All posts by Dennis Crouch

About Dennis Crouch

Law Professor at the University of Missouri School of Law.

Prosecution Disclaimer: Should patent law have a Parole Evidence Rule for Claim Construction?

by Dennis Crouch

Technology Properties Limited LLC, v.  Huawei Technologies Co., Ltd. (Supreme Court. 2019)

Back in February, the Federal Circuit issued a R.36 affirmance — affirming the lower court’s claim construction and non-infringement finding.  Tech. Properties has now filed a statement of intent to petition for writ of certiorari, now with Ken Starr at the helm and focusing on prosecution disclaimer precedent from the 1880’s along with a constitutional argument.  The patentee writes:

This case presents important questions of constitutional and patent law. The law of prosecution disclaimer, as applied in this case and in other cases, has morphed in a manner inconsistent with the Patent Act. The Federal Circuit’s increasingly anti-textualist methodology also conflicts with this Court’s long-established precedent. The improper expansion of this judicially-created doctrine upsets the balance between the role of the Patent Office and the role of the judiciary, as established by Congress, and injects great uncertainty into the publicnotice function of patents. Congress delegated the examination and issuance of patents to the Patent Office and requires deference to the agency’s decision-making.

The expanded disclaimer doctrine calls into question the Patent Office’s authority to examine and issue patents, and the limited role of the judiciary in reviewing the Patent Office’s determinations. Encouraging litigants and courts to wade through the back-and-forth between the Patent Office and a patent applicant to rewrite the issued claims through imposition of additional limitations under the guise of “claim construction” runs afoul of Congress’s delegation.

The basic argument that the patentee is making here is that patent claims should be adjudged by their terms and buried statements within the prosecution history should not be allowed to enlarge or reduce the patent scope.  You might call this the patent law parole evidence rule:

A patent is a public franchise.  The public and the patentee are entitled to clarity on the boundaries of a patentee’s rights; the claims, which define the metes and bounds of the inventor’s rights, provide that clarity. Gratuitous statements in the file history do not; they are inherently less predictable—illustrated by this case and other recent cases.

That 1880’s case: Goodyear Dental Vulcanite Co. v. Davis, 102 U.S. 222 (1880).

Distribution of Working Draft to 250-Member Standard Setting Working Group – NOT a PUBLICATION

Samsung v. InfoBridge (Fed. Cir. 2019)

In the inter partes review (IPR), the Patent Trial & Appeal Board (PTAB) sided with the patentee Infobridge — concluding that the purported prior art was not sufficiently publicly accessible prior to the patent’s November 7, 2011 filing date (and therefore not prior art).  On appeal, the Federal Circuit has rejected that decision — holding that the PTAB “applied the wrong legal standard in assessing public accessibility.”

The reference at issue is “Working Draft 4 of the H.265 standard” (WD4) which was developed by an MPEG group known as the Joint Collaborative Team on Video Coding (“JCT-VC”).  The information included int he reference was discussed at a July 2011 meeting in Torino that included about 250 participants including both academics and corporate representatives. WD4 then written and uploaded to the JCT-VC website on October 4, 2011 as one of hundreds of documents listed on the Torino meeting sub-page. The documents are in no apparent order and when printed run 48 pages long. (The relevant page is listed below, can you find our reference of interest?).

 WD4 was also uploaded to an MPEG website on October 4, 2011, but required a password to access.  Also, the same day the WD4 lead author posted a link to the document to a listserve that included JCT-VC members and other interested individuals.

A publication must be either actually distributed or else made publicly accessible.  Courts ask “whether a person of ordinary skill in the art could, after exercising reasonable diligence, access a reference.”  If so, then it is a publication.

Level of Access: In its decision, the Board found no evidence to show that “WD4 was accessible to anyone other than members of JCT-VC” because the websites were too complicated and unorganized. Regarding the listserve, the Board found that the “other interested individuals” testimony to lack credibility and found it  “nothing more than conjecture and speculation.”  The board – in essence – found no evidence that the WD4 document “was generally disseminated to persons interested and ordinarily skilled in the art.” As such, the Board held that the reference should not be considered prior art as of its 2011 date.

Distribution within the Group: Samsung argued that the JCT-VC group should be considered analogous to an academic conference and that distribution within the group should count as publication.  “JCT-VC was composed of more than 250 members who were skilled artisans” in the relevant video coding art.  On appeal though the Federal Circuit rejected this argument — holding that publication requires distribution beyond the creators of the document.  ” [A] work is not publicly accessible if the only people who know how to find it are the ones who created it” — even if those people are a loose standard setting organization of 250 global experts.

Email Listserv Distribution: The patent challenger was able to gain traction with its listserv argument by showing public accessibility.

The Board departed from this well-established principle by repeatedly faulting Samsung for not proving that the WD4 reference was “generally” or “widely” disseminated. …[A] limited distribution can make a work publicly accessible under certain circumstances.  But the Board’s analysis stopped short of considering whether those circumstances were present here. The Board also faulted Samsung for failing to show that the email recipients “represented a significant portion of those interested and skilled in the art.” That was not Samsung’s burden. The Board’s decision to reject Samsung’s evidence because it did not establish that enough interested and ordinarily skilled artisans actually obtained the WD4 reference was therefore erroneous.

Rather than requiring Samsung to prove that persons of ordinary skill actually received the listserv email, the Board should have considered whether Samsung’s evidence established that an ordinarily skilled artisan could have accessed the WD4 reference, after exercising reasonable diligence, based on the listserv email. This might include examining whether a person of ordinary skill, exercising reasonable diligence, would have joined the listserv. It also might include considering the circumstances of the email itself, for example why the email was sent and whether it was covered by an expectation of confidentiality. Because the record is not clear on these factual questions, we decline to resolve them in the first instance on appeal. In particular, we are reluctant to assume that an email among potential collaborators should be treated the same as a public disclosure without clear findings by the Board. Accordingly, we vacate the Board’s finding that Mr. Bross’s email did not make the WD4 reference publicly accessible and remand so that the Board can consider this issue after applying the correct legal standard.

On remand, the PTAB will reconsider these issues — and likely find again that the listserv distribution was not sufficiently public.

Apportionment of Willfulness and Discretion to Reconsider Attorney Fees

by Dennis Crouch

SRI International, Inc. v. Cisco Systems, Inc. (Fed. Cir 2019)  (modified opinion on rehearing)

When the Federal Circuit released its eligibility decision in March 2019, I panned the opinion as a “results-oriented decision [that] unfortunately shades-facts and provides no clarity in its legal analysis of eligibility.”  On petition, the panel has modified its original opinion. Unfortunately, the court did not modify its eligibility analysis, but rather modified a portion of the remand on attorney fees.

At the conclusion of the trial, a jury awarded the patentee SRI $23 million in reasonable royalty damages associated with SRI’s network monitoring patents.  The jury also found that Cisco’s infringement was willful.

The jury awarded SRI a 3.5% reasonable royalty for a total of $23,660,000 in compensatory damages.  The jury also found by clear and convincing evidence that Cisco’s infringement was willful.  The judge then double the compensatory award and also awarded $8 million attorney fees as well as an ongoing compulsory license for any future infringement. (I believe the patents have now expired).

Willful Infringement: The patent act does not expressly identify willfulness as relevant to an infringement lawsuit. However, courts have ruled that willfulness is an underlying requirement for enhanced damages under 35 U.S.C. 284. “Enhanced damages under § 284 are predicated on a finding of willful infringement.”

On appeal here, the Federal Circuit ruled that enhanced damages willfulness should be further apportioned by time.  I.e., enhanced damages cannot be awarded for infringement that occurred prior to the infringer’s willful infringement. Here, the patentee proved infringement going back to 2000, but did not show that Cisco knew of the patent before May 2012 – thus no willfulness. On remand, the district court will need to reconsider the willfulness award to match the court’s temporal apportionment approach.

The court’s approach here is interesting — the jury found the infringement to be willful.  Rather than rejecting the jury verdict, the appellate panel “interpreted” the verdict as finding willfulness as of May 2012 (and finding no willfulness prior to 2012).  Then, the appellate court found error by the district court in enhancing damages for the entire term of infringement.

Attorney Fees: Ordinarily, each party must pay its own trial costs, including attorney fees. However, in patent cases the district court has discretion to award fees to the prevailing party in “exceptional cases.” Here, the district court found that Cisco’s litigation tactics were unduly aggressive:

Cisco pursued litigation about as aggressively as the court has seen in its judicial experience.  While defending a client aggressively is understandable, if not laudable, in the case at bar, Cisco crossed the line in several regards.

One example – was that Cisco maintained 19 invalidity theories until the eve of trial — then only presented two of them at trial along with defenses that were contrary to both the evidence and prior court rulings. The district court also noted that the willfulness finding by the jury contributed to the decision to award attorney fees.  Because the now-modified willful infringement judgment served as one basis for the enhanced damages, the appellate panel also vacated the enhanced damages for reconsideration on remand.

In its original opinion, the appellate panel had explained that there was sufficient evidence of bad behavior to justify a fee award even without willfulness — and thus had affirmed an award.  In the modified opinion, the court instead vacated the finding of exceptional case — likely because that decision is supposed to be within the discretion of the district court.

[Modified Opinion]

In its petition for rehearing, Cisco had also asked for reconsideration of the eligibility decision.  That portion of the petition was denied.  EFF had filed a petition in support of rehearing, arguing that “the claims here fall squarely within a category of abstract ideas that is now well-established: claims that involve collecting, analyzing, and displaying information without more.”

Network Monitoring and . . .

Relevant claim:

1. A computer-automated method of hierarchical event monitoring and analysis within an enterprise network comprising:

deploying a plurality of network monitors in the enterprise network;

detecting, by the network monitors, suspicious network activity based on analysis of network traffic data selected from the following categories:

  • network packet data transfer commands,
  • network packet data transfer errors,
  • network packet data volume,
  • network connection requests,
  • network connection denials,
  • error codes included in a network packet;

generating, by the monitors, reports of said suspicious activity; and

automatically receiving and integrating the reports of suspicious activity, by one or more hierarchical monitors.

US Utility Patents Granted per Year

by Dennis Crouch

We are about 3/4 of the way through fiscal year 2019 (ends September 30, 2019) and the USPTO is on-track to issue the most patents ever in a single year period — I’m forecasting 330,000 issued utility patents, which is up about 5% from the prior 1-year high in 2017.  This rise is consistent with more patentee-friendly attitude of Andrei Iancu who began his role as Trump’s USPTO director in 2018.

 

Fastest Patents of 2019

U.S. Patent No. 10,285,922 (110 days from earliest priority to issuance). The ‘922 Patent claims a “topical exfoliating formulation” that includes papain enzyme.   Case was subject to a petition to make special based upon the inventor’s age of 65+.  Applicant cited no references and the (primary) examiner only found two.

U.S. Patent No. 10,343,988 (111 days from earliest priority to issuance).  The ‘988  patent is directed to a new compound known as hydroxytyrosol thiodipropionic acid apparently useful for food preservation.

The patent claims priority to a Chinese application filed March 1, 2019.  The U.S. application was then filed March 20, 2019 and issued on June 19, 2019. Applicant cited no references and the (primary) examiner only found one.

U.S. Patent No. 10,336,689 (114 days from earliest priority to issuance). The ‘689 patent has a similar path to the ‘988 patent (and is owned by the same entity (Shaanxi University of S&T) and examined by the same primary examiner — but is directed to a totally different compound that exhibits “antitumor activities.”

U.S. Patent No. 10,302,471 (116 days from earliest priority to issuance). The ‘471 also stems from China, but does not rely on foreign priority.  The patent claims a device for observing “abyssal flow” and was subject to a “track one” petition.

 

Venue: “Regular and Established Place of Business” is a Questions of Law

Westech v. 3M (Fed. Cir. 2019)

Westech sued 3M for patent infringement in W.D.Washington. On motion from 3M, the district court then dismissed the case for improper venue under 28 U.S.C. 1400(b).  Under the statute, infringement cases can only be brought in a judicial district where the defendant either (1) resides (i.e., is incorporated) or (2) infringed the patent and has a regular and established place of business.  Here, the focus is on 3M’s sales activities with vendors, distributors, and sales professionals — and whether those activities constitute a “regular and established place of business.”  Two key precedential cases: In Cray, the Federal Circuit held that a “place of business” must be a “physical place in the district.”  In ZTE, the Federal Circuit held that it is the plaintiff’s burden of establishing proper venue (burden of persuasion).

Westech’s amended complaint states:

3M has one or more regular and established places of business in this judicial district. Furthermore, on information and belief, Defendants maintain contractual relationships with distributors of the infringing products who are located in this judicial district, Defendants have sales representatives located in this judicial district, Defendants represent that they sell products in this judicial district, and Defendants earn substantial sales revenue from sales of the infringing products in this judicial district.

Sufficient for venue? The district court saw these allegations as insufficient and the Federal Circuit has affirmed on appeal.  On point – The asserted facts do not lead to a conclusion that 3M has a physical place of business in the district, and the allegation that 3M has “regular and established places of business” is a legal conclusion not given any weight in the analysis. The court explains:

Simply stating that 3M has a regular and established place of business within the judicial district, without more, amounts to a mere legal conclusion that the court is not bound to accept as true. . . .

A presumption that facts pleaded in the complaint are true does not supplant a plaintiff’s burden to plead specific facts showing that the defendant has a regular and established place of business physically located in the judicial district.

Question of Law: The statements by the court here is a bit oblique, but it may be the first precedent expressly stating that whether the defendant “has a regular and established place of business” in the district is a question of law and not a question of fact.  In Cray, the court indicated that the analysis will be based upon underlying facts: “In deciding whether a defendant has a regular and established place of business in a district . . . each case depends on its own facts.”

Predictability and Criticality in the Written Description Analysis

by Dennis Crouch

In re Global IP Holdings (Fed. Cir. 2019)

In its reissue application, Global IP asked the PTO to broaden its carpeted-car-floor patent by changing the “thermoplastic” requirement to simply “plastic.”  The PTO rejected the reissue application on written description grounds — noting that the specification only discloses the use of thermoplastics and not parts “formed generally from plastic materials.”  According to the examiner, the broader scope constituted “new matter.”  The PTAB made clear that the, although “plastics” might be enabled and within the skill of someone in the art, the patent document does not show possession of that invention:

[R]egardless of the predictability of results of substituting alternatives, or the actual criticality of thermoplastics in the overall invention,[Global’s] Specification, as a whole, indicates to one skilled in the art that the inventors had possession only of the skins and core comprising specifically thermoplastic.

PTAB Decision.

On appeal, the Federal Circuit has vacated — can you spot the written description error?

In its opinion, the Federal Circuit explained that the level of written description required to show possession “varies depending on the nature and scope of the claims and on the complexity and predictability of the relevant technology.” Ariad.  Thus, the Board erred by stating that the predictability and criticality made no difference.

Contrary to the Board’s statement, the predictability of substituting generic plastics for thermoplastics … is relevant to the written description inquiry. . . . In addition to predictability, we have held that the criticality or importance of an unclaimed limitation to the invention can be relevant to the written description inquiry.

In other words, a variation predictable to PHOSITA is more likely to covered by the written description (as compared with an unpredictable variation). Likewise, variation of a non-critical component of the invention is more likely to be covered by the written description (as opposed to a component at the point of novelty).

= = = = =

Note here that in this case the Examiner/Board raised a standard written description challenge. On remand, they might achieve better results by focusing on the heightened written description standard for broadening reissues.

Heightened Written Description Standard for Reissue Patents

 

Athena Loses on Eligiblity – Although 12 Federal Circuit Judges Agree that Athena’s Claims Should be Eligible

by Dennis Crouch

Athena Diagnostics, Inc. v. Mayo Collaborative Services, LLC (Fed. Cir. 2019)

In a 7-5 decision, the Federal Circuit has denied Athena’s petition for en banc rehearing on the question of eligibility of diagnostic patents. As discussed below, the en banc denial includes eight (8) separate opinions — all of which call for Supreme Court or Congressional intervention. Judge Moore explains:

This is not a case in which the judges of this court disagree over whether diagnostic claims, like those at issue in Athena, should be eligible for patent protection. They should. None of my colleagues defend the conclusion that claims to diagnostic kits and diagnostic techniques, like those at issue, should be ineligible. The only difference among us is whether the Supreme Court’s Mayo decision requires this outcome.

Athena and its co-petitioners Oxford University and the Max-Planck institute asked the Federal Circuit to address two particular questions:

  1. Whether this Court now recognizes a categorical bias against patent claims to methods of diagnosis, an impermissible expansion of the Supreme Court’s narrowly defined judicial exception to patent eligible subject matter under 35 U.S.C. § 101.
  2. Whether courts may now exclude claim elements that they deem “conventional” in determining whether the claim is “directed to” patent eligible subject matter, or does Supreme Court authority requiring that claims be assessed “as a whole” still apply in Section 101 analysis.

Athena’s claim at issue covers a method for diagnosing neurotransmission disorders by obtaining “bodily fluid” and running a set of lab tests to identify whether the fluid contains a “MuSK” complex.  I described the patent in a prior post:

Diagnosis: Ineligible

In its original decision, the Federal Circuit found the claim directed to an ineligible preexisting law of nature: “the correlation between the presence of naturally-occurring MuSK autoantibodies in bodily fluid and MuSK-related neurological diseases.” The court found the additional concrete steps in the claim were all “standard techniques in the art” and thus did not rise to a patentable inventive concept.

The en banc denial includes eight (8) separate opinions

  • Concurring opinion by Judge Lourie: Although we disagree with the Supreme Court, we are bound by its precedent. Thus, there is no need to revisit this case. (joined by Judges Reyna and Chen)
  • Concurring opinion by Judge Hughes:  “[T]his is not a problem that we can solve. As an inferior appellate court, we are bound by the Supreme Court. . . . I, for one, would welcome further explication of eligibility standards in the area of diagnostics patents.” (joined by Chief Judge Prost and Judge Taranto)
  • Concurring opinion by Judge Dyk: Section 101 is necessary — sometimes it is the only defense against overbroad patents that would stifle future discoveries.  However, the claims in this case are specific enough and have proven utility an provide the Supreme Court with a good vehicle “to refine the Mayo framework.” (Joined by Judge Hughes, and partially joined by Judge Chen)
  • Concurring opinion by Judge Chen: Under Diehr, the claims are patent eligible — but not under Mayo.
  • Dissenting opinion by Judge Moore: The claims in this
    case should be held eligible, and they are distinguishable
    from Mayo — especially when that case is read in light of Myriad(joined by Judges O’Malley, Wallach, and Stoll)
  • Dissenting opinion by Judge Newman: Medical diagnostics methods are critically important for society and the patent system should encourage their development.  Mayo does not create any anti-diagnosis rule. (joined by Judge Wallach)
  • Dissenting opinion by Judge Stoll:  Although the decision here is foreclosed by Mayo, the court should rehear the case because it is so important. (joined by Judge Wallach)
  • Dissenting opinion by Judge O’Malley: The Supreme Court is simply wrong in its statutory interpretation of 35 U.S.C. 101. 

The statements here by the judges have no direct impact on the law and are all 100% dicta.  That said, this collection of opinions is designed to send a powerful signal to both the Supreme Court and – perhaps more importantly to Congress – that all members of the “high patent court” see a major problem with the law as it stands now.

Of some interest – the judges were almost uniformly all careful to focus their attention on medical diagnosis inventions — suggesting a targeted solution that would not extend to business methods and other information-based inventions.

Good Luck Enforcing a Payment System Patent Claimed in Abstract Form

by Dennis Crouch

Innovation Sciences, LLC v. Amazon.com, Inc. (Fed. Cir. 2019)

Eligibility: Of the three patents in suit, the district court found one ineligible under 35 U.S.C. § 101. U.S. Reissue Patent No. 46,140 (asserted claim 17).  The patent claims an use of a “payment server” in an online transaction to enhance transaction security, and the district found “securely processing a credit card transaction with a payment server” to be an unpatentable abstract idea. The key claim step includes the following limitation:

[R]eceiving credit card payment information at the payment server to buy items from a website … “wherein the credit card payment information is received after online communication of the buyer has been switched from the website listing the items to a website supported by the payment server, wherein the switching of the online communication of the buyer is after an indication from the buyer to buy the one or more of the items”

On appeal, the Federal Circuit affirmed the holding — finding that the claim “is directed to the abstract idea of securely processing a credit card transaction with a payment server.”  In reaching that conclusion, the court noted that the claim elements are written in “merely functional, result-oriented terms” — “an idea, having no particular concrete or tangible form.” (quoting Ultramercial).   Further, the recitation of “servers” limited the invention’s use to particular area of existing technology, but did not “render the claims any less
abstract.” (quoting Affinity Labs).

Regarding the wherein clause for switching from a regular server to a payment server, the court explained that the claim is merely directed to the abstract idea of switching — not any particular implementation or system improvement.

In Alice step two, the court explained “[t]here is no inventive concept in the claim’s use of a generic payment server ‘to perform well-understood, routine, and conventional activities commonly used in industry.'”

= = = = =

In the lawsuit, Innovation Services also asserted two other patents with claims that the Federal Circuit explained “are not a model of clarity and stray from the embodiments described in the specification.”

Still, with that framework, the court chose to give the claims their express meaning — broad enough to allow for infringement.  On remand though the court suggests review of the written description and enablement requirements. (“We do not express an opinion as to whether they satisfy the
requirements of § 112.”)

 

When do the “Principles of Equity” allow for Profit Disgorgment?

Romag Fasteners, Inc. v. Fossil, Inc., et al., No. 18-1233 (Supreme Court 2019).

The Supreme Court has granted writ of certiorari in the trademark case of Romag Fasteners involving profit disgorgement under 15
U.S.C. § 1117(a).

The statute appears to provide profit disgorgment (i.e., awarding the defendant’s profits) as a regular remedy for trademark infringement although “subject to the principles of equity.” In its decision, the Federal Circuit (following 2nd Circuit law) held that profit disgorgment must be associated with a more-egregious activity – such as willful infringement – before being awarded.  Here, the jury found no willful infringement and so that foreclosed the award of the defendant’s profits.  We are now set-up for the Supreme Court to decide the following question presented:

Whether, under section 35 of the Lanham Act, 15 U.S.C. § 1117(a), willful infringement is a prerequisite for an award of an infringer’s profits for a violation of section 43(a), id. § 1125(a).

Question presented in petition.  The adjudged infringer Fossil provided its alternative question as follows:

Whether the Court should address the standard for an accounting of a defendant’s profits even though (a) regardless of the different formulations of “principles of equity” invoked by lower courts, their application in the overwhelming majority of cases results in an accounting being ordered when the infringement was willful and denied when it was not; and (b) the trial court’s findings in this case bar petitioner from recovering respondents’ profits under either standard applied by the courts of appeals.

The relevant statute itself reads as follows:

When a violation of any right of the registrant of a mark registered in the [PTO], a violation under section 1125(a) or (d) of this title, or a willful violation under section 1125(c) of this title, shall have been established in any civil action arising under this chapter, the plaintiff shall be entitled, subject to the provisions of sections 1111 and 1114 of this title, and subject to the principles of equity, to recover (1) defendant’s profits, (2) any damages sustained by the plaintiff, and (3) the costs of the action.

My reading of the statute itself suggests that non-willful infringement can support an award of defendant’s profits, so long as that award is in accord with “the principles of equity.”  And, those principles are not fully defined for this particular question. There is also a question of timing — principles of equity as of when? Are these 18th; 19th; 20th; or 21st century equity principles?

In the patent world, profit disgorgment is permitted as a remedy for design patent infringement.  That remedy is not expressly limited to willful infringement or limited by the principles of equity.  However, the remedy does require on-its-face an “imitation,” which in my mind should be read to require some amount of copying.

Duty to Submit Supplemental Evidence

Polygroup Limited MCO v. Willis Electric Co., LTD (Fed. Cir. 2019)

In a rare split decision, the PTAB upheld the patentability of Polygroup’s U.S. Patent No. 8,974,072 (2-1 decision).  On appeal, however, the Federal Circuit has vacated that decision with an oddly written double-negative conclusion: “substantial evidence does not support the Board’s finding that Polygroup failed to establish a rationale to combine the prior art.”

This case is part of ongoing litigation between these makers of pre-lit artificial trees. The appeal here was already pending when the Federal Circuit decided a separate set of IPR appeals – holding that the PTAB had been unduly narrow in its claim construction on the claim term “tree portion” and had also failed to address a single-reference obviousness argument.  [prior decision] The patent at issue here is a child of that at issue in the prior case. On appeal here, those same issues were raised and – in a conclusory statement – the appellate panel found them resolved for the child as a matter of collateral estoppel (issue preclusion):

[B]ecause we have already decided [these issues] in Polygroup’s favor in a previous appeal concerning U.S. Patent No. 8,454,186, a parent of the ’072 patent, [these arguments have] been resolved against Willis as a matter of collateral estoppel.

The court here does not explain its view of whether claim construction associated with a parent patent always decides the issue for a child patent.  In the case, we apparently had a lack of good briefing.  Apparently neither party provided supplemental authority to this panel regarding the intervening decision, and the court provided a little chastising footnote:

Although Polygroup notified us that it anticipated an earlier decision … would control the “tree portion” construction issue in this appeal, see Appellant’s Br. 1, we expected more. Pertinent and significant authority came to the parties’ attention after the briefing in this appeal concluded, yet both parties failed to notify the Panel about this occurrence. Rule 28(j) contemplates the submission of such supplemental authority. Fed. R. App. P. 28(j).

To be clear, 28(j) does not require supplemental submissions, but only states that “a party may promptly advise” the court of “pertinent and significant authorities” identified after briefing or oral arguments. At oral arguments, the Judges went further to state that the failure to submit supplemental authority “is no small matter; its your duty to ensure to ensure to the best you can, that the court doesn’t go down blind alleys.” “Both [counsel] had an obligation to advise us of these cases.”  The court’s upset here is a bit odd since the parties had designated these cases as related and one of the judges (Judge Dyk) was on both sets of panels.

Regarding the actual underlying obviousness decision: The big question was whether someone of skill in the art would alter “snap-fitting” electrical connectors with the claimed tapered compression-fitted electrical connectors. In its decision, the Board found that these were not known alternatives.  On appeal, the Federal Circuit vacated that conclusion — finding that the board made several errors in its reasoning that were not supported by substantial evidence. On that portion, I’ll just say that it appears to be a poorly written decision.

Eligibility: Pleadings are Enough, but they must Tie the Claims to an Inventive Concept

Cellspin Soft v. Fitbit, Moov, Nike, Fossil, etc. (Fed. Cir 2019)

The district court dismissed Cellspin’s infringement lawsuit on the pleadings — finding the asserted claims unenforceable as a matter of law under 35 U.S.C. § 101 (ineligible abstract idea).  On appeal, the Federal Circuit has vacated — holding instead that the early-stage dismissal was inappropriate because the patentee’s amended complaint included “specific factual allegations” that, when accepted as true, showed a plausible inventive concept sufficient to satisfy Alice Step 2.

The court explains here that under Aatrix, “plausible and specific factual allegations that aspects of the claims are inventive” are sufficient to overcome a pleadings-stage motion to dismiss.  “[T]he specification need not expressly list all the reasons why this claimed structure is unconventional” so long as the arguably inventive elements are “recited by the claims.”

Here, the claims recite a sensor with Bluetooth.  The claims recite a “two-step, two-device structure requiring a connection before data is transmitted.” And, the complaint identified this structure as a concrete and inventive application that goes beyond the abstract idea of “acquiring, transferring, and publishing data and multimedia content on one or more websites.”  The appellate panel found that “[t]he district court erred by not accepting those allegations as true.”

On remand, the case will move to summary judgment stage — moving beyond the mere allegations and looking at the evidence produced by both parties.  The burdens of proof and presentation at summary judgment may be confusing.  Eligibility is a question of law that does not necessarily require any evidentiary conclusions by the court.  However, we would expect that the patentee here will present some amount of evidence (probably expert testimony coupled with documentation) potentially sufficient to support a prima facie case of inventive concept under Alice Step 2.

The term inventive concept sounds very patent-like, but the law remains confused about more precise qualities of the term.  A patent claim directed to an abstract idea (or law of nature) can still be patented so long as it also recites an “inventive concept.”  Inventive Concept:

  • Something more than the application of an abstract idea using “well-understood, routine, and conventional activities previously known to the industry.”
  • Enough to “transform an abstract idea into a patent-eligible invention.”
  • More than simply “using conventional and well-understood techniques.”

Here, the court held that the patent itself must include the concept (and it must be particularly claimed) but need not explain in the specification that it represents the inventive concept. What is not clear is how directly inventive concept relates to other patentability concepts such as novelty, obviousness, and utility.

Copyrighting the Official Annotated Statutes: Georgia v. Public.Resource.org

The Supreme Court has granted certiorari in the important public access case of Georgia v. PublicResource.org Inc. The case focuses on Georgia official statutory code with official annotations (the “Official Code of Georgia Annotated” or  “OCGA”).  OCGA includes the statutes, section titles, statutory histories, guidance from the Georgia Code Revision Commission, judicial summaries, and opinions by the State AG, for example.  PublicResources.org bought a copy of the OCGA, copied it, and uploaded it to the internet so that the public could have free access to the law.  Georgia then sued for copyright infringement.

The district court held OCGA copyrightable and the 11th Circuit reversed that decision — finding that the “government edicts doctrine” prohibits copyright in this case.  One difficulty with with that doctrine is that it was last discussed by the U.S. Supreme Court 130 years ago in Callaghan v. Myers, 128 U.S. 617 (1888) and Banks v. Manchester, 128 U.S. 244 (1888).

Question presented:

This Court has held, as a matter of “public policy,” that judicial opinions are not copyrightable. Banks v. Manchester, 128 U.S. 244, 253-254 (1888). Lower courts have extended that holding to state statutes. See, e.g., John G. Danielson, Inc. v. Winchester-Conant Props., Inc., 322 F.3d 26, 38 (1st Cir. 2003). But the rule that “government edicts” cannot be copyrighted has “proven difficult to apply when the material in question does not fall neatly into the categories of statutes or judicial opinions.” Ibid.

The question presented is: Whether the government edicts doctrine extends to—and thus renders uncopyrightable—works that lack the force of law, such as the annotations in the Official Code of Georgia Annotated.

OCGA is published by LEXIS, but its contents are particularly controlled by the Georgia General Assembly and the Commission (a division of the Assembly).  The appellate panel found particularly that “the Commission exercises direct, authoritative control over the creation of the OCGA annotations at every stage of
their preparation.”

Although PublicResources won at the appellate court, it agreed that the Supreme Court should hear the case in order to clarify and simplify the law of public access to public information. Current case law “is confusing and outcomes are difficult to predict.”

Briefing in the case will continue over the summer and the Court will likely schedule oral arguments for late 2019.

Oops I Did it Again: Time to Register those Scandalous Marks

by Dennis Crouch

Trademark rights have long held substantial sway and power in courts and among administrators who are often required by regulations to respect trademark rights.  This case – expanding the scope of rights to include immoral and scandalous content – is likely to undermine and begin an erosion of those protections.

Iancu v. Brunetti (2019)

In an interesting free speech opinion, the Supreme Court has sided against Congress and the USPTO — finding the statutory prohibitions on registering immoral or scandalous trademarks to be an unconstitutional limit on free speech.  The decision here follows Matal v. Tam (2017) where the court similarly held unconstitutional a  parallel provision restricting disparaging marks.

Justice Kagan wrote the 6-person majority opinion that was joined by Justices Thomas, Ginsburg, Alito, Gorsuch, and Kavanaugh.  The remaining justices agreed that the First Amendment requires the government to register immoral marks, but argued that at least some scandalous marks can be properly prohibited. In the minority viewpoint, the court should have narrowly construed that aspect of the statute to a Constitutional scope while retaining some of its effectiveness.

This case involves the mark “FUCT” that Brunetti has been using for many years in association with his product line for wealthy rebellious skaters.  However, when he decided to register the mark, the PTO rejected his application as directed toward immoral or scandalous matter as required by the Lanham Act.  Brunetti appealed.

The big question in the case was whether the court would see these restrictions as viewpoint based — they did.  The court explains:

So the key question becomes: Is the “immoral or scandalous” criterion in the Lanham Act viewpoint-neutral or viewpoint-based?

It is viewpoint-based. . . . [T]he Lanham Act permits registration of marks that champion society’s sense of rectitude and morality, but not marks that denigrate those concepts. . . . [T]he Lanham Act allows registration of marks when their messages accord with, but not when their messages defy, society’s sense of decency or propriety. Put the pair of overlapping terms together and the statute, on its face, distinguishes between two opposed sets of ideas: those aligned with conventional moral standards and those hostile to them; those inducing societal nods of approval and those provoking offense and condemnation.

Once the limitation is defined as viewpoint based, the result was easy for the court — invalid as unconstitutional.

The decision here did not resolve the open question in Tam: whether the Lanham Act registration bars are (1) conditions on a government benefit or instead (2) simply restrictions on speech.

[Iancu v. Brunetti]

Although not fully stated, I expect that a slight majority of the justices would agree with Justice Alito’s concurring opinion that Congress could adopt “a more carefully focused statute that precludes the registration of marks containing vulgar terms that play no real part in the expression of ideas.” Alito goes on to suggest that the particular mark here – FUCT – could be barred under such a statute. “The term suggested by that mark is not needed to express any idea and, in fact, as commonly used today, generally signifies nothing except emotion and a severely limited vocabulary.”  Chief Justice Roberts further explained: “The First Amendment protects the freedom of speech; it does not require the Government to give aid and comfort to those using obscene, vulgar, and profane modes of expression.”

I have to admit difficulty in working through the fundamentals of this case — how does a limit on registering a mark equate with a limit on speech?  The majority opinion entirely skipped this debate because it was covered in Tam – although tersely and incompletely.  Justice Breyer did a nice job of explaining the problem that free speech analysis has become intensely category-based , and that “the trademark statute does not clearly fit within any of the existing outcome-determinative categories.  Why, then, should we rigidly adhere to these categories?”

Failing to Identify Real Party In Interest was Excusable Error that Did Not Reset Petition Filing Date

by Dennis Crouch

Mayne Pharma v. Merck Sharp & Dohme (Fed. Cir. 2019)

Mayne’s U.S. Patent 6,881,745 covers an azole antifungal drug with a particular formulation designed to increase absorption and bioavailability.  Back in 2015, Mayne sued Merck for infringement — accusing Merck’s Noxafil product. In the Inter Partes Review (IPR), the PTAB agreed with Merck — finding the claims unpatentable as obvious.  That decision has now been affirmed on appeal.

Time Bar under 315(b): An IPR may not be instituted if the petitioner (or its proxy or a real-party-in-interest) was served with an infringement complaint more than one year beforehand. 35 U.S.C. § 315(b).  Here’s the timeline:

  • May 29, 2015, Mayne sued both Merck & Co, Inc. (MCI) and the company’s international subsidiary Merck Sharp & Dohme (MSD) for infringing the ‘745 patent.
  • June 12 2015, MCI and MSD both served with a summons for the lawsuit.
  • June 11, 2016, MSD (but not MCI) filed for inter partes review challenging the ‘745 patent.  This appears to fall within the 1-year time limit.  Mayne asked the PTAB to require MCI be joined as a real-party-in-interest, but the PTAB refused at the institution stage.  At institution, MSD did not respond to the allegations regarding real party in interest; and the Board found insufficient evidence of Control.
  • December 2017,  PTAB required MSD to add MCI as a real party in interest to the case.  Although MCI was added to the case well after the one-year 315(b) deadline, the PTAB found that MCI’s addition did not alter the filing date.

The Board had provided “guidance” that it would not allow correction of non-clerical errors in the petition without also changing the filing date, 80 Fed. Reg. 50,  and Mayne argued that the rule applies here.

On appeal, the Federal Circuit sided with the patent challenger and PTAB — holding that the Board did not commit reversible error based upon a no-harm no-foul rule of law:

There was no evidence suggesting that MSD intended to conceal MCI’s identity. In fact, Mayne was aware of MCI because MCI was a named defendant in parallel district court litigation, and, had MSD named MCI as a real party in interest in its original petition, Mayne would be in the same position it is in now.

With regard to the PTAB guidance, the court noted that such guidance was “non binding” [upon whom?] and that the Board had allowed several petition corrections without changing the filing date.

Why Do It? – Privileged: The gaping hole in in the analysis is any discussion of why MSD did not name its parent company who was being sued for infringement as a real party in interest.

In the IPR, Merck’s attorneys (who represented both companies) indicated that they had intentionally omitted MCI as a real-party-in-interest, but did not explain their actions other than: “privileged legal strategy immune from discovery” (although this is in quotes, it is my paraphrasing).  The key patent-related reason here that comes to mind is that – at the time – Merck thought it might get around IPR estoppel by having its subsidiary file the petition.  It was not until more than a year later that Merck agreed that both companies would be bound by any resulting estoppel.

Appealable:  The patent challenger also argued that the issue here is not appealable because it is tied to institution. On appeal, the Federal Circuit ducked that issue and instead held that the case is affirmed whether or not it is appealable. (Interesting jurisprudence dance on this one).

Fed. Cir. Spots Weak Claim Construction Arguments

Game and Tech. Co. v. Activision Blizzard (Fed. Cir. 2019)

Activision won its inter partes review (IPR) challenge that ended with the Patent Trial & Appeal Board (PTAB) finding obvious claims 1-11 of GAT’s U.S. Patent 8,253,743.

The patent here covers a method for customizing game characters. The method begins with shopping for an avatar – via an “avatar shop”; then, a set of “game item functions” are combined with the avatar (via layers).  A game item function might be “a function for attacking or defending other gamers” or perhaps “a function for charging cyber money.”  Once these “game functions” are added to the avatar, it becomes a “GAMVATAR.” Figure 5 of the patent (below) explains the equation: Avatar + Item (function) = Gamvatar.  The infringement lawsuit involving the ‘743 was administrative closed after the PTAB decision here.

In the appeal, GAT provided an oddball claim construction argument — arguing that the “avatar” must represent the user in cyberspace outside of game play and even game-related functions.  That narrowing definition of the term would be helpful in avoiding some of the prior art.  The narrowness has some limited support in the specification, but is really rejected by the claim language which simply calls for choosing an avatar from a store.

GAT also suggested an oddball definition for the “layer” used to combine the game-function with the avatar.  In the drawing above, the layer is visible and GAT argued that Layer should be construed as a visible element of the display. The key problem here as noted above is that examples of the layer include functions not displayed on the character (such as the ability to charge money).

So, obviousness affirmed. Everyone keep making your characters (I mean gamvatars).

= = = =

I have not spent a lot of time researching the details of this case, but the patentee’s claim construction arguments here appear pretty weak — we’re talking thin slices of bologna. My sense is that claim construction has moved into a more-predictable process under Phillips – a process that that will be further enhanced by the PTAB’s application of that approach in AIA trials.

= = = =

Eligibility?:

1. A method for generating a character associated with a character generating system comprising a gamvatar provider, a gamvatar controller, and a game server, the method comprising:

providing an avatar to a user accessing an avatar shop via a network, the avatar comprising multiple layers for displaying avatar functions or performing game item functions by using the respective layers; and

combining each of a plurality of game item functions with the avatar by adding the respective layers to the avatar to create a gamvatar associated with the plurality of the game item functions,

wherein the gamvatar is configured to be used to perform the plurality of the game item functions and each of the plurality of game item functions being combined with the respective layers is exhausted in response to detection of each time of using the each of the plurality of game item functions associated with playing a game provided by the game server.

 

Heightened Written Description Standard for Reissue Patents

by Dennis Crouch

Forum US v. Flow Valve (Fed. Cir. 2019)

The question here is whether the broadened claims in Flow Valve’s U.S. Patent No. RE45,878 satisfy the heightened written description requirement for reissue patents.

In order to broaden claims as part of a reissue application, the patentee must show that the new scope was considered by the original patent applicant as party of the original invention.  This precedent stretches back to 1893:

[T]o warrant new and broader claims in a reissue, such claims must not be merely suggested or indicated in the original specification, drawings, or models, but it must further appear from the original patent that they constitute parts or portions of the invention, which were intended or sought to be covered or secured by such original patent.

Corbin Cabinet Lock Co. v. Eagle Lock Co., 150 U.S. 38 (1893).

It must appear from the face of the instrument that what is covered by the reissue was intended to have been covered and secured by the original.

U.S. Indus. Chems., Inc. v. Carbide & Carbon Chems. Corp., 315 U.S. 668 (1942).

These cases are pre-1952.  At the time, the statute limited reissues be “for the same invention.” In 1952, that provision was altered to instead limit reissue claims to “the invention disclosed in the original patent.”  Although the text of this statutory change appears to loosen the limits on reissue claim scope, the Federal Circuit has indicated that the statutory change did not change the requirement.  Antares Pharma, Inc. v. Medac Pharma Inc., 771 F.3d 1354 (Fed. Cir. 2014) (The pre-1952 requirement has not “in any way been altered by the legislative changes”).

Here,  the patent at issue focuses on fixtures for holding pipe fittings during machining. All of the embodiments in the original patent as well as the claims include arbors that are used for holding the pipe joint in place (circled below).   However, during the reissue the patentee added new claims without the arbor requirement.

The courts agreed that, in this situation, the broadened scope that includes an arbor-less device was not apparent from the “face of the instrument” — i.e., in the text of the original patent application.

A written description requirement: The patentee had presented expert testimony that a person of skill in the art would understand that the arbors were optional components of the assembly.  Taking that evidence as true, the Federal Circuit found it insufficient to save the claims because the test is whether the new claim scope is written down in the specification.  In essence, this is a heightened written description test, not a test of enablement.

Query: How would our patent system adjust to applying this written description standard in all cases, not just reissues?

Supreme Court End of Term Updates

by Dennis Crouch

The Supreme Court decided only two patent cases this term.  Helsinn is somewhat important for many patentees and certainly the PTO; while Return Mail more narrowly focuses on the role of Federal Government agencies in challenging patents:

  • Helsinn Healthcare S.A. v. Teva Pharmaceuticals USA, Inc., 139 S.Ct. 628 (2019) (non-public sales are still “on sale” under the America Invents Act (AIA) rewriting of 35 U.S.C. 102).
  • Return Mail, Inc. v. United States Postal Service, et al., 139 S.Ct. 397 (2019) (IPR statute does not provide for petitions filed by the Federal Gov’t.).

Certiorari has been granted in only one additional patent case: Peter v. NantKwest. That case asks whether the USPTO is permitted by statute to recover attorney fees associated with § 145 civil actions.

An applicant dissatisfied with the decision of the [PTAB] . . . may . . . have remedy by civil action. . . . The court may adjudge that such applicant is entitled to receive a patent for his invention, as specified in any of his claims. . . . All the expenses of the proceedings shall be paid by the applicant.

35 U.S.C. § 145. In this case Laura Peter, USPTO Deputy Director, is the named petitioner on behalf of the Government, standing in for Dir. Iancu who has a conflict of interest in the case. (Irell & Manella represents NantKwest, and Iancu was managing partner at Irell when the representation began.)

In many other countries, litigation losers commonly pay the attorney fees of the victor.  One argument against that approach is an access-to-justice problem — parties without much money will not be able to find representation if there is a good chance that they’ll have to pay the other-side’s attorney fees upon losing.  In its amicus brief supporting the Government, R Street (Charles Duan) argued that only rich pharmaceutical companies are bringing these cases. “There is thus little reason to believe that those additional expenses will greatly affect the strategic calculus of those patent applicants likely to make legitimate use of § 145.”

As R Street‘s brief outlines, § 145 are used rarely — usually for the most potentially valuable pharmaceutical patents – with top lawyers handling the case (such as Irell & Manella).  The real shift from the outcome may come from the USPTO — if it knows someone else is footing the bill, the USPTO may fight these cases harder.

Upcoming Soon: The Supreme Court has one final conference set this term (June 20) and is slated to rule on a number of pending petitions for certiorari:

  • InvestPic, LLC v. SAP America, Inc., No. 18-1199  (physicality requirement for eligibility);
  • Romag Fasteners, Inc. v. Fossil, Inc., et al., No. 18-1233 (profit disgorgement under the Lanham Act);
  • Ariosa Diagnostics, Inc. v. Illumina, Inc., No. 18-109 (prior art date for unclaimed disclosures in a provisional filing);
  • Texas Advanced Optoelectronic Solutions, Inc. v. Renesas Electronics America, Inc., fka Intersil Corporation, No. 18-600 (infringement associated with and “offer” made in the US to actually “sell” a product in a foreign country);
  • Dex Media, Inc. v. Click-To-Call Technologies, LP, et al., No. 18-916 (Is the 315(d) time-bar triggered by prior lawsuits that were dismissed without prejudice?); Atlanta Gas Light Company v. Bennett Regulator Guards, Inc., No. 18-999 (same); Superior Communications, Inc. v. Voltstar Technologies, Inc., No. 18-1027 (same). .

Rather than guessing at the court’s potential decisions as to whether or not to grant certiorari, I’ll just wait a few days on these to know the outcome.

We also have the beginnings of a heap of new cases for consideration next term:

  • HP Inc., fka Hewlett-Packard Company v. Steven E. Berkheimer, No. 18-415 (fact-law divide in eligibility);
  • Hikma Pharmaceuticals USA Inc., et al. v. Vanda Pharmaceuticals Inc., No. 18-817 (threshold of a natural phenomenon);
  • Google LLC v. Oracle America, Inc., No. 18-956 (copyright for software interfaces).
  • Acorda Therapeutics, Inc. v. Roxane Laboratories, Inc., et al., No. 18-1280 (obviousness and blocking patents)
  • Hyatt v. Iancu, No. 18-1285 (reopening prosecution after successful appeal; “Whether MPEP § 1207.04 violates patent applicants’ statutory right of appeal following a second rejection.”);
  • Senju Pharmaceutical Co., Ltd., et al. v. Akorn, Inc., No. 18-1418  (R.36 judgments; holistic approach to obviousness)
  • Glasswall Solutions Limited, et al. v. Clearswift Ltd., No. 18-1448 (eligibility on the pleadings; Berkheimer question);
  • Enplas Display Device Corporation v. Seoul Semiconductor Company, Ltd., No. 18-1530 (can foreign sales qualify as induced infringement of a U.S. patent — if defendant knew that “the components might be incorporated by third parties into infringing products that might be sold by other third parties in the United States.”)
  • Zimmer, Inc., et al. v. Stryker Corporation, et al., No. 18-1549 (more on treble damages — is negligence enough?)

This last set of cases won’t see any light until at least October 2019 when the Court returns from its summer break.

Using a Technique in a Known Way is Usually Obvious

Samsung Electroncs v. UUSI (Fed. Cir. 2019)

In the inter partes review (IPR), the PTAB sided with the patentee UUSI — finding that Samsung had failed to prove the obviousness of UUSI’s U.S. Patent No. 5,796,183.  On appeal, however, the Federal Circuit has vacated that decision — holding that the Board’s findings of no motivation-to-combine or reasonable-expectation-of-success were not supported by the evidence.

The patent is directed to multi-point capacitive sensing circuity – the type used for the multi-billion dollar touchscreen market. It’s 1996 priority date situates the invention before a substantial amount of prior art.  However, Samsung identified several key prior art references, including U.S. Patent Nos. 5,565,658 (Gerpheide), 5,087,825 (Ingraham), and 5,594,222 (Caldwell).

Obvious by Combination of References: Most often, obviousness is proven with a combination of references that collectively teach the claimed elements.  In addition to providing the set of prior art references, the patent challenger must also show that a person of skill in the art (POSITA) would have a “motivation to combine” the references in the way claimed and that such a combination would have a “reasonable expectation of success.”

In KSR v. Teleflex, the Supreme Court explained that the motivation to combine analysis is flexible and not bound to rigid limitations or requirements. The High Court explained: “[I]f a technique has been used to improve one device, and a person of ordinary skill in the art would recognize that it would improve similar devices in the same way, using the technique is obvious unless its actual application is beyond his or her skill.” KSR.

Here, the PTAB decided to exclude Gerpheide from the analysis because its approach was directed toward single-point capacitive sensing rather the multi-point approach of the patentee.  On appeal, the Federal Circuit vacated that holding:

The Board’s categorical rejection of the teachings from a single input device to those of a multi input device is not supportable. . . . Samsung presented uncontested evidence that the combination of Ingraham and Caldwell would experience electrical interference, and Gerpheide taught a way to address electrical interference in capacitive touch devices. The fact that Gerpheide and Ingraham/Caldwell involved different types of capacitive touch devices (single versus multi input) does not undermine the motivation to combine the teachings of Gerpheide with Ingraham/Caldwell since
both devices can experience electrical interference. Gerpheide recognized this as a problem and provided a solution to reduce such interference. Thus, a person of skill in the art would have been motivated to include such a feature from analogous prior art in a multi input capacitive touch pad device (i.e., the device of the Ingraham/Caldwell combination). The Board’s contrary conclusion is not supportable.

With regard to reasonable expectation of success, the Federal Circuit also vacated — primarily holding “that the Board’s implicit claim construction was erroneous.”  Here, the Federal Circuit found that the PTAB had unduly narrowed the claim scope and that under the broader scope there may indeed be a reasonable expectation.