The Senate has confirmed Tiffany Cunningham, President Biden’s first pick for the Court of Appeals for the Federal Circuit. Judge Cunningham is expected to be sworn in this week and immediately step into her new role (although the court typically slows down during August). Judge Cunningham will be the first African American judge on the Federal Circuit. The vote was bipartisan, although 33 republicans voted NO, including my two senators (Josh Hawley and Roy Blunt).
by Dennis Crouch
If affirmances by the Patent Trial and Appeal Board (PTAB) are any guide, patent examiners appear to now have a good handle on applying the PTAB eligibility examination guidance. I looked at PTAB patent eligibility decisions from the past month and found that examiner eligibility rejections were affirmed in 92% of cases (55 of 60 decisions). There were also five cases where the PTAB added eligibility as a new ground for rejection.
92% affirmance for eligibility issues is quite high compared to other issues being appealed. So far in FY2021, the PTAB is fully affirming examiner decisions in only 56% of cases and partially affirming in an addition 10%.
The PTAB’s general approach is to follow the USPTO’s eligibility examination guidance and then supplement that approach with Federal Circuit and Supreme Court cases. Most often, the PTAB is able to draw a direct analogy with a prior appellate decision.
The following are three recent affirmances:
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Ex Parte Ausubel, Appeal No. 2021-000765, 2021 WL 2982136 (PTAB)
Lawrence Ausubel is a Professor of Economics at Maryland and has published dozens of articles on efficient auction design and holds several patents. His pending patent application claims a computer-implemented system for allowing smaller-quantity intra-round bidding during a “clock auction.”
The examiner rejected the claims as directed to a fundamental economic practice rather than a practical invention and that, absent the computer limitations, the method is a mental process (with pencil + paper). On appeal though the PTAB affirmed:
Hedging risk is a fundamental economic practice. … Here, claim 1 seeks to hedge risk in a clock auction by using intra-round bids with generic computers and components that perform generic data processing of sending and receiving data to auction securities, contracts, commodities, spectra, and other items.
The Board’s analysis directly analogized to Bilski’s patent application which the Supreme Court rejected.
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Ex parte Knoll, Appeal No. 2021-000035, 2021 WL 3015118 (PTAB) (Philips Medizin)
The invention here is directed to a method of approximating a patient’s pulse-wave using the pressure signal from a blood pressure cuff. The claims require receipt of repeated measurement of pulse-curves as the clamp pressure changes. Those curves are weighted and combined to create the approximated pulse wave. The examiner rejected the claims as directed toward ineligible abstract idea. On appeal, the PTAB has affirmed, finding the claims directed to a series of mathematical calculations based upon selected information. Further, the fact that data is received from a blood-pressure cuff does not transform the idea into a patent eligible practical application.
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Ex Parte Tazono, Appeal No. 2021-000816, 2021 WL 3015120 (PTAB) (Alpine Electronics).
Tazano’s application is directed to methods of acquiring and presenting information about upcoming events. The PTAB affirmed the examiner rejection — finding the claims directed to the abstract idea of organizing human activities. Further, the claims rely only upon generic computer technology and do not “recite an improvement to a particular computer technology. . . . All purported inventive aspects reside in how the data is interpreted and the results desired, and not in how the process physically enforces such a data interpretation or in how the processing technologically achieves those results.”
by Dennis Crouch
BOT M8 v. Sony (Fed. Cir. 2021)
Pleading Standards: The starting point of a civil lawsuit is the filing of the complaint that makes a claim for relief. FRCP 3. In order to properly state a claim, the rules require “a short and plain statement of the claim showing that the pleader is entitled to relief.” FRCP 8. For many years, the rules included an Appendix of Form Complaints deemed legally sufficient to satisfy R. 8. Form 18 focused on patent infringement and included a bare-bones set of allegations that (1) the plaintiff owns a particular patent and (2) the defendant has infringed that patent. (Image of Form 18 below). In general, Form 18 was plaintiff friendly, making it easy to file a patent infringement lawsuit without providing any details beyond the patent number at issue. That approach was in place for a number of years and only began to crumble with the Supreme Court’s decision in Bell v. Twombly, 550 U.S. 544 (2007), followed by Ashcroft v. Iqbal, 556 U.S. 662 (2009). Those cases interpreted the “short and plain statement” requirement as requiring “facial plausibility” that can be satisfied by the inclusion of factual allegations that lead to a reasonable inference of liability. Still, even after Iqbal, the form-pleading-sufficiency rule was still in place in a way that forestalled complete implementation of the Iqbal regime. In 2015, Form 18 was removed and the transformation complete.
Element-by-Element Claim Analysis in Pleadings: Post-Iqbal, the courts have struggled with line-drawing-what quality of factual allegations are sufficient to survive the plausibility test. In patent cases, one question is whether then plaintiff needs to provide an element-by-element analysis of how the accused activity practices each element of the asserted claims. Here, the Federal Circuit holds (again) that element-by-element analysis is not a pleading requirement:
To the extent this district court and others have adopted a blanket element-by-element pleading standard for patent infringement, that approach is unsupported and goes beyond the standard the Supreme Court articulated in Iqbal and Twombly.
Slip Op.
In Bot M8 v. Sony, the district court dismissed Bot M8’s infringement claims against Sony’s PlayStation 4 (PS4). (Dismissing claims stemming from four patents). On appeal, the Federal Circuit has reversed-in-part. While plausibility is required, the court repeated its prior statement that the plaintiff “need not prove its case at the pleading stage.” Bill of Lading (Fed. Cir. 2012).
Regarding infringement, the court found that a complaint may be sufficient without an element-by-element infringement analysis. “A plaintiff is not required to plead infringement on an element-by-element basis.” Rather, the focus of complaint sufficiency is notice — a complaint needs to provide fair notice of what activities by the defendant constitute infringement.
The court then tried to draw some lines:
Again, the focus is on fair notice to the defendant and “specific facts are not necessary” when the general allegations are sufficient.
Although the district court required too much by demanding element-by-element analysis in the complaint, the Federal Circuit still affirmed the dismissal with regard to two of the four patents. For those two patents, the court concluded that allegations found in the complaint actually disprove infringement. The complaint “contains too much rather than too little, to the point that Bot M8 has essentially pleaded itself out of court.” In particular, Bot M8 alleges that the “authentication program” is stored on the motherboard, but the claims require the program to be stored on a separate board. “That allegation renders Bot M8’s infringement claim not even possible, much less plausible. While claim 1 requires that the game program and authentication program be stored together, separately from the motherboard, the [complaint] alleges that the authentication program is located on the PS4 motherboard itself.”
The conclusion here warns against a “kitchen sink” approach to infringement assertions within a patent complaint. In particular, patentees will need to be cautious when alleging infringement of alternative claim language such as below.
Barring unusual claim construction, an accused system cannot infringe both claims 2 and 3 since they are claimed in the alternative. It turns out that you might not know at the time of filing the exact location of the motherboard. Although some amount of pre-filing investigation is required, the rules allow for plaintiffs to rely upon potential discoverable evidence when making the complaint. In Bot M8, plaintiff’s counsel argued that it “had not previously reverse engineered the PS4 to support the prior pleadings because ‘jailbreaking’ the PS4 is illegal under the Digital Millennium Copyright Act (“DMCA”) and other anti-hacking statutes.” In this particular case, the district court did not rule on the merits of the of the excuse, but ruled that that the concern had been raised too late in the litigation to be viable. “Because Bot M8 did not raise any concerns about its ability to reverse engineer the PS4 until after the district court issued its decision on Sony’s motion to dismiss, the court found that Bot M8 was not diligent.”
An easy solution here is to “plead in the alternative.” The FRCP permits parties to set out two different statements of a claim “alternatively or hypothetically . . . A party may state as many separate claims or defenses as it has, regardless of consistency.” FRCP 8(d). One difficulty though is that each alternative pathway must meet the plausibility standard. The difficulty for Bot M8 is that it did not plead in the alternative. “Notably, Bot M8’s allegations were not pled in the alternative.” Slip Op. at Note 3. Rather, Bot M8 told one story that effectively disproved infringement for two of the asserted patents.
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Claim 1 of another asserted patent had also been determined invalid as ineligible. On appeal, the Federal Circuit affirmed that the asserted claim 1 “recites the abstract idea of increasing or decreasing the risk-to-reward ratio, or more broadly the difficulty, of a multiplayer game based upon previous aggregate results. But the claim leaves open how to accomplish this, and the specification provides hardly any more direction.” Slip Op. (quoting district court and affirming on the same reasoning).
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Interesting pending civil action in Grupo Bimbo v. Hirshfeld (E.D.Va. 2021).
The Mexican company Grupo Bimbo makes more bread than any other company — including Wonder Bread and Sara Lee brands in the USA. Bimbo is attempting to register a mark for its “ARTESANO” line of bread — after apparently selling more than $1 billion in pre-packaged sliced bread product.
The PTO found that “Artisan Bread” is a generic term, and that consumers will translate the Spanish word “ARTESANO” to its English equivalent when purchasing.
In this appeal, the resemblance between ARTESANO and the word “Artisan” is so evident in both sound and appearance that the average American consumer will automatically translate ARTESANO and equate ARTESANO and the word “artisan.”
Bimbo has now filed a civil action under 15 U.S.C. 1071(b) seeking a declaration from the District Court that its mark is not generic but instead is distinctive.
Chief Judge Moore does not mince words — especially when she senses that a party is attempting to mislead her as to the record. I transcribed the following from recent oral arguments in Shure Incorporated v. ClearOne, Inc. This is a discussion between Chief Judge Moore and ClearOne’s attorney Christina V. Rayburn — discussing whether Shure’s briefing was frivolous.
Chief Judge Moore: Did you file a motion asking us to contemplate whether the brief as written [by Shure] was frivolous . . . given the clear inconsistencies between the brief and [Shure’s] statements to the district court?
Ms. Rayburn: We seriously considered it, your honor, but we chose not to.
Chief Judge Moore: Well, you can always do it after arguments.
Ms. Rayburn: Thank you your honor.
Ex parte Zhang, Reexam No. 90/014,234, 2021 WL 633718 (PTAB)
Folks continue to file anonymous ex parte reexaminations. Michael Piper of Conley Rose filed this one on behalf of an anonymous party challenging Zhang’s U.S. Design Patent No. D810,925 (“breast pump”). The reexamination examiner agreed with the challenge and issued a final rejection that the claimed design was anticipated by four different prior art references. Note that design patent anticipation asks whether the design to be patented is “substantially the same” as the prior art in the eyes of an ordinary observer.
Two designs are substantially the same if their resemblance is deceptive to the extent that it would induce an ordinary observer, giving such attention as a purchaser usually gives, to purchase an article having one design supposing it to be the other.
Door-Master Corp. v. Yorktowne Inc., 256 F.3d 1308 (Fed. Cir. 2001) (citing Gorham Co. v. White, 81 U.S. 511 (1871)).
Not Prior Art: On appeal, the PTAB has reversed — finding that cited references are not prior art at all.
First to Disclose: Two of the references were Chinese Design Registrations filed and published a couple of months before Zhang’s filing date. Prior to that date, but still within one-year, Zhang had already licensed the design and licensed pumps embodying the patented design were on sale in China. The timing of this prior public disclosure was just right to save the day under Section 102(b)(1)(B).
(b)(1) 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—(B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor … or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.
Zhang apparently did not make this argument until the appeal, and, the examiner withdrew his rejection after receiving the declaration with supporting evidence.
The other two references were internet publications purportedly published online two-years before Zhang’s application filing date. However, the PTAB found insufficient evidence proving their publication dates.
Here, an anonymous third party, through counsel, provided the USPTO with copies of two webpages in a foreign language … each paired with an uncertified English translation. Both documents and translations were submitted by a third party requester in a very unclear, grainy or pixelated manner and the text and details over the figures are very difficult to discern.
The submitted material do include printed dates, but the PTAB found them unclear and insufficient without any corroborating evidence regarding context or accuracy. Further, no evidence was submitted showing that the sites were publicly accessible as of those dates, and the pages are no longer available on the internet.
There is simply no explanation or verification of the source, date or accessibility of the information presented on these documents. While we can put some weight in the duty of a signatory of a registered patent attorney in accordance with 37 C.F.R. § 11.18 that statements of fact are “believed to be true,” we simply cannot find the evidence sufficient to establish the documents as prior art.
Zhang. Thus, the PTAB reversed the rejection.
by Dennis Crouch
In re Uber Technologies, Inc. (Fed. Cir. 2021)
Another week, another mandamus. This case is parallel to In re Samsung discussed earlier where Ikorongo divided its patent rights between Ikorongo-Texas (right to enforce in W.D.Tex.) and Ikorongo-Tech (right to enforce elsewhere in USA). In Samsung, the appellate court rejected this brazen attempt to manipulate venue. Here, the court found “no basis for a disposition different from the ones reached in Samsung” and ordered transfer to N.D.Cal.
President Biden is expected to sign an executive order today focusing on competition that includes 72 separate initiatives. The following are a few.
More to come on this topic. Note, the statement does not mention patent rights or intellectual property, but several of the orders have IP implications.
by Dennis Crouch
At the behest of several leading Senators, the USPTO has begun a study on the “Current State of Patent Eligibility Jurisprudence.” To that end, the agency is seeking comments from the public that will be due by Early September. The agency would like input from various stakeholders, including inventors, owners, investors, licensees, users, and patent attorneys. The agency appears to be looking from key insight regarding the actual experience of parties involved — telling a story of the impact of patent eligibility doctrine.
Acting Director Hirshfeld has made clear in some settings his predilection for broad subject matter eligibility, and the wording of the questions suggest that the Agency is looking for reasons to decry the current state of narrowed eligibility.
The exact topic of comments are not limited, but the Agency has created a list of 13 questions that may guide input. I have paraphrased:
Read more here: https://public-inspection.federalregister.gov/2021-14628.pdf
I expect that the comments here will also be relevant to the views of the solicitor general that will be submitted in Am. Axle.
Submit comments via the Federal Register portal using Docket No: PTO-P-2021-0032.
by Dennis Crouch
Timberland has been selling its iconic boots back in 1973 – almost 50 years ago. Actually, at the time the company name was Abington Shoes, but quickly changed its name to Timberland Boot because of the popularity. Timberland did not patent or register a copyright the design, and the market it rife with copycat boots.
Over the past several years, Timberland has been attempting to register the shape of the boots as protectable trade dress. However, the USPTO’s Trademark Trial & Appeal Board (TTAB) rejected the application, finding that the the company had failed to demonstrate that the boot shape had acquired secondary meaning in the eyes of consumers. The examiner had also rejected the trade dress registration as improperly functional, but the TTAB did not reach that issue.
In a new lawsuit, Timberland has asked a district court judge to overturn these rulings and find that the trade dress is distinctive and registrable.
Complaint: TBL Registering TM on Timberlands
Should Timberland be permitted to register a trademark (Trade Dress) on its "iconic timberland boot"??
Lawsuit pending in TBL Licensing v. Hirshfeld (EDVA).
Read the complaint: https://t.co/GOS65fmvK8 pic.twitter.com/sldUCc5eHU
— Dennis Crouch (@patentlyo) July 8, 2021
In its brief, Timberland provides examples of other shoe shape trade dress that have been registered, including the classic low-top Converse sneakers.
DataCloud Techs v. SquareSpace (D.Del. 2021)
Eligibility and indefiniteness are both judged primarily as questions of law, although both can occasionally depend upon some underlying factual finding. And, even when questions of fact are at issue, it is a judge (rather than a jury) that hears the evidence and determines the facts.
In recent years, eligibility determinations have moved forward in the litigation context and become a true “threshold test.” See Bilski v. Kappos, 561 U.S. 593 (2010). Often, eligibility is the first substantive determination in patent litigation and it is typically decided either on a motion to dismiss (12(b)(6)) or motion on the pleadings (12(c)).
With all the parallels, it is not surprising that some litigants are also suggesting that indefiniteness be decided at the pleadings stage.
The recent motion for dismissal by SquareSpace is on point — arguing that DataCloud’s patent claims indefinite functional limitations parallel to those rejected by the Supreme Court in O’Reilly v. Morse. [Brief in Support of Motion to Dismiss].
The brief walks through Supreme Court history in indefiniteness associated with functional claim limitations.
SquareSpace filed its motion to dismiss in May and DataCloud has recently filed an amended complaint and has argued that the amended complaint renders the motion “a nullity.” The new complaint adds three additional patents and also includes an allegation that attempts to skirt the indefiniteness question:
A person skilled in the art … would understand that each of the limitations and/or steps in the claims … are defined by what they do (not what they are). Even if any limitation and/or step of the claims is “functional”— and none are—the teachings of the … Patent provides to any skilled artisan sufficient structure, material, or acts necessary to perform the recited function or provides information sufficiently identifying a finite group of structures, materials, or acts necessary to perform the recited function that were well known to skilled artisans at the priority date.
Amended Complaint.
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Lawyers on the brief include James Dabney and Sue Robinson (as well as others).
I have been following the patent ownership lawsuit of Bio-Rad Laboratories, Inc. v. International Trade Commission and 10X Genomics. The case is now pending on a petition for en banc rehearing before the Federal Circuit.
Several former Bio-Rad employees left to form 10X Genomics. While at Bio-Rad, the individuals began development of a number of ideas but did not complete conception or reduction-to-practice. Some months later, after leaving and forming 10X, they completed the inventions and filed patent applications. Bio-Rad now argues that it has partial ownership rights to the inventions based upon the inventor’s contributions while employees.
In the appeal, the Federal Circuit sided with 10X, holding that the terms of the employment agreement were limited to Intellectual Property, and pre-conception ideas were not enough.
Pre-Invention Innovations Not Captured by Employment Agreement Duty to Assign
Now, Bio-Rad has petitioned for en banc rehearing arguing that the decision is contrary to a host of Federal Circuit decisions:
First, the panel’s decision conflicts with this Court’s precedent that employment contracts such as Bio-Rad’s are to be given their full import and not limited to a final conceived patentable invention. See, e.g., AT&T v. Integrated Network Corp., 972 F.2d 1321 (Fed. Cir. 1992).
Second, the panel’s decision also conflicts with precedent regarding joint inventorship that can occur serially over time and that contribution of a single idea to a final invention can qualify as joint inventorship, which is a protectable right subject to contract. See, e.g,. Vanderbilt Univ. v. ICOS Corp., 601 F.3d 1297 (Fed. Cir. 2010). Precedent does not impose a temporal restriction on when a person can become a co-inventor. The analysis requires comparing the significance of the work alleged to be an inventive contribution to the claims as a whole. Fina Oil & Chem Co. v. Ewen, 123 F.3d 1446 (Fed. Cir. 1997).
Bio-Rad is correct that the Federal Circuit appears to have been too tight in its statements of the law, but it may well be that the contributions made while employees at Bio-Rad were still insufficient.
by Dennis Crouch
VoIP-Pal.com, Inc. v. Apple, Inc., No. 20-1809 (Supreme Court 2021)
VoIP-Pal sued Apple for infringing its U.S. Patent Nos. 9,537,762; 9,813,330; 9,826,002; and 9,948,549. Apple filed four petitions for for inter partes review, but all four were denied by the PTAB. Judge Koh then dismissed the infringement case in Apple’s favor–finding that all asserted claims were directed to ineligible subject matter. On appeal, the Federal Circuit affirmed without opinion (R.36). Now, VoIP-Pal has petitioned for writ of certiorari. The case is now part of a trio of eligibility cases pending before the Court. See American Axle & Manufacturing, Inc. v. Neapco Holdings LLC, No. 20-891; iLife Technologies, Inc. v. Nintendo of America, Inc., No. 20-1760.
The patents here are all directed routing calls using Voice Over Internet Protocol (VoIP) communications. The basic idea is to rout calls based upon a user identification, rather than using key parts of a telephone number (such as country codes; area codes; and other signals). Once the recipient ID is entered, the system would look-up their location and route the communications accordingly. Judge Koh found the claims were directed to the abstract idea of “Routing a communication based on characteristics of the participants.” Judge Koh did not attempt to define “abstract idea,” but noted some hallmarks found in VoIP’s claims:
Claim 1 is directed to an abstract idea: (a) the claimed method discloses only generalized steps drafted in purely functional terms; (b) it is analogous to well-known, longstanding practices; and (c) it does not recite an improvement in computer functionality.
In its petition for writ of certiorari, VoIP-Pal asks three questions:
1. What is the appropriate standard for determining whether a patent claim is “directed to” a patent-ineligible concept under step one of the Court’s two-step framework for determining whether an invention is eligible for patenting under 35 U.S.C. §101?
2. Is patent eligibility (at each step of the Court’s two-step framework) a question of law for the court based on the scope of the claims or a question of fact for the jury based on the state of art at the time of the patent?
3. Is it improper to apply 35 U.S.C. § 112 considerations to determine whether a patent claims eligible subject matter under 35 U.S.C. § 101?
[Petition] The 112 discussion is basically an argument that any problems with functional claim limitations should be dealt with under §112 rather than §101.
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The chart above shows the number of U.S. patents issued each year that include the phrase “VoIP” somewhere in the document. Folks were already doing some packet-switched voice communications before the 2000’s, but typically used a different name.
Ex parte Callewaert, APPEAL 2019-005598 (Patent Tr. & App. Bd. Feb. 25, 2021).
Following an obviousness rejection, applicant relied upon an example in the specification to help prove an unexpected result (that the living cell would create certain “unnatural glycan structures”). The PTAB rejected the argument — finding that the example was written in the present tense and therefore assumed to be prophetic and therefore “does not provide the factual evidence needed to support unexpected results.” (emphasis in original). It appears in this case, the PTAB treated the prophetic example as merely an argument. 
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Ex Parte Cigan, APPEAL 2020-001230 (Patent Tr. & App. Bd. Sept. 14, 2020)
Cigan provides a minor counterpoint to Callewaert. The patent applicant argued that the prior art examples should be disregarded as merely a prophetic example. The PTAB rejected the call and instead presumed that the prior art teachings were enabling. See In re Antor Media Corp., 689 F.3d 1282 (Fed. Cir. 2012) (holding that prophetic examples in the prior art are still presumed to be enabling).
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Ex Parte Harriman, APPEAL 2020-004459 (Patent Tr. & App. Bd. Feb. 10, 2021)
In Harriman, the PTAB reversed an examiner’s enablement and written description rejections, holding that the prophetic examples of an immunoglobulin light chain were sufficient. The claims are directed to a genetically modified (transgenic) chicken grows human immunoglobulin. (owned by Ligand)
by Dennis Crouch
In re Samsung Electronics Co., LTD (Fed. Cir. 2021)
The Federal Circuit has again granted mandamus and ordered Judge Albright to transfer two cases case out of his W.D.Tex. court to a more convenient forum (N.D.Cal.).
The underlying actions were filed by a patent holding company known as Ikorongo Texas LLC against Samsung and LG Electronics. As explained below, the owners of Ikorongo Texas formed the company as an attempt to solidify venue in W.D.Texas and avoid the case being transferred for inconvenient forum.
Ikorongo Texas is owned by five-individuals led by patent agents Hugh Svendsen & Sarah Svendsen. The five also own a separate company known as Ikorongo Technology LLC. The asserted patents were previously fully owned by Ikorongo Tech. However, before suing, Ikorongo Tech geographically divided the patent rights. In particular, the company assigned all rights in the patents relating to the WDTX back to the five-individuals. At that point, the five individuals owned all rights to sue and collect damages associated with infringement occurring in the “specific counties” covered by WDTX. The five individuals then created the new company Ikorongo Texas and assigned their WDTX rights to the company. Ikorongo Texas then sued Samsung and LGE. The following day, Ikorongo Texas amended its complaint to also add Ikorongo Tech as a co-plaintiff so that collectively they could seek damages for the full USA. Ikorongo Texas is a Texas LLC (corporate registration in Texas), but its owners and managers all reside in North Carolina.
The defendants in the lawsuit admitted that venue was proper in WDTX, even under the high bar for proper venue created by 28 U.S.C. § 1400(b). But, the defendants argued that N.D.Cal. is a better, more convenient venue, and requested transfer. Even if venue is proper, a defendant may still complain that that the forum is inconvenient and request a change of venue. The statute:
For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.
28 U.S.C. § 1404(a). A court has discretion as to whether to transfer a case, but should look to the convenience of the parties, convenience of the witness, and also the interest of justice. In addition, the court may only transfer a case to a district where venue and personal jurisdiction are proper (“where it might have been brought”).
Judge Albright refused to transfer the case to California — holding that Ikorongo Texas would not have had proper venue to sue in the state. In patent cases venue is only proper against a US corporate defendant if either (1) the defendant is incorporated within the state or (2) the infringement occurred within the district and the defendant has a regular place of business in the district. The defendants here are incorporated in NY & Delaware, and the infringement alleged by Ikorongo Texas was only in WDTX. Thus, no proper venue.
On mandamus, the Federal Circuit has rejected that analysis — rejecting this “collusive” attempt to avoid the transfer on convenience grounds.
Ikorongo Texas is plainly recent, ephemeral, and artificial—just the sort of maneuver in anticipation of litigation that has been routinely rejected. . . . [T]he district court disregarded the pre-litigation acts by Ikorongo Tech and Ikorongo Texas aimed at manipulating venue.
Slip Op. The court then disregarded the creation geographic division and ordered transfer (after also finding that the convenience factors clearly weigh in favor of transfer and refusing to transfer would be an abuse of discretion).
The decision here has a limiting feature–that Ikorongo Texas was formed for the sole purpose of manipulating venue. I wonder what the courts would say about Apple closing its store in E.D.Tex.
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I’ll note also that the case might have turned out differently if Ikorongo Tech had not been added to the case.
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The decision does not rely in direct on-point precedent, but instead relies heavily upon precedent in in the context of subject matter diversity jurisdiction. Miller & Lux, Inc. v. E. Side Canal & Irrigation Co., 211 U.S. 293, 305–06 (1908). In that case, a California corporation had formed a separate Nevada corporation and transferred property rights to the Nevada Corp in order to create diversity jurisdiction. The Supreme Court said No. One problem with this analogy is that there is a particular statute barring collusive incorporation in order to create diversity jurisdiction:
A district court shall not have jurisdiction of a civil action in which any party, by assignment or otherwise, has been improperly or collusively made or joined to invoke the jurisdiction of such court.
28 U.S.C. § 1359. Although also statutory, diversity jurisdiction has an express constitutional basis whereas convenient-forum is entirely statutory. That distinction has historically offered courts to – at times – distinguish between the two in their analysis and interpretation. The opinion does not delve into why the linkage is appropriate here.
by Dennis Crouch
Many patent applications are not fully reduced-to-practice by the time the patent application is filed. Although reduction-to-practice is a required element of invention, the Courts and Patent Office have long permitted the filing of a patent application to constructively satisfy the RTP requirement. Still, the application must fully satisfy the disclosure requirements of 35 U.S.C. 112(a), namely written description, enablement, and best mode.
A patent specification will typically include a series of examples, embodiments, use-cases and/or experimental results. In this post, I’ll refer to these collectively as “examples.” One way of categorizing the examples is to divide between actual “working examples” and predicted “prophetic examples.” As you might guess, working examples are typically more compelling and indicative that the invention will actually work as claimed. But, prophetic examples also have their use and are absolutely permissible. Although I have not measured this, I expect that the vast majority of patentees rely on prophetic examples to some extent in order to expand the scope and depth of their disclosure. Thus, even if the patentee has reduced the invention to practice and explained the RTP in a working example, the specification may also provide a set of prophetic examples with differing arrangements, elements, and outcomes. Because of their differences, the courts and USPTO have called on patent applicants to take care in distinguishing between the two in their patent applications.
My definition of prophetic example is broad: I’ll pause here to recognize that my definition of prophetic examples is broad. Traditionally, many have focused the “prophetic example” doctrines only on reports of experimental results that are typically found in chemistry and biology related patents. In her Prophetic Patents article, Professor Janet Freilich primarily limited her analysis to “experiments that report protocols that were not actually conducted and describe results that are made up, or prophesized.” Using that definition and an automated search, Freilich found about 50% of chem/bio patents include prophetic examples. The MPEP has a broader definition that more closely parallels mine: “A prophetic example describes an embodiment of the invention based on predicted results rather than work actually conducted or results actually achieved.” MPEP 2164.02. Basically, if you are describing something that has not been actually reduced to practice, it is a prophetic example.
The USPTO has published a new notice to patent applicants with the same reminder cautioning applicants to distinguish between working and prophetic examples:
The USPTO is reminding patent applicants of their duty to ensure that patent applications are written in a manner that clearly distinguishes prophetic examples with predicted experimental results from working examples with actual experimental results. Prophetic examples, also called paper examples, are typically used in a patent application to describe reasonably expected future or anticipated results. Prophetic examples describe experiments that have not in fact been performed. Rather, they are presented in a manner that forecasts simulated or predicted results. In contrast, working examples correspond to work performed or experiments conducted that yielded actual results.
Notice: Properly Presenting Prophetic and Working Examples in a Patent Application, PTO-P-2021-0020 (Fed. Reg. July 1, 2021) (“Notice”). The notice indicates that examiners generally do not question disclosed test results unless there is a reasonable basis to do so. But, prophetic examples that fail a reasonableness test will be rejected for insufficient disclosure (enablement and/or written description).
In addition, applications that include prophetic examples should make clear whenever the example is prophetic. Otherwise, the application may be deemed to include a misleading statement in violation of the applicant’s “duty of candor and good faith in dealing with the Office.” 37 C.F.R. 1.56.
QUESTION for PATENT DRAFTERS: When you describe various embodiments in your patent application, do you tell the PTO which ones are working-examples (actually reduced to practice) and which ones are prophetic?
— Dennis Crouch (@patentlyo) June 30, 2021
One way to disclose prophetic examples is to expressly label them as “Prophetic Examples.” “It is a best practice to label examples as prophetic or otherwise separate them from working examples to avoid ambiguities.” Notice. The PTO has also deemed it appropriate to use future-tense language in describing prophetic examples and past tense for working examples. “When drafting a patent application, care must be taken to ensure the proper tense is employed to describe experiments and test results so readers can readily distinguish between actual results and predicted results.”
The USPTO Notice focuses on prophetic examples stemming from experimental results, and thus remains to be seen whether the requirements will be practically extended to situations involving prophetic embodiments and use-cases presented without any experimental results. One approach for patent applicants is to write everything as if it is a prophetic example.
by Dennis Crouch
The USPTO has released some implementation information for Arthrex. In its decision, the Supreme Court held that the USPTO Director has power to review any IPR decision by the PTAB. The Agency’s basic approach is as follows:
The request must be filed within 30-days of the PTAB’s final written decision or rehearing decision. The Agency has indicated that a request for review by the USpTO Director will be considered a request for rehearing under 37 C.F.R. 90.3(b) — that means that no appeal to the Federal Circuit will be due until after the Director acts on the request. In the short-term, the Office is not charging a fee for the request, but a fee will be added.
Request vs Petition: I’m not sure why, but the PTO is not identifying the Request for Review as a Petition for Review.
Pop-Panels and Ex Parte Proceedings: The Supreme Court identified inter partes review as demanding a process for PTO Director Review. However, it is clear that this extends to Post-Grant and Covered-Business-Method Reviews. It is unclear though whether it will extend to reexaminations or ordinary ex parte examination. I’m sure that the Director will still receive those petitions this month. The Office created Precedential Opinion Panels (POP) as a mechanism for giving the PTO Director more direct control over PTAB precedent. The Agency has indicated that the POP system remains in place for now, but is could be eliminated in favor of the simpler system of director review.
Links:
Webinar: PTO will host a webinar Thursday, July 1 at 10 a.m. ET on implementation. [LINK]
by Dennis Crouch
Minerva Surgical Inc. v. Hologic Inc. (Supreme Court 2021)
In my property law course, I spend a good bit of time walking through post-conveyance rights and obligations. What warranties are are promised to the buyer? Do these need to be express or may they be implied? Can you disclaim the warranties by selling via quitclaim deed or “as is”? Are warranties different in for sale than for a gift? And What about caveat emptor? My class focuses on land and, to a lesser extent, personal property. Minerva asks the same questions, but for patents. The court upheld the assignor doctrine, but with some big caveats.
The dissenting opinions would have overturned the prior precedent, although Justice Alito’s approach would have been more strident especially with regard to the reenactment canon (did the 1952 Act reenact the prior law except where expressly disturbed?).
These ideas of stare decisis and silent reenactment are part of a major ongoing debate within the Court over its role in changing its own prior precedent.
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Practice Note: The holding in the case suggests that attorneys may want to begin to require inventors to sign a confirmatory assignment at the time of patent issuance.
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In a 5-4 decision, the Supreme Court has upheld prior precedent maintaining the doctrine of assignor estoppel:
When an assignor warrants that a patent is valid, his later denial of validity breaches norms of equitable dealing.
The baseline here is an issue of unfair dealing:
By saying one thing and then saying another, the assignor wants to profit doubly—by gaining both the price of assigning the patent and the continued right to use the invention it covers. That course of conduct by the assignor strikes us, as it has struck courts for many a year, as unfair dealing—enough to outweigh any loss to the public from leaving an invalidity defense to someone other than the assignor.
Implicit here is that assignor estoppel applies when the the assignor receives some compensation for transferring rights — that there is some deal. A transfer without compensation then would not imply the same warranty. Of course, inventors and others who assign their patent rights rarely offer an express “warrant that a patent is valid.” Doesn’t matter, the court found that , the court found that any assignment of any specific patent claims will typically include an implied warranty of validity. “[T]he assignment of specific patent claims carries with it an implied assurance.”
There is no warranty in cases where there is no explicit nor implicit representations:
But when the assignor has made neither explicit nor implicit representations in conflict with an invalidity defense, then there is no unfairness in its assertion. And so there is no ground for applying assignor estoppel.
So, the warranty of validity is ordinarily implied when assigning “specific patent claims” but the court explains that a warranty would typically not exist if, for instance, the assignment occurred before the invention even existed.
An employee assigns to his employer patent rights in any future inventions he develops during his employment; the employer then decides which, if any, of those inventions to patent. In that scenario, the assignment contains no representation that a patent is valid. How could it? The invention itself has not come into being. See Lemley, Rethinking Assignor Estoppel, 54 Houston L. Rev. 513 (2016). And so the employee’s transfer of rights cannot estop him from alleging a patent’s invalidity in later litigation.
The court notes other situations where no warranty would be implied:
On remand, the Federal Circuit will consider how these caveats play into the specific case here where the claims were apparently changed substantially post-assignment.
by Dennis Crouch
The US Supreme Court has almost cleaned-up its patent docket for the October 2020 term. I still expect a decision at some point this week (by July 2) in Minerva Surgical, Inc. v. Hologic, Inc. focusing on the ongoing viability of assignor-estoppel. The court has already decided its one other patent-focused case for the term–United States v. Arthrex, 594 U. S. ___ (2021). In Arthrex, the court altered the power of the PTO Director beyond statutory limitations in order to preserve the PTAB’s constitutional authority during IPR proceedings. A number of parallel petitions had raised the same or similar questions to Arthrex. The Court vacated and remanded some cases back to the Federal Circuit “for further consideration in light of United States v. Arthrex, Inc.” For other cases, the court simply denied certiorari. There are also several Arthrex-follow-on petitions pending that have not yet been fully briefed. I expect these will also be denied.
The court also denied certiorari in TCL Communication v. Godo Kaisha IP Bridge 1, No. 20-1545. That case asked a couple of interesting questions regarding proof of literal infringement. The court allowed the patentee to make assumptions about the accused devices based upon admissions that the devices conform to certain industry standards.
The lone hold-over case is American Axle & Manufacturing, Inc. v. Neapco Holdings LLC, 20-891 focusing on patent eligibility. A petition for certiorari was filed in that case back in December 2020. After briefing was completed, the Supreme Court then requested the views of the U.S. Government on whether the court should grant certiorari. Those views will come from the US Solicitor General, but probably will not be submitted until November or December 2020. The CVSG signals some amount of interest, making this case the most likely to be granted cert next year. Am. Axle asks two questions:
A follow-on petition asks the identical questions in iLife Technologies, Inc. v. Nintendo of America, Inc.
New cases have already begun to line-up for consideration next term, starting at the end of September 2021:
The court will likely act on these certiorari petitions within the first couple of weeks of the October 21 term. Each of these cases are interesting and important. Still, it is quite possible that the Court will not grant certiorari in any new patent case for the next year.
I believe the clincher in this case is the fact that TVnGO’s patent claims use language not found anywhere within the patent specification. The result, claims invalid as indefinite. — Dennis Crouch
TVnGO v. LG Electronics (Fed. Cir. 2021) (nonprecedential) [Opinion]
Patentee TVnGO sued LGE–alleging that its Smart TV’s infringed U.S. Patent Nos. 8,132,220, 9,124,945, 9,392,339, 9,407,969, and 9,794,621. The district court found all asserted claims across the five related patents invalid as indefinite under 35 U.S.C. 112. On appeal, the Federal Circuit has affirmed. Opinion by Judge Prost, joined by Judge Reyna and Senior Judge Schall.
Section 112(b) of the Patent Act requires “one or more claims particularly pointing out and distinctly claiming” the invention. The language is only slightly modified from historical statutes:
The addition of claims in the 1836 Act was designed to provide notice to the world as to the scope of the patent right following an on-point complaint from the U.S. Supreme Court (and others). See Evans v. Eaton, 20 U.S. 356 (1822). Over the years, the Supreme Court focused more on the importance of claims for publicly demarking the property line. See Winans v. Denmead, 56 U.S. 330, 347 (1853) (Campbell, J., dissenting); Merrill v. Yeomans, 94 U.S. 568, 573 (1876) (The patent laws “leave no excuse for ambiguous language or vague descriptions. The public should not be deprived of rights supposed to belong to it, without being clearly told what it is that limits these rights.”). The 1952 Act did not appear to change these general rules but rather attempted to clean-up the requirement slightly by grammatically separating the disclosure requirements 112¶1 from the claim requirements 112¶2. In his contemporary commentaries, P.J. Frederico explained that “the clause relating to the claim has been made a separate paragraph to emphasize the distinction between the description and the claim, and the language has been modified.” P.J. Frederico, Commentary on the New Patent Act (1952). In 2011, the statute was renumbered so that Sections 112¶1 and 112¶2. are now Sections 112(a) and 112(b).
The newest Supreme Court case on point is Nautilus, Inc. v. Biosig Instruments, Inc., 134 S. Ct. 2120 (2014). In Nautilus, the court explained that claims must provide reasonable certainty as to the claim scope:
[W]e read § 112, ¶ 2 to require that a patent’s claims, viewed in light of the specification and prosecution history, inform those skilled in the art about the scope of the invention with reasonable certainty. The definiteness requirement, so understood, mandates clarity, while recognizing that absolute precision is unattainable.
Id. Previously, the Federal Circuit had invalidated claims on definiteness only when claims are unable to be construed are “insolubly ambiguous.” The Supreme Court found that standard allowed claims that “lack the precision § 112, ¶ 2 demands.”
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The claims here all generally relate to producing an overlay of logo icons and small window-in-window content on a TV screen. All of the claims include the phrases “overlay activation criterion” or “overlay activation signal.” One problem here is that the those terms were not found in the original disclosure but rather added during prosecution. A second problem is that neither of these have any ordinary meaning to one skilled in the art (even though each word is individually known, the combination is not known to PHOSITA). A third problem is that the different patents appear to use the terms in slightly different ways — even though all have the same original specification. The court indicated that it was unclear whether the signal/criterion was focused on the icon-overlay or on the content-overlay or on both.
Here, a person of ordinary skill would encounter two claim phrases without an ordinary meaning in the art. Upon consulting the specification, he or she would not find those phrases. And when attempting to glean their meaning from the patent’s use of “activates” and “activating,” he or she would find that “the patents teach two different results”—i.e., display of IP content associated with an already displayed overlay versus display of an overlay in the first place—without reasonable certainty as to which reading is correct. The asserted ’339, ’945, and ’621 patent claims are therefore indefinite.
Slip Op. Note here that the court’s ruling could have gleaned further definitional information from the claims that state expressly that the “overlay activation criterion” is used “to cause the display screen to display the overlays” and that the “overlay activation signal” is used to “generat[e] display drive signals causing the
TV screen to display the overlays.”
The other two patents provided more specific description of the terms within the claims, but also expressed what the court called intra-patent inconsistencies (within the patent). The particularly inconsistency was the source of the activation criteria — was it from the internet or from the user’s devices.
On the one hand, the independent claims indicate that an “overlay activation criterion” is … provided “over the Internet” and “transmitted to the user’s premises.” But the dependent claims, on the other hand, state that “said overlay activation criterion includes . . . a user command information,” indicating that an “overlay activation criterion” can come from a user’s premises via the remote control. Comparing ’220 patent claims 1 and 9
Slip Op. According to the court, this internal inconsistency further sealed the deal. Invalidity Affirmed. I would note that the proffered inconsistency appears easily reconcilable in that the “activation criterion” and “user command” can come from two different sources. But, that is a distinction I had to guess at and create in my head ex post — not something offered by the patent documents.
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Invalid.