It is a slow patent news day, but the Supreme Court offered a big employment discrimination decision in Bostick v. Clayton County Georgia (Supreme Court 2020).

The opinion joins together several cases challenging employment discrimination on the basis of gender identity (transgender) and also sexual orientation (homosexuality). Title VII of the Civil Rights Act of 1964 prohibits employment discrimination on the basis of an “individual’s race, color, religion, sex, or national origin.”   Here, the Supreme Court holds that gender identity and sexual orientation both fall with the ambit of “sex” and thus are also protected against discrimination.

Justice Gorsuch wrote the 6-3 majority opinion in textualist form:

Today, we must decide whether an employer can fire someone simply for being homosexual or transgender. The answer is clear. An employer who fires an individual for being homosexual or transgender fires that person for traits or actions it would not have questioned in members of a different sex. Sex plays a necessary and undisguisable role in the decision, exactly what Title VII forbids.

Those who adopted the Civil Rights Act might not have anticipated their work would lead to this particular result. Likely, they weren’t thinking about many of the Act’s consequences that have become apparent over the years, including its prohibition against discrimination on the basis of motherhood or its ban on the sexual harassment of male employees. But the limits of the drafters’ imagination supply no reason to ignore the law’s demands. When the express terms of a statute give us one answer and extratextual considerations suggest another, it’s no contest. Only the written word is the law, and all persons are entitled to its benefit.

Slip Op. Beyond the importance of the holding, the Gorsuch opinion has a few lines that will be quoted and used in future cases:

Sometimes small gestures can have unexpected consequences. Major initiatives practically guarantee them.

Likely, [the legislators] weren’t thinking about many of the Act’s consequences that have become apparent over the years . . . But the limits of the drafters’ imagination supply no reason to ignore the law’s demands.

In dissent, Justices Alito & Kavanaugh each argued that the Gorsuch opinion represented “legislation.” None of the decisions included any substantive discussion of the importance of either (1) the right of potential employees to not be discriminated against on the basis of gender identity and sexuality or (2) the right of employers to discriminate on those bases.   The majority does indicate that it is not a problem to fire an employee for “supporting the wrong sports team” (or it is at least not a violation of Title VII). 

by Dennis Crouch

Ubisoft v. Yousician (Fed. Cir. 2020) (nonprecedential)

Ubisoft (Rocksmith) and Yousician are competitors in the music-lesson software market.  Truthfully, I really enjoy using these tools — their main problem is the added screen time.

In 2018, Ubisoft sued Yousician for infringing its U.S. Patent 9,839,852 covering an “Interactive Guitar Game.”  Before the opening act even started, the district court dismissed the case on failure-to-state-a-claim. Fed. R. Civ. Pro. 12(b)(6).  In particular, the court found the claimed invention to be improperly directed to an abstract idea. On appeal, the Federal Circuit has now affirmed.

The claims at issue are directed to functional software stored on a computer drive — “a non-transitory computer readable storage medium with a computer program stored thereon.”  The claimed software is designed “present an interactive game for playing a song on a guitar” by causing the computer processor to take the following steps:

show finger notations on a display device (corresponding to the song to be played by a user);

receive audio input from the guitar that corresponds to the song played by the user;

assess the performance and determining a portion of the performance that should be improved;

change the difficulty level of the fingering notations (based upon the assessment); and

generate a “mini-game” targeted to improving the user’s skills associated with problematic portion.

Human tutors have worked in the music lesson world for a long time. Some folks are self-taught, but it is a pretty big deal to have responsive computer software that actually works for helping learn guitar.  Within the claim, you can see hints of major developments of (1) accurately assessing performance and then (2) motivating learning through gamification.  The problem with the claims is that they are written in broad functional form without actually claiming how the results are accomplished.  In particular, the claims could be transformed by expressing the algorithms for assessing performance; changing difficulty level; or generating the mini game.  Taking all this a step further, the court looked to the specification and found only a description of “these steps in functional terms and not by what process or machinery is required to achieve those functions.”

Without those specifics, the court held that this is just taking a human tutor’s method and saying “do it on a computer.”

[The steps here are] thus no different from the ordinary mental processes of a guitar instructor teaching a student how to play the guitar.

Slip Op.

[Post title comes from Titanic (1997)]

by Dennis Crouch

Merck Sharp & Dohme Corp. v. Microspherix LLC (Fed. Cir. 2020)

The Federal Circuit here affirms the PTAB IPR final determination that Merck failed to prove the Microspherix claims invalid. US9636401; US9636402; US8821835. Microspherix sued Merck — accusing Merck’s implantable contraceptive of infringing. Merck responded with the three IPR petitions.

The patents here cover implantable therapeutic/diagnostic devices that also have a radiopaque marker that helps find the device after insertion.  As originally filed, the claims were directed to “brachytherapy” — slow release of radioactive agents to treat cancer.  However, the claims were expanded in various continuation applications to broadly claim any “therapeutic, prophylactic, and/or diagnostic agent”

The interesting legal question on appeal has to do with the timing of the asserted prior art reference Zamora. The chart below shows the patent filings in question, and each party argued that the opposing non-provisional applications could not properly claim priority to their respective provisional applications.

Question 1: Does 102(e) (pre-AIA) apply in inter partes review?: 35 U.S.C. 311 limits IPR validity challenges “the basis of prior art consisting of patents or printed publications.”  Under 102(e), Zamora’s 2001 non-provisional application became prior art once the resulting patent issued. However, as of its 2001 filing date, the application was neither a “patent or printed publication.”  In its decision here, the court simply assumed that 102(e) prior art counts under the IPR statute (as it has done in prior cases as well) See In re Cuozzo Speed Techs., LLC, 793 F.3d 1268, 1281 (Fed. Cir. 2015), aff’d sub nom. Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016).  Post-AIA 102(a)(2) does not have the same problem because the statute makes clear that it is the patent / published application that is the prior art.

Question 2: Does Zamora’s provisional date allow for further back-dating of the 102(e) date?: Here, the court explains that Zamora would get the 2000 prior art date of its provisional “if it was entitled to the date of the Zamora provisional.” The court quoted Drinkware, LLC v. Nat’l Graphics, Inc., 800 F.3d 1375, 1381 (Fed. Cir. 2015) in explaining that the “‘reference patent is only entitled to claim the benefit of the filing date of its provisional application if the disclosure of the provisional
application provides support for the claims in the reference patent in compliance with’ the written description requirement.”  Here, the court noted that 2001 Zamora claimed three options for placement of a radiopaque medium, but one of those was not present in the provisional application.  That failure of written decription meant that Zamora’s prior art date was 2001, not Jan. 2000.

Question 3: Does Microspherix’s provisional date work as a priority date?: In considering priority claims, the courts generally operate on a claim-by-claim basis.  Thus, in a complex patent family, a single patent may include claims with a variety of priority dates. One problem with our current system is that a patent only tells us the earliest claimed priorty date — not the actual priority date.  The actual date is only realized and determined through ex post litigation.  Here, Merck argued that some of the claims went beyond the provisional disclosure. On appeal, the Federal Circuit disagreed — explaining that the the written description requirement requires the disclosure to “reasonably convey” possession of the invention.

Here, the particular written description argument focused on the length of the claimed strands that were inserted into a body.  The original provisional disclosed a variety of strand lengths, but none of them were longer than 1 cm (10 mm).  Some of the patent claims claim strands without any length limitation, and Merck argued that Microspherix was not in possession of such a broad range of strand lengths. On appeal, the Federal Circuit agreed with the PTAB that the description found int he provisional “adequately supports the claimed strand recited in Microspherix’s patent
claims.”

Federal Circuit Backtracks (A bit) on Prior Art Status of Provisional Applications and Gives us a Disturbing Result

Munchkin, Inc. v. Luv N’ Care, Ltd. (Fed. Cir. 2020)

This lawsuit centers on Munchkin’s U.S. Patent 8,739,993 covers a “spillproof drinking container” as well as associated trademark and unfair competition claims.  Munchkin sued and LNC responded with an inter partes review petition. The PTAB cancelled the claims; the Federal Circuited affirmed without opinion (R.36); and Munchkin then dismissed its patent claims in the district court.  By that point, Munchkin had also dropped all of its non-patent claims (dismissed with prejudice).

After Munchkin’s voluntary dismissal, the defendant then asked for attorney fees under 35 U.S.C. § 285 (Patent Act) and 15 U.S.C. § 1117(a) (Lanham Act).  Both provisions indicate that attorney fees can be awarded to the prevailing party in “exceptional cases.”  Although a district court is given discretion in determining whether a case is “exceptional,” a threshold still exists.

The judge sided with LNC — finding all of the claims “substantively weak” and noting that Munchkin should have known of the weakness. The court then awarded $1.1 million in attorney fees.

On appeal, the Federal Circuit has reversed — holding that the moving party (LNC) had failed to meet its burden of presentation since it “presented nothing to justify” an exceptional case finding.

Here, the trademark and unfair competition claims were voluntarily dismissed by the plaintiff without any substantial analysis of the issues by the court.  That situation can still lend itself to a fee award. However, the Federal Circuit here ruled that those underlying issues of merit or misbehavior must be “meaningfully considered by the district court.”

LNC failed to make the detailed, fact-based analysis of Munchkin’s litigating positions to establish they were wholly lacking in merit. The district court’s opinion granting a fee award likewise lacked adequate support.

Slip Op.

The appellate panel showed its approach with the patent claim.  Although the patent was found invalid, for exceptional case analysis we begin with an assumption that the patentee had a reasonable basis for believing its patent was valid.  The prevailing party has the burden of then showing that the position was unreasonable.

The relevant question for purposes of assessing the strength of Munchkin’s validity position is not whether its proposed construction is correct; rather the relevant question is whether it is reasonable.

In other words, a prevailing defendant does not receive attorney fees simply for winning the case or by proving the patent invalid.  Fee awards require a second step of proving the patentee’s case was also unreasonable. “That Munchkin’s patent was ultimately held unpatentable does not alone translate to finding its defense of the patent unreasonable.”

No fees.

I told my elder teenage child about Syngenta’s pending copyright case against Willowood involving EPA-required fungicide labeling. Crouch, Copyright Labels and Scope of 271(g), Patently-O (June 1, 2020).

Her graphic response follows:

SCT: Copyrighting Labels and scope of 271(g)

by Dennis Crouch.  NOTE – The patentee here is represented by my former law firm MBHB, including my mentors of mine Dan Boehnen & Grant Drutchas. MBHB is also a financial sponsor of Patently-O. That said, I have not had any communication with MBHB regarding this case. 

British Telecom v. IAC/InteractiveCorp and Tinder, Inc. (Fed. Cir. 2020)

In a short nonprecedential decision, the Federal Circuit has again affirmed a FRCP 12(b)(6) dismissal of an infringement lawsuit based upon a finding that the patent improperly claims an abstract idea.  The district court decision was written by Federal Circuit Judge Bryson sitting by designation.

Here, the claims walk through a step-by-step method of using a user’s geo-location to match the user with a short-list of relevant information sources and push those out to the user’s device. U.S. Pat. No. 6,397,040 (1997 priority date).

Steps in claim 1:

A telecommunications system server (i) proactively tracking each individual user, (ii) accessing location data to determine geo-relevant information sources; (iii) dynamically developing a shortlist of information sources that the server deemed relevant to a specific user based on both the user’s geographical location and other personalized factors, and (iv) then pushing that shortlist out to the user.

On appeal, the Federal Circuit found the claims generally directed to providing location-specific information to users — an abstract idea.

We have previously held that tailoring the provision of information to a user’s characteristics, such as location, is an abstract idea.

The court went on to hold that that the claims added nothing new — an inventive step — to take claim 1 across the patent eligibility threshold.  Here, the court only indicates that the claims recite “generic computer hardware.” The court focused only on the tech hardware and court did not particularly reference the patentee’s arguments of dynamic individualized user tracking and new techniques of combining data.

Non-Asserted Claims: In the case, the defendants challenged all 44 claims in the patent, but only discussed claim 1. The district court found all 44 ineligible – writing without further discussion that its analysis of claim 1 “applies equally to all claims of the ’040 Patent.”  On appeal, the Federal Circuit affirmed, explaining that:

Because British Telecom did not present any “meaningful argument for the distinctive significance of any claim limitation” not found in claim 1, the district court did not err in finding that British Telecom had forfeited its ability to argue that other claims are separately patent eligible.

Slip Op. Quoting Berkheimer v. HP Inc., 881 F.3d 1360 (Fed. Cir. 2018).  The odd aspect of the court’s citation of Berkheimer is that the patentee had relied upon the same portion of Berkheimer for its argument that claim 1 cannot simply be assumed to be a representative claim if the patentee argues that limitations in the other claims “bear on patent eligibility and never agreed to make claim 1 representative.”  Berkheimer.

= = = =

Note that the district court dismissed this portion of the action and issued final judgment with respect to the ‘040 patent.  The case is ongoing, however, with respect to other asserted patents.

Bozeman Financial LLC v. Federal Reserve Bank (Fed. Cir. 2020)

The Federal Circuit has denied Bozeman’s petition for en banc rehearing in this case – confirming the holding that the Federal Reserve Banks are permitted to petition the PTO for inter partes review proceedings despite the Supreme Court’s decision in Return Mail barring the US Postal Service (USPS) from taking such action.

The AIA indicates that any “person” other than the patentee can petition for inter partes review (IPR).  However, in Return Mail, the Supreme Court held that the U.S. Gov’t does not qualify as a “person” under the statute and thus cannot files such petitions. Since USPS is a branch of the US Gov’t, its petition was improperly filed.

The distinction in Bozeman is that the Federal Reserve banks are not actually governmental institutions but rather a set of somewhat independent banks.  Of course, the various Federal Reserve banks are substantially controlled by the Board of Governors, which is more appropriately termed a branch of the US Government.

The Chartered Institute of Patent Attorneys (CIPA) is the professional organization of UK Patent attorneys. The organization has released a new discussion paper on invention without the inventor.

Although the current debate is captioned around artificial intelligence (AI) systems, a real underlying focal point is a mechanism to allow for immediate and automatic corporate ownership:

Many in CIPA think patent rights should be available for inventions which represent new, non-obvious technical developments, regardless of how they were created (with or without an AI system).

Others in CIPA prefer to limit patent protection to inventions having a human contribution – in effect, retaining current inventorship requirements, but accepting that an invention created using AI is patentable as long as there is a genuine human contribution.

CIPA DISCUSSION PAPER ON AI AND INVENTORSHIP.

Willowood, LLC v. Syngenta Crop Protection, LLC, Docket No. 19-1147 (Supreme Court 2020)

Syngenta sued Willowood for both patent and copyright infringement associated with its generic fungicide compound.  Willowood won at the district court, but that holding was overturned on appeal. Now Willowood is bringing it to the Supreme Court.

The copyright claim: Syngenta product “labels” have many pages of small-type that were registered with the US Copyright office.  Willowood apparently copied the labels for its competing generic product.  Because the fungicides are dangerous chemicals, these labels are required in order to sell the product.

The district court dismissed the copyright claims — holding that the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”) precludes the copyright claim because FIFRA requires a generic product to use “identical or substantially similar” labels that are typically mandated by EPA regulations.  On appeal, the Federal Circuit vacated — holding that statute does not allow thoughtless copying since “the text of FIFRA does not, on its face, require a me-too registrant to copy the label of a registered product.”  Rather, according to the court, the court must look at each copyrightable element of Syngenta’s label and consider whether that portion is “necessary” for the generic approval process.

In its petition for certiorari, Willowood asks for a blanket rule:

Whether, by requiring the EPA to grant expedited review and approval of labels for generic pesticides that are “identical or substantially similar” to the previously approved labels for the same product, Congress intended to preclude claims of copyright infringement with respect to generic pesticide labels.

Question presented in Petition for Certiorari.  This portion of the case could be a nice companion case to Google v. Oracle if certiorari is granted there.

The product label was apparently substantially copied, but without the TM, patent claims, or Syngenta name.

The Patent Claims: A portion of the infringement case turned on the court’s interpretation of 35 U.S.C. 271(g).

(g) Whoever without authority imports into the United States … a product which is made by a process patented in the United States shall be liable as an infringer, if the importation, offer to sell, sale, or use of the product occurs during the term of such process patent.

The district court ruled found no infringement because the product was purchased from a separate entity and that the single-infringer-rule requires “every step of a claimed process to be performed or attributable to a single entity.”

On appeal, the Federal Circuit also rejected this statement of the law — holding that importation is the act of infringement under 271(g) (or sale/offer).  The statute does not require that the accused infringer be the one performed the method.

This [statutory] language makes clear that the acts that give rise to liability under § 271(g) are the importation, offer for sale, sale, or use within this country of a product that was made by a process patented in the United States. Nothing in this statutory language suggests that liability arises from practicing the patented process abroad. Rather, the focus is only on acts with respect to products resulting from the patented process. Thus, because the statutory language as a whole is clear that practicing a patented process abroad cannot create liability under § 271(g), whether that process is practiced by a single entity is immaterial to the infringement analysis under that section.

Syngenta Crop Protec., LLC v. Willowood, LLC, 944 F.3d 1344, 1359–60 (Fed. Cir. 2019). In its petitition, Willowood asks that the Supreme Court step-in here as well:

Whether liability for patent infringement under 35 U.S.C. § 271(g) requires that all steps of a patented process must be practiced by, or at least attributable to, a single entity, a requirement that the Supreme Court previously recognized is a prerequisite for infringement under 35 U.S.C. §§ 271(a) and (b) in Limelight Networks Inc. v. Akamai Technologies Inc.

Petition.

by Dennis Crouch

The Chamberlain Group, Inc. v. Techtronic Indus. Co. (Supreme Court 2020)

Chamberlain Group’s asserted patent claims a garage-door-opener (claim 1, 5) and an associated method (claim 15). US7224275.

Garage doors and opening mechanisms have been the subject of patents for 150 years. Back in 1919 Lee Hynes filed an early patent on electric-controller for a car door operating mechanism. Despite this long history, the Federal Circuit found Chamberlain’s patent ineligible under 35 U.S.C. 101 as directed to an abstract idea.

Chamberlain’s opener consists of three key elements:

• A device controller — This is an electronic component that receives and processes control signals and sends out the orders to open/close.
• A movable barrier interface coupled to the controller — This is the actual drive or clutch mechanism that powers the door movement.
• A wireless data transmitter coupled to the controller.

By the time this patent application was filed, all three of these elements were all “generally well understood in the art.” The innovative feature of the claims is that the system is designed to transmit the door’s “present operational status” — i.e., is it moving up; moving down; reversing; blocked; etc.  The signal also includes a “relatively unique” identifier for folks with multiple garage doors so that the unclaimed receiver can tell which door is up/down. Note here that there is nothing new about these various status points — the only difference is that it that the signals are being sent, and being sent wirelessly.

So, although the patent claims a garage-door-opener including various physical components, the point-of-novelty is that a particular signal is being sent wirelessly. In its decision, the Federal Circuit found the wireless transmission of status to be an abstract idea: “the broad concept of communicating information wirelessly, without more, is
an abstract idea.”  One Alice Step 2, the court held that the claims did not include any inventive concept beyond the excluded abstract idea:

In other words, beyond the idea of wirelessly communicating status information about a movable barrier operator, what elements in the claim may be regarded as the “inventive concept”?

[W]ireless transmission is the only aspect of the claims that CGI points to as allegedly inventive over the prior art. . . . Wireless communication cannot be an inventive concept here, because it is the abstract idea that the claims are directed to. Because CGI does not point to any inventive concept present in the ordered combination of elements beyond the act of wireless communication, we find that no inventive concept exists in the asserted claims sufficient to transform the abstract idea of communicating status information about a system into a patent-eligible application of that idea.

Fed. Cir. Opinion.

The new petition has two focal points (1) whether eligibility should be seen as a “narrow exception;” and (2) whether the Federal Circuit errs in its approach of separating the claim into various components and excluding the abstract idea portion from the claim when considering Alice Step 2.

Question presented:

Whether the Federal Circuit improperly expanded § 101’s narrow implicit exceptions by failing to properly assess Chamberlain’s claims “as a whole,” where the claims recite an improvement to a machine and leave ample room for other inventors to apply any underlying abstract principles in different ways.

Chamberlain Petition.  The petition also repeats the refrain of unsettling uncertainty:

The root cause of all this ire and uncertainty is the Federal Circuit’s insistence once again on crafting an elaborate test that strays from—and here, contradicts—the plain text of the Act.

Id.

The petition ends with a call for immediate action — calling out the current situation as “a patent emergency.” The breadth of eligibility challenges are shifting innovator behavior:

[T]here is no time. Innovators are adapting their behavior right now to the Federal Circuit’s new patent-hostile regime. Investors are deciding now to withhold investments they would have made before the Federal Circuit changed the law. Waiting any longer to intervene could inflict irreparable harm on U.S. industry.

Techtronic has already waived its right to respond to the petition — meaning that the Supreme Court may act on the petition before the close of its current session in June.

by Dennis Crouch

McRO, Inc. (Planet Blue) v. Bandai Namco Games (Fed. Cir. 2020)

This case has returned to the Federal Circuit. In 2016, the court issued an important legibility decision in the case — finding the algorithm for syncing anime lip-movements with various sounds to be patent eligible. McRO, Inc. v. Bandai Namco Games America Inc., 837 F.3d 1299 (Fed. Cir. 2016) (McRO I). Less than four years later, McRO I has been cited by over 2000 PTAB decisions as well as 200+ court decisions. The only more-cited patent cases from 2016 are Enfish, LLC v. Microsoft Corp., 822 F.3d 1327 (Fed. Cir. 2016); Cuozzo Speed Techs., LLC v. Lee, 136 S. Ct. 2131 (2016); and Electric Power Group, LLC v. Alstom S.A., 830 F.3d 1350 (Fed. Cir. 2016).

On remand, the accused infringers again successfully moved for dismissal — this time on summary judgment of invalidity (enablement) and non-infringement. On appeal, the Federal Circuit has vacated the invalidity holding, but upheld the non-infringement determination.

Non-Enablement and Point of Novelty: Aspects of the invention that are known in the art need not be fully described.  Rather, the law relies upon the artisanal  knowledge to fill the gaps. A “patent need not teach, and preferably omits, what is well known in the art.” AK Steele (Fed. Cir. 2003). However, novel aspects of the invention must be enabled – and must reasonably teach how to make and use that aspect of the invention.

Non-Enablement by Example: Enablement requires that the patentee “teach the public how ‘to practice the full scope of the claimed invention.'” without undue experimentation. Slip Op. quoting AK Steele.  In a number of cases, the courts have invalidated patents on enablement grounds after identifying infringing products/processes that are not enabled. On appeal here, the Federal Circuit offered a limiting principle to that approach — it must be tied to a particular and actual product/process, not simply “an abstract assertion of breadth.”

In the case, the accused infringers identified two particular techniques that were not enabled (“bones” and BALDI).  However, a narrow claim construction meant that neither of those were actually covered by the claims.  And, only the claimed invention need be enabled.

No other concretely identified animation techniques have been advanced to support the district court’s and Developers’ enablement analyses.

Slip Op. Without any other particular example of infringing but non-enabled activity, the court held that theory of enablement failed.  The district court noted the breadth of the claims and narrowness of the specification.  On appeal, the Federal Circuit found that conclusion suggestive of an enablement problem, but insufficient:

[T]hese observations merely state the conclusion that the claims are too broad and the specification’s discussion is too narrow. The observations do not justify the conclusion with any concrete support. To say that the “first set of rules” limitation is broader than “if . . . then . . . else” statements based on keyframes is not to say what else is or may be within the phrase—and it was the burden of the Developers, not McRO, to prove that such specific content exists and that it is not enabled.

The appellate panel does not delve into this, but remember that enablement is a question of law, not a question of fact.  The result then is that the defendant has the burden of persuading the judge on enablement, not proving its case.  Lack of enablement can be supported by various factual conclusions, and those must be proven with clear and convincing evidence.

Non-Infringement: McRO’s non-infringement argument hinged upon claim construction of the claim term “morph weight set.” The morph weights identify how much and in what direction various morph targets (such as lip portions) move.  The district court interpreted the term to require these be in 3-D geometric vector form. The result of that claim construction was no-infringement because the accused infringers “do not represent the displacements of each vertex in terms of a simple xyz displacement vector.”

On appeal, the Federal Circuit affirmed the claim construction — holding that “the specification compels the three-dimensional geometric construction of ‘vector’ adopted by the district court.”  McRO had argued that vector should be given a broader definition to include how it is used in computer science — as a sequential list of numbers.

Three notes

• I don’t know why the Federal Circuit allowed the focus of this whole argument to be on the term ‘vector.’ Here, the argument was on how to define the term used to define the actual claim terms. Rather, the focus should have zeroed in on the claim term itself (“morph weight set”) and decide what that claim term required.
• In a bit of an oddity, Federal Circuit’s opinion actually uses vector in the computer science form — noting that the accused process “stores information, whether as a 4×4 matrix or as an equivalent 16-term vector.”
• Without knowing more, the difference being argued about here appears to be resolvable with a mere mathematical transform that could be seen as the equivalent.  No doctrine of equivalents argument was presented on appeal.

U.S. Patent No. 6,611,278 (“Method for automatically animating lip synchronization and facial expression of animated characters”).

by Dennis Crouch

Esip Series 2, LLC v. Puhzen Life USA, LLC (Fed. Cir. 2020)

In its decision here, the Federal Circuit has applied Thryv, Inc v. Click-To-Call Techs., LP, 140 S. Ct. 1367 (2020) and refused to consider whether the USPTO erred in its real-party-in-interest analysis.

In Cuozzo (2016), the Supreme Court held that this Court is precluded from reviewing Board decisions concerning the “particularity” requirement under § 312(a)(3). The Court explained that § 314(d) bars appellate review of “questions that are closely tied to the application and interpretation of statutes related to the Patent Office’s decision to initiate inter partes review.” The Court further explained that “where a patent holder grounds its claim in a statute closely related to that decision to institute inter partes review, § 314(d) bars judicial review.”

[I]n Thryv (2020) … the Supreme Court held that § 314(d) also precludes judicial review of the agency’s decision whether to apply the one-year time bar set forth in § 315(b)). . . .

In view of Cuozzo and Click-to-Call, we find no principled reason why preclusion of judicial review under § 314(d) would not extend to a Board decision concerning the “real parties in interest” requirement of § 312(a)(2). ESIP’s contention that the Board failed to comply with § 312(a)(2) is “a contention that the agency should have refused to institute an inter partes review.” Indeed, ESIP expressly argues that the agency should have refused to institute inter partes review because of Puzhen’s failure to identify all “real parties in interest.”

Slip Op. Here, the statute requires that a petition for inter partes review “may be considered only if” the petition identifies all real-parties-in-interest.  In the case, ESIP argued that doTERRA should be considered a real-party-in-interest because the company is a co-defendant in the underlying litigation, sells the accused Puhzen product, and agreed to be bound by the IPR estoppel.  The Board’s approach to the issue will stand without considering whether it is in accordance with the law.

Thryv was released after briefing and oral arguments had been complete.  The court did accept the supplemental authority, but those are severely limited.  In its statement to the court, patentee ESIP argued that it wasn’t (only) appealing the institution decision but rather (also) whether the petition met the statutory requirements: “[We] contend that Puzhen’s IPR Petition did not satisfy the statutory requirement in 35 U.S.C. § 312(a)(2).”

= = = =

On the underlying merits, the Federal Circuit affirmed the PTAB’s obviousness final decision regarding the claimed “method for introducing a scent into breathable air,” US9415130; IPR2017-02197.

by Dennis Crouch

Lucky Brand Dungarees, Inc. v. Marcel Fashions Group, Inc. (Supreme Court 2020)

This case makes me sad because it reminds me that my walk-able grocery store, Lucky’s Market, has closed down. Colorado based Lucky’s had its own trademark dispute with California based Lucky Supermarket.

The case before the supreme court involved two other uses of LUCKY:

The parties in this case have been fighting in federal court over trademark rights for almost 20 years; and in three separate actions.

The petition before the U.S. Supreme Court involves “defense preclusion” –asking when a defendant in a subsequent action will be precluded from raising a defense that was or could-have been raised in the prior action.  In its decision, the Supreme Court explained that there is no special doctrine of defense preclusion, but rather the courts should apply the general rules of claim preclusion and issue preclusion.

The first litigation ended in a settlement.  During the second litigation, Lucky Brand raised the prior settlement as a reason to dismiss, but the court denied the motion-to-dismiss without prejudice (thus not “on the merits”).  The second litigation was then decided on other grounds.  In the third litigation Lucky Brand again raised the prior settlement as a defense, and Marcel argued that it was precluded.  In its analysis, the Supreme Court focused on whether the third litigation involved the “same claim” as the second; and whether it mattered.

Claim preclusion bars relititgation of an already decided claim between two parties.  Our notice pleading system encourages parties to join together in a single lawsuit all the claims that the parties have against one another.  Once the lawsuit ends, our claim preclusion will step-in to bar any further litigation between the parties relating to that transaction or occurrence.  If, for example, a patentee sues a manufacturer for infringing claim 1 of its patent (and wins).  The patentee will be barred from later filing a lawsuit asserting claim 2 of the same patent against the same manufacturer for the same infringing behavior.

Claim preclusion is thought to also precludes defenses that were raised or that could have been raised in the the first lawsuit.  However, a key limiting factor that the court found today is the “same transaction” or “common nucleus of operative facts” test — and that test is defined by the well pled complaint.

Here, the Supreme Court explained that the two lawsuits did not involve the same claims: “Put simply, the two suits here were grounded on different conduct, involving different marks, occurring at different times.”  Thus, no claim preclusion. [I believe that both cases involved assertion of the “get lucky” mark, and so I don’t know what the court is talking about regarding “different marks.” – DC]

Note here that the court also suggested a possibility of eliminating claim preclusion to defenses altogether: “There may be good reasons to question any application of claim preclusion to defenses.” That issue though is saved for another day.

Issue preclusion bars relitigation of an already decided issue.  However, issue preclusion requires that the issue be actually decided. Although the defense was raised in the original lawsuit, it was not actually decided but rather dismissed without prejudice. Thus, no issue preclusion.

Trademark Law: In his short post on the case, Eric Moran notes:

The Court specifically pointed out the risk in barring such claims in trademark cases, when “liability for trademark infringement turns on marketplace realities that can change dramatically from year to year.”

The court could have allowed more conflation between these various cases, but drew a tight line on the “same claim” element of claim preclusion.  One ongoing debate on this topic in patent law is the extent that a patentee should be required to assert all of its patents related to a defendant’s accused infringing content at the risk of beinig precluded. Or, may a patentee file a first lawsuit with a first patent; then later a second lawsuit with a second patent; etc. Current Federal Circuit rule is that allegations of infringement of two different patents involve the “same claim” only if the claim scopes are “essentially the same.” SimpleAir, Inc. v. Google LLC, 884 F.3d 1160, 1167 (Fed. Cir. 2018); See also Acumed LLC v. Stryker Corp., 525 F.3d 1319 (Fed. Cir. 2008) (same claim also requires infringing activity to be “essentially the same”).

Patent Infringement Claim Preclusion: Only When Accused Device is “Essentially the Same” as Prior Adjudicated Device

by Dennis Crouch

This case is going to end up being a big one for our online marketplace.  Many many producers are finding knock-off versions of their products sold via Amazon — often with Amazon’s direct backing. The decision here support’s Amazon’s approach and is especially important coming from the pro-protection Federal Circuit. Importantly, the court here does not allow IP rights to be improperly extended in order to catch a counterfeit. 

Lanard Toys Limited v. Dolgencorp LLC and Ja-Ru (Fed. Cir. 2020)

Lanard makes the “Lanard Chalk Pencil” and sued the knock-off competitor Ja-Ru Products along with Lanard’s former distributor Dolgencorp and former retailer Toys-R-Us.

The setup begins with the clear statement that Ja-Ru copied the design and then Dolgencorp and TRU stopped buying from Lanard and started buying from Ja-Ru.  The question then is whether this setup is simply fair competition or is it somehow unfair or unlawful.

Here, Lanard made its chalk-pencil product look like a well-known unprotectable product — a pencil with an eraser.  Perhaps it shouldn’t be surprised that its associated exclusive rights are quite thin.

The trial court ended the case on summary judgment holding that (1) Ja-Ru’s product does not infringe the asserted design patent, D671,167; (2) that the asserted copyright over the pencil is invalid and not infringed; (3) Ja-Ur’s product does not infringe Lanard’s trade dress; and (4) there was no unfair competition since no IP rights were violated.

On appeal, the Federal Circuit has affirmed.

Infringing the Design Patent: The design patent is directed toward the “ornamental design for a chalk holder” as shown in the drawings.  35 USC 289 calls out design patent infringer as someone who as “applies the patented design, or any colorable imitation thereof, to any article of manufacture for the purpose of sale …”  Here, the court did not cite the statute, but went straight to the test in Egyptian Goddess that asks – what is the scope of the patented design? In that case, the court explained that the scope of a design patent will depend upon how it differs from the prior art.  Here:

The district court [] recognized that “the overall appearance of Lanard’s design is distinct from this prior art only in the precise proportions of its various elements in relation to each other, the size and ornamentation of the ferrule, and the particular size and shape of the conical tapered end.” In so doing, the district court fleshed out and rejected Lanard’s attempt to distinguish its patent from the prior art by importing the “the chalk holder function of its design” into the construction of the claim.

The Federal Circuit affirmed this approach as well as the district court’s separate consideration of functional and non-functional features of the design.

We have instructed trial courts that design patents “typically are claimed as shown in drawings,” but that it can be helpful to “distinguish[] between those features of the claimed design that are ornamental and those that are purely functional.” Egyptian Goddess.

In the end, the court compared the accused product with the patented design — keeping in mind the broad scope of prior art — and concluded that the ordinary observer would be drawn more to the differences than the similarities.

In its decision, the Federal Circuit focused some attention on the “points of novelty” that the Federal Circuit previously rejected as a requisite test for design patent infringement.  Here, the court recognized that the doctrine remains a useful approach when considering the scope of design patent claims.

Here, as a matter of claim construction, the district court undoubtedly considered the points of novelty of the patented design over the prior art. And the court placed those points of novelty in context by considering that those points of novelty would draw “the attention of the ordinary observer.” [W]e conclude that the district court correctly balanced the need to consider the points of novelty while remaining focused on how an ordinary observer would view the overall design. See Egyptian Goddess.

Slip Op.

On Copyright infringement, the court here essentially ruled that the pencil is more like a shovel than a cheerleader uniform. See Star Athletica, L.L.C. v. Varsity Brands, Inc., 137 S. Ct. 1002 (2017).

In attempting to identify separable features, “the feature cannot itself be a useful article.” Star Athletica. … Here, Lanard’s ’458 copyright is for the chalk holder itself, and Lanard’s arguments in the district court and in this appeal merely confirm that it seeks protection for the dimensions and shape of the useful article itself. Because the chalk holder itself is not copyright protectable, Lanard cannot demonstrate that it holds a valid copyright.

Slip Op.

The appellate panel went on to similarly reject Landards trade dress & unfair competition claims. (“Lanard has not identified evidence with which it could satisfy its burden to prove at trial that, when customers see the Lanard Chalk Pencil, their minds jump to the producer of the product rather than the product itself.”)

Affirmed.