A basic question in these cases is whether the claim elements at issue recite sufficient “structure” to avoid being classified as a “means” claim under 35 U.S.C. 112(f). Patentee’s typically prefer to avoid 112(f) classification as the result is typically either (1) narrow claim scope or (2) invalid claims.  The classification is seemingly easy when a patentee uses classic “means plus function” (MPF) claim language without reciting specific structure, but patentees usually avoid that approach in favor of quasi-structural elements such as a “module,” “circuit,” or “system.” Prior to Williamson, the Federal Circuit  strongly presumed claim elements lacking traditional MPF language were not MPF elements.  Williamson eliminated that  strong presumption in favor of a weak rebuttable presumption that can be overcome with a demonstration “that the claim term fails to recite sufficiently definite structure or else recites function without reciting sufficient structure for performing that function. Williamson v. Citrix Online, LLC, 792 F.3d 1339 (Fed. Cir. 2015) (en banc as to Part II.C.1).  That case went on to focus attention on “nonce words” such as “mechanism,” “element,” and “device” that “typically” fail to recite sufficiently definite structure.  The problem here is discerning in any particular case what level of structure is sufficient.  Although the court used the word “definite”, it seems unlikely that they intended to tie the 112(f) here to the same reasonable certainty test used for 112(b).

In the recent cases of Dyfan and VDPP, the Federal Circuit pushed-back a bit on an expansive interpretation of Williamson.  In Dyfan, the court considered a wherein clause requiring certain actions and concluded it was implicitly tied to claimed “code” and therefore recited sufficient structure to avoid MPF designation.  In VDPP, the court indicated that the nonce word designation should be based upon “evidence that a person of ordinary skill would not have understood the limitations to recite sufficiently definite structure.”  The district court in VDPP had not required submission of “evidence” but rather had summarily concluded that the “processor” and “storage” elements were nonce words lacking structure.  On appeal, the Federal Circuit reversed — holding that those words provided sufficiently definite structure.

Now, the accused infringers in both of these cases have petitioned for rehearing: calling for either (1) panel rehearing or (2) rehearing en banc.  The court has not yet requested responses in either case. (No response may be filed to a petition for panel or en banc rehearing unless the court orders a response).

In Dyfan, Target argues that the law was settled by Williamson v. Citrix Online, LLC, 792 F.3d 1339 (Fed. Cir. 2015) (en banc as to Part II.C.1) and confirmed in Egenera, Inc. v. Cisco Sys., 972 F.3d 1367 (Fed. Cir. 2020).  The petition asks the following questions:

  1. For claims that recite computer software for performing functions, what
    are the criteria for determining whether software-implemented functional claim
    language is subject to 112(6)?
  2. Can the Court ignore parts of the recited software-implemented function, or ignore such function entirely, in making the determination as to whether the claim recites sufficiently definite structure?
  3. If no, and if the software-implemented function cannot be performed by a general-purpose computer without special programming can 112(6) be avoided by claiming a general-purpose computer term (such as code or program or processor) and a software-implemented result, if a person of ordinary skill in the art would understand how to write a program to achieve this result; or is the claim required to recite an algorithm to achieve the software-implemented result to avoid the application of 112(6)?

Dyfan En Banc Petition.

As you can see, the focus of the questions tie the case to to general-purpose computers and software-implemented inventions, and thus implicitly raises overlay questions of subject matter eligibility. A group of law professor led by Mark Lemley have also filed an amicus brief in support of rehearing in Dyfan.

There is a reason Congress limited functional claiming in 1952. And that reason applies with particular force in the software industry. Many of the problems with abuse of software patents can be traced to the fact that we historically allowed patentees to claim functions, not implementations. It is broad functional claiming that leads to assertions that every part of a complex technology product is patented, often by many different people at the same time. It is broad functional claiming that puts stars in the eyes of patent plaintiffs, who can demand huge royalties on the theory that there simply is no other way to implement the technology they have patented. And it is broad functional claiming that makes most of the resulting patents invalid, since even if ten programmers developed ten different algorithms to solve a problem only one of them could be the first to solve the problem at all.

Williamson reined in those abuses by setting a clear rule: patentees can’t avoid section 112(f) simply by picking a magic word other than “means.” The panel opinion directly contradicts Williamson. This Court should grant en banc rehearing to resolve the conflict

Professor Brief in Dyfan.

In VDPP, the defendant (Vizio) asks the following questions in its petition:

  1. May a claim term that connotes structure to one of skill in the art nonetheless require means-plus-function treatment because the structure it connotes is not sufficient for performing the functions the structure is recited as performing
  2. Must the proponent of means-plus-function treatment of a claim term that does not include the word “means” adduce extrinsic or other evidence beyond the language of the claim itself, in order to meet its burden of production in rebutting the Williamson presumption—or may the proponent satisfy its burden by showing that on its face, the claim does not recite sufficient structure?
  3. May the algorithmic-disclosure requirement that this Court has erected as a bulwark against purely functional claiming for computer-implemented inventions be evaded by reciting in a claim, rather than the specification, a generic “processor adapted to” perform claimed functions?

Vizio Petition.

What is missing here:

  • The court decisions lack some clarity as to what it means to “recite sufficiently definite structure.” Is this linked to the definiteness test of 112(b)?
  • It is unclear what “evidence” is required for a court to overcome the presumption — in particular, must a court always look outside the patent document itself?
  • How should all this be handled by the USPTO during ordinary prosecution?

HB20: Social Media Censorship and the Supreme Court

by Dennis Crouch

Texas HB20 treats social media platforms as common carriers, especially those with very large number of users and market dominance.  For its purposes, the law focuses on platforms with more than 50 million US monthly users and has a number of disclosure requirements. But, the heart of the new law is its prohibition on “censorship.”

CENSORSHIP PROHIBITED. (a) A social media platform may not censor a user, a user’s expression, or a user’s ability to receive the expression of another person based on: (1) the viewpoint of the user or another person; (2) the viewpoint represented in the user’s expression or another person’s expression; or (3) a user’s geographic location in this state or any part of this state.

“Censor” means to block, ban, remove, deplatform, demonetize, de-boost, restrict, deny equal access or visibility to, or otherwise discriminate against expression.

HB 20.  The rule has a few exceptions. Censorship appears OK if done to protect intellectual property rights; based upon a request from “an organization with the purpose of preventing the sexual exploitation of children and protecting survivors of sexual abuse from ongoing harassment” or if user expression “directly incites criminal activity or “consists of specific threats of violence targeted against a person or group because of their race, color, disability, religion, national origin or ancestry, age, sex, or status as a peace officer or judge.”  The law creates a private right of action for a censored user and also authorizes the state Attorney General to bring action.

The new law was passed by the Republican dominated Texas House and Senate and signed by Gov. Abbott back in 2021.  But, before the law became effective a Federal District Court entered a preliminary injunction against its enforcement.  Ordinarily, appeals are only proper after final judgment. One exception though is that a district court’s decision regarding a preliminary injunction is ordinarily immediately appealable.  And so the state of Texas has appealed the Preliminary Injunction to the 5th Circuit.

The news over the past two weeks: On May 9, the 5th Circuit heard oral arguments and two days later issued a 1-sentence decision staying the preliminary injunction pending appeal (as the State requested).  Here, the judges have not issued their final decision on whether the preliminary injunction was proper, but the stay suggests that their final decision will also favor Texas since a key element of relief here is likelihood of success on the merits.  Those opposing the law have filed an emergency request with the US Supreme Court to reinstate the preliminary injunction during the appeal.  Justice Alito is assigned to the Fifth Circuit region and so is set to decide the emergency petition–however, the full court could choose to weigh-in.  Briefing in the SCOTUS case from Texas is due on May 18.

So to be clear, the decisions thus far have all focused on preliminary relief — whether the law can be enforced while the trial & appeal is ongoing.

In prior cases, the Court has treated social media has an important avenue for speech. In Packingham v. North Carolina, 137 S. Ct. 1730 (2017), for instance, the court found that prohibiting prior sex offenders from all social media violated those individuals speech rights since social media is the “modern public square.” Id.  Here though, it is the social media platforms seeking the right to discriminate freely against viewpoints.”  Texas presents the argument that social media platforms are  not speaking through their editorial role, but rather are taking technological actions to present the speech of others.  Of course, publishing and dissemination of speech are also protected by the First Amendment, and those opposed to the law present this as an open-and-shut case.

From the moment users access a social media platform, everything they see is subject to editorial discretion by the platform in  accordance with the platforms’ unique policies. Platforms dynamically create curated combinations of user-submitted expression, the platforms’ own expression, and advertisements. This editorial process involves prioritizing, arranging, and recommending content according to what users would like to see, how users would like to see it, and what content reflects (what the platform believes to be) accurate or interesting information.

SCT Brief.


Supreme Court on Patent Law May 2022

by Dennis Crouch

  1. The Supreme Court has denied certiorari in the pending case of PersonalWeb Techs. v. Patreon.  The case questioned the unique patent-law preclusion doctrine known as the “Kessler doctrine.”  I previously argued that the court should hear the case and clarify the law. On the same day, the court also denied petitions in Universal Secure Registry LLC v. Apple Inc. (eligibility) and Cisco Systems, Inc. v. SRI International, Inc. (willfulness).
  2. In Olaf Sööt Design v. Daktronics, the patentee argues that unduly aggressive claim construction undermined its 7th Amendment jury trial right.  This case argues against 02Micro‘s requirement that any disputed term be construed by the court.  In a new filing, the US Solicitor General has recommended against certiorari — concluding that it is the Judge’s role to construe the claims.
  3. We are still waiting for a Gov’t brief in the pending eligibility case of American Axle & Manufacturing, Inc. v. Neapco Holdings LLC.  The court requested the CVSG brief on May 3, 2021–more than a year ago.  Pending follow-on cases include Ameranth, Inc. v. Olo, Inc., Spireon, Inc. v. Procon Analytics, LLC and Interactive Wearables, LLC v. Polar Electro Oy. 
  4. The parties are also awaiting the Gov’t CVSG brief in Apple Inc. v. Qualcomm Incorporated (licensee appellate standing) and Amgen Inc. v. Sanofi (written description requirement).
  5. Hyatt v. USPTO challenges the district court’s APA trial procedures as part of his effort to force the Patent Office to issue patents for applications that have been pending for decades.

Top six pending cases:

  1. Eligibility: American Axle & Manufacturing v. Neapco Holdings – pending petition for writ of certiorari awaiting CVSG amicus brief from Gov’t.
  2. Written Description: Amgen v. Sanofi – pending petition for writ of certiorari awaiting CVSG amicus brief from Gov’t.
  3. Appellate Standing: Apple . Qualcomm  pending petition for writ of certiorari awaiting CVSG amicus brief from Gov’t.
  4. Nexus Requirement for Secondary Considerations: Zaxcom, Inc. v. Lectrosonics – pending en banc petition before the Federal Circuit.
  5. Deference to Examiner on Definiteness: Nature Simulation Systems Inc. v. Autodesk, Inc. – pending en banc petition before the Federal Circuit.
  6. Level of Possession for WD negative claim limitations: Novartis Pharmaceuticals v. Accord Healthcare Inc. – pending en banc petition before the Federal Circuit.

Hyatt back to the Supreme Court: Special APA Procedures for the Patent Office?

by Dennis Crouch

Hyatt v. USPTO (Supreme Court 2022)

Following a failed en banc petition, famed inventor Gilbert Hyatt hired a new Supreme Court counsel (the famed Erwin Chemerinsky) who has now filed a petition for writ of certiorari focusing on standards for dismissing Administrative Procedure Act (APA) claims.

According to the USPTO, there are a couple of hundred patent applications still pending that were filed prior to the June 1995 patent term transformation (GATT).  Of those, 99% list Gilbert Hyatt as an inventor. Hyatt is known for being tenacious. He does not give up easily.  But, his filings argue that the USPTO is largely to blame for the delays.

In particular, Hyatt provided testimony of various former PTO officials of a no-patent-for-HYATT policy — “a secret agency policy to block issuance of his applications as patents, regardless of the merits of his patent claims.” The PTO created a Hyatt Unit of examiners who repeatedly referred to Hyatt as a “submariner” and tracked Hyatt applications using software they called the “submarine detector.”  The group apparently distributed the shallow-fake image below depicting Hyatt applying Ted DiBiase’s finishing move – the Million Dollar Dream.

In 2018, Hyatt filed an Administrative Procedure Act (APA) suit seeking an order requiring “bona fide examination of his applications.” The lawsuit sought review under both Section 706(1) and 706(2).

The reviewing court shall—

(1) compel agency action unlawfully withheld or unreasonably delayed; and

(2) hold unlawful and set aside agency action, findings, and conclusions found to be (A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; . . .

5 U.S.C. § 706.  The district court sided with the USPTO with a sua sponte summary judgment order — finding that the USPTO was already working diligently on the applications based upon its recent filing of “numerous office actions on plaintiff’s applications.” In the process, the district court (1) based its decision upon facts already developed in the administrative record and without following the usual summary judgment approach of drawing every reasonable inference in favor of Respondents; and (2) concluded that summary judgment was proper because Hyatt could not satisfy the extraordinary “mandamus standard” that the court concluded was required to prove a Section 706(1) or (2) case.  These two rulings form the basis of Hyatt’s newest petition for writ of certiorari.

Petitioner Gilbert Hyatt brought this action to challenge the Patent and Trademark Office’s secret rule, attested to by former agency officials and reflected in its official actions, to deny him further patents irrespective of the merit of his applications. After finding that Hyatt had plausibly alleged this rule’s  existence, the district court sua sponte entered summary judgment against him, notwithstanding clear disputes of material fact as to the agency’s actions. Expressly holding that the ordinary summary judgment standard of Federal Rule of Civil Procedure 56 does not apply in agency cases, the district court drew inferences, made credibility determinations, and decided fact disputes in favor of the agency and against Hyatt. It also held that, because there was no basis to “compel agency action unlawfully withheld or unreasonably delayed,” 5 U.S.C. § 706(1), the agency’s rule could not be “h[e]ld unlawful and set aside” as “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” id. § 706(2). The Federal Circuit upheld the district court’s decision.

This Court should grant review to decide:

1. Whether the ordinary summary judgment standard of Rule 56 applies to review of agency action, as held by the First, Fifth, Ninth, and District of Columbia Circuits.

2. Whether the mandamus standard of Norton v. S. Utah Wilderness Alliance, 542 U.S. 55 (2004), applies to claims seeking to set aside agency action under 5 U.S.C. § 706(2).

[Petition]. On the second question, in Norton, the Supreme Court held that the mandamus standard applies when seeking an order under 706(1) to compel some administrative action. Hyatt argues that an ordinary legal standard should apply to 706(2) when seeking a declaration that the agency’s past actions were arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law.”

The setup here is somewhat parallel to Kappos v. Hyatt, 566 US 431 (2012).  In that decision, the Supreme Court held that Hyatt had a right to de novo consideration of evidence presented in a Section 145 civil action even for factual findings that had already been made as part of the prior administrative review.

Appellate Jurisdiction over Mixed IPR Questions

by Dennis Crouch

The Federal Circuit’s new decision in Atlanta Gas Light Co. v. Bennett Regulator Guards, Inc. (Fed. Cir. 2022) denies appellate jurisdiction over a case where the PTAB decision involves a wholistic judgment involving non-appealable issues (time-bar vacatur of institution) and appealable issues (sanctions award).  Judge Newman dissented.  In my mind, the could could have logically separated its decision to focus on the sanctions issue and decide whether sanctions decision to decide whether the dismissal was appropriate and sufficient.

This case has been up and down several times.  The docket includes a final written decision cancelling Bennett’s claims while also awarding monetary sanctions against Atlanta Gas for failed to update its filing regarding Real Parties of Interest (RPI). But, those decisions were later vacated by the Board itself and the proceeding terminated based upon a new interpretation of the time-bar under 35 U.S.C. § 315(b).  The Board eventually concluded that termination would “most effectively resolve the issues on remand by operating as a sufficient sanction while also conforming this Decision to current Office policy.”

The problem here is that time-bar issues are not appealable institution decisions. Thryv, Inc v. Click-To-Call Technologies, LP, 140 S. Ct. 1367 (2020). On the other hand, award or denial of sanctions are properly appealable.

On appeal, the Federal Circuit recognized that sanctions were relevant to the “multifaceted” termination decision, but ultimately concluded that the time-bar issues were “central” and “the core of the Board’s decision.”  As such the court found that it lacked jurisdiction over the appeal.  The majority distinguishes this case from a potential appeal over “purely a sanctions decision over which we ordinarily would have jurisdiction.” Dismissed for lack of appellate jurisdiction.

The majority opinion was written by Judge Stoll and joined by Judge Lourie.

Judge Newman wrote in dissent and explained that the appellate filings here had been careful to focus on the sanctions aspect of the order. “The Sanctions Order is the only issue on appeal.”

Here the agency imposed the sanction of cancellation of extensive administrative  proceedings and their final decisions of patent invalidity, which final decisions had been appealed to the Federal Circuit and affirmed with issuance of the mandate on patent invalidity. We surely have jurisdiction to receive appeal of the agency action vacating all these proceedings and decisions, and purportedly including vacatur of decisions of the Federal Circuit. Our appellate jurisdiction is surely within our statutory assignment of judicial review of decisions of the PTAB.

Newman in dissent.

Post Thrive: PTAB Decision Affirmed rather than Vacated


Copyright Clause Restoration Act of 2022

Missouri Senator (and my former Mizzou Law Colleague) Josh Hawley has introduced S.4171 a modest copyright proposal that would substantially reduce copyright term to 56 years (28 years if holder fails to timely file for renewal).  Current Copyright term is significantly longer and does not require renewal to stay in force.

  • Life of the author + 70 years.
  • For works-made-for-hire or anonymous works 95 years from first publication or 120 years from creation (whichever expires first).

The proposal is retroactive, but only if the owner fits has a market capitalization of $150 billion and operates in the industries of “Arts, Entertainment, and Recreation” or “Motion Pictures and Videos.”

Hawley Proposed Bill.  In the U.S., about 70 companies fit the market cap requirement, including Sen. Hawley’s stated target Disney.


The Kessler Cat is Still in the Studio: Restabilizing Res Judicata

By Dennis Crouch

Claim preclusion and issue preclusion are conceptually difficult, but the Federal Circuit has further confused preclusion doctrines in its patent law jurisprudence. In a series of recent decisions, the appellate court improperly created and then expanded upon a separate-and-distinct form of res judicata that it labels the Kessler Doctrine. We argued recently that this expansion is in error and should be eliminated as an improper destabilization of settled res judicata principles.[1] In a recent amicus filing, the United States Solicitor General agreed that the Federal Circuit’s precedent is in error.[2]  Despite that core agreement, the SG brief is rife with misleading guidance. The SG asserted the non-legal maxim “two wrongs make a right” to effectively conclude that the Kessler expansion error was rendered harmless by compounding errors in the court’s claim preclusion doctrine.  The SG’s brief implicitly calls for a wholesale reevaluation of preclusion doctrine rather than addressing the issues at hand. The brief includes other doublespeak. At one point, for example, the SG argues that Kessler remains “practically significant” and “relevant as a practical matter.” Later, the same document concludes that the question presented—i.e., the viability of Kessler—“does not have practical importance.”  Of course, the law of judgments remains critically important to both ensure justice and stability.

On May 12, 2022, the Supreme Court is set to decide whether to move forward with the pending case of PersonalWeb Technologies, LLC v. Patreon, Inc., No. 20-1394 which focuses on the Federal Circuit’s aforementioned doctrinal expansions.

Kessler and its Progeny: Kessler v. Eldred is an old and largely dormant 1907 Supreme Court case permitting a manufacturer to bring an equity action to stop an infringement lawsuit against its customers.[3]  The manufacturer (Kessler) had already won on non-infringement grounds against the patentee (Eldred), thus freeing Kessler to continue freely commercialize his product. The Supreme Court saw the subsequent lawsuit against Kessler’s customers as an affront to Kessler’s right to manufacture and sell as guaranteed by the non-infringement judgment.[4]  A lot has happened in procedural law 1907. Some of the relevant changes here include the merger of law and equity; adoption of the Federal Rules of Civil Procedure and its expansion of claim preclusion under the broader “transaction or occurrence” test; adoption of the Declaratory Judgment Act and its expanded use in counterclaims; and allowance of non-mutual issue preclusion, especially in the defensive setting.  These changes are major, but they had had all been recognized as the Restatement (Second) of Judgments was being adopted in the early 1980s. In the 40 years since, the law of judgments has remained remarkably stable, with the courts adopting the stated principles of the Restatement embodied in the two preclusion principles of claim and issue preclusion.

But, the Federal Circuit has taken the law of judgments on a major tangent: Particularly, the court has identified a third form of preclusion, the Kessler doctrine, that it offers as separate and distinct from standard principles of preclusion.  The court’s Kessler doctrine operates applies to bar litigation in situations where these traditional forms of preclusion do not.  Despite its references to the 1907 decision, the appellate court’s Kessler decisions are also unmoored from that original precedent.  In particular, the court has applied Kessler to situations where the issue of infringement was not actually litigated or even decided; as well as apply non-mutually.  The effective approach is an odd blend of issue preclusion and claim preclusion where the due process safeguards of each are relaxed or removed.

The effect of judgment is inherent to every litigation, and the confusion created by the Federal Circuit in these cases is ripe for resolution.

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[1] See, Dennis Crouch and Homayoon Rafatijo, Resorbing Patent Law’s Kessler Cat into the General Law of Preclusion, 55 Akron L. Rev. 51 (2022). We argue that the newly expanded doctrine is improper for several reasons.  Most pointedly, the Supreme Court has chastised lower courts from fashioning new rules of preclusion “unmoored from the two guideposts of issue preclusion and claim preclusion.” Lucky Brand Dungarees, Inc. v. Marcel Fashions Grp., Inc., 140 S. Ct. 1589, 1595 (2020).

[2] SG Brief in PersonalWeb Techs. [20220408144608169_20-1394PersonalWeb-CVSG-final].

[3] Kessler v. Eldred, 206 U.S. 285 (1907).

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Thaler v. Vidal: Will Patentability be Negated by the Manner of Invention?

by Dennis Crouch

Oral arguments in the AI-inventorship case of Thaler v. Vidal are set for June 6, 2022.  Prof. Ryan Abbott is set to argue on behalf of the patent owner (and AI creator) Stephen Thaler. Assistant US Attorney Dennis Barghaan will argue on the USPTO’s behalf.

Thaler developed an AI that he calls DABUS. DABUS apparently created two inventions–a “neural flame” and a “fractal container.”  But, Thaler refused to name himself as inventor. Rather, he says that it was DABUS who did the inventing.  But, the PTO refused to issue the patent without a human listed inventor.  After being rejected by the PTO, Thaler filed a civil action in the E.D. Va.  That court dismissed the case–holding that a non-human device cannot quality as an “inventor.”  Abbott and Barghaan litigated the case below as well.

The question on appeal:

As stated by Thaler: “whether an AI-Generated Invention is patentable.”

As stated by the Gov’t: Whether “an artificial intelligence device comprised solely of source code can[] qualify as an ‘inventor’ under the Patent Act.”

Lots of folks might resist Thaler’s suggestion that the AI is the one who invented, but at this dismissal stage of the litigation that fact is procedurally assumed to be true.  Both sides in this case have good arguments, but we should probably be troubled if the result is that “two otherwise patentable inventions cannot receive patent protection” despite the statutory statement that “[p]atentability shall not be negated by the manner in which the invention was made.” 35 U.S.C. 103.

Federal Circuit asked to Decide whether US Patent Law Excludes Non-Human Inventors


Skinny Label Safe Harbor

by Dennis Crouch

Most of the Orange Book patents do not cover a novel active ingredient or new drug. Rather, most are new methods of treatment or formulations.  When a drug is covered only by method-of-treatment claims, that means that generic sales of the active ingredients does constitute patent infringement, unless the sales are somehow inducing folks to perform the method.  This gets a bit complicated when a drug has  multiple therapeutic uses, only some of which are patented.  Obviously, generic versions should be permitted for the non-patented uses.  But, we know that there is going to be a lot of substitution at the retail level because of the price differential between the brand & generic.

Skinny Label: Congress thought through this problem (a little bit).  The basic approach is that the Brand (Patent Owner) must tell the FDA (under penalty of perjury) which of its labelled & approved uses are protected by patent.  When approving a generic version, the FDA will respect the patent by carving-out the patented uses for the generic’s “skinny label.”  Of course, doctors, pharmacists, and patients all know that the generic version is the same drug at a lower price and so go ahead and substitute the generic version even for the patented uses.  In these cases we’re talking about many millions of dollars in sales. That means we have very sophisticated parties on all sides–everyone knows what is happening.

The statute does not create any express ‘safe harbor’ for the generic manufacturer against liability for patent infringement.  Certainly, the manufacturer would be liable for inducement if it encouraged off-label infringing use of its product.  But, does the manufacturer need to take a more active role in discouraging infringing use?

This situation was litigated most recently in GlaxoSmithKline LLC v. Teva Pharm. USA, Inc., 7 F.4th 1320 (Fed. Cir. 2021), en banc denied at GlaxoSmithKline LLC v. Teva Pharm. USA, Inc., 25 F.4th 949 (Fed. Cir. 2022).  GSK sells the beta blocker carvedilol labelled for three uses:

  1. treatment of congestive heart failure
  2. treatment of hypertension
  3. treatment of left ventricular dysfunction following myocardial infarction

All three uses were patented, but by 2007, patents covering the second and third uses had expired.  At that point, Teva received approval for its generic version, but with a skinny label that carved-out the congestive heart failure usage.  The procedural posture of the case is somewhat confusing, but the Federal Circuit eventually sided with the patentee–holding that Teva’s skinny-label along with other practices induced infringement (i.e., encouraged folks to use it for congestive heart failure).

In a recent filing, Teva’s attorney William Jay (Goodwin Proctor) indicated that Teva plans to petition the Supreme Court for writ of certiorari in the case.   (Request for Extension). If Teva’s request for extension is granted, the petition will be due July 11, 2022 with any amicus in support due in early August.  Teva’s failed en banc petition provides a guide for questions that it will likely ask in its petition:

(1) Can the generic manufacturer nonetheless be held liable for induced infringement based on evidence that would be available in every carve-out case—the skinny label itself and product materials that describe the generic drug product as the AB-rated generic equivalent of the brand product, but do not even mention the patented method?

(2) Even if the generic manufacturer were found to have encouraged infringement, can it be held liable for infringement that it did not cause—e.g., if the direct infringer undisputedly did not see the communication that supposedly encouraged infringement?

Teva En Banc Petition.


Virtual Instructor Led Training (vILT): Writing Rejections

If you have time, I would recommend attending the USPTO’s Virtual Instructor Led Training (vILT).  The training is great background for patent prosecutors because it is typically identical to what is provided to patent examiners. The Office is working through a multi-part course on how it examines 35 U.S.C. § 103 and the next 2-hour course is called Obviousness Part 2: “Writing Rejections.”

  • How to establish a prima facie case
  • Rationale for combining prior art
  • Communicating a rejection

Although it is online, the PTO is still limiting enrollment because it is an interactive course.  For questions email vILT@USPTO.GOV or go to this link.  Part 1 covered obviousness rejections and you can see the materials here.  Part III will focus on “examining evidence.”

Meanwhile, consider attending the PTO’s symposium on cross-border trade secrecy on May 11.


The Specification must “Fully Explain the Principle”

by Dennis Crouch

From 1793-1952, the Patent Act included a requirement that the specification “fully explain the principle” of any machine being patented.  That provision was eliminated in 1952.  My question, did that change reduce the disclosure requirement in any way?

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The Patent Act of 1836 included the language now found in 35 U.S.C. 112(a) and that we identify as the enablement and written description requirements.  In particular, the statute required the inventor to provide “a written description of [the] invention, in such full, clear, and exact terms, as to enable any person skilled in the art or science to which it appertains, to make and construct the same.” 5 Stat. 117 (1836).

But, the 1836 statute did not stop there, it also included a further requirement for machine inventions:

and, in case of any machine, [the inventor] shall fully explain the principle, and the several modes of the application of the machine, so that it may be distinguished from other inventions.

Id.  This addendum was originally part of the Patents Act of 1793 and remained in the statute until the Patent Act of 1952.  It is not clear to me how the elimination of this requirement shifts the level of disclosure.  What do you think?

Judging Patent Cases

by Dennis Crouch

For the chart below, I tabulated about 7,000 individual votes from the Federal Circuit Judges in patent cases decided 2014-2021. For each judge, I show the percentage of individual decisions that sided with the patent challenger; or patent owner in each case. The results here are not highly surprising.  Judges Moore, Newman, O’Malley, and Stoll are all more likely to favor the patentee while Judges Lourie, Hughes, Dyk, Prost, and Reyna are relatively more likely to side with the patent challenger. Note that the differences between the judges are not huge–at most <10% difference.

This is a very rough-cut of the data. It does not include all decisions, and I used some automated techniques to identify the winner.  This process was greatly aided by Jason Rantanen’s Federal Circuit Document Dataset that he makes publicly available.

The AIA substantially altered the role of the Federal Circuit and post-AIA patent challengers are much more likely to win appeals. That is why the data here is limited to 2014+.


Generic Industry Skepticism Irrelevant to Non-Obviousness

by Dennis Crouch

In a divided opinion, the Federal Circuit rejected a PTAB non-obviousness decision–holding that “generic industry skepticism” is irrelevant to the question of obviousness.  Auris Health, Inc. v. Intuitive Surgical Operations, Inc., 2021-1732, — F.4th —, 2022 WL 1275241 (Fed. Cir. Apr. 29, 2022).  I suggest the Auris Health majority departs from KSR by again drawing sharp lines rather than allowing for a functional, flexible analysis. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007). The opinion was penned by Judge Prost and joined by Judge Dyk. Judge Reyna wrote in dissent.

The Intuitive Surgical patent is directed to a “method for performing robotic surgery.”   The improvement is a servo-pulley mechanism for swapping surgical tools (e.g., scissors to scalpel to graspers).  In 2018, Intuitive Surgical sued Auris Health for patent infringement. Intuitive Surgical Operations, Inc. v. Auris Health, Inc., No. 1:18-cv-01359 (D. Del.).  In response, Auris petitioned for inter partes review. The PTAB instituted the IPR, but ultimately concluded in its final written decision that the claims had not been proven obvious.  On appeal, the Federal Circuit has vacated and remanded.

The IPR focused on the combination of two prior art references: Smith and Faraz (US5624398 and US5824007) that collectively teach all of the claim limitations. Smith is directed to a robotic surgical system; and Faraz is directed to stand for holding surgical instruments. In its analysis, the PTAB considered evidence presented that (1) combining the two references would create some complications and (2) conventional wisdom established substantial skepticism regarding the use of robotic systems during surgery.  Based upon this evidence, the PTAB concluded that a person of skill in the art would not have been motivated to combine the references in order to arrive at the claimed invention.  On appeal, the Federal Circuit altered course–holding that “generic industry skepticism cannot, standing alone, preclude a finding of motivation to combine.”

There are two areas where skepticism might come into play: (1) as part of the KSR obviousness analysis considering reasons to combine references; and (2) as a secondary consideration of non-obviousness (aka objective indicia).  In the second use-case (objective indicia), the Federal Circuit has previously tightened scope of relevant evidence to only those shown to have a tight nexus with the claimed invention.  Here, however, the skepticism was tied to the particular claim elements, but rather was general skepticism shown to be held by persons of skill in the art “about performing robotic surgery in the first place.”

Here, the Federal Circuit has taken the nexus requirement used for secondary indicia and brought it forward to also apply when considering motivation-to-combine.

[W]hile specific evidence of industry skepticism related to a specific combination of references might contribute to finding a lack of motivation to combine, that’s not what we have here.

Auris Health. It seems to me that this approach is unduly restrictive and in tension with KSR’s rejection of “[r]igid preventative rules that deny factfinders recourse to common sense.”  Rather, in KSR, the Supreme Court held that the question of whether a person of skill would combine references is a broad and flexible inquiry.  Here, it appears that the Federal Circuit is asking for evidence relating to motivation-to-combine to be tied directly to the problem being solved. But KSR rejected that approach as well.

The Court of Appeals failed to recognize that the problem motivating the patentee may be only one of many addressed by the patent’s subject matter. . . . Under the correct analysis, any need or problem known in the field of endeavor at the time of invention and addressed by the patent can provide a reason for combining the elements in the manner claimed.

KSR. One question to consider here is whether the Supreme Court intended its analysis to by symmetrical or balanced. The Supreme Court talked about “reasons for combining” involving substantial flexibility, but did not discuss whether “reasons for not combining” should receive the same treatment. It seems obvious that this should be a balanced inquiry.

In his dissent, Judge Reyna agreed that “general skepticism toward robotic surgery” should ordinarily not be enough–by itself–to negate a motivation to combine.  However, he argues that it should still may be relevant to the analysis.  Here, Judge Reyna found that the Board had included this reason as one among many, and that substantial evidence thus supported the Board’s conclusion of no motivation to combine.  (For example, the Board noted that the combination would restrict physician movement and would reduce surgical precision).

Judge Reyna also commented on the seeming rigid new rule:

I am also concerned that the majority opinion may reasonably be understood to announce an inflexible and rigid rule, namely that it is “impermissible” for the Board to consider evidence of artisans’ skepticism toward robotic surgery in determining motivation to combine. I find no authority for this assertion, and indeed it appears in tension, at a minimum, with the central thrust of KSR. See KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 415, 127 S.Ct. 1727, 167 L.Ed.2d 705 (2007) (rejecting the “rigid approach of the Court of Appeals” and articulating an “expansive and flexible approach” of determining obviousness). This is particularly true when considering art in fields of endeavor that are inherently dangerous or risky. Indeed, in past cases, this court has accounted for the attitudes of medical professionals toward certain types of procedures when determining whether a motivation to combine has been adequately demonstrated. See, e.g., Kinetic Concepts, Inc. v. Smith & Nephew, Inc., 688 F.3d 1342, 1369 (Fed. Cir. 2012) (finding no motivation to combine where “doctors were not using the disclosed devices and methods to heal wounds with negative pressure because they did not believe that these devices were capable of such healing”).

Reyna in dissent.

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What’s really happening here.  In my view, the problem in this case comes down to the reality that the patentee’s evidence against combining the references is quite weak, and the majority disagreed with the PTAB’s conclusion giving it weight.  However, since the court must give deference to PTAB factual findings, it would have been much harder challenge the decision on that ground, especially because the obviousness analysis depends upon so many factors. So, instead of challenging the factual findings, the majority decided to create a bright rule of law barring the evidence from even being considered as relevant to the inquiry.

On Sale Bar – Sales require Consideration, not necessarily Money Payment

by Dennis Crouch

On Sale Bar: The Federal Circuit’s recent decision in Sunoco Partners v. U.S. Venture (Fed. Cir. 2022) focuses on the classic patent law question of whether the inventor’s pre-filing sales activity serve to bar the patent from issuing.  Was the agreement an “offer to sell” and was it excused by the “experimental use” exception.

Sunoco’s patents cover systems for blending butane into gasoline.  In a bench trial, N.D. Ill. Judge Pallmeyer sided largely with the patentee–finding US Venture liable for willful infringement and awarding $6 million in damages.  Both sides appealed, with the infringer wanting to escape liability and the patentee wanting more money.

The “on sale bar” prohibits patenting an invention that was placed “on sale” prior to the application being filed. The patents here are pre-AIA and so the on-sale bar included a one-year pre-filing grace period.  For newer patents, the one-year grace-period is limited to pre-filing sales that can be linked-back to the inventors.  “On sale” is defined by the courts as a “commercial offer for sale” of an embodiment that takes place once the invention is “ready for patenting.”  Pfaff v. Wells Elecs., Inc., 525 U.S. 55 (1998).  In addition, sales/offers can be excused if they qualify as “experimental use.” City of Elizabeth v. Am. Nicholson Pavement Co., 97 U.S. 126 (1877) (delay excused by “bona fide effort to bring his invention to perfection, or to ascertain whether it will answer the purpose intended”). In this analysis, the court conducts a wholistic totality-of-the-circumstances analysis in considering whether the pre-filing sales were primarily for experimentation or instead primarily for profit.  Allen Eng’g Corp. v. Bartell Indus., Inc., 299 F.3d 1336 (Fed. Cir. 2002).

Application of the on sale bar is a question of law as is the underlying issue of whether the experimental use exception applies.  However, underlying factual conclusions made by the lower court should be given deference on appeal.

The Facts: On February 7, 2000, the inventor’s company (MCE) offered to sell and install a butane-blending system to Equilon.  In the agreement, Equilon wasn’t actually pay anything for the machine, but would agree to purchase substantial butane from MCE over the next 5 years.  The Feb 7 date is important.  The original patent application was filed Feb 9, 2001–one year and two days later and outside the one year grace period.

On appeal, the Federal Circuit looked to the contract and its own prior precedent to conclude that a purchase agreement is a classic offer to sell.  The proposal expressly stated that “ownership and title to the Equipment” would be conveyed.  The district court found effectively that the equipment was being given away since the “the contract did not require Equilon to pay MCE anything in exchange for the system in the normal course of events.”  On appeal, though the Federal Circuit sided with the patent challenger–holding that the contract required transfer of title as part of the consideration for Equilon’s agreement to purchase butane.  Using its de novo power, the appellate court rejected the district court’s offer’s interpretation and found that it constituted an offer for sale.  The court cited a prior decision on point. Netscape Commc’ns Corp. v. Konrad, 295 F.3d 1315 (Fed. Cir. 2002) (offer to make a “remote database object . . . in exchange for four months full time employment or no more than $48,000” was a “commercial offer for sale”).

Experimental use: Even if thought it is an offer for sale, it could be excused based upon a conclusion of experimental use.  Here, the court’s test is whether the offer was “primarily [for] experimental purposes.”   The offer included a sections for both “pre-installation testing” and “post-installation testing.”  On appeal, the Federal Circuit found that those contract provisions do not necessarily indicate any intent to experiment with the system design or to ensure that the invention works.  Rather, those testing provisions could instead simply be for ensuring that the particular embodiment was tuned correctly.  Further, the Federal Circuit found that there was no reason why the sale was needed to further any design experimentation.

Sunoco’s analogy to the Supreme Court’s seminal City of Elizabeth case falls flat. While “the nature of a street pavement,” the invention in that case, “is such that it cannot be experimented upon satisfactorily except on a highway, which is always public,” Sunoco does not dispute that MCE’s pre-installation testing was conducted at [a different contractor’s site], and could have been performed before offering to sell the system.

Slip Op.  The district court had excused the prior offer as experimental use, but on appeal, the Federal Circuit reversed that as well.  “These tests are not experiments, but are acceptance tests to confirm that the equipment is properly blending butane—that is, that it is working as promised.” Id.

Here, the testing described in the Equilon agreement occurred to effectuate the sale, rather than the sale occurring to occasion the testing. Therefore, we conclude that the Equilon agreement was an offer for sale made to commercially exploit the invention rather than primarily for experimental purposes. On that basis, we reverse the district court’s experimental-use determination and vacate its infringement determination.

At trial, the district court did not decide whether the invention was “ready for patenting” at the time of the offer.  That second prong of Pfaff could still excuse the prior offer on remand.  The defense will need to show either (1) reduction to practice or (2) a sufficient and enabling written description of the invention — one of which must have occurred prior to the offer date.

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This case is one where savvy patent attorneys would have helped: (1) filing the patent application earlier; or (2) drafting the contract so that it is not a “sale.”

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Software License: One question I have in this case involves the onboard software. The patent claims here include software elements: a “process control unit [that] generates a ratio input signal …”  The sales contract though was quite clear that the equipment was being sold, but the software was only subject to “a license.”  An offer to license is distinct from an offer to sell.  However, the Federal Circuit has several times suggested that licensing of software code can constitute a “sale.”

[A] commercial transaction arranged as a “license” or a “lease” of a product or a device … may be tantamount to a sale (e.g., a standard computer software license), whereupon the bar of § 102(b) would be triggered because “[t]he product is … just as immediately transferred to the ‘buyer’ as if it were sold.”

In re Kollar, 286 F.3d 1326, 1331 n. 3 (Fed. Cir. 2002) quoting Group One, Ltd. v. Hallmark Cards, Inc., 254 F.3d 1041, 1053 (Fed.Cir.2001) (Judge Lourie Concurring).  In Minton v. National Association of Securities Dealers, Inc., 336 F.3d 1373 (Fed. Cir. 2003), Judge Lourie wrote for the majority and concluded that a “lease” of software constituted an invalidating offer for sale.  These cases (and others from the Federal Circuit) appear in tension with the consistant refrain that the on sale bar is guided tightly by Article 2 of the UCC and its focus on “sale” rather than licenses or leases.

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Enhanced Damages: On appeal, the Federal Circuit vacated the district court’s award of enhanced damages — finding an abuse of discretion. In particular, the district court had excluded testimony and opinion evidence from the defendant’s attorney John Manion because of his confusion during testimony. On appeal, the Federal Circuit concluded that the confusion was created by the cross-examining attorney who had created a new term on the spot. “The record shows that Manion was merely confused by an unfamiliar term—’online rack tank’—that Sunoco’s attorney was using.”  Id.  On remand, the court will need to reassess if the infringement remains sufficiently egregious to allow for enhanced damages.

Judge Prost wrote the opinion here, joined by Judges Reyna and Stoll.

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Thanks to the comment from kotodama. I have updated the post to correct a date error.

Examining the Specification

by Dennis Crouch

Earlier this month, I posted a short essay about recent enablement cases at the PTAB.  Section 112(a) includes three disclosure requirements: written description; enablement; and best mode.  I would further divide written description into two categories: new matter and Ariad-style.  Thus we get:

  1. New Matter Written Description: Any amendments made to the claims during prosecution must be supported by the originally filed specification.  In particular, the original specification must show ‘possession’ of the newly claimed invention.  During prosecution, this is also captured under 35 U.S.C. 132(a) (“No amendment shall introduce new matter into the disclosure of the invention.”)
  2. Ariad-Style Written Description: Originally filed claims may also lack written description if the four-corners of the specification fail to show the inventor was in possession. The court in Ariad explained that a “a vague functional description” may be insufficient as it likely describes the unpatentable problem rather than a patentable solution.  Ariad Pharmaceuticals et al. v. Eli Lilly and Company, 598 F.3d 1336 (Fed. Cir. 2010) (en banc).
  3. Enablement: The original specification must enable a person of skill in the art to make and use the invention without undue experimentation.
  4. Best-Mode: The original specification must disclose the best mode for carrying out the invention–if one is known by the inventors.  Best mode can only be raised during prosecution and is not available as a validity defense in litigation. 35 U.S.C. 282 (as amended by AIA 2011).

Of these for 112(a) rejection types. I suggest that patent examiners are primarily focusing on Number 1, New Matter Written Description. These new matter rejections are the most straightforward: (a) check to see if newly added language is supported by the specification; (b) if no, reject.  Although the US rules on new matter are looser than some other jurisdictions (such as EPO), a prima facie rejection is still an ‘internal research project’ that can largely be accomplished with a quick scan of the document and CTRL-F.

The other three types of 112(a) rejections are more difficult for patent examiners because they require expansive analysis facts–delving into what would be understood by someone of skill in the art and asking questions about ‘what is missing’ without the aide of a comparison guide. In the case of best-mode, the inquiry requires subjective information about what was known by the inventor at the time of filing–something that is generally impossible for the examiner to research absent a request for information from the inventor.

I would love to hear your thoughts on this topic.

Guest Post: Old Designs, New Design Patents

By Sarah Burstein, Professor of Law at the University of Oklahoma College of Law

In December 2020, the USPTO put out a request for comments on “The Article of Manufacture Requirement.” (For prior PatentlyO coverage, see here.) Last week, at Design Day 2022, the USPTO announced that it had completed its summary of those comments. That summary is available here.

In the request for comments, the USPTO floated the idea of issuing design patents for what they are now calling “designs for projections, holograms, and virtual and augmented reality (PHVAR).” Presumably, this acronym is meant to suggest that these are new types of designs, uncontemplated by Congress when it passed statutes that—according to some—are in need of “modernization.”

But projected designs aren’t new.

As we explained in our law professor comments, designs for “magic lantern” projections go back at least as far as the 17th century. So the concept of projected designs was well-established by the time Congress passed the first design patent act in 1842—not to mention when it codified the Patent Act in 1952. Projected designs are simply not some new, unforeseen concept.

There may be new types of projection machines today, but this type of design is not new.

The USPTO suggests that the scope of design patentable subject matter “should be reevaluated in order to incentivize and protect innovation in new and emerging technologies.”

But it is not—and should not—be the role of the design patent system to incentivize or protect new machines. We have utility patents for that.

Furthermore, projected designs are not as the USPTO seems to suggest, unprotected today. Projected images qualify as pictorial, graphic, or audiovisual works that are already protected—costlessly and immediately upon fixation—by copyright. It can’t be seriously suggested that Congress was unaware of projected designs when it passed the broad definitions of protectable subject matter in the Copyright Act of 1976. It’s clear from the definitions that one form of projected creativity, cinema, was very much on Congress’ mind. See, e.g., 17 U.S.C. § 102(a)(6) (providing protection for “motion pictures and other audiovisual works.”).

Again, the type of projector may be new, but the type of work is not.

So why push for design patents when copyright is already available? There may be some who just want to accrue as many belts and suspenders as their IP budgets will allow. But that alone is not a good enough reason to expand design patentable subject matter.

It may be that, for at least some potential applicants, the goal is to avoid the requirements of copyright law. In Feist v. Rural, the Supreme Court held that a work must have “minimal creativity” to be protected. Thus, to gain copyright protection, a work must “possess some creative spark, ‘no matter how crude, humble or obvious’ it might be.” This is, according to the Supreme Court, a requirement of the Progress Clause.

Minimal creativity is a low bar. Yet the USPTO has granted numerous design patents for designs that fall below it—especially in the context of computer-generated designs. In theory, novelty and nonobviousness could be a higher bar but, in practice, that is not the case.

So let’s all be clear:

  1. These are not new types of designs.
  2. They’re not unprotected—unless they fail to meet the low constitutional threshold set in Feist.

For more on why § 171 shouldn’t be “reinterpreted” to cover projected designs, see: